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A Oneindia Venture

Nifty 25,966.40 +0.58%

22k Gold ₹ 12,300 /gm

Sensex 84,929.36 +0.53%

Nifty 25,966.40 +0.58%

22k Gold ₹ 12,300 /gm

Sensex 84,929.36 +0.53%

Nifty 25,966.40 +0.58%

22k Gold ₹ 12,300 /gm

Notes to Accounts of Bharat Seats Ltd.

Mar 31, 2025

The Company has only one class of equity shares having a par value of Rs. 2/- per share ( 31st March 2024 : Rs 2/- per share). Each holder of equity shares is entitled to one vote per share. The company declares and pays dividend in Indian Rupees. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting.

In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the Company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.

(f ) Pursuant to approval given by its shareholders vide postal ballot the results of which were announced on 9th December, 2024 the company had issued 3,14,00,000 fully paid up bonus equity share of Rs 2/- each in the ratio of 1(one) equity share of Rs. 2/- for every 1 (One) existing equity shares of Rs. 2/- each. Consequent to the allotment of shares dated 23rd December, 2024, the issued, subscribed and paid up capital of the Company has increased to a sum of Rs. 1256.00 lakhs by capitalising a sum of Rs.628.00 lakhs from free reserves.

27 Contingent liabilities & commitments	(Rs. in lakhs except as otherwise stated)
	As at	As at
	31st March 2025	31st March 2024
(A) Contingent liabilities ( to the extent not provided for)
(a) Claims against the company not acknowledged as debt
i) Excise duty cases (refer note (ai) below)	228.21	228.20
ii) GST case (refer note (aii) below)	3,382.41	-
iii) Labour cases (refer note (b) below)	173.00	184.56
iv) Income tax demand (refer note (c) below)	2,768.00	-
	6551.62	412.76

(B) Commitments
Estimated amount of contracts remaining to be executed on
capital account and not provided for:
a) Capital commitments (net of advance)	1,081.47	408.14
b) Other commitments (net of advance)	576.83	2,257.94
	1,658.30	2,666.08

a) Contingent liability with respect to item (i) above represents disputed excise demands pertaining to various years ranging from 1996 to 1999. This matter is pending with appellate authorities and the company believes that it has merit in these cases and more likely than not the company will succeed in this case. The company is contesting this demand and the management, including its tax advisors, believe that its position will likely to be upheld in the appellate process and accordingly no provision has been accrued in the financial statements for the demand raised. (ii) An industry-wide dispute arose regarding the appropriate classification and GST rate applicable to the supply of two-wheeler seats. To prevent immediate contention, the Company proactively deposited the differential tax liability. The Office of the Commissioner of Central Goods and Service Tax, Gurugram Commissionerate, issued an order under Section 74 of the GST Act due to the misclassification of two-wheeler seats under an incorrect HSN code. This order confirmed a demand and appropriated an amount of ?33.82 crores for the period from November 15,

2017, to March 31, 2024. The Company has already deposited this amount under protest. Additionally, the order imposed a penalty of ?33.82 crores along with applicable interest. The Company has filed an appeal against these orders with the CGST Appellate Authority in Gurugram. Based on its own assessment and legal counsel, management is confident of a favorable outcome for this appeal.

2018. The Company is contesting the demands and the management, including its legal advisors, believe that its position will likely to be upheld in the honourable High Courts and accordingly no provision has been accrued in the financial statements for the demand raised.

The management believes that the ultimate outcome of these proceeding will not have a material adverse effect on the Company''s financial position and results of operations.

c) During the financial year 2023-24, the Income Tax Department (''the department'') conducted a search under section 132 of the Income Tax Act, 1961 at certain premises of the Company including manufacturing locations and residence of few of its employees/key managerial personnel. Subsequently, the Company received notices from the Department requesting details of specific transactions and documents from prior years. In response, the Company submitted the required information, pursuant to which the Company has received demand orders amounting to Rs. 2,243.72 lacs (excluding penalties) for the Assessment Years 2014-15 to 2024-25, along with a penalty demand order of Rs. 524.28 lacs for the Assessment Year 2022-23. The Company has filed appeals against the demand orders received from department with the Commissioner of Income Tax (Appeals). As per Company''s own assessment and also based on legal advice, management is confident of favourable outcome for such appeals. Pending outcome of appeal proceedings, no adjustment has been made to these financial statements.

d) There are numerous interpretative issues relating to the Supreme Court (SC) judgement dated 28th February, 2019 on Provident Fund (PF) on the inclusion of allowances for the purpose of PF contribution as well as its applicability of effective date. The Company is evaluating and seeking legal inputs regarding various interpretative issues and its impact.

28.4 Performance obligation

The performance obligation is satisfied upon delivery of the equipment to the customer and payment is generally due within 30 to 60 days from delivery.

28.5 Revenue from contracts with customers is measured by the Company at the transaction price i.e. amount of consideration received/ receivable in exchange of transferring goods or services to the customers. In determining the transaction price for the sale of goods, the Company considers the effect of price adjustments, to be claimed/ passed on to the customers, based on various cost parameters like raw material and other costs. Adequate Provisions have been made for such price differences with a corresponding impact on the revenue. Accordingly, revenue for the current year is net of such price differences.

Note: The Code on Social Security, 2020 (''Code'') relating to employee benefits during employment and postemployment benefits received Presidential assent in September 2020. The Code has been published in the Gazette of India. However, the date on which the Code will come into effect has not been notified and the final rules/interpretation have not yet been issued. The Company will assess the impact of the Code when it comes into effect and will record any related impact in the period the Code becomes effective. Based on a preliminary assessment, the entity believes the impact of the change will not be significant.

38 Other Notes to Accounts

a. Disclosures pursuant to Ind AS-19 âEmployee Benefitsâ(specified under section 133 of the Companies Act, 2013, read with Rule 7 of Companies (Accounts) Rules, 2015) are given below :

Defined Benefit Plan

The Company has a defined benefit gratuity plan. Every employee who has completed five years or more of service gets a gratuity on departure at 15 days salary (last drawn salary) for each completed year of service. The Scheme is funded with the Life Insurance Corporation of India in the form of a qualifying insurance policy.

The Company has also provided for leave encashment which is unfunded.

The following tables summarize the components of net benefit expense recognised in the other comprehensive income in the statement of the profit and loss and the funded status and amounts recognised in the balance sheet for the respective plans:

xi) The estimates of rate of escalation in salary considered in actuarial valuation are after taking into account inflation, seniority, promotion and other relevant factors including supply and demand in the employment market. The above information is as certified by the Actuary.

xii) Discount rate is based on the prevailing market yields of Indian Government securities as at the balance sheet date for the estimated term of the obligations.

xiii) The sensitivity analyses above have been determined based on a method that extrapolates the impact on defined benefits obligation as a result of reasonable changes in key assumption occurring at the end of the reporting period.

xiv) The plan assets are maintained with Life Insurance Corporation of India (LIC).

c. Operating segment information

The Company has only one reportable business segment as it manufactures and deals only in different seating systems, carpet etc. in terms of Ind AS 108 ââOperating Segmentâ. Further, the Company operates only in one geographical segment -India. All the assets of the Company are located in India. The chief operating officer and chief financial officer (chief operating decision maker) monitors the operating results as one single segment for the purpose of making decisions about resource allocation and performance assessment. Hence, the disclosure requirements of the standard are not considered.

The revenue from external customer includes revenue from three customer which is equal to 10% or more of entity''s revenue amounts to Rs. 1,25,502.11 lakhs (31st March, 2024: Rs. 1,05,063.87 lakhs).

Terms and Conditions of transactions with related parties

The transactions with related parties are made on terms equivalent to those that prevail in arm''s length transactions. Outstanding balances at the year end are unsecured and settlement occurs in cash. There have been no guarantees provided or received for any related party receivables or payables. For the year ended March 31, 2025 the Company has not recorded any impairment of receivables relating to amounts owed by related parties. This assessment is undertaken each financial year through examining the financial position of the related party and the market in which the related party operates.

e. Expenditure on corporate social responsibility

As per provisions of section 135 of the Companies Act, 2013, the Company has to incur at least 2% of average net profits of the preceding three financial years towards Corporate Social Responsibility (âCSRâ). Accordingly, a CSR committee has been formed for carrying out CSR activities as per the Schedule VII of the Companies Act, 2013. The Company has contributed a sum of Rs.54 lakhs (31st March, 2024 : Rs.36.00 lakhs) towards relief activities, education, healthcare and Skil Development purpose. The same is debited to the Statement of Profit and Loss.

The fair value of the financial assets and liabilities is included at the amount at which the instruments could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale. The following method and assumption were used to estimate the fair value.

i) The fair value of unquoted instruments, loans from banks and other financial liabilities, as well as other noncurrent financial liabilities is estimated by discounting future cash flow using rates currently available for debt on similar terms, credit risk and remaining maturities. In additional to being sensitive to a reasonably possible change in the forecast cash flow or the discount rate, the fair value of the equity instruments is also sensitive to a reasonably possible change in the growth rates. The valuation requires management to use unobservable inputs in the model, of which the significant unobservable inputs are disclosed in the tables below. Management regularly assesses a range of reasonably possible alternatives for those significant unobservable inputs and determines their impact on the total fair value.

ii) Receivables/Payables are evaluated by the Company based on parameters such as interest rate, risk factors, and individual credit worthiness of the counterparty and the risk characteristics of the financed project. Based on this evaluation, allowances are taken into account for the expected credit losses of these receivables.

iii) The significant unobservable inputs used in the fair value measurement categorized within level 3 of the fair value hierarchy together with a quantitative sensitivity analysis as at 31st March, 2025 are as shown below :-

Fair Value Hierarchy

The Company uses the following hierarchy for determining and disclosing the fair value of financial instruments by valuation technique:

Level 1: quoted (unadjusted) prices in active markets for identical assets or liabilities.

Level 2: other techniques for which all inputs that have a significant effect on the recorded fair value are observable, either directly or indirectly.

Level 3: techniques that use inputs that have a significant effect on the recorded fair value that are not based on observable market data.

Note: The Company has measured its all financial assets and liabilities at amortized cost accordingly, Quantitative disclosures fair value measurement hierarchy in not applicable on the Company.

g. Financial risk management

The Company has instituted an overall risk management program which also focuses on the unpredictability of financial markets and seeks to minimize potential adverse effects on the Company''s financial performance. The Corporate Finance department evaluates financial risks in close co-operation with the various stakeholders.

The Company is exposed to market risk, credit risk and liquidity risk. These risks are managed pro-actively by the Senior Management of the Company.

i) Market risk

Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices. Market prices comprises three types of risk: currency rate risk, interest rate risk and other price risks, such as equity price risk and commodity price risk. Financial instruments affected by market risks include loans and borrowings, deposits, investments and foreign currency receivables and payables. The sensitivity analyses in the following sections relate to the position as at 31st March, 2025 and 31st March, 2024. The analyses exclude the impact of movements in market variables on; the carrying values of gratuity and other post-retirement obligations; provisions; and the non-financial assets and liabilities. The sensitivity of the relevant Profit and Loss item is the effect of the assumed changes in the respective market risks. This is based on the financial assets and financial liabilities held as at 31st March, 2025 and 31st March, 2024.

A) Currency Riski-

Foreign currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in foreign exchange rates. The Company''s exposure to the risk of changes in foreign exchange rates relates primarily to the Company''s operating activities (when revenue or expense is denominated in foreign currency). Foreign currency exchange rate exposure is partly balanced by purchasing of goods from the respective countries. The Company evaluates exchange rate exposure arising from foreign currency transactions and follows established risk management policies.

Foreign currency risk sensitivity

The following tables demonstrate the sensitivity to a reasonably possible change in USD, Euro and JPY exchange rates, with all other variables held constant. The impact on the Company profit before tax is due to changes in the fair value of monetary assets and liabilities.

The Company is not exposed to any price risk as there is no investment in securities and the Company does not deal in commodities.

ii) Liquidity risk:

Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they become due. The Company employs'' prudent liquidity risk management practices which inter alia means maintaining sufficient cash and the availability of funding through an adequate amount of committed credit facilities. Given the nature of the underlying businesses, the corporate finance maintains flexibility in funding by maintaining availability under committed credit lines and this way liquidity risk is mitigated by the availability of funds to cover future commitments. Cash flow forecasts are prepared and the utilized borrowing facilities are monitored on a daily basis and there is adequate focus on good management practices whereby the collections are managed efficiently. The Company while borrowing funds for large capital project, negotiates the repayment schedule in such a manner that these match with the generation of cash on such investment. Longer term cash flow forecasts are updated from time to time and reviewed by the senior management of the Company.

The table below represents the maturity profile of Company''s financial liabilities at the end of 31st March, 2025 and 31st March, 2024 based on contractual undiscounted payments:

Credit risk is the risk of financial loss to the Company if a customer or the counterparty to a financial instrument fails to meet its contractual obligation, and arises principally from the Company''s receivables from customers. Credit risk arises from cash held with banks, as well as credit exposure to customers including outstanding accounts receivables. The maximum exposure to credit risk is equal to the carrying value of the financials assets. The Company assesses the credit quality of the counterparties, taking in to account their financial position, past experience and other factors.

Balances with banks is subject to low credit risk due to good credit ratings assigned to these banks.

Credit risk relating to trade receivable, securities given is considered negligible as counterparties are having good credit quality.

h. Capital Management

For the purposes of Company''s capital management, Capital includes equity attributable to the equity holders of the Company and all other equity reserves. The primary objective of the Company''s capital management is to ensure that it maintains an efficient capital structure and maximize shareholder value. The Company manages its capital structure and makes adjustments in light of changes in economic conditions and the requirements of the financial covenants. To maintain or adjust the capital structure, the Company may adjust the dividend payment to shareholders or issue new shares. The Company is not subject to any externally imposed capital requirements. No changes were made in the objectives, policies or processes for managing capital during the year ended 31st March, 2025 and 31st March, 2024.

The Company monitors capital using gearing ratio, which is net debt divided by total capital plus net debt. The Company''s policy is to keep the gearing ratio between 0% to 10%.

i LeaseContractual maturities of lease liabilities

The Company has entered into leases for its commercial premises, duration of such leases is 20 to 33 years. These lease agreements are normally renewed on expiry. At the date of commencement of the lease, the Company recognize lease liability for all lease arrangements in which it is a lessee, except for leases with a term of twelve months or less (short-term leases) and low value leases. For these short-term and low value leases, the Company recognizes the lease payments as an operating expense on a straight-line basis over the term of the lease. The rental expense charged to statement of profit and loss is Rs. 9.58 lakhs.

The weighted average incremental borrowing rate applied to lease liabilities recognized in the balance sheet at the date of initial application is 10.15%, 8.70%, 9.00%.

Company as lessor

The Company has entered into a cancellable operating lease with Toyo Sharda India Private Limited for a further period of one year starting from 01 April 2024 at such terms and conditions mutually agreed upon. Lessee shall not assign / sublet property to any other person. The total rent recognised as income during the year is Rs. 114.61 lakhs (31st March 2024: Rs. 102.74 lakhs).

The Company has entered into a cancellable operating lease with NDR Auto Components Limited for a period of 3- years extendable every three years up to a period of 9 years, starting from 16th August 2022, at such terms and conditions mutually agreed upon. The rent shall increase by 15% after every three years, Lessee shall not assign/ sublet property to any other person. The total rent recognised as income during the year is Rs. 115.20 lakhs (31st March 2024: Rs. 115.20 lakhs).

Events after the reporting period

The board of directors have proposed dividend after the balance sheet date which are subject to approval by the shareholders at the annual general meeting.

k The Company has migrated from legacy accounting software to upgraded version of accounting software during the year. The Company has used accounting software (SAP Rise) for maintaining its books of account which has a feature of recording audit trail (edit log) facility and the same has operated for all relevant transactions recorded in the software, except that audit trail feature is not enabled for certain changes made using privileged/ administrative access rights to the application and/or the underlying database. Further no instance of audit trail feature being tampered with was noted in respect of accounting software''s where the audit trail has been enabled. The Company is in the process of establishing necessary controls and documentations regarding audit trail in respect of upgraded version of the accounting software. Additionally, the audit trail of prior year (whatever was enabled) has been preserved by the Company as per the statutory requirements for record retention.

l During the year, the Company has reassessed presentation of outstanding employee salaries and wages, which were previously presented under ''Trade Payables'' within ''Current Financial Liabilities''. In line the recent opinion issued by the Expert Advisory Committee (EAC) of the Institute of Chartered Accountants of India (ICAI) on the âClassification and Presentation of Accrued Wages and Salaries to Employeesâ, the Company has concluded that presenting such amounts under ''Other Financial Liabilities'', within ''Current Financial Liabilities'', results in improved presentation and better reflects the nature of these obligations. Accordingly, amounts aggregating to Rs. 643.16 lakhs as at March 31,2025 (Rs. 439.96 lakhs as at March 31,2024), previously classified under ''Trade Payables'', have been reclassified under the head ''Other Financial Liabilities''. Both line items form part of the main heading ''Financial Liabilities''.

m The company has issued 3,14,00,000 fully paid-up bonus equity shares, each with a nominal value of Rs 2, in a 1:1 ratio, pursuant to approval granted by shareholders i.e. every existing equity share with a face value of Rs 2, one additional equity share with a face value of Rs 2 was issued. As a result of the share allotment on December 23, 2024, the company''s issued, subscribed, and paid-up capital has increased to Rs 1,256 lakhs. This increase was achieved by capitalizing Rs 628 lakhs from the company''s free reserves. Consequently, the basic and diluted earnings per equity share have been recalculated to Rs 1.21 and Rs 1.29, respectively, for the quarters ending December 31, 2024, and March 31, 2024. For the year ended March 31, 2025, the earnings per share stood at Rs. 5.21 and for the fiscal year ending March 31, 2024, the earnings per share reached Rs 3.99. Additionally, pursuant to the approval of shareholder obtained through a postal ballot notice dated November 5, 2024, with the results declared on December 9, 2024 (the approval date and the last date for e-voting being the same), the company''s authorized share capital has been increased from Rs 700 lakhs to Rs 1,500 lakhs.

n Other Statutory Information

(i) The Company do not have any Benami property, where any proceeding has been initiated or pending against the Company for holding any Benami property.

(ii) The Company do not have any transactions with companies struck off.

(iii) The Company have not any such transaction which is not recorded in the books of accounts that has been surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961 (such as, search or survey or any other relevant provisions of the Income Tax Act, 1961

(iv) The Company have not traded or invested in Crypto currency or Virtual Currency during the financial year.

(v) The Company have not advanced or loaned or invested funds to any other person(s) or entity(ies), including foreign entities (Intermediaries) with the understanding at the Intermediary shall.

(a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company (Ultimate Beneficiaries) or

(b) provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries

(vi) The Company have not received any fund from any persons or entities, including foreign entities (Funding Party) with the understanding (whether recorded in writing or otherwise) that the Company shall:

(a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (Ultimate Beneficiaries) or

(b) provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries,

(vii) The Company do not have any charge or satisfaction which is yet to be registered with Registrar of Companies (ROC) beyond the statutory period.

(viii) The Company did not have any long-term contracts including derivative contracts, for which there were any material foreseeable losses.

Mar 31, 2024

Terms/rights attached to equity shares

The Company has only one class of equity shares having a par value of Rs. 2/- per share ( 31st March 2023 : Rs 2/- per share). Each holder of equity shares is entitled to one vote per share. The company declares and pays dividend in Indian Rupees. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting.

Disclosure under MSMED Act

Information as required to be furnished as per section 22 of Micro, Small and Medium Enterprises Development Act, 2006 (MSMED Act) for year ended 31st March, 2024 is given below. This information has been determined to the extent such parties have been identified on the basis of information available with the Company.

(a) Investor Education and Protection Fund is being credited by the amount of unclaimed dividend after seven years from the due date. The Company has transferred Rs. 3.24 lakhs ( 31st March, 2023 Rs.3.14 lakhs) out of unclaimed dividend pertaining to the financial year 2015-2016 to Investor Education and Protection Fund of Central Government in accordance with the provisions of section 125 of the Companies Act, 2013.

27 Contingent liabilities & commitments	(Rs. in lakhs except as otherwise stated)
	As at	As at
	31st March 2024	31st March 2023
(A) Contingent liabilities ( to the extent not provided for)
(a) Claims against the company not acknowledged as debt
i) Excise duty (refer note (a) below)	228.20	486.85
ii) Labour cases (refer note (b) below)	184.56	208.56
	412.76	695.41
(B) Commitments
Estimated amount of contracts remaining to be executed on capital account and not provided for:
a) Capital commitments (net of advance)	408.14	697.61
b) Other commitments (net of advance)	2,257.94	457.40
	2,666.08	1,155.01

b) The Company has suspended few workmen in the year 2002 for misconduct and instigating other workmen to give less production including himself. The Company has adhered to all the stipulated process as is desired by statute, mainly the Industrial Dispute Act and The Payment of Wages Act. The workmen has raised a demand notice and state government has raised the dispute to Industrial Tribunal cum Labour court. The tribunal has passed order in favour of workmen with reinstatement with back wages. The Company has filed a Writ in the Punjab and Haryana High court in Chandigarh for grant of stay and the same has been granted on 08th August, 2018. The Company is contesting the demands and the management, including its legal advisors, believe that its position will likely to be upheld in the honourable High Courts and accordingly no provision has been accrued in the financial statements for the demand raised.

The management believes that the ultimate outcome of these proceeding will not have a material adverse effect on the Company''s financial position and results of operations.

c) There are numerous interpretative issues relating to the Supreme Court (SC) judgement dated 28th February, 2019 on Provident Fund (PF) on the inclusion of allowances for the purpose of PF contribution as well as its applicability of effective date. The Company is evaluating and seeking legal inputs regarding various interpretative issues and its impact.

28.4 Performance obligation

The performance obligation is satisfied upon delivery of the equipment to the customer and payment is generally due within 30 to 60 days from delivery.

38 Other Notes to Accounts

a. Disclosures pursuant to Ind AS-19 âEmployee Benefitsâ(specified under section 133 of the Companies Act, 2013, read with Rule 7 of Companies (Accounts) Rules, 2015) are given below :

Defined Benefit Plan

The Company has also provided for leave encashment which is unfunded.

xii) Discount rate is based on the prevailing market yields of Indian Government securities as at the balance sheet date for the estimated term of the obligations.

xiv) The plan assets are maintained with Life Insurance Corporation of India (LIC).

c. Operating segment information

The revenue from external customer includes revenue from three customer which is equal to 10% or more of entity''s revenue amounts to Rs 1,05,063.87 lakhs (31st March, 2023: Rs. 1,03,805.60 lakhs).

*The remuneration to the key management personnel does not include the provision made for leave benefits, as it has been determined on an actuarial basis for the Company as a whole.

Terms and Conditions of transactions with related parties

The transactions with related parties are made on terms equivalent to those that prevail in arm''s length transactions. Outstanding balances at the year end are unsecured and settlement occurs in cash. There have been no guarantees provided or received for any related party receivables or payables. For the year ended March 31, 2024 the Company has not recorded any impairment of receivables relating to amounts owed by related parties. This assessment is undertaken each financial year through examining the financial position of the related party and the market in which the related party operates.

e. Expenditure on corporate social responsibility

As per provisions of section 135 of the Companies Act, 2013, the Company has to incur at least 2% of average net profits of the preceding three financial years towards Corporate Social Responsibility (âCSRâ). Accordingly, a CSR committee has been formed for carrying out CSR activities as per the Schedule VII of the Companies Act, 2013. The Company has contributed a sum of Rs.36 lakhs (31st March, 2023 : Rs.24.00 lakhs) towards relief activities, education, healthcare and Skill Development purpose. The same is debited to the Statement of Profit and Loss.

ii) Receivables/Payables are evaluated by the Company based on parameters such as interest rate, risk factors,

and individual credit worthiness of the counterparty and the risk characteristics of the financed project. Based on this evaluation, allowances are taken into account for the expected credit losses of these receivables.

Fair Value Hierarchy

The Company uses the following hierarchy for determining and disclosing the fair value of financial instruments by valuation technique:

Level 1: quoted (unadjusted) prices in active markets for identical assets or liabilities.

Level 2: other techniques for which all inputs that have a significant effect on the recorded fair value are observable, either directly or indirectly.

Level 3: techniques that use inputs that have a significant effect on the recorded fair value that are not based on observable market data.

Note: The Company has measured its all financial assets and liabilities at amortized cost accordingly, Quantitative disclosures fair value measurement hierarchy in not applicable on the Company.

Financial risk management

The Company is exposed to market risk, credit risk and liquidity risk. These risks are managed pro-actively by the Senior Management of the Company.

i) Market risk

Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices. Market prices comprises three types of risk: currency rate risk, interest rate risk and other price risks, such as equity price risk and commodity price risk. Financial instruments affected by market risks include loans and borrowings, deposits, investments and foreign currency receivables and payables. The sensitivity analyses in the following sections relate to the position as at 31st March, 2024 and 31st March, 2023. The analyses exclude the impact of movements in market variables on; the carrying values of gratuity and other post-retirement obligations; provisions; and the non-financial assets and liabilities. The sensitivity of the relevant Profit and Loss item is the effect of the assumed changes in the respective market risks. This is based on the financial assets and financial liabilities held as at 31st March, 2024 and 31st March, 2023.

A) Currency Risk:-

Foreign currency risk sensitivity

The Company does not have any derivative financial instruments such as foreign currency forward contracts to mitigate the risk of changes in exchange rate on foreign currency exposures.

B) Interest rate risk:

Interest rate is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Company''s exposure to the risk of changes in market interest rates relates primarily to the Company''s long term debt obligation at floating interest rates:

C) Price risk

The Company is not exposed to any price risk as there is no investment in securities and the Company does not deal in commodities.

ii) Liquidity risk:

iii) Credit risk:

Balances with banks is subject to low credit risk due to good credit ratings assigned to these banks.

Credit risk relating to trade receivable, securities given is considered negligible as counterparties are having good credit quality.

h. Capital Management

The Company monitors capital using gearing ratio, which is net debt divided by total capital plus net debt. The Company''s policy is to keep the gearing ratio between 0% to 10%.

i LeaseContractual maturities of lease liabilities

The weighted average incremental borrowing rate applied to lease liabilities recognized in the balance sheet at the date of initial application is 10.15%.

Company as lessor

The Company has entered into a cancellable operating lease with Toyo Sharda India Private Limited for a further period of 3 years starting from 01 October 2021 at such terms and conditions mutually agreed upon. The rent shall increase by 5% annually. Lessee shall not assign/ sublet property to any other person. The total rent recognised as income during the year is Rs. 102.74 lakhs (31st March 2023: Rs. 91.37 lakhs).

Events after the reporting period

The board of directors have proposed dividend after the balance sheet date which are subject to approval by the

shareholders at the annual general meeting.

k The Company has used accounting software for maintaining its books of account which has a feature of recording audit trail (edit log) facility and the same has operated throughout the year for all relevant transactions recorded in the software, except that audit trail feature is not enabled at database level and the underlying Oracle database due to space/performance constraints. Further no instance of audit trail feature being tampered with was noted in respect of software.

l During the month of May 2023, the Income Tax Department (''the department'') conducted a search under section 132 of the Income Tax Act, 1961 at certain premises of the Company including manufacturing locations and residence of few of its employees/key managerial personnel. The business and operations of the Company continued without any disruptions.

The Company has subsequently received notices wherein the department has sought details of certain transactions and documents. The Company is making the required submissions. No demand notice has been raised on the Company as of date. Based on the aforesaid and having regard to the matters of inquiry during the search proceedings stated above, management is of the view that no material adjustments are required to these financial results in this regard.

m The Company is engaged in supplying seats for two-wheeled motor vehicles classifying the same under HSN 9401 2000 chargeable to tax at the rate of 18%. The entire industry was facing an interpretational issue with respect to such classification and certain disputes were also raised by the authorities that such seats should be classifiable under CTH 8714 which is taxable under GST at the rate of 28%.The Company re-classified twowheeler seats and parts thereof and started charging GST at the rate of 28% w.e.f. 18th December 2023 on all the supplies made. Further the Company also paid the differential GST amount suo moto amounting to Rs. 2,891 lacs to the department for supplies made in the past period.

The Company subsequently received a letter dated 16th March 2024 from the Directorate General of GST stating that interest under section 50 of the CGST Act shall be deposited. In response to the above, the Company has replied via letter dated 28th March 2024 where the Company reiterated the submissions made in response to the letter and submitted that the Company is of the firm view that the tax liability has been paid suo moto under protest and it has good merit and there will not be any future liability against this. Further the Company has not received any demand notice from the department as on date.

n Other Statutory Information

(i) The Company do not have any Benami property, where any proceeding has been initiated or pending against the Company for holding any Benami property.

(ii) The Company do not have any transactions with companies struck off.

(iv) The Company have not traded or invested in Crypto currency or Virtual Currency during the financial year.

(v) The Company have not advanced or loaned or invested funds to any other person(s) or entity(ies), including

foreign entities (Intermediaries) with the understanding at the Intermediary shall.

(a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company (Ultimate Beneficiaries) or

(b) provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries

(a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (Ultimate Beneficiaries) or b) provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries,

(vii) The Company do not have any charge or satisfaction which is yet to be registered with Registrar of Companies (ROC) beyond the statutory period.

(viii) The Company did not have any long-term contracts including derivative contracts, for which there were any material foreseeable losses.

Mar 31, 2023

2.16 Provisions and Contingent Liabilities Provisions

A provision is recognised when the Company has a present obligation (legal or constructive) as a result of past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. The expense relating to a provision is presented in the statement of profit and loss net of any reimbursement. These estimates are reviewed at each reporting date and adjusted to reflect the current best estimates.

If the effect of the time value of money is material, provisions are discounted using a current pre-tax rate that reflects, when appropriate, the risks specific to the liability. When discounting is used, the increase in the provision due to the passage of time is recognised as a finance cost.

Onerous Contracts

If the Company has a contract that is onerous, the present obligation under the contract is recognised and measured as a provision. However, before a separate provision for an onerous contract is established, the Company recognises any impairment loss that has occurred on assets dedicated to that contract.

Contingent liabilities

A contingent liability is a possible obligation that arises from past events whose existence will be confirmed by the occurrence or non-occurrence of one or more uncertain future events beyond the control of the Company or a present obligation that is not recognised because it is not probable that an outflow of resources will be required to settle the obligation. A contingent liability also arises in extremely rare cases, where there is a liability that cannot be recognised because it cannot be measured reliably. The Company does not recognize a contingent liability but discloses its existence in the financial statements unless the probability of outflow of resources is remote.

Provisions, contingent liabilities, contingent assets and commitments are reviewed at each balance sheet date.

2.17 Dividend distributions

The Company recognizes a liability to make payment of dividend to owners of equity when the distribution is authorized and is no longer at the discretion of the Company and is declared by the shareholders. A corresponding amount is recognised directly in equity.

2.18 Current versus non - current classification

The Company presents assets and liabilities in the balance sheet based on current/non- current classification. An asset is treated as current when it is:

Â¦ Expected to be realized or intended to be sold or consumed in normal operating cycle,

Â¦ Held primarily for purpose of trading,

Â¦ Expected to be realized within twelve months after the reporting period, or

Â¦ Cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period.

All other assets are classified as non-current.

A liability is current when:

â¢ It is expected to be settled in normal operating cycle,

â¢ It is held primarily for purpose of trading,

â¢ It is due to be settled within twelve months after the reporting period, or

â¢ There is no unconditional right to defer the settlement of the liability for at least twelve months after the reporting period.

All other liabilities are classified as non-current.

Deferred tax assets and deferred tax liabilities are classified as non- current assets and liabilities.

The operating cycle is the time between the acquisition of assets for processing and their realization in cash and cash equivalents. The Company has identified twelve months as its operating cycle.

3. Significant accounting judgements, estimates and assumptions:

The preparation of the Company''s financial statements requires management to make judgements, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the accompanying disclosures, and the disclosure of contingent liabilities. Uncertainty about these assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of the asset or liability affected in future periods.

Judgements

In the process of applying the Company''s accounting policies, management has made the following judgements, which have the most significant effect on the amounts recognised in the financial statements.

a) Operating lease commitments - Company as lessor

The Company has entered into commercial property leases on its investment property portfolio. The Company has determined, based on an evaluation of the terms and conditions of the arrangements, such as the lease term not constituting a substantial portion of the economic life of the commercial property, and that it retains all the significant risks and rewards of ownership of these properties and accounts for the contracts as operating leases.

b) Assessment of lease term:

In determining the lease term, management considers all facts and circumstances that create an economic incentive to exercise an extension option, or not exercise a termination option.

Extension options (or periods after termination options) are only included in the lease term if the lease is reasonably certain to be extended (or not terminated). The assessment is reviewed if a significant event or a significant change in circumstances occurs which affects this assessment and that is within the control of the lessee.

c) Revenue from contracts with customers

The Company applied the following judgments that significantly affect the determination of the amount and timing of revenue from contracts with customers:

â¢ Determining method to estimate variable consideration and assessing the constraint.

Certain contracts for the sale of products include a right of price revision on account of change of commodity prices/purchase price that give rise to variable consideration. In estimating the variable consideration, the Company is required to use either the expected value method or the most likely amount method based on which method better predicts the amount of consideration to which it will be entitled.

The Company determined that the most likely method is the appropriate method to use in estimating the variable consideration for the sale of products. The selected method that better predicts the amount of variable consideration was primarily driven by the number of volume thresholds contained in the contract. The most likely amount method is used for those contracts with a single volume threshold, while the expected value method is used for contracts with more than one volume threshold.

Before including any amount of variable consideration in the transaction price, the Company considers whether the amount of variable consideration is constrained. The Company determined that the estimates of variable consideration are not constrained based on its historical experience, business forecast and the current economic conditions. In addition, the uncertainty on the variable consideration will be resolved within a short time frame.

Estimates and assumptions

The key assumptions concerning the future and other key sources of estimation uncertainty at the reporting date, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year, are described below. The Company based its assumptions and estimates on parameters available when the financial statements were prepared. Existing circumstances and assumptions about future developments, however, may change due to market changes or circumstances arising beyond the control of the Company. Such changes are reflected in the assumptions when they occur.

a) Property, plant and equipment

The useful lives and residual values of property, plant and equipment are determined by the management based on technical assessment by the management. The Company believes that the derived useful life best represents the period over which the Company expects to use these assets.

b) Taxes

Uncertainties exist with respect to the interpretation of complex tax regulations, changes in tax laws, and the amount and timing of future taxable income. Given the wide range of business relationships and the long-term nature and complexity of existing contractual agreements, differences arising between the actual results and the assumptions made, or future changes to such assumptions, could necessitate future adjustments to tax income and expense already recorded. The Company establishes provisions based on reasonable estimates. The amount of such provisions is based on various factors, such as experience of previous tax audits and differing interpretations of tax regulations by the taxable entity and the responsible tax authority.

Such differences of interpretation may arise on a wide variety of issues depending on the conditions prevailing in the respective domicile of the companies.

c) Gratuity benefit

The cost of defined benefit plans (i.e. Gratuity benefit) is determined using actuarial valuations. An actuarial valuation involves making various assumptions which may differ from actual developments in the future. These include the determination of the discount rate, future salary increases, mortality rates and future pension increases. Due to the complexity of the valuation, the underlying assumptions and its long-term nature, a defined benefit obligation is highly sensitive to changes in these assumptions. All assumptions are reviewed at each reporting date. In determining the appropriate discount rate, management considers the interest rates of long term government bonds with extrapolated maturity corresponding to the expected duration of the defined benefit obligation. The mortality rate is based on publicly available mortality tables for the specific countries. Future salary increases and pension increases are based on expected future inflation rates for the respective countries. Further details about the assumptions used, including a sensitivity analysis, are given in Note 37 (a).

d) Fair value measurement of financial instrument

When the fair value of financial assets and financial liabilities recorded in the balance sheet cannot be measured based on quoted prices in active markets, their fair value is measured using valuation techniques including the Discounted Cash Flow (DCF) model. The inputs to these models are taken from observable markets where possible, but where this is not feasible, a degree of judgement is required in establishing fair values. Judgements include considerations of inputs such as liquidity risk, credit risk and volatility. Changes in assumptions about these factors could affect the reported fair value of financial instruments.

e) Impairment of financial assets

The impairment provisions of financial assets are based on assumptions about risk of default and expected loss rates. the Company uses judgement in making these assumptions and selecting the inputs to the impairment calculation, based on Company''s past history, existing market conditions as well as forward looking estimates at the end of each reporting period.

f) Impairment of non-financial assets

Impairment exists when the carrying value of an asset or cash generating unit exceeds its recoverable amount, which is the higher of its fair value less costs of disposal and its value in use.

The fair value less costs of disposal calculation is based on available data from binding sales transactions, conducted at arm''s length, for similar assets or observable market prices less incremental costs for disposing of the asset. The value in use calculation is based on a DCF model. The cash flows are derived from the budget for the next five years and do not include restructuring activities that the Company is not yet committed to or significant future investments that will enhance the asset''s performance of the

CGU being tested. The recoverable amount is sensitive to the discount rate used for the DCF model as well as the expected future cash-inflows and the growth rate used for extrapolation purposes. These estimates are also relevant to other intangibles. During the year the Company has done the impairment assessment of non-financial assets and has concluded that there is no impairment in value of nonfinancial assets as appearing in the financial statements.

g) Lease incremental borrowing rate

The Company cannot readily determine the interest rate implicit in the lease, therefore its incremental borrowing rate (IBR) to measure lease liability. The IBR is the rate of interest that the Company would have to pay to borrow over similar terms, and with a similar security, the fund necessary to obtain an asset of a similar value to the right of use assets in similar economic environments. The IBR therefore affects what the Company âwould have to payâ which requires estimates when no observable rates are available or when they need to be adjusted to reflect the term and conditions of the lease. The Company estimates the IBR using observable inputs such as market interest rates when available.

a) Contingent liability with respect to item (i) above represents disputed excise demands pertaining to various years ranging from 1996 to 1999, from 2004 to 2006 and from 2013 to 2018. All these matters are pending with appellate authorities and the company believes that it has merit in these cases and more likely than not the company will succeed in these cases. The company is contesting these demands and the management, including its tax advisors, believe that its position will likely to be upheld in the appellate process and accordingly no provision has been accrued in the financial statements for the demand raised.

The management believes that the ultimate outcome of these proceeding will not have a material adverse effect on the Company''s financial position and results of operations.

Fair Value Hierarchy

The Company uses the following hierarchy for determining and disclosing the fair value of financial instruments by valuation technique:

Level 1: quoted (unadjusted) prices in active markets for identical assets or liabilities.

Level 2: other techniques for which all inputs that have a significant effect on the recorded fair value are observable, either directly or indirectly.

Level 3: techniques that use inputs that have a significant effect on the recorded fair value that are not based on observable market data.

Note: The Company has measured its all financial assets and liabilities at amortized cost accordingly, Quantitative disclosures fair value measurement hierarchy in not applicable on the Company.

g. Financial risk management

The Company is exposed to capital risk, market risk, credit risk and liquidity risk. These risks are managed pro-actively by the Senior Management of the Company.

i) Market risk

Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices. Market prices comprises three types of risk: currency rate risk, interest rate risk and other price risks, such as equity price risk and commodity price risk. Financial instruments affected by market risks include loans and borrowings, deposits, investments and foreign currency receivables and payables. The sensitivity analyses in the following sections relate to the position as at 31st March, 2023 and 31st March, 2022. The analyses exclude the impact of movements in market variables on; the carrying values of gratuity and other post-retirement obligations; provisions; and the non-financial assets and liabilities. The sensitivity of the relevant Profit and Loss item is the effect of the assumed changes in the respective market risks. This is based on the financial assets and financial liabilities held as of 31st March, 2023 and 31st March, 2022.

A) Currency Risk:-

Foreign currency risk sensitivity

iii) Credit risk:

Balances with banks is subject to low credit risk due to good credit ratings assigned to these banks.

Credit risk relating to trade receivable, securities given is considered negligible as counterparties are having good credit quality.

h. Capital Management

The Company monitors capital using gearing ratio, which is net debt divided by total capital plus net debt. The Company''s policy is to keep the gearing ratio between 0% to 10%.

k Estimation of uncertainties relating to the global health pandemic from COVID-19:

Consequent to the uncertainties caused due to continuation of pandemic, the Company has considered the possible effects that may result from the pandemic relating to Covid 19 in the preparation of these financial statements and has done a detailed assessment for carrying amount of financial and non-financial assets and does not anticipate any impairment to these assets. Also, the management does not see any risks in the Company''s ability to continue as a going concern and meeting its liabilities as and when they fall due. The situation though is changing rapidly giving rise to inherent uncertainty around the extent and timing of the potential future spread of COVID-19 and due to which the Company will continue to closely monitor any material changes to future economic conditions, if any.

l Other Statutory Information

(i) The Company do not have any Benami property, where any proceeding has been initiated or pending against the Company for holding any Benami property.

(ii) The Company do not have any transactions with companies struck off.

(iv) The Company have not traded or invested in Crypto currency or Virtual Currency during the financial year.

(v) The Company have not advanced or loaned or invested funds to any other person(s) or entity(ies), including foreign entities (Intermediaries) with the understanding at the Intermediary shall:-

(a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company (Ultimate Beneficiaries) or

(b) provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries

n Note no. 1 to 37 pertaining to balance sheet and statement of profit and loss form an integral part of the financial statements.

As per our report of even date For and on behalf of Board of Directors

For S.R. Batliboi & Co. LLP ROHIT RELAN RISHABH RELAN

Chartered accountants Chairman and Managing Director Whole Time Director

ICAI Registration No. 301003E/E300005 DIN: 00257572 DIN: 07726444

Place : Bengaluru Place : Delhi

per AMIT CHUGH RITU BAKSHI SANJEEV KUMAR

Partner Company Secretary Chief Financial Officer

Membership no. 505224 Place : Gurugram Place : Gurugram

Place : Mumbai Date : May 11, 2023

Mar 31, 2018

1. Corporate information

Bharat Seats Limited (âthe companyâ) is a public limited company domiciled in India and incorporated on March 06, 1986 under the provisions of Companies Act,1956 having its registered office at Plot No. 1, Nelson Mandela Road, Vasant Kunj, New Delhi 110070. . The Company is listed on Bombay Stock Exchange of India Limited. The Company is a joint venture of Suzuki Motor Corporation- Japan, Maruti Suzuki India Ltd. and M/s Rohit Relan and Associates for the manufacture of complete seating system and interior component for the automotive and surface transport. The Companyâs manufacturing facilities are located at Gurugram and Manesar in Haryana. The financial statements were authorized by the Board of Directors for issue in accordance with resolution April 19, 2018.

2 Significant accounting judgements, estimates and assumptions:

The preparation of the Companyâs financial statements requires management to make judgements, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the accompanying disclosures, and the disclosure of contingent liabilities. Uncertainty about these assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of the asset or liability affected in future periods.

Judgements

In the process of applying the Companyâs accounting policies, management has made the following judgements, which have the most significant effect on the amounts recognised in the financial statements.

a) Operating lease commitments - Company as lessor

b) Operating lease commitments -Company as lessee:

The Company has taken various commercial properties on leases. The Company has determined, based on an evaluation of the terms and conditions of the arrangements, such as the lease term not constituting a substantial portion of the economic life of the commercial property, and that it does not retain all the significant risks and rewards of ownership of these properties and accounts for the contracts as operating leases.

Estimates and assumptions

a) Property, plant and equipment

b) Taxes

Uncertainties exist with respect to the interpretation of complex tax regulations, changes in tax laws, and the amount and timing of future taxable income. Given the wide range of business relationships and the long-term nature and complexity of existing contractual agreements, differences arising between the actual results and the assumptions made, or future changes to such assumptions, could necessitate future adjustments to tax income and expense already recorded. The Company establishes provisions, based on reasonable estimates. The amount of such provisions is based on various factors, such as experience of previous tax audits and differing interpretations of tax regulations by the taxable entity and the responsible tax authority.

Such differences of interpretation may arise on a wide variety of issues depending on the conditions prevailing in the respective domicile of the companies.

c) Gratuity benefit

The cost of defined benefit plans (i.e. Gratuity benefit) is determined using actuarial valuations. An actuarial valuation involves making various assumptions which may differ from actual developments in the future. These include the determination of the discount rate, future salary increases, mortality rates and future pension increases. Due to the complexity of the valuation, the underlying assumptions and its longterm nature, a defined benefit obligation is highly sensitive to changes in these assumptions. All assumptions are reviewed at each reporting date. In determining the appropriate discount rate, management considers the interest rates of long term government bonds with extrapolated maturity corresponding to the expected duration of the defined benefit obligation. The mortality rate is based on publicly available mortality tables for the specific countries. Future salary increases and pension increases are based on expected future inflation rates for the respective countries. Further details about the assumptions used, including a sensitivity analysis, are given in Note 38(a).

3 Standards issued but not yet effective

The standard issued, but not yet effective up to the date of issuance of the Company financial statements is disclosed below. The Company intends to adopt the standard when it becomes effective.

a) Appendix B to Ind AS 21, Foreign currency transactions and advance consideration:

The Appendix clarifies that, in determining the spot exchange rate to use on initial recognition of the related asset, expense or income (or part of it) on the derecognition of a non-monetary asset or non-monetary liability relating to advance consideration, the date of the transaction is the date on which an entity initially recognises the non-monetary asset or non-monetary liability arising from the advance consideration. If there are multiple payments or receipts in advance, then the entity must determine the transaction date for each payment or receipt of advance consideration.

Entities may apply the Appendix requirements on a fully retrospective basis. Alternatively, an entity may apply these requirements prospectively to all assets, expenses and income in its scope that are initially recognised on or after:

(i) The beginning of the reporting period in which the entity first applies the Appendix, or

(ii) The beginning of a prior reporting period presented as comparative information in the financial statements of the reporting period in which the entity first applies the Appendix.

The Appendix is effective for annual periods beginning on or after 1st April 2018. However, since the Companyâs current practice is in line with the interpretation, the Company does not expect any effect on its financial statements.

b) Ind AS 115 Revenue from Contracts with Customers:

Ind AS 115 was issued on 28 March 2018 and establishes a five-step model to account for revenue arising from contracts with customers. Under Ind AS 115, revenue is recognised at an amount that reflects the consideration to which an entity expects to be entitled in exchange for transferring goods or services to a customer.

The new revenue standard will supersede all current revenue recognition requirements under Ind AS. The effective date for adoption of Ind AS 115 is financial periods beginning on or after April 1, 2018.This standard will come into force from accounting period commencing on or after 1st April 2018. The Company will adopt the new standard on the required effective date using the full retrospective method.

The Company is in the business of manufacture of complete seating system and interior component for the automotive and surface transport.

a) Sale of goods

For contracts with customers in which the sale of goods is generally expected to be the only performance obligation, adoption of Ind AS 115 is not expected to have any impact on the Companyâs revenue and profit or loss. The Company expects the revenue recognition to occur at a point in time when control of the goods is transferred to the customer, generally on delivery of the goods.

In preparing to adopt Ind AS 115, the Company is considering the following:

(i) Variable Consideration

Some contracts with customers provide a right of return, trade discounts or volume rebates. Currently, the Company recognises revenue from the sale of goods measured at the fair value of the consideration received or receivable, net of returns and allowances, trade discounts and volume rebates. If revenue cannot be reliably measured, the Company defers revenue recognition until the uncertainty is resolved. Such provisions give rise to variable consideration under Ind AS 115, and will be required to be estimated at contract inception and updated thereafter.

Ind AS 115 requires the estimated variable consideration to be constrained to prevent over-recognition of revenue. The Company however does not expects that application of the constraint will result in any revenue being deferred than under current Ind AS.

b) Advances received from customers

Generally, the Company receives only short-term advances from its customers. They are presented as part of Trade and other payables. Under Ind AS 115, the Company must determine whether there is a significant financing component in its contracts. However, the Company decided to use the practical expedient provided in Ind AS 115, and will not adjust the promised amount of the consideration for the effects of a significant financing components in the contracts, where the Company expects, at contract inception, that the period between the Company transfer of a promised good or service to a customer and when the customer pays for that good or service will be one year or less. Therefore, for short-term advances, the Company will not account for a financing component as there is not a significant financing component involved in these contracts.

c) Presentation and disclosure requirements

The presentation and disclosure requirements in Ind AS 115 are more detailed than under current Ind AS. The presentation requirements represent a significant change from current practice and significantly increases the volume of disclosures required in the Companyâs financial statements. Many of the disclosure requirements in Ind AS 115 are new and the Company is in the preliminary stage of assessment of impact of of these disclosures.

d) Other adjustments

In addition to the major adjustments described above, on adoption of Ind AS 115, other items of the primary financial statements such as deferred taxes, assets held for sale and liabilities associated with them will be affected and adjusted as necessary.

The recognition and measurement requirements in Ind AS 115 are also applicable for recognition and measurement of any gains or losses on disposal of non-financial assets (such as items of property, plant and equipment and intangible assets), when that disposal is not in the ordinary course of business. However, on transition, the effect of these changes is not expected to be material for the Company.

(c) Terms/rights attached to equity shares

The Company has only one class of equity shares having a par value of Rs. 2/- per share ( 31st March 2017 : Rs 2/per share). Each holder of equity shares is entitled to one vote per share. The company declares and pays dividend in India Rupees. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting

Loan covenants

Bank loans contain certain debt covenants relating to limitation on indebtedness, debt-equity ratio, net borrowings to EBITDA ratio, current ratio and debt service coverage ratio. The Company has satisfied all debt covenants prescribed in the terms of bank loan. Current ratio is low considering the economic environment in the automotive industry which is within the acceptable norms.

The other loans do not carry any debt covenant.

Note : During the year the company has paid dividend to its shareholders for the year ended 31st March, 2017. This has resulted in payment of corporate dividend tax (CDT) to the taxation authorities. The Company believes that CDT represents additional payment to taxation authority on behalf of the shareholders. Hence CDT paid is charged to equity.

* Trade Payables include due to related parties Rs 3,188.99 lakhs ( 31st March 2017: Rs 3,696.96 lakhs) refer note 38 (c)

* Trade Payables are unsecured and usually paid within 60 days of recognition.

* Trade Payables are usually non-interest bearing.

Disclosure under MSMED Act

Information as required to be furnished as per section 22 of Micro, Small and Medium Enterprises Development Act, 2006 (MSMED Act) for year ended 31st March, 2018 is given below. This information has been determined to the extent such parties have been identified on the basis of information available with the Company.

(a) Investor Education and Protection Fund is being credited by the amount of unclaimed dividend after seven years from the due date. The Company has transferred Rs. 1.66 lakhs ( 31st March, 2017 Rs. 1.67 lakhs) out of unclaimed dividend pertaining to the financial year 2008-2009 and 2009-2010 to Investor Education and Protection Fund of Central Government in accordance with the provisions of section 125 of the Companies Act, 2013.

a) The Company has made a provision of excise duty payable amounting to Rs. Nil (31st March, 2017 Rs. 20.48 lakhs) on stocks of finished goods at the end of the year. Excise duty is considered as an element of cost at the time of manufacture of goods. The Government of India has implemented Goods and Service Tax (âGSTâ) from 01st July, 2017 replacing Excise Duty, Service Tax and various other indirect taxes. Accordingly, as per IND AS

18, no provision is required to be made for excise duty on closing inventory of finished goods.

a) Contingent liability with respect to item (i) above represents disputed excise demands pertaining to various years ranging from 1996-1997 to 2005-2006. All these matters are pending with appellate authorities and the company believes that it has merit in these cases and more likely than not the company will succeed in these cases.The company is contesting these demands and the management, including its tax advisors, believe that its position will likely to be upheld in the appellate process and accordingly no provision has been accrued in the financial statements for the demand raised.

b) The Company has suspended few workmen in the year 2002 for misconduct and instigating other workmen to give less production including himself. The Company has adhered to all the stipulated process as is desired by statue, mainly the Industrial Dispute Act and The Payment of Wages Act. The workmen has raised a demand notice and state government has raised the dispute to Industrial Tribunal cum Labour court. The tribunal has passed order in favour of workmen with reinstatement with back wages. The Company has filed a Writ in the Punjab and Haryana High court in Chandigarh for these cases and the same was listed for hearing for grant of stay on May 25, 2018. The Company is contesting the demands and the management, including its legal advisors, believe that its position will likely to be upheld in the High Courts and accordingly no provision has been accrued in the financial statements for the demand raised.

The management believes that the ultimate outcome of these proceeding will not have a material adverse effect on the

Companyâs financial position and results of operations

(C) Undrawn committed borrowing facility

(a) The company has availed working capital limit amounting to Rs. 1,760 lakhs from HDFC Bank Limited which remain undrawn as at 31st March, 2018.

(b) Working capital limit from HDFC Bank are secured by way of:

(i) pari-passu first charge with HDFC Bank Limited by way of hypothecation on entire stocks of raw materials, semifinished goods, finished goods, stores and spares, bill receivables, book debts and all movable and other current assets of the Company.

(ii) pari-passu second charge with HDFC Bank Limited by way of equitable mortgage of land and building at Bhorakalan, Haryana.

(iii) pari-passu second charge on all moveable fixed assets.

(c) The Company has a debit balance in cash credit account with HDFC Bank as on date of Balance Sheet except in case of Yes Bank Limited where the company has sanctioned working capital limit of Rs. 1,760 lakhs and balance outstanding of Rs. 74.40 lakhs represented under short- term borrowings as at 31st March, 2018. {refer note no. 22}.

(D) For commitments relating to leases, refer note 38(h).

Note :

a) According to the requirement of IND AS, revenue for the year ended 31st March, 2017 were reported inclusive of excise duty. The Government of India has implemented Goods and Service Tax (ââGSTââ) from 01st July, 2017 replacing Excise Duty, Service Tax and various other indirect taxes. Accordingly, as per IND AS 18, the revenue for the year ended 31st March, 2018, is reported net of GST and inclusive of excise duty pertaining to Aprilâ 2017 to Juneâ 2017.

b) Excise duty collected from customers included in sale of products amounting to Rs. 3,109.72 lakhs (31st March, 2017: Rs. 10,736.69 lakhs).

4. OTHER NOTES TO ACCOUNTS

a. Disclosures pursuant to Ind AS-19 âEmployee Benefitsâ(specified under section 133 of the Companies Act, 2013, read with Rule 7 of Companies (Accounts) Rules, 2015) are given below :

Defined Benefit Plan

The Company has also provided for leave encashment which is unfunded.

xii) Discount rate is based on the prevailing market yields of Indian Government securities as at the balance sheet date for the estimated term of the obligations.

xiv The plan assets are maintained with Life Insurance Corporation of India (LIC).

b. Operating segment information

The revenue from external customer includes revenue from one customer which is equal to 10% or more of entityâs revenue amounts to Rs. 93,986.42 lakhs (31^st March, 2017: Rs 89,904.80 lakhs).

c. Related party transactions

The related parties as per the terms of Ind AS-24,âRelated Party Disclosuresâ, (specified under section 133 of the Companies Act, 2013, read with Rule 7 of Companies (Accounts) Rules, 2015) are disclosed below:-

Note: The remuneration to the key management personnel does not include the provision made for leave benefits, as it has been determined on an actuarial basis for the Company as a whole.

Terms and Conditions of transactions with related parties

The transactions with related parties are made on terms equivalent to those that prevail in armâs length transactions. Outstanding balances at the year-end are unsecured and interest free and settlement occurs in cash. There have been no guarantees provided or received for any related party receivables or payables. For the year ended March 31, 2018, the Company has not recorded any impairment of receivables relating to amounts owed by related parties .This assessment is undertaken each financial year through examining the financial position of the related party and the market in which the related party operates.

d. Expenditure on corporate social responsibility

As per provisions of section 135 of the Companies Act, 2013, the Company has to incur at least 2% of average net profits of the preceding three financial years towards Corporate Social Responsibility (âCSRâ). Accordingly, a CSR committee has been formed for carrying out CSR activities as per the Schedule VII of the Companies Act, 2013. The Company has contributed a sum of Rs. 26.23 lakhs (31^st March, 2017: Rs. 6.50 lakhs) towards education and healthcare purpose. The same is debited to the Statement of Profit And Loss.

e. Fair Value measurements

Set out below, is a comparison by class of the carrying amounts and fair value of the Companyâs financial instruments, other than those with carrying amounts that are reasonable approximations of their fair value:

Fair Value Hierarchy

The Company uses the following hierarchy for determining and disclosing the fair value of financial instruments by valuation technique:

Level 1: quoted (unadjusted) prices in active markets for identical assets or liabilities

Level 2: other techniques for which all inputs that have a significant effect on the recorded fair value are observable, either directly or indirectly

Level 3: techniques that use inputs that have a significant effect on the recorded fair value that are not based on observable market data

Note: The management assessed that cash and cash equivalents, trade receivables, trade payables, bank overdrafts and other current liabilities approximate their carrying amounts largely due to the short-term maturities of these instruments.

f. Financial risk management

The Company has instituted an overall risk management programme which also focuses on the unpredictability of financial markets and seeks to minimize potential adverse effects on the Companyâs financial performance. The Corporate Finance department, evaluates financial risks in close co-operation with the various stakeholders.

The Company is exposed to capital risk, market risk, credit risk and liquidity risk. These risks are managed pro-actively by the Senior Management of the Company.

i) Market risk

Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices. Market prices comprises three types of risk: currency rate risk, interest rate risk and other price risks, such as equity price risk and commodity price risk. Financial instruments affected by market risks include loans and borrowings, deposits, investments and foreign currency receivables and payables. The sensitivity analyses in the following sections relate to the position as at 31st March, 2018 and 31st March, 2017. The analyses exclude the impact of movements in market variables on; the carrying values of gratuity and other post-retirement obligations; provisions; and the non-financial assets and liabilities. The sensitivity of the relevant Profit and Loss item is the effect of the assumed changes in the respective market risks. This is based on the financial assets and financial liabilities held as of 31^st March, 2018 and 31^st March, 2017.

a) Currency risk:-

Foreign currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in foreign exchange rates. The Companyâs exposure to the risk of changes in foreign exchange rates relates primarily to the Companyâs operating activities (when revenue or expense is denominated in foreign currency). Foreign currency exchange rate exposure is partly balanced by purchasing of goods from the respective countries. The Company evaluates exchange rate exposure arising from foreign currency transactions and follows established risk management policies.

Foreign currency risk sensitivity

The Company has derivative financial instruments such as foreign currency forward contracts to mitigate the risk of changes in exchange rate on foreign currency exposures. The counterparty for these contracts is generally a bank or a financial instruments. The details of the outstanding foreign exchange forward are as follows:

b) Interest rate risk:

Interest rate is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Companyâs exposure to the risk of changes in market interest rates relates primarily to the Companyâs long term debt obligation at floating interest rates:

c) Price risk

The Company is not exposed to any price risk as there is no investment in equities and the Company does not deal in commodities.

ii) Liquidity risk:

Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they become due. The Company employeesâ prudent liquidity risk management practices which inter alia means maintaining sufficient cash and the availability of funding through an adequate amount of committed credit facilities. Given the nature of the underlying businesses, the corporate finance maintains flexibility in funding by maintaining availability under committed credit lines and this way liquidity risk is mitigated by the availability of funds to cover future commitments. Cash flow forecasts are prepared and the utilized borrowing facilities are monitored on a daily basis and there is adequate focus on good management practices whereby the collections are managed efficiently. The Company while borrowing funds for large capital project, negotiates the repayment schedule in such a manner that these match with the generation of cash on such investment. Longer term cash flow forecasts are updated from time to time and reviewed by the senior management of the Company.

The table below represents the maturity profile of Companyâs financial liabilities at the end of 31^st March, 2018 and 31^st March, 2017 based on contractual undiscounted payments:

iii) Credit risk:

Credit risk is the risk of financial loss to the Company if a customer or the counterparty to a financial instrument fails to meet its contractual obligation, and arises principally from the Companyâs receivables from customers. Credit risk arises from cash held with banks, as well as credit exposure to customers including outstanding accounts receivables. The maximum exposure to credit risk is equal to the carrying value of the financials assets. The Company assesses the credit quality of the counterparties, taking in to account their financial position, past experience and other factors.

Credit risk relating to trade receivable, securities given is considered negligible as counterparties are having good credit quality.

g. Capital Management

For the purposes of Companyâs capital management, Capital includes equity attributable to the equity holders of the Company and all other equity reserves. The primary objective of the Companyâs capital management is to ensure that it maintains an efficient capital structure and maximize shareholder value. The Company manages its capital structure and makes adjustments in light of changes in economic conditions and the requirements of the financial covenants. To maintain or adjust the capital structure, the Company may adjust the dividend payment to shareholders or issue new shares. The Company is not subject to any externally imposed capital requirements. No changes were made in the objectives, policies or processes for managing capital during the year ended 31st March, 2018 and 31st March, 2017.

The Company monitors capital using gearing ratio, which is net debt divided by total capital plus net debt. The Companyâs policy is to keep the gearing ratio between 0% to 10%.

The gearing ratio for each year is as follows:-

h. Lease

Operating lease commitments-Company as lessee

i) The Company has taken various commercial premises under cancellable operating leases. These lease agreements are normally renewed on expiry. There are no restrictions placed upon the Company by entering into these leases and there are no subleases. The annual increments are expected to be in line with the expected general inflation to compensate the lessor for the expected inflationary cost increase.

ii) The Company has also taken few commercial premises under non-cancellable operating leases. There are no restrictions placed upon the Company by entering into these leases and there are no subleases. Normally there are renewal and escalation clauses in these contracts. The total of future minimum lease payments in respect of such leases are as follows:

Operating lease commitments-Company as lessor

The Company has entered into a cancellable operating lease with Toyo Sharda India Private Limited for 2 years starting from 01 June 2015. It can be extended for 2 years at such terms and conditions mutually agreed upon. The rent shall increase by 5% annually. Lessee shall not assign/ sublet property to any other person. The total rent recognised as income during the year is Rs. 22.31 lakhs (31st March 2017: Rs. 21.25 lakhs).

i. Disclosures pursuant to Ind AS-8 âAccounting policies, changes in accounting estimates and errorsâ(specified under section 133 of the Companies Act, 2013, read with Rule 7 of Companies (Accounts) Rules, 2015) are given below :

Following are the restatement made in the current year financial statements in previous year.

- The above restatements in previous year have been made, wherever necessary to conform to the current year classification/disclosure and doesnât have any impact on the profit, hence no change in the basic and diluted earnings per share of the previous year.

- The above restatements doesnât have any impact at the beginning of the previous year i.e. 01st April, 2016.

The Research and Development facilities are located at the Head office, Gurugram in Haryana and are approved by the Department of Scientific and Industrial Research, Ministry of Science and Technology, Government of India. The Company is entitled to a weighted deduction of 150% of the expenditure incurred at this unit under section 35(2AB) of the Income Tax Act, 1961.

l. Note no. 1 to 38 pertaining to balance sheet and statement of profit and loss form an integral part of the financial statements.

Mar 31, 2016

1 The rights, preferences and restrictions attaching to each class of shares including restrictions on the distribution of dividends and the repayment of capital are as under:

Equity shares

The Company has only one class of equity shares having a par value of Rs. 2 per share. Each shareholder is entitled to one vote per share. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting, except in case of interim dividend. During the year ended 31st March 2016, the amount of per share dividend recognized as distributions to Equity Shareholders is Re 0.90/- (31st March 2015 : Re 0.90).The total dividend appropriation for the year ended 31st March 2016 amounted to Rs. 34,013,058/- (Rs 34,013,058) including corporate dividend tax of Rs. 5,753,058 /- (Rs 5,753,058). In the event of liquidation of the Company, the holders of equity shares will be entitled to receive any of the remaining assets of the Company, after distribution of all preferential amounts. However, no such preferential amounts exist currently. The distribution will be in proportion to the number of equity shares held by the shareholders.

2. Borrowing cost capitalized during the year Rs. 581,239/- (Previous Year Rs. 5,402,179) includes Rs. 72,428/towards fixed assets (Previous Year Rs. 4,319,858) & Rs. 508,811/- towards capital work in progress (Previous year Rs. 1,082,321 /-).

3. The estimated useful lives of certain fixed assets have been revised in accordance with Schedule II to the Companies Act 2013, with effect from 1st April, 2014. Pursuant to these changes in useful lives, the depreciation expense for the previous year ended 31st March 2015 is lower by Rs. 400,649 and for the assets whose revised useful lives have expired on or before 31st March, 2014, the net book value of Rs. 966,839 (net of deferred tax of Rs. 464,349) has been deducted from the retained earnings.

4. During the current year pursuant to section 135 of the Companies act, 2013 corporate social responsibility expenses of Rs. 550,000/- (Previous year Rs. 921,000) has been incurred by the company which have been disclosed in other expenses under note no. 31.

5. Current year financial statements are prepared as per Accounting Standard prescribed under section 133 read with rule 7 of Companies (Accounts) Rules, 2014 and relevant provisions of Companies act 2013.

6. Note no. 1 to 45 pertaining to Balance Sheet and statement of Profit and Loss Account form an integral part of the accounts.

Note No. 7: Previous year figures have been regrouped and /or reclassified, wherever necessary.

Mar 31, 2015

1. The rights, preferences and restrictions attaching to each class of shares including restrictions on the distribution of dividends and the repayment of capital are as under:

Equity shares

The Company has only one class of equity shares having a par value of Rs. 2 per share. Each shareholder is entitled to one vote per share. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting, except in case of interim dividend. During the year ended 31st March 2015, the amount of per share dividend recognized as distributions to Equity Shareholders is Re 0.90/- (31st March 2014 : Re 0.80).The total dividend appropriation for the year ended 31st March 2015 amounted to Rs. 34,013,058/- (Rs 29,389,144) including corporate dividend tax of Rs. 5,753,058/- (Rs 4,269,144). In the event of liquidation of the Company, the holders of equity shares will be entitled to receive any of the remaining assets of the company, after distribution of all preferential amounts. However, no such preferential amounts exist currently. The distribution will be in proportion to the number of equity shares held b.

2.Contingent Liabilities & Commitments

(All amounts in Rs., unless otherwise stated)

Particulars As at As at 31st March 31st March 2015 2014

(i) Contingent Liabilities

(a) Claims against the company not acknowledged as debt

- Disputed Excise Matters 345,668,355 345,668,355

- Disputed Service Tax Demands - 1,147,470

- Disputed Income Tax Demands

(b) Bank guarantee furnished 185,241

93,315,100 121,205,000

438,983,455 468,206,066

(ii) Commitments

(a) Estimated amount of contracts remaining to be executed on capital account and not provided for (Net of advance) 116.873.490 83,818,325

116.873.490 83,818,325

555,856,945 552,024,391

3. Statement Of Realization Of Assets Other Than Fixed Assets And Non - Current Investments

In the opinion of the management, current assets, loans and advances have a value on realisation in the ordinary course of business, at least equal to the amount shown in the Balance Sheet.

In respect of Trade & other receivables, there is no major difference or dispute pending reconciliation/ settlement.

In respect of Trade & other payables, management is in the process of reconciliation.

4. Segment Reporting

The Company has only one reportable business segment as it manufactures and deals only in different seating systems, carpet etc. in terms of AS 17 "Segment Reporting" notified by Central Government under Companies (Accounting Standards), Rules 2006 and therefore, the disclosure requirements of the Standard are not applicable. Further, the Company operates only in one geographical segment -"India". All the assets of the company are located in India. Further the entire revenue is also derived from customers in India.

5. Related Party Disclosure (In pursuance of AS-18) a) Names of parties

i) Where control exists : None (i.e. holding companies subsidiaries and fellow subsidiaries)

ii) Parties in respect of : Maruti Suzuki India which Bharat Seats Ltd.Ltd. Suzuki Motor Corporation, Japan. is an Associate Sharda Motor Industries Limited

iii) Key management persons : Mr. N. D. Relan -Chairman and their relatives Mr. Rohit Relan - Managing Director Mr. Rishabh Relan - Chief Operating Officer Mr. Sanjeev Kumar - Chief Financial Officer Ms. Ritu Bakshi-Company Secretary Mr. T J. Chacko - Whole Time Director (w.e.f. 1st December, 2014)

Relatives :

Mrs. Sharda Relan -Wife of Mr. N.D. Relan Mrs. Ritu Relan -Wife of Mr. Rohit Relan Mr. Pranav Relan-Son of Mr. RohitRelan Mr. Ayush Relan -Son of Mr. Rohit Relan Mr. Ajay Relan- son of Mr. N.D. Relan Mrs. Mala Relan-Wife of Mr. Ajay Relan Ms. Aashita Relan- Daughter of Mr. Ajay Relan Mr. Aashim Relan-Son of Mr. Ajay Relan

iv) Other enterprises over : N. D. Relan (HUF) which person(s) referred to Rohit Relan (HUF) in (iii) above is able to Ajay Relan (HUF) exercise Sharda Enterprises significant influence Relan Industrial Finance Limited Progressive Engineering & Automation Pvt. Ltd. Sharda Inoac Pvt. Ltd. Pebco Motors Ltd. Toyota Boshoku Relan India Pvt. Ltd. Toyo Sharda India Private Limited

6. Borrowing cost capitalized during the year Rs. 5,402,179/- (Previous Year Rs. 15,040,626) includes Rs. 4,319,858/- towards fixed assets (Previous Year Rs. 11,627,828) & Rs. 1,082,321/- towards capital work in progress (Previous year Rs. 3,412,798/-).

7. The estimated useful lives of certain fixed assets have been revised in accordance with Schedule II to the Companies Act 2013, with effect from 1st April, 2014. Pursuant to these changes in useful lives, the depreciation expense for the Year ended 31st March 2015 is lower by Rs. 4,00,649 and for the assets whose revised useful lives have expired on or before 31st March, 2014, the net book value of Rs. 9,66,839 (net of deferred tax of Rs. 4,64,349) has been deducted from the retained earnings.

8. During the current year pursuant to section 135 of the Companies Act, 2013 corporate social responsibility expenses of Rs. 921,000 has been incurred by the company which have been disclosed in other expenses under note no. 31.

9. Current year financial statements are prepared as per Accounting Standard prescribed under section 133 read with rule 7 of Companies (Accounts) Rules, 2014 and relevant provisions of Companies act 2013 and previous year financial statement were prepared as per relevant provisions of the Companies Act, 1956 (refer General circular 08/2014 dated 04/04/2014 of the Ministry of Corporate Affairs for applicability of relevant provisions/ schedules/ rules of the Companies Act, 1956 for the financial statements prepared for the financial year commenced earlier than 01.04.2014) and the provisions of the Companies Act, 2013 (to the extent applicable).

10. Note no. 1 to 45 pertaining to Balance Sheet and statement of Profit and Loss Account form an integral part of the accounts.

11. Previous year figures have been regrouped and /or reclassified, wherever necessary.

Mar 31, 2014

1. Contingent Liabilities & Commitments

(All amounts in Rs., unless otherwise stated)

Particulars As at 31 March 2014 As at 31 March 2013

(i) Contingent Liabilities

(a) Claims against the company not acknowledged as debt

- Disputed Excise Matters 345,668,355 346,034,541

- Disputed Service Tax Demands 1,147,470 1,147,470

- Disputed Income Tax Demands 185,241 -

(b) Bank guarantee furnished to custom authorities 2,800,000

349,801,066 347,182,011

(ii) Commitments

(a) Estimated amount of contracts remaining to be 83,818,325 209,030,505

executed on capital account and not provided for (Net of advance) 83,818,325 209,030,505

433,619,391 556,212,516

2. Statement Of Realization Of Assets Other Than Fixed Assets And Non - Current Investments

In the opinion of the management, current assets, loans and advances have a value on realisation in the ordinary course of business, at least equal to the amount shown in the Balance Sheet. In respect of Trade & other receivables, there is no major difference or dispute pending reconciliation/ settlement.

In respect of Trade & other payables, management is in the process of reconciliation.

Note no. 3 - GRATUITY AND EARNED LEAVE BENEFIT PLANS

The Company has a defned beneft gratuity plan. Every employee who has completed fve years or more of service gets a gratuity on departure at 15 days salary (last drawn salary) for each completed year of service. The Scheme is funded with "The Life Insurance Corporation of India" in the form of a qualifying insurance policy. The Company has also provided for Leave Encashment which is unfunded.

The following tables summarize the components of net beneft expense recognized in the proft and loss statement and the funded status and amounts recognized in the balance sheet for the respective plans (as per actuarial valuation as on March 31, 2014).

Note No. 4: Segment Reporting

The Company has only one reportable business segment as it manufactures and deals only in different seating systems, carpet etc. in terms of AS 17 "Segment Reporting" notifed by Central Government under Companies (Accounting Standards), Rules 2006 and therefore, the disclosure requirements of the Standard are not applicable. Further, the Company operates only in one geographical segment Â"India". All the assets of the company are located in India. Further the entire revenue is also derived from customers in India.

1. Under the Micro, Small and Medium Enterprises Development Act, 2006, the Company is in process of identifying such parties. However, to the extent they already been identifed, necessary disclosures have been made as required under the said Act.

2. (i) Particulars of Un-hedged Foreign Currency Exposure as at Balance Sheet Date : Foreign Currency Term Loan NIL [P.Y. Â Rs. 278,870,461 (USD 5,127,303.74)]

Foreign Currency ECB Rs. 83,238,089 (JPY 141,489,188)

[P.Y.Rs. 89,389,097 (Japanese Yen 154,759,517)]

Creditors Rs. 7,713,811 (Euro 97,377.60)

[P.Y.Â 3,177,351.94 (Euro 44,827.20)]

NIL

[P.Y. Â 215,547 (USD 770)]

Rs. 1,1070,785 (JPY 18,118,166)

[P.Y. Rs. 880,992 (JPY 1,311,000)]

Advances recoverable in cash or kind NIL

[P.Y. Rs. 3,480,915 (USD 64,000)] Rs. 4,893,502 (Euro 60112.80) (P.Y. NIL)

3. Borrowing cost capitalized during the year Rs.15,040,626/- (Previous Year Rs. 21,797,777) includes Rs 11,627,828/- towards fxed assets (Previous Year Rs. 624,545) & Rs. 3,412,798 /- towards capital work in progress (Previous year Rs. 21,173,232 /-).

4. Note no. 1 to 45 pertaining to Balance Sheet and statement of Proft and Loss Account form an integral part of the accounts.

Note No. 5: Previous year fgures have been regrouped and /or reclassifed, wherever necessary.

Mar 31, 2013

1. Contingent Liabilities & Commitments

(All amounts in Rs., unless otherwise stated)

Particulars As at 31 March 2012 As at 31 March 2011

(i) Contingent Liabilities

(a) Claims against the company not acknowledged as debt

- Disputed Excise Matters 346,034,541 346,256,646

- Disputed Custom Duty Matters 1,166,957

- Disputed Income Tax Demands 1,147,470 1,147,470

- Disputed Income Tax Demands 3,523,811

347,182,011 352,094,884

(ii) Commitments

(a) Estimated amount of contracts remaining to be 209,030,505 403,042,266

executed on capital account and ot provided for (Net of advance) 209,030,505 403,042,266

556,212,516 755,137,150

2. Statement Of Realization Of Assets Other Than Fixed Assets And Non - Current Investments

In the opinion of the management, current assets, loans and advances have a value on realisation in the ordinary course of business, at least equal to the amount shown in the Balance Sheet. In respect of Trade & other receivables, there is no major difference or dispute pending reconciliation/ settlement. In respect of Trade & other payables, management is in the process of reconciliation."

Note no. 3 - GRATUITY AND EARNED LEAVE BENEFIT PLANS

The Company has a defi ned benefi t gratuity plan. Every employee who has completed fi ve years or more of service gets a gratuity on departure at 15 days salary (last drawn salary) for each completed year of service. The Scheme is funded with "The Life Insurance Corporation of India" in the form of a qualifying insurance policy. The Company has also provided for Leave Encashment which is unfunded.

The following tables summarize the components of net benefi t expense recognized in the profi t and loss statement and the funded status and amounts recognized in the balance sheet for the respective plans (as per actuarial valuation as on March 31, 2013).

Note No. 4: Segment Reporting

The Company has only one reportable business segment as it manufactures and deals only in different seating systems, carpet etc. in terms of AS 17 "Segment Reporting" notifi ed by Central Government under Companies

(Accounting Standards), Rules 2006 and therefore, the disclosure requirements of the Standard are not applicable. Further, the Company operates only in one geographical segment Â"India". All the assets of the company are located in India. Further the entire revenue is also derived from customers in India.

Note: Since no commission has been paid to any director, the computation of profi t under section 349 of the Companies Act, 1956 has not been given.

5. Borrowing cost capitalized during the year Rs. 21,797,777/- (Previous Year Rs. 17,611,707) includes Rs. 624,545/- towards fi xed assets (Previous Year Rs. 7,081,371) & Rs. 21,173,232 /- towards capital work in progress (Previous year Rs. 10,530,336/-).

6. Note no. 1 to 46 pertaining to Balance Sheet and Profi t and Loss Account form an integral part of the accounts.

Note No. 7: Previous year fi gures have been regrouped and /or reclassifi ed, wherever necessary.

Mar 31, 2012

1.1 The rights, preferences and restrictions attaching to each class of shares including restrictions on the distribution of dividends and the repayment of payment are as under:

The company has only one class of equity shares having a par value of Rs. 2 per share. Each shareholder is entitled to one vote per share. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting, except in case of interim dividend. During the year ended 31 March 2012, the amount of per share dividend recognized as distributions to Equity Shareholders was Re. 0.80/- (31 March 2011 : Rs. 0.80). The total dividend appropriation for the year ended March 31, 2012 amounted to Rs. 2,91,95,092/- (Rs. 2,91,95,092) including corporate dividend tax of Rs 40,75,092/- (Rs 40,75,092).

In the event of liquidation of the Company, the holders of equity shares will be entitled to receive any of the remaining assets of the company, after distribution of all preferential amounts. However, no such preferential amounts exist currently. The distribution will be in proportion to the number of equity shares held by the shareholders.

1.2 The aforesaid Shares include 1,57,00,000 Equity shares allotted as fully paid bonus shares in the ratio of 1:1 by capitalization of General Reserve during the year ended 31st March 2008.

2. Contingent Liabilities & Commitments

(All amounts in Rs., unless otherwise stated)

Particulars_ As at 31 March 2012 As at 31 March 2011

(I) Contingent Liabilities

(a) Claims against the company not acknowledged as debt '

- Disputed Excise Matters1 346,256,646 333,146,000

- Disputed Custom Duty Matters2 1,166,957 1,166,957

- Disputed ESI Demands - 539,000

- Disputed Service Tax Demands 1,147,470 1,146,000

- Disputed Income Tax Demands 3,523,811 3,523,811

352,094,884 339,521,768

(II) Commitments

(a) Estimated amount of contracts remaining to be 403,042,266 331,758,000

executed on capital account and not provided for (Net of advance) 403,042,266 331,758,000

755,137,150 671,279,768

1. On the matter of Rs. 31.95 crores including penalty of Rs. 6.5 crores, which had been decided in favour of the Company by Customs, Excise and Service Tax Appellate Tribunal, New Delhi (CESTAT), the department had sought the intervention of the Hon'ble Delhi High Court which had then issued directions to CESTAT to clarify certain points of law arising out of that Order. The matter is still pending for final decision. Further for other matters-Rs 136.46 lacs.

2. The amount has been deposited under protest.

3. Statement Of Realization Of Assets Other Than Fixed Assets And Non - Current Investments

In the opinion of the management, current assets, loans and advances have a value on realization In the ordinary course of business, at least equal to the amount shown in the Balance Sheet. In respect of Trade & other receivables, there is no major difference or dispute pending reconciliation/settlement. In respect of Trade & other payables, management is in the process of reconciliation.

Note No. 4 - GRATUITY AND EARNED LEAVE BENEFIT PLANS

The Company has a defined benefit gratuity plan. Every employee who has completed five years or more of service gets a gratuity on departure at 15 days salary (last drawn salary) for each completed year of service. The Scheme is funded with "The Life Insurance Corporation of India" in the form of a qualifying insurance policy. The Company has also provided for Leave Encashment which is unfunded.

The following tables summarize the components of net benefit expense recognized in the profit and loss account and the flinted status and amounts recognized in the balance sheet for the respective plans (as per actuarial valuation as on March 31, 2012).

Net employee benefit expense (recognized in the Statement of Profit & Loss for the year ended March 31, 2012)

Note No 5: Segment Reporting

The Company has only one reportable business segment as it manufactures and deals only in different seating systems, carpet etc. in terms of AS 17 "Segment Reporting issued by "The Institute of Chartered Accountants of India and therefore, the disclosure requirements of the Standard are not applicable. Further ,the Company operates only in one geographical segment - " India. All the assets of the company are located in India. Further the entire revenue is also derived from customers in India.

Note no. 6 - Additional Notes to the Accounts

1. Under the Micro, Small and Medium Enterprises Development Act, 2006, the Company is in process of identifying such parties. However, to the extent they already been identified, necessary disclosures have been made as required under the said Act. Further, in case the parties already identified, there are no Micro, Small and Enterprises to whom the Company owes dues which are outstanding for more than 45 days as at 31st March 2012.

2. The Company has only one reportable business segment as it manufactures and deals only in different seating systems, carpet etc. in terms of AS 17 Segment Reporting issued by The Institute of Chartered Accountants of India and therefore, the disclosure requirements of the Standard are not applicable. Further, the Company operates only in one geographical segment - " India. All the assets of the company are located in India. Further the entire revenue is also derived from customers in India.

3. Borrowing cost capitalized during the year - Rs.1,76,11,707/- includes Rs. 70,81,371/- towards fixed assets and Rs. 1,05,30,336/- towards capital work in progress (Previous year Rs. nil)

4. Note no. 1 to 45 pertains to Balance Sheet and Profit and Loss Account form an integral part of the accounts.

Mar 31, 2011

1. Contingent Liabilities not provided for (being disclosed in terms of AS-29 issued by ICAI): (i) Disputed Excise Duty Matters

a) On the matter of Rs.31.95 crores including penalty of Rs. 6.5 crores (previous year Rs.31.95 crores), which had been decided in favour of the Company by Customs, Excise and Service Tax Appellate Tribunal, New Delhi (CESTAT), the department had sought the intervention of the Honble Delhi High Court which had then issued directions to CESTAT to clarify certain points of law arising out of that Order. The matter is still pending for final decision.

b) Other matters - Rs. 136.46 lacs (previous year- Rs.146.20 lacs).

(ii) Disputed Customs Duty matter - Rs.11.66 lacs which has been deposited under protest and shown under Schedule 10" Loans & Advances".

(iii) Disputed ESI demands - Rs 5.39 lacs (previous year-Rs.5.39 lacs). Against these, the Company has deposited Rs.1.22 lacs (previous year Rs.1.22 lacs) under protest.

(iv) Disputed Service Tax demands - Rs. 11.46 lacs (previous year-Rs.11.46 lacs).

(v) Disputed Income Tax demands - Rs.35.23 lacs (previous year - Rs.200.57 lacs)

2. Estimated value of contracts remaining to be executed on capital account and not provided for in the accounts, net of advance is Rs.3317.58 lacs (Previous year Rs.624.92 lacs)

3. Under the Micro, Small and Medium Enterprises Development Act, 2006, the Company is in the process of identifying such parties. However, to the extent they have already been identified, necessary disclosures have been made as required under the said Act. Further, in case of the parties already identified, there are no Micro, Small and Enterprises to whom the Company owes dues which are outstanding for more than 45 days as at 31st March, 2011.

7. Current Assets, Loans and Advances

In the opinion of the management, current assets, loans and advances have a value on realisation in the ordinary course of business, at least equal to the amount shown in the Balance Sheet.

In respect of debtors, there is no major difference or dispute pending reconciliation/settlement. In respect of creditors, management is in the process of reconciliation.

8. Borrowing cost capitalized during the year - Nil (Rs. 5.38 Lacs)

9. Company has been providing depreciation on Plant & Machinery purchased/put to use on or after 1st April 2005 on the straight line method as per the rates prescribed under Schedule XIV to the Companies Act,1956. However it has been decided that on Plant & Machinery purchased/ put to use on or after 1st April 2010, depreciation is provided on straight line method based on average estimated useful life of such Plant & Machinery as determined below :

Ã Tools & Dies - 5 years

Ã Other Plant & Machinery - 8 years

Had the Company provided depreciation on Plant & Machinery purchased/put to use on or after 1st April 2010 as per the straight line method followed earlier as per rates prescribed by Schedule XIV to the Companies act,1956, depreciation for the year would have lower by Rs. 69.85 lakhs and Consequently profit would have been higher by that amount.

10. (i) Particulars of Un-hedged Foreign Currency Exposure as at Balance Sheet Date :

Foreign Currency Term Loan Rs. 8,68,91,324 (USD 19,46,054.28) [P.Y. - Rs. 1,21,95,478 (USD 2,70,170.06)]

Foreign Currency ECB Rs.5,93,20,714 (Japanese Yen 10,98,12,503) [P.Y.Rs.6,38,31,811 (Japanese Yen 13,17,75,002).

Creditors Rs.28,15,148 (Euro 44,827.20) [P.Y.- Rs.20,03,650 (Euro 33,234)]

Rs. 26,73,030 (USD 59,164) [P.Y. - Rs 32,79,046 (USD 72,181)]

Rs. 19,05,901 (Japanese Yen 34,40,584) [P.Y. Nil]

Advances recoverable in cash Rs.15,94,630 (USD 35,714) or kind [P.Y. Rs.17,91,697 (USD 39,692)]

(ii) Particulars of Hedged Foreign Currency Exposure as at Balance Sheet Date :

Foreign Currency ECB Rs. 1,22,86,222 (Japanese Yen 2,19,62,499) [P.Y. Rs.1,45,26,826 (JapaneseYen 2,92,83,332 )]

11. Disclosure in pursuance of AS-18 (Related Party Disclosure )

a) Names of parties

i) Where control exists (i.e. holding companies : None subsidiaries and fellow subsidiaries)

ii) Parties in respect of which Bharat Seats Ltd. : Maruti Suzuki India Ltd. is an Associate

Suzuki Motor Corporation, Japan.

Sharda Motor Industries Limited

iii) Key management persons and their relatives : Mr.N.D.Relan - Chairman

Mr. Rohit Relan - Managing Director

Relatives :

Mrs. Ritu Relan

Mr. Rishabh Relan

Mr. Pranav Relan

Mr. Ayush Relan

Mr. Ajay Relan

Mrs. Sharda Relan

iv) Other enterprises over which person(s) : N.D.Relan (HUF) referred to in (iii) above is able to exercise Rohit Relan (HUF) significant influence Ajay Relan (HUF)

Sharda Enterprises

16. The Company has only one reportable business segment as it manufactures and deals only in different seating systems, carpet etc. in terms of AS 17 "Segment Reporting" issued by "The Institute of Chartered Accountants of India" and therefore, the disclosure requirements of the Standard are not applicable. Further ,the Company operates only in one geographical segment - " India". All the assets of the company are located in India. Further the entire revenue is also derived from customers in India.

17. GRATUITY AND EARNED LEAVE BENEFIT PLANS

The Company has a defined benefit gratuity plan. Every employee who has completed five years or more of service gets a gratuity on departure at 15 days salary (last drawn salary) for each completed year of service. The Scheme is funded with "The Life Insurance Corporation of India" in the form of a qualifying insurance policy. The Company has also provided for Leave Encashment which is unfunded.

The following tables summarize the components of net benefit expense recognized in the profit and loss account and the funded status and amounts recognized in the balance sheet for the respective plans (as per actuarial valuation as on March 31, 2011).

Net employee benefit expense (recognized in the Statement of Profit & Loss for the year ended March 31, 2011)

18. Details of Raw Materials Consumption:

iii) Licensed capacity, Installed capacity, Production, Stock and Turnover :

(1) The Company is operating in a delicensed industry and therefore, the information regarding licenced capacity have not been given.

(2) Installed Capacity (as certified by the management and relied upon by the auditors, being a technical matter)

20. Previous year figures have been regrouped and /or reclassified, wherever necessary.

21. Figures have been rounded off to the nearest rupee (except where stated otherwise) and previous year figures have been shown in bracket.

22. Schedules 1 to 17 to the Balance Sheet and Profit and Loss Account and Schedule 18 on Notes to Accounts form an integral part of the accounts.

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