Your Directors have pleasure in presenting the Thirty three (33) Directors' Report onthe business and operations of the Company together with the financial statements for thefinancial year ended on 31 st March 2018.
| || ||(Rs. in Lakhs) |
|Particular ||Standalone ||Consolidated |
| ||Year Ended 31st March 2018 ||Year Ended 31st March 2017 ||Year Ended 31st March 2018 ||Year Ended 31st March 2017 |
|Revenue from operations ||120425.88 ||122538.86 ||120425.88 ||122538.86 |
|Other Income ||1780.30 ||1385.78 ||1699.30 ||1304.78 |
|Total Revenue ||122206.18 ||123924.64 ||122125.18 ||123843.64 |
|Profit before Financial Charges Depreciation ||21205.65 ||32718.21 ||21124.64 ||32637.22 |
|Less : Financial Costs ||213.00 ||759.57 ||213.00 ||759.57 |
|Less : Excise duty ||4881.31 ||18350.35 ||4881.31 ||18350.35 |
|Profit before Depreciation Exceptional Items & ||16111.34 ||13608.29 ||16030.33 ||13527.30 |
|Taxes || || || || |
|A. Depreciation ||4377.89 ||4979.38 ||4377.89 ||4979.38 |
|B. Exceptional items ||58.73 ||915.27 ||58.73 ||915.27 |
|Taxation || || || || |
| Current Tax ||4088.59 ||2677.43 ||4088.59 ||2677.43 |
| Deferred Tax Charged/ (Released) ||(274.89) ||(639.26) ||(274.89) ||(639.26) |
|Profit for the year before share of profit/(loss) of associates and joint ventures ||7861.02 ||5675.47 ||7780.02 ||5594.48 |
|Share of profit/(loss) of associates (net of tax) ||- ||- ||879.32 ||374.59 |
|Share of profit/(loss) of Joint venture (net of tax) ||- ||- ||137.78 ||120.49 |
|Profit for the year ||7861.02 ||5675.47 ||8797.12 ||6089.56 |
|Add: Profit brought forward from Previous year ||6915.96 ||2135.11 ||8936.06 ||3764.25 |
|Profit available for appropriation ||14776.98 ||7810.58 ||17733.18 ||9853.81 |
|APPROPRIATIONS || || || || |
|Proposed Dividend ||371.64 ||371.64 ||371.64 ||371.64 |
|Tax on Proposed Dividend ||75.67 ||75.67 ||75.67 ||75.67 |
|Interim Dividend ||371.64 ||371.64 ||371.64 ||371.64 |
|Tax on Interim Dividend ||75.67 ||75.67 ||75.67 ||75.67 |
|Transferred to General Reserves ||- ||- ||- ||- |
|Depreciation Adjustment as per Schedule II of Companies Act 2013 ||- ||- ||- ||23.14 |
|Balance carried forward to Balance Sheet ||13882.36 ||6915.96 ||16838.61 ||8936.06 |
|Paid-up equity share capital (Face value of Rs. 10/- each) ||594.63 ||594.63 ||594.63 ||594.63 |
The Company has adopted Ind AS with effect from 1st April 2017 with a transition dateof 1st April 2016. Accordingly the financial statements for the year ended 31st March2017 have been re-stated to conform to Ind AS. The reconciliations and descriptions of theeffect of the transition from IGAAP to Ind AS have been provided in Note No. 41 (c) of thenotes to accounts in the standalone and consolidated financial statements.
During the year under review the total revenue from operations and other income was122206.18 Lakhs as against Rs.123924.64 Lakhs of previous year whereas the net sale(i.e. before tax) was 115544.57 Lakhs as against Rs.104188.51 Lakhs of previous yeardepicting a growth of 11% . Profit before taxation has increased from Rs. 7713.64 Lakhsto Rs. 11674.72 Lakhs (increased by approx 51%) during the year. Finance cost has beenreduced to Rs. 213 Lakhs from Rs. 759.57 Lakhs. Net Profit after taxes of the company hasincreased by approx 39% year on year basis.
During the year under review company has not changed the nature of business.
Your directors are pleased to recommend a final dividend of Rs 6.25/- per equity sharei.e. 62.5% for the year ended 31st March 2018 out of the current year's profits inaddition to the Interim Dividend of Rs. 6.25/- per equity share i.e. 62.5% already paidfor the year thus making a total Dividend to Rs.12.50/- per equity share i.e. 125% on thepaid up equity shares Rs. 10/- each.
Final dividend of Rs.6.25/-per equity share i.e. 62.5% if approved at the ensuingAnnual General Meeting shall be paid out of the profits of the Company to those shareholders whose name appear in the Register of Members on 20th September 2018.
DIRECTORS AND KEY MANAGERIAL PERSONNEL
The existing composition of the Board is fully in conformity with the Companies Act2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015("Listing Regulations").
Further all the independent directors have given a declaration confirming that theymeet the criteria of independence as prescribed under the Companies Act and ListingRegulations.
Pursuant to section 152 of the Companies Act 2013 Shri Rohit Relan (DIN: 00257572)and Shri Bireswar Mitra (DIN: 06958002) directors of the Company are liable to retire byrotation at the ensuing Annual General Meeting.
A brief profile of the above mentioned directors seeking appointment/re-appointment atthe ensuing Annual General Meeting of the Company has been provided in the Notice of thesaid meeting.
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 intervening gap between any two meetings was withinthe period prescribed under the Companies Act 2013 and Listing Regulations.
BOARD LEVEL PERFORMANCE EVALUATION
Pursuant to the provisions of the Companies Act 2013 and Listing Regulations TheBoard of Directors ("Board") at its meeting held on 26th May 2018 carried outthe performance evaluation of its own performance and that of its committees andindividual directors. The performance of the Board was evaluated after taking inputs fromall the directors on the basis of the criteria such as the Board composition andstructure effectiveness of board processes contribution towards development of thestrategy etc.
The performance of the committees was evaluated by the Board after seeking inputs fromthe committee members on the basis of the criteria such as the composition of committeeseffectiveness of committee meetings etc.
The Board of directors based on the recommendations of Nomination & RemunerationCommittee reviewed the performance of the individual directors including bothindependent and non-independent on the basis of the evaluation criteria likequalification & experience attendance of directors at Board and committee meetingsconflict of interest effective participation integrity knowledge & competenciesdomain knowledge compliance with code of conduct independent judgment vision andstrategy 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 at which the performance of the Board its committees andindividual directors was also discussed.
NOMINATION REMUNERATION & EVALUATION POLICY
The Policy of the Company on Directors' appointment and remuneration including criteriafor determining qualifications positive attributes independence of a director and othermatters provided under sub-section (3) of section 178 of the Companies Act 2013 isappended as Annexure I to this Report.
Audit Committee comprises of three members out of which two are independent directorsand one is executive director. Shri Kishan N Parikh Independent Director is theChairperson of the Committee. All three members of committee have adequate financial &accounting knowledge and background. Detailed information regarding the number ofcommittee meetings terms of reference etc. are provided in the Corporate GovernanceReport forming part of this annual report. All recommendations of the Audit Committeewhenever made were accepted by the Board during the financial year 2017-18.
Pursuant to provisions of Section 204 of the Act and the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 the Board of Directors has appointedM/s. VKC & Associates Company Secretaries in practice bearing CP. No. 4548 asSecretarial Auditor of the Company to conduct Secretarial Audit of the Company for thefinancial year 2017-18. The Secretarial Audit Report for the financial year ended 31stMarch 2018 is annexed herewith marked as Annexure II to this Report. The SecretarialAudit Report does not contain any qualification reservation or adverse remark.
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 32nd Annual General Meeting of the Company held on 30th August 2017 till theconclusion of 37th 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.
Pursuant to an amendment in Section 139 of the Companies Act 2013 ratification ofappointment of statutory Auditor is no more required at each Annual general Meeting("AGM") accordingly the same has not been taken up at this AGM.
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 CostAccountants (holding M.No. 9967) as Cost Auditors of the Company for conducting the costaudit for the Financial Year 2018-19 subject to ratification of remuneration by themembers in the ensuing Annual General Meeting. The Company has received a letter from CostAuditors of the Company to the effect that there appointment is within the limitsprescribed as per the Companies Act 2013 and are not disqualified from being appointed asCost Auditors of the Company .
Further the Company has made and maintained all such accounts and costrecordsasspecifiedin section 148 of the Companies Act 2013 read with sub rule (5) ofrule 8 of the Companies (Accounts) Rules 2014.
CORPORATE SOCIAL RESPONSIBILITY
During the year under review your company undertook several projects and programmesbased on the recommendation of the Corporate Social Responsibility Committee of theCompany especially in the area of Education & Healthcare. Your Company is committedtowards making a sustainable impact on the society through its CSR projects and programmesin the long term. Company through its philanthropic arm Sharda CSR Foundation Trust hassponsored various projects like Blood Donation Camps Toilet Construction in the poorrural sectors Stationary donation and infrastructure development to the low incomegovernment schools blanket distribution to the poor and needy people of slum communities.The Company is moving rapidly towards achieving its goal by increasing the pace of theactivities at various levels.
CSR Committee of the Company has identified certain long term projects and programmeswhich will be focused in the coming years in the area of education & healthcare. Thesecan be implemented through Sharda CSR Foundation Trust or any other implementing agency inthe most effective way to reach the society at large.
Details of composition of Committee no. of meetings attendance at the meetings areprovided in the Corporate Governance Report forming part of this annual report. CorporateSocial Responsibility Policy of the company is available on the website of the Company(www.shardamotor.com).
In terms of Section 135 and rules made thereunder an annual report on CSR activitiesexpenditure committee composition etc. is provided as Annexure III to the Director'sreport.
EXTRACT OF ANNUAL RETURN
In accordance with Section 134(3) (a) of the Companies Act 2013 an extract of theannual return in the prescribed format is appended as Annexure IV to the Directors' report
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 V.
The statement containing details of employees as required under Section 197(12) of theCompanies Act 2013 read with Rule 5(2) of the Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014 forms part of this report as Annexure VI.
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO
The particulars of Conservation of Energy Technology Absorption and Foreign ExchangeEarnings and Outgo as required under Section 134(3) (m) of the Companies Act 2013 readwith Rule 8(3) of the Companies (Accounts) Rules 2014 are annexed herewith marked asAnnexure VII 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 AnnexureVIII forming part of this 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 certificate from 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 websitewww.shardamotor.com.
The Company has not accepted any deposits from the public covered under chapter V ofthe Companies Act 2013 during the year under review and no amount was outstanding as onthe date of Balance Sheet.
MATERIAL CHANGES AND COMMITMENTS IF ANY AFFECTING THE FINANCIAL POSITION OF THECOMPANY
No material changes and commitments which affect the financial position of theCompany have occurred between the end of the financial year under review and the date ofthis report.
THE DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS ORTRIBUNALS
During the year under review no significant and material orders have been passed bythe regulators or courts or tribunals impacting the going concern status and company'soperations in future.
However during the financialyear 2017-18 several interim orders have been passed bythe Hon'ble National Company Law Tribunal New Delhi (Hon'ble NCLT) in respect of petitionwas filed against the Company by Shri Rohit Relan non-executive director of the Companyalong with his wife and sons under section 241 242 read with section 244 of theCompanies Act 2013. Hon'ble NCLT has reserved the final order till the date of thisreport.
Further during the year the Company has filed a petition under Section 241 242 and/or other applicable provisions of the Companies Act 2013 against Toyo Sharda India Pvt.Ltd. & Others before the Hon'ble NCLT. Several Interim Orders have been passed by theHon'ble NCLT in this regard; however no final order has been passed till the date of thisreport.
Copies of the above mentioned interim orders are available on the website of theCompany www.shardamotor.com and also on the websites of the National Stock Exchange ofIndia Limited and BSE Limited.
SUBSIDIARIES jOINT VENTURES OR ASSOCIATE COMPANIES
During the year under review there is no change in the status of subsidiary/ jointventures/ associate companies. Financial performance of the Associate and Joint VentureCompanies are disclosed in the financialstatements forming part of this annual report. Astatement in form AOC-1 containing the salient features of the financial statements ofthe joint ventures/ associate companies is provided as Annexure IX.
RISK ASSESSMENT AND RISK MINIMIZATION PROCEDURE
In line with the new regulatory requirements the Company has formally framed a RiskAssessment and Risk Minimization Procedure to identify and assess the key risk areas andmonitor the same. The Board periodically reviews the risks and suggests steps to be takento control the risks.
Details on the Company's risk management framework risk evaluation riskidentification etc. is provided in the Management Discussion and Analysis Report formingpart of this report.
DETAILS OF NUMBER OF CASES FILED IF ANY AND THEIR DISPOSAL IN TERMS OF SECTION 22 OFTHE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION PROHIBITION AND REDRESSAL) ACT2013.
The Company values the dignity of individuals and strives to provide a safe andrespectable work environment to all its employees. The Company is committed to provide anenvironment which is free of discrimination intimidation and abuse. The Company believesthat it is the responsibility of the organisation to protect the integrity and dignity ofits employees and also to avoid conflicts and disruptions in the work environment due tosuch 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"). During the year the Company hasconducted an awareness programme against the sexual harassment. As per the policy anyemployee may report his / her complaint to the Redressal Committee / Internal ComplaintsCommittee constituted with duly compliance under the Sexual Harassment Act for thispurpose to their Manager or HR personnel. We affirm that adequate access has been providedto any complainant who wished to register a complaint under the policy but no complaintwas received during the year under review.
DIRECTORS' RESPONSIBILITY STATEMENT
In terms of Section 134(3) (c) read with 134(5) of the Companies Act 2013 it ishereby stated that:
(a) In the preparation of the annual accounts the applicable accounting standards hadbeen followed;
(b) Appropriate accounting policies have been selected and applied consistently andjudgments and estimates made are reasonable and prudent so as to give a true and fair viewof the state of affairs of the company as at 31st March 2018 and of the profit and lossof the company for the year ended on that date;
(c) Proper and sufficientcare has been taken for the maintenance of adequate accountingof this Act for safeguarding the assets of the company and for preventing and detectingfraud and other irregularities;
(d) The annual accounts have been prepared on a going concern basis;
(e) Internal financial controls have been laid down to be followed by the company andthat such internal financial controls are adequate and were operating effectively;
(f) Proper systems have been devised to ensure compliance with the provisions of allapplicable laws and that such systems were adequate and operating effectively.
INTERNAL FINANCIAL CONTROL SYSTEMS AND THEIR ADEQUACY
The details in respect of internal financial control and their adequacy are included inthe Management Discussion 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.
Your Company has been able to operate efficiently because of the professionalismcreativity integrity and continuous improvement in all functional areas to ensureefficient utilization of the Company's resources for sustainable and profitable growth.The Directors acknowledge their deep appreciation to employees at all levels for theirtotal dedication hard work commitment and collective team work which has enabled theCompany to remain at the forefront of the industry despite increased competition andchallenges.
Your Directors take this opportunity to express their grateful appreciation for theexcellent assistance and co-operation received from its customers Your Directors alsoextend their appreciation to Bankers Credit rating Agencies and various departments ofCentral and State Government(s).
Your Directors also would like to thank all the shareholders for their continuedsupport & co-operation.
| || ||On behalf of the Board of Directors |
| ||For Sharda Motor Industries Limited || |
| ||Sharda Relan ||Ajay Relan |
|Date : 3rd August 2018 ||Co-Chairperson ||Managing Director |
|Place : New Delhi ||(DIN:00252181) ||(DIN:00257584) |