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Directors Report of Harita Seating Systems Ltd.
Mar 31, 2018
The Directors have pleasure in presenting the twenty-second Annual Report and the audited accounts for the year ended 31st March 2018.
1. FINANCIAL HIGHLIGHTS
(Rs. In Lakhs)
|
Particulars |
Year ended 31.03.2018 |
Year ended 31.03.2017 |
|
Sales and other income |
45,470.08 |
38,779.13 |
|
Profit before financial costs, depreciation and amortization expenses |
4,748.42 |
3,660.30 |
|
Less : Finance costs |
111.17 |
44.01 |
|
Depreciation |
719.13 |
515.42 |
|
Profit before tax |
3,918.12 |
3,100.96 |
|
Less : Provision for: |
||
|
Income tax |
740.34 |
463.64 |
|
Deferred tax |
(66.12) |
183.14 |
|
Tax relating to earlier years |
164.03 |
- |
|
Profit after tax |
3,079.87 |
2,454.19 |
|
Other Comprehensive Income |
6.42 |
18.01 |
|
Total Comprehensive income for the year |
3,086.39 |
2,472.20 |
|
Appropriations: |
||
|
First interim Dividend paid @ Rs.2/- per share |
155.38 |
155.38 |
|
Second interim Dividend paid @ Rs.4/- per share |
310.76 |
233.07 |
|
Balance carried to Balance Sheet |
2,620.16 |
2,083.75 |
2. DIVIDEND
The Board of Directors of the Company (the Board) at their meeting held on 8th November 2017, declared a first interim dividend of Rs.2/- per share (20%) for the year 2017-18 absorbing a sum of Rs.1.55 Cr. The same was paid to the shareholders on 21st November 2017.
The Board at its meeting held on 6th February 2018 declared a second interim dividend of Rs.4/- per share(40%) for the year 2017-18 absorbing a sum of Rs.3.11 Cr. The same was paid to the shareholders on 20th February 2018.
Thus, the total amount of both dividends for the year ended 31st March 2018 aggregated to Rs.6/- per share (60%) on 77,69,040 equity shares of Rs.10/- each absorbing Rs.4.66 Cr.
The Company has set-off its dividend distribution tax payable under Section 115-O(1A) of the Income Tax Act, 1961 against the dividend distribution tax paid by its subsidiary Company viz., Harita Fehrer Limited on its dividend declared.
The Board does not recommend any further dividend for the year under consideration.
3. DIRECTORSâ RESPONSIBILITY STATEMENT
In accordance with the provisions of Section 134(5) of the Companies Act, 2013 with respect to Directorsâ Responsibility Statement, it is hereby stated that -
i. in the preparation of annual accounts for the financial year ended 31st March 2018, the applicable Accounting Standards had been followed along with proper explanation relating to material departures if any;
ii. the Directors had selected such accounting policies and applied them consistently and made judgments and estimates that were reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the Company for the year under review;
iii. the Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
iv. the Directors had prepared the accounts for the financial year ended 31st March 2018 on a âgoing concern basisâ;
v. the Directors, had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and are operating effectively; and
vi. the Directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.
4. CORPORATE SOCIAL RESPONSIBILITY (CSR)
CSR activities have already been textured into the Companyâs value system through Srinivasan Services Trust (SST), established in 1996 with the vision of building self-reliant rural community.
Over 22 years of service, SST has played a pivotal role in changing lives of people in rural India by creating self-reliant communities that are models of sustainable development.
The Company is eligible to spend on their ongoing projects/ programs, falling within the CSR activities specified under the Act, 2013 as mandated by the Ministry of Corporate Affairs for carrying out the CSR activities.
The CSR Committee of the Company formulated and recommended a CSR policy in terms of Section 135 of the Act, 2013 along with a list of projects / programmes to be undertaken for CSR spending in accordance with the Companies (Corporate Social Responsibility Policy) Rules, 2014.
Based on the recommendation of the CSR Committee, the Board has approved the projects / programmes carried out as CSR activities by SST, having an established track record for more than the prescribed years in undertaking similar programmes / projects, constituting more than 2% of average net profits of the Company made during the three immediately preceding financial years, towards CSR spending for the financial year 2017-18 amounting to Rs.40 Lakhs.
Presently, SST is working in 5,000 villages spread across Tamil Nadu, Karnataka, Maharashtra, Himachal Pradesh and Andhra Pradesh covering about 30,92,281 population and 7,19,890 families. Its major focus areas are Economic development, health care, quality education, environment and infrastructure.
Achievements in the above villages are:
Economic development:
- 3,81,801 families living in these villages have a monthly income of Rs.15,000/- and above. They have financial security.
- 3,846 Farmers group have been formed with 53,323 Members.
- Improved agriculture practices enabled 2,31,059 Farmers owning 2,51,393 hectares increased the yields higher than the state average by 15%.
- 2,24,805 families earn more than Rs 3,500/per month through livestock.
Women empowerment:
- Formed 9,692 Self Help Groups. These groups have 1,43,821 women as Members.
- Of the 1,43,821 Members, 1,40,480 Members are in income generation activities. They earn a minimum income of Rs. 3000/- per month.
Health care:
- 76,945 children in the age group below 5 are not malnourished.
- 4,52,930 women are freed from anaemia.
- 4,04,589 households made access to toilet facilities.
- The morbidity percentage reduced from 9% to 5%.
- Enrolment in anganwadis increased from 86% to 100% and attendance is 99%.
- 1,688 anganwadis have met all the Integrated Child Development Services Scheme (ICDS) standards.
- 88% involvement of mother volunteers in the functioning of anganwadis. They volunteer their time to ensure proper functioning.
Quality education:
- 100% enrolment of children in schools. There are no drop outs in the schools.
- Number of percentage of slow learners reduced in schools from 29% to 11%.
- Out of 1,764 schools, 1,299 schools are now model schools.
- 1,14,273 illiterate women out of 1,53,493 have been made literates.
Environment and Infrastructure:
- 3,45,140 households disposed solid waste through individual and common compost pits. 91 tons of vermi compost generated per month from wastes.
- Sewage water from 3,48,604 households disposed through soak pits, kitchen gardens and drain.
- Safe drinking water is available to 3,343 villages.
Community takes care of their development needs. 11,639 social leaders are active in this effort.
As required under Section 135 of the Act, 2013 read with Rule 8 of the Companies (Corporate Social Responsibility Policy) Rules, 2014, the Annual Report on CSR, containing the particulars of the projects / programmes approved and recommended by CSR Committee and approved by the Board for the financial year 2017-18 are given by way of Annexure-IV attached to this Report.
5. PERFORMANCE OF THE SUBSIDIARY COMPANY
As on the date of this report, Harita Fehrer Limited, Chennai (HFRL) is the only subsidiary of the Company.
HFRL is a material un-listed Indian subsidiary in terms of Regulation 24 read with Regulation 16(1)(c) of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (SEBI LODR Regulations 2015), as the total turnover of the subsidiary exceeds 20% of the consolidated turnover of the Company.
During the year, HFRL achieved a turnover of Rs.506.37 Cr and earned a profit after tax of Rs.23.45 Cr. HFRL declared two interim dividends for the year ended 31st March 2018 aggregating to Rs.5.00 per share (50%) on 2,00,98,040 equity shares of Rs.10/- each absorbing a sum of Rs.12.09 Cr including dividend distribution tax.
6. CONSOLIDATED FINANCIAL STATEMENTS
The consolidated financial statements of the Company are prepared in accordance with the provisions of Section 129 of the Act, 2013 read with the Companies (Accounts) Rules, 2014 and Regulation 33 of the SEBI LODR Regulations 2015 along with a separate statement containing the salient features of the financial performance of the subsidiary.
The audited consolidated financial statements together with Auditorâs Report form part of the Annual Report.
The audited financial statements in respect of the subsidiary Company will be made available to the shareholders, on receipt of a request from any shareholder and it has also been placed on the website of the Company. This will also be available for inspection by the shareholders at the Registered Office during the business hours as mentioned in the Notice of AGM.
The consolidated profit aftertax of the Company and its subsidiary amounted to Rs.49.13 Cr for the financial year 2017-18 as compared to Rs.36.74 Cr in the previous year.
7. DIRECTORS & KEY MANAGERIAL PERSONNEL
Independent Directors (IDs)
All IDs hold office for a fixed term and are not liable to retire by rotation.
At the Annual General Meeting (AGM) held on 6th August 2014, M/s H Lakshmanan, C N Prasad and Mr S I Jaffar Ali, were appointed as IDs for the first term of five consecutive years from the conclusion of the eighteenth AGM and to receive remuneration by way of fees, reimbursement of expenses for participation in the meetings of the Board and / or Committees and profit related commission in terms of applicable provisions of the Act, 2013 as determined by the Board from time to time. During the year 2015-16, Mr L Bhadri and Ms Sasikala Varadachari were appointed as IDs for a period of three consecutive years effective 13th October 2015 and 22nd March 2016 respectively.
On appointment, each ID has acknowledged the terms of appointment as set out in their letter of appointment. The terms cover inter alia, the duties, rights of access to information, disclosure of their interest / concern, dealing in Companyâs shares, remuneration and expenses, insurance and indemnity. The IDs are provided with copies of the Companyâs policies and charters of various committees of the Board.
In accordance with Section 149(7) of the Act, 2013 all IDs have declared that they meet the criteria of independence as provided under Section 149(6) of the Act, 2013.
The detailed terms of appointment of IDs are disclosed on the Companyâs website with following link:
www.haritaseating.com/PDF/HSSL-TermsofAppointmentofIDs.pdf
Approval of the shareholders is being sought in the ensuing Annual General Meeting for re-appointment of Mr L Bhadri and Ms Sasikala Varadachari as Independent Director for the second term of 3 years effective 13th October 2018 and 22nd March 2019, respectively.
Separate meeting of Independent Directors:
During the year under review, a separate meeting of IDs was held on 6th February 2018 and all the Independent Directors were present at the Meeting.
Based on the set of questionnaires complete feedback on Non-Independent Directors and details of various activities undertaken by the Company were provided to IDs to facilitate for their review / evaluation.
a) Non-Independent Directors (Non-IDs)
The Independent Directors (IDs) used various criteria and methodology practiced in Industry, prescribed by Nomination and Remuneration Committee (NRC) for evaluation of Mr Martin Grammer, Non-ID, Chairman of the Board and Board as a whole.
IDs evaluated the performance of Mr Martin Grammer, through a set of questionnaires. They reviewed his interaction during the Board meetings and strategic inputs given by him to improve risk management, internal controls and contribution to the Companyâs growth.
IDs were satisfied fully with the performance of Mr Martin Grammer.
b) Chairman
The IDs reviewed the performance of Chairman of the Board after taking into account his performance and benchmarked the achievement of the Company with industry under the stewardship of Chairman.
The IDs also placed on record, their appreciation of Chairmanâs visionary leadership, setting tone, pace and opportunity for positive change and passion for constant improvement and admired the high standards of integrity and probity, quality and adequacy of leadership of Chairman and his versatile performance.
The IDs also endorsed that the Chairman is a very accomplished leader and is exceptionally well informed about the state of economy.
c) Board
The IDs also evaluated Boardâs composition, size, mix of skills and experience, its meeting sequence, effectiveness of discussion, decision making, follow up action, so as to improve governance and enhance personal effectiveness of Directors.
The evaluation process focused on Board Dynamics and upon evaluation, IDs concluded that the Board is well balanced in terms of diversity of experience with expert in each domain viz., Banking, Finance, Operations, Legal, Administration and International economy. The Company has a Board with wide range of expertise in all aspects of business.
The IDs unanimously evaluated the prerequisites of the Board viz., formulation of strategy, acquisition & allocation of overall resources, setting up policies, directorsâ selection process and cohesiveness on key issues and satisfied themselves that they were adequate.
They were satisfied with the Companyâs performance in all fronts and finally concluded that the Board operates with global best practices.
d) Quality, Quantity and Timeliness of flow of Information between the Company, Management and the Board
All IDs have expressed their overall satisfaction with the support received from the management and the excellent work done by the management during the last year and also relationship between the top management and Board is smooth and seamless.
Directors appointment/re-appointment
In terms of the provisions of sub-section (6) read with explanation to Section 152 of the Act 2013, two-thirds of the total number of directors i.e., excluding IDs, are liable to retire by rotation and out of which, one-third is liable to retire by rotation at every Annual General Meeting.
Mr Martin Grammer, Director is liable to retire by rotation, at the AGM, and being eligible, offers himself for re-appointment.
The Directors have recommanded his re-appointment. Aa brief resume of the Director proposed to be re-appointed and other relevant information have been furnished in the Notice of AGM. Appropriate resolution for his re-appointment is being placed for approval of the shareholders at the AGM.
Key Managerial Personnel (KMP)
In terms of Section 2(51) and Section 203 of the Act 2013, M/s A G Giridharan, President & CEO, Mr S Jagannathan, Chief Financial Officer and Ms N Iswarya Lakshmi, Company Secretary are KMPs of the Company.
Nomination and Remuneration Policy
The Nomination and Remuneration Committee of Directors (NRC) reviews the composition of the Board, to ensure that there is an appropriate mix of abilities, experience and diversity to serve the interests of all shareholders and the Company.
Nomination and Remuneration Policy was approved by the Board at its meeting held on 22nd September, 2014 and amended at the Board meeting held on 10th May 2018 in terms of Section 178 of the Act, 2013. The objective of such policy is to attract, retain and motivate executive management and remuneration structured to link to Companyâs strategic long term goals, appropriateness, relevance and risk appetite.
NRC will identify, ascertain the integrity, qualification, appropriate expertise and experience, having regard to the skills that the candidate will bring to the Board / Company, whenever the need arises for appointment of Directors / KMP / SMP.
Criteria for performance evaluation, disclosures on the remuneration of directors, criteria of making payments to non-executive directors have been disclosed as part of Corporate Governance Report attached herewith.
Evaluation of the Independent Directors and Committees of Directors
In terms of Section 134 of the Act, 2013 and the Corporate Governance requirements as prescribed under SEBI LODR Regulations 2015, the Board reviewed and evaluated Independent Directors and its Committees viz., Audit Committee, Nomination and Remuneration Committee, Corporate Social Responsibility Committee and Stakeholders Relationship Committee, based on the evaluation criteria laid down by the NRC.
The Board concurred with the recommendations made by the NRC on the evaluation of Non-IDs based on the views expressed at the IDs meeting held on 6th February 2018.
Hence, the Board carried out the evaluation of IDs (excluding the ID being evaluated) and the Board appointed Committee through a set of questionnaires.
Independent Directors
The performance of all Independent Directors (IDs) was assessed against a range of criteria such as contribution to the development of business and performance of the Company, understanding the major risks affecting the Company, clear direction to the management and contribution to the Board cohesion. The performance evaluation has been done by the entire Board of Directors except the Director concerned being evaluated.
The Board noted that all IDs have understood the opportunities and risks to the Companyâs strategy and are supportive of the direction articulated by the management team towards consistent improvement.
Committees
The Board delegates specific mandates to Board constituted Committees, to optimize Directorsâ skills and talents besides complying with key regulatory aspects.
- Audit Committee for overseeing financial reporting;
- Nomination and Remuneration Committee for selecting and compensating Directors / Employees;
- Stakeholdersâ Relationship Committee for redressing investors grievances; and
- Corporate Social Responsibility Committee for overseeing CSR initiatives and inclusive growth.
The performance of each Committee was evaluated by the Board after seeking inputs from its Members on the basis of the specific terms of reference, its charter, time spent by the Committees in considering key issues, quality of information received major recommendations / action plans and work of each Committee.
The Board was satisfied with overall effectiveness and decision making of all Committees. The Board reviewed each Committeeâs terms of reference, to ensure that the Companyâs existing practices remain appropriate. Recommendations from each Committee are considered and approved by the Board prior to implementation.
Number of Board meetings held
The number of Board meetings held during the financial year 2017-18 is provided as part of Corporate Governance Report attached to this Report.
8. AUDITORS
Statutory Auditors
The Company at its twenty first AGM held on 9th August 2017 appointed M/s Raghavan, Chaudhuri & Narayanan, Chartered Accountants, having Firm Registration No. 007761S allotted by The Institute of Chartered Accountants of India, as Statutory Auditors of the Company to hold office, for the first term of five consecutive years, from the conclusion of the said AGM, subject to ratification at every AGM, at such remuneration in addition to applicable taxes, out of pocket expenses, travelling and other expenses as may be mutually agreed between the Board of Directors of the Company and the Auditors.
In terms of the above provisions, M/s Raghavan, Chaudhuri & Narayanan, Chartered Accountants, have completed their first year in the first term of five consecutive years.
The Companies Amendment Act, 2017 has dispensed with the ratification of Statutory Auditorâs appointment at every AGM.
The Statutory Auditors of the Company were appointed for a period of five years in the last AGM held on 9th August 2017 to hold office till the conclusion of the 26th AGM. Hence they will continue as Statutory Auditors for the year 2018-19 also.
The Company has obtained necessary certificate under Section 141 of the Act 2013 conveying their eligibility for being Statutory Auditors of the Company for the year 2018-19.
The Auditorâs Report for the financial year 2017-18 does not contain any qualification, reservation or adverse remark and the same is attached with the annual financial statements.
Secretarial Auditor
As per Section 204 of the Act, 2013, and the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014, the Company is required to appoint a Secretarial Auditor for auditing secretarial and related records of the Company.
As required by Section 204 of the Act, 2013, the Secretarial Audit Report for the year 2017-18 given by Ms B Chandra, Practising Company Secretary, is attached to this Report. The said Secretarial Audit Report does not contain any qualification, reservation or other remarks.
The Board at its meeting held on 10th May, 2018 has re-appointed Ms B Chandra, Practising Company Secretary having registration no. 7859 allotted by the Institute of Company Secretaries of India, as Secretarial Auditor for the financial year 2018-19.
9. CORPORATE GOVERNANCE
The Company has been practicing the principles of good governance over the years and lays strong emphasis on transparency, accountability and integrity.
A separate section on Corporate Governance and a certificate from the Statutory Auditors of the Company regarding compliance of conditions of Corporate Governance as stipulated under SEBI LODR Regulations, 2015 form part of this Annual Report.
The CEO & CFO of the Company have certified to the Board on financial statements and other matters in accordance with Regulation 17(8) of SEBI LODR Regulations 2015 pertaining to CEO I CFO certification for the financial year ended 31st March 2018.
10. POLICY ON VIGIL MECHANISM
The Company has adopted a Policy on Vigil Mechanism in accordance with the provisions of Companies Act, 2013 and Regulation 22 of SEBI LODR Regulations 2015, which provides a formal mechanism for all Directors, Employees and other Stakeholders of the Company to report to the management, their genuine concerns or grievances about unethical behaviour, actual or suspected fraud and any violation of the Companyâs Code of Business Conduct and Ethics.
The Code also provides a direct access to the Chairman of the Audit Committee to make protective disclosures to the management about grievances or violation of the Companyâs Code.
The Policy is disclosed on the Companyâs website in the following link: www.haritaseating.coa/PDF/WhistleBlowerPolicy.pdf
11. PUBLIC DEPOSITS
The Company has not accepted any deposit from the public within the meaning of Chapter V of the Act 2013, for the year ended 31st March 2018.
12. STATUTORY STATEMENTS
Information on conservation of energy, technology absorption, foreign exchange, etc.
Relevant information is given in Annexure-I to this Report, in terms of the requirements of Section 134(3)(m) of the Act, 2013 read with the Companies (Accounts) Rules 2014.
Material changes and commitments
There have been no material changes and commitments affecting the financial position of the Company, which have occurred between the end of the financial year of the Company to which the financial statements relate and the date of this Report.
Significant and material orders passed by the Regulators or Courts or Tribunals impacting the going concern status of the Company
There are no significant and material orders passed by the Regulators or Courts or Tribunals, which would impact the going concern status of the Company and its future operations.
Annual Return
Extract of Annual Return in the prescribed form is given as Annexure-II to this report, in terms of the requirement of Section 134(3)(a) of Act, 2013 read with the Companies (Accounts) Rules, 2014.
Employeesâ remuneration
Details of employees receiving the remuneration in excess of the limits prescribed under Section 197 of the Act, 2013 read with Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are annexed as a statement and given in Annexure-lll. In terms of first proviso to Section 136(1) of the Act, 2013 the Annual Report, excluding the aforesaid annexure is being sent to the shareholders of the Company. The annexure is available for inspection at the Registered Office of the Company during business hours as mentioned in Notice of AGM and any shareholder interested in obtaining a copy of the said annexure may write to the Company Secretary at the Registered Office of the Company.
Comparative analysis of remuneration paid
A comparative analysis of remuneration paid to Directors and Employees with the Companyâs performance is given as Annexure-V to this Report.
Details of material related party transactions
Details of material related party transactions under Section 188 of the Act, 2013 read with the Companies (Meetings of Board and its Powers) Rules, 2014, are given in Annexure-VI to this Report in the prescribed form.
Details of loans / guarantees / investments made
During the year under review, the Company had not granted any loans or guarantees covered under Section 186 of the Act, 2013.
Please refer note no.3 to Notes on accounts for the financial year 2017-18, for details of investments made by the Company.
Reporting of fraud
The Auditorâs of the Company have not reported any fraud as specified under Section143(12) of the Act, 2013.
Other laws
During the year under review, the Company has not received any complaint of sexual harassment from any of the women employees of the Company in terms of Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act 2013.
13. ACKNOWLEDGEMENT
The Directors gratefully acknowledge the continued support and co-operation received from the promoters, Harita Group and Mr Martin Grammer. The Directors thank the customers, suppliers, financial institutions and bankers for their valuable support and assistance.
The Directors wish to place on record their appreciation of the good work done by all the employees of the Company during the year under review.
The Directors also thank the shareholders for their continued faith in the Company.
For and on behalf of the Board of Directors
Chennai H Lakshmanan
10th May, 2018 Chairman
Mar 31, 2014
Dear Members,
The directors have pleasure in presenting the eighteenth annual
report of the Company and the audited accounts for the year ended
31st March 2014.
1. FINANCIAL HIGHLIGHTS
(Rs. in lakhs)
Year ended Year ended
Particulars 31.3.2014 31.3.2013
Sales and other income 25,354.39 27,842.86
Gross profit before
financial costs, depreciation
and amortization expenses
and tax 1,558.39 2,295.52
Finance costs 505.92 559.36
Depreciation and
amortization expenses 463.24 422.14
Profit before tax 589.23 1,314.02
Provision for taxation 123.51 246.87
Profit after tax 465.72 1,067.15
Add: Surplus brought
forward 950.04 213.17
Profit available
for appropriation 1,415.76 1,280.32
Appropriations:
Tax relating to earlier years  13.74
Proposed Interim Dividend 116.54 194.23
Dividend tax payable  15.59
Transfer to general reserve 23.30 106.72
Balance surplus in
profit and loss statement
carried forward 1,275.92 950.04
1,415.76 1,280.32
2. DIVIDEND
The board of directors (the board), at its meeting held on 22nd May
2014, declared an interim dividend of Rs.1.50 per share (15%) for the
year 2013-14 absorbing a sum of Rs.116.54 lakhs on 77,69,040 equity
shares of Rs.10/- each. The same will be paid to the shareholders on or
after 31st May 2014.The Company has set-off its dividend distribution
tax payable under Section
115-O(1A) of the Income Tax Act, 1961 against the dividend distribution
tax paid by its subsidiary company on the dividend declared.
The board does not recommend any further dividend for the year under
consideration.
3. MANAGEMENT DISCUSSION AND ANALYSIS REPORT
The Company provides a complete seating solutions for driver and cabin
seating for commercial vehicles, tractors and construction equipment,
as well as passenger seats for buses across all segments and has
established itself as a leader in these segments in the country for
seating systems. This premier position in the country has helped the
Company emerge as the seat provider of choice for new OEMs entering the
country, such as Scania buses.
INDUSTRY STRUCTURE AND DEVELOPMENTS
In 2013-14, the economy grew only at 4.9% as against 5.5% previous
year. In tandem, the industrial sector growth was low at 0.7% which was
1.0% last year. This slowdown can be attributed to all-round
contraction in demand as well as drop in consumer confidence due to the
global economic conditions.
During the fiscal year 2013-14, Rupee depreciated steeply to Rs. 60.10
/ USD from Rs. 53 / USD levels in the previous year.
All the customer segments of the Company in the Indian domestic market
except tractors registered a decline during 2013-14. The following
table highlights the segment wise industry sales figures in vehicle
units.
2013-14 2012-13 Growth /
Category
Nos. Nos. (decline) %
Medium and
Heavy Commercial
Vehicles (M & HCV) 2,24,433 2,87,371 (21.9)
Light Commercial
Vehicles (LCV) 4,85,302 5,85,816 (17.2)
Buses - M & HCV 45,813 53,691 (14.7)
Tractors 6,34,151 5,27,329 20.3
[ Source: SIAM ]
The Company registered sales at Rs.25,012.53 lakhs in 2013-14. During
the year, efficiency in supply chain was improved through inter-plant coordination; horizontal deployment of lean and other improvement
initiatives was done across all plants. These initiatives, along with
the implementation of various other cost reduction projects across
functions have enabled the Company to post a profit before tax of
Rs. 589.23 lakhs in 2013-14.
OPPORTUNITIES AND THREATS
The Company has initiated product development activities to maintain
the leadership position in the tractor segment in the domestic market.
The Company continues to supply products to export markets and is
exploring opportunities to increase export sales.
As a leader in the bus passenger seats with a wide range of seats, the
Company has further strengthened its position with new product variant
launches, including the seats for deluxe, standard and school bus
segments. The Company expects the added features to support further
growth in this segment.
A significant competitive threat is the entry of overseas competition
and the Indian bus body builders getting into seat manufacturing.
During the past years, international seating companies have entered
India with plans for local manufacturing facility either directly or
through joint ventures. The Company continues to invest in the
indigenous design capability to counter and address this threat.
The continued slow-down in the Indian economy is a threat to the
Company owing to the large share of domestic sales. The Company is
taking steps to expand the customer base and market spread to counter
this threat.
PRODUCT-WISE PERFORMANCE
The Company posted a decline of 9.5% in the overall sales. The
Company''s sales declined in the Commercial Vehicle segment and exports
by 8% and 25% respectively.
BUSINESS OUTLOOK AND OVERVIEW
Continuing the depressed growth scenario in the previous year, the
projected GDP growth for 2014-15 is 5.0-5.5%. The M&HCV and LCV
segments are estimated to further decline. Bus segment is also expected
to decline over last year levels. Tractor growth is expected to be
marginal in year 2014-15.
RISKS AND CONCERNS
The domestic market for commercial vehicles, buses and off road
equipment seat has declined last year. The continuing depressed
economic projection for the country is expected to further impact the
commercial vehicles and bus industry. The Company is working across
the entire value chain to improve operational efficiency and maintain
the cost base during the market decline. The Company plans to develop
additional products to maintain its growth plans. The Company has also
put in place initiatives to improve product quality to support the
growth plans.
The Rupee depreciated in the last year as against the US dollar. There
may not be a major recovery in 2014-15, and the Company is taking
suitable forex cover to mitigate the risk in foreign exchange
fluctuations.
OPERATIONS REVIEW
a. Manufacturing:
The Company has continued its focus on imparting training to key
employees in an effort to reskill people and upgrade the manufacturing
processes, apart from improvements in the facility by means of
automation.
Further improvements of Lean Manufacturing initiatives will help the
Company in containing manufacturing costs.
b. Quality:
The Company has earned recognition from customer in the form of best
Supplier award
from Tata Motors Limited and TAFE Motors &Tractors Limited. The Company
was selected for the honour in recognition of its dedication for
providing products and service of outstanding quality as well as its
commitment to continuous improvement. The quality system at the
factories aims at achieving total customer satisfaction through its
focus on improving product quality. Consistently, the Company has been
achieving improved Quality levels at the customer-end, both in their
line and warranty quality.
The Company plants are certified for TS 16949. In addition, the
Quality laboratory at the Company is certified by National
Accreditation Board for Testing and Calibration Laboratories (NABL) for
conformance to ISO/IEC 17025.
100% employee participation in the Company''s improvement programmes
like suggestion schemes, Quality Control Circle projects, Supervisory
Improvement Team projects, Cross Functional Team projects and
Task Force Team projects continued successfully for the 13th year in
succession.
c. Focus on Vendor Development: In the previous year, the Company has
launched a programme to improve capability and competitiveness of its
vendors, in association with CII and Prof. Shoji Shiba, through the
auspices of the Visionary Small and Medium Enterprises Programme. The
pilot programme, run in one plant, had yielded positive results. This
initiative was continued in 2013-14 also to cover other product
segments and associated vendors. The Company will pursue this program
in 2014-15 as well and will cover other vendors under this program.
d. Financial performance:
The financial and operational performance of the Company for the year
2013-14, as compared to the previous year 2012-13, is as follows:
Year ended
Particulars 31st March 2014
Rs. in lakhs %
Income:
Sales 25,012.53 98.65
Other Income 341.86 1.35
Total Income 25,354.39 100.00
Expenditure:
Raw materials and components consumed 18,471.10 72.85
Changes in inventories of finished goods
and work-in-process 30.42 0.12
Staff cost 2,793.23 11.02
Stores and tools consumed 56.59 0.22
Power and fuel 253.48 1.00
Repairs and maintenance 448.37 1.77
Carriage outward & Packing expenses 508.18 2.00
Other expenses 1,234.63 4.87
Finance costs 505.92 2.00
Depreciation and amortization expenses 463.24 1.83
Total expenditure 24,765.16 97.68
Year ended
Particulars 31st March 2013
Rs. in lakhs %
Income:
Sales 27,616.68 99.19
Other Income 226.18 0.81
Total Income 27,842.86 100.00
Expenditure:
Raw materials and components consumed 20,264.92 72.78
Changes in inventories of finished goods
and work-in-process 2.99 0.01
Staff cost 2,564.76 9.21
Stores and tools consumed 102.85 0.37
Power and fue l263.49 0.95
Repairs and maintenance 393.41 1.41
Carriage outward & Packing expenses 760.82 2.73
Other expenses1, 194.10 4.29
Finance costs 559.36 2.01
Depreciation and amortization expenses 422.14 1.52
Total expenditure 26,528.84 95.28
Year ended
Particulars 31st March 2014
Rs. in lakhs %
Profit/(Loss) before exceptional
items and tax 589.23 2.32
Profit before tax 589.23 2.32
Provision for taxation - Current tax 116.00 0.46
- Deferred tax 7.51 0.03
Profit / (Loss) after tax 465.72 1.84
EBITDA/Turnover % 6.15
Profit/(Loss)before tax/turnover % 2.32
Return on capital employed % 11.51
Return on net worth % 11.08
Earnings per share in Rs. 5.99
Year ended
Particulars 31st March 2013
Rs. in lakhs %
Profit/(Loss) before exceptional
items and tax1, 314.02 4.72
Profit before tax1, 314.02 4.72
Provision for taxation - Current tax 277.36 1.00
- Deferred tax (30.49) (0.11)
Profit / (Loss) after tax 1,067.15 3.83
EBITDA/Turn over % 8.24
Profit/(Loss)before tax/turnover % 4.72
Return on capital employed % 22.40
Return on net worth % 29.59
Earnings per share in Rs. 13.74
INTERNAL CONTROLS AND THEIR ADEQUACY
The Company has effective and adequate internal control systems
covering all areas of operations. The internal control system provides
for well documented policies / guidelines, authorisations and approval
procedures. The internal control system stipulates a reasonable
assurance with regard to maintaining of proper accounting controls,
protecting assets from unapproved use and compliance of statutes.
The Internal Controls are supplemented by defined program of periodic
internal audits at all locations and functions based on the plan
approved by the Audit Committee. The observations, if any arising out
of audit are periodically reviewed and compliance ensured. The summary
of the Internal Audit observations and the status on implementation of
corrective actions are reported to the Audit Committee of the Board of
Directors for their review.
HUMAN RESOURCE DEVELOPMENT
The Company has been able to sustain its financial performance despite
the industry slow- down, through the concerted and goal-aligned efforts
by employees across the hierarchy. The Company places on record its
deep appreciation
for the exemplary contribution of the employees at all levels.
The Company continued to induct fresh talent. The Company has upgraded
the training needs identification based on the role requirements and
gaps in this identification are closed by providing training to improve
employee competencies. The Company''s industrial relations continue to
be cordial.
As of 31st March 2014, the Company had 366 employees on its rolls.
COMMUNITY DEVELOPMENT AND SOCIAL RESPONSIBILITY
The Board at its meeting held on 5th November 2013, constituted a
Corporate Social Responsibility Committee with
Mr H Lakshmanan as the Chairman of the Committee and Mr C N Prasad and
Mr S I Jaffar Ali as members.
The Company has a vision to contribute to all round development of the
rural areas around the Company. Some of the activities engaged by the
Company are mentioned below:
a) Providing material support to a government school for improving the
infrastructure in the area.
b) Assisting Self Help Groups in Belagondapalli village near Hosur
Factory and at villages near Ranjangaon Factory on a continuous basis.
c) In order to encourage students in education and motivate them to do
well in their studies, the Company offers scholarships to meritorious
students of schools in nearby villages of the Factories.
CAUTIONARY STATEMENT
Statements in the management discussion and analysis report describing
the Company''s objectives, projections, estimates, expectations may be
forward looking statements within the meaning of applicable Securities
Laws and Regulations. Actual results could differ materially from those
expressed and implied. Important factors that could make a difference
to the Company''s operations include, among other things, economic
conditions affecting the demand, supply and price conditions in the
markets in which the Company operates, changes in government
regulations, tax laws and other statutes and incidental factors.
4. SUBSIDIARY COMPANY
As on the date of this report, Harita Fehrer Limited, Chennai (HFRL) is
the only subsidiary of the Company.
HFRL is a material non-listed Indian subsidiary in terms of sub-clause
III of Clause 49 of the Listing Agreement, as the total turnover of the
subsidiary exceeds 20% of the consolidated turnover of the Company.
The Company is in fully compliant with the provisions as specified in
sub-clause III of Clause 49 of the Listing Agreement. During the
financial year 2013-14, HFRL achieved an income of Rs.28,501.94 lakhs
and registered a profit after tax of Rs. 816.74 lakhs.
5. CONSOLIDATED FINANCIAL STATEMENTS
As required under the Listing Agreement with the Stock Exchanges, the
consolidated financial
statements of the Company are attached.
The Ministry of Corporate Affairs (MCA) vide its circular No.2 in file
No. 51/12/2007-CL-III dated 8th February 2011 has granted general
exemption from attaching annual reports of subsidiaries along with the
annual report of the holding companies without seeking any approval of
the Central Government, subject to the conditions laid down therein.
The board of directors, at the meeting held on 22nd May 2014, passed
necessary resolution confirming compliance with all the conditions
enabling the circulation of annual report of the Company without
attaching all the documents, referred to in Section 212(1) of the
Companies Act, 1956 of the subsidiary company to the shareholders of
the Company.
The annual accounts, reports and other documents of the subsidiary
company will be made available to the stakeholders, on receipt of a
request from them at the registered office of the Company during the
business hours on any working day of the Company. If any member or
investor wishes to inspect the same, it will be available during the
business hours of any working day of the Company.
A statement giving the following information about HFRL consisting of
(a) capital (b) reserves (c) total assets (d) total liabilities (e)
details of investment (f) turnover (g) profit before taxation (h)
provision for taxation (i) profit after taxation and (j) proposed
dividend, has been attached with the consolidated balance sheet of the
Company in compliance with the conditions as provided in the circular
issued by MCA.
6. DIRECTORS
During the year, the Ministry of Corporate Affairs (MCA) has notified
majority of the Sections of the Companies Act, 2013 (the Act, 2013)
which include inter alia provisions relating to selection, manner of
appointment, roles, functions, duties, reappointment of independent
directors (IDs) and the relevant rules under the Act, 2013 and made
them effective 1st April 2014.
The existing composition of the Company''s board is fully in conformity
with the applicable provisions of the Act 2013 and Clause 49 of the
Listing Agreement having the following directors as non-executive IDs,
namely M/s H Lakshmanan, S I Jaffar Ali and C N Prasad.
In terms of the provisions of Section 149(10) read with Section 149(5)
of the Act 2013, IDs are eligible to hold office for a term upto five
consecutive years on the board and eligible for re-appointment for the
second term on passing special resolutions by the Company. During the
period, they will not be liable to ''retire by rotation'' as per the
provisions of Sections 150(2) and 152(2) read with Schedule IV to the
Act, 2013.
It is, therefore, proposed to appoint them as IDs for a consecutive
period of five years at the ensuing annual general meeting. Necessary
declarations have been obtained from them, as envisaged under the Act,
2013.
Both the Nomination and Remuneration Committee and the board also
ensured that their appointments as IDs are in compliance with the
requirements under the relevant statutes and that there were
appropriate balance of skills, experience and knowledge in the board,
so as to enable the board to discharge its functions and duties
effectively.
Notices in writing signifying the intention to offer their candidatures
as IDs of the Company along with the requisite deposit have been
received from members of the Company in terms of Section 160 of the
Act, 2013.
In terms of the provisions of sub-section (6) read with explanation to
Section 152 of the Act 2013, two-third of the total number of directors
i.e., excluding IDs, are liable to retire by rotation and out of which,
one-third is liable to retire by rotation at every annual general
meeting.
Mr Martin Grammer, director of the Company, is, therefore, liable to
retire by rotation, at the ensuing annual general meeting, and being
eligible, offers himself for re-appointment.
The brief resume of these directors proposed to be appointed and
reappointed and other relevant information have been furnished in the
Notice of AGM. Appropriate resolutions for their appointment /
reappointment are being placed for approval of the shareholders at the
annual general meeting.
The board, therefore, recommend their appointment / re-appointment as
directors of the Company.
7. AUDITORS
Statutory Auditors
The Company, in terms of Section 139 (1) and (2) of the Act, 2013 (the
Act) is required to appoint a statutory auditor for a term of five
consecutive years i.e., till the conclusion of sixth annual general
meeting and ratify their appointment, during the period, in every
annual general meeting, till the sixth such meeting by way of passing
of an ordinary resolution.
The period, for which any firm has held office as auditor prior to the
commencement of the Act, 2013 will be taken into account for
calculating the period of five consecutive years, as per the fourth
proviso to Section 139(2) of the Act, 2013 read with Rule 6(3) of the
Companies (Audit and Auditors) Rules, 2014.
M/s. Sundaram & Srinivasan, Chartered Accountants, Chennai, who were
earlier appointed as statutory auditors of the Company, were
functioning as auditor for more than ten years. Hence, they are
eligible to be appointed for the transitional period of three years in
terms of the aforesaid provisions and rules under the Act, 2013.
It is proposed to appoint them as statutory auditors for the
transitional period of three years, subject to the approval and
ratification by the shareholders at the ensuing annual general meeting
and at subsequent annual general meeting during the transitional
period.
The Company has obtained necessary certificate under Section 141 of the
Act, 2013 conveying their eligibility for the above appointment. The
audit committee and board reviewed their eligibility criteria, as laid
down under Section 141 of the Act, 2013 and recommended their
appointment as auditors for the aforesaid period by the members.
Cost Auditor
As required under the Companies (Cost Accounting Records) Rules 2011,
the Company filed the Cost Audit Report for the financial year 2012-13
in XBRL format.
The board of directors, subject to the approval of the Central
Government, has re-appointed M/s. Raman & Associates, Cost Accountants,
Chennai, with Firm Registration No. 000050, as Cost Auditors for
conducting the Cost Audit for the financial year 2014-15. The audit
committee of directors recommended their appointment and remuneration
subject to the compliance of all the requirements as stipulated in
circular no.15/ 2011 dated 11th April 2011 issued by the MCA.
The Company has also received necessary certificate under Section 141
of the Act, 2013 conveying their eligibility for re-appointment. The
remuneration fixed by the board, based on the recommendation of the
audit committee is required to be ratified by the members at the
ensuing annual general meeting as per the requirement of Section 148(3)
of the Act, 2013.
Secretarial Auditor
As required under Section 204 of the Act, 2013 and the Companies
(Appointment and Remuneration of Managerial Personnel) Rules 2014, the
Company is required to appoint a
Secretarial Auditor for auditing the secretarial and related records of
the Company and to provide a report in this regard.
Accordingly, Ms B Chandra, Practising Company Secretary, has been
appointed as Secretarial Auditor for carrying out the secretarial audit
for the financial year 2014-2015 for attaching the report with the
Board''s report to the shareholders.
8. CORPORATE GOVERNANCE
The Company has been practicing the principles of good corporate
governance over the years and lays strong emphasis on transparency,
accountability and integrity.
A separate section on corporate governance and a certificate from the
statutory auditors of the Company regarding compliance of conditions of
Corporate Governance, as stipulated under Clause 49 of the Listing
Agreement with the Stock Exchanges form part of this Annual Report.
The President cum Manager (CEO) and the General Manager - finance (CFO)
of the Company have certified to the board on financial statements and
other matters in accordance with Clause 49(V) of the Listing Agreement
pertaining to CEO/CFO certification for the financial year ended 31st
March 2014.
9. STATUTORY STATEMENTS
a. Conservation of energy, technology absorption and foreign exchange
earnings and outgo:
As per the requirements of Section 217(1)(e) of the Companies Act,
1956, read with the Companies (Disclosure of Particulars in the Report
of Board of Directors) Rules, 1988, the information regarding
conservation of energy, technology absorption and foreign exchange
earnings and outgo are given in Annexure I to this report.
b. Particulars of employees:
The particulars required pursuant to Section 217(2A) of the Companies
Act, 1956 read with the Companies (Particulars of Employees) Rules,
1975 as amended, are given in Annexure II to this report. However, in
terms of the provisions of Section 219(1)(b)(iv) of the Companies Act,
1956, the Directors'' Report (excluding Annexure II) is being sent to
all the shareholders of the Company. Any shareholder interested in
obtaining a copy of the said annexure may write to the Company
Secretary at the registered office of the Company.
c. Public Deposits:
The Company has not accepted any deposit from the public within the
meaning of Section 58A of the Companies Act, 1956, for the year ended
31st March 2014.
d. Directors'' Responsibility Statement
In accordance with the provisions of Section 217(2AA) of the Companies
Act, 1956 with respect to Directors'' Responsibility Statement, it is
hereby stated:
i) that in the preparation of annual accounts for the financial year
ended 31st March, 2014, the applicable accounting standards had been
followed and that there were no material departures;
ii) that the directors had selected such accounting policies and
applied them consistently and made judgements and estimates that were
reasonable and prudent so as to give a true and fair view
of the state of affairs of the Company at the end of the financial year
and of the profit of the Company for the year under review;
iii) that the directors had taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with the
provisions of the Companies Act, 1956 for safeguarding the assets of
the Company and for preventing and detecting fraud and other
irregularities; and
iv) that the directors had prepared the accounts for the financial year
ended 31st March 2014 on a "going concern basis".
10.ACKNOWLEDGEMENT
The directors acknowledge the support and co-operation received from
the promoters, Harita Group and Mr Martin Grammer.
The directors thank the customers, suppliers, financial institutions
and bankers for their valuable support and assistance.
The directors wish to place on record their appreciation of the sincere
efforts of all the employees of the Company during the year under
review.
The directors also thank the shareholders for their continued faith in
the Company.
For and on behalf of the Board
Chennai H LAKSHMANAN
22nd May 2014 Chairman
Mar 31, 2013
To The Shareholders
The directors have pleasure in presenting the seventeenth annual report
of the Company and the audited accounts for the year ended 31st March
2013.
1. FINANCIAL HIGHLIGHTS
(Rs. in lakhs)
Year ended Year ended
Particulars 31.3.2013 31.3.2012
Sales and other income 27,842.86 30,890.03
Gross profit before financial
costs, depreciation and
amortization expenses
and tax 2,295.52 2,364.22
Finance costs 559.36 663.70
Depreciation and
amortization expenses 422.14 434.38
Profit / (Loss) before
exceptional items and tax 1,314.02 1,266.14
Exceptional items (income) 151.82
Profit before tax 1,314.02 1,417.96
Provision for taxation 246.87 295.95
Profit / (Loss) after tax 1,067.15 1,122.01
Add: Surplus brought forward 213.17 (493.99)
Profit / (Loss) available for
appropriation 1,280.32 628.02
Appropriations:
Tax relating to earlier years 13.74 3.25
Proposed Interim Dividend 194.23 271.92
Dividend tax payable 15.59 27.48
Transfer to general reserve 106.72 112.20
Balance surplus in profit
and loss statement
carried forward 950.04 213.17
2. DIVIDEND
The board, at its meeting held on 22nd May 2013, declared an interim
dividend of Rs. 2.50/- per share (25%) for the year 2012-13 absorbing a
sum of Rs.209.82 lakhs including dividend distribution tax on 77,69,040
equity shares of Rs.10/- each. The same will be paid to the
shareholders on 5th June 2013.
The directors of the Company do not recommend any further dividend for
the year under consideration.
3. SUBSIDIARY COMPANY
As on the date of this report, Harita Fehrer Limited, Chennai (HFRL) is
the only subsidiary of the Company.
HFRL is a material non-listed Indian subsidiary in terms of sub-clause
III of Clause 49 of the Listing Agreement, as the total turnover of the
subsidiary exceeds 20% of the consolidated turnover of the Company.
The Company is fully compliant with the provisions as specified in
sub-clause III of clause 49 of the Listing Agreement. During the
financial year 2012-13, HFRL achieved an income of Rs. 277.03 crores
and registered a profit after tax of Rs. 1.84 crores.
5. CONSOLIDATED FINANCIAL STATEMENTS
The annual accounts of the subsidiary for the year ended 31st March
2013 is consolidated with the accounts of the Company in accordance
with Accounting Standards as prescribed under Section 211(3C) of the
Companies Act, 1956 and as required under the Listing Agreement. These
financial statements disclose the assets, liabilities, income, expenses
and other details of the Company and its subsidiary.
The Ministry of Corporate Affairs (MCA) vide its circular No.2 in file
No. 51/12/2007-CL-III dated 8th February 2011 has granted general
exemption under Section 212(8) of the Companies Act, 1956 for holding
companies from attaching annual reports of subsidiaries along with its
annual report without seeking any approval of the Central Government.
However, this is subject to fulfilment of conditions as stipulated in
the said circular granting general exemption to the holding company and
passing of a resolution by the board of the holding company in this
regard.
The board of directors at the meeting held on 22nd May 2013 passed
necessary resolution for complying with all the conditions enabling the
circulation of annual report to the shareholders of the Company without
attaching all the documents of the subsidiary company, referred to in
Section 212(1) of the Companies Act, 1956.
The annual accounts, reports and other documents of the subsidiary
company will be made available to the members, on receipt of a request
from them. The annual accounts of the subsidiary company will be
available at the registered office of the Company and at the registered
office of the subsidiary company. If any member or investor wishes to
inspect the same, it will be available during the business hours of any
working day at the registered office of the Company.
A statement giving the following information about HFRL consisting of
(a) capital (b) reserves (c) total assets (d) total liabilities (e)
details of investment (f) turnover (g) profit before taxation (h)
provision for taxation (i) profit after taxation and (j) proposed
dividend, has been attached with the consolidated balance sheet of the
Company in compliance with the conditions as provided in the circular
issued by MCA.
6. DIRECTORS
Mr C N Prasad, director, retires at the ensuing annual general meeting
of the Company and being eligible, offers himself for reappointment.
The brief resume of Mr C N Prasad, director has been detailed in the
notice convening the annual general meeting of the Company. Appropriate
resolution for his re-appointment is being placed for approval of the
shareholders at the ensuing annual general meeting. The directors
recommend his re-appointment as director of the Company.
7. AUDITORS
M/s. Sundaram & Srinivasan, Chartered Accountants, Chennai, retire at
the ensuing annual general meeting and are eligible for re-appointment.
The Company has received a letter from them, stating that the
appointment, if made, will be within the limit prescribed under Section
224(1B) of the Companies Act, 1956.
8. COST AUDITOR
In terms of the Companies (Cost Accounting) Records Rules, 2011, the
Company had filed the Cost Compliance Report for the financial year
2011-12 with the Ministry of Company Affairs (MCA) in XBRL format.
Consequent to the MCA''s industry specific Cost Audit Order No.
52/26/CAB-2010 dated 24th January 2012, the Company appointed M/s Raman
& Associates, Cost Accountants, Chennai for auditing the cost
accounting information for the financial year 2012 - 13 and a report in
this regard will be filed with the Central Government within the
stipulated time. The Central Government has also approved the
appointment of M/s Raman & Associates, Cost Accountants, Chennai as
Cost Auditors for the said financial year.
The board, at its meeting held on 22nd May 2013, re-appointed M/s Raman
& Associates, Cost Accountants, Chennai as Cost Auditors of the Company
for the financial year 2013-14, subject to approval of the Central
Government. The Company has received a letter from them, stating that
the appointment, if made, will be within the prescribed limit under
Section 224(1B) of the Companies Act, 1956.
9. CORPORATE GOVERNANCE
The Company has been practicing the principles of good corporate
governance over the years and lays strong emphasis on transparency,
accountability and integrity.
A separate section on Corporate Governance and a certificate from the
statutory auditors of the Company regarding compliance of conditions of
Corporate Governance as stipulated under Clause 49 of the Listing
Agreement with the Stock Exchanges form part of the Annual Report.
The president and the general manager - finance of the Company have
certified the financial statements and other connected matters in
accordance with Clause 49(V) of the Listing Agreement pertaining to
CEO/CFO certification for the financial year ended 31st March 2013.
10.STATUTORY STATEMENTS
a. Conservation of energy, technology absorption and foreign exchange
earnings and outgo:
As per the requirements of Section 217(1)(e) of the Companies Act,
1956, read with The Companies (Disclosure of Particulars in the Report
of Board of Directors) Rules, 1988, information regarding conservation
of energy, technology absorption and foreign exchange earnings and
outgo are given in Annexure I to this report.
b. Particulars of employees:
There is no employee receiving remuneration in excess of the limits
prescribed under Section 217 (2A) of the Companies Act, 1956, read with
the Companies (Particulars of Employees) Rules 1975 as amended.
c. Public Deposits:
The Company has not accepted any deposit from the public within the
meaning of Section 58A of the Companies Act, 1956, for the year ended
31st March 2013.
d. Directors'' Responsibility Statement: Pursuant to the requirement of
Section 217(2AA) of the Companies Act, 1956 with respect to directors''
responsibility statement, it is hereby confirmed:
(i) that in the preparation of annual accounts for the financial year
ended 31st March, 2013, the applicable accounting standards had been
followed and there were no material departures;
(ii) that the directors had selected such accounting policies and
applied them consistently and made judgements and estimates that were
reasonable and prudent so as to give a true and fair view of the state
of affairs of the Company at the end of the financial year and of the
profit of the Company for the year under review;
(iii) that the directors had taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with the
provisions of the Companies Act, 1956 for safeguarding the assets of
the Company and for preventing and detecting fraud and other
irregularities; and
(iv) that the directors had prepared the accounts for the financial
year ended 31st March 2013 on a "going concern basis".
11.ACKNOWLEDGEMENT
The directors acknowledge the support and co- operation received from
the promoters, Harita Group and Mr Martin Grammer.
The directors thank the customers, suppliers, financial institutions
and bankers for their valuable support and assistance.
The directors wish to place on record their appreciation of the sincere
efforts of all the employees of the Company during the year under
review.
The directors also thank the shareholders for their continued faith in
the Company.
For and on behalf of the Board
Chennai H LAKSHMANAN
22nd May 2013 Chairman
Mar 31, 2012
The directors have pleasure in presenting the sixteenth annual report
of the Company and the audited accounts for the year ended 31st March
2012.
1. FINANCIAL HIGHLIGHTS
(Rs. in lakhs)
Year ended Year ended
31.3.2012 31.3.2011
Sales and other income 30890.03 24231.80
Gross profit before financial
costs, depreciation and amortization
expenses and tax 2,364.22 594.85
Financial costs 663.70 747.29
Depreciation and
amortization expenses 434.38 431.66
Profit / (Loss) before
exceptional items and tax 1,266.14 (584.10)
Exceptional items (income) 151.82 -
Profit before tax 1,417.96 (584.10)
Provision for taxation 295.95 (74.11)
Profit / (Loss) after tax 1,122.01 (509.99)
Add: Surplus brought forward (493.99) 17.20
Profit / (Loss) available
for
appropriation 628.02 (492.79)
Appropriations:
Tax relating to earlier years (3.25) (1 20)
Proposed Interim Dividend 271.92 -
Dividend tax payable 27.48 -
Transfer to general reserve 112.20 -
Surplus in profit and loss
statement carried
forward 213.17 (493.99)
2. DIVIDEND
The board of directors of the Company at their meeting held on 30th May
2012, declared an interim dividend of Rs.3.50 per share for the year
ended 31st March 2012, absorbing a sum of Rs.299.40 lakhs (including
dividend distribution tax) on 77,69,040 equity shares of Rs.10/- each
fully paid up. The same will be paid on or after 11th June 2012.
The directors of the Company do not recommend any further dividend for
the year under consideration.
4. SUBSIDIARY COMPANY
As on the date of this report, Harita Fehrer Limited, Chennai (HFRL) is
the only subsidiary of the Company. HFRL is a material non-listed
Indian subsidiary in terms of sub-clause III of Clause 49 of the
Listing Agreement, as the total turnover of the subsidiary exceeds 20%
of the consolidated turnover of the Company.
The Company is fully compliant with the provisions as specified in
sub-clause III of Clause 49 of the Listing Agreement. During the
financial year 2011-12, HFRL achieved an income of Rs. 294.76 Cr and
registered a profit after tax of Rs. 11.04 Cr. It had declared a maiden
dividend of 10% for the year 2011 -2012.
5. CONSOLIDATED FINANCIAL STATEMENTS
The annual accounts of the subsidiary for the year ended 31st March
2012 is consolidated with the accounts of the Company in accordance
with Accounting Standards as prescribed under Section 211(3C) of the
Companies Act, 1956 and as required under the Listing Agreement. These
financial statements disclose the assets, liabilities, income, expenses
and other details of the Company and its subsidiary.
The Ministry of Corporate Affairs (MCA) vide its circular No. 2 in file
No. 51/12/2007-CL-III dated 8th February 2011 has granted general
exemption under Section 212(8) of the Companies Act, 1956 for holding
companies from attaching annual reports of subsidiaries along with its
annual report without seeking any approval of the Central Government.
However, this is subject to fulfillment of conditions as stipulated in
the said circular granting general exemption to the holding company and
passing of a resolution by the board of the holding company in this
regard.
The board of directors at the meeting held on 30th May 2012 passed
necessary resolution for complying with all the conditions enabling the
circulation of annual report to the shareholders of the Company without
attaching all the documents of the subsidiary company, referred to in
Section 212(1) of the Companies Act, 1956. The annual accounts,
reports and other documents of the subsidiary company will be made
available to the members, on receipt of a request from them. The
annual accounts of the subsidiary company will be available at the
registered office of the Company and at the registered office of the
subsidiary company. If any member or investor wishes to inspect the
same, it will be available during the business hours of any working day
at the registered office of the Company.
A statement giving the following information about HFRL consisting of
(a) capital (b) reserves (c) total assets (d) total liabilities (e)
details of investment (f) turnover (g) profit before taxation (h)
provision for taxation (i) profit after taxation and (j) proposed
dividend, has been attached with the consolidated balance sheet of the
Company in compliance with the conditions as provided in the circular
issued by MCA.
6. DIRECTORS
Mr Martin Grammer, director, retires at the ensuing annual general
meeting of the Company and being eligible, offers himself for
re-appointment.
Mr Ram Natarajan was appointed as an additional, non executive and
independent director of the Company effective 10th November 2011. Mr
Ram Natarajan will hold office upto this annual general meeting.
A notice in terms of Section 257 of the Companies Act, 1956 has been
received from a member of the Company signifying his proposal for the
appointment of Mr Ram Natarajan as a director of the Company.
The brief resume of Mr Martin Grammer and Mr Ram Natarajan, directors,
have been detailed in the notice convening the annual general meeting
of the Company. Appropriate resolutions for their re-appointment and
appointment are being placed for approval of the shareholders at the
ensuing annual general meeting. The directors recommend their
re-appointment / appointment as directors of the Company.
7. AUDITORS
M/s.Sundaram & Srinivasan, Chartered Accountants, Chennai, retire at
the ensuing annual general meeting and are eligible for re-appointment.
The Company has received a letter from them, stating that the
appointment, if made, will be within the limit prescribed under Section
224(1 B) of the Companies Act, 1956.
8. COST AUDITOR
MCA issued an industry specific Cost Audit Order vide No.
52/26/CAB-2010 dated 24th January 2012, thereby requiring all such
companies, which are in the manufacturing activities of automotive
components (covered under Central Excise Tariff Chapter Nos. 84, 87) to
appoint a Cost Auditor for auditing the cost accounting information
effective 1st April 2012 for the financial year 2012-13 and file a
report with the Central Government, on or before 30th September of
every year.
The board of directors, in view of this industry specific order, at
their meeting held on 30th May 2012 appointed M/s. Raman & Associates,
Cost Accountants, Chennai, as Cost Auditor for carrying out the cost
audit of the Company for the financial year 2012-2013, subject to the
compliance of all the requirements, as stipulated in circular
no.15/2011 dated 11th April 2011 issued by MCA and subject to the
approval of the Central Government.
The Company has received a letter from the said Cost Audit firm,
stating that the appointment, if made, will be within the prescribed
limit under Section 224(1 B) of the Act.
For the financial year under review, a Cost Compliance report will be
obtained and filed with MCA on or before 30th September 2012 in terms
of Companies (Cost Accounting) Records Rules, 2011.
9. CORPORATE GOVERNANCE
The Company has been practicing the principles of good corporate
governance over the years and lays strong emphasis on transparency,
accountability and integrity.
A separate section on Corporate Governance and a certificate from the
statutory auditors of the Company regarding compliance of conditions of
Corporate Governance as stipulated under Clause 49 of the Listing
Agreement with the Stock Exchanges form part of the Annual Report.
The president and the general manager - finance of the Company have
certified the financial statements and other connected matters in
accordance with Clause 49(V) of the Listing Agreement pertaining to
CEO/CFO certification for the financial year ended 31st March 2012.
10. STATUTORY STATEMENTS
a. Conservation of energy, technology absorption and foreign exchange
earnings and outgo:
As per the requirements of Section 217(1)(e) of the Companies Act,
1956, read with The Companies (Disclosure of Particulars in the Report
of Board of Directors) Rules, 1988, information regarding conservation
of energy, technology absorption and foreign exchange earnings and
outgo are given in Annexure I to this report.
b. Particulars of employees:
There is no employee receiving remuneration in excess of the limits
prescribed under Section 217 (2A) of the Companies Act, 1956, read with
the Companies (Particulars of Employees) Rules 1975 as amended.
c. Public Deposits:
The Company has not accepted any deposit from the public within the
meaning of Section 58A of the Companies Act, 1956, for the year ended
31st March 2012.
d. Directors' Responsibility Statement: Pursuant to the requirement of
Section 217(2AA) of the Companies Act, 1956 with respect to directors'
responsibility statement, it is hereby confirmed:
(i) that in the preparation of annual accounts for the financial year
ended 31st March 2012, the applicable accounting standards had been
followed and there were no material departures;
(ii) that the directors had selected such accounting policies and
applied them consistently and made judgments and estimates that were
reasonable and prudent so as to give a true and fair view of the state
of affairs of the Company at the end of the financial year and of the
profit of the Company for the year under review;
(iii) that the directors had taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with the
provisions of the Companies Act, 1956 for safeguarding the assets of
the Company and for preventing and detecting fraud and other
irregularities; and
(iv)that the directors had prepared the accounts for the financial year
ended 31st March 2012 on a "going concern basis".
11. ACKNOWLEDGEMENT
The directors acknowledge the support and co- operation received from
the promoters, Harita Group and Mr Martin Grammer.
The directors thank the customers, suppliers, financial institutions
and bankers for their valuable support and assistance.
The directors wish to place on record their appreciation of the sincere
efforts of all the employees of the Company during the year under
review.
The directors also thank the shareholders for their continued faith in
the Company.
For and on behalf of the Board
Chennai H LAKSHMANAN
30th May 2012 Chairman
Mar 31, 2011
Dear Members,
The directors have pleasure in presenting the fifteenth annual report
of the Company and the audited accounts for the year ended 31st March
2011.
I. FINANCIAL HIGHLIGHTS
(Rs. in lakhs)
Year ended Year ended
31.3.2011 31.3.2010
Sales and other income 23,195.17 23,249.86
Gross profit before interest,
depreciation and tax 580.04 1,487.56
Interest 732.48 704.44
Depreciation 431.66 883.52
Profit / (Loss) before tax (584.10) (100.40)
Provision for taxation
(including deferred tax) (74.11) (109.21)
Profit / (Loss) after tax (509.99) 8.81
Add: Surplus brought
forward 17.20 -
Profit / (Loss) available
for appropriation (492.79) 8.81
Appropriations:
Tax relating to earlier years 1.20 (8.39)
Surplus / (Deficit) in
profit and loss account (493.99) 17.20
2. DIVIDEND
The board of directors of the Company has not recommended any dividend
for the year ended 31st March 2011.
4. SUBSIDIARY COMPANY
As on the date of this report, Harita Fehrer Limited, Chennai (HFRL) is
the only subsidiary of the Company.
During the year, the subsidiary company allotted 30,14,676 additional
equity shares of Rs.10/- each for cash at a premium of Rs.41.78 per
share to M/s F.S. Fehrer Automotive GmbH, Germany (Fehrer), on 14th
February 2011 on a preferential basis, in pursuance of the Joint
Venture arrangement between the Company and Fehrer.
During the year, the shareholding of the Company in HFRL, in view of
the above allotment of shares by HFRL to Fehrer, got reduced from 60%
to 51%. However HFRL continues to be a subsidiary of the Company in
terms of Section 4(1)(b) of the Companies Act, 1956.
HFRL is a material non-listed Indian subsidiary in terms of sub-clause
III of clause 49 of the Listing Agreement, as the total turnover of the
subsidiary exceeds 20% of the consolidated turnover of the Company.
The Company is fully compliant with the provisions as specified in
sub-clause III of clause 49 of the Listing Agreement.
During the financial year 2010-11, HFRL achieved an income of Rs.246.67
Cr and registered a profit after tax of Rs.2.12 Cr.
5. CONSOLIDATED FINANCIAL STATEMENTS
The annual accounts of the subsidiary for the year ended 31st March
2011 is consolidated with the accounts of the Company in accordance
with Accounting Standards as prescribed under Section 211(3C) of the
Companies Act, 1956 and as required under the Listing Agreement. These
financial statements disclose the assets, liabilities, income, expenses
and other details of the Company, its subsidiaries and associates.
The Ministry of Corporate Affairs (MCA) vide its circular No. 2 in file
No. 51/12/2007-CL-III dated 8th February 2011 has granted general
exemption under Section 212(8) of the Companies Act, 1956 for holding
companies from attaching annual reports of subsidiaries along with the
annual report of the holding companies without seeking any approval of
the Central Government. However, this is subject to fulfilment of
conditions as stipulated in the said circular granting general
exemption to the holding company and passing of a resolution by the
board of the holding company in this regard.
The board of directors at their meeting held on 2nd May 2011 passed
necessary resolution for complying with all the conditions enabling the
circulation of annual report to the shareholders of the Company without
attaching all the documents referred to in Section 212(1) of the
Companies Act, 1956 of the subsidiary company.
The annual accounts, reports and other documents of the subsidiary
company will be made available to the members, on receipt of a request
from them. The annual accounts of the subsidiary company will be
available at the registered office of the Company and at the registered
office of the subsidiary company. If any member or investor wishes to
inspect the same, it will be available during the business hours of any
working day at the registered office of the Company.
A statement giving the following information about HFRL consisting of
(a) capital (b) reserves (c) total assets (d) total liabilities (e)
details of investment (f) turnover (g) profit before taxation (h)
provision for taxation (i) profit after taxation has been attached with
the consolidated balance sheet of the Company in compliance with the
conditions as provided in the circular issued by MCA.
6. DIRECTORS
During the year, Mr H Lakshmanan, director was re-appointed as chairman
of the Board of Directors, for a further period of five years effective
24th April 2011 in terms of the Articles of Association of the Company.
Mr S I Jaffar Ali, director, retires at the ensuing annual general
meeting of the Company and being eligible, offers himself for
re-appointment.
His brief resume and other information have been detailed in the notice
convening the annual general meeting of the Company. Appropriate
resolution for his re-appointment is being placed for approval of the
shareholders at the ensuing annual general meeting. The directors
recommend his re-appointment as a director of the Company.
7. AUDITORS
M/s. Sundaram & Srinivasan, Chartered Accountants, Chennai, the
statutory Auditors of the Company retire at the ensuing annual general
meeting and are eligible for re-appointment.
The Company has received a letter from them, stating that the
appointment, if made, will be within the limit prescribed under Section
224(1B) of the Companies Act, 1956.
8. CORPORATE GOVERNANCE
The Company has been practicing the principles of good corporate
governance over the years and lays strong emphasis on transparency,
accountability and integrity.
A separate section on corporate governance and a certificate from the
statutory auditors of the Company regarding compliance of conditions of
corporate governance as stipulated in clause 49 of the Listing
Agreement with the Stock Exchanges form part of the annual report.
The president and the general manager - finance of the Company have
certified to the board on financial statements and other matters in
accordance with clause 49(V) of the Listing Agreement pertaining to
CEO/CFO certification for the financial year ended 31st March 2011.
9. STATUTORY STATEMENTS
a. Conservation of energy, technology absorption and foreign exchange
earnings and outgo:
As per the requirements of Section 217(1)(e) of the Companies Act,
1956, read with The Companies (Disclosure of Particulars in the Report
of Board of Directors) Rules, 1988, information regarding conservation
of energy, technology absorption and foreign exchange earnings and
outgo are given in Annexure I to this report.
b. Particulars of employees:
There is no employee receiving remuneration excess of the limits
prescribed under Section 217 (2A) of the Companies Act, 1956, read with
the Companies (Particulars of Employees) Rules 1975 as amended.
c. Public Deposits:
The Company has not accepted any deposit from the public within the
meaning of Section 58A of the Companies Act, 1956, for the year ended
31st March 2011.
d. Directors' Responsibility Statement:
Pursuant to the requirement of Section 217(2AA) of the Companies Act,
1956, with respect to directors' responsibility statement, it is hereby
confirmed:
(i) that in the preparation of annual accounts for the financial year
ended 31st March 2011, the applicable Accounting Standards had been
followed and that there are no material departures;
(ii) that the directors had selected such accounting policies and
applied them consistently and made judgements and estimates that were
reasonable and prudent so as to give a true and fair view of the state
of affairs of the Company at the end of the financial year and of the
loss of the Company for the year under review;
(iii) that the directors had taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with the
provisions of the Companies Act, 1956, for safeguarding the assets of
the Company and for preventing and detecting fraud and other
irregularities; and
(iv) that the directors had prepared the accounts for the financial
year ended 31st March 2011 on a "going concern basis".
10.ACKNOWLEDGEMENT
The directors gratefully acknowledge the continued support and
co-operation received from the promoters, Harita Group and Mr Martin
Grammer.
The directors thank the customers, suppliers, financial institutions
and bankers for their valuable support and assistance.
The directors wish to place on record their appreciation for the
sincere efforts of all the employees of the Company during the year
under review.
The directors also thank the investors for their continued faith in the
Company.
For and on behalf of the Board
H LAKSHMANAN
Chairman
Chennai
3rd August 2011
Mar 31, 2010
The directors have pleasure In presenting the fourteenth annual report
of the Company and the audited accounts for the year ended 31st March
2010.
1. FINANCIAL HIGHLIGHTS
Rs. in lakhs
Year ended Year ended
31.3.2010 31.3.2009
Sales and other Income 23,249.86 19,822.16
Gross profit before interest,
depreciation and tax 1,487.56 330.76
Interest 704.44 424.77
Depreciation 883.52 696.92
Profit / (Loss) before tax (100.40) (790.93)
Provision for taxation
(Including FBT and
Deferred Tax) (109.21) 101.16
Profit / (Loss) after tax 3.81 (892.09)
Add: Surplus brought forward - 230.94
Profit / (Loss) available
for appropriation 3.81 (661.15)
Appropriations;
Tax relating to earlier years (8.39) (16.63)
Depreciation relating to
earlier years - (0.30)
Surplus / (deficit) in
profit and loss account 17.20 (644.22)
2. DIVIDEND
The board of directors of the Company has not recommended cny dividend
for the year ended 31 * March 2010 in view of the inadequacy of profits
of the Company.
4. SUBSIDIARY COMPANY
During the year under review, the name of the Companys subsidiary
"Harita Polymer Limited" was changed to "Harita Fehrer Limited" (HFRL)
effective 21st August 2009.
During the year, the board of directors, as approved by the
shareholders in terms of Section 293(1 )(a) of the Companies Act, 1956
through the process of Postal Ballot, transferred the following
businesses namely:
(a) business owned by the Company viz., foaming business, two wheeler
and three wheeler seats, seat cushions. Long Fibre Injection (LFI) and
Micro Cellular Urethane (MCU) products; and
(b) all foaming and fabrication business as acquired by the Company
from M/s. Polyflex India Private Limited and Polyflex Engineering
Private Limited to and In favour of HFRL effective 22nd January 2010,
1oge1hei wilh aii assels, which include property, rights and powers and
liabilities, which include duties of every description relating to the
aforesaid businesses.
The shareholders also authorized the board of directors to determine
the consideration for the said transfer of business. Accordingly, the
board of directors fixed the sale consideration at Rs. 46.50 Cr which
was settled partly by way of allotment of 1,02,00,000 equity shares of
Rs. 10/- each at a premium of Rs. 17/- per share amounting to Rs.27.54
Cr in the equity capital of HFRL and the balance consideration of Rs.
18.96 Cr by way of cash, both aggregating to Rs.46.50 Cr.
During the year, the Company and M/S.F.S Fehrer Automotive GmbH,
Germany (Fehrer) entered into a Joint Venture agreement on 28th May
2009 to control and manage the business activities of HFRL. In terms
of the said Joint Venture agreement, HFRL allotted 68,33,364 equity
shares of Rs. 10/- each for cash at a price of Rs. 101.54 per share
(including a premium of Rs.91.54 per share) aggregating to Rs.69.39 Cr
to its foreign collaborators, namely Fehrer on 8th February 2010.
The shareholding of the Company in HFRL, in view of the above allotment
of shares by HFRL to Fehrer, got reduced from 100% to 60%. Hence, the
status of HFRL changed from that of the wholly owned subsidiary to that
of a subsidiary of the Company effective 8th February 2010.
It may be noted from the annual accounts of HFRL, that it has become a
material non-listed Indian subsidiary in terms of sub-clause III of
clause 49 of the Listing Agreement, as the total turnover of the
subsidiary exceeds 20% of the consolidated turnover of the Company.
Shareholders ate requested to note that the Company is fully compliant
with the provisions of the aforesaid clause 49 of the Listing
Agreement.
As on the date of this report, HFRL is the only subsidiary of the
Company.
The annual accounts of the subsidiary for the period ended 31st March
2010 is consolidated with the accounts of the Company in accordance
with Accounting Standard 21 (AS 21) prescribed by The Institute of
Chartered Accountants of India pursuant to clause 32 of the Listing
Agreement. The consolidated accounts duly audited by the statutory
auditors of the Company and the consolidated financial information of
the subsidiary form part of the annual report.
As required by Section 212 of the Companies Act, 1956, a statement and
a copy of the audited annual accounts of HFRL, for the period ended
31st March 2010 together with reports of the directors and the
statutory auditors are attached to the balance sheet of the Company.
5. DIRECTORS
During the year, Mr C N Prasad, director, retires at the ensuing annual
general meeting of the Company and being eligible, offers himself for
re- appointment.
His brief resume and other information have been detailed in the notice
convening annual general meeting of the Company. Appropriate resolution
for his re-appointment is being placed for approval of the shareholders
at the ensuing annual general meeting. Your directors recommend his
re-appointment as a director of the Company.
6. AUDITORS
M/s. Sundaram & Srinivasan, Chartered Accountants, Chennai, retire at
the ensuing annual general meeting and are eligible for
le-appoinlrnent.
The Company has received a letter from them, stating that the
appointment, if made, will be within the limit prescribed under Section
224(1 B) of the Companies Act, 1956.
7. CORPORATE GOVERNANCE
The Company has been practicing the principles of good corporate
governance over the years and lays strong emphasis on transparency,
accountability and integrity.
A separate section on Corporate Governance and a certificate from the
statutory auditors of the Company regarding compliance of conditions of
Corporate Governance as stipulated under Clause 49 of the Listing
Agreement with the Stock Exchanges form part of the Annual Report.
The president and the senior manager (finance) of the Company have
certified the financial statements and other connected matters in
accordance with clause 49(V) of the Listing Agreement pertaining to
CEO/CFO certification for the financial year ended 31 * March 2010.
The Ministry of Corporate Affairs issued Corporate Governance Voluntary
Guidelines 2009 in the second half of December 2009. The guidelines
broadly outline conditions for appointment of directors, their
remuneration / responsibilities, risk management by the board, the
enhanced role of audit committee, rotation of audit partners, firms and
conduct of secretarial audit, The Company while generally meeting the
various requirements has already commenced taking steps for appropriate
action for compliance of the relevant items of the guidelines.
8. STATUTORY STATEMENTS
Conservation of energy, technology absorption and foreign exchange
earnings and outgo
As per the requirements of Section 217(1 )(e) of the Companies Act,
1956, read with the Companies (Disclosure of Particulars in the Report
of Board of Directors) Rules, 1988, the information regarding
conservation of energy, technology absorption and foreign exchange
earnings and outgo are given in the Annexure I to this report.
Particulars of employees
As required under the provisions of Section 217(2A) of the Companies
Act, 1956, read with the Companies (Particulars of Employees) Rules,
1975 as amended, the names and other particulars of the employees are
set out in the Annexure II to this report.
However, as per the provisions of Section 219(1 )(b)(iv) of the
Companies Act, 1956, the report and accounts are being sent to all the
shareholders of the Company excluding the aforesaid information on
employees. Any shareholder interested in obtaining such particulars may
write to the Company Secretary at the registered office of the Company.
Public Deposits
The Company has not accepted any deposit from the public within the
meaning of Section 58A of the Companies Act, 1956 for the year ended 31
st March 2010.
Directors Responsibility Statement
Pursuant to the requirement of Section 217(2M) of the Companies Act,
1956 with respect to directors responsibility statement, it is hereby
confirmed:
(i) that in the preparation of annual accounts for the financial year
ended 31 * March, 2010, the applicable accounting standards had been
followed along wfth proper explanation relating to material departures;
(ii) that the directors had selected such accounting policies and
applied them consistently and made judgements and estimates that were
reasonable and prudent so as to give a true and fair view of the state
of affairs of the Company at the end of the financial year and of the
profit of the Company for the year under review;
(iii) that the directors had taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with the
provisions of the Companies Act, 1956 for safeguarding the assets of
the Company and for preventing and detecting fraud and other
irregularities; and
(iv) that the directors had prepared the accounts for the financial
year ended 31 * March 2010 on a "going concern basis".
9. ACKNOWLEDGEMENT
The directors acknowledge the support and co-operation received from
the promoters, Harita Group and Mr Martin Grammer.
The directors thank the customers, suppliers, financial institutions
and bankers for their valuable support and assistance.
The directors wish to place on record their appreciation of the sincere
efforts of all the employees of the Company during the year under
review.
The directors also thank the shareholders for their continued faith in
the Company.
For and on behalf of the Board
Chennai H LAKSHMANAN
30th July 2010 Chairman
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