As on: Sep 30, 2023 03:15 PM
To
The Members,
North Eastern Carrying Corporation Limited
Your Board of Directors has immense pleasure in presenting the Thirty Seventh (37th) Annual Report of North Eastern Carrying Corporation Limited (the "Company") together with the Audited Financial Statements for the Financial Year ended March 31, 2022.
1. FINANCIAL HIGHLIGHTS
1.1 The highlights of performance of the Company for the financial year 2021-22 were as under with comparative position of previous year's performance:
(Rs. in Lakhs except EPS'
1.2 FINANCIAL PERFORMANCE
During the year, the revenue from operations has been increased to Rs. 25042.77 Lakhs as against Rs. 23058.64 Lakhs in the previous financial year 2020-21 registering a profit of 8.60%. Our Net profits has Increased to Rs. 425.75 Lakhs for the current financial year 2021-22 as against Rs. 143.01 Lakhs in the previous financial year 2020-21, recording an increase of 197.71 %.
1.3 STATE OF THE COMPANY'S AFFAIRS
The operational highlights of the Company during the year are as follows:-
• Work order worth of Rs. 19.05 Cr from Tata Steel Mining Limited to be effective from 01.04.2022 till 31.03.2023 to conduct transportation of chrome ore and related activities safely from Sukinda.
• Work order worth of Rs. 20.10 Cr from TATA Steel Ltd to arrange for mechanised loading of the dumpers/trucks by deploying his own pay loader, to facilitate trucks/dumpers for
• loading from bunker and to provide and arrange for mechanized loading of wagons including leveling along with all associated activities.
• Work order worth of Rs. 135.94 Cr from TATA Steel Ltd to provide adequate numbers of trucks/dumpers inside KIM mine & Katamati Mine for transportation of iron ore.
• In Continuation of the work order received from TATA STEELS LIMITED for transportation of their raw materials and mining products from Joda/ NOMA Mandi. We have successfully completed 50 % of the work order upto 31.05.2022 and remaining work will be accomplished by 31.08.2023
• Partial truck load Sundry Movement is decreased from 58.17 % in the previous year 202021 to 54.61 % in the currentyear 2021-22.
• Full truck load is increased from 41.83% in the previous FY 2020-21 to 45.39% in the current FY 2021-22.
• The Company is looking to expand its existing 1.5 mn. sq.ft warehousing capabilities over the next years across 250 major Indian cities with its Asset Light approach which includes
owned and leased under management. The Warehousing and distribution segment is to be headed by Mr. Utkarsh Jain.
• Continued focus on improving profitability by moving away from non profitable clients
• Top 5 customers contributed 39% of total revenues in FY 2021-22 as compared to 34% in FY 2020-2021
• Rating of Brickwork Ratings BBB- stable on our long-term debt and A3 on short Term Loan.
2. DIVIDEND
Your Company needs Capital for its expansion plans, therefore the Board of Director has decided to invest the profit into the operations of the Company. Hence, no dividend is recommended for the financial year ended 31st March, 2022.
3. SHARE CAPITAL
As on March 31, 2022, the Authorized Share Capital of the Company was Rs.10,000.00 Lakhs consisting of 10,00,00,000 equity shares of Rs.10/- each and the issued & paid up share capital of the Company was Rs.5019.73 Lakhs consisting of 5,01,97,336 equity shares of Rs.10/- each.
4. TRANSFER TO RESERVES
The Company doesn't propose to transfer any amount to General Reserve during the financial year 2021-22.
5. ANNUAL RETURN
In accordance with Section 92(3) of the Act, the annual return is available on the Company's website at www.neccgroup.com.
6. CORPORATE GOVERNANCE
We, at NECC, believe that good and effective Corporate Governance is critical to achieve corporate vision and mission of the organization; it is more of an organizational culture than a mere adherence to rules and regulations. Your Company has established and maintained a strong ethical environment, overseen by Board of Directors, where 3 out of 6 Directors are Independent. The Company's practices and policies reflect the true spirit of Corporate Governance initiatives.
Your Company is in compliance of all mandatory requirements of Corporate Governance as stipulated as per Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations 2015. In terms of Regulation 34(3) read with Schedule V of the SEBI Listing Regulations, a Report on Corporate Governance along with Compliance Certificate issued by the Practicing Company Secretaries, M/s A. K. Friends & Co. is attached and forms integral part 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 Board and its Committee held during the financial year 2021-22 are provided in the Corporate Governance Report.
8. DIRECTORS AND KEY MANAGERIAL PERSONNEL
As per the provisions of Section 152 of the Companies Act, 2013 and in Articles of Association of the Company, Mr. Utkarsh Jain (DIN: 05271884), shall retire by rotation in the ensuing 37th Annual General Meeting and being eligible, offers himself for re-appointment.
The Board of Directors hereby confirms and represent that none of the Directors of the Company are disqualified from being appointed as Director pursuant to Section 164 of the Companies Act, 2013. Mr. Manoj Kumar Jain, Mr. Mohak Jain and Mr. Utsav Jain, Independent Directors have submitted a declaration that each of them meets the criteria of independence as provided in Section 149(6) of the Act and in Listing Regulations.
Brief particulars and expertise of director seeking reappointment together with their other directorships and committee memberships have been given in the annexure to the Notice of the Annual General Meeting in accordance with the requirements of the Listing Regulations 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. Sunil Kumar Jain, Chairman & Managing Director
2. Mr. Utkarsh Jain, Whole-Time Director
3. Mr. Shyam Lal Yadav, Chief Financial Officer
4. Ms. Mamta Bisht, Company Secretary & Compliance Officer.
9. DIRECTORS' RESPONSIBILTY STATEMENT
With reference to Section 134(5) of the Companies Act, 2013, your Directors hereby confirmed that:-
i. in the preparation of the annual accounts for the financial year ended March 31, 2022, 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 for changes in the Accounting Policies as disclosed in the Notes to Accounts to the Financial Statements) and judgments and estimates made that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year 2021-22 and of the profit and Loss of the Company for the that period;
iii. proper and sufficient care is taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
iv. the annual accounts have been prepared on a going concern basis.
v. Internal financial controls have been laid down to be followed by the Company and such internal financial controls were adequate and operating effectively; and
vi. the Directors had devised proper system to ensure compliance with the provisions of all applicable laws and such systems were adequate and are operating effectively.
10. INTERNAL FINANCIAL CONTROLS AND THEIR ADEQUACY
The Board of your Company has laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and operating effectively. Your Company has adopted policies and procedures for ensuring the orderly and efficient conduct of its business, including adherence to the Company's policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial disclosures.
M/s Nemani Garg Agarwal & Co, Chartered Accountants, the Statutory Auditors of the Company, has audited the financial statements included in the Annual Report and has issued an attestation report on our internal control over financial reporting (as defined in Section 143 of Companies Act 2013).
11. AUDITORS
STATUTORY AUDITORS
Members in their 36th AGM had appointed M/s. Nemani Garg Agarwal & Co,, Chartered Accountants, (Firm Registration No. 010192N) as Statutory Auditors of the Company to hold office for a period of upto 5 (Five) years i.e. till the conclusion of the 41st AGM of the Company to be held in the financial Year 2026.The Auditors have confirmed that they are not disqualified from continuing as Auditors of the Company.
The Auditors' Report for the financial year ended March 31, 2022 contains the following qualifications made by the statutory auditors:
1. The Company has not provided provision for doubtful debts.
2. The Company has not recognized right to use assets of leased property.
3. The Debit & credit balances are subject to confirmation.
However, the management clarified that:
1. The Company has not provided provision for doubtful debts since the debtors are fully realizable.
2. The Company has not recognized right to use assets of leased property since the lease are not long term lease.
3. Company is in process of getting confirmation from parties.
SECRETARIAL AUDITORS
Pursuant to the provisions of Section 204 of the Companies Act, 2013 read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Board of Directors of the Company had appointed M/s Ashish Kumar Friends & Co., Practicing Company Secretaries (COP No.4056), New Delhi to undertake the Secretarial Audit of the Company for the year ended March 31, 2022. The Secretarial Audit Report for the financial year ended March 31, 2022 is annexed to this report as Annexure II.
The Secretarial Audit Report for the financial year ended March 31, 2022 do not contain any qualification, reservation, adverse remark or disclaimer.
During the year under review, under Section 143 (12) of the Act, neither the statutory auditors nor the secretarial auditors have reported to the Audit Committee, any instances of material fraud committed against the Company by its officers or employees, the details of which need to be mentioned in the Board's Report
INTERNAL AUDIT
Pursuant to Section 138 of the Act & rules made thereunder, M/s Sanghi & Co., Chartered Accountant (Firm Registration No. 012619N), was appointed as Internal Auditor of the Company in place of Ms. Shikha Sharma who has resigned from the post of Internal Auditor w.e.f 14.02.2022.
12. PARTICULARS OF LOANS. GUARANTEES AND INVESTMENTS BY COMPANY
Pursuant to Section 186 of the Act and Schedule V of the SEBI Listing Regulations, disclosure on particulars relating to loans, advances, guarantees and investments are forms part of the financial statements and are provided in this Annual Report
13. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES
All Related Party Transactions that were entered into during the financial year were on an arm's length basis, in the ordinary course of business and were in compliance with the applicable provisions of Section 188 of the Companies Act, 2013 read with Rule 8(2) of Companies (Accounts) Rules, 2014 and Regulation 23 of the Listing Regulations. There were no materially significant Related Party Transactions made by the Company during the year that would have required Shareholder approval under the Listing Regulations.
The Particulars of contract or arrangement entered into by the Company with related parties as per the provisions of Section 188 of the Companies Act, 2013 read with Rule 8(2) of Companies (Accounts) Rules, 2014 are disclosed in Form AOC-2, in Annexure I is annexed to this report.
The Board has approved a policy on related party transactions. An abridged policy on related party transactions has been placed on the Company's website at website link: http://www.neccaroup.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, technology absorption under Rule 8(3) of Companies (Accounts) Rules, 2014 since your Company is not engaged in any manufacturing activity. No agreement has been entered into for Technology absorption.
However, the Company has made intensive use of technology in its operation during the year under review.
15. PARTICULARS REGARDING EXPENDITURE INCURRED ON RESEARCH AND DEVELOPMENT AND FOREIGN EXCHANGE EARNINGS & OUTGO
The Company has not incurred any expenditure on Research & Development during the financial year 2021-22. Further, the Company has no earning or outgo in Foreign exchange as per Rule 8(3) of Companies (Accounts) Rules, 2014.
16. RISK MANAGEMENT
Risk Management comprises all the organizational rules and actions for early identification 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 had constituted a Risk Management Committee of the Board, however the same was dissolved at the duly convened meeting of the Risk management committee held on September 04, 2021.
The Company has a Risk Management Policy which outlines the manner in which the Company identifies, assesses, monitors and manages risk. As the Company belongs to transportation and Logistics Industry and in the opinion of the Board, the following are the risks which would threaten the existence of the Company:
• Material Handling
• Motor Vehicle Accidents
• Slips, Trips, And Falls
• Competition
• Medical Management
To recover the above-mentioned risks, the Company has adopted Risk Management Strategy which comprising of following stages:
• Risk identification
• Risk analysis
• Risk evaluation
• Risk treatment
• Risk monitoring and review
The Policy and Strategy is duly implemented and monitored in the Company. The Company has identified various risks and has taken various steps to mitigate them. The "Risk Management Policy" is available on the website of the Company at website link http://neccgroup.com/wp-content/upIoads/201S/02/Risk-managment-PoIicy.pdf
17. CORPORATE SOCIAL RESPONSIBILITY
The "Corporate Social Responsibility Policy" prepared in the line with the provisions of Section 135 of the Companies Act, 2013 and Rules made there under, The Companies (Corporate Social Responsibility Policy) Rules, 2014 read with Schedule VII of the Companies Act, 2013 including any statutory modification or amendment thereto was approved by the Board of Directors of the Company. The "Corporate Social Responsibility Policy" is available on the website of the Company at website link http://neccgroup.com/wp-content/uploads/201S/02/CSR- PoIicy.pdf
As per section 135 of the Companies Act, 2013, every company having net worth of rupees five hundred crores or more, or turnover of rupees one thousand crore or more or a net profit of rupees five crores or more during preceding financial year shall spend atleast 2% of the average net profits before tax made during the three immediately preceding financial years in pursuance of its Corporate Social Responsibility Policy.
Since the criterions set out in Section 135 of the Companies Act, 2013 is not applicable to your Company, no sum was spent on CSR during the Financial Year 2021-22.
18. EVALUATION OF BOARD OF DIRECTORS/INDEPENDENT DIRECTORS
During the year, the Board has carried out an Annual evaluation of its own performance, performance of the Directors, as well as the evaluation of the working of its Committees. The Nomination and Remuneration Committee (NRC) has defined the evaluation criteria, procedure and time schedule for the Performance Evaluation process for the Board, its Committees and Directors. The Chairman of the Committee also had interactions with each of the Directors and sought their feedback and suggestions on the overall Board Effectiveness and Directors performance.
A structured questionnaire covering various aspects of the Board's functioning such as adequacy of the composition of the Board and its Committees, Board culture, execution and performance of specific duties, obligations and governance was prepared based on the Guidance note issued by SEBI vide circular no, CMD/CIR/P/2017/004 dated 05.01.2017 and MCA vide Notification dated July 5, 2017 also prescribed that the provisions relating to review of performance of Independent Directors and evaluation mechanism, prescribed in Schedule IV of the Companies Act, 2013,
A separate exercise was carried out to evaluate the performance of individual directors including the Chairman of the Board who were evaluated on parameters such as guidance/ support to management outside Board/ Committee meetings, degree of fulfillment of key responsibilities, effectiveness of meetings etc.
In addition, pursuant to the provisions of Schedule IV to the Companies Act, 2013 the Independent Directors reviewed the performance of the Non-Independent Directors and of the Board as a whole, performance of the Chairman of the Board taking into account the views of all the Directors, and the quality, quantity and timeliness of flow of information between the Company management and the Board and its sufficiency for the Board to effectively perform its duties.
19. SUBSIDIARIES. IOINT VENTURES & ASSOCIATE COMPANIES
There is no Subsidiary, Joint Ventures and Associate Companies during the Financial Year 202122.
20. PARTICULARS OF EMPLOYEES AND REMUNERATION
The information required under Section 197(12) of the Companies Act, 2013 read with Rule 5(2) and (3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is annexed to this report as Annexure III. None of the employees listed in the said Annexure is related to any Director of the Company.
21. HUMAN RESOURCE MANAGEMENT
The COVID pandemic has changed the focus of employee experience to sustaining the performance and engagement of a distributed workforce where some employees work fully remote or partially remote and others at the workplace
At a very fast pace, the Company adopted tech-driven solutions to variety of problems faced during this period. This, in turn, has helped in enhanced business productivity & increased workforce effectiveness.
Your Company has more than 270 branches across PAN INDIA, NEPAL and operational set ups into BHUTAN and BANGLADESH and the total Manpower of the Company as on March 31, 2022 was 450 employees which include Executives and Non-Executives. In order to increase the professional culture in the Company, 158 employees were appointed through Interview and written test during the year.
• TRAINING AND HUMAN RESOURCE DEVELOPMENT
As a measure of capacity building including up-gradation of employees' skill and to ensure high delivery of performance, training and HRD continued to receive priority during the financial year.
Training and Human Resource policy of the Company aims and sharpening business skills and competence required for better employee performance and provides all possible opportunities and support to the employees to improve their performance and productivity. Training was also provided to promote better understanding of professional requirements as well as to aware employees towards socio-economic environment in which business of the Company is carried out.
• REPRESENTATION OF WOMEN EMPLOYEES
As on March 31, 2022, the Company has 11 women employees, which represent 2% of the total work force. There is no discrimination of employees on the basis of gender. An internal compliant committee has been constituted to look after the welfare and provide protection 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 the important resources for the success of NECC. Over the years, your Company has strengthened its HR processes to ensure continual development and growth of its employees. In order to build the right organizational culture, the Company distributes various awards and recognition in terms of their performance, capabilities, communication skills, coordination etc. on quarterly or half yearly basis. Though NECC is an equal opportunity employer, special focus is given to employees for enhance their diversity and knowledge.
22. DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION. PROHIBITION AND REDRESSAL! ACT. 2013
In line with the provisions of Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal) Act, 2013, every employer of a workplace shall constitute an "Internal Compliant Committee" for redressal of compliant(s) against sexual harassment of women employees. Your Company has about 11 women employees in various cadres including Permanent, contractual, temporary and trainees. The Internal Compliant Committee aims to provide protection to employees at the workplace and prevent and redress complaints of sexual harassment and for matters connected or incidental thereto, with the objective of providing a safe working environment, where employees feel secure.
There was no complaint received from any employee during the financial year 2021-22 and hence no complaint is outstanding as on March 31, 2022 for redressal.
23. STATUTORY DISCLOSURES
1. There was no change in the nature of business of the Company during the financial year 2021-22.
2. The Company has not accepted any deposits within the meaning of Section 73 of the Companies Act, 2013 during the financial year 2021-22.
3. No significant and material orders were passed by the regulators or courts or tribunals impacting the going concern status and Company's operations in future.
4. The Company maintains an adequate system of Internal Controls including suitable monitoring procedures, which ensure accurate and timely financial reporting of various transactions, efficiency of operations and compliance with statutory laws, regulations and Company policies. For more details, please refer to the "Management Discussion and Analysis" annexed to this report.
5. There are no material changes and commitments affecting the financial position of the Company, which has occurred between the end of the financial year i.e. March 31, 2022 and the date of this Report.
6. The Company has not issued any Stock options to the Directors' or any employee of the 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 blower policy and web-links for familiarization/training policy of Directors, Policy on Materiality of Related Party Transactions and Dealing with Related Party Transactions and Policy for determining Material Subsidiaries, Compensation to Key Managerial Personnel, Sitting fees to Independent Directors, etc. have been provided in the Report on Corporate Governance, prepared in compliance of provisions of SEBI (LODR) Regulations, 2015, as amended from time to time, which forms part of the Annual Report.
8. No new Independent Directors were appointed on the Board of Directors of the Company during the financial year 2021-22, requiring disclosure to be made under Rule 8(5)(iiia) of the Companies (Accounts) Rules, 2014.
9. The Company is compliant with the applicable Secretarial Standards issued by the Institute of Company Secretaries of India.
24. MATERIAL CHANGES AFFECTING THE COMPANY
There have been no material changes and commitments affecting the financial position of the Company between the end of the financial year and the date of this report.
However, The consent of the Board of Directors of the Company has been accorded on July 05, 2022 for issue of equity shares of the Company having face value of Rs. 10.00/- [Indian Rupees Ten Only] for an amount not exceeding Rs. 85,00,00,000/- (Indian Rupees Eighty five Crore Only) to the existing shareholders on rights basis in their existing proportion.
25. MAINTENANCE OF COST RECORDS
The Central Government has not prescribed the maintenance of cost records for the products/services of the Company under Companies (Cost Records and Audit) Rules, 2014, read with Companies (Cost Records and Audit) Amendment Rules, 2014 prescribed by the Central Government under Section 148 of the Companies Act, 2013. Accordingly, Cost Accounts and Records are not required to be maintained by the Company
26. POLICIES
We seek to promote and follow the highest level of ethical standards in all our business transactions guided by our value system. The SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 mandated the formulation of certain policies for 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 (Listing Obligations and Disclosure Requirements) Regulations, 2015 and other applicable statutory provisions is annexed to this report as under:
28. THINK GREEN. GO GREEN' INITIATIVE
The Companies Act, 2013 permits companies to send documents like Notice of Annual General Meeting, Annual Report and other documents through electronic means to its members at their registered email addresses. As a responsible Corporate Citizen, the Company has actively supported the implementation of ‘Green Initiative' of the Ministry of Corporate Affairs (MCA)and effected electronic delivery of Notices and Annual Reports to shareholders, whose email IDs are registered.
Further, pursuant to Section 108 of the Companies Act, 2013 read with Rule 20 of the Companies (Management and Administration) Rules, 2014, the Company is providing e- voting facility to all members to enable them to cast their votes electronically in respect of resolutions set forth in the Notice of Annual General Meeting (AGM). The Company will also be conducting the AGM this year through Video Conferencing / Other Audio Visual Means. Members can refer to the detailed instructions for e-voting and electronic participation in the AGM, as provided in the Notice of the AGM.
Members, who have not registered their e-mail addresses so far, are requested to register their e-mail address with the Registrar and Share Transfer Agent (R&TA) of the Company/Depository Participant (DP) of the respective member and take part in the Green Initiative of the Company.
29. WHISTLE BLOWER MECHANISM
Pursuant to Section 177(9) of the Act, a vigil mechanism has been established for Directors and employees to report to the management, instances of unethical, actual or suspected, fraud or violation of the Company's code of conduct or ethics policy. The Ethics and Whistle Blower Policy provides for direct access to the Chairperson of the Audit Committee. The policy is available on the Company's website and can be accessed at:
http://neccgroup.com/wp-content/uploads/2015/02/Vigil-Mecchanism-Policy.pdf
30. THE INSOLVENCY AND BANKRUPTCY CODE. 2016
During the year under review, there is no application made/proceeding pending against the Company under the Insolvency and Bankruptcy Code, 2016.
31. VALUATION AT THE TIME OF ONE TIME SETTLEMENT
During the year under review, the Company has not entered in any one time settlement with any of the Banks/Financial Institutions and therefore, the relevant disclosures are not applicable to the Company.
32. ACKNOWLEDGEMENT
The Board of Directors place on record their sincere appreciation for the continued support and goodwill of the esteemed Shareholders, Bankers, Financial Institutions, Business partners and other Stakeholders. The Directors also thank to M/s, Nemani Garg Agarwal & Co, Statutory Auditor and M/s Ashish Kumar Friends & Co., Secretarial Auditor and other professionals for their valued contribution. The Directors also sincerely appreciate and thank all the employees of
the Company for their valuable contribution and dedicated efforts in steering the Company to excellent performance for yet another year in succession.