ETL Annual Report FY 17-18 PDF

MILESTONES
2013-2015 2015-2018
Launched Franchisee- Dealer network in Nepal
0perations Production capacity - 12,000 MT
Retreading Machinery Supply Supply of Accessories
Own Retreading Outlet Transition from a tread rubber
manufacturer to enabler of tyre
2006-2012 retreading ecosystem
Initiated Export Operations
Production capacity -
6,000 MT
1998-2005
Expanded to ROI.
1994-1997
IPO & Listing
Public Limited Company
Investment by KSIDC
Hot Press Process 1993
Incorporation
Private Limited Company
Production capacity – 4,800 MT
Cold press Retread Process
ETL, a brand from the bouquet of the Eastern Group, focuses on manufacturing and marketing tyre-retreading materials
like pre-cured rubber, bonding gum, vulcanizing solutions and many other accessories. The Company has a national
presence across 17 States having tie-ups with 88 Dealers, 40 Exclusive Retreaders, 33 Infinity Zones and 2 own retreading
units which being serviced through 10 depots and 2 C&F’s across India. Its extensive product portfolio with Eastern Brand
are sold though domestic and international business networks. ETL is transitioning from a tread rubber manufacturer to a
leading enabler of tyre retreading ecosystem across the entire retreading value chain.
ANNUAL
REPORT
2017-2018
EASTERN TREADS LIMITED

CIN: L25119KL1993PLC007213
COMPANY INFORMATION
BOARD OF DIRECTORS
Mr. Navas M Meeran Chairman

Mr. M.E. Mohamed Managing Director
Mr. M.S. Ranganathan Director
Mr. Naiju Joseph Director
Mr. K.S. Neelakanta Iyer Director
Mr. K.V. Rajagopalan Nair Director (Nominee of KSIDC)
Mrs. Shereen Navaz Director
Mr. Rajesh S. Chief Executive Officer

Mr. Mohammed Sherif Shah Chief Financial Officer
CS Baiju T. Company Secretary
REGISTERED & CORPORATE OFFICE INVESTOR CORRESPONDENCE

3A, 3rd Floor, Eastern Corporate Office, The Company Secretary, Eastern Treads Limited
34/137 E NH Bypass, Edappally, Kochi, 3A, 3rd Floor, Eastern Corporate Office, NH Bypass, Edappally,
Ernakulam - 682024, Kerala Kochi, Ernakulam - 682024, Kerala
OFFICIAL WEBSITE BANKERS

www.easterntreads.com The Federal Bank Limited,
ICICI Bank Limited
WORKS
HDFC Bank Limited, IDBI Bank Limited
Oonnukal, Kothamangalam, Ernakulam
STATUTORY AUDITOR INTERNAL AUDITOR
Walker Chandiok & Co LLP, Chartered Accountants, JVR & Associates, Chartered Accountants
7th Floor, Modayil Centre Point, 39/2790A, Wilmont Park Business Centre
Warriam Road Jn., M G Road, Near St. George’s Church,
Kochi 682 016, India Pallimuku, Kochi, Ernakulam – 682016
REGISTRAR & SHARE TRANSFER AGENT SECRETARIAL AUDITOR

Integrated Registry Management Services Private Limited, BVR & Associates Company Secretaries LLP,
2nd Floor, ‘Kences Towers’ No.1, Swastika, First Floor, Chitteth House, PC Road,
Ramakrishna Street, North Usman Road, Vyttila P.O., Cochin - 682 019
T. Nagar, Chennai – 600017
CONTENTS
Notice 03
Directors’ Report 07
Corporate Governance Report 25
Management Discussion and Analysis 33
Auditors’ Report 39
Balance Sheet 45
Statement of Profit and Loss 46
Cash Flow Statement 47
Statement of Changes in Equity 48
Notes to Financial Statements 49
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REPORT
2017-2018
Dear Shareholder,
I am privileged to get this opportunity to present you the financial and operating performance of Eastern Treads Limited
(ETL) for the financial year 2017-18 and share our thoughts on the business outlook. Having started its journey 25
years ago, ETL has come a long way and today we are known as a highly reputed brand in the tyre retreading industry
with a broad range of products that deliver excellent performance in diverse weather and road conditions. Over the
years, we have successfully transitioned from a tread rubber manufacturer to a leading enabler of tyre retreading
ecosystems in India.
As you would be aware, 2017-18 has been a year of significant changes with structural reforms like GST being
introduced, changing business modalities in the sector. The year was also marked by an increase in competitive
intensity resulting in pricing pressure adversely affecting margins. In addition, fluctuations in rubber prices impacted
the business. As a result, ETL registered a revenue (net of indirect taxes) growth of 4% in FY17-18 but profitability was
adversely affected. We have seen these changes as an opportunity to adapt and create the levers of long-term growth.
We are leveraging the transitioning operating environment and our strong industry position to expand long-term growth
opportunities. The focus has been on expanding revenues from open market and franchisee sales that have higher
margins compared to institutional sales.
During the year, we announced renewal of supply agreement with Kerala State RTC, obtaining a repeat order to supply
1,375 MT of tyre retreading materials, we launched our Nepal operations and appointed our 73 rd exclusive franchisee.
We have also consolidated hot rubber tread production, previously partly outsourced to external small scale units. Apart
from garnering a larger share of the domestic markets, we are also targeting several export markets, including
developed countries, where supplies from our cost-efficient production can deliver substantial economic benefits. We
anticipate this diversified contribution mix to start delivering higher volume growth on our existing base of manufacturing
infrastructure. This we believe, will not only result in revenue expansion but also higher margin contribution based on
improved utilization of capacity.
The construction of national highways hit an all-time high of about 10,000 km in 2017-18, translating to 28km/day. To
further boost road infrastructure the Government has announced to construct 83,000 km over the next five years with
a target of 45 km/day. Higher investments in road infrastructure and improving economic activity are great positive
factors for us. In addition, we see consolidation of opportunities for organized players like us and our strong presence
across the entire retreading value chain is already delivering high quality retreading solutions to our customers.
On this positive note, I would like to thank all our stakeholders for believing in us and being an integral part of our
journey. I would also like to specially offer my appreciation to our Board for its continued guidance and for giving us the
benefit of their rich experience. I also extend our gratitude to the investors, employees, vendors, business associates,
customers bankers and legal authorities for placing their trust in the ETL nameplate. As a growing organisation I am
optimistic about delivering a performance that is commensurate with our position as a leading tyre retreading solution
provider.
With warm regards
Navas M. Meeran
Chairman
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ANNUAL
NOTICE REPORT
2017-2018
NOTICE is hereby given that the 25 th Annual General Meeting of the members of Eastern Treads Limited will be held
on Friday, 20th July 2018, at 3.30 PM at Hotel TGR Suites, Thannikal, Pukkattupady Road, Edappally Toll, Cochin,
Ernakulam – 682024, Kerala to transact the following business:
Ordinary Business
1. To receive, consider and adopt the Audited Financial Statements of the Company for the Financial Year ended 31st
March 2018 together with the Reports of the Board of Directors and Auditor thereon.
2. To appoint a Director in place of Mrs. Shereen Navaz, having DIN: 00328770, who retires by rotation in compliance
with the provisions of Section 152 of the Companies Act, 2013 and being eligible, seeks reappointment.
3. To ratify the appointment of M/s. Walker Chandiok & Co LLP, Chartered Accountants, Kochi as the Auditors of the
Company to hold office till the conclusion of 29 th Annual General Meeting in compliance with the provisions of
Section 139 of the Companies Act, 2013 read with the resolution passed at the 24th Annual General Meeting and
to authorise the Board of Directors to fix their remuneration from time to time.
By Order of the Board

For Eastern Treads Limited
Kochi CS Baiju T.
10/05/2018 Company Secretary
Notes
1. A member entitled to attend and vote at the meeting is entitled to appoint 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. Duly
completed instrument of proxies in order to be effective must be reached the registered office of the
Company not less than 48 hours before the scheduled time of the meeting.
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 than 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. 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.
4. The Register of Members and Share Transfer Books of the Company will remain closed from Saturday, 14/07/2018
to Friday, 20/07/2018 (both days inclusive).
5. 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, 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.
6. 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.
7. Notice of this Annual General Meeting, Audited Financial Statements for 2017-18 along with Directors’ Report and
Auditors’ Report are available on the website of the Company www.easterntreads.com.
8. Members and Proxies attending the meeting are requested to bring the annual report to the meeting as extra
copies will not be distributed.
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ANNUAL
REPORT
2017-2018
9. 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 holding may do
so through any of the depository participants. The ISIN of the equity shares of the Company is INE500D01015.
10. SEBI has mandated the submission of Permanent Account Number by every participant in securities market.
Members holding shares in electronic form are, therefore, requested to submit their PAN to their respective
Depository Participants. Members holding shares in physical form can submit their PAN to the Company/RTA.
SEBI has also mandated the submission of copy of the PAN card to the Company/RTA by the transferee(s) as
well as transferor(s) for registration of transfer of securities.
11. Members are requested to address all correspondence, including change in their addresses, to the Company or
to the Registrar and Share Transfer Agent, Integrated Registry Management Services Private Limited, 2 nd Floor,
Kences Towers, No: 1, Ramakrishna Street, North Usman Road, T. Nagar, Chennai - 600017. E-mail:
[email protected]. Members whose shareholdings are in electronic mode are requested to approach their
respective depository participants for effecting change of address.
12. The Shareholders are requested to update the contact address and e-mail address and are requested to notify
immediately any change in their address, exclusively on separate letter without clubbing it with any other request,
for quicker attention directly to the Company's Share Transfer Agent.
13. Members who are holding shares in the same name or in the same order of names, under different folios, are
requested to notify the same to the Registrar and Share Transfer Agent 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 ten days in advance, so as to enable the Company to keep the
information ready.
15. 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 Registrar and Share Transfer Agent. The said
nomination form can also be downloaded from the Company’s website www.easterntreads.com.
16. At the ensuing Annual General Meeting, Mrs. Shereen Navaz, Director, having DIN: 00328770 retires by rotation
and seek reappointment. The information about the director as required to be provided pursuant to the Listing
Agreement read with SEBI (LODR) Regulations, 2015 are furnished in the report on Corporate Governance.
17. In pursuance of Sections 124 of the Companies Act 2013 and other applicable provisions, if any the amount of
dividends that remain unclaimed/unpaid for a period of seven years from the date on which they were declared, is
required to be transferred to the Investor Education and Protection Fund (IEPF). Shareholders, who have not
claimed their dividend including interim dividend, if any, are requested to make their claims without any delay. The
details of such unclaimed dividends are available on the Company’s website.
18. Pursuant to Section 101 and Section 136 of the Companies Act, 2013 read with relevant provisions of Companies
(Management and Administration) Rules, 2014, companies can serve annual reports and other communications
through electronic mode to those members who have registered their e-mail address either with the company or
with the depository. Hence, members are requested to provide their email address to the Company/the Registrar
and Transfer Agent or update the same with their depositories to enable the Company to send the documents in
electronic form.
19. Pursuant to the prohibition imposed vide Section 118 of the Companies Act, 2013 read with Secretarial Standard
on General Meetings (SS-2) issued by the Institute of Company Secretaries of India, no gifts/coupons shall be
distributed at the Meeting.
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ANNUAL
REPORT
2017-2018
20. Voting through Electronic means
a) In compliance with Section 108 of the Companies Act, 2013, read with corresponding Rules and the Listing
Agreement read with Regulation 44 of SEBI (LODR) Regulations 2015, the Company has provided a facility
to its members to exercise their right to vote on resolutions proposed to be considered at the 25 th Annual
General Meeting by electronic means and the business may be transacted through e-Voting (“remote e-
voting”) Service facilitated by National Securities Depository Limited (NSDL). The facility for voting through
ballot paper shall be made available at the AGM and the members attending the meeting who have not cast
their vote by remote e-voting shall be able to exercise their right at the meeting through ballot paper. The
members who have cast their vote by remote e-voting prior to the AGM may also attend the AGM but shall
not be entitled to cast their vote again. A person, whose name is recorded in the register of members or in
the register of beneficial owners maintained by the depositories as on the cutoff date i.e. 14/07/2018 only
shall be entitled to avail the facility of remote e-voting as well as voting at the AGM through ballot paper.
b) The remote e-voting period commences on 17/07/2018 (9:00 am) and ends on 19/07/2018 (5:00 pm). During
this period members’ of the Company, holding shares either in physical form or in dematerialised form, as on
the cutoff date may cast their vote by remote e-voting. The remote e-voting module shall be disabled by
NSDL for voting thereafter. Once the vote on a resolution is cast by the member, the member shall not be
allowed to change it subsequently.
c) The process and manner for remote e-voting are as under:

(i). In case a Member receives an email from NSDL {for members whose email IDs are registered with the
Company/Depository Participants(s)} :
1) Open email and open PDF file viz; “Eastern Treads remote e-voting.pdf” with your Client ID or Folio
No. as password. The said PDF file contains your user ID and password/PIN for remote e-voting.
Please note that the password is an initial password.
2) Launch internet browser by typing the following URL: https://www.evoting.nsdl.com/
3) Click on “Shareholder – Login”
4) Put user ID and password as initial password/PIN noted in step (i) above. Click Login.
5) 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.
6) Home page of remote e-voting opens. Click on remote e-voting: Active Voting Cycles.
7) Select “R EVEN” (Remote E-Voting Event Number) of Eastern Treads Limited
8) Now you are ready for remote e-voting as Cast Vote page opens.
9) Cast your vote by selecting appropriate option and click on “Submit” and also “Confirm” when
prompted.
10) Upon confirmation, the message “Vote cast successfully” will be displayed.
11) Once you have voted on the resolution, you will not be allowed to modify your vote.
12) 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 [email protected] with a copy marked to [email protected]
(ii). 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] :
1) Initial password is provided as below/at the bottom of the Attendance Slip for the AGM:
R EVEN (Remote e-voting Event Number) USER ID PASSWORD/PIN
2) Please follow all steps from Sl. No. (2) to Sl. No. (12) above, to cast vote.
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ANNUAL
REPORT
2017-2018
d) In case of any queries, you may refer the Frequently Asked Questions (FAQs) for Members and remote e -
voting user manual for Members available at the download section of www.evoting.nsdl.com OR contact
NSDL at the following Telephone No:022 24994600. If you are already registered with NSDL for remote e-
voting then you can use your existing user ID and password/PIN for casting your vote. If you forgot your
password, you can reset the same by using “Forgot User Details/Password” option available on
www.evoting.nsdl.com or contact NSDL. 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 voting rights of members shall be in proportion to their shares of the paid up equity share capital of the
Company as on the cutoff date. Any person who acquires shares and become member of the Company after
dispatch of the notice and holding shares as of the cutoff date may obtain the login ID and password by
sending a request at [email protected] or [email protected]. However, if you are already registered
with NSDL for remote e-voting then you can use your existing user ID and password for casting your vote.
f) CS. Satheesh Kumar N., Company Secretary (Membership No. 16543), Partner M/s. Satheesh & Remesh,
Company Secretaries has been appointed for as the Scrutinizer for providing facility to the members of the
Company to scrutinize the voting and remote e-voting process in a fair and transparent manner. The
Chairman shall, at the AGM, at the end of discussion on the resolutions on which voting is to be held, allow
voting with the assistance of scrutinizer, by use of “remote e-voting” or “Ballot Paper” for all those members
who are present at the AGM but have not cast their votes by availing the remote e-voting facility.
g) The Scrutinizer shall after the conclusion of voting at the General Meeting, will first count the votes cast at
the meeting and thereafter unblock the votes cast through remote e-voting in the presence of at least two
witnesses not in the employment of the Company and shall make, not later than three days of the conclusion
of the AGM, a consolidated scrutinizer’s report of the total votes cast in favour or against, if any, to the
Chairman or a person authorized by him in writing, who shall countersign the same and declare the result of
the voting forthwith.
h) The results declared along with the report of the Scrutinizer shall be placed on the website of the Company
http://www.easterntreads.com and on the website of NSDL immediately after the declaration of result by the
Chairman or a person authorized by him in writing. The results shall also be immediately forwarded to the
BSE Limited, Mumbai.
Route Map & Land Mark

25th AGM on Friday, 20th July 2018, at 3.30 PM
Hotel TGR Suites,
Thannikal, Pukkattupady Road, Edappally Toll, Cochin, Ernakulam, Kerala. PIN 682024
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ANNUAL
DIRECTORS’ REPORT REPORT
2017-2018
Dear Member,
Your Directors have pleasure in presenting the 25th Annual Report on the business and operations of the Company
and the audited Ind AS financial statements for the financial year ended 31 st March, 2018 along with comparative
Financial Statements for the financial year 2016-17 and opening Ind AS transition Balance Sheet as on 1 st April 2016.
Financial Highlights
The Company has adopted the Indian Accounting Standards, notified under the Companies (Indian Accounting
Standards) Rules, 2015 with effect from April 1, 2017. Financial statements for the financial year 2016-17 have been
restated to conform to Ind AS. The following table shows the operational results of the Company for the year 2017-18
as compared to that of the previous year.
(₹in lakhs)
Year ended
31/03/18 31/03/17
Revenue from Operations 9,539.36 9,577.23
Other Income 22.32 70.48
Total Revenue 9,561.68 9,647.71
Expenditure 9,271.80 8,988.00
Profit before Interest, Depreciation and Tax 289.88 659.71
Financial Cost 326.92 296.67
Depreciation and Amortization 210.67 181.97
Profit (Loss) before Tax (247.71) 181.07
Profit (Loss) after Tax (229.39) 131.77
Other comprehensive income/ (loss) (net of tax expenses) (6.51) (12.44)
Total comprehensive (loss)/income for the period (235.90) 119.33
FY 2017-18 was a challenging fiscal for the Company. The Company has addressed various issues on regulatory
developments like implementation of GST, Ind AS etc. During the year the Company managed its revenue growth, the
revenue (net of indirect taxes) has improved by 4%, when compared to the previous year. However the margin has
impacted during the first half of the fiscal due to uncertainty caused by regulatory reforms as well as continuing industrial
slowdown and managed the second half as effects of regulatory changes were absorbed. Due to the general slowdown
of the industry during the year the Company has reported net loss for the year ended.
Operational Highlights
During the year, the drop in Natural Rubber price was favorable to the industry, however the shortage of other
ingredients including Carbon Black and Chemicals has restrained the Company from generating margin as anticipated.
The volatility of Synthetic Rubber price, hefty price and poor availability of Carbon Black and Chemicals has also
affected profitability. Carbon Black prices had increased by more than 50% due to strong demand and tight supply. In
addition to these cost escalations our consumers were not in a position to absorb the price hike as they were struggling
to manage recent regulatory developments. The operations are exhaustively discussed in ‘Management Discussion
and Analysis’ forming part of the annual report.
Dividend
In view of the inadequacy of profit, your Directors are not in a position to recommend any dividend.
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2017-2018
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.
Directors and Key Managerial Personnel
Mr. Rajesh S., Chief Executive Officer, Mr. Mohamed Sherif Shah, Chief Financial Officer and CS. Baiju T., Company
Secretary are the Whole-time Key Managerial Personnel of the Company. Mr. M.E. Mohamed, Managing Director has
vacated his office as the Whole-time KMP on 25th July, 2017 and continued as Managing Director. Mr. Rajesh S., and
Mr. Mohamed Sherif Shah, were appointed by the Board as Chief Executive Officer and Chief Financial Officer
respectively on 25th July, 2017. Earlier Mr. Rajesh S was appointed as Chief Financial Officer of the Company.
Mrs. Shereen Navaz, Director, retires by rotation at the ensuing Annual General Meeting and being eligible, offer herself
for re-appointment. The Board recommends her appointment. The Board is in the process of making necessary
appointment in the vacancy of an Independent Director.
The Board has considered the declarations given by independent directors under Section 149 (6) and the Company’s
policy on directors’ appointment and remuneration including criteria for determining qualifications, positive attributes
and independence of a director. The Board has annually evaluated the performance of the Board, its committees and
individual directors. None of the Directors is disqualified under Section 164 of the Companies Act, 2013.
Board Meetings
Six Board meetings were held during the year. Details of Board meetings are included in Corporate Governance Report.
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 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, 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) Had laid down internal financial controls to be followed by the Company and that such internal financial controls
are adequate and were operating effectively.
(f) Devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems
were adequate and operating effectively.
Auditors & Audit Observations
M/s. Walker Chandiok & Co LLP, Chartered Accountants, Kochi, were appointed as the Auditors of the Company at
the Annual General Meeting held on 6th July 2017 to hold office for a period of 5 consecutive years. Necessary certificate
has been obtained from the Auditors as per Section 139(1) of the Companies Act, 2013. The Auditor’s observations
are suitably explained in notes to the Accounts and are self-explanatory.
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Cost Audit Report
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.
Secretarial Audit Report
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 - A. The
findings of the audit have been satisfactory.
Public Shareholding
About 34.66% of the paid up equity share capital of the Company are held by a large number of public shareh olders.
The category-wise shareholdings are reported in the “Extract of Annual Return” forming part of the annual report.
Listing and Dematerialisation
The equity shares of the Company are listed on the Bombay Stock Exchange Ltd. Shareholders are requested to
convert their holdings to dematerialized form to derive its benefits by availing the demat facility provided by NSDL and
CDSL.
Extract of Annual Return
Extract of Annual Return pursuant to Section 92 of Companies Act, 2013 and Rule 12(1) of the Companies
(Management and Administration) Rules, 2014, is annexed herewith as Annexure - B.
Audit committee
The details pertaining to the composition of the audit committee are included in the Corporate Governance Report.
Related Party Transactions
There were no materially significant related party transactions which could have had a potential conflict with the
interests of the Company. Transactions with related parties are in the ordinary course of business on arm’s 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 - C.
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. This Policy has been uploaded on the website of the Company. There
has been no change in the policy since the last fiscal year.
Conservation of Energy, Technology Absorption, Foreign Exchange Inflow & Outflow
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 - D to this report.
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Corporate Governance
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 the Listing Agreement read with 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 the Company. However,
as a good Corporate Governance practice the Company has generally complied with the Corporate Governance
requirements and a report on Corporate Governance is annexed as Annexure - E and forms part of this Report. As
required under SEBI (LODR) Regulations 2015 the Management Discussion and Analysis Report is annexed as
Annexure – F and forms part of this Report.
Personnel
None of the employees is in receipt of remuneration in excess of the limit laid down under Rule 5(2) of the Companies
(Appointment and Remuneration of Managerial Personnel) Rules, 2014. 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 in respect of employees of the Company and Directors are annexed as Annexure - G and
forms part of this Report.
Corporate Social Responsibility
Company has generally taken corporate social responsibility (CSR) initiatives. However, the present financial position
of the Company does not mandate the implementation of CSR activities pursuant to the provisions of Section 135 and
Schedule VII of the Companies Act, 2013.
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.
Particulars of Loans, Guarantees or Investments
Particulars of loans, guarantees or investments under Section 186 of the Companies Act, 2013 are given in the notes
to the Financial Statement. Company has availed Line of Credit facility offered by IDBI Bank Ltd to the extent of ₹850
Lakhs in the form of Bill discounting facility to the Company’s approved vendors supplying raw materials to the Company
and has guaranteed for its repayment.
Risk Management
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.
Internal Financial Controls
Internal financial control and their adequacy are included in the Management Discussion and Analysis, forming part of
this report.
Material Changes and Commitments
No material changes and commitments, affecting the financial position of the Company has been occurred between
the end of the financial year 2017-18 and till the date of this report.
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Statutory Orders
No significant and material orders were passed by Courts, Tribunals and other Regulatory Authorities affecting the
going concern status of the Company’s operations.
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. Internal Complaints
Committee has been set up to redress complaints. The Company has not received any complaint under this policy
during the year 2017-18.
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
Kochi Navas M Meeran

10/05/2018 Chairman
Din : 00128692
11
ANNUAL
Annexure – A REPORT
2017-2018
Form No. MR-3
SECRETARIAL AUDIT REPORT

For the Financial year ended 31 st March 2018
[Pursuant to Section 204(1) of the Companies Act, 2013 and
Rule No.9 of the Companies (Appointment and Remuneration Personnel) Rules, 2014]
To
The Members
Eastern Treads Limited
CIN: L25119KL1993PLC007213.
We, BVR & Associates Company Secretaries LLP, have conducted the secretarial audit of the compliance of applicable
statutory provisions and the adherence to good corporate practices by Eastern Treads Limited [CIN:
L25119KL1993PLC007213] (hereinafter called the Company). The Secretarial Audit was conducted in a manner that
provided us a reasonable basis for evaluating the corporate conducts/statutory compliances and expressing our opinion
thereon.
Based on our verification of Eastern Treads Limited’s books, papers, minutes book, forms and returns filed and other
records produced to us and according to the information and explanations given to us by the Company, we hereby
report that in our opinion, the Company has, during the audit period covering the financial year ended on 31/03/2018
complied with the provisions of the Companies Act, 2013 (Act) and the Rules made there under, the Memorandum and
Articles of Association of the Company and also applicable provisions of the aforesaid laws, standards, guidelines,
agreements, etc.
We have examined the books, papers, minute books, forms and returns filed and other records maintained by Eastern
Treads Limited (“the Company”) for the financial year ended on 31/03/2018 according to the provisions of:
1. The Companies Act, 2013 and the Rules made there under.
2. The Securities Contracts (Regulation) Act, 1956 (‘SCRA’) and the Rules made there under.
3. The Depositories Act, 1996 and the Regulations and Bye-laws framed there under.
4. Foreign Exchange Management Act, 1999 and the applicable rules and regulations made there under.
5. The following Regulations and Guidelines prescribed under the Securities and Exchange Board of India Act, 1992
(‘SEBI Act’).
a) The Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations,
2011.
b) The Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 1992 & 2015.
c) The Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations,
2009.
d) The Securities and Exchange Board of India (Issue and Listing of Debt Securities) Regulations, 2008.
e) The Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations,
2015.
f) The Securities and Exchange Board of India (Depositories And Participants) Regulations, 1996
g) The Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase
Scheme) Guidelines, 1999.
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2017-2018
h) The Securities and Exchange Board of India (Registrars to an Issue and Share Transfer Agents) Regulations,
1993.
i) The Securities and Exchange Board of India (Buyback of Securities) Regulations, 1998
6. The Listing Agreement has been entered into by the Company with Bombay Stock Exchange.
As informed to us the following other Laws specifically applicable to the Company as under:
1. The Factories Act, 1948.

2. The Competition Act, 2002.
3. The Kerala Panchayat Raj Act, 1994.
4. Sexual Harassment of Women at the Work Place (Prevention, Prohibition and Redressal) Act, 2013.
5. The Petroleum Act, 1934
6. The Rubber Act 1947
We have also examined compliance with the applicable clauses of the following:
Secretarial Standards issued by The Institute of Company Secretaries of India.
During the period under review the company has complied with the provisions of the Act, Rules, Regulations,
Guidelines, Standards, etc. mentioned above subject to the observations noted against each legislation.
In respect of other laws specifically applicable to the Company, we have relied on information/ records produced by the
Company during the course of our audit and the reporting is limited to that extent.
We report that, during the year under review:
1. The status of the Company during the financial year has been that of a Listed Public Company.
2. The Company has not been a holding or subsidiary of another company. The Company is a Listed Public Company.
3. The Board of Directors of the Company is duly constituted with proper balance of Executive Directors, Non-
Executive Directors and Woman Director. However, regarding the composition of Independent Directors in the
Board, it has been noted Mr. M.S Sebastian resigned on 13/04/2016 as Independent Director and we have been
informed by the Company that as on the date of this report appointment of Independent Director has not been
made to the vacancy so arisen. The Board is in the process of making the necessary appointments and
compliances with respect to Independent Directors, as have been informed. Adequate notice is given to all directors
to schedule the Board Meetings, and agenda and detailed notes on agenda are sent at least seven days in
advance, a system exists for seeking and obtaining further information and clarifications on the agenda items
before the meetings and for meaningful participation at the meetings. Majority decision is carried through while the
dissenting members’ views are captured and recorded as part of the minutes.
4. The Directors have complied with the disclosure requirements in respect of their eligibility of appointment, their
being independent and compliance with the code of Business Conduct & Ethics for Directors and Management
Personnel.
5. The Directors have complied with the requirements as to disclosure of interests and concerns in contracts and
arrangements, shareholdings/debenture holdings and directorships in other companies and interests in other
entities.
6. The Company has not advanced loans, given guarantees and provided securities to directors and/or persons or
firms or companies in which directors were interested.
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REPORT
2017-2018
7. The Company has made loans and investments or provided securities. The Company given guarantees to other
business entities during the previous financial year and the same was continuing in this financial year also, and
the Company has complied with the provisions of the Companies Act, 2013 and any other statutes as may be
applicable.
8. The amount borrowed by the Company from its directors, members, bank(s)/ financial institution(s) and others
were within the borrowing limits of the Company. Such borrowings were made by the Company in compliance with
applicable laws.
9. The Company has not defaulted in the repayment of unsecured loans, facilities granted by bank(s)/financial
institution(s) or non-banking financial companies. The Company has not issued Debentures / collected Public
Deposits.
10. The Company has created /modified or satisfied charges on the assets of the Company and complied with the
applicable provisions of Companies Act 2013 and other Laws.
11. All registrations under the various States and Local Laws as applicable to the Company are valid.
12. The Company has not issued and allotted the securities during the period under scrutiny.
13. The Company has declared and paid dividends to its shareholders during the period under scrutiny and complied
with the provisions of the Act.
14. The Company has not issued debentures and not accepted fixed deposits.
15. The Company has paid all its statutory dues and satisfactory arrangements have been made for arrears of any
such dues.
16. The Company being a listed entity has complied with the provisions of the Listing Agreement and SEBI (Listing
Obligations and Disclosure Requirements) Regulations, 2015.
17. The Company has provided a list of statutes in addition to the laws as mentioned above and it has been observed
that there are proper systems in place to ensure compliance of all laws applicable to the company.
We further report that:
1. The Company has followed the Secretarial Standards issued by the Institute of Company Secretaries of India.
2. The Company has complied with the provisions of Equity listing Agreements and the Securities and Exchange
Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 entered into with Bombay
Stock Exchange.
3. The provisions of the Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers)
Regulations, 2011 are not applicable for the company during the period under scrutiny.
4. The Company has complied with the provisions of the Securities and Exchange Board of India (Prohibition of
Insider Trading) Regulations, 1992 and 2015 including the provisions with regard to disclosures and maintenance
of records required under the Regulations.
5. The provisions of the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements)
Regulations, 2009 are not applicable for the company during the period under scrutiny.
6. The Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase
Scheme) Guidelines, 1999 with regard to grant of Stock Options and implementation of the Schemes are not
applicable for the company during the period under scrutiny.
7. The provisions of Securities and Exchange Board of India (Issue and Listing of Debt Securities) Regulations, 2008
are not applicable for the company during the period under scrutiny.
8. The Company has complied with the provisions of the Securities and Exchange Board of India (Registrars to an
Issue and Share Transfer Agents) Regulations, 1993.
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2017-2018
9. The provisions of the Securities and Exchange Board of India (Buyback of Securities) Regulations, 1998 with
regard to buy back of Equity Shares are not applicable for the Company during the period under scrutiny.
10. The Company has complied with the provisions of the Securities and Exchange Board of India (Depositories and
Participants) Regulations, 1996 including the provisions with regard to disclosures and maintenance of records
required under the Regulations;
11. The Company had complied with the provisions of The Competition Act, 2002 with regard to prohibition of anti -
competitive agreements, abuse of dominance and ensuring of competition advocacy. As per the verification, the
Company is ensuring fair competition in the market among its competitors.
We further report that the compliance with regard to the following Acts is as pointed out below:
1. The Factories Act, 1948
Factory license valid as on the report date, till 31 st December 2018. Statutory registers as per Factories Act has
been maintained.
2. The Competition Act 2002
Overall Compliance under the Act complied by the Company.
3. The Kerala Panchayat Raj Act 1994.
The Panchayati Raj License is valid up to 31/03/2018. The License to Dangerous and Offensive Trades is valid
up to 31/03/2018 and the Company has complied with the provisions of this Act. Necessary steps were taken by
the Company for renewing the License.
4. Sexual Harassment of Women at the Work Place (Prevention, Prohibition and Redressal) Act, 2013
The Company has a Policy and has constituted a committee against the Sexual Harassment of Women at Work
Place and the policy has been published in the website of the company. As per the information and records
available from the Company there were no complaints during the financial year in this regard and the Company
ensures protection to the women employees.
5. The Petroleum Act, 1934
Overall Compliance under the Act complied by the Company. The Company has obtained a valid license from the
Petroleum & explosives safety organization and the license is valid up to 31/12/2018
6. The Rubber Act 1947
Overall Compliance under the Act complied by the Company. The License from Rubber Board for acquisition and
sale is valid till 31/03/2023.
7. The Company has obtained integrated consent to operate license from Kerala State Pollution Control Board and
the same is valid up to 30/06/2018.
We further report that there are adequate systems and processes in the Company commensurate with the size and
operations of the Company to monitor and ensure compliance with applicable laws, rules, regulations and guidelines.
For BVR & Associates Company Secretaries LLP
Ernakulam CS N Balasubramanian
23/04/2018 Designated Partner,
FCS No. F6439
C P No.: 4996
15
ANNUAL
ANNEXURE REPORT
2017-2018
To
The Members
EASTERN TREADS LIMITED
Our report of even date is to be read along with this letter.

1. Maintenance of Secretarial records is the responsibility of the management of the Company. Our responsibility is
to express an opinion on these secretarial records based on our audit.
2. We have followed the audit practices and process as were appropriate to obtain reasonable assurance about the
correctness of the contents of the Secretarial records.
3. The verification was done on test basis to ensure that correct facts are reflected in Secretarial records. We believe
that the process and practices, we followed provide a reasonable basis for our opinion.
4. We have not verified the correctness and appropriateness of financial records and Books of Accounts of the
Company.
5. Wherever required, we have obtained the Management representation about the Compliance of Laws, Rules and
Regulations and happening of events etc.
6. The Compliance of the provisions of Corporate and other applicable Laws, Rules, Regulations, standards is the
responsibility of management. Our examination was limited to the verification of procedure on test basis.
7. The Secretarial Audit report is neither an assurance as to the future viability of the Company nor of the efficacy or
effectiveness with which the management has conducted the affairs of the Company.
For BVR & Associates Company Secretaries LLP
Ernakulam CS N Balasubramanian
23/04/2018 Designated Partner,
FCS No. F6439
C P No.: 4996
16
ANNUAL
Annexure - B REPORT
2017-2018
Form No: MGT 9
EXTRACT OF ANNUAL RETURN
As on the financial year ended on 31/03/2018
[Pursuant to Section 92(3) of Companies Act, 2013 and

Rule 12(1) of the Companies (Management and Administration) Rules, 2014]
1) Registration and other Details:
1 CIN : L25119KL1993PLC007213
2 Registration Date : 02/07/1993
3 Name of the Company : EASTERN TREADS LIMITED
4 Category / Sub-Category of the : Public Company / Company having Share Capital
Company
5 Address of the Registered office : 3A, 3rd Floor, Eastern Corporate Office,
and contact details 34/137 E, NH Bye-pass, Edappally, Kochi-682024,
Ph: 0484 3001100, Fax: 3001110,
Email: [email protected], www.easterntreads.com
6 Whether listed Company : Yes
7 Registrar and Transfer Agency : Integrated Registry Management Services Private Limited
2nd Floor, Kences Towers, No:1, Ramakrishna Street,
North Usman Road, T. Nagar, Chennai- 600017
[email protected]
2) Principal Business Activities of the Company
All the business activities contributing 10% or more of the total turnover of the Company shall be stated:-
Sl. NIC Code % to total turnover

Name and Description of main products / services
No Product/ service of the Company
1 Tread Rubber 2211 71%
2 Rubber Compounds 2211 14%
3) Particulars of Holding, Subsidiary and Associate Companies

Nil
4) Share Holding Pattern (Equity Share Capital Breakup as percentage of Total Equity)
i) Category-wise Share Holding

No. of Shares No. of Shares
held at the beginning of the year held at the end of the year %
Category of
% of % of Change
Shareholders
Demat Physical Total Total Demat Physical Total Total
Share Share
A. Promoters
(1) Indian
a) Individual 2811999 --- 2811999 53.75 2803500 --- 2803500 53.58 (0.17)
b) Bodies Corp. 615000 -- 615000 11.75 615000 -- 615000 11.75 --
Sub-total (A)(1) 3426999 -- 3426999 65.50 3418500 -- 3418500 65.33 (0.17)
(2) Foreign --- --- --- --- --- --- --- --- ---
Sub-total (A)(2) --- --- --- --- --- --- --- --- ---
Total shareholding of
3426999 --- 3426999 65.50 3418500 --- 3418500 65.33 (0.17)
Promoter (A)=(A)(1)+(A)(2)
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2017-2018
B. Public Shareholding
1. Institutions --- --- --- --- --- --- --- --- ---
Sub -total (B) (1) --- --- --- --- --- --- --- --- ---
2.Non-Institutions
a) Body Crop.
i) Indian 155725 68900 224625 4.29 141865 68900 209765 4.01 -0.28
ii) Overseas --- 50000 50000 0.96 --- 50000 50000 0.96 ---
b) Individuals
i) Individual shareholders 474593 561300 1035893 19.80 470211 543700 1013911 19.38 -0.42
holding nominal share capital
up to ₹ 1 lakh
ii) Individual Shareholder 425781 23600 449381 8.59 467997 23600 491597 9.40 0.81
holding nominal share capital
exceeding ₹1lakh
c) Others (specify) 45102 --- 45102 0.86 47227 --- 47227 0.90 0.04
Sub -total (B) (2) 1101201 703800 1805001 34.50 1127300 686200 1813500 34.66 0.16
Total public shareholding 1101201 703800 1805001 34.50 1127300 686200 1813500 34.66 0.16
(B) =(B)(1)+ (B) (2)
C. Shares held by custodian --- --- --- --- --- --- --- --- ---
for GDR & ADR
Grand Total (A+B+C) 4528200 703800 5232000 100.00 4545800 686200 5232000 100.00 ---
(ii) Shareholding of Promoters

Shareholding at beginning of the year Shareholding at the end of the year % change
No. of % of total % of shares No. of % of total % of shares in
Shareholder’s Name Shares shares of pledge/ Shares shares of pledge/encu shareholdin
the encumbered the mbered to g during the
Company to total shares Company total shares year
1 Firoz Meeran 1350550 25.82 --- 1350550 25.82 --- ---
2 Navas Meeran 1321750 25.26 --- 1321750 25.26 --- ---
Kerala State Industrial
3 615000 11.75 --- 615000 11.75 --- ---
Development Corp.
4 Mohamed M E 8500 0.16 --- 8500 0.16 ---
5 Nabeesa Meeran 34000 0.65 --- 34000 0.65 ---
6 Soyamol Anwar Sajith 48499 0.93 --- 40000 0.76 --- (0.17)
7 Niza Zakir 48700 0.93 --- 48700 0.93 ---
Total 3426999 65.50 --- 3418500 65.33 --- (0.17)
(iii) Change in promoter’s Shareholding (please specify, if there is no change)

Shareholding Cumulative Shareholding
Promoters No. of Shares % of total No. of Shares % of total
shares shares
1 Firoz Meeran
At the beginning of the year 1350550 25.82 1350550 25.82
At the end of the year 1350550 25.82 1350550 25.82
2 Navas Meeran
3 Kerala State Industrial Development Corp.Ltd
4 Mohamed M E
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2017-2018
5 Nabeesa Meeran
6 Soyamol Anwar Sajith
Transfer/Sale (26/12/17) 141 0.00 48358 0.92
Transfer/Sale (27/12/17) 859 -0.02 47499 0.91
Transfer/Sale (29/12/17) 2000 -0.04 45499 0.87
Transfer/Sale (02/01/18) 100 0.00 45399 0.87
Transfer/Sale (03/01/18) 111 0.00 45288 0.87
Transfer/Sale (04/01/18) 15 0.00 45273 0.87
Transfer/Sale (06/01/18) 3773 -0.07 41500 0.79
Transfer/Sale (09/01/18) 1206 -0.02 40294 0.77
Transfer/Sale (12/01/18) 294 -0.01 40000 0.76
7 Niza Zakir
(iv) Shareholding Pattern of top ten Shareholders (Other than Directors, Promoters and Holders of GDRs and ADRs)
Cumulative
Shareholding
Shareholding
For Each of the Top 10 Shareholders
No. of % of total No. of % of total
Shares shares Shares shares
1 Biju Job
Transfer/Sale (18/08/17) 5000 -0.09 177780 3.30
2 Equity Intelligence India Private Limited
3 Thomas George Muthoot.
Transfer/Sale (14/04/17) 1000 -0.02 69811 1.33
Transfer/Sale (21/04/17) 1500 -0.03 68311 1.31
Transfer/Sale (28/04/17) 5545 -0.11 62766 1.20
Transfer/Sale (05/05/17) 1955 -0.04 60811 1.16
4 White Label Enterprises Ltd
5 Ritu Garg
At the beginning of the year --- --- --- ---
Transfer/ Purchase (07/10/17) 652 0.01 652 0.01
19
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REPORT
2017-2018
6
Foresight Finl Svcs Ltd A/C Pms
7 Manishkumar Sumatilal Mehta
At the beginning of the year 10831 0.21
Transfer/Sale (15/09/17) 10526 -0.20 2504 0.05
8 Jasila Ajit Moopan
Transfer/Purchase (21/04/17) 1250 0.02 21250 0.41
9 Adesh Enterprises LLP
Transfer/Sale (07/04/17) 3573 -0.07 33129 0.63
Transfer/Sale (14/04/17) 1320 -0.03 31809 0.61
Transfer/Sale (21/04/17) 1000 -0.02 30809 0.59
Transfer/Sale (28/04/17) 658 -0.01 30151 0.58
Transfer/Sale (05/05/17) 492 -0.01 29659 0.57
10 Aleema Aliyar
(v) Shareholding of Directors and Key Managerial Personnel

Shareholding Cumulative Shareholding
Sl % of total % of total
For Each of the Directors & KMP
No No. of Shares shares of No. of Shares shares of
the Company the Company
1 Navas M Meeran (Chairman)
2 M.E. Mohamed (Managing Director)
3 M.S. Ranganathan (Director)
At the end of the year --- --- --- ---
4 Naiju Joseph (Director)
5 K.S. Neelakanta Iyer (Director)
6 K.V. Rajagopalan Nair (Director)
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REPORT
2017-2018
7 Shereen Navaz (Director)

8 Baiju T. (Company Secretary)
9 Rajesh S. (CEO)
Transfer/Sale (08/09/17) 1000 -0.02 3833 0.07
Transfer/Sale (22/09/17) 2521 -0.05 1312 0.03
Transfer/Sale (27/10/17) 1000 -0.02 312 0.01
10 Mohammed Sherif Shah (CFO) **
** As a Joint Shareholder
5) Indebtedness- Indebtedness of the Company including interest outstanding/accrued but not due for payment
(₹ in Lakhs)
Secured Loans Unsecured Total
For the financial year 2017-18 Excluding Deposits Loans Deposits Indebtedness
Indebtedness at the beginning
i) Principal Amount 1581 25 --- 1606
ii) Interest due but not paid --- --- --- ---
iii) Interest accrued but not due --- --- --- ---
Total (i+ii+iii) 1581 25 --- 1606
Change in Indebtedness during year
Addition 593 --- --- 593
Reduction 206 --- --- 206
Net Change 387 --- --- 387
Indebtedness at the end
i) Principal Amount 1968 25 --- 1993
ii) Interest due but not paid --- --- ---
iii) Interest accrued but not due --- --- ---
Total (i+ii+iii) 1968 25 --- 1993
6) Remuneration of Directors and Key Managerial Personnel
A. Remuneration to Managing Director, Whole-time Directors and/or Manager:
Name of MD/ WTD/
Sl Manager Total
Particulars of Remuneration
No. Mr. M.E Mohamed Amount
(Managing Director)
1 Gross salary --- ---
(a) Salary as per provisions contained in Section 17(1)
of the Income-tax Act,1961
(b) Value of perquisites u/s17(2) Income-tax Act,1961 --- ---
(c) Profits in lieu of salary under Section 17(3) Income-tax Act, 1961 --- ---
2 Stock Option --- ---
3 Sweat Equity --- ---
4 Commission - as % of profit, and Others --- ---
5 Others, please specify --- ---
Total (A) --- ---
Ceiling as per the Act --- ---
21
ANNUAL
REPORT
2017-2018
B. Remuneration to other Directors:

(₹ in Lakhs)
Total
Particulars of Remuneration Name of Director
Amount
1. Independent Directors M.S Ranganathan K.S Neelakanta Iyer
Fee for attending board ---
0.30 0.30
committee meetings
Commission --- --- ---
Others, please specify --- --- ---
Total (1) --- 0.30 0.30
2. Other Non-Executive Navas M Meeran Naiju Joseph KV Rajagopalan Nair Shereen Navaz
Directors
Fee for attending board --- 0.30 0.10 --- 0.40
committee meetings
Commission --- --- --- --- ---
Others, please specify --- --- --- --- ---
Total (2) --- 0.30 0.10 --- 0.40
Total (B)= (1+2) 0.70
Total Managerial Remuneration 0.70
Overall Ceiling as per the Act Remuneration is within the limit specified under the Companies Act, 2013
C. Remuneration to Key Managerial Personnel Other Than MD/Manager/WTD
(Amount in ₹ in Lakhs)
Key Managerial Personnel
Sl KA
Particulars of Remuneration Rajesh S Mohamed Baiju T
No Total
(CEO) Sherif Shah (CS)
CFO
1 Gross salary
(a) Salary as per provisions contained in Section 17(1)of the
24.18 14.66 10.42 49.26
Income-tax Act,1961
(b) Value of perquisites u/s17(2) Income-tax Act,1961 0.09 0.11 --- 0.20
(c) Profits in lieu of salary under Section 17(3) Income-tax Act, --- --- ---
1961
2 Stock Option --- --- ---
3 Sweat Equity --- --- ---
4 Commission - as % of profit, others, specify… --- --- ---
5 Others - Performance Incentive (Payable) ** --- 0.79 0.46 1.43
Total 24.27 15.56 10.88 50.89
** Provisioning only, actual disbursement will be linked with the Individual and Company performance as per the
remuneration policy and at the discretion of the management.
7) Penalties / Punishment/ Compounding of Offences
Section of the Authority

Brief Details of Penalty/Punishment Appeal
Type Companies (RD/NCLT/
Description compounding fee imposed made, if any
Act COURT)
Company, Directors,
Other Officers in Default
Penalty
Punishment None
Compounding
22
ANNUAL
Annexure - C REPORT
2017-2018
FORM NO. AOC-2
(Pursuant to Clause (h) of Sub-Section (3) of Section 134 of the Act and Rule 8(2) of the Companies (Accounts)
Rules, 2014)
Disclosure of particulars of contracts/arrangements entered into by the Company with related parties referred to in
Sub-Section (1) of Section 188 of the Companies Act, 2013 including certain arm’s length transactions under third
proviso thereto
Details of contracts or arrangements or transactions not at arm’s length basis: Nil
(a) Name(s) of the related party and nature of relationship : NA

(b) Nature of contracts/arrangements/transactions : NA
(c) Duration of the contracts / arrangements/transactions : NA
(d) Salient terms of the contracts or arrangements or transactions including the value, if any : NA
(e) Justification for entering into such contracts or arrangements or transactions : NA
(f) Date(s) of approval by the Board : NA
(g) Amount paid as advances, if any: : NA
(h) Date on which the special resolution was passed in general meeting as required under first : NA
proviso to Section 188
Details of material contracts or arrangement or transactions at arm’s length basis:
Eastern Condiments Eastea Chai (P) Eastern Retreads

(a) Name(s) of the related party
(P) Ltd Ltd (P) Ltd
Nature of relationship Two Directors are Two Directors Two Directors
interested are interested are interested
(b) Nature of contracts/ arrangements/ transactions By agreement By agreement By agreement
(c) Duration of the contracts / arrangements/ 01/04/2016 to 01/04/2017 to 01/04/2014 to
transactions 31/03/2018 31/03/2018 31/03/2019
(d) Salient terms of the contracts or arrangements or Sharing of Purchase and Sharing of
transactions Expenses and Lease Rent Expenses, Sale
Lease Rent of Goods
Value, if any: (₹ in lakhs) 11.95 0.37 223.61
(e) Date(s) of approval by the Board, if any: 13/04/2016 09/02/2017 28/04/2014
(f) Amount paid as advances, if any: (₹ in lakhs) Nil Nil 72.90
(a) Vazhakkulam Rubbers Alfa Rubbers Rosekhan Industries Sahara Treads
Two Directors are One Director is interested One Director is interested One Director is interested
interested
(b) By agreement By agreement By agreement By agreement
(c) 01/04/2017 to 31/03/2018 01/04/2017 to 31/03/2018 01/04/2017 to 31/03/2018 01/04/2017 to 31/03/2018
(d) Sales & Purchase of Sales & Purchase of Purchase of Goods and Sales & Purchase of
Goods, and Job works Goods and Job works Job works Goods and Job works
107.37 142.31 771.40 665.98
(e) 04/05/2017 04/05/2017 04/05/2017 04/05/2017
(f) 74.30 Nil 40.86 Nil
For and on behalf of the Board of Directors
Kochi Navas M Meeran

10/05/2018 Chairman
Din : 00128692
23
ANNUAL
Annexure - D REPORT
2017-2018
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION,

FOREIGN EXCHANGE EARNINGS AND OUTGO
As per Section 134(3) (m) of the Companies Act, 2013 read with
Rule 8 of the Companies (Accounts) Rules, 2014
A. Conservation of Energy
The Company has been continually working on efficient utilization of all

(i). Steps taken or impact kinds of energy sources and kept top priority for energy conservation. The
on conservation of Company has successfully expanded its manufacturing operations by about
energy two fold with the same infrastructure of Energy sources.
(ii). Steps taken by the With focused improvements in operational techniques, maintenance and
Company for utilising distribution systems, we have reduced the energy utilization. Increased the
alternate sources of outflow of products by minimizing all kinds of process wastages.
energy
The Company has been using fire wood as the fuel for thermic fluid heater
saving fossil fuels. However, the Company couldn’t utilize any alternate
(iii). Capital investment on sources of energy in its operations. The capital investment for energy
energy conservation conservation was around ₹ 5 lakhs, most of the projects were done without
equipment. much capital investment.
B. Technology Absorption
As an integral part of continuous improvements in productivity and cost effectiveness, the Company has
successfully implemented “Lip System” in Extrusion Process along with line modification through PLC based
synchronization. For enhancing customer satisfaction, the Company has developed and successfully established
application specific compounds in pre cured tread rubber like applications in severe road conditions, heavy load
applications as well as in lighter tread categories. The R& D department is further working on new polymers,
materials and compounds to meet the international requirements competitive to leading global brands.
The Company’s products has been recently approved by European Experts. The Company would undertake
appropriate R&D activities depending up on the future requirements too. The Company use latest technology and
operates at international standards. No technology has been imported by the Company during the period.
C. Foreign exchange earnings and Outgo
The Foreign Exchange inflows and outgo during the year are as follows:-
Particulars (₹ in Lakhs)
Foreign exchange inflows 274.16
Foreign exchange outgo 55.81
24
ANNUAL
Annexure - E REPORT
2017-2018
CORPORATE GOVERNANCE REPORT
Your Company is generally complying with the requirements of the Corporate Governance practices. Pursuant to the
Listing Agreement read with Regulation 15(2) of the SEBI (LODR) Regulations 2015, the requirement of 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 is not mandatory to the Company. However, as a good Corporate Governance
practice a report on the implementation of the Corporate Governance provisions 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. While focusing
on Corporate Governance, we practice the highest standards of ethical and responsible business culture and thereby
enhance the value of all 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 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.
Board of Directors
The Board is made up of one Executive Director and Six Non-executive Directors that includes one Woman Director
and two Independent Directors. The Chairman of the Board is a Non-executive Director. The Composition, category
and attendance of each Director at the Board and Annual General Meeting and Number of o ther Directorship and
Chairmanship / Membership of Committee of each Director in various companies is as follows:-
Name of the Director Category Attendance No. of other Committee

Particulars Directorships membership
Board Last Director# Chairman Member Chairman
Meetings AGM
Mr. Navas M Meeran P, C & NE 5 Yes 13 2 None None
Mr. M.E. Mohamed MD & ED 6 Yes 3 None None None
Mrs. Shereen Navaz P&NE 4 No 5 None None None
Mr. M.S. Ranganathan NE & I 6 Yes 2 None None None
Mr. K.S. Neelakanta Iyer NE & I 6 Yes 1 None None None
Mr. Naiju Joseph NE 6 Yes 1 None None None
Mr. K.V. Rajagopalan Nair NE & N 2 No 1 None None None
C: Chairman; P: Promoter; E: Executive Director; N: Nominee Director (Nominee of KSIDC)

I: Independent Director; NE: Non-Executive Director; MD: Managing Director;
# Includes directorships in Public and Private Ltd companies.
Mrs. Shereen Navaz, wife of Mr. Navas M Meeran, Chairman occupy the position of woman director in the Board.
Regarding the details of number of shares held by non-executive directors please refer the Extract of Annual Return,
annexed with the Directors report.
25
ANNUAL
REPORT
2017-2018
Details of Directors seeking reappointment at the AGM
Name of Director : Mrs. Shereen Navaz

DIN : 00328770
Date of Birth : 28th October 1977
Date of appointment : 31st March 2015
Qualifications : Graduate in English Literature
Expertise in specific functional : She occupy the position of woman director in the Board. She is actively
area involving in the business of the group and occupying directorship in various
companies and has wide expertise in administration. She has involved in
the growth and development of various educational institutions.
Details of other Directorship : Sheram Treads (P) Ltd
Nasher Properties (P) Ltd
Shenaz Properties (P) Ltd
M.E Meeran Management (P) Ltd
Auditplus Business Solutions (P) Ltd
Membership/Chairmanship of : NIL
committees of other companies
Number of shares held in the : NIL
Company
Number and date of Board meetings held
Six Board meetings were held during the year. The Board meets at least once in a quarter with a gap of not more than
one hundred and twenty days between any two meetings. The details of the Board meetings are as under.
Sl.No. Date Board Strength Directors present Sl.No. Date Board Strength Directors present
1 04/05/2017 7 7 4 06/10/2017 7 4
2 25/07/2017 7 7 5 14/12/2017 7 6
3 13/09/2017 7 6 6 14/02/2018 7 5
Independent Directors
The Company has complied with provisions of Listing Agreement read with SEBI (LODR) Regulations 2015 and the
Provisions of Section 149(6) Companies Act, 2013 with respect to the appointment of Independent Directors, except in
case of appointment of Independent Director in this casual vacancy caused by the resignation Mr. M.S Sebastian,
Independent Director, the Board is in the process of making necessary appointment in this casual vacancy. The
Company has also obtained declarations from all the Independent Directors pursuant to Section 149(7) of the
Companies Act, 2013.
Appropriate orientation sessions were given to Directors to get involvement on Company’s culture, organization
structure, business, constitution, board procedures and risks and management strategy of the Company. The
familiarization programmes imparted to independent directors is disclosed in the Company’s website:
www.easterntreads.com. The appointment letters of Independent Directors has been placed on the Company’s
website. The Board evaluated the performance of Non-executive and Independent Directors. 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.
The Independent Directors held a meeting on 26 th March, 2018, without the attendance of Non-Independent Directors
and members of Management. All Independent Directors were present at the meeting and they have reviewed the
performance of non-independent directors and the Board, performance of the Chairman and information flow structure
of the Company.
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REPORT
2017-2018
Audit Committee
The Audit Committee is duly constituted in accordance with the Listing Agreement read with SEBI (LODR) Regulations
2015 and of Section 177 of the Companies Act, 2013 read with Rule 6 of the Companies (Meetings of the Board and
its Powers) Rules, 2014. It adheres to the terms of reference, prepared in compliance with Section 177 of the
Companies Act, 2013, and SEBI (LODR) Regulations 2015. The Members of the Committee are:-
Name Category Position

Mr. K.S. Neelakanta Iyer Non-Executive Independent Director Chairman
Mr. M.S. Ranganathan Non-Executive Independent Director Member
Mr. M.E. Mohamed Managing Director Member
Two third of the members are Independent Directors and all the members 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 financial statements, internal audit
reports, related party transactions, financial and risk management policies, auditors qualifications, compliance with
Accounting Standards etc. and oversee compliance with Stock Exchanges and legal requirements concerning financial
statements and fixation of audit fee as well as payment for other services etc.
Five Audit Committee meetings were held during the year 2017-18 at the Registered Office of the Company on
02/05/2017, 25/07/2017, 13/09/2017, 13/12/2017 and 12/02/2018. All the meetings were attended by the Chairman
and all the members of the Committee, representatives of Internal and Statutory Auditors, Chief Financial Officer and
Chief Executive Officer. The Company Secretary acts as Secretary to the Audit Committee and no personnel has been
denied access to the audit committee. The Chairman of the Audit Committee was present at the Company’s Annual
General Meeting held on 06/07/2017 to answer the shareholders’ queries.
Nomination and Remuneration Committee
The Nomination and Remuneration Committee is constituted in compliance with the requirements of Listing Agreement
read with SEBI (LODR) Regulations 2015 and Section 178 of the Companies Act, 2013 read with Rule 6 of the
Companies (Meetings of the Board and its Powers) Rules, 2014. The Company Secretary acts as the Secretary to the
Committee and the Committee Members are:

Mr. M.S. Ranganathan Non-Executive Independent Director Chairman
Mr. K.S. Neelakanta Iyer Non-Executive Independent Director Member
Mr. Naiju Joseph Non-Executive Director Member
The Committee formulates criteria for determining qualifications, positive attributes and independence of a director and
recommends to the Board the policy relating to the remuneration for the directors, Key Managerial Personnel and other
employees and evaluation of Independent Directors and the Board. It identifies persons who are qualified to become
directors and who may be appointed in senior management in accordance with the criteria laid down, and recommend
to the Board their appointment and removal and carry out evaluation of every director’s performance. The Nomination
and Remuneration Committee held meetings on 25/07/2017 and 26/03/2018 and all the committee members were
present at the meeting. The Chairman of the Committee was present at the Company’s Annual General Meeting held
on 06/07/2017 to answer the shareholders’ queries.
Remuneration Policy
The remuneration policy is in consonance with the existing industry practice and also with the provisions of the
Companies Act, 2013. The Board of Directors has adopted a Remuneration Policy for Directors, Key Managerial
Personnel and other employees. The Company’s remuneration policy is driven by the success and performance of the
individual employee and the performance of the Company. Through its compensation programme, the Company
endeavors to attract, retain, develop and motivate a high performance workforce. The said policy is available on the
website of the company, www.easterntreads.com.
27
ANNUAL
REPORT
2017-2018
The details of remuneration/sitting fee paid to Directors during the financial year are given in the Extract of Annual
Return. There is no other pecuniary relationship or transactions between the Company and the non-executive directors.
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 Managing Director
during the financial year.
Share Transfer Committee
The Share Transfer Committee was constituted on 25/06/1996 in compliance with the requirements of Listing
Agreement. The Company Secretary acts as the Secretary to the Committee and the Compliance Officer. The members
of the Committee are:

Mr. Navas M Meeran Promoter / Non-Executive Director Chairman
Mr. M.E. Mohamed Managing Director / Executive Director Member
Mr. M.S Ranganathan Non-Executive Independent Director Member
Share Transfer Committee meetings were held in every month to approve the transfer of shares, to issue duplicate
share certificates and review matters connected with the transfer of shares.
Stakeholders Relationship Committee
The Stakeholders Relationship Committee was constituted in compliance with the requirements of the Listing
Agreement and Section 178 of the Companies Act, 2013. CS Baiju T. Company Secretary is the Compliance officer,
who acts as the Secretary to the Committee and the Members of the Committee are:

Mr. Naiju Joseph Non-Executive Director Chairman
Mr. M.S. Ranganathan Non-Executive Independent Director Member
Mr. K.S. Neelakanta Iyer Non-Executive Independent Director Member
The Stakeholders Relationship Committee looks into shareholders’ complaints relates to 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 Agent, and recommends measures for overall improvement
in the quality of investor services. The Company is in compliance with the SCORES, which has initiated by SEBI for
processing the investor complaints in a centralized web based redress system and online redressal of all the
shareholders complaints. No shareholders complaints received during the financial year and there were no outstanding
complaints as on 31/03/2018.
Risk Management Committee
The Risk Management Committee was constituted in compliance with the requirements of the Listing Agreement. The
Company Secretary acts as the Secretary to the Committee and the members of the Committee are:-

Mr. M.S. Ranganathan Non-Executive Independent Director Chairman
Mr. M.E. Mohamed Managing Director / Executive Director Member
The Risk Management Committee reviewed the risk management plan of the Company and its status of its
implementation. The risk management plans and procedure implemented by the Company in its operation are adequate
with respect to the operational risks in the business of the Company.
28
ANNUAL
REPORT
2017-2018
Plant Location
Oonnukal P.O, Kothamangalam, Ernakulam District, Kerala
General Body Meetings
The location and time for last three Annual General Meetings are as follows:-
Year Venue Date Day Time Whether Special

Resolution passed
16-17 Holiday Inn Cochin, Ernakulam 06/07/17 Thursday 3 PM No
15-16 Gokulam Park Hotel and Convention Centre, Ernakulam 04/06/16 Saturday 3 PM No
14-15 Broad Bean Hotels & Resorts, Ernakulam 28/07/15 Tuesday 3 PM Yes
No Extraordinary General Meeting was held during the financial year and no special resolutions were put through postal
ballot last year.
Related party transactions
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. The transactions of purchase/sale of finished goods,
raw materials and job work with related parties have been made in the ordinary course of business and at arm’s length.
The Register of Contracts containing transactions, in which Directors are interested, is placed before the board
regularly. Full disclosures of related party transactions are given in notes to the Financial Statements as well as in Form
AOC-2 in Annexure – C of this report.
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 or 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 non-compliance, if any.
Means of Communication
The quarterly financial results, after their approval by the Board of Directors, are promptly issued to the Stock Exchange
(BSE). These Quarterly Financial Results are normally published in Business Line, Deepika 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.
Code of Conduct
The Board approved and adopted the Code of Conduct including Code of Conduct for Prevention of Insider Trading
and Whistle Blower Policy as applicable to the Board Members and the Senior Management Personnel of the Company.
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.
Annual General Meeting Book Closure Date

Date and Time : 20/07/2018 at 3.30 P.M
Venue : Hotel TGR Suites, Thannikal, Saturday, 14/07/2018 to Friday, 20/07/2018
Pukkattupady Road, Edappally Toll, Cochin, (both days inclusive)
Ernakulam – 682024, Kerala
29
ANNUAL
REPORT
2017-2018
Financial Calendar (Tentative)
Annual General Meeting : 20/07/2018

1st, 2nd and 3rd Quarterly Financial Results : Within 45 days of the end of each quarter
Audited yearly results for the year ended 31/03/19 : Within 60 days of the end of the financial year
Listing on Stock Exchange
The equity shares of the Company are listed on the Bombay Stock Exchange Ltd (BSE). The Company has paid the
annual listing fees for the year 2018-19 to Bombay Stock Exchange and the annual custodial fee to National Securities
Depository Limited (NSDL) and Central Depository Services (India) Limited (CDSL) will be paid with in the due dates.
Stock Code & Demat ISIN Number Registrar and Share Transfer Agent
Integrated Registry Management Services (P) Ltd
Scrip Code No. : 531346 2nd Floor, ‘Kences Towers’, No.1, Ramakrishna Street,
North Usman Road, T.Nagar, Chennai-600017
Trading Symbol : EASTRED
Phone: 044 28140801, 28140803,
Demat ISIN Number : INE500D01015 Fax; 044 – 28143378, 28142479
E-mail: [email protected]
Market Price Data: High, Low during Each Month in Last Financial Year
Amount in ₹
BSE
Month
High Price Low Price
April, 2017 130.00 113.05
May, 2017 122.00 98.00
June, 2017 114.95 97.60
July, 2017 114.00 99.15
August, 2017 108.95 82.00
September, 2017 118.70 88.00
October, 2017 108.00 94.00
November, 2017 100.75 88.95
December, 2017 117.00 91.00
January, 2018 115.00 93.00
February, 2018 104.30 85.60
March, 2018 99.95 75.70
Performance in Comparison to Broad-based Indices such as BSE Sensex
140 ETL Price BSE Sensex

37000
130
ETL High Price
BSE Sensex High
120 35000
110
33000
100
31000
90
80 29000
Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar
Finacial Year 2017-18
30
ANNUAL
REPORT
2017-2018
Share Transfer System
The Board has delegated the authority for approving transfer, transmission, etc. of the Company’s 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 Boar d meeting.
Presently the shares are transferred both in physical and dematerialised form and request for re -materialisation and /
or transfer of shares in physical mode is also attended within the stipulated time.
The physical share transfers were 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 and confirmation is given to NSDL
and CDSL. No request for share transfer was pending as on 31/03/2018. Shares held in dematerialized form are
electronically traded and the Registrars and Share Transfer Agent of the Company periodically receive from the
Depository, the beneficiary holdings so as to enable them to update their records. Company obtained half yearly
certificate on compliance with the share transfer formalities as required under Regulation 40(9) of the SEBI (LODR)
Regulations 2015 from a Company Secretary in practice and submitted the certificate with the Stock Exchanges within
the prescribed time limit.
Distribution of Shareholding as on 31/03/2018
No. of % of No. of shares

Category % Shares
shareholders shareholders holding
Equity
Up to 500 1640 77.58 324585 6.20
501 – 1000 287 13.58 247367 4.73
1001 – 2000 77 3.64 116931 2.23
2001 – 3000 41 1.94 106156 2.03
3001 – 4000 13 0.61 46029 0.88
4001 – 5000 12 0.57 57850 1.11
5001 – 10000 19 0.90 158006 3.02
Above 10000 25 1.18 4175076 79.80
Total 2114 100.00 5232000 100.00
Preference
Above 10000 2 100.00 900000 100.00
Total 2 100.00 900000 100.00
Shareholding Pattern as on 31/03/2018
Category Equity Preference

No. of holders % No. of shares % No of shares %
Promoters 7 0.33 3418500 65.34 900000 100
Body Corporate 28 1.32 210765 4.03 --- ---
NRI / OCB 45 2.13 71324 1.36 --- ---
Public 2017 95.41 1484184 28.37 --- ---
Others (Clearing Member) 16 0.76 17568 0.34
Others (LLP) 1 0.05 29659 0.57 --- ---
Total : 2114 100.00 5232000 100.00 900000 100
Dematerialization of Shares and Liquidity
As on 31st March 2018, 86.88% of the Company’s total paid up equity capital representing 4545800 equity shares as
in dematerialised form. The balance 13.12% equity representing 686200 shares are held in physical form. Presently
the Company's shares are transferred both in physical and dematerialised form and are traded on BSE.
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2017-2018
Convertible Instruments
Outstanding GDRs, ADRs, Warrants, Convertible instruments, conversion date and likely impact on equity are not
applicable
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, the members may contact in the following addresses:-
Integrated Registry Management Services (P) Ltd The Company Secretary

2nd Floor, ‘Kences Towers’ Eastern Treads Limited,
No.1, Ramakrishna Street, North Usman Road, 3A, 3rd Floor, Eastern Corporate Office, 34/137 E,
T. Nagar, Chennai-600017 NH Bypass, Edappally, Kochi,
Phone: 044 28140801, 28140803, Ernakulam-682 024, Kerala.
Fax; 044 – 28143378, 28142479 Phone: 0484 3001247, Fax: 0484 3001110
E-mail: [email protected] Email : [email protected]
Secretarial Certifications
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.
Demat Suspense Account/ Unclaimed Suspense Account
The Company does not have any shares in the demat suspense account or unclaimed suspense account.
DECLARATION ON CODE OF CONDUCT
To the best of my knowledge and belief and on the basis of declarations given to me by the Directors and the Senior
Management Personnel of the Company, I hereby affirm that a Code of Conduct for the Board Members and the Senior
Management Personnel of the Company which includes Code of Conduct for Prevention of Insider Trading and Whistle
Blower Policy has been approved by the Board of Directors and all Directors 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 of Directors
Kochi M.E. Mohamed

10/05/2018 Managing Director
Din : 00129005
32
ANNUAL
Annexure - F REPORT
2017-2018
MANAGEMENT DISCUSSION AND ANALYSIS
Industry Structure and Developments
Infrastructure is a key driver for the Indian economy and is being accorded increasing importance in the country’s long -
term development plans. The Indian Government has been committing more resources to infrastructure sector projects,
including highways, renewable energy and urban transport to enhance economic growth. In the Union Budget for 2018-
19, there is a massive push to the infrastructure sector with allocations of ₹5.9 7 lakh crore, up 21% over the previous
year.
India already has one of the largest road networks in the world, spanning a total of 5.6 million km. The planned outlay
under the Union Budget 2018-19 for the roads sector is ₹1.21 lakh crore. Moreover, ₹ 71,00 0 crore have been allocated
specifically for the development of national highways in the country. With the Government permitting 100% Foreign
Direct Investment (FDI) in the roads sector, several foreign companies have formed partnerships with Indian players to
capitalise on the sector's growth, which should provide a further boost to the ever-growing roads infrastructure in the
country. Eastern Treads Limited (ETL), operating in the emerging tyre retreading industry, is positioned to benefit from
the expanding roads network in the country that allows expansion in road freight volumes and demand for the
company’s products.
The implementation of GST augurs well for the organized retreading sector and the overall market is already seeing
consolidation to the benefit of high quality players. Presently, about one-third of the Indian retreading market is with the
unorganized sector. Tax avoidance previously allowed unorganized players to offer 20% lower cost – however, quality
and safety preferences are already moving customers to industry leaders. More radial tyres and larger share of market
with large fleet owners also leads to consolidation to organized retreaders. ETL expects benefit from this trend and, in
addition, is also engaging with unorganized players to integrate them with its nationwide network.
Following global trends, retreading is gaining stronger traction in India based on both monetary advantages as well as
environmental considerations. Also, improving highway and city road conditions is expected to lead to greater
radialisation of truck tyres. Retreading a radial tyre consumes ~10% more tread rubber and needs more sophisticated
capabilities. With about 31 radial patterns already in production, ETL is well equipped for future demand for retreading
radial tyres. Our objective is to innovate more patterns with time and we have a strong focus in place on R&D.
ETL is present across 17 states through 88 dealers servicing to more than 1500 multi-brand retreaders, 40 exclusive
retreaders, and 33 branded franchisees (Infinity Zones). Our capacity at Oonnukal, Kerala stands at 1000 tons per
month and the current capacity utilization stands at 50%.
2017-18 has been a game changing year following the implementation of several structural reforms transitioning the
operating environment. ETL has instituted several initiatives with the objective of benefiting from these changes and
expanding its long-term growth opportunities. However, the year was also marked by demand weakness and there has
been an increase in competitive intensity resulting in margin pressures. In addition, lower rubber prices resulted in
some impact on profitability due to lower inventory valuation. Defying these headwinds, ETL continued to deliver stable
operational and financial progress.
During the year, we announced renewal of supply agreement with Kerala State RTC and obtained repeat order to
supply 1,375 MT of tyre retreading materials, launch of our Nepal operations and appointment of our 67 th exclusive
franchise. We anticipate this diversified contribution mix to start delivering high volumes which should not only see
revenue expansion but also improve capacity utilization in our existing manufacturing set up.
ETL aims to be the leading retreading player in India. The company targets growth from several segments, including
higher share of open market sales, expansion of branded franchisee network, road transport corporation business and
opening up lucrative export markets.
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2017-2018
Opportunities and Threats
With the effects of demonetization and GST dissipating, along with certain structural reforms being introduced by the
Government, there is wide expectation of continuing improvement in the country’s economic scenario. This, clubbed
along with infrastructure impetus from higher spending, growth in the mining and industrial sectors along with robust
CV sales will help in improving prospects for the retreading industry.
The retreading industry in India, unlike developed nations, is highly fragmented. Customers are willing to ent rust the
quality and safety of their tyres to even road side repairers and retreaders whose technical competency and quality of
equipment/materials used are highly susceptible. However, implementation of GST is bringing in greater consolidation
along with pricing parity for organized sector players. This is a key positive for companies such as ETL.
CV Industry has bounced back strongly after initial disruptions led by BS IV transition and demonetization and it is set
to witness overall positive changes in FY 18. Previously, peak CV sales were seen in 2012-13 and this mark is yet to
be surpassed leaving ample scope for growth. Recent CV sales numbers have been driven by pent up demand post -
GST. The smart uptick in sales numbers has come about due to the overall improved market sentiment, higher
infrastructure spend, demand from the mining segment, rural India’s improved fortunes. Demand for trucks has been
upbeat and is expected to grow with pick up in construction, infrastructure and e-commerce activity. Replacement
demand coming from overloading ban especially in the North East will push growth. CV’s can be expected to continue
their growth momentum in double-digits at 10-12%, with M&HCVs up by 9-11% and light commercial vehicles growing
at 10-12% in 2018-19. However, a slower than anticipated growth could hamper these prospects.
India has experienced more radialisation of tyres in recent times, including in the truck tyre segment which is on the
rise and likely to reach 50% in the next couple of years. Radial tyres have 20% longer life, provide better riding comfort
and can be successfully retreaded multiple times compared to bias-ply tyres. Retreading these tyres requires a greater
degree of sophistication, which is a positive for organized players like ETL. Thus, expansion of radial tyre usage will
have a positive impact on the overall market, and also on the company’s performance. Another factor in favour is the
fall in tyre imports from China following the levy of antidumping duty.
Increasing competition is a key challenge faced by tyre retreaders, due to which ETL has been unable to immediately
pass on increasing rubber prices to its customers, creating higher margin pressure. To counter this, higher raw material
inventories have been maintained, which requires higher working capital and increases interest costs.
Branded tyre majors have also entered the retreading industry. This has led to higher competition and at the same time
improved awareness about retreading and its benefits, helping grow the overall market. ETL is the pioneer in
manufacturing and marketing of tread rubber used for retreading tyres. The company has developed several distinct
strengths such as a robust brand image, best-in-class services capability and a wide portfolio of products. ETL is the
proud winner of numerous awards and accolades which are a testament of its capabilities. Given these attributes, we
are confident of maintaining a strong position in the market.
Segment-wise or product-wise performance
The Company manufactures quality tread rubber (pre-cured tread rubber, conventional tread), Rubber compounds,
cushion/bonding gum and black vulcanizing cement. The contribution of these products to the current year’s turnover
is 71%, 14%, 9% and 4% respectively.
Outlook
The retreading industry is gaining prominence in the domestic market whereas it is an established business in key
global markets. Improving road network, increased economic activity, higher radialisation and implementation of GST
are all positives for long term growth of the sector. Also monetary advantages and environmental considerations are
aiding popularity of retreaded tyres.
34
ANNUAL
REPORT
2017-2018
ETL aims to be the leading retreading player in India and also exports to key markets worldwide. We are at the forefront
of building a comprehensive ecosystem across the entire retreading value chain, having transformed from a tread
rubber manufacturer. We are on the path to build comprehensive and industry leading capabilities that would generate
long term opportunities in India and globally. With an increasing distribution presence, high quality products and
services, ETL is hopeful of enhancing its share of the various markets it addresses. Our main objective is to become a
one-stop shop for our customers’ requirements and deliver substantial economic returns to their businesses.
ETL aspires to deliver superior operational performance through value enhancement initiatives for its customers along
with economies of scale that aid long-term volume growth. The manufacturing processes are supported by a technically
talented workforce. We have limited capex requirement for expansion over next 2-3 years, as sizeable production
capacities are available currently. However, we will continue to invest in R&D initiatives for new product development
to remain at the forefront of the industry.
Over the years, ETL has invested aggressively in educating and growing the market, benefits of which will be seen in
the medium to long term. We have achieved pan-India presence with an extensive network across 17 Indian states and
are further expanding our distribution footprint. We also have presence in overseas markets such as the Middle East,
Africa, South America and South Asia, catering to higher global demand for tread rubber. All these initiatives are
expected to give ETL the platform from which we can achieve success in expanding our business.
Risks and Concerns
The Company’s performance primarily depends on the performance of the tyre replacement market. This market has
several growth levers like growth of the economy, development of infrastructure, commercial vehicle sales and other
trends relating to the transportation sector. The company’s business is exposed to many internal and external risks and
it has consequently put in place robust systems and processes, along with appropriate review mechanisms to actively
monitor, manage and mitigate these risks. The main risks and the steps undertaken to mitigate these risks are
mentioned below:
Financial Risk
In the course of its business, ETL is exposed to certain financial risks namely interest risk, currency risk and liquidity
risk. The financial risks are managed in accordance with the risk management policy which has been approved by
the Board. We use cash and carry, advance payments and bank guarantees to mitigate credit risk on account of
material supplied to customers and payments received. There is an ongoing follow-up which arrests any delay of
payments from State Transport Corporations and other customers.
Fluctuation in Raw Material Price and Other Input Costs
Unexpected changes in commodity prices can impact margins. During the year, prices of natural dropped from its
high price, but other key raw materials like carbon black, synthetic rubber and chemicals have shown an uptrend.
However, we have actively maintained higher raw material inventories to mitigate this risk which adversely impacted
working capital and put pressure on interest costs. We generally factor in normal variations of raw material prices
and input costs when fixing product prices with customer but any exceptional fluctuations in input costs may have
an adverse impact on profitability. We expect that the Government will remove of antidumping duty and allow the
import of carbon black to increase its availability.
Changes in Governments’ Policies
Unanticipated changes in Government policies may affect the company’s financial position.
Operational Risk
Preventive maintenance is carried out periodically to achieve increased machine availability. Adequate inventory of
stocks at each stage of operation is maintained to run production schedules uninterrupted.
Product Risk
Research and development efforts are undertaken to continuously develop new products categories and expand
the portfolio, along with improved service and value to our customers.
35
ANNUAL
REPORT
2017-2018
Internal Control System and their Adequacy
ETL has a comprehensive internal control structure to ensure that all assets are safeguarded and protected against
loss from unauthorised use or disposition, all transactions are authorised, recorded and reported correctly and that
operations are conducted in an efficient and cost effective manner. The internal control is supplemented by an extensive
audit by internal and external audit teams and periodic review by the top management, Audit Committee and Board of
Directors. The statutory auditors, as part of their audit process, carry out a systems and process audit to ensure that
the ERP and other IT systems used for transaction processing have adequate internal controls embedded to ensure
preventive and detective controls.
The Company has implemented and evaluated the Internal Financial Controls which provide a reasonable assurance
in respect of providing financial and operational information, complying with applicable statutes and policies,
safeguarding of assets, prevention and detection of frauds, accuracy and completeness of accounting records.
During the period external agencies were appointed as internal Auditors. The internal audit reports were reviewed
quarterly by Audit Committee as well as by the Board. Internal audit 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. Further, the Board
reviews the effectiveness of the Company’s internal control system.
The Directors and Management confirm that the Internal Financial Controls (IFC) are adequate with respect to the
operations of the Company. 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. A report of Auditors pursuant to Section 143(3) (i) of the Companies Act, 2013 certifying the adequacy of
Internal Financial Controls is annexed with the Auditors report.
Financial Performance and Operational Performance
Over the past 25 years, ETL has sustainably created value by setting increasingly higher standards of performance.
We witnessed gross margin pressure from increasing rubber prices, some of which was managed by actively
maintaining higher raw material inventories. This has resulted in higher interest costs due to a transitional increase in
working capital. The same is expected to normalize in the ensuing year. ETL continues to undertake cost saving
initiatives and is moving into more profitable areas of business, based on higher value-addition to customers. Significant
financial highlights in FY2018 are as follows:-
Revenue
Total Revenue reported ₹9561.68 lakhs compared to the previous year’s figure of ₹9,647.71 lakhs. Revenues (net
of indirect taxes) grew by 4% YoY.
Earnings Before interest, Tax, Depreciation and Amortisation (EBITDA)
During the fiscal 2017-18, ETL reported EBIDTA of ₹289.88 lakhs when compared to the previous year’s figure of
₹659.71lakhs.
Profit Before Tax (PBT)
PBT was at ₹(-)247.71 lakhs in 2017-18, compared with previous year’s ₹181.07 lakhs.
Profit After Tax (PAT)
PAT stood at ₹(-)229.39 lakhs in 2017-18 as compared to ₹131.77 lakhs in 2016-17.
Earnings Per Share (EPS)
EPS in 2017-18 stood at ₹(-)4.51 per share compared to EPS of ₹2.28 per share in fiscal 2016 -17.
36
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REPORT
2017-2018
Overall, we see consolidation of opportunities for organized players like us. Our strong presence across the en tire
retreading value chain would be expected to deliver high-quality retreading solutions to our entire range of customers.
In a major spur to developing an integrated logistics framework, the Government has granted infrastructure status to
the logistics sector, enabling the industry to access cheaper finances. As a result, Infrastructure related vehicles will
see robust demand. Normal monsoon forecasts for 2018 will stimulate CV sales led by an uptick in rural consumption.
These factors put together will be conducive for our industry and our business as we have market-leading attributes
and a strong brand reputation that has already enabled better acceptance in both domestic and international markets.
ETL is today a leading provider of tyre retreading services across the entire retreading value chain. We are at the
forefront of building a comprehensive ecosystem and have developed a robust distribution infrastructure to penetrate
the market further and establish a pan India presence. In addition, domestic B2B opportunities are being pursued by
engaging with several state road transportation corporations.
Human Resource Development and Industrial Relations
Human workforce plays a pivotal role is shaping the company’s progress. Skilled and motivated employees are the key
ingredient for driving transformation. The company’s strength is derived from the employee’s involvement and team
orientation. We believe that a committed and motivated workforce constitutes the most important factor in achieving
business goals. We pursue management practices designed to enrich the quality of life of our employees, developing
their potential and maximizing their productivity. Cordial and harmonious relationship is maintained between the
management and employees at every location. We continue to organize various training programs with experts
engaged to interact with our employees at various levels. We follow best practices in recruiting people and undertake
their learning and development, employee engagement, employee feedback and rewards and recognition with a holistic
development perspective. ETL had total employee strength of 333 employees as on 31st March 2018.
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.
37
ANNUAL
Annexure - G REPORT
2017-2018
DIRECTORS’/ EMPLOYEES REMUNERATION
[Pursuant to Section 197(12) of Companies Act, 2013 read with

Rule 5 of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014]
1) Ratio of the remuneration of each Director to the median remuneration of the employees and the percentage
increase in remuneration of each Director, Chief Financial Officer, Chief Executive Officer, Company Secretary in
the financial year 2017-18 are as follows:
Name of Director / KMP Designation Ratio of remuneration of each % increase in

Director / to median remuneration of Directors*
remuneration of employees * & KMP in the FY 2017-18
Mr. M.E Mohamed Managing Director --- ---
Mr. Rajesh S Chief Executive Officer NA -16%
Mr. Mohammed Sherif Shah Chief Financial Officer NA 8%
CS. Baiju T Company Secretary NA 6%
* None of the Directors received any remuneration other than sitting fees during the financial year 17-18.
* Mr. Rajesh S. and Mr. Mohammed Sherif Shah were designated as was designated as CEO and CFO
respectively on 25/07/2017. Till that date Mr. Rajesh S was designated as CFO.
** The remuneration to KMP includes the provision for performance incentive, the actual disbursement of which
will be linked with the Individual and Company performance as per the remuneration policy and at the
discretion of the management.
2) In the financial year, there was an increase of 4% in the median remuneration of employees.
3) There were 196 permanent employees on the rolls of Company as on 31 st March, 2018.
4) Average percentile increase made in the salaries of employees other than the managerial personnel in the
financial year 2017-18 was 9%, whereas the percentile increase in the managerial remuneration for the same
financial year was 7%. The increase in remuneration was in line with the performance of the Company, industrial
standards and individual employee’s performance.
5) It is hereby affirmed that the remuneration paid during the year 2017-18 is as per the Remuneration Policy of the
Company.
38
ANNUAL
INDEPENDENT AUDITOR’S REPORT REPORT
2017-2018
To the Members of Eastern Treads Limited
Report on the Financial Statements
1. We have audited the accompanying financial statements of Eastern Treads Limited (‘the Company’), which
comprise the Balance Sheet as at 31 March 2018, the Statement of Profit and Loss (including Other
Comprehensive Income), the Cash Flow Statement and the Statement of Changes in Equity for the year then
ended, and a summary of the significant accounting policies and other explanatory information.
Management’s Responsibility for the Financial Statements
2. The Company’s Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act,
2013 (‘the Act’) with respect to the preparation of these financial statements that give a true and fair view of the
state of affairs (financial position), profit or loss (financial performance including other comprehensive income),
cash flows and changes in equity of the Company in accordance with the accounting principles generally accepted
in India, including the Indian Accounting Standards (‘Ind AS’) specified under Section 133 of the Act. This
responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the
Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities;
selection and application of appropriate accounting policies; making judgments and estimates that are reasonable
and prudent; and design, implementation and maintenance of adequate internal financial controls, that were
operating effectively for ensuring the accuracy and completeness of the accounting records, 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
3. Our responsibility is to express an opinion on these financial statements based on our audit.
4. We have taken into account the provisions of the Act, the accounting and auditing standards and matters which
are required to be included in the audit report under the provisions of the Act and the Rules made thereunder.
5. We conducted our audit in accordance with the Standards on Auditing specified under Section 143(10) of the Act.
Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain
reasonable assurance about whether these financial statements are free from material misstatement.
6. An audit involves performing procedures to obtain audit evidence about the amounts and the 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 financial controls relevant to the Company’s preparation of the financial
statements that give a true and fair view in order to design audit procedures that are appropriate in the
circumstances. An audit also includes evaluating the appropriateness of the accounting policies used and the
reasonableness of the accounting estimates made by the Company’s Directors, as well as evaluating the overall
presentation of the financial statements.
7. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit
opinion on these standalone financial statements.
39
ANNUAL
REPORT
2017-2018
Opinion
8. In our opinion and to the best of our information and according to the explanations given to us, the aforesaid
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 including Ind AS specified under
Section 133 of the Act, of the state of affairs (financial position) of the Company as at 31 March 2018, and its profit,
its cash flows and the changes in equity for the year ended on that date.
Other Matter
9. The comparative financial information for the year ended 31 March 2017 and the transition date opening balance
sheet as at 1 April 2016 prepared in accordance with Ind AS included in these standalone financial statements,
are based on the previously issued statutory financial statements for the year ended 31 March 2017 and 31 March
2016 respectively prepared in accordance with Accounting Standards prescribed under Section 133 of the Act,
read with Rule 7 of the Companies (Accounts) Rules, 2014 (as amended), which were audited by the predecessor
auditor whose reports dated 4 May 2017 and 13 April 2016 respectively expressed unmodified opinion on those
financial statements, and have been adjusted for the differences in the accounting principles adopted by the
Company on transition to Ind AS, which have been audited by us. Our opinion is not modified in respect of this
matter.
Report on Other Legal and Regulatory Requirements
10. As required by the Companies (Auditor’s Report) Order, 2016 (‘the Order’) issued by the Central Government of
India in terms of Section 143(11) of the Act, we give in the Annexure I a statement on the matters specified in
paragraphs 3 and 4 of the Order.
11. Further to our comments in Annexure I, as required by Section 143(3) of the Act, we report that:
a) we have sought and 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 it appears
from our examination of those books;
c) the financial statements dealt with by this report are in agreement with the books of account;
d) in our opinion, the aforesaid financial statements comply with Ind AS specified under Section 133 of the Act;
e) on the basis of the written representations received from the directors and taken on record by the Board of
Directors, none of the directors is disqualified as on 31 March 2018 from being appointed as a director in terms
of Section 164(2) of the Act;
f) we have also audited the internal financial controls over financial reporting (IFCoFR) of the Company as on 31
March 2018 in conjunction with our audit of the financial statements of the Company for the year ended on that
date and our report dated 10 May 2018 as per Annexure II expressed unmodified opinion; and
g) with respect to the other matters to be included in the Auditor’s Report in accordance with Rule 11 of the
Companies (Audit and Auditors) Rules, 2014 (as amended), in our opinion and to the best of our informatio n
and according to the explanations given to us:
i. the Company, as detailed in Note 2.29 to the financial statements, has disclosed the impact of pending
litigations on its financial position;
ii. the Company did not have any long-term contracts including derivative contracts for which there were any
material foreseeable losses;
iii. there were no amounts which were required to be transferred to the Investor Education and Protection
Fund by the Company;
40
ANNUAL
REPORT
2017-2018
iv. the disclosure requirements relating to holdings as well as dealings in specified bank notes were applicable
for the period from 8 November 2016 to 30 December 2016 which are not relevant to these standalone
financial statements. Hence, reporting under this clause is not applicable.
For Walker Chandiok & Co LLP

Chartered Accountants
Firm’s Registration No.: 001076N/N500013
per Krishnakumar Ananthasivan

Partner
Membership No. 206229
Kochi
10 May 2018
Annexure I to the Independent Auditor’s Report of even date to the members of Eastern Treads Limited, on
the financial statements for the year ended 31 March 2018
Annexure I
Based on the audit procedures performed for the purpose of reporting a true and fair view on the financial statements
of the Company and taking into consideration the information and explanations given to us and the books of account
and other records examined by us in the normal course of audit, and to the best of our knowledge and belief, we report
that:
(i) (a) The Company has maintained proper records showing full particulars, including quantitative details and
situation of fixed assets.
(b) The fixed assets have been physically verified by the management during the year and no material
discrepancies were noticed on such verification. In our opinion, the frequency of verification of the fixed assets
is reasonable having regard to the size of the Company and the nature of its assets.
(c) The title deeds of all the immovable properties (which are included under the head ‘Property, plant and
equipment’) are held in the name of the Company.
(ii) In our opinion, the management has conducted physical verification of inventory at reasonable intervals during the
year and material discrepancies noticed on physical verification have been properly dealt with in the books of
account.
(iii) The Company has not granted any loan, secured or unsecured to companies, firms, Limited Liability Partnerships
(LLPs) or other parties covered in the register maintained under Section 189 of the Act. Accordingly, the provisions
of clauses 3(iii)(a), 3(iii)(b) and 3(iii)(c) of the Order are not applicable.
(iv) In our opinion, the Company has not entered into any transaction covered under Section 185 and 186 of the Act.
Accordingly, the provisions of clause 3(iv) of the order are not applicable.
(v) In our opinion, the Company has not accepted any deposits within the meaning of Sections 73 to 76 of the Act and
the Companies (Acceptance of Deposits) Rules, 2014 (as amended). Accordingly, the provisions of clause 3(v) of
the Order are not applicable.
(vi) 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 cost records under sub-section (1) of Section 148 of the Act in respect
of Company’s products/services and are of the opinion that, prima facie, the prescribed accounts and records have
been made and maintained. However, we have not made a detailed examination of the cost records with a view to
determine whether they are accurate or complete.
41
ANNUAL
REPORT
2017-2018
the financial statements for the year ended 31 March 2018 (cont’d.)
(vii) (a) Undisputed statutory dues including provident fund, employees’ state insurance, income-tax, sales-tax,
service tax, duty of customs, duty of excise, value added tax, cess and other material statutory dues, as
applicable, have generally been regularly deposited to the appropriate authorities, though there has been a
slight delay in a few cases. Further, no undisputed amounts payable in respect thereof were outstanding at the
year-end for a period of more than six months from the date they became payable.
(b) The dues outstanding in respect of income-tax, sales-tax, service-tax, duty of customs, duty of excise and
value added tax on account of any dispute, are as follows:
Statement of Disputed Dues:
Name of the Nature of Amount Amount paid Period to which Forum where dispute
statute dues under Protest the amount is pending
(₹ Lakhs) (₹ Lakhs) relates
Central Sales Tax Central 1.76 1.76 FY 2004-05 Deputy Commissioner
Act, 1956 Sales Tax of Sales Tax (Appeals)
Central Sales Tax Central 7.88 2.78 FY 2010-11 and Deputy Commissioner
Act, 1956 Sales Tax 2011-12 of Sales Tax (Appeals)
Kerala Value Added Value 3.80 1.25 FY 2008-09, Deputy Commissioner
Tax Act, 2003 Added Tax 2009-10, 2011-12, of Sales Tax (Appeals)
2013 -14 and
2015-16
Kerala Value Added Value 0.66 0.66 FY 2015-16 Assessing Officer of
Tax Act, 2003 Added Tax Sales Tax
Income-tax Act, Income tax 20.97 - AY 2012-13 Assessing Officer,

1961 Income Tax
(viii) The Company has not defaulted in repayment of loans or borrowings to any bank during the year. The Company
has no loans or borrowings payable to a financial institution or government and no dues payable to debenture -
holders during the year.
(ix) The Company did not raise moneys by way of initial public offer or further public offer (including debt instruments).
In our opinion, the term loans were applied for the purposes for which the loans were obtained.
(x) No fraud by the Company or on the Company by its officers or employees has been noticed or reported during the
period covered by our audit.
(xi) The Company has not paid or provided for any managerial remuneration. Accordingly, the provisions of Clause
3(xi) of the order are not applicable.
(xii) In our opinion, the Company is not a Nidhi Company. Accordingly, provisions of clause 3(xii) of the Order are not
applicable.
(xiii) In our opinion all transactions with the related parties are in compliance with Sections 177 and 188 of Act, where
applicable, and the requisite details have been disclosed in the financial statements etc., as required by the
applicable Ind AS.
42
ANNUAL
REPORT
2017-2018
the financial statements for the year ended 31 March 2018 (cont’d.)
(xiv) During the year, the Company has not made any preferential allotment or private placement of shares or fully or
partly convertible debentures.
(xv) In our opinion, the Company has not entered into any non-cash transactions with the directors or persons
connected with them covered under Section 192 of the Act.
(xvi) The Company is not required to be registered under Section 45-IA of the Reserve Bank of India Act, 1934.


Partner
Membership No. 206229
Kochi
10 May 2018
Annexure II
Annexure II to the Independent Auditor’s Report of even date to the members of Eastern Treads Limited on
the financial statements for the year ended 31 March 2018
Independent Auditor’s Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section
143 of the Companies Act, 2013 (‘the Act’)
1. In conjunction with our audit of the financial statements of Eastern Treads Limited (‘the Company’) as at and for
the year ended 31 March 2018, we have audited the internal financial controls over financial reporting (‘IFCoFR’)
of the Company as at that date.
Management’s Responsibility for Internal Financial Controls
2. The Company’s Board of Directors is responsible for establishing and maintaining internal financial controls based
on the internal control over financial reporting criteria established by the Company considering the essential
components of internal control stated in the Guidance Note on Audit of Internal Financial Controls over Financial
Reporting (the ‘Guidance Note’) issued by the Institute of Chartered Accountants of India (‘ICAI’). These
responsibilities include the design, implementation and maintenance of adequate internal financial controls that
were operating effectively for ensuring the orderly and efficient conduct of the Company’s business, including
adherence to the Company’s policies, the safeguarding of its assets, the prevention and detection of frauds and
errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial
information, as required under the Act.
43
ANNUAL
REPORT
2017-2018
Independent Auditor’s Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section
143 of the Companies Act, 2013 (‘the Act’) (cont’d.)
Auditor’s Responsibility
3. Our responsibility is to express an opinion on the Company's IFCoFR based on our audit. We conducted our audit
in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India (‘ICAI’) and
deemed to be prescribed under Section 143(10) of the Act, to the extent applicable to an audit of IFCoFR, and the
Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (‘the Guidance Note’) issued by
the ICAI. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and
perform the audit to obtain reasonable assurance about whether adequate IFCoFR were established and
maintained and if such controls operated effectively in all material respects.
4. Our audit involves performing procedures to obtain audit evidence about the adequacy of the IFCoFR and their
operating effectiveness. Our audit of IFCoFR includes obtaining an understanding of IFCoFR, assessing the risk
that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal
control based on the assessed risk. The procedures selected depend on the auditor’s judgement, including the
assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.
5. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit
opinion on the Company’s IFCoFR.
Meaning of Internal Financial Controls over Financial Reporting
6. A company's IFCoFR is a process designed to provide reasonable assurance regarding the reliability of financial
reporting and the preparation of financial statements for external purposes in accordance with generally accepted
accounting principles. A company's IFCoFR include those policies and procedures that (1) pertain to the
maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of
the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit
preparation of financial statements in accordance with generally accepted accounting principles, and that receipts
and expenditures of the company are being made only in accordance with authorisations of management and
directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of
unauthorised acquisition, use, or disposition of the company's assets that could have a material effect on the
financial statements.
Inherent Limitations of Internal Financial Controls over Financial Reporting
7. Because of the inherent limitations of IFCoFR, including the possibility of collusion or improper management
override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections
of any evaluation of the IFCoFR to future periods are subject to the risk that the IFCoFR may become inadequate
because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Opinion
8. In our opinion, the Company has, in all material respects, adequate internal financial controls over financial
reporting and such controls were operating effectively as at 31 March 2018, based on the internal control over
financial reporting criteria established by the Company considering the essential components of internal control
stated in the Guidance Note issued by ICAI.


Partner
Membership No.: 206229
Kochi
10 May 2018
44
ANNUAL
BALANCE SHEET AS AT 31ST MARCH 2018 REPORT
2017-2018
(All amounts in ₹ lakhs, unless otherwise stated)

As at As at As at
Note 31 March 2018 31 March 2017 1 April 2016
ASSETS
Non-Current Assets
(a) Property, Plant and Equipment 2.1 1,571.52 1,584.07 1,246.59
(b) Capital Work in Progress 2.1 252.64 35.99 26.15
(c) Intangible Assets 2.2 17.33 11.51 13.91
(d) Financial Assets
(i) Trade Receivables 2.7 5.76 11.99 13.37
(ii) Loans 2.3 1.57 12.20 20.61
(iii) Other Financial Assets 2.4 88.40 80.01 75.57
(e) Other Non-Current Assets 2.5 28.28 32.72 155.48
1,965.50 1,768.49 1,551.68
Current Assets
(a) Inventories 2.6 812.83 1,014.47 686.22
(b) Financial Assets
(i) Trade Receivables 2.7 2,567.17 2,401.08 1,479.55
(ii) Cash and Cash Equivalents 2.8 122.25 94.62 31.13
(iii) Other Bank Balances 2.9 27.06 25.48 23.05
(iv) Loans 2.3 8.14 8.77 6.98
(v) Other Financial Assets 2.4 4.93 2.03 3.80
(c) Current Tax Asset (Net) 27.01 -- --
(d) Other Current Assets 2.5 53.85 31.26 57.06
3,623.24 3,577.71 2,287.79
Total Assets 5,588.74 5,346.20 3,839.47
EQUITY AND LIABILITIES
Equity
(a) Equity Share Capital 2.10 541.18 541.18 541.18
(b) Other Equity 2.11 448.99 716.39 628.55
990.17 1,257.57 1,169.73
Liabilities
Non-Current Liabilities
(a) Financial Liabilities
(i) Borrowings 2.12 826.87 869.01 814.15
(ii) Other Financial Liabilities 2.13 8.66 6.28 --
(b) Provisions 2.14 69.23 59.77 57.87
(c) Deferred Tax Liabilities (Net) 2.15 157.46 179.23 210.72
(d) Other Non-Current Liabilities 2.17 18.14 25.51 15.43
1,080.36 1,139.80 1,098.17
Current Liabilities
(a) Financial Liabilities
(i) Borrowings 2.12 1,580.32 1,052.03 289.63
(ii) Trade Payables 2.16 1,476.99 1,279.91 829.95
(iii) Other Financial Liabilities 2.13 408.08 507.87 390.25
(b) Provisions 2.14 6.33 3.56 --
(c) Current Tax Liability (Net) -- 8.79 7.66
(d) Other Current Liabilities 2.17 46.49 96.67 54.08
3,518.21 2,948.83 1,571.57
Total Equity and Liabilities 5,588.74 5,346.20 3,839.47
See accompanying notes forming part to these Financial Statements.
This is the Balance Sheet referred to in our report of even date.
For Walker Chandiok & Co LLP For and on behalf of the Board of Directors of
Chartered Accountants Eastern Treads Limited
Per Krishnakumar Ananthasivan Rajesh S. Mohammed Sherif Shah Baiju T. Navas M. Meeran
Partner Chief Executive Chief Financial Company Chairman
Officer Officer Secretary Din: 00128692
Kochi,
10 May 2018
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2017-2018
STATEMENT OF PROFIT AND LOSS FOR THE YEAR ENDED 31 MARCH 2018
Year Ended Year Ended
Note 31 March 2018 31 March 2017
I Revenue from Operations 2.18 9,539.36 9,577.23
II Other Income 2.19 22.32 70.48
III Total Income (I+II) 9,561.68 9,647.71
IV Expenses
Cost of Materials Consumed 2.20 5,425.21 3,990.33
Purchases of Stock-in-Trade 1,504.87 2,763.22
Decrease/(Increase) in Inventories of Finished Goods,
Traded Goods and Work-in-Progress 2.21 81.43 (244.40)
Excise Duty on Sales 100.84 517.78
Employee Benefits Expense 2.22 848.08 754.99
Finance Cost 2.23 326.92 296.67
Depreciation and Amortisation Expense 2.24 210.67 181.97
Other Expenses 2.25 1,311.37 1,206.08
Total Expenses (IV) 9,809.39 9,466.64
V (Loss)/Profit before Tax (247.71) 181.07
VI Tax Expense:
Current Tax - 74.22
Deferred Tax (18.32) (24.92)
VII (Loss)/Profit for the Year (229.39) 131.77
VIII Other Comprehensive Income / (Loss)
(i) Items that will not be reclassified to Profit or Loss:
(a) Re-measurement Gains/(Loss) in defined Benefit Plans (9.95) (19.02)
(ii) Income Tax relating to items that will not be reclassified to 3.44 6.58
Profit and Loss
Other Comprehensive (Loss), net of Tax (6.51) (12.44)
IX Total Comprehensive (Loss) / Income for the Year (235.90) 119.33
X Earnings /(Loss) Per Equity Share 2.26
Basic and Diluted (4.51) 2.28
See accompanying notes to these Financial Statements
This is the Statement of Profit and Loss referred to in our report of even date.
Kochi
10 May 2018
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2017-2018
STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 31 MARCH 2018

Year Ended Year Ended
31 March 2018 31 March 2017
A. Cash flow from Operating Activities
Net (Loss) / profit beforeTax (247.71) 181.07
Adjustments for:
Depreciation and Amortisation Expense 210.67 181.97
Finance Costs 326.92 296.67
Bad Debts written off 1.31 -
Provision for Doubtful Debts 2.94 -
Provision for Doubtful Debts no longer required, written back - (37.86)
Loss on sale of Property, Plant and Equipment /Assets written off 2.52 3.90
Interest Income (4.05) (8.76)
Operating Profit before Working Capital Changes 292.60 616.99
Adjustments for Working Capital Changes
Decrease / (Increase) in Inventories 201.64 (328.25)
(Increase) in Trade Receivables and Other Receivables (178.57) (853.49)
Increase in Trade and Other Payables 68.93 602.74
Increase/(decrease) in provisions 2.28 (13.56)
Cash Generated from Operations 386.88 24.43
Net Income Tax Paid (35.81) (73.08)
Net Cash Generated from /(used in) operating activities (A) 351.07 (48.65)
B. Cash Flow from Investing Activities
Payments for Purchase of Property, Plant and Equipment (421.72) (415.72)
Payments for Purchase of Intangible Assets (10.51) (1.70)
Proceeds from sale of Property, Plant and Equipment 4.88 -
Movement in Other Bank Balances (1.58) (2.42)
Interest Received 3.86 7.86
Net Cash used in Investing Activities (B) (425.07) (411.98)
C. Cash Flow from Financing Activities
Long-term Borrowings (net of repayments) (136.49) 119.21
Short-term Borrowings (net of repayments) 528.30 762.39
Interest Paid (260.50) (227.48)
Dividend Paid including Dividend Distribution Tax (29.68) (30.00)
Redemption of Preference Shares - (100.00)
Net Cash Flow from Financing Activities (C) 101.63 524.12
Net Increase in Cash and Cash Equivalents (A+B+C) 27.63 63.48
Cash and Cash Equivalents at the beginning of the year 94.62 31.13
Cash and Cash Equivalents at the end of the Year 122.25 94.62
See accompanying notes forming part to these Financial Statements
This is the Cash Flow statement referred to in our report of even date.
Kochi
10 May 2018
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2017-2018
STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 31 MARCH 2018

a) Equity Share Capital
Equity Shares
Equity Shares of ₹10 each, fully paid-up Number Amount *
in Lakhs
Balance as at 01 April 2016 52.32 541.18
Changes in equity share capital during the year - -
Balance as at 31 March 2017 52.32 541.18
Changes in equity share capital during the year - -
* Including forfeited shares balance ₹17.98 lakhs
b) Other Equity
Reserves and Surplus Total

Particulars Capital Other General Retained
Reserve Equity Reserves Earnings
Balance as at 1 April 2016 - 744.41 97.46 (213.32) 628.55
Profit for the Year - - - 131.77 131.77
Payment of final dividend including dividend distribution tax - - - (31.49) (31.49)
Other Comprehensive Loss, net of Tax - - - (12.44) (12.44)
Transfer to Capital Reserve (on Redemption of Preference Shares) 100.00 - - (100.00) -
Balance as at 31 March 2017 100.00 744.41 97.46 (225.48) 716.39
Payment of final dividend including dividend distribution tax - - - (31.50) (31.50)
Loss for the Year - - - (229.39) (229.39)
Other Comprehensive Loss, net of tax - - - (6.51) (6.51)
Balance as at 31 March 2018 100.00 744.41 97.46 (492.88) 448.99
See accompanying notes to these Financial Statements

This is the Statement of Changes in Equity referred to in our report of even date.
Kochi
10 May 2018
48
ANNUAL
REPORT
2017-2018
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND OTHER EXPLANATORY INFORMATION

FOR THE YEAR ENDED 31 MARCH 2018

General Information:
Eastern Treads Limited (the 'Company'/ 'ETL') was incorporated on 02/07/1993 (CIN:L25119KL1993PLC007213) with
its registered office at 3A, 3rd Floor, Eastern Corporate Office, 34/137 E, NH Bypass, Edappally, Kochi, Ernakulam -
682 024, Kerala. Its shares are listed in Bombay Stock Exchange. The Company is primarily engaged in the business
of manufacturing and dealing of tread rubber, rubber based adhesives, tyre retreading accessories a nd retreading
services.
1. Summary of Significant Accounting Policies
Statement of Compliance
Financial statements have been prepared in accordance with the accounting principles generally accepted in
India including Indian Accounting Standards (Ind AS) prescribed under the Section 133 of the Companies Act,
2013 read with rule 3 of the Companies (Indian Accounting Standards) Rules, 2015 and the Companies
(Accounting Standards) Amendment Rules, 2016. The aforesaid financial statements have been approved by the
Board of Directors in the meeting held on 10 May 2018.
For all periods up to and including the period ended 31 March 2017, the Company prepared its financial
statements in accordance with requirements of the Accounting Standards notified under the Companies
(Accounting Standards) Rules, 2006 (“Previous GAAP”). These are the first Ind AS financial statements of the
Company. The date of transition to Ind AS is 1 April 2016. Refer note no. 2.36 for the details of first-time adoption
exemptions availed by the Company, reconciliations and descriptions of the effect of the transition.
1.1. Basis of Preparation
In accordance with the notification issued by the Ministry of Corporate Affairs, the Company is required to prepare
its financial statements as per the Indian Accounting Standards (‘Ind AS’) prescribed under Section 133 of the
Companies Act, 2013 read with Rule 3 of the Companies (Indian Accounting Standards) Rules, 2015 and the
Companies (Accounting Standards) Amendment Rules, 2016 with effect from 1 April, 2017. Accordingly, the
Company has prepared these financial statements which comprise the Balance Sheet as at 31 March 2018, the
Statement of Profit and Loss, the Statements of Cash Flows and the Statement of Changes in Equity for the
period ended 31 March 2018, and accounting policies and other explanatory information (together hereinafter
referred to as" financial statements”).
The financial statements have been prepared on the historical cost basis except for certain financial instruments
measured at fair values at the end of each reporting period, as explained in the accounting policies below.
1.2. Use of Estimates and Judgements
The preparation of the Company’s financial statements requires management to make judgements, estimates
and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the related
disclosures.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates
are recognised in the period in which the estimate is revised if the revision affects only that period, or in the period
of the revision and future period, if the revision affects current and future period.
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Summary of Significant Accounting Policies and other Explanatory Information for the Year ended 31 March 2018 (cont'd)
Significant Management Judgements
The following are significant management judgements in applying the accounting policies of the Company that
have the most significant effect on the financial statements.
Classification of Leases
The Company enters into leasing arrangements for various assets. The classification of the leasing arrangement
as a finance lease or operating lease is based on an assessment of several factors, including, but not limited to,
transfer of ownership of leased asset at end of lease term, lessee’s option to purchase and estimated certainty
of exercise of such option, proportion of lease term to the asset’s economic life, proportion of present value of
minimum lease payments to fair value of leased asset and extent of specialised nature of the leased asset.
Recognition of Deferred Tax Assets
The extent to which deferred tax assets can be recognised is based on an assessment of the probability that
future taxable income will be available against which the deductible temporary differences and tax loss carry
forward can be utilised. In addition, significant judgement is required in assessing the impact of any legal or
economic limits or uncertainties in various tax jurisdictions.
Evaluation of Indicators for Impairment of Assets
The evaluation of applicability of indicators of impairment of assets requires assessment of several external and
internal factors which could result in deterioration of recoverable amount of the assets. In assessing impairment,
management estimates the recoverable amount of each asset or cash generating units based on expected future
cash flows and uses an interest rate to discount them. Estimation uncertainty relates to assumptions about future
operating results and the determination of a suitable discount rate.
Recoverability of Advances / Receivables
At each balance sheet date, based on historical default rates observed over expected life, the management
assesses the expected credit loss on outstanding receivables and advances.
Useful Lives of Depreciable / Amortisable Assets
Management reviews its estimate of the useful lives of depreciable / amortisable assets at each reporting date,
based on the expected utility of the assets. Uncertainties in these estimates relate to technical and economic
obsolescence that may change the utility of certain items of property, plant and equipment.
Defined Benefit Obligation (DBO)
Management’s estimate of the DBO is based on a number of critical underlying assumptions such as standard
rates of inflation, medical cost trends, mortality, discount rate and anticipation of future salary increases. Variation
in these assumptions may significantly impact the DBO amount and the annual defined benefit expenses.
Fair Value Measurements
Management applies valuation techniques to determine the fair value of financial instruments (where active
market quotes are not available) and non-financial assets. This involves developing estimates and assumptions
consistent with how market participants would price the instrument. Management bases its assumptions on
observable data as far as possible but this is not always available. In that case management uses the best
information available. Estimated fair values may vary from the actual prices that would be achieved in an arm’s
length transaction at the reporting date.
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1.3. Revenue Recognition
(a) Sale of Goods
(i) Revenue is measured at the fair value of the consideration received or receivable. Amounts disclosed
as revenue are inclusive of excise duty and net of returns, trade allowances, rebates, value added taxes,
goods and service tax and amounts collected on behalf of third parties.
(ii) Revenue from sales is recognised when all significant risks and rewards of ownership of the goods sold
are transferred to the customer which generally coincides with delivery /at the point of dispatch to the
customers depend on the terms with the customers.
(iii) The amount of revenue can be measured reliably and it is possible that the economic benefits associated
with the transaction will flow to the entity.
(b) Rendering of Services
Revenue from job work and retreading services are recognised at the completion of the agreed services.
(c) Interest and Other Income
(i) Lease rentals are recognised as income at the time when they accrue as per the agreements entered
into with the customers.
(ii) Export benefits are accounted on recognition of export sales.
(iii) Interest income is recognised on an accrual basis using effective rate of interest method.
1.4. Leases
A lease is classified at the inception date as a finance lease or an operating lease. A lease that transfers
substantially all the risks and rewards incidental to ownership to the Company is classified as a finance lease.
The determination of whether an arrangement is (or contains) a lease is based on the substance of the
arrangement at the inception of the lease. The arrangement is, or contains, a lease if fulfilment of the arrangement
is dependent on the use of a specific asset or assets and the arrangement conveys a right to use the asset or
assets, even if that right is not explicitly specified in an arrangement.
a) Company as a Lessor
The rental income from operating leases is generally recognised on a straight-line basis over the term of the
relevant lease except where another systematic basis is more representative of the time pattern in which
economic benefits from the leased asset are consumed. Initial direct costs incurred in negotiating and
arranging an operating lease are added to the carrying amount of the leased asset and recognised on a
straight- line basis over the lease term.
Company has entered into operating lease agreements with the customers for permitting the use of fixed
assets. The lease term ranges from 3- 5 years. As per the terms of lease agreements, the agreements are
cancellable at the option of both the parties by serving due notice. The residual value as per the lease
agreements has been considered as the amount guaranteed by the lessees at the end of the lease period
and the depreciation on leased assets has been computed accordingly after considering the guaran teed
value.
b) Company as a Lessee
Finance leases are capitalised at the commencement of the lease at the inception date fair value of the leased
property or, if lower, at the present value of the minimum lease payments. Lease payments are apportioned
between finance charges and reduction of the lease liability so as to achieve a constant rate of interest on the
remaining balance of the liability. Finance charges are recognised in finance costs in the statement of profit
and loss, unless they are directly attributable to qualifying assets, in which case they are capitalized in
accordance with the Company’s general policy on the borrowing costs. Contingent rentals are recognised as
expenses in the periods in which they are incurred. Operating lease payments are recognised as an expense
in the statement of profit and loss on a straight line basis over the lease term.
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1.5. Employee Benefits
Employee benefits include provident fund, employee state insurance scheme, gratuity and co mpensated
absences. Expenses and liabilities in respect of employee benefits are recorded in accordance with Ind AS 19,
Employee Benefits.
a) Short-term Employee Benefits
Employee benefits payable wholly within twelve months of receiving employee services are classified as short-
term employee benefits. These benefits include salaries and wages, performance incentives which are
expected to occur in next twelve months. The undiscounted amount of short-term employee benefits to be
paid in exchange for employee services is recognised as an expense as the related service is rendered by
employees.
b) Defined Contribution Plans
The Company has defined contribution plans for employees comprising of Provident Fund and Employee’s
State Insurance. The contributions paid/payable to these plans during the year are charged to the Statement
of Profit and Loss for the year.
c) Defined Benefit Plans
The Company has a defined benefit plan (the “Gratuity Plan”). The Gratuity Plan provides a lump sum payment
to employees who have completed five years or more of service at retirement, disability or termination of
employment, being an amount based on the respective employee’s last drawn salary and the number of years
of employment with the Company. Presently the Company’s gratuity plan is unfunded.
The present value of the defined benefit obligation is determined by discounting the estimated future cash
outflows by reference to market yields at the end of the reporting period on government bonds that have terms
approximating to the terms of the related obligation. The net interest cost is calculated by applying the discount
rate to the net balance of the defined benefit obligation and the fair value of plan assets if any. This cost is
included in employee benefit expense in the statement of profit and loss.
The liability or asset recognised in the balance sheet in respect of gratuity plan is the present value of the
defined benefit obligation at the end of the reporting period less the fair value of plan assets if any. The defined
benefit obligation is calculated annually by actuaries using the projected unit credit method.
Re-measurement gains and losses arising from experience adjustments and changes in actuarial assumptions
are recognised in the period in which they occur, directly in other comprehensive income and are never
reclassified to profit or loss. Changes in the present value of the defined benefit obligation resulting from plan
amendments or curtailments are recognised immediately in the statement of profit and loss as past service
cost.
The present value of the defined benefit obligation denominated in ₹ is determined by discounting the
estimated future cash outflows by reference to market yields at the end of the reporting period on government
bonds that have terms approximating to the terms of the related obligation. Service and interest cost on the
Company’s defined benefit plan is included in employee benefits expense. Employee contributions, all of which
are independent of the number of years of service, are treated as a reduction of service cost.
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1.6. Foreign Currency Transactions
The functional currency of the Company is the Indian Rupee (INR). These financial statements are presented in
INR (₹). In the financial statements of the Company, transactions in currencies other than the functional currency
are translated into the functional currency at the exchange rates ruling at the date of the transaction.
Monetary assets and liabilities denominated in other currencies are translated into the functional currency at
exchange rates prevailing on the reporting date. Non-monetary assets and liabilities denominated in other
currencies and measured at historical cost or fair value are translated at the exchange rates prevailing on the
dates on which such values were determined.
All exchange differences are included in the statement of profit and loss except any exchange differences on
monetary items designated as an effective hedging instrument of the currency risk of designated forecasted sales
or purchases, which are recognized in the other comprehensive income.
1.7. Borrowing Costs
Borrowing costs directly attributable to the acquisition, construction or production of an asset that necessarily
takes a substantial period of time to get ready for its intended use or sale are capitalised as part of the cost of the
asset. All other borrowing costs are expensed in the period in which they occur. Borrowing costs consist of interest
and other costs that an entity incurs in connection with the borrowing of funds.
1.8. Government Grants
Government grants are recognised where there is reasonable assurance that the grant will be received and all
attached conditions will be complied with. When the grant relates to an expense item, it is recognised as income
on a systematic basis over the periods that the related costs, for which it is intended to compensate, are
expensed. When the grant relates to an asset, it is treated as deferred income and released to the statement of
profit and loss over the expected useful lives of the assets concerned. When the Company receives grants of
non-monetary assets, the asset and the grant are recorded at fair value amounts and released to statement of
profit and loss over the expected useful life in a pattern of consumption of the benefit of the underlying asset.
1.9. Taxation
a) Income Tax
Income tax assets and liabilities are measured at the amount expected to be recovered from or paid to the
Taxation Authorities. The tax rates and tax laws used to compute the amount are those that are enacted or
substantively enacted, at the reporting date.
Current income tax relating to items recognised outside profit or loss is recognised outside profit or loss (either
in other comprehensive income or in equity). Current tax items are recognised in correlation to the underlying
transaction either in OCI or directly in equity. Management periodically evaluates positions taken in the tax
returns with respect to situations in which applicable tax regulations are subject to interpretation and
establishes provisions where appropriate.
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Minimum Alternate Tax (MAT) paid in accordance with the tax laws, which gives future economic benefits in
the form of adjustment to future income tax liability, is considered as an asset if there is convincing evidence
that the Company will pay normal income tax. Accordingly, MAT is recognised as an asset in the Balance
Sheet when it is probable that future economic benefit associated with it will flow to the Company.
b) Deferred Tax
Deferred tax is provided using the liability method on temporary differences between the tax bases of assets
and liabilities and their carrying amounts for financial reporting purposes at the reporting date. Deferred tax
liabilities are recognised for all taxable temporary differences, except when it is probable that the temporary
differences will not reverse in the foreseeable future.
Deferred tax assets are recognised for all deductible temporary differences, the carry forward of unused tax
credits and any unused tax losses. Deferred tax assets are recognised to the extent that it is probable that
taxable profit will be available against which the deductible temporary differences, and the carry forward of
unused tax credits and unused tax losses can be utilized.
The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that
it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred tax
asset to be utilised. Unrecognised deferred tax assets are re-assessed at each reporting date and are
recognised to the extent that it has become probable that future taxable profits will allow the deferred tax
asset to be recovered.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the year when
the asset is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or
substantively enacted at the reporting date.
Deferred tax relating to items recognised outside profit or loss is recognised outside profit or loss (either in
other comprehensive income or in equity). Deferred tax items are recognised in correlation to the underlying
transaction either in OCI or directly in equity.
Deferred tax assets and deferred tax liabilities are offset if a legally enforceable right exists to set off current
tax assets against current tax liabilities and the deferred taxes relate to the same taxable entity and the same
taxation authority.
1.10. Property, Plant and Equipment
The Company has elected to continue with the carrying value for all of its property, plant and equipment as
recognized in its Previous GAAP financial statements as deemed cost at the transition date, viz., 1 April 2016.
Property, plant and equipment are stated at cost, less accumulated depreciation and impairment, if any. Costs
directly attributable to acquisition are capitalised until the property, plant and equipment are ready for use, as
intended by management.
Expenditure incurred after the property, plant and equipment have been put into operation, such as repairs and
maintenance, are normally charged to the statements of profit and loss in the period in which the costs are
incurred. Major inspection and overhaul expenditure is capitalized if the recognition criteria are met.
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Gains and losses on disposal of an item of property, plant and equipment are determined by comparing the
proceeds from disposal with the carrying amount of property, plant and equipment, and are recognized net within
other income/other expenses in statement of profit and loss.
An item of property, plant and equipment and any significant part initially recognised is derecognized upon
disposal or when no future economic benefits are expected from its use or disposal. Any gain or loss arising on
derecognition of the asset (calculated as the difference between the net disposal proceeds and the carrying
amount of the asset) is included in the statement of profit and loss, when the asset is derecognised.
The residual values, useful lives and methods of depreciation of property, plant and equipment are reviewed at
each financial year end and adjusted prospectively, if appropriate.
1.11. Capital Work in Progress
Assets in the course of construction are capitalized in capital work in progress account. At the point when an
asset is capable of operating in the manner intended by management, the cost of construction is transferred to
the appropriate category of property, plant and equipment. Costs associated with the commissioning of an asset
are capitalised when the asset is available for use but incapable of operating at normal levels unti l the period of
commissioning has been completed. Revenue generated from production during the trial period is credited to
capital work in progress.
1.12. Depreciation
Assets in the course of development or construction and freehold land are not depreciated. Other property, plant
and equipment are stated at cost less accumulated depreciation and any provision for impairment. Depreciation
commences when the assets are ready for their intended use.
Depreciation is calculated on the depreciable amount, which is the cost of an asset less its residual value.
Depreciation on tangible assets has been provided under Straight Line Method over the useful life of the assets
estimated by the management (determined based on technical estimates), which is in line with the te rms
prescribed in Schedule II to The Companies Act, 2013. Depreciation for assets purchased/sold during the period
is proportionately charged. The management estimates the useful life of the Property, Plant and Equipment as
follows:
Asset Category Useful Life

a) Buildings 30 Years
b) Roads - Non RCC 5 Years
c) Plant and machinery at Factory 8-15 Years
d) Plant and machinery at Branches 15 Years
e) Plant and machinery given for Lease 3-5 Years
f) Manufacturing tools 7 Years
g) Furniture and fixtures 10 Years
h) Computers 3 Years
i) Vehicles 8 Years
j) Office equipment 5 Years
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The Company has evaluated the applicability of component accounting as prescribed under Ind AS 16 and
Schedule II of the Companies Act, 2013. The management has not identified any significant component having
different useful lives as the company's assets are not capable of being accounted separately as components.
Schedule II requires the Company to identify and depreciate significant components with different useful lives
separately.
Note: The useful life of plant & equipment given under lease is taken as 3 years and 5 years based on the lease
agreements. The residual value of the same has been considered as the amount guaranteed by the lessees as
per the lease agreements at the end of the lease period. Hence the useful lives and residual values for these
assets are different from the useful lives/residual value as prescribed under Part C of Schedule II of the
Companies Act 2013. The useful life of vehicles given to employees as per the car policy scheme approved by
the Company is taken as 3 years to 5 years based on the tenure of scheme availed by the employee. Depreciation
methods, useful lives and residual values are reviewed at each financial year end and changes in estimates, if
any, are accounted for prospectively.
1.13. Intangible Assets
The Company has elected to continue with the carrying value for all of its intangible assets as recognised in its
Previous GAAP financial statements as deemed cost at the transition date, viz., 1 April 2016.
Intangible assets are recorded at the consideration paid for the acquisition of such assets and are carried at cost
less accumulated amortisation and impairment. Advances paid towards the acquisition of intangible assets
outstanding at each Balance Sheet date are disclosed as other non-current assets and the cost of intangible
assets not ready for their intended use before such date are disclosed as intangible assets under development.
The Company amortises intangible over their estimated useful lives using the straight-line method. The estimated
useful lives of assets are as follows:
Asset Category Useful lives (in years)

Computer software 5
Gains or losses arising from derecognition of an intangible asset are measured as the difference between the
net disposal proceeds and the carrying amount of the asset and are recognised in the Statement of Profit and
Loss when the asset is derecognised.
The residual values, useful lives and methods of amortisation of intangible assets are reviewed at each financial
year end and adjusted prospectively, if appropriate.
1.14. Impairment of non - Financial 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.
1.15. Inventories
Inventories are valued at the lower of cost and net realisable value item wise. Cost includes indirect cost also.
Costs incurred in bringing the inventory to its present location and condition are accounted for as follows:
(i) Raw materials: Cost includes cost of purchase net of duties, taxes that are recoverable from the Government
and other costs incurred in bringing the inventories to their present location and condition. Cost is
determined on FIFO basis using weighted average rate.
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(ii) Finished goods and work in progress: Cost includes cost of direct materials and labour and a proportion of
manufacturing overheads based on the normal operating capacity, but excluding borrowing costs. Cost is
determined on weighted average basis.
Net realisable value is the estimated selling price in the ordinary course of business, less estimated costs of
completion and the estimated costs necessary to make the sale.
1.16. Provisions and Contingent Liabilities
The assessments undertaken in recognising provisions and contingencies have been made in accordance with
the applicable Ind AS. Provisions represent liabilities to the Company for which the amount or timing is uncertain.
Provisions are recognized when the Company has a present obligation (legal or constructive), as a result of past
events, and it is probable that an outflow of resources, that can be reliably estimated, will be required to settle
such an obligation. If the effect of the time value of money is material, provisions are determined by discounting
the expected future cash flows to net present value using an appropriate pre-tax discount rate that reflects current
market assessments of the time value of money and, where appropriate, the risks specific to the liability.
Unwinding of the discount is recognized in the statement of profit and loss as a finance cost. Provisions are
reviewed at each reporting date and are adjusted to reflect the current best estimate.
In the normal course of business, contingent liabilities may arise from litigation and other claims against the
Company. Guarantees are also provided in the normal course of business. There are certain obligations which
management has concluded, based on all available facts and circumstances, are not probable of payment or are
very difficult to quantify reliably, and such obligations are treated as contingent liabilities and disclosed in the
notes but are not reflected as liabilities in the financial statements. Although there can be no assurance regarding
the final outcome of the legal proceedings in which the Company involved, it is not expected that such
contingencies will have a material effect on its financial position or profitability. Contingent assets are not
recognised but disclosed in the financial statements when an inflow of economic benefits is probable.
1.17. Financial Instruments
A) Financial Assets
a) Initial Recognition and Measurement
All financial assets are recognised initially at fair value plus, in the case of financial assets not recorded at
fair value through statement of profit and loss, transaction costs that are attributable to the acquisition of
the financial asset. Purchases or sales of financial assets that require delivery of assets within a time
frame established by regulation or convention in the market place (regular way trades) are recognised on
the trade date, i.e., the date that the Company commits to purchase or sell the asset.
b) Subsequent Measurement
Subsequent measurement of financial assets is described below:
(i) Debt Instruments at Amortised Cost
A 'debt instrument' is measured at the amortised cost if both the following conditions are met:
a) The asset is held within a business model whose objective is to hold assets for collecting
contractual cash flows, and
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b) Contractual terms of the asset give rise on specified dates to cash flows that are solely payments
of principal and interest (SPPI) on the principal amount outstanding.
After initial measurement, such financial assets are subsequently measured at amortised cost using
the effective interest rate (EIR) method. Amortised cost is calculated by taking into account any
discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR
amortisation is included in finance income in the statement of profit and loss. The losses arising from
impairment are recognised in the statement of profit and loss. This category generally applies to trade
and other receivables.
(ii) Debt Instrument at Fair Value through Other Comprehensive Income (FVTOCI)
A debt instrument’ is classified as at the FVTOCI if both of the following criteria are met:
a) The objective of the business model is achieved both by collecting contractual cash flows and
selling the financial assets, and
b) The asset’s contractual cash flows represent solely payments of principal and interest (SPPI).
Debt instruments included within the FVTOCI category are measured initially as well as at each
reporting date at fair value. Fair value movements are recognized in the other comprehensive income
(OCI).
However, the Company recognizes interest income, impairment losses & reversals and foreign
exchange gain or loss in the P&L. On derecognition of the asset, cumulative gain or loss previously
recognised in OCI is reclassified from the equity to P&L. Interest earned whilst holding FVTOCI debt
instrument is reported as interest income using the Effective Interest Rate (EIR) method.
(iii) Debt Instrument at Fair Value through Profit or Loss (FVTPL)
FVTPL is a residual category for debt instruments. Any debt instrument, which does not meet the
criteria for categorization as at amortized cost or as FVTOCI, is classified as at FVTPL. In addition, the
Company may elect to designate a debt instrument, which otherwise meets amortized cost or FVTOCI
criteria, as at FVTPL. However, such election is allowed only if doing so reduces or eliminates a
measurement or recognition inconsistency (referred to as ‘accounting mismatch’). The Company has
designated its investments in debt instruments as FVTPL. Debt instruments included within the FVTPL
category are measured at fair value with all changes recognized in the P&L.
c) Financial Assets – Derecognition
A financial asset (or, where applicable, a part of a financial asset or part of a group of similar financial
assets) is primarily derecognised (i.e. removed from the Company’s balance sheet) when:
1) The rights to receive cash flows from the asset have expired, or
2) The Company has transferred its rights to receive cash flows from the asset or has assumed an
obligation to pay the received cash flows in full without material delay to a third party under a ‘pass
through’ arrangement; and either
a) the Company has transferred substantially all the risks and rewards of the asset, or
b) the Company has neither transferred nor retained substantially all the risks and rewards of the
asset, but has transferred control of the asset.
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When the Company has transferred its rights to receive cash flows from an asset or has entered into a
pass-through arrangement, it evaluates if and to what extent it has retained the risks and rewards of
ownership. When it has neither transferred nor retained substantially all of the risks and rewards of the
asset, nor transferred control of the asset, the Company continues to recognise the transferred asset to
the extent of the Company’s continuing involvement. In that case, the Company also recognises an
associated liability. The transferred asset and the associated liability are measured on a basis that reflects
the rights and obligations that the Company has retained.
Continuing involvement that takes the form of a guarantee over the transferred asset is measured at the
lower of the original carrying amount of the asset and the maximum amount of consideration that the
Company could be required to repay.
d) Impairment of Financial Assets
In accordance with Ind AS 109, the Company applies expected credit loss (ECL) model for measurement
and recognition of impairment loss on the financial assets that are debt instruments, and are measured at
amortised cost e.g., loans, debt securities, deposits and trade receivables or any contractual right to
receive cash or another financial asset that result from transactions that are within the scope of Ind AS
18.
The Company follows 'simplified approach' for recognition of impairment loss allowance on trade
receivables. The application of simplified approach does not require the Company to track changes in
credit risk. Rather, it recognises impairment loss allowance based on lifetime ECLs at each reporting date,
right from its initial recognition.
For recognition of impairment loss on other financial assets and risk exposure, the Company determines
that whether there has been a significant increase in the credit risk since initial recognition. If credit risk
has not increased significantly, 12-month ECL is used to provide for impairment loss. However, if credit
risk has increased significantly, lifetime ECL is used. If, in a subsequent period, credit quality of the
instrument improves such that there is no longer a significant increase in credit risk since initial recognition,
the Company reverts to recognising impairment loss allowance based on 12-month ECL. Lifetime ECL
are the expected credit losses resulting from all possible default events over the expected life of a financial
instrument. The 12-month ECL is a portion of the lifetime ECL which results from default events that are
possible within 12 months after the reporting date.
ECL is the difference between all contractual cash flows that are due to the Company in accordance with
the contract and all the cash flows that the entity expects to receive (i.e., all cash shortfalls), discounted
at the original EIR.
ECL impairment loss allowance (or reversal) recognized during the period is recognized as income/
expense in the statement of profit and loss. This amount is reflected under the head 'other expenses' in
the statement of profit and loss. The balance sheet presentation for various financial instruments is
described below:
1) Financial Assets Measured as at Amortised Cost: ECL is presented as an allowance, i.e., as an

integral part of the measurement of those assets in the balance sheet. The allowance reduces the
net carrying amount. Until the asset meets write-off criteria, the Company does not reduce impairment
allowance from the gross carrying amount.
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2) Debt Instruments Measured at FVTPL: Since financial assets are already reflected at fair value,
impairment allowance is not further reduced from its value. The change in fair value is taken to the
statement of Profit and Loss.
3) Debt Instruments Measured at FVTOCI: Since financial assets are already reflected at fair value,
impairment allowance is not further reduced from its value. Rather, ECL amount is presented as
accumulated impairment amount' in the OCI.
For assessing increase in credit risk and impairment loss, the Company combines financial instruments
on the basis of shared credit risk characteristics with the objective of facilitating an analysis that is designed
to enable significant increases in credit risk to be identified on a timely basis.
The Company does not have any purchased or originated credit-impaired (POCI) financial assets, i.e.,
financial assets which are credit impaired on purchase/ origination.
B) Financial Liabilities
a) Recognition and Measurement
Financial liabilities are classified, at initial recognition, as financial liabilities at fair value through statement
of profit and loss, loans and borrowings, payables, or as derivatives designated as hedging instruments
in an effective hedge, as appropriate.
All financial liabilities are recognised initially at fair value and, in the case of loans and borrowings and
payables, net of directly attributable transaction costs. The Company’s financial liabilities include trade
and other payables, loans and borrowings including bank overdrafts, financial guarantee contracts and
derivative financial instruments.
The measurement of financial liabilities depends on their classification, as described below:
1) Financial Liabilities at Fair Value through Statement of Profit and Loss
Financial liabilities at fair value through statement of profit and loss include financial liabilities held for
trading and financial liabilities designated upon initial recognition as at fair value through statement
of profit and loss. Financial liabilities are classified as held for trading if they are incurred for the
purpose of repurchasing in the near term. This category also includes derivative financial instruments
entered into by the Company that are not designated as hedging instruments in hedge relationships
as defined by Ind AS 109. Separated embedded derivatives are also classified as held for trading
unless they are designated as effective hedging instruments.
2) Gains or Losses on Liabilities held for Trading are Recognised in the Statement of Profit and
Loss
Financial liabilities designated upon initial recognition at fair value through statement of profit and
loss are designated as such at the initial date of recognition, and only if the criteria in Ind AS 109 are
satisfied.
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3) Liabilities Designated as FVTPL
Fair value gains/ losses attributable to changes in own credit risk are recognized in OCI. These gains/
losses are not subsequently transferred to statement of profit and loss. However, the Company may
transfer the cumulative gain or loss within equity. All other changes in fair value of such liability are
recognised in the statement of profit and loss. The Company has not designated any financial liability
as at fair value through statement of profit and loss.
b) Financial Liabilities - Derecognition

A financial liability is derecognised when the obligation under the liability is discharged or cancelled or
expires. When an existing financial liability is replaced by another from the same lender on substantially
different terms, or the terms of an existing liability are substantially modified, such an exchange or
modification is treated as the derecognition of the original liability and the recognition of a new liability.
The difference in carrying amounts the respective is recognised in the statement of profit and loss.
C) Offsetting of Financial Instruments
Financial assets and financial liabilities are offset and the net amount is reported in the balance sheet if there
is a currently enforceable legal right to offset the recognised amounts and there is an intention to settle on a
net basis, to realise the assets and settle the liabilities simultaneously.
Initial Recognition and Subsequent Measurement
In order to hedge its exposure to foreign exchange, interest rate, and commodity price risks, the Company
enters into forward, futures and other derivative financial instruments. The Company does not hold derivative
financial instruments for speculative purposes.
Such derivative financial instruments are initially recognised at fair value on the date on which a derivative
contract is entered into and are subsequently re-measured at fair value. Derivatives are carried as financial
assets when the fair value is positive and as financial liabilities when the fair value is negative. Any gains or
losses arising from changes in the fair value of derivatives are taken directly to statement of profit and loss,
except for the effective portion of cash flow hedges, which is recognised in other comprehensive income and
later reclassified to statement of profit and loss when the hedge item affects profit and loss or treated as basis
adjustment if a hedged forecast transaction subsequently results in the recognition of a non-financial asset
or non-financial liability. For the purpose of hedge accounting, hedges are classified as:
1) Fair value hedges when hedging the exposure to changes in the fair value of a recognised asset or
liability or an unrecognised firm commitment.
2) Cash flow hedges when hedging the exposure to variability in cash flows that is either attributable to a
particular risk associated with a recognised asset or liability or a highly probable forecast transaction
or the foreign currency risk in an unrecognised firm commitment.
At the inception of a hedge relationship, the Company formally designates and documents the hedge
relationship to which the Company wishes to apply hedge accounting and the risk management objective
and strategy for undertaking the hedge. The documentation includes the Company’s risk management
objective and strategy for undertaking hedge, the hedging/ economic relationship, the hedged item or
transaction, the nature of the risk being hedged, hedge ratio and how the entity will assess the effectiveness
of changes in the hedging instrument’s fair value in offsetting the exposure to changes in the hedged item’ s
fair value or cash flows attributable to the hedged risk. Such hedges are expected to be highly effective in
achieving offsetting changes in fair value or cash flows and are assessed on an ongoing basis to determine
that they actually have been highly effective throughout the financial reporting periods for which they were
designated.
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D) Loans and Borrowings
After initial recognition, interest-bearing loans and borrowings are subsequently measured at amortised cost
using the effective interest rate (hereinafter referred as EIR) method. Gains and losses are recognized in
statement of profit and loss when the liabilities are derecognised as well as through the EIR amortisation
process.
Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or costs
that are an integral part of the EIR. The EIR amortisation is included as finance costs in the statement of profit
and loss.
1.18. Fair Value Measurement
Fair value is the price that would be received to sell an asset or paid to transfer a liability at the measurement
date. All assets and liabilities for which fair value is measured or disclosed in the financial statements are
categorised within the fair value hierarchy, described as follows, based on the lowest level input that is significant
to the fair value measurement as a whole.
a) Level 1- Quoted (unadjusted) market prices in active markets for identical assets or liabilities
b) Level 2 - Valuation techniques for which the lowest level input that is significant to the fair value measurement
is directly or indirectly observable.
c) Level 3 - Valuation techniques for which the lowest level input that is significant to the fair value measurement
is unobservable.
For the purpose of fair value disclosures, the Company has determined classes of assets and liabilities on the
basis of the nature, characteristics and risks of the asset or liability and the level of the fair value hierarchy as
explained above.
1.19. Cash and Cash Equivalents
Cash and cash equivalent in the balance sheet comprise cash at banks and on hand and short-term deposits
with an original maturity of three months or less, which are subject to an insignificant risk of changes in value.
For the purpose of the statement of cash flows, cash and cash equivalents consist of cash and short-term
deposits, as defined above.
1.20. Segment Reporting
Operating segments are reported in a manner consistent with the internal reporting provided to the Chief
Operating Decision Maker. The Company is engaged in the business of manufacture and sale of Quality tread
rubber (pre-cured tread rubber, conventional tread), Rubber compounds, cushion/ bonding gum and black
vulcanizing cement, which form broadly part of one product group and hence constitute a single business
segment.
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1.21. Earnings/ (Loss) per Share (EPS)
The Company presents basic and diluted earnings per share (“EPS”) data for its equity shares. Basic EPS is
calculated by dividing the profit and loss attributable to equity shareholders of the Company by the weighted
average number of equity shares outstanding during the period. Diluted EPS is determined by adjusting the profit
and loss attributable to equity shareholders and the weighted average number of equity shares ou tstanding for
the effects of all dilutive potential equity shares.
1.22. Recent Accounting Pronouncements
Appendix B to Ind AS 21, Foreign Currency Transactions and Advance Consideration:
On 28 March 2018, MCA has notified the Companies (Indian Accounting Standards) Amendment Rules, 2018
containing Appendix B to Ind AS 21, Foreign currency transactions and advance consideration which clarifies the
date of the transaction for the purpose of determining the exchange rate to use on initial recognition of the related
asset, expense or income, when an entity has received or paid advance consideration in a foreign currency. This
amendment will come into force from 1 April 2018. The Company has evaluated the effect of this on the financial
statements and the impact is not material.
Ind AS 115, Revenue from Contract with Customers:
On 28 March 2018, MCA has notified the Ind AS 115, Revenue from Contract with Customers. The core principle
of the new standard is that an entity should recognize revenue to depict the transfer of promised goods and
services to customers in an amount that reflects the consideration to which the entity expects to be entitled in
exchange for those goods and services. Further the new standard requires enhanced disclosures about the
nature, amount, timing and uncertainty of revenue and cash flows arising from the entity's contracts with
customers. The standard permits two possible methods of transition:
Retrospective approach - Under this approach the standard will be applied retrospectively to each prior reporting
period presented in accordance with Ind AS 8 - Accounting policies, changes in accounting estimates and errors.
Retrospectively with cumulative effect of initially applying the standard recognized at the date of initial application
(Cumulative catch - up approach)
The effective date for adoption of Ind AS 115 is financial periods beginning on or after 1 April 2018. The Company
will adopt the standard on 1 April 2018 by using the cumulative catch-up transition method and accordingly
comparatives for the year ending or ended 31 March 2018 will not be retrospectively adjusted. The Company is
still in the process of evaluating the impact on application of Ind AS 115. The Company has evaluated the
disclosure requirements of the amendment and the effect on the financial statements is not expected to be
material.
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2.1. Property, Plant and Equipment

Land - Buildings Plant and Plant and Furniture Office Computers Vehicles Manufact Total Capital
freehold Machinery machinery and Equipment uring work in
under lease fixtures Tools progress
Deemed Cost:
Balance as at 9.00 243.33 654.31 112.97 20.76 4.54 13.59 34.48 153.61 1,246.59 26.15
1 April 2016
Additions 127.60 28.40 139.15 104.07 0.85 - 4.31 88.07 26.80 519.25 166.65
Disposals (3.90) - - - - - - - - (3.90) (156.82)
Balance as at 132.70 271.73 793.47 217.04 21.61 4.54 17.90 122.55 180.41 1,761.94 35.99
31 March 2017
Additions - - 150.46 15.17 - - 1.65 26.32 7.24 200.84 358.98
Disposals - - - (8.43) - - - - - (8.43) -
Capitalised - - - - - - - - - - (142.32)
during the Year
Balance as at 132.70 271.73 943.92 223.78 21.61 4.54 19.55 148.87 187.65 1,954.35 252.64
31 March 2018
Accumulated
Depreciation
Depreciation Charge - 12.09 92.71 14.87 2.47 1.38 7.66 15.40 31.29 177.87 -
for the Year
Disposals - - - - - - - - - - -
Balance as at - 12.09 92.71 14.87 2.47 1.38 7.66 15.40 31.29 177.87 -
31 March 2017
Depreciation Charge - 12.99 104.13 19.29 2.45 1.29 5.42 27.72 32.70 205.98 -
for the Year
Disposals - - - (1.03) - - - - - (1.03) -
Balance as at - 25.08 196.84 33.13 4.92 2.67 13.08 43.12 63.99 382.83 -
31 March 2018
Net Block
Balance as at 9.00 243.33 654.31 112.97 20.76 4.54 13.59 34.48 153.61 1,246.59 26.15
1 April 2016
Balance as at 132.70 259.64 700.75 202.17 19.14 3.16 10.24 107.15 149.12 1,584.07 35.99
31 March 2017
Balance as at 132.70 246.65 747.08 190.65 16.68 1.87 6.47 105.76 123.66 1,571.52 252.64
31 March 2018
Notes:
a) Deemed Carrying Cost
For property, plant and equipment existing as on the date of transition to Ind AS, i.e., 1 April 2016, the Company
has used Previous GAAP carrying value as deemed costs.
b) Contractual Obligations
Refer note 2.29
c) Capitalised Borrowing Cost
There is no borrowing costs capitalised during the year ended 31 March 2018 (31 March 2017: Nil).
d) Property, Plant and Equipment Pledged as Security
Refer note 2.12 and 2.27
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2.2. Intangible Assets
Software Total
Gross block
Additions 1.70 1.70
Disposals - -
Additions 10.51 10.51
Disposals - -
Accumulated Amortisation
Balance as at 1 April 2016 - -
Amortisation charge for the year 4.10 4.10
Disposals - -
Amortisation charge for the year 4.69 4.69
Disposals - -
Net block
2.3. Loans
As at As at As at
31 March 2018 31 March 2017 1 April 2016
Non-current
(Unsecured, considered good)
Loans and Advances 1.57 12.20 20.61
1.57 12.20 20.61
Current
(Unsecured, considered good)
Loans and Advances 8.14 8.77 6.98
8.14 8.77 6.98
2.4. Other Financials Assets
As at As at As at
Non-current
Security Deposits 69.73 79.11 71.88
Margin Money Deposits with banks against bank guarantees 18.67 0.90 3.69
88.40 80.01 75.57
Current
Interest accrued on Margin Money 1.54 1.35 0.45
Other Financial Assets 3.39 0.68 3.35
4.93 2.03 3.80
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2.5. Other Assets
As at As at As at
Non-current
(Unsecured, Considered Good)
Prepaid Expenses 0.82 1.58 0.76
Duties and Taxes Recoverable 22.98 27.03 27.03
Capital Advance
a) Related Party - - 75.75
b) Others 4.48 4.11 51.94
28.28 32.72 155.48
Current
(Unsecured, Considered Good)
Duties and Taxes Recoverable 15.80 1.63 3.37
Prepaid Expenses 14.57 13.60 17.01
Advance for Expenses 16.05 4.34 28.77
Other Current Assets 7.43 11.69 7.91
53.85 31.26 57.06
2.6. Inventories
As at As at As at
Raw Materials 96.08 222.51 135.57
Work in Progress 74.67 39.00 124.16
Finished Goods 613.32 705.46 366.99
Goods in Transit ( Finished Goods) 0.11 25.05 33.98
Packing Materials 11.20 5.58 8.89
Fuel & Oil 7.66 2.90 1.65
Tools & Spares 9.79 13.97 14.98
812.83 1,014.47 686.22
2.7. Trade Receivables
As at As at As at
Non- Current
Unsecured, Considered Good 5.76 11.99 13.37
5.76 11.99 13.37
Current
Unsecured, Considered Good 2,567.17 2,401.08 1,479.55
Unsecured, Considered Doubtful 2.94 - 37.86
2,570.11 2,401.08 1,517.41
Less: Provision for Doubtful Receivables (2.94) - (37.86)
2,567.17 2,401.08 1,479.55
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2.8. Cash and Cash Equivalents
As at As at As at
Cash on Hand 0.78 1.08 2.08
Balances with Banks
- on Current Accounts 121.47 93.54 29.05
122.25 94.62 31.13
2.9. Other Bank Balances
As at As at As at
Unpaid Dividend accounts 7.90 6.08 4.59
Margin Money Deposits with banks against bank guarantees 19.16 19.40 18.46
[ref note (a) below]
27.06 25.48 23.05
(a) The amount classified under Margin money accounts consists of amount deposited with banks towards margin
money for Bank Guarantee, Letter of Credit and Vendor bill discounting facilities.
2.10. Equity Share capital
(a) Authorised Equity Capital
As at 31 March 2018 As at 31 March 2017 As at 1 April 2016

Number Amount Number Amount Number Amount
(In Lakhs) (In Lakhs) (In Lakhs)
Equity shares of ₹ 10 each 60.00 600.00 60.00 600.00 60.00 600.00
60.00 600.00 60.00 600.00 60.00 600.00
(b) Issued, Subscribed and Paid-up Capital

Equity shares of ₹ 10 each, fully paid up 52.32 523.20 52.32 523.20 52.32 523.20
Shares Forfeited - 17.98 - 17.98 - 17.98
52.32 541.18 52.32 541.18 52.32 541.18
(c) Reconciliation of the Number of Shares and Amount Outstanding at the beginning and at the end of
the reporting period:

Equity Shares of ₹ 10 each, par value
Balances as at the beginning of the year 52.32 523.20 52.32 523.20 52.32 523.20
Add: Issued and Subscribed during the Year - - - - - -
Shares Forfeited - 17.98 - 17.98 - 17.98
Balance at the end of the Year 52.32 541.18 52.32 541.18 52.32 541.18
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(d) Details of Shareholders Holding more than 5% Shares:
Particulars As at 31 March 2018 As at 31 March 2017 As at 1 April 2016
Number Percentage Number Percentage Number Percentage
Equity shares of ₹10 each, par value
Feroz Meeran 13.51 25.81% 13.51 25.81% 13.51 25.81%
Navas Meeran 13.22 25.26% 13.22 25.26% 13.22 25.26%
Kerala State Industrial Development 6.15 11.75% 6.15 11.75% 6.15 11.75%
Corporation Limited
(e) Terms Rights, Attached to Equity Shares
The Company has only one class of shares referred to as equity shares with a face value of ₹10 each. Each
holder of equity share is entitled to one vote per share. The Company declares and pays dividend in Indian
Rupees. The dividend proposed/declared by the Board of Directors is subject to approval/regularisation of the
shareholders’ in the ensuing Annual General Meeting. In the event of liquidation of the Company, the holders
of equity shares will be entitled to receive remaining assets of the Company after distribution of all preferential
amounts, in proportion to the number of equity shares held by the shareholders.
(f) Issue of Bonus Shares

There has been no issuance of bonus shares or share buyback during five years immediately preceding 31
March 2018.
2.11. Other Equity
As at As at As at
Capital Reserve 100.00 100.00 -
Other Equity 744.41 744.41 744.41
General Reserves 97.46 97.46 97.46
Retained Earnings (492.88) (225.48) (213.32)
448.99 716.39 628.55
Capital Reserve:
The Company had redeemed 100,000 nos of Zero coupon cumulative Redeemable Preference Shares of ₹100/-
each amounting to ₹1 Crore during the FY 2016-17 and the amount equal to the face value of such number of
shares has been transferred to Capital reserve.
2.12. Borrowings
As at As at As at
Non-current
(Secured)
Term Loan 323.13 465.68 420.03
Vehicle Loan 88.04 84.06 11.88
(Unsecured)
Liability Component of Cumulative Redeemable 596.76 532.82 565.02
Preference Shares
1,007.93 1,082.56 996.93
Amount disclosed under "Other Current Financial Liabilities" (181.06) (213.55) (182.78)
(refer note 2.13)
826.87 869.01 814.15
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2.12. Borrowings (Cont’d)
As at As at As at
Current
(Secured)
Cash Credit 1,555.32 1,027.03 289.63
1,555.32 1,027.03 289.63
(Unsecured)
Loan from Director 25.00 25.00 -
25.00 25.00 -
1,580.32 1,052.03 289.63
Notes:
(i) Term Loans from Banks
a) Term loan from The Federal Bank Ltd is secured by way of first charge on the movable fixed assets and
are further guaranteed by the Promoter Directors of the Company. The above loans are further secured by
Collateral security by deposit of title deeds of the land and building of the Company.
b) These loans are repayable ranging from a period of 36 months to 60 months with equal monthly installments
ranging from ₹2.00 lakhs to ₹6.00 lakhs. The rate of interest ranges from 9.25% to 13.20% p.a.
(ii) Vehicle Loan
a) The vehicle loans are secured by hypothecation of the vehicle with HDFC Bank Limited.
b) These loans are repayable ranging from a period of 36 months to 60 months with equal monthly
installments ranging from ₹10,241 to ₹57,181.The rate of interest ranges from 9.50 % to 11.50% p.a.
(iii) Liability Component of Cumulative Redeemable Preference Shares
(a) The Company had issued 10 lakhs Zero Coupon Cumulative Redeemable Preference Shares of ₹100
each to the promoters, which are redeemable after 5 years from the date of allotment subject to achieving
net worth of ₹100 lakhs (without considering the said preference shares).
(b) The Board Meeting held on 22 July 2016 had approved the redemption plan of the Preference Shares.
Ten Lakhs Redeemable Preference Shares of ₹100/- each shall be redeemed out of the profits of the
Company in not more than 10 annual installments of a minimum of 100,000 Preference Shares of ₹100/ -
each aggregating to ₹1 crore per year. During the FY 16-17, the Company had redeemed 100,000 nos
of Zero coupon cumulative redeemable Preference Shares of ₹100/- each valued at ₹1 Crore. In
accordance with Ind AS 32, these preference shares are classified as amortised cost liability as the
preference shares provides for redemption on specific date or at the option of the holder.
69
(iv) Cash Credit
(a) 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. The above loans are further secured by collateral security by deposit of title deeds of the
land and building of the Company.
(b) The rate of interest for the Cash credit facility with Federal Bank Limited is 9.95% p.a.
(v) Loan from Director

(a) The interest free unsecured loan was accepted from director by the Company to meet working capital
requirements.
(b) As per the terms of borrowings the Company reserves the right to repay either the full amount or part of
the unsecured loan in case it does not require the same to meet its working capital requirements. Hence
the loan will be repaid on demand and hence classified as short term borrowings.
2.13. Other Financial Liabilities
As at As at As at
Non-current
Deposit from Employees 8.66 6.28 -
8.66 6.28 -
Current
Current maturities of Long Term Borrowings 181.06 213.55 182.78
Security Deposit /Retention Money Payable 162.11 216.77 107.57
Due to Employees 42.21 60.54 75.90
Creditors for Capital Goods 14.80 10.93 19.41
Unpaid Dividends 7.90 6.08 4.59
408.08 507.87 390.25
2.14. Provisions
As at As at As at
Non-current
Provision for Employee Benefits 69.23 59.77 57.87
69.23 59.77 57.87
Current
Provision for Employee Benefits 6.33 3.56 -
6.33 3.56 -
2.15. Deferred Tax Liabilities, Net

As at As at As at
Deferred Tax Liability
On excess of net book value over Income Tax written
down value of fixed assets 66.27 66.27 71.87
Deferred Tax impact on fair value changes 103.02 124.79 148.88
169.29 191.06 220.75
Deferred Tax Assets
On Provisions (11.83) (11.83) (10.03)
Deferred Tax Liabilities, net 157.46 179.23 210.72
ANNUAL
REPORT
2017-2018
2.16. Trade Payables
As at As at As at
Dues to Micro Enterprises and Small Enterprises 41.33 60.31 11.72
(Refer Note (a) below)
Dues to others 1,435.66 1,219.60 818.23
1,476.99 1,279.91 829.95
(a) Dues to micro and small enterprises as defined under the Micro, Small and Medium Enterprises Development
Act (MSMED), 2006 to the extent identified and information available with the Company pursuant to Section
22 of the Micro, Small and Medium Enterprises Development Act (MSMED), 2006, details are mentioned
below:
As at As at As at
i) Principal amount remaining unpaid (but within due date as 41.33 60.31 11.72
per the Micro, Small and Medium Enterprises Development
Act, 2006)
ii) Interest due thereon remaining unpaid
iii) Interest paid by the Company in terms of Section 16 of the - - -
Micro, Small and Medium Enterprises Development Act,
2006, along-with the amount of the payment made to the
supplier beyond the appointed day during the period.
iv) Interest due and payable for the period of delay in making - - -
payment (which have been paid but beyond the appointed
day during the period) but without adding interest specified
under the Micro, Small and Medium Enterprises Act, 2006
v) Interest accrued and remaining unpaid - - -
vi) Interest remaining due and payable even in the succeeding - - -
years, until such date when the interest dues as above are
actually paid to the small enterprises
Total 41.33 60.31 11.72
2.17. Other Liabilities
As at As at As at
Non-current
Advance Lease Rent 15.84 23.12 15.43
Others 2.30 2.39 -
18.14 25.51 15.43
Current
Advance Lease Rent 7.55 8.71 -
Advances from Customers 20.95 36.79 22.07
Other Payables 17.99 51.17 32.01
46.49 96.67 54.08
71
ANNUAL
REPORT
2017-2018
2.18. Revenue from Operations
Year ended Year ended
31 March 2018 31 March 2017
Sale of Products
Gross Sales 9,344.76 9,297.96
Other Operating Revenue
Sale of Scrap and Waste 6.77 20.30
Job Work Receipts 35.04 172.63
Retreading Charges 125.80 65.48
Lease Rent Received 26.99 20.86
194.60 279.27
9,539.36 9,577.23
Gross sales includes excise duty paid ₹100.84 lakhs for the current year and ₹517.78 lakhs for the previous financial year
2.19. Other Income

31 March 2018 31 March 2017
Interest Income 4.05 8.76
Provision for Doubtful Debts no longer required, written back - 37.86
Other Income 18.27 23.86
22.32 70.48
2.20. Cost of Materials Consumed

31 March 2018 31 March 2017
Opening Inventory 222.51 135.57
Add: Purchases 5,298.78 4,077.27
Less: Closing Inventory (96.08) (222.51)
5,425.21 3,990.33
2.21. Decrease/(Increase) in Inventories of Finished Goods, Traded Goods and Work-in-Progress

31 March 2018 31 March 2017
Closing Stock
Finished Goods 613.42 730.52
Work-in-Progress 74.67 39.00
688.09 769.52
Less: Opening Stock
Finished Goods 730.52 400.96
Work-in-Progress 39.00 124.16
769.52 525.12
81.43 (244.40)
2.22. Employee Benefits Expense
31 March 2018 31 March 2017
Salaries, Wages and Bonus 732.43 658.43
Contributions to Provident and other Funds [refer note (a) and (b)] 70.35 52.37
Staff Welfare Expenses 45.30 44.19
848.08 754.99
72
ANNUAL
REPORT
2017-2018
(a) Eligible employees of the Company receive benefits under the Provident Fund which is a defined contribution
plan wherein both the employee and the Company make monthly contributions equal to a specific percentage
of covered employees' salary. These contributions are made to the Fund administered and managed by the
Government of India and the Company has no further obligation beyond making its contribution. The
Company's monthly contributions are charged to Statement of Profit and Loss in the period in which they are
incurred:
31 March 2018 31 March 2017
Employer's contribution to Provident Fund 46.74 44.58
Employer's contribution to ESI 11.88 2.30
(b) In accordance with the payment of gratuity under ‘Payment of Gratuity Act, 1972’ of India, the Company
provides for gratuity, a defined retirement benefit plan covering eligible employees. Liability with regard to
such gratuity is determined by an independent actuarial valuation using the Projected Unit Credit method and
is charged to the Statement of Profit and Loss in the year. Re-measurement gains and losses arising from
experience adjustments and changes in actuarial assumptions are recognised in the period in which they
occur, directly in other comprehensive income. They are included in retained earnings in the statement of
changes in equity and in the Balance Sheet. The following table set out the status of the gratuity plan as
required under Ind AS 19, Employee Benefits:
Change in defined Benefit Obligations Year ended Year ended

31 March 2018 31 March 2017
Present value of defined benefit obligations at the beginning of the year 56.82 30.70
Current service cost 5.96 4.47
Interest cost 4.48 2.63
Benefits settled - -
Actuarial (gain)/ loss 9.95 19.02
Present value of defined benefit obligations at the end of the year 77.21 56.82
Reconciliation of present value of Year ended Year ended
Obligation and the fair value of assets 31 March 2018 31 March 2017
Present value of the defined benefit obligation at the end of the year 77.21 56.82
Fair Value of plan assets 1.76 0.46
Liability / (asset) recognised in the Balance Sheet 75.45 56.36
Change in defined Benefit Obligations Year ended Year ended
31 March 2018 31 March 2017
Fair Value of the Plan Assets at the beginning of the period 0.46 0.37
Expected Return on Plan assets - -
Contributions by employer 1.30 -
Benefits paid from the fund - -
Actual return - 0.09
Fair Value of the Plan Assets at the end of the period 1.76 0.46
Components of net Gratuity Cost Year ended Year ended
31 March 2018 31 March 2017
Current service cost 5.96 4.47
Interest cost 4.48 2.54
Net gratuity costs charged to profit or loss 10.44 7.01
Components Actuarial Losses/(Gains) in Year ended Year ended
Other Comprehensive Income 31 March 2018 31 March 2017
Actuarial (gain) / loss due to demographic assumption changes in defined - -
benefit obligations
Actuarial (gain) / losses due to financial assumption changes in defined - -
benefit obligations
Actuarial (gain) / losses due to experience on defined benefit obligations (9.95) (19.02)
Total actuarial (gain) / loss included in other comprehensive income (9.95) (19.02)
73
Assumptions Used
Discount Rate 8.00% 7.50%
Salary escalation rate * 3.00% 3.00%
Retirement age 58 58
* Estimates of future salary increases takes into account inflation, seniority, promotions and other relevant
factors such as supply and demand in employment market.
Sensitivity Analysis
Description of Risk Exposures
Valuations are performed on certain basic set of pre-determined assumptions which may vary over time. Thus,
the Company is exposed to various risks in providing the above benefit which are as follows:
Interest Rate Risk
The plan exposes the Company to the risk of fall in interest rates. A fall in interest rates will result in an increase
in the ultimate cost of providing the above benefit and will thus result in an increase in the value of liability (as
shown in financial statements).
Liquidity Risk
This is the risk that the Company is not able to meet the short term benefit payouts. This may arise due to non-
availability of enough cash/cash equivalent to meet the liabilities or holding of illiquid assets not being sold in time.
Salary Escalation Risks
The present value of the above benefit plan is calculated with the assumption of salary increase rate of plan
participants in future. Deviation in the rate of increase in salary in future for plan participants from the rate of
increase in salary used to determine the present value of obligation will have a bearing on the plan's liability.
Regulatory Risk
Gratuity benefit is paid in accordance with the requirements of the Payment of Gratuity Act, 1972 (as amended
from time to time). There is a risk of change in regulations requiring higher gratuity payouts (for example, increase
in the maximum liability on gratuity of ₹2,000,000).
Investment Risk
The probability or likelihood of occurrence of losses relative to the expected return on any particular investment.
Significant actuarial assumptions for the determination of the defined benefit obligation are discount rate, expected
salary increase and mortality. The sensitivity analysis below have been determined based on reasonably possible
changes of the assumptions occurring at the end of the reporting period, while holding all other assumpti ons
constant. A quantitative sensitivity analysis for significant assumption is as shown below:
Assumption Year ended 31 March 2018 Year ended 31 March 2017
Increase Decrease Increase Decrease
Discount rate (- / + 1%) (5.79) 10.00 (12.13) 7.64
Salary growth rate (- / + 1%) 9.21 (5.47) (0.33) (11.93)
Attrition rate (- / + 1%) 41.67 (38.62) 23.07 (36.11)
Sensitivity analysis presented above may not be representative of the actual change in the defined benefit
obligation as it is unlikely that the change in assumptions would occur in isolation of one another as some of the
assumptions may be correlated. There are no changes from the previous period in the methods and assumptions
used in preparing the sensitivity analysis.
74
2.23. Finance Costs
31 March 2018 31 March 2017
Interest Expense 249.92 209.07
Interest on Income tax 3.53 0.67
Other Borrowing Costs 73.47 86.93
326.92 296.67
2.24. Depreciation and Amortisation Expense
31 March 2018 31 March 2017
Depreciation on Tangible Assets (refer note 2.1) 205.98 177.87
Amortisation of Intangible Assets (refer note 2.2) 4.69 4.10
210.67 181.97
2.25. Other Expenses
31 March 2018 31 March 2017
Repairs and Maintenance:
Building 3.11 1.30
Plant and Machinery 9.41 5.24
Others 32.85 31.21
Rent 70.22 67.69
Insurance 14.78 17.39
Professional Charges 29.36 26.88
Payments to the auditor (refer note 2.25.1 ) 10.93 9.27
Travelling Expenses 107.95 114.69
Business Promotion Expenses 110.25 142.02
Freight Charges 146.39 117.39
Claim Settlement 4.49 16.05
Tools and Spares Consumed 15.55 12.83
Commission 25.65 22.46
Power and Fuel 273.69 239.91
Rates and Taxes excluding Taxes on Income 50.76 123.38
Job Work Charges 109.28 20.09
Consumables 35.47 32.92
Packing Materials Consumed 141.79 79.50
General Factory Expenses 68.25 70.98
Provision for Doubtful Debts 2.94 -
Miscellaneous Expenses 48.25 54.88
1,311.37 1,206.08
2.25.1. Payments to the Auditor

Statutory audit fees 10.00 7.00
Taxation matters (including tax audit) - 1.00
Others - 1.00
Reimbursement of expenses 0.93 0.27
2.26. Earning Per Share
31 March 2018 31 March 2017
Net profit/(loss) after tax for the year (235.90) 119.33
Weighted number of ordinary shares for basic EPS in lakhs 52.32 52.32
Nominal value of ordinary share (in ₹ per share) 10.00 10.00
Basic and Diluted earnings for ordinary shares (in ₹ per share) (4.51) 2.28
ANNUAL
REPORT
2017-2018
2.27. Assets pledged as Security
The carrying amounts of assets pledged as security for current and non-current As at As at
borrowings are: 31 March 2018 31 March 2017
Current
First Charge
Financial Assets
Trade Receivables 2,567.17 2,401.08
Cash and Cash Equivalents 122.25 94.62
Bank Balances other than Cash and Cash Equivalents 27.06 25.48
Other Financial Assets 4.93 2.03
Inventories 812.83 1,014.47
Other Current Assets 53.85 31.26
Total Current Assets Pledged as Securities 3,588.09 3,568.94
Non-Current
First Charge
Property, Plant and Equipment (PPE) and Capital Work in Progress 1,824.16 1,620.06
Total Non-Current Assets Pledged as Securities 1,824.16 1,620.06
Total Assets Pledged as Security 5,412.24 5,189.00
2.28. Related Party Disclosures

(A) Name of the related party and nature of relationship where control exists
Key Management Personnel (KMP)
Navas M. Meeran Chairman
M.E. Mohamed Managing Director
Rajesh S. CEO (w.e.f 25.07.2017)
Mohammed Sherif Shah CFO (w.e.f 25.07.2017)
Baiju T. Company Secretary
Entities where significant influence is exercised by the director, KMP and/or their relatives having
transactions with the Company
1. Eastern Condiments Private Limited 8. Vazhakkulam Rubbers
2. Eastern Mattresses Private Limited 9. Alfa Rubbers
3. Eastern Retreads Private Limited 10. Rosekhan Industries
4. Eastea Chai Private Limited 11. Sahara Treads
5. Feroz Treads Private Limited 12. Soya Rubbers Private Limited
6. Sheram Treads Private Limited 13. Nilima Treads Private Limited
7. Sumo Treads Private Limited
(B) Transactions with Related Parties as per the books of account during the period
Entities where significant influence is Key Managerial Person (KMP)
exercised by the director, KMP and/or
their relatives having transactions with
Nature of Transaction
the Company
Year ended Year ended Year ended Year ended
31 March 2018 31 March 2017 31 March 2018 31 March 2017
Eastern Condiments Private Limited
Sharing of Expenses 11.95 7.09 - -
Eastern Mattresses Private Limited
Sale of Finished Goods - 0.02 - -
Eastern Retreads Private Limited
Sale of Finished Goods 223.07 14.30 - -
Purchase of Goods 0.03 - - -
Eastea Chai Private Limited
Feroz Treads Private Limited
Purchase of Goods 130.32 138.84 - -
Sale of Raw Materials - 120.27 - -
Sale of Finished Goods 4.56 - - -
Job Work Receipt 2.87 17.05 - -
76
ANNUAL
REPORT
2017-2018
Vazhakulam Rubbers
Sale of Finished Goods 69.97 329.91 - -
Sharing of Expenses - 0.43 - -
Job Work Payment 0.27 0.80 - -
Job Work Receipt - 5.12 - -
Sumo Treads Private Limited
Sale of Raw Materials 0.02 - - -
Soya Rubbers Private Limited
Security Services provided 7.12 5.91 - -
Nilima Treads Private Limited
Purchase of Goods 1.30 135.64
Job Work Receipt - 7.82
Alfa Rubbers
Sale of Raw Materials - 76.59 - -
Job Work Payment - 2.38 - -
Rosekhan Industries
Sale of Raw Materials 259.64 104.40 - -
Job Work Payment 75.24 0.18 - -
Sale of Finished Goods& scrap 66.82 - - -
Sahara Treads
Sale of Raw Materials 226.78 139.68 - -
Job Work Payment 44.76 - - -
Remuneration
Rajesh S - - 26.22 33.48
Baiju T. - - 11.10 9.97
K.A. Mohammed Sherif Shah* - - 17.82 -
* Remuneration for the full financial year.
Loan Accepted
Navas Meeran - - - 25.00
(C) Amount Outstanding as at end of each reporting periods

Amount receivables/ (payables): As at As at As at
Entities where significant influence is exercised by the director,
KMP and/or their relatives having transactions with the Company
Eastern Retreads Private Limited 72.90 6.37 (0.15)
Feroz Treads Private Limited - 42.30 12.96
Eastern Mattresses Private Limited - - 75.75
Sumo Treads Private Limited - (29.75) 13.30
Vazhakulam Rubbers 74.30 119.57 32.84
Nilima Treads Private Limited - (20.95) 5.90
Soya Rubbers Private Limited 7.41 7.41 7.99
Rosekhan Industries 40.86 - -
Key Management Personnel
Navas Meeran (25.00) (25.00) -
Rajesh S - (5.00) (10.00)
Baiju T (0.46) (0.53) (1.43)
Mohammed Sherif Shah (0.79) - -
77
ANNUAL
REPORT
2017-2018
2.29. Contingent Liabilities And Commitments (To The Extent Not Provided For)
As at As at As at
a) Claims against the company not acknowledged as debt
i) Sales Tax matters 14.10 14.10 13.72
ii) Income Tax matters 20.97 - -
iii) Bank Guarantees outstanding 91.38 74.48 124.91
iv) Guarantee provided to IDBI Bank Limited for Vendor bill
750.00 750.00 750.00
Discounting facility
b) Capital Commitments
i) Estimated amounts of contracts remaining to be executed not
7.09 14.13 530.40
provided for
2.30. Financial Risk Management
The Company's activities expose it to a variety of financial risks: market risk, credit risk and liquidity risk. The Company's
focus is to foresee the unpredictability of financial markets and seek to minimize potential adverse effects on it's financial
performance. The Company's exposure to credit risk is influenced mainly by the individual characteristic of each
customer. The Company's risk management activity focuses on actively securing the Company’s short to medium-term
cash flows by minimising the exposure to volatile financial markets. Long-term financial investments are managed to
generate lasting returns. The Company does not actively engage in the trading of financial assets for speculative
purposes nor does it write options. The most significant financial risks to which the Company is exposed are described
below.
A. Credit Risk Analysis
Credit risk refers to the risk that counterparty will default on its contractual obligations resulting in financial loss to t he
Company. The Company is exposed to credit risk for receivables, cash and cash equivalents, short term investments
and financial guarantee.
Cash and cash equivalents and short term investments
The Company considers factors such as track record, size of institution, market reputation and service standard to
select the banks with which deposits are maintained. Generally the balances are maintained with the institutions with
which the Company has also availed borrowings. The Company does not maintain significant deposit balances other
than those required for its day to day operations.
Trade receivables
The Company is exposed to credit risk from its operating activities primarily from trade receivables amounting to
₹2,572.93 and ₹2,413.07 as of 31 March 2018 and 31 March 2017 respectively. The Company has standard operating
procedure for obtaining sufficient security like bank guarantees where appropriate, as a means of mitigating the risk
of financial loss from defaults. No customers accounted for 10% or more of revenue during the reporting periods
covered.
The credit quality of the Company’s customers is monitored on an ongoing basis and assessed for impairment where
indicators of such impairment exist. The history of trade receivables shows a negligible provision for bad and doubtful
debts. The solvency of customers and their ability to repay the receivable is considered in assessing receivables for
impairment. Therefore, the Company does not expect any material risk on account of nonperformance by any of the
Company’s counterparties. Where receivables are impaired, the Company actively seeks to recover the amounts in
question and enforce the compliance with credit terms.
B. Liquidity Risk
The Company requires funds both for short-term operational needs as well as for long-term growth projects. The
Company generates sufficient cash flows from the current operations which together with the available cash and cash
equivalents provide liquidity both in the short-term as well as in the long-term. In addition, Company has also availed
short term / long term finance from banks as and when required. The Company has been rated by CRISIL Limited
(CRISIL) for its banking facilities in line with Basel II norms with a rating of Long term - CRISIL BB/ Stable and short
term A4+.
78
ANNUAL
REPORT
2017-2018
The Company remains committed to maintaining a healthy liquidity, gearing ratio and strengthening the balance sheet.
The maturity profile of the Company’s financial liabilities based on the remaining period from the date of balance sheet
to the contractual maturity date is given in the table below. The figures reflect the contractual undiscounted cash
obligation of the Company.
Maturities of financial liabilities
As at 31 March 2018 < 1year 1-5 years >5years Total

Borrowings 1,761.38 232.11 - 1,993.49
Preference Share Redemption 200.00 500.00 200.00 900.00
Other Financial Liabilities 227.03 8.66 - 235.69
Trade Payables 1,476.99 - - 1,476.99
3,665.40 740.77 200.00 4,606.17
As at 31 March 2017 < 1year 1-5 years >5years Total
Borrowings 1,265.58 340.27 - 1,605.85
Other Financial Liabilities 294.31 6.28 - 300.59
Trade Payables 1,279.91 - - 1,279.91
2,939.80 846.55 300.00 4,086.35
As at 1 April 2016 < 1year 1-5 years >5years Total
Borrowings 472.41 254.60 0.00 727.01
Other Financial Liabilities 207.47 - - 207.47
Trade Payables 829.95 - - 829.95
1,609.83 754.60 400.00 2,764.43
C. Interest Rate Risk
The Company is exposed to interest rate risk on short-term (cash credit) and long-term (term loans). All the
vehicle loans of the company are fixed rate borrowings. The borrowings of the Company are principally
denominated in Indian Rupees. These exposures are reviewed by appropriate levels of management on a
regular basis. There are no foreign currency borrowings made by the company during the reporting periods.
The impact on the Companies profit before tax due to change in interest rate is given below:
Change in Effect on Profit before Tax

Interest Sensitivity:
interest rate 31 March 2018 31 March 2017
Interest rates – increase by 100 basis points (100 bps) 1.00% (18.78) (14.93)
Interest rates – decrease by 100 basis points (100 bps) -1.00% 18.78 14.93
2.31. Capital Management
The Company’s objectives when managing capital is to safeguard continuity, maintain a strong credit rating and
healthy capital ratios in order to support its business and provide adequate return to sharehold ers through
continuing growth and maximise the shareholders value. The Company’s overall strategy remains unchanged
from previous year. The Company sets the amount of capital required on the basis of annual business and long-
term operating plans. The Company’s policy is to use short term and long-term borrowings to meet anticipated
funding requirements. For the purpose of calculating gearing ratio, debt is defined as non-current and current
borrowings (excluding derivatives). Equity includes all capital and reserves of the Company attributable to equity
holders of the Company.
79
ANNUAL
REPORT
2017-2018
As at As at As at
Short Term Borrowings 1,580.32 1,052.03 289.63
Long term borrowings 826.87 869.01 814.15
Current maturities of long term borrowings 181.06 213.55 182.78
Less: Cash and cash equivalents (122.25) (94.62) (31.13)
Less: Bank balances other than cash and cash equivalents (27.06) (25.48) (23.05)
Net Debt 2,438.94 2,014.48 1,232.38
Equity share capital 541.18 541.18 541.18
Other equity 448.99 716.39 628.55
Total capital (equity + net debt) 3,429.11 3,272.05 2,402.11
Gearing Ratio 71% 62% 51%
2.32. Disclosure with respect to Operating Leases
The lease expenses for cancellable operating leases during the year ended 31 March 2018 is ₹70.22 (31 March
2017: ₹67.69). The Company's significant leasing arrangements in respect of operating leases for office premises,
which includes cancellable leases generally range between 11 months to 60 months and are usually renewable
by mutual consent on mutually agreeable terms. The aggregate lease rentals payable are charged as rent under
note 2.25 to the financial statements.
2.33. Income Tax

31 March 2018 31 March 2017
The major components of income tax expense are:
Current income tax:
Current income tax charge - 74.22
Deferred tax credit
Relating to the origination and reversal of temporary differences (18.32) (24.92)
Income tax expense reported in Statement of Profit and Loss (18.32) 49.29
Deferred tax related to items recognised in
Other comprehensive income (OCI)
Income tax relating to re-measurement gains on defined benefit plans (3.44) (6.58)
Reconciliation of Deferred Tax (net)

As at As at
31 March 2018 31 March 2017
Opening balance 179.22 210.72
Tax credit during the year recognized in statement of profit and loss (18.32) (24.92)
Tax credit during the year recognised in OCI (3.44) (6.58)
Closing balance 157.46 179.22
80
ANNUAL
REPORT
2017-2018
Reconciliation of tax expense and the accounting profit Year ended Year ended
multiplied by India’s domestic tax rate 31 March 2018 31 March 2017
Accounting (loss)/profit before tax and exceptional item (247.71) 181.07
Tax on accounting profit at statutory income tax rate [27.82% (2017: 33.063%)] (68.91) 59.87
Tax effects of amounts which are not deductible (taxable) in calculating taxable
income:
Non deductible expenses 5.99 1.84
Assets written off - 1.29
Change in tax rates (12.99) -
Other disallowances - 13.70
Deferred tax assets not recognized on the loss for the year as there is no
certainty of future taxable profit 57.59 -
Tax charge for the year (18.32) 49.30
Income tax expense reported in the Statement of Profit and Loss (18.32) 49.30
2.34. Fair Value Measurements
(i) Financial Instruments by Category
The carrying value and fair value of financial instruments by categories are as follows:
Particulars 31 March 2018 31 March 2017 1 April 2016
Amortised Financial Financial Amortised Financial Financial Amortised Financial Financial
cost assets / assets / cost assets / assets / cost assets / assets /
liabilities at liabilities at liabilities liabilities at liabilities at liabilities at
FVTPL FVTOCI at FVTPL FVTOCI FVTPL FVTOCI
Financial Assets:
Non-current
i) Trade Receivables 5.76 - - 11.99 - - 13.37 - -
ii) Loans 1.57 - - 12.20 - - 20.61 - -
iii) Other Financial Assets 88.40 - - - - - 75.57 - -
Current
i) Trade Receivables 2,567.17 - - 2,401.08 - - 1,479.55 - -
ii) Cash and Cash Equivalents 122.25 - - 94.62 - - 31.13 - -
iii) Other Bank Balances 27.06 - - 25.48 - - 23.05 - -
iv) Loans 8.14 - - 8.77 - - 6.98 - -
v) Other Financial Assets 4.93 - - 2.03 - - 3.80 - -
Total financial assets 2,825.28 - - 2,556.17 - - 1,654.06 - -
Financial Liabilities:
Non-current
i) Borrowings 826.87 - - 869.01 - - 814.15 - -
ii) Other Financial Liabilities 8.66 - - 6.28 - - - - -
Current
i) Borrowings 1,580.32 - - 1,052.03 - - 289.63 - -
ii) Trade Payables 1,476.99 - - 1,279.91 - - 829.95 - -
iii) Other Financial Liabilities 408.08 - - 507.87 - - 390.25 - -
Total Financial Liabilities 4,300.92 - - 3,715.09 - - 2,323.98 - -
The management assessed that the fair value of cash and cash equivalents, trade receivables, loans, other
financial assets, trade payables, working capital loans and other financial liabilities approximate the carrying
amount largely due to short-term maturity of this instruments.
(ii) Fair value of financial assets and liabilities measured at amortised cost
The management assessed that for amortised cost instruments, fair value approximate largely to the carrying
amount.
81
ANNUAL
REPORT
2017-2018
2.35. Segment Information
The Company is engaged in the manufacture and sale of products which form part of one product group which
represents one operating segment, as the Chief Operating Decision Maker (CODM), reviews business
performance at an overall company level. Entity-wide disclosure as required by Ind AS 108 "Operating Segment"
are as follows:
i) Revenues from external customers for each product or each group of similar products:
Particulars Year ended Year ended

31 March 2018 31 March 2017
Sales of products 9,344.76 9,297.96
9,344.76 9,297.96
ii) Revenues from external customers attributed to the Company’s country of domicile and attributed to all
foreign countries from which the Company derives revenues:

31 March 2018 31 March 2017
India 9,032.86 9,035.39
Outside India 311.91 262.57
9,344.76 9,297.96
iii) Non-current assets (other than financial instruments and deferred tax assets) located in the Company’s
country of domicile and in all foreign countries in which the Company holds assets:

31 March 2018 31 March 2017
India 1,869.77 1,664.29
Outside India - -
1,869.77 1,664.29
iv) The following table gives details in respect of percentage of revenues generated from top customer and
revenues from transactions with customers amounts to 10 percent or more of Company’s revenues from
product sale:

31 March 2018 31 March 2017
Revenue from top customer 730.00 848.38
Revenue from customers contributing 10% or more to the Company’s - -
revenues from product sale
2.36. First Time Adoption of Ind AS
These are the Company’s first financial statements for the year ended 31 March 2018 prepared in accordance
with Ind AS. For the purposes of transition to Ind AS, the Company has followed the guidance prescribed in Ind
AS 101 - First Time adoption of Indian Accounting Standard, with 1 April 2016 as the transition date to the Ind AS.
An explanation of the transition from previous GAAP to Ind AS and the Company’s financial position, financial
performance and cash flows is set out in the following tables and notes.
The accounting policies set out in note 1 have been applied in preparing the financial statements for the year
ended 31 March 2018, the comparative information presented in these financial statements for the year ended 31
March 2017 and in the preparation of an opening Ind AS balance sheet at 1 April 2016 (the Company’s date of
transition).
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A. Ind AS Optional Exemptions
a) Deemed Cost for Property, Plant and Equipment and Intangible Assets
Ind AS 101 permits a first-time adopter to elect to continue with the carrying value for all of its property, plant and
equipment as recognised in the financial statements as at the date of transition to Ind AS, measured as per the
previous GAAP and use that as its deemed cost as at the date of transition after making necessary adjustments
for de-commissioning liabilities. This exemption can also be used for intangible assets covered by Ind AS 38
Intangible Assets. Accordingly, the Company has elected to measure all of its property, plant and equipment and
intangible assets at their previous GAAP carrying value.
b) Lease
Appendix C to Ind AS 17, Leases, requires an entity to assess whether a contract or arrangement contains a
lease. In accordance with Ind AS 17, Leases, this assessment should be carried out at the inception of the
contract or arrangement. Ind AS 101, First-time Adoption of Indian Accounting Standards, provides an option to
make this assessment on the basis of facts and circumstances existing at the date of transition to Ind AS, except
where the effect is expected to be not material. The Company has elected to apply this exemption for such
contracts/arrangements.
B. Ind AS Mandatory Exemptions
B1. Estimates
In accordance with Ind AS, as at the date of transition to Ind AS an entity's estimates shall be consistent with
the estimates made for the same date in accordance with previous GAAP (after adjustments to reflect any
difference in accounting policies), unless there is objective evidence that those estimates were in error.
Ind AS estimates as at 1 April 2016 are consistent with the estimates as at the same date made in conformity
with previous GAAP except impairment of financial assets based on expected credit loss model in accordance
with Ind AS at the date of transition this was not required under the previous GAAP.
B2. Classification and Measurement of Financial Assets and Liabilities
The classification and measurement of financial assets will be made considering whether the conditions as per
Ind AS 109 Financial Instruments are met based on facts and circumstances existing at the date of transition.
Financial assets can be measured using effective interest method by assessing its contractual cash flow
characteristics only on the basis of facts and circumstances existing at the date of transition and if it is
impracticable to assess elements of modified time value of money i.e. the use of effective interest method, fair
value of financial asset at the date of transition shall be the new carrying amount of that asset. The measurement
exemption applies for financial liabilities as well.
Applying a requirement is impracticable when the entity cannot apply it after making every reasonable effort to
do so. It is impracticable to apply the changes retrospectively if:
a) The effects of the retrospective application or retrospective restatement are not determinable; or
b) The retrospective application or restatement requires assumptions about what management’s intent would
have been in that period; or
c) The retrospective application or retrospective restatement requires significant estimates of amounts and it is
impossible to distinguish objectively information about those estimates that existed at that time.
83
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B3. De-recognition of Financial Assets and Liabilities
Ind AS 101 requires a first-time adopter to apply the de-recognition provisions of Ind AS 109, Financial
Instruments, prospectively for transactions occurring on or after the date of transition to Ind AS. However, Ind
AS 101, First-time Adoption of Indian Accounting Standards, allows a first-time adopter to apply the de-
recognition requirements in Ind AS 109, Financial Instruments, retrospectively from a date of the entity’s
choosing, provided that the information needed to apply Ind AS 109, Financial Instruments, to financial assets
and financial liabilities derecognised as a result of past transactions was obtained at the time of initially
accounting for those transactions. The Company has elected to apply the de-recognition provisions of Ind AS
109, Financial Instruments, prospectively from the date of transition to Ind AS.
C. Reconciliations between Previous GAAP and Ind AS
Ind AS 101 First-time Adoption of Indian Accounting Standards, requires an entity to reconcile equity, total
comprehensive income and cash flows for prior periods. The following tables represent the reconciliations from
previous GAAP to Ind AS as at the periods specified below.
C1. Reconciliation of Total Equity as at 31 March 2017 and 1 April 2016
As At As At
Particulars Note
31 March 2017 1 April 2016
Total equity as per previous GAAP 1,950.22 1,916.91
Adjustments to retained earnings 5 (28.44) (59.98)
Restated equity as per previous GAAP 1,921.77 1,856.93
Adjustments:
i) Measurement of financial assets and liabilities at amortised cost 1
- Long term borrowings 4.09 5.47
- Security deposits paid (0.21) (0.13)
- Loans given to franchisees (5.78) (6.39)
- Security deposits received from employees 0.06 -
ii) Reclassification of preference shares 2 (532.82) (565.01)
iii) Revenue from credit sales recorded at fair value 3 (4.76) (3.75)
iv) Reversal of proposed dividend 6 - 31.49
v) Deferred tax impact of above Ind AS adjustments (124.78) (148.88)
Total Equity as per Ind AS 1,257.57 1,169.73
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C2. 1. Reconciliation of Balance Sheet as at 1 April 2016 (date of transition to Ind AS)
Notes Previous Adjustments Ind AS Ind AS
GAAP* Adjustments
ASSETS
Non-Current Assets
Property, Plant and Equipment 5 1,095.12 151.47 - 1,246.59
Capital Work in Progress 26.15 - - 26.15
Intangible Assets 13.26 0.65 - 13.91
Financial Assets
Trade Receivables 3 17.13 - (3.75) 13.37
Loans 1 25.23 - (4.62) 20.61
Other Financial Assets 1 78.79 - (3.22) 75.57
Other Non-Current Assets 1 198.98 (45.84) 2.34 155.48
1,454.66 106.28 (9.25) 1,551.68
Current Assets
Inventories 5 824.27 (138.72) - 686.22
Financial Assets
Trade Receivables 1,479.55 - - 1,479.55
Cash and Cash Equivalents 31.13 - - 31.13
Other Bank Balances 23.05 - - 23.05
Loans 6.98 - - 6.98
Other Current Assets 1 56.30 - 0.76 57.06
2,427.51 (138.72) (1.01) 2,287.79
Total Assets 3,882.17 (32.44) (10.26) 3,839.47
Equity
Equity Share Capital 2 1,541.18 - (1,000.00) 541.18
Other Equity 11,5 375.73 (59.98) 312.80 628.55
1,916.91 (59.98) (687.20) 1,169.73
Liabilities
Non-current Liabilities
Financial Liabilities
Borrowings 1,2 254.60 - 559.55 814.15
Provisions 5 30.33 27.54 - 57.87
Deferred Tax Liabilities, net 7 61.84 - 148.88 210.72
Other Non-current Liabilities 15.43 - - 15.43
362.20 27.54 708.42 1,098.17
Current Liabilities
Borrowings 289.63 - - 289.63
Trade Payables 829.95 - - 829.95
Other Financial Liabilities 390.25 - - 390.25
Provisions 6 31.49 - (31.49) -
Current Tax Liability (net) 7.66 - - 7.66
Other Current Liabilities 54.08 - - 54.08
1,603.06 - (31.49) 1,571.57
Total Equity and Liabilities 3,882.17 (32.44) (10.26) 3,839.47
85
ANNUAL
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C3. 1. Reconciliation of Balance Sheet as at 31 March 2017
GAAP* Adjustments
ASSETS
Non-Current Assets
Property, Plant and Equipment 5 1,408.74 175.33 - 1,584.07
Capital Work in Progress 35.99 - - 35.99
Intangible Assets 11.61 (0.11) - 11.51
Financial Assets
Trade Receivables 3 16.75 - (4.76) 11.99
Loans 1 14.42 - (2.22) 12.20
Other Non-Current Assets 1 76.98 (45.84) 1.58 32.72
1,647.05 129.38 (7.95) 1,768.49
Current Assets
Inventories 5 1,144.75 (130.28) - 1,014.47
Financial Assets
Trade Receivables 2,401.08 - - 2,401.08
Cash and Cash Equivalents 94.62 - - 94.62
Other Bank Balances 25.48 - - 25.48
Loans 8.77 - - 8.77
Other Current Assets 1 30.50 - 0.76 31.26
3,710.80 (130.28) (2.80) 3,577.71
5,357.85 (0.90) (10.75) 5,346.20
Equity
Equity Share Capital 2 1,441.18 - (900.00) 541.18
Other Equity 11,5 509.03 (28.44) 235.80 716.39
1,950.21 (28.44) (664.20) 1,257.57
Liabilities
Non-current Liabilities
Borrowings 1,2 338.20 2.09 528.72 869.01
Other Financial Liabilities 1 9.40 - (3.11) 6.28
Provisions 5 32.23 27.54 - 59.77
Deferred Tax Liabilities, net 8 54.44 - 124.78 179.23
Other Non-current Liabilities 1 23.12 - 2.39 25.51
457.39 29.63 652.78 1,139.80
Current Liabilities
Borrowings 1,052.03 - - 1,052.03
Trade Payables 1,279.91 - - 1,279.91
Other Financial Liabilities 1 509.96 (2.09) - 507.87
Provisions 3.56 - - 3.56
Current Tax Liability (net) 8.79 - - 8.79
Other Current Liabilities 1 96.00 - 0.67 96.67
2,950.25 (2.09) 0.67 2,948.83
Total Equity and Liabilities 5,357.85 (0.90) (10.75) 5,346.20
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C4. Reconciliation of Statement of Profit and Loss for the year ended 31 March 2017
Particulars GAAP* Adjustments
INCOME
Revenue from Operations 3,7 9,063.60 - 513.64 9,577.23
Other Income 1,3 66.05 - 4.42 70.48
TOTAL 9,129.65 - 518.06 9,647.71
EXPENSES
Cost of Materials Consumed 3,990.33 - - 3,990.33
Purchases of Stock-in-Trade 2,763.22 - - 2,763.22
Change in Inventories of Finished goods, traded (244.40) - - (244.40)
goods and work-in-progress
Excise duty on sales 7 - - 517.78 517.78
Employee benefits expense 1,4 774.31 - (19.32) 754.99
Finance cost 1,2 227.23 - 69.44 296.67
Depreciation and amortisation expense 213.51 (31.54) - 181.97
Other expenses 1 1,205.33 - 0.75 1,206.08
Total 8,929.53 (31.54) 568.65 9,466.65
Profit before tax 200.12 31.54 (50.59) 181.06
Tax expense:
Current tax 74.22 - - 74.22
Deferred tax 8 (7.41) - (17.51) (24.92)
Profit after tax 133.31 31.54 (33.08) 131.77
Other Comprehensive Income / (loss)
(i) Items that will not be reclassified to profit or loss:
(a) Re-measurement gains in defined benefit plans 9 - - (19.02) (19.02)
(b)Income tax relating to items that will not be 9 - - 6.58 6.58
reclassified to profit and loss
Other Comprehensive income, net of Tax - - (12.44) (12.44)
Total Comprehensive Income for the Year 133.31 31.54 (45.51) 119.33
C5. Reconciliation of cash flow statement for the year ended 31 March 2017
Particulars GAAP* Adjustments
Net cash (used in)/generated from operating 5,10 (305.85) 257.20 - (48.65)
activities
Net used in investing activities 5,10 (376.51) (35.47) - (411.98)
Net cash generated from financing activities 10 748.29 (224.17) - 524.12
Net increase/(decrease) in cash and cash 65.93 (2.44) - 63.49
equivalents
Cash and cash equivalents at the beginning of 10 54.18 (23.05) - 31.13
the year
Cash and cash equivalents at the end of the 120.11 (25.49) - 94.62
year
* The Indian GAAP figures have been reclassified to conform to Ind AS presentation requirements for the purposes of this note.
C6. Notes
1. Financial Assets and Liabilities
Under Previous GAAP the financial assets and liabilities were carried at cost. However under Ind AS, all
financial assets and liabilities are required to be recognised at fair value. Accordingly, the Company has
recognised all financial assets and liabilities initially at fair value and measured them subsequently at
amortised cost using the effective interest method.
87
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2017-2018
2. Issue of preference shares
The Company had issued 10 lakhs Zero Coupon Cumulative redeemable preference shares of ₹100 each
to the promoters, which are redeemable after 5 years from the date of allotment subject to achieving net
worth of ₹100 lakhs (without considering the said preference shares). Under the Previous GAAP, the
preference shares were classified as equity and dividend payable thereon was treated as distribution of
profit. Under Ind AS 32, Financial Instruments: Presentation, such instruments are separated into liability
and equity components based on the terms of the contract. The difference between carrying value of
financial liability and fair value on initial recognition has been considered as equity contribution by the
Company and shown as part of ‘Other equity’. Interest expense on financial liability is charged to the
Statement of Profit and Loss using the effective interest method.
3. Credit Sales
Under some franchisee agreements, the Company has made sale of machineries to the franchisees. In
these cases the collections will be done in monthly installments over a period of 2-3 years. Under Previous
GAAP the Company has recognised entire revenue upfront at the time of sale. However under Ind AS,
revenue shall be recorded at fair value and interest income will be recognised in the statement of profit or
loss in the subsequent periods using the effective interest method.
4. Defined benefit obligation
Both under the Previous GAAP and Ind AS, the Company recognized costs related to its post-employment defined
benefit plan on an actuarial basis. Under previous GAAP, the entire cost, including actuarial gains and losses, are
charged to profit or loss. Under Ind AS, re-measurements comprising of actuarial gains and losses are recognised
immediately in the balance sheet with a corresponding debit or credit to retained earnings through OCI. Thus the
employee benefit cost is reduced by such amount with a corresponding adjustment on defined benefit plans has
been recognized in the OCI net of tax.
5. Adjustments to retained earnings

i) Under the Previous GAAP the Company had erroneously charged an excess depreciation ₹31.54 in the
previous financial year which has been adjusted in the statement of profit and loss for the year ended
31 March 2017.
ii) Under the Previous GAAP, the Company had erroneously not written off the amount paid under protest
against the sales tax litigation amounting to ₹45.84 lakhs, considering the amount was not recoverable.
Accordingly, the same has been recorded as an adjustment in the opening retained earnings.
iii) Under the Previous GAAP, the Company had erroneously recorded short provision of gratuity liability
by ₹27.54 lakhs, the same has been recorded as an adjustment in the opening re tained earnings.
iv) Under the Previous GAAP, the Company had classified the Manufacturing tools as tools and spares
under inventories and following the policy to charged 25% of the closing value of tools and spares to the
statement of profit and loss. The management has revised the accounting policy and estimated the
useful life of manufacturing tools as 7 years. And accordingly, the Company has included the
Manufacturing Tools worth ₹153.61 lakhs (net of accumulated depreciation amounting to ₹44.91) as on
01 April 2016 to Property, plant and equipment. The effect of this change is an increase in total equity
as at 01 April 2016 by ₹14.89 lakhs and decrease in Inventory by ₹138.72 lakhs which has been adjusted
in the opening retained earnings and Inventory respectively.
v) Under the Previous GAAP, the Company had erroneously recorded short depreciation by ₹1.49 lakhs,
the same has been recorded as an adjustment in the opening retained earnings.
88
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6. Adjustment for Proposed Dividend
Under the Previous GAAP, dividends proposed by the board of directors after the balance sheet date but
before the approval of the financial statements were considered as adjusting events. Accordingly, provision
for proposed dividend was recognised as a liability. Under Ind AS, such dividends are recognised when the
same is approved by the shareholders in the general meeting. Accordingly, the liability for proposed
dividend included under provisions has been reversed with corresponding adjustment to retained earnings.
7. Excise Duty
Under the Previous GAAP, revenue from sale of goods was presented net of excise duty whereas under
Ind AS the revenue from sale of goods is presented inclusive of excise duty. Accordingly, the excise duty
has been included in revenue and expenses respectively.
8. Deferred Tax
Under the Previous GAAP, deferred tax was accounted using the income statement approach, on the timing
differences between the taxable profit and accounting profits for the period. Under Ind AS 12, Income Tax,
deferred taxes are recognised following the balance sheet approach on the temporary differences between
the carrying amount of asset or liability in the balance sheet and its tax base.
9. Other Comprehensive Income

Under Ind AS, all items of income and expense recognised in a period should be included in profit or loss
for the period, unless a standard requires or permits otherwise. Items of income and expense that are not
recognised in profit or loss but are shown in the Statement of Profit and Loss as ‘other comprehensive
income’ includes re-measurements of defined benefit plans. The concept of other comprehensive income
did not exist under the Previous GAAP.
10. Statement of Cash Flows

(i). Under the Previous GAAP, Interest received and Interest paid was erroneously disclosed under
operating activity in the Statement of cash flows which has been included now under investing activities
and financing activities respectively in the Statement of Cash Flows.
(ii). For the purpose of the statement of cash flows, cash and cash equivalents consist of cash and short -
term deposits with an original maturity of three months or less, which are subject to an insignificant risk
of changes in value as described in note 1.19 and the other bank balances are shown separately as
Other bank balances, refer note 2.9.
11. Other Equity

Adjustments to retained earnings as at 31 March 2017 and 1 April 2016 has been adjusted consequent to
the above Ind AS transition adjustments.
This is the summary of accounting policies and other explanatory information referred to in our report of even date.
Kochi
10 May 2018
89
ANNUAL
REPORT
2017-2018
OUR BRANCHES
BANGALORE COIMBATORE
No: 3/1 Roshan Bagh Road, Opp. Kovai Diabetic Hospital,
Near Minerva Circle, Balasundaram Layout, Vivekananda Road,
V.V .Puram, Bangalore – 560004, Ramnagar, Coimbatore – 641009,
Ph: 9341060794 Ph: 9363108658
CUTTACK DELHI
Ground Floor, Khata No.25/134 Shop No.-1, Ground Floor ,
Plot No.565/616, Bilateruan Canal Road, CW-64, Sanjay Gandhi Transport Nagar,
Harianta Tangi, Cuttack Delhi - 110042,
Ph: 9438249206 Ph: 9873817106
GUWAHATI HYDERABAD
Nalapara, Kali Mandir Road, Plot No-36/37, Block No -36/A, Sy .No-96/1,
Bapujipath Bye Lane, Autonagar, Vanasthalipuram
Guwahati - 781034 Hyderabad – 500070
Ph: 9127072802 Ph: 09052034157
KOLKATTA MADURAI
C1- 50/B/New B. B. T. Road, LST Kolkata Door No:25,
Santhoshpur Govt Colony, P.O. Santhoshpur (M), Athimoolam Plillai Agraharam
South 24 Parganas, Kolkata, West Bengal – 700142, Simmakkal, Madurai – 625001
Ph: 8336989232 Ph: 9159906544
NEDUMANGAD RAIPUR
Kollankavu, Pazhakutty P O Plot N 33, Kedia Business Park
Nedumangad, Trivandrum(DIST) Tatibandh, Raipur, Durg, Chhattisgarh - 492099
Ph: 7593875465 Ph: 9370093131
SILIGURI TRICHY
Patharghata Road, Gaucharan Door No.5, E B Road
Matigara, Siliguri, Darjeelin - 734010 Trichy-620008, Tamilnadu
Ph: 8336989236 Ph: 7593875494
VAZHAKULAM VIJAYAWADA
Avoly Panchayath, PM Road Plot No-54-5-79
Vazhakulam - 686670 2nd Cross, 5th Road, Jawahar Autonagar, Vijayawada,
Ernakulam Krishna District, Andhrapradesh - 520007,
Ph: 09447178817 Ph : 09160574625
EASTERN INFINITY ZONE

BANGALORE CHENNAI
No. 63/A, Road No.5, Jigani Industrial Area, Door No. 12, Madhavaram – Redhills Road,
2nd Stage, Anekal Taluk Grand Line Village,
Bengaluru – 562106 Chennai, Tamilnadu – 600052
Ph: 9538833554 Ph: 8489908810
Email : [email protected] Email : [email protected]
90
ANNUAL
REPORT
2016-2017

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MILESTONES

EASTERN TREADS LIMITED

Mr. Navas M Meeran Chairman

Mr. Rajesh S. Chief Executive Officer

REGISTERED & CORPORATE OFFICE INVESTOR CORRESPONDENCE

OFFICIAL WEBSITE BANKERS

REGISTRAR & SHARE TRANSFER AGENT SECRETARIAL AUDITOR

With warm regards

By Order of the Board

c) The process and manner for remote e-voting are as under:

Route Map & Land Mark

Directors and Key Managerial Personnel

Directors’ Responsibility Statement

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

Auditors & Audit Observations

Cost Audit Report

Secretarial Audit Report

Listing and Dematerialisation

Extract of Annual Return

Related Party Transactions

Conservation of Energy, Technology Absorption, Foreign Exchange Inflow & Outflow

Corporate Social Responsibility

Particulars of Loans, Guarantees or Investments

Internal Financial Controls

Material Changes and Commitments

Employee Wellbeing and Safety

For and on behalf of the Board

Kochi Navas M Meeran

Form No. MR-3

SECRETARIAL AUDIT REPORT

1. The Factories Act, 1948.

Secretarial Standards issued by The Institute of Company Secretaries of India.

We report that, during the year under review:

We further report that:

1. The Factories Act, 1948

2. The Competition Act 2002

Overall Compliance under the Act complied by the Company.

3. The Kerala Panchayat Raj Act 1994.

5. The Petroleum Act, 1934

6. The Rubber Act 1947

For BVR & Associates Company Secretaries LLP

Our report of even date is to be read along with this letter.

For BVR & Associates Company Secretaries LLP

[Pursuant to Section 92(3) of Companies Act, 2013 and

1) Registration and other Details:

2) Principal Business Activities of the Company

Sl. NIC Code % to total turnover

3) Particulars of Holding, Subsidiary and Associate Companies

i) Category-wise Share Holding

(ii) Shareholding of Promoters

(iii) Change in promoter’s Shareholding (please specify, if there is no change)

(v) Shareholding of Directors and Key Managerial Personnel

7 Shereen Navaz (Director)

B. Remuneration to other Directors:

Section of the Authority

FORM NO. AOC-2

(a) Name(s) of the related party and nature of relationship : NA

Details of material contracts or arrangement or transactions at arm’s length basis:

Eastern Condiments Eastea Chai (P) Eastern Retreads