Mar 31, 2018
Dear Shareholders,
The Directors are pleased to present the 39th Annual Report and the Audited Statement of Accounts for the financial year ended March 31, 2018.
FINANCIAL RESULTS
The financial performance of the Company for the year ended March 31, 2018 is summarized below:
(Rs. in Lakhs, unless otherwise stated)
Particulars |
Standalone |
Consolidated |
||
2017-18 |
2016-17 |
2017-18 |
2016-17 |
|
Continuing Operations |
||||
Revenue from operations |
32,622.94 |
26,886.58 |
54,245.54 |
58,872.02 |
Other income |
1,750.48 |
706.39 |
1,560.77 |
630.41 |
Total Income |
34,373.42 |
27,592.97 |
55,806.31 |
59,502.43 |
Profit before Finance Cost, Depreciation & Exceptional Items |
6,680.55 |
4,735.56 |
9,807.93 |
8,112.57 |
Less: |
||||
- Finance costs |
2,668.23 |
3,637.62 |
3,472.54 |
4,436.25 |
- Depreciation and amortisation |
1,268.55 |
1,475.08 |
3,181.80 |
3,448.15 |
Profit / (Loss) before exceptional items and tax |
2,743.77 |
(377.14) |
3,153.59 |
228.17 |
Exceptional items (net) |
(967.83) |
7,527.19 |
32.17 |
9,571.06 |
Profit before tax from continuing operations |
1,775.94 |
7,150.05 |
3,185.76 |
9,799.23 |
Tax expense |
||||
- Current tax |
465.00 |
- |
455.90 |
15.30 |
- Deferred tax |
5.90 |
2.43 |
5.91 |
2.00 |
Profit after tax from continuing operations |
1,305.04 |
7,147.62 |
2,723.95 |
9,781.93 |
Discontinued Operations |
||||
Profit / (Loss) from discontinued operations before tax |
- |
- |
(344.36) |
(1,957.00) |
Tax expense of discontinued operations |
- |
- |
- |
- |
Profit / (Loss) from discontinued operations after tax |
- |
- |
(344.36) |
(1,957.00) |
Profit / (Loss) after tax from total operations |
1,305.04 |
7,147.62 |
2,379.59 |
7,824.93 |
Other comprehensive income |
||||
(a) Items that will not be reclassified to profit and loss |
57.00 |
0.44 |
57.00 |
- |
(b) Tax (expense) / benefit on items that will not be reclassified to profit and loss |
(12.86) |
6.07 |
(12.86) |
5.64 |
(a) Items that will be reclassified to profit and loss |
- |
- |
(206.84) |
(435.07) |
(b) Tax expense / (benefit) on items that will be reclassified to profit and loss |
- |
- |
- |
- |
Total other comprehensive income (net of tax) |
44.14 |
6.51 |
(162.70) |
(429.43) |
Total Comprehensive Income |
1,349.18 |
7,154.13 |
2,216.89 |
7,395.50 |
Net Profit for the period attributable to: |
||||
- Equity shareholders of the Company |
- |
- |
2,336.50 |
7,833.34 |
- Non controlling interests |
- |
- |
43.09 |
(8.41) |
(Rs. in Lakhs, unless otherwise stated)
Particulars |
Standalone |
Consolidated |
||
2017-18 |
2016-17 |
2017-18 |
2016-17 |
|
Total Comprehensive Income for the period attributable to: |
||||
- Equity shareholders of the Company |
- |
- |
2,173.80 |
7,403.91 |
- Non controlling interests |
- |
- |
43.09 |
(8.41) |
Retained Earnings: Balance brought forward from the previous year |
(19,591.42) |
(26,734.44) |
7,760.03 |
(68.71) |
Net profit for the year |
1,305.04 |
7,147.62 |
2,336.50 |
7,833.34 |
Other Comprehensive Income |
44.14 |
6.51 |
(162.70) |
(429.43) |
Adjustments to OCI for Foreign Currency Translation |
- |
- |
206.84 |
435.07 |
Adjustments to OCI for FVOCI Equity |
(55.12) |
(11.11) |
(55.13) |
(10.24) |
Retained Earnings carried forward |
(18,297.36) |
(19,591.42) |
10,085.54 |
7,760.03 |
Earnings per share (not annualised) (in ''): |
||||
Basic & diluted earnings per share |
||||
(i) Continuing operations |
1.16 |
6.37 |
2.39 |
8.72 |
(ii) Discontinuing operations |
- |
- |
(0.31) |
(1.74) |
(iii) Total operations |
1.16 |
6.37 |
2.08 |
6.98 |
PERFORMANCE REVIEW
During the financial year 2017-18, the Company saw the upward trend in the sales compared to sales in the previous year. The Company has encountered an increase in demand towards end of the financial year, due to CNG cylinders requirements in Northern India for controlling the pollution due to recent ruling by Supreme Court for not registering Diesel Vehicles.
Sale proceeds received against disposal of assets situated at Gandhidham in earlier year, resulted in cash surplus which was utilized to reduce the borrowing and in-turn resulted in reduction of financial expenses.
On standalone basis, for the financial year 2017-18, revenue from operations stood at Rs.32,622.94 Lakhs against the previous year''s revenues of Rs.26,886.58 Lakhs, an increase of around 21% and Net Profit at Rs.1,305.04 Lakhs against Net Profit of Rs.7,142,.62 Lakhs in the previous year.
On consolidated basis, the Company manufactured 575,762 units as compared to 530,048 units in the financial year 2016-17. During the said period the Company sold 540,232 units as compared 493,225 units in the previous financial year. Revenues for financial year 2017-18 at Rs.54,245.54 Lakhs were marginally lower over the previous year''s revenues of Rs.58,872.02 Lakhs. Your Company has focussed on quality product sales which have resulted in improvement of Net profit before exceptional items from Rs.228.17 Lakhs in financial year 2016 - 17 to Rs.3,153.59 Lakhs in financial year 2017 - 18.
CONSOLIDATED FINANCIAL STATEMENTS
In accordance with Section 129 of Companies Act, 2013 and the IND AS-27 on Consolidated and Separate Financial Statements, the Audited Consolidated Financial Statements are provided in the Annual Report. As a significant part of the Companyâs business is conducted through its subsidiaries, the Directors believe that the consolidated accounts provide a more accurate representation of the performance of the Company.
SHARE CAPITAL STRUCTURE
The Paid Up Share Capital of the Company is Rs.22.44 Crore divided into 11,22,07,682 Equity Shares of Rs.2/- each.
INTERNAL FINANCIAL CONTROL SYSTEM
The Company has adequate internal financial control system commensurate with the size, scale and complexity of its operations. The Company has in place a mechanism to identify, assess, monitor and mitigate various risks to key business objectives. Major risks identified by the business and functions are systematically addressed through mitigation action on continuing basis. These are routinely tested and certified by Statutory as well as Internal Auditors. The Audit observations on internal financial controls are periodically reported to the Audit Committee.
MANAGEMENT DISCUSSION AND ANALYSIS REPORT
Management Discussion and Analysis Report for the financial year 2017-18, as stipulated under Regulation 34(2)(e) of the SEBI (Listing obligations and Disclosure Requirements) Regulations, 2015, is presented in a separate section forming part of the Annual Report.
DETAILS OF FRAUD REPORTED BY AUDITORS
There were no frauds reported by the Statutory Auditors under provisions of Section 143(12) of the Companies Act, 2013 and rules made thereunder.
SIGNIFICANT DEVELOPMENTS DURING THE YEAR
There were no significant development during the year 2017-18.
DIVIDEND
The Directors have not proposed any dividend for the financial year 2017-18 to preserve reserves for future betterment of the Company.
TRANSFER TO RESERVES
The Company does not propose to transfer any amount to reserves.
CREDIT RATING FROM CARE RATINGS
During the year, in respect of the borrowings of the Company, CARE Ratings has upgraded the Long Term and Short Term Ratings, as under:
Sr. No. |
Facility |
Amount (Rs. in Crore) |
Rating |
Remarks |
1 |
Long term fund based bank facilities (Term Loan) |
84.99 |
CARE BB, Positive [Double B, Outlook:Positive] |
Revised from CARE B |
2 |
Long term fund based bank facilities |
8.50 |
CARE BB, Positive [Double B, Outlook: Positive] |
Revised from CARE B |
3 |
Long term fund based bank facilities (Cash Credit) |
81.00 |
CARE BB, Positive [Double B, Outlook: Positive] |
Revised from CARE B |
4 |
Short term bank facilities (Non Fund Based) |
54.92 |
CARE A4 [A Four Plus] |
Revised from CARE A4 |
Total |
229.41 (Two Hundred Twenty Nine Crore and Forty One lakhs only) |
DEPOSITS UNDER CHAPTER V OF COMPANIES ACT, 2013
The Company has not accepted any Deposits from the public within the ambit of Section 73 of the Companies Act, 2013 and the Companies (Acceptance of Deposits) Rules, 2014.
PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS
The particulars of loans given, guarantees provided and investments made have been duly disclosed in the financial statement
MATERIAL CHANGES AND COMMITMENTS
The Company has sought and obtained members approval for disinvestment of its wholly owned subsidiary i.e EKC Industries (Tianjin) Co. Ltd, which is subject to Regulatory Approvals. Necessary applications have been made to Regulators and upon completion of the transaction, the consolidated financial position would improve substantially.
SUBSIDIARIES
As on 31st March, 2018, 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 Joint Venture Company in Tanzania, viz, Kamal EKC industries Ltd (d) Two Indian subsidiary Companies viz., Calcutta Compressions & Liquefaction Engineering Ltd., and EKC Positron Gas Ltd. and one wholly owned Indian subsidiary Company, viz., Next Gen Cylinder Private Limited
DIRECTORS AND KEY MANAGERIAL PERSONNEL (KMPs) RETIREMENT BY ROTATION
In accordance with the provisions of Section 152(6) of the Companies Act, 2013, Mr. Pushkar Khurana (DIN 00040489) will retire by rotation at the ensuing Annual General Meeting of the Company and being eligible, offers himself for re-appointment. The Board recommends his re-appointment.
APPOINTMENT AND CESSATION OF KMP
a. Mr. Kishore Thakkar resigned as Chief Financial Officer of the Company w.e.f. December 13, 2017;
b. Mr. Dinesh Bhalotia was appointed as Chief Financial Officer of the Company w.e.f December 14, 2017 and was removed on May 8, 2018.
c. Mr. Alok Bodas has resigned from the post of the Company Secretary and Compliance officer of the Company w.e.f March 8, 2018.
INDEPENDENT DIRECTOR DECLARATION
The Company has received necessary declaration from each Independent Director of the Company under Section 149(7) of the Companies Act, 2013 confirming that they fulfill criteria for independence as laid under Section 149(6) of the Act and Regulation 25 of the SEBI (Listing Obligation and Disclosures Requirements) Regulations, 2015 and there has been no change in the circumstances which may affect their status as an Independent Director during the year.
During the year, the Non-Executive Directors of the Company had no pecuniary relationship or transactions with the Company, other than sitting fees, commission, and reimbursement of expenses incurred by them for the purpose of attending meetings of the Company.
NUMBER OF BOARD MEETINGS DURING THE YEAR
During the year, four meetings of the Board of Directors were held, details are mentioned in Corporate Governance Report.
NOMINATION AND REMUNERATION POLICY
In accordance with the provisions of the Section 178 of the Companies Act, 2013 read along with the applicable Rules thereto and Regulation 19 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Company has formulated âNomination and Remuneration Policyâ containing criteria for determining qualifications, positive attributes, independence of a Director and other matters provided under section 178(3) of Companies Act, 2013 for selection of any Director, Key Managerial Personnel and Senior Management Employees.
The said policy is attached as Annexure 5 to this report and is available on the Companyâs website and the web link thereto is http://www.everestkanto.com/policies.html.
BOARD EVALUATION
The Board of Directors has carried out an annual evaluation of its own performance, Board Committees and individual Directors pursuant to the provisions of the Act and the corporate governance requirements as prescribed by the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements), Regulations 2015 (âSEBI Listing Regulationsâ).
The Company evaluated performance of the Board on the basis of criteria(s) such as the board composition and structure, effectiveness of board processes, information and functioning, etc. as mentioned in the Guidance Note on Board Evaluation issued by the Securities and Exchange Board of India on January 5, 2017.
The performance of the Committees was evaluated by the Board after seeking inputs from the Committee Members on the basis of criteria such as the composition of committees, effectiveness of committee meetings, etc.
The Board and the Nomination and Remuneration Committee reviewed the performance of individual Ddirectors on the basis of criteria such as the contribution of the individual Director to the Board and Committee Meetings like preparedness on the issues to be discussed, meaningful and constructive contribution and inputs in meetings, etc.
In a separate meeting of Independent Directors, performance of Non-Independent Directors and the Board as a whole was evaluated, taking into account the views of Executive Directors and Non-Executive Directors. The same was discussed in the Board Meeting that followed the meeting of the Independent Directors, at which the performance of the Board, its Committees, and individual Directors was also discussed. Performance evaluation of Independent Directors was done by the entire Board, excluding the Independent Director being evaluated.
SECRETARIAL STANDARD
The Directors declared that applicable Secretarial Standard i.e SS1 and SS2, relating to âMeetings of the Board of Directorsâ and âGeneral Meetingsâ respectively, has been duly followed.
DIRECTORSâ RESPONSIBILITY STATEMENT
Pursuant to Section 134(3) of the Companies Act, 2013, with respect to Directorsâ Responsibility Statement, it is hereby confirmed that:
i) In the preparation of the annual accounts for the year ended March 31, 2018, the applicable accounting standards have been followed and there are no material departure;
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 March 31, 2018 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
a) STATUTORY AUDITORS
In accordance with the provisions of Section 139(2) of the Companies Act, 2013 and the Companies (Audit and Auditors) Rules, 2014, the Members of the Company at their 35th Annual General Meeting held on August 2, 2014 had appointed M/s. Walker Chandiok & Co LLP, Chartered Accountants, as the Statutory Auditors of the Company for one term of five years to hold office from the conclusion of aforesaid Annual General Meeting till the conclusion of the Annual General Meeting to be held in the year 2018, subject to ratification by the shareholders at every Annual General Meeting.
In terms of provisions of Section 139(2) of the Companies Act, 2013, the Company proposes to appoint M/s. Walker Chandiok & Co LLP, Chartered Accountants for another term of five years, subject to approval of Members.
b) BRANCH AUDITORS
The Board of Directors of the Company at their Meeting held on May 30, 2018 re-appointed M/s. Arun Arora & Co., Chartered Accountants as Branch Auditors of the Company for financial year 2018-19. The Company has received a letter from M/s. Arun Arora & Co. to the effect that their reappointment, if made, for the financial year 2018-19, 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.
c) COST AUDITORS
The Board of Directors has appointed Mr. Vinayak B. Kulkarni, Cost Accountant, (Membership No. 28559) as the Cost Auditor under section 148 of the Companies Act, 2013, for conducting audit of cost records for the financial year 2017-18. 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, (Firm Registration No. 101319) as the Cost Auditor of the Company for the financial year 2017-18 on a remuneration of Rs. 2,25,000/- recommended by the Audit Committee and as required under the Act, the remuneration was ratified by the members at the Annual General Meeting held on September 27, 2017.
d) SECRETARIAL AUDITORS
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 2017-18. The Report of the Secretarial Auditor forms part of this Report as Annexure 1. There is one qualification in the Secretarial Audit Report.
STATUTORY AUDITORâS QUALIFICATIONSâ EXPLANATION
There are no qualifications in the Auditorâs Report & therefore there are no further explanations to be provided for in this Report.
SECRETARIAL AUDITORâS QUALIFICATIONâS EXPLANATION
The Company has executed Shareholdersâ Agreement with Brightwill Limited and TVG India Investment Holdings Limited (hereinafter referred to as âthe erstwhile shareholdersâ) on November 02, 2006 and November 19, 2007 respectively. The clauses of the aforesaid agreement have been incorporated in the Articles of Association of the Company as per the requirement of the said agreements.
As on March 31, 2017, the erstwhile shareholders have gradually sold their entire holdings during the year and hence the aforesaid Shareholdersâ Agreement stands redundant. Further, on the redundancy of such agreement, one of the Promoters of the Company has entered into the business of Fire Fighting Equipments during the year ended March 31, 2017.
However the Company has passed necessary resolution through postal ballot during the current financial year for alteration of the Articles of Association of the Company for removal of the clauses pertaining to the erstwhile shareholders, hence said qualification will not appear in their report again.
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
No Related Party Transactions (RPTs) were entered into by the Company during the financial year, which attracted the provisions of section 188 of the Companies Act, 2013. There being no âMaterialâ Related Party Transactions as defined under regulation 23 of SEBI Listing Regulations, 2015, there are no details to be disclosed in Form AOC-2 (Refer Annexure 3) in that regard.
During the year 2017-18, pursuant to section 177 of the Companies Act, 2013 and Regulation 23 of SEBI Listing Regulations, 2015, all RPTs were placed before the Audit Committee for its approval.
The Policy on Related Party Transactions framed under the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 is available on Companyâs website and web link 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 SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Report on Corporate Governance and the Certificate from a practicing Company Secretary on the Report as stipulated under SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 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 (CSR)
As the provisions of section 135 of Companies Act, 2013, the CSR Committee consists of Mr. P. K. Khurana, Mr. Pushkar Khurana and Ms. Uma Acharya. In terms of Section 135(5) of the Companies Act, 2013, the Company was not required to spend towards CSR activities. The Company has in place a CSR Policy which provides guidelines to conduct CSR activities of the Company. The CSR Policy is available on the website of the Company www.everestkanto.com.
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 2017-18:
Name of Directors |
Designation |
Remuneration of Directors* |
Median remuneration of Employees (Rs.) |
Ratio to median remuneration |
Mr. P.K. Khurana |
Chairman & Managing Director |
Nil |
235,525 |
Nil |
Mr. Pushkar Khurana |
Non-Executive Director |
Nil |
235,525 |
Nil |
Mr. Mohan Jayakar |
Independent Director |
90,500 |
235,525 |
0.38 |
Mr. Sudhindra Rao |
Independent Director |
170,500 |
235,525 |
0.72 |
Ms. Uma Acharya |
Independent Director |
170,500 |
235,525 |
0.72 |
* Remuneration to Directors during the financial year comprises solely of sitting fees for attending the meetings of Board of Directors and of the Committees thereof.
(b) Percentage increase in remuneration of each Director, Chief Financial Officer, Chief Executive Officer, Company Secretary or Manager, if any, in the Financial Year 2017-18:
Director, Chief Financial Officer, Chief Executive Officer and Company Secretary |
Designation |
% increase in remuneration in financial year |
Mr. P. K. Khurana |
Chairman & Managing Director |
0.0% |
Mr. Pushkar Khurana |
Non-Executive Director |
0.0% |
Mr. Mohan Jayakar |
Independent Director |
(35.36%) |
Mr. Sudhindra Rao |
Independent Director |
(5.28%) |
Ms. Uma Acharya |
Independent Director |
21.79% |
Mr. Kishore Thakkar # |
Chief Financial Officer |
0.0% |
Mr. Dinesh Bhalotia* |
Chief Financial Officer |
Not Applicable |
Mr. Puneet Khurana |
Chief Executive Officer |
67.00% |
Mr. Alok Bodas** (upto March 8, 2018) |
Company Secretary |
0.0% |
# Mr Kishore Thakkar ceased to be Chief Financial Officer as on December 13, 2017
* Mr. Dinesh Bhalotia was appointed as Chief Financial Officer on December 14, 2017 and removed on May 8, 2018.
** Mr. Alok Bodas resigned as Company Secretary and Compliance Officer of the Company on March 8, 2018.
(c) Percentage increase in the median remuneration of employees in the financial year 2017-18: 10.37%
(d) Number of permanent employees on the rolls of Company: 485
(e) 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 2017-18 is 10.16% whereas the percentile increase in the managerial remuneration during the year is 11.00%.
(f) Affirmation that the remuneration is as per the remuneration policy of the Company.
The Company affirms remuneration is as per the remuneration policy of the Company.
(g) Name of top 10 employee of Company, who were employed throughout the financial year, was in receipt of remuneration for that year which, in the aggregate, was not less than One Crore and two Lakhs Rupees per financial year - Annexure 7.
(h) Name of top 10 employee of Company, who were employed for part of year, was in receipt of remuneration for that period which, in the aggregate, was not less than eight lakhs fifty thousand rupees per month.
Nil
(i) 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 wholetime 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:
Nil
DISCLOSURE UNDER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL)
The Company is committed and dedicated in providing a healthy and harassment free work environment to every individual of the Company. A work environment that does not tolerate sexual harassment. We highly respect dignity of everyone involved at our work place, whether they are employees, suppliers or our customers. We require all employees to strictly maintain mutual respect and positive attitude towards each other. The said policy is attached as Annexure 6 to the report.
Number of complaints pending as on the beginning of the financial year - Nil
Number of complaints filed during the financial year- Nil
Number of complaints pending at the end of the financial year-Nil
LISTING OF SECURITIES
The Equity shares of the Company are listed on the Stock Exchanges viz. BSE Limited and National Stock Exchange of India Limited.
ACKNOWLEDGEMENT AND APPRECIATION
The Board of Directors 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
Chairman & Managing Director
Place: Mumbai
Date: August 13, 2018
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-Ã -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
à 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 à à 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 Ã 83.96 Ã
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 AÃ 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 BÃ 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 assetÃs 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 PeopleÃs 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 (ÃCC&LÃ).
During the year under review, there has been a change in the status of
CC&L from ÃPrivateà to ÃPublicà 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 (ÃTVGÃ), 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 (Ãthe AgreementÃ). 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
CompanyÃs financial discipline and prudence.
DIRECTORSÃ RESPONSIBILITY STATEMENT
Pursuant to the requirement under Section 217(2AA) of the Companies
Act, 1956, with respect to Directorsà 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 Ãgoing concernà 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 CompanyÃs 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 AUDITORSÃ 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 Auditorsà 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 ÃAnnexure AÃ 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 ÃAnnexure BÃ 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
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