Your directors have pleasure in presenting the Thirty-Sixth (36) Directors' Report onthe business and operations of the Company together with the financial statements for thefinancial year ended on March 31 2021
|Particular || |
| ||Year Ended ||Year Ended ||Year Ended ||Year Ended |
| ||March 31 2021 ||March 31 2020 ||March 31 2021 ||March 31 2020 |
|Revenue from operations ||173653.60 ||86298.81 ||173653.60 ||86298.81 |
|Other Income ||2145.03 ||2373.27 ||2145.03 ||2373.27 |
|Total Revenue ||175798.63 ||88672.08 ||175798.63 ||88672.08 |
|Profit before Financial Charges Depreciation ||15069.15 ||11961.63 ||15069.15 ||11961.63 |
|Less: Financial Costs ||142.70 ||92.82 ||142.70 ||92.82 |
|Profit before Depreciation Exceptional Items & Taxes ||14926.45 ||11868.81 ||14926.45 ||11868.81 |
|A. Depreciation ||4398.46 ||4021.28 ||4398.46 ||4021.28 |
|B. Exceptional items ||- ||- ||- ||- |
|Taxation || || || || |
|Current Tax ||3050.00 ||2456.00 ||3050.00 ||2456.00 |
|Deferred Tax Charged/ (Released) ||(381.04) ||(383.83) ||(381.04) ||(383.83) |
|Profit for the year before share of profit/(loss)of associates and joint venture ||7859.03 ||5775.36 ||7859.03 ||5775.36 |
|Share of profit/(loss)of associate (net of tax) ||- ||- ||(35.82) ||46.55 |
|Share of profit/(loss)of Joint venture (net of tax) ||- ||- ||(1158.31) ||(583.13) |
|Profit for the year ||7859.03 ||5775.36 ||6664.90 ||5238.78 |
|Other comprehensive income (net of tax) ||(37.14) ||(9.53) ||(37.14) ||(9.53) |
|Add: Profit brought forward from Previous year ||15102.19 ||22208.07 ||14836.75 ||25842.09 |
|Less: Adjustments pursuant to scheme of arrangement (Demerger) ||- ||(12871.71) ||- ||(16234.59) |
|Profit available for appropriation ||22924.08 ||15102.19 ||21464.51 ||14836.75 |
|APPROPRIATIONS || || || || |
|Dividend ||- ||- ||- ||- |
|Tax on Dividend ||- ||- ||- ||- |
|Interim Dividend ||- ||- ||- ||- |
|Tax on Interim Dividend ||- ||- ||- ||- |
|Transferred to General Reserves ||- ||- ||- ||- |
|Balance carried forward to Balance Sheet ||22924.08 ||15102.19 ||21464.51 ||14836.75 |
|Paid-up equity share capital ||594.63 ||594.63 ||594.63 ||594.63 |
|(Face value of Rs. 10/- each) || || || || |
During the year under review the total revenue from operations and other income wasRs. 175798.63 Lacs as against Rs. 88672.08 Lacs of previous year. Profit beforetaxation was Rs. 10527.99 Lacs as against Rs. 7847.53 Lacs Lacs of previous year (i.e.Increased by approx. 34.16 Percent) during the year whereas the finance cost has beenincreased to Rs. 142.70 Lacs from Rs. 92.82 Lacs. Net Profit after taxes of the Companyhas Increased by approx. 27.22 Percent year on year basis.
During the year under review the total revenue from operations and other income wasRs. 175798.63 Lacs as against 88672.08 Lacs of previous year. Profit before taxationwas Rs. 10527.99 Lacs as against Rs.7847.53 Lacs of previous year (i.e. Increase byapprox 34.16 Percent) during the year and finance cost has been increased to Rs. 142.70Lacs from Rs. 92.82 Lacs. Net Profit after taxes of the Company has increased byapproximate 36.07 Percent year on year basis.
CHANGE IN THE NATURE OF BUSINESS
During the year under review; the Company has not changed the nature of its Business.
SHARE CAPITAL & SPLIT OF FACE VALUE OF EQUITY SHARE
The Shareholders of the Company vide resolution passed through Postal Ballot on March22 2021 has approved the matter of Sub-division / Split of Equity Shares of the Companysuch that 1 (One) equity share of face value of Rs. 10/- each split / sub-divided into 5(Five) equity shares of face value of Rs. 2/- each with effect from the Record Date i.e.April 19 2021. The Memorandum & Articles of Association of the Company was alsomodified sub-division the paid-up share capital of the Company is Rs. 59463260 dividedinto 29731630 equity shares of Rs. 2/- each as on the date of this Report.
The scheme of Arrangement (in pursuant to Sections 230 to 232 and other applicableprovisions of the Companies Act 2013 [Act/ Rules]) between Sharda Motor IndustriesLimited ("SMIL") and NDR Auto Components Limited ("NACL") and theirrespective Shareholders and Creditors ("Scheme") with effect from December 312018 (appointed date) to demerge the Seating Business Undertakings of the Company wasapproved by the Securities & Exchange Board of India ("SEBI") & Hon'bleNational Company Law Tribunal Delhi Bench ("NCLT") vide. their "NoObjection/ Observation letter of Stock Exchanges" dated August 19 2019 and NCLTOrder dated February 20 2020.
Thereafter for giving effect to the Scheme of Arrangement as approved by the SEBI &NCLT the Equity Shares of NACL was listed for Trading at the BSE Limited & NationalStock Exchange of India Limited (Stock Exchanges) on July 30 2020.
DIVIDEND & RESERVES
Despite the prevalent downturn in Automobile Industry amid the outbreak of COVID-19pandemic the Board of Directors of the Company at its Meeting held on June 23 2021 hasrecommended a final dividend of Rs. 2.63/- per equity of face value of Rs. 2 each i.e. 132Percent on the paid up share capital for the FY 2020-21. During the year under reviewthe Company has not transferred any amount to the Reserves.
DIVIDEND DISTRIBUTION POLICY
The Securities & Exchange Board of India ("SEBI") vide notification inOfficial Gazette dated May 05 2021hasnotifiedthe SEBI (Listing Obligations andDisclosure Requirements) (Second Amendment) Regulations 2021 (LODR Amended Regulations)which come into force from May 6 2021. Regulation 43A of the LODR Amended Regulationsprovides that the Dividend Distribution Policy shall be approved and implemented by theCompany for Top 1000 listed entities based on market capitalisation. Since the Companyfalls within the ambit of Top 1000 listed entities therefore the Dividend DistributionPolicy was approved by the Board of Directors of the Company at its Meeting held on June23 2021 and is available on the Company's website at: https://www.shardamotor.com/wp-content/uploads/2021/07/DIVIDEND-DISTRIBUTION-POLICY.pdfthe said Policy shall provide the Shareholders understanding the Dividend aspect of theCompany with following parameters: the circumstances under which the shareholders of thelisted entities may or may not expect dividend; while declaring dividend; the internal andexternal factors that shall be considered for declaration of dividend; policy as to howthe retained earnings shall be utilised; and parameters that shall be adopted with regardto various classes of shares.
DIRECTORS AND KEY MANAGERIAL PERSONNEL
The existing composition of the Board is fully in conformity with the Companies Act2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015("Listing modification(s)/ amendment(s) Regulations") including any statutorythereof for the time being in force.
Further all the Directors of the Company have given the declaration that they are notdebarred from being appointed / re-appointed or continuing as Director of the Company bythe virtue of any Order passed by the SEBI Ministry of Corporate Affairs or any suchStatutory Authority. All the Independent Directorsmeets/fulfillsthe criteria / conditionsof Independence as prescribed under the Companies Act and Listing Regulations and areIndependent of the Management of the Company.
The Company has receiveddeclarationfromalltheIndependentDirectorsconfirmingthat theymeet the criteria of Independence as prescribed under Section 149(6) of the Companies Act2013 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. During the year under review the shareholders of the Company at its 35Annual General Meeting has approved the appointment of Smt. Sarita Dhuper (DIN: 08776286)as Non-Executive Independent Director on the Board of the Company to hold office for aterm of 5 (Five) consecutive years with effect from June 29 2020 and also approved thecontinuation of Shri Ashok Kumar Bhattacharya (DIN: 02804551) as Non-Executive IndependentDirector of the Company in pursuant to Regulation 17 (1A) of the Listing Regulations forthe remaining period of present tenure i.e. till September 2 2024 being aged about 75years. Further Smt. Sharda Relan Director of the Company liable to retire by rotation wasalso re-appointed as Executive Director of the Company by the Shareholders of the Companyat its 35 Annual General Meeting.
Further Shri Rohit Relan Non-Executive Director of the Company resigned from itsDirectorship with effect from October 24 2020 in view of the Memorandum of FamilySettlement. Smt. Sharda Relan Co-Chairperson & Director of the Company vide. letterdated February 9 2021 has step down from the office of the Whole-Time Director of theCompany with effect from April 1 2021 due to personal reason. However Smt. Sharda Relanshall continue as Non-Executive Director of the Company eligible to retire by rotation onthe Board of the Company with the payment of sitting Fees. The Board of Directors of theCompany vide resolution passed through circulation on January 16 2021 & Shareholdersof the Company vide resolution passed through Postal Ballot on March 22 2021 has approvedthe :
1. Re-appointment of Shri Satinder Kumar Lambah (DIN: 07425155) as Non-ExecutiveIndependent Directors of the Company for a second term of five consecutive yearscommencing with effect from February 5 2021 to February 4 2026 in pursuant to theprovisions of Section 149 152 of the Companies Act 2013 ("Act") and "SEBIListing Regulations and other applicable provisions if any.
2. Continuation of Shri Satinder Kumar Lambah (DIN: 07425155) as Non-ExecutiveIndependent Directors of the Company being aged about 79 years for a second term of fiveconsecutive years commencing with effect from February 5 2021 to February 4 2026 inpursuant to the requirement of Regulation 17 (1A) of the Listing Regulations and otherapplicable provisions if any.
3. Continuation of Smt. Sharda Relan (DIN: 00252181) as Non- Executive Director on theBoard of the Company being aged about 85 years with effect from April 1 2021 in pursuantto the requirement of Regulation 17 (1A) of the Listing Regulations and other applicableprovisions if any.
In pursuant to section 152 of the Companies Act 2013 the Board of Directors of theCompany at its Meeting held on June 23 2021 has considered and recommended there-appointment of Shri Nitin Vishnoi (DIN: 08538925) Director of the Company is liable toretire by rotation at the ensuing Annual General Meeting considering that being eligiblehe offers himself for re-appointment. Pursuant to Regulation 17 of Listing Regulations andSection 149 152 161 & other applicable provisions of the Companies Act 2013 on therecommendation of Nomination and Remuneration Committee the Board of Directors of theCompany at its meeting held on June 23 2021 has approved the re-appointment of ShriUdayan Banerjee (DIN: 00339754) as Non-Executive Independent Director on the Board of theCompany for a second term of five consecutive years commencing with effect from January 12022 till December 31 2027 subject to the approval of shareholders i.e. proposed beforethe ensuing Annual General
Meeting of the Company. Since Shri Udayan Banerjee (DIN: 00339754) shall be attainingthe age of 75 years on January 15 2022 therefore the approval of shareholders is alsobeing sought for his continuation as Non-Executive Independent Director on the Board ofthe Company for a second term of five consecutive years commencing with effect fromJanuary 15 2022 till December 31 2027 in pursuant to the requirement of Regulation 17(1A) of the Listing Regulations. The Shareholders of the Company at its 31 Annual GeneralMeeting of the Company has approved the appointment of Shri Ajay Relan as ManagingDirector of the Company from September 1 2016 for a consecutive period of five yearssince the present tenure of Shri Ajay Relan as a Managing Director is getting completed onAugust 31 2021 therefore in view of the provision of Section 196 197 198 & 203read with Schedule V of the of the Companies Act 2013 and other applicable provisions ifany based on the Performance Evaluation and on the recommendation of Nomination &Remuneration Committee (considering his background experience and contribution made tothe Company) the Board of Directors of the Company at its Meeting held on June 23 2021has approved the re-appointment of Shri Ajay Relan as Managing Director for a period offive consecutive years i.e. with effect from September 01 2021 to August 31 2026subject to the approval of Shareholders of the Company. Accordingly the approval ofshareholders is being sought at the ensuing 36 Annual General Meeting of the Company forthe said re-appointment as Managing Director for a period of five consecutive years i.e.with effect from September 01 2021 to August 31 2026 on such remuneration and on suchterms & conditions as mentioned in the proposed resolution herein under item no. 6 ofthis AGM Notice.
Pursuant to the provisions of Section 2 (19) & (51) and 203 of the Companies Act2013 read with Rules made thereunder and on the recommendation of Nomination &Remuneration Committee & Audit Committee the Board of Directors of the Company at itsMeeting held on March 30 2021 has appointed Shri Srinivasan Narasimhan as Chief FinancialOfficer (CFO) of the Company and consequently Shri Vivek Bhatia ceased to be the CFO. Abrief profile of the above mentioned directors seeking appointment / re-appointment /continuation at the ensuing 36 Annual General Meeting (36 AGM) of the Company has beenprovided in the Explanatory Statement of the Notice of this AGM. In compliance with theprovisions of Companies Act 2013 Listing Regulations and other applicable provisions ifany the required consents / declarations showing the willingness and confirming that theyare eligible and are not disqualified from being appointed / re-appointed / continued asDirector were duly received from all the as Director(s) / Key Managerial Personnel(s) ofthe Company. All the Non-Executive Directors have extensive business experience and areconsidered by the Board to be independent in character and judgment of the management ofthe Company and free from any business or other relationship which could materiallyinterfere with the exercise of their independent judgment and had no pecuniaryrelationship or transactions with the Company other than sitting fees commission andreimbursement of expenses incurred by them for the purpose of attending meetings of theBoard / Committee of the Company.
During the year under review except than above mentioned there is no change inDirectorship & Key Managerial Personnel(s) of the Company.
NUMBER OF MEETINGS OF THE BOARD
Number of Board and committee meetings including the date of the meeting and attendancethereof by each director during the year is given in Report on Corporate Governance thatforms part of this Annual Report. The compliance of intervening gap between any twomeetings was well within the purview Companies Act 2013 & SEBI Listing Regulationsread with Circulars / notifications / amendments thereof as may be issued / notified byMinistry of CorporateAffairs & SEBI from time to time.
BOARD LEVEL PERFORMANCE EVALUATION
Pursuant to the provisions of the Companies Act 2013 and Listing Regulations and otherapplicable provisions if any. The Board of Directors ("Board") at its meetingheld on June 23 2021 carried out the performance evaluation of its own performance andthat of its committees and individual directors.
A suggestive evaluation format (structured questionnaire) for the performanceevaluation based on the approved criteria was provided to all the Directors for theirevaluation and was also placed / presented before the members of the Board to give theircomments therein for facilitating the performance evaluation of individual directors theBoard as a whole and its committees.
Based on the above the performance of the Board was evaluated through the ratings givenby each Director based on the structured questionnaire that was prepared after consideringthe approved criteria such as the Board composition and structure effectiveness of boardprocesses contribution towards development of the strategy etc.
The performance of the committees was also evaluated by the Board after seeking inputs/ ratings from the committee members on the basis of the approved criteria such as thecomposition of committees effectiveness of committee meetings etc. The Board deliberatedand found that the overall performance of individual directors and the Board as a wholeand its committees were satisfactory.
The Board of Directors has reviewed the performance of the individual directorsincluding both independent and non-independent on the basis of the evaluation criterialike qualification & experience attendance of directors at Board and committeemeetings conflict of interest effective participation integrity knowledge &competencies domain knowledge compliance with code of conduct independent judgmentvision and strategy.etc.
In a separate meeting of independent directors performance of non-independentdirectors performance of the Board as a whole and performance of the Chairperson wasevaluated taking into account the views of executive directors and non-executivedirectors. The same was discussed in the next board meeting held after the meeting of theindependent directors held on March 30 2021 at which the performance of the Board itscommittees and individual directors was also discussed.
The Directors expressed their satisfaction with the evaluation process. The Board alsonoted that the Independent Directors fulfills the independence criteria as specified inthe Listing Regulations and are Independent of the Management of the Company.
NOMINATION REMUNERATION & EVALUATION POLICY
Pursuant to Section 134(3) read with Section 178 of the Companies Act 2013 thenomination and remuneration policy of the Company which lays down the criteria fordetermining qualifications competencies positive attributes and independence forappointment of Directors and policies of the Company relating to remuneration ofDirectors Key Managerial Personnel(s) ("KMP") and other employees is availableon the Company's website athttp://www.shardamotor.com/wp-content/uploads/2018/08/NRC-policy.pdf
Audit Committee comprises of five members out of which four are independent directorsincluding Shri Kishan N Parikh Independent Director is the Chairperson of the Committee.Smt. Sharda Relan Executive Director (upto March 31 2021 and Non-Executive Director fromApril 1 2021) of the Company is also a Member of the Committee. All the members ofcommittee have adequate financial & accounting knowledge and background. Detailedinformation regarding the number of committee meetings terms of reference etc. areprovided in the Corporate Governance Report forming part of this annual report. Allrecommendations of the Audit Committee whenever made were accepted by the Board duringthe FY 2020-21.
Secretarial Auditors & Auditors Reports
Pursuant to provisions of Section 204 of the Act and the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 and other applicable provisions is anythe Board of Directors has appointed M/s.VKC & Associates Company Secretaries inpractice bearing CP. No. 4548 as Secretarial Auditor of the Company to conductSecretarial Auditor the Company for the FY 2020-21. The Secretarial Audit Report for theFY ended March 31 2021 is annexed herewith marked as Annexure I to this Report.Further the Board of Directors of the Company at its Meeting held on June 23 2021 hasconsidered and approved the appointment of M/s. VKC & Associates Company Secretariesin practice bearing CP. No. 4548 as Secretarial Auditor of the Company for the FY2021-22.
Statutory Auditors & Auditors Reports
Pursuant to the provisions of sections 139 and other applicable provisions of the Actand the Companies (Audit and Auditors) Rules 2014 M/s. Gupta Vigg & Co. CharteredAccountants (Firm Registration No. 001393N) were appointed by the Members as StatutoryAuditors of the Company for a term of 5 (five) consecutive years from the conclusion ofthe 32 Annual General Meeting of the Company held on August 30 2017 till the conclusionof 37 Annual General Meeting of the Company to be held in year 2022.
Further the Statutory Auditors have confirmed that they are not disqualified from beingcontinued as Statutory Auditors of the Company in terms of the provisions of Section139(1) Section 141(2) and Section 141(3) of the Act and the other applicable provisionsof the Companies (Audit and Auditors) Rules 2014. The requirement to place the matterrelating to the appointment of Statutory Auditors for ratification by Members at everyAnnual General Meeting has been done away with vide notificationdated May 7 2018 issuedby the Ministry of Corporate Affairs accordingly the same has not been taken up at thisAGM.
During the year under review there was no incident related to fraud which was reportedto the Audit Committee or Board of Directors under section 143(12) of the Companies Act2013 by the Statutory Auditors of the Company. Hence no detail is required to bedisclosed under Section 134 (3) (ca) of the said Act. The Auditors' Reports (Standalone& Consolidated) to the Shareholders does not contain any qualification reservation oradverse remarks. The notes on financial Statement referred to in the Auditors' Report areself-explanatory and do not require any further comments.
Cost Auditors & Cost Audit Report
In terms of Section 148 of the Companies Act 2013 read with Companies (Cost Recordsand Audit) Rules 2014 and based on the recommendation of audit committee the Board ofDirectors of the Company has appointed M/s. Gurdeep Singh & Associates (holding M.No.9967) as Cost Auditors of the Company for conducting the cost audit for the FY 2020-21considering that the remuneration has also been approved by the members at the 35 AnnualGeneral Meeting. The Company has also received a letter from Cost Auditors of the Companyto the effect that their appointment is within the limits prescribed as per the CompaniesAct 2013 and are not disqualified from being appointed as Cost Auditors of the Company.
Further the Board of Directors of the Company at its Meeting held on June 23 2021 hasconsidered and approved the appointment of M/s. Gurdeep Singh & Associates (holding M.No. 9967) as Cost Auditors of the Company for conducting the cost audit for the FY 2021-22subject to the ratificationof remuneration by the members that has been placed before theensuing 36 Annual General Meeting.
Further on the recommendation of Audit Committee the Company has made and maintainedall such accounts and cost records as specifiedin section 148 of the Companies Act 2013read with sub rule (5) of rule 8 of the Companies (Accounts) Rules 2014.
CORPORATE SOCIAL RESPONSIBILITY
The Ministry of Corporate Affairs vide its Notification dated January 22 2021 hasamended the existing Companies (Corporate Social Responsibility Policy) Rules 2014("Rules") namely Companies (Corporate Social Responsibility Policy) AmendmentRules 2021 (" CSR Amended Rules") which came into force with immediate effect.Based on the CSR Amended Rules on the recommendation of CSR Committee the Board ofDirectors of the Company at its Meeting held on March 30 2021 has majorly identified /approved and complied with the following:
Identified "Medical Clinics" as the Ongoing Projects in which the Companyshall undertake its CSR Activities / Obligation through "Sharda CSR FoundationTrust"
CSR Policy was revised in order to align with the CSR Amended Rules.
Opening of "Sharda Motor Industries Limited -Unspent CSR Account FY 2020-21"
Transferring Unspent CSR Amount that remains unspent for the FY 2020-21 for theutilisation of funds over the identified Ongoing Project.
Devising of Annual Action Plan for carrying out the CSR activities for the FY 2021-22.
During the year under review your Company has directly spent an approx. amount of Rs.2.28 Lacs for distribution of food help and support to the poor in order to supportweaker section of society in the situation of COVID-19 pandemic at several locations. Inpursuance to our CSR Activities through Ongoing Projects as "Medical Clinics""Sharda CSR Foundation Trust" (Trust) which is a philanthropic arm of theCompany has purchased three Ambulances for an amount of Rs. 66.59 Lacs i.e. one each forNasik & Chakan in state of Maharashtra and one for Chennai in the state of Tamil Nadu.The Trust has also made donation / subscription of Rs. 45000 to Rotary Club.
Further the Company has transferred an amount of Rs. 137.58 Lacs to "Sharda MotorIndustries Limited - Unspent CSR Account FY 2020-21 in deed to accomplishment of the CSRObligations as identified by the CSR Committee & Board of Directors as Ongoing Projecti.e. Medical Clinics. The said amount shall be utilised in a period of three years for theOpening of Medical Clinics / purchasing of Ambulances purchasing of equipments or anyasset or such other activity only for the purpose of Medical aid / benefit to the Society.The actual activity undertaken for the Medical Clinics shall be reported in the nextAnnual Report. Details of composition of Committee number of meetings attendance at themeetings are provided in the Corporate Governance Report forming part of this annualreport. The revised Corporate Social Responsibility Policy of the Company is available onthe website of the Company atweblink:http://www.shardamotor.com/wp-content/uploads/2016/07/Corporate-Social-Responsibility-Policy-1.pdfIn terms of Section 135 and rules made thereunder an annual report on CSR activitiesexpenditure committee composition etc. is provided as Annexure II to theDirector's report.
EXTRACT OF ANNUAL RETURN
In accordance with Section 134 (3) (a) of the Companies Act 2013 an extract of theannual return in the prescribed format is appended as Annexure III to theDirectors' Report.
The annual return of the Company as required under the Companies Act 2013 will beavailable on the website of the Company athttps://www.shardamotor.com/investor-relations/notices-results/
PARTICULARS OF EMPLOYEES
The details in terms of sub-section 12 of Section 197 of the Companies Act 2013 readwith Rule 5 (1) of the Companies (Appointment and Remuneration of Managerial Personnel)Rules 2014 are forming part of this report as Annexure IV. The statementcontaining details of employees as required under Section 197(12) of the Companies Act2013 read with Rule 5(2) of the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 forms part of this report as Annexure V. CONSERVATION OF ENERGYTECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO
The particulars of Conservation of Energy Technology Absorption and Foreign ExchangeEarnings and Outgo as required under Section134(3)(m) of the Companies Act 2013 read withRule 8(3) of the Companies (Accounts) Rules 2014 are annexed here with marked as AnnexureVI to this Report.
PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS
The particulars of Loans guarantees and investments under section 186 have beendisclosed in the financial statements.
PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES
The particulars of contracts or arrangements with related parties referred to insection 188(1) of the Companies Act 2013 in Form AOC - 2 are appended as Annexure VIIforming part of this report.
Further in pursuant to the Amendment in SEBI Listing Regulations 2018 the transactionsbelonging to the promoter/promoter group holding 10 Percent or more shareholding in theCompany are for Shri Ajay Relan Promoter/ Managing Director of the Company is holding58.42 Percent of Equity Shares in the Company. The above detail is also provided in theRelated Party Disclosures in Note No. 37 of Notes to Financial Statements for year endedMarch 31 2021 forms part of this Annual Report.
We strive to attain high standards of corporate governance while dealing with all ourstakeholders and have complied with all the mandatory requirements relating to CorporateGovernance as stipulated in Para C of Schedule V of Listing Regulation. The "Reporton Corporate Governance" forms an integral part of this report and is set out asseparate section to this annual report. A certificatefrom M/s. Gupta Vigg & Co.Chartered Accountants the statutory auditors of the Company certifying compliance withthe conditions of corporate governance stipulated in Para E of Schedule V of ListingRegulations is annexed with the report on corporate governance.
MANAGEMENT DISCUSSION AND ANALYSIS REPORT
The Management Discussion and Analysis Report for the year under review as stipulatedunder Regulation 34(2)(e) read with Para B of Schedule V of the Listing Regulation ispresented in a separate section forming part of this Annual Report.
The Company has a vigil mechanism for directors and employees to report their genuineconcerns. Vigil Mechanism / Whistle Blower policy is available on the Company's website athttp://www.shardamotor.com/wp-content/uploads/2020/08/Whistle-Blower-Policy.pdf
During the year under review the Company has not accepted any deposits from the publiccovered under chapter V of the Companies Act 2013 and no amount was outstanding as on thedate of Balance Sheet.
MATERIAL CHANGES AND COMMITMENTS IF ANY AFFECTING THE FINANCIAL POSITION OF THECOMPANY
During the year under review there were no material changes and commitments affectingthe financial position of the Company.
THE DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS ORTRIBUNALS
During the year under review no other material orders have been passed by theRegulators/Court or Tribunals which can impact the going concern status and Company'soperation in future.
SUBSIDIARIES JOINT VENTURES OR ASSOCIATE COMPANIES
During the financial year no Company has become or cease to be a subsidiary Associateor Joint Venture of the Company. The total amount of investment of the Company that stoodin the Exhaust Technology Private Limited Joint Venture Company as on March 31 2021 isRs. 37.5 Crore. During the year under review the Joint Venture Company has started theproduction / Manufacturing of Exhaust Systems for Commercial Vehicle under BS VI norms.
The Board of Directors of Sharda Motor Industries Limited ("SMIL" / "theCompany") at its Meeting held on June 23 2021 has approved the Joint VentureAgreement with M/s. Kinetic Green Energy & Power Solutions Limited("Kinetic") with equity sharing ratio i.e. SMIL: 74 & Kinetic: 26.
Financial performance for the FY 2020-21 of the Associates and Joint Venture Companiesare disclosed in the financialstatements which forms part of this annual report. Astatement in form AOC-1 containing the salient features of the financial statements ofthe joint venture and associate company is provided as Annexure VIII.
RISK ASSESSMENT RISK MINIMISATION PROCEDURE
In line with the new regulatory requirements the Company has formally framed a RiskAssessment and Risk Minimisation Procedure to identify and assess the key risk areas andmonitor the same. The Board periodically reviews the risks and suggests steps to be takento control the risks. Details on the Company's risk management framework risk evaluationrisk identification etc. is provided in the Management Discussion and Analysis Reportforming part of this report.
RISK MANAGEMENT COMMITTEE & POLICY
The Securities & Exchange Board of India ("SEBI") vide notification inOfficial Gazette dated May 05 2021hasnotifiedthe SEBI (Listing Obligations andDisclosure Requirements) (Second Amendment) Regulations 2021 (LODR Amended Regulations)which come into force from May 6 2021. Regulation 21 read with Schedule II Part D Para Cof the LODR Amended Regulations provides that the Board of Directors shall constitute theRisk Management Committee and Risk Management Policy setting out the Risk factors andmitigation process of the Companies for Top 1000 listed entities based on marketcapitalisation. Since the Company falls within the ambit of Top 1000 listed entitiestherefore the Board of Directors of the Company at its Meeting held on June 23 2021 hasconstituted the Risk Management Committee and approved the Risk Management Policy. Thedetails regarding the constitution of Risk Management Committee are provided in theCorporate Governance Report and the Risk Management Policy is available on the Company'swebsite at:http://www.shardamotor.com/wp-content/uploads/2021/07/Risk-Management-Policy.pdf The saidPolicy shall provide the Shareholders with the understanding of Risk factors / parametersand its process of monitoring and mitigation.
DETAILS OF NUMBER OF CASES FILED IF ANY AND THEIR DISPOSAL IN TERMS OF SECTION 22 OFTHE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION PROHIBITION AND REDRESSAL) ACT2013
The Company values the dignity of individuals and strives to provide a safe andrespectable work environment to all its employees. The Company is committed to provide anenvironment which is free of discrimination intimidation and abuse. The Company believesthat it is the responsibility of the organisation to protect the dignity of its employeesand also to avoid conflicts and disruptions in the work environment due to such cases.
The Company has put in place a Policy on redressal of Sexual Harassment at WorkPlace' as per the Sexual Harassment of Women at Workplace (Prevention Prohibition andRedressal) Act 2013 ("Sexual Harassment Act"). As per the policy any employeemay report his / her complaint to the Redressal Committee / Internal Complaints Committeeconstituted with duly compliance under the Sexual Harassment Act for this purpose totheir Manager or HR personnels. We affirm that adequate access has been provided to anycomplainant who wished to register a complaint under the policy but no complaint wasreceived / filed by any person during the year under review and no complaint is pending tobe resolved as at the end of the year.
BUSINESS RESPONSIBILITY REPORT
In pursuant to the amended in Regulation 34(2)(f) of the SEBI Listing Obligations andDisclosure Requirements (LODR') (Fifth Amendment) Regulations 2019 the BusinessResponsibility Report detailing the various initiatives taken by the Company on theenvironmental social and governance and various other factors forms an integral part ofAnnual Report as Annexure X.
DIRECTORS' RESPONSIBILITY STATEMENT
In terms of Section 134(3)(c) read with 134(5) of the Companies Act 2013 it is herebystated that: (a) In the preparation of the annual accounts the applicable accountingstandards had been followed;
(b) Appropriate accounting policies have been selected and applied consistently andjudgments and estimates made are reasonable and prudent so as to give a true and fair viewof the state of affairs of the Company as at March 31 2021 and of the profit and loss ofthe Company for the year ended on that date; (c) Proper and sufficient care has been takenfor the maintenance of adequate accounting records in accordance with the provisions ofthis Act for safeguarding the assets of the Company and for preventing and detecting fraudand other irregularities; (d) The annual accounts have been prepared on a going concernbasis; (e) Internal financial controls have been laid down to be followed by the Companyand that such internal financial controls are adequate and were operating effectively; (f)Proper systems have been devised to ensure compliance with the provisions of allapplicable laws and that such systems were adequate and operating effectively.
INTERNAL FINANCIAL CONTROL SYSTEMS AND THEIR ADEQUACY
The details in respect of internal financial control and their adequacy are included inthe Management Discussion and Analysis Report which forms part of this annual report.
The applicable Secretarial Standards i.e. SS-1 and SS-2 relating to Meetings ofthe Board of Directors' and General Meetings' respectively have been duly followedby the Company.
IMPACT OF COVID-19 PANDEMIC
The World Health Organisation (WHO) on March 11 2020 has declared the novelcoronavirus (COVID-19) outbreak a global pandemic. The COVID-19 pandemic has adverselyaffected the business and industrial activity and caused extraordinary economic disruptionworldwide. The Company has been monitoring the situation closely and has taken proactivemeasures to comply with various directions / regulations / guidelines issued by theGovernment and local bodies from time to time to ensure safety of workforce across allits plants and offices.
The arrival of second wave of COVID-19 pandemic has led to the mass loss of livescreating havoc or panic considering which the Company extended the support to poor /several needful peoples by distributing food / edible at various locations. The Companyhas always prioritised health safety and well-being of its employees their families andother stakeholders. The Company has put in place a robust protocol for ensuring workplacesafety including sanitisation and social distancing norms and shall continue to strengthenit further based on the guidelines / directions of Government of India.
ACKNOWLEDGEMENT of the professionalism creativity integrity and continuousimprovement Your Companyhasbeenableto operateefficiently in all functional areas to ensureefficientutilisation of the Company's resources for sustainable and profitable growth. TheDirectors acknowledge their deep appreciation to employees at all levels for theirdedication hard work commitment and collective team work which has enabled the Companyto remain at the forefront of the industry despite increased competition and challenges.Your Directors take this opportunity to express their grateful appreciation for theexcellent assistance and co-operation received from its Customers and also extend theirappreciation to Bankers various departments of Central and State Government(s) and otherstakeholders.
|On behalf of the Board of Directors |
|For Sharda Motor Industries Limited |
|Sharda Relan ||Ajay Relan |
|Co-Chairperson ||Managing Director |
|(DIN:00252181) ||(DIN:00257584) |
June 23 2021