Your Directors have pleasure in presenting the 33rd AnnualReport together with the Audited Accounts for the year ended 31st March 2020.
Rupees In Lakhs
|Particulars ||2019-2020 ||2018-2019 |
|Revenue from Operations ||58857.47 ||90356.85 |
|Other Income ||208.41 ||527.54 |
|Profit before Financial Charges & Depreciation ||3790.14 ||5485.74 |
|Less: Finance Costs ||322.41 ||302.10 |
|Profit before Depreciation & Taxation ||3467.73 ||5183.64 |
|Less: || || |
|A) Depreciation ||2245.73 ||2061.25 |
|B) Provision for Taxation || || |
|- Current Tax ||474.43 ||831.76 |
|- Deferred Tax ||(515.61) ||142.94 |
|- Adjustment of Tax Relating to earlier years ||11.29 ||5.64 |
|Net Profit after Tax ||1251.89 ||2142.05 |
|Add: Other Comprehensive Income Net of Taxes ||1.41 ||16.33 |
|Total Comprehensive Income for the year ||1253.30 ||2158.38 |
|Transfer to General Reserve ||- ||- |
|Balance Carried Forward to Balance Sheet ||1253.30 ||2158.38 |
FINANCIAL HIGHLIGHTS AND OPERATIONS
The revenue from operations and other income for the financial yearunder review was Rs. 59065.88 lakhs as against Rs.90884.39 lakhs for the previousfinancial year showing a decrease of 35%. The profit before finance costs depreciationand taxation is Rs. 3790.14 lakhs for the financial year under review as against Rs.5485.74 lakhs for the previous financial year a decrease by 31%. The profit after taxdecreased to Rs. 1251.89 lakhs as compared to Rs. 2142.05 lakhs for the previousfinancial year i.e. by 42%. Total comprehensive income for the year decreased toRs.1253.30 lakhs as compared to Rs. 2158.38 lakhs for the previous financial year adecrease by 42%. This is due to decrease in sales of Car Seats to Maruti Suzuki IndiaLimited mainly on account of discontinuance/ shifting of certain models and also lessersales of some existing models.
Maruti Suzuki India Limited (MSIL) has shifted the manufacture of acertain model to Suzuki Motor Gujarat Private Limited (SMG) in Gujarat. In line with thisshifting plan your Company has also taken the necessary measures to shift themanufacturing of certain model of seat and carpet currently being manufactured at ourManesar and Gurgaon plants to Gujarat.
The production at SMG Gujarat is expected to start in January 2021.The setting up of this facility will lead to enhancement in the Company's productioncapacity in line with customer's requirements.
Total Productive Maintenance (TPM) Activity
Your Company first started the TPM activity in the year of 1999 atGurugram plant and was awarded the "Excellence Award" in 2006 by JIPM (JapanInstitute of Plant Maintenance).
The Gurugram plant in 2017 started working on the next level of theaward "Consistency in Excellence" with top Management commitment. The other twoplants at Manesar & Bhorakalan plant are going for Excellence Award in 2021.
The focus remains on Quality improving capacity utilizationoptimizing performance increase productivity enhance efficiency and this is done withthe involvement of all employees. Rigorous training both in classroom and on the shopfloor are done. Working smarter faster with flexibility and more economically are someof the gains.
TRANSFER TO GENERAL RESERVE
During the F.Y2019-20 the Company has not transferred any amount toGeneral Reserve.
Your Directors are pleased to recommend for the approval of theshareholders at the 33rd Annual General Meeting a dividend of 25% (Re 0.50/-per equity share) for the financial year ended 31.03.2020.
TRANSFER TO INVESTOR EDUCATION AND PROTECTION FUND
a. The members of the Company are informed that the dividends thatremain unpaid/unclaimed for a period of 7 (seven) years from the date of transfer to theUnpaid / Unclaimed dividend account are required to be transferred to the account of theInvestor Education & Protection Fund (IEPF) Authority established by the CentralGovernment.
Accordingly during the financial year under review the Company hastransferred Unclaimed dividend amounting to Rs.246038/- lying with the Company for aperiod of seven years pertaining to the financial year ended on 31st March2012.
b. The members of the Company are also informed that as per theprovisions introduced in the year 2016 underlying equity shares on which dividend remainUnpaid/Unclaimed for a period of 7 (seven) consecutive years are required to betransferred to the Investor Education & Protection Fund (IEPF) Authority establishedby the Central Government.
Accordingly during the financial year under review the Company hastransferred the following shares to IEPF Authority:
11501 equity shares in respect of which dividend have not been claimedby the members for seven consecutive years pertaining to the financial year ended on 31stMarch 2012 upto financial year 2018.
There is no change in the capital structure of the Company.
CHANGE IN THE NATURE OF BUSINESS
There was no change in the nature of business during the financial year2019-2020 under review.
CHANGE IN PROMOTERS
As you are aware there was a family settlement mainly between Mr.Rohit Relan and Mr. Ajay Relan the brief about which has already been given on thewebsite of the company and was also disseminated on the BSE as per requirements ofRegulation 30 of SEBI (LODR) Regulations. As a part of this settlement Sharda MotorIndustries Limited (Company belonging to Mr. Ajay Relan) has transferred their entireholding of 9000000 equity shares to NDR Auto Components Limited w.e.f. 11th April 2020.The said transfer falls under the exempted category as per provisions of SEBI (SAST)Regulations. As NDR Auto Components Limited also falls in the category of promoter grouptherefore there is no change in the overall promoter holding of the company Members arerequested to go through Note No 37(k) given in the Financial Statements for the Financialyear 2019-20 for more details.
AWARDS AND RECOGNITION
We are pleased to inform that during the year your company has beenawarded:
a. A Certificate of Appreciation in recognition of the superiorperformance in the field of Comprehensive Excellence at vendor conference of Maruti SuzukiIndia Limited held in May 2019.
b. Performance award for spare delivery by Suzuki Motorcycle India Pvt.Ltd. in April 2019.
MANAGEMENT DISCUSSION AND ANALYSIS
The Management Discussion And Analysis as stipulated under Regulation34 of the SEBI (Listing Obligations And Disclosure Requirements) Regulations 2015 ispresented in a separate section forming part of the Annual Report.
ICRA has assigned its Short Term credit rating of A2+ and Long termCredit rating of A- indicating the outlook on the long term rating as 'Stable'.
RELATED PARTY TRANSACTIONS
All contracts/ transactions entered into by the Company during thefinancial year with related parties were in the ordinary course of business and on arm'slength basis.
The Related Party Transactions Policy as approved by the Board isuploaded on the Company's website at the web link: http://www.bharatseats.com/wp-content/uploads/2020/05/Policv-on-Related-Partv-Transactions 2020.pdf.
The information relating to particulars of contracts or arrangementswith related parties referred to in sub section (1) of section 188 of the Companies Act2013 in Form AOC-2 is annexed as Annexure I forming part of this Report.
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGEEARNINGS AND OUTGO
The information relating to conservation of energy technologyabsorption foreign exchange earnings and outgo pursuant to Section 134(3)(m) of theCompanies Act 2013 read with Rule 8(3) of Companies(Accounts) Rules 2014 is annexedhereto as Annexure II forming part of this Report.
BOARD ANNUAL EVALUATION
In compliance with the Companies Act 2013 and SEBI (ListingObligations and Disclosure Requirements) Regulations 2015 and guidance note dt. 5thJanuary2017 issued by SEBI performance evaluation was carried out of the Board its Committeesand individual Directors including the Chairman of the Board.
Nomination & Remuneration Committee reviewed the evaluationcriteria for the Board its Committees Executive and non-executive Directors and Chairmanof the Company considering qualification expertise attributes and various parametersbased on which evaluation of the Board has to be carried out by the Company.
A meeting of the independent directors was held which reviewed theperformance of the Board (as a whole) Committees of the Board the non- independentdirectors and the Chairman.
The evaluation of Independent Directors was carried out by the Board.
This exercise was carried out through structured evaluation processcovering various aspects of the Board such as composition of the Board/ Committeesexperience competencies performance of specific duties etc. Separate exercise wascarried out to evaluate the performance of individual directors including Board Chairmanwho were evaluated on the parameters such as attendance contribution at the meetingindependent judgment etc. and was found to be satisfactory.
DIRECTORS AND KEY MANAGERIAL PERSONNEL:
Approval of shareholders (vide postal ballot which concluded on March27 2019) was obtained for reappointment of Mr. Girish Narain Mehra Mr. Prateep KumarLahiri and Mr. Ravindra Gupta as independent directors w.e.f. April 1 2019 and furtherMs. Shyamla Khera and Mr. Arvind Varma were also reappointed as independent directorsw.e.f. July 21 2019 and October 21 2019 respectively.
In accordance with the Articles of Association of the Company andrelevant provisions of the Companies Act 2013 Mr. C. V. Raman (DIN: 07093663) is liableto retire by rotation at the ensuing Annual General Meeting.
The Board recommends his re-appointment.
The Company has received declaration from all the Independent Directorsconfirming that they meet the criteria of Independence as prescribed under Section 149(6)of the Companies Act 2013 read with the schedules and rules made there under along withdeclaration for compliance with clause 16 of the SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015.
KEY MANAGERIAL PERSONNEL (KMP)
Mr. Rohit Relan Chairman and Managing Director Mr. Sanjeev Kumar CFOand Ms. Ritu Bakshi Company Secretary continue to be the KMPs of the Company in terms ofSection 203 of the Companies Act 2013 read with the Companies (Appointment &Remuneration of Managerial Personnel) Rules2014. There has been no new appointment ofKMP.
The Company is committed to maintain the highest standards of CorporateGovernance and adhere to the Corporate Governance requirements as set out by theRegulators/ applicable laws.
The report on Corporate Governance as stipulated under SEBI (ListingObligations and Disclosure Requirements) Regulations 2015 been included in this AnnualReport as a separate section along with the certificate of Mr. R S Bhatia PractisingCompany Secretary.
DETAILS OF DEPOSIT AS PROVIDED UNDER CHAPTER V OF THE COMPANIES ACT2013
Your Company has not accepted any deposits under Chapter V of theCompanies Act 2013 but there was an outstanding loan of Rs. 2260 Lakhs as on 31.03.2020from Mr. Rohit Relan Chairman and Managing Director of the Company which is exempted asdeposit under Rule 2(c)(viii) of Companies(Acceptance of Deposit) Rules 2014.
DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS ORCOURTS OR TRIBUNALS IMPACTING THE GOING CONCERN STATUS AND COMPANY'S OPERATION IN FUTURE
There are no significant and material orders passed by the RegulatorsCourts or Tribunals which would impact the going concern status of the Company and itsoperations in future.
DETAILS OF ADEQUACY OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TOTHE FINANCIAL STATEMENTS
The Directors had laid down internal financial controls to be followedby the Company and such policies and procedures adopted by the Company for ensuring theorderly and efficient conduct of its business including adherence to Company's policiesthe safeguarding of its assets the prevention and detection of frauds and errors theaccuracy and completeness of the accounting records and the timely preparation ofreliable financial information. The Audit Committee evaluates the internal financialcontrol system periodically.
The Equity shares of the Company are listed at Bombay Stock Exchange.The Company has paid listing fees due to the Stock Exchange.
CORPORATE SOCIAL RESPONSIBILITY (CSR)
The Company believes in giving back to society and we have taken stepsfor that. Alongside our business priorities the Company is committed to society as welland this is apparent through our CSR activities.
Your Company believes that change is essential for growth developmentand progress and this comes through a change in our way of thinking.
Bharat Seats believes empowering Women is essential for social changeand this empowerment comes through education. For the girl child we took the call of"Beti Bachao Beti Padhao" and contribute to "Prerna" a school inLucknow for girls from the under privileged and marginalized section of society. Theschool provides education and makes them culturally ready to mix and mingle with allstrata of society.
Your company is also supporting a centre of skill development where ourboys and girls are given training in different areas to make them employable.
We are also supporting the cause of skill development
through Rotary Southend Charitable Trust. We are also supporting thecause of COVID 19 through Rotary Southend Charitable Trust.
The stress and strain of life affects many humans. No matter what ageor strata of society we have cases of mentally distressed depressed persons who requirecounselling from experts. We are supporting this cause through an organization"Sanjeevani". Set up in 1976 Sanjeevani is a non-profit organization addressingthe mental and emotional needs of society through free and confidential counselling.Sanjeevani has helped many persons over the age of 16 years.
The CSR Policy is uploaded on the Company's website at the web link:http://www.bharatseats.com/wp-content/ uploads/2020/05/CSR-policy 2020.pdf
The annual report on CSR activities composition of the CSR committeeand other prescribed details are annexed as Annexure III. There is no amount which islying unspent in respect of the financial year under review.
EXTRACT OF ANNUAL RETURN
Details forming part of the extract of Annual return as on 31st March2020 in Form MGT-9 pursuant to sub section (3) of Section 92 of Companies Act 2013 readwith Rule 12 of Companies (Management And Administration) Rules 2014 is annexed heretoas Annexure IV As per provisions of Section 134(3)(a) of the Companies Act 2013 theAnnual return for financial year 2018-19 is placed on website of the company i.e.http://www.bharatseats.com/ wp-content/uploads/2020/05/annual-return-2018-19.pdf.
MEETINGS OF THE BOARD
Five meetings of the Board of Directors were held during the financialyear. For further details please refer the Report on Corporate Governance givenseparately in the Annual Report.
The Audit Committee comprises of four Independent NonexecutiveDirectors namely Mr. G.N. Mehra Chairman Mr. PK. Lahiri Mr. Ravindra Gupta and Ms.Shyamla Khera.
Powers and Role of the Audit Committee are included in the CorporateGovernance Report. All the recommendations made by the Audit Committee were accepted bythe Board.
DIRECTORS' RESPONSIBILITY STATEMENT
Pursuant to Section 134(3)(c) of the Companies Act2013 the Directorsconfirm that:
(a) In the preparation of the annual accounts the applicableaccounting standards have been followed and no material departures have been made from thesame.
(b) Appropriate accounting policies have been selected and appliedconsistently and judgments and estimates made that are reasonable and prudent so as togive a true and fair view of the state of affairs of the Company at 31st March 2020 andof the Profit of the Company for the year ending 31st March 2020;
(c) Proper and sufficient care has been taken for the maintenance ofadequate accounting records in accordance with the provisions of the Companies Act 2013for safeguarding the assets of the Company and for preventing and detecting fraud andother irregularities;
(d) The annual accounts have been prepared on a going concern basis.
(e) Internal financial controls to be followed by the Company have beenlaid down and that such internal financial controls are adequate and were operatingeffectively.
(1) Proper systems have been devised to ensure compliance with theprovisions of all applicable laws and that such systems are adequate and operatingeffectively.
PARTICULARS OF EMPLOYEES
Disclosure as required under Sub Rule 2 of Rule 5 of Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 is annexed hereto asAnnexure V.
The ratio of the remuneration of each Director to the median employees'remuneration 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 ofManagerial Personnel) Rules 2014 is annexed as part of the report as Annexure VI.
COMPANY'S POLICY ON DIRECTORS' APPOINTMENT AND REMUNERATION INCLUDINGCRITERIA FOR DETERMINING QUALIFICATIONS POSITIVE ATTRIBUTES INDEPENDENCE OF A DIRECTORAND OTHER MATTERS AS PROVIDED UNDER SUB SECTION(3) OF SECTION OF THE COMPANIES ACT 2013
The Company has formulated a Nomination and Remuneration Policy whichis available on the website of the company. The link of the same is http://www.bharatseats.com/wp-content/uploads/2020/05/ NRCPolicv 2020.pdf Other details areprovided in Corporate Governance Report.
PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS UNDER SECTION 186
There was no transaction falling under the provision of Section 186during the financial year under review.
In March 2020 the World Health Organisation declared COVID 19 to be apandemic. The Company's manufacturing operations at all its plants in Gurgaon Manesar andBorakalan were disrupted w.e.f. 23rd March 2020 in compliance with Governmentorders on account of the COVID -19 pandemic.
During this period Covid-19 outbreak brought production as well asdispatch of our major vendor Maruti Suzuki India Limited to a standstill resulting indecline in sales of your Company.
The Company partially resumed manufacturing operations at all itsplants from 13th May 2020.
The Company has adopted measures to curb the spread of infection inorder to protect the health of its employees and ensure business continuity with minimaldisruption. The company carried out modifications on it's processes to ensure socialdistancing. Prior to opening all plants were sanitized. Similarly office areas canteenwere modified to ensure social distancing. Material handling processes were modified toensure that incoming and out going Material Work in progress and Finished goods aresanitized making them free from any contamination. All employees visitors entering theplant go through a check as prescribed under the MHA guidelines and maximum measures havebeen taken to minimize touch points.
The Company will continue to closely monitor the situation. RISKMANAGEMENT
The Company has in place the Risk Management Policy to identify andassess the key risk areas and monitor the same.
The Board periodically reviews the risks and suggests steps to be takento control the risks.
The Company has in place an established Whistle Blower Policy. TheAudit Committee and the Board periodically reviews the policy and its implementation. Thepurpose of this policy is to provide a framework to promote responsible whistle blowing byemployees.
The Whistle Blower Policy may be accessed at the Company's website atweb link: http://www. bharatseats. com/wp-content/uploads/2020/05/Whistle-Blower-Policv2020.pdf
Our relations with the employees are very cordial. Your Directors wouldlike to place on record their appreciation of the commitment and efficient servicesrendered by all employees of the Company without whose wholehearted efforts the overallsatisfactory performance of the Company would not have been possible.
AUDITORS AND AUDITORS'REPORT
(a) Statutory Auditors
M/s S.R. Batliboi & Co. LLP Chartered Accountants LLP (ICAI FirmRegistration No. 301003E/E300005) was appointed as Statutory Auditor at AGM held onSeptember 212017 will hold office till the conclusion of Annual General Meeting to beheld in 2022.
The Auditors' Report given by M/s S.R.Batliboi & Co. LLP StatutoryAuditors on the financial statements of the Company for the year ended March 31 2020 ispart of the Annual Report. The Auditors' Report does not contain any qualificationreservation or adverse remark. During the year under review the Auditors had not reportedany matter under Section 143(12) of the Act therefore no detail is required to bedisclosed under Section 134 (3)(ca) of the Act.
(b) Secretarial Auditor
In accordance with the provisions of the Section 204 read with theCompanies (Appointment And Remuneration of Managerial Personnel) Rules 2014 theSecretarial Audit was carried out by Mr. R. S. Bhatia Practising Company Secretary forthe Financial year: 2019-20. The report of Secretarial Auditor for the financial year2019-20 is annexed herewith marked as Annexure VII to this Report. The Secretarial AuditReport does not contain any qualification reservation or adverse remark.
Pursuant Regulation 24(A) of SEBI (LODR) Regulations 2015 the Companyhas obtained annual secretarial compliance report from Mr. R S Bhatia (C P No. 2514)Company Secretary in Practice and the same has been submitted to stock exchange within theprescribed time limits. The annual secretarial compliance report does not contain anyadverse remarks and qualifications.
(c) Cost Audit
The company is not required to maintain cost records as specified bythe Central Government under Section 148(1) of the Act.
Safety first is our motto. While the Act makes it mandatory for us toadopt benchmark practices our values drive us towards this objective. We also believeit's an oath to ourselves.
With the regular guidance from the Safety Team of Maruti Suzuki IndiaLimited Bharat Seats Ltd is now among the leading companies which have made safety itsculture.
Well trained staff focus on best practices & aided withinstallation of state of the art Aerosol fire Detection & Suppression system acrosslocations have worked at force multipliers in our Journey.
Besides this the environmentally friendly practices fireextinguishers thermography test adherence to NBC 2016 NOC from fire office ®ular third party inspections speaks of the commitment.
The review mechanism monitoring & mock drills happen periodically& monitored at APEX level. Last but not the least SHE (Safety Health &Environment) training is regularly imparted to all the employees.
EFFECIVE MANAGEMENT SYSTEMS
The company is system certified for IATF (International Automotive TaskForce) 16949 for quality ISO 14001 for environment and OHSAS for occupational health andsafety. BSL is also accredited with ISO/IEC 17025:2005 "General Requirements for thecompetence of Testing & Calibration Laboratories"
Your Company's focus on preventive maintenance and effective mitigationof all the likely risks involved has led to safe and healthy working environment for allemployees thus helping them to perform at their optimum level of competence.
The Company is committed to the protection of environment and is notinvolved in any type of activity hazardous to environment. During 2019-20 our ManesarGurgaon and Bhorakalan Plants has been certified as Green Plant in ComprehensiveExcellence Activities of Maruti Suzuki India Limited.
The Company strictly adheres to the provisions of environmental laws.There is no trade effluent generated by the Company which may cause pollution. Our Companyis an ISO14001 certified Company.
DISCLOSURE AS REQUIRED UNDER SECTION 22 OF SEXUAL HARASSMENT OF WOMENAT WORKPLACE (PREVENTION PROHIBITION AND REDRESSAL) ACT 2013
The Company has in place an Anti-Sexual Harassment Policy in line withthe requirement of the Sexual Harassment of Women at Workplace (Prevention Prohibitionand Redressal) Act 2013.
The following is the summary of the complaints received and disposedoff during the financial year: 2019-20:
a) No. of complaints received:1
b) No. of Complaints disposed off:1 SHARES
a. Buy Back of Securities
The Company has not bought back any of its securities during the yearunder review.
b. Sweat Equity
The Company has not issued any Sweat Equity Shares during the yearunder review.
c. Bonus Shares
No Bonus Shares were issued during the year under review.
d. Issue of Shares with differential voting rights
The Company has not issued any shares with differential rights duringthe year under review.
e. Issue of Shares under Employee Stock Option Scheme
No such issue of shares under employee stock option scheme was made.
f. Issue of shares through private placement - Nil
g. Issue of Shares without differential voting rights - Nil
The Directors place on record their deep appreciation of the valuableassistance and co-operation extended to the Company by Suzuki Motor Corporation JapanMaruti Suzuki India Ltd. Suzuki Motor Gujarat Private Limited Suzuki Motorcycle IndiaPrivate Limited Toyo Seat Co. Ltd. Japan Inoac Corporation Japan Hayashi Telempu(Thailand) Co. Ltd. Yes Bank Ltd. HDFC Bank Ltd. various departments of CentralGovernment and Government of Haryana. The directors convey their deep appreciation to eachand every employee for her/his efficient service commitment and collective team work.
Your support as shareholders is greatly valued.
Your Directors thank you and look forward to the future withconfidence.
| ||For and on behalf of the Board |
| ||Bharat Seats Limited |
| ||(Rohit Relan) |
| ||Chairman and Managing Director |
|Place : ||Gurugram |
|Dated : ||June 122020 |