Your Directors have pleasure in presenting the Thirty Second (32nd)Directors' Report on the business and operations of the Company together with thefinancial statements for the financial year ended on 31st March 2017.
| || || |
(Rs. in Lakhs)
|Particular || |
| ||Year Ended 31st March 2017 ||Year Ended 31st March 2016 ||Year Ended 31st March 2017 ||Year Ended 31st March 2016 |
|Revenue from operations ||104261.18 ||92684.70 ||104925.41 ||92732.41 |
|Other Income ||1119.78 ||1405.12 ||1038.21 ||1326.88 |
|Total Revenue ||105380.96 ||94089.82 ||105963.62 ||94059.29 |
|Profit before Financial Charges Depreciation ||14223.93 ||11036.54 ||14333.14 ||10968.37 |
|Less : Financial Costs ||726.51 ||1213.19 ||726.84 ||1213.19 |
|Profit before Depreciation Exceptional Items & Taxes ||13497.42 ||9823.35 ||13606.30 ||9755.18 |
|A. Depreciation ||4979.37 ||4421.52 ||5005.66 ||4432.43 |
|B. Exceptional items ||915.27 ||357.43 ||915.27 ||359.25 |
|Taxation || || || || |
|- Current Tax ||2939.79 ||1730.00 ||2984.16 ||1732.55 |
|- Deferred Tax Charged/ (Released) ||(672.07) ||(38.02) ||(673.62) ||(38.02) |
|- Adjustments for earlier years ||(262.36) ||(69.98) ||(262.36) ||(69.98) |
|Add: Current year profit from associates ||- ||- ||331.50 ||191.84 |
|Net Profit after Tax ||5597.42 ||3422.40 ||5968.69 ||3530.79 |
|Add: Profit brought forward from Previous year ||1446.15 ||1518.37 ||3060.56 ||3021.00 |
|Profit available for appropriation ||7043.57 ||4940.77 ||9029.25 ||6551.79 |
|APPROPRIATIONS || || || || |
|Proposed Dividend ||- ||371.64 ||- ||371.64 |
|Tax on Proposed Dividend ||- ||75.67 ||- ||75.67 |
|Interim Dividend ||371.64 ||371.64 ||371.64 ||371.64 |
|Tax on Interim Dividend ||75.67 ||75.67 ||75.67 ||75.67 |
|Transferred to General Reserves ||- ||2600.00 ||- ||2600.00 |
|Depreciation Adjustment as per Schedule II of Companies Act 2013 ||- ||- ||- ||- |
|Balance carried forward to Balance Sheet ||6596.26 ||1446.15 ||8581.94 ||3057.17 |
|Paid-up equity share capital (Face value of Rs. 10/- each) ||594.63 ||594.63 ||594.63 ||594.63 |
During the year under review the total revenue from operations and other income wasRs. 105380.96 Lakhs as against Rs. 94089.82 Lakhs of previous year. Profit beforetaxation has increased from Rs. 5044.40 Lakhs to Rs. 7602.78 Lakhs during the year.Finance cost has been reduced to Rs. 726.51 Lakhs from Rs. 1213.19 Lakhs. Net Profitafter taxes of the company has increased by approx 64% year on year basis.
During the year under review company has not changed the nature of business.
Your directors are pleased to recommend a final dividend of Rs. 6.25 per equity sharefor the year ended 31st March 2017 out of the current year's profits in addition to theInterim Dividend of Rs. 6.25 per equity share i.e. 62.5% already paid for the year thusmaking a total Dividend to Rs. 12.50/- per equity share i.e. 125% on the paid up equityshares Rs. 10/- each.
Final dividend of Rs. 6.25/- per equity share if approved at the ensuing AnnualGeneral Meeting shall be paid out of the profits of the Company to those share holderswhose name appear in the Register of Members on 23rd August 2017.
DIRECTORS AND KEY MANAGERIAL PERSONNEL
The existing composition of the Board is fully in conformity with the Companies Act2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015("Listing Regulations").
Shri N. D. Relan (DIN:00240280) Co-Chairperson of the Company ceased to be a directorof the Company due to his sad demise on 2nd June 2016. The Board places onrecord its deep appreciation for the enormous contributions made by him since inception ofthe Company. During the year under review Smt. Sharda Relan (DIN:00252181) was appointedas whole-time director and Co-Chairperson of the Company w.e.f. 10th August2016.
Pursuant to the Companies Act 2013 and Listing Regulations Shri Satinder Kumar Lambah(DIN:07425155) was appointed as an additional director designated as independent directorof the Company on 05th February 2016 and subsequently his appointment as aDirector (designated as independent director) was approved by shareholders at 31stAnnual General Meeting to hold office for a term of up to five consecutive years on theboard of the company.
Further all the independent directors have given a declaration confirming that theymeet the criteria of independence as prescribed under the Companies Act 2013 and ListingRegulations.
Pursuant to section 152 of the Companies Act 2013 Smt. Sharda Relan (DIN:00252181)and Shri R. P Chowdhry (DIN:00337775) directors of the Company are liable to retire byrotation and being eligible offer themselves for re-appointment at the ensuing AnnualGeneral Meeting.
During the year Shri Pradeep Rastogi Chief Financial Officer of the company hasresigned from the office of Key Managerial Personnel (i.e CFO) w.e.f. 10thAugust 2016 and Shri Vivek Bhatia has been appointed as Chief Financial Officer at hisplace w.e.f. 10th August 2016.
A brief profile of the above mentioned directors seeking appointment/ re-appointment atthe ensuing Annual General Meeting of the Company has been provided in the Notice of thesaid meeting.
Number of Board and committee meetings including the date of the meeting and attendancethereof by each director during the year is given in Report on Corporate Governance thatforms part of this Annual Report. The intervening gap between any two meetings was withinthe period prescribed under the Companies Act 2013.
BOARD LEVEL PERFORMANCE EVALUATION
The Board of directors has carried out an annual evaluation of its own performance andthat of its committees and individual directors pursuant to the provisions of theCompanies Act 2013 and Listing Regulations.
The performance of the Board was evaluated after taking inputs from all the directorson the basis of the criteria such as the Board composition and structure effectiveness ofboard processes contribution towards development of the strategy etc.
The performance of the committees was evaluated by the Board after seeking inputs fromthe committee members on the basis of the criteria such as the composition of committeeseffectiveness of committee meetings etc.
The Board of directors based on the recommendations of Nomination & RemunerationCommittee reviewed the performance of the individual directors including bothindependent and non-independent on the basis of the evaluation criteria likequalification & experience attendance of directors at Board and committee meetingsconflict of interest effective participation integrity knowledge & competenciesdomain knowledge compliance with code of conduct independent judgment vision andstrategy etc.
In a separate meeting of independent directors performance of non-independentdirectors performance of the Board as a whole and performance of the Chairperson wasevaluated taking into account the views of executive directors and non-executivedirectors. The same was discussed in the next board meeting held after the meeting of theindependent directors at which the performance of the Board its committees andindividual directors was also discussed.
NOMINATION REMUNERATION & EVALUATION POLICY
The Policy of the Company on Directors' appointment and remuneration including criteriafor determining qualifications positive attributes independence of a director and othermatters provided under sub-section (3) of section 178 of the Companies Act 2013 isappended as Annexure I to this Report.
Audit Committee comprises of three members out of which two are independent directorsand one is executive director. Shri Kishan N Parikh Independent Director is theChairperson of the Committee. All three members of committee have adequate financial &accounting knowledge and background. Detailed information regarding the number ofcommittee meetings terms of reference etc. are provided in the Corporate GovernanceReport forming part of this annual report. All recommendations of the Audit Committeewhenever made were accepted by the Board during the financial year 2016-17.
The Board has appointed M/s. VKC & Associates earlier known as M/s. V. K.Chaudhary & Co. (Company Secretaries in practice holding CP No 4548) to conductSecretarial Audit for the financial year 2016-17. The Secretarial Audit Report for thefinancial year ended 31st March 2017 is annexed herewith marked as AnnexureII to this Report. The Secretarial Audit Report does not contain any qualificationreservation or adverse remark.
M/s. S.R. Dinodia & Co. LLP Chartered Accountants (Registration No.01478N/N500005) Statutory Auditors of the Company will retire at the conclusion of theforthcoming Annual General Meeting. The Company has received the consent from M/s. GuptaVigg & Co. Chartered Accountants (Registration No. 001393N) and confirmation to theeffect that they are not disqualified to be appointed as the Auditors of the Company interms of the provisions of the Companies Act 2013 ("Act") and rules madethereunder and that their appointment if made will be within the prescribed limits underthe Act. Accordingly the Audit Committee and the Board of directors have recommended theappointment of M/s. Gupta Vigg & Co. Chartered Accountants as the Statutory Auditorsof the Company to hold office from the ensuing Annual General Meeting till the conclusionof the 37th Annual General Meeting on remuneration to be decided by the Boardor Committee subject to ratification by the shareholders at every Annual General Meeting.The first year of audit will be of the financial statement of the year ending 31stMarch 2018.
There was no incident related to fraud during the financial year which was reported tothe Audit Committee or Board of Directors under section 143(12) of the Companies Act 2013by the Statutory Auditors of the Company. Auditors' report is self-explanatory andtherefore does not require further comments and explanation.
Based on the recommendation of audit committee M/s. Gurdeep Singh & AssociatesCost Accountants (holding M.No. 9967 being eligible have been re-appointed by the Boardas the Cost Auditors of the Company for the financial year 2017-18 subject to ratificationof remuneration by the members in the ensuing Annual General Meeting. The Company hasreceived a letter from them to the effect that their re-appointment would be within thelimits prescribed under Companies Act 2013 and that they are not disqualified for suchre-appointment within the meaning of section 141 of the Companies Act 2013.
CORPORATE SOCIAL RESPONSIBILITY
Your company is committed towards the goal of sustainable development for improving theeducation and health of under privileged children of the society. The Company recognizesthat its operations impact a wide community of stakeholders including investorsemployees customers business associates and local communities and that appropriateattention to the fulfillment of its corporate responsibilities can enhance the overallperformance of the Company.
During the year under review Corporate Social Responsibility Committee wasre-constituted due to the sad demise of Shri N. D. Relan Chairman of the Committee. ShriAjay Relan & Shri Satinder Kumar Lambah were inducted as the new committee members andSmt. Sharda Relan was appointed the Chairperson of the Committee w.e.f. 10thAugust 2016. Details of composition of Committee no. of meetings attendance at themeetings are provided in the Corporate Governance Report forming part of this annualreport. Corporate Social Responsibility Policy of the company is available on the websiteof the Company (www.shardamotor.com).
Your Company has identified various projects and programs where it can possiblycontribute under its CSR initiatives. During the financial year 2016-17 Sharda CSRFoundation Trust philanthropic arm of the Company has organised blood donation camps inall the units of the Company across India aiming to fulfill its goals of betterhealthcare. The Company has also taken firm steps for the infrastructure development ingovernment schools for improving the primary education in the urban and semi-urban partsof the Country preferably where the company operates and has started funding to them.
CSR expenditure of the Company during the current financial year has increased almostby fifty percent and will continue to grow as more programmes will be rolled down in thecoming years and the Company will widen its area of coverage.
In terms of Section 135 and rules made thereunder an annual report on CSR activitiesexpenditure committee composition etc. is provided as Annexure III to theDirector's report.
EXTRACT OF ANNUAL RETURN
In accordance with Section 134(3) (a) of the Companies Act 2013 an extract of theannual return in the prescribed format is appended as Annexure IV to the Directors'report.
PARTICULARS OF EMPLOYEES
The ratio of the remuneration of each director to the median employee's remunerationand other details in terms of sub-section 12 of Section 197 of the Companies Act 2013read with Rule 5(1) of the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 are forming part of this report as Annexure V.
The statement containing name and particulars of employees as required under Section197(12) of the Companies Act 2013 read with Rule 5(2) of the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 forms part of this report as AnnexureVI.
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO
The particulars of Conservation of Energy Technology Absorption and Foreign ExchangeEarnings and Outgo as required under Section 134(3) (m) of the Companies Act 2013 readwith Rule 8(3) of the Companies (Accounts) Rules 2014 are annexed herewith marked as AnnexureVII to this Report.
PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS
The particulars of Loans guarantees and investments under section 186 have beendisclosed in the financial statements. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITHRELATED PARTIES
The particulars of contracts or arrangements with related parties referred to insection 188(1) of the Companies Act 2013 in Form AOC - 2 are appended as AnnexureVIII forming part of this report.
We strive to attain high standards of corporate governance while dealing with all ourstakeholders. The "Report on Corporate Governance" forms an integral part ofthis report and is set out as separate section to this annual report. A certificate fromM/s.
S.R. Dinodia & Co. LLP Chartered Accountants the statutory auditors of theCompany certifying compliance with the conditions of corporate governance as stipulatedunder Listing Regulations is annexed with the report on corporate governance.
MANAGEMENT DISCUSSION AND ANALYSIS REPORT
The Management Discussion and Analysis Report for the year under review as stipulatedunder Listing Regulations is presented in a separate section forming part of this AnnualReport.
The Company has a vigil mechanism for directors and employees to report their genuineconcerns. Vigil Mechanism/Whistle Blower policy is available on the Company's websitewww.shardamotor.com.
The Company has not accepted any deposits from the public covered under chapter V ofthe Companies Act 2013 during the year under review and no amount was outstanding as onthe date of Balance Sheet.
MATERIAL CHANGES AND COMMITMENTS IF ANY AFFECTING THE FINANCIAL POSITION OF THECOMPANY
No material changes and commitments which affect the financial position of theCompany have occurred between the end of the financial year under review and the date ofthis report.
THE DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS ORTRIBUNALS
During the year under review no significant and material orders have been passed bythe regulators or courts or tribunals impacting the going concern status and company'soperations in future.
However during the financial year 2016-17 a petition has been filed against theCompany by Shri Rohit Relan non-executive director of the Company along with his wife andsons in the National Company Law Tribunal New Delhi (NCLT) under section 241242 readwith section 244 of the Companies Act 2013. No final order has been passed by the NCLTtill the date of this report.
SUBSIDIARIES JOINT VENTURES OR ASSOCIATE COMPANIES
During the year under review there is no change in the status of subsidiary/ jointventures/ associate companies. Financial performance of the Associate and Joint VentureCompanies are disclosed in the financial statements forming part of this annual report. Astatement in form AOC-1 containing the salient features of the financialstatements of the joint ventures/ associate companies is provided as Annexure IX.
RISK ASSESSMENT AND RISK MINIMIZATION PROCEDURE
In line with the new regulatory requirements the Company has formally framed a RiskAssessment and Risk Minimization Procedure to identify and assess the key risk areas andmonitor the same. The Board periodically reviews the risks and suggests steps to be takento control the risks.
Details on the Company's risk management framework risk evaluation riskidentification etc. is provided in the Management Discussion and Analysis Report formingpart of this report.
DETAILS OF NUMBER OF CASES FILED IF ANY AND THEIR DISPOSAL IN TERMS OF SECTION 22 OFTHE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION PROHIBITION AND REDRESSAL) ACT2013.
The Company values the dignity of individuals and strives to provide a safe andrespectable work environment to all its employees. The Company is committed to provide anenvironment which is free of discrimination intimidation and abuse. The Company believesthat it is the responsibility of the organisation to protect the integrity and dignity ofits employees and also to avoid conflicts and disruptions in the work environment due tosuch cases.
The Company has put in place a Policy on redressal of Sexual Harassment at WorkPlace' as per the Sexual Harassment of Women at Workplace (Prevention Prohibition andRedressal) Act 2013 ("Sexual Harassment Act"). During the year the Company hasconducted an awareness programme against the sexual harassment. As per the policy anyemployee may report his / her complaint to the Redressal Committee formed for this purposeor their Manager or HR personnel. We affirm that adequate access has been provided to anycomplainant who wished to register a complaint under the policy but no complaint wasreceived during the year under review.
DIRECTORS' RESPONSIBILITY STATEMENT
In terms of Section 134(3) (c) read with 134(5) of the Companies Act 2013 it ishereby stated that:
(a) In the preparation of the annual accounts the applicable accounting standards hadbeen followed;
(b) Appropriate accounting policies have been selected and applied consistently andjudgments and estimates made are reasonable and prudent so as to give a true and fair viewof the state of affairs of the company as at 31st March 2017 and of the profit and lossof the company for the year ended on that date;
(c) Proper and sufficient care has been taken for the maintenance of adequateaccounting records in accordance with the provisions of this Act for safeguarding theassets of the company and for preventing and detecting fraud and other irregularities;
(d) The annual accounts have been prepared on a going concern basis;
(e) Internal financial controls have been laid down to be followed by the company andthat such internal financial controls are adequate and were operating effectively;
(f) Proper systems have been devised to ensure compliance with the provisions of allapplicable laws and that such systems were adequate and operating effectively.
INTERNAL FINANCIAL CONTROL SYSTEMS AND THEIR ADEQUACY
The details in respect of internal financial control and their adequacy are included inthe Management Discussion and Analysis Report which forms part of this annual report.
Your Company has been able to operate efficiently because of the professionalismcreativity integrity and continuous improvement in all functional areas to ensureefficient utilization of the Company's resources for sustainable and profitable growth.The Directors acknowledge their deep appreciation to employees at all levels for theirtotal dedication hard work commitment and collective team work which has enabled theCompany to remain at the forefront of the industry despite increased competition andchallenges.
Your Directors take this opportunity to express their grateful appreciation for theexcellent assistance and co-operation received from its customers i.e. M/s. Hyundai MotorIndia Ltd. M/s. Mahindra & Mahindra Ltd. Cummins Power Generation M/s. Tata MotorsLtd. and M/s. Bharat Seats Ltd.
Your Directors also extend their appreciation to Yes Bank Limited IDFC Bank CitiBank CTBC Bank State Bank of India and various departments of Central and StateGovernment(s).
Your Directors also would like to thank all the shareholders for their continuedsupport & co-operation.
| ||On behalf of the Board of Directors |
| ||For Sharda Motor Industries Limited |
| ||Sharda Relan ||Ajay Relan |
|Date : 17th July 2017 ||Director ||Managing Director |
|Place : New Delhi ||(DIN:00252181) ||(DIN:00257584) |
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO
The disclosures to be made under sub-section (3) (m) of Section 134 of the CompaniesAct 2013 read with Rule (8)(3) of the Companies (Accounts) Rules 2014 by your Company areexplained as under:
A. CONSERVATION OF ENERGY:
(i) The steps taken by the company for conservation of energy or impact on conservationof energy
Being an environmentally responsible corporate citizen your company always strives toachieve the highest standards of energy conservation. Company constantly makes efforts forthe conservation of energy in all its endeavours. Some of them are:
> Spreading awareness among the employees to develop good habits of energyconservation;
> Pasting necessary notices pamphlets in premises for effective use of resources;
> Auto timer provided to turn off machine lights and fan Blower power and Coolingtower pump motor at break hours;
> Variable frequency drives (VFD) Installation for the Power presses;
> Auto Stop Timers have been installed in the machines in case of idle time;
> Constant monitoring of energy consumption of all Manufacturing Units andcorrective actions for optimum Utilization;
> HPMV 250w lights replaced with 150w LED lights.
(ii) The steps taken by the Company for utilizing alternate sources of energy:
Your Company has explored the potential of using alternate sources of energy throughvarious projects which may be considered for implementation in future and your Companywould continue to explore alternative sources of energy in future including utilizingSunlight Transparent Sheet added in factory roof and side walls to increase the lux levelduring day working.
(iii) The capital investment on energy conservation equipments :
Company has not made any capital investment during the year.
B. TECHNOLOGICAL ABSORPTION:
(i) The efforts made towards technology absorption;
> Improved performance of exhaust system;
> Advanced technology familiarization through seminars and internship programmes;
> Managing extended enterprises;
> Emphasis on absorption of design and manufacturing technology;
> Expansion and modernization programme;
(ii) The benefits derived like product improvement cost reduction product developmentor import substitution;
> Import substitution and less dependence on technical collaborators;
> Product line extension;
> Improving fuel economy and consequent reduction in CO2;
> Improvement in core competencies;
> Significant improvement in meeting demand of end user;
(iii) In case of imported technology (imported during the last three years reckonedfrom the beginning of the financial year)
No Technology has been imported during the last three years
(iv) The expenditure incurred on Research and Development
Capital Expenditure - Rs. 217.47 Lakhs
Revenue Expenditure - Rs. 986.33 Lakhs
C. FOREIGN EXHANGE EARNINGS AND OUTGO
The Foreign Exchange earned in terms of actual inflows during the year and the foreignexchange outgo during the year in terms of actual outflows.
The information is reported under suitable heading in the Notes to FinancialStatement' forming part of the Annual Report of the Company for the year 2016-17.