Eastern Treads Ltd Directors Report

Dear Member,

Your Directors have pleasure in presenting the 32^nd Annual Report on the business operations of the Company and the audited Ind AS financial statements for the financial year ended March 31, 2025 along with comparatives.

Financial Summary and Highlights

The following table shows the operational results of the Company for the year 2024-25 as compared to that of the previous year.

( Rs. in lakhs)

	Year ended
	31/03/25	31/03/24
Revenue from Operations	6023	5,953
Other Income	39	24
Total Revenue	6063	5,977
Expenditure	6111	5,870
(Loss) / Profit before Interest, Depreciation and Tax	(48)	107
Depreciation/Amortization/ Impairment	84	122
Profit before Finance Costs and Tax	(132)	(15)
Finance Costs	246	297
Profit (Loss) before Tax	(378)	(312)
Tax Expense	(75)	(17)
Profit (Loss) for the year	(303)	(295)
Other comprehensive income/ (loss)	(10)	14
Total comprehensive loss for the year	(313)	(280)

Performance

During the financial year ending March 31, 2025, your company recorded a total income of Rs. 6063 lakhs, compared to Rs. 5,977 lakhs in the preceding year. Despite the increase in income, the Company incurred a loss before tax of Rs. 378 lakhs, as compared to a loss of Rs. 312 lakhs in the previous year. The total comprehensive loss for the year stood at Rs. 313 lakhs, as compared to Rs. 280 lakhs in the previous year. Company anticipate positive results in the upcoming financial year mainly through increase in market share in both domestic & export markets. We have already achieved this goal in the second half of financial year 2024-25 by clocking average monthly turnover of more than 300 tons. Also exports have commenced to new markets such as United States and Mexico. Due to this, we have already achieved a positive outcome in the first quarter of FY 25-26 and we expect to continue the trend in the rest of the financial year 2025-26.

Reserves

In view of the loss incurred during the year, the Board of Directors of your Company has decided not to transfer any amount to the reserves for the year under review.

Dividend

In view of the losses incurred during the year under review and accumulated losses of earlier years, your Directors do not recommend any dividend during the year.

Material Changes and Commitments

There have been no material changes and commitments affecting the financial position of the Company between the end of the financial year to which the financial statements relate and the date of this Report

Information On State Of Companys Affairs

Information on operational and financial performance etc., is provided in the Management Discussion and Analysis Report, which is annexed to the Directors Report as Annexure 6.

Change in the nature of business, if any;

There has been no change in the nature of business of the Company during the year under review.

Capital and Debt Structure

As at the end of the financial year the authorized Equity Share Capital of the Company stands at Rs. 600 lakhs and the paid-up Share Capital stands at Rs. 523.20 Lakhs, net of Rs. 17.98 Lakhs in the forfeiture account.

The promoters controls 65.75% of the paid up equity share capital while 34.25% of the paid up equity share capital is held by public shareholders.

The Company has not issued any equity shares with differential rights, sweat equity shares, employee stock options or Employee stock purchase scheme.

However, the company allotted 900 equity shares to Mrs. Wahida Begum G, whose shares were earlier forfeited by the company due to non-payment of allotment money. Mrs. Wahida Begum G made a request to the company to allot the shares earlier applied by her for which the application money was already paid. The board at its meeting held on February 14, 2025 considered her request and allotted 900 fully paid up equity shares upon payment of the balance amount, subject to approval from the Bombay Stock Exchange. The Bombay Stock Exchange has considered the application and issued the trading approval for the aforesaid shares on May 29, 2025. However the corporate action of the 900 shares are pending with the Central Depository Services Limited as on the date of this report.

Your Company neither issued any shares with differential voting rights nor granted any stock options or sweat equity and instruments convertible into equity shares. Your Company has not made any provision of money for purchase of its own shares by employees or by trustees for the benefit of employees during the year under review.

As per the terms of issue (as varied), the outstanding Zero Coupon Redeemable Preference Shares are liable to be redeemed at the rate of rupees One Crore every year in a phased manner. The Company has the option to stretch the redemption until 9^th February 2029, being the date of expiry of twenty years from the date of the original allotment. While the first tranche of redemption of rupees One Crore was made in FY 2016-17, no redemption was made in subsequent financial years including FY 2024-25.

It is also to be noted that the Board of Directors at its meeting held on February 14,2019, approved the proposal to convert 9,00,000 outstanding Redeemable Preference Shares into Equity Shares by issue of equity shares through Preferential Allotment route to the Preference Shareholders. Company was in the process of getting required approvals to take further steps for the proposed conversion of Preference Shares. Currently this preference shares continues to be Zero Coupon Redeemable Preference Shares.

Directors and Key Managerial Personnel

The composition of the Board of Directors of the Company is duly constituted as per provisions of Companies Act 2013. It is further to be noted that Regulation 17 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, relating to Board composition is not applicable to the company during the year under review. The Directors and Key Managerial Personnel ("KMPs") of the Company as on March 31, 2025 are as below:

Sl No	Name of the Director/KMP	DIN/PAN	Designation
1	Navas Meeran	00128692	Chairman
2	M E Mohamed	00129005	Managing Director (KMP)
3	N Jeyaseelan	02281278	Independent Director
5	Rani Joseph	07423144	Independent Director
6	Naiju Joseph	00419362	Director
7	Shereen Navas	00328770	Director
8	Devarajan Krishnan	AFMPK6587P	Chief Executive Officer & Chief Financial Officer (KMP)
9	Abil Anil	CPKPA5304J	Company Secretary (KMP)

Mr. K. S. Neelcanta Iyer (DIN: 00328870) and Mr. M S Ranganthan (DIN: 00254692), Independent Directors retired from their office due to expiry of their term effective from May 08, 2024. The Board appointed Mr. N. Jeyaseelan (DIN: 02281278) as an Additional Director in the capacity of Non-Executive Independent Director effective from May 06, 2024. The members of the company has consented to his appointment as Independent Director by passing a special resolution at the Annual General Meeting held on September 25, 2024. Mrs. Rani Joseph (DIN: 07423144) was re-appointed as Independent Director for her second tenure effective from May 08, 2024 and the consent of the members was obtained by a special resolution passed through postal ballot.

During the year under review, following changes occurred in the composition of Director/KMP:

SI No	Name of the Director/KMP	DIN	Designation	Effective Date	Nature of Change
1	Natarajan Jayaseelan	02281278	Independent Director	May 06, 2024	Appointment
2	K. S. Neelacanta Iyer	00328870	Independent Director	May 08, 2024	Cessation
3	M. S. Ranganathan	00254692	Independent Directors	May 08, 2024	Cessation
4	Rani Joseph	07423144	Independent Director	May 08, 2024	Re-appointment
5	Devarajan Krishnan	NA	Chief Executive Officer	August 14, 2024	Appointment
6	M.E.Mohamed	00129005	Managing Director	February 14, 2025	Re-appointment

Mr. Ravi Kumar Mava, Chief Operating Officer, Senior Management Personnel, tendered his resignation effective from November 30, 2024 citing personal reasons.

The members re-appointed Mrs. Shereen Navas (DIN: 00328770), who retired by rotation at the Annual General Meeting held on September 25, 2024. Mr. Navas Meeran, having DIN: 00128692, Director retires by rotation at the ensuing Annual General Meeting and being eligible, offers himself for re-appointment. The Board recommends his reappointment at the ensuing Annual General Meeting. Further the board considered the following changes in the board composition at its meeting held on August 14, 2025;

i. The appointment of Dr. Siby Varghese as Additional Director in the category of Independent Director effective from August 14, 2025. His appointment is proposed for a period of 5 years from August 14, 2025 till August 13, 2030 (both days inclusive) subject to the approval of the shareholders of the Company at the ensuing Annual General Meeting.

ii. The appointment of Mr.Devarajan Krishnan, currently the Chief Executive Officer(CEO) and the Chief Financial Officer(CFO) as Additional Director in the category of Executive Director effective from August 14, 2025. Further the board has re-designated Mr. Devarajan Krishnan from the position of CEO & CFO to Whole Time Director & CFO. His appointment as WTD is proposed for a period of 3 years from August 14, 2025 till August 13, 2028 (both days inclusive) subject to the approval of the shareholders of the Company at the ensuing Annual General Meeting.

The Board has considered the declarations given by independent directors under Section 149(7) with respect to meeting the criteria of independence and compliance with the Code for Independent Directors. Independent directors further declared that they are not aware of any circumstance or situation, which exist or may be reasonably anticipated, that could impair or impact their ability to discharge their duties with an objective independent judgment and without any external influence and are independent of the management.

The Independent Directors of the Company had no pecuniary relationship or transactions with the Company, other than sitting fees and reimbursement of expenses, if any, incurred by them for the purpose of attending meetings of the Company. The Board is of the opinion that the Independent Directors of the Company possess requisite qualifications, experience and expertise and they hold highest standards of integrity. The Directors are compliant with the applicable provisions of Companies (Appointment and Qualification of Directors) Rules, 2014.

Committees of the Board

Pursuant to the requirements under the Companies Act, 2013 the Board of Directors have constituted various committees such as Audit Committee, Nomination and Remuneration Committee and Stakeholders Relationship Committee.

Details of all the committees along with their main terms, composition and meetings held during the year under review are provided in the Governance Report which is annexed as Annexure 5 of this Annual Report. The Board has accepted all recommendations of the Audit Committee during the year under review.

Board Evaluation

The Board has annually evaluated the performance of the Board, its committees and individual directors. The Board evaluated the performance of Non-Executive and Independent Directors and their core skills, expertise and competencies. All the Directors are eminent personalities having wide experience in the field of business, industry and administration. Their presence on the Board is advantageous and fruitful in taking business decisions. Further details of Board evaluation are provided in the Governance Report.

Remuneration of Directors and Employees

The Board has considered the Companys policy on directors appointment and remuneration including criteria for determining qualifications, positive attributes and independence of a director. The information required pursuant to Section 197 of the Companies Act, 2013 read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are annexed as Annexure -1 and forms part of this Report.

In accordance with the provisions of Section 197(12) of the Act and Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the names and particulars of remuneration of top ten employees in terms of remuneration is available on the website of the Company at https://easterntreads.com/invester-zone/annual-reports . There were no employes in receipt of remuneration exceeding the limits as specified in the aforesaid rule and hence, no disclosure is made for the same.

Internal Financial Controls

Internal financial control and their adequacy are included in the Management Discussion and Analysis, forming part of this report.

Frauds reported by the Auditor, if any.

The Statutory Auditors of the Company have not reported any fraud as specified under the second proviso to Section 143(12) of the Act.

Subsidiaries, associates and joint ventures

The company has no subsidiaries, associates and joint ventures during the period under review.

Deposits

The Company has not accepted any fixed deposits during the year to which the provisions of Section 73 of the Companies Act, 2013 are applicable.

Corporate Social Responsibility

The company does not fall within the ambit of the provisions of Section 135 of the Companies Act 2013 regarding Corporate Social Responsibility and hence there are no disclosures to be made as per the provisions of Section 135 and Schedule VII of the Companies Act, 2013.

Loans, Guarantees or Investments

Details regarding loans, guarantees, or investments as per Section 186 of the Companies Act, 2013 are provided in the notes to the Financial Statements. The company has made investments in Shipnext Solutions Private Limited, holding 1441550 equity shares representing a 9.69% stake in the company and there existed a corporate guarantee with Federal Bank Limited for an amount of Rs.100 lakhs, extended by the company to Shipnext Solutions Private Limited at the beginning of the financial year. However, during the year the corporate guarantee was released on August 06, 2024.

Contracts or Arrangements with Related Parties

There were no materially significant related party transactions which could have a potential conflict with the interests of the Company. Transactions with related parties are in the ordinary course of business at arms length and are periodically placed before the Audit Committee and Board for its approvals and the particulars of contracts entered during the year, in Form AOC-2 is enclosed as Annexure - 2.

The Board of Directors, as recommended by the Audit Committee, adopted a policy to regulate transactions between the Company and its Related Parties, in compliance with the applicable provisions of the Companies Act 2013, the Rules thereunder and the Listing Agreement. The policy on Related Party Transactions is available on the website of the Company at https://www.easterntreads.com/invester-zone/policies-downloads. The details of the transactions with related parties during the financial year are provided in the financial statements as well as in the website of the company at https://easterntreads.com/invester-zone/annual-reports .

Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and Outgo

Your Company continues its efforts to improve energy conservation and utilization most efficiently to nurture and preserve the environment and to exploit all its avenues to adopt latest technology in its operations. The information required under Section 134(3)(m) of the Companies Act, 2013 read with Rule 8 of the Companies

(Accounts) Rules, 2014, regarding Conservation of Energy, Technology Absorption, Foreign Exchange Inflow and Outflow are given in Annexure - 3 to this report.

Risk Management

The Company has developed and implemented a risk management policy, and formed a Risk Management Committee to address and evaluate various risks impacting the Company and a report on risk management is provided in this Annual Report in Management Discussion and Analysis. The Risk Management Committee of the Company has not identified any elements of risk which in their opinion may threaten the existence of your Company.

Vigil Mechanism

A Vigil Mechanism for directors and employees to report genuine concerns has been established as required under the provisions of Section 177 of the Companies Act, 2013. The Vigil Mechanism Policy has been uploaded on the website of the Company at https://www.easterntreads.com/invester-zone/policies-downloads.

Material Orders of Judicial Bodies / Regulators

No significant and material orders were passed by Courts, Tribunals and other Regulatory Authorities affecting the going concern status of the Companys operations. However the Company has received the following orders from Income Tax Department.

1. The Company has received an order under section 143(3) read with section 144B of the Income tax Act, 1961 from the Income Tax Department. The penalty proceedings under section 274 read with section 271AAC(1) of Income-tax Act, 1961 is initiated as the company has received Notice under Section 156 of the Income-Tax Act, 1961 demanding a sum of Rs. 1.90 Crores. The Order and the Demand Notice alleges an expenditure adding to a sum of Rs. 1.98 Crores to the suppliers to be unexplained expenditure under Section 69(C) of the Income-tax Act, 1961. Consequently, the taxable income for Assessment Year 2023-24 has been reassessed by disallowing the expenditure amount of Rs. 1.98 Crores and thereby increasing the taxable income of the Company.

The company believes that the imposition of the aforesaid penalty due to absence of third-party response is not maintainable particularly when all documentary evidences proving the genuineness of transactions are on record. Hence, the company has filed an appeal against the order dated March 25, 2025 to Joint Commissioner (Appeals) or the Commissioner of Income Tax under Income Tax Act, 1961.

2. The Company has received an Intimation Letter dated March 31, 2025 from Principal Commissioner of Income Tax Department, Government of India including an order under Section 263 of the Income Tax Act, 1961, concluding the revision proceeding pertained to misstatement of Rs. 48.24 Lakhs as "Provision for bad or doubtful advances" instead of "Bad debts written off" .The amount was mistakenly referred to as ‘Provision for bad and doubtful advances" instead of "Bad debts written off" in the Assessment Year 2015-16. The company has claimed the aforesaid expenditure towards provision for bad and doubtful debts u/s. 36(1)(viia). This has resulted in escapement of income to the tune of Rs. 48.24 Lakhs resulting in short levy of tax for an amount of Rs.30.68 Lakhs. National Faceless Assessment Centre (NaFAC) passed an order disallowing the expenditure and imposed tax. The

company was aggrieved by the order and appealed to the Appellate Authority. Subsequently Principal Commissioner of Income Tax Department, Government of India passed an order dated March 31, 2025 eliminating the uncertainty and potential liability associated with the dispute.

Statutory Auditors and Auditors Report

In accordance with Section 139 of the Companies Act, 2013, read with the Companies (Audit and Auditors) Rules, 2014, M/s. G Joseph & Associates, Chartered Accountants, Kochi were appointed as the Statutory Auditors of the Company at the 29^th Annual General Meeting for a tenure of five years, from the conclusion the 29^th Annual General Meeting till conclusion of 34^th Annual General Meeting. Necessary certificate has been obtained from the Auditors as per Section 139(1) of the Companies Act, 2013. The Auditors have confirmed that they hold a valid certificate issued by the Peer Review Board of the ICAI. There were no qualifications, reservation or adverse remarks given in the Statutory Auditors Report. No offence of fraud was reported by the Statutory Auditor of the Company.

Secretarial Audit Report

The Company has appointed M/s. BVR & Associates Company Secretaries LLP as the Secretarial Auditors of the Company for the period under review and the secretarial audit report on the compliance of the applicable Acts, Laws, Rules, Regulations, Guidelines, Listing Agreement, Standards etc. as stipulated by Section 204 of the Companies Act 2013, read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 forms part of this report as Annexure - 4. There were no qualifications, reservation or adverse remarks given in the Secretarial Audit Report. No offence of fraud was reported by the Secretarial Auditor of the Company. Further, Regulation 24 and 24A of SEBI (LODR) Regulations, 2015 is not applicable to the Company. The Company has re-appointed M/s. BVR & Associates Company Secretaries LLP as the Secretarial Auditors for the financial year 2025-26 at the meeting held on August 14, 2025.

Cost Records and Cost Audit

Pursuant to Section 148 of the Companies Act, 2013 read with the Companies (Cost Records and Audit) Rules, 2014 the Cost Audit Report is not mandatorily applicable to our Company for the financial year, hence, no such audit has been carried out during the year. The Cost accounts and records as required to be maintained under Section 148 (1) of Act are duly made and maintained by the Company.

Secretarial Standards

The Company has complied with Secretarial Standards issued by the Institute of Company Secretaries of India on Board meetings and Annual General Meetings.

Corporate Insolvency Resolution Process

No application filed for corporate insolvency resolution process, by financial or operational creditor or by the Company under The Insolvency and Bankruptcy Code, 2016 before the National Company Law Tribunal during the year.

Annual Return

In compliance with Section 92 and Section 134 of the Companies Act, 2013 the Annual Return in the prescribed format is available at https://www.easterntreads.com/reports/Annual+Reports

Listing and Dematerialization

The equity shares of the Company are listed on the BSE Limited. The equity shares of the Company were not suspended from trading during the year. Shareholders are requested to convert their holdings to dematerialized form to derive its benefits by availing the demat facility provided by NSDL and CDSL.

Corporate Governance Report

Your Company has been complying with the principles of good Corporate Governance over the years and is committed to the highest standards of compliance. Pursuant to Regulation 15(2) of the SEBI (LODR) Regulations 2015, the compliance with the corporate governance provisions as specified in regulations 17 to 27 and clauses (b) to (i) of Regulation 46(2) and para C, D and E of Schedule V shall not apply to the Company. Hence the company has claimed exemptions with respect to the aforesaid regulations including the Corporate Governance provisions and the report. However, a Governance Report on the practices which are voluntarily followed in the company is disclosed as a means of communication to the shareholders and is annexed as Annexure-5.

Management Discussion and Analysis Report

As required under SEBI (LODR) Regulations 2015 the Management Discussion and Analysis Report is annexed as Annexure – 6 and forms part of this Report.

Employee Wellbeing and Safety

Your Company has implemented policies and procedures with the objective of ensuring employee safety, security and wellbeing at the workplace. As stated in our Code of Conduct, we are committed to provide a gender friendly workplace, equal opportunities for men and women, prevent/redress sexual harassment and institute good employment practices. The Company has adopted policy on prevention of sexual harassment in line with the requirements of the Sexual Harassment of Women at the work place (Prevention, Prohibition and Redressal) Act, 2013. The employees including their dependent family members are covered under group Mediclaim policies, which gives them access to cashless claims across wide network of hospitals.

Internal Complaints Committee has been set up to redress complaints received regarding sexual harassment. All employees (permanent, contractual, temporary, trainees) are covered under this policy. The following is a summary of sexual harassment complaints received and disposed of during the year:

a) Number of complaints pending at the beginning of the year	: Nil
b) Number of complaints received during the year	: Nil
c) Number of complaints disposed off during the year	: Nil
d) Number of cases pending for more than 90 days	: Nil
e) Number of cases pending at the end of the year	: Nil

During the year ended we had complied with provisions of Maternity Benefit Act and the disclosures with respect to the same is disclosed under:

a) Paid maternity leave	: Nil
b) Medical bonuses	: Nil
c) Nursing breaks	: Nil
d) Creche facilities (where applicable)	: Nil

During the period under review there were 16 female employees and 192 male employees in the company.

Directors Responsibility Statement

Pursuant to the requirement of Section 134 (3) and (5) of the Companies Act, 2013, your Directors confirm that:

(a) In the preparation of the Annual Accounts, the applicable Accounting Standards have been followed and that there are no material departures.

(b) Selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of your Company at the end of the financial year and of the loss of the Company for that period.

(c) Taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of your Company and for preventing and detecting fraud and other irregularities.

(d) Prepared the Annual Accounts on a going concern basis.

(e) Devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

(f) Had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively.

Other Disclosures

Details of difference between amount of the valuation done at the time of one-time settlement and the valuation done while taking loan from the Banks or Financial Institutions along with the reasons thereof: NIL

Acknowledgement

Your Directors wish to place on record their gratitude to Bankers, Share Transfer Agents, Auditors, Customers, Suppliers and Regulatory Authorities for their timely and valuable assistance and support. The Board values and appreciates the professionalism, commitment and dedication displayed by employees at all levels. Your Directors are thankful to the shareholders for their continued support and confidence.

	For and on behalf of the Board
Ernakulam	sd/-
	Navas Meeran
August 14, 2025	Chairman
	DIN: 00128692