Your Directors have immense pleasure in presenting the Thirty Second (32nd) AnnualReport together with the Audited Financial Statements of the Company for the FinancialYear ended March 31 2017.
1. PERFORMANCE HIGHLIGHTS
The highlights of performance of the Company for the Financial Year 2016-17 were asunder with comparative position of previous year's performance:-
|Particulars ||Standalone ||Consolidated |
| ||FY 2016-17 ||FY 2015-16 ||FY 2016-17 || ||FY 2015-16 |
|Profit before Depreciation & Income ||1171.10 ||1202.39 ||1170.84 ||Tax ||1202.26 |
|Less: Depreciation ||270.26 ||306.56 ||270.26 || ||306.56 |
|Profit after depreciation ||900.84 ||895.82 ||900.58 || ||895.70 |
|Less: Provision for: || || || || || |
|Income Tax ||337.48 ||291.76 ||337.48 || ||291.77 |
|Deferred tax Saving/Liability ||(0.33) ||6.33 ||(0.33) || ||6.33 |
|Previous year adjustment ||3.59 ||33.82 ||3.59 || ||33.82 |
|Profit After Taxation ||560.09 ||563.96 ||559.84 || ||563.79 |
2. FINANCIAL PERFORMANCE AND STATE OF THE COMPANY'S AFFAIRS
During the year total Income on standalone basis increased to Rs. 54869.49 Lakhs fromRs. 53975.05 Lakhs in the previous year registering the growth of 2%. The profit beforetax in the current year was Rs. 900.84 Lakhs as compared to Rs. 895.82 Lakhs in theprevious year recording an improvement of 0.56%.
During the financial yearour total income on consolidated basis has increased by 2% toRs. 54869.49 Lakhs from Rs. 53975.05 Lakhs in the previous year. The profitbefore tax inthe current year was Rs. 900.58 Lakhs as compared to
Rs. 895.71 Lakhs in the previous year recording an improvement of 0.54%.
The operational highlights of the Company during the year are as follows:-
The company secured a prestigious order from Tata Steel for carrying raw materials andmining products from Tata
Steel's Joda and Sukinda mines to the Company's factories valued at Rs.450 crore whichis to be executed over 4 years. Partial truck load Sundry Movement contributes 49% ofrevenues.
Full truck load grew by 29% during the year.
The company is planning to expand its existing warehousing capabilities across 50 majorIndian cities
Continued focus on improving profitability by moving away from non profitable clients
Top 5 customers contributed 20% of total revenues in FY 2016-17 as compared to 13% inFY 2015-16.
Your Company needs Capital for its expansion plans therefore the Board of Director hasdecided to invest the profit into the operation of the Company. Hence no dividend isrecommended for the year ended 31st March 2017.
4. SHARE CAPITAL
The issued and paid up share capital of the Company as on March 31 2017 was Rs 5019.73Lakhs divided into 50197336 equity shares of Rs. 10 each against the Authorized ShareCapital of Rs.5400.00 Lakhs divided into 54000000 equity shares of Rs.10 each.
5. TRANSFER TO RESERVES
The Company proposes to transfer an amount of Rs. 560.09 Lakhs to the General Reserveout of the amount available for appropriations.
6. EXTRACT OF ANNUAL RETURN
Pursuant to Section 92(3) of the Companies Act 2013 read with Rule 12(1) of theCompanies (Management and Administration) Rules 2014 an Extract of the Annual Return inForm MGT-9 is annexed to this report.
7. BOARD & COMMITTEE OF BOARD
The details of the composition terms of reference and number of meetings of the Boardand its Committee held during the financial year 2016-17 are provided in the CorporateGovernance Report annexed to this report.
8. DIRECTORS AND KEY MANAGERIAL PERSONNEL
As per Article 84 of Articles of Association of the Company the number of Directors ofthe Company shall not be less than 3 and not more than 12. As per the provisions ofCompanies Act 2013 read with SEBI (Listing Obligations & Disclosure Requirements)Regulations 2015 the Board of Directors of the Company has designated the Chairman andManaging Director (CMD) and Whole-Time Director three Independent Directors and oneNon-Executive Director
(Women Director) and Chief Financial Officer (CFO) and Company Secretary (CS) as KeyManagerial Personnel
(KMPs) of the Company.
During the Financial year 2016-17 Mrs. Vanya Jain (DIN: 01364596) has resigned fromthe post of Non-Executive Director w.e.f January 31 2017. Further pursuant to theprovisions of Section 161(1) of the Companies Act 2013 read with Article 86 of theArticles of Association of the Company Mrs. Reena Gupta (DIN: 06966728) has beenappointed as an Additional Director on the Board of the Company w.e.f April 25 2017.
The Board of Directors hereby confirms and represent that none of the Directors of theCompany are disqualified from being appointed as Director pursuant to Section 164 of theCompanies Act 2013 read with Rule 14 of the Companies
(Appointment and Qualification of Directors) Rules 2014.
As per the provisions of Section 152(6) of the Companies Act 2013 and in terms ofprovisions of Article 102 of the
Articles of Association of the Company Mr. Sunil Kumar Jain (DIN:00010695) who islongest in the office shall by rotation in the ensuing 32nd Annual General Meeting andbeing eligible offers himself for re-appointment. His brief resume is annexed to theNotice of the Annual General Meeting.
During the Financial Year 2016-17 Mr. Anand Kumar Pandey (ACS: 38239) has resignedfrom the post of Company
Secretary and Compliance Officer of the Company w.e.f December 13 2016. The Companyhas appointed Ms. Mamta Bisht (ACS: 30347) as Company Secretary and Compliance Officer ofthe Company on December 14 2016.
In terms of Section 203 of the Act the following are the Key Managerial Personnel(KMP) of the Company:
Mr. Shyam Lal Yadav Chief Financial Officer
Ms. Mamta Bisht Company Secretary
9. DIRECTOR RESPONSIBILTY STATEMENT
With reference to Section 134(5) of the Companies Act 2013 it is confirmed that:-
i. in the preparation of the annual accounts for the year ended March 31 2017 theapplicable Accounting Standards have been followed and no material departures have beenmade from the same; ii. such accounting policies have been selected and appliedconsistently (except for changes in the Accounting Policies as disclosed in the Notes toAccounts to the Financial Statements) and judgments and estimates made that are reasonableand prudent so as to give a true and fair view of the state of affairs of the Company atthe end period; ofthefinancial year and ofthe profit and Lossof the Company for that iii.proper and sufficient care is taken for the maintenance of adequate accounting records inaccordance with the provisions of the Companies Act 2013 for safeguarding the assets ofthe Company and for preventing and detecting fraud and other irregularities; iv. theannual accounts have been prepared on a going concern basis. v. Internal financialcontrolshavebeen laid down to be followed by the Company and such internalfinancialcontrols were adequate and operating effectively; and vi. the Directors haddevised proper system to ensure compliance with the provisions of all applicable laws andsuch systems were adequate and are operating effectively.
10. DECLARATION BY INDEPENDENT DIRECTORS
All Independent Directors of the Company have given declarations that they meet thecriteria of independence as laid down under Section 149(6) of the Act and Regulation16(1)(b) of the Listing Regulations. In the opinion of the Board they fulfill theconditions of independence as specified in the Act and the Rules made there under and areindependent of the management.
Pursuant to the provisions of section 139 of the Act and the rules framed thereafterM/s Sanghi & Company Chartered Accountants present statutory auditors retire at theconclusion of ensuing Annual General Meeting.
Pursuant to Section 139 of the Act the Company shall appoint / reappoint StatutoryAuditors firm for two consecutive terms of 5 years each. The Board of Directors of theCompany at its meeting held on August 9 2017 has recommended the appointment of M/s. RajAchint & Associates Chartered Accountants (FRN: 022023N) as the statutory auditors ofthe Company for a period of 5 years from the conclusion of ensuing AGM till the conclusionof 37th Annual General Meeting to be held in the year 2022 subject to approval of theMembers of the Company.
M/s. Raj Achint & Associates Chartered Accountants have confirmed theirwillingness and eligibility for appointment in accordance with Section 139 read withSection 141 of the Act. Members are requested to consider the appointment of M/s. RajAchint & Associates Chartered Accountants and authorize the Board of Directors to fixtheir remuneration.
Pursuant to the provisions of Section 204 of the Companies Act 2013 read with theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 the Board ofDirectors of the Company had appointed M/s Ashish
Kumar Friends & Co. Practicing Company Secretaries (Certificate of PracticeNo.4056) New Delhi to undertake the
Secretarial Audit of the Company for the year ended March 31 2017. The SecretarialAudit Report is annexed to this report.
The Auditors' Report and the Secretarial Audit Report for the financial year endedMarch 31 2017 do not contain any qualification reservation adverse remark ordisclaimer.
12. PARTICULARS OF LOANS GUARANTEES AND INVESTMENTS BY COMPANY
The Company has neither given any guarantee nor provided any security covered under theprovision of Section 186 of the Companies Act 2013 during the financial year 2016-17.
13. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES
All Related Party Transactions that were entered into during the financial year were onan arm's length basis in the ordinary course of business and were in compliance with theapplicable provisions of Section 188 of the Companies Act 2013 read with Rule 8(2) ofCompanies (Accounts) Rules 2014 and Regulation 23 of the SEBI (Listing Obligations
& Disclosure Requirements) Regulations2015.TherewerenomateriallysignificantRelatedParty Transactions made by the Company during the year that would have requiredShareholder approval under the Listing Regulations.
The Particulars of contract or arrangement entered into by the Company with relatedparties as per the provisions of Section 188 of the Companies Act 2013 read with Rule8(2) of Companies (Accounts) Rules 2014 are disclosed in Form AOC-2 is annexed to thisreport.
The "Related Party Transactions Policy" is available on the website of theCompany at website linkhttp://www.neccgroup.com/wp-content/uploads/2016/03/Policy-on-Related-Party-Transaction-NECC.pdf
14. PARTICULARS REGARDING CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION
There are no significantparticulars relating to Conservation of Energy technologyabsorption under Rule 8(3) of
Companies (Accounts) Rules 2014 since your Company is not engaged in any manufacturingactivity. No agreement has been entered into for Technology absorption. However theCompany has made intensive use of technology in its operation during the year underreview.
15. PARTICULARS REGARDING EXPENDITURE INCURRED ON RESEARCH AND DEVELOPMENT AND FOREIGNEXCHANGE EARNINGS & OUTGO
The Company has not incurred any expenditure on Research & Development during thefinancial year 2016-17.
Further the Company has no earning or outgo in Foreign exchange as per Rule 8(3) ofCompanies (Accounts) Rules 2014.
16. RISK MANAGEMENT
Risk Management comprises all the organizational rules and actions for earlyidentification of risks in the course of doing business and the management of such risks.
Although not mandatory as per SEBI (Listing Obligations & Disclosure Requirements)Regulations 2015 as a measure of good governance the Company has constituted a RiskManagement Committee of the Board. The
Committee reviews the Company's performance against identified risks formulatesstrategies towards identifying new and emergent risks that may materially affect theCompany's overall risk exposure and reviews the Risk Management Policy and structure.
The Company has a Risk Management Policy which outlines the manner in which the Companyidentifies assesses monitors and manages risk. As the Company belongs to transportationand Logistics Industry and in the opinion of the Board the following are the risks whichwould threaten the existence of the Company:
Motor Vehicle Accidents
Slips Trips And Falls
To recover the above-mentioned risks the Company has adopted Risk Management Strategywhich comprising of following stages:
Risk monitoring and review
The Policy and Strategy is duly implemented and monitored in the Company. The Companyhas identified various risks and has taken various steps to mitigate them. The "RiskManagement Policy" is available on the website of the Company at website linkhttp://neccgroup.com/wp-content/uploads/2015/02/Risk-managment-Policy.pdf
17. CORPORATE SOCIAL RESPONSIBILITY
The "Corporate Social Responsibility Policy" prepared in the line with theprovisions of Section 135 of the Companies Act 2013 and Rules thereunder The Companies(Corporate Social Responsibility Policy) Rules 2014 was approved by the Board ofDirectors of the Company. The "Corporate Social Responsibility Policy" isavailable on the website of the Company at website linkhttp://neccgroup.com/wp-content/uploads/2015/02/CSR-Policy.pdf
During the Financial Year 2016-17 the Corporate Social Responsibility initiatives ofthe Company were continued with a view to integrated NECC's business operations withsocial processes while recognizing the interests of its Stakeholders. While identifyingsuch initiatives the Company has adopted an integrated approach to address the Communitysocietal and environmental concerns. During the year the Company has undertaken variousCSR activities in the fields of skill development programmes education social welfareupliftment & empowerment of the neglected and under-privileged sections of thesociety financially support by making donation to Sewa Bharti NGO sponsoring theTeacher's Salary on monthly basis of "Unnati" NGO project. During the FinancialYear 2016-17 the company had donated funds to Bharat Lok Siksha Parishad for providingbasic education through non- formal Schools to children of rural areas.
During the financial year 2016-17 your Company has spent a total expenditure ofRs.17.95 Lakhs towards CSR
Activities The average net profit of the Company computed as per three immediatelypreceding financial years was Rs. 843.49 Lakhs . It was hence required to spend Rs. 16.86Lakhs on CSR activities during the Financial Year 2016-17 being 2% of the average netprofits of the three immediately precedingfinancial . years
In terms of the Companies (Corporate Social Responsibility Policy) Rules 2014 theAnnual Report on Corporate Social Responsibility activities is annexed to this Report.
18. FORMAL ANNUAL EVALUATION OF BOARD
As per the statutory provisions of Companies Act 2013 and SEBI (Listing Obligations& Disclosure Requirements) Regulations 2015 a listed company is required to disclosein its Board's Report a statement indicating the manner in which formal annual evaluationhas been made by the Board of its own performance that of its Committees and individualdirectors and the criteria for performance evaluation of Independent Directors as laiddown by the Nomination and Remuneration Committee is also required to be disclosed in theAnnual Report.
During the year the Board has carried out an annual evaluation of its own performanceperformance of the Directors as well as the evaluation of the working of its Committees.The Nomination and Remuneration Committee (NRC) has defined the evaluation criteriaprocedure and time schedule for the Performance Evaluation process for the Board its
Committees and Directors.
The formal annual evaluation of the Board Directors and Committees of the Company hasbeen done on the following criteria
: (a) Attendance and contribution at Board and Committee meetings (b) His/her statureappropriate mix of expertise skills behaviour experience leadership qualities senseof sobriety and understanding of business strategic direction to align company's valueand standards.
(c) His/her knowledge of finance accounts legal investment marketing foreignexchange/ hedging internal controls risk management assessment and mitigation businessoperations processes and Corporate Governance.
(d) His/her ability to create a performance culture that drives value creation and ahigh quality of debate with robust and probing discussions.
(e) Effective decisions making ability to respond positively and constructively toimplement the same to encourage more transparency.
(f) Open channels of communication with executive management and other colleague onBoard to maintain high standards of integrity and probity.
(g) Recognize the role which he/she is expected to play internal Board Relationshipsto make decisions objectively and collectively in the best interest of the Company toachieve organizational successes and harmonizing the Board.
(h) His/her global presence rational physical and mental fitness broader thinkingvision on corporate social responsibility etc.
(i) His/her ability to monitor the performance of management and satisfy himself withintegrity of the financial controls and systems in place by ensuring right level ofcontact with external stakeholders.
19. SUBSIDAIRY COMPANY AND CONSOLIDATED FINANCIAL STATEMENTS
Your Company has one Wholly Owned Subsidiary in the name and style of "N.E.C.C.Retail Solutions Private Limited" incorporated on February 14 2013 and theregistered office of the Company situated at 9062/47 Ram Bagh Road
Azad Market Delhi-110006. As on March 31 2017 the Board of Directors consists of twomembers namely Mr. Sunil Kumar Jain and Mr. Utkarsh Jain.
Pursuant to Section 129 of the Companies Act 2013 and Accounting Standards-21 theCompany has prepared Consolidated Financial Statements including that of its Subsidiarywhich shall be laid before the ensuing 32nd Annual General Meeting along with theStandalone Financial Statements of the Company.
The Audited Financial Statements including the consolidated financial statements andaudited accounts of subsidiary company are available on the website of the Company atwww.neccgroup.com. Further these documents will be kept for inspection by any member atthe registered office of the Company. The Company will also make available copy thereofupon specific request by any member of the Company interested in obtaining of the same
20. PARTICULARS OF EMPLOYEES AND REMUNERATION
The information required under Section 197(12) of the Companies Act 2013 read withRule 5(2) and (3) of the Companies (Appointment and Remuneration of Managerial Personnel)Rules 2014 is annexed to this report. None of the employees listed in the said Annexureis related to any Director of the Company.
21. HUMAN RESOURCE MANAGEMENT
Your Company has 250 offices including Branch offices across 28 states and the totalManpower of the Company as on March 31 2017 was 570 employees which include Executivesand Non-Executives. In order to increase the professional culture in the Company 103employees were appointed through Interview and written test during the year.
TRAINING AND HUMAN RESOURCE DEVELOPMENT
As a measure of capacity building including up-gradation of employees' skill and toensure high delivery of performance training and HRD continued to receive priority duringthe financial year.
Training and Human Resource policy of the Company aims and sharpening business skillsand competence required for better employee performance and provides all possibleopportunities and support to the employees to improve their performance and productivity.Training was also provided to promote better understanding of professional requirements aswell as to aware employees towards socio-economic environment in which business of theCompany is carried out.
During the financial year2016-17 the following no. of training imparted and Skilldevelopment programmes organized by the Company:-
|Particulars ||No. of programs held during the |
| ||year |
|1. Training imparted to Executives & Non-executives ||159 |
|2. Skill Development programs ||31 |
REPRESENTATION OF WOMEN EMPLOYEES
As on March 31 2017 the Company had 20 women employees which represent 4% of thetotal work force. There is no discrimination of employees on the basis of gender. Aninternal compliant committee has been constituted to look after the welfare and provideprotection against sexual harassment of women at workplace.
AWARDS AND RECOGNITION TO EMPLOYEES
Employees' management is the backbone of your Company and it is regarded as one of theimportant resources for the success of NECC. Over the years your Company has strengthenedits HR processes to ensure continual development and growth of its employees. In order tobuild the right organizational culture the Company distributes various awards andrecognition in terms of their performance capabilities communication skillscoordination etc. on quarterly or half yearly basis. Though NECC is an equal opportunityemployer special focus is given to employees for enhance their diversity and knowledge.
22. DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTIONPROHIBITION AND REDRESSAL) ACT 2013
In line with the provisions of Sexual Harassment of Women at Workplace (PreventionProhibition & Redressal) Act 2013 every employer of a workplace shall constitute an"Internal Compliant Committee" for redressal of compliant(s) against sexualharassment of women employees. Accordingly an Internal Compliant Committee has beenreconstituted in the Company on March 27 2017 vide Circular No.-NECC/CO/ADM-8999/16-17.Your Company has about 20 women employees in various cadres including Permanentcontractual temporary and trainees. The Internal Compliant Committee aims to provideprotection to employees at the workplace and prevent and redress complaints of sexualharassment and for matters connected or incidental thereto with the objective ofproviding a safe working environment where employees feel secure.
| ||Committee |
|1. Ms. Mamta Rawat Company Secretary ||Presiding Officer & Chairperson |
|2. Ms. Anita Mishra Regional Accounts head ||Member |
|3. Mr. Vinod Nair HR & Legal Head ||Member |
There was no compliant received from any employee during the financial year 2016-17 andhence no complaint is outstanding as on March 31 2017 for redress.
23. CORPORATE GOVERNANCE
The company is committed to maintain high standards of Corporate Governance and adhereto Corporate Governance Requirements set out in SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015. The report on Corporate Governance as stipulated underthe Listing Regulations forms an integral part of this Report. The requisite certificatefrom the Auditors of the Company confirming compliance with the conditions of CorporateGovernance is attached to the Report on Corporate Governance.
24. STATUTORY DISCLOSURES
1. There was no change in the nature of business of the Company during the financialyear 2016-17. 2. The Company has not accepted any public deposits during the financialyear 2016-17. by the regulators or courts or tribunals impacting the going concern3.Nosignificant status and Company's operations in future.
4. The Company maintains an adequate system of Internal Controls including suitablemonitoring procedures which ensure accurate and timely financial reporting of varioustransactions efficiency of operations and compliance with statutory laws regulations andCompany policies. For more details please refer to the "Management Discussion andAnalysis Report" annexed to this report.
5. There are no material changes and commitments affecting the financial position ofthe Company which has occurred between the end of the financial year i.e. March 31 2017and the date of this report
6. The Company has not issued any Stock options to the Directors' or any employee ofthe Company.
We seek to promote and follow the highest level of ethical standards in all ourbusiness transactions guided by our value system. The SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 mandated the formulation of certain policiesfor all listed companies.
All our corporate governance policies are available on our website i.e.www.neccgroup.com
26. STATUTORY AND OTHER INFORMATION REQUIREMENTS
Information required to be furnished as per the Companies Act 2013 and SEBI (ListingObligations and Disclosure Requirements) Regulations 2015 and other applicable statutoryprovisions is annexed to this report as under:
|Particulars ||Annexure |
|Extract of Annual Return ||I |
|Particulars of Contracts or Arrangement with Related Parties ||II |
|Annual Report on CSR Activities ||III |
|Secretarial Audit Report issued by the Secretarial Auditor of the Company ||IV |
|Particulars of Employees and Remuneration as per Rule 5 of The Companies (Appointment and || |
| ||V |
|Remuneration of Managerial Personnel) Rules 2014. || |
The Directors place on record their sincere appreciation for the continued support andgoodwill of the esteemed Shareholders Bankers Financial Institutions Business partnersand other Stakeholders. The Directors also thank M/s Sanghi & Company StatutoryAuditor and M/s Ashish Kumar Friends & Co. Secretarial Auditor for their valuedcontribution. The Directors also sincerely appreciate and thank all the employees of theCompany for their valuable contribution and dedicated efforts in steering the Company toexcellent performance for yet another year in succession.
On Behalf of the Board of Director of
North Eastern Carrying Corporation Limited
(Sunil Kumar Jain)
Chairman & Managing Director DIN: 00010695
Date: 9th August 2017