CORPORATE GOVERNANCE REPORT
COMPANY'S PRACTICE ON CORPORATE GOVERNANCE
Corporate Governance is the combination of practices and compliance with laws and regulations leading to effective control and management of the Organization. We consider stakeholders as our partners in our success and remain committed to maximizing stakeholder value. Good Corporate Governance leads to long term stakeholder value. Corporate Governance rests upon the four pillars of transparency, disclosure, monitoring and fairness to all. Your Company is committed to the adoption of and adherence to the best Corporate Governance practices at all times and continuously benchmarks itself with the best standards of Corporate Governance, not only in form but also in spirit.
1. BOARD OF DIRECTORS
The Company has a high profile Board with varied management expertise. The Board's roles, functions, responsibilities and accountabilities are known to them due to their vast experience. Notice, Agenda and Minutes of the Board Meetings/Committee Meetings are circulated to the Directors well in advance and confirmed at the subsequent meetings.
(A) Composition of Board
The present Board of the Company consists of eight Directors of which three are Executive Directors and five are Non-Executive Directors including one woman Director. Out of five Non-Executive Directors, four are Independent Directors. The Company has an appropriate size of the Board for real strategic discussion and avails benefit of diverse experience and viewpoints.
(B) Non-Executive Directors' compensation and disclosures
The Non-Executive Directors are paid sitting fee as well as commission within the limits prescribed under Section 197(1) of the Companies Act, 2013. No stock options were granted to Non-Executive Directors during the year under review. The NonExecutive Directors did not have any material pecuniary relationship or transactions with the Company except the payment of sitting fees and commission to them during the year 2015-16.
Independent Directors are not serving as Independent Directors in more than seven listed companies.
The Directors of the Company who holds the position as Whole Time Director in the Company do not serve as Independent Director in more than three listed companies.
(C) Other provisions as to Board and Committees
The Board comprises of Mr. A.V. Somani as Executive Chairman, Mr. Manish Sanghi as Managing Director, Mr. Y. Srinivasa Rao as Executive Director and Mr. M.L. Gupta as Non Executive Director. Mr. M.L. Narula, Mr. Amitabh Das Mundhra, Mr. B.L. Taparia and Mrs. Bhavna G. Doshi are Independent Directors.
During the year 2015-16, five meetings of the Board of Directors were held on 22nd April, 2015, 15th July, 2015, 20th October, 2015, 13th January, 2016 and 30th March, 2016 with clearly defined agenda, circulated well in advance before each meeting. The maximum time gap between any two consecutive meetings did not exceed 120 days.
None of the Directors on the Board are Members of more than 10 Committees or Chairman of more than 5 Committees across the Companies in which they are Directors. Necessary disclosures regarding Committee positions in other public Companies as on 31st March, 2016 have been made by the Directors as per Regulation 26(2) of the SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015.
Details of attendance of Directors at Board Meetings held during the period under review and at the last Annual General Meeting held on 26th August, 2015, with particulars of their Directorships and Chairmanship/Membership of Board Committees of other public limited companies showing the position as on 31st March, 2016 are given below:
(D) Code of Conduct
The Board of Directors has adopted and laid down the Code of Conduct for all Directors and Senior Management Personnel, which comprises of members of Management one level below the Executive Director, including all Functional, Works and Zonal Heads. The Code is posted and available at the website of the Company www.everestind.com
The members of the Board and Senior Management personnel have affirmed the compliance with the Code applicable to them during the year ended on 31st March, 2016. The Annual Report of the Company contains a declaration by the Managing Director in terms of para D of Schedule V of the Securities and Exchange Board of India (Listing Obligations & Disclosure Requirements) Regulations, 2015 based on the compliance declarations received from the Board and Senior Management.
(E) Performance Evaluation
Pursuant to the provisions of the Companies Act, 2013 and Securities and Exchange Board of India (Listing Obligations & Disclosure Requirements) Regulations, 2015, the Board has carried out the annual performance evaluation of its own performance, the Directors individually as well as the evaluation of the working of its Board Committees. A structured questionnaire was prepared after circulating the draft forms, covering various aspects of the Board's functioning such as adequacy of the composition of the Board and its Committees, Board culture, execution and performance of specific duties, obligations and governance.
The performance evaluation of the Independent Directors was done by the entire Board excluding the Directors being evaluated. The performance evaluation of the Chairman, Board as a whole and the Non-Independent Directors was carried out by the Independent Directors. The Board of Directors expressed their satisfaction with the evaluation process.
(F) Familiarization Programmes for Board Members
Periodic presentations are made at the Board and Committee Meetings of Board, on business and performance updates of the Company. The Familiarization Programme Module and details of Familiarisation Programme organised during the financial year 2015-2016 are available on the Company's website at the link : <http://www.everestind.com/about-us/board-directors>.
2. BOARD COMMITTEES
The Board has constituted four Committees namely Audit Committee, Stakeholders Relationship Committee, Nomination and Remuneration Committee and Corporate Social Responsibility Committee.
2.1 AUDIT COMMITTEE
(A) Qualified and Independent Audit Committee
The Company complies with Section 177 of the Companies Act, 2013 as well as requirements under Listing Agreement/ Securities and Exchange Board of India (Listing Obligations & Disclosure Requirements) Regulations, 2015 pertaining to the Audit Committee. The Audit Committee presently consists of four Non-Executive Directors, out of which three are Independent Directors. All members of the Committee are financially literate and having the requisite financial management expertise. The Chairman of the Audit Committee is an Independent Director. The Chairman of the Audit Committee was present at the last Annual General Meeting held on 26th August, 2015.
(B) Terms of Reference
The Committee has its Charter. The brief description of terms of reference of the Audit Committee is mentioned below:
• Oversight of the Company's financial reporting process and the disclosure of its financial information;
• Recommendation for appointment, remuneration and terms of appointment of auditors of the Company;
• Approval of payment to statutory auditors for any other services rendered by them.
• Reviewing with the management, the annual financial statements and auditor's report thereon.
• Matters required to be included in the Director's Responsibility Statement to be included in the Board's Report.
• Changes, if any, in accounting policies and practices and reasons for the same.
• Major accounting entries involving estimates based on the exercise of judgment by management.
• Significant adjustments made in the financial statements arising out of audit findings.
• Compliance with listing and other legal requirements relating to financial statements.
• Approval of the related party transactions as per policy of the Company.
• Review and monitor the auditor's independence and performance, and effectiveness of audit process.
• Scrutiny of inter-corporate loans and investments.
• Evaluation of internal financial controls and risk management systems.
• Reviewing with the management, performance of statutory and internal auditors, adequacy of the internal control systems.
• Reviewing the adequacy of internal audit function, if any, including frequency of internal audit.
• Discussion with internal auditors of any significant findings and follow up there on.
• Reviewing the findings of any internal observations by the internal auditors into matters where there is irregularity or a failure of internal control systems of a material nature and reporting the matter to the board.
• Discussion with statutory auditors before the audit commences, about the nature and scope of audit as well as post-audit discussion to ascertain any area of concern.
• To review the functioning of the Vigil mechanism.
• Management discussion and analysis of financial condition and results of operations
2.2 STAKEHOLDERS RELATIONSHIP COMMITTEE
Stakeholders Relationship Committee comprises of Mr. M.L. Gupta (Chairman), Mr. A.V. Somani (Member) and Mr. Manish Sanghi (Member).
(B) Terms of Reference
i. To consider and resolve the grievances of Security holders of the Company
ii. To approve applications for transfer, transmission, transposition of shares and mutation of share certificates including issue of duplicate certificates, split, sub-division or consolidation of certificates and to deal with all related matters.
iii. To look into and redress the Shareholders / investors grievances relating to:
a. Transfer of shares;
b. Non-receipt of dividends;
c. Non-receipt of annual reports; and
d. Any other complaint concerning the Shareholders / investors
iv. The Committee will oversee the performance of the Registrars and Share Transfer Agents of the Company.
v. Such other matters as may from time to time be required by any statutory or regulatory authority to be attended by the Committee;
vi. Consider other matters, as from time to time be referred to it by the Board
2.3 NOMINATION AND REMUNERATION COMMITTEE
The Nomination and Remuneration Committee comprises of Mr. M.L. Narula (Chairman), Mr. M.L. Gupta (Member), Mr. Amitabh Das Mundhra (Member) and Mr. B.L. Taparia (Member).
(B) Terms of reference
The Terms of Reference of Nomination and Remuneration Committee inter-alia includes:
a) To identify persons who are qualified to become Directors and who may be appointed in senior management in accordance with the criteria laid down, recommend to the Board their appointment and removal and to carry out evaluation of every Directors' performance.
b) Formulation of the criteria for determining qualifications, positive attributes and independence of the Director and recommend to the Board a policy, relating to the remuneration of the Directors, Key Managerial Personnel and other employees.
c) Determine/ review on behalf of Board of Directors of the Company the compensation package, service agreements and other employment conditions for Managing/Whole Time Director(s).
d) Determine on behalf of the Board of Directors of the Company the quantum of annual increments/incentives on the basis of performance of the Key Managerial Personnel.
e) Formulate, amend and administer stock options plans and grant stock options to Managing / Whole Time Director(s) and employees of the Company.
f) Delegate any of its power/ function as the Committee deems appropriate to Senior Management of the Company.
g) Consider other matters, as from time to time be referred to it by the Board.
(D) Remuneration policy
The Remuneration policy of your Company is a comprehensive policy which is competitive, in consonance with the industry practices and rewards good performance of the employees of the Company. The policy ensures equality, fairness and consistency in rewarding the employees on the basis of performance against set objectives. The Company endeavors to attract, retain, develop and motivate a high performance workforce. The Company follows a compensation mix of fixed and variable pay. Individual performance pay is determined by business performance and the performance of the individuals measured through the annual appraisal process. The Nomination, Remuneration and Board Diversity Policy of the Company is attached to the Board's Report as Annexure 5.
(F) Details of Remuneration of Non-Executive Directors for the Financial Year 2015-16
The Non-Executive Directors are entitled to sitting fee for attending the Board/ Committee Meetings. The Non-Executive Directors are paid Sitting Fees at the rate of Rs. 40,000/- for each Board Meeting; Rs. 20,000/- for each Audit Committee Meeting; Rs. 10,000/- for each Nomination and Remuneration Committee Meeting/Corporate Social Responsibility Committee Meeting and Rs. 5,000/- for each Stakeholder Relationship Committee Meeting
2.4 CORPORATE SOCIAL RESPONSIBILITY COMMITTEE
The Corporate Social Responsibility Committee comprises of Mr. A.V. Somani (Chairman), Mr. M.L. Gupta (Member), Mr. M.L. Narula (Member), Mr. Manish Sanghi (Member) and Mr. Y. Srinivasa Rao (Member).
(B) Terms of Reference
i) To formulate and recommend to the Board, a Corporate Social Responsibility Policy which shall indicate the activity or activities to be undertaken by the Company as per the Schedule VII of the Companies Act, 2013.
ii) To recommend the amount of expenditure to be incurred on the activities related to CSR; and
iii) To monitor the Corporate Social Responsibility Policy of the Company from time to time.
3. Independent Directors Meeting
Independent Directors are regularly updated on the performance of the Company, strategy going forward and new initiatives being taken/proposed to be taken by the Company. The Independent Directors Mr. M.L. Narula, Mr. B. L. Taparia and Mrs. Bhavna G. Doshi met on 30th March, 2016 without the attendance of non independent directors and members of the management to:
(i) Review the performance of non-independent directors and the Board as a whole;
(ii) Review the performance of the Chairman of the Company, taking into account the views of executive directors and non-executive directors;
(iii) Assess the quality, quantity and timelines of flow of information between the company management and the Board that is necessary for the Board to effectively and reasonably perform their duties.
Mr. Amitabh Das Mundhra was granted leave of absence.
4.1 Subsidiary Company
i) The Company has one wholly owned subsidiary company in India viz. Everest Building Solutions Limited.
(ii) The Company has three foreign subsidiaries viz., Everest Building Products in Mauritius, Everestind FZE in Jebel Ali Free Zone, Dubai, UAE and Everest Building Products LLC in Ras Al Khaimah, UAE.
4.2 Basis of related party transactions
The particulars of transactions between the Company and its related parties are as per the Accounting Standard 18 "Related Party Disclosure" prescribed by the Companies (Accounting Standards) Rules, 2006 are disclosed in the Annual Accounts (Note No. 2.32). There were no transactions with related parties during the year, which were not in the normal course of business as well as not on an arm's length basis. Further, no related party transaction have been taken place which is materially significant or that may have potential conflict with the interests of the Company at large.
4.3 Disclosure of Weblink of Policy for Determining Material Subsidiaries and Policy on Dealing with Related Party Transactions
As required by Securities and Exchange Board of India (Listing Obligations and Disclosures Requirements) Regulations, 2015, web link of the website of the company where members can view or download Policy for determining Material Subsidiaries is <http://> www.everestind.com/sites/default/files/pdfs/Material%20Subsidiary%20Policy.pdf and for Policy on dealing with related party transactions is <http://www.everestind.com/sites/default/files/pdfs/Related%20Party%20Transaction%20policy%201.10.2014.pdf>
4.4 Risk Management
The Company has Risk Management Policy to mitigate the risks. The Company manages and monitors the principal risks and uncertainties that can impact its ability to achieve its strategic objectives. The Internal Auditor of the Company prepares quarterly risk analysis reports which are reviewed and discussed in the Board Meetings.
4.5 Proceeds From Public Issues, Right Issues, Preferential Issues Etc.
During the Financial Year ended 31st March, 2016, the Company has not raised any money from public issues, right issues, preferential issues etc.
4.6 Management Discussion and Analysis Report
The Management Discussion and Analysis Report have been included separately in this Annual Report.
4.7 Vigil Mechanism Policy
The Vigil Mechanism of the Company, which also incorporates a Whistle Blower Policy in terms of the SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015 for directors and employees to report concerns about unethical behaviour, actual or suspected fraud. Protected disclosures can be made by a whistle blower in writing to the Ombudsman and under the said mechanism no person has been denied direct access to the chairperson of the Audit Committee.
The Company has introduced a Vigil Mechanism helpdesk on "E-connect" which is Company's Intranet wherein employees of the Company can raise their complaints on E-connect which will directly go to Ombudsman. The Whistle Blower has the option to keep his identity confidential on vigil mechanism helpdesk.
4.8 Commodity Price Risk or Foreign Exchange Risk and Hedging Activities
The Board is reported about the foreign exchange exposures on a quarterly basis. The Company has managed the foreign exchange risk and hedged to the extent considered necessary. The Company enters into forward contracts for hedging foreign exchange exposures against exports and imports. The details of foreign currency exposure are disclosed in Note No. 2.28 to the Annual Accounts. The Company purchases commodities like chrysotile fibre, cellulose pulp, cement and various grades of steel. The Company enters into long term contracts for some of them.
4.9 There is no non-compliance by the Company and no penalty, stricture imposed on the Company by Stock Exchange(s) or SEBI or any Statutory Authority on any matter related to capital markets, during the last three years.
4.10 Company is in compliance with the mandatory requirements in respect of Corporate Governance to the extent applicable as required under Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015.
4.11 The Adoption of non-mandatory requirements under regulation 27(1) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 are reviewed by the Board from time to time. The Company has appointed separate persons to the post of Chairman and Managing Director.
(i) The quarterly results and presentations made by the Company to analysts are put on the Company's website www.everestind.com
(ii) The Company has sent Annual Report through email to those Shareholders who have registered their email ids with Depository Participant and with the Registrar and Share Transfer Agent of the Company who are holding their shares in physical form.
6. MEANS OF COMMUNICATION
The Quarterly/Annual Financial Results of the Company are forwarded to The BSE Limited and to The National Stock Exchange of India Limited where the Company's shares are listed and published in Business Standard, Mumbai & Sakal, Nashik and are displayed on the Company's website www.everestind.com Official press releases, presentations to analysts and institutional investors and other general information about the Company are also available on the Company's website.
7. PREVENTION OF INSIDER TRADING
In compliance with the SEBI (Prohibition of Insider Trading) Regulations, 2015, the Company has adopted Code of Practices and procedures for Fair Disclosure and Code of conduct to regulate, monitor and reporting trading by insiders. The codes advise procedures to be followed and disclosures to be made, while dealing in shares of the Company and cautioning them on consequences of non-compliances.
8. COMPLIANCE CERTIFICATE BY CEO/CFO
The Managing Director and the Chief Financial Officer of the Company give annual certification on financial reporting and internal controls to the Board in terms of Regulation 17(8) of SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015. The Managing Director and the Chief Financial Officer also give quarterly certification on financial results while placing the financial results before the Board in terms of Regulation 33 of SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015. The annual certificate given by the Managing Director and the Chief Financial Officer is published in this Report.
11. GENERAL SHAREHOLDER'S INFORMATION
Annual General Meeting Day, Date, Time and Venue :
Wednesday, 29th June, 2016, at 11.00 a.m. at GAT 152, Lakhmapur, Taluka Dindori, Nashik-422202 (Maharashtra)
Financial Year : 1st April, 2015 to 31st March, 2016
Dates of Book Closure : 23rd June, 2016 to 29th June, 2016 (both days inclusive)
Posting of Annual Report : On or before 4th June, 2016.
Dividend : Rs. 5/- per equity share of face value of Rs. 10/- each.
Dividend Payment date : Dividend, if any, declared in the forthcoming 83rd Annual General Meeting will be paid on or before 15th July, 2016.
Unclaimed/Unpaid Dividend for the previous years.
The Company is required to transfer dividends which have remained unpaid/ unclaimed for a period of seven years to the Investor Education & Protection Fund established by the Government. Unclaimed/ unpaid dividend for the year 31st March, 2008 has been transferred to the Investor Education & Protection Fund established by the Government. The Company will transfer the dividend for the year ended 31st March, 2009, which have remained unclaimed to the said fund in September, 2016.
Members who have not encashed their dividend warrants for the Financial Year 2009-2010 & onwards may approach the Company for obtaining demand draft in lieu of unpaid dividend warrant.
a) Unaudited Financial Results for the quarter ending 30th June, 2016, Quarter and half year ending 30th September, 2016, Quarter and nine months period ending 31st December, 2016.
Within 45 days from the end of each quarter as stipulated under SEBI (Listing Obligations & Disclosures Requirements) Regulations, 2015.
b) Audited Financial Results for the quarter/ year ending March 31, 2017.
Within 60 days from the end of the last quarter/year as stipulated under SEBI (Listing Obligations & Disclosures Requirements) Regulations, 2015.
Listing of Equity Shares
BSE Limited & The National Stock Exchange of India Limited at Mumbai. The Listing fees for the Financial Year 2015-16 has been paid to the Exchanges.
Corporate Identification Number (CIN) of the Company : L74999MH1934PLC002093
12. STOCK CODE
BSE Limited : 508906
National Stock Exchange of India Limited : EVERESTIND
ISIN of the CompanyINE295A01018
14. REGISTRAR & SHARE TRANSFER AGENT (RTA)
M/s MCS Share Transfer Agent Limited F-65, First Floor, Okhla Industrial Area, Phase - I, New Delhi-110020 Phone No. 011-41406149, 41406151, 41406152 Fax No. 011-41709881
15. SHARE TRANSFER SYSTEM
All the requests received from Shareholders for transfer, transmission etc. are processed by the Share Transfer Agent of the Company within the stipulated time as prescribed in the SEBI (Listing Obligations & Disclosures Requirements) Regulations, 2015 or in any other applicable law.
16. PERMANENT ACCOUNT NUMBER (PAN)
Members who hold shares in physical form are advised that SEBI has made it mandatory that a copy of the PAN card of the transferee/s, members, surviving joint holders/legal heirs be furnished to the Company while obtaining the services of transfer, transposition and transmission of shares
18. OUTSTANDING GDRS/ADRS/WARRANTS OR ANY CONVERTIBLE INSTRUMENTS, CONVERSION DATE AND LIKELY IMPACT ON EQUITY
The Company has not issued any GDRs/ADRs/Warrants or any convertible instruments.
19. DEMATERILIZATION OF SHARES
98.17% of the Equity Shares of the Company have been dematerialised as on 31st March, 2016. The Company's shares can be traded only in dematerialised form as per SEBI notification. The Company has entered into an agreement with NSDL and CDSL whereby shareholders have the option to dematerialize their shares with either of the depositories. The Company's shares are regularly traded on BSE and NSE.
20. NOMINATION FACILITY FOR SHAREHOLDERS
As per the provisions of the Companies Act, 2013, facility for making nomination is available for Members in respect of shares held by them. Those Members who hold shares in physical form may obtain nomination form from the Company Secretary at D-206, Sector-63, Noida-201301 or download the same from the Company's website www.everestind.com
21. RECONCILIATION OF SHARE CAPITAL
As stipulated by SEBI, a qualified Practicing Company Secretary carries out audit of Reconciliation of Share Capital to reconcile the share capital held with Depositories (i.e. NSDL & CDSL) in dematerialised form and share capital held in physical form with the total issued and listed share capital of the Company.
22. PAYMENT OF DIVIDEND THROUGH ELECTRONIC CLEARING SERVICE
The Securities and Exchange Board of India (SEBI) has made it mandatory for all Companies to use the bank account details furnished by the depositories for depositing dividend through Electronic Clearing Service (ECS) to the Investors wherever ECS and bank details are available. Those Members who hold shares in physical form may obtain mandate form for payment of dividend through Electronic Clearing Service (ECS) from Company Secretary at D-206, Sector-63, Noida-201301 or download the same from the Company's website www.everestind.com
Kymore Works Everest Nagar, P.O. Kymore Dist. Katni - 483880 Madhya Pradesh
Lakhmapur Works Gat 152, Lakhmapur Taluka Dindori, Nashik - 422202 Maharashtra
B hagwanpur Works 158 & 159, Lakesari, Pargana Bhagwanpur Tehsil Roorkee - 247661 Uttarakhand
Ranchi Works Sarwal Namkum, Opp. Tola - Charna Bera Ranchi - 834010 Jharkhand
Kolkata Works 1, Taratola Road, Garden Reach Kolkata - 700024 West Bengal
Podanur Works Podanur P.O. Coimbatore - 641023 Tamil Nadu
Somnathpur Works Z5, IID Centre, Somnathpur Tehsil Remuna, Dist. Baleshwar - 756019 Odisha
Narmada Works E-68, GIDC Dahej-3, Dahej, Dist. Bharuch-392130 Gujarat
24. ADDRESS FOR CORRESPONDENCE
a) For any complaints relating to non-receipt of shares after transfer, transmission, change of address, mandate etc., dematerialization of shares or any other query relating to shares shall be forwarded to the Share Transfer Agents directly at the address given hereunder. Members are requested to provide complete details regarding their queries quoting folio number/DP ID no./Client ID No., number of shares held etc.
M/s. MCS Share Transfer Agent Ltd. (Unit: Everest Industries Limited) F-65, First Floor, Okhla Industrial Area, Phase - I, New Delhi-110020. Tel : 011-41406149, 41406151, Fax : 011-41709881 Email: email@example.com
b) For any query on any point in Annual Report, non-receipt of Annual Report, non-receipt of dividend etc., the complaint should be forwarded to the kind attention of Mr. Neeraj Kohli, Company Secretary & Head-Legal, Compliance Officer of the Company at the following address:
Everest Industries Limited, D-206, Sector-63, Noida - 201 301 (UP) Tel.: 0120- 4791800 Fax No.: 0120 - 4791802 Members can also register their complaints at firstname.lastname@example.org, an exclusive email ID, designated by the Company for the purpose of registering complaints by investors, in compliance of Regulation 6(2)(d) of SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015.
For Everest Industries Limited
Place : Delhi
Date : 29th April, 2016