Your Directors have pleasure in presenting the 39th Annual Report together with theAudited Accounts of the Company for the Financial Year ended 31st March 2020.
The Standalone and Consolidated Financial Highlights for the year ended 31stMarch 2020:
| || || || ||(Amount in Rs.) |
|Particulars ||Standalone ||Consolidated |
| ||2019-2020 ||2018-2019 ||2019-2020 ||2018-2019 |
|Revenue from Operations ||85585299 ||15002229 ||1965616747 ||2366302736 |
|Other Income ||5738750 ||11572977 ||13546993 ||12103181 |
|Total ||91324049 ||26575205 ||1979163740 ||2378405917 |
|Profit/loss before Depreciation Finance Costs Exceptional items and Tax Expense ||533737 ||8362532 ||102123019 ||148727492 |
|Less: Depreciation/ Amortization/ Impairment ||3084 ||- ||14579258 ||13651455 |
|Profit /loss before Finance Costs Exceptional items and Tax Expense ||530653 ||8362532 ||87543761 ||135076037 |
|Less: Finance Costs ||- ||- ||63132935 ||59945005 |
|Profit /loss before Exceptional items and Tax Expense ||530653 ||8362532 ||24410826 ||75131032 |
|Add/(less): Exceptional items ||- ||- ||- ||- |
|Profit /loss before Tax Expense ||530653 ||8362532 ||24410826 ||75131032 |
|Less: Tax Expense || || || || |
|-Current Tax ||124782 ||2190000 ||8124782 ||21690000 |
|-Deferred Tax ||- ||- ||1514122 ||2250564 |
|-Prior Period Tax ||- ||- ||1120520 ||(2224889) |
|Profit /loss for the year (1) ||405871 ||6172532 ||13651401 ||53415357 |
|Total Comprehensive Income/loss (2) ||(54643830) ||(401899) ||(54757734) ||473991 |
|Total Comprehensive Income for the period (Comprising profit/ (loss) and other Comprehensive Income for the period) (1+2) ||(54237959) ||5770633 ||(41098509) ||53897034 |
REVIEW OF PERFORMANCE:
The Revenue from operations for FY 2019-20 increased to Rs. 85585299/-as comparedto the revenue of Rs. 15002229/- in the previous year. The Profit before Tax for the FY2019-20 stood at Rs. 530653/- as compared to Rs. 8362532/- in the previous year. TheProfit After Tax for the FY 2019-20 decreased to Rs 405871/- as compared to profit of Rs6172532 /- in the previous year.
The Revenue from operations for the FY 2019-20 decreased to Rs. 1965616747/- ascompared to revenue of Rs. 2366302736/- in the previous year. The Profit before Taxfor the FY 2019-20 decreased to Rs 24410826/- as compared to Rs. 75131032/- in theprevious year. The Profit after Tax for the FY 2019-20 decreased to Rs. 13651401/- ascompared to Rs. 53415357/- in the previous year.
The Directors are pleased to recommend dividend on equity shares at the rate of Rs0.05/- per Equity Share of face value Rs 10/- each for the financial year 2019-2020subject to approval by the shareholders at the ensuing Annual General Meeting (AGM).
TRANSFER TO RESERVES:
During the financial year there was no amount proposed to be transferred to theReserves.
MAJOR EVENTS OCCURED DURING THE YEAR:
State of the Company's affairs
The Company has a strategic vision of emerging as a recognized player in subscribing tothe capital of private enterprises in order to fast track its strategic vision ofexpanding and diversifying its business.
During the year under review the Company has entered into Share Purchase Agreement(SPA) on 14th November 2019 with Marinetrans India Private Limited and MarinetransLogistics Private Limited (wholly owned subsidiary of Marinetrans India Private Limited)for acquiring 100% stake in Marinetrans Logistics Private Limited. The acquisition wasexpected to be completed before March 2020 but due to COVID-19 the said acquisition willtake some time.
On the completion of the acquisition East West Holdings Ltd is expected to add 15000container capacities and this will result in increase in revenue of the Company upto Rs.120 cr approx.
Changes in the Nature of Business if any
During the year under review the Company continued to provide Logistics and alliedservices to its customers and there was no change in the nature of business or operationsof the Company which impacted the financial position of the Company
Material Changes and Commitments Affecting Financial Position of the Company:
There have been no material changes and commitments affecting the financial position ofthe Company between the end of the financial year and the date of this report.
However COVID-19 pandemic driven situation has created disruptions in the businessoperations of the Company and this has posed major challenges to the Logistics Businessesof East West Holdings Limited and its wholly owned subsidiary (WOS) East West FreightCarriers Limited. The operations of the Company's corporate office and its branch officesall over India were shut down resulting into the adverse impact on the business. TheCompany had to face many hurdles in clearance and transportation of cargo and containersdue to scarcity of drivers and labour for material handling.
At this juncture the exact future impact of the COVID-19 cannot be quantified but theimpact on the business of the Company will be for long-term. The consolidated revenue andprofitability of the Company is affected.
The Company is closely monitoring the situation and taking appropriate measure for thesmooth running of business operations of the Company and is confident that business willnormalize in the near future.
A detailed note pursuant to provision of the regulation 30 of SEBI (Listing Obligationsand Disclosure Requirements) Regulations 2015 read with SEBI Circular No.SEBI/HO/CFD/CMD1/CIR/P/2020/84 dated 20th May 2020 was filed with the stock exchanges.
During the year under review there is no change in the Authorized Issued Subscribedand Paid-up Share Capital of the Company. As on March 31 2020 the Authorized ShareCapital of the Company is Rs. 180000000/- divided into 18000000 Equity Shares of Rs.10/- (Rupee Ten) each and the Issued Subscribed and Paid-up Equity Share Capital of theCompany is Rs. 175300000/-divided into 17530000 Equity shares of Rs.10/- each.
The Company has not issued any Equity Share with differential rights sweat equityshares or bonus shares during the year under review.
TRANSFER OF UNPAID AND UNCLAIMED AMOUNT TO IEPF:
The Ministry of Corporate Affairs under Section 124 and 125 of the Companies Act 2013requires dividends that are not encased/ claimed by the shareholders for a period of sevenconsecutive years to be transferred to the Investor Education and Protection Fund (IEPF).
During the year under consideration no amount was due for transfer to IEPF inaccordance with Section 125 of the Companies Act 2013.
Directors and Key Managerial Personnel Appointment and Reappointments
- During the year Mr. Anand Nerurkar was appointed as Chief Financial Officer (CFO) ofthe Company at the Board Meeting held on 27th June 2019.
- Mr. Mohammad Shafi (DIN: 00198984) retires by rotation at the ensuing Annual GeneralMeeting and being eligible offers himself for re-appointment.
Retirements and Cessations
- Mr. Sanjiv Panchal resigned as the Chief Financial Officer (CFO) of the Company w.e.f30th June 2019.
- Mr. Anand Nerurkar resigned as Chief Financial Officer (CFO) of the Company w.e.f 1stMarch 2020.
Number of meetings of the Board of Directors:
Eight meetings of the Board of Directors of the Company were held during the year. TheDirectors actively participated in the meetings and contributed valuable inputs on thematters brought before the Board from time to time. The intervening gap between theMeetings was within the period prescribed under the Companies Act 2013. Detailedinformation is given in the Corporate Governance Report.
The details of the composition of the Committees meeting held attendance of CommitteeMembers at such meetings and other relevant details are provided in the CorporateGovernance Report'.
Declaration from Independent Directors
The Company has received from all Independent Directors declarations that they meet thecriteria of independence as laid down under Section 149(6) of the Companies Act 2013 andRegulation 16(1)(b) of the SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 and there is no change in their status of Independence as required underSection 149(7) of the Companies Act 2013.
POLICY ON DIRECTORS' APPOINTMENT AND REMUNERATION:
The Board has on the recommendation of the Nomination & Remuneration Committeeframed a policy for selection and appointment of Directors Senior Management and theirremuneration including criteria for determining qualifications positive attributes andother matters provided under sub section (3) of section 178 of the Companies Act 2013.
The said policy alternatively can also be accessed on the website of the Company at thefollowing link: http: //ewhl. in/ doc/policy/Nomination%20and%20remuneration .pdf.
Pursuant to the provisions of the Companies Act 2013 and SEBI Listing Regulations theannual performance of the Board its Committees Chairperson and Individual Directorsincluding Independent Directors was evaluated based on the framework that has beendesigned in compliance with the requirements of the Act and the SEBI Listing Regulationsand in consonance with Guidance Note on Board Evaluation issued by SEBI.
DIRECTORS RESPONSIBILITY STATEMENT:
Pursuant to the requirement under Section 134 3 (c) of the Companies Act 2013 withrespect to Directors Responsibilities Statement it is hereby confirmed:
a. that in the preparation of the annual accounts for the financial year ended 31stMarch 2020 the applicable accounting standards had been followed along with properexplanation relating to material departures.
b. that the Directors has selected such accounting policies and applied themconsistently and made judgments and estimates that were reasonable and prudent so as togive a true and fair view of the state of affairs of the Company at the end of thefinancial year and of the profit or loss of the Company for the year review.
c. that the Directors had taken proper and sufficient care for the maintenance ofadequate accounting records in accordance with the provisions of the Companies Act 2013for safeguarding the assets of the Company and for preventing and detecting fraud andother irregularities and
d. The Directors had prepared the accounts for the financial year ended 31st March2020 on a going concern basis.
e. The Directors had laid down internal financial controls to be followed by theCompany and that such internal financial controls are adequate and were operatingeffectively.
f. The Directors had devised proper systems to ensure compliance with the provisions ofall applicable laws and that such systems were adequate and operating effectively.
PARTICULARS OF EMPLOYEES:
Disclosure pertaining to the remuneration and other details as required under Section197(12) of The Companies Act 2013 read with rule 5 of the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 form part of the Directors report and isenclosed as Annexure I.
SUBSIDIARIES JOINT VENTURES ANDASSOCIATE COMPANIES:
As on 31st March 2020 following are the Subsidiaries/Associates/Joint ventures of theCompany:
- East West Freight Carriers Limited is the wholly owned subsidiary of the Company.
A statement containing the salient feature of the financial statement of the Company'sWholly-owned Subsidiary and the Associate company pursuant to the first proviso tosub-section (3) of Section 129 has been given in Form AOC-1 and is enclosed as AnnexureII.
The Company has formulated a Policy for determining Material Subsidiaries. The Policyis placed on the Company's website at the link http://www.ewhl.in/doc/policy/material.pdf
During the year under review your Company has neither accepted/ invited any depositsfrom public falling within the ambit of Section 73 of the Companies Act 2013 and theCompanies (Acceptance of Deposits) Rules 2014 nor did any deposits remain unpaid orunclaimed during the year under review.
LOANS GUARANTEES OR INVESTMENTS:
The Company has given Loan to its wholly owned subsidiary East West Freight CarriersLimited under the provisions of Section 186 of the Act read with the Companies (Meetingsof Board and its Powers) Rules 2014 and the details have been disclosed in the Financialstatements.
RELATED PARTY TRANSACTIONS:
The particulars of the contracts and arrangements entered into by the Company withrelated parties referred to in Sub-Section (1) of Section 188 of the Companies Act 2013which were on arms' length basis as provided under Explanation (b) to the third provisothereto and the details have been furnished in Form No. AOC-2 and is enclosed as AnnexureIII.
The Policy on materiality of related party transactions and dealing with related partytransactions as approved by the Board may be accessed on the Company's website.
CONSERVATION OF ENERGY AND TECHNOLOGY ABSORPTION:
Information in accordance with the provisions of Section 134 (3)(m) of the Act readwith the Companies (Accounts) Rules 2014 regarding Conservation of Energy TechnologyAbsorption and Foreign Exchange Earnings and Outgo during the reporting period is enclosedherewith as Annexure- IV.
IMPLEMENTATION OF RISK MANAGEMENT POLICY:
The Company has formulated a policy and process for risk Management. The Company hasset up a core group of leadership team which identifies assesses the risks and thetrends exposure and potential impact analysis at different level and lays down theprocedure for minimization of risks. Risk Management forms an integral part of Managementpolicy and is an ongoing process integrated with the operations.
Company has identified various strategic operational and financial risks which mayimpact Company adversely. However management believes that the mitigation plans foridentified risks are in place and may not threaten the existence of the Company.
VIGIL MECHANISM / WHISTLE BLOWER POLICY:
Your Company believes in promoting a fair transparent ethical and professional workenvironment. The Company pursuant to the provisions of Section 177 of the Companies Act2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 hasestablished a vigil mechanism for Directors and employees and the same has beencommunicated to the Directors and employees of the Company. The Policy aims to provide anavenue for Employees and Directors to raise their concerns about unethical behaviouractual or suspected fraud or violation of the company's code of conduct and it alsoempowers the Audit Committee of the Board of Directors to investigate the concerns raisedby the employees.
The Whistle Blower Policy is hosted on the Company's websitehttp://www.ewhl.in/investor.html.
MATERIAL CHANGES AND COMMITMENTS IF ANY AFFECTING FINANCIAL POSITION BETWEEN END OFTHE FINANCIAL YEAR AND DATE OF REPORT:
There were no material changes and commitments which affected the financial positionof the company between the end of the financial year to which the financial statementsrelates and the date of the report.
SIGNIFICANT AND MATERIAL ORDERS:
There are no significant and material orders passed by the regulators or courts ortribunals impacting the going concern status and Company's operations in future.
M/s. Koshal & Associates Chartered Accountants were appointed as StatutoryAuditors of the Company at the 35th Annual General Meeting held on 30/09/2016 to holdoffice from the conclusion of ensuing Annual General Meeting (AGM) till the conclusion of40th AGM i.e. for a period of five (5) consecutive years subject to the ratification bythe shareholders at each AGM held after the previous AGM.
The Report given by the Auditors on the financial statements of the Company is part ofthis Annual Report. There has been no qualification reservation adverse remark ordisclaimer given by the Auditors in their Report.
The Ministry of Corporate Affairs vide notification dated 07/05/2018 notified severalSections of the Companies (Amendment) Act 2017. In view of the said notification therequirement of ratification of appointment of auditors under Section 139 of the CompaniesAct 2013 at each AGM is no longer required.
Pursuant to the provisions of Section 204 of the Companies Act 2013 and the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 the Board of Directorsof the Company have re-appointed Mr. Mandar Palav Partner - M/s DSM & AssociatesPracticing Company Secretaries Mumbai to conduct the Secretarial Audit for the financialyear 2020-2021. The Secretarial Audit Report for the year 2019-2020 issued by him in theprescribed form MR-3 is attached to this Report as Annexure- V. The said Secretarial AuditReport does not contain any qualification reservation adverse remark or disclaimer madeby the Secretarial Auditor.
Secretarial Audit has also been carried out for our wholly owned subsidiary East WestFreight Carriers Limited as required under the SEBI (Listing Obligations & DisclosureRequirements) Regulations 2015 as amended.
INTERNAL CONTROL SYSTEM:
The Company has in place well defined and adequate internal controls commensurate withthe size of the Company and same were operating throughout the year. Pursuant to theprovisions of Section 138 of the Companies Act 2013 the Board of Directors of theCompany appointed M/s. Meenakshi Manish Jain & Associates Chartered accountants asInternal Auditor of the Company for the F.Y. 2019-2020.The audit committee of the Board ofDirectors in consultation with the Internal Auditor formulates the scope functioningperiodicity and methodology for conducting the internal audit.
DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION PROHIBITIONAND REDRESSAL) ACT 2013:
Your Company has always believed in providing a safe and harassment free workplace forevery individual working in the Company's premises through various interventions andpractices. The Company always endeavours to create and provide an environment that is freefrom discrimination and harassment including sexual harassment.
The policy on prevention of sexual harassment at workplace aims at prevention ofharassment of employees and lays down the guidelines for identification reporting andprevention of undesired behaviour.
During the year ended March 31 2020 there was Nil complaints recorded pertaining tosexual harassment.
EXTRACT OF ANNUAL RETURN:
As provided under Section 92(3) of the Act the extract of annual return as prescribedin Form MGT-9 forms part of this Report as Annexure - VI and is also available on theCompany's website at the link http: //www .ewhl. in/investor.html.
Report on Corporate Governance and Certificate of the Auditors of your Companyregarding compliance of the conditions of Corporate Governance as stipulated in Schedule Vread with Regulation 34(3) of the SEBI (LODR) Regulations forms part of the Annual Reportas Annexure - VII.
MANAGEMENT DISCUSSION ANALYSIS REPORT:
In terms of the provisions of Regulation 34 of the Securities and Exchange Board ofIndia (Listing Obligations and Disclosure Requirements) Regulations 2015 (SEBI ListingRegulations) the Management discussion and Analysis forms part of the Annual Report asAnnexure-VIII.
CONSOLIDATED FINANCIAL STATEMENTS:
The Consolidated Financial Statements of the Company and its subsidiary prepared inaccordance with Indian Accounting Standards notified under the Companies (IndianAccounting Standards) Rules 2015 (Ind AS') form part of the Annual Report and arereflected in the Consolidated Financial Statements of the Company.
Your Directors wish to place on record their appreciation of the support which theCompany has received from its promoters shareholders lenders business associatesvendors customers media and the employees of the Company.