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COMPANY INFORMATION

BOARD OF DIRECTORS
Mr. Navas M Meeran
Mr. M.E. Mohamed
Mr. M.S. Ranganathan
Mr. M.S. Sebastian
Mr. Naiju Joseph
Mr. K.S Neelacanta Iyer
Mr. K.V. Rajagopalan Nair

Chairman
Managing Director
Director
Director
Director
Director
Director (Nominee of KSIDC)

CS. Baiju.T

Company Secretary

REGISTERED & CORPORATE OFFICE


3A, 3rd Floor, Eastern Corporate Office, 34/137 E,
NH Bypass, Edappally, Kochi, Ernakulam-682 024, Kerala
CIN: L25119KL1993PLC007213
FACTORY
Oonnukal, Kothamangalam, Ernakulam

REGISTRAR & SHARE TRANSFER AGENTS


Integrated Enterprises (India) Limited,
2nd Floor, 'Kences Towers' No.1,
Ramakrishna Street,
North Usman Road, T.Nagar,
Chennai-600017
INVESTOR CORRESPONDENCE
The Company Secretary
Eastern Treads Limited
3A, 3rd Floor, Eastern Corporate Office,
34/137 E, NH Bypass, Edappally, Kochi,
Ernakulam-682 024, Kerala

BANKERS
The Federal Bank Limited
AUDITORS
JVR & Associates, Chartered Accountants
39/3639, Valanjambalam Lane,
South of South Overbridge
Kochi, Ernakulam 682016

CONTENTS
Notice ..............................................................................................3
Directors' Report ............................................................................11
Form A...........................................................................................17
Report of Corporate Governance....................................................18
Auditor's Certificate.........................................................................29
Management Discussion & Analysis ...............................................30
Auditor's Report...............................................................................34
Balance Sheet.................................................................................39
Profit and Loss Statement...............................................................40
Notes to Financial Statements ........................................................41
Cash Flow Statement......................................................................56

Dear shareholder,
Warm greetings to you!
It is my pleasure and privilege to communicate to you through this annual
report. In spite of arduous defies on several fronts we are able to reform the
year 2013-14 to another eventful and successful year in our passionate
journey towards sustainable development. Our performance in totality has
been encouraging and on the financial front, I'm proud to announce that
despite the volatile market conditions, our revenue has grew by 37.31 % and
we are able to report a quantum leap in net profit, by 54.05 %, the highest-ever
net profit since its inception. This spectacular achievement is the result of our
operational excellence and goal oriented efforts.
It is evident that our products has gained greater and wider acceptance which backed us to get orders
from institutional buyers like Sate Road Transport Corporations. Besides the dealer networks, our
services to cater indigenous retreading requirements have been further supported by franchise
partners.Towards our international reach, we are able to explore various international markets like UAE,
African Countries, Nepal, Bangladesh, Bhutan etc.
Since the tyre retreading gives better road performance than new tyres at an absolute minimum fiscal
impact, this industry has gained greater acceptance and better position in tyre replacement market.
Retreading has other distinct advantages like prolonged tyre life, prevention of premature disposal etc.
which leads to saving of energy and natural resources. Hence tyre retreading effectively addresses the
environmental apprehensions and has become an ecological as well as economical choice.
Currently Eastern Brand has emerged as a premier tyre retreading solution provider with quality products
and manufacturing facility in tune with market necessities. We're equipped to cater the market
requirements by supplying products to cover all stages of the retreading process of every tyre size of all
vehicles. This has made our brand a favourite for major retreading companies and RTCs in our
indigenous and international markets and now we are competing with multinational branded tyre
manufacturers who have recently entered into this industry.
Similar to international scenario our native market is also moving towards branding of tyre retreading
products and we have actively taken various brand building exercises like introduction of new face to our
website and logo towards better brand visibility, fleet owner's campaigns, ads etc. In this dynamic
industrial environment our future growth prospects are associated with our ability to cater our consumer
expectations. In this juncture I'm confident that we have bright future and ability to deliver better results to
all our stakeholders.
In this scenario, I would like to thank our biggest resource and asset, our employees for taking
concomitant efforts to achieve our goals and targets through significant efforts, goal oriented hard-work
and commitment. I'm confident that this young and dynamic Eastern Team will drive us towards greater
heights notwithstanding the challenges that may arise in future.
Let me take this opportunity to express my sincere appreciation to my colleagues on Board for their
immense contribution and cooperation in charting a road map. Before I conclude, let me also express my
gratitude to our Customers, Business Associates, Suppliers, Bankers and Statutory Authorities. Let me
thank all of you for your continued confidence and support.
With warm regards

Navas M Meeran
Chairman

EASTERN TREADS LIMITED


CIN: L25119KL1993PLC007213
3A, 3rd Floor, Eastern Corporate Office, 34/137 E,
NH Bypass, Edappally, Kochi, Ernakulam-682 024, Kerala

NOTICE TO SHAREHOLDERS
NOTICE is hereby given that the 21st Annual General Meeting of the members of Eastern Treads Limited
will be held at Hotel Park Central, Kaloor, Ernakulam, Kochi - 682017, Kerala on Tuesday, 24th June 2014,
at 3.00 P.M to transact the following business:-

A) Ordinary Business:
1.

To receive, consider and adopt the Audited Balance sheet as at 31st March 2014 and the Profit and
Loss Statement for the year ended on that date together with the Reports of the Directors' and
Auditors' thereon.

2.

To appoint a Director in place of Mr. Navas M Meeran, who retires by rotation and, being eligible, offers
himself for re-appointment.

3.

To appoint Auditors for a period of 3 years and fix their remuneration, the retiring Auditors M/s. JVR &
Associates, Chartered Accountants, Kochi -16 are eligible for re-appointment.

B) Special Business:
4.

To consider and if thought fit, to pass with or without modification, the following resolution as a special
resolution:RESOLVED THAT in supersession of the Resolution No: 7 passed at the 15th Annual General
Meeting of the Company held on 29/09/2008 and pursuant to Section 180 (1) (c) and other applicable
provisions if any of the Companies Act, 2013, and the rules made thereunder (including any statutory
modification(s) or re-enactment thereof for the time being in force)consent of the members be and is
hereby accorded to the Board of Directors of the Company for borrowing from time to time any sum of
money on such terms and conditions and with or without security as the Board may think fit which,
together with the money already borrowed by the Company (apart from the temporary loans obtained
or to be obtained from the Company's bankers in the ordinary course of business) may exceed the
aggregate of the paid up capital of the Company and its free reserves, that is to say reserves not set
apart for any specific purpose, provided that the total amount of money so borrowed shall not at any
time exceed the limit of Rs. 50 Crores (Rupees Fifty Crores).

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21st Annual Report 2013-14

5.

To consider and if thought fit, to pass with or without modification, the following resolution as a special
resolution:RESOLVED THAT pursuant to Section 188 and other applicable provisions if any of the Companies
Act, 2013 and The Companies (Meetings of Board and its Powers) Rules, 2014, (including any
statutory modification(s) or re-enactment thereof for the time being in force) consent of the members
be and arehere by accorded to enter into contracts for Sale, Purchase or Supply of Raw materials,
Compounds and Finished Goods and availing and rendering of job works for a period of 5 years with
effect from the date of execution of the contracts for an amount not exceeding Rupees Three Crores,
per year with each of the following Related Parties namely 1) Alfa Rubbers, 2) Sahara T reads,
3) Rosekhan Industries, 4) Vazhakkulam Rubbers and 5) Eastern Retreads (P) Ltd.
RESOLVED FURTHER THAT the Board of Directors of the Company be and is hereby authorised to
do all such acts, deeds and things as may be necessary, desirable or expedient and to take all
necessary steps, for and on behalf of the Company and is authorised and empowered to negotiate, fix
the price and agree upon other terms and conditions and enter into legal agreement and contracts to
the extent the Board of Directors may consider appropriate, as may be permitted or authorised in
accordance with any provisions under the Companies Act, 2013.
RESOLVED FURTHER THAT the Board of Directors be and is hereby authorised to take such steps
as the Board may consider necessary or expedient to give effect to this resolution.

6.

To consider and if thought fit, to pass with or without modification, the following resolution as an
Ordinary Resolution:RESOLVED THAT pursuant to Section 148(3) and other applicable provisions if any of the Companies Act, 2013 and the Companies (Audit and Auditors) Rules, 2014, (including any statutory modification(s) or re-enactment thereof for the time being in force) and subject to such guidelines and
approval as may be required from the Central Government the reappointment of Mr. K.A Felix,
Proprietor, M/s. K.A Felix & Co., Cost Accountants, Cochin as the cost auditor(s) of the Company
to conduct audit of cost accounting records maintained by the Company for the year ending on
2014-15 on a remuneration of Rs. 50,000/- plus service tax be and is hereby ratified.

By Order of the Board


For Eastern Treads Limited
Kochi
17/05/2014

Baiju. T
Company Secretary

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21st Annual Report 2013-14

Notes:-

1. A member entitled to attend and vote at the meeting is entitled to appoint a proxy/proxies to
attend and vote on a poll instead of himself/herself and such proxy / proxies need not be a
member of the Company.
2. A person can act as proxy on behalf of members not exceeding fifty (50) and holding in the aggregate
not more than 10% of the total share capital of the Company, provided a member holding more 10%,
of the total share capital may appoint a single person as proxy and such person shall not act as proxy
for any other shareholder.
3. The enclosed proxy form, if intended to be used, must reach the registered office of the Company duly
completed not less than 48 hours before the scheduled time of the meeting.
4. Corporate members intending to send their authorised representative to attend the Meeting are
requested to ensure that the authorised representative carries a certified copy of the Board
Resolution, Power of Attorney or such other valid authorisations, authorising them to attend and vote
on their behalf at the Meeting.
5. The required Explanatory Statement pursuant to Section 102 of the Companies Act, 2013 in respect
of the items under Special Business is annexed herewith.
6. The Register of Members and Share Transfer Books of the Company will remain closed from
Tuesday, 17/06/2014 to Tuesday, 24/06/2014 (both days inclusive).
7. For the convenience of the Members and for proper conduct of the Meeting, entry to the place of the
Meeting will be regulated by the Attendance Slip, which is annexed to the Proxy Form.
Members/Proxies are requested to bring the attendance slip duly filled in and to affix their signature at
the place provided on the Attendance Slip and hand it over at the counters at the venue.
8. Members who hold the shares in the dematerialized form are requested to incorporate their DP ID
Number and Client ID Number in the Attendance Slip/Proxy Form, for easier identification of
attendance at the Meeting.
9. Members and Proxies attending the meeting are requested to bring the annual report to the meeting
as extra copies will not be distributed.
10. The Company is having agreements with NSDL and CDSL to enable Members to have the option of
dealing and holding the shares of the Company in electronic form. Any member desirous to
dematerialise his / her holding may do so through any of the depository participants. The ISIN of the
equity shares of the Company is INE500D01015.

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21st Annual Report 2013-14

11. Members may note that transferees of shares of the Company in physical form shall furnish copy of
PAN card to the Company/RTAs for registration of such transfer of shares.
12. Members are requested to address all correspondences, including change in their addresses, to the
Company or to the Registrar and Share Transfer Agents, M/s. Integrated Enterprises (India) Limited,
2nd Floor, Kences Towers, No:1, Ramakrishna Street, North Usman Road, T. Nagar, Chennai 600017. Email: sureshbabu@iepindia.com. Members whose shareholding are in electronic mode
are requested to approach their respective depository participants for effecting change of address.
13. If any of the members are holding shares in the same name or in the same order of names, under
different folios, then members are requested to notify the same to the Registrar and Share Transfer
Agents for consolidation of their shareholding into a single folio.
14. Members desirous of getting any information on the Annual Accounts, at the Annual General Meeting,
are requested to write to the Company at least 10 days in advance, so as to enable the Company to
keep the information ready.
15. Notice of this Annual General Meeting, Audited Financial Statements for 2013-14 along with
Directors' Report and Auditors Report are available on the website of the Company,
www.easterntreads.com.
16. As per Section 72 of the Companies Act, 2013, shareholders are entitled to make nomination in
respect of shares held by them. Shareholders desirous of making nomination are requested to send
their request in Form No: SH-13 (which will be made available on request) to the Company or
Rregistrar and Share Transfer Agent. The said nomination form can also be downloaded from the
Company's website www.easterntreads.com.
17. As per Circulars issued by the Ministry of Corporate Affairs, Members are requested to provide their
email address to the Company/ the Registrar and Transfer Agents or update the same with their
depositories to enable the Company to send the documents in electronic form.
18. Voting through Electronic means
a) In compliance with provisions of Section 108 of the Companies Act, 2013 and Rule 20 of the
Companies (Management and Administration) Rules, 2014, the Company is pleased to provide
members facility to exercise their right to vote at the 21st Annual General Meeting (AGM) by
electronic means and the business may be transacted through e-Voting Services provided by
National Securities Depository Limited (NSDL). The instructions for e-voting are as under:
A.

In case a Member receives an email from NSDL {for members whose email IDs are
registered with the Company/Depository Participants(s)}:
(i)

Open email and open PDF file viz; Eastern Treads e-Voting.pdf with your Client ID or
Folio No. as password. The said PDF file contains your user ID and password/PIN for
e-voting. Please note that the password is an initial password.
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21st Annual Report 2013-14

(ii)

Launch internet browser by typing the following URL: https://www.evoting.nsdl.com

(iii)

Click on Shareholder - Login

(iv)

Put user ID and password as initial password/PIN noted in step (i) above. Click Login.

(v)

Password change menu appears. Change the password/PIN with new password of
your choice with minimum 8 digits/characters or combination thereof. Note new
password. It is strongly recommended not to share your password with any other
person and take utmost care to keep your password confidential.

(vi)

Home page of e-voting opens. Click on e-Voting: Active Voting Cycles.

(vii)

Select EVEN of Eastern Treads Limited.

(viii) Now you are ready for e-voting as Cast Vote page opens.

B.

(ix)

Cast your vote by selecting appropriate option and click on Submit and also
Confirm when prompted.

(x)

Upon confirmation, the message Vote cast successfully will be displayed.

(xi)

Once you have voted on the resolution, you will not be allowed to modify your vote.

(xii)

Institutional shareholders (i.e. other than individuals, HUF, NRI etc.) are required to
send scanned copy (PDF/JPG Format) of the relevant Board Resolution/ Authority
letter etc. together with attested specimen signature of the duly authorized
signatory(ies) who are authorized to vote, to the Scrutinizer through e-mail to
evoting@eastern.in with a copy marked to evoting@nsdl.co.in

In case a Member receives physical copy of the Notice of AGM {for members whose email
IDs are not registered with the Company/ Depository Participants(s) or requesting physical
copy} :
(i) Initial password is provided as below/at the bottom of the Attendance Slip for the AGM :
EVEN (E Voting Event Number)
USER ID
PASSWORD/PIN
(ii) Please follow all steps from Sl. No. (ii) to Sl. No. (xii) above, to cast vote.

b) In case of any queries, you may refer the Frequently Asked Questions (FAQs) for Shareholders
and e-voting user manual for Shareholders available at the Downloads section of
www.evoting.nsdl.com
c) If you are already registered with NSDL for e-voting then you can use your existing user ID and
password/PIN for casting your vote.
d) You can also update your mobile number and e-mail id in the user profile details of the folio which
may be used for sending future communication(s).
e) The e-voting period commences on 18/06/2014 (9:00 am) and ends on 20/06/2014 (6:00 pm).
During this period shareholders of the Company, holding shares either in physical form or in
dematerialized form, as on the cut-off date of 16/05/2014, may cast their vote electronically.
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21st Annual Report 2013-14

The e voting module shall be disabled by NSDL for voting thereafter. Once the vote on a resolution
is cast by the shareholder, the shareholder shall not be allowed to change it subsequently.
f)

The voting rights of shareholders shall be in proportion to their shares of the paid up equity share
capital of the Company as on the cut-off date of 16/05/2014.

g) CS. Satheesh Kumar. N, Company Secretary (Membership No. 16543), Partner M/s. Satheesh &
Remesh, Company Secretaries has been appointed as the Scrutiniser to scrutinise the e-voting
process in a fair and transparent manner.
h) The Scrutinizer shall within a period not exceeding three (3) working days from the conclusion of
the e-voting period unblock the votes in the presence of at least two (2) witnesses not in the
employment of the Company and make a Scrutinizer's Report of the votes cast in favour or
against, if any, forthwith to the Chairman of the Company.
i)

The results shall be declared on or after the AGM of the Company. The results declared along with
the Scrutiniser's Report shall be placed on the Company's website http://www.easterntreads.com
and on the website of NSDL within two (2) days of passing of the resolutions at the AGM of the
Company and communicated to Bombay Stock Exchange, Cochin Stock Exchange and Madras
Stock Exchange.

19. Details of the Director seeking reappointment at the Annual General Meeting as required under
Clause 49 of the Listing Agreement is as follows:The Chairman of the Company, Mr. Navas M Meeran, aged 45 years, joined the Board of Directors of
the Company on 26/08/1997. He is a Post Graduate in Business Management. He is the recipient of
'Kamal Patra' award from the Indian Junior Chamber for being an outstanding young entrepreneur of
the year in 1994. He hails from a respectable business family in Adimali renowned for manufacturing
and exporting of spices and curry powder. He has been involved in the business of spices for the last
27 years and having immense practical experience in tyre retreading industry. Presently he is the
Chairman of Eastern Group of Companies and Confederation of Indian Industries (CII), Southern
Region Council. Earlier he was the Deputy Chairman of CII, Southern Region Council. He has also
held the position of the Chairman of the CII, Kerala Chapter. Presently he is the Director of the
following other public limited companies:
1.
2.
3.

Adimali Industries Limited


Kerala State Industrial Development Corporation Ltd
Mather Projects and Constructions Ltd

He is not a Chairman or Member in Committees of Directors in other public limited companies. He


holds 6,20,800 Equity Shares and 6,00,000 Preference Shares in the Company. His Director
Identification No. is 00128692. He is not related any of the Directors of the Company, except with Mr.
M.E Mohamed, Managing Director.
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21st Annual Report 2013-14

Explanatory Statement pursuant to Section 102 of the Companies Act, 2013:Item No.04
Pursuant to Section 180 (1) (c) of the Companies Act 2013, the Board of Directors cannot except with the
consent of the Company by special resolution borrow money apart from temporary loans obtained from
the Company's bankers in the ordinary course of business, in excess of the aggregate of paid up capital
and free reserves of the Company, that is to say, reserves not set apart for specific purpose.
th

At the 15 Annual General Meeting of the Company held on 29/09/2008 the shareholders had authorized
the Board to borrow money up to `25 Crores (Rupees Twenty Five Crores) at any time in excess of the
aggregate of the paid up capital of the Company and its free reserves.
In view of the growing operations, the Company requires additional funds and as an abundant caution it is
proposed to increase the power of borrowing from `25 Crores (Rupees Twenty Five Crores) to `50 Crores
(Rupees Fifty Crores).
Accordingly, the consent of the shareholders by way of special resolution pursuant to Section 180 (1) (c) of
the Companies Act, 2013 is being requested to enable the Board to borrow to the extent of `50 Crores
(Rupees Fifty Crores) in supersession of the earlier resolution passed on 29/09/2008.
None of the Directors is interested or concerned in the said resolution.
Item No.05
Pursuant to Section 188 of the Companies Act, 2013 and The Companies (Meetings of Board and its
Powers) Rules, 2014, no contracts or arrangement with a related party with respect to the transactions
specified in that Section can be entered by our Company, other than transactions which are entered in the
ordinary course of business on an arm's length basis without the consent of the shareholders by special
resolution.
In view of the growing operations, the Company requires to trade, avail and render job works with following
Related Parties namely 1) Alfa Rubbers, 2) Sahara Treads, 3) Rosekhan Industries, 4) Vazhakkulam
Rubbers and 5) Eastern Retreads (P) Ltd.
Even though the transactions will be entered in the ordinary course of business of the Company on arms
length basis, as good Corporate Governance the consent of the shareholders by way of special resolution
pursuant to Section 188 of the Companies Act, 2013 and the Rules made thereunder is being requested to
enable the Board to enter into contracts for Sale, Purchase or Supply of Raw materials, Compounds and
Finished Goods and to avail and render job works with the above Related Parties for a period of 5 years

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21st Annual Report 2013-14

with effect from the date of execution of the contracts for an amount not exceeding Rupees Three Crores
per year with each Related Party.
Mr. Navas M Meeran, Chairman, and Mr. Naiju Joseph Director are interested or concerned in the said
resolution as they are having following interests in the Related Parties.

Sl
No

Name

Entity

Interested Director

Nature of Interest

Alfa Rubbers

Proprietorship

Mr. Navas M Meeran

Wife is Proprietor

Sahara Treads

Proprietorship

Mr. Navas M Meeran

Mother is Proprietor

Rosekhan Industries

Proprietorship

Mr. Navas M Meeran

Brother is Proprietor

Vazhakkulam Rubbers

Partnership

Mr. Navas M Meeran &


Mr. Naiju Joseph

Both are Partners

Eastern Retreads (P) Ltd

Company

Mr. Navas M Meeran &


Mr. Naiju Joseph

Both are Directors and


Members

Item No.06
A proposal for appointment of Cost Auditor for 2014-15 was recommended by the Audit Committee to the
Board. It was proposed to re-appoint M/s. K.A Felix & Co., Cost Accountants, Cochin as Cost Auditors.
Certificate dated 28/04/2014 issued by the above firm regarding their eligibility for appointment as Cost
Auditors will be available for inspection at the registered office of the Company during 11.00 A.M to 1.00
P.M and shall also available at the meeting.
As per Rule 14 of Companies (Audit and Auditors) Rules 2014, the appointment and remuneration payable to the Cost Auditors is to be ratified by the Shareholders. Hence this resolution is put for the consideration of the shareholders.
None of the Directors and Key Managerial personnel or relatives of them are interested in the above
resolution. The Board of Directors recommends the resolution for your approval.

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21st Annual Report 2013-14

EASTERN TREADS LIMITED


CIN: L25119KL1993PLC007213
rd

3A, 3 Floor, Eastern Corporate Office, 34/137 E,


NH Bypass, Edappally, Kochi, Ernakulam-682 024, Kerala

DIRECTORS' REPORT
Dear Member,
Your 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, 2014.
Financial Highlights
The performance of your Company has been satisfactory. The following table shows the operational
results of the Company for the year 2013-14 as compared to that of the previous year.

(` in lakhs)
Year ended
31/03/2014
Revenue from Operations

31/03/2013

8,924.72

6499.80

32.62

3.81

Total Revenue

8,957.34

6503.61

Expenditure

8,547.98

6236.50

409.36

267.11

Financial Cost

82.59

58.41

Depreciation and Amortization

79.09

58.52

Profit before tax

247.68

150.18

Profit after tax

164.09

106.52

Other Income

Profit before Interest, Depreciation and Tax

Operations
Your Company has reported a revenue growth of 37.31 % during financial year ended 31st March 2014.
The revenue has augmented from `6,499.80 Lakhs to `8,924.72 Lakhs and the PBIDT amounted to
`409.36 Lakhs as against `267.11 Lakhs during the previous year, registering an increase by 53.26%.
During this year your Company has posted a quantum leap in net profit by reporting a growth by 54.05 %,
the highest-ever net profit since its inception. The net profit amounted to `164.09 Lakhs as against
`106.52 Lakhs during the previous year.

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21st Annual Report 2013-14

This spectacular achievement is the result of goal oriented workings, cost effective production, increase
in operational efficiency and better working capital management. Furthermore, major orders from Road
Transport Corporations, International Markets and healthier support by franchise partners are important
backings to our remarkable achievement. Now your Company is aiming to pursue higher levels by
expanding its activities in international and domestic markets especially in institutional buyers markets.
Dividend
In view of the inadequacy of profit, your Directors are not in a position to recommend any dividend.
Current Scenario
Our Company and the tyre retreading industry in general show healthy signs during this financial year.
Various factors like cost advantage, increasing number of vehicles, demand by tyre replacement market,
logistic network, improvement in quality of roads, overloading norms, increasing level of radialisation etc.
drive retreading and it helped our Company to grow further.
The changes in consumer behavior due to monetary benefits, technological innovations and
advancement in manufacturing systems are important factors which helped the retreading to emerge as a
part of overall tyre management program. Now the retreading holds out as an economically viable option
for fleet owners. Hence, your Company is enthusiastic in its development prospects.
The Company has gone through a challenging year which has showed volatility in raw material prices.
Even though the rubber price has declined from its peak level other input costs like labour, power and
other raw materials continued its increasing trend and has affected the profitability. However the volatile
market condition has forced the Company to offer further reduction in price to its finished goods. To face
this challenge we strive to save cost in all areas of production to offer better competitive price. Our
continuous improvement in production process, cutting edge technology, good customer care, vendor
development and better utilization of resources also helped the Company to achieve our remarkable
growth in profitability.
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
Over the years we built our Eastern brand and recognition as a premier tyre retreading solution provider.
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. Now we earned reputation as a specialist
in producing comprehensive range of tyre retreading materials that can excel in all weather and road
conditions.

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21st Annual Report 2013-14

Our extensive product portfolio with Eastern brand are sold through our domestic and international
business networks. This brand reputation with quality products facilitated us to get acceptance in
institutional buyers like large retreading companies and Road Transport Corporations. This abetted us to
get the order from KSRTC to cater their entire retreading requirement and major orders from MSRTC
during this year. Moreover our retreading services have been further supported by our franchise partners,
reflecting strong growth in our priority markets. Our healthy network and brand presence have enabled us
to further expand our presence internationally. Now we are growing our presence in various export
markets like UAE, African Countries, Nepal, Bangladesh, Bhutan etc. and are exploring various
international markets.
Now we emphasis to further intensify our customer base by better market penetration in existing as well as
new geographies and to further strengthen and establish a long standing association with our consumers
by providing total tyre retreading solutions. As there is a growing demand for quality products in domestic
and international markets, with our brand image on well performing products and with more than two
decades of manufacturing experience in retreading industry we are on the move to capture our market
share globally by offering premium range retreading materials.
Raw Materials
Even though the prices of key raw materials like natural and synthetic rubber come down from its peak
level prices of other inputs have increased due its supply deficit. Import of such inputs became inevitable
but imports are become 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
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 provides 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.
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21st Annual Report 2013-14

Public Shareholding
Your Directors have given in principle approval to waive the interest on allotment money due and to issue
final notice to shareholders holding partly paid shares to pay the allotment money due, `5/- per share, and
in the event of non-payment thereof to proceed to forfeit the partly paid equity shares, subject to approvals
by SEBI including exemptions under SEBI (SAST) Regulations, 2011 and approvals from other Statutory
Authorities required if any. Your Directors request to the members, 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 in 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 Companies Act, 1956 and Section 73 of the Companies Act, 2013 are applicable.
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 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 Band forms part of this Report.

14

21st Annual Report 2013-14

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 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 for re-appointment for a period of 3 years and the proposal has
been placed before the Members. Necessary certificate has been obtained from the Auditors as per
Section 139 (1) of the Companies Act, 2013
Cost Audit Report
The Company has submitted the Cost Compliance Report for the year 2012-13 duly certified by a Cost
Accountant to the Central Government within the due date. M/s. K.A Felix & Co., Cost Accountants,
Cochin were appointed with the approval of the Central Government to carry out the cost audit in respect
of the Company for the financial year 2013-14 and they have submitted their report to the Board of
Directors, and will submit the report to the Ministry of Corporate Affairs, Government of India within the
due date. Based on the recommendation of the Audit Committee, M/s. K.A Felix & Co., Cost Accountants,
Cochin, being eligible have also been appointed by the Board as the Cost Auditors for the financial year
2014-15.
Board of Directors
Mr. Navas M Meeran, Chairman,retire by rotation at the ensuing Annual General Meeting and being
eligible, offer himself for reappointment. The Board recommends his reappointment. None of the
Directors is disqualified under Section 274(1) (g) of the Companies Act, 1956 and Section 164 of the
Companies Act, 2013.
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;

15

21st Annual Report 2013-14

(d)

prepared the Annual Accounts on a going concern basis.

Reconciliation of Share Capital 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 the 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
equip our human assets. 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 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

Kochi
17/05/2014

Navas M Meeran
Chairman

16

21st Annual Report 2013-14

ANNEXURE A TO THE DIRECTORS' REPORT


Information as per Section 217(1)(e) of the Companies Act, 1956 read with Companies (Disclosure of
particulars in the report of Board of Directors) Rules 1988 and forming part of the Directors' report.
(A) Conservation of Energy Form A
Power and fuel consumption

2013-14

2012-13

1. Electricity
(a) Purchased
Unit (Kwh)
Total Amount (`)

24,77,394.00

16,45,008.00

1,34,09,936.00

90,98,191.00

5.41

5.53

46,500.00

45,228.00

2.18

2.54

26.00

19.08

0.00

0.00

Rate/Unit (Average) (`)


(b) Own generation
Through diesel generator
Unit (Kwh)
Unit per litre of Diesel Oil
Rate/Unit (`)
2. Others
Consumption per unit of production
Products (with details) unit
Tread Rubber (MT)

2741.767

2,037.360

Bonding Gum (MT)

129.464

75.030

Vulcanizing Solution (KL)

434.610

269.270

Master Batch Compound (MT)

212.529

177.420

Conventional Tread (MT)

301.526

355.960

1305.310

1,303.160

492.447

400.700

0.000

0.000

Job work done (MT)


Electricity (KWH)
Others (Specify)
(B) Research & Development,Technology Absorption

In order to cater the customer specific requirements your Company has developed and successfully
introduced a range of compounds and is working on new compounds, raw materials etc to improve
the productivity further. To improve the quality and productivity new batch-off unit, curing press etc
were installed. The Company would undertake appropriate R & D activities depending up on the
future requirements. The Company use the latest technology and operates to the highest possible
standards. No technology has been imported by the Company during the period.
17

21st Annual Report 2013-14

(C) Foreign Exchange Earnings and Outgo


The Foreign Exchange Earnings and outgo during the year and the previous year are as follows :` In Lakhs
2013-14

2012-13

431.21

124.42

26.28

0.90

Foreign Exchange Earnings


Foreign Exchange Outgo

Annexure B to the Directors' Report


CORPORATE GOVERNANCE REPORT
Eastern Treads Limited is committed to ensure good Corporate Governance practice. Your Company has
complied in all material respects, with the requirements of the Corporate Governance Code as per Clause
49 of the listing agreement with the Stock Exchanges. A report on the implementation of the Corporate
Governance Code of the listing agreement by your Company is furnished below:Company's Philosophy on Corporate Governance
The Company is a part of the Eastern Group which has established a reputation for honesty and integrity.
The Company believes that by focusing on good Corporate Governance we practice the highest
standards of ethical and responsible business culture and thereby enhance the value of all its
stakeholders. It is a combination of voluntary practices and compliance with laws and regulations in all
areas of its operations and in its interactions with the stakeholders. It provides direction and control to the
affairs of the Company.
Your Company is fully committed to practice sound Corporate Governance and to uphold the highest
business standards in conducting business. The Company has always worked towards building trust with
all its stakeholders based on the principles of good corporate governance. Your Company is guided by a
key set of values for all its internal and external interactions. The Company is open, accessible and
consistent with its communication.

18

21st Annual Report 2013-14

Board of Directors
The Board is made up of one Executive Director and six Non-executive Directors, of whom three are
independent. The Chairman of the Board is a Non-executive Director. The Composition, category and
attendance of each Director at the Board meetings, last Annual General Meeting and Number of other
Directorship and Chairmanship / Membership of Committee of each Director in various companies is as
follows:

Name of the Director

Mr. NavasM Meeran


Mr. M.E. Mohamed
Mr. M.S. Sebastian
Mr. M.S. Ranganathan
Mr. Naiju Joseph
Mr. K.S. NeelacantaIyer
Mr. K.V. Rajagopalan Nair

Category

P, C & NE
MD & ED
NE & I
NE & I
NE
NE & I
NE & N

Attendance
No. of other
Committee
Particulars
Directorships
membership
Board
Last Director Chairman Member Chairman
Meetings AGM
#
5
Yes
16
None
None
None
5
Yes
4
None
None
None
5
Yes
1
None
None
None
4
Yes
3
None
None
None
5
Yes
1
None
None
None
4
Yes
2
None
None
None
3
No
1
None
None
None

(Nominee of KSIDC)

C: Chairman; P: Promoter; E: Executive Director; N: Nominee Director (Nominee of KSIDC) I: Independent Director;
NE: Non-Executive Director; MD: Managing Director;
# This includes directorships in Public and Private Ltd companies.

Number and date of Board meetings held


Five Board meetings were held during the year. The Board meets at least once in a quarter with a gap of
not more than four months between any two meetings. The details of the Board meetings are as under.
Sl. No.

Date

1
2
3
4
5

10/04/2013 & 29/04/2013 *


13/08/2013
13/11/2013
13/02/2014
31/03/2014

Board Strength

No. of Directors present

7
7
7
7
7

7
6
6
7
5

*Meeting held on 10/04/13 was adjourned and adjourned meeting held on 29/04/13

19

21st Annual Report 2013-14

Audit Committee
The Audit Committee is duly constituted in accordance with Clause 49 II (C) and (D) of the Listing
Agreement and Section 292A of the Companies Act, 1956 and Section 177 of the Companies Act,
2013.The Members of the Committee are:
Name

Category

Position

Mr. K.S. Neelacanta Iyer

Non-Executive Independent Director

Chairman

Mr. M.S. Ranganathan

Non-Executive Independent Director

Member

Mr.Naiju Joseph*

Non-Executive Director

Member

Mr. M.E. Mohamed

Managing Director

Member

*resigned from the committee w.e.f 28/04/14

Two third of the members are Independent Directors and all the members of the Audit Committee are
financially literate. The composition, role, functions and powers of the Audit Committee are in line with
the requirements of applicable laws and regulations. The Audit Committee shall oversee financial reporting
process and disclosures, review annual financial statements, review related party transactions, review
financial and risk management policies, oversee compliance with Stock Exchanges and legal
requirements concerning financial statements, review auditors qualifications, compliance with Accounting
Standards, fixation of audit fee and also approval for the payment of any other services etc.
The Audit Committee meetings are usually held at the Registered Office of the Company and are usually
attended by the Chairman and the members of the Committee, representatives of Internal and Statutory
Auditors and Chief Financial Officer. The Company Secretary acts as Secretary to the Audit Committee.
The Chairman of the Audit Committee was present at the Company's Annual General Meeting held on
26/06/2013 to answer the shareholders' queries.
The Audit Committee strictly adheres to the terms of reference which is prepared in compliance with
Section 292A of the Companies Act, 1956, Section 177 of the Companies Act, 2013, and Clause 49 of the
Listing Agreement.
Five Audit Committee meetings were held during the year 2013-14. The dates on which the meetings were
held are 10/04/2013 & 29/04/2013(adjourned meeting), 13/08/2013, 13/11/2013, 13/02/2014,31/03/2014.
The number of meetings attended by each committee members of the Audit Committee is as follows:
Name

No. of meetings held

Number of meetings attended

Mr. K.S. Neelacanta Iyer

Mr. M.S. Ranganathan

Mr. Naiju Joseph

Mr. M.E. Mohamed

20

21st Annual Report 2013-14

Remuneration Committee
The Remuneration Committee was constituted in compliance with the requirements of Clause 49 of the
Listing Agreement. The Committee analyses and recommend to the Board of Directors regarding the
remuneration payable to Board members including Executive Directors and Managing Director, sitting
fees payable to Directors and remuneration payable to the employees working at the senior management
level.
The Committee approves the minimum remuneration payable to the Managing Director/ Executive
Directors in the event of loss or inadequate profits in any year, within the limits and subject to the
parameters as prescribed in Schedule XIII of the Companies Act, 1956. The Chairman of the
Remuneration Committee was present at the Company's Annual General Meeting held on 26/06/2013 to
answer the shareholders' queries.
The Committee Members are:
Name

Category

Position

Mr. M.S. Ranganathan

Non-Executive Independent Director

Chairman

Mr. K.S. Neelacanta Iyer

Non-Executive Independent Director

Member

Mr. Naiju Joseph

Non-Executive Director

Member

The Company Secretary acts as the Secretary to the Committee.


Remuneration Policy
The remuneration policy is in consonance with the existing industry practice and also with the provisions of
The Companies Act,1956 and The Companies Act,2013.The Company's remuneration policy is driven by
success and performance of the individual employee of the Company. Through its compensation
programme, the Company endeavors to attract, retain, develop and motivate a high performance
workforce. Individual performances of the employees are measured through annual appraisal process.
The details of remuneration/sitting fee paid to Directors during the financial year are given below.
Name

Salary

Perquisites

Commission

Sitting Fees*

Mr. M.E. Mohamed

0.00

0.00

0.00

0.00

Mr. Naiju Joseph

0.00

0.00

0.00

4,944.00

Mr. K.S. Neelacanta Iyer

0.00

0.00

0.00

3,708.00

Mr. K.V. Rajagopalan Nair

0.00

0.00

0.00

3,708.00

* Inclusive of Service Tax

Even though the terms of appointment of Mr. M.E. Mohamed as the Managing Director include the
payment of remuneration, he has waived his right to remuneration. Hence no remuneration has been paid
to Mr. M.E. Mohamed, Managing Director during the financial year.
21

21st Annual Report 2013-14

Share Transfer Committee


The Share Transfer Committee was constituted on 25/06/1996 in compliance with the requirements of
Clause 49 of the Listing Agreement. The members of the Committee are:
Name
Mr. Navas M Meeran
Mr. M.E. Mohamed
Mr. M.S Ranganathan

Category
Promoter / Non-Executive Director
Managing Director / Executive Director
Non-Executive Independent Director

Position
Chairman
Member
Member

The Company Secretary acts as the secretary to the Committee.


Two Share Transfer Committee meetings were held in every month to approve the transfer of shares and
issue of duplicate share certificates and oversee and review matters connected with the transfer of
shares.
Shareholders'/Investors' Grievance Committee
The Shareholders'/Investor's Grievance Committee was constituted in compliance with the requirements
of Clause 49 of the Listing Agreement. The Members of the Committee are:
Name

Category

Position

Mr. Naiju Joseph

Non-Executive Director

Chairman

Mr. M.S. Ranganathan

Non-Executive Independent Director

Member

Mr. K.S. Neelacanta Iyer

Non-Executive Independent Director

Member

The Shareholders' Grievance Committee looks into shareholders' complaints like non-transfer of shares,
non-receipts of balance sheet besides complaints from SEBI, Stock Exchanges, Court and various
Investor Forums. It oversees the performance of the Registrars and transfer agents, and recommends
measures for overall improvement in the quality of investor services. The Company Secretary acts as the
secretary to the Committee.
During the year under review, no complaints received from the shareholders and there were no
outstanding complaints as on 31/03/2014. No request for share transfer was pending as on 31/03/2014.
General Body Meetings
The location and time for last three Annual General Meetings are as follows:
Year

Location

Date

Day

Time

2012-2013

Hotel Park Central, Ernakulam

26/06/2013

Wednesday

03.00 PM

2011-2012

Hotel Park Central, Ernakulam

23/08/2012

Thursday

03.00 PM

2010-2011

Hotel Amruthaa International, Ernakulam 28/09/2011

Wednesday

10.30 AM

No Extraordinary General Meeting was held during the financial year and no special resolutions were put
through postal ballot last year and no proposal for the same this year.
22

21st Annual Report 2013-14

Disclosures
(a) Related party transactions
The transactions of purchase/sale of finished goods, raw materials and job work with concerns in
which Directors/relatives of Directors have interest have been made in the ordinary course of
business at prices which are reasonable having regard to quality and prevailing market prices or
prices at which transactions of similar goods or services have been made with other parties.
During the year, the Company had not entered into any transaction of a material nature with any of the
related parties which may have potential conflict with the interest of the Company. All transactions
with the related parties were in the ordinary course of business and at arms length. The Register of
Contracts containing transactions, in which Directors are interested, is placed before the board
regularly.Full disclosure of related party transactions as per Accounting Standard -18 is given under
Note no: 30 of Notes to the Financial Statements.
(b) Compliance by the Company
The Company has complied with the requirements of the Stock Exchanges, SEBI and other statutory
authorities on all matters relating to capital markets. No penalties, strictures imposed on the
Company by Stock Exchanges or SEBI and other Statutory Authorities on matters related to capital
markets during the last three years. The Board quarterly reviews the compliance report on applicable
laws to the Company as well as steps taken by the Company to rectify the instances of noncompliance, if any
Means of Communication
The quarterly financial results, after their approval by the Board of Directors, are promptly issued to the
Stock Exchanges with whom the Company has listing arrangements. These Quarterly Financial Results
are normally published in Business Line, Deepika or New Age and are also posted on the Company's
website: www.easterntreads.com.
The Company's website also displays all official news releases, if any. All material information about the
Company is promptly sent to the Stock Exchanges. The Management Discussion and Analysis forms part
of the Annual Report.
Code of Conduct
The Board approved the code of conduct applicable to the Board Members and the Senior Management
Personnel of the Company at its meeting held on 28/04/2009. The Code has been posted on the website
of the Company. All Board Members and Senior Management Personnel have affirmed compliance with
the Code and a declaration to this effect signed by the Managing Director is annexed to this report.

23

21st Annual Report 2013-14

General Shareholder Information


(a) Annual General Meeting
Date and Time
Venue

: Tuesday, 24/06/2014 at 3.00 P.M


: Hotel Park Central, Kaloor, Kochi, Ernakulam

(b) Financial Calendar (Tentative)


Annual General Meeting

: 24th June 2014

Financial results for the quarter ending 30/06/14

: First week of August 2014

Financial results for the quarter ending 30/09/14

: First week of November 2014

Financial results for the quarter ending 31/12/14

: First week of February 2014

Financial results for the quarter ending 31/03/15

: First week of May 2015

(c) Book Closure Date


Tuesday, 17/06/2014 to Tuesday, 24/06/2014 (both days inclusive)
(d) Listing of Equity Shares on Stock Exchanges
The Equity Shares of the Company are listed in Bombay Stock Exchange, Cochin Stock Exchange
and Madras Stock Exchange.
Listing fees for the financial year 2013-14and 2014-15 have been paid to all the Stock Exchanges.
The Company has also paid the annual custodial fee for the year 2013-14 and 2014-15 to both the
depositories namely, National Securities Depository Limited and Central Depository Services
(India) Limited.
(e) Stock Code

(f)

Scrip Code No.

: Bombay Stock Exchange - 531346

Trading Symbol

: Cochin Stock Exchange

- ETD

Trading Symbol

: Madras Stock Exchange

- EASTETREAD

Demat ISIN Number


INE500D01015

24

21st Annual Report 2013-14

(g) Market Price Data: High, Low during each month in last financial year
BSE
Month

High Price

Low Price

April 2013

18.00

18.00

May 2013

17.15

15.25

June 2013

15.50

14.05

July 2013

14.10

10.36

August 2013

11.00

9.60

September 2013

13.20

11.55

November 2013

15.05

12.90

December 2013

15.00

14.20

January 2014

15.00

13.50

February 2014

15.00

12.75

March 2014

14.60

12.20

October 2013

(i)

BSE Sensex High

Performance in comparison to broad-based indices such as BSE Sensex:

ETL High Price

(h)

Registrar and Share Transfer Agents


Integrated Enterprises (India) Limited
2nd Floor, 'Kences Towers', No.1, Ramakrishna Street,
North Usman Road, T.Nagar, Chennai-600017
Phone: 044 28140801, 28140803, Fax; 044 28143378, 28142479
E-mail: sureshbabu@iepindia.com
25

21st Annual Report 2013-14

(j) Share transfer system


During the financial year 2013-14, the share transfers which are received in physical form are
processed and the share certificates returned within a period of 15 days from the date of receipt,
subject to the documents being valid and complete in all respects. Shares held in dematerialised form
are electronically traded and the Registrars and Share Transfer Agents of the Company periodically
receive from the Depository, the beneficiary holdings so as to enable them to update their records.
The Board has delegated the authority for approving transfer, transmission, etc. of the Companys
securities to the Share Transfer Committee of the Board of Directors constituted for this purpose. A
summary of transfer / transmission of the securities of the Company so approved by the Share
Transfer Committee have placed at every Board meeting.
Presently the Company's shares are transferred both in physical and dematerialised form and are
traded on the Stock Exchanges. Any request for rematerialisation and / or transfer of shares in
physical mode is also attended within the stipulated time. The Company obtains from a Company
Secretary in practice half yearly certificate of compliance with the share transfer formalities as
required under Clause 47(c) of the Listing Agreement with the Stock Exchanges and files a copy of
the certificate with the Stock Exchanges within the prescribed time limit.
(k) Dematerialization of shares and liquidity
More than 73.66% of the Company's paid-up equity share capital has been dematerialised up to 31st
March 2014. Presently the Company's shares are transferred both in physical and dematerialised
form and are traded on the Stock Exchanges.
(l) Outstanding GDRs/ADRs/Warrants or any Convertible instruments, conversion date and
likely impact on equity
Not Applicable
(m) Shareholding pattern as on 31st March, 2014

Category

Equity
No. of shares
%

Preference
No of shares

Promoters
Body Corporate
NRI
Public
Others (Clearing Member)

3427500
280678
7901
1874210
1211

61.30
5.02
0.14
33.52
0.02

1000000
Nil
Nil
Nil
Nil

100
Nil
Nil
Nil
Nil

Total :

5591500

100.00

1000000

100

26

21st Annual Report 2013-14

(n) Distribution of Shareholding as on 31st March, 2014


Equity
No. of
shareholders

% of
shareholders

No. of shares
holding

Up to 500

1177

63.79

367711

6.58

501 1000
1001 2000

490
66

26.56
3.58

441215
100700

7.89
1.80

2001 3000

42

2.28

106964

1.91

3001 4000

14

0.76

50212

0.90

4001 5000

12

0.65

57450

1.03

5001 10000

16

0.87

138200

2.47

Above 10000

28

1.52

4329048

77.42

100.00

5591500

100.00

Category

Total

1845

% Shares

Preference
Above 10000

100.00

1000000

100.00

Total

100.00

1000000

100.00

(o) Plant Location


Oonnukal P.O, Kothamangalam, Ernakulam District, Kerala
(p) Investor Correspondence
(For share transfer, communication regarding share certificates, change of address and any other
query relating to the shares or Annual Report of the Company)
Integrated Enterprises (India) Limited,
2nd Floor, 'Kences Towers' No.1,
Ramakrishna Street,
North Usman Road,
T. Nagar, Chennai-600017

The Company Secretary


Eastern Treads Limited,
3A, 3rd Floor, Eastern Corporate Office,
34/137 E, NH Bypass, Edappally, Kochi,
Ernakulam-682 024, Kerala.

Phone: 044 28140801, 28140803,


Fax; 044 28143378, 28142479
E-mail: sureshbabu@iepindia.com

Phone: (0484) 3001247


Fax: (0484) 3001110
Email : baijut@eastern.in

27

21st Annual Report 2013-14

(q) Secretarial Certification


As stipulated by SEBI, a qualified Company Secretary in practice conducts the Audit for the purpose
of reconciliation of total admitted capital with the National Securities Depository Ltd (NSDL) and
Central Depository Services (India) Ltd (CDSL) and the total issued and listed capital of the
Company.
The Audit is carried out every quarter and the report thereon is submitted to the stock exchanges and
is also placed before the Board of Directors. The audit, inter-alia, confirms that the total listed and paid
up capital of the Company is in agreement with the aggregate of the total number of shares in
dematerialised form (held with NSDL and CDSL) and total number of shares in physical form.

DECLARATION ON CODE OF CONDUCT


To the best of my knowledge and belief and on the basis of declarations given to me by the Board
Members and the Senior Management Personnel of the Company, as required by Clause 49 (ID) of
the Listing Agreement, I hereby affirm that all the Board members and the Senior Management
personnel have fully complied with the provisions of the code of conduct of the Company.

For and on behalf of the Board


Kochi
17/05/2014

M.E Mohamed
Managing Director

28

21st Annual Report 2013-14

Auditors Certificate
on compliance with the conditions of
Corporate Governance
under clause 49 of the Listing Agreement

To the members of Eastern Treads Limited,


We have examined the relevant documents of Eastern Treads Limited for the year ended 31/03/14 for
certifying the compliance with conditions of the corporate governance under clause 49 of the listing
agreement of the said company with the Stock Exchanges. The compliance of conditions of corporate
governance is the responsibility of the management.
Our examination was limited to procedures and implementation thereof, adopted by the company for
ensuring the compliance of the conditions of corporate governance. It is neither an audit nor an expression of opinion on the financial statements of the company.
In our opinion and to the best of our information and according to the explanation given to us, and the
representation made by the management, we certify that the company has complied with the conditions
of corporate governance as stipulated in Clause 49 of the above mentioned listing agreement. As
required by the guidance note on certification of corporate governance issued by the Institute of Chartered Accountants of India, we state that the share registry department of the company has certified that
as at 31st March, 2014 there were no investor grievance remaining unattended/pending for more than
thirty days.
We state that compliance is neither an assurance as to the future viability of the company nor the
efficiency or effectiveness with which the management has conducted the affairs of the company.

For JVR & Associates


Chartered Accountants
(F.R.No. 011121s)
Jomon K. George
Partner
M.No. 202144
Kochi - 16,
17/05/2014

29

21st Annual Report 2013-14

Annexure C to the Directors' Report

MANAGEMENT DISCUSSION AND ANALYSIS


a) Industry Structure and Developments
Similar to the tyre industry, the tyre replacement market has a vital role for the growth of tyre
retreading industry, because around 85% of the tyre demand is for replacement. Hence, this market is
the backbone to the tyre retreading industry. The tyre retreading has reported healthy growth in past
few years. Its cost advantage when compared with the cost of new tyre is the prime reason for this
growth. Secondary factors like growth in transportation, agriculture, industry, vehicle demand,
infrastructure development, has also influenced in this growth.
In the international markets, branded tyre manufacturers play a key role in the re-treading business.
However, Indian scenario was different and it was fragmented and unorganised. However, the recent
entry of tyre brands in retreading environment in India is an indication that Indian market is also
surging towards branding. Your Company has actively taken various brand building exercises in
domestic and international markets. Several welcome steps have been taken towards this direction
including new face to our website and logo for better brand visibility, fleet owner's campaigns etc.
The technological improvements and quality of tyre retreading materials resulted in an increased
service life of tyres. As retreading prolongs the tyre life, it is the way to reduce fleet owners operating
cost. This cost savings facilitated the tyre retreading to gain greater acceptance and has placed the
retreaders in a better position than the tyre industry in tyre replacement market. In fact, retreading has
not only cost less but is a comprehensive ecological choice which provides considerable
environmental sustainability and thereby addresses social concerns due to energy savings and
diminution in pollution.
Our Easten branded products covers all stages of the retreading process and we are committed to put
constant endeavour to ensure continuous improvement in quality, durability and reliability with
minimum economy.
b) Opportunities and Threats
While analyzing fleet operating costs, the tyres outlays third stage right after labour and fuel. Here the
tyre retreading has emerged as a good tyre management program, which limits the fleet operating
cost to an absolute minimum. Since around 85% of the tyre demand is for replacement, retreading
could have a detrimental impact on replacement demand for tyres.
Tyre retreading is having good future with the introduction of radialisation, better quality road networks
and increased share of multi-axle trucks. Even though the radial tyres have improved mileage, rolling
resistance and less tread wear compared to bias-ply tyres which will impact retreading, it is a blessing to
tyre retreading as radial tyres give high quality casings that can be successfully retreaded multiple times
and the quality retreaded tyres will build customer confidence. This gives a range of opportunities for
higher level retreading and Eastern Treads aims to capitalize this opportunity.

30

21st Annual Report 2013-14

The advantages of Eastern Treads in tyre retreading industry are its vast experience, prompt after
sales service, good customer relations and network, awards and recognitions to prove consistent
quality, judicious purchase of materials, reputation and brand image of its quality products, talented
technical and marketing personnel and supporting management which gives leadership and
acceptability in the market.
The entry of branded tyre majors including multinational corporations in retreading industry may be a
threat to the Company, however, it creates awareness in the customers about retreading and its
quality. Since the ability of the retreading sector to capture potential replacement demand would
depend on the awareness among customers of the quality and benefits of retreading, as the
customers further know tyre retreading, the market will expand at a fabulous speed.
Another area of concern for retreading industry is the unhealthy competition from small and
unorganized players who are producing poor quality retreads which may hurt the consumer
confidence in retreading. We are confident that customers have faith in our products and we shall be
able to get reasonable market share in the short term.
c) Outlook
With the advancement of technology and economies of scale, retreading has reached a level of quality
and sophistication unprecedented in its history, and now it has overcome its past reputation and
become part of established fleet management practice for commercial and utility operations. Since
the mentality of the market towards retreading has changed and it became an integral element of the
tyre market, the scope for our business expansion is high.
Retreading is not only cost effective, but dependable, reliable, safe and environment friendly. We are
of the view that Eastern Treads can use this opportunity to continue its passionate journey towards
customer delight and loyalty. We have developed business plans to exploit the market to become the
most successful retreader with the highest quality products, delivering the best possible return on
investment to the fleets.
d) Risks and Concerns
Our growth is fully depending on tyre replacement market, which depends on various factors like
economic growth, infrastructural development, growth in the automobile industry and transportation
etc. The Company is exposed to various risks which are normal in any business enterprise. The main
ones and the steps undertaken to mitigate these risks are mentioned below:
Financial Risk
Credit risk on account of material supplied to customers has been reduced by the introduction of cash
and carry policy, advance and bank guarantee from the customers. The risk of delayed payment from
State Transport Corporations is controlled and managed by continuous follow-up.
31

21st Annual Report 2013-14

Increase in Raw Material Price


Normal fluctuations in raw material prices are generally considered while fixing product prices to the
customers. However the unprecedented fluctuations have serious impact on profitability till prices are
revised to meet the costs, especially in case of exports and supply to Sate Transport Corporations and
others, based on fixed price contracts.
The petroleum based raw material prices are linked to the movement in crude oil prices and the
Natural rubber price is subject to production volatility resulting from speculating activities and natural
causes. While demand of tyre retreading materials in the industry is expected to be healthy, cost
pressures remains as a challenge. With the rupee depreciating against the US dollar, the expensive
raw material import has emerged as the biggest concern.
Changes in Government Policies
Changes in government policies will affect the Company's financial position or investments.
Operational Risk
Preventive maintenance has been carried out to achieve high level of machine availability. Adequate
inventory of stocks at each stage of operation is maintained to keep production going on in case of any
breakdown.
Product Risk
Research and development is being undertaken to deliver better products, service and value to the
customers.
e) Internal Control System and their Adequacy
Your Company has a proper and adequate system of internal controls, to ensure that all assets are
safeguarded and protected against loss from unauthorized use or disposal and that the transactions
are authorised, recorded and reported correctly. The internal control is supplemented by an extensive
programme of internal, external audits and periodic review by the top management and by the Audit
Committee of the Board of Directors.
We have our own internal audit department which evaluates legal and compliance issues and
supports in assessment of Internal Control Systems and identification of other important issues as a
powerful tool for risk control and governance. The system is designed to adequately ensure the
reliability of financial and other records for preparing financial information and other data and for
maintaining accountability of our assets. The external auditors have evaluated the system of internal
controls in the Company and have reported that the same is adequate and commensurate with the
size of the Company and the nature of its business.

32

21st Annual Report 2013-14

f)

Discussion on Financial Performance with respect to Operational Performance


(Please refer to Directors' Report on Operations)

g)

Material Developments in Human Resources and Industrial Relations


The dedication and hard work of productive and dynamic goal oriented team is the key factor to the
success of our Company. We believe that hiring the right personnel and proper retaining is the
decisive factor for this success. To keep the Company and its human resource competitive, experts
were engaged to train the employees at various levels.
We have actively involved to empower our employees through greater knowledge, team spirit and to
develop greater sense of accountability. The Company lays greater prominence on augmenting
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.
The Company conducts programs such as TQM to create team synergy. Our quality circles meet to
exchange their experiences and to offer suggestions and improvements for the system. Our intensive
training programs encourage team work and develop the employees to face future challenges. The
Company expects an exponential growth, because of this Total Employee Involvement Programme.
The Company has 405 employees in its rolls as on 31/03/2014. Employee relations remained cordial
and the work atmosphere remained congenial during the year.

(h) Cautionary Statement


Some of the statements in this management discussion and analysis describing the Company's
objectives, projections, estimates and expectations may be 'forward looking statements' within the
meaning of applicable laws and regulations. Actual results might differ substantially or materially from
those expressed or implied. Important developments that could affect the Company's operations
include global and domestic supply and demand conditions affecting selling prices of products
downtrend in industry, significant changes in political and economic environment in India, tax laws,
import duties, litigation and labor and industrial relations.
The Company assumes no responsibility in respect of the forward-looking statements, which may
undergo changes in future on the basis of subsequent developments, information or events.

33

21st Annual Report 2013-14

INDEPENDENT AUDITOR'S REPORT


The Members of
EASTERN TREADS LIMITED
Kochi
Report on the Financial Statements
We have audited the accompanying financial statements of EASTERN TREADS LIMITED, which
comprise the Balance Sheet as at March 31, 2014 and the Statement of Profit and Loss and Cash Flow
Statement for the year then ended, and a summary of significant accounting policies and other
explanatory information.
Management's Responsibility for the Financial Statements
Management is responsible for the preparation of these financial statements that give a true and fair view
of the financial position, financial performance and cash flows of the Company in accordance with the
Accounting Standards notified under the Companies Act, 1956 read with the General Circular 15/2013
dated 13th September 2013 of the Ministry of Corporate Affairs in respect of Section 133 of the Companies
Act, 2013. This responsibility includes the design, implementation and maintenance of internal control
relevant to the preparation and presentation of the financial statements that give a true and fair view and
are free from material misstatement, whether due to fraud or error.
Auditor's Responsibility
Our responsibility is to express an opinion on these financial statements based on our audit. We
conducted our audit in accordance with the Standards on Auditing issued by the Institute of Chartered
Accountants of India. Those Standards require that we comply with ethical requirements and plan and
perform the audit to obtain reasonable assurance about whether the financial statements are free from
material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in
the financial statements. The procedures selected depend on the auditor's judgment, including the
assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.
In making those risk assessments, the auditor considers internal control relevant to the Company's
preparation and fair presentation of the financial statements in order to design audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of
the entity's internal control. An audit also includes evaluating the appropriateness of accounting policies
used and the reasonableness of the accounting estimates made by management, as well as evaluating
the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
audit opinion.
Opinion
In our opinion and to the best of our information and according to the explanations given to us, the financial
statements give the information required by the Act in the manner so required and give a true and fair view
in conformity with the accounting principles generally accepted in India:
34

21st Annual Report 2013-14

a) In the case of the Balance Sheet, of the state of affairs of the Company as at March 31,2014;
b) In the case of the Statement of Profit and Loss, of the profit for the year ended on that date; and
c) In the case of the Cash Flow Statement, of the cash flows for the year ended on that date.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor's Report) Order, 2003 issued by the Central Government
of India in terms of sub-Section (4A) of Section 227 of the Act, we give in the Annexure a statement
on the matters specified in paragraphs 4 and 5 of the Order.
2. As required by Section 227(3) of the Act, we report that:
a.

We have obtained all the information and explanations which to the best of our knowledge
and belief were necessary for the purpose of our audit;

b.

In our opinion proper books of account as required by law have been kept by the Company so
far as appears from our examination of those books.

c.

The Balance Sheet, Statement of Profit and Loss, and Cash Flow Statement dealt with by
this Report are in agreement with the books of account.

d.

In our opinion, the Balance Sheet and Statement of Profit and Loss comply with the
Accounting Standards, notified under the Companies Act, 1956 read with the General
Circular 15/2013 dated 13th September 2013 of the Ministry of Corporate Affairs in respect of
Section 133 of the Companies Act, 2013;

e.

On the basis of written representations received from the directors as on March 31, 2014,
and taken on record by the Board of Directors, none of the directors is disqualified as on
March 31,2014 from being appointed as a director in terms of Clause(g) of sub-Section (1) of
Section 274 of the Companies Act, 1956.

f.

Since the Central Government has not issued any notification as to the rate at which the cess
is to be paid under Section 441A of the Companies Act, 1956 nor has it issued any Rules
under the said Section, prescribing the manner in which such cess is to be paid, no cess is
due and payable by the Company.

For JVR& ASSOCIATES


Chartered Accountants
(F. R. No. 011121S)
JOMON K GEORGE
Partner
M.No.202144

Kochi-16
17/05/2014
35

21st Annual Report 2013-14

The Annexure referred to in paragraph 1 of the our Report of even date to the members of
Eastern Treads Limited on the accounts of the Company for the year ended 31st March, 2014.
In terms of Companies (Auditor's Report) Order 2003, issued by the Government of India, in terms of
Section 227 (4A) of The Companies Act, 1956, we further report, on the matters specified in paragraph 4
and 5 of the said Order, to the extent applicable to the Company, that:1. (i)

The Company has maintained proper records showing full particulars including quantitative
details and situation of its fixed assets, which requires to be updated.

(ii)

The fixed assets have been physically verified by the management during the year. We are
informed that no serious discrepancies have been noticed by the management on such
verification as compared to the aforesaid records of fixed assets.

(iii)

During the year, there was no major disposal of fixed assets.

2. (i)

The management has carried out physical verification of stocks at reasonable intervals during the
year.

(ii)

In our opinion, the procedure of verification of stocks followed by the Company are reasonable
and adequate having regard to the size of the company and the nature of its business.

(iii) On the basis of our examination of the records of inventory, we are of the opinion that the
Company has a proper system of maintaining records of inventory. We are informed that the
discrepancies between the stock records and the physical stocks are not material.
3. (i)

The Company has not granted loans to any party covered in the register maintained under
Section 301 of The Companies Act, 1956.

(ii)

The Company has not taken loans from any party covered in the register maintained under
Section 301 of The Companies Act, 1956.

4. In our opinion and according to the information and explanations given to us, there are adequate
internal control systems commensurate with the size of the Company and the nature of its business
with regard to the purchases of inventory and fixed assets and for the sale of goods and services.
There is no continuing failure to correct weaknesses in internal controls.
5.

(i)

The particulars of contracts or arrangements referred to Section 301 of the Act have been
entered in the register required to be maintained under that Section.

(ii)

In our opinion and according to the information and explanations given to us, the transactions
made in pursuance of contracts or arrangements entered in the register maintained under
Section 301 of the Act and exceeding the value of five lakhs rupees in respect of any party during
36

21st Annual Report 2013-14

the year have been made at prices which are reasonable having regard to prevailing market
prices at the relevant time.
6. The Company has not accepted any deposit from the public.
7. In our opinion, the Company has an internal audit system commensurate with the size and nature of its
business.
8. We have broadly reviewed the books of account maintained by the Company pursuant to the Rules
made by the Central Government for the maintenance of the cost records under Section 209(1)(d) of
The Companies Act,1956 and are of the opinion that prima facie, the prescribed accounts and records
have been made and maintained.
9.

(i) According to the records of the Company, the company has been generally regular in depositing
undisputed statutory dues with the appropriate authorities.
(ii)

According to the information and explanations given to us, there are no undisputed statutory
dues which are outstanding as on 31stMarch, 2014, for a period of more than six months from the
date they became payable.

(iii)

According to the records of the company, there are no statutory dues which have not been
deposited on account of any dispute, except the following disputed amounts.

Name of the
Statute

Nature of
Dues

CST

CST

3,80,200.00

2008-2009

Vehicle
Interception

14,400.00

2009-2010

VAT

Amount (Rs)

Period to
which the
amount
relates

Forum where dispute


is pending

Deputy
Commissioner(Appeals),
Ernakulam
Commercial Tax Officer,
Kattappana

10. The accumulated loss of the company is not more than fifty percent of its net worth. The Company
has not incurred cash losses during the financial year covered by our audit and in the immediately
preceding financial year
.
11. The Company has not defaulted in repayment of dues to Financial Institutions/Banks.

37

21st Annual Report 2013-14

12. The Company has not granted any loans on the basis of security by way of pledge of shares,
debentures and other securities.
13. The Company is not a chit fund or a nidhi/mutual benefit fund/society.
14. The Company is not dealing or trading in shares, securities, debentures and other investments.
15. The Company has not given any guarantee for loans taken by others from banks or financial
institutions.
16. The term loans has been utilised for the purposes for which they have been availed.
17. On the basis of an overall examination of the Balance Sheet of the Company, no funds raised on a
short term basis, have been used for long term investments.
18. According to the information and explanations given to us, the Company has not made any
preferential allotment of shares to parties and Companies covered in the Register maintained under
Section 301 of The Companies Act, 1956
19. The Company has not issued any debentures during the year.
20. The Company has not raised money by public issues during the year.
21. Based upon the audit procedures performed and information and explanations given by the
management, we report that no fraud on or by the Company has been noticed or reported during the
course of our audit.
For JVR & ASSOCIATES
Chartered Accountants
(F. R. No. 011121S)
JOMON K GEORGE
Partner
M.No.202144
Kochi-16
17/05/2014

38

21st Annual Report 2013-14

BALANCE SHEET AS AT 31/03/2014


Particulars

Amount in `
Previous Year

Notes

Current Year

(1) Shareholder's Funds


(a) Share Capital
(b) Reserves and Surplus

3
4

153,458,500.00
(2,875,012.89)

152,664,500.00
(19,284,510.16)

(2) Non-Current Liabilities


(a) Deferred Tax Liability (Net)
(b) Long Term Borrowings
(c) Long Term Provisions

5
6

1,315,018.54
14,439,730.93
1,871,022.00

1,010,878.78
1,531,363.08
1,959,984.00

(3) Current Liabilities


(a) Short Term Borrowings
(b) Trade Payables
(c) Other Current Liabilities
(d) Short-T erm Provisions

7
8
9
10

101,426,611.78
69,815,144.01
15,143,199.92
5,258,239.53

43,423,146.47
39,752,608.56
6,862,815.55
3,163,600.00

359,852,453.82

231,084,386.28

14
15

64,359,519.41
672,012.33
23,703,117.66
523,000.00

42,827,902.14
39,202.18
111,437.00
15,118,168.73
40,000.00

16
17
18
19
20

74,005,425.07
148,152,559.42
2,985,321.74
33,931,161.81
11,520,336.39

52,126,934.38
79,730,499.88
7,270,657.86
27,776,779.33
6,042,804.78

359,852,453.82

231,084,386.28

I. EQUITY AND LIABILITIES

Total
II.ASSETS
(1) Non-Current Assets
(a) Fixed Assets
(i) Tangible Assets
(ii) Intangible Assets
(iii) Capital work-in-progress
(b) Deferred Tax Assets (Net)
(c) Long Term Loans and Advances
(d) Other Non-current Assets
(2) Current Assets
(a) Inventories
(b) Trade Receivables
(c) Cash and Cash Equivalents
(d) Short Term Loans and Advances
(e) Other Current Assets

11
12
13

Total

The accompanying notes form integral part of the financial statements


As per our report of even date attached
For JVR & ASSOCIATES
Chartered Accountants
Cochin 24
17/05/2014

M.E.MOHAMED

M S RANGANATHAN

BAIJU.T

JOMON K GEORGE

Managing Director

Director

Company Secretary

Partner

39

21st Annual Report 2013-14

PROFIT AND LOSS STATEMENT FOR THE YEAR ENDED 31ST MARCH 2014
Particulars
I. Revenue from Operations
II. Other Income

Notes
21
22

649,979,890.27

3,262,065.17

380,884.56

895,734,245.42

650,360,774.83

23

487,656,468.01

360,341,609.14

24
25

191,299,088.28
(14,058,312.89)
54,070,672.16

150,972,209.31
(858,931.11)
39,043,882.29

53,418,757.90
8,259,049.24
7,909,426.03
82,410,759.67

36,320,814.90
5,840,719.88
5,851,639.98
37,830,928.03

870,965,908.40

635,342,872.42

(III - IV)

24,768,337.02

15,017,902.41

(V - VI)

24,768,337.02

15,017,902.41

8,054,700.00

3,163,600.00
411,232.05
1,422,648.78
(631,411.13)

16,409,497.27

10,651,832.71

3.07

2.02

IV. Expenses:
Cost of materials consumed
Purchase of Stock-in-T
rade
Changes in Inventories
Operating Expenses
Employee Benefits
Financial costs
Depreciation and amortization expense
Other expenses

26
27
28

Total Expenses

VIII. Tax expense:


(1) Current Tax
(2) Tax paid in excess of provision (AY 12-13)
(2) Deferred Tax
(3) Mat Credit Entitlement
IX. Profit for the year from continuing
operations
X. Earning Per Share :
Basic & Diluted

Amount in `
Previous Year

892,472,180.25

III. Total Revenue

V. Profit before exceptional and


extraordinary items and tax
VI. Exceptional/Extraordinary items
VII. Profit before tax

Current Year

(VII-VIII)

304,139.76

The accompanying notes form integral part of the financial statements


As per our report of even date attached
For JVR & ASSOCIATES
Chartered Accountants
Cochin 24
17/05/2014

M.E.MOHAMED

M S RANGANATHAN

BAIJU.T

JOMON K GEORGE

Managing Director

Director

Company Secretary

Partner

40

21st Annual Report 2013-14

NOTES TO FINANCIAL STATEMENTS


1. BACKGROUND
Eastern Treads Limited was incorporated on 02/07/1993. Its shares are listed in Bombay Stock
Exchange, Cochin Stock Exchange and Madras Stock Exchange. The company is primarily engaged in
the business of manufacturing and dealing of tread rubber and rubber based adhesives.
2. ACCOUNTING POLICIES
Significant Accounting Policies
The significant Accounting Policies followed by the company are as stated below:
General
The financial statements are prepared under historical cost convention and in accordance with the
applicable accounting standards in India.
Use of Estimates
The preparation of financial statements in confirmity with the Generally Accepted Accounting Principal
(GAAP) requires the management to make estimates and assumptions that affect the reported amounts
of assets and liabilities, the disclosure of contingent liabilities on the date of the financial statements and
reported amount of income and expenses during the period. Actual figures may differ from these
estimates. Any revision to accounting estimates is recognised prospectively in current and future periods.
Fixed Assets
Fixed Assets are stated at historical cost less accumulated depreciation.
Advances paid towards acquisition of fixed assets and contractors are disclosed under 'Capital Advances'
Depreciation
Depreciation has been provided on fixed assets under Straight Line Method at the rates and in the manner
given under Schedule XIV to The Companies Act, 1956.
Amortisation of Intangible Assets
Intangible assets are written off over a period of five years under straight line method
Revenue Recognition
Revenue from sale of goods is recognised at the point of despatch to the customers.
Revenue from job work is recognised at the completion of the agreed services.
Interest income is recognised on a time proportion basis taking into account the amount ouststanding and
the interest rate applicable.
Inventories and Tools & Spares
Raw materials are valued at cost on FIFO basis.
Finished Goods are valued at lower of cost or net realisable value. Cost includes indirect costs.
25% of Tools & Spares are written off to revenue.
Preference Share Issue Expenses
The expenses in relation to the preference share issue is written off over a period of five years on straight
line method.
41

21st Annual Report 2013-14

Employee Benefits
a.Short term employee benefits such as salaries, wages, bonus and incentives which fall due within 12
months of the period in which the employee renders the related services which entitles him to avail such
benefits are recognised on an undiscounted basis and charged to the profit and loss account.
b.Defined Contribution Plans - Contributions made to the Recognised Provident Fund & Employee State
Insurance Corporation are expensed to the Profit & Loss Account. The Company's obligation is limited to
the amount contributed by it.
c.Defined Benefit Plans - The Company is a member of Group Gratuity Scheme administered by LIC of
India. The liability for gratuity is accounted on the basis of acturial valuation done by L I C of India.
Foreign Exchange Transactions
Revenue denominated in foreign currencies is translated into relevant functional currencies using the
exchange rate in effect on the date of transaction. Transaction gain or loss realised upon the settlement of
foreign currency transactions are included in determining net profit for the period in which transaction is
settled.
The premium or discount on a forward exchange contract taken to hedge foreign currency risk of an
existing asset/liability is recognised over the period of the contract and is recognised in the statement of
profit and loss.
The forward exchange contracts taken to hedge existing assets/liabilities are translated at the closing
exchange rates and resultant exchange differences are recognised in the same manner as those on the
underlying foreign currency asset/liability.
Borrowing Costs
Borrowing costs are expensed in the absence of outlay on qualifying assets.
Segment Reporting
In the absence of more than one distinguishable business/ geographical segment, segment information is
not given.
Taxes on Income
Income tax expense comprises current tax and deferred tax charge or credit. The current tax is
determined as the amount of tax payable in respect of the estimated taxable income of the period. The
deferred tax charge or credit is recognised using prevailing enacted or substantively enacted tax rates.
Where there are unabsorbed depreciation or carry forward losses, deferred tax asset are recognised only
if there is virtual certainty of realisation of such assets. Other deferred tax assets are recognised only to
the extent there is reasonable certainty of realisation in future. Deferred tax assets are reviewed at each
Balance Sheet date based on the developments during the period.
MAT Credit is recognised as an asset only when and to the extent there is convincing evidence that the
company will pay normal income tax during the specified period. In the year in which the MAT credit
becomes eligible to be recognised as an asset in accordance with the recommendations contained in the
guidance note issued by The Institute of Chartered Accountants of India, the said asset is created by way
of a credit to the profit and loss account and shown as MAT Credit Entitlement. The company reviews the
same at each Balance Sheet date and writes down the carrying amount of MAT credit entitlement to the
extent there is no longer convincing evidence to the effect that company will pay normal Income Tax during
the specified period.

42

21st Annual Report 2013-14

Impairment of Assets
The carrying amount of assets is reviewed at each Balance Sheet date if there is any indication of
impairment based on internal/external factors. An impairment loss will be recognised wherever the
carrying amount of an asset exceeds its estimated recoverable amount. The recoverable amount is
greater of the assets net selling price and value in use. In assessing the value in use; the estimated future
cash flows are discounted to the present value using the weighted average cost of capital.
Provisions, Contingent Liabilities and Contingent Assets
The company creates a provision when there is a present obligation as a result of past event that probably
requires an outflow of resources and a reliable estimate can be made of the amount of obligation. A
disclosure for a contingent liability is made when there is a possible obligation that may, but probably will
not, require an outflow of resources. When there is a possible obligation or a present obligation in respect
of which the likelihood of outflow of resources is remote, no provision or disclosure is made. Contingent
assets are neither recognised nor disclosed in the financial statements.

Amount in `
3. SHARE CAPITAL

Current Year

Previous Year

60,000,000.00

60,000,000.00

100,000,000.00

100,000,000.00

160,000,000.00

160,000,000.00

55,915,000.00

55,915,000.00

3,250,500.00

4,008,500.00

52,664,500.00

51,906,500.00

794,000.00

758,000.00

53,458,500.00

52,664,500.00

100,000,000.00

100,000,000.00

153,458,500.00

152,664,500.00

A. Authorised
60,00,000 Equity shares of ` 10 each
(Previous Year 60,00,000equity shares of ` 10/- each) .
10,00,000 Preference Shares of ` 100 each
(Previous Year - 10,00,000 Preference
Shares of `100 each)

B. Issued, Subscribed and Paid-up


Balance at the beginning of the period
(55,91,500 Equity shares of ` 10/- each)
(Previous year 55,91,500 Equity shares of `10/-each)
Less: Call money in arrears
Paid up share capital at the beginning of the period
Add: Calls collected during the year
Paid up share capital at the end of the period
10,00,000 Zero percent Redeemable Preference Shares
of `100 each (Previous Year - 10,00,000 Zero
percent Redeemable Preference Shares of `100 each
(Redeemable after five years from the date of
allotment subject to achieving net worth of `100
lacs without considering the said preference shares)

43

21st Annual Report 2013-14

Shares held by shareholders holding more than 5% shares


Equity Share Capital
Particulars

Current Year
Previous Year
Number of % of share Number of % of share
shares
holding
shares
holding

List of significant share holders (>5%)


Meeran M E
1,401,900
Firoz Meeran
649,600
Navas Meeran
620,800
Kerala State Industrial Development Corporation 615,000

25.07%
11.62%
11.10%
11.00%

1,401,900
649,600
620,800
615,000

25.07%
11.62%
11.10%
11.00%

Preference Share Capital


Particulars
Meeran M E
Navas Meeran

Current Year
Previous Year
Number of % of share Number of % of share
shares
holding
shares
holding
400,000
400,000
40.00%
40.00%
600,000
600,000
60.00%
60.00%

4. RESERVES & SURPLUS


Capital Reserve
Profit and Loss Account
Opening Balance
Add : Profit for the year

Reserves & Surplus

Current Year

Amount in `
Previous Year

2,000,000.00

2,000,000.00

(21,284,510.16)
16,409,497.27

(31,936,342.87)
10,651,832.71

(4,875,012.89)
(2,875,012.89)

(21,284,510.16)
(19,284,510.16)

5. LONG TERM BORROWINGS


Term Loan from The Federal Bank Limited

11,119,920.00

1,870,895.60

1,448,915.33

1,531,363.08

14,439,730.93

1,531,363.08

1,871,022.00
1,871,022.00

1,959,984.00
1,959,984.00

(Term loan from The Federal Bank Ltd is secured by way of first
charge on the fixed assets and are further guaranteed by the
Promoter Directors of the Company)

Long Term maturities of finance lease obligations


- HP Loans for Vehicles
Creditors - For Capital goods

Term Loan/HP Loans


These loans are repayable ranging from a period of 36
months to 60 months with equal monthly installments
ranging from `.18,140.00 to `.3,00,000 at the rate of
interest ranging from 11.51% to 13.20% p.a

6. LONG TERM PROVISIONS


Provision for Employee Benefits (Gratuity)

44

21st Annual Report 2013-14

Amount in `
7. SHORT TERM BORROWINGS

Current Year

Previous Year

101,428,138.72

43,423,146.47

From Banks
Cash Credit from The Federal Bank Limited
(The Cash Credit from The Federal Bank Ltd is
secured by way of first charge on the floating
assets and second charge on the fixed assets of
the company and are further guaranteed by the
Promoter Directors of the Company)
Packing Credit from The Federal Bank Limited
(PCFC is secured by way of first charge on the floating
assets and second charge on the fixed assets of the
company and are further guaranteed by the Promoter
Directors of the Company)

(1,526.94)

101,426,611.78

43,423,146.47

- For Purchases

53,645,166.83

31,556,524.81

- For Expenses

16,169,977.18

81,96,083.75

69,815,144.01

39,752,608.56

8. TRADE PAYABLES
Sundry Creditors:

9. OTHER CURRENT LIABILITIES


Current maturities of long term debt

3,300,000.00

Current maturities of finance lease obligations - HP Loans

1,179,000.00

Advances from Customers

3,499,127.12

4,249,298.95

Other Payables

7,165,072.80

2,613,516.60

15,143,199.92

6,862,815.55

8,054,700.00

3,163,600.00

10. SHORT TERM PROVISIONS


Provision for Taxation
Less: MAT Credit Entitlement

(2,796,460.46)
5,258,239.53

3,163,600.00
45

21st Annual Report 2013-14

21st Annual Report 2013-14


102,733,845.85

173,446.93

111,437.00

111,437.00

Building work in Progress

TOTAL

As at
01.04.2013

13. CAPITAL WORK IN PROGRESS

Computer Software

12. INTANGIBLE ASSETS

As at
01.04.2013

29,312,915.44

1,397,818.58

9. Furniture & Fixtures

TOTAL

181,069.00

3,551,055.26

8. Computer & Accessories

6,705,334.39

6,705,334.39

Addition

(6,816,771.39)

(6,816,771.39)

Deletions

Deletions

Cost

768,460.00

Addition

5,183,900.85

725,700.30

For the
Period

1,578,887.58

4,839,344.26

1,260,299.78

5,904,809.73

897,157.54

5,622,241.16

As at
Upto
31.03.2014 31.03.2013

941,906.93 134,244.75

As at
Upto
31.03.2014 31.03.2013

91,972.11

664,895.36

59,500.36

494,524.31

42,614.98

256,313.74

For the
Period

67,679,569.88

1,261,613.02

3,890,932.27

917,156.68

2,495,634.11

639,837.85

4,048,555.80

269,894.60

Deletions/
Upto
Adjustments 31.03.2014
-

899,987.00

As at
31.03.2013

228,177.67

324,868.34

331,143.46

744,775.06

299,934.68

1,526,096.10

111,437.00

111,437.00

As at
As at
31.03.2014 31.03.2013

Net Carrying Amount

39,202.18

As at
As at
31.03.2014 31.03.2013

Net Carrying Amount

64,359,519.41 42,827,902.14

317,274.56

948,411.99

343,143.10

3,409,175.62

257,319.69

1,573,685.36

48,516,239.00 34,554,759.17 22,508,228.00

Deletions/
Upto
Adjustments 31.03.2014

Depreciation

135,649.86

For the
Period

(150.00)

(150.00)

Depreciation

59,905,943.71 7,773,776.17

1,169,640.91

3,226,186.92

857,656.32

2,001,109.80

597,222.86

3,792,242.06

899,987.00

As at
31.03.2014

Net Carrying Amount

5,909,601.15 22,055,762.92 15,964,691.83

Deletions/
Upto
Adjustments 31.03.2014

Depreciation

83,070,998.17 43,077,983.99 5,438,255.01

27,965,364.07

899,987.00

As at
Upto
31.03.2014 31.03.2013

(7,672.00) 132,039,089.29

(7,672.00)

Deletions

Cost

1,295,961.00

71,500.00

1,188,799.78

7. Office Equipments

3,158,924.87

303,903.00

2,745,884.86

897,157.54

5,318,338.16

6. Vehicles

5. Lab Equipments

4.Electrification and water systems

65,586,211.99 17,484,786.18

3. Plant & Equipment

6,816,771.39

Addition

21,148,592.68

899,987.00

As at
01.04.2013

Cost

2. Building

1. Land & Land Development

TANGIBLE ASSETS

11. TANGIBLE ASSETS

46

14. LONG TERM LOANS AND ADVANCES


(Unsecured,considered good)

Amount in `
Current Year

Previous Year

13,225,087.00

1,109,917.60

Security Deposits

2,737,493.00

3,471,253.00

Security Deposits

4,760,352.00

4,760,352.00

MAT Credit Entitlement

2,980,185.66

5,776,646.13

23,703,117.66

15,118,168.73

523,000.00

40,000.00

523,000.00

40,000.00

Capital Advance
Advance for Land/Machinery/Civil Works

15. OTHER NON CURRENT ASSETS


Other Bank balances - Margin Money

16. INVENTORIES : (As taken, valued and certified by the management)


Raw Materials

12,333,687.77

10,547,276.46

Work in Progress

15,676,196.81

9,857,180.28

Finished Goods

35,184,119.26

27,315,807.97

Goods in Transit ( Finished Goods)

1,391,791.75

1,020,806.68

Packing Materials

1,026,470.60

332,274.58

261,053.15

136,506.00

8,132,105.73

2,917,082.41

74,005,425.07

52,126,934.38

7,146,592.86

12,150,499.63

141,005,966.56

67,580,000.25

148,152,559.42

79,730,499.88

Balances with Banks in Current Accounts

1,310,508.29

4,927,332.41

Other Bank balances - Margin Money

1,358,148.00

2,115,048.00

316,665.45

228,277.45

2,985,321.74

7,270,657.86

Fuel & Oil


Tools & Spares

17. TRADE RECEIVABLES (unsecured considered good)


Debtors
Outstanding for a period exceding six months
Other Debts

18. CASH AND CASH EQUIVALENTS

Cash in Hand

47

21st Annual Report 2013-14

Amount in `
19. SHORT TERM LOANS AND ADVANCES
(unsecured considered good)
Staff Advances
Advances to Suppliers
Other Advances

Current Year

Previous Year

581,865.40

388,695.26

30,401,675.16

27,312,484.07

2,947,621.25

75,600.00

33,931,161.81

27,776,779.33

7,000,000.00

2,200,000.00

754,687.85

1,216,584.35

2,230,269.81

876,374.80

20. OTHER CURRENT ASSETS


Advance Tax - Income Tax
Tax Deducted at Source
Vat\Service Tax Credit Recievable
Unamortised Expenses\Premium
Interest accrued on Margin Money
Other Current Assets

516,331.96

45,031.00

121,683.56

1,490,347.73

1,111,830.11

11,520,336.39

6,042,804.78

878,674,958.32
72,118,648.98

650,235,361.03
49,989,903.44

806,556,309.34

600,245,457.59

43,120,661.32

12,442,201.85

31,060,695.62

28,884,745.06

5,992,394.96

2,525,166.83

236,001.96
79,937,749.94

114,531.30
43,737,582.44

886,494,059.28

643,983,040.03

3,915,758.00

3,521,577.31

2,177,527.67

2,585,567.43

115,164.70

110,294.50

2,062,362.97

2,475,272.93

892,472,180.25

649,979,890.27

21. REVENUE FROM OPERATIONS


SALES
a) Sale of Products :
-Domestic (Gross)
Less: Excise Duty Paid

-Export Sales
Sale of Compound mix
Sale of Raw Materials (Gross)
Less: Excise Duty Paid

b) Sale of services
Job Work Receipts
c) Other Operating Revenues
Sale of Scrap & Waste(Gross)
Less: Excise Duty Paid

48

21st Annual Report 2013-14

Amount in `
22. OTHER INCOME
Interest Income
Other non Operating Income

Current Year

Previous Year

69,691.44
3,192,373.73

247,749.56
133,135.00

3,262,065.17

380,884.56

10,547,276.46

9,328,541.93

489,442,879.32

361,560,343.67

12,333,687.77

10,547,276.46

487,656,468.01

360,341,609.14

Closing Stock - Finished Goods/Work in Progress

52,252,107.82

38,193,794.93

Opening Stock - Finished Goods/Work in Progress

38,193,794.93

37,334,863.82

14,058,312.89

858,931.11

2,710,702.00

972,360.80

Power & Fuel

17,441,858.85

14,282,480.50

Rates and taxes excluding taxes on income

13,608,260.59

14,148,806.57

Job Work Charges

6,272,014.54

3,251,044.95

Consumables

4,209,598.32

2,550,239.69

Packing Materials Consumed

9,828,237.86

3,838,949.78

54,070,672.16

39,043,882.29

Salaries and wages

46,500,040.90

32,020,822.56

Contribution to provident fund and other funds

1,733,200.00

1,328,312.34

17,322.00

324,194.00

5,168,195.00

2,647,486.00

53,418,757.90

36,320,814.90

23. COST OF RAW MATERIAL CONSUMED


Opening Stock
Add : Purchases
Less : Closing Stock

24. CHANGES IN INVENTORY

25. OPERATING EXPENSES


Tools & Spares consumed

26. EMPLOYEE BENEFIT EXPENSES

Gratuity
Staff welfare expenses

27. FINANCIAL COSTS


Interest on Term Loan

809,083.00

Interest on Cash Credit

5,906,500.00

5,102,372.00

Other Borrowing costs

1,543,466.24

589,838.88

148,509.00

Exchange Rate Fluctuation

8,259,049.24

5,840,719.88

49

21st Annual Report 2013-14

28. OTHER EXPENSES


Payments to the Auditor as
(a) Auditor:
(b) For Taxation matters
( c) For Management Services
Repairs to Building
Repairs to Machinery
Rent
Insurance
Professional Charges
Travelling Expenses
Business Promotion Expenses
Bad Debts
Freight Outward
Miscellaneous expenses

Amount in `
Current Year
405,000.00
30,500.00
60,750.00
622,790.00
1,095,414.05
1,885,125.00
641,879.67
3,047,485.00
8,801,962.00
20,618,457.16
6,472,425.00
9,256,419.68
29,472,552.11
82,410,759.67

Previous Year
330,000.00
27,500.00
55,500.00
266,748.00
378,117.00
582,419.00
512,403.00
999,285.00
4,557,828.10
9,457,747.48
4,263,588.23
5,661,970.00
10,737,822.22
37,830,928.03

29. CONTINGENT LIABILITIES AND COMMITMENTS (to the extent not provided for)
a. Claims against the company not acknowledged as debt
Demand by KVAT Authorities in appeal pending disposal
Bank Guarantees outstanding
Foreign Bills Discounting
b. Estimated amounts of contracts remaining to be executed
on capital account and not provided for
30. RELATED PARTY DISCLOSURES

5,455,836.00

5,455,836.00

14,469,543.00

10,695,000.00

6,537,313.53

34,198,950.00

2,826,632.00

Name of the related party and nature of relationship where control exists
List of the companies in which one of the director has significant influence
Eastern Condiments Pvt Ltd
Eastern Mattresses Pvt Ltd
Eastern Retreads Pvt Ltd
Eastea Chai Pvt Ltd
Feroz Treads Pvt Ltd
Sheram Treads Pvt Ltd
Sumo Treads Pvt Ltd
Sumo Treads Pvt Ltd
Key Management Personnel
Navas M. Meeran
M.E. Mohamed
M S Ranganathan
Relative of Key Management Personnel
Alfa Rubbers
Rosekhan Rubbers
Sahara Treads
50

21st Annual Report 2013-14

Transactions with related parties as per the books of account during the year ended Amount in `
Current Year
Previous Year
Eastern Condiments Pvt Ltd
Sharing of Expenses
Sale of Scrap
Eastern Mattresses Pvt Ltd
Purchase of Goods
Sharing of Expenses
Land Advance
Eastern Retreads Pvt Ltd
Sale of Finished Goods
Sharing of Expenses
Eastea Chai Pvt Ltd
Sharing of Expenses
Feroz Treads Pvt Ltd
Purchase of Goods
Sale of Goods
Job Work Payment
Job Work Receipt
Sharing of Expenses
Sheram Treads Pvt Ltd
Purchase of Goods
Sale of Raw Materials
Job Work Receipt
Sharing of Expenses
Sumo Treads Pvt Ltd
Purchase of Goods
Sale of Raw Materials
Job Work Receipt
Navas M. Meeran
Loan Accepted
Loan Repaid
M.E. Meeran
Loan Repayment

702,805.55
-

792,580.00
4,802.00

16,800.00
7,575,000.00

4,020.00
14,000.00
-

792,437.00
68,333.00

1,257,359.00
79,840.00

24,000.00

24,000.00

14,212,129.00
333,901.00
52,035.84
278,908.00
-

13,912,371.00
1,495,406.00
500,632.97
-

43,831.00
-

274,279.00

160,890.00
-

160,890.00
-

2,441,000.00

6,243,583.00

Alfa Rubbers
Purchase of Goods
Sale of Raw Materials
Job Work Payment
Job Work Receipt

14,597,918.01
64,995.00
4,543.00
326,899.00

14,644,127.00
26,719.00
530,637.49

Rosekhan Rubbers
Purchase of Finished Goods
Sale of Raw Materials
Job Work Payment
Job Work Receipt
Sharing of Expenses

13,948,407.50
2,613,570.00
672,316.00
130,000.00

14,632,101.00
1,509,091.00
59,206.00
374,573.00
51

21st Annual Report 2013-14

Current Year
Sahara Treads
Purchase of Goods
14,142,968.00
Sale of Raw Materials
1,018,495.00
Job Work Payment
2,366,594.00
Job Work Receipt
491,168.00
Amount Outstanding as at 31st March 2014
List of the companies in which one of the directors has significant influence
Eastern Condiments (P) Ltd
Eastern Retreads (P) Ltd
Sheram Treads (P) Ltd
Feroz Treads (P) Ltd
Eastern Mattresses (P) Ltd
Eastea Chai (P) Ltd
Sumo Treads (P) Ltd

Nil
1,119.78 Cr
Nil
4,880,220.63 Dr
Nil
Nil
1,487,695.08 Dr

Amount in `

Previous Year
14,621,377.00
1,640,425.30
270,336.75

Nil
713,934.23
68,361.70
3,091,513.53
Nil
Nil
1,486,195.08

Cr
Cr
Dr

Dr

Key Management Personnel


Navas M. Meeran
M.E. Mohammed

Nil
Nil

Relative of Key Management Personnel


Alfa Rubbers
Sahara Treads
Rosekhan Industries

Nil
Nil
Nil

4,353,704.49 Dr
371,850.45 Dr
3,699,873.00 Dr

31. DISCLOSURE IN ACCORDANCE WITH AS - 15 ON EMPLOYEE BENEFITS


a) Change in projected benefit obligation
Projected benefit obligation at the beginning of the year

2,050,710.00

Service Cost

255,841.00

Interest Cost

164,057.00

Acturial (gain)/loss
Benefits paid
Projected benefit obligation at the end of the year

(397,697.00)
(96,720.00)
1,976,191.00

b) Change in plan assets


Fair value of plan assets at the beginning of the year
Expected return on plan assets
Acturial (gain)/loss
Contributions
Benefits paid
Fair value of plan assets at the end of the year

90,726.00
4,879.00
106,284.00
(96,720.00)
105,169.00
52

21st Annual Report 2013-14

c) Reconciliation of present value of obligation and the fair value of plan assets
Present value of projected benefit obligation at the end of the year
Funded status of the plans
Funded status amount of liability recognised in the balance sheet

1,976,191.00
105,169.00
1,871,022.00

d) The components of net gratuity costs are reflected below


Service Cost

255,841.00

Interest Cost

164,057.00
(4,879.00)

Expected return on plan assets

(397,697.00)

Recognised net acturial (gain)/loss

17,322.00

Net gratuity costs


e) Following are the Principal Actuarial Assumptions used at the balance sheet date:
Particulars

Gratuity

Discount Rate

8% p.a.

Salary Escalation Rate

7% p.a.

32. Basic and Diluted Earning Per Share (EPS), of face value ` 10/- has been calculated as under:
Numerator

Current Year

Previous Year

Net Profit for the year


Denominator
Weighted average number of equity shares outstanding
during the year (Partly paid shares treated as a fraction of
an equity share)
Earnings per Share

16,409,497.27

10,651,832.71

5,345,850

5,266,450

3.07

2.02

33. Major Components of Deferred Tax Asset/Deferred Tax Liability are:-

Item
Unabsorbed Depreciation%)
Depreciation
Provision for Gratuity
Total
NET DTL/DTA

As on 01.04.2013

Current Year

Asset/(Liability)

Asset /
(Liability)

Previous Year

Asset

Liability

(1,646,893.59)
636,014.81
(1,010,878.78)
(1,010,878.78)

(1,922,169.62)
(275,276.03)
(28,863.72) 607,151.09
(304,139.76) 607,151.09 (1,922,169.62)
(1,315,018.54)
(304,139.76)

34. The details of Provisions as per AS- 29 are given below:


Particulars

Opening Balance

Additions/Reversals

Closing Balance

Provision for Taxation

3,163,600.00

4,891,100.00

8,054,700.00

Provision for Gratuity

1,959,984.00

(88,962.00)

1,871,022.00
53

21st Annual Report 2013-14

35. ADDITIONAL INFORMATION


a. Details of Finished Goods
Finished Goods purchased ( Traded Items)

Amount in `

Particulars

Current Year

PCTR
Cushion Gum

409,950.00

220,833.78

51,760,406.70

37,343,695.30

14,892.00

110,377,330.00

135,824,961.60

2,280.00

3,076,333.17

3,028,070.23

212,544.81

150,972,209.31

Vulcunising Solution
CT
Patches
Others
TOTAL

Previous Year

191,299,088.28

Amount in `
Sales Values
Item
Manufactured Goods
PCTR
Cushion Gum
Vulcunising Solution
CT
Others
TOTAL
Traded Goods
PCTR
Cushion Gum
Vulcunising Solution
CT
Repair Patches
TOTAL

Current Year

Closing
Inventory

Previous Year

Opening
Inventory

504,029,858.25 336,004,147.61 30,111,740.72


23,808,087.70
11,202,946.29
848,285.51
1,557,175.03
37,831,306.23
21,858,295.65
48,462.18
54,343,553.35
61,700,675.37
31,360,017.99
46,247,989.55
673,617,917.11 454,768,960.89 32,565,663.44
450,494.86
3,129,970.03
47,426,493.00
63,150,221.05
2,622.00
14,750.00
147,485,353.83 134,660,342.00
3,837,684.89
4,059,289.51
214,938,504.63 189,278,716.54

648,503.25
2,384,382.02
319,634.30
3,352,519.57

** Sale value is given exclusive of Excise Duty.


** Sale of Raw Materials not considered

24,889,291.13
418,561.26
324,526.98
25,632,379.37
509,616.15
1,907,314.57
287,304.56
2,704,235.28

Amount in `

b. Details of Work in Progress


Particulars

Current Year

Previous Year

PCTR

11,045,806.57

7,485,254.62

1,473,863.19

582,210.01

440,002.12

100,744.20

1,479,109.55

1,539,536.83

1,237,415.38
15,676,196.81

149,434.62

Cushion Gum
Vulcunising Solution
CT
Others
TOTAL

9,857,180.28
54

21st Annual Report 2013-14

Amount in `

c. Raw Materials Consumed


Item

Current Year

Previous Year

RMA

111,941,191.59

65,169,038.73

Cisamer

119,198,020.04

110,843,841.61

56,332,551.45

60,882,372.92

103,040,526.48

68,040,353.75

Zinc Oxide

9,838,284.03

6,104,658.38

Process Oil

17,469,733.91

10,662,998.97

Stearic Acid
Others

3,494,168.74

2,560,323.97

66,341,991.76

38,610,554.50
362,874,142.83

ISNR
Carbon Black

TOTAL

**

487,656,468.01

d) Break-up of Indigenous & Imported Raw Materials Consumed


Current Year

Particulars
Indigenous
Imported
Total

Previous Year

Amount

Amount

485,173,470.01

99.49%

2,482,998.00

0.51%

487,656,468.01

100%

360,341,609.14

b) Earnings in Foreign Exchange (Export of Goods)


c) Expenditure in Foreign Currency

100.00%

0.00%

360,341,609.14

Current Year
a) CIF Value of imports made during the year

2,482,998.00

100%

Previous Year
Nil

43,120,661.32

12,442,201.85

145,257.00

89,987.00

d) Amount remitted during the year in foreign currency

Nil

Nil

For JVR & ASSOCIATES


Chartered Accountants
Cochin 24
17/05/2014

M.E.MOHAMED

M S RANGANATHAN

BAIJU.T

JOMON K GEORGE

Managing Director

Director

Company Secretary

Partner

55

21st Annual Report 2013-14

CASH FLOW STATEMENT FOR THE YEAR ENDED 31/03/2014


(In terms of Listing Agreement)
A. Cashflow from Operating Activities
a. Net Profit before tax and extra ordinary items
Adjustments for :-

Amount in `
2013-14

2012-13

24,768,337.02

15,017,902.41

Depreciation

7,909,426.03

5,851,639.98

Interest Received
Provision for Taxation

(304,139.76)

(1,202,469.70)

Interest Paid

6,715,583.00

5,102,372.00

516,331.96

514,172.04

(478.50)

19,273.36

39,605,059.75

25,302,890.09

Trade and Other Receivables

(77,523,085.12)

5,766,596.72

Inventories

(21,878,490.69)

(2,862,364.64)

42,441,184.96

6,637,955.56

(17,355,331.10)

34,845,077.73

d. Interest Paid

6,715,583.00

5,102,372.00

e. Provision for Taxation

8,054,700.00

3,163,600.00

f. Cashflow before Extraordinary Items

(32,125,614.10)

26,579,105.73

g. Extraordinary Items
h. Net Cash from Operating Activities

(32,125,614.10)

26,579,105.73

(42,085,107.84)

(11,940,532.17)

Miscellaneous Expenditure written off


Loss/(Profit) on sale of Fixed Assets
b. Operating Profit before Working Capital Changes
Adjustments for :-

Trade and other Payables


c. Cash Generation from Operations

B. Cashflow from Investing Activities


a. Purchase of Fixed Assets
b. Preoperative Expenses

c. Investments

d. Interest Received

e. Sale of Fixed Assets


f. Net Cash from Investing Activities
C. Cashflow from Financing Activities
a. Proceeds from Issue of Share Capital / Conversion
b. Proceeds from Borrowings / Conversion

8,000.50

174,654.00

(42,077,107.34)

(11,765,878.17)

794,000.00

758,000.00

69,123,385.31

(15,294,485.25)

c. Proceeds from Investment Subsidy

d. Share Re-listing Expenses

e. Net Cash from Financing Activities

69,917,385.31

(14,536,485.25)
56

21st Annual Report 2013-14

(4,285,336.13)

276,742.31

Cash & Cash equivalents as at 01/04/2013

7,270,657.86

6,993,915.54

Cash & Cash equivalents as at 01/04/2014

2,985,321.73

7,270,657.85

D. Net increase / decrease in cash or cash equivalents(A+B+C)

Notes:
1) Comparative figures have been regrouped whereever necessary.
2) The cash flow statement has been prepared under the indirect method as set out in the Accounting Standard-3
on Cash Flow Statements issued by the Institute of Chartered Accountants of India
As per our report of even date attached
For JVR & ASSOCIATES
Chartered Accountants
Cochin 24
17/05/2014

M.E.MOHAMED

M S RANGANATHAN

BAIJU.T

JOMON K GEORGE

Managing Director

Director

Company Secretary

Partner

AUDITOR'S REPORT
The Members of
EASTERN TREADS LIMITED
Kochi
We have examined the attached Cash Flow Statement of EASTERN TREADS LIMITED for the year
ended 31stMarch, 2014. The statement has been prepared by the Company in accordance with the
requirements of Listing Agreements executed with the stock exchanges where the shares of the Company
are listed and is based on and in agreement with the corresponding Profit and Loss Account and Balance
sheet of the Company covered by our report of 17/05/2014 to the members of the Company.
For JVR & ASSOCIATES
Chartered Accountants
(F. R. No. 011121S)

Kochi-16
17/05/2014

JOMON K GEORGE
Partner
M.No.202144

57

21st Annual Report 2013-14

BRANCHES

Coimbatore
Opp. Kovai Diabetic Hospital
Balasundaram Layout
Vivekananda Road
Ramnagar,Coimbatore -641009
Ph: 9363108658

Vijayawada
Plot No.54-5-79,
2nd Cross, 5th Road, Auto Nagar,
Vijayawada
Krishna District A.P., - 520007.
Ph: 09160574625

Bangalore
NO: 3/1, Roshan Bagh Road,
Near Minerva Circle
V.V. Puram, Bangalore - 560004
Ph: 9341060794

Baroda
6&7, Jai Narayan Estate,
Opp. Bhagavan Park ,
IPCL Road, Ranoli, Baroda - 391350
Ph: 9376217179

Pune
155 A Pune, Ground Floor, Saswad Road
Near Over Bridge, Phursingi, Pune-412308

Hyderabad
Plot No.36, 37,
Block No. 36/A,
Sy.No.96/1,Autonagar,
Vanasthalipuram,
Hyderabad, A.P., - 500070.

Kolkatta
Plot No. 466
Santhoshpur Govt Colony
B.B.T Road Police Station
Maheshtala P.O, Santhoshpur (M)
Kolkatta-700142

58

21st Annual Report 2013-14

EASTERN TREADS LIMITED


CIN:L25119KL1993PLC007213
Regd. Office: :3A, 3rd Floor, Eastern Corporate Office, 34/137 E,
NH Bypass, Edappally, Kochi, Ernakulam-682 024, Kerala
ATTENDANCE SLIP
21ST ANNUAL GENERAL MEETING

I/We hereby record my/our presence at the 21st Annual General Meeting of the Company at Hotel Park Central, Kaloor,
Ernakulam, Kochi-682017, Kerala onTuesday, 24th June 2014, at 3.00 P.M.



Members Folio/

DP ID-Client ID No.


Members/Proxys name
in Block Letters


Members/Proxys
Signature

Voting through Electronic means


EVEN(E Voting Event Number)

USER ID

PASSWORD/PIN

Note:
1. Please complete the Folio/DP ID-Client ID No. and name, sign this Attendance Slip and hand it over at the Attendance
Verification Counter at the ENTRANCE OF THE MEETING HALL.
2. Electronic copy of the Annual Report for 2013-14 and Notice of the Annual General Meeting (AGM) along with Attendance
Slip and Proxy Form is being sent to all the members whose email address is registered with the Company/Depository
Participant unless any member has requested for a hard copy of the same. Members receiving electronic copy and attending
the AGM can print copy of this Attendance Slip.
3. Physical copy of the Annual Report for 2013-14 and Notice of the Annual General Meeting (AGM) along with Attendance
Slip and Proxy Form is sent in the permitted mode to all members whose e mail is not registered or have requested for a
hard copy.

EASTERN TREADS LIMITED


CIN:L25119KL1993PLC007213
Regd. Office: :3A, 3rd Floor, Eastern Corporate Office, 34/137 E,
NH Bypass, Edappally, Kochi, Ernakulam-682 024, Kerala
Form No. MGT-11
PROXY FORM
[Pursuant to section 105(6) of the Companies Act, 2013and Rule 19(3) of the
Companies (Management andAdministration) Rules, 2014]
Name of the member (s)

Registered address

:...

E-mail Id

:...

Folio No/ Client Id, DP ID

:...

I/We, being the member (s) of . shares of the above named company, hereby appoint
1. Name: ......................, Address: ......................

E-mail Id:.................Signature:......................, or failing him,

2. Name: ......................, Address: ......................


E-mail Id:.................Signature:......................, or failing him,

3. Name: ......................, Address: ......................


E-mail Id:.................Signature:...........................................

as my/our proxy to attend and vote (on a poll) for me/us and on my/our behalf at the 21st Annual General Meeting of the Company,
to be held on Tuesday, 24th June 2014, at 3.00 P.M at Hotel Park Central, Kaloor, Ernakulam, Kochi-682017, Kerala and at any
adjournment thereof in respect of such resolutions as are indicated below:
Resolution
No.

Resolution
Ordinary Business

1.

Adoption of the Financial Statement for the year ended 31/03/2014

2.

Reappointment of Mr. Navas M Meeran, as Director,

3.

Appointment & fixing of remuneration of Auditors.

Optional
For

Against

Special Business
4.

Special resolution under Section 180 (1) (c) of the Companies Act, 2013.

5.

Special resolution under Section 188 of the Companies Act, 2013

6.

Ordinary resolution under Section 148 of the Companies Act, 2013

Signed this.. day of.2014


Signature of shareholder
Signature of Proxy holder(s)

Affix
`1
Revenue
Stamp

Note:
1. This form of proxy in order to be effective should be duly completed and deposited at the Registered Office of the Company,
not less than 48 hours before the commencement of the Meeting.
2. It is optional to put a X in the appropriate column against the resolutions indicated in the box. If you leave the For or
Against column blank against any or all resolutions, your proxy will be entitled to vote in the manner as he/she thinks
appropriate.
3. Please complete all details of member(s) before submission.






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