Your Directors have pleasure in presenting the 28th Annual Report on thebusiness operations of the Company and the audited standalone and consolidated Ind ASfinancial statements for the financial year ended 31st March 2021 along withcomparatives.
Financial Summary and Highlights
The following table shows the operational results of the Company for the year 2020-21as compared to that of the previous year.
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|Revenue from Operations || |
|Other Income || |
|Total Revenue || |
|Expenditure || |
|Profit before Interest Depreciation and Tax || |
|Depreciation/Amortisation/ Impairment || |
|Profit before Finance Costs and Tax || |
|Finance Costs || |
|Profit (Loss) before Tax || |
|Tax Expense || |
|Profit (Loss) for the year || |
|Other comprehensive income/ (loss) || |
|Total comprehensive loss for the year || |
Impact of COVID-19 on operations
FY 2020-21 was an extraordinary and challenging fiscal year. During the month of March2020 World Health Organisation declared COVID -19 to be a global pandemic. The spread ofthis pandemic affected the normal business operations in many countries including India.The country has witnessed several disruptions in normal operations due to lockdownsimposed by the Government and other restrictions on movement of people transportation andsupply chain along with other stringent measures to contain Covid-19 spread. Due tonationwide lockdown during the first quarter the operations of the Company were affectedand totally disrupted until the end of April 2020.
Though the lockdown and transport movement restrictions were progressively relaxedsubsequently disruptions in operations of entities in road transport and automobilesector continued which adversely affected Company's sales during the year. We observedsales dip in some areas but through our conscious efforts we were able to manage thesales by identifying new customers and active supports by existing customers. Even with adip of around 25.17% sales on tonnage basis from some set of customers we were able toget growth in volume sales by 17.04% by adding new customers as well as by focusing onreinforcing customer relationship. This helped the Company to manage the sales withmarginal dip of 8.13% when compared to previous year.
The Company is in a comfortable liquidity position to meet its commitments. There couldbe impact of increased input costs due to changes in current market scenario and hencethere will be some impact on our profitability in the short term; however it is difficultto assess the exact quantum at this stage. The Company has taken adequate measures acrossthe organization to control costs and to address any evolving situation resulting fromthe pandemic.
Even though we are facing tough situations during the current year as Covid-19 bouncedback with its second wave we are expecting to revive our operations once normalcyregained. We also see that the prevailing slowness enable further acceptance of our costeffective products thereby expanding the market share. The future depends on how thesociety respond to coronavirus and its economic outcome. The Company will take all effortsto adapt to the changing business environment and respond suitably to fulfil the needs ofits customers.
Standalone and Consolidated Performance
During the year the Company could not achieve a better financial performance due tothe continued weakness in demand due to Covid 19 Pandemic which created disruption acrossthe globe. As the use of private vehicles were limited due to movement restrictions andthe public transport services were disrupted during lockdowns the sales weresignificantly impacted. The revenue for FY 2021 was Rs.6709 Lakhs lower by 13.74% overthe previous year's revenue of Rs.7778 Lakhs. Strong control over organizational expensesallowed the Company to report cash profit. Compared to previous FY the PBIT has improvedby 13.80%.
Through our subsidiary Shipnext Solutions Private Limited we were able to strengthenour relationship with fleet- owners who are our end customers. We hold 55% shareholdingin Shipnext. Shipnext has focused its operations to provide cost effective flexibleefficient and prompt services in logistic sector. With the intention to provideinformation technology in B2B and B2C logistic space it is in the verge of launchingfleet owner app that works on a chat based model. Even though disruptions continued inlogistic industry due to localised restrictions across states we were able to manage ourrevenue growth in subsidiary. On a consolidated basis the revenue for FY 2021 was Rs.7474Lakhs lower by 4.86% over the previous year's revenue of Rs.7856 Lakhs. Compared toprevious FY the PBIT has improved by 17.71%. The operations are exhaustively discussed in'Management Discussion and Analysis' forming part of the annual report.
In view of the loss incurred during the year the Board of Directors of your Companyhas decided not to transfer any amount to the reserves for the year under review.
In view of loss incurred during the year under review and losses of earlier years yourDirectors do not recommend any dividend during the year under review.
Material Changes and Commitments
There have been no material changes and commitments which affect the financialposition of the Company which have occurred between the end of the financial year to whichthe financial statements relate and the date of this Report
Capital and Debt Structure
As per the terms of issue (as varied) the outstanding Zero Coupon RedeemablePreference Shares are liable to be redeemed at the rate of rupees One Crore every year ina phased manner. The Company has the option to stretch the redemption until 9thFebruary 2029 being the date of expiry of twenty years from the date of the originalallotment.
While the first tranche of redemption of rupees One Crore was made in FY 2016-17 noredemption was made in subsequent financial years including FY 2020-21. The Board ofDirectors at its meeting held on 14th February 2019 approved the proposal toconvert 900000 Outstanding Redeemable Preference Shares of Rs.100 each aggregating toRs.900 Lakhs into Equity Shares of Rs.10 each by issue of equity shares throughPreferential Allotment route to the Preference Shareholders as consented by them on thatdate.
The outstanding Redeemable Preference Shares shall upon approval of equity shareholdersbe treated as Convertible Preference Shares with effect from the date of EquityShareholders' approval till the date of the completion of the conversion. Considering thatKerala State Industrial Development Corporation (KSIDC) is also a Promoter Shareholderthe Board has expressed the need to obtain their consent prior to proceeding with theEquity Shareholders' approval. Company is in the process of getting approval from KSIDC totake further steps for the proposed conversion of Preference Shares.
Directors and Key Managerial Personnel
Mr. M.E. Mohamed Managing Director Mr. Mohammed Sherif Shah Chief Financial Officerand CS. Baiju T. Company Secretary are the Whole-time Key Managerial Personnel (WKMP).Mr. Sachin Saxena was appointed as Chief Executive Officer and WKMP of the Company witheffect from 23 June 2021. Mr. K.S. Neelacanta Iyer having DIN: 00328870 Mr. M.S.Ranganathan having DIN: 00254692 Mrs. Rani Joseph having DIN: 07423144 are theIndependent Directors of the Company. None of the Directors is disqualified under Section164 of the Companies Act 2013. Mrs. Shereen Navaz having DIN: 00328770 Director retiresby rotation at the ensuing Annual General Meeting and being eligible offer herself forre-appointment. The Board recommends her appointment.
The Board has considered the declarations given by independent directors under Section149(7) with respect to meeting the criteria of independence compliance with the Code forIndependent Directors. Independent directors further declared that they are not aware ofany circumstance or situation which exist or may be reasonably anticipated that couldimpair or impact their ability to discharge their duties with an objective independentjudgment and without any external influence and are independent of the management.
Five Board meetings were held during the year. Details of Board meetings are includedin Corporate Governance Report.
Committees of the Board
The Company is having five Board Committees Audit Committee Nomination andRemuneration Committee Stakeholders Relationship Committee Risk Management Committee andShare Transfer Committee. Details of all the committees along with their main termscomposition and meetings held during the year under review are provided in the Report onCorporate Governance forming part of this Annual Report. The Board has accepted allrecommendations of the Audit Committee during the year under review.
The Board has annually evaluated the performance of the Board its committees andindividual directors. The Board evaluated the performance of Non-Executive and IndependentDirectors. All the Directors are eminent personalities having wide experience in the fieldof business industry and administration. Their presence on the Board is advantageous andfruitful in taking business decisions. Further details of Board evaluation are provided inthe Report on Corporate Governance.
Remuneration of Directors and Employees
The Board has considered the Company's policy on directors' appointment andremuneration including criteria for determining qualifications positive attributes andindependence of a director. The information required pursuant to Section 197 of theCompanies Act 2013 read with Rule 5 of the Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014 are annexed as Annexure -1 and forms part of thisReport. No Directors of the Company has received any remuneration from the subsidiarycompany.
Directors' Responsibility Statement
Pursuant to the requirement of Section 134 (3) and (5) of the Companies Act 2013 yourDirectors confirm that:
(a) In the preparation of the Annual Accounts the applicable Accounting Standards havebeen followed and that there are no material departures.
(b) Selected such accounting policies and applied them consistently and made judgmentsand estimates that are reasonable and prudent so as to give a true and fair view of thestate of affairs of your Company at the end of the financial year and of the profit of theCompany for that period.
(c) Taken proper and sufficient care for the maintenance of adequate accounting recordsin accordance with the provisions of the Companies Act 2013 for safeguarding the assetsof 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 applicablelaws and that such systems were adequate and operating effectively.
(f) Had laid down internal financial controls to be followed by the Company and thatsuch internal financial controls are adequate and were operating effectively.
Internal Financial Controls
Internal financial control and their adequacy are included in the Management Discussionand 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 underthe second proviso to Section 143(12) of the Act.
Performance and financial position of the subsidiaries associates and joint ventures
Pursuant to Section 129(3) of the Companies Act 2013 ("Act")the consolidated financial statements of the Company and its subsidiary prepared inaccordance with the relevant Accounting Standard specified under Section 133 of the Actread with Rule 7 of the Companies (Accounts) Rules 2014 form part of this Annual Report.
Pursuant to the provisions of the said section a statement containing the salientfeatures of the financial statements of the Company's subsidiary in Form AOC-1 is given inthis Annual Report as Annexure - 2. Further pursuant to the provisions of Section 136 ofthe Act the standalone financial statements of the Company consolidated financialstatements of the Company and the relevant consolidated financial statements and separateaudited financial statements along with other relevant documents in respect ofsubsidiary are available on the website of the Company. Except Shipnext Solutions PrivateLimited the Company do not have subsidiaries associates and joint ventures.
The Company has not accepted any fixed deposits during the year to which the provisionsof Section 73 of the Companies Act 2013 are applicable.
Corporate Social Responsibility
Company has generally taken corporate social responsibility (CSR) initiatives. Howeverthe present financial position of the Company does not mandate the implementation of CSRactivities pursuant to the provisions of Section 135 and Schedule VII of the CompaniesAct 2013.
Particulars of loans Guarantees or Investments
Particulars of loans guarantees or investments under Section 186 of the Companies Act2013 are given in the notes to the Financial Statement. Company has invested Rs.2.59 Lakhsin Shipnext Solutions Private Limited and hold 55% shareholding 1441550 Equity shares ofRs.1/- each at the agreed purchase price of Re.0.18 per share. The Board of directors ofthe Company has further agreed to provide financial assistance to Shipnext SolutionsPrivate Limited in the form of loan or to give guarantee or provide security in connectionwith a loan taken by it up to limit Rs.450 Lakhs on requirement basis. Shareholdersauthorised the Board to provide financial assistance to subsidiary company not exceedingRs.10 Crores over and above the limit as prescribed under Section 186 of the CompaniesAct 2013.
Contracts or Arrangements with Related Parties
There were no materially significant related party transactions which could have had apotential conflict with the interests of the Company. Transactions with related partiesare in the ordinary course of business on arm's length and are periodically placed beforethe Audit Committee and Board for its approvals and the particulars of contracts enteredduring the year in Form AOC-2 is enclosed as Annexure - 3.
The Board of Directors as recommended by the Audit Committee adopted a policy toregulate transactions between the Company and its Related Parties in compliance with theapplicable provisions of the Companies Act 2013 the Rules thereunder and the ListingAgreement. The policy on Related Party Transactions is available on the website of theCompany. The details of the transactions with related parties during the financial yearare 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 mostefficiently to nurture and preserve the environment and to exploit all its avenues toadopt latest technology in its operations. The information required under Section134(3)(m) of the Companies Act 2013 read with Rule 8 of the Companies (Accounts) Rules2014 regarding Conservation of Energy Technology Absorption Foreign Exchange Inflow andOutflow are given in Annexure - 4 to this report.
Company has developed and implemented a risk management policy and formed a RiskManagement Committee to address and evaluate various risks impacting the Company and areport on risk management is provided in this Annual Report in Management Discussion andAnalysis.
A Vigil Mechanism for directors and employees to report genuine concerns has beenestablished as required under the provisions of Section 177 of the Companies Act 2013.The Vigil Mechanism Policy has been uploaded on the website of the Company.
Material Orders of Judicial Bodies / Regulators
No significant and material orders were passed by Courts Tribunals and otherRegulatory Authorities affecting the going concern status of the Company's operations.
Secretarial Audit Report
The secretarial audit report on the compliance of the applicable Acts Laws RulesRegulations Guidelines Listing Agreement Standards etc. as stipulated by Section 204 ofthe Companies Act 2013 read with the Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014 forms part of this report as Annexure - 5. The findingsof the audit have been satisfactory.
Statutory Auditors and Auditors' Report
M/s. Walker Chandiok & Co LLP Chartered Accountants Kochi were appointed as theAuditors of the Company at the Annual General Meeting held on 06 July 2017 to hold officefor a period of 5 consecutive years. Necessary certificate and consent has been obtainedfrom the Auditors as per Section 139(1) and 141 of the Companies Act 2013 and theCompanies (Audit and Auditors) Rules 2014 for their continuance as the Auditors of theCompany. They Auditors have confirmed that they hold a valid certificate issued by thePeer Review Board of the ICAI. Since ratification by Shareholders every year for theappointment of the Statutory Auditors is not required the Notice of ensuing Annual GeneralMeeting does not include the proposal for seeking Shareholders approval for ratificationof Statutory Auditors appointment.
The Auditors' Report on the financial statement of the Company forms part of thisAnnual Report and it does not contain any qualifications reservations or adverse remarksor disclaimer. The Auditor's observations are suitably explained in notes to the Accountsand are self-explanatory.
Cost Records and Cost Audit
Pursuant to Section 148 of the Companies Act 2013 read with the Companies (CostRecords and Audit) Rules 2014 the Cost Audit Report is not mandatorily applicable to ourCompany 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 Actare duly made and maintained by the Company.
Compliance with Secretarial Standards
The Company has complied with Secretarial Standards issued by the Institute of CompanySecretaries of India on Board meetings and Annual General Meetings.
Corporate Insolvency Resolution Process
No application filed for corporate insolvency resolution process by financial oroperational creditor or by the Company under The Insolvency and Bankruptcy Code 2016before the National Company Law Tribunal during the year.
The Board of Directors approved the proposal to convert 900000 outstanding RedeemablePreference Shares into Equity Shares by issue of equity shares through PreferentialAllotment route to the Preference Shareholders. Company is in the process of gettingrequired approvals to take further steps for the proposed conversion of Preference Shares.
In compliance with Section 92 and Section 134 of the Companies Act2013 the AnnualReturn in the prescribed format is available athttps://www.easterntreads.com/reports/Annual+Reports
Listing and Dematerialisation
The equity shares of the Company are listed on the BSE Limited. Shareholders arerequested to convert their holdings to dematerialized form to derive its benefits byavailing the demat facility provided by NSDL and CDSL.
Corporate Governance Report
Your Company has been complying with the principles of good Corporate Governance overthe years and is committed to the highest standards of compliance. Pursuant to the ListingAgreement read with Regulation 15(2) of the SEBI (LODR) Regulations 2015 the compliancewith 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 theCompany. However as a good Corporate Governance practice the Company has generallycomplied with the Corporate Governance requirements and a report on Corporate Governanceis annexed as Annexure - 6 and forms part of this Report.
Management Discussion and Analysis Report
As required under SEBI (LODR) Regulations 2015 the Management Discussion and AnalysisReport is annexed as Annexure - 7 and forms part of this Report.
Employee Wellbeing and Safety
Your Company has implemented policies and procedures with the objective of ensuringemployee safety security and wellbeing at the workplace. As stated in our Code ofConduct we are committed to provide a gender friendly workplace equal opportunities formen and women prevent/redress sexual harassment and institute good employment practices.The Company has adopted policy on prevention of sexual harassment in line with therequirements of the Sexual Harassment of Women at the work place (Prevention Prohibitionand Redressal) Act 2013.
Internal Complaints Committee has been set up to redress complaints received regardingsexual harassment. All employees (permanent contractual temporary trainees) are coveredunder this policy. The following is a summary of sexual harassment complaints received anddisposed 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 |
Your Directors wish to place on record their gratitude to Bankers Share TransferAgents Auditors Customers Suppliers and Regulatory Authorities for their timely andvaluable assistance and support. The Board values and appreciates the professionalismcommitment and dedication displayed by employees at all levels. Your Directors arethankful to the shareholders for their continued support and confidence.
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For and on behalf of the Board
|Kochi || |
Navas M Meeran
|23 June 2021 || |
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