Everest Kanto Cylinder

The Directors are pleased to present the 29th Annual Report together
 with the audited accounts for the year ended 31st March, 2008.
 
 FINANCIAL RESULTS
 
 The financial performance of the Company for the Financial Year ended
 31st March, 2008 is summarized below:
 
                                                         (Rs. In Lacs)
 
 Particulars                       Standalone          Consolidated
 
                              2007-08     2006-07   2007-08      2006-07
 
 Sales                      38,001.80   35,516.17 57,516.34    44,964.18
 
 Less: Excise Duty           4,642.21    2,459.16  4,642.21     2,459.16
 
 Net Sales                  33,359.59   33,057.01 52,874.13    42,505.02
 
 Profit before Interest, 
 Depreciation and Tax        9,618.82    9,042.58 16,063.51    11,678.15
 
 Less:
 
 - Interest and Finance 
   Charges                    483.393       29.26    709.78      365.97
 
 -Depreciation               1,632.27    1,646.90  2,149.13    1,777.96
 
 Profit before Tax           7,503.16    7,066.42 13,204.60    9,534.22
 
 Less/(Add): Provision for 
 Taxation
 
 - Current                   1,751.50    2,450.00  1,751.50    2,450.00
 
 - Deferred                    647.44     (130.91)   647.44     (130.91)
 
 - Fringe Benefit               27.20       40.00     27.20       40.00
 
 Profit after Tax            5,077.02    4,707.33 10,778.46    7,175.13
 
 Balance brought forward     4,463.45    2,911.40  7,946.47    2,911.40
 
 Less/(Add): Prior period 
 adjustment and Tax
 adjustment of earlier years   350.97       (1.93)   350.97       (1.93)
 
 Available for appropriation 9,189.50    7,620.66 18,373.96   10,088.46
 
 Appropriations
 
 Proposed Dividend           1,213.89      976.10  1,213.89      976.10
 
 Tax on Proposed Dividend      206.30      165.89    206.30      165.89
 
 Transfer to Capital Reserve     -       1,015.22      -           -
 
 Transfer to General Reserve 1,000.00    1,000.00  1,000.00    1,000.00
 
 Balance carried forward     6,769.31    4,463.45 15,953.77    7,946.47
 
 Basic and Diluted earning 
 per share of Rs. 2 each 
 (in Rupees)*                    4.78        5.12     10.54       7.80
 
 * Calculated on weighted average number of shares.
 
 OPERATIONS
 
 During the year, your Company has scaled new heights and set several
 new benchmarks in terms of sales, profits, networth and assets. The
 Company has effectively capitalized opportunities presented by a
 favourable market through its product profile, strengthening its
 operational excellence practices and further extending its market
 reach. During the year, the total consolidated sales volume of
 cylinders increased to 646,490 nos. as against
 
 471,873 nos. in the previous year. Consolidated Net Sales increased to
 a level of Rs. 52,874 Lacs as compared to Rs. 42,505 Lacs in the
 previous year, registering an impressive growth of 24% mainly aided by
 improved CNG cylinder sales and a better product mix.
 
 The year under review also saw consolidated export revenues grow by 38%
 from a level of Rs. 22,249 Lacs in the previous year to a level of Rs.
 30,678 Lacs. Consolidated Profit before Tax was
 
 at Rs. 13,204 Lacs as against Rs. 9,534 Lacs registering an increase of
 38%. Consolidated Profit after Tax was at Rs. 10,427 Lacs which is
 higher by 45% as compared to that of the previous year, mainly on
 account of overall improvement in sales performance and continuing
 efforts to control costs and improve profitability. The rapid growth in
 international business also contributed towards the overall
 profitability of the Company.
 
 OUTLOOK
 
 Your Company has consolidated its position as the market leader in High
 Pressure Cylinders in India and is ideally positioned towards attaining
 leadership status globally in the coming years.  Your Directors are
 hopeful of sustaining the Companys growth trajectory to enable it to
 continue its dominant status in the marketplace.
 
 DIVIDEND
 
 Your Directors have recommended a dividend @ 60% i.e., Rs. 1.20 per
 equity share of face value Rs. 2 each (last year @ 50% i.e., Rs. 5 per
 equity share of face value Rs. 10 each) on the expanded capital, for
 the financial year ended 31st March, 2008.  If approved, by the
 shareholders at the ensuing Annual General Meeting, the dividend will
 absorb approximately Rs. 1,420 Lacs (inclusive of Dividend Distribution
 Tax) to be borne by the Company.
 
 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 performance, keeping in view the Companys need for
 capital for its growth plans and the intent to finance such plans
 through internal accruals to the maximum.
 
 SUB-DIVISION OF EQUITY SHARES
 
 To facilitate easy accessibility to the Companys equity shares by the
 investors and enhance liquidity of the Companys shares on the Stock
 Exchanges, the Company has sub-divided its one equity share of Rs. 10
 each into five equity shares of Rs. 2 each, which was approved by the
 members at the Twenty Eighth Annual General Meeting of the Company held
 on 3rd July, 2007.  Accordingly, 28th August, 2007 was fixed as Record
 Date for the purpose of determining the shareholders, who would be
 entitled to receive the sub-divided equity shares. The Company had
 after completing all corporate actions, debited the demat account of
 respective shareholders holding equity shares of Rs. 10 each, in demat
 form represented by ISIN:INE184H01019 and given credit for shares of
 Rs. 2 each, represented by new ISIN:INE184H01027.  In caseof shares
 held in physical form, the Company had dispatched the new certificates
 for equity shares of Rs. 2 each to all those shareholders who hold
 their shares in physical form.
 
 ISSUE OF FOREIGN CURRENCY CONVERTIBLE BONDS
 
 Pursuant to the approval accorded by the members at the Twenty Eighth
 Annual General Meeting held on 3rd July, 2007, the Company had in
 October 2007 raised US $ 35 million
 
 (approximately Rs. 13,944 Lacs) through an issue of Zero Coupon Foreign
 Currency Convertible Bonds (FCCBs). The FCCBs are listed on Singapore
 Exchange Securities Trading Limited (a wholly owned subsidiary of
 Singapore Exchange Limited) and are convertible into fully paid up
 equity shares of the Company at any time on or after 19th November,
 2007 up to the close of business on 3rd October, 2012 at the option of
 the Bondholder at the conversion price of Rs. 303.36 per share.
 
 PREFERENTIAL ALLOTMENT
 
 Pursuant to the approval accorded by the members at the Extraordinary
 General Meeting held on 7th November, 2007, your Company had raised
 around Rs. 8,870 Lacs by allotment of 3,200,000 equity shares to TVG
 India Investment Holdings Limited and 348,027 equity shares to
 Brightwill Limited on a preferential basis at Rs. 250/- per equity
 share (including a premium of Rs. 248/- per share) on 21st November,
 2007. The Objects of the preferential issue were to finance the
 expansion plans of the Company in India and for working capital
 purposes.
 
 SHIFTING OF REGISTERED OFFICE
 
 With effect from 8th April, 2008, the Registered Office of the Company
 has been shifted from 501, Raheja Centre, Free Press Journal Marg, 214,
 Nariman Point, Mumbai-400 021 to 204, Raheja Centre, Free Press Journal
 Marg, 214, Nariman Point, Mumbai- 400021, falling under the same
 jurisdiction and within the local limits of the town, where the
 registered office of the Company was previously situated.
 
 SUBSIDIARIES
 
 As on 31st March, 2008 the Company had two wholly owned subsidiary
 companies, viz., EKC International FZE in Dubai, UAE and EKC Industries
 (Tianjin) Co. Ltd. in Peoples Republic of China.
 
 The statement pursuant to Section 212 of the Companies Act, 1956,
 containing details of the two subsidiaries is attached. In terms of
 approval granted by the Central Government under Section 212(8) of the
 Companies Act, 1956, copy of the Balance Sheet, Profit and Loss
 Account, Reports of the Board of Directors and Auditors of the two
 subsidiaries have not been attached with the Balance Sheet of the
 Company. These documents will be made available upon request by any
 Member of the Company interested in obtaining the same. Further,
 pursuant to Accounting Standard AS-21 issued by the Institute of
 Chartered Accountants of India, Consolidated Financial Statements
 presented by the Company includes financial information of its
 subsidiaries.
 
 In October 2007, EKC International FZE, the wholly owned subsidiary of
 the Company in Dubai successfully commissioned the second plant in
 Dubai which resulted in doubling the existing capacity of the
 subsidiary to 196,000 cylinders per annum.
 
 EKC Industries (Tianjin) Co. Ltd., the wholly owned subsidiary of the
 Company in Peoples Republic of China has successfully completed the
 trial production phase and commercial production commenced during the
 first week of May, 2008. The initial production capacity of the unit is
 around 2,00,000 cylinders.
 
 FORMATION OF STEP DOWN SUBSIDIARIES
 
 During April 2008, EKC International FZE, wholly owned subsidiary of
 the Company in UAE has formed a wholly owned subsidiary (WOS) in
 Hungary by the name of EKC Hungary Kft.
 
 Further EKC Hungary Kft has invested in the entire share capital of CP
 Industries Holdings, Inc. which had been incorporated in the State of
 Delaware, USA by virtue of which CP Industries Holdings, Inc. has
 become the WOS of EKC Hungary Kft.
 
 ACQUISITION
 
 During April 2008, EKC group successfully completed the acquisition
 process and acquired all the assets of CP Industries, Inc., a division
 of Reunion Industries, Inc., USA (CPI) located in McKeesport,
 Pittsburgh, USA. CPI manufactures and sells large seamless pressure
 vessels for the containment and transportation of pressurized gases and
 is a global leader in this business. All the tangible and intangible
 assets of CPI have been acquired by CP Industries Holdings, Inc. and
 EKC Hungary Kft respectively, the step down subsidiary companies of the
 Company. The acquisition gives EKC an entry into the global markets for
 large seamless pressure vessels.
 
 ISO CERTIFICATION
 
 The Company continues to maintain the certificate under ISO 9001:2000
 for Quality Management at two of its plants in India located at
 Aurangabad and Tarapur as well as its Subsidiarys plant in Dubai,
 U.A.E.
 
 FIXED DEPOSITS
 
 The Company has not accepted any fixed deposits during the year under
 review.
 
 DIRECTORS
 
 As per the provisions of Article 137 of the Articles of Association of
 the Company, Mr. Pushkar Khurana, Mr. Naresh Oberoi and Mr. Vyomesh
 Shah are retiring by rotation and being eligible offer themselves for
 re-appointment at the Twenty Ninth Annual General Meeting. The Board of
 Directors has recommended their re-appointment for consideration of the
 shareholders.
 
 With effect from 1st January, 2008, Mr. Pushkar Khurana ceased to be
 Whole-Time Director. However, he continues to function as a Non -
 Executive Director of the Company.
 
 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.
 
 DIRECTORS RESPONSIBILITY STATEMENT
 
 In terms of section 217(2AA) of the Companies Act, 1956 your Directors
 have:
 
 a) followed in the preparation of the Annual Accounts, the applicable
 accounting standards along with proper explanation relating to material
 departures;
 
 b) 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 your Company at
 the end of the financial year and of the profit of your Company for
 that period;
 
 c) 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 your Company and for
 preventing and detecting fraud and other irregularities; and
 
 d) prepared the Annual Accounts on a going concern basis.
 
 CONSOLIDATED FINANCIAL STATEMENTS
 
 In accordance with the Accounting Standard AS-21, issued by the
 Institute of Chartered Accountants of India, on Consolidated Financial
 Statements, your Directors provide the audited Consolidated Financial
 Statements in the Annual Report.
 
 AUDITORS AND AUDITORS REPORT
 
 M/s. Dalai & Shah, Statutory Auditors and M/s. Arun Arora & Co., 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. Dalai & Shah and M/s. Arun
 Arora & Co. to the effect that their appointment if made.
 
 would be within the prescribed limits under Section 224(1 B) of the
 Companies Act, 1956 and that they are not disqualified within the
 meaning of Section 226 of the said Act.
 
 Members are requested to consider their appointment, on a remuneration
 to be decided by the Board of Directors thereof for the ensuing
 financial year i.e. 2008-2009.
 
 The Notes on Accounts referred to in the Auditors Report are
 self-explanatory and therefore do not call for any further comments.
 
 MANAGEMENT DISCUSSION AND ANALYSIS REPORT
 
 Management Discussion and Analysis Report for the year under review, as
 stipulated under Clause 49 of the Listing Agreement with the Stock
 Exchanges in India, is presented in a separate section forming part of
 the Annual Report.
 
 ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE
 EARNINGS AND OUTGO
 
 In accordance with Section 217(1 )(e) of the Companies Act, 1956, the
 required information relating to Conservation of Energy, Technology
 Absorption and Foreign Exchange Earnings and Outgo is annexed as
 Annexure A and forms part of this report.
 
 PARTICULARS OF EMPLOYEES
 
 The Company continues to maintain cordial relationship with its
 workforce at all locations. Continuous upgradation of core skills by
 way of training programmes either through internal or external agencies
 are an integral part of human resources development policy. The
 statement under sub-section (2A) of Section 217 of the Companies Act,
 1956, read with the Companies (Particulars of Employees) Rules, 1975,
 as amended and forming part of this report is given in Annexure B.
 
 CORPORATE GOVERNANCE
 
 Your Company is committed to achieving the highest standards of
 Corporate Governance. Accordingly your Board functions as trustees of
 the shareholders and seeks to ensure the long term economic value for
 its shareholders while balancing the interest of the stakeholders. A
 separate section on Corporate Governance standards followed by your
 Company as stipulated under Clause 49 of the Listing Agreement with the
 Stock Exchanges is forming part of the Annual Report.
 
 Certificate from the Auditors of the Company, M/s. Dalai & Shah,
 confirming compliance of conditions of Corporate Governance as
 stipulated under the aforesaid Clause 49, is annexed as Annexure C
 and forms part of this report.
 
 ACKNOWLEDGEMENTS AND APPRECIATION
 
 Your Directors would like to express their appreciation for the
 assistance and co-operation received from 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
 
 PLACE : MUMBAI
 DATE  : 26th MAY, 2008