Eastern Treads Ltd
Directors Reports
Dear Member,
Your Directors have pleasure in presenting the 30th Annual Report on the
business operations of the Company and the audited Ind AS financial statements for the
financial year ended 31st March, 2023 along with comparatives.
Financial Summary and Highlights
The following table shows the operational results of the Company for the year 2022-2 3
as compared to that of the previous year.
(Rs in lakhs)
|
Year ended |
|
31/03/23 |
31/03/22 |
| Revenue from Operations |
5,984 |
7,227 |
| Other Income |
8 |
34 |
| Total Revenue |
5,992 |
7,261 |
| Expenditure |
6,272 |
7,747 |
| (Loss) / Profit before Interest, Depreciation and Tax |
(280) |
(486) |
| Depreciation/Amortisation/ Impairment |
165 |
183 |
| Profit before Finance Costs and Tax |
(445) |
(669) |
| Finance Costs |
323 |
320 |
| Profit (Loss) before Tax |
(767) |
(989) |
| Tax Expense |
(45) |
(21) |
| Profit (Loss) for the year |
(723) |
(968) |
| Other comprehensive income/ (loss) |
18.85 19 |
388 |
| Total comprehensive loss for the year |
(742) |
(580) |
Performance
During this financial year ended 31st March 2023, your company's total income was Rs.
5,984 lakhs as against Rs. 7,227 Lakhs in the previous year. The profit/(loss) before tax
stood at Rs.(767) lakhs for the year as against Rs. (989) Lakhs for the previous financial
year. The profit/(loss) after Tax for the year ended 31st March, 2023 is Rs.(723) as
against Rs. (968) lakhs for the previous financial year. Though the revenue has dropped by
17%, your company has managed to reduce the loss by 21%. Your company expects to further
reduce the loss and reach to earn positive figures in the upcoming financial years.
Reserves
In view of the loss incurred during the year, the Board of Directors of your Company
has decided not to transfer any amount to the reserves for the year under review.
Dividend
In view of loss incurred during the year under review and losses of earlier years, your
Directors do not recommend any dividend during the year under review.
Change in nature of business, if any
There are no change in the nature of business of the company during the period under
review.
Material Changes and Commitments
There have been no material changes and commitments, which affect the financial
position of the Company which have occurred between the end of the financial year to which
the financial statements relate and the date of this Report.
Capital and Debt Structure
About 34.33% of the paid up equity share capital held by large number of public
shareholders. Your Company neither issued any shares with differential voting rights nor
granted any stock options or sweat equity and instruments convertible into equity shares.
Your Company has not made any provision of money for purchase of its own shares by
employees or by trustees for the benefit of employees during the year under review.
As per the terms of issue (as varied), the outstanding Zero Coupon Redeemable
Preference Shares are liable to be redeemed at the rate of rupees One Crore every year in
a phased manner. The Company has the option to stretch the redemption until 9th
February 2029, being the date of expiry of twenty years from the date of the original
allotment. While the first tranche of redemption of rupees One Crore was made in FY
2016-17, no redemption was made in subsequent financial years including FY 2022-23.
Directors and Key Managerial Personnel
The composition of the Board of Directors of the company is duly constituted and the
Directors and Key Managerial Personnel ("KMP") of the Company as on the date of
this report is as follows:
| Sl No |
Name of the Director/KMP |
DIN/PAN |
Designation |
| 1 |
Navas M Meeran |
00128692 |
Chairman |
| 2 |
M E Mohamed |
00129005 |
Managing Director (KMP) |
| 3 |
M S Ranganathan |
00254692 |
Independent Director |
| 4 |
K S Neelakanta Iyer |
00328870 |
Independent Director |
| 5 |
Rani Joseph |
07423144 |
Independent Director |
| 6 |
Naiju Joseph |
00419362 |
Director |
| 7 |
Shereen Navas |
00328770 |
Director |
| 8 |
Devarajan Krishnan* |
AFMPK6587P |
Chief Financial Officer |
| 9 |
Abil Anil* |
CPKPA5304J |
Company Secretary |
*Mr. Abil Anil was appointed as the Company Secretary with effect from 05th
April 2023 and Mr. Devarajan Krishnan was appointed as Chief Financial Officer with effect
from 14th August 2023.
During the year under review, following changes occurred in the composition of the
Board of Directors and KMP:
Sl No |
Name of the Director/KMP |
DIN |
Designation |
Effective Date |
Nature of Change |
1 |
Mr. Mohammed Sherif Shah |
NA |
Chief Financial Officer |
01st June 2022 |
Retirement |
2 |
Mr. Bijo Joseph |
NA |
Chief Financial Officer |
01st June 2022 |
Appointment |
3 |
Mr. Bijo Joseph |
NA |
Chief Financial Officer |
13th August 2022 |
Resignation |
4 |
Mr. Suresh S.* |
NA |
Chief Financial Officer |
13th August 2022 |
Appointment |
5 |
Mr. Sachin Saxena |
NA |
Chief Executive Officer |
31st October 2022 |
Resignation |
6 |
Mr. Baiju T |
NA |
Company Secretary |
16th December 2022 |
Resignation |
7 |
Mr. Rajesh Jacob |
06443594 |
Nominee Director (KSIDC) |
19th January 2023 |
Resignation |
*Mr. Suresh S. has resigned from the post of Chief Financial Officer with effect from
04th August 2023 and Mr. Devarajan Krishnan was appointed as Chief Financial
Officer with effect from 14th August 2023.
During the period under review, Mr. M.E. Mohamed was opined to continue to hold the
office of Managing Director for a period of 3 years with effect from 11 February, 2022 by
the members at the AGM held on 29th September 2022.
Mr. Naiju Joseph, having DIN: 00419362, Director retires by rotation at the ensuing
Annual General Meeting and being eligible, offer himself for re-appointment. The Board
recommends his reappointment.
The Board has considered the declarations given by independent directors under Section
149(7) and Regulation 25(8) of the SEBI (Listing Obligations and Disclosure Requirements)
Regulations, 2015 with respect to meeting the criteria of independence and compliance with
the Code for Independent Directors. Independent directors further declared that they are
not aware of any circumstance or situation, which exist or may be reasonably anticipated,
that could impair or impact their ability to discharge their duties with an objective
independent judgment and without any external influence and are independent of the
management.
The Independent Directors of the Company had no pecuniary relationship or transactions
with the Company, other than sitting fees and reimbursement of expenses, if any, incurred
by them for the purpose of attending meetings of the Company. The Board is of the opinion
that the Independent Directors of the Company possess requisite qualifications, experience
and expertise and they hold highest standards of integrity. The Directors are compliant
with the applicable provisions of Companies (Appointment and Qualification of Directors)
Rules, 2014.
Board Meetings
Five Board meetings held during the year. Details of Board meetings are included in
Corporate Governance Report.
Committees of the Board
The Company has five Board Committees, Audit Committee, Nomination and Remuneration
Committee, Stakeholders Relationship Committee, Risk Management Committee and Share
Transfer Committee. Details of all the committees along with their main terms, composition
and meetings held during the year under review are provided in the report on Corporate
Governance, forming part of this Annual Report. The Board has accepted all recommendations
of the Audit Committee during the year under review.
Board Evaluation
The Board has annually evaluated the performance of the Board, its committees and
individual directors. The Board evaluated the performance of Non-Executive and Independent
Directors and their core skills, expertise and competencies. All the Directors are eminent
personalities having wide experience in the field of business, industry and
administration. Their presence on the Board is advantageous and fruitful in taking
business decisions. Further details of Board evaluation are provided in the Report on
Corporate Governance.
Remuneration of Directors and Employees
The Board has considered the Company's policy on directors' appointment and
remuneration including criteria for determining qualifications, positive attributes and
independence of a director. The information required pursuant to Section 197 of the
Companies Act, 2013 read with Rule 5 of the Companies (Appointment and Remuneration of
Managerial Personnel) Rules, 2014 are annexed as Annexure -1 and forms part of this
Report.
Directors' Responsibility Statement
Pursuant to the requirement of Section 134 (3) and (5) of the Companies Act, 2013, your
Directors confirm that: (a) In the preparation of the Annual Accounts, the applicable
Accounting Standards have been followed and that there are no 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 the
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, 2013
for safeguarding the assets of your Company and for preventing and detecting fraud and
other irregularities. (d) Prepared the Annual Accounts on a going concern basis. (e)
Devised proper systems to ensure compliance with the provisions of all applicable laws and
that such systems were adequate and operating effectively. (f) Had laid down internal
financial controls to be followed by the Company and that such internal financial controls
are adequate and were operating effectively.
Internal Financial Controls
Internal financial control and their adequacy are included in the Management Discussion
and Analysis, forming part of this report.
Frauds reported by the Auditor, if any.
The Statutory Auditors of the Company have not reported any fraud as specified under
the second proviso to Section 143(12) of the Act.
Subsidiaries, associates and joint ventures
The company has no Subsidiaries, associates and joint ventures during the period under
review.
Deposits
The Company has not accepted any fixed deposits during the year to which the provisions
of Section 73 of the Companies Act, 2013 are applicable.
Unsecured Loan
The Company has accepted unsecured Loan from Director, Mr. Navas Meeran for an amount
of Rs. 125 Lakhs during the period under review and the outstanding balance amount as on
the period ended 31st March 2023 is Rs. 366 Lakhs
Corporate Social Responsibility
Company has generally taken corporate social responsibility (CSR) initiatives. However,
the present financial position of the Company does not mandate the implementation of CSR
activities pursuant to the provisions of Section 135 and Schedule VII of the Companies
Act, 2013.
Loans, Guarantees or Investments
Particulars of loans, guarantees or investments under Section 186 of the Companies Act,
2013 are given in the notes to the Financial Statement. The company had invested in
Shipnext Solutions Private Limited and holds 1441550 equity shares aggregating to 9.69%
holding in the shares. The company has also provided Guarantee on behalf of Shipnext
Solutions private Limited for the Loan taken from Federal Bank to the extent of Rs. 100
Lakhs.
Contracts or Arrangements with Related Parties
There were no materially significant related party transactions which could have had a
potential conflict with the interests of the Company. Transactions with related parties
are in the ordinary course of business on arm's length and are periodically placed before
the Audit Committee and Board for its approvals and the particulars of contracts entered
during the year, in Form AOC-2 is enclosed as Annexure - 2. Disclosures of related party
transactions are as given in notes to the Financial Statement.
The Board of Directors, as recommended by the Audit Committee, adopted a policy to
regulate transactions between the Company and its Related Parties, in compliance with the
applicable provisions of the Companies Act 2013, the Rules thereunder and the Listing
Agreement. The policy on Related Party Transactions is available on the website of the
Company. The details of the transactions with related parties during the financial year
are provided in the financial statements.
Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and Outgo
Your Company continues its efforts to improve energy conservation and utilization most
efficiently to nurture and preserve the environment and to exploit all its avenues to
adopt latest technology in its operations. The information required under Section
134(3)(m) of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules,
2014, regarding Conservation of Energy, Technology Absorption, Foreign Exchange Inflow and
Outflow are given in Annexure - 3 to this report.
Risk Management
Company has developed and implemented a risk management policy, and formed a Risk
Management Committee to address and evaluate various risks impacting the Company and a
report on risk management is provided in this Annual Report in Management Discussion and
Analysis.
Vigil Mechanism
A Vigil Mechanism for directors and employees to report genuine concerns has been
established as required under the provisions of Section 177 of the Companies Act, 2013 and
has established mechanism for employees to express to the management, their concerns and
suggestions about the deficiencies in the systems and procedures or violation of any code
of conduct or general rules. The Vigil Mechanism Policy has been uploaded on the website
of the Company. No person has been denied the access to the Audit Committee.
Material Orders of Judicial Bodies / Regulators
No significant and material orders were passed by Courts, Tribunals and other
Regulatory Authorities affecting the going concern status of the Company's operations.
Statutory Auditors and Auditors' Report
In accordance with Section 139 of the Companies Act, 2013, read with the Companies
(Audit and Auditors) Rules, 2014, M/s. G Joseph & Associates, Chartered Accountants,
Kochi were appointed as the Statutory Auditors of the Company at the 29th
Annual General Meeting for a tenure of five years, from the conclusion the 29th
Annual General Meeting till conclusion of 34th Annual General Meeting.
Necessary certificate has been obtained from the Auditors as per Section 139(1) of the
Companies Act, 2013. The Auditors have confirmed that they hold a valid certificate issued
by the Peer Review Board of the ICAI.
The Auditors' Report on the financial statement of the Company forms part of this
Annual Report.
With respect to the emphasis of matter in the Auditor's reports on the uncertainties
associated with recovery of market operations post COVlD-19 and its impact on the
company's operations, the Board perceived that the Company has initiated steps and
activities to improve its performance, as well as to align its efforts to adapt to the
changing business environment to focus on more profitable areas. Further the Company has
received letter of support from its Chairman and Promoter Director, wherein he has
confirmed to provide financial support to the Company to meet the shortfall in its working
capital requirements, if required. In view of the above letter of support and various
performance improvement measures undertaken, the Management believes that the Company will
be able to meet its commitments.
Secretarial Audit Report
The secretarial audit report on the compliance of the applicable Acts, Laws, Rules,
Regulations, Guidelines, Listing Agreement, Standards etc. as stipulated by Section 204 of
the Companies Act 2013, read with the Companies (Appointment and Remuneration of
Managerial Personnel) Rules 2014 forms part of this report as Annexure - 4. There were no
qualifications, reservation or adverse remarks given in the Secretarial Audit Report.
Cost Records and Cost Audit
Pursuant to Section 148 of the Companies Act, 2013 read with the Companies (Cost
Records and Audit) Rules, 2014 the Cost Audit Report is not mandatorily applicable to our
Company for the financial year, hence, no such audit has been carried out during the year.
The Cost accounts and records as required to be maintained under Section 148 (1) of Act
are duly made and maintained by the Company.
Secretarial Standards
The Company has complied with Secretarial Standards issued by the Institute of Company
Secretaries of India on Board meetings and Annual General Meetings.
Corporate Insolvency Resolution Process
No application filed for corporate insolvency resolution process, by financial or
operational creditor or by the Company under The Insolvency and Bankruptcy Code, 2016
before the National Company Law Tribunal during the year.
Corporate Action
The Board of Directors at its meeting held on 14 February 2019 approved the proposal to
convert 9,00,000 outstanding Redeemable Preference Shares into Equity Shares by issue of
equity shares through Preferential Allotment route to the Preference Shareholders. Company
was in the process of getting required approvals to take further steps for the proposed
conversion of Preference Shares. Currently this preference shares continues to be Zero
Coupon Redeemable Preference Shares.
Annual Return
In compliance with Section 92 and Section 134 of the Companies Act,2013 the Annual
Return in the prescribed format is available at
https://www.easterntreads.com/reports/Annual+Reports
Listing and Dematerialization
The equity shares of the Company are listed on the BSE Limited. Shareholders are
requested to convert their holdings to dematerialized form to derive its benefits by
availing the demat facility provided by NSDL and CDSL.
Corporate Governance Report
Your Company has been complying with the principles of good Corporate Governance over
the years and is committed to the highest standards of compliance. Pursuant to Regulation
15(2) of the SEBI (LODR) Regulations 2015, the compliance with the corporate governance
provisions as specified in regulations 17 to 27 and clauses (b) to (i) of Regulation 46(2)
and para - C, D and E of Schedule V shall not apply the Company. However, as a good
Corporate Governance practice the Company has generally complied with the Corporate
Governance requirements and a report on Corporate Governance is annexed as Annexure - 5
and forms part of this Report.
Management Discussion and Analysis Report
As required under SEBI (LODR) Regulations 2015 the Management Discussion and Analysis
Report is annexed as Annexure –6 and forms part of this Report.
Employee Wellbeing and Safety
Your Company has implemented policies and procedures with the objective of ensuring
employee safety, security and wellbeing at the workplace. As stated in our Code of
Conduct, we are committed to provide a gender friendly workplace, equal opportunities for
men and women, prevent/redress sexual harassment and institute good employment practices.
The Company has adopted policy on prevention of sexual harassment in line with the
requirements of the Sexual Harassment of Women at the work place (Prevention, Prohibition
and Redressal) Act, 2013.
Internal Complaints Committee has been set up to redress complaints received regarding
sexual harassment. All employees (permanent, contractual, temporary, trainees) are covered
under this policy. The following is a summary of sexual harassment complaints received and
disposed of during the year:
a) Number of complaints pending at the beginning of the year : Nil b) Number of
complaints received during the year : Nil c) Number of complaints disposed off during the
year : Nil d) Number of cases pending at the end of the year : Nil
Acknowledgement
Your Directors wish to place on record their gratitude to Bankers, Share Transfer
Agents, Auditors, Customers, Suppliers and Regulatory Authorities for their timely and
valuable assistance and support. The Board values and appreciates the professionalism,
commitment and dedication displayed by employees at all levels. Your Directors are
thankful to the shareholders for their continued support and confidence. For and on behalf
of the Board
|
Sd/- |
| Place: Ernakulam |
Navas M Meeran |
| Date: 04 September 2023 |
Chairman |
|
DIN: 00128692 |
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