DIRECTORS’ REPORT Dear Shareholders Your Directors have pleasure in presenting the 29th Annual Report together with the Audited Accounts for the year ended 31st March, 2016 FINANCIAL HIGHLIGHTS AND OPERATIONS The gross revenue from operations and other income for the financial year under review was Rs. 79533.57.lacs as against Rs 78371.57 lacs for the previous financial year. The profit before finance costs, depreciation and taxation is Rs. 3166.40 lacs for the financial year under review as against Rs 3401.21 lacs for the previous financial year, i.e. decrease by 6.90%. The profit after tax decreased to Rs.704.32 lacs, as compared to Rs. 811.99 lacs for the previous financial year, i.e. decrease by 13.26%. This is mainly due to on account of expenses incurred on strengthening of R&D Department and Business Development. DIVIDEND Your Directors are pleased to recommend for the approval of the shareholders, a dividend of 45% (Re 0.90/- per equity share) for the financial year ended 31.03.2016. 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. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES REFERRED TO IN SUB SECTION (1) OF SECTION 188 OF THE COMPANIES ACT, 2013 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 weblink: 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, 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 non independent directors and the Chairman. The evaluation of Independent Directors was carried out by the entire 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 DIRECTORS: In accordance with the Articles of Association of the Company and relevant provisions of the Companies Act, 2013, Mr. Narinder Dev Relan(DIN: 00240280) and Mr. Ajay Relan (DIN:00257584) are liable to retire by rotation at the ensuing Annual General Meeting and being eligible, have offered themselves for reappointment. The Board recommends their re-appointment. Mr. Venkat Raman Challa , Nominee Director – Maruti Suzuki India Limited, was appointed as an Additional Director w.e.f.18th July, 2015, who shall hold office upto the date of the ensuing Annual general meeting. The Company has received requisite notice in writing from the member proposing the candidature of Mr. Challa for the office of Director. The Board recommend the appointment of Mr. Challa. During the year, Mr. I.V. Rao, Director resigned w.e.f. close of business hours on 17th July, 2015. The Board placed on record its appreciation for the valuable services rendered by Mr. I.V.Rao during his association with your Company. 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 thereunder as well as SEBI(Listing Obligations And Disclosure Requirements) Regulations, 2015. KEY MANAGERIAL PERSONNEL(KMP): Mr. Rohit Relan, Managing Director, Mr. T.J.Chacko, Director (Operations), 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 separate section, alongwith the Auditors’ Certificate. The composition of Audit Committee with other details also form part of Corporate Governance Report. DETAILS OF DEPOSIT AS PROVIDED UNDER CHAPTER V OF THE COMPANIES ACT, 2013 During the year, your Company has not accepted any deposits within the meaning of section 73 of the Companies Act, 2013 read with Companies(Acceptance of Deposit)Rules, 2014and as such, no amount of principal or interest was outstanding as on the date of the Balance Sheet. 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 None DETAILS OF ADEQUACY OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO THE FINANCIAL STATEMENTS A strong internal control culture is prevalent in the Company. The Internal Auditor monitors the compliance with the objective of providing to the Audit Committee and the Board of Directors an independent and reasonable assurance on the adequacy and effectiveness of the organisation’s governance processes. 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, recommended by the Audit Committee and approved by the Board is uploaded on the Company’s website at the weblink: http://www.bharatseats.com/investors/Corporate Social Responsibility Policy The Corporate Social Responsibility Report as provided in Companies(Corporate Social Responsibility Policy) Rules, 2014 is annexed hereto as Annexure III. EXTRACT OF ANNUAL RETURN Pursuant to sub section (3) of Section 92 and Sub section (3)(a) of Section 134 of the Companies Act, 2013 read with Rue 12 of Companies(Management And Administration)Rules, 2014, the extract of Annual return as on 31st March, 2016 is annexed hereto as Annexure IV. NUMBER OF MEETINGS OF THE BOARD Four 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. 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, 2016 and of the Profit or Loss of the Company for the year ending 31st March, 2016; (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. (f) 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 V. 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 SECTION(3) OF SECTION 178 OF THE COMPANIES ACT, 2013 The Company has formulated a Nomination And Remuneration Policy. Details are provided in Corporate Governance Report. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS UNDER SECTION 186. None STATEMENT INDICATING DEVELOPMENT AND IMPLEMENTATION OF A RISK MANAGEMENT POLICY FOR THE COMPANY INCLUDING IDENTIFICATION THEREIN OF ELEMENTS OF RISK, IF ANY, WHICH IN THE OPINION OF THE BOARD MAY THREATEN THE EXISTENCE OF THE COMPANY 1. 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. 2. WHISTLE BLOWER POLICY The Company has implemented Whistle Blower Policy. The Audit Committee and the Board periodically reviews the policy and its implementation. The Whistle Blower Policy may be accessed at the Company’s website at weblink: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.S.Kothari Mehta & Co., Chartered Accountants hold office till the conclusion of the ensuing Annual General Meeting and being eligible offer themselves for reappointment. They have confirmed that their re-appointment, if made, would be within the prescribed limits under the Act and that they are not disqualified for re-appointment. The notes on financial statement referred to in the Auditors’ Report are self explanatory and do not call for any further comments. The Auditors’ Report does not contain any qualification, reservation or adverse remark. (b) Secretarial Auditor Pursuant to the provisions of Section 204 of the Companies Act, 2013, the Company had appointed Ms.Nidhi Chawla, Practising Company Secretary, to conduct Secretarial Audit for the financial year: 2015-16. The Company provided all assistance and facilities to the Secretarial Auditor for conducting their audit. The report of Secretarial Auditor for the financial year 2015-16 is annexed herewith marked as Annexure VII to this Report. The Secretarial Audit Report does not contain any qualification, reservation or adverse remark. 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: 2015-16: a) No. of complaints received : NIL b) No. of Complaints disposed off: 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 Pvt.Limited, Toyo Seat Co.Ltd., Japan, Houwa Kogyo Co Ltd , Japan, Inoac Corporation, Japan, State Bank of Travancore, Bank of Tokyo- Mitsubishi UFJ Ltd., Yes Bank Ltd., IDBI Bank Ltd., various departments of Central Government and Haryana State Government. The directors convey their deep appreciation to employees at all levels for their 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 (N. D. RELAN) CHAIRMAN Place : New Delhi Dated : 15th April, 2016 |