Your Directors have pleasure in presenting the Thirty First (31st) DirectorsReport on the business and operations of the Company together with the financialstatements for the financial year ended on 31st March 2016.
| || ||(Rs. in Lacs) |
| ||Year Ended 31st March 2016 ||Year Ended 31st March 2015 |
|Revenue from operations ||92684.70 ||87454.21 |
|Other Income ||1405.12 ||980.36 |
|Total Revenue ||94089.82 ||88434.57 |
|Profit before Financial Charges Depreciation ||11036.54 ||10130.00 |
|Less: Financial Costs ||1213.19 ||1486.15 |
|Profit before Depreciation & Taxes ||9823.35 ||8643.85 |
|A. Depreciation ||4421.52 ||5200.49 |
|B. Exceptional items ||357.43 ||- |
|Taxation || || |
|- Current Tax ||1730.00 ||276.00 |
|- Deferred Tax Charged/ (Released) ||(38.02) ||(445.38) |
|- Adjustments for earlier years ||(69.98) || |
|Net Profit after Tax ||3422.40 ||3612.74 |
|Add: Profit brought forward from Previous year ||1518.37 ||1758.54 |
|Profit available for appropriation ||4940.77 ||5371.28 |
|APPROPRIATIONS || || |
|Proposed Dividend ||371.65 ||297.32 |
|Tax on Proposed Dividend ||75.67 ||60.87 |
|Interim Dividend ||371.65 ||297.32 |
|Tax on Interim Dividend ||75.67 ||59.45 |
|Transferred to General Reserves ||2600.00 ||3000.00 |
|Depreciation Adjustment as per Schedule II of Companies Act 2013 ||- ||137.95 |
|Balance carried forward to Balance Sheet ||1446.13 ||1518.37 |
During the year under review the gross revenue from operations and other income wasRs. 94089.82 Lacs as against Rs. 88434.57 Lacs of previous year. Profit before taxationhas increased from Rs. 3443.36 Lacs to Rs. 5044.40 Lacs during the year. Finance cost hasbeen reduced to Rs. 1213.19 Lacs from Rs. 1486.15 Lacs.
Your directors are pleased to recommend a final dividend of Rs. 6.25/- per equity sharefor the year ended 31st March 2016 out of the current years profits in addition tothe Interim Dividend of Rs. 6.25/- per equity share i.e. 62.5% already paid for the yearthus making a total Dividend to Rs. 12.50/- per equity share i.e. 125% on the paid upequity shares 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 31st August 2016.
The cash outflow on account of dividend including interim dividends on equity sharecapital will be Rs. 894.64 Lacs including dividend tax of Rs. 151.34 Lacs.
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").
It is said to inform that Shri O.P. Khaitan (DIN: 00027798) ceased to be a director ofthe Company due to his sad demise on 6th December 2015. Board placed on record itssincere appreciation for the contributions made by him during his tenure on the Board.
Pursuant to 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. His appointment is subject to the approval ofshareholders in the ensuing Annual General Meeting.
Further all the independent directors have given a declaration confirming that theymeet the criteria of independence as prescribed under Companies Act 2013 and ListingRegulations.
Pursuant to section 152 of the Companies Act 2013 Shri Bireswar Mitra (DIN: 06958002)and Shri Rohit Relan (DIN:00257572) directors of the Company are liable to retire byrotation and being eligible offer themselves for re-appointment at the ensuing AnnualGeneral Meeting.
As per the resolution passed by the Company in 26th Annual General Meeting of theCompany tenure of Shri Ajay Relan (DIN:00257584) Managing Director of the Company iscompleting on 31st August 2016. It is desired to re-appoint Shri Ajay Relan as theManaging Director & CEO of the Company for a further period of five years. Terms andConditions of his appointment and remuneration structure are mentioned in the Notice ofthe Annual General Meeting forming part of this Annual Report.
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. Pursuant to the provisions of section 203 of the Act the key managerialpersonnel of the Company are Shri Ajay Relan Managing Director & Chief ExecutiveOfficer Shri Pradeep Rastogi Chief Financial Officer and Shri Nitin Vishnoi CompanySecretary. There has been no change in the key managerial personnel
Number of Board & committee meetings including the date of the meeting andattendance thereof by each director during the year is given in Report on CorporateGovernance that forms part of this Annual Report. The intervening gap between any twomeetings was within the period prescribed by 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 requirements.
The performance of the Board was evaluated after seeking 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 in consultation with Nomination and Remuneration Committee ("NRC")reviewed the performance of the individual directors on the basis of the criteria such asthe contribution of the individual director to the Board and committee meetings likepreparedness on the issues to be discussed contribution at the meetings and otherwiseindependent judgment etc.
In a separate meeting of independent directors performance of non-independentdirectors performance of the Board as a whole and performance of the Chairman 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.
During the year under review Audit Committee was re-constituted due to the sad demiseof Shri O.P. Khaitan and appointment of Shri Satinder Kumar Lambah on 5th February 2016.Audit Committee comprises of three members out of which two are independent directors andone is non-executive director. Shri Kishan N Parikh is the Chairman of the Committee. Allthree members of committee have adequate financial & accounting knowledge andbackground. Detailed information regarding the number of committee meetings terms ofreference etc. are provided in the Corporate Governance Report forming part of this annualreport.
The Board has appointed M/s. Vineet K. Chaudhary & Co. (Company Secretaries inpractice holding CP. No 4548) to conduct Secretarial Audit for the financial year 2015-16.The Secretarial Audit Report for the financial year ended 31st March 2016 is annexedherewith marked as Annexure II to this Report. The Secretarial Audit Report doesnot contain any qualification reservation 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 and being eligible offer themselves forre-appointment. The Company has received the consent from the auditors and confirmation tothe effect that they are not disqualified to be appointed as the Auditors of the Companyin terms 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 there-appointment of M/s. S.R. Dinodia & Co. LLP Chartered Accountants as the StatutoryAuditors of the Company to hold office from the ensuing Annual General Meeting till theconclusion of the next Annual General Meeting on remuneration to be decided by the Boardor Committee thereof to the shareholders for approval.
Auditors report is self-explanatory and therefore does not require furthercomments 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 2016-17 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
The Company recognizes that its operations impact a wide community of stakeholdersincluding investors employees customers business associates and local communities andthat appropriate attention to the fulfillment of its corporate responsibilities canenhance overall performance. In structuring its approach to the various aspects ofCorporate Social Responsibility the Company takes into account the guidelines andstatements issued by various regulatory bodies.
In accordance with Section 135 of the Companies Act 2013 your company has in place aCorporate Social Responsibility Committee. Details of composition of Committee no. ofmeetings attendance at the meeting are provided in Corporate Governance Report formingpart of this annual report. Corporate social responsibility policy of the company isavailable on the website of the Company (www.shardamotor.com)
As per the requirements of section 135 of the Companies Act 2013 the Company isrequired to spend at least two per cent of its average net profits for the threeimmediately preceding financial years in pursuance of its Corporate Social Responsibility(CSR) Policy. Accordingly the Company was required to spend a minimum of Rs. 62.22 Lacsduring the current financial year towards CSR activities.
As informed earlier the Company was in process of evaluating and identifying thespecific programmes in which it can spend CSR funds allocated for the purpose. During thefinancial year 2015-16 company has evaluated various sectors and areas for spending thefunds.
During the year Company has set up a trust exclusively for the purpose of CSRactivities with the name and style of "Sharda CSR Foundation Trust". Objectivesof the trust are in line with Schedule VII of the Companies Act 2013. In terms of Section135 and rules made thereunder an annual report on CSR activities expenditure committeecomposition etc. is provided as Annexure III to the Director'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 theDirectors report.
PARTICULARS OF EMPLOYEES
The ratio of the remuneration of each director to the median employeesremuneration and other details in terms of sub-section 12 of Section 197 of the CompaniesAct 2013 read 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 have been disclosed in thefinancial statements.
PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES
The particulars of contracts or arrangements with related parties in Form AOC -2 are appended as Annexure VIII 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. The certificate ofM/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 Companys 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 affects 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 IMPACTING THE GOING CONCERN STATUS AND COMPANYS OPERATIONS IN FUTURE
During the year under review no significant and material orders have been passed bythe regulators or courts or tribunals impacting the going concern status andcompanys operations in future.
SUBSIDIARIES JOINT VENTURES OR ASSOCIATE COMPANIES
During the year under review there is no change in the status of subsidiary/ jointventures/ associate companies. A statement in form AOC-1 containing the salientfeatures of the financial statements of the joint Ventures/ Associate Companies isprovided 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 providingan environment which is free of discrimination intimidation and abuse. The Companybelieves that it is the responsibility of the organisation to protect the integrity anddignity of its employees and also to avoid conflicts and disruptions in the workenvironment due to such 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 Prohibitionand Redressal) Act 2013 ("Sexual Harassment Act"). During the year the Companyhas conducted 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 wasregistered 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 2016 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 & analysis 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 Companys resources for sustainable and profitablegrowth. The Directors acknowledge their deep appreciation to employees at all levels fortheir total dedication hard work commitment and collective team work which has enabledthe Company 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 Ml s. TataMotors Ltd. and M/s. Bharat Seats Ltd.
Your Directors also extend their appreciation to Yes Bank Limited ICICI Bank LimitedState Bank of India Punjab National Bank Citi Bank IDFC Bank and various departmentsof Central and State Govemment(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 : 27th May 2016 ||Director ||Managing Director |
|Place : New Delhi ||(DIN: 00252181) ||(DIN: 00257584) |