Your Directors have pleasure in presenting the 34th Annual Report together with theAudited Accounts for the year ended 31st March 2021.
| || ||Rupees In Lakhs |
|Particulars ||2020-2021 ||2019-2020 |
|Revenue from Operations ||54766.05 ||58857.47 |
|Other Income ||204.96 ||208.41 |
|Profit before Financial Charges & Depreciation ||2890.11 ||3790.14 |
|Less: Finance Costs ||427.31 ||322.41 |
|Profit before Depreciation & Taxation ||2462.80 ||3467.73 |
|Less: || || |
|A) Depreciation ||1798.31 ||2245.73 |
|B) Provision for Taxation || || |
|- Current Tax ||286.38 ||474.43 |
|- Deferred Tax ||(102.46) ||(515.61) |
|- Adjustment of Tax Relating to earlier years ||- ||11.29 |
|Net Profit after Tax ||480.57 ||1251.89 |
|Add: Other Comprehensive Income Net of Taxes ||7.92 ||1.41 |
|Total Comprehensive Income for the year ||488.49 ||1253.30 |
|Transfer to General Reserve ||- ||- |
|Balance Carried Forward to Balance Sheet ||488.49 ||1253.30 |
FINANCIAL HIGHLIGHTS AND OPERATIONS
The revenue from operations and other income for the financial year under review wasRs. 54971.01 lakhs as against Rs. 59065.88 lakhs for the previous financial yearshowing a decrease of 7%. The profit before finance costs depreciation and taxation isRs. 2890.11 lakhs for the financial year under review as against Rs. 3790.14 lakhs forthe previous financial year a decrease by 24%. The profit after tax decreased to Rs.480.57 lakhs as compared to Rs. 1251.89 lakhs for the previous financial year i.e. adecrease by 62%. Total comprehensive income for the year decreased to Rs.488.49 lakhs ascompared to Rs. 1253.30 lakhs for the previous financial year a decrease by 61%. This isdue to decrease in sales of Car Seats to Maruti Suzuki India Limited in the face of covidpandemic and high spurt in raw material prices.
After the closure of financial year 2020-2021 with the rampant spread of the secondwave of COVID-19 and lockdowns the sales of our Company was adversely affected in themonths of April/ May 2021 owing to shut down of the customers' plants. The supplies havesince resumed.
Maruti Suzuki India Limited (MSIL) has shifted the manufacture of certain models toSuzuki Motor Gujarat Private Limited (SMG) in Gujarat. Accordingly your Company alsoshifted the manufacturing of seats and carpets of a certain model in Gujarat plant whichwere earlier manufactured at our Manesar/ Gurugram plants.
Total Productive Maintenance (TPM) Activity
Your company first started the TPM activity in the year of 1999 at Gurugram plant andwas awarded the "Excellence Award" in 2006 by Japan Institute of PlantMaintenance (JIPM).
The Gurugram plant in 2017 started working on the next level of the award"Consistency in Excellence" with top management commitment. The Manesar plantis going for Excellence Award in 2022.
The application for the assessment for "Consistency in Excellence" wassubmitted in the month of December 2020 as per the timeline for BSL Gurugram Plant. Withthe submission of activity report in the month of February 2021 to JIPM we have comecloser to the assessments for the award.
All team members of the Company are focused towards achieving outstanding levels ofperformance through "Manufacturing Accuracy" that meet or exceed theexpectations of all our stakeholders through several focused improvement activities suchas Low Cost Automation Bottle Neck Analysis Ideal Situation Analysis and QualityMaintenance activities.
TPM provides a holistic structured and a quantifiable methodology for deeper &wider continual improvements in an integrated way to align to BSL's business vision.
TRANSFER TO GENERAL RESERVE
During the F.Y.2020-2021 the Company has not transferred any amount to GeneralReserve.
Your Directors are pleased to recommend for the approval of the shareholders at the34th Annual General Meeting a dividend of 25% (Re 0.50 per equity share) for thefinancial year ended 31.03.2021.
TRANSFER TO INVESTOR EDUCATION AND PROTECTION FUND
a. The members of the Company are informed that the dividends that remainunpaid/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 has transferredUnclaimed dividend amounting to Rs. 254880/- lying with the Company for a period ofseven years pertaining to the financial year ended on 31st March 2013.
b. The members of the Company are also informed that as per the provisions introducedin the year 2016 underlying equity shares on which dividend remain Unpaid/Unclaimed for aperiod of 7 (seven) consecutive years are required to be transferred to the InvestorEducation & Protection Fund (IEPF) Authority established by the Central Government.
Accordingly during the financial year under review the Company has transferred thefollowing shares to IEPF Authority:
108380 equity shares in respect of which dividend have not been claimed by themembers for seven consecutive years pertaining to the financial year ended on 31st March2013 upto financial year 2019.
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 2020-2021 underreview.
CHANGE IN PROMOTERS
As you are aware there was a family settlement mainly between Mr. Rohit Relan and itsgroup and Mr. Ajay Relan and its group. Brief about which has already been given on thewebsite of the company and was also disseminated on the BSE website 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 (28.66%) equity shares to NDR Auto Components Limited w.e.f. 11thApril 2020 and Mr. Ajay Relan Ms. Sharda Relan and Ms. Mala Relan also transferred theirentire holding to Mr. Rohit Relan on 24th October 2020 i.e. 1451308 (4.62%) equityshares 1251350 (3.99%) equity shares and 398500 (1.2%) equity shares respectively. AsNDR Auto Components Limited and Mr. Rohit Relan are part of promoter/promoter grouptherefore there is no change in the overall promoter holding of the company. Members arerequested to refer to Note No 37(k) given in the Financial Statements for the financialyear 2020-21. It is worth mentioning here that there is no change in management.
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 attached to thisreport and forms part of the Annual Report.
ICRA has assigned its Short Term credit rating of A2+ and Long term Credit rating of A-stable 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 withrelated parties were in the ordinary course of business and are at arm's length basis.
The Related Party Transactions Policy as approved by the Board is uploaded on theCompany's website at the web link:https://bharatseats.com/wp-content/uploads/2020/05/policy-on-related-party-trasactions2020.pdf
The information relating to particulars of contracts or arrangements with relatedparties referred to in sub section (1) of section 188 of the Companies Act 2013 in FormAOC-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 foreignexchange earnings and outgo pursuant to Section 134(3)(m) of the Companies Act 2013 readwith Rule 8(3) of Companies (Accounts) Rules 2014 is annexed hereto as Annexure IIforming part of this Report.
BOARD ANNUAL EVALUATION
In compliance with the Companies Act 2013 and SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 and guidance note dt. 5th January 2017 issued by SEBIperformance evaluation was carried out of the Board its Committees and individualDirectors including the Chairman of the Board.
Nomination & Remuneration Committee reviewed the evaluation criteria for the Boardits Committees Executive and non-executive Directors and Chairman of the Companyconsidering qualification expertise attributes and various parameters based on whichevaluation of the Board has to be carried out by the Company.
A meeting of the independent directors was held which reviewed the performance of theBoard (as a whole) Committees of the Board the non- independent directors and theChairman.
The evaluation of Independent Directors was carried out by the Board.
This exercise was carried out through structured evaluation process covering variousaspects of the Board such as composition of the Board/ Committees experiencecompetencies performance of specific duties etc. Separate exercise was carried out toevaluate the performance of individual directors including Board Chairman who wereevaluated on the parameters such as attendance contribution at the meeting independentjudgment etc. and was found to be satisfactory.
DIRECTORS AND KEY MANAGERIAL PERSONNEL:
Retirement by rotation
In accordance with the Articles of Association of the Company and relevant provisionsof the Companies Act 2013 Mr. Toshiya Miki (DIN: 07505339) is liable to retire byrotation at the ensuing Annual General Meeting.
The Board recommends his re-appointment.
Declaration from Independent Directors
The Company has received declaration from all the Independent Directors confirming thatthey meet the criteria of Independence as prescribed under Section 149(6) of the CompaniesAct 2013 read with the schedules and rules made there under along with declaration forcompliance with clause 16 of the SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015.
The Board of Directors on the recommendation of Nomination and Remuneration Committeeappointed Mr. Rishabh Relan and Mr. Ashwani Aggarwal as additional directors and wholetime directors w.e.f. 4th February 2021 subject to the approval of shareholders at theAnnual General meeting.
Ms. Sharda Relan and Mr. Ajay Relan resigned from directorship w.e.f. close of workinghours of 24th October 2020. Your board place on record its appreciation for the valuableservices rendered by them during their tenure as Directors.
KEY MANAGERIAL PERSONNEL (KMP)
Mr. Rohit Relan Chairman and Managing Director Mr. Sanjeev Kumar CFO and Ms. RituBakshi Company Secretary continue to be the KMPs of the Company in terms of Section 203of the Companies Act 2013 read with the Companies (Appointment & Remuneration ofManagerial Personnel) Rules 2014.
Mr. Rishabh Relan and Mr. Ashwani Aggarwal were appointed as Whole time Directorsw.e.f. 4th February 2021 for a period of three years.
The Company is committed to maintain the highest standards of Corporate Governance andadhere to the Corporate Governance requirements as set out by the Regulators/ applicablelaws.
The report on Corporate Governance as stipulated under SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 been included in this Annual Report as aseparate section along with the certificate of Mr. R S Bhatia Company Secretary inPractice.
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 Act2013.There was an outstanding loan of Rs. 2260 Lac as at 31.03.2021 from Mr. Rohit RelanChairman and Managing Director of the Company which is exempted as deposit under Rule2(c)(viii) of Companies (Acceptance of Deposit) Rules 2014.
DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS ORTRIBUNALS IMPACTING THE GOING CONCERN STATUS AND COMPANY'S OPERATION IN FUTURE
There are no significant and material orders passed by the Regulators Courts orTribunals which would impact the going concern status of the Company and its operations infuture.
DETAILS OF ADEQUACY OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO THE FINANCIALSTATEMENTS
The Directors had laid down internal financial controls to be followed by the Companyand such policies and procedures adopted by the Company for ensuring the orderly andefficient conduct of its business including adherence to Company's policies thesafeguarding 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 haspaid listing fees due to the Stock Exchange.
CORPORATE SOCIAL RESPONSIBILITY (CSR)
The Company believes in giving back to society and we have taken steps for that.Alongside our business priorities the Company is committed to society as well and this isapparent through our CSR activities.
Your Company believes that change is essential for growth development and progressand this comes through a change in our way of thinking.
Bharat Seats believes empowering Women is essential for social change and thisempowerment comes through education. For the girl child we took the call of "BetiBachao Beti Padhao" and contributed to "Prerna" a school in Lucknow forgirls from the under privileged and marginalized section of society. The school provideseducation and makes them culturally ready to mix and mingle with all strata of society.
Your company is also supporting a centre of skill development where our boys and girlsare given training in different areas to make them employable.
Your Company is also supporting the cause of COVID 19 through Rotary SouthendCharitable Trust. The Company has contributed hazmat suits manufactured by the Company toRotary Southend Charitable Trust.
The stress and strain of life affects many humans. No matter what age or strata ofsociety we have cases of mentally distressed depressed persons who require counsellingfrom experts. We are supporting this cause through an organization "Sanjeevani".Set up in 1976 Sanjeevani is a non-profit organization addressing the mental andemotional needs of society through free and confidential counselling. Sanjeevani hashelped many persons over the age of 16 years.
The CSR Policy is uploaded on the Company's website at the web link:https://bharatseats.com/wp-content/uploads/2020/05/CSR-Policy-bsl-Final2021for-website.doc.pdf
The annual report on CSR activities composition of the CSR committee and otherprescribed details are given in the report format provided under the Companies (CorporateSocial Responsibility Policy) Rules 2014 in Annexure III.
During the financial year 2020-21 the Company has contributed an amount of ?59.01lakhs towards CSR aggregating to 2% of its average net profits for preceding 3 financialyears.There is no amount which is lying unspent in respect of the financial year underreview.
Pursuant to Sec 92(3) of the Companies Act 2013 read with Rule 12 of the Companies(Management and Administration) Rules 2014 the copy of Annual Return can be accessed atCompany's website at https://bharatseats.com/wp-content/ uploads/2020/05/1749_001.pdf.
MEETINGS OF THE BOARD
Five meetings of the Board of Directors were held during the financial year. Forfurther details please refer the Report on Corporate Governance given separately in theAnnual Report.
The Audit Committee comprises of four Independent Non- executive Directors namely Mr.G.N. Mehra Mr. P.K. Lahiri Mr. Ravindra Gupta and Ms. Shyamla Khera. Mr. G.N. Mehra isthe Chairman of the committee.
Further details on the Committee reference meetings held are given in the CorporateGovernance Report. 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 Directors confirm that:
(a) In the preparation of the annual accounts the applicable accounting standards havebeen followed and no material departures have been made from the same.
(b) Appropriate accounting policies have been selected and applied consistently andjudgments and estimates made that are reasonable and prudent so as to give a true and fairview of the state of affairs of the Company at 31st March 2021 and of the Profit of theCompany for the year ending 31st March 2021.
(c) Proper and sufficient care has been taken for the maintenance of adequateaccounting records in accordance with the provisions of the Companies Act 2013 forsafeguarding the assets of the Company and for preventing and detecting fraud and otherirregularities;
(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 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 are adequate and operating effectively.
PARTICULARS OF EMPLOYEES
Disclosure as required under Sub Rule 2 of Rule 5 of Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 is annexed hereto as Annexure IV.
The ratio of the remuneration of each Director to the median employees' 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 is annexed as part of the report as Annexure V.
COMPANY'S POLICY ON DIRECTORS' APPOINTMENT AND REMUNERATION INCLUDING CRITERIA FORDETERMINING QUALIFICATIONS POSITIVE ATTRIBUTES INDEPENDENCE OF A DIRECTOR AND OTHERMATTERS AS PROVIDED UNDER THE COMPANIES ACT 2013
The Company has formulated a Nomination and Remuneration Policy which is available onthe website of the company. The link of the same ishttps://bharatseats.com/wp-content/uploads/2020/05/NRCPolicy2020.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 186 of the CompaniesAct 2013 during the financial year under review.
The Company has in place the Risk Management Policy to identify and assess the key riskareas and monitor the same. The Board periodically reviews the risks and suggests steps tobe taken to control the risks.
The Company has in place an established Whistle Blower Policy. The Audit Committee andthe Board periodically reviews the policy and its implementation. The purpose of thispolicy is to provide a framework to promote responsible whistle blowing by employees.
The Whistle Blower Policy may be accessed at the Company's website atweblink:https://bharatseats.com/wp-content/ uploads/2020/05/whistle-blower-policy2020.pdf
Our relations with the employees are very cordial. Your Directors would like to placeon record their appreciation of the commitment and efficient services rendered by allemployees of the Company without whose wholehearted efforts the overall satisfactoryperformance 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 RegistrationNo. 301003E/E300005) was appointed as Statutory Auditor at AGM held on September 21 2017will hold office till the conclusion of Annual General Meeting to be held in the year2022.
The Auditors' Report given by M/s S.R. Batliboi & Co. LLP Statutory Auditors onthe financial statements of the Company for the year ended March 31 2021 is part of theAnnual Report. The Auditors' Report does not contain any qualification reservation oradverse remark. During the year under review the Auditors had not reported any matterunder Section 143(12) of the Act therefore no detail is required to be disclosed underSection 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 Auditwas carried out by Mr. R. S. Bhatia Company Secretary in Practice for the financial year2020-21. The report of Secretarial Auditor for the financial year 2020-2021 is annexedherewith marked as Annexure VI to this Report. The Secretarial Audit Report does notcontain any qualification reservation or adverse remark.
Pursuant Regulation 24A of SEBI (Listing Obligation and Disclosure Requirements)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 submittedto stock exchange within the prescribed time limit. The annual secretarial compliancereport does not contain any adverse remarks and qualifications.
Safety first is our motto. While the laws makes it mandatory for us to adopt benchmarkpractices our values drive us towards this objective.
With the regular guidance from the Safety Team of Maruti Suzuki India Limited theCompany is now among the leading companies which have made safety its culture.
Well trained staff focus on best practices & aided with installation of state ofthe art Aerosol fire Detection & Suppression system across locations have worked atforce multipliers in our Journey.
Besides this the environmentally friendly practices fire extinguishers thermographytest adherence to NBC 2016 NOC from fire office & regular third party inspectionsspeaks of the commitment.
The review mechanism monitoring & mock drills happen periodically & monitoredat APEX level. Last but not the least SHE (Safety Health & Environment) training isregularly imparted to all the employees.
EFFECTIVE MANAGEMENT SYSTEMS
The company is system certified for IATF (International Automotive Task Force) 16949for quality ISO 14001 for environment and OHSAS for occupational health and safety. BSLis also accredited with ISO/IEC 17025:2017 "General Requirements for the competenceof Testing & Calibration Laboratories". Our Manesar Gurgaon and BhorakalanPlants have been certified as Comprehensive Excellence "Green" Plants by MarutiSuzuki India Limited.
Your Company's focus on preventive maintenance and effective mitigation of all thelikely risks involved has led to safe and healthy working environment for all employeesthus helping them to perform at their optimum level of competence.
Through OHSAS (Occupational Health and Safety Assessment Series) & ISO 14001 weare committed to work on continuously improving both Human Safety and Plant safety &Environment through: -
- Management of Safety & Environmental Risks through proactive risk mitigationplanning. (Hazard Identification & Risk Assessment (HIRA) and Operation ControlProcedure (OCP) Compliance to all safety & Environmental Regulations
- Focus on optimum use of Energy and Reduction of waste.
- Effective handling and waste disposal.
- Focus on "Zero accidents"
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 requirementof the Sexual Harassment of Women at Workplace (Prevention Prohibition and Redressal)Act 2013.
The Company has constituted Internal Complaints Committee (ICC) known as Prevention ofSexual Harassment (POSH) Committee to enquire in to complaints of Sexual Harassment andrecommend appropriate action. The Company has not received any complaint of sexualharassment during the financial year 2020-21.
a. Buy Back of Securities
The Company has not bought back any of its securities during the year under review.
b. Sweat Equity
The Company has not issued any Sweat Equity Shares during the year under 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 during the year underreview.
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 valuable assistance andco-operation extended to the Company by Suzuki Motor Corporation Japan Maruti SuzukiIndia Ltd. Suzuki Motor Gujarat Private Limited Suzuki Motorcycle India Private LimitedToyo Seat Co. Ltd. Japan Inoac Corporation Japan Hayashi Telempu (Thailand) Co. Ltd.Yes Bank Ltd. HDFC Bank Ltd. various departments of Central Government and Government ofHaryana. The directors convey their deep appreciation to each and every employee forher/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.
| ||For and on behalf of the Board |
| ||Bharat Seats Limited |
| ||(Rohit Relan) |
| ||Chairman and Managing Director |
|Place : Gurugram || |
|Date : July 27 2021 || |