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Bharat Seats Ltd.

BSE: 523229 Sector: Auto
NSE: N.A. ISIN Code: INE415D01024
BSE 00:00 | 06 Jul 53.75 2.85
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NSE 05:30 | 01 Jan Bharat Seats Ltd
OPEN 52.45
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VOLUME 33774
52-Week high 76.00
52-Week low 29.10
P/E 13.47
Mkt Cap.(Rs cr) 169
Buy Price 53.40
Buy Qty 408.00
Sell Price 53.75
Sell Qty 50.00
OPEN 52.45
CLOSE 50.90
VOLUME 33774
52-Week high 76.00
52-Week low 29.10
P/E 13.47
Mkt Cap.(Rs cr) 169
Buy Price 53.40
Buy Qty 408.00
Sell Price 53.75
Sell Qty 50.00

Bharat Seats Ltd. (BHARATSEATS) - Director Report

Company director report

Dear Shareholders

Your Directors have pleasure in presenting the 32nd Annual Report together with the Audited Accounts for the year ended 31st March 2019.

Financial ResultsRupees In Lakhs
Particulars2018-20192017-2018
Revenue from Operations90356.85100137.75
Other Income527.54120.90
Profit before Financial Charges & Depreciation5485.746581.48
Less: Finance Costs302.10320.38
Profit before Depreciation & Taxation5183.646261.10
Less:
A) Depreciation2061.251911.08
B) Provision for Taxation
- Current Tax831.761542.02
- Deferred Tax142.94(61.34)
- Adjustment of Tax Relating to earlier years5.6447.83
Net Profit after Tax2142.052821.51
Add: Other Comprehensive Income Net of Taxes16.33(19.21)
Total Comprehensive Income for the year2158.382802.30
Transfer to General Reserve--
Balance Carried Forward to Balance Sheet2158.382802.30

FINANCIAL HIGHLIGHTS AND OPERATIONS

The revenue from operations and other income for the financial year under review was Rs. 90884.39 lakhs as against Rs. 100258.65 lakhs for the previous financial year i.e. a decrease by 9.35%.The profit before finance costs depreciation and taxation is Rs.5485.74 lakhs for the financial year under review as against Rs. 6581.48 lakhs for the previous financial year i.e. decrease by 16.65%. The profit after tax decreased to Rs. 2142.05 lakhs as compared to Rs. 2821.51 lakhs for the previous financial year i.e. decrease by 24.08%. Total comprehensive income for the year decreased to Rs. 2158.38 lakhs as compared to Rs. 2802.3 lakhs for the previous financial year i.e. decrease by 22.98%. This was due to decrease in sales volumes of Car Seats to Maruti Suzuki India Limited mainly on account of discontinuance of certain models and also lesser sales of some existing models.

Guiarat Project

Maruti Suzuki India Limited (MSIL) is shifting manufacture of a certain model (YSD notchback model) to Suzuki Motor Gujarat Private Limited (SMG) in Gujarat. In line with MSIL shifting plan the Company proposes to shift the manufacturing of seat of YSD Notchback (currently being manufactured at our Manesar plant) to Gujarat. Accordingly the Company has commenced the setting up of production facility at a location close to SMG facilities in Gujarat at an estimated project cost of Rs.38 crores in one or more phases which is proposed to be funded mainly out of internal accruals.

The start of production at SMG Gujarat is scheduled for April 2020. Going forward the setting up of this facility will lead to enhancement in the Company's production capacity from time to time in line with customer's requirements.

Total Productive Maintenance(TPM) ACTIVITY

We first started the TPM activity in the year of 1999 at Gurugram plant under the able guidance of Yamaguchi san and mentoring of our Chairman and Managing Director Mr. Rohit Relan and learnt numerous new tools and techniques and achieved positive results. BSL Gurugram plant was awarded with Excellence Award in 2006 by JIPM (Japan Institute of Plant Maintenance).

Currently Bharat Seats Limited (BSL) at group level has started TPM activity under the able guidance of Kuramitsu san (TPM Consultant from JMAC Japan) and mentoring of our CMD Mr. Rohit Relan. We launched the same in July 2017 with total management commitment.

Gurugram Plant now has started activity for Second Level Award: Consistence in Excellence award and Manesar & Bhorakalan plant are going for Excellence Award in 2021.

We started with manager model machine implementation approach for all of our plants. This activity focuses on zero accidents zero defects improvement in productivity and no machine breakdowns. This activity has resulted in tremendous improvement in above said areas.

TPM kick-off event took place in February 2018 in the presence of esteemed guest from our valuable customer (MSIL) our key suppliers CMD Mr. Rohit Relan & BSL Team. During the event basic TPM policies and TPM objectives were formally announced to all employees by top management after taking oath on total commitment to TPM activities.

Since TPM kick-off activities of 6 Key Pillars have started for all plants across all the areas. The Company is currently in the expansion phase to implement TPM activities at all manufacturing locations with emphasis on Kaizen Autonomous Maintenance Focused Improvements and other improvement project activities and actions.

TRANSFER TO GENERAL RESERVE

During the F.Y 2018-19 the Company has not transferred any amount to General Reserve.

DIVIDEND

Your Directors are pleased to recommend for the approval of the shareholders at the 32'1<J Annual General Meeting a dividend of 50% (Re 1/- per equity share) for the financial year ended 31.03.2019 which is same as of the last financial year. The dividend payment shall be subject to tax on dividend to be paid by the Company.

TRANSFER TO INVESTOR EDUCATION AND PROTECTION FUND

a The members of the Company are informed that the dividends that remain unpaid / unclaimed for a period of 7 (seven) years from the date of transfer to the Unpaid / Unclaimed dividend account are required to be transferred to the Investor Education & Protection Fund (IEPF) Authority established by the Central Government.

Accordingly during the financial year under review the Company has transferred Unclaimed dividend amounting to Rs.236249/- lying with the Company for a period of seven years pertaining to the financial year ended on 31st March 2011.

b. The members of the Company are also informed that as per the provisions introduced in the year 2016 underlying equity shares on which dividend remain Unpaid/Unclaimed for a period of 7 (seven) consecutive years are required to be transferred to the Investor Education & Protection Fund (IEPF) Authority established by the Central Government.

Accordingly during the financial year under review the Company has transferred the following shares to IEPF Authority:

(i) 10832 equity shares in respect of which dividend have not been claimed by the members for seven consecutive years pertaining to the financial year ended on 31st March 2011 upto financial year 2017.

SHARE CAPITAL

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 year 2018-2019 under review.

AWARDS AND RECOGNITION

During the year your company has been awarded:

1. A certificate for fire safety at vendor conference of mMaruti Suzuki India Limited in May 2018

2. Shield for cost reduction by Suzuki Motorcycle India Pvt. Ltd. in April 2018

Your Company has been awarded with:

a. A Certificate of Appreciation in recognition of the superior performance in the field of Comprehensive Excellence at vendor conference of Maruti Suzuki India 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 Regulation 34 of the SEBI (Listing Obligations And Disclosure Requirements) Regulations 2015 is presented in a separate section forming part of the Annual Report.

CREDIT RATING

ICRAhas assigned its Short Term credit rating ofA2+ and Long term Credit 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 the financial year with related parties were in the ordinary course of business and on arm's length basis.

The Related Party Transactions Policy as approved by the Board is uploaded on the Company's website at the web link: http://www.bharatseats.com/investors/ Policy on Related Party Transactions.

The information relating to particulars of contracts or arrangements with related parties referred to in sub section (1) of section 188 of the Companies Act 2013 in Form AOC-2 is annexed as Annexure I forming part of this Report.

CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNINGS AND OUTGO

The information relating to conservation of energy technology absorption foreign exchange earnings and outgo pursuant to Section 134(3)(m) of the Companies Act 2013 read with Rule 8(3) of Companies(Accounts) Rules 2014 is annexed hereto as Annexure II forming part of this Report.

BOARD ANNUAL EVALUATION

In compliance with the Companies Act 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 and guidance note dt. 5th January 2017 issued by SEBI performance evaluation was carried out of the Board its Committees and individual Directors including the Chairman of the Board.

Nomination & Remuneration Committee reviewed the evaluation criteria for the Board its Committees Executive and non-executive Directors and Chairman of the Company considering qualification expertise attributes and various parameters based on which evaluation of the Board has to be carried out by the Company.

A separate meeting of the independent directors was convened which reviewed the performance of the Board (as a whole) Committees of the Board the nonindependent directors and the Chairman.

The evaluation of Independent Directors was carried out by the Board.

This exercise was carried out through structured evaluation process covering various aspects of the Board such as composition of the Board/ Committees experience competencies performance of specific duties etc. Separate exercise was carried out to evaluate the performance of individual directors including Board Chairman who were evaluated on the parameters such as attendance contribution at the meeting independent judgment etc. and was found to be satisfactory.

DIRECTORS AND KEY MANAGERIAL PERSONNEL:

During the year under review approval of shareholders (vide postal ballot which concluded on March 27 2019) was obtained for reappointment of Mr. Girish Narain Mehra Mr. Prateep Kumar Lahiri and Mr. Ravindra Gupta as independent directors w.e.f. April 1 2019. Further Ms. Shyamla Khera and Mr. Arvind Varma were also reappointed as independent directors w.e.f. July 212019 and October 212019 respectively.

Mr. Kishan Nagin Parikh Independent Director ceased to be Director of the company due to expiry of his tenure as Independent Director after close of business hours on March 312019.

In accordance with the Articles of Association of the Company and relevant provisions of the Companies Act 2013 Ms. Sharda Relan (DIN: 00252181) is liable to retire by rotation at the ensuing Annual General Meeting.

The Board recommends her re-appointment.

The Company has received declaration from all the Independent Directors confirming 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 with declaration for compliance with clause 16 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015.

KEY MANAGERIAL PERSONNEL (KMP)

Mr. Rohit Relan Chairman and Managing Director Mr. Sanjeev Kumar CFO and Ms. Ritu Bakshi Company Secretary continue to be the KMPs of the Company in terms of Section 203 of the Companies Act 2013 read with the Companies (Appointment & Remuneration of Managerial Personnel) Rules 2014.

CORPORATE GOVERNANCE

The Company is committed to maintain the highest standards of Corporate Governance and adhere to the Corporate Governance requirements as set out by the Regulators/ applicable laws.

The report on Corporate Governance as stipulated under SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 been included in this Annual Report as a separate section along with the Secretarial Auditors' Certificate.

DETAILS OF DEPOSIT AS PROVIDED UNDER CHAPTER V OF THE COMPANIES ACT 2013

Your Company has not accepted any deposits under Chapter V of the Companies Act 2013 but there was an outstanding loan of Rs. 1660 Lakhs from Mr. Rohit Relan Chairman and Managing Director of the Company which is exempted as deposit under Rule 2(c)(viii) of Companies(Acceptance of Deposit) Rules 2014.

DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGISTRARS OR COURTS OR TRIBUNALS IMPACTING THE GOING CONCERN STATUS AND COMPANY'S OPERATION IN FUTURE

There are no significant and material orders passed by the Regulators Courts or Tribunals which would impact the going concern status of the Company and its operations in future.

DETAILS OF ADEQUACY OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO THE FINANCIAL STATEMENTS

The Directors had laid down internal financial controls to be followed by the Company and such policies and procedures adopted by the Company for ensuring the orderly and efficient conduct of its business including adherence to 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. The Audit Committee evaluates the internal financial control system periodically.

LISTING

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 CSR Policy is uploaded on the Company's website at the web link:

http://www.bharatseats.com/investors/Corporate Social responsibility Policy

The annual report on CSR activities composition of the CSR committee and other prescribed details are annexed as Annexure III. There is no amount which is lying 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 March 2019 in Form MGT-9 pursuant to sub section (3) of Section 92 of Companies Act 2013 read with Rule 12 of Companies (Management And Administration) Rules is annexed hereto as Annexure IV and as per provisions of Section 134(3)(a) of the Companies Act 2013 the Annual return for financial year 2017-18 is placed on website of the company i.e. http://www.bharatseats.com/investors.

MEETINGS OF THE BOARD

Five meetings of the Board of Directors were held during the financial year. For further details please refer the Report on Corporate Governance to this Annual Report.

AUDIT COMMITTEE

The Audit Committee comprises of Independent Nonexecutive Directors namely Mr. G.N. Mehra Chairman Mr. P.K. Lahiri Mr. Ravindra Gupta and Ms.Shyamla Khera*. (* Ms. Shyamla Khera became member of the Audit Committee on 23rd April 2019) Powers and Role of theAudit Committee are included in the Corporate Governance Report. All the recommendations made by the Audit Committee were accepted by the Board.

DIRECTORS' RESPONSIBILITY STATEMENT

Pursuant to Section 134(3)(c) of the Companies Act 2013 the Directors confirm that:

(a) In the preparation of the annual accounts the applicable accounting standards have been followed and no material departures have been made from the same.

(b) Appropriate accounting policies have been selected and applied consistently and judgments and estimates made that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at 31st March 2019 and of the Profit of the Company for the year ending 31st March 2019;

(c) Proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act 2013 for safeguarding the assets 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 to be followed by the Company have been laid down and that such internal financial controls are adequate and were operating effectively.

ffi Proper systems have been devised to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.

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 as Annexure V.

The ratio of the remuneration of each Director to the median employees' remuneration and others detail in terms of Sub Section 12 of Section 197 of the Companies Act 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 is annexed as part of the report to Annexure VI.

COMPANY'S POLICY ON DIRECTORS'APPOINTMENT AND REMUNERATION INCLUDING CRITERIA FOR DETERMINING QUALIFICATIONS POSITIVE ATTRIBUTES INDEPENDENCE OF A DIRECTOR AND OTHER MATTERS AS PROVIDED UNDER SUB SECTIONS) OF SECTION OF THE COMPANIES ACT 2013

The Company has formulated a Nomination and Remuneration Policy which is available on the website of the company. The link of the same is http://www. bharatseats.com/Ddf/NRCPolicv.Ddf. Other details are provided in Corporate Governance Report.

PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS UNDER SECTION 186

There was no transaction falling under the provision of Section 186 during the financial year under review.

RISK MANAGEMENT

The Company has in place the Risk Management Policy to identify and assess the key risk areas and monitor the same.

The Board periodically reviews the risks and suggests steps to be taken to control the risks.

VIGIL MECHANISM

The Company has in place an established Whistle Blower Policy. The Audit Committee and the Board periodically reviews the policy and its implementation. The purpose of this policy is to provide a framework to promote responsible whistle blowing by employees.

The Whistle Blower Policy may be accessed at the Company's website at web link: http://www. bharatseats. com/investors/policies/Whistle Blower Policy.pdf

HUMAN RESOURCES

Our relations with the employees are very cordial. Your Directors would like to place on record their appreciation of the commitment and efficient services rendered by all employees of the Company without whose wholehearted efforts the overall satisfactory 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 Firm Registration No. 301003E/E300005) was appointed as Statutory Auditor at Annual General Meeting held on September 21 2017 will hold office till the conclusion of Annual General Meeting to be held in 2022.

The Auditors' Report given by M/s S.R. Batliboi & Co. LLP Statutory Auditors on the financial statements of the Company for the year ended March 31 2019 is part of the Annual Report. The Auditors' Report does not contain any qualification reservation or adverse remark. During the year under review the Auditors had not reported any matter under Section 143 (12) of the Act therefore no detail is required to be disclosed under Section 134 (3)(ca) of the Act.

(b) Secretarial Auditor

In accordance with the provisions of the Section 204 read with the Companies (Appointment And Remuneration of Managerial Personnel) Rules 2014 the Secretarial Audit was carried out by Mr. R S Bhatia Practising Company Secretary for the Financial year: 2018-19. The report of Secretarial Auditor for the financial year 2018-19 is annexed herewith marked as Annexure VII to this Report. The Secretarial Audit Report does not contain any qualification reservation or adverse remark.

Pursuant Regulation 24(A) of SEBI (LODR) Regulations 2015 the Company has 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 the prescribed time limits. The annual secretarial compliance report does not contain any adverse remarks and qualifications.

(c) Cost Audit

The company is not required to maintain cost records as specified by the Central Government under Section 148(1) of the Act.

SAFETY

Safety first is our motto. While the Act makes it mandatory for us to adopt benchmark practices our values drive us towards this objective. We also believe it's an oath to ourselves.

With the regular guidance from the Safety Team of Maruti Suzuki India Limited Bharat Seats Ltd is now among the leading companies which have made safety its culture.

Well trained staff focus on best practices & aided with installation of state of the art Aerosol fire Detection & Suppression system across locations have worked at force multipliers in our Journey. Besides this the environmentally friendly practices fire extinguishers thermography test adherence to NBC 2016 NOCfrom fire office & regular third party inspections speaks of the commitment.

The review mechanism monitoring and mock drills happen periodically and are monitored at apex level. Last but not the least SHE (Safety Health & Environment) training is regularly imparted to all the employees.

EFFECTIVE MANAGEMENT SYSTEMS

The company is system certified for IATF (International Automotive Task Force) 16949 for quality ISO 14001 for environment and OHSAS for occupational health and safety. BSL is also accredited with ISO/IEC 17025:2005 General Requirements for the competence of Testing & Calibration Laboratories.

Our Chairman and Managing Director Mr. Rohit Relan's focus on preventive maintenance and effective mitigation of all the likely risks involved has led to safe and healthy working environment for all employees thus helping them to perform at their optimum level of competence.

ENVIRONMENT

The Company is committed to the protection of environment and is not involved in any type of activity hazardous to environment. It strictly adheres to the provisions of environmental laws. There is no trade effluent generated by the Company which may cause pollution. Our Company is an ISO14001 certified company.

DISCLOSURE AS REQUIRED UNDER SECTION 22 OF SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION PROHIBITION AND REDRESSAL) ACT 2013

The Company has in place an Anti-Sexual Harassment Policy in line with the requirement of the Sexual Harassment of Women at Workplace (Prevention Prohibition and Redressal) Act 2013.

The following is the summary of the complaints received and disposed off during the financial year: 2018-19:

a) No. of complaints received: NIL

b) No. of Complaints disposed off: NIL

SHARES

a. Buy Back Of Securities

The Company has not bought back any of its securities during the year under review.

a. Sweat Equity

The Company has not issued any Sweat Equity Shares during the year under review.

b. Bonus Shares

No Bonus Shares were issued during the year under review.

c. Issue of Shares with Differential Rights

The Company has not issued any Shares with differential rights during the year under review.

d. Issue of Shares under Employee Stock Option Scheme

No such issue of shares under employee stock option scheme was made.

e. Issue of Shares through Private Placement- Nil

f. Issue of Equity Shares without Differential Voting Rights- Nil

ACKNOWLEDGEMENTS

The Directors place on record their deep appreciation of the valuable assistance and co-operation extended to the Company by Suzuki Motor Corporation Japan Maruti Suzuki India Ltd. Suzuki Motorcycle India Private Limited ToyoSeat Co. Ltd. Japan Houwa Kogyo Co Ltd. Japan Inoac Corporation Japan State Bank of India MUFG Bank Ltd. Yes Bank Ltd. HDFC Bank Ltd. IDBI Bank Ltd. various departments of Central Government and Government of Haryana. The directors convey their deep appreciation to each and 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 with confidence.

DY>
For and on behalf of the Board
Bharat Seats Limited
(Rohit Relan)
Chairman and Managing Director
Place: New Delhi
Date : 23rd July 2019

ANNEXURE-I

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)

Form for 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

1. Details of contracts or arrangements or transactions not at arm's length basis: -NONE -

Sl. No.Name(s) of the related partyNature of relationshipNature of contracts/ arrangements/ transactionsDuration of the contracts/ arrangements/ transactionsSalient terms of the contracts or arrangements or transactions including the value if anyDate(s) of approval by the BoardAmount paid as advances if any:Date on which the special resolution was passed in general meeting as required under first proviso to section 188
NONE

2. Details of material contracts or arrangement or transactions at arm's length basis:

Sl. No.Name(s) of the related partyNature of relationshipNature of contracts/ arrangements/ transactionsDuration of the contracts/ arrangements/ transactionsSalient terms of the contracts or arrangements or transactions including the value if anyDate(s) of approval by the BoardAmount paid as advances if any:Date on which the special resolution was passed in general meeting as required under first proviso to section 188
1.Maruti Suzuki India LimitedAssociate CompanySale Purchase or Supply of Goods MaterialsTransaction repetitive in natureUpto a max.of Rs.1200 crores per annumNIL27.12.2014
2.Maruti Suzuki India LimitedAssociate CompanySale of tooling job chargesTransaction repetitive in natureUpto a max.of Rs.50 crores per annumNIL27.12.2014
3.Maruti Suzuki India LimitedAssociate CompanyPayment of Lease RentTransaction repetitive in natureUpto a max.of Rs.50 lakhs per annumNIL27.12.2014
4.Maruti Suzuki India LimitedAssociate CompanyPurchase of ElectricityTransaction repetitive in natureUpto a max. of Rs.30 crores per annumNIL27.12.2014
5.Sharda Motor Industries LimitedAssociate CompanyPurchase of Goods materialsTransaction repetitive in natureUpto a max. of Rs.500 crores per annumNIL27.12.2014
6.Sharda Motor Industries LimitedAssociate CompanyPurchase of Tooling job chargesTransaction repetitive in natureUpto a max. of Rs.100 crores per annumNIL27.12.2014
7.Toyo Sharda India Pvt. Ltd.Associate CompanySale purchase or supply of Goods materialsTransaction repetitive in natureUpto a max. of Rs.25 crores per annumNIL
8.Toyo Sharda India Pvt. Ltd.Associate CompanySale of Tooling/ Job ChargesTransaction repetitive in natureUpto a max. of Rs.3.50 crores per annumNIL
9.Toyo Sharda India Pvt. Ltd.Associate CompanyLease Rent to be receivedTransaction repetitive in natureUpto a max. of Rs.30 lakhs per annumNIL
10.Toyo Sharda India Pvt. Ltd.Associate CompanyMarketing Fees to be receivedTransaction repetitive in natureUpto a max. of Rs.50 Lakhs per annumNIL
11.Toyo Sharda India Pvt. Ltd.Associate CompanySharing of expenses on housekeeping security and utilities etc.Transaction repetitive in natureUpto a max. of Rs.40 Lakhs per annumNIL

ANNEXURE-II

Information pursuant to Section 134(3) of the Companies Act 2013 read with Rule 8 of the Companies (Accounts) Rules 2014 forming part of Board of Directors' Report for the year ended 31st March 2019.

(A) CONSERVATION OF ENERGY

(i) the steps taken or impact on conservation of energy

The following steps have been implemented to save electricity:

Gurugram Plant

PU motor cycle line pouring unit converted in pneumatic in place of electrical motor. Energy saving 19690 kwh / Year.

Manesar Plant

LED light provided in shop floor energy saving 13000 kwh / Year.

Bhorakalan Plant

VFD air compressor provided in place normal air compressor. Energy saving 22400 KWH / Year

(ii) the steps taken by the Company for utilising alternate sources of energy-NIL

(iii) the capital investment on energy conservation equipments-NIL

B. TECHNOLOGY ABSORPTION

I. RESEARCH AND DEVELOPMENT (R&D)

1) Specific areas in which Research & Development work is carried out by your company is :

a) In developing Seating Systems for Hatch-Backs Sedans and SUV segment vehicles.

b) Moulded floor carpets for 4-wheelers.

c) Extrusion components for vehicle roof and windshield installation for Maruti Suzuki India Limited.

d) In developing the Seats and the complete frame assembly (2-Wheelers) for Suzuki Motorcycle India Private Ltd.

Currently your R&D department has slew of new product's development and refresh models on the anvil for the launch in coming years. The R&D department has successfully launched full newly developed Seating System for new generation Wagon R. Your R&D has introduced and implemented Seat Belt Reminders for safety and upcoming regulatory requirement. The similar systems SBR & implementing Child Seat anchorage (Iso-fix & Top Tether) system as add-on are launched for SUV vehicles Brezza and Alto in export market.

Seating system has been upgraded by R&D for flagship model of Suzuki Motorcycle India Pvt Limited highest selling `Suzuki Access'. New Extrusion parts introduced for newly launched Ertiga. Your R&D was awarded new Frame Assemblies and successfully launched in production for Suzuki Motorcycle's Gixxer.

R&D is committed to enhance design capabilities. Virtual Product Test System (Computer Aided Engineering / CAE) is being used to make R&D team more equipped with latest technologies that will help to design the products with more confidence. R&D has invested in Virtual testing facility with latest software like Nastran LD-Dyna 1-step forming analysis Tube Bending analysis and Hyper-mesh. This technology will help to bolster the confidence of engineers doing the product design before huge investment is committed for making prototype and conducting physical testing. This will yield cost optimization by reducing modifications post launch as well as ensure quality of the product before start of production. This will yield faster product launches and reduced time to market.

Benchmarking Room- This has been followed for finding better features in terms of design processes and cost optimization. This will help your R&D to improve the yield and overall reduction of quality.

War Room review system - Mechanism of flawless new product launch with involvement of cross functional team.

This will ensure smoother launch of new product.

Proto Room - For validation and verification of design concept while the product is in development phase. The Proto Room has been equipped with high Lux table. This ensure proper visual / appearance checking.

Dedicated Program Management Team is involved that will act as SPOC (Single Point of Contact) between Customers and other CFT members. PM team shall support the launch activities and ensure the customer timelines are met before time.

On Technology transfer your company is engaging international players in the similar field like Toyo Seats from Japan for seating system design Inoac from Japan for extrusion product line Houwa Kogyo Co. Ltd. for carpet technology Fisher Dynamic for Seat mechanisms etc. We have upgraded & launched Floor Carpets for Swift Tour Alto K10 and Alto Export. Recently discussion started with HTT Thailand to develop latest 5th generation Floor Carpets.

Technology Transfer -

The new technologies that your R&D is working on is high tensile steel stamping AWP (Active Wire-feed Process) welding Cold Metal Transfer (CMT). These new technologies being employed to reduce weight of product which in turn will improve fuel efficiency of the vehicle as a green initiative also ensuring the safety of Seating System. Experts from these reputed organizations frequently visit our production facility for Kaizen initiatives R&D for people training etc. Your R&D has developed the latest new Robotic Weld cell for Breeza (Rear Frames). It has the capability to detect presence of all child parts before welding.

All above initiatives demonstrates urge of your company to continue thrust on product innovation.

2) Benefits derived as a result of above R&D

Your R&D has launched many initiatives for development of its people and products like:

a. Benchmarking activity -For finding better features in-terms of design processes and latest technologies and trends in forth coming / future project launches.

b. War Room - Initiative for review mechanism of new product launches so that the customer milestones are met without any delay.

c. Proto room - For validation and verification of design concepts new project trials innovation projects etc.

Such initiatives will continue to bolster people development deployment of technologies etc. along with retention of employees for long-term association with organization.

3) R&D Future Plans

Going forward your R&D focus is towards achieving;

(a) Focusing on establishing capability to develop High Tensile Stamping Parts.

(b) Global standards in comfort craftsmanship and safety while also manufacturing global quality products in an environment friendly way.

(c) Developing / attracting high-end R&D talent especially in innovative products safety materials engineering electrical and electronics engineering and automotive interiors.

(d) People development through Trainings across the TA partners / sister concern organizations.

(e) Process based approach to launch new products which will improve efficiency as well of quality of product.

(f) Lean Management in design common parts modular design concept by retaining talent.

(g) TGR and TGW / lessons learned will be implemented across the future projects and also backward integration of the same for current running projects.

(h) Work started to establish foot print in Gujarat for SMG

For all above initiatives your company is engaging international players in the similar field for technology transfer.

International players pioneer in this product line like Toyo Seats from Japan for seating system design Inoac from Japan for extrusion product line Fisher Dynamics for mechanisms etc.

4) R&D EXPENDITURE

Your Company is undertaking Research and Development activities for development of varieties of new products tooling and testing fixtures as per the requirement of esteemed customer besides internal initiatives as stated which has resulted in capital & other expenditures as follows:

CapitalRs. 448.01 lakhs
RecurringRs. 341.28 lakhs
TotalRs. 789.29 lakhs

Total R&D expenditure as a percentage of total turnover 0.87%

II. TECHNOLOGY ABSORPTION ADAPTATION AND INNOVATION

(i) Efforts made towards Technology absorption

Bharat Seats Limited is continuously undertaking product development / improvement for existing as well as new products with the help of in-house resources as well as through technical assistance from technical collaborators. For this purpose experts from Toyo Seats Japan and Inoac Corporation Japan had frequent visits to your Company to give special training on designing the process of new type of seats extruded products and also to add new product type seat mechanism.

Your company has developed best assembly line for New Wagon R with SCADAto ensure mistake proofing.

First time Seat Belt Reminder testing started on line.

First time we have introduced and started Frame Traceability for better welding control.

(ii) Benefits derived like Product improvement. Cost reduction product development or import substitution. Trials for localisation of Extrusion wire on advance stages.

a. Process based approach to manufacture has improved efficiency and quality of product.

b. In-house deployment of technologies has reduced the cost of production.

c. Flexible lines by using modular concept have been installed by your Company to launch new products in a very short lead time.

d. New Test Lab established to enhance test capabilities. High End Test Machines got developed from France Germany and within India.

(iii) Your R&D has designed Modular Berth for Indian Railways. We have registered our First Patent. The protos are made and tested. This is a unique design for quick replacement of defective pads / trims rather than replacing complete Berth. It is a light weight & saves significant time in replacing defective berths. We are under discussion with Indian Railways to take this design to next level.

(iv) In case of imported technology technology imported during the last three years reckoned from the beginning of the financial year

DETAILS OF TECHNOLOGY IMPORTEDYEAR OF IMPORTHAS TECHNOLOGY BEEN FULLY ABSORBED
(a)(b)(c)
- For continuous improvement2016-2017Yes
- For manufacture of moulded carpets and seating system for four wheelersCarpet with Sound absorption technology - In Transition phase of absorption
- For Manufacture of Two Wheeler Seat AssembliesYes
- For Manufacture of extruded components for automobilesYes
- For continuous improvement2017-2018Yes
- For manufacture of moulded carpets and seating system for four wheelersYes
- For Manufacture of Two Wheeler Seat AssembliesYes
- For Manufacture of extruded components for automobiles.Yes
- For continuous improvement2018-2019Yes
- For manufacture of seating system for four wheelersYes
- For manufacture of extruded components for automobilesYes

(C) FOREIGN EXCHANGE EARNINGS AND OUTGO

In terms of actual inflows and actual outflows Foreign exchange outflow on account of import of Capital Goods and raw materials amounted to Rs. 1437.68 lakhs (Rs. 1138.93 lakhs). Other expenditure in foreign currency relating to travelling training and technical fees amounted to Rs.386.37 lakhs (Rs. 280.41 lakhs). Remittances in foreign currency on account of dividend amounted to Rs. 46.50 lakhs (Rs. 41.85 lakhs). (Figures in bracket pertain to last year)

ANNEXUREV

DISCLOSURE AS REQUIRED UNDER SUB RULE 2 OF RULE 5 OF COMPANIES (APPOINTMENT AND REMUNERATION OF MANAGERIAL PERSONNEL) RULES 2014

EMPLOYED FOR FULL FINANCIAL YEAR: 2018-2019

NameDesignation & Nature of dutiesRemuneration Gross (Rs.)QualificationsDate of

Commencement of Employment

Total

Experience

Age in Yearslast EmploymentPercentage

Equity

Mr. Rohit RelanChairman and

Managing

Director

Rs. 157.03 LakhsB.Com(hons.) F.C.A. Owner/ President Management Programme from Harvard Business School6-3-198640 Years64 yearsM/S S.P. Marwah & Co. Chartered Accountants1.01%
Mr. T J ChackoSr. VPRs. 66.65 lakhsB.E (Mech)18-11-199747 Years74 YearsVXL India Limited-
Mr. Ashwani AggarwalBusiness

Head-

Business

development

Rs. 112.01 lakhsB. Tech (Mechanical)01-12-201736 Years60 YearsBrose India Automotive Systems Private Limited
Mr. Rajat BhandariSr. VPRs. 63.00 lakhsFCA & ACS01-10-200831 Years55 YearsFederal Mogul Goetze India Ltd.0.01%
Mr. Hari Das NairV.P.-HRRs. 45.10 lakhsMaster in Personal Management & Industrial relations16-01-201722 Years55 yearsMICR Electronics Ltd.-
Ms. Padma PanikkarAVPRs. 46.41 lakhsGraduate01-05-198742 Years65 YearsOberoi Hotel-
Mr. M Shariq QureshiVP-

Operations

Rs. 41.11 lakhsPGPM Dual specilization in Operation research & international Business22-03-201029 Years53 YearsRico Auto Industries Ltd.
Mr. Rishabh RelanCOORs. 46.40 lakhsBSc in Industrial Engneering & Diploma-6 Sigma in lean manufacturing16-08-20127 Years28 Years1.12%
Mr. Sanjeev KumarCFORs. 34.53 lakhsChartered Accountant02-11-198733 Years56 YearsJ.P.Jain & Co. Chartered Accountants0.02%
Mr. Sanjeev KawatraCGM-

Marketing

Rs. 28.88 lakhsExecutive Development prog. In Global Business Strategy01-05-200822 Years46 YearsMitsubishi Heavy Industry

EMPLOYED FOR PART OF FINANCIAL YEAR : 2018-2019 :

NameDesignation and Nature of DutiesRemuneration Gross (Rs.)QualificationsDate of Commencement of EmploymentTotal ExperienceAge in YearsLast EmploymentPercentage Equity
Mr. Ajay RainaVP-Corporate Strategy & Business PlanningRs. 38.41 lakhsMechanical Engineer03-10-201824 Years50 yearsAdient India Pvt Ltd.
Mr. Vinay MittalDGM - R&DRs. 22.59 lakhsB.E.(Mech)02-07-201823 Years45 YearsBadve Engineering Ltd.-

NOTES:

1. Remuneration includes perquisites and company's contribution to provident fund

2. The nature of employment of Mr. Rohit Relan is contractual. For the rest of employees it is other than contractual.

3. Mr. Rohit Relan is related to Mrs Sharda Relan director and Mr. Ajay Relan director of the company. Mr. Rishabh Relan is related to Mr. Rohit Relan Chairman and Managing Director of the Company. Other than Mr Rohit Relan none of the above mentioned employee is relative of any other director/ manager.

ANNEXURE VI

THE RATIO OF THE REMUNERATION OF EACH DIRECTOR TO THE MEDIAN EMPLOYEES' REMUNERATION AND OTHERS DETAIL IN TERMS OF SUB SECTION 12 OF SECTION 197 OF THE COMPANIES ACT 2013 READ WITH RULE 5(1) OF THE COMPANIES (APPOINTMENT AND REMUNERATION OF MANAGERIAL PERSONNEL) RULES

1. The ratio of the remuneration of each director to the median remuneration of the employees of the company for the financial year:

Sr. No.ParticularsRatio to the median remuneration (times)
i)Mr. Rohit Relan Chairman and Managing Director37.19

2. The percentage increase in remuneration of each Director Chief Financial Officer Company Secretary or Manager if any in the financial year

Sr. No.ParticularsPercentage Increase
i)Mr. Rohit Relan Chairman and Managing Director14.26%
ii)Mr. Sanjeev Kumar Chief Financial Officer12.20%
iii)Ms. Ritu Bakshi Company Secretary14.49%

3. The percentage increase in the median remuneration of employees in the financial year is 36.65%

4. Total number of permanent employees on the rolls of company as on March 312019 is 460.

5. Average percentile increase already made in the salaries of employees other than the managerial personnel in the last financial year and its comparison with the percentile increase in the managerial remuneration and justification thereof and point out if there are any exceptional circumstances for increase in the managerial remuneration.

ParticularsNon-ManagerialManagerial
% Average increase in salaries during 2018-1914.26%10.56%

6. Affirmation that the Remuneration is as per the remuneration policy of the company.