eastern sugar & industries ltd share price Directors report


To

The MEMBERS,

The Directors have pleasure in presenting the Annual Report and the Audited Accounts of the Company for the financial year ended March 31, 2021:

FINANCIAL RESULTS: (Rs. in lacs)
2020-21 2019-20
Sales & Other Income
Profit/(Loss) before Interest, Depreciation and Tax (21.00) (16.46)
Less: Depreciation
Profit/(Loss) before tax (21.00) (16.46)
Less, Provision for tax
Profit/(Loss) after tax (21.00) (16.46)
Add: Balance brought forward from previous year 735.39 751.85
Profit available for appropriation 714.39 735.39
Balance carried to Balance Sheet 714.39 735.39

OVERVIEW:

During the financial year under review, your Company had no income, similar to that in the previous financial year. As such, Loss after Tax was registered at Rs. 21.00 lacs, which stood at Rs. 16.46 lacs in the previous financial year 2019-20.

The Company was engaged in the business of manufacturing of sugar and molasses at the unit taken on lease, located in Motihari, Bihar. However, in view of termination of lease agreement by the lessor in the year 2005 and other problems, the manufacturing activities of the Company came to standstill, inspite of the fact that the Company had spent more than 50 Crores towards balancing equipments for the plant. Thereafter, the management of the Company has been making its best efforts to set up its own unit for manufacture of sugar and allied products but could not succeed due to non-availability of required funds for the project and also in view of viability of setting up of sugar plant varying from time to time.

DIVIDEND:

Your Directors do not recommend any dividend for the year in view of net loss.

RESERVE FUND

The company has not transferred any amount in General Reserve Account.

MATERIAL CHANGES FROM THE END OF THE FINANCIAL YEAR

The outbreak of corona virus (COVID-19) pandemic globally and in India is causing significant disturbance and slowdown of economic activity. As presently there is no operating activities in the Company there has been no impact of COVID -19. However, Companys efforts to upgrade the Sugar Plant and recommence operations are definitely adversely impacted causing delay in formalising and implementing the same due to the pandemic situation.

MATERIAL EVENTS DURING THE YEAR UNDER REVIEW

There has been no material event during the year to be reported.

PUBLIC DEPOSITS

During the year under review, the Company has neither accepted nor renewed any deposits from public falling under the ambit of Section 73 of the Companies Act, 2013 ("Act") read with the Companies (Acceptance of Deposits) Rules, 2014.

INTERNAL FINANCIAL CONTROL

The Company has in place adequate internal financial controls with respect to financial statements. The policies and procedures adopted by the Company ensure prevention and detection of frauds and errors, accuracy and completeness of the records and timely preparation of reliable financial statements. No reportable material weakness in the design or operation was observed during the year.

DIRECTORS AND KEY MANAGERIAL PERSONNEL

During the financial year under review the following changes took place among the Directors and Key Managerial Personnel of the Company:

1) The following Directors and KMPs were appointed

? Mr. Chandan Sharma (DIN: 08855518), Ms. Ankita Srivastava (DIN: 08855511) and Ms. Khushbu Sharma (DIN: 08855892) were appointed as Independent Directors w.e.f September 29, 2020 for a period of for 5 (five) consecutive years for a term up to September 28, 2025.

? Mr. Bijan Aditya (DIN: 07887918) was appointed as Additional Non-Executive Director w.e.f November 11, 2020 to hold office upto ensuing Annual General Meeting and being eligible has been proposed to be reappointed as Non-Executive Director at the said Annual General Meeting .

? Mr. Subir Kumar Dey (DIN: 08945343) was appointed as Additional Non-Executive Director w.e.f December 23, 2020 to hold office upto ensuing Annual General Meeting and being eligible has been proposed to be reappointed as Non-Executive Director at the said Annual General Meeting. ? Mr. Shibojyoti Majumder (PAN: ATJPM6195J ), was appointed as Chief Financial Officer of the Company w.e.f November 11, 2020.

2) The following Directors ceased to be director for the reasons as mentioned thereagainst -

? Mr. Bimal Kumar Nopany (DIN: 00694221) ceased to director w.e.f August 20, 2020 due to demise. ? Mr. Chandan Kumar Garodia (DIN: 05325649) resigned from directorship w.e.f October 07, 2020. ? Mr. Ram Chandra Jha resigned (DIN: 02812046) resigned from directorship w.e.f October 07, 2020. ? Ms. Ratna Srivastava (DIN: 02657363) resigned from directorship w.e.f December 23, 2020.

Your Directors put on records their appreciation for the guidance and valued services received from Mr. Bimal Kumar Nopany, Mr. Chandan Kumar Garodia, Mr. Ram Chandra Jha and Ms. Ratna Srivastava during the tenure of their office.

Mr. Shirish Goswami (DIN: 02899135), retires by rotation at the ensuing AGM, and being eligible, offers himself for re-appointment.

Profiles of Directors to be appointed/re-appointed at the ensuing AGM, as required by Regulation 36 (3) of the Listing Regulations and Secretarial Standard - 2 on General Meetings, are given in the notice of the ensuing AGM.

DECLARATION BY INDEPENDENT DIRECTORS

The Companys Independent Directors have submitted requisite declarations confirming that they continue to meet the criteria of independence as prescribed under Section 149(6) of the Act and Regulation 16(1)(b) of the Listing Regulations. The Independent Directors have also confirmed that they have complied with Schedule IV of the Act and the Companys Code of Conduct.

Further, in terms of Section 150 of the Act read with Companies (Appointment and Qualification of Directors) Rules, 2014, all Independent Directors of the Company are registered with Indian Institute of Corporate Affairs. In the opinion of the Board, the Independent Directors hold highest standard of integrity and possess the requisite qualifications, experience, expertise and proficiency. .

PERFORMANCE EVALUATION

The Company has framed the criteria for performance evaluation of Independent Directors, the Board, the Board Committees and other individual Directors. Criteria for performance evaluation of the Whole Time Director, Non-Executive Director and Non-Independent Director have also been framed.

The criteria for performance evaluation of Directors among others includes factors such as preparation, participation, engagement, personality and conduct, value addition, strategic planning and vision, team spirit and consensus building, leadership quality, understanding and focus on key business issues, independent thinking and judgment, quality of analysis, experience and business wisdom, management qualities, awareness, motivation, integrity, ethics and receptivity. The criteria for evaluating the Boards functioning/effectiveness inter alia includes its structure, strategic review, business performance review, internal controls, process and procedures.

On the basis of the criteria framed, a process was followed by the Board for evaluating the performance of individual Directors, its own performance and its Committees. The Nomination and Remuneration Committee also evaluated the performance of every individual Director. The Independent Directors in their separate Meeting also carried out the performance evaluation of the Whole Time Director, Non-Executive Director and other non-independent Director as well as the Board of the Company. The Directors expressed overall satisfaction on the performance and functioning of the Board, its Committees and the Directors.

FAMILIARISATION PROGRAMMES

The details of programmes to familiarise the Independent Directors with the Company, their roles, rights, responsibilities in the Company, nature of the industry in which the Company operates, business model/procedures/processes of the Company, etc. through various programmes are put on the website of the Company and can be accessed at the link: https://www.easternsugar.in/

NUMBER OF MEETINGS OF BOARD OF DIRECTORS:

Eight Meetings of the Board of Directors were held during the year. The particulars of the meetings held and attended by each Director are detailed in the Corporate Governance Report.

AUDIT COMMITTEE

During the financial year under review, in view of changes in Directorships of the Company the Audit Committee of the Company was reconstituted from time to time and the present Committee comprises of Mr. Chandan Sharma as Chairperson and Mr. Ankita Srivastava and Mr. Subir Kumar Dey as its members. The terms of reference of the Committee have been provided in the Corporate Governance Report

NOMINATION & REMUNERATION COMMITTEE

During the financial year under review, in view of changes in Directorships of the Company the Nomination & Remuneration Committee of the Company was reconstituted from time to time and the present Committee comprises of Mr. Chandan Sharma as Chairperson and Ms. Ankita Srivastava and Mr. Subir Kumar Dey as its members.

The Nomination & Remuneration Committee shall identify persons who are qualified to become directors and who may be appointed in senior management in accordance with the criteria lay down, recommend to the Board their appointment and removal and shall carry out evaluation of every directors performance. The terms of reference of the committee have been provided in the Corporate Governance Report.

STAKEHOLDERS RELATIONSHIP COMMITTEE

During the financial year under review, in view of changes in Directorships of the Company the Stakeholders Relationship Committee of the Company was reconstituted from time to time and the present Committee comprises of Ms. Khushbu Sharma as Chairperson and Ms. Ankita Srivastava and Mr. Subir Kumar Dey as its members. The terms of reference of the committee have been provided in the Corporate Governance Report.

CORPORATE SOCIAL RESPONSIBILITY (CSR) POLICY

The Company has not developed and implemented any Corporate Social Responsibility initiatives as the said provisions are not applicable to the Company.

MANAGEMENT DISCUSSION AND ANALYSIS

Management Discussion and Analysis Report for the year under review, as stipulated under the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("Listing Regulations"), is presented in a separate section, forming part of the Annual Report.

SUBSIDIARIES, JOINT VENTURE COMPANIES

There are no companies which have become or ceased to be its Subsidiaries, Joint Ventures or companies during the year.

PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS

Details of Loans, Guarantees and Investments covered under the provisions of Section 186 of the Companies Act, 2013 are given in the point no. 2 & 7 to the Financial Statement.

CONTRACT AND ARRANGEMENT WITH RELATED PARTIES:

All contracts /arrangements /transactions entered by the Company during the financial year with related parties were in its ordinary course of business and on an arms length basis. During the year, the Company had not entered into any contract/ arrangement/transaction with related parties which could be considered material in accordance with the policy of the Company on materiality of related party transactions or which is required to be reported in Form No. AOC-2 in terms of Section 134(3) (h) read with Section 188 of the Act and Rule 8(2) of the Companies (Accounts) Rules, 2014. The Policy on Materiality of Related Party Transactions and on dealing with Related Party Transactions as approved by the Board is available on the Companys website and can be accessed at https://www.easternsugar.in/

There were no materially significant related party transactions which could have potential conflict with the interests of the Company at large. Members may refer to Note 18(xi) to the Standalone Financial Statement which sets out related party disclosures pursuant to Ind AS.

VIGIL MECHANISM

The Company promotes ethical behavior in all its business activities and has put in place a mechanism of reporting illegal or unethical behavior. In compliance with the provisions of Section 177(9) of the Companies Act, 2013 and the Listing Regulations, 2015, the Company has in place a Whistle Blower Policy for its Directors and Employees to report concerns about unethical behavior, actual or suspected fraud or violation of applicable laws and regulations and the Companys Codes of Conduct. The concerns may be reported to the Audit Committee through the Nodal Officer and, in exceptional cases, may also be reported to the Chairman of the Audit Committee. The confidentiality of those reporting violations is maintained and they are not subjected to any discriminatory practice. During the year under review, no employee was denied access to the Audit Committee.

The Whistle Blower Policy may be accessed on the Companys website at the link: https://easternsugar.in/Whistle-blower-policy.aspx

COMPLIANCE WITH THE CODE OF CONDUCT:

A declaration signed by the Whole time Director affirming compliance with the Companys Code of Conduct by the Directors and Senior Management, for the financial year 2020-21, as required under Schedule V of the Listing Regulations, forms a part of this Annual Report.

CORPORATE GOVERNANCE AND MANAGEMENT DISCUSSION AND ANALYSIS:

The Company adheres to good governance practices. Corporate Governance at the Company extends to all stakeholders and is embodied in every business decision. The Company places prime importance on reliable financial information, integrity, transparency, empowerment and compliance with the law in letter and spirit. Management Discussion and Analysis Report, the Corporate Governance Report and the Certificate from the Auditors of the Company confirming compliance of the conditions of Corporate Governance are annexed hereto and form a part of the Directors Report.

There is a conscious effort to ensure that the values enshrined in the Codes of Conduct for the Directors and Senior Management Personnel and the Employees respectively, are followed in true spirit across all levels of the Company.

ANNUAL RETURN:

Pursuant to Section 92(3) read with Section 134(3)(a) of the Act, the Annual Return as on March 31, 2021 is available on the Companys website at https://easternsugar.in/PDF/anualreturn/Annual_Return_March_2021.pdf

AUDITORS AND AUDITORS REPORT

At the AGM held on September 18, 2017 the Members approved appointment of M/s Saraf Manoj & Co (FRN 323473E), Kolkata as the Statutory Auditors of the Company to hold office for a period of five years from the conclusion of that AGM till the conclusion of the AGM to be held in the year March 31, 2022 subject to ratification of their appointment by Members at every AGM, if so required under the Act. The requirement to place the matter relating to appointment of auditors for ratification by Members at every AGM has been done away by the Companies (Amendment) Act, 2017 with effect from May 7, 2018. Accordingly, no resolution is being proposed for ratification of appointment of statutory auditors at this AGM.

The Statutory Auditor has confirmed that they continue to remain eligible to act as the Statutory Auditor of the Company.

Observations of the Auditors M/s. Saraf Manoj & Co., Chartered Accountants, on financial statement of the Company given in the following:

AUDITORS REMARKS OUR COMMENT
Non compliance of sections 194-A, 192 & 192-J, of Income Tax Act, 1961 with respect to TDS on interest other than interest on securities , salary, & fee for professional & Technical services respectively. The TDS on above have not been deducted and deposited in time. The Sugar factory has not been in operation for last 16 consecutive seasons, hence the normal working and availability of data is affected, and the Company has not able to deducted the TDS.
Non compliance of generally accepted accounting principles in accounting of Gratuity, Leave liabilities towards employees, bonus, Professional Taxes, Trade License Fees, Interest and penalty on delayed deposit of TDS & income from interest on securities and other deposits as they are accounted for on cash basis. Due to non-working in the factory there has been no access to the records of the employees. Initiative has been taken for the updating of the records and thereafter the estimation can be made.
The Company has not provided depreciation on its Fixed Assets for the period covered under this audit. The Company has also not provided depreciation on transition to Schedule II of The Companies Act, 2013.. The Sugar factory has not been in operation for last 16 consecutive seasons, hence the normal working and availability of data is affected. Due to no access of data, company has been unable to ascertain exact amount of depreciation..

FRAUD REPORTING

During the year under review, the Auditors have not reported any matter under Section 143 (12) of the Companies Act, 2013, therefore no detail is required to be disclosed under Section 134 (3) (ca) of the Act.

SECRETARIAL AUDITORS & REPORT

Your Company appointed CS Meena Chowdhary, Practising Company Secretary, (Membership No. - ACS 41084 and Certificate of Practice No. 16829) as the Secretarial Auditor of your Company for F.Y.-2020-21 to conduct the Secretarial Audit pursuant to Section 204 of the Companies Act, 2013 read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.

The Secretarial Audit Report for the financial year ended March 31, 2021 is annexed as Annexure and forms part of the Report.

Observations of the Secretarial Auditor are self explanatory and do not call for any further comments.

SECRETARIAL COMPLIANCE REPORT:

Pursuant to Regulation 24(A) of SEBI Listing Regulations, the Company has obtained annual secretarial compliance report from Ms. Meena Chowdhary (Membership No. ACS 41084 and CP No. 16829), Company Secretary in Practice, Kolkata and the same was submitted to the stock exchanges within the prescribed time limits. The Annual Secretarial Compliance Report duly signed by the Company Secretary in Practice is available on the Companys website at https://easternsugar.in/annual-secretarial-compliance/AnnualSecretarialComplianceMarch_2021.pdf

BUSINESS RISK MANAGEMENT

The main identified risks at the company are commercial risks, financial risks, operational risks and legal & regulatory risks. Your company has established a comprehensive risk management system to ensure that risk to the companys continued existence as a going concern and to its development are identified and addressed on timely basis. Risk management strategy as approved by the board of directors is implemented by the company management.

ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNING AND OUTGOING

As the manufacturing operation of the Company has been discontinued long ago, and since the company doesnt have any manufacturing facilities and is not engaged in the manufacturing activity, the prescribed information regarding compliance of rules relating to conservation of Energy and Technology absorption pursuant to Section 134 (3) (m) of the Companies Act, 2013, read with Rule 8 (3) of the Companies (Accounts) Rules, 2014 is not provided.

The Company does not have any Foreign Exchange Earnings and outgo in the year under review.

REMUNERATION POLICY

The Board has, on the recommendation of the nomination & remuneration Committee framed a policy for selection and appointment of Directors, senior management and their remuneration. The Remuneration Policy is available on the Companys website at https://www.easternsugar.in/

EMPLOYEES INFORMATION AND RELATED DISCLOSURES

As required under Section 197(12) of the Companies Act, 2013 read with the Rules 5(1), 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, disclosures of remuneration and other details/particulars of the Directors and employees of the Company are provided in the Corporate Governance Report.

DIRECTORS RESPONSIBILITY STATEMENT

To the best of their knowledge and belief and according to the information and explanations obtained by them, your Directors make the following statements in terms of Section 134(5) of the Companies Act, 2013:

a) that in the preparation of the annual financial statements for the year ended March 31, 2021, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any;

b) that such accounting policies have been selected and applied consistently and judgement and estimates have been made that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company as at March 31, 2021 and of the profit/(loss) of the Company for the year ended on that date;

c) that proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; d) that the annual financial statements have been prepared on a going concern basis;

e) that proper internal financial controls to be followed by the Company have been laid down and that the financial controls are adequate and are operating effectively; and

f) that proper systems have been devised to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013

Your Company is committed to provide and promote a safe, healthy and congenial atmosphere irrespective of gender, caste, creed or social class of the employees. During the year under review, there was no case file pursuant to the Sexual Harassment of Women at workplace (Prevention, Prohibition And Redressal) Act , 2013.

COMPLIANCE WITH SECRETARIAL STANDARDS

The Company has complied with the applicable Secretarial Standards issued by the Institute of Company Secretaries of India.

DE-MATERIALISATION OF SHARES:

The Companys equity shares are available for de-materialization on both the depositories, viz., NSDL & CDSL. Shareholders may be aware that SEBI has made trading in your Companys shares mandatory, in de-materialized form. As on March 31, 2021, 26316000 equity shares representing 90.28% of your Companys Equity Share Capital have been de-materialised.

LISTING AT STOCK EXCHANGE:

The Shares of the Company are listed on BSE Ltd., Mumbai and National Stock Exchange of India Ltd.

However, trading of shares of the Company at the BSE Ltd., and National Stock Exchange of India Ltd. is suspended and necessary applications for revocation of suspension have been made and revocation is awaited. Annual Listing fee upto financial year 2020-21 has already been paid.

EMPLOYEE RELATIONS:

During the year under review, the relations between the Management and the workmen were cordial, except witness of recent agitation. The management of the Company in confident to solve the problem soon.

INVESTOR RELATIONS:

Your Company always endeavors to keep the time of response to Shareholders requests/grievance at the minimum.

Priority is accorded to address all the issues raised by the Shareholders and provide them a satisfactory reply at the earliest possible time. The Shareholders Grievance Committee of the Board meets periodically and reviews the status of the redressal of Shareholders Grievances. The Shares of the Company continue to be traded in Electronic Form and the De-materialization arrangement exists with both the depositories, viz., National Depository Limited and Central Depository Services (India) Limited.

ACKNOWLEDGEMENT:

Yours Directors wish to place on record the sincere and dedicated efforts of all the members of the Companys team which has throughout the year remained active. Your Directors also take this opportunity to offer their sincere thanks to Financial Institutions, Banks, other Government Agencies, our valued customers and the investors for their continued support and assistance. The employees of your Company continued to display their unstinted devotion, cooperation. Your Directors take this opportunity to record their appreciation for the same. Your Directors also express their profound thanks to the Shareholders for their faith and continued support to the endeavors of the Company.

For and Behalf of Board of Directors
Sd/-
Shirish Goswami
Whole Time Director
DIN: 02899135
Sd/-
Place: Kolkata Subir Kumar Dey
Date: 14.08.2021 Director
DIN: 08945343