North Eastern Carrying Corporation Limited
Your Directors have immense pleasure in presenting the Thirty Fourth (34th) AnnualReport together with the Audited Financial Statements of your Company for the FinancialYear ended March 31 2019.
1. PERFORMANCE HIGHLIGHTS
1.1 The highlights of performance of the Company for the financial year 2018-19were as under with comparative position of previous year's performance:
(Rs. in Lakhs)
|Particulars ||2018-19 ||2017-18 |
|Revenue from Operations ||34292.13 ||38487.20 |
|Profit before Tax ||702.86 ||601.01 |
|Tax Expenses ||282.09 ||213.65 |
|Net Profit for the year ||453.45 ||387.36 |
|Total Comprehensive Income ||453.45 ||387.36 |
|Earning per Share ||0.90 ||1.12 |
1.2 FINANCIAL PERFORMANCE
During the year the revenue from operations declined to Rs. 34292.13 Lakhs as againstRs. 38487.20 Lakhs in the previous financial year 2017-18 recording a decline of 11%. OurNet profit has increased to Rs. 453.45 Lakhs for the current financial year 2018-19 asagainst Rs. 387.36 Lakhs in the previous financial year 2017-18 recording a increase of17 %.
1.3 STATE OF THE COMPANY'S AFFAIRS
The operational highlights of the Company during the year are as follows:-
During the year your Company has received a work order worth of Rs. 356 crore approx.from TATA STEELS LIMITED for transportation of their raw materials and miningproducts from its Sukinda mines situated in Odisha. The work order is valid from April 12018 to March 31 2021.
Partial truck load Sundry Movement has increased from 53.91% in the previous year2017-18 to 54.26% in the current year 2018-19.
Full truck load has declined from 46.09% in the previous FY 2017-18 to 45.74% in thecurrent FY 2018-19.
The Company is looking to expand its existing 1.5 mn. sq.ft warehousing capabilitiesover the next years across
50 major Indian cities with its Asset Light approach which includes owned and leasedunder management. The Warehousing and distribution segment is to be headed by Mr. UtkarshJain.
Continued focus on improving profitability by moving away from non profitable clients
Top 5 customers contributed 37% of total revenues in FY 2018-19 as compared to 33% inFY 2017-18 which is also a remarkable increment in contribution to Total Revenue.
Rating of Crisil BBB-/stable on our long-term debt
Your Company has completed its marvelous and glorious 50 years and the Company hadcelebrated its Golden
Jubilee on 24th November 2018 at Delhi.
Your Company needs Capital for its expansion plans therefore the Board of Director hasdecided to invest the profit into the operations of the Company. Hence no dividend isrecommended for the financial year ended 31st March
3. SHARE CAPITAL
As on March 31 2019 the Authorized Share Capital of the Company was Rs.5400.00 Lakhsconsisting of 54000000 equity shares of Rs.10/- each and the issued & paid up sharecapital of the Company was Rs.5019.73 Lakhs consisting of 50197336 equity shares ofRs.10/- each.
4. TRANSFER TO RESERVES
The Company doesn't propose to transfer any amount to General Reserve during thefinancial year 2018-19
5. EXTRACT OF ANNUAL RETURN
As per the requirements of Section 92(3) of the Act the extract of the annual returnis given in Annexure-I in the prescribed Form No. MGT-9 which is a part of thisreport & is also available on the website of the Company at www. neccgroup.com.
6. CORPORATE GOVERNANCE
We at NECC believe that good and effective Corporate Governance is critical toachieve corporate vision and mission of the organization; it is more of an organizationalculture than a mere adherence to rules and regulations. Your Company has established andmaintained a strong ethical environment overseen by Board of Directors where 3 out of 6Directors are Independent. The Company's practices and policies reflect the true spirit ofCorporate Governance initiatives.
Your Company is in compliance of all mandatory requirements of Corporate Governance asstipulated as per Securities and Exchange Board of India (Listing Obligations andDisclosure Requirements) Regulations 2015. In terms of Regulation 34(3) read with ScheduleV of the SEBI Listing Regulations a Report on Corporate Governance along with ComplianceCertificate issued by the Statutory Auditors of the Company is attached and forms integralpart of this Report (herein referred to Corporate Governance Report").
7. BOARD & COMMITTEES OF BOARD
The details of the composition terms of reference and number of meetings of the Boardand its Committee held during the financial year 2018-19 are provided in the CorporateGovernance Report.
8. DIRECTORS AND KEY MANAGERIAL PERSONNEL
As per the provisions of Section 152 of the Companies Act 2013 and in Articles ofAssociation of the Company Mr. Sunil Kumar Jain (DIN:00010695) shall retire by rotationin the ensuing 34th Annual General Meeting and being eligible offers himself forre-appointment.
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. Mr. Manoj Kumar Jain Mr. Mohak Jain and Mr. Utsav Jain IndependentDirectors have submitted a declaration that each of them meets the criteria ofindependence as provided in Section 149(6) of the Act and in Listing Regulations.
Brief particulars and expertise of director seeking reappointment together with theirother directorships and committee memberships have been given in the annexure to thenotice of the Annual General Meeting in accordance with the requirements of the ListingRegulations and applicable Secretarial Standards.
In terms of Section 203 of the Act the following are the Key Managerial Personnel(KMP) of the Company as on date of this report:
1. Mr. Shyam Lal Yadav Chief Financial Officer
2. Ms. Mamta Bisht Company Secretary
9. DIRECTOR RESPONSIBILTY STATEMENT
With reference to Section 134(5) of the Companies Act 2013 your Directors herebyconfirmed that:-i. in the preparation of the annual accounts for the financial year endedMarch 31 2019 the applicable Accounting
Standards have been followed and no material departures have been made from the same;ii. such accounting policies have been selected and applied consistently (except forchanges in the Accounting Policies as disclosed in the Notes to Accounts to the FinancialStatements) and judgments and estimates made that are reasonable and prudent so as to givea true and fair view of the state of affairs of the Company at the end of the financialyear and of the profit and Loss of the Company for the that period; iii. proper andsufficient care is taken for the maintenance of adequate accounting records in accordancewith the provisions of the Companies Act 2013 for safeguarding the assets of the Companyand for preventing and detecting fraud and other irregularities; iv. the annual accountshave been prepared on a going concern basis. v. Internal financial controls have been laiddown to be followed by the Company and such internal financial controls were adequate andoperating effectively; and vi. the Directors had devised proper system to ensurecompliance with the provisions of all applicable laws and such systems were adequate andare operating effectively.
10. INTERNAL FINANCIAL CONTROLS AND THEIR ADEQUACY
The Board of your Company has laid down internal financial controls to be followed bythe Company and that such internal financial controls are adequate and operatingeffectively. Your Company has adopted policies and procedures for ensuring the orderly andefficient conduct of its business including adherence to the Company's policies thesafeguarding of its assets the prevention and detection of frauds and errors theaccuracy and completeness of the accounting records and the timely preparation ofreliable financial disclosures.
M/s Raj Achint & Associates Chartered Accountants the Statutory Auditors of theCompany has audited the financial statements included in the Annual Report and has issuedan attestation report on our internal control over financial reporting (as defined inSection 143 of Companies Act 2013).
Members in their 32nd AGM had appointed M/s. Raj Achint & Associates CharteredAccountants (Firm Registration
No. 022023N) as Statutory Auditors of the Company to hold office for a period of upto 5(Five) years i.e. till the conclusion of the 37th AGM of the Company to be held in theFinancial Year 2022 subject to ratification by the Members at every AGM of the Company.
Pursuant to the issued by the Ministry of Corporate Affairs on 7th May 2018 amendingSection 139 of the ratification Act the mandatory requirement for of appointment ofAuditors by the Members at every AGM has been omitted. Accordingly the Notice of ensuingAGM does not include the proposal for seeking Members approval for ratification ofappointment of Statutory Auditors of the Company
The Statutory Auditors have not reported any frauds under Section 143(12) of theCompanies Act 2013.
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. PracticingCompany Secretaries (COP No.4056) New Delhi to undertake the Secretarial
Audit of the Company for the year ended March 31 2019. The Secretarial Audit Reportfor the financial year ended
March 31 2019 is annexed to this report as Annexure IV.
The Auditors' Report and the Secretarial Audit Report for the financial year endedMarch 31 2019 do not contain any qualification reservation adverse remark ordisclaimer.
12. PARTICULARS OF LOANS GUARANTEES AND INVESTMENTS BY COMPANY
Pursuant to Section 186 of the Act and Schedule V of the SEBI Listing Regulationsdisclosure on particulars relating to loans advances guarantees and investments areprovided as part of the financial statements.
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 Listing Regulations.
There were no materially significant Related Party Transactions made by the Companyduring the year that would have required Shareholder approval under the ListingRegulations.
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 in Annexure IIis annexed to this report.
The Board has approved a policy on related party transactions. An abridged policy onrelated party transactions has been placed on the Company's website at website link: http://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 significant particulars 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 2018-19.
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 link http://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 made thereunder TheCompanies (Corporate Social Responsibility Policy) Rules 2014 read with
Schedule VII of the Companies Act 2013 including any statutory modification oramendment thereto was approved by the Board of Directors of the Company. The"Corporate Social Responsibility Policy" is available on the website of theCompany at website link http://neccgroup.com/wp-content/uploads/2015/02/CSR-Policy.pdf
During the Financial Year 2018-19 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 the societyfinancially support by sponsoring the Teacher's Salary on monthly basis of"Unnati" NGO project.
During the financial year 2018-19 your Company has spent a total expenditure of Rs.401960/- towards CSR Activities The average net profit of the Company computed as perSection 198 of the Act during the three immediately preceding financial years was Rs.78165174.67/-.It was hence required to spend Rs. 1161344/- on CSR activities duringthe Financial Year 2018-19 being 2% of the average net profits of the three immediatelypreceding financial years but due to avoidable circumstances and paucity of time theCompany has spent on the CSR activities less than the limits prescribed under CompaniesAct 2013. The CSR activities are scalable with few new initiatives that may be consideredin future and moving forward the Company will endeavor to spend the complete amount on CSRactivities in accordance with the statutory requirements.
In terms of the Companies (Corporate Social Responsibility Policy) Rules 2014 theAnnual Report on Corporate Social Responsibility activities is annexed to this Report as AnnexureIII.
18. EVALUATION OF BOARD OF DIRECTORS/INDEPENDENT DIRECTORS
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 itsCommittees and Directors. The Chairman of the Committee also had interactions with each ofthe Directors and sought their feedback and suggestions on the overall Board Effectivenessand Directors performance.
A structured questionnaire covering various aspects of the Board's functioning such asadequacy of the composition of the Board and its Committees Board culture execution andperformance of specific duties obligations and governance was prepared based on theGuidance note issued by SEBI vide circular no CMD/CIR/P/2017/004 dated 05.01.2017 and MCAvide dated July 5 2017 also prescribed that the provisions relating to review ofperformance of
Independent Directors and evaluation mechanism prescribed in Schedule IV of theCompanies Act 2013
A separate exercise was carried out to evaluate the performance of individual directorsincluding the Chairman of the Board who were evaluated on parameters such as guidance/support to management outside Board/ Committee meetings degree of fulfillment of keyresponsibilities effectiveness of meetings etc.
In addition pursuant to the provisions of Schedule IV to the Companies Act 2013 theIndependent Directors reviewed the performance of the Non-Independent Directors and of theBoard as a whole performance of the Chairman of the
Board taking into account the views of all the Directors and the quality quantity andtimeliness of flow of information between the Company management and the Board and itssufficiency for the Board to effectively perform its duties.
19. SUBSIDIARIES JOINT VENTURES & ASSOCIATE COMPANIES
There is no Subsidiary Joint Ventures and Associate Companies during the FinancialYear 2018-19.
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 as Annexure V. None of the employees listedin the said Annexure is related to any Director of the Company.
21. HUMAN RESOURCE MANAGEMENT
Your Company has 250+ branches across PAN INDIA NEPAL and operational set ups intoBHUTAN and BANGLADESH and the total Manpower of the Company as on March 31 2019 was 513employees which include Executives and Non-Executives. In order to increase theprofessional culture in the Company 73 employees were appointed through Interview andwritten 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.
REPRESENTATION OF WOMEN EMPLOYEES
As on March 31 2019 the Company had 18 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 we have an Internal Compliant Committee whichis constituted on March 27 2017. Your Company has about 18 women employees in variouscadres including Permanent contractual temporary and trainees. The Internal CompliantCommittee aims to provide protection to employees at the workplace and prevent and redresscomplaints of sexual harassment and for matters connected or incidental thereto with theobjective of providing a safe working environment where employees feel secure. TheCommittee consists with following members:-
|Name & Designation ||Post in the Internal Complaints 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 2018-19 andhence no complaint is outstanding as on March 31 2019 for redressal.
23. STATUTORY DISCLOSURES
1. There was no change in the nature of business of the Company during the financialyear 2018-19.
2. The Company has not accepted any deposits within the meaning of Section 73 of theCompanies Act 2013 during the financial year 2018-19.
3. No significant and material orders were passed by the regulators or courts ortribunals impacting the going concern 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" 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 2019and the date of this report.
6. The Company has not issued any Stock options to the Directors' or any employee ofthe Company.
7. Information on composition terms of reference and number of meetings of the Board& its Committees held during the year establishment of vigil mechanism/whistle blowerpolicy and web-links for familiarization/ training policy of Directors Policy onMateriality of Related Party Transactions and Dealing with Related Party Transactions andPolicy for determining Material Subsidiaries Compensation to Key Managerial PersonnelSitting fees to Independent Directors etc. have been provided in the Report on CorporateGovernance prepared in compliance of provisions of SEBI (LODR) Regulations 2015 asamended from time to time which forms part of the Annual Report.
24. COMPLIANCE WITH SECREATRIAL STANDARDS
The Company has devised proper systems to ensure compliance with the provisions of allapplicable Secretarial Standards issued by the Institute of Company Secretaries of Indiaand that such systems are adequate and operating effectively.
25. MAINTENANCE OF COST RECORDS
The Central Government has not prescribed the maintenance of cost records for theproducts/services of the Company under Companies (Cost Records and Audit) Rules 2014read with Companies (Cost Records and Audit) Amendment Rules 2014 prescribed by theCentral Government under Section 148 of the Companies Act 2013. Accordingly CostAccounts and Records are not required to be maintained by the 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
27. 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 Board of Directors place on record their sincere appreciation for the continuedsupport and goodwill of the esteemed Shareholders Bankers Financial InstitutionsBusiness partners and other Stakeholders. The Directors also thank to M/s Raj Achint &Associates Statutory Auditor and M/s Ashish Kumar Friends & Co. Secretarial Auditorand other professionals for their valued contribution. The Directors also sincerelyappreciate and thank all the employees of the Company for their valuable contribution anddedicated efforts in steering the Company to excellent performance for yet another year insuccession.
On Behalf of the Board of Director of
North Eastern Carrying Corporation Limited
(Sunil Kumar Jain)
Chairman & Managing Director Place: Delhi DIN: 00010695 Date: 13thAugust 2019