Mar 31, 2017
Dear Member,
The Directors have pleasure in presenting the 24th Annual Report along with the audited statements of accounts of your Company for the financial year ended 31st March, 2017.
Financial Results
The following table shows the operational results of the Company for the year 2016-17 as compared to that of the previous year.
(Rs. in lakhs)
Year ended |
||
31/03/17 |
31/03/16 |
|
Revenue from Operations |
9336 |
8759 |
Other Income |
87 |
12 |
Total Revenue |
9423 |
8771 |
Expenditure |
8820 |
8003 |
Profit before Interest, Depreciation and Tax |
603 |
768 |
Financial Cost |
225 |
138 |
Depreciation and Amortization |
178 |
116 |
Profit before Tax |
200 |
514 |
Profit after Tax |
133 |
341 |
Financial Highlights
Considering the turmoil in the industry in general, your Company reported satisfactory performance during the financial year. The revenue has been improved by 7.4%, when compared to the previous year. Due to the uncertainties and turbulences in the market PBIDT has declined by 21%. The profit before tax and Net Profit after Tax have also dropped by 61%.
The Company was able to manage its growth in revenue, but the margin has shrunk due the rise in input costs. This fall in profit was on account of factors, like volatility in raw material prices, increased debt, higher finance cost, depreciation charges, demonetization and other economic restrictions etc.
Operational Highlights
During the year, key raw material prices were volatile in nature and this unpredictability impacted margins. Even though the Company has fought hard to mitigate the increase in input cost and passed some of this cost on to its customers, it could not increase the price in line with the extensive escalation of costs due to resistance in accepting the hike, as the retreaders were under high pressure to transmit the increase to end customers due to the pricing strategies of tyre manufacturers. Further as tyre retreading industry is cash driven in nature, the industry faced strong adverse impact of demonetization. However better operating efficiencies, saving in cost to the possible extent, launch of new products and franchise operations helped the Company to manage the profitability. The operations are exhaustively discussed in âManagement Discussion and Analysisâ forming part of the annual report.
Dividend
The Board has recommended a dividend @ 5% (Re. 0.50 per equity share of Rs. 10/- each) for the financial year 2016-17. Subject to the approval of shareholders, the dividend will be paid on or after 15th July, 2017 to the shareholders, whose name appears on the Register of Members / Beneficial Owners at the close of business hours on Friday, 30th June, 2017.
Deposits
The Company has not accepted any fixed deposits during the year to which the provisions of Section 73 of the Companies Act, 2013 are applicable.
Board of Directors and Key Managerial Personnel
Mr. M.E. Mohamed, Managing Director, Mr. Rajesh S., Chief Financial Officer and CS. Baiju T., Company Secretary are the Whole-time Key Managerial Personnel of the Company. Mr. Naiju Joseph, Director, retires by rotation at the ensuing Annual General Meeting and being eligible, offer himself for re-appointment. The Board recommends his appointment.
Mr. M.E. Mohamed, Managing Director has vacated his office as the Managing Director and Whole-time KMP on 25th August, 2016 and continued as a director. Considering his rich and varied experience in the industry and his involvement in the operations of the Company over a long period of time, as recommended by the Nomination and Remuneration Committee, the Board reappointed him as the Managing Director for a period of 5 years with effect from 9th February, 2017. Being the Managing Director, he has also designated as Whole-time KMP. Mr. M.E. Mohamed seeks the approval of shareholders to hold the office of Managing Director for a period of 5 years with effect from 9th February, 2017.
The Board has considered the declarations given by independent directors under Section 149 (6) and the Companyâs policy on directorsâ appointment and remuneration including criteria for determining qualifications, positive attributes and independence of a director. The Board has further evaluated its own performance and that of its committees and individual directors. None of the Directors is disqualified under Section 164 of the Companies Act, 2013.
Directors'' Responsibility Statement
Pursuant to the requirement of Section 134 (3) and (5) of the Companies Act, 2013, your Directors confirm that:-
(a) In the preparation of the Annual Accounts, the applicable Accounting Standards have been followed and that there are no material departures.
(b) Selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of your Company at the end of the financial year and of the profit of the Company for that year.
(c) Taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of your Company and for preventing and detecting fraud and other irregularities.
(d) Prepared the Annual Accounts on a going concern basis.
(e) Had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively.
(f) Devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.
Auditors & Audit Observations
The period of appointment of M/s. JVR & Associates, Chartered Accountants as the auditors of the Company expires at this Annual General meeting. Pursuant to the provisions of Section 139(2) of the Companies Act, 2013 the existing auditors cannot be reappointed at the ensuing Annual General Meeting and the Board recommends the appointment of M/s. Walker Chandiok & Co LLP, Chartered Accountants, Kochi as Statutory Auditors, to hold office for a period of five consecutive financial years from the conclusion the 24th Annual General Meeting, subject to ratification of the appointment at every Annual General Meeting. Necessary certificate has been obtained from the Auditors as per Section 139(1) of the Companies Act, 2013. The Auditorâs observations are suitably explained in notes to the Accounts and are self-explanatory.
Cost Audit Report
Pursuant to Section 148 of the Companies Act, 2013 read with the Companies (Cost Records and Audit) Rules, 2014 the Cost Audit Report is not mandatorily applicable to our Company for the financial year 2016-17; hence, no such audit has been carried out during the year.
Secretarial Audit Report
The secretarial audit report on the compliance of the applicable Acts, Laws, Rules, Regulations, Guidelines, Listing Agreement, Standards etc. as stipulated by the provisions of Section 204 of the Companies Act 2013, read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 forms part of this report as Annexure - A. The findings of the audit have been satisfactory.
Public Shareholding
About 34.50% of the paid up equity share capital of the Company are held by a large number of public shareholders. The category-wise shareholdings are reported in the âExtract of Annual Returnâ forming part of the annual report.
Listing and Dematerialization
The equity shares of the Company are listed on the Bombay Stock Exchange Ltd. Shareholders are requested to convert their holdings to dematerialized form to derive its benefits by availing the demat facility provided by NSDL and CDSL.
Extract of Annual Return
The details regarding extract of Annual Return in Form No: MGT-9 pursuant to Section 92 of Companies Act, 2013 and Rule 12(1) of the Companies (Management and Administration) Rules, 2014, is annexed herewith as
Annexure - B.
Related Party Transactions
There were no materially significant related party transactions which could have had a potential conflict with the interests of the Company. Transactions with related parties are in the ordinary course of business on armâs length and are periodically placed before the Audit Committee and Board for its approvals and the particulars of contracts entered during the year, in Form AOC-2 is enclosed as Annexure - C.
The Board of Directors, as recommended by the Audit Committee, adopted a policy to regulate transactions between the Company and its Related Parties, in compliance with the applicable provisions of the Companies Act 2013, the Rules there under and the Listing Agreement. This Policy was has been uploaded on the website of the Company. There has been no change in the policy since the last fiscal year.
Conservation of Energy, Technology Absorption, Foreign Exchange Inflow & Outflow
Your Company continues its efforts to improve energy conservation and utilization most efficiently to nurture and preserve the environment and to exploit all its avenues to adopt latest technology in its operations. The information required under Section 134(3)(m) of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014, regarding Conservation of Energy, Technology Absorption, Foreign Exchange Inflow and Outflow are given in Annexure - D to this report.
Corporate Governance
Your Company has been complying with the principles of good Corporate Governance over the years and is committed to the highest standards of compliance. Pursuant to the Listing Agreement read with Regulation 15(2) of the SEBI (LODR) Regulations 2015, the compliance with the corporate governance provisions as specified in regulations 17 to 27 and clauses (b) to (i) of Regulation 46(2) and para C , D and E of Schedule V shall not apply the Company. However, as a good Corporate Governance Practice the Company has generally complied with the Corporate Governance requirements and a report on Corporate Governance is annexed as Annexure - E and forms part of this Report. As required under SEBI (LODR) Regulations 2015 the Management Discussion and Analysis Report is annexed as Annexure - F and forms part of this Report.
Personnel
None of the employees is in receipt of remuneration in excess of the limit laid down under Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014. The information required pursuant to Section 197 of the Companies Act, 2013 read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 in respect of employees of the Company and Directors are annexed as Annexure - G and forms part of this Report.
Corporate Social Responsibility
Company has generally taken corporate social responsibility (CSR) initiatives. However, the present financial position of the Company does not mandate the implementation of CSR activities pursuant to the provisions of Section 135 and Schedule VII of the Companies Act, 2013. The Company will constitute CSR Committee, develop CSR policy and implement the CSR initiatives whenever it is applicable to the Company.
Vigil Mechanism
A Vigil Mechanism for directors and employees to report genuine concerns has been established as required under the provisions of Section 177 of the Companies Act, 2013. The Vigil Mechanism Policy has been uploaded on the website of the Company.
Particulars of Loans, Guarantees or Investments
Particulars of loans, guarantees or investments under Section 186 of the Companies Act, 2013 are given in the notes to the Financial Statement. Company has availed Line of Credit facility offered by IDBI Bank Ltd to the extent of Rs.750 Lakhs in the form of Bill discounting facility to the Companyâs approved vendors supplying raw materials to the Company and has guaranteed for its repayment.
Development and Implementation of Risk Management Policy
Company has developed and implemented a risk management policy, and formed a Risk Management Committee to address and evaluate various risks impacting the Company and a report on risk management is provided in this Annual Report in Management Discussion and Analysis.
Adequacy of Internal Financial Controls with reference to the Financial Statements
The Company has implemented and evaluated the Internal Financial Controls which provide a reasonable assurance in respect of providing financial and operational information, complying with applicable statutes and policies, safeguarding of assets, prevention and detection of frauds, accuracy and completeness of accounting records. The Company Secretary has been appointed as the Internal Auditor with a dedicated internal audit team. The internal audit reports were reviewed periodically by Audit Committee as well as by the Board. Further, the Board annually reviews the effectiveness of the Companyâs internal control system. The Directors and Management confirm that the Internal Financial Controls (IFC) are adequate with respect to the operations of the Company. A report of Auditors pursuant to Section 143(3) (i) of the Companies Act, 2013 certifying the adequacy of Internal Financial Controls is annexed with the Auditors report.
Material Changes and Commitments
No material changes and commitments, affecting the financial position of the Company has been occurred between the end of the financial year 2016-17 and till the date of this report.
Statutory Orders
No significant and material orders were passed by Courts, Tribunals and other Regulatory Authorities affecting the going concern status of the Companyâs operations.
Employee Wellbeing and Safety
Your Company has implemented policies and procedures with the objective of ensuring employee safety, security and wellbeing at the workplace. As stated in our Code of Conduct we are committed to provide a gender friendly workplace, equal opportunities for men and women, prevent/redress sexual harassment and institute good employment practices. The Company has adopted policy on prevention of sexual harassment in line with the requirements of the Sexual Harassment of Women at the work place (Prevention, Prohibition and Redressal) Act, 2013. Internal Complaints Committee has been set up to redress complaints. The Company has not received any complaint under this policy during the year 2016-17.
Acknowledgement
Your Directors wish to place on record their gratitude to Bankers, Share Transfer Agents, Auditor, Customers, Suppliers and Regulatory Authorities for their timely and valuable assistance and support. The Board values and appreciates the professionalism, commitment and dedication displayed by employees at all levels. Your Directors are thankful to the shareholders for their continued support and confidence.
For and on behalf of the Board
Kochi Navas M Meeran
04/05/2017 Chairman
Mar 31, 2015
Dear Member,
The Directors have pleasure in presenting the Annual Report along with
the audited statements of account of your Company for the financial
year ended 31st March, 2015.
Financial Highlights
The performance of your Company has been satisfactory. The following
table shows the operational results of the Company for the year 2014-15
as compared to that of the previous year.
RS. in lakhs
Year ended
31/03/2015 31/03/2014
Revenue from Operations 8,761.27 8,924.72
Other Income 107.42 32.62
Total Revenue 8,868.69 8,957.34
Exceptional Income 104.06 0.00
Expenditure 8,481.98 8,547.98
Profit before Interest, Depreciation 490.77 409.36
and Tax
Financial Cost 154.46 82.59
Depreciation and Amortization 94.57 79.09
Profit before Tax 241.74 247.68
Profit after Tax 157.59 164.09
Operations
Your Company reported satisfactory performance during the financial
year. Even though revenue has been declined by 0.99% due to the general
market trend, PBIDT has improved by 19.89%. However, the Profit Before
Tax and Net Profit after Tax have dropped by 2.39% and 3.96%
respectively.
During the year, the key raw materials prices have been dropped from
its peak level. However the hike in other input costs has impacted on
the margins. The availability of inventory at lower prices has
negatively impacted on inventory valuation and profitability. Due to
this sharp dip in prices the procurement of our products were deferred
by our dealers and forced the Company to offer discounts and reduction
in prices. We have managed this challenge by putting all efforts to
save operations cost to the possible extent.
Prospects
Our brand reputation together with quality product portfolio
facilitated us to get strong customer support and better acceptance
from domestic and international markets. With comprehensive range
products that can excel in all weather and road conditions, Eastern
brand has been recognized as a premier tyre retreading solution
provider and market leader in this industry.
With our brand image and healthy networks we are focusing to further
deepen our customer base and to magnify our global presence through
better market penetration by providing tyre retreading solutions and
services to our end users through own and franchise tyre service
centers. As tyre retreading has emerged as a part of overall tyre
management program and fiscally viable option for fleet owners, with
more than two decades of expertise in providing retreading solutions,
with Eastern brand, we are confident inaccomplishing our forecasts.
Dividend
Subject to the approval of the members in the Annual General Meeting, a
dividend payment of 5% per equity share (face value 10 per equity
share) for the year 2014-15 will be paid on or after 28th July 2015, to
those whose names appear in the Register of Members / beneficial owners
at the close of business hours on Wednesday, 22nd July 2015.
Deposits
The Company has not accepted any fixed deposits during the year to
which the provisions of Section 73 of the Companies Act, 2013 are
applicable.
Board of Directors & Key Managerial Personnel
Mr. Naiju Joseph, Director, retires by rotation at the ensuing Annual
General Meeting and being eligible, offer himself for reappointment.
Mrs. Shereen Navaz was appointed as an Additional Director at the Board
Meeting held on 31/03/2015 and holds office up to the date of the
ensuing Annual General Meeting, and being eligible, offer herself for
appointment. Company received a notice in writing from a member,
pursuant to the provisions of Section 160 of the Companies Act, 2013
signifying his intention to propose the candidature of Mrs. Shereen
Navaz for the office of Director. Mr. M.S. Ranganathan, Mr. M.S.
Sebastian and Mr. K.S. Neelacanta Iyer were appointed as Director
liable to retire by rotation and are eligible to continue as
Independent Directors to hold office for a term up to 31st March, 2019.
The Board recommends their appointments.
Mr. M.E. Mohamed, Managing Director, Mr. Rajesh S., Chief Financial
Officer and CS. Baiju T., Company Secretary are the Whole-time Key
Managerial Personnel of the Company as on 31st March 2015. As per the
terms of appointment of Mr. M.E. Mohamed as Managing Director as
approved by the shareholders at the AGM held on 28th September, 2011he
can continue as Managing Director till 25th August, 2016. However as
per the requirement of the Schedule V Part I (c) of the Companies Act,
2013 if a Managing or Whole-time Director has attained the age of 70
years then his appointment/continuation needs to be approved by a
special resolution passed by the Company in General Meeting otherwise
Central Government approval is required. Mr. M.E. Mohamed, has attained
the age of seventy years in September, 2012. Being the Managing
Director of the Company, he was appointed as Whole-time Key Managerial
Personnel of the Company subject to the approval of shareholders. Your
Board recommends his continuation as Managing Director till the
original period of appointment on the existing terms and conditions
including the remuneration and perquisites.
The Board has considered the declarations given by Independent
Directors under Sub-Section 6 of Section 149 and the Company''s policy
on directors'' appointment and remuneration including criteria for
determining qualifications, positive attributes, independence of a
director. The Board has further evaluated its own performance and that
of its committees and individual directors. None of the Directors is
disqualified under Section 164 of the Companies Act, 2013.
Directors'' Responsibility Statement
Pursuant to the requirement of Sub-Section 5 of Section 134 of the
Companies Act, 2013, your Directors confirm that:-
(a) in the preparation of the Annual Accounts, the applicable
Accounting Standards have been followed and that there are no material
departures.
(b) selected such accounting policies and applied them consistently and
made judgments and estimates that are reasonable and prudent so as to
give a true and fair view of the state of affairs of your Company at
the end of the financial year and of the profit of the Company for that
year.
(c) taken proper and sufficient care for the maintenance of adequate
accounting records in accordance with the provisions of the Companies
Act, 2013 for safeguarding the assets of your Company and for
preventing and detecting fraud and other irregularities.
(d) prepared the Annual Accounts on a going concern basis.
(e) had laid down internal financial controls to be followed by the
Company and that such internal financial controls are adequate and were
operating effectively.
(f) devised proper systems to ensure compliance with the provisions of
all applicable laws and that such systems were adequate and operating
effectively.
Auditors & Audit Observations
M/s. JVR & Associates, Chartered Accountants, Kochi-16, were
reappointed as the Auditors of the Company at the previous Annual
General Meeting to hold office for a period of three consecutive years.
The proposal to ratify their appointment in compliance with the
provisions of Section 139 of the Companies Act, 2013 has been placed
before the Members. Necessary certificate has been obtained from the
Auditors as per Section 139 (1) of the Companies Act, 2013. The
Auditor''s observations are suitably explained in notes to the Accounts
and are self-explanatory.
Cost Audit Report
The Company has submitted the Cost Audit Report for the year 2013-14 to
the Central Government within the due date. Even though M/s. K.A. Felix
& Co., Cost Accountants, Cochin were appointed to carry out the cost
audit in respect of the Company for the financial year 2014-15,
pursuant to Section 148 of the Companies Act, 2013 read with the
Companies (Cost Records and Audit) Rules, 2014 the Cost Audit Report is
not mandatorily applicable to our Company for the financial year
2014-15, hence no such audit has been carried out doing the year.
Secretarial Audit Report
A qualified Practicing Company Secretary carries out secretarial audit
and provides a report on the compliance of the applicable Acts, Laws,
Rules, Regulations, Guidelines, Listing Agreement, Standards, etc. as
stipulated by the provisions of Section 204 of the Companies Act 2013,
read with the Companies (Appointment and Remuneration of Managerial
Personnel) Rules 2014. The Secretarial Audit Report forms part of this
report as Annexure - A. The findings of the audit have been
satisfactory.
Public Shareholding
After giving enough opportunities and sending various reminder notices
requesting the shareholders holding partly paid shares to pay the
allotment money due, your Directors at their meeting held on 13th
August 2014 has forfeited 3,63,900 equity shares in the capital of the
company for non-payment of allotment money of RS. 5/- per share in
compliance with the provisions of Listing Agreement, Articles of
Association of the Company read with Regulation 29 of Schedule I of
Table A of the Companies Act, 1956 and Regulation 28 of Table F of the
Companies Act, 2013. Notices of such forfeiture were also given to the
defaulting Equity Shareholders. Subsequently the Board has annulled the
forfeiture of the 3400 Equity shares, as this shareholders have later
paid the amount due, with interest and other charges to make the shares
fully paid. Bombay Stock Exchange has approved the forfeiture as well
as the annulment of forfeiture of equity shares.
Listing and Dematerialisation
Initially the equity shares of the Company are listed on the Bombay
Stock Exchange, Cochin Stock Exchange and Madras Stock Exchange.
However the Company opted to voluntary delist form Madras Stock
Exchange (MSE) and it was approved by MSE with effect from 23/02/2015
and the recognition to Cochin Stock Exchange was withdrawn by SEBI with
effect from 23/12/2014. The facility to demat the shares is made
available with both the depositories in India, NSDL and CDSL to give a
choice to shareholders in selecting depository participant. Your
Directors earnestly request you to convert your holdings to
dematerialised form and derive the benefits of holding the shares in
electronic form.
Extract of Annual Return
The details regarding extract of Annual Return in Form No: MGT-9
pursuant to Section 92 of Companies Act, 2013 and Rule 12(1) of the
Companies (Management and Administration) Rules,2014, is annexed
herewith as Annexure - B.
Related Party Transactions:
There were no materially significant related party transactions which
could have potential conflict with the interests of the Company.
Transactions with related parties are in the ordinary course of
business on arm''s length and are periodically placed before the Audit
Committee and Board for its approvals and the particulars of contracts
entered during the year, in Form AOC-2 is enclosed as Annexure-C.
The Board of Directors of the Company has, on the recommendation of the
Audit Committee, adopted a policy to regulate transactions between the
Company and its Related Parties, in compliance with the applicable
provisions of the Companies Act 2013, the Rules thereunder and the
Listing Agreement. This Policy was considered and approved by the
Board, which has been uploaded on the website of the Company.
Conservation of Energy, Technology Absorption, Foreign Exchange Inflow
& Outflow
In pursuit of continual improvement towards energy conservation and
compliance with environmental regulations, efforts have been taken to
utilise the energy most efficiently and to nurture and preserve the
environment. The Company has taken all possible efforts to conserve
energy and absorb latest technology. The information required under
Section 134(3) (m) of the Companies Act, 2013 read with Rule 8 of the
Companies (Accounts) Rules, 2014, regarding Conservation of Energy,
Technology Absorption, Foreign Exchange Inflow and Outflow are given in
Annexure - D to this report.
Corporate Governance
Your Company has been complying with the principles of good Corporate
Governance over the years and is committed to the highest standards of
compliance. The Company has complied with the Corporate Governance
requirements, as stipulated under Clause 49 of the Listing Agreement. A
report on Corporate Governance along with a certificate from the
Auditors of the Company confirming the compliance is annexed as
Annexure - E and forms part of this Report. As required under Clause 49
of the listing agreement with stock exchange the Management Discussion
and Analysis Report is annexed as Annexure - F and forms part of this
Report.
Personnel
None of the employees is in receipt of remuneration in excess of the
limit laid down under Rule 5 (2) of the Companies (Appointment and
Remuneration of Managerial Personnel) Rules, 2014. The information
required pursuant to Section 197 of the Companies Act, 2013 read with
Rule 5 of the Companies (Appointment and Remuneration of Managerial
Personnel) Rules, 2014 in respect of employees of the Company and
Directors are annexed as Annexure - G and forms part of this Report.
Corporate Social Responsibility
Company has generally taken corporate social responsibility
initiatives. However the present financial position of the Company does
not mandate the implementation of corporate social responsibility
activities pursuant to the provisions of Section 135 and Schedule VII
of the Companies Act, 2013. The Company will constitute a CSR
Committee, develop CSR policy and implement the CSR initiatives
whenever it is applicable to the Company.
Vigil Mechanism
In pursuant to the provisions of Section 177(9) & (10) of the Companies
Act, 2013, a Vigil Mechanism for Directors and Employees to report
genuine concerns has been established. The Vigil Mechanism Policy has
been uploaded on the website of the Company.
Particulars of Loans, Guarantees or Investments
Particulars of loans, guarantees or investments under Section 186 of
the Companies Act, 2013 are given in the notes to the Financial
Statement. Company has availed Line of Credit facility offered by IDBI
Bank Ltd. to the extent of RS. 750 Lakhs in the form of Bill
discounting facility to the Company''s approved vendors supplying Raw
materials to the Company and has guaranteed for its repayment. Towards
the business development the Company has provided RS. 15 Lakhs in the
form of loan to one of our franchisee, CIO Tyres Private Limited, after
complying with the provisions of Section 186 of the Companies Act,
2013.
Development and Implementation of Risk Management Policy
Company has developed and implemented a risk management policy, and a
committee of the Board named as Risk Management Committee has been
formed by the Board to address and evaluate various risks impacting the
Company and a report on risk management is provided in this Annual
Report in Management Discussion and Analysis.
Adequacy of Internal Financial Controls with reference to the Financial
Statements
The Company has implemented and evaluated the Internal Financial
Controls which provide a reasonable assurance in respect of providing
financial and operational information, complying with applicable
statutes and policies, safeguarding of assets, prevention and detection
of frauds, accuracy and completeness of accounting records. The
Directors and Management confirm that the Internal Financial
Controls (IFC) are adequate with respect to the operations of the
Company.
The Company Secretary has been appointed as the Internal Auditor with a
dedicated internal audit team. The internal audit reports were reviewed
periodically by Audit Committee as well as by the Board. Further, the
Board annually reviews the effectiveness of the Company''s internal
control system.
Material changes and commitments
No Material changes and commitments, affecting the financial position
of the Company has been occurred between the end of the financial year
2014-15 and till the date of this report.
Statutory Orders
No Significant and material orders were passed by Courts, Tribunals and
other Regulatory Authorities affecting the going concern status of the
Company''s operations.
Disclosure under the Sexual Harassment of Women at the work place
(Prevention, Prohibition and Redressal) Act, 2013
The Company has in place an Anti-Sexual Harassment Policy in line with
the requirements of the Sexual Harassment of Women at the work place
(Prevention, Prohibition and Redressal) Act, 2013. Internal Complaints
Committee (ICC) has been set up to redress complaints received
regarding sexual harassment. All employees (permanent, contractual,
temporary, trainees) are covered under this policy. The Company has not
received any Complaint under this policy during the year 2014-15.
Acknowledgement
Your Directors wish to take this opportunity to place on record their
gratitude and sincere appreciation for the timely and valuable
assistance and support received from Bankers, Share Transfer Agents,
Auditors, Customers, Suppliers and Regulatory Authorities. The Board
values and appreciates the valuable committed services of the employees
towards performance of your Company, without which it would not have
been possible to achieve all round progress and growth. Your Directors
are thankful to the shareholders for their continued patronage.
For and on behalf of the Board of Directors
Kochi Navas M. Meeran
29/04/2015 Chairman
Mar 31, 2013
Dear Member,
The Directors have pleasure in presenting the Annual Report along with
the audited statements of accounts of your Company for the financial
year ended 31st March, 2013.
Financial Highlights
The performance of your Company has been satisfactory. The following
table shows the operational results of the Company for the year 2012-13
as compared to that of the previous year.
(Rs. in lakhs)
Year ended
31.03.2013 31.03.2012
Revenue from Operations 6499.80 8503.87
Other Income 3.81 3.85
Total Income 6503.61 8507.72
Expenditure 6236.50 8275.03
Profit before Interest,
Depreciation and Tax 267.11 232.69
Financial Cost 58.41 75.13
Depreciation and Amortization 58.52 56.59
Profit before tax 150.18 100.97
Prof it after tax 106.52 106.31
Operations
Your Company reported satisfactory working performance during financial
year ended 31st March 2013. Even though your Company has reported a
dip in revenue by 23.57%, the Profit before Tax has improved by 48.74%.
The revenue has come down from Rs. 8503.87 Lakhs to Rs. 6499.80 Lakhs,
however. Profit before tax has increased from Rs. 100.97 Lakhs to Rs.
150.18 Lakhs. The Net Profit after Tax amounted to Rs. 106.52 Lakhs as
againstRs. 106.31 Lakhs during the previous year.
Despite the downcast growth of the economy, this spectacular
achievement was made possible by cost effective production, better
utilisation of plant efficiency, and working capital management. Your
Company will continue its efforts to grow further by doing its tasks in
a better way than what we have done in the past.
Dividend
In view of the inadequacy of profit, your Directors are not in a
position to recommend any dividend.
Current Scenario
Even though the business in general is going through a critical
situation, the tyre retreading industry shows healthy signs due to its
cost advantage. As the increasing numbers of vehicles on roads has
driven the replacement tyre market and around 85% of the tyre demand is
for replacement, the evolution in Tyre retreading industry is more
significant. The financial benefit due to the wide price gap between
the retread and new tyre makes retreading more remarkable and has
detrimental impact on replacement demand for new tyres. In addition to
the cost benefit, other factors like logistic network, improvement in
quality of roads, overloading norms, increasing level of radialisation
etc. helped retreading industry to grow.
The changes in consumer behaviour due to economic benefits and
advancement in technology and manufacturing systems helped the
retreading to emerge as a part of overall tyre management program and
the retreading holds out as an economically viable option for fleet
owners. Hence, your Company is optimistic about its development
prospects.
The Company has gone through a challenging year which has showed
volatility in raw material prices. Even though we strive to save cost
in all areas of production to offer better competitive price, as the
rubber price has declined from its peak level the volatile market
conditions has forced the company to offer further reduction in price
to its finished goods, which resulted in revenue dip. However, other
input costs like labour, power and other raw materials continued its
increasing trend and has affected the profitability. Despite the
challenges, continuous improvement in production process, cutting edge
technology, good customer care, vendor development and better
utilization of resources helped the Company to manage the situation.
Your Company has grown over the years and is widely recognized as a
world class manufacturer of tyre retreading materials. Now Eastern
Treads has a brand image closely associated with Tyre retreading
industry and the Company is arming towards a bright future.
Marketing Strategy
Your Company is one of the market leaders in the production of tyre
retreading materials and has proven to the market that we are firmly
committed to supply quality products. We provide premium quality
retreading products that can offer better value and more strength by
producing reliable retreads that have good characteristics in mileage,
heat dispersion and traction. Our extensive product portfolio with
Eastern brand consisting tread rubber, procured tread rubber and other
retreading materials are today sold through our domestic and
international business networks.
Over the years we built our Eastern brand and recognition as a premier
tyre retreading solution provider. Your Company has earned reputation
as a specialist in producing comprehensive range of tyre retreading
materials that can excel in all weather and road conditions. This
facilitated the Company to get acceptance with major retreading
companies and Road Transport Corporations. Our strong network and brand
presence have enabled us to grapple the challenges in the industry and
supported to our growth. Now we emphasis to further intensify our
customer base by better market penetration in existing as well as new
geographies, to further deepen our consumer relationship and to
establish a long standing association with them by providing total tyre
retreading solutions that create great intrinsic worth.
Since the tyre replacement market is sizeable as well as stable, with
well performing products and more than 20 years of manufacturing
experience in retreading industry now we are on the move to capture our
market share around the globe and we will continue our onward march
more aggressively, offering premium range retreading materials to our
domestic as well as international consumers.
Raw Materials
As a relief to the industry the prices of key raw materials like
natural and synthetic rubber softened of from its peak level. However,
prices of other inputs have increased due its supply deficit. Import of
raw materials became inevitable in view of wide gap between domestic
production and consumption. Imports became expensive as inflation
remained above manageable level. Since this industry is highly raw
material intensive, the volatility in input costs has affected the
profitability of the Company.
Your Company has managed the situation by developing reliable,
efficient and sustainable raw material supply sources of national and
International level. The Company has maintained good relationship with
all of its suppliers by working closely with them through which the raw
material procurement system has functioned effectively.
Quality
The Company is always keen on maintaining quality and productivity.
Your Company has built its brand with its commitment to total quality
management. The products are tested at every stage of manufacturing to
ensure that the very best is made available to the market that meets
the exact customer requirement. The Company''s policy of best
manufacturing practices has been bestowed with various quality
certifications and accreditations to its credit.
To cater for the different needs of the market our research and
development team is committed to understand the customer demands and to
develop products that make value and satisfaction to the customers.
This made the Company to keep its competitive edge in the market by
producing products which can provide superior performance, safety, and
comfort, under different and extreme road conditions. In addition to
give high quality products we provide after sale services and expert
technological assistance aiming to serve complete service to our
customers.
Public Shareholding
Your Directors request to the Shareholders, who have not yet paid their
allotment money, to pay the same at the earliest and make the shares
fully paid.
Listing and Dematerialisation
The equity shares of the Company are listed on the Bombay Stock
Exchange, Cochin Stock Exchange and Madras Stock Exchange. The facility
to demat the shares is made available with both the depositories in
India, NSDL and CDSL to give a choice to shareholders in selecting
depository participant. Your Directors earnestly request you to convert
your holdings to dematerialized form and derive the benefits of holding
the shares in electronic form.
Fixed Deposits
The Company has not accepted any fixed deposits during the year to
which the provisions of Section 58A of the Companies Act, 1956 are
applicable.
Conservation of Energy, Technology Absorption, Foreign Exchange Inflow
and Outflow
In pursuit of continual improvement towards energy conservation and
compliance with environmental regulations, efforts have been taken to
utilise the energy most efficiently and to nurture and preserve the
environment. The Company has taken all possible efforts to conserve
energy and absorb latest technology. The information required under
Section 217(1) (e) of the Companies Act,1956 read with Rule 2 of the
Companies (Disclosure of Particulars in the Report of Board of
Directors) Rules, 1988, regarding Conservation of Energy,. Technology
Absorption, Foreign Exchange Inflow and Outflow are given in Annexure
"A" to this report.
Corporate Governance
The Company''s Equity Shares are listed with Bombay Stock Exchange,
Cochin Stock Exchange and Madras Stock Exchange. Your Company has been
complying with the principles of good Corporate Governance over the
years and is committed to the highest standards of compliance. The
Company has complied with the Corporate Governance requirements, as
stipulated under Clause 49 of the Listing Agreement.
A separate section on Corporate Governance along with a certificate
from the Auditors of the Company confirming the compliance is annexed
as Annexure "B"and forms part of this Report.
The Report on Management Discussion and Analysis is forming part of
Director''s Report and is given in Annexure "C".
Auditors
M/s. JVR & Associates, Chartered Accountants, Kochi-16, were
re-appointed as the Auditors of the Company at the previous Annual
General Meeting. They hold office until the conclusion of the ensuing
Annual General Meeting. They are eligible for re-appointment and the
proposal has been placed before the Members. Necessary certificate has
been obtained from the Auditors as per Section 224 (1B) of the
Companies Act, 1956.
Cost Compliance Certificate
Pursuant to the provisions of the Companies (Cost Accounting Records)
Rules, 2011 within 180 days from the close of the financial year, our
Company has to submit a Compliance Report duly certified by a Cost
Accountant to the Central Government. The Board has Appointed M/s. K.A
Felix & Co., Cost Accountants, Cochin to issue the Compliance Report on
the Cost Records maintained by the Company and the Compliance Report
for the year ended on 31-03-2013 has been approved by the Board of
Directors. The due date for filing the Cost Compliance Report is 27th
September, 2013.The audit of the Cost Accounts maintained by the
Company has been made mandatory for the financial year commencing on or
after 1st April 2013 through an auditor with qualification prescribed
in Section 233 B (1) of the Companies Act, 1956. Subject to the
approval of Central Government, the Board has appointed M/s. K.A Felix
& Co., Cost Accountants, Cochin as Cost Auditors for conducting Cost
Audit for the Financial Year ending 31st March, 2014.
Board of Directors
Mr. K.S. Neelcanta Iyer retire by rotation at the ensuing Annual
General Meeting and being eligible, offer themselves for
re-appointment. The Board recommends his re-appointment.
None of the Directors is disqualified under Section 274(1) (g) of the
Companies Act, 1956.
Directors'' Responsibility Statement
Pursuant to the requirement of Sub-Section 2AA of Section 217 of the
Companies Act, 1956, your Directors confirm that-
(a) in the preparation of the Annual Accounts, the applicable
Accounting Standards have been followed and that there are no material
departures;
(b) selected such accounting policies and applied them consistently and
made judgments and estimates that are reasonable and prudent so as to
give a true and fair view of the state of affairs of your Company at
the end of the financial year and of the profit of the Company for that
year;
(c) taken proper and sufficient care for the maintenance of adequate
accounting records in accordance with the provisions of the Companies
Act, 1956 for safeguarding the assets of your Company and for
preventing and detecting fraud and other irregularities;
(d) prepared the Annual Accounts on a going concern basis.
Secretarial Audit
As directed by Securities and Exchange Board of India (SEBI),
Reconciliation of Share Capital Audit is being carried out at the
specified periodicity by a Practicing Company Secretary. The findings
of this Audit have been satisfactory.
Personnel
None of the employees is in receipt of remuneration in excess of the
limit laid down under Section 217(2A) of the Companies Act, 1956 read
with the Companies (Particulars of employees) Rules, 1975.
Human Resource Development and Industrial Relations
In a competitive economy, the proper utilisation of human resources
plays a crucial role. Towards this your Company took various
initiatives for human resource development and has maintained healthy
and harmonious industrial relations at all locations. Your Company
organized various training programs to encourage the professional
development. This active process of learning made the employees
competent and motivated. Your Company has recruited high quality human
resource, the solid foundation on which the company can build itself
up. With this solid foundation your Company is now looking for a global
reach.
Acknowledgement
Your Directors wish to take this opportunity to place on record their
gratitude and sincere appreciation for the timely and valuable
assistance and support received from Bankers, Share Transfer Agents,
Customers, Suppliers, Regulatory Authorities. The Board values and
appreciates the valuable committed services of the employees towards
performance of your Company, without which it would not have been
possible to achieve all round progress and growth. Your Directors are
thankful to the shareholders for their continued patronage.
For and on behalf of the Board of Directors
Kochi Navas M Meeran
29.04.2013 Chairman
Mar 31, 2012
The Directors have pleasure in presenting the Annual Report along with
the audited statements of accounts of your Company for the financial
year ended 31st March, 2012.
Financial Highlights
The performance of your Company has been satisfactory. The following
table shows the operational results of the Company for the year 2011-12
as compared to that of the previous year.
(Rs. in lakhs)
Year ended
31.03.2012 31.03.2011
Revenue from Operations 8532.88 6666.32
Other Income 3.85 6.95
Total Income 8536.73 6673.27
Total Expenditure 8304.04 6443.69
Profit before Interest, Depreciation and Tax 232.69 229.58
Financial Cost 75.13 47.32
Depreciation and Amortization 56.59 54.36
Profit before tax 100.97 127.90
Profit after tax 106.31 127.91
Operations
Your Company has reported a revenue growth of 28 % during financial
year ended 31st March 2012.The revenue has improved from Rs. 6666.32
Lakhs to Rs. 8532.88 Lakhs and the Profit before Interest, Depreciation
And Tax amounted to Rs. 232.69 Lakhs as against Rs. 229.58 Lakhs during the
previous year, registering an increase of 1.35%. However the net profit
for the year fell by 16.89% as compared to the previous year. The Net
Profit after Tax amounted to 106.31 Lakhs as against Rs. 127.91
Lakhs during the previous year.
The growth in revenue is remarkable, but the margin has shrunk due to
the surge in input costs. This fall in net profit was on account of
other factors, like volatility in raw material prices, increased debt,
higher interest and depreciation charges, unavailability of trained
labour forces, rupee depreciation Etc.
To face these challenges several steps had been taken, which helped the
Company to manage and maintain the profitability. The Company is working
hard to avoid such situations in coming years and will continue its
efforts to ensure its growth, without compromise by aggressive
marketing initiatives.
Dividend
In view of the inadequacy of profit, your Directors are not in a
position to recommend any dividend.
Current Scenario
The tyre retreading industry shows a healthy growth rate and your
company is optimistic about its development prospects mainly due to the
constant and rapid growth of transport industry and the cost saving
factor to vehicle owners by using retreaded tyres.
The increasing tyre price due to the supply deficit in rubber resulted
in increased retreading. Other factors like growing industrialization,
logistic network, improvement in quality of roads, overloading norms,
increasing level of radialisation etc. push retreading.
The financial benefit of retreading compared to the replacement cost
demands retreading in all type of vehicles and it makes more attractive
in case of commercial vehicle segment. Hence retreading holds out as an
economically viable option for fleet owners and it has detrimental
impact on replacement demand for tyres.
The changes in consumer behavior due to climb in tyre price resulted in
growth and technological advancement in retreading industry. The
economic benefits of retreading will continue to grow and tyre
retreading will emerge as a part of overall tyre management programme.
The Company has gone through a challenging year which has showed
volatility in raw material prices and increased input costs which
affected the profitability. Despite the challenges, high performance,
cutting edge technology, and good customer care, appropriate price
revisions, new vendor development and the introduction of new value
added products helped the Company to manage the situation.
Your Company has grown over the years and is widely recognized as a
world class manufacturer of tyre retreading materials. Now Eastern
Treads has a brand image closely associated with tyre retreading
industry and the long term prospective of your Company seems to be
bright.
Marketing Strategy
Your Company is one of the market leaders in the production of tyre
retreading materials. As a leader in the industry, we provide quality
retreading products that can offer better value and more strength by
producing reliable retreads that have good characteristics in mileage,
heat dispersion and traction. Our extensive product portfolio with
Eastern brand consisting tread rubber, procured tread rubber and other
retreading materials are today sold through our large business network.
We built our Eastern brand over 19 years and have developed a vast
marketing network in the country and now we look to further deepen our
customer relationship by introducing products that create better value
for customers. This strong network and brand presence have facilitated
us to face the challenges in the industry and contributed to our
growth. We always make every effort to exceed the customer expectations
and works to establish a long term professional relationship with them.
Now we focus to further intensify our customer base by better market
penetration in existing as well as new geographies, through our dealer
network and through a team of dedicated marketing professionals by
directly contacting the individual fleet owners.
As a premier tyre retreading solution provider, your Company has earned
a reputation as a specialist in producing full range of tyre retreading
materials that can excel in all weather and road conditions. This
facilitated the Company to get acceptance with major retreading
companies and Road Transport Corporations.
Our recently released diamond quality products offer significant
benefits like durability, mileage and safety in all challenging
conditions and some of the products are creating new trend in the
industry
Since internationally the replacement market is sizeable as well as
stable, with 19 years of manufacturing experience now we are on the
move to capture our market share around the globe to reach our
ambitious growth plans.
Raw Materials
The new year has begun with a peak in price of natural rubber due to
supply crunch, and it created a record in daily trade price. All other
raw material prices have also raised beyond expectations. Initially
there was a rising concern about the availability of natural rubber due
to climatic and other conditions. Natural Rubber continued its high
price in the first quarter due to strong surge in demand. Thereafter the
price of natural rubber has softened from its peak level with fall in
international prices. However prices of synthetic rubber and other raw
materials continued its high rate due its supply deficit. Imports
become expensive as rupee devalued significantly. Since this industry
is highly raw material intensive, the volatility in input costs has
affected the profitability of the Company.
The market trends indicate that it is not possible to ensure
non-volatile supplies of natural rubber due to the wide gap between the
production and demand and synthetic rubber will also become expensive
due to the increase in the price of petroleum products in the
international market combined with the rupee depreciation.
Your Company has managed the situation by developing reliable and
efficient raw material supply sources at national and International
level, through which the raw material procurement system is functioning
effectively.
Quality
The Company is always keen on maintaining quality and productivity.
Your Company has built its brand with its commitment to total quality
management. Our products are tested at every stage of manufacturing to
ensure the quality that can meet the exact customer requirement. Our
policy of best manufacturing practices has been bestowed with various
quality certifications and accreditations to its credit which includes
FACT MKK Nair Memorial Productivity Award for excellent performance and
ISO 9001-2008.
We are committed to understand the customer requirements and to develop
products that create value for customers. Our research and development
team has focused on our customer needs, which helped the Company to
keep its competitive edge in the market by producing products which can
provide superior performance, safety, and comfort, under different and
extreme road conditions, from village roads to newly constructed
national highways, from extreme cold to hot and wet conditions
prevailing in different geographical parts of the country. Providing
after sale services and technological assistance to the customers by
committed professionals and experts is another initiative of the
Company to provide quality services.
The newly commissioned effluent treatment system, which meets ISO
standards, helped the Company to keep an eco friendly and safety
environment to our workforce.
Public Shareholding
Your Directors request to the shareholders, who have not yet paid their
allotment money, to pay the same at the earliest and make the shares
fully paid.
Listing and Dematerialisation
The equity shares of the Company are listed on the Bombay Stock
Exchange, Cochin Stock Exchange and Madras Stock Exchange. The facility
to demat the shares are made available with both the depositories in
India, NSDLand CDSL to give a choice to shareholders in selecting
depository participant. Your Directors earnestly request you to convert
your holdings to dematerialised form and derive the benefits of holding
the shares in electronic form.
Fixed Deposits
The Company has not accepted any fixed deposits during the year to
which the provisions of Section 58A of the Companies Act, 1956 are
applicable.
Conservation of Energy, Technology Absorption, Foreign Exchange
Inflow and Outflow
The Company has taken all possible efforts to conserve energy and
absorb latest technology. The information required under Section 217(1)
(e) of the Companies Act,1956 read with Rule 2 of the Companies
(Disclosure of Particulars in the Report of Board of Directors) Rules,
1988, regarding Conservation of Energy* Technology Absorption, Foreign
Exchange Inflow and Outflow are given in Annexure"A" to this report.
Corporate Governance
Your Company has been complying with the principles of good Corporate
Governance over the years and is committed to the highest standards of
compliance. The Company has complied with the Corporate Governance
requirements, as stipulated under Clause49 of the Listing Agreement.
A separate section on Corporate Governance along with a certificate
from the Auditors of the Company confirming the compliance is annexed
as Annexure"B" and forms part of this Report.
Management Discussion and Analysis Statement
Report on Management Discussion and Analysis is given in Annexure "C"
forming part of this report.
Auditors
M/s. JVR & Associates, Chartered Accountants, Kochi-16, were
reappointed as the Auditors of the Company at the previous Annual
General Meeting. They hold office until the conclusion of the ensuing
Annual General Meeting. They are eligible and recommended for
re-appointment. Certificate from the Auditors has been received to the
effect that their re-appointment, if made, would be in accordance with
Section 224 (1B) of the Companies Act, 1956.
Board of Directors
Mr. Navas M. Meeran and Mr. Naiju Joseph retire by rotation at the
ensuing Annual General Meeting and being eligible, offer themselves for
re-appointment. The Board recommends their reappointment.
None of the Directors is disqualified under Section 274(1) (g) of the
Companies Act, 1956.
The Board expresses its deep grief on the demise of our founder
Chairman, Mr. M.E Meeran. He died on 8th September 2011, leaving behind
an illustrious entrepreneurial career. He was associated with the
Company from the days of its inception and had successfully steered the
Company out of several compelling adversities. His efforts and
contributions made the Company a competitive and reputed leader in the
industry.
Directors' Responsibility Statement
Pursuant to the requirement of Sub-Section 2AA of Section 217 of the
Companies Act, 1956, your Directors confirm that:-
(a) in the preparation of the Annual Accounts, the applicable
Accounting Standards have been followed and that there are no material
departures;
(b) selected such accounting policies and applied them consistently and
made judgments and estimates that are reasonable and prudent so as to
give a true and fair view of the state of affairs of your Company at
the end of the financial year and of the profit of the Company for that
year;
(c) taken proper and sufficient care for the maintenance of adequate
accounting records in accordance with the provisions of the Companies
Act,1956 for safeguarding the assets of your Company and for preventing
and detecting fraud and other irregularities;
(d) prepared the Annual Accounts on a going concern basis.
Secretarial Audit
As directed by Securities and Exchange Board of India (SEBI),
Reconciliation of Share Capital Secretarial Audit is being carried out
at the specified periodicity by a Practising Company Secretary. The
findings of the Secretarial Audit have been satisfactory.
Personnel
None of the employees is in receipt of remuneration in excess of the
limit laid down under Section 217(2A) of the Companies Act, 1956 read
with the Companies (Particulars of employees) Rules, 1975.
Human Resource Development and Industrial Relations
Your Company continues to take various initiatives for the development
of its human resources and has maintained healthy and harmonious
industrial relations at all locations.
The Company conducts programs such as TQM for the workmen and
technicians to enhance pride in being an employee of the Company and
also to create team synergy. This will boost their morale and
productivity.
Your Company organised various training programmes, sponsored the
employees for training programmes / seminars / conference organised by
reputed professional institutions to upgrade the skill and knowledge of
the employees in different operational areas and for all round growth
of our employees. This made the employees competent and motivated. Your
Company has recruited high quality human resource, the solid foundation
on which the Company can build itself up. With this solid foundation of
talented professionals your Company is now looking for a global reach.
Acknowledgement
Your Directors wish to take this opportunity to place on record their
gratitude and sincere appreciation for the timely and valuable
assistance and support received from Bankers, Share Transfer Agents,
Customers, Suppliers, Regulatory Authorities. The Board values and
appreciates the valuable committed services of the employees towards
performance of your Company, without which it would not have been
possible to achieve all round progress and growth. Your Directors are
thankful to the shareholders for their continued patronage.
For and on behalf of the Board
Kochi Navas M. Meeran M.E. Mohamed
29.05.2012 Chairman Managing Director
Mar 31, 2010
The Directors have pleasure in presenting the 17th Annual Report along
with the audited statements of account of your Company for the
financial year ended 31st March, 2010.
Financial Performance
The performance of your Company has been satisfactory. The following
table shows the operational results of the Company for the year 2009-10
as compared to that of the previous year.
(Rs. In Lakhs)
Year ended Year ended
31.03.2010 31.03.2009
Net Sales 4773.97 3874.08
Other Income 151.67 143.96
Total Income 4925.64 4018.05
Total Expenditure 4754.01 3877.76
Profit before Interest,
Depreciation and Tax 171.63 140.29
Interest 13.79 24.60
Depreciation 46.66 40.65
Profit/Loss before tax 111.18 75.04
Provision for taxation 8.50 0.00
MAT Credit Entitlement -8.50 0.00
Net Profit/Loss after tax 111.18 75.04
Operations
During the financial year ended 31st March 2010 sales from operations
amounted to Rs.4773.97 Lakhs as against Rs.3874.08 Lakhs during the
previous year, recorded a growth of 23.23 %.
Operating profit before Interest, Depreciation and Tax amounted to
Rs.171.63 Lakhs as against Rs.140.29 Lakhs during the previous year,
recorded a growth of 22.34%. Net profit amounted to Rs.111.18 Lakhs as
against Rs.75.04 Lakhs during the previous year registering an increase
of 48.16 %.
Your Company has achieved all time high profit and robust growth in its
operations supported by a motivated management team, aggressive
marketing initiatives, better working capital management and overall
cost reduction measures. The cost management and production
efficiencies helped in maintaining a good profitable track record.
Dividend
In view of the inadequacy of profit, your Directors are not in a
position to recommend any dividend.
Current Scenario
Slowdown in automotive industry and global economy in general
negatively impacted the Indian tyre industry in the first half of the
financial year, but since the last quarter the industry is working in
their full capacity. Since the tyre industry is highly raw material
intensive, any change in the prices of raw materials affects the
profitability. The raw materials have experienced volatility in prices,
especially during the last few months when price of domestic natural
rubber increased drastically. With raw material costs accounting for
70% of the cost of production, combined with the manufacturers
inability to pass on the increased cost to their customers due to
intense competition, rise in prices of raw material have an impact on
profitability.
Despite these challenges, your Company has registered growth in this
financial year by better operational efficiency, appropriate price
increase to offset the raw material prices and the introduction of new
value added products in the market. The long term prospective of the
Company seems to be bright.
As is the experience in other parts of the world, even though the tyre
industry has come under pressure during the first half of the year due
to the economic slowdown tyre retreading in India has gained greater
acceptance in the commercial segment, due to operational savings. High
quality retreading products gave acceptance in commercial segment which
offer added financial benefits.
Retreading costs is approximately 20% of a new tyre and is therefore
gaining popularity, due to this cost benefit compared to the
replacement cost, the fleet owners and agriculture vehicles demand to
retreading.
Your Company is one of the leading producers of pre-cured retreading
materials as well as the mould cure tread rubber in India. Our range of
retreading products with Eastern brand are today sold both in India and
in numerous overseas markets.
Marketing Strategy
Over the years, the Company has developed a vast marketing network
using dealers and depots and as such our products are now easily
available in every corner of the country. Retreading extends the
economic life of tyres and reduces running cost. It makes financial
sense and is an integral part of good tyre management. Your Company
promotes quality retreading products that can offer better value and
more strength by producing reliable retreads that have good
characteristics in mileage, heat dispersion and traction.
Globally the retreading industry has many markets, which offer great
scope for the development of retreading. The Indian market itself
offers biggest potential in the short to medium term.
Raw Materials
The high price of raw material affected the profitability of the
operations to a large extent. Raw materials like Natural Rubber,
Synthetic Rubber and Carbon Black mainly accounted for this. Prices of
the basic raw material continued its upward trend during the year and
the rubber prices have nearly doubled in the past one year. The
increased demand for natural rubber from tyre sector has led the rubber
price to its all time high. Your Company has
managed the situation by developing reliable and efficient raw material
supply sources of National and International level, through which the
raw material procurement system is functioning effectively.
Quality
The Company has focused on quality and productivity. The Company has
achieved quality certifications and accreditations to its credit which
includes FACT MKK Nair Memorial Productivity Award for excellent
performance and ISO 9001-2000. Our Products are meant, and expected to
perform, under different and extreme road conditions, from unmetalled
village roads to newly constructed national highways, from extreme cold
to hot and wet conditions prevailing in different geographical parts of
the country.
Public Shareholding
There are a few shareholders who have not yet paid their allotment
money and your Directors would request to pay the same at the earliest
and make the shares fully paid.
Listing and Dematerialisation:
The equity shares of the Company are listed on the Bombay Stock
Exchange, Cochin Stock Exchange and Madras Stock Exchange. The facility
for demat the shares are made available with both the depositories in
India, NSDL and CDSL to give a choice to shareholders in selecting
depository participant. As per the Securities and Exchange Board of
Indias (SEBI) instructions, the Companys shares have to be transacted
in dematerialised form and therefore your Directors earnestly request
you to convert your holdings to dematerialised form and derive the
benefits of holding the shares in electronic form.
Fixed Deposits
The Company has not accepted any fixed deposits during the year to
which the provisions of Section 58A of the Companies Act, 1956 are
applicable.
Conservation of Energy, Technology Absorption, Foreign Exchange Inflow
and Outflow
The Company has taken all possible efforts to conserve energy and
absorb latest technology. The information required under Section 217(1)
(e) of the Companies Act. 1956 read with Rule 2 of the Companies
(Disclosure of Particulars in the Report of Board of Directors) Rules,
1988, regarding Conservation of Energy, Technology Absorption, Foreign
Exchange Inflow and Outflow are given in Annexure "A" to this report.
Corporate Governance
Your Company has been complying with the principles of good Corporate
Governance over the years and is committed to the highest standards of
compliance. The Company has complied with the Corporate Governance
requirements, as stipulated under Clause 49 of the Listing Agreement. A
separate section on Corporate Governance along with a certificate from
the Auditors of the Company confirming the compliance is annexed as
Annexure "B"and forms part of this Report.
Registered Office
The registered office of the Company has been shifted from C/IV/1, 4th
Floor, Mather Square, Opp: North Railway Station, Ernakulam, Kochi Ã
682 018 to 3A, 3rd floor, Eastern corporate office, 34/137 E, NH
Bypass, Edappally, Kochi, Ernakulam-682 024 with effect from 28-04-2010
Management Discussion and Analysis Statement
Report on Management Discussion and Analysis is given in Annexure "C"
forming part of this report.
Auditors
The Auditors M/s. JVR & Associates, Chartered Accountants, Kochi -16,
were reappointed as the Auditor of the Company at the previous Annual
General Meeting. They hold office until the conclusion of the ensuing
Annual General Meeting. They are eligible and recommended for
re-appointment. Certificate from the Auditors has been received to the
effect that their re-appointment, if made, would be in accordance with
Section 224 (1B) of the Companies Act, 1956.
Board of Directors
Mr. Neelacanta Iyer and Mr. M.E. Meeran retires by rotation at the
ensuing Annual General Meeting and being eligible, offer themselves for
re-appointment. The Board recommend their reappointment. None of the
Directors is disqualified under Section 274(1)(g) of the Companies Act,
1956.
Directors Responsibility Statement
Pursuant to the requirement of Sub-Section 2AA of Section 217 of the
Companies Act. 1956 your Directors confirms that :
(a) in the preparation of the Annual Accounts, the applicable
Accounting Standards have been followed and that there are no material
departures ;
(b) selected such accounting policies and applied them consistently and
made judgments and estimates that are reasonable and prudent so as to
give a true and fair view of the state of affairs of your Company at
the end of the financial year and of the profit of the Company for that
year;
(c) taken proper and sufficient care for the maintenance of adequate
accounting records in accordance with the provisions of the Companies
Act,1956 for safeguarding the assets of your Company and for preventing
and detecting fraud and other irregularities;
(d) prepared the Annual Accounts on a going concern basis.
Secretarial Audit
As directed by Securities and Exchange Board of India (SEBI),
Secretarial Audit is being carried out at the specified periodicity by
a Practicing Company Secretary. The findings of the Secretarial Audit
have been satisfactory.
Personnel
None of the employees are in receipt of remuneration in excess of the
limit laid down under Section 217(2A) of the Companies Act, 1956 read
with the Companies (Particulars of employees) Rules, 1975.
Human Resource Development and Industrial Relations
The Company has always focused on employees development. The Company
conducts programs such as TQM for the workmen and technicians to
enhance pride in being an employee of the Company and also to create
team synergy. The idea is to develop better understanding and increase
the support and co-operation for the employees from their families. The
TQM encourages team work and teams come back fully motivated to face
future challenges.
Your Company organised various training programmes for upgrading the
skill and knowledge of its employees in different operational areas. At
the middle management level, the focus of the programme is to inculcate
leadership qualities. Your Company had been sponsoring its employees
for training programmes / seminars / conference organised by reputed
professional institutions.
Your Company continues to take various initiatives for the development
of its human resources and has maintained healthy and harmonious
industrial relations at all locations. Your Company lays great emphasis
on optimizing people performance through various people processes. It
begins with best practices in recruiting people and moves through
learning and development, engagement, employee feedback and rewards and
recognition.
Acknowledgement
Your Directors wish to take this opportunity to place on record their
gratitude and sincere appreciation for the timely and valuable
assistance and support received from Bankers, Share Transfer Agents,
Customers, Suppliers, regulatory authorities. The Board values and
appreciates the valuable committed services of the employees towards
performance of your Company during the year, without which it would not
have been possible to achieve all round progress and growth. Your
Directors are thankful to the shareholders for their continued
patronage.
For and on behalf of the Board of Directors
Kochi M.E Meeran M.E Mohamed
11.08.2010 Chairman Managing Director
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