north eastern carrying corporation ltd Directors report

1.1 The highlights of performance of the Company for the financial year 2022-23 were as under with comparative position of previous years performance: (Rs. in Lakhs except EPS)

1.2 FINANCIAL PERFORMANCE

During the year, the revenue from operations has been increased to Rs. 30599.22 Lakhs as against Rs. 25042.77 Lakhs in the previous financial year 2021-2022 registering a profit of 22.19%. Our Net profits has Increased to Rs. 577.10 Lakhs for the current financial year 2022-23 as against Rs. 425.75 Lakhs in the previous financial year 2021-22, recording an increase of 35.55 %.

1.3 STATE OF THE COMPANYS AFFAIRS

The operational highlights of the Company during the year are as follows:-

Work order/contracts

TATA STEEL LIMITED

Other Work order/contracts

Your Company needs Capital for its expansion plans, therefore the Board of Director has decided to invest the profit into the operations of the Company. Hence, no dividend is recommended for the financial year ended 31^st March, 2023.

As on March 31, 2023, the Authorized Share Capital of the Company was Rs. 10,000.00 Lakhs consisting of 10,00,00,000 equity shares of Rs.10/- each and the issued & paid up share capital of the Company was Rs. 5019.73 Lakhs consisting of 5,01,97,336 equity shares of Rs.10/- each.

However, w. e. f. July 17, 2023 the paid up Share capital of the Company has increased from Rs.5019.73 Lakhs consisting of 5, 01,97,336 equity shares of Rs.10/- each to Rs 7278. 61 Lakhs consisting of 7, 27, 86,137 equity shares of Rs.10/- each pursuant to the allotment of 4, 51, 77,602 partly paid up equity shares under Right Issue.

These shares rank pari passu with the existing Equity Shares of the Company, in all respects. The Company has not issued any Equity Shares with differential rights, sweat equity shares or bonus shares during the year under review.

The Company doesnt propose to transfer any amount to General Reserve during the financial year 2022-23.

In accordance with Section 92(3) of the Act, the annual return in form MGT-7 is available on the Companys website at www.neccgroup.com.

We, at NECC, believe that good and effective Corporate Governance is critical to achieve corporate vision and mission of the organization; it is more of an organizational culture than a mere adherence to rules and regulations. Your Company has established and maintained a strong ethical environment, overseen by Board of Directors, where 6 out of 8 Directors are Independent. The Companys practices and policies reflect the true spirit of Corporate Governance initiatives.

Your Company is in compliance of all mandatory requirements of Corporate Governance as stipulated as per Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations 2015. In terms of Regulation 34(3) read with Schedule V of the SEBI Listing Regulations, a Report on Corporate Governance along with Compliance Certificate issued by the Practicing Company Secretaries, M/s A. K. Friends & Co. is attached and forms integral part of this Report (herein referred to Corporate Governance Report").

The details of the composition, terms of reference and number of meetings of the Board and its Committee held during the financial year 2022-23 are provided in the Corporate Governance Report.

As per the provisions of Section 152 of the Companies Act, 2013 and in Articles of Association of the Company, Mr. Sunil Kumar Jain (DIN: 00010695), shall retire by rotation in the ensuing 38^th Annual General Meeting and being eligible, offers himself for re-appointment.

The Board of Directors hereby confirms and represent that none of the Directors of the Company are disqualified from being appointed as Director pursuant to Section 164 of the Companies Act, 2013. Mr. Manoj Kumar Jain, Mr. Mohak Jain , Mr. Utsav Jain, Mr. Saurav Upadhyay , Mr. Ashutosh Dubey & Ms. Priya Singh, Independent Directors have submitted a declaration that each of them meets the criteria of independence as provided in Section 149(6) of the Act and in Listing Regulations.

Ms. Reena Gupta (DIN: 06966728) has resigned from the directorship (Non Executive Director) of the Company w.e.f December 16, 2022 due to other commitments.

Mr. Mohak Jain and Mr. Utsav Jain have resigned from the directorship (Non Executive Independent Directors) of the Company w.e.f June 09, 2023 due to personal reasons.

Further, brief particulars and expertise of director seeking reappointment together with their other directorships and committee memberships have been given in the annexure to the Notice of the Annual General Meeting in accordance with the requirements of the Listing Regulations and applicable Secretarial Standards.

In terms of Section 203 of the Act, the following are the Key Managerial Personnel (KMP) of the Company as on date of this report:

With reference to Section 134(5) of the Companies Act, 2013, your Directors hereby confirmed that:-

10. INTERNAL FINANCIAL CONTROLS AND THEIR ADEQUACY

The Board of your Company has laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and operating effectively. Your Company has adopted policies and procedures for ensuring the orderly and efficient conduct of its business, including adherence to the Companys policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial disclosures.

M/s Nemani Garg Agarwal & Co, Chartered Accountants, the Statutory Auditors of the Company, has audited the financial statements included in the Annual Report and has issued an attestation report on our internal control over financial reporting (as defined in Section 143 of Companies Act 2013).

11. AUDITORS

STATUTORY AUDITORS

Members in their 36^th AGM had appointed M/s. Nemani Garg Agarwal & Co,, Chartered Accountants, (Firm Registration No. 010192N) as Statutory Auditors of the Company to hold office for a period of upto 5 (Five) years i.e. till the conclusion of the 41^st AGM of the Company to be held in the financial Year 2026. The Auditors have confirmed that they are not disqualified from continuing as Auditors of the Company.

The Auditors Report for the financial year ended March 31, 2023 contains the following qualifications as made by the statutory auditors for the financial year ended March 31, 2022:

1. The Company has not provided provision for doubtful debts.

2. The Company has not recognized right to use assets of leased property.

3. The Debit & credit balances are subject to confirmation.

However, the management has already clarified that:

SECRETARIAL AUDITORS

Pursuant to the provisions of Section 204 of the Companies Act, 2013 read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Board of Directors of the Company had appointed M/s Ashish Kumar Friends & Co., Practicing Company Secretaries (COP No.4056), New Delhi to undertake the Secretarial Audit of the Company for the year ended March 31, 2023. The Secretarial Audit Report for the financial year ended March 31, 2023 is annexed to this report as Annexure II.

The Secretarial Audit Report for the financial year ended March 31, 2023 does not contain any qualification, reservation, adverse remark or disclaimer.

During the year under review, under Section 143 (12) of the Act, neither the statutory auditors nor the secretarial auditors have reported to the Audit Committee, any instances of material fraud committed against the Company by its officers or employees, the details of which need to be mentioned in the Boards Report

INTERNAL AUDIT

12. PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS BY COMPANY

Pursuant to Section 186 of the Act and Schedule V of the SEBI Listing Regulations, disclosure on particulars relating to loans, advances, guarantees and investments are forms part of the financial statements and are provided in this Annual Report.

13. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES

All Related Party Transactions that were entered into during the financial year were on an arms length basis, in the ordinary course of business and were in compliance with the applicable provisions of Section 188 of the Companies Act, 2013 read with Rule 8(2) of Companies (Accounts) Rules, 2014 and Regulation 23 of the Listing Regulations. There were no materially significant Related Party Transactions made by the Company during the year that would have required Shareholder approval under the Listing Regulations.

The Particulars of contract or arrangement entered into by the Company with related parties as per the provisions of Section 188 of the Companies Act, 2013 read with Rule 8(2) of Companies (Accounts) Rules, 2014 are disclosed in Form AOC-2, in Annexure I is annexed to this report.

The Board has approved a policy on related party transactions. An abridged policy on related party transactions has been placed on the Companys website at website link: http://www.neccgroup.com/wp-content/uploads/2016/03/Policy-on-Related-Party-Transaction-NECC.pdf

14. PARTICULARS REGARDING CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION

There are no significant particulars relating to Conservation of Energy, technology absorption under Rule 8(3) of Companies (Accounts) Rules, 2014 since your Company is not engaged in any manufacturing activity. No agreement has been entered into for Technology absorption. However, the Company has made intensive use of technology in its operation during the year under review.

15. PARTICULARS REGARDING EXPENDITURE INCURRED ON RESEARCH AND DEVELOPMENT

AND FOREIGN EXCHANGE EARNINGS & OUTGO

The Company has not incurred any expenditure on Research & Development during the financial year 2022-23. Further, the Company has no earning or outgo in Foreign exchange as per Rule 8(3) of Companies (Accounts) Rules, 2014.

16. RISK MANAGEMENT

Risk Management comprises all the organizational rules and actions for early identification of risks in the course of doing business and the management of such risks.

The Company has a Risk Management Policy which outlines the manner in which the Company identifies, assesses, monitors and manages risk. As the Company belongs to transportation and Logistics Industry and in the opinion of the Board, the following are the risks which would threaten the existence of the Company:

To recover the above-mentioned risks, the Company has adopted Risk Management Strategy which comprising of following stages:

17. CORPORATE SOCIAL RESPONSIBILITY

The "Corporate Social Responsibility Policy" prepared in the line with the provisions of Section 135 of the Companies Act, 2013 and Rules made there under, The Companies (Corporate Social Responsibility Policy) Rules, 2014 read with Schedule VII of the Companies Act, 2013 including any statutory modification or amendment thereto was approved by the Board of Directors of the Company. The "Corporate Social Responsibility Policy" is available on the website of the Company at website link http://neccgroup.com/wp-content/uploads/2015/02/CSR-Policy.pdf

As per section 135 of the Companies Act, 2013, every company having net worth of rupees five hundred crores or more, or turnover of rupees one thousand crore or more or a net profit of rupees five crores or more during preceding financial year shall spend atleast 2% of the average net profits before tax made during the three immediately preceding financial years in pursuance of its Corporate Social Responsibility Policy.

Since the criteria set out in Section 135 of the Companies Act, 2013 is not applicable to your Company, no sum was spent on CSR during the Financial Year 2022-23.

18. EVALUATION OF BOARD OF DIRECTORS/INDEPENDENT DIRECTORS

During the year, the Board has carried out an Annual evaluation of its own performance, performance of the Directors, as well as the evaluation of the working of its Committees. The Nomination and Remuneration Committee (NRC) has defined the evaluation criteria, procedure and time schedule for the Performance Evaluation process for the Board, its Committees and

Directors. The Chairman of the Committee also had interactions with each of the Directors and sought their feedback and suggestions on the overall Board Effectiveness and Directors performance.

A structured questionnaire covering various aspects of the Boards functioning such as adequacy of the composition of the Board and its Committees, Board culture, execution and performance of specific duties, obligations and governance was prepared based on the Guidance note issued by SEBI vide circular no, CMD/CIR/P/2017/004 dated 05.01.2017 and MCA vide Notification dated July 5, 2017 also prescribed that the provisions relating to review of performance of Independent Directors and evaluation mechanism, prescribed in Schedule IV of the Companies Act, 2013,

A separate exercise was carried out to evaluate the performance of individual directors including the Chairman of the Board who were evaluated on parameters such as guidance/ support to management outside Board/ Committee meetings, degree of fulfillment of key responsibilities, effectiveness of meetings etc.

In addition, pursuant to the provisions of Schedule IV to the Companies Act, 2013 the Independent Directors reviewed the performance of the Non-Independent Directors and of the Board as a whole, performance of the Chairman of the Board taking into account the views of all the Directors, and the quality, quantity and timeliness of flow of information between the Company management and the Board and its sufficiency for the Board to effectively perform its duties.

19. SUBSIDIARIES, JOINT VENTURES & ASSOCIATE COMPANIES

There is no Subsidiary, Joint Ventures and Associate Companies during the Financial Year 2022-23.

20. PARTICULARS OF EMPLOYEES AND REMUNERATION

The information required under Section 197(12) of the Companies Act, 2013 read with Rule 5(2) and (3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is annexed to this report as Annexure III. None of the employees listed in the said Annexure is related to any Director of the Company.

21. HUMAN RESOURCE MANAGEMENT

Your Company has more than 187 branches across PAN INDIA, NEPAL and operational set ups into BHUTAN and BANGLADESH (upto border) and the total Manpower of the Company as on March 31, 2023 was 478 employees which include Executives and Non-Executives. In order to increase the professional culture in the Company, 78 employees were appointed through Interview and written test during the year.

As a measure of capacity building including up-gradation of employees skill and to ensure high delivery of performance, training and HRD continued to receive priority during the financial year.

Training and Human Resource policy of the Company aims and sharpening business skills and competence required for better employee performance and provides all possible opportunities and support to the employees to improve their performance and productivity. Training was also provided to promote better understanding of professional requirements as well as to aware employees towards socio-economic environment in which business of the Company is carried out.

As on March 31, 2023, the Company has 8 women employees, which represent 1.67% of the total work force. There is no discrimination of employees on the basis of gender. An internal compliant committee has been constituted to look after the welfare and provide protection against sexual harassment of women at workplace.

Employees management is the backbone of your Company and it is regarded as one of the important resources for the success of NECC. Over the years, your Company has strengthened its HR processes to ensure continual development and growth of its employees. In order to build the right organizational culture, the Company distributes various awards and recognition in terms of their performance, capabilities, communication skills, coordination etc. on quarterly or half yearly basis. Though NECC is an equal opportunity employer, special focus is given to employees for enhance their diversity and knowledge.

The Company got the award from Grow Care India Business Excellence Award in March 2023.

22. DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE

(PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013

In line with the provisions of Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal) Act, 2013, every employer of a workplace shall constitute an "Internal Compliant Committee" for redressal of compliant(s) against sexual harassment of women employees. Your Company has about 8 women employees in various cadres including Permanent, contractual, temporary and trainees. The Internal Compliant Committee aims to provide protection to employees at the workplace and prevent and redress complaints of sexual harassment and for matters connected or incidental thereto, with the objective of providing a safe working environment, where employees feel secure.

There was no complaint received from any employee during the financial year 2022-23 and hence no complaint is outstanding as on March 31, 2023 for redressal.

23. STATUTORY DISCLOSURES

24. MATERIAL CHANGES AFFECTING THE COMPANY

RIGHT ISSUE OF THE COMPANY

Pursuant to the consent of the Board of Directors of the Company being accorded on July 05, 2022 for issuance of the equity shares of the Company by way of a rights issue to the eligible equity shareholders of the Company, the Board of Directors at its meeting held on Tuesday, May 16, 2023 has approved the terms and conditions for Rights Issue of up to 4,51,77,602 partly paid-up Equity Shares with face value of Rs. 10.00/- each (‘Rights Shares) for cash at a price of Rs. 18.00/- (‘Issue Price) per Right Shares including a premium of Rs.8.00/- per Rights Shares aggregating up to Rs. 8,131.97 Lakhs payable on Application Rs. 9.00/- and balance

Rs. 9.00/- payable on First and Final call in the ratio of 9 (Nine) Equity Shares for every 10 (Ten) fully paid-up Equity Shares held by the Eligible Equity Shareholders of the Company.

The Board of Directors at its meeting held on Wednesday, May 24, 2023 has fixed friday, June 02, 2023 as the record date for the purpose of determining the equity shareholders entitled to receive the rights entitlement in the Rights Issue. The Offer period for the eligible securities commenced on Wednesday, June 14, 2023 and end on Tuesday, July 11, 2023. [both days inclusive].

On Monday, July 17, 2023, the Rights Issue Committee of the Company approved the allotment of 4,51,77,602 partly paid-up equity shares to the successful Shareholders.

The Company has duly received the Listing Approval on July 19, 2023 & Trading approval on July 21, 2023 for the aforesaid partly paid up equity shares from BSE Ltd & National Stock Exchange of India limited after completing the requisite formalities.

The Synopsis of the Right Issue are as follows:

The Company has successfully closed the right issue by July 2023 which was oversubscribed by the shareholders.

25. MAINTENANCE OF COST RECORDS

The Central Government has not prescribed the maintenance of cost records for the products/services of the Company under Companies (Cost Records and Audit) Rules, 2014, read with Companies (Cost Records and Audit) Amendment Rules, 2014 prescribed by the Central Government under Section 148 of the Companies Act, 2013. Accordingly, Cost Accounts and Records are not required to be maintained by the Company

26. POLICIES

We seek to promote and follow the highest level of ethical standards in all our business transactions guided by our value system. The SEBI (Listing Obligations and Disclosure

Requirements) Regulations, 2015 mandated the formulation of certain policies for all listed companies.

All our corporate governance policies are available on our website i.e. www.neccgroup.com

27. STATUTORY AND OTHER INFORMATION REQUIREMENTS

Information required to be furnished as per the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and other applicable statutory provisions is annexed to this report as under:

28. ‘THINK GREEN, GO GREEN INITIATIVE

The Companies Act, 2013 permits companies to send documents like Notice of Annual General Meeting, Annual Report and other documents through electronic means to its members at their registered email addresses. As a responsible Corporate Citizen, the Company has actively supported the implementation of ‘Green Initiative of the Ministry of Corporate Affairs (MCA)and effected electronic delivery of Notices and Annual Reports to shareholders, whose email IDs are registered.

Further, pursuant to Section 108 of the Companies Act, 2013 read with Rule 20 of the Companies (Management and Administration) Rules, 2014, the Company is providing e-voting facility to all members to enable them to cast their votes electronically in respect of resolutions set forth in the Notice of Annual General Meeting (AGM). The Company will also be conducting the AGM this year through Video Conferencing / Other Audio Visual Means. Members can refer to the detailed instructions for e-voting and electronic participation in the AGM, as provided in the Notice of the AGM.

Members, who have not registered their e-mail addresses so far, are requested to register their e-mail address with the Registrar and Share Transfer Agent (R&TA) of the Company/Depository Participant (DP) of the respective member and take part in the Green Initiative of the Company.

29. WHISTLE BLOWER MECHANISM

Pursuant to Section 177(9) of the Act, a vigil mechanism has been established for Directors and employees to report to the management, instances of unethical, actual or suspected, fraud or violation of the Companys code of conduct or ethics policy. The Ethics and Whistle Blower Policy provides for direct access to the Chairperson of the Audit Committee. The policy is available on the Companys website and can be accessed at:

http://neccgroup.com/wp-content/uploads/2015/02/Vigil-Mecchanism-Policy.pdf

30. THE INSOLVENCY AND BANKRUPTCY CODE, 2016

During the year under review, there is no application made/proceeding pending against the Company under the Insolvency and Bankruptcy Code, 2016.

31. VALUATION AT THE TIME OF ONE TIME SETTLEMENT

During the year under review, the Company has not entered in any one time settlement with any of the Banks/Financial Institutions and therefore, the relevant disclosures are not applicable to the Company.

32. ACKNOWLEDGEMENT