Moneycontrol
SENSEX NIFTY
you are here:

Harita Seating Systems Ltd.

BSE: 590043 | NSE: HARITASEAT | Series: NA | ISIN: INE939D01015 | SECTOR: Auto Ancillaries

BSE Live

Jul 09, 16:00
375.20 -2.40 (-0.64%)
Volume
AVERAGE VOLUME
5-Day
313
10-Day
172
30-Day
178
1,007
  • Prev. Close

    377.60

  • Open Price

    368.75

  • Bid Price (Qty.)

    375.80 (2)

  • Offer Price (Qty.)

    390.00 (5)

NSE Live

Jul 09, 15:53
377.30 7.60 (2.06%)
Volume
AVERAGE VOLUME
5-Day
5,102
10-Day
3,349
30-Day
2,657
10,069
  • Prev. Close

    369.70

  • Open Price

    384.05

  • Bid Price (Qty.)

    0.00 (0)

  • Offer Price (Qty.)

    377.30 (7)

Annual Report

For Year :
2018 2016 2015 2014 2013 2012 2011 2010 2009

Director’s Report

The Directors have pleasure in presenting the twenty-second Annual Report and the audited accounts for the year ended 31st March 2018.

1. FINANCIAL HIGHLIGHTS

(Rs. In Lakhs)

Particulars

Year ended 31.03.2018

Year ended 31.03.2017

Sales and other income

45,470.08

38,779.13

Profit before financial costs, depreciation and amortization expenses

4,748.42

3,660.30

Less : Finance costs

111.17

44.01

Depreciation

719.13

515.42

Profit before tax

3,918.12

3,100.96

Less : Provision for:

Income tax

740.34

463.64

Deferred tax

(66.12)

183.14

Tax relating to earlier years

164.03

-

Profit after tax

3,079.87

2,454.19

Other Comprehensive Income

6.42

18.01

Total Comprehensive income for the year

3,086.39

2,472.20

Appropriations:

First interim Dividend paid @ Rs.2/- per share

155.38

155.38

Second interim Dividend paid @ Rs.4/- per share

310.76

233.07

Balance carried to Balance Sheet

2,620.16

2,083.75

2. DIVIDEND

The Board of Directors of the Company (the Board) at their meeting held on 8th November 2017, declared a first interim dividend of Rs.2/- per share (20%) for the year 2017-18 absorbing a sum of Rs.1.55 Cr. The same was paid to the shareholders on 21st November 2017.

The Board at its meeting held on 6th February 2018 declared a second interim dividend of Rs.4/- per share(40%) for the year 2017-18 absorbing a sum of Rs.3.11 Cr. The same was paid to the shareholders on 20th February 2018.

Thus, the total amount of both dividends for the year ended 31st March 2018 aggregated to Rs.6/- per share (60%) on 77,69,040 equity shares of Rs.10/- each absorbing Rs.4.66 Cr.

The Company has set-off its dividend distribution tax payable under Section 115-O(1A) of the Income Tax Act, 1961 against the dividend distribution tax paid by its subsidiary Company viz., Harita Fehrer Limited on its dividend declared.

The Board does not recommend any further dividend for the year under consideration.

3. DIRECTORS’ RESPONSIBILITY STATEMENT

In accordance with the provisions of Section 134(5) of the Companies Act, 2013 with respect to Directors’ Responsibility Statement, it is hereby stated that -

i. in the preparation of annual accounts for the financial year ended 31st March 2018, the applicable Accounting Standards had been followed along with proper explanation relating to material departures if any;

ii. the Directors had selected such accounting policies and applied them consistently and made judgments and estimates that were reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the Company for the year under review;

iii. the Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

iv. the Directors had prepared the accounts for the financial year ended 31st March 2018 on a “going concern basis”;

v. the Directors, had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and are operating effectively; and

vi. the Directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

4. CORPORATE SOCIAL RESPONSIBILITY (CSR)

CSR activities have already been textured into the Company’s value system through Srinivasan Services Trust (SST), established in 1996 with the vision of building self-reliant rural community.

Over 22 years of service, SST has played a pivotal role in changing lives of people in rural India by creating self-reliant communities that are models of sustainable development.

The Company is eligible to spend on their ongoing projects/ programs, falling within the CSR activities specified under the Act, 2013 as mandated by the Ministry of Corporate Affairs for carrying out the CSR activities.

The CSR Committee of the Company formulated and recommended a CSR policy in terms of Section 135 of the Act, 2013 along with a list of projects / programmes to be undertaken for CSR spending in accordance with the Companies (Corporate Social Responsibility Policy) Rules, 2014.

Based on the recommendation of the CSR Committee, the Board has approved the projects / programmes carried out as CSR activities by SST, having an established track record for more than the prescribed years in undertaking similar programmes / projects, constituting more than 2% of average net profits of the Company made during the three immediately preceding financial years, towards CSR spending for the financial year 2017-18 amounting to Rs.40 Lakhs.

Presently, SST is working in 5,000 villages spread across Tamil Nadu, Karnataka, Maharashtra, Himachal Pradesh and Andhra Pradesh covering about 30,92,281 population and 7,19,890 families. Its major focus areas are Economic development, health care, quality education, environment and infrastructure.

Achievements in the above villages are:

Economic development:

- 3,81,801 families living in these villages have a monthly income of Rs.15,000/- and above. They have financial security.

- 3,846 Farmers group have been formed with 53,323 Members.

- Improved agriculture practices enabled 2,31,059 Farmers owning 2,51,393 hectares increased the yields higher than the state average by 15%.

- 2,24,805 families earn more than Rs 3,500/per month through livestock.

Women empowerment:

- Formed 9,692 Self Help Groups. These groups have 1,43,821 women as Members.

- Of the 1,43,821 Members, 1,40,480 Members are in income generation activities. They earn a minimum income of Rs. 3000/- per month.

Health care:

- 76,945 children in the age group below 5 are not malnourished.

- 4,52,930 women are freed from anaemia.

- 4,04,589 households made access to toilet facilities.

- The morbidity percentage reduced from 9% to 5%.

- Enrolment in anganwadis increased from 86% to 100% and attendance is 99%.

- 1,688 anganwadis have met all the Integrated Child Development Services Scheme (ICDS) standards.

- 88% involvement of mother volunteers in the functioning of anganwadis. They volunteer their time to ensure proper functioning.

Quality education:

- 100% enrolment of children in schools. There are no drop outs in the schools.

- Number of percentage of slow learners reduced in schools from 29% to 11%.

- Out of 1,764 schools, 1,299 schools are now model schools.

- 1,14,273 illiterate women out of 1,53,493 have been made literates.

Environment and Infrastructure:

- 3,45,140 households disposed solid waste through individual and common compost pits. 91 tons of vermi compost generated per month from wastes.

- Sewage water from 3,48,604 households disposed through soak pits, kitchen gardens and drain.

- Safe drinking water is available to 3,343 villages.

Community takes care of their development needs. 11,639 social leaders are active in this effort.

As required under Section 135 of the Act, 2013 read with Rule 8 of the Companies (Corporate Social Responsibility Policy) Rules, 2014, the Annual Report on CSR, containing the particulars of the projects / programmes approved and recommended by CSR Committee and approved by the Board for the financial year 2017-18 are given by way of Annexure-IV attached to this Report.

5. PERFORMANCE OF THE SUBSIDIARY COMPANY

As on the date of this report, Harita Fehrer Limited, Chennai (HFRL) is the only subsidiary of the Company.

HFRL is a material un-listed Indian subsidiary in terms of Regulation 24 read with Regulation 16(1)(c) of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (SEBI LODR Regulations 2015), as the total turnover of the subsidiary exceeds 20% of the consolidated turnover of the Company.

During the year, HFRL achieved a turnover of Rs.506.37 Cr and earned a profit after tax of Rs.23.45 Cr. HFRL declared two interim dividends for the year ended 31st March 2018 aggregating to Rs.5.00 per share (50%) on 2,00,98,040 equity shares of Rs.10/- each absorbing a sum of Rs.12.09 Cr including dividend distribution tax.

6. CONSOLIDATED FINANCIAL STATEMENTS

The consolidated financial statements of the Company are prepared in accordance with the provisions of Section 129 of the Act, 2013 read with the Companies (Accounts) Rules, 2014 and Regulation 33 of the SEBI LODR Regulations 2015 along with a separate statement containing the salient features of the financial performance of the subsidiary.

The audited consolidated financial statements together with Auditor’s Report form part of the Annual Report.

The audited financial statements in respect of the subsidiary Company will be made available to the shareholders, on receipt of a request from any shareholder and it has also been placed on the website of the Company. This will also be available for inspection by the shareholders at the Registered Office during the business hours as mentioned in the Notice of AGM.

The consolidated profit aftertax of the Company and its subsidiary amounted to Rs.49.13 Cr for the financial year 2017-18 as compared to Rs.36.74 Cr in the previous year.

7. DIRECTORS & KEY MANAGERIAL PERSONNEL

Independent Directors (IDs)

All IDs hold office for a fixed term and are not liable to retire by rotation.

At the Annual General Meeting (AGM) held on 6th August 2014, M/s H Lakshmanan, C N Prasad and Mr S I Jaffar Ali, were appointed as IDs for the first term of five consecutive years from the conclusion of the eighteenth AGM and to receive remuneration by way of fees, reimbursement of expenses for participation in the meetings of the Board and / or Committees and profit related commission in terms of applicable provisions of the Act, 2013 as determined by the Board from time to time. During the year 2015-16, Mr L Bhadri and Ms Sasikala Varadachari were appointed as IDs for a period of three consecutive years effective 13th October 2015 and 22nd March 2016 respectively.

On appointment, each ID has acknowledged the terms of appointment as set out in their letter of appointment. The terms cover inter alia, the duties, rights of access to information, disclosure of their interest / concern, dealing in Company’s shares, remuneration and expenses, insurance and indemnity. The IDs are provided with copies of the Company’s policies and charters of various committees of the Board.

In accordance with Section 149(7) of the Act, 2013 all IDs have declared that they meet the criteria of independence as provided under Section 149(6) of the Act, 2013.

The detailed terms of appointment of IDs are disclosed on the Company’s website with following link:

www.haritaseating.com/PDF/HSSL-TermsofAppointmentofIDs.pdf

Approval of the shareholders is being sought in the ensuing Annual General Meeting for re-appointment of Mr L Bhadri and Ms Sasikala Varadachari as Independent Director for the second term of 3 years effective 13th October 2018 and 22nd March 2019, respectively.

Separate meeting of Independent Directors:

During the year under review, a separate meeting of IDs was held on 6th February 2018 and all the Independent Directors were present at the Meeting.

Based on the set of questionnaires complete feedback on Non-Independent Directors and details of various activities undertaken by the Company were provided to IDs to facilitate for their review / evaluation.

a) Non-Independent Directors (Non-IDs)

The Independent Directors (IDs) used various criteria and methodology practiced in Industry, prescribed by Nomination and Remuneration Committee (NRC) for evaluation of Mr Martin Grammer, Non-ID, Chairman of the Board and Board as a whole.

IDs evaluated the performance of Mr Martin Grammer, through a set of questionnaires. They reviewed his interaction during the Board meetings and strategic inputs given by him to improve risk management, internal controls and contribution to the Company’s growth.

IDs were satisfied fully with the performance of Mr Martin Grammer.

b) Chairman

The IDs reviewed the performance of Chairman of the Board after taking into account his performance and benchmarked the achievement of the Company with industry under the stewardship of Chairman.

The IDs also placed on record, their appreciation of Chairman’s visionary leadership, setting tone, pace and opportunity for positive change and passion for constant improvement and admired the high standards of integrity and probity, quality and adequacy of leadership of Chairman and his versatile performance.

The IDs also endorsed that the Chairman is a very accomplished leader and is exceptionally well informed about the state of economy.

c) Board

The IDs also evaluated Board’s composition, size, mix of skills and experience, its meeting sequence, effectiveness of discussion, decision making, follow up action, so as to improve governance and enhance personal effectiveness of Directors.

The evaluation process focused on Board Dynamics and upon evaluation, IDs concluded that the Board is well balanced in terms of diversity of experience with expert in each domain viz., Banking, Finance, Operations, Legal, Administration and International economy. The Company has a Board with wide range of expertise in all aspects of business.

The IDs unanimously evaluated the prerequisites of the Board viz., formulation of strategy, acquisition & allocation of overall resources, setting up policies, directors’ selection process and cohesiveness on key issues and satisfied themselves that they were adequate.

They were satisfied with the Company’s performance in all fronts and finally concluded that the Board operates with global best practices.

d) Quality, Quantity and Timeliness of flow of Information between the Company, Management and the Board

All IDs have expressed their overall satisfaction with the support received from the management and the excellent work done by the management during the last year and also relationship between the top management and Board is smooth and seamless.

Directors appointment/re-appointment

In terms of the provisions of sub-section (6) read with explanation to Section 152 of the Act 2013, two-thirds of the total number of directors i.e., excluding IDs, are liable to retire by rotation and out of which, one-third is liable to retire by rotation at every Annual General Meeting.

Mr Martin Grammer, Director is liable to retire by rotation, at the AGM, and being eligible, offers himself for re-appointment.

The Directors have recommanded his re-appointment. Aa brief resume of the Director proposed to be re-appointed and other relevant information have been furnished in the Notice of AGM. Appropriate resolution for his re-appointment is being placed for approval of the shareholders at the AGM.

Key Managerial Personnel (KMP)

In terms of Section 2(51) and Section 203 of the Act 2013, M/s A G Giridharan, President & CEO, Mr S Jagannathan, Chief Financial Officer and Ms N Iswarya Lakshmi, Company Secretary are KMPs of the Company.

Nomination and Remuneration Policy

The Nomination and Remuneration Committee of Directors (NRC) reviews the composition of the Board, to ensure that there is an appropriate mix of abilities, experience and diversity to serve the interests of all shareholders and the Company.

Nomination and Remuneration Policy was approved by the Board at its meeting held on 22nd September, 2014 and amended at the Board meeting held on 10th May 2018 in terms of Section 178 of the Act, 2013. The objective of such policy is to attract, retain and motivate executive management and remuneration structured to link to Company’s strategic long term goals, appropriateness, relevance and risk appetite.

NRC will identify, ascertain the integrity, qualification, appropriate expertise and experience, having regard to the skills that the candidate will bring to the Board / Company, whenever the need arises for appointment of Directors / KMP / SMP.

Criteria for performance evaluation, disclosures on the remuneration of directors, criteria of making payments to non-executive directors have been disclosed as part of Corporate Governance Report attached herewith.

Evaluation of the Independent Directors and Committees of Directors

In terms of Section 134 of the Act, 2013 and the Corporate Governance requirements as prescribed under SEBI LODR Regulations 2015, the Board reviewed and evaluated Independent Directors and its Committees viz., Audit Committee, Nomination and Remuneration Committee, Corporate Social Responsibility Committee and Stakeholders Relationship Committee, based on the evaluation criteria laid down by the NRC.

The Board concurred with the recommendations made by the NRC on the evaluation of Non-IDs based on the views expressed at the IDs meeting held on 6th February 2018.

Hence, the Board carried out the evaluation of IDs (excluding the ID being evaluated) and the Board appointed Committee through a set of questionnaires.

Independent Directors

The performance of all Independent Directors (IDs) was assessed against a range of criteria such as contribution to the development of business and performance of the Company, understanding the major risks affecting the Company, clear direction to the management and contribution to the Board cohesion. The performance evaluation has been done by the entire Board of Directors except the Director concerned being evaluated.

The Board noted that all IDs have understood the opportunities and risks to the Company’s strategy and are supportive of the direction articulated by the management team towards consistent improvement.

Committees

The Board delegates specific mandates to Board constituted Committees, to optimize Directors’ skills and talents besides complying with key regulatory aspects.

- Audit Committee for overseeing financial reporting;

- Nomination and Remuneration Committee for selecting and compensating Directors / Employees;

- Stakeholders’ Relationship Committee for redressing investors grievances; and

- Corporate Social Responsibility Committee for overseeing CSR initiatives and inclusive growth.

The performance of each Committee was evaluated by the Board after seeking inputs from its Members on the basis of the specific terms of reference, its charter, time spent by the Committees in considering key issues, quality of information received major recommendations / action plans and work of each Committee.

The Board was satisfied with overall effectiveness and decision making of all Committees. The Board reviewed each Committee’s terms of reference, to ensure that the Company’s existing practices remain appropriate. Recommendations from each Committee are considered and approved by the Board prior to implementation.

Number of Board meetings held

The number of Board meetings held during the financial year 2017-18 is provided as part of Corporate Governance Report attached to this Report.

8. AUDITORS

Statutory Auditors

The Company at its twenty first AGM held on 9th August 2017 appointed M/s Raghavan, Chaudhuri & Narayanan, Chartered Accountants, having Firm Registration No. 007761S allotted by The Institute of Chartered Accountants of India, as Statutory Auditors of the Company to hold office, for the first term of five consecutive years, from the conclusion of the said AGM, subject to ratification at every AGM, at such remuneration in addition to applicable taxes, out of pocket expenses, travelling and other expenses as may be mutually agreed between the Board of Directors of the Company and the Auditors.

In terms of the above provisions, M/s Raghavan, Chaudhuri & Narayanan, Chartered Accountants, have completed their first year in the first term of five consecutive years.

The Companies Amendment Act, 2017 has dispensed with the ratification of Statutory Auditor’s appointment at every AGM.

The Statutory Auditors of the Company were appointed for a period of five years in the last AGM held on 9th August 2017 to hold office till the conclusion of the 26th AGM. Hence they will continue as Statutory Auditors for the year 2018-19 also.

The Company has obtained necessary certificate under Section 141 of the Act 2013 conveying their eligibility for being Statutory Auditors of the Company for the year 2018-19.

The Auditor’s Report for the financial year 2017-18 does not contain any qualification, reservation or adverse remark and the same is attached with the annual financial statements.

Secretarial Auditor

As per Section 204 of the Act, 2013, and the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014, the Company is required to appoint a Secretarial Auditor for auditing secretarial and related records of the Company.

As required by Section 204 of the Act, 2013, the Secretarial Audit Report for the year 2017-18 given by Ms B Chandra, Practising Company Secretary, is attached to this Report. The said Secretarial Audit Report does not contain any qualification, reservation or other remarks.

The Board at its meeting held on 10th May, 2018 has re-appointed Ms B Chandra, Practising Company Secretary having registration no. 7859 allotted by the Institute of Company Secretaries of India, as Secretarial Auditor for the financial year 2018-19.

9. CORPORATE GOVERNANCE

The Company has been practicing the principles of good governance over the years and lays strong emphasis on transparency, accountability and integrity.

A separate section on Corporate Governance and a certificate from the Statutory Auditors of the Company regarding compliance of conditions of Corporate Governance as stipulated under SEBI LODR Regulations, 2015 form part of this Annual Report.

The CEO & CFO of the Company have certified to the Board on financial statements and other matters in accordance with Regulation 17(8) of SEBI LODR Regulations 2015 pertaining to CEO I CFO certification for the financial year ended 31st March 2018.

10. POLICY ON VIGIL MECHANISM

The Company has adopted a Policy on Vigil Mechanism in accordance with the provisions of Companies Act, 2013 and Regulation 22 of SEBI LODR Regulations 2015, which provides a formal mechanism for all Directors, Employees and other Stakeholders of the Company to report to the management, their genuine concerns or grievances about unethical behaviour, actual or suspected fraud and any violation of the Company’s Code of Business Conduct and Ethics.

The Code also provides a direct access to the Chairman of the Audit Committee to make protective disclosures to the management about grievances or violation of the Company’s Code.

The Policy is disclosed on the Company’s website in the following link: www.haritaseating.coa/PDF/WhistleBlowerPolicy.pdf

11. PUBLIC DEPOSITS

The Company has not accepted any deposit from the public within the meaning of Chapter V of the Act 2013, for the year ended 31st March 2018.

12. STATUTORY STATEMENTS

Information on conservation of energy, technology absorption, foreign exchange, etc.

Relevant information is given in Annexure-I to this Report, in terms of the requirements of Section 134(3)(m) of the Act, 2013 read with the Companies (Accounts) Rules 2014.

Material changes and commitments

There have been no material changes and commitments affecting the financial position of the Company, which have occurred between the end of the financial year of the Company to which the financial statements relate and the date of this Report.

Significant and material orders passed by the Regulators or Courts or Tribunals impacting the going concern status of the Company

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

Annual Return

Extract of Annual Return in the prescribed form is given as Annexure-II to this report, in terms of the requirement of Section 134(3)(a) of Act, 2013 read with the Companies (Accounts) Rules, 2014.

Employees’ remuneration

Details of employees receiving the remuneration in excess of the limits prescribed under Section 197 of the Act, 2013 read with Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are annexed as a statement and given in Annexure-lll. In terms of first proviso to Section 136(1) of the Act, 2013 the Annual Report, excluding the aforesaid annexure is being sent to the shareholders of the Company. The annexure is available for inspection at the Registered Office of the Company during business hours as mentioned in Notice of AGM and any shareholder interested in obtaining a copy of the said annexure may write to the Company Secretary at the Registered Office of the Company.

Comparative analysis of remuneration paid

A comparative analysis of remuneration paid to Directors and Employees with the Company’s performance is given as Annexure-V to this Report.

Details of material related party transactions

Details of material related party transactions under Section 188 of the Act, 2013 read with the Companies (Meetings of Board and its Powers) Rules, 2014, are given in Annexure-VI to this Report in the prescribed form.

Details of loans / guarantees / investments made

During the year under review, the Company had not granted any loans or guarantees covered under Section 186 of the Act, 2013.

Please refer note no.3 to Notes on accounts for the financial year 2017-18, for details of investments made by the Company.

Reporting of fraud

The Auditor’s of the Company have not reported any fraud as specified under Section143(12) of the Act, 2013.

Other laws

During the year under review, the Company has not received any complaint of sexual harassment from any of the women employees of the Company in terms of Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act 2013.

13. ACKNOWLEDGEMENT

The Directors gratefully acknowledge the continued support and co-operation received from the promoters, Harita Group and Mr Martin Grammer. The Directors thank the customers, suppliers, financial institutions and bankers for their valuable support and assistance.

The Directors wish to place on record their appreciation of the good work done by all the employees of the Company during the year under review.

The Directors also thank the shareholders for their continued faith in the Company.

For and on behalf of the Board of Directors

Chennai H Lakshmanan

10th May, 2018 Chairman

Director’s Report