HARITA SEATING SYSTEMS LIMITED 24th Annual Report 2019-2020
HARITA SEATING SYSTEMS LIMITED
Board of Directors Registered Office H Lakshmanan, Chairman “Jayalakshmi Estates” S I Jaffar Ali No.29 (Old No.8), Haddows Road, Martin Grammer C N Prasad Chennai - 600 006, Tamil Nadu, India L Bhadri Tel. : 044-2827 2233, Fax : 044-2825 7121 Sasikala Varadachari CIN : L27209TN1996PLC035293 E-mail : [email protected] Audit Committee, Stakeholders’ Relationship Committee and Corporate Social Responsibility Website: www.haritaseating.com Committee Plant Locations H Lakshmanan, Chairman 1. Belagondapalli, Thally Road, S I Jaffar Ali Hosur - 635 114, Tamil Nadu, India C N Prasad Tel.: 04347-233445 Nomination and Remuneration Committee C N Prasad, Chairman 2. Plot A2 MIDC Industrial area H Lakshmanan Ranjangaon, Koregaon village, Shirur taluk, S I Jaffar Ali Pune - 412210, Maharashtra, India President and Chief Executive Officer Tel.: 02138-610700 A G Giridharan 3. Plot No.553-D, 2nd Stage, Chief Financial Officer Belur Industrial Area, K Subramanian Dharwad - 580 011, Karnataka, India Company Secretary Tel.: 0836 2486625 N Iswarya Lakshmi 4. Plot No.35, Sector 4, Bankers State Bank of India Integrated Industrial Estate, Pantnagar, Corporate Accounts Group Branch Rudrapur, Udham Singh Nagar District, 18/3, Sigapi Achi Building, Uttarakhand - 263 153, India 3rd Floor, Rukmani Lakshmipathi Road, Tel.: 5944 250889 Egmore, Chennai-600008, Tamil Nadu, India. 5. Survey No.29, 30, 31, Statutory Auditor Vellanthangal Village, Raghavan, Chaudhuri & Narayanan Chartered Accountants, No.55,Thandalam Group, No. 17/12, II Floor, Casa Capitol Irrungattukottai, Sriperumpudur - 602 105 Wood Street, Ashok Nagar, Bangalore 560 025. Tamil Nadu, India. Tel.: 080-2556 7578 / 2551 4771 Tel : 044-67121380/381 E-mail: [email protected] 6. 39/2, Gram, Sonwai - Ner Sti, Secretarial Auditor Rau Pithampur Road, Tehsil Mhow, B Chandra District Road, Indore, Practising Company Secretary AG 3, Ragamalika, Madhya Pradesh - 453 441 No. 26, Kumaran Colony Main Road, Subsidiary company Vadapalani, Chennai-600 026, Tamil Nadu, India. Harita Fehrer Limited, Chennai Tel.: 044-2362 0157 E-mail: [email protected] Shares listed with Contents Page No. National Stock Exchange of India Ltd., Mumbai Financial highlights 2 Share Transfer Agent Sundaram-Clayton Limited Notice of Annual General Meeting 3 "Jayalakshmi Estates", 1st Floor, New No.29 (Old No.8), Haddows Road, Directors’ Report to the shareholders 11 Chennai - 600 006 Tamil Nadu, India. Standalone Financial Statements 84 Tel. : 044 - 2828 4959 Fax : 044 - 2825 7121 Consolidated Financial Statements 135 E-mail : [email protected]; [email protected]
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Financial Highlights Rs. in lakhs
Year ended 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Statement of Profit & Loss Sales 24,078.27 30,664.18 27,616.68 25,012.53 27,375.54 30,781.08 37,717.38 44,428.13 47,759.52 34,624.54 Other income 153.53 225.85 226.18 341.86 643.71 973.75 1,061.75 1,041.95 1,342.71 582.39 Total income 24,231.80 30,890.03 27,842.86 25,354.39 28,019.25 31,754.83 38,779.13 45,470.08 49,102.23 35,206.93 Gross profit before interest, depreciation & tax 594.85 2,516.04 2,295.52 1,558.39 1,692.60 3,432.33 3660.39 4748.42 4,026.65 1,758.72 Depreciation 431.66 434.38 422.14 463.24 407.78 438.76 515.42 719.13 938.54 1,327.16 Profit/(Loss) before interest & tax 163.19 2,081.66 1,873.38 1,095.15 1,284.82 2,993.57 3144.97 4029.29 3,088.11 431.56 Interest 747.29 663.70 559.36 505.92 470.99 147.95 44.01 111.17 182.87 322.00 Profit/(Loss) before taxation (584.10) 1,417.96 1,314.02 589.23 813.83 2,845.62 3,100.96 3,918.12 2,905.24 109.56 Profit/(Loss) after taxation (509.99) 1,122.01 1,067.15 465.72 709.27 2,531.71 2,454.19 3,079.87 2,202.00 224.84 Balance Sheet Net fixed assets 4,652.63 3,577.92 4,101.30 4,072.18 4,031.81 3,470.03 4562.47 5775.76 10,829.16 10,586.57 Investment 2,759.00 2,759.00 2,857.03 2,857.03 2,857.03 2,857.03 2819.50 2,817.32 2,817.32 2,824.56 Net current assets 1,064.00 2,374.75 2,041.49 2,983.28 1,709.84 935.43 2788.15 4692.62 3,176.42 2,343.96 Total 8,475.63 8,711.67 8,999.82 9,912.49 8,598.68 7,262.49 10,170.12 13,285.71 16,822.90 15,755.09 Share capital 776.90 776.90 776.90 776.90 776.90 776.90 776.90 776.90 776.90 776.90 Reserves & Surplus 1,561.79 2,407.25 3,250.84 3,600.02 4,061.93 6,109.38 8,172.04 10,792.21 12,616.96 12,788.84 Net worth 2,338.69 3,184.15 4,027.74 4,376.92 4,838.83 6,886.28 8,948.94 11,569.11 13,393.86 13,565.74 Loan funds 5,888.97 5,282.64 4,757.69 5,313.67 3,568.26 477.14 1130.61 1688.75 3,167.57 2,080.72 Deferred tax liability 247.97 244.88 214.39 221.90 191.59 (100.93) 90.57 27.85 261.47 108.63 Total 8,475.63 8,711.67 8,999.82 9,912.49 8,598.68 7,262.49 10,170.12 13,285.71 16,822.90 15,755.09 Earnings per share (Rs.) (6.56) 14.44 13.74 5.99 9.13 32.59 31.59 39.64 28.34 2.89 Dividend per share (Rs.) - 3.50 2.50 1.50 2.50 6.00 5.00 6.00 6.00 - Book value per share (Rs.) 30.10 40.99 51.84 56.34 62.28 88.64 115.19 148.91 172.40 174.61 Return on capital employed %(ROCE) 1.92 25.88 22.40 11.51 15.71 47.22 34.76 33.72 19.73 2.77 Return on networth % (RONW) (19.66) 40.63 29.59 11.08 15.39 43.18 31.00 30.02 17.64 1.67 Fixed asset turnover (No. of times) 5.15 7.45 7.19 6.12 6.76 8.21 9.39 8.59 5.75 3.23 Working capital turnover (No. of times) 24.52 17.83 12.51 9.96 11.67 23.27 20.26 11.88 12.14 12.54 Gross profit as % of total income 2.45 8.15 8.24 6.15 6.04 10.81 9.44 10.44 8.20 5.00 Profit / (Loss) before tax as % of total income (2.41) 4.59 4.72 2.32 2.90 8.96 8.00 8.62 5.92 0.31 Average netwoth 2,594.29 2,761.42 3,605.95 4,202.33 4,607.88 5,862.56 7,917.61 10,259.03 12,481.49 13,479.80 Average net fixed assets 4,678.87 4,115.28 3,839.61 4,086.74 4,052.00 3,750.92 4,016.25 5,169.12 8,302.46 10,707.87 Average net current assets 982.18 1,719.38 2,208.12 2,512.39 2,346.56 1,322.64 1,861.79 3,740.39 3,934.52 2,760.19 Previous year's figures have been regrouped wherever necessary to conform to the current year's classification.
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Notice to the Shareholders issued by the Securities and Exchange Board NOTICE is hereby given that the twenty-fourth of India ("SEBI") and in compliance with the Annual General Meeting of the Company (AGM) will provisions of the Companies Act, 2013 (The Act) be held on Friday, 25th September 2020 at and the SEBI (Listing Obligations and Disclosure 2.00 P.M. [Indian Standard Time (IST)] through Requirements) Regulations, 2015 ("Listing Video Conferencing / Other Audio Visual Means to Regulations"), physical attendance of the transact the following business: Members at the AGM venue is not required and AGM can be held through video conferencing ORDINARY BUSINESS (VC) or other audio visual means (OAVM). 1. To consider passing the following resolution as Hence, Members can attend and participate at an ordinary resolution: the ensuing AGM through VC/OAVM. "RESOLVED THAT the standalone and 2) Pursuant to the aforesaid Circulars, the consolidated audited financial statements for facility to appoint proxy by Members under the year ended 31st March 2020, together with Section 105 of the Act to attend and cast the Directors' Report and the Auditors' Report vote for the Members is not available for this thereon as circulated to the Members and AGM as the physical attendance of Members presented to the meeting be and are hereby has been dispensed with. However, Body approved and adopted." Corporates are entitled to appoint authorised 2. To consider passing the following resolution as representatives as its Member to attend the an ordinary resolution: AGM through VC / OAVM and participate thereat and cast their votes through e-Voting. RESOLVED THAT Mr Martin Grammer (holding DIN 00061786), Director, who retires by rotation 3) The Members can join the AGM through the and being eligible offers himself for VC / OAVM mode 15 minutes before and after reappointment, be and is hereby re-appointed the scheduled time of the commencement of as a Director of the Company. the AGM by following the procedure mentioned in the Notice. The facility of participation at the AGM through VC/OAVM will be made available By order of the Board to the members on "first come first served" basis. This will not include large Shareholders Chennai N Iswarya Lakshmi (Shareholders holding 2% or more of the total th 10 August 2020 Company Secretary number of shares of the Company as on the Registered Office: cut-off date herein below mentioned), "Jayalakshmi Estates" Promoters, Institutional Investors, Directors, 29, Haddows Road Key Managerial Personnel, the Chairpersons Chennai - 600 006 of the Audit Committee, Nomination and Notes: Remuneration Committee and Stakeholders' 1) In view of the outbreak of COVID 19 pandemic, Relationship Committee, Auditors etc. who are social distancing norms is being followed and allowed to attend the AGM without restriction the continuing restriction on movement of on account of "first come first served" basis. persons at several places in the country and 4) Members attending the AGM through VC/ pursuant to the Circular No. 14/2020 dated OAVM will be counted for the purpose of 8th April 2020, Circular No.17/2020 dated reckoning the quorum under Section 103 of the 13th April 2020 and Circular No. 20/2020 dated Act. 5th May 2020 issued by the Ministry of Corporate 5) Pursuant to the provisions of Section 108 of the Affairs (MCA) and Circular No. SEBI/HO/CFD/ Act read with Rule 20 of the Companies CMD1/CIR/P/2020/79 dated 12th May, 2020 (Management and Administration) Rules, 2014
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(as amended) and Regulation 44 of Listing Pursuant to IEPF Authority (Accounting, Audit, Regulations (as amended), and the Circulars Transfer and Refund) Rules, 2016, the issued by MCA dated 8th April, 2020, 13th April, Company is providing / hosting the required 2020 and 5th May, 2020 the Company is details of unclaimed amount referred to under providing facility of remote e-Voting to its Section 124 of the Act, on its website and also Members in respect of the business to be on the website of MCA viz., www.iepf.gov.in. transacted at the AGM. For this purpose, the General Company has entered into an agreement with 10) With a view to serving the Members better and National Securities Depository Limited (NSDL) for administrative convenience, Members who for facilitating voting through electronic means, hold shares in identical names and in the same as the authorized agency. The facility of casting order of names in more than one folio are votes by a member using remote e-Voting requested to write to the Company to system as well as voting at the meeting will be consolidate their holdings into one folio. provided by NSDL. 11) Members may also note that the Annual Report 6) In line with MCA Circular No. 17/2020 dated will also be available on the Company's website th 13 April, 2020, the Notice calling the AGM has viz., www.haritaseating.com for their download. been uploaded on the website of the Company at www.haritaseating.com. The Notice can also Members holding shares in electronic form be accessed from the website of National Stock 12) SEBI has mandated the submission of Exchange of India Limited at www.nseindia.com Permanent Account Number (PAN) by every and the AGM Notice is also available on participant in securities market. Members are the website of NSDL (agency for providing requested to submit their PAN to the Depository the Remote e-Voting facility) i.e. Participant(s) (DP) with whom they are www.evoting.nsdl.com. maintaining their demat accounts. 7) AGM has been convened through VC/OAVM 13) Members are requested to intimate all changes in compliance with applicable provisions of the pertaining to their bank details such as bank Act read with Circulars issued by MCA and SEBI account number, name of the bank and branch in this regard. details, MICR code and IFSC Code, Mandates, Nominations, Power of Attorney, Change of Unclaimed Dividend Address / Name / e-mail Address / Contact 8) In terms of Section 124 of the Act, the dividend Numbers, etc., to their DP. declared by the Company, for earlier years, 14) Electronic copy of the Annual Report and the which remain unclaimed for a period of seven Notice of the AGM inter-alia indicating the years will be transferred on due dates to the process and manner of e-Voting are being sent Investor Education and Protection Fund (IEPF), to all the Members whose e-mail IDs are established by the Central Government. The registered with the Company / DPs for particulars of due dates for transfer of such communication purposes. unclaimed dividends to IEPF are furnished in the Report on Corporate Governance, forming Members holding shares in physical form part of the Annual Report. 15) Members can submit their PAN details to the 9) Members who have not encashed their dividend Company / Share Transfer Agent (STA). warrants in respect of the above period are 16) Members are requested to intimate all changes requested to make their claim(s) by pertaining to their bank details such as bank surrendering the un-encashed warrants account number, name of the bank and branch immediately to the Company. details, MICR code and IFSC code, Mandates,
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Nomination as per Section 72 of the Act, by INSTRUCTIONS FOR REMOTE E-VOTING AND filling Form SH-13, Power of Attorney, Change VOTING AT THE MEETING ARE AS UNDER of Address / Name / e-mail Address / Contact 1) The remote e-voting period begins on 22nd Numbers, etc., with the Company / STA. Blank September 2020 at 9:00 A.M. (IST) and ends forms (SH-13) will be sent by e-mail. on 24th September 2020 at 5:00 P.M. (IST). 17) Members holding shares in physical form, in During this period, Members of the Company, their own interest, are requested to holding shares either in physical form or in dematerialize the shares to avail the benefits dematerialized form, as on the cut-off date, may of electronic holding / trading. cast their vote by remote e-Voting. The remote e-Voting module shall be disabled by NSDL for Voting voting thereafter. Once the vote on a resolution 18) The business as set out in the Notice will be is cast by the Member, the Member shall not transacted through electronic voting system and be allowed to change it subsequently. the Company is providing facility for voting by electronic means. The Members may cast their 2) The details of the process and manner for votes using electronic voting system during the remote e-Voting are explained herein below: meeting ('remote e- Voting'). Step 1: Log-in to NSDL e-Voting system at 19) In case of joint holders attending AGM, the https:// www.evoting.nsdl.com/ Member whose name appears as the first Step 2: Cast your vote electronically on NSDL holder in the order of names as per the Register e-Voting system. of Members of the Company will be entitled to Details on Step 1 is mentioned below: vote. How to Log-in to NSDL e-Voting website? 20) In terms of Section 108 of the Act read with Rule 20 of the Companies (Management and 1) Visit the e-Voting website of NSDL. Open web Administration) Rules, 2014, as amended ('the browser by typing the following URL: https:// Rules') and Regulation 44 of the Listing www.evoting.nsdl.com/ either on a Personal Regulations, the Company has provided facility Computer or on a mobile. to exercise votes through electronic voting 2) Once the home page of e-Voting system is system to Members holding shares as on 18th launched, click on the icon "Login" which is September 2020 being the "Cut-off Date"("Cut- available under 'Shareholders' section. Off" for the purpose of Rule 20(4)(vii) of the Rules) fixed for determining voting rights of 3) A new screen will open. You will have to enter Members entitled to participate in the remote your User ID, your Password and a Verification e-Voting process through the platform provided Code as shown on the screen. by NSDL viz., www.evoting.nsdl.com. Alternatively, if you are registered for NSDL e- The voting rights of the Members / Beneficial services i.e. IDEAS, you can log-in at https:// Owners will be reckoned on the Equity Shares eservices.nsdl.com/ with your existing IDEAS held by them as on Cut-off date. Members as login. Once you log-in to NSDL e-services after on the Cut-off date only shall be entitled to avail using your log-in credentials, click on e-Voting the facility of remote e-Voting or voting at the and you can proceed to Step 2 i.e. Cast your meeting. vote electronically.
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4) Your User ID details are given below : your 'initial password' would be communicated to you on your email ID. Manner of holding Trace the email sent to you from NSDL shares i.e. Demat Your User ID is from your mailbox. Open the email and (NSDL or CDSL) or open the attachment i.e. a.pdf file. Physical Open the .pdf file. The password to a) For Members who 8 Character DP ID open the .pdf file is your 8 digit client hold shares in followed by 8 Digit ID for NSDL account, last 8 digits of demat account Client ID. client ID for CDSL account or folio with NSDL. For example if your DP number for shares held in physical ID is IN300*** and form. The .pdf file contains your 'User Client ID is 12****** ID' and your 'initial password'. then your user ID is IN300***12******. (ii) If your email ID is not registered, please follow steps mentioned below in b) For Members who 16 Digit Beneficiary ID. hold shares in process for those shareholders whose For example if your demat account email IDs are not registered. Beneficiary ID is with CDSL. 12************** then 6) If you are unable to retrieve or have not received your user ID is the "Initial password" or have forgotten your 12************** password: c) For Members EVEN Number a) Click on "Forgot User Details/Password?"(If holding shares in followed by Folio you are holding shares in your demat Physical Form. Number registered account with NSDL or CDSL) option with the Company. available on www.evoting.nsdl.com. For example if folio b) Physical User Reset Password?" (If you are number is 001*** and holding shares in physical mode) option EVEN is 101456 then available on www.evoting.nsdl.com. user ID is 101456001*** c) If you are still unable to get the password 5) Your password details are given below: by aforesaid two options, you can send a request at [email protected] mentioning a) If you are already registered for e-Voting, your demat account number / folio number, then you can use your existing password your PAN, your name and your registered to login and cast your vote. address. b) If you are using NSDL e-Voting system for d) Members can also use the OTP (One Time the first time, you will need to retrieve the Password) based login for casting the votes 'initial password' which was communicated on the e-Voting system of NSDL. to you. Once you retrieve your 'initial password', you need to enter the 'initial 7) After entering your password, tick on Agree to password' and the system will force you to "Terms and Conditions" by selecting on the change your password. check box. c) How to retrieve your 'initial password'? 8) Now, you will have to click on "Login" button. (i) If your email ID is registered in your 9) After you click on the "Login" button, Home page demat account or with the Company, of e-Voting will open.
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Details on Step 2 is mentioned below: and AADHAR (self-attested scanned copy) to How to cast your vote electronically on NSDL [email protected]. e-Voting system? 2. Alternatively member may send an e-mail 1) After successful login as provided in Step 1, request to [email protected] for obtaining you will be able to see the Home page of User ID and Password by proving the details e-Voting. Click on e-Voting. Then, click on mentioned in Point (1) or (2) as the case may Active Voting Cycles. be. 2) After clicking on Active Voting Cycles, you will INSTRUCTIONS TO THE MEMBERS FOR be able to see all the companies "EVEN" in E-VOTING ON THE DAY OF THE AGM ARE AS which you are holding shares and whose voting UNDER: cycle is in active status. i. The procedure for e-Voting on the day of the 3) Select "EVEN" of Harita Seating Systems AGM is same as the instructions mentioned Limited for which you wish to cast your vote. above for remote e-voting. 4) Now you are ready for e-Voting as the Voting ii. Only those Members / shareholders, who will page opens. be present in the AGM through VC / OAVM facility and have not cast their vote on the 5) Cast your vote by selecting appropriate options resolutions through remote e-Voting and are i.e. assent or dissent, verify/modify the number otherwise not barred from doing so, shall be of shares for which you wish to cast your vote eligible to vote through e-Voting system at the and click on "Submit" and also "Confirm" when AGM. prompted. iii. Members who have voted through Remote 6) Upon confirmation, the message "Vote cast e-Voting will be eligible to attend the AGM. successfully" will be displayed. However, they will not be eligible to vote at the 7) You can also take the printout of the votes cast AGM. by you by clicking on the print option on the iv. The details of the person who may be contacted confirmation page. for any grievances connected with the facility 8) Once you confirm your vote on the resolution, for e-Voting on the day of the AGM shall be the you will not be allowed to modify your vote. same person mentioned for remote e-Voting. Process for those shareholders whose email ids INSTRUCTIONS TO THE MEMBERS FOR are not registered with the depositories for ATTENDING THE AGM THROUGH VC/OAVM procuring user id and password and registration ARE AS UNDER: of e-mail ids for e-Voting for the resolutions set out in this notice: i. Members will be provided with a facility to attend the AGM through VC/OAVM through the NSDL 1) In case shares are held in physical mode, e-Voting system. Members may access the please provide Folio No., Name of shareholder, same at https://www.evoting.nsdl.com under scanned copy of the share certificate (front and shareholders/members login by using the back), PAN and AADHAR (self-attested remote e-Voting credentials. The link for VC/ scanned copy) by email to [email protected]. OAVM will be available in shareholder/ In case shares are held in demat mode, please members login where the EVEN of Company provide DPID-CLID (16 digit DPID + CLID or will be displayed. Please note that the members 16 digit beneficiary ID), Name, client master or who do not have the User ID and Password for copy of Consolidated Account statement, PAN e-Voting or have forgotten the User ID and
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Password may retrieve the same by following Company's e-mail address at the remote e-Voting instructions mentioned in [email protected] / [email protected] the notice to avoid last minute rush. Further atleast 48 hours in advance before the start of members can also use the OTP based login for the meeting. Such questions by the Members logging into the e-Voting system of NSDL. shall be taken up during the meeting and replied by the Company suitably. ii. Members are encouraged to join the Meeting through Laptops for better experience. General Guidelines for shareholders: iii. Further Members will be required to allow 1. Institutional shareholders (i.e. other than Camera and use Internet with a good speed to individuals, HUF, NRI etc.) are required to send avoid any disturbance during the meeting. scanned copy (PDF/JPG Format) of the iv. Please note that participants connecting from relevant Board Resolution / Authority letter etc. mobile devices or tablets or through laptop via with attested specimen signature of the duly mobile hotspot may experience audio / video authorized signatory(ies) who are authorized to loss due to fluctuation in their respective vote, to the Scrutinizer by e-mail network. It is therefore recommended to use [email protected] with a copy marked to [email protected]. Stable Wi-Fi or LAN connection to mitigate any kind of aforesaid glitches. 2. It is strongly recommended not to share your password with any other person and take Members who would like to express their views/ utmost care to keep your password confidential. ask questions during the meeting may register Login to the e-Voting website will be disabled themselves as a speaker and send their request upon five unsuccessful attempts to key in the mentioning their name, demat account number correct password. In such an event, you will / folio number, email id, mobile number at need to go through the "Forgot User Details / [email protected] / [email protected] from Password?" or "Physical User Reset th rd 19 September 2020 (9.00 A.M) to 23 Password?" option available on September 2020 (10.00 A.M) www.evoting.nsdl.com to reset the password. v. Members who would like to express their views 3. A person, whose name is recorded in the / have questions may send their questions in Register of Members or in the Register of advance mentioning their name, demat account Beneficial Owners maintained by the number / folio number, email id, mobile number depositories as on the cut-off date only shall be at [email protected] / [email protected]. entitled to avail the facility of remote e-Voting The same will be replied by the Company or casting vote through e-Voting system during suitably. the meeting. vi. Those members who have registered 4. M/s B Chandra & Associates, Practising themselves as a speaker will only be allowed Company Secretaries (Reg. No. to express their views / ask questions during P2017TN065700), Chennai, have been the meeting. appointed as the Scrutinizers to scrutinize the remote e-Voting process and casting vote at vii. Members can submit questions in advance with the AGM in a fair and transparent manner. regard to the financial statements or any other matter to be placed at the AGM, from their 5. In case of any queries, Members may refer to registered e-mail address, mentioning their the Frequently Asked Questions (FAQs) for name, DP ID and Client ID number / folio Shareholders and e-Voting user manual for number and mobile number, to reach the Shareholders available at the download section
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of www.evoting.nsdl.com or call on toll free no.: from time to time, can get their email address 1800-222-990. Members who need assistance registered by following the steps as given below: before or during the AGM, can contact NSDL on [email protected]/ or contact Mr Amit Vishal, a) For Members holding shares in physical Senior Manager - NSDL at [email protected] / form, please send scan copy of a signed 022-24994360 / +91 9920264780 or Mr Sagar request letter mentioning your folio number, Ghosalkar, Assistant Manager- NSDL at complete address, email address to be [email protected] / 022-24994553 / registered along with scanned self-attested +91 9326781467. copy of the PAN and any document (such 6. The Scrutinizers shall after the conclusion of as Driving Licence, Passport, Bank e-Voting at the AGM, first download the votes Statement, AADHAR) supporting the cast at the AGM and thereafter unblock the registered address of the Member, by email votes cast through remote e-Voting and shall to the Company's email address make a consolidated scrutinizer's report of the [email protected]. total votes cast in favour or against, invalid votes, if any, and whether the resolution has b) For Members holding shares in demat form, been carried or not, and such report shall then please update your email address through be sent to the Chairman or a person authorized your respective Depository Participant/s. in this regard, within 48 (forty eight) hours from 9. Pursuant to Finance Act, 2020, dividend income the conclusion of the AGM, who shall then countersign and declare the result of the voting will be taxable in the hands of the shareholders st forthwith. w.e.f. 1 April 2020 and the Company is required to deduct tax at source ("TDS") from 7. The results declared along with the report of the dividend paid to the Members at rates Scrutinizers shall be placed on the website of prescribed in the Income Tax Act, 1961 ("the the Company at www.haritaseating.com and on IT Act"). In general, to enable compliance with the website of NSDL at www.evoting.nsdl.com TDS requirements, Members are requested to immediately after the declaration of results by complete and / or update their Residential the Chairman or a person authorized by him. Status, PAN, Category as per the IT Act with The results shall also be immediately forwarded their Depository Participants or in case shares to National Stock Exchange of India Limited, are held in physical form, with the Company by Mumbai. sending email to the Company's email address 8. Pursuant to the Circulars issued by MCA and viz., [email protected]. SEBI, owing to the difficulties involved in dispatching of physical copies of the Notice of 10. In order to receive dividend/s in a timely manner, the AGM and the Annual Report for the year Members holding shares in physical form who 2019-20, the said documents are being sent have not updated their mandate for receiving only by email to the Members. the dividends directly in their bank accounts through Electronic Clearing Service or any other Therefore, those Members, whose email address is not registered with the Company or means ("Electronic Bank Mandate"), can with their respective Depository Participant/s, register their Electronic Bank Mandate to and who wish to receive the Notice of the AGM receive dividends directly into their bank and the Annual Report for the year 2019-20 and account electronically or any other means, by all other communication sent by the Company, sending scanned copy of the following details /
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documents through email to reach the Directorships and Committee Memberships, his Company's email address: shareholding and relationship with other Directors of the Company are given below: a. a signed request letter mentioning your name, folio number, complete address and Mr Martin Grammer following details relating to bank account Born on 5th June, 1960 in Amberg, Germany, in which the dividend is to be received : Mr Martin Grammer holds a degree in Business i. Name and Branch of Bank and Bank Economics from University Nuremberg, Germany. st Account type; He was co-opted as a Director on 21 January 2004. ii. Bank Account Number allotted by your He has vast experience in international marketing bank after implementation of Core and consultancy areas. He has served in Banking Solutions; internationally renowned companies which include Magna International Inc., Toronto, Canada, a iii. 11 digit IFSC Code; leading supplier to the global automotive industry iv. Self-attested scanned copy of and Roland Berger & Partner, a leading international cancelled cheque bearing the name of management consultant in Germany and Europe. the Member or first holder, in case He held the position as Managing Director and shares are held jointly; Member of Executive Committee Board of Grammer v. Self-attested scanned copy of the PAN AG, Germany for ten years, a leading supplier to Card; and the global automotive industry. vi. Self-attested scanned copy of any During 2003 - 2008, he served as a Member of the document (such as AADHAR Card, Board of Directors of GHE S.P.A, Milano, Italy, a Driving Licence, Election Identity Card, leading supplier of European bus and train interiors Passport) in support of the address of industry with manufacturing locations in Italy, the Member as registered with the Germany, Spain, UK, Czech Republic and Mexico. Company. He does not hold position as a Director in any other b. For the Members holding shares in demat Indian Company or a Member of any committee of form, please update your Electronic Bank Directors of any other Company and he is not related Mandate through your Depository to any Director of the Company. Participant/s. He has attended three board meetings held during 21. In accordance with the provisions of Article 132 the year 2019-20. He holds 10,87,600 equity shares of the Articles of Association of the Company, of the Company. Mr Martin Grammer will retire by rotation at AGM By order of the Board of Directors and being eligible offer himself for re-appointment; and Chennai N Iswarya Lakshmi 22. In terms of 36(3) of the Listing Regulations read 10th August 2020 Company Secretary with Secretarial Standards on General Meeting, Registered Office: brief profile of the Director, who is proposed to "Jayalakshmi Estates", be re-appointed in this AGM, nature of his 29, Haddows Road, expertise in specific functional areas, other Chennai - 600 006.
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Directors’ Report to the Shareholders Amalgamation amongst Harita Limited, Harita Venu Private Limited, Harita Cheema Private The Directors have pleasure in presenting the twenty Limited, Harita Financial Services Limited, Harita fourth annual report and the audited financial Seating Systems Limited (Transferor Companies) statements of the Company for the year ended and Minda Industries Limited (Transferee 31st March 2020. Company) and their respective shareholders ("Scheme"). 1. FINANCIAL HIGHLIGHTS The approval of the shareholders of the Company (Rs. in lakhs) for the said scheme was obtained at the National Year ended Year ended Company Law Tribunal (NCLT) convened Particulars 31.3.2020 31.3.2019 meeting held on 4th December 2019. Sales and other income 35,206.93 49,102.23 Hon'ble NCLT, Chennai by an order dated 19th Profit before financial February 2020, has directed the Company to call costs, depreciation and for representations, if any, in connection with the amortization expenses 1758.72 4,026.65 proposed scheme from regulatory authorities. Less : Finance costs 322.00 182.87 The Scheme is pending for the Final Orders of Depreciation 1,327.16 938.54 NCLT, Chennai and NCLT, New Delhi. Profit before tax 109.56 2,905.24 4. MANAGEMENT DISCUSSION AND ANALYSIS Less : Provision for: REPORT Income tax 17.89 538.01 The Company provides complete seating Deferred tax (133.17) 185.86 solutions for driver and cabin seating for commercial vehicles, tractors and construction Tax relating to earlier years – (20.63) equipment, as well as passenger seats for buses across all segments and has established itself Profit after tax 224.84 2,202.00 as a leader in these segments in the country. Other Comprehensive Income (36.63) 88.92 INDUSTRY STRUCTURE AND DEVELOPMENTS Total Comprehensive In 2019-20, the GDP grew by 4.7% (estimated) income for the year 188.21 2,290.92 as against 6.1% (revised series) previous year. The following table highlights the segment wise Appropriations: industry sales in vehicle units for the year First interim Dividend paid – 233.07 2019-20. Second interim Dividend paid – 233.07 Category 2019-20 2018-19 Growth / Balance carried to Nos. Nos. (decline) % Balance Sheet 188.21 1,824.78 Medium and Heavy Commercial Total 188.21 2,290.92 Vehicles (M & H CV) 2,48,968 4,39,408 (43.3) Light Commercial Vehicles (LCV) 5,29,433 6,67,836 (20.7) 2. DIVIDEND Buses - M & H CV 49,551 47,890 3.5 Due to lower profit, the board of directors of the Company has not recommended any dividend Tractors 7,97,799 8,78,704 (9.2) for the year ended 31st March 2020. [ Source: SIAM, CRISIL, internal estimates]
3. UPDATE ON SCHEME OF ARRANGEMENT The Company registered sales at Rs. 346.2 Cr in 2019-20 as against Rs. 477.6 Cr in 2018-19. th The Board at their meeting held on 14 February During the year, various new products were 2019 approved a draft Composite Scheme of introduced, efficiency in supply chain was
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improved through inter-plant coordination, PRODUCT-WISE PERFORMANCE horizontal deployment of lean and other During the year, the Company registered a improvement initiatives across all plants. decline in overall sales by 30% due to lower These initiatives, along with the implementation industry growth both in M&HCV and Tractor of various other cost reduction projects across segment. Export sales de-grew by 25% because functions have enabled the Company to post a of the change in delivery terms from Ex-works profit before tax of Rs. 109.56 Lakhs in 2019-20. to Delivered at Terminal (DAT). All the industry segments had de-growth, the Company too OPPORTUNITIES AND THREATS registered decline in sales at similar levels. The The Company has initiated new product Company positively looks forward to improve development activities to maintain the leadership new product development lead time and position in the tractor segment in the domestic effectively establish growth in domestic tractor market and to grow the export market. The market in 2020-21. Company continues to strengthen its position in AWARDS & RECOGNITION export markets and has won significant new orders from overseas customer. The supplies are The Company received the "India AE scheduled in 2020-21. The Company has performance" award from John Deere during the year. developed Instructor seats for cabin tractors as one of its new product line, Company is obtaining BUSINESS OUTLOOK AND OVERVIEW nominations from customers for supply of these India's GDP growth has decelerated to 11 year products. The Company also has developed high low estimated at 4.7% in 2019-20. In 2020-21, end pneumatic and mechanical suspension seats the economy will see significant challenges owing as platform product offerings. It continues to to the impact of COVID-19 pandemic and the actively seek orders from global OEMs in the resultant interruption to economic activity which current year. In the year 2018-19, Company has is beginning to reopen. obtained and supplied pneumatic suspended seats to Aftermarket companies in Europe. As a The M&HCV segment was initially expected to leader in the bus passenger seats with a wide grow at 2.8% and LCV (>3.5 Tons) segment at range of seats, the Company has further 4%, however with the slowdown in GDP, both strengthened its position with new product these segments are expected to de-grow by launches across India. The market has well 50%.The M&HCV, LCV industry has a higher responded to these new launches and the correlation to the GDP activities, thus the slowing Company is gaining market share in this segment. GDP will hurt the industry badly and similar decline will be seen in the company's performance A significant competitive threat is the entry of in these segments. overseas manufacturers and the Indian bus body With the reduction in travel (intra and inter-city) builders getting into seat manufacturing. The due to social distancing and decline in tourism, Company continues to invest in strengthening the the Bus segment too is expected to have a lower design and testing capabilities to retain the market demand. It is also expected to have lower leadership status. induction by fleet operators and STU's. The Company aims to take advantage of the However the Company is hoping to expand its growing Tractor industry by offering platform presence in North, East and West India thereby products to leading tractor OEMs and thereby minimising the negative impact on sales. looks forward to win a large share of domestic The tractor segment is expected to grow at 4.2% sales. With respect to the CV OEMs, the and it is hopeful that this segment will not decline Company is taking steps to retain the sales growth as there is improvement in agriculture output and by expanding customer base and increasing better monsoon. (Estimates based on SIAM, share of business in existing domestic customers. CRISIL and internal estimates).
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RISKS AND CONCERNS employees in an effort to reskill people and The Indian commercial vehicle industry has upgrade the manufacturing processes, apart strong correlation with the agricultural growth, from improvements in the facility by means infrastructure development and the mining of automation. Further improvements of Lean industry and is cyclical. The Company's Manufacturing / Flow Management initiatives presence across the segments of auto industry will help the Company in containing will largely mitigate the segment specific risks. manufacturing costs. The Company plans to develop additional The Company's initiatives to introduce new products to maintain its growth plans. The refresh ideas in existing products was well Company has also put in place initiatives to received by leading customers both in OEM improve product quality to support the growth and aftermarket segment. plans. b. Quality: The Rupee has depreciated sharply in the last year against the US dollar. It is expected to The Company continues to take steps to depreciate further in the current year due to improve further the quality of its products. global economic crisis. The Company will The Final Product Audit (FPA) initiative taken continue to take suitable forex cover to mitigate by the Company has brought appreciation the risk in foreign exchange fluctuations. from customers. The quality system at the factories aims at achieving total customer RISK MANAGEMENT POLICY satisfaction through its focus on improving product quality. Consistently, the Company The Board has established a Risk Minimization has been achieving improved Quality levels Policy which formalizes the Company's at the customer-end, both in their line and approach to overview and manage material warranty quality. business risks. The policy is implemented through a top down and bottom up approach The Company's plants are certified for IATF identifying, assessing, monitoring and managing 16949. In addition, the Quality laboratory as key risks across the Company's business units. well as the R&D test facility at the Company Risks and effectiveness of their management is certified by National Accreditation Board are internally reviewed and reported regularly for Testing and Calibration Laboratories to the Board. The management has reported to (NABL) for conformance to ISO/IEC 17025. the Board that the Company's risk management 100% employee participation in the and internal compliance and control systems are Company's improvement programmes like operating efficiently and effectively in all material suggestion schemes, quality control circle respects. projects, supervisory improvement team The Board is satisfied that there are adequate projects, cross functional team projects and systems and procedures in place to identify, task force team projects continued th assess, monitor and manage risks. The Audit successfully for the 19 year in succession. Committee also reviews reports by Members of c. Focus on Vendor Development: the management team and recommends suitable action. Risk Minimization Policy has The Company continued its vendor been approved by the Board. development initiative through Visionary Small and Medium Enterprise programme. The OPERATIONS REVIEW Company has also decided and formed a a. Manufacturing: Cross Functional Team (CFT) to improve the The Company has continued its focus on supplier performance to strengthen the new having best manufacturing processes and product introduction. The focus in 2020-21 facilities. It has also imparted training to key would be on the fabricated suppliers.
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INTERNAL CONTROL AND THEIR ADEQUACY The Company has a proper and adequate internal control system to ensure that all the assets of the Company are safeguarded and protected against any loss and that all the transactions are properly authorized and recorded. Information provided to management is reliable and timely. The Company ensures adherence to all statutes.
INTERNAL FINANCIAL CONTROL The Company has an established internal financial control framework including internal controls over financial reporting, operating controls and anti-fraud framework. The framework is reviewed regularly by the management and tested by internal audit team and presented to the audit committee. Based on the periodical testing, the framework is strengthened, from time to time, to ensure adequacy and effectiveness of Internal Financial Controls. KEY FINANCIAL RATIOS As required under Regulation 34 of the Listing Regulations, there was a significant change in some of the ratios as compared to the previous financial year. Details of such change is given below: Unit of Standalone Consolidated Particulars Measurement 2019-20 2018-19 2019-20 2018-19 Inventory Turnover Ratio Times 15.55 24.92 15.00 19.49 Interest Coverage Ratio Times 1.34 16.89 7.71 19.32 Debt Equity Ratio % 15.34 23.65 10.85 17.76 Operating Profit Margin % 1.23 6.29 4.07 7.96 Net Profit Margin % 0.31 5.92 3.54 6.13 Return on Net worth % 1.67 17.64 13.38 24.18 Profit for the year is lower primarily due to de-growth in auto Industry. Reduction in profit for the current financial year has resulted in adverse movement of ratios. HUMAN RESOURCE DEVELOPMENT objectives, projections, estimates, expectations The Company has achieved a performance, may be forward looking statements within the through the concerted and goal- aligned efforts meaning of applicable Securities Laws and by employees across the hierarchy. The Regulations. Actual results could differ materially Company places on record its deep appreciation from those expressed and implied. Important for the exemplary contribution of the employees factors that could make a difference to the at all levels. Company's operations include, among other things, economic conditions affecting the The Company continued to induct fresh talent. demand, supply and price conditions in the The Company has upgraded the training needs markets in which the Company operates, identification based on the role requirements and changes in government regulations, tax laws and gaps in this identification are closed by providing other statutes and incidental factors. training to improve employee competencies. The Company's industrial relations continue to be cordial. 5. DIRECTORS' RESPONSIBILITY STATEMENT In accordance with the provisions of Section 134(5) As of 31st March 2020, the Company had 341 of the Act, 2013 with respect to Directors' employees on its rolls. Responsibility Statement, it is hereby stated that - CAUTIONARY STATEMENT i. in the preparation of annual accounts for the Statements in the management discussion and financial year ended 31st March 2020, the analysis report describing the Company's applicable Accounting Standards had been
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followed along with proper explanation The Committee formulated and recommended relating to material departures if any; a Corporate Social Responsibility policy in terms ii. the Directors had selected such accounting of Section 135 of the Act, 2013, along with a list policies and applied them consistently and of projects / programmes to be undertaken for made judgments and estimates that were CSR spending in accordance with the reasonable and prudent so as to give a true Companies (Corporate Social Responsibility and fair view of the state of affairs of the Policy) Rules, 2014. Company at the end of the financial year and Based on the recommendation of the CSR profit of the Company for the year under Committee, the Board has approved the projects review; / programs to be carried out as CSR activities iii. the Directors had taken proper and sufficient by Srinivasan Services Trust (SST) by care for the maintenance of adequate undertaking these programmes / projects, in accounting records in accordance with the compliance with the CSR policy of the Company provisions of the Act, 2013 for safeguarding and contributed Rs.60 Lakhs for the financial the assets of the Company and for year 2019-20, towards CSR spending. preventing and detecting fraud and other irregularities; Presently, SST is working in 5,000 villages spread across Tamil Nadu, Karnataka, iv. the Directors had prepared the annual Maharashtra, Himachal Pradesh and Andhra st accounts for the financial year ended 31 Pradesh covering a population of about 24.50 March 2020 on a "going concern basis"; lakhs and 6.24 lakh families. SST has focussed v. that the Directors had laid down internal on the areas of economic development, health financial controls to be followed by the care, education, environment, social and Company and that such internal financial infrastructure actively in 3000 villages. SST will controls are adequate and are operating focus on 2000 villages also, so that all the areas effectively; and are covered in the next 3 years. vi. that the Directors had devised proper As required under Section 135 of the Act, 2013 systems to ensure compliance with the read with Rule 8 of the Companies (Corporate provisions of all applicable laws and that such Social Responsibility Policy) Rules, 2014, the systems were adequate and operating Annual Report on CSR, containing the effectively. particulars of the projects / programmes 6. CORPORATE SOCIAL RESPONSIBILITY approved and recommended by CSR (CSR) Committee and approved by the Board for the CSR activities have already been textured into financial year 2019-2020 are given by way of the Company's value system through Srinivasan Annexure - IV attached to this Report. Services Trust (SST), established in 1996 with the vision of building self-reliant rural community. 7. FINANCIAL PERFORMANCE AND POSITION Over 24 years of service, SST has played a OF THE SUBSIDIARY COMPANY pivotal role in changing lives of people in rural As on the date of this report, Harita Fehrer India by creating self-reliant communities that Limited, Chennai (HFRL) is the only subsidiary are models of sustainable development. of the Company. The Company is eligible to spend on their HFRL is a material un-listed Indian subsidiary ongoing projects / programmes, falling within the in terms of Regulation 24 read with Regulation CSR activities specified under the Act, 2013, as 16(1)(c) of Securities and Exchange Board of mandated by the Ministry of Corporate Affairs India (Listing Obligations and Disclosure for carrying out the CSR activities. Requirements) Regulations, 2015 (Listing
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Regulations), as the total turnover of the On appointment, each ID has acknowledged the subsidiary exceeds 10% of the consolidated terms of appointment as set out in their letter of turnover of the Company. appointment. The terms cover, inter-alia, duties, During the year, HFRL achieved a turnover of rights of access to information, disclosure of their Rs. 445.21 Cr and earned a profit after tax of interest / concern, dealing in Company's shares, Rs. 22.37 Cr (before Other comprehensive remuneration and expenses, insurance and Income). indemnity. The IDs are provided with copies of the Company's policies and charters of various 8. CONSOLIDATED FINANCIAL STATEMENTS Committees of the Board. The consolidated financial statements of the In accordance with Section 149(7) of the Act, Company are prepared in accordance with the 2013, all IDs have declared that they meet the provisions of Section 129 of the Act, 2013 read criteria of independence as provided under with the Companies (Accounts) Rules, 2014 and Section 149(6) of the Act, 2013 and Regulation Regulation 33 of the Listing Regulations along 25 of the Listing Regulations. with a separate statement containing the salient features of the financial performance of the The detailed terms of appointment of IDs is subsidiary. The audited consolidated financial disclosed on the Company's website in link as statements together with Auditors' Report form provided in page no. 80 of this Annual Report. part of the Annual Report. Separate meeting of Independent Directors: The audited financial statements in respect of the subsidiary Company will be made available During the year under review, a separate th to the shareholders, on receipt of a request from meeting of IDs was held on 10 March, 2020 any shareholder and it has also been placed on and all the Independent Directors were present the website of the Company. This will also be at the Meeting. available for inspection by the shareholders at Based on the set of questionnaires complete the registered office during the business hours. feedback on Non-IDs and details of various The consolidated profit after tax of the Company activities undertaken by the Company were and its subsidiary amounted to Rs. 24.76 Cr for provided to IDs to facilitate for their review / the financial year 2019-20 as compared to evaluation. Rs. 40.23 Cr in the previous year. (a) Non-Independent Directors (Non-IDs) 9. DIRECTORS & KEY MANAGERIAL PERSONNEL IDs used various criteria and methodology Independent Directors (IDs) practiced in Industry, prescribed by NRC for evaluation of Mr Martin Grammer Non-ID, All IDs hold office for a fixed term and are not Chairman of the Board and the Board as a liable to retire by rotation. whole. M/s H Lakshmanan, C N Prasad and S I Jaffar Ali were re-appointed as IDs for the second term IDs evaluated the performance of Mr Martin of three consecutive years from 6th August 2019 Grammer individually, through a set of through postal ballot approval dated 25th June questionnaires. They reviewed his 2019. interaction during the board meetings and strategic inputs given by him to improve the At the AGM of the Company held on 13th August risk management, internal controls and 2018, Mr L Bhadri and Ms Sasikala Varadachari contribution to the Company's growth. were appointed as IDs for the second term of three consecutive years effective 13th October IDs were satisfied fully with the performance 2018 and 22nd March 2019 respectively. of Mr Martin Grammer.
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(b) Chairman IDs have also ensured that the skills / The IDs reviewed the performance of expertise / competence of the Board of Chairman of the Board after taking in to Directors are in line with the Company's business requirement to enable it to function account his performance and bench marked effectively. the achievement of the Company with industry under the stewardship of Chairman. (d) Quality, Quantity and Timeliness of flow The IDs also placed on record, their of Information between the Company, Management and the Board appreciation of Chairman's visionary leadership, setting tone, pace and All IDs have expressed their overall opportunity for positive change and passion satisfaction with the support received from for constant improvement and admired the the management and the excellent work high standards of integrity and probity, quality done by the management during the last year and also that the relationship between the and adequacy of leadership of Chairman and top management and Board is smooth and his versatile performance. seamless. The information provided for the The IDs also endorsed that the Chairman is meetings were clear, concise and a very accomplished leader and is comprehensive to facilitate detailed exceptionally well informed about the state discussions. of economy. Directors appointment / re-appointment (c) Board In terms of the provisions of sub-section (6) read IDs also evaluated Board's composition, with explanation to Section 152 of the Act, 2013, size, mix of skills and experience, its meeting two-thirds of the total number of directors i.e., excluding IDs, are liable to retire by rotation and sequence, effectiveness of discussion, out of which, one-third is liable to retire by rotation decision making follow up action, so as to at every AGM. improve governance and enhance personal effectiveness of Directors. Mr Martin Grammer, Director is liable to retire by rotation at the AGM, and being eligible, offers The evaluation process focused on Board himself for re-appointment. Dynamics and upon evaluation, IDs The Directors have recommended his re- concluded that the Board is well balanced in appointment. A brief resume of the Director terms of diversity of experience with expert proposed to be re-appointed and other relevant in each domain viz., Banking, Finance, information have been furnished in the Notice Operations and Administration. The of AGM. Appropriate resolution for his re- Company has a Board with wide range of appointment is being placed for approval of the expertise in all aspects of business. shareholders at the AGM. The IDs unanimously evaluated the Key Managerial Personnel (KMP) prerequisites of the Board viz., formulation During the year under review, Mr S Jagannathan of strategy, acquisition & allocation of overall resigned as the Chief Financial Officer of the resources, setting up policies, directors' Company effective 23rd September 2019 and selection process and cohesiveness on key Mr K Subramanian was appointed as the Chief issues and satisfied themselves that they Financial Officer effective 7th November 2019, were adequate. based on the recommendation of the NRC and They were satisfied with the Company's Audit Committee. performance in all fronts and finally In terms of Section 2(51) and Section 203 of the concluded that the Board operates with Act, 2013, Mr A G Giridharan, President & CEO, global best practices. Mr K Subramanian, Chief Financial Officer and
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Ms N Iswarya Lakshmi, Company Secretary are direction to the management and contribution the KMP of the Company. to the Board cohesion. The performance evaluation has been done by the entire Board Nomination and Remuneration Policy of Directors, except the Director concerned being NRC reviews the composition of the Board, to evaluated. ensure an appropriate mix of abilities, experience and diversity to serve the interests The Board noted that all IDs have understood of all shareholders and the Company. the opportunities and risks to the Company's strategy and are supportive of the direction Nomination and Remuneration Policy was approved by the Board at its meeting held on articulated by the management team towards 22nd September, 2014 and amended from time- consistent improvement. to-time in terms of Section 178 of the Act, 2013. On the basis of the report of performance The objective of such policy shall be to attract, evaluation of directors, the Board noted and retain and motivate executive management and recorded that all the directors should extend and devise remuneration structure to link to continue their term of appointment as Directors Company's strategic long term goals, / Independent Director, as the case may be. appropriateness, relevance and risk appetite. Committees NRC will identify, ascertain the integrity, qualification, appropriate expertise and Board delegates specific mandates to its experience, having regard to the skills that the Committees, to optimize Directors' skills and candidate will bring to the Board / Company, talents besides complying with key regulatory whenever the need arises for appointment of aspects. Directors / KMP. • Audit Committee for overseeing financial Criteria for performance evaluation, disclosures Reporting; on the remuneration of directors, criteria of • Nomination and Remuneration Committee making payments to non-executive directors for selecting and compensating Directors / have been disclosed as part of Corporate Employees; Governance Report attached herewith. • Stakeholders' Relationship Committee for Evaluation of Directors and Committees redressing investors grievances; and In terms of Section 134 of the Act, 2013 and the Corporate Governance requirements as • Corporate Social Responsibility Committee prescribed under the Listing Regulations, the for overseeing CSR initiatives and inclusive Board reviewed and evaluated all Directors growth. (excluding the Director being evaluated) and The performance of each Committee was various Committees viz., Audit Committee, evaluated by the Board after seeking inputs from Nomination and Remuneration Committee, its Members on the basis of specific terms of Corporate Social Responsibility Committee and reference, its charter, time spent by the Stakeholders' Relationship Committee, based Committees in considering key issues, quality on the evaluation criteria laid down by the NRC of information received, major recommendations i.e., through a set of questionnaires. / action plans and work of each Committee. Independent Directors The Board is satisfied with the overall The performance of all IDs were assessed effectiveness and decision making of all against a range of criteria such as contribution Committees. The Board reviewed each to the development of business strategy and Committee's terms of reference to ensure that performance of the Company, understanding the the Company's existing practices remain major risks affecting the Company, clear appropriate.
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Recommendations from each Committee were Secretarial Auditor considered and approved by the Board prior to As required under Section 204 of the Act, 2013, its implementation. The Board has accepted all and the Companies (Appointment and the recommendations of the committees which Remuneration of Managerial Personnel) Rules are mandatorily required, in the relevant financial 2014, the Company is required to appoint a year. Secretarial Auditor for auditing secretarial and Details of Committees, its charter, functions are related records of the Company. provided in the Corporate Governance Report The Secretarial Audit Report for the year attached to this Report. 2019- 20 given by Ms B Chandra, Practicing Number of board meetings held Company Secretary, Chennai is attached to this report. The Secretarial Audit Report does not The number of Board meetings held during the contain any qualification, reservation or other financial year 2019-20 is provided as part of remarks. Corporate Governance Report prepared in terms of the Listing Regulations. 11. CORPORATE GOVERNANCE 10. AUDITORS The Company has been practicing the principles Statutory Auditors of good governance over the years and lays The Company at its twenty first AGM held on strong emphasis on transparency, accountability 9th August 2017 appointed M/s Raghavan, and integrity. Chaudhuri & Narayanan, Chartered A separate section on Corporate Governance Accountants, Bangalore, having Firm and a certificate from the statutory auditors of Registration No. 007761S allotted by The the Company regarding compliance of Institute of Chartered Accountants of India, as conditions of Corporate Governance as statutory auditors of the Company to hold office, stipulated under SEBI LODR Regulations, 2015 for the first term of five consecutive years, from forms part of this Annual Report. the conclusion of the said AGM, at such remuneration in addition to applicable taxes, out The CEO & CFO of the Company have certified of pocket expenses, travelling and other to the board on financial statements and other expenses as may be mutually agreed between matters in accordance with Regulation 17 (8) of the Board of Directors of the Company and the the Listing Regulations pertaining to CEO/CFO st Auditors. certification for the financial year ended 31 March 2020. The Statutory Auditors will continue to hold office for the fourth year in the first term of five 12. POLICY ON VIGIL MECHANISM consecutive years, from the conclusion of this The Company has adopted a Policy on Vigil AGM. Mechanism in accordance with the provisions of The Company has obtained necessary Act, 2013 and Regulation 22 of the Listing certificate under Section 141 of the Act, 2013 Regulations, which provides a formal mechanism conveying their eligibility for being statutory for all Directors, Employees and other auditors of the Company for the year 2020-21. Stakeholders of the Company to report to the The Auditors' Report for the financial year 2019- management, their genuine concerns or 20 does not contain any qualification, reservation grievances about unethical behaviour, actual or or adverse remark and the same is attached with suspected fraud and any violation of the the annual financial statements. Company's Code of Business Conduct and Ethics.
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The Code also provides a direct access to the Property, Plant and Equipment, Investments, Chairman of the Audit Committee to make Inventories, Trade Receivable and Other Current protective disclosures to the management about Assets. In developing the assumptions relating grievances or violation of the Company's Code. to the possible future uncertainties in the The Board at its meeting held on 8th May 2019 economic conditions because of this pandemic, the Company, as at the date of approval of the made certain amendments to the Whistle Blower financial results, has used external and internal Policy for reporting any allegations of material sources of information / indicators to estimate nature on any leakage of Unpublished Price the future performance of the Company. Based Sensitive Information. on current estimates, the Company expects the The Policy is disclosed on the Company's website carrying amount of these assets to be recovered. in the link as provided in page no. 80 of this Annual Report. Significant and material orders passed by the Regulators or Courts or Tribunals impacting 13. PUBLIC DEPOSITS the going concern status of the Company The Company has not accepted any deposit from There are no significant and material orders the public within the meaning of Section 76 of passed by the Regulators or Courts or Tribunals, the Act, 2013, for the year ended 31st March 2020. which would impact the going concern status of the Company and its future operations. 14. STATUTORY STATEMENTS Annual Return Information on conservation of energy, Extract of the Annual Return in prescribed form technology absorption, foreign exchange, is given as Annexure-II to this Report, in terms etc. of the requirements of Section 134(3)(a) of the Information on conservation of energy, Act, 2013 read with the Companies (Accounts) technology absorption and foreign exchange Rules, 2014. The same is available on the earnings and outgo are given in Annexure I to Company's website in the link as provided in this report, in terms of the requirements of page no. 80 of this Annual Report. Section 134(3)(m) of the Act, 2013 read with the Companies (Accounts) Rules 2014. Employee's remuneration Material changes and commitments Details of employees receiving the remuneration in excess of the limits prescribed under Section The manufacturing facilities and all offices of the 197 of the Act 2013 read with Rule 5(2) of the Company were closed on March 23, 2020 Companies (Appointment and Remuneration of following the nationwide lockdown due to CoVID- Managerial Personnel) Rules, 2014 are annexed 19. The Company has since obtained required as a statement and given in Annexure III. In permissions and restarted its manufacturing terms of first proviso to Section 136(1) of the facilities and all offices partially. Based on Act, 2013 the Annual Report, excluding the assessment of the impact of CoVID-19 on the aforesaid annexure is being sent to the operations of the Company and ongoing shareholders of the Company. The annexure is discussions with customers, vendors and service available for inspection at the Registered Office providers, the Company is confident of obtaining of the Company during business hours and any regular supply of raw materials and components, shareholder interested in obtaining a copy of the resuming supply chain logistics and serving said annexure may write to the Company customers. Secretary at the Registered Office of the The Company has considered the possible Company. Certain incentive / performance effects of CoVID-19 on the carrying amounts of related payments relating to financial year
20 HARITA SEATING SYSTEMS LIMITED
2019-20 for KMPs and SMPs have been Disclosure in terms of Sexual Harassment reduced / deferred on account of COVID-19. of Women at workplace (Prevention, Prohibition and Redressal) Act, 2013 Comparative analysis of remuneration paid The Company has Internal Complaints A comparative analysis of remuneration paid to Committees as required under The Sexual Directors and employees with the Company's Harassment of Women at Workplace (Prevention, performance is given as Annexure V to this Prohibition and Redressal) Act, 2013. report. During the year under review, there were no cases filed pursuant to the provisions of Sexual Details of related party transactions Harassment of Women at Workplace (Prevention, Details of material related party transactions Prohibition and Redressal) Act 2013. under Section 188 of the Act, 2013 read with the Companies (Meetings of Board and its 15. ACKNOWLEDGEMENT Powers) Rules, 2014, are given in Annexure VI The Directors acknowledge the support and co- to this report in the prescribed form. operation received from the promoters, Harita Group and Mr Martin Grammer. The Directors Details of loans / guarantees / investments thank the customers, suppliers, financial made institutions and bankers for their valuable support and assistance. During the year under review, the Company had not granted any loans or guarantees covered The Directors wish to place on record their under Section 186 of the Act 2013. appreciation of the sincere efforts of all the employees of the Company during the year Please refer note no.4 to Notes on accounts for under review. the financial year 2019-20, for details of The Directors also thank the shareholders for investments made by the Company. their continued faith in the Company. Reporting of fraud For and on behalf of the Board The Auditor's of the Company have not reported any fraud as specified under Section 143(12) of Chennai H Lakshmanan the Act, 2013. 19th June 2020 Chairman
21 HARITA SEATING SYSTEMS LIMITED
Annexure - I to Directors' Report to the shareholders Information pursuant to Section 134(3)(m) of the Companies Act, 2013
A. CONSERVATION OF ENERGY B. TECHNOLOGY ABSORPTION FOR 2019-20 1. Measures taken in the year 2019-20 for Research & Development (R&D) reduction of energy consumption: 1. Specific areas in which R&D is carried out in the • Replacing existing lights with LED lights in Company: offices • Mofussil seats for buses; • Reduce energy consumption in canteen water pumps; • Co-driver seats for Exports market • Auto cut off system in paint plant blower • Instructor seats for various cabin tractors; The above measures had resulted in an annual • Pneumatic suspended driver seats for trucks saving of Rs. 12 lakhs. & buses; 2. Proposed measures for the year 2020-21 • Mechanical suspended driver seat reducing energy consumption: developed for trucks; • Solar thermal panel implementation for LPG • Staff bus seats developed; vapouriser heating; • Energy conservation by centralised drinking • Deluxe seats developed; and RO plant; and • Driver seats for Lawn and Garden vehicles • Auto cut off system in Cathodic Electro developed. Deposition (CED) plant. The above measures will result in an annual 2. Benefits derived as a result of above measures: saving of Rs. 10 lakhs. • Growth in Export business. 3. Steps taken for utilizing alternate sources of • Additional sales through new products. energy: • Expansion of product portfolio with high end Solar thermal heating system for CED (Cathodic seating. Electro Deposition Coating) painting process has been installed at Ranjangaon plant which will 3. Future plan of action: continue to yield the benefits. • Development of identified new technologies 4. Capital investment in Energy Conservation for Tractor, Commercial Vehicles and Bus Equipment: Passenger Seats; and • Introduction of product upgrade / refresh for The Company is planning to invest Rs. 12 lakhs the identified seats. for electrical equipments as energy efficient measures and Rs. 18 lakhs for conserving Expenditure on R&D: Rs. 1,391.36 Lakhs energy by investing in Solar thermal heating. (including Capex)
22 HARITA SEATING SYSTEMS LIMITED
4. Technology absorption, adaptation and including tool invoice of Rs.32.61 lakhs as innovation: against Rs. 7,386.50 lakhs for the year ended 31st March 2019. (i) Efforts in brief: 1. Activities relating to export: • Development of modular / platform seats • During the year 2019-20, the Company to enter into global markets; has pursued multiple opportunities for • New products to existing customers; and new orders for tractor seats; and
• Established dust test chamber for driver • The Company has been continuing its and tractor seat testing. efforts to increase the current volume of export of tractor seats to USA and (ii) Benefits derived as a result of the above are: Germany. a. Price competitiveness; and 2. Total foreign exchange earned and used b. Lead time reduction for proto samples. (actual): (iii) Details relating to imported technology: (Rs. in lakhs)
Technology imported during the last three years Foreign exchange earned : 7,124.60 reckoned from the beginning of the financial year Foreign exchange used : 1,349.51 - NIL For and on behalf of the Board C. FOREIGN EXCHANGE EARNINGS AND OUTGO st Export activities during the year ended 31 Chennai H LAKSHMANAN March 2020 amounted to Rs. 5,529.57 lakhs 19th June 2020 Chairman
23 HARITA SEATING SYSTEMS LIMITED
Annexure - II to Directors' Report
Form No. MGT-9 EXTRACT OF ANNUAL RETURN for the financial year ended 31st March 2020 [Pursuant to Section 92(3) of the Companies Act, 2013 and Rule 12(1) of the Companies Management and Administration) Rules, 2014]
I. REGISTRATION AND OTHER DETAILS: i) CIN : L27209TN1996PLC035293 ii) Registration Date : 24.04.1996 iii) Name of the Company : Harita Seating Systems Limited iv) Category / Sub-Category of the Company : Public Company / Limited by Shares v) Address of the Registered office and : "Jayalakshmi Estates", contact details No.29, Haddows Road, Chennai - 600 006 Tel. : 044 - 2827 2233 Fax : 044 - 2825 7121 vi) Whether listed company Yes / No : Yes vii) Name, Address and Contact details of : Sundaram - Clayton Limited Registrar and Transfer Agent, if any Share Transfer Agent "Jayalakshmi Estates", 1st Floor, No.29 (Old No.8), Haddows Road, Chennai - 600 006 Tel. : 044 - 2828 4959; 2827 2233 Fax : 044 - 2825 7121
II. PRINCIPAL BUSINESS ACTIVITIES OF THE COMPANY All the business activities contributing 10% or more of the total turnover of the Company shall be stated:- Sl. Name and Description of NIC code of the product / % to total turnover No main products / services service HSS code of the Company 1 Seats used for Motor vehicle 94012000 97.87%
III. PARTICULARS OF HOLDING, SUBSIDIARY AND ASSOCIATE COMPANIES Holding / % of Applicable Sl. Name and Address Subsidiary / shares Section of the No of the Company CIN / GLN Associate held Companies Act, 2013 1 Harita Fehrer Limited, No.29, Haddows Road, U25200TN2008PLC068513 Subsidiary 51% 2(87) Chennai - 600 006
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IV. SHARE HOLDING PATTERN (Equity Share Capital Breakup as percentage of Total Equity) i) Category-wise Share Holding Category of No. of Shares held at the beginning of the year No. of Shares held at the end of the year Change in Shareholders (as on 1st April 2019) (as on 31st March 2020) shareholding Demat Physical Total % of total shares Demat Physical Total % of total shares during the year A. Promoters Indian - Bodies Corp. 40,57,362 – 40,57,362 52.22 40,57,362 – 40,57,362 52.22 – Foreign - Director 10,87,600 – 10,87,600 14.00 10,87,600 – 10,87,600 14.00 – Total Shareholding of Promoter (A) 51,44,962 – 51,44,962 66.22 51,44,962 – 51,44,962 66.22 – B. Public Shareholding 1. Institutions a) Mutual Funds 30,008 – 30,008 0.39 1,37,736 – 1,37,736 1.77 1.38 b) Banks / FI 1,454 200 1,654 0.02 3,444 200 3,644 0.05 0.03 c) Insurance Companies – – – – – – – – – d) Foreign Portfolio Investor-Corporate 51,175 - 51,175 0.66 4,08,341 - 4,08,341 5.26 4.60 Sub–total (B)(1) 82,637 200 82,837 1.07 5,49,521 200 5,49,721 7.08 6.01 2. Non-Institutions a) Bodies Corp. i) Indian 5,35,603 3,880 5,39,483 6.94 58,545 1,900 60,445 0.78 (6.16) ii) Overseas – – – – – – – – – b) Individuals i) Individual shareholders holding nominal share capital upto Rs. 1 lakh 13,36,418 2,65,802 16,02,220 20.62 12,90,435 1,70,507 14,60,942 18.80 (1.82) ii) Individual shareholders holding nominal share capital in excess of Rs.1 lakh 3,30,051 – 3,30,051 4.25 4,21,968 – 4,21,968 5.43 1.18 c) Others (specify) (c-i) Directors & relatives 2,020 – 2,020 0.03 2,020 – 2,020 0.03 – (c-ii) NRI Repatriable 27,476 – 27,476 0.35 22,210 – 22,210 0.29 (0.06) (c-iii) NRI-Non Repatriable 17,153 – 17,153 0.22 18,121 – 18,121 0.23 0.01 (c-iv) Clearing member 21,417 – 21,417 0.28 14,939 – 14,939 0.19 (0.09) (c-v) Limited Liability Partnership 1,421 – 1,421 0.02 122 – 122 – (0.02) (c-vi) Trusts – – – – 161 – 161 – – (c-vii) IEPF – – – – 73,429 – 73,429 0.05 0.05 Sub-total (B)(2) 22,71,559 2,69,682 25,41,241 32.71 19,01,950 1,72,407 20,74,357 26.70 (6.01) Total Public Shareholding (B) = (B)(1)+ (B)(2) 23,54,196 2,69,882 26,24,078 33.78 24,51,471 1,72,607 26,24,078 33.78 – C. Shares held by Custodian for GDRs & ADRs – – – – – – – – – Grand Total (A+B+C) 74,99,158 2,69,882 77,69,040 100.00 75,96,433 1,72,607 77,69,040 100.00 –
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(ii) Shareholding of Promoters
Shareholding at the beginning of the year Shareholding at the end of the year % change in Sl. % of shares % of shares Shareholder’s name % to total % to total shareholding No. No. of shares of Pledged / No. of shares of Pledged / during shares the Company Encumbered shares the Company Encumbered the year to total shares to total shares 1 Harita Limited 18,00,500 23.18 – 18,00,500 23.18 – – 2 Harita Financial Services Limited 2,92,700 3.77 – 2,92,700 3.77 – – 3 Harita Sheela Private Limited 4,85,000 6.24 – 4,85,000 6.24 – – 4 Harita Malini Private Limited 4,67,800 6.02 – 4,67,800 6.02 – – 5 Harita Venu Private Limited 4,67,800 6.02 – 4,67,800 6.02 – – 6 Harita Cheema Private Limited 27,000 0.35 – 27,000 0.35 – – 7 Harita Prema LLP (Status changed from Harita Prema Private Limited) 27,000 0.35 – 27,000 0.35 – – 8 Harita Trade and Services Private Limited (Formerly Harita Balaji Private Limited) 9,800 0.12 – 9,800 0.12 – – 9 Vidhar Management And Consultancy Services LLP 4,79,762 6.17 – 4,79,762 6.17 – – 10 Mr Martin Grammer (Director) 10,87,600 14.00 – 10,87,600 14.00 – – Total 51,44,962 66.22 – 51,44,962 66.22 – –
(iii) Change in Promoters' Shareholding - NIL (iv) Shareholding Pattern of top ten Shareholders (other than Directors, Promoters and Holders of GDRs and ADRs):
Opening Date of Reason % to total Cumulative Closing Balance Balance increase or for No. of shares of the No. of % to total No. of % to total (% of share decrease increase or shares Company shares shares of the shares shares of the capital) (Benpos date) decrease Company Company 3 SIGMA GLOBAL FUND Nil 01-04-2019 10-01-2020 Transfer / Purchase 3,59,554 4.62 3,59,554 4.63 31-03-2020 3,59,554 4.63
26 HARITA SEATING SYSTEMS LIMITED
Opening Date of Reason % to total Cumulative Closing Balance Balance increase or for No. of shares of the No. of % to total No. of % to total (% of share decrease increase or shares Company shares shares of the shares shares of the capital) (Benpos date) decrease Company Company UNION SMALL CAP FUND Nil 01-04-2019 21-06-2019 Transfer / Purchase 1,685 0.02 1,685 0.02 28-06-2019 Transfer / Purchase 2,021 0.02 3,706 0.05 05-07-2019 Transfer / Purchase 2,986 0.03 6,692 0.09 12-07-2019 Transfer / Purchase 7,580 0.09 14,272 0.18 19-07-2019 Transfer / Purchase 8,974 0.11 23,246 0.30 26-07-2019 Transfer / Purchase 4,300 0.05 27,546 0.35 06-08-2019 Transfer / Purchase 190 0.01 27,736 0.36 09-08-2019 Transfer / Purchase 5,008 0.06 32,744 0.42 16-08-2019 Transfer / Purchase 3,319 0.04 36,063 0.46 23-08-2019 Transfer / Purchase 5,503 0.07 41,566 0.54 30-08-2019 Transfer / Purchase 7,647 0.09 49,213 0.63 06-09-2019 Transfer / Purchase 938 0.01 50,151 0.65 13-09-2019 Transfer / Purchase 413 0.05 50,564 0.65 18-10-2019 Transfer / Purchase 25,000 0.32 75,564 0.97 22-11-2019 Transfer / Purchase 1,789 0.02 77,353 1.00 20-12-2019 Transfer / Purchase 10,672 0.13 88,025 1.13 31-03-2020 88,025 1.13 ABHAY SHYAMSUNDER CHANDAK 79,998 01-04-2019 - - - - - (1.03) 31-03-2020 - 79,998 1.03 ADITYA S CHANDAKK 75,001 01-04-2019 - - - - - (0.97) 31-03-2020 - 75,001 0.97 ARUNA AGGARWAL Nil 01-04-2019 13-03-2020 Transfer / Purchase 11,718 0.15 11,718 0.15 20-03-2020 Transfer / Purchase 14,367 0.18 26,085 0.34 20-03-2020 Transfer / Purchase 10,611 0.14 36,696 0.47 27-03-2020 Transfer / Purchase 11,010 0.14 47,706 0.61 31-03-2020 Transfer / Purchase 4,519 0.06 52,225 0.67 31-03-2020 52,225 0.67 EDELWEISS TRUSTEESHIP CO LTD AC- EDELWEISS MF AC-EDELWEISS SMALL CAP FUND 30,008 01-04-2019 (0.39) 26-04-2019 Transfer / Purchase 6,202 0.080 36,210 0.47 10-05-2019 Transfer / Purchase 2,602 0.033 38,812 0.50 17-05-2019 Transfer / Purchase 9,281 0.119 48,093 0.62 24-05-2019 Transfer / Purchase 1,618 0.021 49,711 0.64 31-03-2020 49,711 0.64
27 HARITA SEATING SYSTEMS LIMITED
Opening Date of Reason % to total Cumulative Closing Balance Balance increase or for No. of shares of the No. of % to total No. of % to total (% of share decrease increase or shares Company shares shares of the shares shares of the capital) (Benpos date) decrease Company Company THE INDIAMAN FUND (MAURITIUS) LIMITED. 32,595 01-04-2019 (0.42) 31-03-2020 32,595 0.42
KALPESH DAYALBHAI VAGHANI 26,601 01-04-2019 (0.34) 24-05-2019 Transfer / Purchase 200 - 26,801 0.34 07-02-2020 Transfer / Purchase 5,093 - 31,894 0.41 31-03-2020 31,894 0.41
SRIKANTH P MANCHIKANTI 3,750 01-04-2019 (0.05) 07-06-2019 Transfer / Purchase 8,440 0.11 12,190 0.16 16-08-2019 Transfer / Purchase 1,454 0.02 13,644 0.18 27-09-2019 Transfer / Purchase 568 0.01 14,212 0.18 04-10-2019 Transfer / Purchase 102 0.00 14,314 0.18 11-10-2019 Transfer / Purchase 100 0.00 14,414 0.19 18-10-2019 Transfer / Purchase 2,725 0.04 17,139 0.22 29-11-2019 Transfer / Purchase 3,500 0.05 20,639 0.27 10-01-2020 Transfer / Purchase 600 0.01 21,239 0.27 24-01-2020 Transfer / Purchase 5,386 0.07 26,625 0.34 31-01-2020 Transfer / Purchase 2,114 0.03 28,739 0.37 07-02-2020 Transfer / Purchase 111 0.00 28,850 0.37 28-02-2020 Transfer / Purchase 398 0.01 29,248 0.38 06-03-2020 Transfer / Purchase 25 0.00 29,273 0.38 20-03-2020 Transfer / Purchase 336 0.00 29,609 0.38 27-03-2020 Transfer / Purchase 50 0.00 29,659 0.38 31-03-2020 29,659 0.38 ASHWANI KUMAR 27,900 01/04/2019 - - - - - (0.36) 31/03/2020 - 27,900 0.36
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(v) Shareholding of Directors and Key Managerial Personnel (KMP): Opening % to Cumulative Closing Balance Name of the Balance total % to total % to total Director / (% to Date of Purchase / No. of shares No. of shares of No. of shares of KMP share Dealing Sale shares of the shares the shares the (M/s.) capital) Company Company Company H Lakshmanan 2,020 – – – 0.03 – – 2,020 0.03 (0.03) C N Prasad – – – – – – – Nil – S I Jaffar Ali – – – – – – – Nil – Martin Grammer 10,87,600 – – – 14.00 – – 10,87,600 14.00 (14.00) L Bhadri – – – – – – – Nil – Sasikala Varadachari – – – – – – – Nil – A G Giridharan – – – – – – – Nil – S Jagannathan (*) –– –––––Nil– K Subramanian ($) –– –––––Nil– N Iswarya Lakshmi – – – – – – – Nil – (*) Resigned as Chief Financial Officer effective 23rd September 2019. ($) Appointed as Chief Financial Officer effective 7th November 2019.
V. INDEBTEDNESS Indebtedness of the Company including interest outstanding/accrued but not due for payment (Rs. in Lakhs) Particulars Secured Loans Unsecured Total excluding deposits Loans Indebtedness Indebtedness at the beginning of the financial year i) Principal Amount 2,167.57 1,000.00 3,167.57 ii) Interest due but not paid – – – iii) Interest accrued but not due – – – Total (i) 2,167.57 1,000.00 3,167.57 Change in Indebtedness during the financial year • Addition – 3,000.00 3,000.00 • Reduction 692.98 3,393.87 4,086.85 Net Change (ii) (692.98) (393.87) (1,086.85) Indebtedness at the end of the financial year i) Principal Amount 1,474.59 606.13 2,080.72 ii) Interest due but not paid – – – iii) Interest accrued but not due – – – Total (i + ii) 1,474.59 606.13 2,080.72
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VI. REMUNERATION OF DIRECTORS AND KEY MANAGERIAL PERSONNEL A. Remuneration to Managing Director, Whole-time Directors and / or Manager: Not Applicable B. Remuneration to other Directors: (Rs. in lakhs) Name of Directors Total Particulars of Remuneration HL CNP SIJ LB SKV Amount Independent Directors Fee for attending board / committee meetings 0.85 0.85 0.85 0.25 0.20 3.00 Commission – – – – – – Total (1) 0.85 0.85 0.85 0.25 0.20 3.00 MG Other Non-Executive Directors Fee for attending board / committee meetings 0.15 0.15 Commission – – – Total (2) 0.15 0.15 Total Managerial Remuneration = (1) + ( 2) 3.15 Overall Ceiling as per the Act Not Applicable HL - Mr H Lakshmanan, CNP - Mr C N Prasad, SIJ - Mr S I Jaffar Ali, LB - Mr L Bhadri, SKV - Ms Sasikala Varadachari, MG - Mr Martin Grammer
C. Remuneration to Key Managerial Personnel other than MD / MANAGER / WTD (Rs. in lakhs) Sl. Key Managerial Personnel Total Particulars of Remuneration No. CEO CFO CS Amount (From 07.11.2019) 1. Gross salary (a) Salary as per provisions contained under Section 17(1) of the Income Tax Act, 1961 129.42 30.45 6.51 166.38 (b) Value of perquisites under Section 17(2) Income Tax Act, 1961 0.07 – – 0.07 (c) Profits in lieu of salary under Section 17(3) Income Tax Act, 1961 – – – – 2. Stock Option – – – – 3. Sweat Equity – – – – 4. Commission – – – – 5. Others - Contributions to provident and other funds 6.02 1.16 0.61 7.79 Total 135.51 31.61 7.12 174.24 CEO - Chief Executive Officer; CFO - Chief Financial Officer; CS - Company Secretary Mr S Jagannathan, CFO of the Company upto 23rd September 2019 received remuneration from the subsidiary company. Mr K Subramanian was appointed as the CFO of the Company effective 7th November 2019. VII.PENALTIES / PUNISHMENT/ COMPOUNDING OF OFFENCES: Nil For and on behalf of the Board
Chennai H LAKSHMANAN 19th June 2020 Chairman
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Annexure - IV to Directors' Report Particulars of Corporate Social Responsibility activities carried out by the Company in terms of Section 135 of the Companies Act, 2013 1. A brief outline of the Company's CSR policy: 3. Web-link to the CSR policy and projects or This policy encompasses the Company's programs is provided in page no. 80 of this philosophy for giving back to society as a Annual Report. corporate citizen and lays down the guidelines 4. Composition of the CSR Committee. and mechanism for undertaking socially useful S.No. Name of the Director (M/s.) Status programs for the transformation and sustainable development of the rural communities at large. 1. H Lakshmanan Chairman 2. Overview of projects or programs proposed to 2. C N Prasad Member be undertaken: 3. S I Jaffar Ali Member Focus areas relate to economic development, quality education, health care, conservation of 5. Average net profit of the Company for last three environment and the creation, maintenance of financial years Rs. 28.27 Cr infrastructure, art, culture and protection of 6. Prescribed CSR Expenditure (2% of the amount places of public and historical importance. as in item 5 above) Rs. 56.55 Lakhs
7. Details of CSR spent during the financial year (a) Total amount spent for the financial year Rs. 60.00 Lakhs (b) Amount unspent, if any – (c) Manner in which the amount spent during the financial year is detailed below. 1 Name of the Implementing Srinivasan Services Trust Agency Jayalakshmi Estates, No. 29, Haddows Road, Chennai - 600 006, Tamil Nadu Phone No: 044-2827 2233 mail id: [email protected] 2 CSR Project or activity • Eradicating hunger, poverty, promoting preventive healthcare and sanitation identified as mentioned in and making available safe drinking water; Schedule VII to the • Promotion of Education, including special education and employment Companies Act, 2013 enhancing vocation skills especially among children, women and livelihood enhancement projects; • Promoting gender equality, empowering women and measures for reducing inequalities faced by socially and economically backward groups; • Ensuring environment sustainability, ecological balance, animal welfare, agroforestry, conservation of natural resources and maintain quality of soil, air and water; and • Rural development projects 3 Sector in which the Economic Development, Education, Environment, Health and Infrastructure Project is covered
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4 Areas in which Projects / Programmes undertaken: Local Area / Others: • Hosur, Padavedu, Thirukkurungudi and Navatirupati • Mysore and Chamrajnagar • Himachal Pradesh State & district: - Tamil Nadu : Krishnagiri, Tiruvannamalai, Tirunelveli and Thoothukudi districts - Karnataka: Mysore and Chamrajnagar districts - Himachal Pradesh: Solan district Amount outlay (budget) Rs. 2100 Lakhs project or program-wise: 5 Amount spent on the Rs. 766 lakhs projects or programmes: 6 Sub-heads: Direct expenses Rs. 2008 Lakhs (including contribution of Harita Seating Systems Limited of On projects / programs: Rs.60 Lakhs) Overheads: Nil 7 Cumulative expenditure Rs. 2008 Lakhs (including contribution of Harita Seating Systems Limited of upto the reporting period: Rs.60 Lakhs)
8. In case the Company has failed to spend the "To discharge the duties cast under provisions 2% of the average net profit of the last three of the Act, members of the CSR Committee visit financial years or any part thereof, the Company places where Srinivasan Services Trust is doing shall provide the reasons for not spending the service." amount in its Board report. For and on behalf of the Board - Not applicable - 9. A responsibility statement of the CSR Committee that the implementation and monitoring of CSR H LAKSHMANAN Policy, is in compliance with CSR objectives and Chennai Chairman of the Board Policy of the Company. 19th June 2020 and Chairman of CSR Committee
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Annexure - V to Directors’ Report Comparative analysis of remuneration paid to directors and employees with the Company’s performance
Sl. Name of the Directors / Officials Ratio to Median % increase / No. (M/s.) Designation Remuneration (Decrease) in Remuneration 1. H Lakshmanan NE-ID - - C N Prasad NE-ID - - Martin Grammer NE-NID - - L Bhadri NE-ID - - S I Jaffar Ali NE-ID - - Sasikala Varadachari NE-ID - - A G Giridharan CEO NA 5% S Jagannathan* (Ceased to be CFO effective 23rd September 2019) CFO NA - K Subramanian (Appointed effective 7th November 2019) CFO NA NA N Iswarya Lakshmi CS NA NA * Received remuneration from subsidiary company CEO - Chief Executive Officer CFO- Chief Financial officer CS - Company Secretary NENID - Non executive Non Independent Director NEID - Non executive Independent Director 2. The percentage increase in the median remuneration of employees in the financial year; 15% 3. The number of permanent employees on the rolls of Company; 341 4. a. Average percentile increase already made in the salaries of employees other than the managerial personnel in the financial year 2019-20; 16% and b. Average percentile increase in the managerial remuneration in the financial year 2019-20 Not Applicable There are no exceptional circumstances for increase in the managerial remuneration. 5. Affirmation that the remuneration is as per the Remuneration paid during the year 2019-20 remuneration policy of the Company. is as per the Remuneration Policy of the Company.
For and on behalf of the Board
Chennai H LAKSHMANAN 19th June 2020 Chairman
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Annexure - VI to Directors’ Report
Particulars of contracts/arrangements entered into by the Company with related parties referred to in sub-section (1) of Section 188 of the Companies Act, 2013 including certain arm's length transactions under third proviso thereto.
1. Details of contracts or arrangements or Nature of Salient terms of Amount of transactions not at arm's length basis: contracts / Goods / the contracts or contract or NIL arrangements Services arrangements arrangement / transactions or transactions (Rs. in lakhs) 2. Details of material contract, arrangement or Sale Rexine 225.64 transaction at arm's length basis: Cost plus Purchase Foams Mark-up 3,543.10 (a) Name of the related party Harita Fehrer and Moulds Limited Services Lease Rent 65.40 availed Other services 122.61 (b) Nature of relationship Subsidiary Electricity, Man (c) Duration of the contracts / power, Rent, 2019-20 Rendering Telephone, At Cost arrangements / transactions of services Management 612.00 th (d) Date (s) of approval by 6 February 2019 & service charges, th salary, canteen the Board, if any: 6 February 2020 and Lease rent
For and on behalf of the Board
Chennai H LAKSHMANAN 19th June 2020 Chairman
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Annexure - VII to Directors' Report to the shareholders BUSINESS RESPONSIBILITY REPORT [Pursuant to Regulation 34(2)(f) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015]
INTRODUCTION Harita Seating Systems Limited provides complete seating solutions for driver and cabin seating for commercial vehicles, tractors and construction equipments, as well as passenger seats for buses across all segments. The Business Responsibility disclosures in this Report illustrate the Company's efforts towards creating an enduring value for all stakeholders in a responsible manner. This Report is aligned with the National Guidelines on Responsible Business Conduct (NGRBC) introduced by the Ministry of Corporate Affairs (MCA) in the year 2019. This report conforms to the Business Responsibility Reporting (BRR) requirement of the Securities & Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 ('SEBI LODR) and the NGRBC. The NGRBC are designed to be used by all businesses, irrespective of their ownership, size, sector, structure or location. The NGRBC also provide a useful framework for guiding companies in their operations, in addition to aligning with applicable national standards and norms governing responsible business conduct. SECTION A: GENERAL DISCLOSURES 1. Name of the Company : Harita Seating Systems Limited 2. Year of registration : 1996 3. Corporate Identity Number (CIN) of the Company (if applicable): : L27209TN1996PLC035293 4. Corporate address, telephone, email and website: : "Jayalakshmi Estates", No.29, Haddows Road, Chennai - 600 006 Tel: 044-2827 2233 e-mail: [email protected] Website: www.haritaseating.com 5. Financial Year Reported : 2019-20 6. Sector(s) that the Company is engaged in : NIC Code Description (industrial activity code): 94012000 Seats used for Motor vehicle 7. List of three key products that the Company : The Company provides complete seating manufactures solutions for automotive applications covering the following segments: • Commercial vehicles • Tractors • Off-road vehicles • Buses (Please refer to Company's website for complete list of its products) 8. Brands (top five by respective share of market) : Not Applicable owned and percentage of revenue contributed:
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Operations: 9. Location of plants (in case of manufacturing : Number of National Locations - businesses) a. National (Districts and states - top five by The Company has six manufacturing locations employee strength): as under: 1. Belagondapalli, Thally Road, Hosur - 635 114, Tamil Nadu, India 2. Plot A2 MIDC Industrial area Ranjangaon, Koregaon village, Shirur taluk, Pune - 412 210, Maharashtra, India 3. Plot No.553-D, 2nd Stage, Belur Industrial Area, Dharwad - 580 011, Karnataka, India 4. Plot No.35, Sector 4, Integrated Industrial Estate, Pantnagar, Rudrapur, Udham Singh Nagar District, Uttarakhand - 263 153, India 5. Survey No.29, 30, 31, Vellanthangal Village, No.55,Thandalam Group, Irrungattukottai, Sriperumpudur - 602 105, Tamil Nadu, India. 6. 39/2, Gram, Sonwai - Ner Sti, Rau Pithampur Road, Tehsil Mhow, District Road, Indore, Madhya Pradesh - 453 441, India b. International (Country - top three by Number of International Locations : employee strength): Nil 10. Location of major offices (in case of service businesses) a. National (Districts and states - top five by Not Applicable employee strength): b. International (Country - top three by Not applicable. employee strength): Employees: 11. Number of permanent employees 341 12. Contractual employees (seasonal, non-seasonal) Non-seasonal: 171 (in roles of security, housekeeping, estate maintenance etc) Seasonal: Nil 13. Temporary employees: 389
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14. Percentage of women employees: – a. On the Governance Structure b. In top management i.e. business and function heads; Associate entities 15. Names of subsidiary / associate companies Harita Fehrer Limited, Chennai is the only subsidiary of the Company. 16. Details of Trust / Society / Section 8 Company to further its CSR agenda: a. Names; a. Srinivasan Services Trust b. Organization form (Trust, Society, Company) b. Trust, Established in 1996 and year of establishment; c. Main objects / purpose; c. Main objects: i. Eradicating hunger, poverty, promoting preventive healthcare and sanitation and making available safe drinking water; ii. Promotion of Education, including special education and employment, enhancing vocation skills especially among children, women and livelihood enhancement projects; iii. Promoting gender equality, empowering women and measures for reducing inequalities faced by socially and economically backward groups; iv. Ensuring environment sustainability, ecological balance, animal welfare, agroforestry, conservation of natural resources and maintain quality of soil, air and water; v. Rural development projects d. Amounts and sources of funds received in d. Donations received from various entities. the reporting year; 17. Contact details of Nodal Officer for this report Mr A G Giridharan (name, designation, email id, phone number). President & Chief Executive Officer [email protected] 04347 - 233445 SECTION B: MANAGEMENT AND PROCESS DISCLOSURES This section is aimed at helping businesses demonstrate the structures, policies and processes put in place towards adopting the Principles and Core Elements. P1 Businesses should conduct and govern themselves with integrity, and in a manner ethical, transparent and accountable. P2 Businesses should provide goods and services in a manner that is sustainable and safe. P3 Businesses should respect and promote the well-being of all employees, including those in their value chains.
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P4 Businesses should respect the interests of, and be responsive to all its stakeholders. P5 Businesses should respect and promote human rights. P6 Businesses should respect and make efforts to protect and restore the environment. P7 Businesses, when engaging in influencing public and regulatory policy, should do so in a manner that is responsible and transparent. P8 Businesses should promote inclusive growth and equitable development. P9 Businesses should engage with and provide value to their customers in a responsible manner.
S.No Disclosure Questions P1 P2 P3 P4 P5 P6 P7 P8 P9 Policy and management processes 1. Names of the policy / policies that covers The Company has in place the following policies each Principle in line with the BGRBC: 1. Code of Business Conduct and Ethics 2. Whistle Blower 3. Related Party Transaction 4. Corporate Social Responsibility 5. Code of fair disclosure 6. Code of conduct to regulate, monitor and report trading by insiders 7. Quality and environment policies relating to safe and sustainable products 8. Health and safety policy. 2. Core Elements related to the Principle that All the core elements as stated in the policies the policy / policies cover 3. Policy / policies relating to each principle that has been translated into guidelines and Y Y Y Y Y Y – Y Y procedures 4. Extent to which manpower, planning and financial resources have been allocated for YYYYYY–YY the implementation of the policy / policies relating to each Principle. 5. National and International codes and standards adopted mapped to various Principles IATF 16949 YYYYYISO –YY 14001 & OHSAS 18001 SO/IEC 17025 All the policies of the Company are in compliance with the national / international standards wherever applicable.
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S.No Disclosure Questions P1 P2 P3 P4 P5 P6 P7 P8 P9 Governance, leadership and oversight 6. Names of the above policies that have been The following policies / codes have been approved approved by the Board / top management by the board: 1. Code of Business Conduct and Ethics 2. Whistle Blower 3. Related Party Transaction 4. Corporate Social Responsibility 5. Code of fair disclosure 6. Code of conduct to regulate, monitor and report trading by insiders Other operational / internal policies are approved by the management. 7. Name of the specified committee(s) of the Audit committee and Board oversees the Board / Director / Officer and processes to implementation of various policies / Codes as oversee the implementation of the policy / required under the legal framework in force from policies time to time. CSR committee oversees the implementation of CSR activities by the Company. All the policies and their implementation are being reviewed at regular intervals by the board. 8. The process for board/ top management to The implementation of the Company's Code of review performance against the above policies Conduct and other policies are reviewed through and incorporating inputs internal audit function. The Quality, Safety & Health and Environmental policies are subject to internal and external audits as part of certification process and continuous assessments. 9. Process for board/ top management to review All policies adopted by the Company for ensuring compliance with statutory requirements of the orderly and efficient conduct of business relevance to the Principles and rectify any including adherence to Company's policies have non-compliances. been evaluated annually internally. The report on Company's conduct of its businesses is presented to the Board for its review and further improvement of its standards. 10. Frequency of the reviews of the business's The board on a continuous basis reviews the alignment with the Principles and Core business' alignment with the principles and core Elements conducted by the board / top elements. management
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S.No Disclosure Questions P1 P2 P3 P4 P5 P6 P7 P8 P9 Stakeholder Engagement 11. Description of the process to identify your The Company is aware of the fact that not all business's key stakeholders stakeholders have a direct business engagement with it. However the Company has identified eight stakeholder groups: 1. Investors 2. Employees 3. Customers 4. Suppliers 5. Government 6. Regulatory Authorities 7. Trade Union 8. Local Community 12. Description of the process to engage with The Company continuously and actively engages your stakeholders on the Principles with the stakeholder groups. The Company also recognizes that stakeholder engagement is an integral part of partnership building and aims to institutionalize a structured approach through a formal process in the future. 13. Description of the processes to identify groups As part of the local community initiative, which is that are vulnerable and marginalized part of the eight stakeholder groups identified, the stakeholders. Company identifies marginalized and disadvantaged groups through need assessment in all the villages where it works by engaging with the local communities around the Company's manufacturing units. 14. Description of the processes to identify issues The Company strives to achieve inclusiveness by related to inclusion and impact of adopting the encouraging people from all sections of the Principles on vulnerable and marginalized community irrespective of caste, creed or religion stakeholders. to benefit from its CSR initiatives which would also be focused around communities that reside in the proximity of the Company's manufacturing units in the country. Communication 15. Description of process to communicate to The Company engages with stakeholders formally stakeholders, the impact of your policies, and informally to share information, discuss the procedures, decisions and performance that Company's sustainability priorities, programs and impact them. performance, and determine opportunities to support the community's goals. 16. Description of how the business communicates The Company communicates the performance the results of stakeholder engagement in the against the Guidelines to the stakeholder through public domain. its website, stakeholder interactions, BRR and Annual Report.
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S.No Disclosure Questions P1 P2 P3 P4 P5 P6 P7 P8 P9 17. Description of the process of communicating The Company listens to the viewpoints of its performance against these Guidelines to stakeholders and addresses them on priority. relevant stakeholders. Such inputs received from the engagement process are valued by the Company and these help to identify material aspects. The progress on the material aspects are communicated in Annual Report, BRR and on website at periodic intervals.
18. Note on how disclosures and reporting helped Such measures have helped the Company to in improving business performance / strategy. design its sustainability strategy to balance the different stakeholder needs and expectations.
If answer to question (1) above is "No" i.e. not all Principles are covered by a policy, reasons to be stated: Questions P1 P2 P3 P4 P5 P6 P7 P8 P9 The Company has not understood the Principles ------The Company is not at a stage where it finds itself in a position to formulate and implement the ------policies on specified Principles The Company does not have financial or manpower ------resources available for the task It is planned to be done within next 6 months ------It is planned to be done within next 12 months ------Any other reason (please specify) P7 - the Company does not engage in influencing public and regulatory policy. Therefore there is no need for such policy. PRINCIPLE 1: BUSINESSES SHOULD CONDUCT AND GOVERN THEMSELVES WITH INTEGRITY, AND IN A MANNER ETHICAL, TRANSPARENT AND ACCOUNTABLE. Essential Indicators: 1. Month / year of last review by Governance Structure / top management of performance of the business across the Principles and Core Elements of the Guidelines: Company's current and future organization structure of senior level employees are reviewed by the Nomination and Remuneration Committee at periodical intervals. 2. Percentage Coverage of leadership team by awareness programmes on the Guidelines: a. In reporting year : 100 % of the functional heads are covered by awareness programmes on the Guidelines at all times. b. Total to date : 100 % 3. Percentage of suppliers and distributors (by value), in the year: a. Covered by awareness programmes for the Guidelines : We have communicated the policy to all suppliers. We sell directly to customers, and do not have distributors.
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b. Had responsible / sustainable business policies in place? - Yes, as confirmed by the suppliers. Yet to be validated. 4. Number of meetings/ dialogues with minority shareholders that were organized in the year: Nil 5. Number of complaints received on any aspect of the NGRBC in the year from: a. Shareholders / investors - Nil b. Lenders - Nil 6. Number of the above complaints pending resolution at close of year: Not Applicable 7. Value of non-disputed fines / penalties imposed on your business by regulatory and judicial institutions in the year? Nil 8. Number of complaints / cases of corruption and conflicts of interest that were registered in the year? Nil 9. Details of unmet obligations (fiscal, social, etc.) arising out of any benefits or concessions provided by the central, state, or local governments: Nil Leadership Indicators: 1. Percentage coverage of all employees by awareness programmes for the Guidelines: a. In reporting year - 100 % of the functional heads b. Total to date - 100% The reporting under the guidelines are ensured by the functional heads and the awareness programme for the guidelines was conducted to the said functional heads. 2. Percentage of suppliers and distributors (by value) covered by social and environmental audits: a. In reporting year - Nil b. Total to date - Nil 3. Was report on responsible business conduct made, in the year: a. As per mandatory / global reporting frameworks -No b. Available in the public domain - Not Applicable c. Assured by a third party - Not Applicable 4. Details of non-disputed fines / penalties imposed on your business by regulatory and judicial institutions in the year available in public domain: Nil 5. Provide examples (up to three) of corrective action taken on the above fines/penalties imposed. Not Applicable. 6. Provide examples (up to three) of corrective action taken on the complaints / cases of corruption and conflicts of interest to prevent recurrence. Not Applicable
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PRINCIPLE 2: BUSINESSES SHOULD PROVIDE GOODS AND SERVICES IN A MANNER THAT IS SUSTAINABLE AND SAFE Essential Indicators: 1. List top three goods / services (revenue in the year) which incorporate environmental and social concerns, risks, and / or opportunities in their design. The Company has installed roof top solar panels at its Hosur plant, for supplying process heat for the pre-treatment plants for Powder coating and CED plants. The excess heat from this solar panel is also used for the canteen. The Company has developed pneumatic and mechanically suspended driver seats for trucks and tractors. The suspension function on these isolates the body of the driver from the road / field vibrations reducing the fatigue of the drivers and improving their comfort. The Company is also working to store harvested rain-water for use in the plants to reduce the use of ground water. 2. Details of investments in specific technologies to improve the environmental and social impacts (top three by value): • Roof top solar thermal for process heat: Rs. 2.7 Cr • Pneumatic and mechanically suspended driver seats: Rs. 9.8 Cr • Rain-water harvesting: Rs. 0.4 Cr 3. Percentage of input material and services (by value), in the year, sourced from suppliers adhering to internal or external sustainability standards / codes / policies / labels 100 % 4. Percentage of total raw material consumed in the year (by value) that consisted of material that was recycled or reused) ( a.<5% ; b. between 5%& 25%, c. > 25%): < 5% 5. Describe the process in place to safely collect, reuse, recycle and dispose of your products at end-of- life: The Company's products are sold to automotive OEMs who advise their customers on end of use recyclability. Since we do not sell directly to end customers, we do not have a process for collection and reuse / recycling of the Company's products. Automotive products are typically 90% or more reusable, recyclable, recoverable (cumulative). To facilitate this, recyclability symbol marking done on the plastic parts (more than 100g component) for easy identification during recycling. The Company also restricts usage of restricted hazardous chemicals in the components. Hence, during recycling, the hazardous substances will not enter into air, water and soil. Leadership Indicators: 1. For goods and services that incorporated environmental and social concerns, give details of: a. Resource use (energy, water, raw material) per unit produced in the year: The Company takes up internal projects to reduce energy consumption - however, per unit (or seat) energy is not calculated.
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b. Reduction in resource use covering sourcing, production and distribution in the year: Annual Value Analysis and Value Engineering (VA / VE) exercises to reduce content in the seats - this will improve the fuel efficiency of the customer's vehicle. c. Sustainability standards / codes / labels adhered to: Recyclability symbol marking done on the plastic and rubber parts (more than 100g component) for easy identification during recycling. d. Product life cycle assessment completed: Life Cycle Assessment studies were done for seats. Approximately 55% of the seat content is ferrous material which is completely recyclable. Another 5% is plastics which is also fully recyclable. 2. Information on the impacts of your products across the value chain communicated to: a. To which stakeholder groups? Customers. b. By which channels for each group? Direct communication to customers. c. At what frequency? Need based. 3. Provide examples (up to three) on how the feedback received from stakeholders is used for improvements: Customers request specific weight reduction projects based on which the Company modifies the design or use alternate materials to reduce the weight.
PRINCIPLE 3: BUSINESSES SHOULD RESPECT AND PROMOTE THE WELL-BEING OF ALL EMPLOYEES, INCLUDING THOSE IN THEIR VALUE CHAINS. Essential Indicators: 1. Complaints received on cases arising out of discrimination and Number of complaints received in the year : The Company follows clear code of conduct and the same is communicated to every employee. It clearly states that the Company is an equal opportunity employer and prohibit any kind of discrimination/ favouritism on the basis of gender / region / religion / race / caste / colour any abide by laws of the country. During 2019-20 the Company has not received any complaints relating to discrimination. 2. Number of the above complaints pending resolution at end of the year: Not applicable since during the year 2019-20, the Company has not received any complaints relating to discrimination. 3. Percentage of permanent employees who are members of the employee association(s) recognized by the management: 100% of permanent workmen are members of Harita Seating Employees Union affiliated to INTUC. 4. Percentage of your establishments / value chain that has been audited in the year for - a. Child labour; b. Forced / involuntary labour: As a part of Internal audit, this particular aspect is scheduled and covered during the audit process. Audits are conducted in all locations of the Company.
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5. Number of cases of child labour in your establishments/ value chains identified to date - a. Resolved; b. Pending resolution: There are no cases of child labour. 6. Number of cases of forced / involuntary labour identified to date - a. Resolved; b. Pending resolution : No cases reported. 7. Percentage of your employees that were paid above the legal minimum wage in the last year: 100%. Majority of employees are above the legal minimum wage limit as agreed through long-term wage settlements for the Company's Workforce and market/industry benchmark for Executives and Managers. Stipends for trainees are fixed above legal minimum wage limit through attracting talent from campus / market. 8. Ratio of the highest salary paid to the lowest salary paid amongst your permanent employees: Refer Annexure V to the Directors Report for the year 2019-20. 9. Number of cases of delay in payment of wages during the year - a. Resolved; b. Pending resolution: NIL. Wages for employees are paid on or before last working day of the month. Stipend for trainees is th paid on or before 7 day of every month. th Wages for contract workforce is ensured to be paid through Service providers on or before 7 day of every month. 10. Number of complaints related to harassment to date - a. Resolved; b. Pending resolution: The Internal Committee (IC) meets regularly towards reviewing issues raised and solved on harassment. It also submits its annual report as stipulated by the POSH Rules. The Company has not received any complaints relating to harassment till date. 11. Percentage of employees (all categories) trained on health and safety issues and measures - a. In the year; b. Total to date: 100% of new recruits in all categories including Workforce, Executives and Managers undergo health and safety orientation before being deployed. 100% of temporary workforce is also provided health and safety orientation before being deployed. As a special drive, all employees have been given specific Covid-19 related training before the plants restarted (this in in FY2020-21). 12. Percentage of employees provided training and skill upgradation - a. In the year; b. Total to date: In-house developed role based online learning management system is available towards identifying training needs for every employee as a part of annual planning process for their current and next role competency requirement. Training programmes are scheduled and employees are encouraged to upgrade themselves by getting certified through online / classroom training.
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Leadership Indicators: 1. Categories of employees (list up to three) supported by affirmative action, and has there been any change from the previous year: Workforce, Executives and Managers are three categories of employees. Continuous efforts are made towards affirmative actions as and when opportunities arise for recruitment/ engagement of Workforce, Executive and Managers. 2. Percentage of non-permanent employees that are linked to any standing platform/ association: The non-permanent employees are not linked to any platform / association. 3. Percentage of children identified as employed in your establishments / value chain that have been remediated - a. In reporting year; b. Total to date : No cases of child labour. As a system lock, hiring process allows only adults aged 18 years and above. As a part of daily management, entry into the premises is restricted only for persons 18 years and above. With all the Company's Supplier and Service provider, this requirement is one of the clauses in all the Business agreements mentioned and enforced. 4. Percentage of forced/ involuntary labour identified in your establishments / supply remediated - a. In reporting year; b. Total to date: NIL. Engagement of Employees, Suppliers and Service Providers is through contract of employment and agreement which contains the clause for separation by giving notice on either side. 5. Examples of steps taken (up to three) to prevent adverse consequences to the complainant in the case of harassment cases: As mentioned in Code of Conduct, all complaints, enquiries and investigations are treated with confidentiality and the protection to whistle blower is also assured. Needless to mention, any attempts to intimidate the whistle blower is also treated as violation of Code of Conduct and communicated to all employees. Information revealed by the committee is strictly on a need to know basis. The process followed is with Principles of Natural Justice, maintaining anonymity of the employee. 6. Percentage of supply chain partners (by value) that were assessed for adherence to health and safety practices: 100% of the suppliers and service providers. 7. Describe the work-life balance issues (up to three) that were brought up by employees: i. The long commute from home to plant and return. ii. With the plants being located outside cities, the ease of taking half a day off for personal work is defeated unless one has personal transportation iii. Alternate Saturday working for executives and managers.
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8. Examples (up to three) of identified work-life balance topics that have been implemented: i. Working hours • No overstay day (Mondays) introduced. • Additionally working hours / days are accumulated under compensatory off credit. • Accumulations beyond 180 hours are encashed. • Flexible shift timings on case to case basis. Eg. For Executive & Managers under exports segment enabled. ii. Wellness • Health check-ups • Yoga / lifestyle management sessions iii. Sabbatical leaves • Temporary break in career or a long leave under emergency / unavoidable situations. • Break to pursue higher education.
PRINCIPLE 4: BUSINESSES SHOULD RESPECT THE INTERESTS OF, AND BE RESPONSIVE TO ALL ITS STAKEHOLDERS Essential Indicators: 1. List stakeholder groups that have been identified as key to your business: Customers, Employees, shareholders, Suppliers, and Local Community. 2. Positions / departments / functions responsible for engagement with each stakeholder category identified above? Customers: Sales & Marketing team, Operations team Employees: Human Relations team, Personnel team Share Holders: Finance & Secretarial team Suppliers: Purchase team 3. Number of stakeholder groups that were formally engaged on environment and social issues in the last year: We engage with customers on a case to case basis on environmental and sustainability related issues. All employees were formally engaged on the environment day, with a series of programmes to protect the environment. 4. Percentage of input material and services (by value), in the year, that were procured from local and small vendors / producers: > 90% of the input is sourced from local vendors (within India) 45% of the input is sourced from MSME suppliers. Leadership Indicators: 1. Frequency of engagement with each stakeholder group: Daily, Weekly, Monthly, Quarterly, Yearly- Based on the needs and Key Performance Indicators (KPI) review schedules.
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2. Examples (up to three) of how the business has incorporated inputs from stakeholders: With support from one of the Company's customers, the Company has been able to reduce their inventory levels as well as improve the delivery performance by getting the vehicle assembly details directly from their IT system to the Company's plant. Despite the lockdown due to Covid, the Company seized the opportunity to provide on-line training sessions to all its employees. 3. List of the vulnerable and marginalized groups in each stakeholder group : Community - villagers and economically deprived women. 4. Examples of decisions and actions taken by the business to address the interests of vulnerable/ marginalized groups : The Company work with its communities through Srinivasan Service Trust, addressing the needs and aspirations of economically deprived women.
PRINCIPLE 5: BUSINESSES SHOULD RESPECT AND PROMOTE HUMAN RIGHTS 1. Percentage of employees that have been provided training on human rights issues - a. In the year; b. Total to date: The Company's Code of Conduct covers Human rights issues which is issued to all employees. 2. Employee categories that are covered by the human rights policies of the business - Permanent/ Contract / Casual All categories of employees viz., Permanent / Contract & Casual are covered by the Human Rights Policies. 3. Number of business agreements and contracts with third party partners that were reviewed in the year, to avoid complicity with adverse human rights impact in the previous year: 100% of business agreements are reviewed so as to ensure protection of Human Rights. 4. Stakeholders groups governed by the grievance committee for human rights issues: No formal committee exists. Concerned team members for a committee to review complaints raised if any. The whistle blower mechanism provides employees to report any concerns or grievances pertaining to any potential or actual violation of the Company's Code of Conduct, which covers all aspects of BRR. Each of the policies formulated by the Company has an in-built grievance and redressal mechanism. 5. Number of stakeholders that reported human rights related grievances and/or complaints - a. Received in the year; b. Pending resolution: Nil Leadership Indicators: 1. Percentage of contractual employees and value chain partners that have been made aware / provided training on human rights issues - a. In the year; b. Total to date: All contract agreements contain compliance to all statutory labour laws including POSH. 2. External stakeholder groups and representatives that are covered by the human rights policies of the business: All contract agreement with stakeholders have clauses pertaining to Industrial & labour laws compliance, which addresses human rights. No separate human rights policy exists.
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3. Stakeholder groups that have been made aware of the grievance mechanisms for human rights issues - a. During the year; b. Total to date: 100% of stakeholders have been made aware of the grievance mechanism for any issues including human rights. In addition, following programmes enable picking up early warning signals and taking action closer to the source of occurrence. • Union and Employee Contact Program - Monthly • Employee Address - Monthly • Open Door Policy • Plant Committee Meeting - Monthly • Workers participation through various committees which meet periodically / monthly • Need based meetings with Union 4. List (up to three) corrective actions taken to eliminate complicity with adverse human rights impact in the last year. Nil 5. Provide (up to two) examples of a business process being modified / introduced as a result of addressing human rights grievances/ complaints. Not Applicable. 6. Provide details of the scope and coverage of any human rights due-diligence conducted during the year. Nil
PRINCIPLE 6: BUSINESSES SHOULD RESPECT AND MAKE EFFORTS TO PROTECT AND RESTORE THE ENVIRONMENT. Essential Indicators 1. Material risks of potential or actual adverse impact upon the environment and communities by the business: a. Identified in the year: The Company has identified hazardous chemicals that pose risk to the environment as well as to the society - Restriction of Hazardous Substances (RoHS) Directive - 2011/65/EU - Identified in FY 2018-19 b. Mitigation and adaptation measures put in place for the above environmental risks: The Company has created internal material standard that lists all the prohibited and declarable substances. This internal standard is shared with the Company's designers and suppliers. Declaration from the suppliers are also received for the same. 2. Good practices (up to three) in reduction, recycling, and reuse initiatives that contributed to lowering the adverse environmental footprint of your business activities: Rainwater harvesting for process use, reducing the groundwater consumption. 3. Examples of any collective action by your business with other businesses / NGOs / government agencies / international partners / development institutions undertaken to address any of the environmental risks opportunities identified above: Nil
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4. Details of any adverse orders in respect of any show cause / legal notices from CPCB/ NGT/ SPCB received during the year: Nil Leadership Indicators: 1. Information on environmental impact assessments undertaken in the year: a. Have the results been communicated in the public domain. b. Provide details of any actions taken to mitigate any negative social impacts. Necessity for Environment impact assessment did not arise. 2. Risk management strategies and measures for each material environmental risk identified for the business: a. Details of measures: Risk Management Strategies: Hazardous chemical elimination: • Replacement of hexavalent chromium passivation with trivalent chromium passivation in the products. b. Targets and achievement values: S.No Risk Target Achievement 1. Ground water depletion and 100% harvesting of rain All the Company's deteriorated ground water water. manufacturing locations quality. have percolation ponds / farm ponds to collect and recharge ground water. 3. Details of your specific contribution to India's Nationally determined Contributions (submitted at UNFCCC COP21 in 2015): Not applicable 4. New businesses - products - services created to address the material environmental risks identified: Not applicable a. Information on businesses created: Not applicable b. Percentage of revenue contributed by these: Not applicable 5. Details of good practices cited in reduction, recycling, and reuse initiatives benchmarked against industry best practice: Not applicable PRINCIPLE 7: BUSINESSES, WHEN ENGAGING IN INFLUENCING PUBLIC AND REGULATORY POLICY, SHOULD DO SO IN A MANNER THAT IS RESPONSIBLE AND TRANSPARENT Essential Indicators: 1. Review public policy advocacy positions by the governance structure for consistency with Principles of these Guidelines a. Frequency; b. Month/ year of last review: Not applicable
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2. Names of trade and industry chambers and associations that you are a member/affiliate of: - Automotive Component Manufacturers Association (ACMA) - Confederation of Indian Industry (CII) 3. Details of any adverse orders received from regulatory authorities for anti-competitive conduct by your business: Nil 4. Monetary contributions (if any) that have been made to political parties: Nil Leadership Indicators: 1. The public policy positions available in the public domain: Not applicable 2. Examples (up to three) of any policy changes in the past year as a result of your advocacy efforts: Not applicable 3. Details of corrective action for anti-competitive conduct, taken by the business based on adverse orders from regulatory authorities: Not Applicable.
PRINCIPLE 8: BUSINESSES SHOULD PROMOTE INCLUSIVE GROWTH AND EQUITABLE DEVELOPMENT. Essential Indicators: 1. Social impact assessments of your business operations conducted: a. Number completed in the year? The Company carries out its welfare and CSR activities through Srinivasan Services Trust (SST). SST's intervention under CSR are mainly confined to individual and household level, the measure on the impact are regularly made at village level internally through few indicators such as: • Increase in community involvement on SST initiatives in villages as equal partner in the process of change. • Increase in the delivery of existing government schemes and programs in villages which enable a win -win situation for people and government officials. • Increase in the level of ownership by community towards sustainability of development created in villages through community based organizations. b. Number conducted by an independent external agency. No social impact assessment was done by external agencies in this year. Development of Social impact assessment matrix by an external agency is under progress in SST. 2. Examples of products, technologies, processes or programmes (up to three) that contribute to the benefit of the vulnerable and marginalized sections of society: • Facilitating formation of Self Help Groups (SHG) among rural women. • Facilitating SHGs to avail credit facilities from banks • Enabling farmers to utilize the benefit of Agriculture schemes announced by the Government. • Undertaking infrastructure repair works for balwadis, school, health centre, water supply and water storage structures.
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• Conducting adult literacy programs among village women folk. • Encouraging farmers to adopt good agricultural practices for increasing yield. 3. With respect to projects during the year for which Re-settlement and Re-habilitation (R&R) is applicable - a. Number of persons that were affected / displaced by these projects ; b Gross amount paid out to project-affected and displaced persons: Not applicable. 4. Details of investments (top three by value) in regions which are underdeveloped: To implement the CSR activities the working areas are categorised into clusters based on geographical division. The top three invested clusters during this year includes: 1. Thirukurungudi, Tamil Nadu : Rs. 151.85 lakhs 2. Hosur, Tamil Nadu : Rs. 117.58 lakhs 3. Padavedu, Tamil Nadu : Rs. 94.10 lakhs 5. Examples of goods and services (up to three) that incorporate local traditional knowledge: The resource and skills available with the Company and employees are transformed to community for making better quality produce such as: • Systematic way of honey collection without disturbing the bees and honey combs. • Concerting waste banana bark into value added product. • Concerting palm leaf into handicraft product. • Making of eco-friendly bags from jute. Similarly the products produced by the community on good quality and enhanced quantity are utilized by Company in canteens and by employees. 6. Summary of the key themes covered by CSR initiatives (as per Section 135 of Companies Act 2013) or linked to the CSR Policy of the business: • The Company CSR initiatives towards developing a conduit between the government and local communities, enabling people to access various government schemes and benefits. • The attempt is to make people independent and drivers of change themselves. The idea is to eventually convert individual beneficiaries into community leaders, who in turn motivate and guide others to bring about social and economic transformation of communities. • Development of rural communities requires a holistic approach where different aspects in an individual's life need to be addressed. • The economic well-being, education, social empowerment, health of the community and clean environment are all interrelated. Improvement of any one parameter often results in a commensurate improvement in others. Leadership Indicators: 1. With respect to these social impact assessments: a. Results made available in the public domain: The results of social impact assessments of SST is made available in its Website: www.tvssst.org. b. Details of any actions taken to mitigate any negative social impacts: No such negative social impact noticed. SST has in house planning, implementation and monitoring team, which review the project activities in various locations at periodic intervals. The CSR team are flexible to take forward the learning at every stage of the project and do course corrective measures.
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2. Numbers benefitting from such beneficial products, technologies or processes: • 485 women SHGs formed with 6950 members. • Rs.15.68 crores received as loan by women SHG members from banks. • Rs.25 crores worth of government schemes availed by farmers in the Company's working villages. • 204 infrastructure works repaired/ improved. • 526 families got direct benefit through WADI plantation. • 1580 illiterate women motivated to undergo literacy classes. • No. of farmers enabled to undertake soil fertility measures: 2300 • No. of farmers enabled to undertake soil & water conservation measures: 750 • No. of farmers enabled to undertake crop protection measures: 900 3. With respect to projects during the year for which R&R is applicable - a. Was the R&R package developed in consultation with project-affected people; b. Information on gross amounts, made available in the public domain: Not applicable. 4. Channels / platforms used to communicate Information regarding resolution of grievances / complaints from communities: CSR team members lives in villages where welfare activities are carried out, in order to understand the needs and receive feedback then and there. Continuous interaction with community to understand the benefit and utility of various programs implemented through SHG meetings, Gram sabha and meeting with various community based organisations. Feedback from government officials at local, block and district level on the effectiveness on implementation of the government welfare schemes and programs at grass root level villages. 5. Examples (up to three) of economic and social value addition in these underdeveloped regions: • Community involvement for inclusive development: Treating the community as equal partners in the process of change. They also play an active role on monitoring and evaluation. • Facilitate and strengthen delivery of existing Government schemes and programs: enabling a win- win situation for the local Government officials and institutions. Hence check and balance done by government departments. • Empower CSR task force for achieving sustainable outcomes. 6. Examples where benefits of this local traditional knowledge being used by the business are shared with the community: The learnings we have within factories which are suitable for village environment will always be utilized in the intervention villages. Few such learning in Company shared with community are: • The needed resources which including ideas, inspiration and funds may are all be within reach but mobilization of the needed is key. • Identify the priority needs and focus to ensure the benefits of development reach. • Effective targeting is key to achieving maximum impact. From a struggle for access, to a path paved with opportunities: • Irulambarai, Tamil Nadu - once was a road less village. • Children couldn't access their school as the small path that cut through fields was unsafe. • Farmers had to hire people to carry their produce as head loads to neighboring markets. Even a sick person had no choice but to be carried up to this point.
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• The 2 kilometer stretch was the main stumbling block in the progress of the people. The villager's efforts to resolve this by approaching various ways had failed. • The SST met leaders of the community and key beneficiaries. They were briefed and it was decided that instead of searching outside source, villagers themselves would carry out the construction of the road - our first taste of self-reliance. • Of the total cost of Rs 2,00,000, a sum of Rs. 30,000 came from key beneficiaries in the village whilst the rest was contributed by SST. • It took a month to complete the project. Today, the gravel road is more than a lifeline. Knowledge being used • A lot of development work in agriculture-based communities is about finding local cost-effective solutions. • It is important to first offer a holding hand so that people gain confidence to follow. • People's mindsets are changing and they are taking the initiative for fulfillment of their needs. 7. Number of beneficiaries covered under your CSR projects (as per Section 135 of Companies Act 2013), disaggregated by the vulnerable and marginalized group categories: SST CSR initiatives are in 5000 villages enabling people to enhance the socio economic condition. Out of 24.50 lakhs people, 1.29 lakhs are tribal people. 8. Examples of how the impact of your community initiatives contribute to local and national development indicators: • So far 63,000 women are enrolled by SST and enabled to do savings. • So far 1,15,100 farmers sensitized on crop management practices and various schemes cum programs through agriculture department, agriculture institutions. • So far 1,36,500 livestock owning families made aware on the available veterinary care services, feeding practice along with animal husbandry department and veterinary science universities. • So far 4,80,600 households sensitized on the need of toilet construction and utilization of government support for constructing. • So far 4,28,500 households made aware about the need of proper solid waste disposal and educated to support local panchayat for disposal of solid waste. • Enhance water storage capacity of 272 MI tanks by desilting to a water holding capacity of 1438 million litres. • Sequestering and fixing carbon to a tune of 1080 tonnes by supporting for planting 5.44 lakh trees in community & private land in last five years in addition to economic benefits.
PRINCIPLE 9: BUSINESSES SHOULD ENGAGE WITH AND PROVIDE VALUE TO THEIR CUSTOMERS IN A RESPONSIBLE MANNER Essential Indicators 1. Examples (up to three) where adverse impacts of goods and services of your business have been raised in public domain: Effect of fire redundant foam and fabric in limiting the spread of fire in buses. Harita uses only fire retardant grade of foam and upholstery, so is not adversely impacted by this. 2. Percentage by value of goods and services of the business that carry information about: a. Environmental and social parameters relevant to the product: Not applicable.
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b. Safe and responsible usage: Not applicable 3. Number of consumer complaints in respect of data privacy - a. Received during the year; b. Pending resolution: Nil 4. Number of consumer complaints in respect of advertising: a. Received during the year - Nil b. Pending resolution - Nil 5. Number of consumer complaints in respect of delivery of essential services- a. Received during the year; b. Pending resolution: Nil Leadership Indicators: 1. Corrective actions taken on adverse impacts of goods and services of your business - a. Details; b. Communicated in the public domain: Not applicable 2. List of national-international product labels / certifications being used by the business: 1. e-Mark for ECE - Economic Commission of Europe 2. ADR - Australian Design Rule 3. Channels platforms where information on goods and services of the business can be accessed: Not applicable 4. Steps taken to inform and educate vulnerable and marginalized consumers about safe and responsible usage of products: Not applicable 5. On complaints received in respect of data privacy and advertising, indicate what corrective actions were taken to ensure that these do not get repeated. Not Applicable. 6. Processes in place to inform consumers of any risk of disruption/ discontinuation of essential services. Not Applicable.
For and on behalf of the Board
Place : Chennai H Lakshmanan th Date : 19 June 2020 Chairman
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Annexure - VIII to Directors' Report to the shareholders Report on Corporate Governance
1. Company's philosophy on code of governance The Company believes in ensuring corporate fairness, transparency, professionalism, accountability and propriety in total functioning of the Company, which are pre-requisite for attaining sustainable growth in this competitive corporate world. Obeying the law, both in letter and in spirit, is the foundation on which the Company's ethical standards are built. The Company would constantly endeavour to improve on these aspects. The Company's corporate governance philosophy has been further strengthened by adopting a Code of Business Conduct and Ethics and Code of Conduct to Regulate, Monitor and Report Trading by Insiders for prevention of insider trading by the Directors and Designated Persons and Code of practices for fair disclosure of unpublished price sensitive information and various other policies available on the Company's website www.haritaseating.com.
2. Board of Directors The Board of Directors (the Board), which consists of eminent persons with considerable professional expertise and experience, provides leadership and guidance to the management, thereby enhancing stakeholders' value. 2.1 Composition and category of directors: As on 31st March 2020 the total strength of the Board consists of six Directors. All the Directors are non-executive Directors. Out of the six non-executive Directors, five Directors are independent Directors. Chairman is a non-executive and independent director (NE-ID). The number of independent Directors is more than one third of its total strength. The composition of the Company's Board is in conformity with SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (Listing Regulations). Mr H Lakshmanan, Mr C N Prasad and Mr S I Jaffar Ali, Non - Executive Independent Directors (NE- ID) have been re-appointed by the shareholders on 25th June 2019 by way of postal ballot for a term of three consecutive years. Their present tenure is upto 5th August 2022. Mr L Bhadri and Ms Sasikala Varadachari were appointed as Non-executive Independent Directors of the Company for the second term of three consecutive years effective 13th October 2018 and 22nd March 2019 respectively, with the approval of shareholders by way of special resolutions passed at the annual general meeting held on 13th August 2018. Mr Martin Grammer, director is liable to retire by rotation at the ensuing annual general meeting. As required under Regulation 16 of the Listing Regulations, it is also ensured that IDs of the Company do not hold NE-NID position in another company, where any NE-NID of the Company is an ID. 2.2 Board Meetings: The Company, in consultation with the Directors, prepares and circulates a tentative annual calendar for meetings of the committees / Board in order to assist the Directors for planning their schedules well in advance to participate in the meetings. Board and Committee meetings through video conferencing or other audio visual means was made available to the Directors. For restricted items of businesses Directors participation through VC are permitted in the discussions wherever necessary quorum of Directors was physically present at the meeting.
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The Company regularly places, before the Board for its review, all the information as required under Part A of Schedule II to Listing Regulations such as annual operating plans, capex budget and its quarterly updates, quarterly financial results, minutes of meetings of Audit Committee and other committees of the Board, information on recruitment and remuneration of senior officers just below the level of Board, any significant development in human resources / industrial relations, show-cause, demand and prosecution notices and penalty notices which are materially important, quarterly details of foreign exchange exposures, risk management and mitigation measures, report on compliance of all laws applicable to the Company, prepared by the Company as well as steps taken by the Company to rectify instances of non-compliances, if any, etc.
Comprehensively drafted notes for each agenda item along with pre-agenda materials, wherever necessary, are circulated well in advance to the committee / Board, to enable them for making value addition as well as exercising their business judgment in the Committee / Board meetings. Presentations are also being made by the business heads on the Company's operations, marketing strategy, Risk Management, Internal Financial Control, etc in Board / Audit Committee meetings. The meetings are convened through i-Pads as an eco-friendly measure. All agenda papers for convening meetings of the Board / Committees are being uploaded in digital mode well in advance. During the year 2019-20, the Board met four times on 8th May 2019, 13th August 2019, 7th November 2019 and 6th February 2020 and the gap between two meetings did not exceed one hundred and twenty days. Besides, the NE-IDs held a separate meeting on 10th March 2020, as per the applicable provisions of the Act 2013 and Regulation 25(3) of Listing Regulations. All the NE-IDs were present at the meeting.
2.3 Attendance and other directorships: The details of attendance of the Directors at the Board meetings during the year and at the last annual general meeting held on 13th August 2019 and also the number of other Directorships and committee memberships / chairmanships as on 31st March 2020 are as follows: Attendance Number of other directorships, particulars committee memberships / Name of the Director DIN chairmanships (M/s) Category Board Last Annual Other Committee Committee Meetings General director- member- chairman- Meeting ships** ships@ ships H Lakshmanan 00057973 NE-ID 4 Yes 18 4 3 S I Jaffar Ali 00058955 NE-ID 4 Yes 1 3 - C N Prasad 01950656 NE-ID 4 Yes 4 2 - Martin Grammer 00061786 NE-NID 4 No - - - L Bhadri 06829886 NE-ID 4 Yes 6 4 - Sasikala Varadachari 07132398 NE-ID 4 No 5 1 - ** - Includes private companies and companies incorporated outside India. @ - Includes committees where the director holds the position of Chairman. NE-ID - Non Executive - Independent director NE-NID - Non Executive - Non independent director
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None of the Directors on the Board is a member of more than ten Committees or Chairman of more than five Committees across all the companies in which they are Directors. Chairmanships / Memberships of Committees include only Audit and Stakeholders' Relationship Committee as covered under Regulation 26 of the Listing Regulations, as per the disclosures made by the Directors. 2.4 Listed entities in which the directors hold position as director other than Harita Seating Systems Limited and category of Directorship: Name of the Director (M/s.) Name of the company Category of Directorship H Lakshmanan TVS Motor Company Limited Non-Executive - Non-Independent Director S I Jaffar Ali - - C N Prasad - - Martin Grammer - - L Bhadri - - Sasikala Varadachari Sundaram - Clayton Limited Non-Executive - Independent Director
None of the NEDs holds directorships in more than eight listed entities and serves as an Independent director in more than seven listed entities. 2.5 Access to information and updation to Directors: The Board reviews all the information provided periodically for discussion and consideration at its meetings in terms of Listing Regulations. Functional heads are present whenever necessary and apprise all the Directors about the developments. They also make presentations to the Board and Audit Committee of Directors. Apart from this, the observations on the audit carried out by the internal auditors and the compliance report on payment of statutory liabilities submitted by the statutory auditors of the Company are placed and discussed with functional heads, by the Audit Committee / Board. The Board also reviews the declarations made by the chief executive officer and the company secretary regarding compliance with all applicable laws on quarterly basis. Decisions taken at the meetings of the Board / committees are communicated to the functional heads. Action taken reports on decisions of previous meetings is placed at every succeeding meeting of the Board / committees for reporting the compliance. 2.6 Familiarization program A familiarization program is made available to Directors covering such topics as the Board's role, Board composition and conduct, and the risks and responsibilities of the Company Directors, to ensure that they are fully informed on current governance issues. The program also includes briefings on the culture, values and business model of the Company, the roles and responsibilities of senior executives and the Company's financial, strategic, operational and risk management position. The induction process for NE-IDs include plant visit for detailed understanding of manufacturing process / activities of the Company. The details of familiarization program are available in the link as provided in page no. 80 of this Annual Report.
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2.7 Chart setting out the skills / expertise / competence of the Board of Directors: While evaluating the Board as a whole, it was ensured that the existing board members have relevant core skills / expertise / competencies as required in the context of its business (es) and sector(s) to function effectively. Skill Description Leadership / Strategy Experience of playing leadership roles in large businesses, with competencies around strategy development & implementation, sales & marketing, business administration/operations and Organisations and people management. Engineering Experience Strong knowledge and experience in engineering and in managing business operations of a sizeable organization in the business of manufacture and sale of automobiles. Financial Practical knowledge and experience in Corporate Finance, accounting and reporting and internal financial controls, including strong ability to asses financial impact of decision making and ensure profitable and sustainable growth. Governance Board level experience in reputed organisations, with strong understanding of and experience in directing the management in the best interests of the Company and its stakeholders and in upholding high standards of governance. Regulatory Strong expertise and experience in corporate law and regulatory compliance in India and overseas (including industry specific laws). Board of Directors is well structured to ensure a high degree of diversity by age, gender, educational qualifications, professional background, present activity, sector expertise and special skills (classification). Board comprises a range and balance of skills, experience, knowledge, gender, social-economic backgrounds and independence. This needs to be backed by a diversity of personal attributes, including sound judgement, honesty and courage. Professional Background & Skills / expertise / competency of Directors: Name of the Directors Brief description about the Directors Mr H Lakshmanan • Rich and long experience in all segments of the business, and helps Chairman in smooth running of management. • Pioneer in establishing the basic priorities, ethical values, policies, attitudes and culture for the Company. • Plays a key role as the most trusted mentor of the board. • With over six decades of experience mostly devoted to human resource development, he plays an important role in inter personnel relationship with workers' union, employees representatives and has the unique distinction of performing exemplary work on industrial relations of companies. • He is committed to fulfill Directors' obligations and fiduciary responsibilities. These include participation in Board and committee meetings and providing moral oversight and people management.
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Name of the Directors Brief description about the Directors Mr C N Prasad, Director • He has vast experience in the areas of production engineering and project management, in Automotive sector. • His strong quality orientation and customer centric approach brought several accolades and achievements to the Companies where he served. • He has been awarded for Corporate Excellence in 2006 by ITM Business School and 'Best CEO' by Quality Circle Forum of India (QCFI) for the year 2007. • He published an article on implementing Lean production Systems in Indian conditions in the January 2006 issue of “The Machinist”. Mr Martin Grammer, • He has vast experience in international marketing and consultancy Director areas. • He has served in internationally renowned companies. He held the position as managing director and member of Executive Committee Board of Grammer AG, Germany and a member of the board of directors of GHE S.P.A, Milano, Italy, leading suppliers to the global automotive industry. Mr S I Jaffar Ali, Director • Mr S I Jaffar Ali is a post-graduate in economics from Madras University and also a law graduate from Madras Law College. • He held senior positions in the Indian Police Service and retired in the year 1995 as Inspector General of Police. Mr L Bhadri, Director • Mr L Bhadri is a qualified Chartered Accountant having over 25 years of experience in the fields of accounts, finance and taxation. • He has in-depth experience in financial matters and taxation. Ms Sasikala Varadachari, • She is a retired banker with over 37 years of experience in the fields Director of banking operations both in India and Overseas. • She worked as chief general manager of State Bank of India (SBI), spearheading the strategic training unit, SBI, corporate center Mumbai, having profound knowledge in Credit and Merchant Banking. • She was the first CEO of SBI in Israel and was responsible for setting up SBI's Commercial Operations there. • She has vast experience in banking and financial services having held key positions in the banking sector.
2.8 Code of Business Conduct and Ethics for The Code has been communicated to members of the Board and Senior Directors and the Senior Management Management Personnel: Personnel. The Company has in place the Code of The Company's Code of Conduct embodies Business Conduct and Ethics for member of its values and expectations to which its the Board and Senior Management Personnel corporate standards and employee policies (the Code) approved by the Board. are aligned.
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The Code has also been displayed on the with a view to ensure accurate, timely and proper Company's website in the link as provided disclosure and transparency, integrity and in page no. 80 of this Annual Report. quality of financial reporting. All the members of the Board and Senior 3.1 Brief description of terms of reference: Management Personnel have confirmed compliance with the Code for the year ended The Audit Committee is entrusted with the 31st March 2020. The annual report contains responsibility to supervise the Company's a declaration to this effect signed by the chief internal control and financial reporting executive officer. process and inter alia performs the following functions: 2.9 Appointment / Re-appointment of Directors: a. Overviewing the Company's financial In terms of Regulation 36(3) of Listing reporting process and the disclosure of Regulations, a brief resume of director its financial information to ensure that the proposed to be re-appointed, nature of his financial statement is correct, sufficient expertise in specific functional areas, other and credible; Directorships and committee memberships, b. Recommending the appointment, shareholding and relationship, if any, with remuneration and terms of appointment other Directors are being provided in the of auditors of the Company; notice convening the AGM of the Company. c. Reviewing, with the management, the annual financial statements and auditor's 2.10 Committees of the Board: report thereon before submission to the The Board has, in order to make a focused Board for approval, with particular attention on business and for better reference to: governance and accountability, constituted • Matters required to be included in the the following mandatory committees, viz., Director's Responsibility Statement in Audit Committee, Stakeholders' Relationship terms of clause (c) of sub-section 3 of Committee, Nomination and Remuneration Section 134 of the Act 2013; Committee and Corporate Social • Changes, if any, in accounting policies Responsibility Committee and non- and practices and reasons for the mandatory Committee, viz., Administrative same; Committee. The terms of reference of these Committees are determined by the Board • Major accounting entries involving and their performance being reviewed. estimates based on the exercise of Meetings of each of these Committees are judgment by management; convened by the respective Chairman of the • Significant adjustments made in the Committee informs the Board about the financial statements arising out of audit summary of discussions held in the findings; Committee Meetings. The minutes of the • Compliance with listing and other legal Committee Meetings are placed before the requirements relating to financial subsequent Board meetings. statements; 3. Audit Committee • Disclosure of any related party transactions; and The primary objective of the Audit Committee is to monitor and provide effective supervision of • Modified opinion, if any, in the draft the management's financial reporting process audit report,
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d. Reviewing with the management, the depositors, debenture holders, quarterly financial statements before shareholders (in case of non-payment of submission to the Board for approval; declared dividends) and creditors; e. Reviewing and monitoring the auditor's p. Reviewing the functioning of the Whistle independence and performance, and Blower mechanism; effectiveness of audit process; q. Approving the appointment of CFO after f. Approving or subsequently modifying any assessing the qualifications, experience transactions of the company with related and background of the candidate; and parties; r. Reviewing the utilisation of loans and / g. Scrutinizing the inter-corporate loans and or advances from / investments / by the investments; holding company in the subsidiary exceeding Rs. 100 Cr , or 10% of the h. Reviewing valuation of undertakings or asset size of the subsidiary, whichever assets of the Company, wherever it is is lower. necessary; In addition, reviewing of such other functions i. Evaluating of internal financial controls as envisaged under Section 177 of the Act and risk management systems; 2013 read with the Companies (Meetings of Board and its Powers) Rules 2014 as j. Reviewing, with the management, amended and Regulation 18 of Listing performance of statutory and internal Regulations. auditors and adequacy of the internal control systems; The subjects reviewed and recommended in the meetings of the Audit Committee were k. Reviewing the adequacy of internal audit apprised to the Board by the Chairman of function, if any, including the structure of the Audit Committee, for its approval. All the the internal audit department, staffing recommendations made by the Committee and seniority of the official heading the during the year under review, were accepted department, reporting structure coverage by the Board. and frequency of internal audit; 3.2 Composition, names of the Chairman and l. Discussing with internal auditors of any Members: significant findings and follow up there As at 31st March 2020, the Audit Committee on; consists of the following non-executive m. Reviewing the findings of any internal independent Directors: investigations by the internal auditors into M/s. H Lakshmanan, C N Prasad and matters where there is suspected fraud S I Jaffar Ali. or irregularity or a failure of internal control systems of a material nature and The composition of the Committee is in reporting the matter to the Board; accordance with the requirements of Regulation 18 of Listing Regulations read n. Discussing with statutory auditors before with Section 177 of the Act, 2013. the audit commences, about the nature Mr H Lakshmanan is the Chairman and and scope of audit as well as post-audit Ms N Iswarya Lakshmi, company secretary discussion to ascertain any area of is the secretary of the committee. concern; Chairman of the Committee was present at o. Looking into the reasons for substantial the last Annual General Meeting held on 13th defaults, if any, in the payment to the August 2019.
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3.3 The particulars of meetings and attendance Copy of the said policy is available on the by the members of the Committee, during the Company's website in the link as provided in year under review, are given in the table below: page no. 80 of this Annual Report.
Date of the Members present Based on the above criteria, Harita Fehrer meeting (M/s.) Limited (HFRL) continues to be the 'material subsidiary' as at 31st March 2020. The Company 08.05.2019 has ensured that HFRL has obtained secretarial 13.08.2019 H Lakshmanan, audit report from a Company Secretary in 07.11.2019 C N Prasad and S I Jaffar Ali Practice and annexed with its annual report for 06.02.2020 the year 2019-20.
5. Disclosures 4. Subsidiary company 5.1 Materially significant related party transactions: The Company's Subsidiary, Harita Fehrer All transactions entered into with Related Limited is covered within the definition of Parties, as defined under the Act 2013 and "unlisted material subsidiary" incorporated in Listing Regulations during the financial year India in terms of Regulation 16(1)(c) read with 2019-20 were in the ordinary course of Regulation 24 of Listing Regulations. business and on an arms' length pricing and The Board of Directors of the said subsidiary do not attract the provisions of Section 188 of Company consists of Four Independent the Act 2013 and the rules made thereunder. Directors representing the Company viz., There were no materially significant Mr H Lakshmanan, Mr C N Prasad, Mr S I Jaffar transactions with the related parties during the Ali and Mr L Bhadri in terms of Regulation 24(1) year, which were in conflict with the interests of Listing Regulations. of the Company and no approval was required for the Company in terms of Listing The Audit Committee reviews the financial Regulations. statements and in particular the investments The transactions with the related parties, made by the said unlisted subsidiary. namely its promoters, its holding, subsidiary The minutes of the Board meetings of the said and associate companies etc., of routine nature unlisted subsidiary are periodically placed before have been reported elsewhere in the annual the Board. The Board is periodically informed report, as per Indian Accounting Standard 24 about all significant transactions and (IND AS 24) notified vide the Companies arrangements entered into by the unlisted (Indian Accounting Standard) Rules, 2015. subsidiary. Details of material related party transactions are enclosed as Annexure VI to the Directors' Material Subsidiaries Policy report for the year ended 31st March 2020.
The Board has duly formulated a policy for Related Party Transactions Policy: determining 'material subsidiaries'. The Board The Board has formulated a policy on related at its meeting held on 8th May 2019 redefined party transactions. The Audit Committee the term "material subsidiary" in line with the reviews and approves transactions between amended Listing Regulations and thereby the Company and related parties, as defined material subsidiary mean a subsidiary whose under the Listing Regulations, to ensure that income or net worth exceeds 10% of the the terms of such RPTs would reasonably be consolidated income or net worth respectively, expected of transactions negotiated or at arm's of the listed entity and its subsidiaries in the length and in the ordinary course of business. immediately preceding accounting year. The Audit Committee meets prior to each
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scheduled Board meeting to review all RPTs monitoring and managing key risks across the of the Company on a quarterly basis. Company's business units. In terms of Regulation 23 of Listing Risks and effectiveness of management are Regulations, all RPTs for the succeeding internally reviewed and reported regularly to financial year, with clear threshold limit, are the Board. As a process, the risks associated regularly placed before the Audit Committee with the business are identified and prioritized meeting convened during last quarter of the based on severity, likelihood and effectiveness financial year for its consideration and approval of current detection. Such risks are reviewed and recommend for Board's approval, by the senior management on quarterly basis. wherever required. RPTs entered during the Process owners are identified for each risk and financial year are reviewed at the same metrics are developed for monitoring and meeting for any upward revision in the reviewing the risk mitigation. threshold limit. The Board is satisfied that there are adequate It was also ensured that none of RPTs involving systems and procedures in place to identify, payments with respect to brand usage or assess, monitor and manage risks. The royalty during the financial year, exceeded two Company's Audit Committee reviews reports percent of the annual consolidated turnover of given by members of the management team the Company as per the previous audited and recommends suitable action. financial statements of the Company. As per the Act, any unforeseen RPT involving 5.4 Instances of non-compliances, if any: amount not exceeding Rs.1 Cr per transaction There was no instance of non-compliance by entered into by a director or officer of the the Company, penalty and stricture imposed Company without obtaining prior approval of on the Company by the Stock Exchanges or the Audit Committee and such transactions SEBI or any other statutory authorities on any being RPTs are ratified by the Audit Committee matter related to the capital markets, during within three months from the date of such last three years. transaction. Copy of the said policy is available on the 5.5 Disclosure by Senior Management Personnel: Company's website in the link as provided in The Senior Management Personnel have page no. 80 of this Annual Report. made disclosures to the Board relating to all material, financial and other transactions 5.2 Disclosure of accounting treatment: stating that they did not have personal interest Pursuant to the notification, issued by the that could result in a conflict with the interest of Ministry of Corporate Affairs dated February the Company at large. 16, 2015 relating to the Companies (Indian Accounting Standard) Rules, 2015, the 5.6 CEO and CFO Certification: Company has adopted "IND AS" with effect The CEO and CFO of the Company have from 1st April 2017. Accordingly, the financial certified to the Board on financial and other statements for the year 2019-20 have been matters in accordance with Regulation 33 of prepared in compliance with the said Rules. the Listing Regulations for the financial year ended 31st March 2020. 5.3 Risk Management: The Company has an established Risk 5.7 Compliance with mandatory / non-mandatory Management Policy which formalizes its requirements: approach to the oversight and management The Company has complied with all applicable of material business risks. The policy is mandatory requirements in terms of Listing implemented through a top down and bottom Regulations. The non-mandatory requirements up approach for identifying, assessing, have been adopted to the extent and in the
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manner as stated under the appropriate 5.9 Management discussion and analysis report, headings detailed elsewhere in this report. familiarization programme and whistle blower policy: 5.8 Code of Conduct for Prevention of Insider Trading: All the above report / policies forms part of the Directors' report. In compliance with the SEBI (Prohibition of Insider Trading) Regulations 2015, the 5.10 Amendment to Whistle Blower Policy: Company has a comprehensive Code of th conduct for prevention of insider trading and The Company has at its meeting dated 8 May the same is being strictly adhered to by the 2019 amended the Whistle Blower Policy to Designated Persons as defined under this enable the employees to report instances of Code. leak or suspected leak of UPSI immediately to In terms of recent amended SEBI (Prohibition the Compliance officer or Chairman of the Audit of Insider Trading) Regulations, 2015, the Committee. board at its meeting held on 8th May 2019 Upon receipt of complaint relating to such approved a policy for determination of leakage / suspected leakage of UPSI, the legitimate purposes for which disclosure of same would be investigated in accordance with Unpublished Price Sensitive Information the procedure as detailed in the Company's (UPSI) is permissible in the ordinary course of Code of conduct under Insider Trading business and maintaining Structured Digital Regulations. Database of Designated persons (DP) for enhanced accountability and control Copy of the said Policy is available on the mechanisms for preventing insider trading. Company's website in the link as provided in page no. 80 of this Annual Report. The Company has amended its Code of Practices and Procedures for fair disclosure of "Unpublished Price Sensitive Information" 6. Nomination and Remuneration Committee (UPSI) and a Code of Conduct to regulate, (NRC) monitor and report trading by insiders at its 6.1 Composition of the Committee: meeting held on 8th May 2019, in accordance with the requirements of SEBI (Prohibition of As at 31st March 2020, the NRC consists of Insider Trading) Regulations 2015, vide its M/s. C N Prasad, H Lakshmanan and Notification dated 31st December 2018. S I Jaffar Ali all of whom are Non-Executive The Code expressly lays down the guidelines Independent Directors. Mr C N Prasad is and the procedures to be followed and the Chairman and Ms N Iswarya Lakshmi, disclosures to be made, while dealing with the company secretary is the secretary of the Shares of the Company. Committee. The Company follows closure of trading All the Members were present at the window from the end of every quarter till 48 meeting of the Committee held on 8th May hours after the declaration of financial results. 2019 and 7th November 2019. The Company has been advising the Designated Persons covered by the Code not Chairman of the Committee was present at to trade in Company's securities during the the AGM held on 13th August 2019 to answer closure of trading window period. the shareholders queries.
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6.2 The broad terms of reference of the NRC 6.4 Evaluation Criteria: are as under: - Guiding the Board for laying down the The NRC laid down the criteria for evaluating terms and conditions in relation to the performance of every Director, appointment and removal of director(s), Committees of the Board and the Board as Key Managerial Personnel (KMP) and a whole and also the performance of KMP Senior Management Personnel (SMP) of and SMP. the Company. - Evaluating the performance of the The performance evaluation of the Board as director(s) and providing necessary a whole was assessed based on the criteria report to the Board for its further like its composition, size, mix of skills and evaluation and consideration. experience, its meeting sequence, - Recommending to the Board on effectiveness of discussion, decision making, remuneration payable to the Director(s) follow- up action, quality of information, and KMP of the Company based on (i) governance issues, performance and the Company's structure and financial reporting by various committees set up by performance and (ii) remuneration trends the board. and practices that prevail in peer companies across automobile industry. NRC prescribed a peer evaluation - Retaining, motivating and promoting methodology by way of set of questionnaire talent among the employees and to evaluate the performance of individual ensuring long term sustainability of Directors, Committee(s) of the Board, talented SMP by creation of competitive Chairman and the Board as a whole', and advantage through a structured talent the Board carried out the performance review. evaluation as per the methodology. 6.3 The role / scope of the NRC is as follows: The performance evaluation of individual - To make recommendations to the Board with respect to incentive compensation director was carried out based on his / her plans for Executive Director(s) and commitment to the role and fiduciary remuneration of NEDs of the Company. responsibilities as a board member, - To identify persons who are qualified to attendance and active participation, strategic become Director(s), KMP and SMP of the and lateral thinking, contribution and Company. recommendations given professionally, - To recommend to the Board for the heading / acting as member of various appointment / removal of director(s), Committees etc. KMP and SMP of the Company. - To formulate criteria for determining The performance of SMP was measured qualification, positive attributes and against their achievement of the business independence of a director. plans approved by the Board during and at - To recommend to the Board a policy for the completion of the financial year and their remuneration of Director(s), KMP and annual 'at-risk' remuneration which reflects SMP of the Company. their business plan achievements.
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NRC has the overall responsibility for to the management of the Company, from evaluating and approving the compensation time to time and hence NE-IDs are being paid plans, policies and programmes applicable by way of sitting fees and commission if any, to SMP. NRC also delegated its authority to subject to the performance of the Company Chairman of the Board, wherever each year. appropriate, for this purpose. The shareholders on 25th June 2019 have 6.5 Remuneration Policy: approved the re-appointment of M/s H Lakshmanan, C N Prasad and S I Jaffar Ali The Nomination and Remuneration Policy for the second term of three consecutive has been placed on the website in the link years effective 6th August 2019. as provided in page no. 80 of this Annual Report. At the AGM of the Company held on 13th The salient features of the policy are as August 2018, Mr L Bhadri and Ms Sasikala follows: Varadachari, were re-appointed as Non- NRC formulate policies to ensure that: Executive Independent Directors of the Company for the second term of three - the level and composition of consecutive years effective 13th October remuneration are reasonable and 2018 and 22nd March 2019 respectively and sufficient to attract, retain and motivate to receive remuneration by way of fees, Director(s) of the quality required to run reimbursement of expenses for participation the Company successfully; in the meetings of the Board and / or - the relationship of remuneration to Committees and also profit related performance is clear and meets commission, in terms of Section 197 of the appropriate performance benchmarks; Act, 2013 in addition to sitting fees. and - the remuneration to Director(s), KMP and Presently, the Company does not have a SMP of the Company involve a balance scheme for grant of stock options either to between fixed and incentive pay the Directors or Employees of the Company. reflecting short and long-term 6.7 Particulars of sitting fees paid to the NE-IDs performance objectives appropriate to and NE-NID during the financial year the working of the Company and its 2019-20 are as follows: goals. (Amount in Rs.) 6.6 Remuneration to Non-Executive Directors: Name of the Sitting Directors fees Total Sitting fees (M/s.) (*) Rs.5,000/- each is paid to the NE-NIDs and NE-IDs for every meeting of the Board and / H Lakshmanan 85,000 85,000 or Committee thereof attended by them, C N Prasad 85,000 85,000 which is within the limits, prescribed under the Act, 2013. S I Jaffar Ali 85,000 85,000 Commission Martin Grammer 15,000 15,000 The Company benefits from the expertise, L Bhadri 25,000 25,000 advise and inputs provided by the NE-IDs. The NE-IDs devote their valuable time in Sasikala Varadachari 20,000 20,000 deliberating strategic and critical issues in Total 3,15,000 3,15,000 the course of the Board / Committee meetings of the Company and give their (*) - Includes fees for attending meetings of valuable advice, suggestions and guidance the Board and committees.
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6.8 Details of shareholdings of non-executive duplicate certificates, general meetings Directors in the Company as on 31st March and related activities. 2020: • Review of measures taken for effective Name of the No. of shares held exercise of voting rights by shareholders. Directors (face value of • Review of adherence to the service (M/s.) Rs.10/- each) standards adopted by the listed entity in H Lakshmanan 2,020 respect of various services being Martin Grammer 10,87,600 rendered by the Registrar & Share Transfer Agent. S I Jaffar Ali – • Review of the various measures and C N Prasad – initiatives taken by the listed entity for L Bhadri – reducing the quantum of unclaimed Sasikala Varadachari – dividends and ensuring timely receipt of dividend warrants/annual reports/ 7. Stakeholders’ Relationship Committee statutory notices by the shareholders of 7.1 The Stakeholders' Relationship Committee of the Company. Directors (SRC) consists of three members The Company, in order to expedite the viz., M/s. H Lakshmanan, C N Prasad and process of share transfers delegated the S I Jaffar Ali, non-executive and independent power of share transfers to an officer of the Directors. Mr H Lakshmanan, non-executive Share Transfer Agent (STA). The Company, director is the chairman of the committee and as a matter of policy, disposes of investors' he was present at the AGM held on complaints within a span of seven days. 13th August 2019. 7.5 During the year 2019-20, the Company 7.2 As required by the Listing Regulations, received only one complaint pertaining to Ms N Iswarya Lakshmi, company secretary non-receipt of annual report and the same is the compliance officer of the SRC who was duly redressed and no queries are oversees the redressal mechanism for pending at the year end. investor grievances. For any clarification / complaint, the shareholders may contact the 7.6 All requests for dematerialization of shares company secretary. were carried out within the stipulated time period and no share certificate was pending 7.3 The meetings of the Committee were held on for dematerialization. 8th May 2019, 13th August 2019, 7th November 2019 and 6th February 2020. All 7.7 Reconciliation of Share Capital Audit: the members of the Committee attended all A Practising Company Secretary carries out the meetings held during the year. Reconciliation of Share Capital (RSC) Audit 7.4 SRC oversees and reviews all the matters on a quarterly basis to reconcile the total connected with share transfers, issue of admitted capital with National Securities duplicate share certificates and other issues Depository Limited (NSDL) and Central pertaining to shares. SRC also looks into Depository Services (India) Limited (CDSL). various aspects of interests: The reports are being regularly placed before • The transfer / transmission of shares, the board for its perusal. non-receipt of Annual Report, non-receipt The RSC audit reports confirmed that the of declared dividends, issue of new/ total issued and listed capital was in
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agreement with the total number of shares 10.2 Special resolutions passed in the previous in physical form and in dematerialized form three AGMs: held with NSDL and CDSL. During the last three years, namely 2016-17 to 2018-19 approvals of the shareholders 8. Corporate Social Responsibility Committee were obtained by passing special resolutions The Corporate Social Responsibility Committee as follows: consists of three directors viz., M/s H Lakshmanan, Year Subject matter of special resolution Date of AGM S I Jaffar Ali and C N Prasad. Mr H Lakshmanan is the Chairman of the Committee. 2016-17 Nil 09.08.2017 The details of CSR Policy, initiatives and spending 2017-18 1. Approving the Re-appointment of Mr L Bhadri as an Independent are spelt out as Annexure - IV to the Directors 13.08.2018 Report. Director for the second term of three years effective 13th October 2018. During the year, the Committee met on 8th May 2. Approving the re-appointment of 2019 and all the members were present at the Ms Sasikala Varadachari as an meeting. Independent Director for the second term of three years effective 9. Administrative Committee 22nd March 2019. The Administrative Committee consists of three 2018-19 Nil 13.08.2019 Directors viz., M/s H Lakshmanan, C N Prasad and S I Jaffar Ali. Mr H Lakshmanan, Non- 10.3 Postal Ballot: Executive Director, is the Chairman of the Committee. The Board sought the consent of During the year the Committee met on 24th shareholders of the Company by way of September 2019 and all the Members were special resolutions through Postal Ballot as present at the meeting. per the notice issued to the shareholders on 8th May 2019 for re-appointment of 10. General body meeting Mr H Lakshmanan, Mr S I Jaffar Ali 10.1 Location and time where the AGMs were held and Mr C N Prasad as Independent Directors during the last three years: for the second term of three consecutive Year Location Date Time years i.e. from 6th August 2019 to 5th August 2016-17 Kasturi Srinivasan Hall 09.08.201710.00 a.m. 2022. (Mini Hall) 2017-18 The Music Academy, 13.08.2018 10.00 A.M. The special resolutions were passed by the No.168 (Old No.306), Shareholders of the Company with requisite 2018-19 T.T.K. Road, 13.08.201910.35 A.M. majority. Chennai 600 014.
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The result of the Postal Ballot is given below. 3. The said notice of Postal Ballot was sent on 23rd May 2019 in electronic No. / % of votes No. / % of votes Particulars mode to the Members, whose e-mail cast in favour cast against IDs were registered with the Company Re-appointment of or the Depository Participants. Mr H Lakshmanan as an Independent 4. The voting under the Postal Ballot was th Director of the 56,73,253 99.95 % 2568 0.05 % kept open from Monday, 27 May 2019 Company for the at 9.00 A.M. (IST) to Tuesday, 25th June second term of three 2019, at 5.00 P.M. (IST). (either consecutive years. physically or electronically). Re-appointment of 5. The Postal Ballot forms were kept under Mr S I Jaffar Ali as an the safe custody of the Scrutinizers. Independent Director 56,72,233 99.94 % 3408 0.06 % 6. All Postal Ballot forms received by the of the Company for the scrutinizer up to 5.00 p.m. on 25th June second term of three 2019 have been considered for consecutive years. scrutiny. Re-appointment of Mr C N Prasad as an 10.6 None of the subjects placed before the shareholders in the last / ensuing AGM Independent Director 56,73,139 99.96 % 2502 0.04 % of the Company for the required/ requires approval by Postal Ballot. second term of three However, in terms of the Regulation 44 of consecutive years. the Listing Regulations and Section 108 of the Act, 2013 read with the Companies 10.4 Person who conducted the Postal Ballot (Management and Administration) Rules, exercise: 2014, the Company facilitated its members M/s B Chandra & Associates, Company to exercise their right to vote through Secretaries (Firm Reg. No. Remote e-Voting and through Ballot Paper P2017TN065700), Chennai were at the meeting for all the items at the AGM appointed to act as the scrutinizers for held on 13th August 2019. conducting the Postal Ballot and E-voting. 10.5 Procedure for Postal Ballot: 11. Means of communication to shareholders 1. The Board of Directors, vide resolution The Board believes that effective dated 8th May 2019, had appointed communication of information is an essential M/s B Chandra & Associates, Company component of corporate governance. The Secretaries, Chennai as the scrutinizers. Company regularly interacts with shareholders 2. The despatch of the Postal Ballot Notice through multiple channels of communication dated 8th May 2019 together with such as results announcement, annual report, Explanatory Statement was completed media releases, Company's website and on 23rd May 2019 along with forms and specific communications to Stock Exchanges, postage prepaid business envelopes to where the Company's shares are listed. all the shareholders whose name(s) 11.1 Quarterly results: appeared on the Registers of Members/ The unaudited quarterly financial results list of beneficiaries as on 17th May of the Company were published in English 2019. and Regional newspapers.
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11.2 Newspapers wherein results are normally 31st December 2020 : On or before published: 14th February 2021 st The results are normally published in 31 March 2021 : On or before th English newspaper, viz., Business Line 30 May 2021 and Regional Newspaper, viz., Makkal 12.3 Particulars of dividend payment: Kural. Due to inadequacy of profits, the Company 11.3 Website: has not declared any dividend for the financial year 2019-20. The Company has in place a website addressed as www.haritaseating.com. 12.4 Listing on Stock Exchanges: This website contains the basic information about the Company viz., Name and Address of Stock Code / details of its business, financial the Stock Exchange Symbol information, shareholding pattern, National Stock Exchange of India Limited HARITASEAT compliance with corporate governance, Exchange Plaza, Plot No. C/1, (Stock Symbol) contact information of the designated G-Block, Bandra Kurla Complex, officials of the Company, who are Bandra (East), Mumbai 400 051. India responsible for assisting and handling Tel.: 91 22 2659 8100 investor grievances, such other details as Fax : 91 22 2659 8120 may be required under Regulation 46 of ISIN allotted by Depositories INE 939D01015 SEBI LODR Regulations. The Company (Company ID Number) ensures that the contents of this website are periodically updated. (Note: Annual listing fees and custodial charges for the year 2019-2020 were duly 11.4 Press Release & Investor / Analysts meet: paid to the above Stock Exchange and In addition, the Company makes use of this Depositories) website for publishing official news release and presentations, if any, made to 11.5 Market price data: institutional investors / analysts. (in Rs.) NSE 12. General shareholder information Month High Low 12.1 Annual General Meeting: April 2019 529 450 Date and time : On or before 30th September 2020 May 2019 490 430 through Video Conferencing (VC) June 2019 464 408 or Other Audio Visual Means (OAVM) July 2019 428 345 August 2019 435 347 12.2 Financial year : 1st April to 31st March September 2019 483 395 Financial Calendar : 2020-21 October 2019 473 391 Financial reporting for : Financial calendar November 2019 485 423 the quarter ending December 2019 458 429 30th June 2020 : On or before January 2020 534 427 14th August 2020 February 2020 527 434 30th September 2020 : On or before 14th November 2020 March 2020 485 286
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12.6 Share price performance in comparison to broad within 15 days. Grievances received based indices - NSE Nifty: from investors are processed by STA SHARE PRICE MOVEMENT within 7 days. Other miscellaneous NSE NIFTY VS HSSL (HIGH) correspondence relating to change of addresses, mandates etc., is processed 12168 12056 11748 11923 11789 11877 11962 528 by STA within 15 days. 11474 11118 11023 534 529 485 11202 e. Certificates are being obtained and 491 485 484 474 465 459 submitted to Stock Exchanges, on half- 428 436 yearly basis, from a Company 8598 Secretary-in-practice towards due compliance of share transfer formalities by the Company within the due dates, Apr. 2019 May June July Aug Sept Oct Nov Dec Jan 2020 Feb March in terms of Regulation 40(9) of the NSE NIFTY HSSL Price (in Rs.) Listing Regulations. 12.7 Share Transfer Agents and share transfer f. Certificates have also been received system: from a Company Secretary-in-practice a. With a view to render prompt and and submitted to the Stock Exchanges, efficient service to the shareholders, on a quarterly basis, for timely Sundaram-Clayton Limited (SCL), which dematerialization of shares of the has been registered with SEBI as share Company and for reconciliation of the transfer agents in Category II, has been share capital of the Company, as appointed as the Share Transfer Agent required under SEBI (Depositories and of the Company (STA) with a view to Participants) Regulations, 1996. rendering prompt and efficient service g. The Company, as required under to the investors and in compliance with Regulation 6(2)(d) of the Listing the Regulation 7 of the Listing Regulations, has designated the Regulations. The shareholders were following e-mail IDs, namely also advised about this appointment of [email protected] / [email protected] STA to handle share registry work for the purpose of registering complaints, pertaining to both physical and electronic if any, by the investors and expeditious st segments of the Company effective 1 redressal of their grievances. October 2004. h. Certificate signed by the Compliance b. All matters connected with the share Officer of STA and the Company transfer, dividends and other matters are Secretary towards maintenance of share handled by the STA located at the transfer facility by STA in compliance address mentioned elsewhere in this with Regulation 7(3) of the Listing report. Regulations has been submitted to the c. Shares lodged for transfers are normally Stock Exchange. processed within 15 days from the date i. Shareholders are requested to of lodgment, if the documents are clear correspond with the STA for transfer / in all respects. transmission of shares, change of d. All requests for dematerialization of address and queries pertaining to their securities are processed and the shareholding, dividend, etc., at their confirmation is given to the depositories address given in this report.
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12.8 Shareholding pattern of the Company as on 31st March 2020: 31.03.2019 31.03.2020 Category of Shareholder No. of shares No. of shares % % held held Promoter and Promoter Group Bodies Corporate & Individual 51,44,962 66.22 51,44,962 66.22 Total (A) 51,44,962 66.22 51,44,962 66.22 Public Shareholding Mutual Funds 30,008 0.39 1,37,736 1.77 Banks / Financial Institutions 1,654 0.02 3,644 0.05 Foreign Portfolio Investor - Corporate 51,175 0.66 4,08,341 5.26 Total Institutions (B) 82,837 1.07 5,49,721 7.08 Bodies Corporate 1,74,483 2.25 60,445 0.78 Individuals holding nominal capital in excess of Rs.2 lakhs 2,09,500 2.70 2,96,677 3.82 Individuals holding nominal capital upto Rs.2 lakhs 17,22,771 22.16 15,86,233 20.41 NRI Repatriable 27,476 0.35 22,210 0.29 NRI Non - Repatriable 17,153 0.22 18,121 0.23 Directors & relatives 2,020 0.03 2,020 0.03 LLP 3,66,421 4.72 122 – Clearing Members 21,417 0.28 14,939 0.19 IEPF – – 73,429 0.95 Trust – – 161 – Total Non-Institutions (C ) 25,41,241 32.71 20,74,357 26.70 Total Public Shareholding D = (B+C) 26,24,078 33.78 26,24,078 33.78 Grand Total (A+D) 77,69,040 100.00 77,69,040 100.00
12.9 Distribution of Shareholding as on 31st March 12.10 Dematerialization of shares and liquidity: 2020: All the promoters holding consisting of Shareholding No. of % No. of % 51,44,962 equity shares of Rs.10/- each is in (Range) shares members dematerialized form. Upto 500 6,93,027 8.92 8,271 92.90 Out of 26,24,078 equity shares of Rs.10/- each 501-1000 2,66,336 3.43 339 3.81 held by persons other than Promoters 1001-2000 2,38,353 3.07 163 1.83 24,51,471 shares have been dematerialised as on 31st March 2020 accounting for 97.77% in 2001-5000 2,29,038 2.95 73 0.82 total. 5001-10000 1,75,651 2.26 25 0.28 12.11 The Company has not issued any Global 10001 and above 61,66,635 79.37 32 0.36 Depository Receipt / American Depository Total 77,69,040 100.00 8,903 100.00 Receipt / Warrant or any convertible instrument,
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which is likely to have impact on the Company's C) Dharwad : Plot No-553-D, 2nd Stage,Belur Industrial Area, equity. Dharwad-580011, Karnataka 12.12 Other Disclosures Tel : +91-0836-2486625 Email: [email protected] a. Pecuniary relationships or transactions D) Pantnagar : Plot No.35, Sector - 4, with NE-IDs vis-a-vis the Company during Integrated Estate, Pantnagar Rudrapur, the year under review, do not exceed the Udham Singh Nagar District, threshold limit as laid down under the Uttarakhand - 263153 Listing Regulations. Tel : +91-5944-250889 Email : [email protected] b. During the year, there were no materially E) Chennai : Survey No.29,30,31, significant transactions with related parties Vellanthangal Village that may have potential conflict with the No.55,Thandalam Group, Irrungattukottai, interests of the Company at large. Sriperumpudur - 602105 c. Company is a net exporter. Company has Tel :044-67121380/381 Email : [email protected] a forex hedging policy and covers are F) Pithampur : 39/2, Gram, Sonwai - Ner Sti, appropriately taken to cover the currency Rau Pithampur Road, risk. The exposure and cover taken are Tehsil Mhow, District Road, reviewed by the Audit Committee on Indore, Madhya Pradesh - 453 441 regular basis. Email: [email protected] d. Company is not a dealer in Commodities. 12.14 Address for investor correspondence: Prices payable to vendors for raw (i) For transfer / demate- : Sundaram-Clayton Limited materials and components are negotiated rialization of shares, Share Transfer Agent (STA) based on internationally available data. payment of dividend on Unit : Harita Seating Cost of manufacture of all products are shares and any other Systems Limited query relating to the “Jayalakshmi Estates”, reviewed at regular intervals and wherever shares of the Company I Floor, No. 29, required suitable price changes are done Haddows Road, based on market conditions. Chennai - 600 006. (ii) For any query on The Company has not entered into any non-receipt of annual [email protected] commodity derivatives with any of the bankers report. [email protected] and hence the disclosure of exposure in (iii) For investors’ grievance : Email commodity risks faced by the company does and general [email protected] not required, as directed in the SEBI Circular correspondence [email protected] dated 15th November 2018. 12.15 List of Credit Rating: The Company is maintaining the existing credit 12.13 Plant Locations: ratings obtained from CARE Rating Limited A) Hosur : Belagondapalli, Thally Road, viz., "CARE A" for long term borrowings and Hosur 635 114. "CARE A1" for short term borrowings. Tel : 04347 - 233445 Email : [email protected] 12.16 Certificate from Practicing Company B) Ranjangaon : Plot No.A2, MIDC Industrial area Secretary: Ranjangaon, Koregaon Village The Company has received a certificate from Shirur taluk, the Secretarial Auditor of the Company stating Pune District - 412 210 that none of the directors on the Board of the Maharashtra Tel : 02138 - 610700 Company have been debarred or disqualified Email : [email protected] from being appointed or continuing as
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directors of companies by the Board / Ministry 13.4 Reporting of internal auditor: of Corporate Affairs or any such statutory authority. The internal auditor is regularly reporting his observations directly to the audit 12.17 Fees paid to Statutory Auditor on a committee. consolidated basis:
The Statutory Auditors of the Company have 14. Request to shareholders not rendered any service to the subsidiary Shareholders are requested to follow the company viz., Harita Fehrer Limited. general safeguards / procedures as detailed Hence, the reporting of payment of fees to hereunder in order to serve them efficiently and Statutory Auditors on a consolidated basis avoid risks while dealing in securities of the does not arise. Company. 12.18 Sexual Harassment at workplace: 14.1 Demat of Shares: During the year under review, the Company Shareholders are requested to convert has not received any complaints in terms of their physical holding to demat/ electronic Sexual Harassment of Women at Workplace form through any of the DPs to avoid any (Prevention, Prohibition and Redressal) Act, possibility of loss, mutilation etc., of 2013. physical share certificates and also to 13. Non-Mandatory Disclosure ensure safe and speedy transaction in securities. The non-mandatory requirements have been adopted to the extent and in the manner as 14.2 Registration of Electronic Clearing stated under the appropriate headings detailed Service (ECS) mandate: below: SEBI has made it mandatory for all companies to use the bank account 13.1 The Board: details furnished by the Depositories for The NE-NIDs of the Company are liable payment of dividend through ECS to to retire by rotation and if eligible, offer investors wherever ECS and bank details themselves for re-appointment. are available. The Company will not Specific tenure has been fixed for the NE- entertain any direct request from IDs in terms of Section 149 of the Act, Members holding shares in electronic 2013 and during this period, they will not mode for deletion of / change in such be liable to 'retire by rotation' as per bank details. Members who wish to Sections 150(2), 152(2) read with change such bank account details are Schedule IV of the Act 2013. therefore requested to advise their DPs 13.2 Shareholder rights: about such change, with complete details The half-yearly results of the Company of bank account. are published in newspapers as soon as ECS helps in quick remittance of dividend they are approved by the Board and are without possible loss/delay in postal also uploaded on the Company's website transit. Shareholders, who have not namely www.haritaseating.com. The earlier availed this facility, are requested results are not sent to the shareholders to register their ECS details with the STA individually. or their respective DPs. 13.3 Audit qualifications: 14.3 Transfer of shares in physical mode: The financial statements of the Company SEBI has amended relevant provisions are unmodified. of the Listing Regulations to disallow
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listed companies from accepting request 14.6 Updation of address: for transfer of securities which are held Shareholders are requested to update in physical form with effect from April 1, their addresses registered with the 2019. Company, directly through the STA, to The shareholders, who continue to hold receive all communications promptly. shares in physical form even after this Shareholders, holding shares in date, will not be able to lodge the shares electronic form, are requested to deal with the company for further transfer. only with their DPs in respect of change Therefore, such shareholders will need of address and furnishing bank account to convert them to demat form number, etc. compulsorily if they wish to effect any 14.7 SMS Alerts: transfer. Only the requests for Shareholders are requested to note that transmission and transposition of NSDL and CDSL have announced the securities in physical form will be launch of SMS alert facility for demat accepted by the Company. account holders whereby shareholders 14.4 Consolidation of Multiple Folios: will receive alerts for debits / credits Shareholders, who have multiple folios (transfers) to their demat accounts a day in identical names, are requested to apply after the transaction. These alerts will be for consolidation of such folios and send sent to those account holders who have the relevant share certificates to the provided their mobile numbers to their Company. DPs. No charge will be levied by NSDL / CDSL on DPs providing this facility to 14.5 Registration of Nominations: investors. This facility will be available Nomination in respect of shares, as per to investors who request for the same Section 72 of the Act, 2013 provides and provide their mobile numbers to the facility for making nominations by DPs. Further information is available on shareholders in respect of their holding the website of NSDL and CDSL namely of shares. Such nomination greatly www.nsdl.co.in and www.cdslindia.com, facilitates transmission of shares from the respectively. deceased shareholder to his / her 14.8 Timely encashment of dividends: nominee without having to go through the Shareholders are requested to encash process of obtaining succession their dividends promptly to avoid hassles certificate / probate of the Will, etc. of revalidation/ losing your right of claim It would therefore be in the best interest owing to transfer of unclaimed dividends of the shareholders holding shares in beyond seven years to Investor physical form registered as a sole holder Education and Protection Fund (IEPF). to make such nominations. As required by SEBI, shareholders are Shareholders, who have not availed requested to furnish details of their bank nomination facility, are requested to avail account number and name and address the same by submitting the nomination of the bank for incorporating the same in in Form SH-13. This form will be made the warrants. This would avoid wrong available on request. Investors holding credits being obtained by unauthorized shares in demat form are advised to persons. contact their DPs for making Shareholders, who have not encashed nominations. their dividend warrants, in respect of
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dividends declared after 31st March, respect of which dividend has remained unpaid/ 2011 may contact the Company and unclaimed for seven consecutive years or more surrender their warrants for payment. are required to be transferred to a Demat Shareholders are requested to note that Account opened in the name of IEPF Authority the dividends, not claimed for a period with Punjab National Bank by the Ministry of of seven years from the date they first Corporate Affairs. became due for payment, shall be During the year, the Company has sent transferred to IEPF in terms of Section individual notices to all the shareholders whose 125(6) of the Companies Act, 2013 read dividends are lying unpaid / unclaimed against with Investor Education & Protection their name for seven consecutive years or more Fund (IEPF) Authority (Accounting, Audit, and also advertised on the Newspapers seeking Transfer and Refund) Rules, 2016. action from the shareholders. The list of such Information in respect of unclaimed dividends due shareholders were also displayed on the for remittance into IEPF is given below: website of the Company. Date of Due date for In case the dividends are not claimed within the Financial Date of transfer to transfer to due date(s) mentioned above, necessary steps Year declaration special the IEPF will be initiated by the Company to transfer account shares held by the members to IEPF. Please 2012-13 (interim) 22.05.2013 21.06.2013 21.06.2020 note that no claim shall lie against the Company 2013-14 (interim) 22.05.2014 21.06.2014 21.06.2021 in respect of the shares so transferred to IEPF. As required under the said provisions, all 2014-15 (interim) 19.05.2015 18.06.2015 18.06.2022 subsequent corporate benefits that accrues in 2015-16 (interim) 02.11.2015 02.12.2015 02.12.2022 relation to the above shares will also be credited 2015-16 to the said IEPF Account. (2nd interim) 14.03.2016 13.04.2016 13.04.2023 In the event of transfer of shares and the 2016-17 unclaimed dividends to IEPF, shareholders are st (1 interim) 02.11.2016 02.12.2016 02.12.2023 entitled to claim the same from IEPF by 2016-17 submitting an online application in the (2nd interim) 03.03.2017 02.04.2017 02.04.2024 prescribed Form IEPF-5 available on the 2017-18 website www.iepf.gov.in and sending a physical (1st interim) 08.11.2017 08.12.2017 08.12.2024 copy of the same duly signed to the Company along with the requisite documents enumerated 2017-18 in the Form IEPF-5, as per the following (2nd interim) 06.02.2018 08.03.2018 08.03.2025 procedures: 2018-19 (1st interim) 06.02.2019 08.03.2019 08.03.2026 1. Download the Form IEPF - 5 from the website of IEPF (http://www.iepf.gov.in) for 2018-19 filling the claim for refund of shares and (2nd interim) 26.03.2019 25.04.2019 25.04.2026 dividends. 15. Transfer of Shares to Investor Education 2. Read the instructions provided on the and Protection Fund (IEPF) authority website / instructions kit along with the As per Section 124(6) of the Act read with the e-form carefully before Filling the form. Investor Education and Protection Fund 3. After filling / completing the form save it on Authority (Accounting, Audit, Transfer and your computer and submit the duly Refund) Rules, 2016 ("IEPF Rules") as completed form by following the instructions amended from time to time, all the shares in given in the upload link on the website.
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4. On successful uploading the Disclosure in respect of equity shares acknowledgment will be generated transferred in the Company's unclaimed indicating the SRN. This SRN is to be used suspense account for future tracking of the form. Pursuant to the requirement of Regulation 5. Printout of the duly completed IEPF - 5 and 34(3) and Schedule V Part F of SEBI LODR the acknowledgment issued after uploading 2015, the following table provides details the form will have to be submitted together in respect of the equity shares lying in the with an Indemnity Bond in original along suspense account. The Company has with the other documents as mentioned in already sent three remainders to the the Form IEPF-5 to the Nodal Officer of the shareholders for claiming those shares at Company in an envelope marked "Claim their latest available address(es) with the for refund from IEPF Authority". Company or Depository, as the case may In the process, general information about be. the Company which have to be provided All the corporate benefits in terms of are as under. securities accruing on those shares like (a) Corporate Identification Number (CIN) of bonus shares, split etc would also be Company:- L27209TN1996PLC035293 credited to unclaimed suspense account of (b) Name of the company:- Harita Seating the Company. The voting rights on shares Systems Limited lying in unclaimed suspense account shall remain frozen till the rightful owner claims (c) Address of registered office of the the shares. company: Jayalakshmi Estates, 29, Haddows Road, Chennai 600 006. No. of No. of Details share- shares (d) email ID of the company:- holders [email protected] No of shares in the Unclaimed suspense Pursuant to Investor Education and account as on 31st March 2019 195 36,493 Protection Fund (Uploading of information Unclaimed Shares Transferred to regarding unpaid and unclaimed amount IEPF Authority on 24th July 2019 163 30,683 lying with companies) Rules, 2012, the Company shall provide / host the required No. of shares transferred to the details of unclaimed dividend amount shareholders on request from 4 500 referred in relevant sections of the Act, 1st April 2019 to 31st March 2020 2013 on its website and also in the Ministry No of shares in the Unclaimed suspense 28 5,310 of Corporate Affairs (MCA) website in the account as on 31st March 2020 relevant form every year.
For and on behalf of the Board
Place : Chennai H Lakshmanan th Date : 19 June 2020 Chairman
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COMPLIANCE WITH CODE OF BUSINESS CONDUCT AND ETHICS
To
The Shareholders of Harita Seating Systems Limited, Chennai
On the basis of the written declarations received from members of the Board and Senior Management Personnel in terms of the relevant provisions of SEBI (Listing Obligations and Disclosure Requirements) Regulation 2015, it is hereby certified that both the members of the Board and the Senior Management Personnel of the Company have affirmed compliance with the respective provisions of the Code of Business Conduct and Ethics of the Company as laid down by the Board for the year ended 31st March 2020.
Place : Chennai A G GIRIDHARAN Date : 19th June 2020 Chief Executive Officer
CHIEF EXECUTIVE OFFICER (CEO) AND CHIEF FINANCIAL OFFICER (CFO) CERTIFICATION To evaluated the effectiveness of internal control systems of the Company pertaining to financial reporting and have The Board of Directors disclosed to the Auditors and the Audit Committee, Harita Seating Systems Limited deficiencies in the design or operation of such internal Jayalakshmi Estates, controls, if any, of which we are aware and steps taken No.29, Haddows Road, or proposed to be taken for rectifying these deficiencies. Chennai - 600 006 (5) We have indicated to the Auditors and the Audit Dear Sirs, Committee: We certify that we have reviewed the financial statements • significant changes, if any, in internal control over prepared based on the Indian Accounting Standards for the financial reporting during the year; st year ended 31 March 2020 and to the best of our knowledge • significant changes in accounting policies, if any, during and belief: the year and that the same have been disclosed in the (1) these statements do not contain any materially untrue notes to the financial statements; and statement or omit any material fact or contain statements • that there were no instances of significant fraud of which that might be misleading; we have become aware and the involvement therein, (2) these statements together present a true and fair view of of the management or an employee having a significant the Company’s affairs and are in compliance with role in the Company’s internal control system over applicable Indian Accounting Standards, Laws and financial reporting. Regulations.
(3) no transactions entered into by the Company during the A G Giridharan K Subramanian year are fraudulent, illegal or violative of the Company’s Chief Executive Officer Chief Financial Officer code of conduct. (4) We accept responsibility for establishing and maintaining Place : Chennai internal controls for financial reporting and we have Date : 19th June 2020
79 HARITA SEATING SYSTEMS LIMITED
AUDITORS' CERTIFICATE ON COMPLIANCE OF THE PROVISIONS OF THE CODE OF CORPORATE GOVERNANCE
To In our opinion and to the best of our information and according to the explanations given to us, we The Shareholders of certify that the Company has complied with the Harita Seating Systems Limited, Chennai conditions of Corporate Governance as stipulated in the above-mentioned Listing Regulations, as We have examined the compliance of conditions of applicable. Corporate Governance by Harita Seating Systems Limited, Chennai - 600 006 (the Company) for the We further state that such compliance is neither an st year ended 31 March 2020 as per the relevant assurance as to the future viability of the Company provisions of Securities and Exchange Board of nor the efficiency or effectiveness with which the India (Listing Obligations and Disclosure management has conducted the affairs of the Requirements) Regulations, 2015 [Listing Company. Regulations].
The compliance of conditions of Corporate Governance is the responsibility of Company's For RAGHAVAN, CHAUDHURI & NARAYANAN management. Our examination was limited to CHARTERED ACCOUNTANTS procedures and implementation thereof, adopted by Firm Regn No. 007761S the Company for ensuring the compliance of the conditions of the Corporate Governance. It is neither V SATHYANARAYANAN an audit nor an expression of opinion on the financial Place : Bangalore Partner th statements of the Company. Date : 19 June 2020 Membership No.027716
LINKS TO COMPANY'S POLICIES 1. TERMS OF APPOINTMENT OF IDS https://www.haritaseating.com/PDF/HSSL-TermsofAppointmentofIDs.pdf 2. BUSINESS RESPONSIBILITY REPORT https://www.haritaseating.com/PDF/HSSL_Business_Responsibility_Report_2019-20.pdf 3. POLICY ON VIGIL MECHANISM / WHISTLE BLOWER POLICY https://www.haritaseating.com/PDF/Whistle_Blower_Policy_08May19.pdf 4. ANNUAL RETURN https://www.haritaseating.com/PDF/HSSL_Annual%20Return_2019-20.pdf 5. CORPORATE SOCIAL RESPONSIBILITY POLICY https://www.haritaseating.com/PDF/CSRPolicyHSSL.pdf 6. DIRECTORS FAMILIARIZATION PROGRAM https://www.haritaseating.com/PDF/Familirisation_Program_HSSL_2018.PDF 7. CODE OF BUSINESS CONDUCT AND ETHICS https://www.haritaseating.com/PDF/CodeofBusinessConductandEthics.pdf 8. MATERIAL SUBSIDIARIES POLICY https://www.haritaseating.com/PDF/MaterialSubsidiaryPolicy.pdf 9. RELATED PARTY TRANSACTION POLICY https://www.haritaseating.com/PDF/RelatedPartyTransactionPolicy.pdf 10. NOMINATION AND REMUNERATION POLICY https://www.haritaseating.com/PDF/Nomination_and_Remuneration_Policy.pdf
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Form No. MR-3 SECRETARIAL AUDIT REPORT for the financial year ended 31.03.2020 [Pursuant to Section 204(1) of the Companies Act, 2013 and Rule No.9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014]
To the Members of (v) Foreign Exchange Management Act, 1999 and Harita Seating Systems Limited, the rules and regulations made thereunder to the Jayalakshmi Estates, extent of Foreign Direct Investment, Overseas No. 29 (8) Haddows Road, Direct Investment and External Commercial Chennai - 600006. Borrowings; I have conducted the secretarial audit of the (vi) The following Regulations and Guidelines compliance of applicable statutory provisions and the prescribed under the Securities and Exchange adherence to good corporate practices by M/s HARITA Board of India Act, 1992 ('SEBI Act'):- SEATING SYSTEMS LIMITED bearing CIN a) The Securities and Exchange Board of L27209TN1996PLC035293 (hereinafter called the India (Substantial Acquisition of Shares and company). Secretarial Audit was conducted in a Takeovers) Regulations, 2011; manner that provided me a reasonable basis for evaluating the corporate conducts/statutory b) The Securities and Exchange Board compliances and expressing my opinion thereon. of India (Prohibition of Insider Trading) Regulations 2015; Based on my verification of the Company's books, papers, minute books, forms and returns filed and c) The Securities and Exchange Board of India other records maintained by the company and also (Registrars to an Issue and Share Transfer the information provided by the Company, its officers, Agents) Regulations, 1993 regarding the agents and authorized representatives during the Companies Act and dealing with client; and conduct of secretarial audit, I hereby report that, in my opinion, the company has, during the audit period d) The Securities and Exchange Board of India covering the financial year ended on 31.03.2020, (Listing obligations and Disclosure complied with the statutory provisions listed hereunder requirements) Regulations 2015. and also that the Company has proper Board- I am informed that the company, during the year, processes and compliance-mechanism in place to was not required to comply with the following the extent, in the manner and subject to the reporting regulations and consequently not required to made hereinafter: maintain any books, papers, minute books or I have examined the books, papers, minute books, other records or file any forms / returns under: forms and returns filed and other records maintained a) The Securities and Exchange Board of India by the Company for the financial year ended on (Issue of Capital and Disclosure Requirements) 31.03.2020, according to the provisions of: Regulations 2018; (i) The Companies Act, 2013 (the Act) and the rules b) Securities and Exchange Board of India (Share made thereunder; Based Employee Benefits) Regulations, 2014; (ii) The Companies Act 1956 (to the extent applicable) c) The Securities and Exchange Board of India (iii) The Securities Contracts (Regulation) Act, 1956 (Issue and Listing of Debt securities) ('SCRA') and the rules made thereunder; Regulations 2008; (iv) The Depositories Act, 1996 and the Regulations d) Securities and Exchange Board of India (Issue and Bye-laws framed thereunder; and Listing of Non-Convertible and
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Redeemable Preference Shares) Adequate notice is given to all directors to schedule Regulations,2013; and the Board Meetings, agenda and detailed notes on agenda were sent at least seven days in advance, e) The Securities and Exchange Board of India and a system exists for seeking and obtaining further (Buy back of Securities) Regulations, 2018. information and clarifications on the agenda items (vii) In addition to the compliance with Factory and before the meeting and for meaningful participation Labour Laws as is applicable to a factory, based at the meeting. on the study of the systems and processes in place and a review of the reports of (1) the Based on the minutes made available to us, I report heads of the Departments (2) Occupier/Manager that Majority decision is carried through and that of the factories located in Hosur, Pune, Dharwad, there were no dissenting votes from any Board Uttarakhand and Sriperumbudur which member that was required to be captured and manufacture seating system for automotive and recorded as part of the minutes. non-automotive applications(3) the compliance I further report that there are adequate systems reports made by the functional heads of various and processes in the company commensurate with departments which are submitted to the Board the size and operations of the company to monitor, of Directors of the Company(4) test check on report deviations, if any, to the Board, take corrective compliances under other laws (5) Management actions and ensure compliance with applicable laws, Representation letter provided by the company rules, regulations and guidelines. in the present pandemic situation, I report that the Company has complied with the provisions I further report that during the year under review, of the following Industry specific statutes and the pursuant to order of the National Company Law rules made thereunder to the extent it is applicable Tribunal, Chennai Bench, in Company Application to them: no. CA 1018 to 1022/ CAA/2019, meeting of equity The Legal Metrology Act, 2009 shareholders of the Company through Remote Evoting/ Postal Ballot and Insta Poll was conducted I have also examined compliance with the on 4.12.2019 to approve the Scheme of applicable clauses of the following: Amalgamation amongst Harita Limited, Harita Venu (i) Secretarial Standards issued by The Institute Private Limited, Harita Cheema Private Limited, of Company Secretaries of India. Harita Financial Services Limited and Harita Seating Systems Limited with Minda Industries Limited and (ii) The Listing Agreements entered into by the the said scheme was approved by the shareholders Company with National Stock Exchange of at the said Court Convened meeting. India Limited. During the period under review, the Company has complied with the provisions of the Act, Rules, B Chandra Regulations, Guidelines, Standards, etc. mentioned Practising Company Secretary above I further report that: The Board of Directors of the Company is duly ACS No.: 20879 constituted with proper balance of Non-Executive Place : Chennai C P No.: 7859 Directors and Independent Directors. Date : 19th June, 2020 UDIN: A020879B000344941
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To the Members of 3. I have not verified the correctness and Harita Seating Systems Limited, appropriateness of financial records and Books of Accounts of the company. Jayalakshmi Estates, No. 29 (8) Haddows Road, 4. Where ever required, I have obtained the Chennai - 600006. Management representation about the compliance of laws, rules and regulations and Our report of even date is to be read along with this happening of events etc. letter. 5. The compliance of the provisions of Corporate 1. Maintenance of secretarial record is the and other applicable laws, rules, regulations, responsibility of the management of the company. standards is the responsibility of management. My responsibility is to express an opinion on these Our examination was limited to the verification of secretarial records based on our audit. procedures on test basis. 2. I have followed the audit practices and 6. The Secretarial Audit report is neither an assurance processes as were appropriate, also taking into as to the future viability of the company nor of the account the peculiar circumstances leading to the efficacy or effectiveness with which the national lockdown imposed by the Government of management has conducted the affairs of the India due to the pandemic, to obtain reasonable company. assurance about the correctness of the contents B Chandra of the Secretarial records. The verification was Practising Company Secretary done on test basis to ensure that correct facts are reflected in secretarial records. I believe that the ACS No.: 20879 processes and practices, we followed provide a Place : Chennai C P No.: 7859 reasonable basis for our opinion. Date : 19th June, 2020 UDIN: A020879B000344961
CERTIFICATE OF NON-DISQUALIFICATION OF DIRECTORS (pursuant to Regulation 34(3) and Schedule V Para C clause (10)(i) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015) To the Members of explanations furnished to me by the Company & its Harita Seating Systems Limited, officers, I hereby certify that none of the Directors on Jayalakshmi Estates, the Board of the Company for the Financial Year st No. 29 (8) Haddows Road, ended 31 March, 2020 have been debarred or Chennai - 600006. disqualified from being appointed or continuing as Directors of companies by the Securities and I have examined the relevant registers, records, forms, Exchange Board of India, Ministry of Corporate Affairs, returns and disclosures received from the Directors or any such other Statutory Authority of Harita Seating Systems Limited having CIN L27209TN1996PLC035293 and having registered Ensuring the eligibility for the appointment / continuity office at "Jayalakshmi Estates", No. 29 (8) Haddows of every Director on the Board is the responsibility of Road, Chennai 600 006 (hereinafter referred to as the management of the Company. Our responsibility 'the Company'), produced before me by the Company is to express an opinion on these based on our for the purpose of issuing this Certificate, in accordance verification. This certificate is neither an assurance as with Regulation 34(3) read with Schedule V Para-C to the future viability of the Company nor of the Sub clause 10(i) of the Securities Exchange Board efficiency or effectiveness with which the management of India (Listing Obligations and Disclosure has conducted the affairs of the Company. Requirements) Regulations, 2015. B Chandra Practising Company Secretary In my opinion and to the best of my information and according to the verifications (including Directors ACS No.: 20879 Identification Number (DIN) status at the portal Place : Chennai C P No.: 7859 www.mca.gov.in) as considered necessary and Date : 19th June, 2020 UDIN: A020879B000344950
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Standalone Financial Statements of Harita Seating Systems Limited
84 HARITA SEATING SYSTEMS LIMITED
INDEPENDENT AUDITOR'S REPORT
To the Members of profit and total comprehensive income, changes in equity and its Harita Seating Systems Limited, cash flows for the year ended on that date. 29 Haddows Road, Chennai. Basis for Opinion We conducted our audit of the standalone financial statements in Report on the Audit of the Standalone Financial Statements accordance with Standards on Auditing (SAs) specified under Opinion Section 143(10) of the Companies Act, 2013. Our responsibilities under those Standards are further described in the Auditor's We have audited the standalone financial statements of Harita Responsibilities for the Audit of the Financial Statements section Seating Systems Limited ("the Company"), which comprise the st of our report. We are independent of the Company in accordance Balance Sheet as at 31 March 2020, the Statement of Profit and with the Code of Ethics issued by the Institute of Chartered Loss (including Other Comprehensive Income), the Statement of Accountants of India together with ethical requirements that are Changes in Equity and Statement of Cash Flows for the year then relevant to our audit of the financial statements under the provisions ended, and notes to the financial statements, including a summary of the Companies Act, 2013 and the Rules thereunder, and we of significant accounting policies and other explanatory information have fulfilled our other ethical responsibilities in accordance with (hereinafter referred to as "the standalone financial statements"). these requirements and the Code of Ethics. We believe that the In our opinion and to the best of our information and according audit evidence we have obtained is sufficient and appropriate to to the explanations given to us, the aforesaid standalone financial provide a basis for our opinion. statements give the information required by the Companies Act, Key Audit Matters 2013 ("the Act") in the manner so required and give a true and Key audit matters are those matters that, in our professional fair view in conformity with the Indian Accounting Standards judgement, were of most significance in our audit of the standalone prescribed under Section 133 of the Act read with the Companies financial statements of the current period. These matters were (Indian Accounting Standards) Rules, 2015, as amended, ("Ind addressed in the context of our audit of the standalone financial AS") and other accounting principles generally accepted in India, statements as a whole, and in forming our opinion thereon, and of the state of affairs of the company as at 31st March 2020, the we do not provide a separate opinion on these matters. S.No Key Audit Matter Auditor's Responses 1 Application of IND AS 116 Principal Audit Procedures From 1st April 2019, IND AS 116 has to be applied on all The company has employed an external agency to assist with the applicable leasing contracts with the application and appropriate transition into IND AS 116 during the financial year and has accounting treatment of identifying lease liability, right to use extensively documented, for each of its leases, based on a policy asset, interest on such lease. of general materiality, the applicability or non-applicability of the standard, to such lease. We have verified the computation and entries passed with reference as part of the initial transition to the standard as part of our audit procedures. The company has appropriately adopted the Modified Retrospective approach, and given impact to the opening reserves along with creation of Right to Use Assets and Lease liability as part of the transition. We have also performed an independent verification of the calculation of the lease liability and it's unwinding during the year, interest on lease and right to use assets and the depreciation thereat, during the year based on the information made available to us and found the results to be satisfactory.
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S.No Key Audit Matter Auditor's Responses 2 Tax Litigations and Provisions. Principal Audit Procedures The Company has material uncertain tax positions, including We have obtained details of completed assessments and demands matters under dispute, which involves significant judgment to relating to direct tax and indirect tax, for the year ended 31st March determine the possible outcome of these disputes. 2020. Our audit procedures involved discussion with the company's experts on the expected outcome of these disputes in comparison with precedent case laws presenting similar facts. Additionally, we have considered the effect of any new information in respect of uncertain tax positions as at April 1, 2020 to evaluate whether any change was required to management's position on these uncertainties. On the basis of the above evaluations, we have analysed the adequacy of provisions made in books against such disputed tax positions. Information Other than the Standalone Financial Statements and detecting frauds and other irregularities; selection and and Auditor's Report Thereon. application of appropriate accounting policies; making judgements The Company's management and Board of Directors are and estimates that are reasonable and prudent; and the design, responsible for the preparation of the other information. The other implementation and maintenance of adequate internal financial information comprises the information included in the Management controls, that were operating effectively for ensuring the accuracy Discussion and Analysis, Board's Report including Annexures to and completeness of the accounting records, relevant to the Board's Report, Business Responsibility Report, Corporate preparation and presentation of the standalone financial statements Governance and Shareholder's Information, but does not include that give a true and fair view and are free from material the standalone financial statements and our auditor's report thereon. misstatements, whether due to fraud or error. Our opinion on the standalone financial statements does not cover In preparing the standalone financial statements, management the other information and we do not express any form of assurance and Board of Directors are responsible for assessing the Company's conclusion thereon. ability to continue as a going concern, disclosing, as applicable, In connection with our audit of the standalone financial statements, matters related to going concern and using the going concern our responsibility is to read the other information and, in doing so, basis of accounting, unless management either intends to liquidate consider whether the other information is materially inconsistent the Company or to cease operations, or has no realistic alternative with the standalone financial statements or our knowledge obtained but to do so. during the course of audit or otherwise appears to be materially The Board of Directors are also responsible for overseeing the misstated. Company's financial reporting process. If, based on the work we have performed, we conclude that there Auditor's Responsibilities for the Audit of the Financial is a material misstatement of this other information, we are required Statements to report that fact. We have nothing to report in this regard. Our objectives are to obtain reasonable assurance about whether Responsibilities of the Management and Board of Directors, the standalone financial statements as a whole are free from for the Standalone Financial Statements material misstatements, whether due to fraud or error, and to issue The Company's management and Board of Directors are an auditor's report that includes our opinion. Reasonable assurance responsible for the matters stated in Section 134(5) of the Act with is a high level of assurance, but is not a guarantee that an audit respect to the preparation of these standalone financial statements conducted in accordance with Standards on auditing will always that give a true and fair view of the financial position, financial detect a material misstatement when it exists. Misstatements can performance, total comprehensive income, changes in equity and arise from fraud or error and are considered material if, individually cash flows of the Company in accordance with the accounting or in the aggregate, they could reasonably be expected to influence principles generally accepted in India, including the Indian the economic decisions of users taken on the basis of these Accounting Standards (Ind AS) specified under section 133 of the standalone financial statements. Act. This responsibility also includes maintenance of adequate As part of an audit in accordance with SAs, we exercise professional accounting records in accordance with the provisions of the Act judgment and maintain professional scepticism throughout the for safeguarding the assets of the Company and for preventing audit. We also:
86 HARITA SEATING SYSTEMS LIMITED
• Identify and assess the risks of material misstatement of the independence, and to communicate with them all relationships standalone financial statements, whether due to fraud or and other matters that may reasonably be thought to bear on our error, design and perform audit procedures responsive to independence, and where applicable, related safeguards. those risks, and obtain audit evidence that is sufficient and From the matters communicated with those charged with appropriate to provide a basis for our opinion. The risk of not governance, we determine those matters that were of most detecting a material misstatement resulting from fraud is significance in the audit of the standalone financial statements of higher, than for one resulting from error, as fraud may involve the current period and are therefore the key audit matters. We collusion, forgery, intentional omissions, misrepresentations, describe these matters in our auditor's report unless law Not Sure or the override of internal control. or regulation precludes public disclosure about the matter, or • Obtain an understanding of internal financial controls relevant when in extremely rare circumstances, we determine that a matter to the audit in order to design audit procedures that are should not be communicated in our report because the adverse appropriate in the circumstances. Under Section 143(3)(i) of consequences of doing so would reasonably be expected to the Act, we are also responsible for expressing our opinion outweigh the public interest benefits of such communication. on whether the Company has adequate internal financial controls system in place and the operating effectiveness of Report on Other Legal and Regulatory Requirements such controls. As required by the Companies (Auditor's Report) Order, 2016 ("the Order"), issued by the Central Government of India in terms • Evaluate the appropriateness of accounting policies used and of sub-section (11) of Section 143 of the Act, we give in the the reasonableness of accounting estimates and related "Annexure A" a statement on the matters specified in the paragraphs disclosures made by the management. 3 and 4 of the Order, to the extent applicable. • Conclude on the appropriateness of management's use of the As required by the Section 143(3) of the Act, we report that: going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists (a) We have sought and obtained all the information and related to events or conditions that may cast significant doubt explanations which to the best of our knowledge and belief on the Company's ability to continue as a going concern. If were necessary for the purpose our audit. we conclude that a material uncertainty exists, we are required (b) In our opinion, proper books of accounts as required by law to draw attention in our auditor's report to the related disclosures have been kept by the Company so far as it appears from in the standalone financial statements or, if such disclosures our examination of those books. are inadequate, to modify our opinion. Our conclusions are (c) The Standalone Balance Sheet, the Standalone Statement based on the audit evidence obtained up to the date of our of Profit and Loss (including Other Comprehensive Income), auditor's report. However, future events or conditions may the Standalone Statement of Changes in Equity and the Cash cause the Company to cease to continue as a going concern. Flow Statement dealt with by this Report are in agreement • Evaluate the overall presentation, structure and content of the with book of accounts. standalone financial statements, including the disclosures, (d) In our opinion, the aforesaid standalone financial statements and whether the standalone financial statements represent comply with Indian Accounting Standards specified under the underlying transactions and events in a manner that Section 133 of the Act, read with Rule 7 of the Companies achieves fair presentation. (Accounts) Rule, 2014. Materiality is the magnitude of misstatements in the standalone (e) On the basis of written representations received from the financial statements that, individually or in aggregate, makes it directors as on 31st March 2020 taken on record by the Board probable that economic decisions of a reasonably knowledgeable of Directors, none of the directors is disqualified as on 31st user of the financial statements may be influenced. We consider March 2020 from being appointed as directors in term of quantitative materiality and qualitative factors in (i) planning the Section 164 (2) of the Act. scope of our audit work and in evaluating the results of our work; and (ii) to evaluate the effect of any identified misstatements in (f) With respect to the adequacy of the internal financial controls the financial statements. over the financial reporting of the Company and the operating effectiveness of such controls, refer to our separate Report We communicate with those charged with governance, regarding, in "Annexure B". Our report expresses an unmodified opinion among other matters, the planned scope and timing of the audit on the adequacy and operating effectiveness of the Company's and significant audit findings, including any significant deficiencies internal financial controls over financial reporting. in internal control that we identify during our audit. (g) With respect to the other matters to be included in the Auditor's We also provide those charged with governance, a statement that Report in accordance with the requirements of section 197(16) we have complied with relevant ethical requirements regarding of the Act, as amended:
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In our opinion and to the best of our information and according foreseeable losses, if any, on long-term contracts including to the explanations given to us, the remuneration paid by the derivative contracts. Company to its directors during the year is in accordance with iii. There has been no delay in transferring amounts, required the provisions of Section 197 of the Act. to be transferred, the Investor Education and Protection (h) With respect to other matters to be included in the Auditor's Fund by the Company. Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, as amended, in our opinion and to the best of our information and according to the explanations for Raghavan, Chaudhuri & Narayanan given to us: Chartered Accountants FRN: 007761S i. The Company has disclosed the impact of pending litigations on the financial position in its standalone financial statements- Refer Note 42(iii) to the financial V. Sathyanarayanan statements; Partner ii. The company has made provision, as required under the Place : Bangalore Membership No. 027716 applicable law or accounting standards, for material Date : 19th June 2020 UDIN : 20027716AAAAGW2187
Annexure'A' to Independent Auditors' Report - 31st March 2020 (Referred to in our report of even date) ii) a) The Company has maintained proper records showing reporting under sub-clause (v) of paragraph 3 of the Order full particulars including quantitative details and is not applicable to the company; situation of fixed assets; vi) We have broadly reviewed the books of account maintained b) Fixed assets are physically verified by the by the Company pursuant to the rules made by the Central management in accordance with a regular programme Government under Section 148(1) of the Companies Act, at reasonable intervals. In our opinion the interval is 2013 for the maintenance of cost records and we are of reasonable having regard to the size of the company the opinion that, prima facie, the prescribed accounts and and nature of its assets. No material discrepancies records have been made and maintained. We have, have been noticed on such verifications; however, not made a detailed examination of the cost records with a view to determine whether they are accurate c) The title deeds of the immovable properties of the or complete; company are held in the name of the company; vii) a) According to the information and explanation given to ii) The inventory, other than in-transit, has been physically us, and on the basis of our examination of the records verified at reasonable intervals during the year under review of the company, the Company is generally regular in by the management. The discrepancies noticed between depositing undisputed statutory dues including the book stock and physical stock were not material and provident fund, employees state insurance, Income- have been properly dealt with in the books of account; tax, sales-tax, custom duty, excise duty, service tax, iii) During the year, the Company has not granted any loan to value added tax, cess, goods and services tax and any company, firm or other parties covered in the register any other material statutory dues with the appropriate maintained under Section 189 to the Companies act 2013; authorities except for few marginal delays; iv) In our opinion and according to the information and b) According to the information and explanations given explanations given to us, the Company has complied with to us, no undisputed amounts payable in respect of the provisions of Section 185 and 186 of the Act in respect income-tax, sales-tax, custom duty, excise duty, of grant of loans, making investments, as applicable. The service tax, value added tax, cess, goods and services company has not provided any guarantees or securities; tax, were in arrears as at 31st March 2020 for a period v) The Company has not accepted any deposits from the of more than six months from the date they became public within the meaning of Section 73 to 76. Hence, payable;
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c) According to the information and explanations given the provisions of Clause 3(xi) of the Order are not to us, following are the details of the dues that were applicable; st not deposited on account of dispute as on 31 March xii) The Company is not a Nidhi Company and as such this 2020: clause of the order is not applicable; Particulars Rs. in Lakhs xiii) In our opinion and according to the information and Income Tax 362.01 explanations given to us, all transactions with the related Service Tax 2.10 parties are in compliance with Section 177 and 188 of the act and details of such transactions have been disclosed Value Added Tax 404.61 in standalone Ind AS financial statements as required by Total 768.72 the applicable accounting standards; viii) Based on our verification and according to the information xiv) According to the information and explanation given to us and explanations given by the management, the Company and in our opinion, the company has not made any has not defaulted in repayment of dues to its banks. The preferential or private placement of shares or fully or partly company has not borrowed from any financial institution convertible debentures during the year under review; or Government nor has issued any debentures; xv) According to the information and explanation given to us ix) a) The Company has not raised any money by way of and in our opinion, the company has not entered into any initial public offer or further public offer (including debt non-cash transactions with directors or persons connected instruments) during the year. Hence, reporting on with them; utilization of such money does not arise; xvi) The company is not required to be registered under section b) In our opinion, the term loans were applied for the 45-IA of the Reserve Bank Act, 1934. purposes for which the loans were obtained; for Raghavan, Chaudhuri & Narayanan x) Based on the audit procedures adopted and the information Chartered Accountants and explanation given to us, no fraud by the Company or FRN: 007761S on the Company has been noticed or reported during the course of our audit; V. Sathyanarayanan xi) In our opinion and according to the information and Partner explanations given to us, no managerial remuneration has Place : Bangalore Membership No. 027716 been provided for or paid during the year. Accordingly, Date : 19th June 2020 UDIN : 20027716AAAAGW2187
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Annexure 'B' to the Independent Auditors' Report for the year ended 31st March 2020 Report on the Internal Financial Controls under financial reporting was established and maintained, Clause (i) of Sub-section 3 of Section 143 of the and if such controls operated effectively in all material Companies Act, 2013 ("the Act") respects. We have audited the internal financial controls over Our audit involves performing procedures to obtain financial reporting of Harita Seating Systems Limited audit evidence about the adequacy of the internal ("the Company"), "Jayalakshmi Estates", No.29, financial controls system over financial reporting and st Haddows Road, Chennai 600 006, as of 31 March their operating effectiveness. Our audit of internal 2020 in conjunction with our audit of the standalone financial controls over financial reporting included financial statements of the Company for the year obtaining an understanding of internal financial controls ended on that date. over financial reporting, assessing the risk that a Management's and Board of Directors material weakness exists, and testing and evaluating Responsibility for Internal Financial Controls the design and operating effectiveness of internal The Company's management and Board of Directors control based on the assessed risk. The procedures are responsible for establishing and maintaining selected depend on the auditor's judgment, including internal financial controls based on the Guidance the assessment of the risks of material misstatement Note on Audit of Internal Financial Controls Over of the standalone financial statements, whether due Financial Reporting issued by the Institute of Chartered to fraud or error. Accountants of India. These responsibilities include We believe that the audit evidence we have obtained the design, implementation and maintenance of is sufficient and appropriate to provide a basis for our adequate internal financial controls that were operating audit opinion on the Company's internal financial effectively for ensuring the orderly and efficient conduct controls system over financial reporting. of its business, including adherence to company's policies, the safeguarding of its assets, the prevention Meaning of Internal Financial Controls Over and detection of frauds and errors, the accuracy and Financial Reporting completeness of the accounting records, and the A company's internal financial control over financial timely preparation of reliable financial information, as reporting is a process designed to provide required under the Companies Act, 2013. reasonable assurance regarding the reliability of financial reporting and the preparation of standalone Auditors' Responsibility financial statements for external purposes in Our responsibility is to express an opinion on the accordance with generally accepted accounting Company's internal financial controls over financial principles. A company's internal financial control reporting based on our audit. We conducted our audit over financial reporting includes those policies and in accordance with the Guidance Note on Audit of procedures that; Internal Financial Controls over Financial Reporting (1) Pertain to the maintenance of records that, in (the "Guidance Note") and the Standards on Auditing, reasonable detail, accurately and fairly reflect issued by Institute of Chartered Accountants of India the transactions and dispositions of the assets and deemed to be prescribed under Section 143(10) of the company; of the Companies Act, 2013, to the extent applicable (2) Provide reasonable assurance that transactions to an audit of internal financial controls. Those are recorded as necessary to permit preparation Standards and the Guidance Note require that we of financial statements in accordance with comply with ethical requirements and plan and perform generally accepted accounting principles, and the audit to obtain reasonable assurance about that receipts and expenditures of the company whether adequate internal financial controls over are being made only in accordance with
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authorisations of management and directors of Opinion the company; and In our opinion, to the best of our information and (3) Provide reasonable assurance regarding according to the explanations given to us, the prevention or timely detection of unauthorised Company has, in all material respects, an adequate acquisition, use, or disposition of the company's internal financial controls system over financial assets that could have a material effect on the reporting and such internal financial controls over standalone financial statements. financial reporting were operating effectively as at 31st March 2020, based on the internal control over Limitations of Internal Financial Controls Over financial reporting criteria established by the Company Financial Reporting considering the essential components of internal Because of the inherent limitations of internal financial control stated in the Guidance Note on Audit of Internal controls over financial reporting, including the Financial Controls over Financial Reporting issued by possibility of collusion or improper management the Institute of Chartered Accountants of India. override of controls, material misstatements due to error or fraud may occur and not be detected. Also, for Raghavan, Chaudhuri & Narayanan projections of any evaluation of the internal financial Chartered Accountants controls over financial reporting to future periods are FRN: 007761S subject to the risk that the internal financial control over financial reporting may become inadequate V. Sathyanarayanan because of changes in conditions, or that the degree Partner of compliance with the policies or procedures may Place : Bangalore Membership No. 027716 Date : 19th June 2020 UDIN : 20027716AAAAGW2187 deteriorate.
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Balance Sheet as at 31st March, 2020 (Rs. in Lakhs) Note As at As at Particulars No 31.03.2020 31.03.2019 ASSETS I Non-Current Assets a) Property, Plant and Equipment 2 10,433.05 9,333.81 b) Capital Work-in-progress 2 – 1,405.65 c) Right of use Assets 3 101.18 – d) Other Intangible Assets 2 52.34 89.70 e) Financial Assets i) Investments 4 2,824.56 2,817.32 ii) Other financial assets 5 123.46 125.54 f) Other non current assets 6 144.11 62.79 II Current Assets a) Inventories 7 2,276.63 2,250.58 b) Financial Assets i) Investments – – ii) Trade Receivables 8 7,598.07 10,506.42 iii) Cash and Cash equivalents 9 27.71 66.73 iv) Bank balances other than (iii) above 10 38.39 34.19 v) Other financial assets 5 145.81 275.29 c) Current Tax assets 314.40 189.24 d) Other Current Assets 11 845.11 1,356.69 Total Assets 24,924.82 28,513.95 EQUITY AND LIABILITIES Equity a) Equity Share Capital 12 776.90 776.90 b) Other Equity 13 12,788.84 12,616.96
Liabilities I Non-Current Liabilities a) Financial Liabilities i) Lease Liabilities 35.06 – b) Provisions 15 594.82 426.93 c) Deferred Tax Liabilities (Net) 16 108.63 261.47 II Current Liabilities a) Financial Liabilities i) Borrowings 17 2,080.72 3,167.57 ii) Trade Payables 18 (a) Total outstanding dues of micro and small enterprises 685.48 186.64 (b) Total outstanding dues other than ii(a) above 7,120.35 10,134.42 iii) Lease Liabilities 77.75 – iv) Other Financial Liabilities 14 242.45 498.00 b) Other Current Liabilities 19 375.43 399.88 c) Provisions 15 38.39 45.18 Total Equity and Liabilities 24,924.82 28,513.95 Significant Accounting Policies 1 for and on Behalf of Board of Directors In terms of our Reports Attached H LAKSHMANAN A G GIRIDHARAN For RAGHAVAN, CHAUDHURI & NARAYANAN Chairman Chief Executive Officer Chartered Accountants F.R. No: 007761S K SUBRAMANIAN N ISWARYA LAKSHMI V SATHYANARAYANAN Chief Financial Officer Company Secretary Partner Place : Chennai Membership No. 027716 Date : 19th June, 2020
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Statement of Profit and Loss for the year ended 31st March, 2020 (Rs. in Lakhs) Note Year ended Year ended Particulars No 31.03.2020 31.03.2019 Income I Revenue from Operations 20 34,624.54 47,759.52 II Other Income 21 582.39 1,342.71 III Total Income (I+II) 35,206.93 49,102.23 IV Expenses a) Cost of Material Consumed 22 25,022.12 35,552.81 b) Changes in Inventory of Finished Goods and Work-in-Progress 23 (267.38) (245.27) c) Employee Benefits Expense 24 4,631.15 4,861.74 d) Finance Costs 25 322.00 182.87 e) Depreciation and Amortization expenses 26 1,327.16 938.54 f) Other Expenses 27 4,062.32 4,906.30 Total Expenses (IV) 35,097.37 46,196.99 V Profit before Exceptional Items and Tax (III-IV) 109.56 2,905.24 VI Exceptional Items – – VII Profit Before Tax (V-VI) 109.56 2,905.24 VIII Tax Expense 28 a) Total of Current tax 17.89 517.38 i. Current Tax 17.89 538.01 ii. Prior period income tax – (20.63) b) Deferred Tax (133.17) 185.86 (115.28) 703.24 IX Profit for the period (VII-VIII) 224.84 2,202.00 X Other Comprehensive Income Items that will not be reclassified to profit or loss - Remeasurement of post employment benefit obligations (56.30) 136.68 - Income tax relating to these items 19.67 (47.76) Other comprehensive income for the year, net of tax (36.63) 88.92 XI Total Comprehensive Income for the Year (IX + X) 188.21 2,290.92 Earnings Per Equity Share a) Basic 36 2.89 28.34 b) Diluted 2.89 28.34 Significant Accounting Policies 1
for and on Behalf of Board of Directors In terms of our Reports Attached H LAKSHMANAN A G GIRIDHARAN For RAGHAVAN, CHAUDHURI & NARAYANAN Chairman Chief Executive Officer Chartered Accountants F.R. No: 007761S K SUBRAMANIAN N ISWARYA LAKSHMI V SATHYANARAYANAN Chief Financial Officer Company Secretary Partner Place : Chennai Membership No. 027716 Date : 19th June, 2020
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Statement of changes in equity (Rs. in Lakhs) a Equity Share Capital Particulars Amount As at 01-04-2018 776.90 Changes in equity share capital - As at 31-03-2019 776.90 Changes in equity share capital - As at 31-03-2020 776.90 b Other equity Reserves and Surplus Particulars General Capital Retained reserve redemption earnings Total reserve Balance as at 1st April, 2018 2,260.96 10.00 8,521.22 10,792.18 Add: Profit for the year 2018-19 2,202.00 2,202.00 Add: Other comprehensive income 88.92 88.92 Less: Dividend and Dividend tax 466.14 466.14 Balance as at 31st March, 2019 2,260.96 10.00 10,346.00 12,616.96 Less: Utilisation on Initial adoption of Ind AS 116 16.33 16.33 Add: Profit for the year 2019-20 224.84 224.84 Less: Other comprehensive income 36.63 36.63 Balance as at 31st March, 2020 2,260.96 10.00 10,517.88 12,788.84
for and on Behalf of Board of Directors In terms of our Reports Attached
H LAKSHMANAN A G GIRIDHARAN For RAGHAVAN, CHAUDHURI & NARAYANAN Chairman Chief Executive Officer Chartered Accountants F.R. No: 007761S K SUBRAMANIAN N ISWARYA LAKSHMI V SATHYANARAYANAN Chief Financial Officer Company Secretary Partner Place : Chennai Membership No. 027716 Date : 19th June, 2020
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Cash flow statement for the year ended 31st March 2020 (Rs. in Lakhs) Year ended Year ended Particulars 31st March 2020 31st March 2019 A. CASH FLOW FROM OPERATING ACTIVITIES Profit before tax and extra ordinary items 109.56 2,905.24 Add: Depreciation & amortization 1,327.16 938.54 Dividend income – (512.50) Interest Income (14.69) (19.03) Finance Cost 322.00 178.37 Net loss on disposal of property, plant & equipment 0.91 1.28 Net profit on sale / fair valuation of investments (7.24) – Change in fair valuation of employee benefit obligation (56.30) 136.68 Operating profit before working capital changes 1,681.41 3,628.59 Adjusted for: Net change in Working Capital changes Trade Payables (2,515.23) 338.01 Other Current Liabilities (24.45) 205.94 Short Term Provisions (6.79) (9.23) Current Liability – Deferred income – (0.29) Other Current Financial Liabilities (517.69) (222.23) Long Term Provisions 167.89 (73.15) Non Current Liability – Deferred income – (2.57) Long Term Loans and Advances – (66.11) Inventories (26.05) (560.09) Trade Receivables 2,908.35 1,913.18 Other Current Assets 511.58 (21.59) Current tax assets (222.57) (55.61) Other Current Financial Assets 129.48 (94.61) Other Non Current Financial Assets 2.08 2.49 Other non current assets (81.32) 205.66 Cash generated from operations 2,006.69 5,188.38 Adjusted for: Tax Liability (Direct tax paid) / net of refund 79.53 (517.38) Net cash Generated from operating activities (A) 2,086.22 4,671.00
B. CASH FLOW FROM INVESTING ACTIVITIES Payment towards property, plant and equipment (including Capital work in progress) (885.58) (5,993.23) Trade payable for fixed asset 262.14 – Proceeds from sale of Fixed assets 2.91 – Interest received 14.69 19.03 Dividend received – 512.50 Net cash used in investing activities (B) (605.84) (5,461.70)
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Cash flow statement for the year ended 31st March 2020 - (continued) (Rs. in Lakhs) Year ended Year ended Particulars 31st March 2020 31st March 2019 C. CASH FLOW FROM FINANCING ACTIVITIES Proceeds / (Payment) of Short Term Borrowings (1,086.85) 1,478.82 Interest paid (307.77) (178.37) Payment of Dividend (including Dividend Tax Liability) – (466.14) Payment towards Lease Liability (120.58) –
Net cash flow from / (used in) financing activities (C ) (1,515.20) 834.31
D. NET INCREASE / (DECREASE) IN CASH AND CASH EQUIVALENTS (A)+(B)+(C) (34.82) 43.61 Cash and Cash Equivalents at the beginning of the year Cash and Cash equivalents 66.73 26.28 Bank balances other than above 34.19 31.03 100.92 57.31 Cash and Cash Equivalents at the end of the year Cash and Cash equivalents 27.71 66.73 Bank balances other than above 38.39 34.19 66.10 100.92
for and on Behalf of Board of Directors In terms of our Reports Attached
H LAKSHMANAN A G GIRIDHARAN For RAGHAVAN, CHAUDHURI & NARAYANAN Chairman Chief Executive Officer Chartered Accountants F.R. No: 007761S K SUBRAMANIAN N ISWARYA LAKSHMI V SATHYANARAYANAN Chief Financial Officer Company Secretary Partner Place : Chennai Membership No. 027716 Date : 19th June, 2020
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Notes to Financial Statements - (continued) 1. SIGNIFICANT ACCOUNTING POLICIES The accounting policies mentioned herein are relating to the standalone financial statements of the Company. a) Brief description of the Company Harita Seating Systems Limited ('the Company') is a public limited company incorporated in India. The company's equity shares are listed with NSE. The registered office is located at "Jayalakshmi Estates", 29, Haddows Road, Nungambakkam, Chennai - 600006, Tamil Nadu, India. The company manufactures seating systems for various segments such as Original Equipment Manufacturers, Bus Passenger, Tractors, Off road vehicles etc. The company has seven plants across India. The Board of Directors of the Company has approved draft composite scheme of Amalgamation on 14th February, 2019 with Minda Industries Limited. The scheme is subject to necessary statutory and regulatory approvals under applicable laws and the approval of the shareholders, creditors and others. The "Appointed Date" for the Scheme, if approved will be 1st April 2019.
b) Basis of preparation and presentation The financial statements comply in all material aspects with Indian Accounting Standards (Ind AS) notified under Section 133 of the Companies Act, 2013 (the Act) read with Companies (Indian Accounting Standard) Rules, 2015 and other relevant provisions of the Act. Disclosure under Ind AS are made only in respect of material items and in respect of items that will be useful to the users of financial statements in making economic decision. The financial statements have been prepared on the historical basis following the principles of prudence which requires recognition of expected losses and non-recognition of unrealized gains. The financial statements have been prepared under accrual basis of accounting except for certain financial assets and liabilities (as per the accounting policy below), which have been measured at fair value.
c) Use of estimates and judgments The preparation of financial statements requires management to make certain estimates and assumptions that affect the amounts reported in the financial statements and notes thereto. The management believes that these estimates and assumptions are reasonable and prudent. However, actual results could differ from these estimates. Any revision to accounting estimates is recognised prospectively in the current and future period. This note provides an overview of the areas that involved a higher degree of judgment or complexity. It also provides an overview of items which are more likely to be materially adjusted due to estimates and assumptions turning out to be different than those originally assessed. Detailed information about each of these estimates and judgments is included in the relevant notes together with information about the basis of calculation for each affected line item in the financial statements.
d) Significant estimates and judgements The areas involving significant estimates or judgments are: i) Estimation of defined benefit obligation - (Refer Note 29) ii) Estimation of useful life of Property, Plant and Equipment (Refer Note 1(g) and 1(h))
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Notes to Financial Statements - (continued) e) Going concern The board of directors have considered the financial position of the Company as at 31 March 2020 and projected cash flows and financial performance of the Company for at least twelve months from the date of approval of these financial statements as well as planned cost and cash improvement actions, and believe that the plan for sustained profitability remains on course. The board of directors have taken actions to ensure that appropriate long-term cash resources are in place at the date of signing the accounts to fund the Company's operations.
f) Revenue recognition Revenue is measured at the fair value of the consideration received or receivable and net of returns, trade allowances and rebates. It excludes Goods and Services Tax.
i) Sale of products Revenue from sale of products is recognized when the products are delivered to the dealer / customer or when delivered to the carrier, when risks and rewards of ownership pass to the dealer / customer, as per terms of contract.
ii) Revenue from service Revenue from Services is recognised in the accounting period in which the services are rendered and when invoices are raised.
iii) Dividend Income Dividends are recognised in the Statement of Profit and Loss only when the right to receive payment is established and it is probable that the economic benefits associated with the dividend will flow to the Company, and the amount of dividend can be reliably measured.
g) Property, plant and equipment Freehold Land is stated at historical cost. All other items of Property, Plant and Equipment are stated at cost of acquisition / construction less accumulated depreciation / amortization and impairment, if any. Cost includes: (i) purchase price, (ii) taxes and duties, (iii) labour cost (iv) directly attributable overheads incurred upto the date the asset is ready for its intended use, and (v) Government grants that are directly attributable to the assets acquired. However, cost excludes excise duty, value added tax and service tax and GST, to the extent credit of the duty or tax is availed of. Subsequent costs are included in the asset's carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Company and the cost of the item can be measured reliably. The carrying amount of any component accounted for as separate asset is derecognised when replaced. All other repairs and maintenance are charged to the Statement of Profit and Loss during the reporting period in which they are incurred. Gains or losses on disposals are determined by comparing proceeds with the carrying amount. These are included in the Statement of Profit and Loss within Other gains / (losses).
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Notes to Financial Statements - (continued) h) Depreciation i) Depreciation on tangible fixed assets is charged over the estimated useful life of the asset or part of the asset (after considering double / triple shifts) as evaluated by a Chartered Engineer, on straight line method, in accordance with Part A of Schedule II to the Companies Act, 2013. ii) The estimated useful life of the tangible fixed assets as assessed by the Chartered Engineer and followed by the Company is furnished below: Particulars Useful life in years (Nos.) Buildings 5 to 30 Plant & Machinery 1 to 15 Tools 2 to 15 Moulds 2 to 15 Furniture and Fixtures 10 Vehicles 8 Computer hardware 1 to 15 Office equipment 1 to 10
iii) The residual value for all the above assets are retained at 5% of the cost. Residual values and useful lives are reviewed, and adjusted, if appropriate, for each reporting period. iv) On tangible fixed assets added / disposed off during the year, depreciation is charged on pro-rata basis for the period for which the asset was purchased and used. v) Depreciation in respect of tangible assets costing individually less than Rs.5,000/- is provided at 100%.
i) Amortization of Intangible assets Intangible assets acquired are accounted at their acquisition cost and are amortised over its useful life, viz., 2 years in the case of software.
j) Impairment of tangible and intangible assets At the end of each reporting period, the Company reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Recoverable amount is the higher of fair value less costs of disposal and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.
k) Foreign currency translation i) Functional and presentation currency Items included in the financial statements are measured using the currency of the primary economic environment in which the company operates ('the functional currency'). The financial statements are presented in Indian rupee, and all values are rounded off to nearest lakhs except where otherwise indicated.
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Notes to Financial Statements - (continued) ii) Transactions and balances Foreign currency transactions are translated into the functional currency using the exchange rates at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation of monetary assets and liabilities denominated in foreign currencies at year end exchange rates are generally recognized in profit or loss.
l) Inventories Inventories are valued at the lower of cost and net realizable value. The cost of finished goods and work in progress comprises raw materials, direct labour, other direct costs and appropriate proportion of variable and fixed overhead expenditure. Overhead expenditures are being allocated on the basis of normal operating capacity. Raw materials are valued at weighted average cost. Cost of inventories also include all other costs incurred in bringing the inventories to their present location and condition. Costs of purchased inventory are determined after deducting rebates and discounts. Net realizable value is the estimated selling price in the ordinary course of business, less the estimated costs of completion and the estimated costs necessary to make the sale. Non- production inventory (other than those supplied along with main plant and machinery, which are capitalized and depreciated accordingly) are charged to profit or loss on consumption.
m) Employee Benefits i. Short term obligations Liabilities for wages and salaries, including non-monetary benefits that are expected to be settled wholly within 12 months after the end of the period in which the employees render the related service are recognized in respect of employees' services upto the end of the reporting period and are measured at the amounts expected to be paid when the liabilities are settled. The liabilities are presented as current employee benefit obligations in the balance sheet. ii. Other long term employee benefit obligations The liabilities for earned leave are not expected to be settled wholly within 12 months after the end of the period in which the employees render the related service. They are, therefore, recognized and provided for at the present value of the expected future payments to be made in respect of services provided by employee upto the end of reporting period using the projected unit credit method. The benefits are discounted using the market yields at the end of the reporting period that have terms approximating to the terms of the related obligation. Remeasurements as a result of experience adjustments and changes in actuarial assumptions are recognised in the Statement of Profit and Loss. The obligations are presented as current liabilities in the balance sheet if the entity does not have an unconditional right to defer settlement for at least twelve months after the reporting period, regardless of when the actual settlement is expected to occur.
iii. Post-employment obligation The Company operates the following post-employment schemes: a) Defined benefit plans such as gratuity and pension for its eligible employees, and b) Defined contribution plans such as provident fund.
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Notes to Financial Statements - (continued) Pension and gratuity obligation: The liability or asset recognised in the balance sheet in respect of defined benefit pension and gratuity plan is the present value of the defined benefit obligation at the end of the reporting period less the fair value of plan assets. The defined benefit obligation is calculated annually by Actuaries using the projected unit credit method. The present value of the defined benefit obligation denominated in INR is determined by discounting the estimated future cash outflows by reference to market yields at the end of the reporting period on the government bonds that have terms approximating to the terms of the related obligation. The net interest cost is calculated by applying the discount rate to the net balance of the defined benefit obligation and the fair value of plan assets. This cost is included in employee benefit expense in the Statement of Profit and Loss. Remeasurement gains and losses arising from experience adjustments and changes in actuarial assumptions are recognised in the period in which they occur, directly in other comprehensive income (net of deferred tax). They are included in retained earnings in the statement of changes in equity and in the balance sheet. Changes in the present value of the defined benefit obligation resulting from plan amendments or curtailments are recognised immediately in the Statement of Profit or Loss as past service cost. Provident fund: The eligible employees of the Company are entitled to receive benefits in respect of provident fund, a defined contribution plan, in which both employees and the Company make monthly contributions at a specified percentage of the covered employees' salary. The contributions are made to the Provident Fund maintained by the Government.
iv. Bonus plans The Company recognizes a liability and an expense for bonus. The Company recognizes a provision where contractually obliged or where there is a past practice that has created a constructive obligation.
n) Taxes on income Tax expense comprises of (i) current tax and (ii) deferred tax. The income tax expense or credit for the period is the tax payable on the current period's taxable income based on the applicable income tax rate adjusted by changes in deferred tax assets and liabilities attributable to temporary differences and to unused tax losses. The current income tax charge is calculated on the basis of the tax laws enacted or substantively enacted at the end of the reporting period. Management periodically evaluates positions taken in tax returns with respect to situations in which applicable tax regulation is subject to interpretation. It establishes provisions, where appropriate, on the basis of amounts expected to be paid to the tax authorities. Deferred income tax is provided in full, using the liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the financial statements. However, deferred tax liabilities are not recognised if they arise from the initial recognition of goodwill. Deferred income tax is also not accounted for if it arises from initial recognition of an asset or liability in a transaction other than a business combination that at the time of the transaction affects neither accounting profit nor taxable profit or loss.
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Notes to Financial Statements - (continued)
Deferred income tax is determined using tax rates (and laws) that have been enacted or substantially enacted by the end of the reporting period and are expected to apply when the related deferred income tax asset is realised or the deferred income tax liability is settled. Deferred tax assets are recognised only if it is probable that future taxable amounts will be available to utilise those temporary differences and losses. Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets and liabilities and when the deferred tax balances relate to the same taxation authority. Current tax assets and tax liabilities are offset where the entity has a legally enforceable right to offset and intends either to settle on a net basis, or to realise the asset and settle the liability simultaneously. Current and deferred tax is recognised in profit or loss, except to the extent that it relates to items recognised in other comprehensive income or directly in equity. In this case, the tax is also recognised in other comprehensive income or directly in equity, respectively. Where the Company is entitled to claim special tax deductions for investments in qualifying assets or in relation to qualifying expenditure (the Research and Development or other investment allowances), the Company accounts for such allowances as tax credits, which means that the allowance reduce income tax payable and current tax expense. A deferred tax asset is recognised for unclaimed tax credits that are carried forward as deferred tax assets.
o) Minimum Alternate Tax (MAT) Credit MAT credit can be carried forward upto a period of 15 years. Hence, outstanding MAT credit as at March 31st 2020 has been considered in this financial year as the certainty for utilization has now been ascertained.
p) Provisions and contingencies i) Provisions: Provisions are recognized when there is a present obligation or constructive obligation as a result of a past event and it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and there is a reliable estimate of the amount of the obligation. Provisions are determined by discounting the expected future cash flows at a pretax rate that reflects current market assessment of the time value of money and the risks specific to the liability. ii) Contingent Liabilities: Contingent liabilities are disclosed when there is a possible obligation arising from past events, the existence of which will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the company or a present obligation that arises from past events where it is either not probable that an outflow of resources will be required to settle or a reliable estimate of the amount cannot be made.
q) Segment reporting Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision maker.
r) Leases From 1st April, 2019, leases are recognised as a right-of-use asset and a corresponding liability at the date at which the leased asset is available for use by the Company. Contracts may contain both lease
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Notes to Financial Statements - (continued)
and non-lease components. The Company allocates the consideration in the contract to the lease and non-lease components based on their relative standalone prices. However, for leases of real estate for which the Company is a lessee, it has elected not to separate lease and non-lease components and instead accounts for these as a single lease component. Assets and liabilities arising from a lease are initially measured on a present value basis. Lease liabilities include the net present value of the following lease payments: • fixed payments (including in-substance fixed payments), less any lease incentives receivable • variable lease payment that are based on an index or a rate, initially measured using the index or rate as at the commencement date • amounts expected to be payable by the Company under residual value guarantees • the exercise price of a purchase option if the Company is reasonably certain to exercise that option, and • payments of penalties for terminating the lease, if the lease term reflects the Company exercising that option Lease payments to be made under reasonably certain extension options are also included in the measurement of the liability. The lease payments are discounted using the interest rate implicit in the lease. If that rate cannot be readily determined, which is generally the case for leases in the Company, the lessee's incremental borrowing rate is used, being the rate that the individual lessee would have to pay to borrow the funds necessary to obtain an asset of similar value to the right-of-use asset in a similar economic environment with similar terms, security and conditions. To determine the incremental borrowing rate, the Company: • where possible, uses recent third-party financing received by the individual lessee as a starting point, adjusted to reflect changes in financing conditions since third party financing was received • uses a build-up approach that starts with a risk-free interest rate adjusted for credit risk for leases held by the Company which does not have recent third party financing, and • makes adjustments specific to the lease, e.g. term, country, currency and security. The Company is exposed to potential future increases in variable lease payments based on an index or rate, which are not included in the lease liability until they take effect. When adjustments to lease payments based on an index or rate take effect, the lease liability is reassessed and adjusted against the right-of-use asset. Lease payments are allocated between principal and finance cost. The finance cost is charged to profit or loss over the lease period so as to produce a constant periodic rate of interest on the remaining balance of the liability for each period. Variable lease payments that depend on sales are recognised in profit or loss in the period in which the condition that triggers those payments occurs. Right-of-use assets are measured at cost comprising the following: • the amount of the initial measurement of lease liability • any lease payments made at or before the commencement date less any lease incentives received • any initial direct costs, and • restoration costs.
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Notes to Financial Statements - (continued) Right-of-use assets are generally depreciated over the shorter of the asset's useful life and the lease term on a straight-line basis. If the Company is reasonably certain to exercise a purchase option, the right-of-use asset is depreciated over the underlying asset's useful life. Payments associated with short-term leases of equipment and all leases of low-value assets are recognised on a straight-line basis as an expense in profit or loss. Short-term leases are leases with a lease term of 12 months or less. Low-value assets comprise IT equipment and small items of office furniture.
s) Financial instruments A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity. Financial assets and financial liabilities are recognised when the Company becomes a party to the contractual provisions of the instruments. Financial assets and financial liabilities are initially measured at fair value. Transaction costs that are directly attributable to the acquisition or issue of financial instruments (other than financial assets and financial liabilities at fair value through profit or loss) are added to or deducted from the fair value of the financial assets or financial liabilities, as appropriate, on initial recognition. Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at fair value through profit or loss are recognized immediately in profit or loss. Subsequently, financial instruments are measured according to the category in which they are classified.
t) Financial assets All purchases or sales of financial assets are recognized and de-recognized on a trade date basis. Regular way purchases or sales are purchases or sales of financial assets that require delivery of assets within the time frame established by regulation or convention in the marketplace. All recognized financial assets are subsequently measured in their entirety at either amortised cost or fair value, depending on the classification of the financial assets. i) Classification of financial assets Classification of financial assets depends on the nature and purpose of the financial assets and is determined at the time of initial recognition. The Company classifies its financial assets in the following measurement categories: • those to be measured subsequently at fair value (either through other comprehensive income, or through profit or loss), and • those measured at amortized cost The classification depends on the Company's business model for managing the financial assets and the contractual terms of the cash flows. A financial asset that meets the following two conditions is measured at amortised cost unless the asset is designated at fair value through profit or loss under the fair value option: • Business model test: the objective of the Company's business model is to hold the financial asset to collect the contractual cash flows. • Cash flow characteristic test: the contractual term of the financial asset gives rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.
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Notes to Financial Statements - (continued) A financial asset that meets the following two conditions is measured at fair value through other comprehensive income unless the asset is designated at fair value through profit or loss under the fair value option: • Business model test: the financial asset is held within a business model whose objective is achieved by both collecting cash flows and selling financial assets. • Cash flow characteristic test: the contractual term of the financial asset gives rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding. All other financial assets are measured at fair value through profit or loss.
ii) Financial assets at fair value through profit or loss (FVTPL) Investments in equity instrument are classified at fair value through profit or loss, unless the Company irrevocably elects on initial recognition to present subsequent changes in fair value in other comprehensive income for investments in equity instruments which are not held for trading. Financial assets that do not meet the amortised cost criteria or fair value through other comprehensive income criteria are measured at fair value through profit or loss. A financial asset that meets the amortised cost criteria or fair value through other comprehensive income criteria may be designated as at fair value through profit or loss upon initial recognition if such designation eliminates or significantly reduces a measurement or recognition inconsistency that would arise from measuring assets and liabilities or recognizing the gains or losses on them on different bases. Investments in debt based mutual funds are measured at fair value through profit and loss. Financial assets which are fair valued through profit or loss are measured at fair value at the end of each reporting period, with any gains or losses arising on re measurement recognized in profit or loss.
iii) Trade receivables Trade receivables are recognized initially at fair value and subsequently measured at amortized cost less provision for impairment.
iv) Cash and cash equivalents For the purpose of presentation in the statement of cash flows, cash and cash equivalents include cash on hand, deposits held at call with financial institutions, other short-term, highly liquid investments with original maturities of three months or less that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities in the balance sheet. v) Impairment of financial assets The Company assesses impairment based on expected credit losses (ECL) model to the following: • financial assets measured at amortised cost • financial assets measured at fair value through other comprehensive income Expected credit loss is measured through a loss allowance at an amount equal to: • the twelve month expected credit losses (expected credit losses that result from those default events on the financial instruments that are possible within twelve months after the reporting date); or
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Notes to Financial Statements - (continued) • full life time expected credit losses (expected credit losses that result from all possible default events over the life of the financial instrument). For trade receivables or any contractual right to receive cash or another financial asset that result from transactions that are within the scope of Ind AS 18, the Company always measures the loss allowance at an amount equal to lifetime expected credit losses.
u) Financial liabilities All financial liabilities are subsequently measured at amortised cost using the effective interest rate method or at fair value through profit or loss.
i) Trade and other payables Trade and other payables represent liabilities for goods or services provided to the Company prior to the end of financial year which are unpaid.
ii) Borrowings Borrowings are initially recognised at fair value, net of transaction costs incurred. Borrowings are subsequently measured at amortised cost. Any difference between the proceeds (net of transaction costs) and the redemption amount is recognised in profit or loss over the period of the borrowings using the effective interest rate method. Borrowings are removed from the balance sheet when the obligation specified in the contract is discharged, cancelled or expired. The difference between the carrying amount of a financial liability that has been extinguished or transferred to another party and the consideration paid, including any non-cash assets transferred or liabilities assumed, is recognised in profit or loss.
iii) Foreign exchange gains or losses For financial liabilities that are denominated in a foreign currency and are measured at amortised cost at the end of each reporting period, the foreign exchange gains and losses are determined based on the amortised cost of the instruments and are recognised in profit or loss. The fair value of financial liabilities denominated in a foreign currency is determined in that foreign currency and translated at the exchange rate at the end of the reporting period. For financial liabilities that are measured at fair value through profit or loss, the foreign exchange component forms part of the fair value gains or losses and is recognised in profit or loss.
v) Borrowing costs General and specific borrowing costs that are directly attributable to the acquisition, construction or production of a qualifying asset are capitalised during the period of time that is required to complete and prepare the asset for its intended use or sale. Qualifying assets are assets that necessarily take a substantial period of time to get ready for their intended use or sale. Investment income earned on the temporary investment of specific borrowings, pending their expenditure on qualifying assets, is deducted from the borrowing costs eligible for capitalisation. Other borrowing costs are expensed in the period in which they are incurred.
w) Government grants Grants from the government are recognised at their fair value where there is a reasonable assurance that the grant will be received and the Company will comply with all attached conditions.
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Notes to Financial Statements - (continued) Government grants relating to income are deferred and recognised in the profit or loss over the period necessary to match them with the costs that they are intended to compensate and presented within other income. Government grants relating to the purchase of property, plant and equipment are included in non- current liabilities as deferred income and are credited to profit or loss on a straight-line basis over the expected lives of the related assets and presented within other income.
x) Earnings Per Share Basic earnings per share is computed by dividing the net income by the weighted average number of shares outstanding during the year. Diluted earnings per share is computed using the weighted average number of shares and diluted potential shares, except where the result would be anti-dilutive.
y) Dividends Final dividends on shares are recorded on the date of approval by the shareholders of the Company.
z) Current and Non-current classification The Company presents assets and liabilities in the balance sheet based on current / non-current classification. Cash or cash equivalent is treated as current, unless restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period. In respect of other assets, it is treated as current when it is: • expected to be realized or intended to be sold or consumed in the normal operating cycle • held primarily for the purpose of trading • Expected to be realized within twelve months after the reporting period. All other assets are classified as non-current. A liability is treated as current when: • it is expected to be settled in the normal operating cycle • it is held primarily for the purpose of trading • it is due to be settled within twelve months after the reporting period, or • 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 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. In Company's considered view, twelve months is its operating cycle.
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Notes to Financial Statements - (continued)
2 PROPERTY, PLANT AND EQUIPMENT Rs. in Lakhs
Property, Plant & Equipment Other Intangible Description Land - Land - Plant & Furniture Office Computer Technical Product Total Freehold Leasehold Buildings equipment & Fixtures Vehicles equipment Total Software know how licence fee Intangible assets 12345678 9101112 Cost of assets Gross carrying value as at 01-04-2019 83.61 1,143.96 2,982.72 6,711.56 104.74 20.79 286.71 11,334.09 196.65 1.58 4.46 202.69 Addition – – 1,115.84 1,145.77 13.11 – 16.51 2,291.23 – – – – Sub - total 83.61 1,143.96 4,098.56 7,857.33 117.85 20.79 303.22 13,625.32 196.65 1.58 4.46 202.69 Sales/deletion – – – 57.40 – – 5.33 62.73 – – – – Total 83.61 1,143.96 4,098.56 7,799.93 117.85 20.79 297.89 13,562.59 196.65 1.58 4.46 202.69 Depreciation / Amortisation Upto 31-03-2019 – 5.89 240.67 1,562.84 43.50 8.50 138.88 2,000.28 108.52 – 4.46 112.98 For the year – 11.73 144.34 958.76 13.06 2.14 58.17 1,188.20 37.37 – – 37.37 Sub–total – 17.62 385.01 2,521.60 56.56 10.64 197.05 3,188.48 145.89 – 4.46 150.35 Withdrawn on assets sold / deleted – – – 54.39 – – 4.55 58.94 – – – – Total – 17.62 385.01 2,467.21 56.56 10.64 192.50 3,129.54 145.89 – 4.46 150.35 Carrying value As at 31–03–2020 83.61 1,126.34 3,713.55 5,332.72 61.29 10.15 105.39 10,433.05 50.76 1.58 – 52.34 Capital work-in-progress (at cost ) as at 31-03-2020 - Nil 2 PROPERTY, PLANT AND EQUIPMENT Rs. in Lakhs
Property, Plant & Equipment Other Intangible Description Land - Land - Plant & Furniture Office Computer Technical Product Total Freehold Leasehold Buildings equipment & Fixtures Vehicles equipment Total Software know how licence fee Intangible assets 12 3 4567 8 9101112 Cost of assets Gross carrying value as at 01-04-2018 83.61 80.11 2,236.56 3,931.21 110.07 21.19 241.70 6,704.45 161.08 1.58 4.46 167.12 Addition – 1,063.85 747.62 2,822.67 6.72 – 49.91 4,690.77 35.57 – – 35.57 Sub - total 83.61 1,143.96 2,984.18 6,753.88 116.79 21.19 291.61 11,395.22 196.65 1.58 4.46 202.69 Sales/deletion – – 1.46 42.32 12.05 0.40 4.90 61.13 – – – – Total 83.61 1,143.96 2,982.72 6,711.56 104.74 20.79 286.71 11,334.09 196.65 1.58 4.46 202.69 Depreciation / Amortisation Upto 31-03-2018 – 1.97 147.24 878.02 38.12 6.23 83.40 1,154.98 75.11 – 4.46 79.57 For the year – 3.92 93.69 727.07 17.43 2.64 60.37 905.12 33.42 – – 33.42 Sub-total – 5.89 240.93 1,605.09 55.55 8.87 143.77 2,060.10 108.53 – 4.46 112.99 Withdrawn on assets sold / deleted – – 0.26 42.25 12.05 0.37 4.89 59.82 – – – – Total – 5.89 240.67 1,562.84 43.50 8.50 138.88 2,000.28 108.53 – 4.46 112.99 Carrying value As at 31-03-2019 83.61 1,138.07 2,742.05 5,148.72 61.24 12.29 147.83 9,333.81 88.12 1.58 – 89.70 Capital work-in-progress (at cost ) as at 31-03-2019 Plant and Machinery 414.25 Building 991.40 Total 1,405.65
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Notes to Financial Statements - (continued) Rs. in Lakhs 3 RIGHT-OF-USE ASSET As at 31.03.2020 Particulars Land Building Plant & Total equipment Opening on transition to Ind AS 116 - Leases 34.17 118.15 50.45 202.77 Additions during the year – – – – Amortization for the year 0.35 59.07 42.17 101.59 Deletions (Preclosures) – – – – Closing net balance during the year 33.82 59.08 8.28 101.18
4 NON CURRENT INVESTMENTS
Sl. Particulars Subsidiary No. of Shares / units Face Rupees in Lakhs No. / associate As at As at value Currency As at As at 31-03-2020 31-03-2019 in INR 31-03-2020 31-03-2019 12 3456789 (a) Investments in Equity Instruments valued at cost (unquoted): Harita Fehrer Limited, Chennai Subsidiary 1,02,50,000 1,02,50,000 10.00 INR 2,759.00 2,759.00 (b) Other non-current investments (unquoted): Life Insurance Corporation of India, Mumbai 65.56 58.32 (Group annuity policy for Pension to employees) Total 2,824.56 2,817.32 Aggregate value of quoted investments and market value thereof - - Aggregate value of unquoted investments 2,824.56 2,817.32 2,824.56 2,817.32
Rs. in Lakhs As at As at 31.03.2020 31.03.2019 5 OTHER FINANCIAL ASSETS Non Current Security Deposits 123.46 125.54 123.46 125.54 Current a) Claims Receivable 120.92 195.80 b) Salary advances 24.89 44.26 c) Derivatives – 35.23 145.81 275.29
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Notes to Financial Statements - (continued) Rs. in Lakhs As at As at 31.03.2020 31.03.2019 6 OTHER NON CURRENT ASSETS Advances for Capital Goods 144.11 62.79 144.11 62.79
7 INVENTORIES* * Valued at Lower of Cost or Net Realisable Value a) Raw materials and components 1,006.82 1,128.06 b) Work-in-progress 455.57 388.57 c) Finished goods 671.57 471.19 d) Stores and consumables 142.67 262.76 2,276.63 2,250.58
8 TRADE RECEIVABLES Unsecured Considered good 7,730.84 10,565.20 Less: Loss allowance 132.77 58.78 7,598.07 10,506.42
9 CASH AND CASH EQUIVALENTS a) Balance with Banks - in Current account 21.96 58.88 - in Fixed deposit 0.40 0.38 b) Cash on hand 5.35 7.47 27.71 66.73
10 OTHER BANK BALANCES Unpaid dividend 38.39 34.19 38.39 34.19
11 OTHER CURRENT ASSETS a) Advance to suppliers and service providers 361.55 321.73 b) Balance with Government authorities 268.77 386.90 c) Advances for tool development 1.59 344.46 d) Prepaid expenses 40.49 113.96 e) MEIS scrips / Export incentive receivable 172.71 178.13 f) Employee benefit asset – 11.51 845.11 1,356.69
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Notes to Financial Statements - (continued) Rs. in Lakhs 12 EQUITY SHARE CAPITAL (a) Authorised, issued, subscribed and fully paid up As at 31.03.2020 As at 31.03.2019 Particulars Number Amount Number Amount of shares of shares Authorised Equity Shares of Rs.10/- each 1,00,00,000 1,000.00 1,00,00,000 1,000.00 Issued, subscribed and fully paid up Equity Shares of Rs.10/- each 77,69,040 776.90 77,69,040 776.90 77,69,040 776.90 77,69,040 776.90
(b) Reconciliation of equity shares outstanding at the beginning and at the end of the year As at 31.03.2020 As at 31.03.2019 Particulars Number Amount Number Amount of shares of shares Shares outstanding at the beginning of the year 77,69,040 776.90 77,69,040 776.90 Shares issued during the year –––– Shares outstanding at the end of the year 77,69,040 776.90 77,69,040 776.90
(c) Terms and rights attached to equity shares: The company has one class of equity shares having a par value of Rs.10 each. Each shareholder is eligible for one vote per share held. In the event of liquidation, the equity shareholders are eligible to receive the 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.
(d) Details of shareholders holding more than 5% shares in the company As at 31.03.2020 As at 31.03.2019 Particulars Number % Number % of shares holding of shares holding Harita Limited, Chennai 18,00,500 23.18% 18,00,500 23.18% Vidhar Management and Consultancy Services LLP 4,79,762 6.18% 4,79,762 6.18% Harita Sheela private Limited, Chennai 4,85,000 6.24% 4,85,000 6.24% Harita Malini Private Limited, Chennai 4,67,800 6.02% 4,67,800 6.02% Harita Venu Private Limited, Chennai 4,67,800 6.02% 4,67,800 6.02% Mr. Martin Grammer, Amberg 10,87,600 14.00% 10,87,600 14.00% 47,88,462 61.64% 47,88,462 61.64%
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Notes to Financial Statements - (continued) Rs. in Lakhs As at As at 31.03.2020 31.03.2019 13 OTHER EQUITY a) General reserve 2,260.96 2,260.96 b) Capital redemption reserve 10.00 10.00 c) Retained earnings 10,517.88 10,346.00 Total Other Equity 12,788.84 12,616.96 14 OTHER FINANCIAL LIABILITIES Current a) Payable to Employees 6.56 22.35 b) Security deposit from dealers 90.86 92.11 c) Payable for Fixed Asset 87.21 349.35 d) Unpaid dividends 38.39 34.19 e) Derivatives 19.43 – 242.45 498.00 15 PROVISIONS Non Current Provision for Employee Benefits a) Pension 403.18 330.82 b) Leave encashment 95.33 65.12 c) Gratuity 62.56 – Other Provisions d) Warranty 33.75 30.99 594.82 426.93 Current Provision for Employee Benefits a) Pension 3.20 2.42 b) Leave encashment 10.53 9.01 Other Provisions d) Warranty 24.66 33.75 38.39 45.18 16 DEFERRED TAX LIABILITIES / (ASSETS) (NET) The balance comprises temporary differences attributable to: MAT credit entitlement (218.79) (200.90) Expenses allowed on payment basis (634.22) (323.62) Other Comprehensive Income (OCI) 28.09 47.76 Total deferred tax (assets) (824.92) (476.76) Depreciation 933.55 738.23 Business loss – – Net deferred tax Liabilities / (Assets) 108.63 261.47
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Notes to Financial Statements - (continued) Rs. in Lakhs
16 DEFERRED TAX LIABILITIES / (ASSETS) (NET) - (continued) Movement in deferred tax assets Expenses MAT Credit Business Particulars Depreciation allowed on OCI Total Entitlement loss payment basis As at 1st April 2018 604.26 (248.01) (328.40) – – 27.85 Charged / (credited): - to profit or loss 133.97 47.11 4.78 – – 185.86 - to other comprehensive income – – – 47.76 – 47.76 As at 31st March 2019 738.23 (200.90) (323.62) 47.76 – 261.47 Charged / (credited): - to profit or loss 195.32 (17.89) (310.60) – – (133.17) - to other comprehensive income – – – (19.67) – (19.67) As at 31st March 2020 933.55 (218.79) (634.22) 28.09 – 108.63
Rs. in Lakhs As at As at 31.03.2020 31.03.2019
17 BORROWINGS From Banks Secured Working Capital Demand Loan 1,474.59 2,167.57 Primary security (for CC): First charge (hypothecation) on all the current assets of the company including stock, work-in -progress, book debt (both current and non-current), both present and future Unsecured Short term loans-PCFC 606.13 1,000.00 2,080.72 3,167.57
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Notes to Financial Statements - (continued) Rs. in Lakhs As at As at 31.03.2020 31.03.2019
18 TRADE PAYABLES Unsecured a) Dues of micro enterprises and small enterprises** 685.48 186.64 b) Dues to enterprises other than micro enterprises and small enterprises 6,532.84 7,787.19 c) Purchase bills accepted and payable 587.51 2,347.23 7,805.83 10,321.06
** Dues to Micro and Small Enterprises have been determined to the extent such parties have been identified on the basis of information collected by the management. The entire closing balance represents the principal amount payable to these enterprises. There are no interest due or outstanding on the same.
19 OTHER CURRENT LIABILITIES a) Statutory Dues 67.09 82.28 b) Advances from customers 209.22 199.12 c) Employee dues 99.12 118.48 375.43 399.88
Year ended Year ended 31.03.2020 31.03.2019
20 REVENUE FROM OPERATIONS Sale of Products - Gross 34,586.94 47,739.48 Sale of Products (A) 34,586.94 47,739.48 Revenue from trading activities Sale of traded goods 2,294.37 4,749.24 Less: Purchases (2,256.77) (4,729.20) Net (B) 37.60 20.04 Total (A)+(B) 34,624.54 47,759.52
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Notes to Financial Statements - (continued) Rs. in Lakhs Year ended Year ended 31.03.2020 31.03.2019 21 OTHER INCOME a) Interest Income 14.69 19.03 b) Dividend Income (from Subsidiary Company) – 512.50 c) Lease rent 169.83 167.52 d) Other non-operating income 7.24 4.51 e) Revenue from services rendered 78.75 78.75 f) Other operating revenues 311.88 556.06 g) Net Gain on foreign currency fluctuation – 4.34 582.39 1,342.71 22 COST OF MATERIAL CONSUMED Opening Stock of Raw materials 1,128.06 915.33 Purchase of Raw Materials and Components 24,900.88 35,765.54 26,028.94 36,680.87 Closing Stock of Raw Materials 1,006.82 1,128.06 25,022.12 35,552.81 23 CHANGES IN INVENTORY OF FINISHED GOODS AND WORK-IN-PROGRESS Opening stock Work-in-progress 388.57 274.65 Finished goods 471.19 339.84 (A) 859.76 614.49 Closing stock Work-in-progress 455.57 388.57 Finished goods 671.57 471.19 (B) 1,127.14 859.76 (A)-(B) (267.38) (245.27) 24 EMPLOYEE BENEFITS EXPENSE a) Salary, Wages and Bonus 3,936.00 3,957.43 b) Contribution to provident and other funds 230.96 270.37 c) Staff welfare expenses 464.19 633.94 4,631.15 4,861.74 25 FINANCE COSTS a) Interest expense 278.12 178.37 b) Other borrowing cost 29.65 4.50 c) Interest on lease liabilities 14.23 – 322.00 182.87
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Notes to Financial Statements - (continued) Rs. in Lakhs Year ended Year ended 31.03.2020 31.03.2019 26 DEPRECIATION AND AMORTIZATION EXPENSE a) Depreciation 1,188.20 905.12 b) Depreciation on Right of use asset 101.59 – c) Amortization 37.37 33.42 1,327.16 938.54 27 OTHER EXPENSES (a) Consumption of stores and spare parts 137.68 175.39 (b) Power and fuel 498.98 416.63 (c) Rent including lease rentals 144.67 256.32 (d) Repairs - buildings 50.43 45.71 (e) Repairs - plant & equipment 357.26 452.47 (f) Repairs - others 7.94 9.27 (g) Insurance 70.15 71.26 (h) Rates and taxes 39.61 48.96 (i) Data processing expenses 172.74 160.66 (j) Audit fees and reimbursement of expenses - As auditors - statutory audit 17.00 17.00 - For taxation matters 2.00 2.00 - For other services 1.00 1.00 - Reimbursement of expenses 1.73 5.03 (k) Packing & Freight Charges 301.37 391.45 (l) Sales promotion 160.89 208.21 (m) Transportation expenses 579.42 789.66 (n) Travelling and conveyance 274.56 492.99 (o) Security detective Charges 96.86 110.11 (p) Bank charges 64.10 84.35 (q) Telephone charges 15.67 24.85 (r) Printing and stationery 35.73 39.36 (s) Legal and professional charges 281.79 261.50 (t) Net Loss on foreign currency fluctuation 8.51 – (u) Loss on fixed assets sold / scrapped / written off 0.91 1.28 (v) Research and Development expenses 430.53 500.68 (w) Donations – 91.77 (x) Corporate Social Responsibility expenditure 60.00 52.00 (y) Other administrative expenses 250.79 196.39 4,062.32 4,906.30
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Notes to Financial Statements - (continued) Rs. in Lakhs Year ended Year ended 31.03.2020 31.03.2019 28 INCOME TAX EXPENSE (a) Income tax expense Current tax 17.89 538.01 Current tax on profits for the year 17.89 538.01 Deferred tax Decrease (increase) in deferred tax assets – 185.86 (Decrease) increase in deferred tax liabilities (133.17) – MAT credit utilised – – Total Deferred tax expenses (133.17) 185.86 Adjustments recognised in current year tax of prior periods – (20.63) Total Tax expenses (115.28) 703.24 (b) Reconciliation of tax expense and the accounting profit multiplied by India’s tax rate: Profit before income tax expense 109.56 2,905.24 Tax at the Indian tax rate of 34.944% 38.29 1,015.21 Tax effect of amounts which are not deductible (taxable) in calculating taxable income: – 11.32 Corporate social responsibility expenditure 10.48 9.09 Adjustments recognised in current year tax of prior periods – (20.63) Others (164.05) (311.75) Income tax expense (115.28) 703.24
29 EMPLOYEE BENEFIT OBLIGATIONS As at 31st March, 2020 As at 31st March, 2019 Particulars Current Non-current Total Current Non-current Total Pension 3.20 403.18 406.38 2.42 330.82 333.24 Gratuity - 62.56 62.56 (11.51) - (11.51) Compensated absences 10.53 95.33 105.86 9.01 65.12 74.13 Less: Net asset position Total employee benefit obligations 13.73 561.07 574.80 (0.08) 395.94 395.86
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Notes to Financial Statements - (continued) Rs. in Lakhs 31st March, 2020 31st March, 2019 29 EMPLOYEE BENEFIT OBLIGATIONS - (continued) (i) Compensated absences Current leave obligations expected to be settled within the next 12 months 10.87 9.34 (ii) Gratuity The company extends defined benefit plans in the form of gratuity to employees. The Company has formed "Harita Seating Systems Limited Employees Group Gratuity Scheme" with Life Insurance Corporation of India (LIC). Contribution to gratuity is made to LIC in accordance with the scheme framed by the corporation. The Company has made contribution towards Gratuity based on the actuarial valuation. (iii)Defined contribution plans Contribution to provident fund is in the nature of defined contribution plan and are made to provident fund account maintained by the Government on its account. Gratuity Pension Leave Salary Present Fair value Present Fair value Present Fair value Particulars value of of plan Net value of of plan Net value of of plan Net obligation assetsamount obligation assetsamount obligation assets amount Position as at 31st March 2018 (A) 409.98 406.89 3.09 351.35 – 351.35 77.68 – 77.68 Current service cost 106.96 – 106.96 6.10 – 6.10 – – – Interest expense / (income) 33.49 33.58 (0.09) 23.87 – 23.87 5.99 – 5.99 Total amount recognised in profit or loss (B) 140.45 33.58 106.87 29.97 – 29.97 5.99 – 5.99 Remeasurements (Gain) / loss from change in financial assumptions – – – – – – (3.54) – (3.54) Experience (gains) / losses (88.61) (88.61) (48.08) – (48.08) 21.16 – 21.16 Total amount recognised in other comprehensive income (C) (88.61) – (88.61) (48.08) – (48.08) 17.62 – 17.62 Employer contributions – 32.86 (32.86) – – – – – – Benefit payments (29.68) (29.68) – – – – (27.16) – (27.16) Total cash flow (D) (29.68) 3.18 (32.86) – – – (27.16) – (27.16) 31st March 2019 (A) + (B) + (C) + (D) 432.14 443.65 (11.51) 333.24 – 333.24 74.13 – 74.13
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Notes to Financial Statements - (continued)
29 EMPLOYEE BENEFIT OBLIGATIONS - (continued) Rs. in Lakhs Gratuity Pension Leave Salary Present Fair value Present Fair value Present Fair value Particulars Net Net Net value of of plan value of of plan value of of plan amount amount amount obligation assets obligation assets obligation assets Position as at 31st March 2019 (A) 432.14 443.65 (11.51) 333.24 – 333.24 74.13 – 74.13 Current service cost 64.89 – 64.89 – – – – – Interest expense / (income) 32.45 32.12 0.33 25.28 – 25.28 5.83 – 5.83 Total amount recognised in profit or loss (B) 97.34 32.12 65.22 25.28 – 25.28 5.83 – 5.83 Remeasurements (Gain) / loss from change in financial assumptions 41.24 – 41.24 56.95 – 56.95 7.62 – 7.62 Experience (gains) / losses (27.75) 4.64 (32.39) (9.09) – (9.09) 18.28 – 18.28 Total amount recognised in other comprehensive income (C) 13.49 4.64 8.85 47.86 – 47.86 25.90 – 25.90 Employer contributions – – – – – – – – – Benefit payments (57.28) (57.28) – – – – – – Total cash flow (D) (57.28) (57.28) – – – – – – – 31st March 2020 (A)+(B)+(C)+(D) 485.69 423.13 62.56 406.38 – 406.38 105.86 – 105.86 As at As at 31.03.2020 31.03.2019 The net liability disclosed above relates to funded plans are as follows: Gratuity Present value of funded obligations 485.69 432.14 Fair value of plan assets 423.13 443.65 (Excess) / Deficit of funded plan 62.56 (11.51) The net liability disclosed above relates to unfunded plans are as follows: Pension Present value of unfunded obligations 406.38 333.24 (iv) Post-Employment benefits Significant estimates: actuarial assumptions and sensitivity The significant actuarial assumptions were as follows: Gratuity Pension Leave Salary Details As at As at As at As at As at As at 31.03.2020 31.03.2019 31.03.2020 31.03.2019 31.03.2020 31.03.2019 Discount rate 6.64% 7.76% 6.28% 7.25% 6.63% 7.64% Salary growth rate 5.50% 5.50% 5.50% 5.50% 5.50% 5.50% Attrition rate 3.00% 3.00% 0.00% 0.00% 3.00% 3.00% Mortality rate IALM (2006-08) Ultimate Assumptions regarding future mortality for pension and medical benefits are set based on actuarial advice in accordance with published statistics and experience. These assumptions translate into an average life expectancy in years for a pensioner retiring at age :58 Years.
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Notes to Financial Statements - (continued) 29 EMPLOYEE BENEFIT OBLIGATIONS - (continued) Rs. in Lakhs (v) Sensitivity analysis The sensitivity of the defined benefit obligation to changes in the weighted principal assumptions are: Impact on defined benefit obligation Impact on defined benefit obligation GratuityChange in assumption Increase in Decrease in assumption assumption Details As at As at As at As at As at As at 31.03.2020 31.03.2019 31.03.2020 31.03.2019 31.03.2020 31.03.2019 Discount rate 0.50% 0.50% 21.76 17.69 (23.57) (19.07) Salary growth rate 0.50% 0.50% (23.72) (19.38) 22.08 18.12
Impact on defined benefit obligation Pension Change in assumption Increase in Decrease in assumption assumption Details As at As at As at As at As at As at 31.03.2020 31.03.2019 31.03.2020 31.03.2019 31.03.2020 31.03.2019 Discount rate 1.00% 1.00% 59.59 46.99 (72.77) (57.30) Salary growth rate 1.00% 1.00% (75.35) (59.77) 62.31 49.43
Impact on defined benefit obligation Leave SalaryChange in assumption Increase in Decrease in assumption assumption Details As at As at As at As at As at As at 31.03.2020 31.03.2019 31.03.2020 31.03.2019 31.03.2020 31.03.2019 Discount rate 0.50% 0.50% 4.42 2.86 (4.76) (3.09) Salary growth rate 0.50% 0.50% (4.79) (3.14) 4.48 2.93 (vi)Risk exposure Through its defined benefit plans, the Company is exposed to a number of risks, the most significant of which are detailed below: Asset volatility The plan liabilities are calculated using a discount rate set with reference to bond yields; if plan assets underperform this yield, this will create a deficit. Changes in bond yields A decrease in bond yields will increase plan liabilities, although this will be partially offset by an increase in the value of the plans’ bond holdings.
The following payments are expected contributions to the defined benefit plan in future years: Particulars As at As at 31.03.2020 31.03.2019 Within the next 12 months (next annual reporting period) 29.94 48.99 Between 2 and 5 years 141.13 117.54 Beyond 5 years 245.95 250.32
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Notes to Financial Statements - (continued) Rs. in Lakhs As at As at 31.03.2020 31.03.2019 30 FINANCIAL INSTRUMENTS AND RISK MANAGEMENT Fair value measurements Financial instruments by category Amortised cost Financial assets Investments 65.56 58.32 Security deposits 123.46 125.54 Claims Receivable 120.92 195.80 Trade receivables 7,598.07 10,506.42 Cash and cash equivalents 27.71 66.73 Derivatives – 35.23 MEIS receivable 172.71 178.13 Employee advance 24.89 44.26 Unpaid dividends 38.39 34.19 Total financial assets 8,171.71 11,244.62 Financial liabilities Security deposits 90.86 92.11 Lease liabilities 112.81 – Employee payables 6.56 22.35 Short term borrowings 2,080.72 3,167.57 Trade payables 7,805.83 10,321.06 Payable for Fixed Asset 87.21 349.35 Derivatives 19.43 – Total financial liabilities 10,203.42 13,952.44 Fair value hierarchy This section explains the judgements and estimates made in determining the fair values of the financial instruments that are (a) recognised and measured at fair value and (b) measured at amortised cost and for which fair values are disclosed in the financial statements.
Level 1: Level 1 hierarchy includes financial instruments measured using quoted prices. This includes listed equity instruments, traded bonds and mutual funds that have quoted price. The fair value of all equity instruments (including bonds) which are traded in the stock exchanges are valued using the closing price as at the reporting period. The mutual funds are valued using the closing NAV.
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Notes to Financial Statements - (continued)
30 FINANCIAL INSTRUMENTS AND RISK MANAGEMENT - (continued)
Level 2: The fair value of financial instruments that are not traded in an active market (for example, traded bonds, over-the-counter derivatives) is determined using valuation techniques which maximise the use of observable market data and rely as little as possible on entity-specific estimates. If all significant inputs required to fair value an instrument are observable, the instrument is included in level 2. Level 3: If one or more of the significant inputs is not based on observable market data, the instrument is included in level 3. This is the case for unlisted equity securities, contingent consideration and indemnification asset included in level 3. There are no transfers among the three levels during the year levels 1 and 2 during the year. The company’s policy is to recognise transfers in and transfers out of fair value hierarchy levels as at the end of the reporting period. The carrying amounts of trade receivables, trade payables, loans, deposits, advances, borrowings, cash and cash equivalents and other current financial liabilities are considered to be the same as their fair values, due to their short-term nature.
31 FINANCIAL RISK MANAGEMENT The company’s activities expose it to market risk, liquidity risk and credit risk.
(A) Credit risk Company faces credit risk from cash and cash equivalents, deposits with banks and financial institutions and unsecured trade receivables. The company doesn't face any credit risk with other financial assets.
(i) Credit risk management Credit risk on deposit is mitigated by depositing the funds in reputed bank. For trade receivables, the primary source of credit risk is that these are unsecured. The Company sells the products to customers only when the collection of trade receivables is certain and whether there has been a significant increase in the credit risk on an on-going basis is monitored throughout each reporting period. As at the balance sheet date, based on the credit assessment the historical trend of low default is expected to continue. An impairment analysis is performed at each reporting date on an individual basis for major clients. Any recoverability of receivables is provided for based on the impairment assessment.
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Notes to Financial Statements - (continued) Rs. in Lakhs 31 FINANCIAL RISK MANAGEMENT - (continued) (ii) Provision for expected credit losses for trade receivables The Company provides for expected credit loss based on the following: Expected credit loss for trade receivables under simplified approach Year ended 31st March 2019: Less than 180 More than 180 Ageing Total days past due days past due Gross carrying amount 10,506.42 58.78 10,565.20 Expected loss rate 0% 100% Expected credit losses – 58.78 58.78 Carrying amount of trade receivables (net of impairment) 10,506.42 – 10,506.42
Year ended 31st March 2020: Less than 180 More than 180 Ageing Total days past due days past due Gross carrying amount 7,598.07 132.77 7,730.84 Expected loss rate 0% 100% Expected credit losses – 132.77 132.77 Carrying amount of trade receivables (net of impairment) 7,598.07 – 7,598.07
(iii)Reconciliation of loss allowance provision – Trade receivables Amount Loss allowance on 31st March 2018 58.78 Changes in loss allowance – Loss allowance on 31st March 2019 58.78 Changes in loss allowance 73.99 Loss allowance on 31st March 2020 132.77
(B) Liquidity risk Objective of liquidity risk management is to maintain sufficient cash and marketable securities and the availability of funding through an adequate amount of committed credit facilities to meet obligations when due. Management monitors rolling forecasts of the company’s liquidity position (comprising the undrawn borrowing facilities below) and cash and cash equivalents on the basis of expected cash flows. The company’s liquidity management policy involves projecting cash flows in major currencies and considering the level of liquid assets necessary to meet these, monitoring balance sheet liquidity ratios against internal requirements.
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Notes to Financial Statements - (continued) Rs. in Lakhs As at As at 31.03.2020 31.03.2019 31 FINANCIAL RISK MANAGEMENT - (continued) (i) Financing arrangements The company had access to the following undrawn borrowing facilities at the end of the reporting period: Floating rate - Expiring within one year (bank overdraft and other facilities) 1,305.41 612.43 The bank overdraft facilities may be drawn at any time and may be terminated by the bank without notice. Subject to the continuance of satisfactory credit ratings, the bank loan facilities may be drawn at any time in INR and have an average maturity of 1 year. (ii) Maturities of financial liabilities The tables below analyse the company’s financial liabilities into relevant maturity groupings based on their contractual maturities for: a) all non-derivative financial liabilities, and b) net and gross settled derivative financial instruments for which the contractual maturities are essential for an understanding of the timing of the cash flows. The amounts disclosed in the table are the contractual undiscounted cash flows. Balances due within 12 months equal their carrying balances as the impact of discounting is not significant.
Contractual maturities of financial liabilities As at 31st March, 2020 As at 31st March, 2019 Non-derivatives Maturing within Maturing within Total Total 3 months 3 months Borrowings 2,080.72 2,080.72 3,167.57 3,167.57 Trade payables 7,805.83 7,805.83 10,321.06 10,321.06 Payable for Fixed Asset 87.21 87.21 349.35 349.35 Lease liabilities 16.89 16.89 –– Security deposits 90.86 90.86 92.11 92.11 Total non-derivative liabilities 10,081.51 10,081.51 13,930.09 13,930.09
(C) Market risk (i) Foreign currency risk The company activities expose it to foreign exchange risk arising from foreign currency transactions, primarily with respect to the USD and EURO Foreign exchange risk arises from future commercial transactions and recognised assets and liabilities denominated in a currency that is not the company’s functional currency (INR). The risk is measured through a forecast of highly probable foreign currency cash flows.
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Notes to Financial Statements - (continued) Rs. in Lakhs 31 FINANCIAL RISK MANAGEMENT - (continued) The company's exposure to foreign currency risk at the end of the reporting period expressed in INR, are as follows: As at 31st March, 2020 As at 31st March, 2019 Particulars USD EUR USD EUR Financial assets Trade receivables 666.50 85.53 1,811.81 74.03 Exposure to foreign currency risk (assets) 666.50 85.53 1,811.81 74.03 Financial liabilities Trade payables 83.02 34.46 49.72 (29.63) Exposure to foreign currency risk (liabilities) 83.02 34.46 49.72 (29.63) Net exposure to foreign currency risk 583.48 51.07 1,762.09 103.66
Sensitivity The sensitivity of profit or loss to changes in the exchange rates arises mainly from major foreign currency denominated financial instruments Impact on profit after tax* Impact on profit after tax* USD sensitivity As at As at EURO sensitivity As at As at 31.03.2020 31.03.2019 31.03.2020 31.03.2019 INR / USD Increases by 5% 18.98 57.32 INR/EURO Increases by 5% 1.66 3.37 INR / USD Decreases by 5% (18.98) (57.32) INR/EURO Decreases by 5% (1.66) (3.37) * Holding all other variables constant Year ended Year ended 31.03.2020 31.03.2019 32 FINANCIAL INSTRUMENTS AND RISK MANAGEMENT Capital management (a) Risk management The company’s objectives when managing capital are to • safeguard their ability to continue as a going concern, so that they can continue to provide returns for shareholders and benefits for other stakeholders, and • maintain an optimal capital structure to reduce the cost of capital. In order to maintain or adjust the capital structure, the company may adjust the amount of dividends paid to shareholders, return capital to shareholders, issue new shares or sell assets to reduce debt.
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Notes to Financial Statements - (continued) Rs. in Lakhs 32 FINANCIAL INSTRUMENTS AND RISK MANAGEMENT - (continued) (b) Dividends Year ended Year ended 31.03.2020 31.03.2019 (i) Equity shares Dividend for the year ended 31st March 2020 - Nil – – (31st March 2019 Rs. 6 per fully paid share) – 466.14
33 NOTE RELATED TO TRANSITION IND AS 116 AND LEASE LIABILITY
The Company has adopted Ind AS 116 'Leases' with the date of initial application being April 1, 2019. Ind AS 116 replaces Ind AS 17 – Leases. The Company has applied Ind AS 116 using the modified retrospective approach, under which the cumulative effect of initial application is recognised in retained earnings as at April 1, 2019. The comparative information in the financial statements would not be restated and would be presented based on the requirements of the previous standard i.e. Ind AS 17. In adopting Ind AS 116, the Company has applied the below practical expedients: a) The Company applied a single discount rate to a portfolio of leases with reasonably similar characteristics. b) The Company relied on its assessment of whether leases are onerous applying Ind AS 37, Provisions, Contingent Liabilities and Contingent Assets, immediately before the date of initial application as an alternative to performing an impairment review as per Ind AS 36 Impairment of assets. c) The Company has treated the leases with remaining lease term of less than 12 months as "short term leases". d) The Company has excluded the initial direct costs from measurement of the right-of-use asset at the date of transition. e) The Company used hindsight, such as in determining the lease term if the contract contains options to extend or terminate the lease. Effective 1st April 2019, the company has adopted Ind AS 116 ‘Leases’ and applied the Standard to its leases retrospectively and has recognised the effect of the cumulative adjustment (net of taxes) of Rs. 16.33 Lakhs in the opening balance of retained earnings, on the date of initial application (1st April 2019). Accordingly, comparatives for the period has not been restated. The adoption of the Standard has resulted in recognising “Right-of-Use Asset" of Rs. 202.77 lakhs and a corresponding “Lease Liability” of Rs. 219.16 lakhs as at the date of initial application (i.e 1st April 2019).
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Notes to Financial Statements - (continued) 33 FINANCIAL INSTRUMENTS AND RISK MANAGEMENT - (continued) Measurement of lease liabilities Rs. in lakhs The lease liabilities as at 1st April 2019 can be reconciled to the operating lease commitments as of 31st March 2019, as follows: As at / Particulars Year ended 31.03.2020 Operating lease commitments disclosed as at 31st March 2019 239.99 Weighted average incremental borrowing rate as at 1st April 2019 9.00% Discounted using the lessee’s incremental borrowing rate at the date of initial application 219.16 Add: Lease payments relating to renewal periods not included in operating lease commitments as at 31 March 2019 – Commitments relating to short-term leases – Commitments relating to leases of low-value assets – Lease liabilities as at 1st April 2019 219.16 Lease liability recognised as at 1st April 2019: Current lease liabilities 106.35 Non-current lease liabilities 112.81 219.16 Interest expenses 14.23 Payment towards liability (120.58) Lease liability recognised as at 31st March 2020: Current lease liabilities 77.75 Non-current lease liabilities 35.06 112.81 34 REVENUE FROM CONTRACTS WITH CUSTOMERS A Disaggregated revenue Revenue from contracts with customers are disaggregated into categories that depict how the nature, amount, timing and uncertainty of revenue and cash flows are affected by economic factors. The Company identifies the product lines, amongst others to indicate the factors as mentioned above. The details of revenue from contracts with customers on the basis of various product lines are as under : Particulars Year ended Year ended 31.03.2020 31.03.2019 (a) Type of goods or service (i) Sale of Products 34,624.54 47,759.52 (ii) Revenue from Services 78.75 78.75 (iii) Sale of Scrap 51.75 59.87 34,755.04 47,898.14 (b) Timing of recognition of revenue (i) At a point in time 34,755.04 47,898.14 (ii) Over time – – 34,755.04 47,898.14
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Notes to Financial Statements - (continued)
34 REVENUE FROM CONTRACTS WITH CUSTOMERS - (continued) Rs. in lakhs B The operations of the Company relate to only one segment viz., automotive components and tools. Thus, the information on the relationship between disaggregated revenue under Ind AS 115 and for reportable segment under Ind AS 108 is not required. C Reconciliation of contracts with customers The following schedule gives the movement of contract liabilities for the reporting period. Particulars Year ended Year ended 31.03.2020 31.03.2019 Contract liabilities at the beginning of the period 199.12 157.51 Add / (Less) : Consideration received during the year as advance 209.22 199.12 Revenue recognized from contract liability 199.12 157.51 Contract liabilities at the end of the period 209.22 199.12 Payments are received in advance towards contracts entered with customers and is recognised as a contract liability. As and when the performance obligation is met the same is recognised as revenue. D Transaction price allocated to the remaining performance obligations The Company's contracts with customers are short term contracts with performance obligations that has an original expected duration of one year or less. Therefore, taking the practical expedient, the details on transaction price allocated to the remaining performance obligations are not disclosed. E Reconciliation of revenue with contract price: Particulars Year ended Year ended 31.03.2020 31.03.2019 (i) Contract price 34,891.36 48,057.26 (ii) Adjustments: Discounts 136.32 159.12 (iii) Revenue from operations as per Statement of Profit and loss 34,755.04 47,898.14 F There is no impact on the retained earnings as on the date of adoption of the standard. No effect on any financial statement line item due to application of this standard and there is no requirement to disclose the same.
35 RELATED PARTY DISCLOSURE Disclosure is made as per the requirements of the standard and the same is furnished below: A) List of Related Parties where control exists Reporting entity : Harita Seating Systems Ltd Holding Company : Nil Subsidiary Company : Harita Fehrer Limited Key Management Personnel : Non-executive Independent Directors: H.Lakshmanan, S.I.Jaffar Ali, C.N.Prasad L.Bhadri, Sasikala Varadachari Non-executive Non-independent Director: Martin Grammer
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Notes to Financial Statements - (continued)
35 RELATED PARTY DISCLOSURE - (continued) B) Particulars of transactions with related parties Rs. in Lakhs As at / As at / year ended year ended 31.03.2020 31.03.2019 (i) Purchases made Subsidiary company from Harita Fehrer Limited, Chennai - Components 3,457.01 4,746.24 - Capital goods 86.13 94.93 (ii) Services availed Subsidiary company from Harita Fehrer Limited, Chennai - Lease rent paid 65.40 65.00 - Others 122.61 125.42 (iii) Sale of Materials Subsidiary company to Harita Fehrer Limited, Chennai 225.64 17.35 (iv) Services rendered Subsidiary company to Harita Fehrer Limited, Chennai - Lease rent 169.89 167.52 - Management Service 78.75 78.75 - Canteen 154.94 196.60 - Others 355.90 382.21 (v) Dividend received from subsidiary company – 512.50 (vi) Amount outstanding as at Balance sheet date Subsidiary company Harita Fehrer Limited, Chennai Trade payables 1,762.88 649.15 Other payables 41.96 4.86 Trade receivables 116.44 0.71 Other receivables 489.94 193.10 (vii) Remuneration to Key Managerial Personnel 3.15 20.40
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Notes to Financial Statements - (continued)
Year ended Year ended 31.03.2020 31.03.2019
36 EARNING PER SHARE Profit after tax 224.84 2,202.00 No. of equity shares 7,769,040 7,769,040 Face value per share (Rs.) 10.00 10.00 Weighted average number of equity shares 7,769,040 7,769,040 Earnings per share (EPS) (Rs.) 2.89 28.34 Diluted Earnings per share (Rs.) 2.89 28.34
37 GOVERNMENT GRANTS During the financial year under review the Company has received and recognised following government grants:- a. Duty drawback on exports 87.18 94.74 b. Merchandise Exports from India Scheme (MEIS) benefits on exports 159.63 269.56 c. Pradhan Mantri Rojgar Protsahan Yojana (PMRPY) scheme benefits (the amount is credited to PF Employer Contribution) 0.24 1.89 d. Board of Apprenticeship Training (BOAT) 7.68 29.00 e. EPCG (Export Promotion Capital Goods) Scheme – 2.86
38 TRADE PAYABLES INCLUDE AMOUNT DUE TO MICRO AND SMALL SCALE INDUSTRIAL UNITS 685.48 186.64 Disclosure under Micro,Small and Medium Enterprises Development Act, 2006 i) The principal amount and interest due thereon remaining unpaid to any supplier at the end of each accounting year: a) Principal (all are within agreed credit period and not due for payment) 685.48 186.64 b) Interest (as no amount is overdue) – – ii) The amount of interest paid by the buyer in terms of Section 16 of the Micro, Small and Medium Enterprises Development Act, 2006 along with the amount of payment made to the supplier beyond the appointed day during each accounting year. – – iii) The amount of interest due and payable for the period of delay in making payment (which have been paid but beyond the appointed day during the year) but without adding the interest specified under the Micro, Small and Medium Enterprises Development Act, 2006 – –
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Notes to Financial Statements - (continued) Rs. in Lakhs Year ended Year ended 31.03.2020 31.03.2019
38 TRADE PAYABLES INCLUDE AMOUNT DUE TO MICRO AND SMAL - (continued) iv) The amount of interest accrued and remaining unpaid at the end of each accounting year – – v) The amount of further interest remaining due and payable even in the succeeding years,until such date when the interest dues as above are actually paid to the small enterprise,for the purpose of disallowance as deductible expenditure under Section 23 of the Micro, Small and Medium Enterprises Development Act, 2006 – –
39 SEGMENT INFORMATION (a) Description of segments The Board of Directors of the Company has been identified as the chief operating decision maker (CODM). They evaluate the company performance, allocate resources based on the analysis of various performance indicators of the company as a single unit. Therefore there is no reportable segment for the company. The company is domiciled in India. (b) Entity wide disclosures (i) Revenue from geographical areas The entire revenue from operation are derived from India All non current assets are with in India. (ii) Information about major customers Revenues of approximately Rs.7620.81 Lakhs (31 March 2019 – Rs.7936.50 Lakhs) are derived from a single external customers.
40 COVID 19 The Manufacturing facilities and all offices of the Company were closed on March 23, 2020 following the countrywide lockdown due to COVID 19. The Company has since obtained required permissions and restarted its manufacturing facilities and all offices partially. Based on assessment of the impact of COVID 19 on the operations of the Company and ongoing discussions with customers, vendors and service providers, the Company is confident of obtaining regular supply of raw materials and components, resuming supply chain logistics and serving customers.
131 HARITA SEATING SYSTEMS LIMITED
Notes to Financial Statements - (continued)
40 COVID 19 - (continued) The Company has considered the possible effects of COVID 19 on the carrying amounts of Property, Plant and Equipment, Investments, Inventories, Trade Receivable and Other Current Assets. In developing the assumptions relating to the possible future uncertainties in the economic conditions because of this pandemic, the company, as at the date of approval of the financial results, has used external and internal sources of information / indicators to estimate the future performance of the Company. Based on current estimates, the Company expects the carrying amount of these assets to be recovered. The impact of the COVID 19 on the Company's financial results may differ from that estimated as at the date of approval of these results.
41 Previous year's figures have been regrouped wherever necessary to conform to the Current year's classification.
Rs. in Lakhs Year ended Year ended 31.03.2020 31.03.2019
42 PROVISIONS, CONTINGENT LIABILITIES AND CONTINGENT ASSETS i) Provisions In respect of warranty obligations provision is made in accordance with terms of sale of seat assemblies Provision for warranty at beginning of the year 64.74 110.47 Provided during the year – 16.58 Total 64.74 127.05 Provision utilised during the year 6.33 62.31 Net Provision as on Balance Sheet date 58.41 64.74 ii) Contingent liabilities not provided for Contracts remaining to be executed on capital account 109.55 53.88 iii) Liability contested and not provided for a) Income tax 362.01 462.88 b) Service tax 2.10 2.10 c) Value added Tax 404.61 422.51
43 EXPENDITURE INCURRED ON CORPORATE SOCIAL RESPONSIBILITY ACTIVITIES a) Gross amount to be spent by the company during the year 56.55 51.83 b) Amount spent during the the year in cash i) Construction / Acquisition of asset – – ii) On purposes other than above 60.00 52.00
132 HARITA SEATING SYSTEMS LIMITED
Notes to Financial Statements - (continued) Rs. in Lakhs Year ended Year ended 31.03.2020 31.03.2019 44 RESEARCH AND DEVELOPMENT EXPENDITURE INCURRED AND CLAIMED UNDER INCOME TAX ACT 1961 a) Revenue expenditure Salary and wages 636.01 650.70 Power – 19.91 Foreign and inland travel 48.11 76.36 Design and testing charges 295.41 68.69 Proto tools, fixtures & Moulds 27.08 54.02 AMC Charges 53.96 60.93 Product & Process Development Expenses 54.38 10.79 Sample, Machinery Spare and Other Expenses 31.43 93.79 Admin and other expenses 1.48 2.84 1,147.86 1,038.03 b) Capital expenditure Plant and Machinery, Workstations, Laptops 243.50 20.61 243.50 20.61
45 DISCLOSURE MADE IN TERMS OF REGULATION 34(3) OF SEBI (LODR) REGULATIONS 2015
Name of As at As at Particulars the Company 31.03.2020 31.03.2019 a) Loans and advances (i) Loans and advances in the nature of loans made to subsidiary company Nil – – (ii) Loans and advances in the nature of loans made to associate company Nil – – (iii) Loans and advances in the nature of loans where there is 1) no repayment schedule or repayment beyond seven years (or) Nil – – 2) no interest or interest below Section 186 of the Companies Act, 2013 Nil – – (iv) Loans and advances in the nature of loans made to firms / companies in which directors of the Company are interested Nil – –
133 HARITA SEATING SYSTEMS LIMITED
Notes to Financial Statements - (continued) Rs. in Lakhs
45 DISCLOSURE MADE IN TERMS OF REGULATION 34(3) OF SEBI (LODR) REGULATIONS 2015 - (continued)
Name of As at As at Particulars the Company 31.03.2020 31.03.2019
b) Investments by the company (i) In subsidiary companies Harita Fehrer Limited 2,759.00 2,759.00 [1,02,50,000 (last year 1,02,50,000) fully paid-up equity shares of Rs. 10/- each] Maximum amount held at any time During the year 2,759.00 During the previous year 2,759.00 ii) In associate company Nil
for and on Behalf of Board of Directors In terms of our Reports Attached H LAKSHMANAN A G GIRIDHARAN For RAGHAVAN, CHAUDHURI & NARAYANAN Chairman Chief Executive Officer Chartered Accountants F.R. No: 007761S K SUBRAMANIAN N ISWARYA LAKSHMI V SATHYANARAYANAN Chief Financial Officer Company Secretary Partner Place : Chennai Membership No. 027716 Date : 19th June, 2020
134 CONSOLIDATED FINANCIAL STATEMENTS OF HARITA SEATING SYSTEMS LIMITED
Consolidated Financial Statements of Harita Seating Systems Limited
135 CONSOLIDATED FINANCIAL STATEMENTS OF HARITA SEATING SYSTEMS LIMITED
INDEPENDENT AUDITOR'S REPORT
To of the Consolidated Financial Statements section of our The Members of Harita Seating Systems Limited, report. We are independent of the Group in accordance with Chennai - 600006. the Code of Ethics issued by Institute of Chartered Accountants of India ( ICAI), together with the independence Report on the Audit of the Consolidated Financial requirements that are relevant to our audit of the consolidated Statements financial statements under the provisions of the Act and the rules made thereunder, and we have fulfilled our other ethical Opinion responsibilities in accordance with the provisions of the We have audited the accompanying consolidated financial Companies Act, 2013 and the ICAI's Code of Ethics. We statements of Harita Seating Systems Limited (hereinafter believe that the audit evidence we have obtained is sufficient referred to as the 'Holding Company') and its subsidiary and appropriate to provide a basis of our opinion on the (Holding Company and its subsidiary together referred to consolidated financial statements as "the Group") which comprise the consolidated Balance st Sheet as at 31 March, 2020, and the consolidated Key Audit Matters Statement of Profit and Loss (including Other Key audit matters are those matters that, in our professional Comprehensive Income), the consolidated Statement of judgement, were of the most significant in our audit of the Changes in Equity and the consolidated Statement of Cash consolidated financial statements of the current period. Flows Statement for the year then ended, and notes to the These matters were addressed in the context of our audit of consolidated financial statements, including a summary of the consolidated financial statements as a whole, and in significant accounting policies and other explanatory forming our opinion thereon, and we do not provide a information (hereinafter referred to as "the consolidated separate opinion on these matters. We have determined financial statements"). that there are no key matters to be communicated in our In our opinion and to the best of our information and report. according to the explanations given to us, the aforesaid consolidated financial statements give the information Information Other than the Consolidated Financial required by the Companies Act 2013, ('the Act') in the manner Statements and Auditor's Report Thereon so required and give a true and fair view in conformity with The Company's Board of Directors is responsible for the Indian Accounting Standards prescribed under Section 133 preparation of the other information. The other information of the Act read with the Companies (Indian Accounting comprises the information included in the Management Standards) Rules, 2015, as amended ('Ind AS') and other Discussion and Analysis, Board's Report including accounting principles generally accepted in India, of the Annexures to Board's Report. Business Responsibility consolidated state of affairs of the Group as at 31st March, Report, Corporate Governance and Shareholder's 2020, the consolidated profit, consolidated total Information, but does not include the consolidated financial comprehensive Income, consolidated changes in equity and statements and our auditor's report thereon. its consolidated cash flows for the year then ended. Our opinion on the consolidated financial statements does not cover the other information and we do not express any Basis for Opinion form of assurance conclusion thereon. We conducted our audit of the consolidated financial statements in accordance with the Standards on Auditing In connection with our audit of the consolidated financial (SAs) specified under Section 143(10) of the Companies statements, our responsibility is to read the other information Act, 2013. Our responsibilities under those standards are and, in doing so, consider whether the other information is further described in the Auditor's Responsibilities for the Audit materially inconsistent with the consolidated financial
136 CONSOLIDATED FINANCIAL STATEMENTS OF HARITA SEATING SYSTEMS LIMITED statements or our knowledge obtained during the course of The respective Board of Directors of the companies included our audit or otherwise appears to be materially misstated. in the Group, are responsible for overseeing the financial reporting process of each of the companies in the Group. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, Auditor's Responsibilities for the Audit of the we are required to report that fact. We have nothing to report Consolidated Financial Statements in this regard. Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole Responsibilities of Management and Board of Directors, are free from material misstatement, whether due to fraud for the Consolidated Financial Statements or error, and to issue an auditor's report that includes our The Holding Company's Board of Directors is responsible opinion. Reasonable assurance is a high level of assurance, for the preparation and presentation of these consolidated but is not a guarantee that an audit conducted in accordance financial statements in terms of the requirements of the with SAs will always detect a material misstatement when it Companies Act, 2013 that give a true and fair view of the consolidated financial position, consolidated financial exists. Misstatements can arise from fraud or error and are performance, consolidated total comprehensive income, considered material if, individually or in the aggregate, they consolidated changes in equity and consolidated cash flows could reasonably be expected to influence the economic of the Group, in accordance with the Ind AS and other decisions of users taken on the basis of these consolidated accounting principles generally accepted in India, including financial statements. the Accounting Standards specified under Section 133 of As part of an audit in accordance with SAs, we exercise the Act. The respective Board of Directors of the companies professional judgment and maintain professional scepticism included in the Group are responsible for maintenance of throughout the audit. We also: adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Group • Identify and assess the risks of material misstatement and for preventing and detecting frauds and other of the consolidated financial statements, whether due irregularities; selection and application of appropriate to fraud or error, design and perform audit procedures accounting policies; making judgments and estimates that responsive to those risks, and obtain audit evidence that are reasonable and prudent; and the design, implementation is sufficient and appropriate to provide a basis for our and maintenance of adequate internal financial controls, that opinion. The risk of not detecting a material misstatement were operating effectively for ensuring accuracy and resulting from fraud is higher, than for one resulting from completeness of the accounting records, relevant to the error, as fraud may involve collusion, forgery, intentional preparation and presentation of the respective financial omissions, misrepresentations, or the override of internal statements that give a true and fair view and are free from control; material misstatement, whether due to fraud or error, which • Obtain an understanding of internal financial controls have been used for the purpose of preparation of the relevant to the audit in order to design audit procedures consolidated financial statements by the Directors of the that are appropriate in the circumstances. Under Section Holding company, as aforesaid. 143(3)(i) of the Act, we are also responsible for In preparing the consolidated financial statements, the expressing our opinion on whether the Company, its respective Board of Directors of the companies included in subsidiary company and its which are companies the Group are responsible for assessing the ability of the each incorporated in India and outside India, has adequate of the companies in the Group, to continue as a going concern, internal financial controls system in place and the disclosing, as applicable, matters related to going concern operating effectiveness of such controls; and using the going concern basis of accounting unless management either intends to liquidate the Group or to cease • Evaluate the appropriateness of accounting policies operations, or has no realistic alternative but to do so. used and the reasonableness of accounting estimates
137 CONSOLIDATED FINANCIAL STATEMENTS OF HARITA SEATING SYSTEMS LIMITED
and related disclosures made by management and We communicate with those charged with governance of board of directors; the Holding Company and such other entities included in • Conclude on the appropriateness of management's use the consolidated financial statements of which we are the of the going concern basis of accounting and, based on independent auditors regarding, among other matters, the the audit evidence obtained, whether a material planned scope and timing of the audit and significant audit uncertainty exists related to events or conditions that findings, including any significant deficiencies in internal may cast significant doubt on the ability of the companies control that we identify during our audit. in the Group, to continue as a going concern. If we We also provide those charged with governance with a conclude that a material uncertainty exists, we are statement that we have complied with relevant ethical required to draw attention in our auditor's report to the requirements regarding independence, and to communicate related disclosures in the consolidated financial with them all relationships and other matters that may statements or, if such disclosures are inadequate, to reasonably be thought to bear on our independence, and modify our opinion. Our conclusions are based on the where applicable, related safeguards. audit evidence obtained up to the date of our auditor's report. However, future events or conditions may cause From the matters communicated with those charged with the Group, to cease to continue as a going concern; governance, we determine those matters that were of most significance in the audit of the consolidated financial • Evaluate the overall presentation, structure and content statements of the current period and are therefore the key of the consolidated financial statements, including the audit matters. We describe these matters in our auditor's disclosures, and whether the consolidated financial report unless law or regulation precludes public disclosure statements represent the underlying transactions and about the matter or when, in extremely rare circumstances, events in a manner that achieves fair presentation; we determine that a matter should not be communicated in • Obtain sufficient appropriate audit evidence regarding our report because the adverse consequences of doing so the financial information of the entities or business would reasonably be expected to outweigh the public interest activities within the Group, to express an opinion on the benefits of such communication. consolidated financial statements. We are responsible for the direction, supervision and performance of the audit of the financial statements of such entities included Other Matters in the consolidated financial statements of which we are The consolidated annual financial results include the audited the independent auditors. For the other entities included financial results of the subsidiary Harita Fehrer Limited, in the consolidated financial statements, which have whose financial statements reflect total assets of been audited by other auditors, such other auditors Rs. 26,194.22 Lakhs as at 31 March 2020, total revenue of remain responsible for the direction, supervision and Rs. 44,521.55 Lakhs, and net cash inflows of Rs. 210.99 performance of the audits carried out by them. We Lakhs for the year ended on that date, as considered in the remain solely responsible for our audit opinion. consolidated annual financial results, which have been audited by their independent auditor. The independent Materiality is the magnitude of misstatements in the auditors' reports on financial statements of the subsidiary consolidated financial statements that, individually or in have been furnished to us by the management and our aggregate, makes it probable that the economic decisions opinion on the consolidated annual financial results, in so of a reasonably knowledgeable user of the financial far as it relates to the amounts and disclosures included in statements may be influenced. We consider quantitative respect of the subsidiary, is based solely on the report of materiality and qualitative factors in (i) planning the scope of our audit work and in evaluating the results of our work; such auditors and the procedures performed by us, are as and (ii) to evaluate the effect of any identified misstatements stated in paragraph above. in the financial statements.
138 CONSOLIDATED FINANCIAL STATEMENTS OF HARITA SEATING SYSTEMS LIMITED
Our opinion on the consolidated financial statements, and of the directors of the Group companies, is disqualified our report on Other Legal and Regulatory Requirements as on 31st March, 2020 from being appointed as a below, is not modified in respect of the above matters with director in terms of Section 164 (2) of the Act. respect to our reliance on the work done and the reports of the other auditors and the financial statements / financial (f) With respect to the adequacy of internal financial information certified by the Management. controls over financial reporting of the Group consisting of subsidiary, which are all incorporated in India, and the operating effectiveness of such controls, refer to Report on Other Legal and Regulatory Requirements our separate report in "Annexure A". As required by Section 143(3) Of the Act, we report, to the extent applicable, that: (g) With respect to the other matters to be included in the Auditor's Report in accordance with Rule 11 of the (a) We have sought and obtained all the information and Companies (Audit and Auditor's) Rules, 2014, in our explanations which to the best of our knowledge and opinion and to the best of our information and according belief were necessary for the purposes of our audit of to the explanations given to us: the aforesaid consolidated financial statements. i. The consolidated financial statements disclose the (b) In our opinion, proper books of account as required by impact of pending litigations on the consolidated law relating to preparation of the aforesaid consolidated financial position of the Group. - Refer Note 38(iii) financial statements have been kept so far as it appears to the consolidated financial statements. from our examination of those books and the reports of the other auditors. ii. The Group has made provision, as required under the applicable law or accounting standards, for (c) The Consolidated Balance Sheet, the Consolidated material foreseeable losses, if any, on long-term Statement of Profit and Loss, and the Consolidated contracts including derivative contracts. Cash Flow Statement dealt with by this Report are in agreement with the relevant books of account iii. There has been no delay in transferring amounts, maintained for the purpose of preparation of the required to be transferred, to the investor Education consolidated financial statements. and Protection Fund by the Holding Company and its subsidiary company. (d) In our opinion, the aforesaid consolidated financial for Raghavan, Chaudhuri & Narayanan statements comply with the Accounting Standards Chartered Accountants specified under Section 133 of the Act. FRN: 007761S (e) On the basis of the written representations received from the directors of the Holding Company as on V. Sathyanarayanan 31st March, 2020 taken on record by the Board of Partner Directors of the Holding Company and the reports of Place : Bangalore Membership No. 027716 the statutory auditors of its subsidiary company, none Date : 19th June 2020 UDIN : 20027716AAAAGX5019
139 CONSOLIDATED FINANCIAL STATEMENTS OF HARITA SEATING SYSTEMS LIMITED
Annexure 'A' to the Independent Auditors' Report on the Consolidated Financial Statements for the year ended 31st March 2020
Report on the Internal Financial Controls Over Financial Our audit involves performing procedures to obtain audit Reporting under Clause (i) of Sub-section 3 of Section evidence about the adequacy of the internal financial 143 of the Companies Act, 2013 ("the Act") controls system over financial reporting and their In conjunction with our audit of the consolidated financial operating effectiveness. Our audit of internal financial statements of the Company as of and for the year ended controls over financial reporting included obtaining an 31st March 2020, we have audited the internal financial understanding of internal financial controls over financial controls over financial reporting of Harita Seating Systems reporting, assessing the risk that a material weakness Limited (hereinafter referred to as the 'Holding Company'), exists, and testing and evaluating the design and "Jayalakshmi Estates", No. 29, Haddows Road, Chennai operating effectiveness of internal control based on the 600 006, and its subsidiary. assessed risk. The procedures selected depend on the auditor's judgment, including the assessment of the risks Management's Responsibility for Internal Financial of material misstatement of the financial statements, Controls whether due to fraud or error. The respective Board of Directors of the Company and its subsidiary company, are responsible for establishing We believe that the audit evidence we have obtained is and maintaining internal financial controls based on the sufficient and appropriate to provide a basis for our audit Guidance Note on Audit of Internal Financial Controls opinion on the internal financial controls system over over Financial Reporting issued by the Institute of financial reporting of the company, and its subsidiary, Chartered Accountants of India (" the ICAI"). These which is a company incorporated in India. responsibilities include the design, implementation and maintenance of adequate internal financial controls that Meaning of Internal Financial Controls Over Financial were operating effectively for ensuring the orderly and Reporting efficient conduct of its business, including adherence to A company's internal financial control over financial the respective company's policies, the safeguarding of reporting is a process designed to provide reasonable its assets, the prevention and detection of frauds and assurance regarding the reliability of financial reporting errors, the accuracy and completeness of the accounting and the preparation of financial statements for external records, and the timely preparation of reliable financial purposes in accordance with generally accepted information, as required under the Companies Act, 2013. accounting principles. A company's internal financial control over financial reporting includes those policies Auditors' Responsibility and procedures that; Our responsibility is to express an opinion on the internal (1) Pertain to the maintenance of records that, in financial controls over financial reporting of the Company reasonable detail, accurately and fairly reflect the and its subsidiary company, based on our audit. We transactions and dispositions of the assets of the conducted our audit in accordance with the Guidance company; Note on Audit of Internal Financial Controls over Financial (2) Provide reasonable assurance that transactions are Reporting (the "Guidance Note") issued by the Institute recorded as necessary to permit preparation of of Chartered Accountants of India and the Standards on financial statements in accordance with generally Auditing, prescribed under section 143(10) of the accepted accounting principles, and that receipts and Companies Act, 2013, to the extent applicable to an audit expenditures of the company are being made only in of internal financial controls. Those Standards and the accordance with authorisations of management and Guidance Note require that we comply with ethical directors of the company; and requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal (3) Provide reasonable assurance regarding prevention financial controls over financial reporting were established or timely detection of unauthorised acquisition, use, and maintained, and if such controls operated effectively or disposition of the company's assets that could have in all material respects. a material effect on the financial statements.
140 CONSOLIDATED FINANCIAL STATEMENTS OF HARITA SEATING SYSTEMS LIMITED
Inherent Limitations of Internal Financial Controls by the respective company considering the essential Over Financial Reporting components of internal control stated in the guidance note Because of the inherent limitations of internal financial on audit of internal financial controls over financial controls over financial reporting, including the possibility reporting issued by Institute of Chartered Accountants of of collusion or improper management override of controls, India. material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation Other Matters of the internal financial controls over financial reporting Our aforesaid report under Section 143 (3) (i) of the Act to future periods are subject to the risk that the internal on the adequacy and operating effectiveness of the financial control over financial reporting may become internal financial controls over financial reporting in so inadequate because of changes in conditions, or that the far as it relates to of its subsidiary company which is a degree of compliance with the policies or procedures may company incorporated in India, is based on the deteriorate. corresponding reports of the auditors of such company incorporated in India. Opinion for Raghavan, Chaudhuri & Narayanan In our opinion and to the best of our information and Chartered Accountants according to the explanations given to us, the Company FRN: 007761S and its subsidiary company which is incorporated in India, have, in all material respects, an adequate internal financial control system over financial reporting and such V. Sathyanarayanan internal financial controls over financial reporting were Partner st operating effectively as at 31 March 2020, based on Place : Bangalore Membership No. 027716 internal control over financial reporting criteria established Date : 19th June 2020 UDIN : 20027716AAAAGX5019
141 CONSOLIDATED FINANCIAL STATEMENTS OF HARITA SEATING SYSTEMS LIMITED
Consolidated Balance Sheet as at 31st March, 2020 (Rs. in Lakhs) Note As at As at Particulars No 31.03.2020 31.03.2019 ASSETS I Non-Current Assets a) Property, Plant and Equipment 2 23,107.57 22,102.22 b) Capital work-in-progress 2 299.46 1,898.60 c) Right to use of Assets 2(a) 113.74 – d) Other Intangible Assets 2 77.94 143.60 e) Financial assets – – i Investments 3 121.18 113.95 ii Other financial assets 4 282.29 281.78 e) Other Non-current assets 5 215.76 132.32 II Current Assets a) Inventories 6 4,925.36 5,073.30 b) Financial Assets i Investments 3 151.05 – ii Trade receivables 7 13,682.72 19,246.20 iii Cash and cash equivalents 8 1,138.81 966.84 iv Bank balances other than (iii) above 9 38.39 34.19 v Other financial assets 4 192.17 345.65 c) Current tax assets 373.10 241.17 d) Other current assets 10 1,557.90 2,232.12 Total Assets 46,277.44 52,811.94 EQUITY AND LIABILITIES Equity a) Equity Share Capital 11 776.90 776.90 b) Other Equity 12 18,406.88 17,059.45 Non-controlling interest 13 8,664.42 7,607.05 Liabilities I Non-Current Liabilities a) Financial Liabilities i Lease liabilities 47.96 – b) Provisions 14 731.83 475.91 c) Deferred Tax Liabilities (Net) 610.37 1,135.05 II Current Liabilities a) Financial Liabilities i Borrowings 16 2,080.72 3,167.57 ii Trade Payables 17 (a) Total outstanding dues of micro and small enterprises 1,234.79 2,091.64 (b) Total outstanding dues other than ii(a) above 12,290.92 18,261.90 iii Lease liabilities 47.46 – iv Other Financial Liabilities 18 469.07 1,258.47 b) Other Current Liabilities 19 815.66 913.17 c) Provisions 15 79.54 49.46 d) Current tax liabilities (Net) 20.92 15.37 Total Equity and Liabilities 46,277.44 52,811.94 Significant Accounting Policies 1 for and on Behalf of Board of Directors In terms of our Reports Attached H LAKSHMANAN A G GIRIDHARAN For RAGHAVAN, CHAUDHURI & NARAYANAN Chairman Chief Executive Officer Chartered Accountants F.R. No: 007761S K SUBRAMANIAN N ISWARYA LAKSHMI V SATHYANARAYANAN Chief Financial Officer Company Secretary Partner Place : Chennai Membership No. 027716 Date : 19th June, 2020
142 CONSOLIDATED FINANCIAL STATEMENTS OF HARITA SEATING SYSTEMS LIMITED
Statement of Consolidated Profit and Loss for the year ended 31st March, 2020 (Rs. in Lakhs) Year ended Year ended Particulars 31st March 2020 31st March 2019 Income I Revenue from Operations 20 74,365.59 97,495.92 II Other Income 21 618.53 955.69 III Total Income (I+II) 74,984.12 98,451.61 IV Expenses a) Cost of Material Consumed 22 52,145.89 70,767.80 b) Changes in Inventory of Finished Goods and Work-in-Progress 23 (353.90) (691.65) c) Employee Benefits Expense 24 9,704.57 10,406.64 d) Finance Costs 25 395.35 329.45 e) Depreciation and Amortization expenses 26 2,712.57 2,289.60 f) Other Expenses 27 7,726.74 9,312.86 Total Expenses (IV) 72,331.22 92,414.70 V Profit before exceptional items and tax (III - IV) 2,652.90 6,036.91 VI Exceptional Items – – VII Profit Before Tax (V-VI) 2,652.90 6,036.91 VIII Tax Expense 28 a) Total of Current tax 674.72 1,657.92 i. Current Tax 674.72 1,678.55 ii. Prior period income tax – (20.63) b) Deferred Tax (498.03) 356.38 176.69 2,014.30 IX Profit for the period (VII-VIII) 2,476.21 4,022.61 X Other Comprehensive Income Items that will not be reclassified to profit or loss - Remeasurement of post employment benefit obligations (84.01) 157.22 - Income tax relating to these items 26.65 (54.94) Other comprehensive income for the year, net of tax (57.36) 102.28 XI Total Comprehensive Income for the Year (IX + X) 2,418.85 4,124.89 Profit attributable to: Owners of Harita Seating Systems Limited 1,380.09 2,879.38 Non-controlling interests 1,096.12 1,143.23 2,476.21 4,022.61 Other comprehensive income attributable to: Owners of Harita Seating Systems Limited (47.20) 95.74 Non-controlling interests (10.16) 6.54 (57.36) 102.28 Total comprehensive income attributable to: Owners of Harita Seating Systems Limited 1,332.89 2,975.12 Non-controlling interests 1,085.96 1,149.77 2,418.85 4,124.89 Earnings Per Share 36 Basic 17.76 37.06 Diluted 17.76 37.06 Significant Accounting Policies 1
for and on Behalf of Board of Directors In terms of our Reports Attached H LAKSHMANAN A G GIRIDHARAN For RAGHAVAN, CHAUDHURI & NARAYANAN Chairman Chief Executive Officer Chartered Accountants F.R. No: 007761S K SUBRAMANIAN N ISWARYA LAKSHMI V SATHYANARAYANAN Chief Financial Officer Company Secretary Partner Place : Chennai Membership No. 027716 Date : 19th June, 2020
143 CONSOLIDATED FINANCIAL STATEMENTS OF HARITA SEATING SYSTEMS LIMITED
Consolidated statement of changes in equity (Rs. in Lakhs) a Equity Share Capital Particulars Amount As at 01-04-2018 776.90 Changes in equity share capital - As at 31-03-2019 776.90 Changes in equity share capital - As at 31-03-2020 776.90 b Other equity Reserves and Surplus Total Non- Securities Capital Particulars General Retained Other controlling Total premium redemption reserve earnings Equity interest account reserve Balance as at March 31, 2018 2,302.62 9,360.32 2,982.88 10.00 14,655.82 7,050.90 21,706.72 Profit for the Year – 2,879.38 – – 2,879.38 1,143.23 4,022.61 Other comprehensive income – 95.74 – – 95.74 6.54 102.28 Dividend paid – (571.49) – – (571.49) (593.62) (1,165.11) Balance as at March 31, 2019 2,302.62 11,763.95 2,982.88 10.00 17,059.45 7,607.05 24,666.50 Profit for the Year – 1,380.09 – – 1,380.09 1,096.12 2,476.21 Other comprehensive income – (47.20) – – (47.20) (10.16) (57.36) Utilisation on Initial adoption of Ind AS 116 – 14.54 – – 14.54 (28.59) (14.05) Dividend paid – – – – – – – Balance as at March 31, 2020 2,302.62 13,111.38 2,982.88 10.00 18,406.88 8,664.42 27,071.30
for and on Behalf of Board of Directors In terms of our Reports Attached H LAKSHMANAN A G GIRIDHARAN For RAGHAVAN, CHAUDHURI & NARAYANAN Chairman Chief Executive Officer Chartered Accountants F.R. No: 007761S K SUBRAMANIAN N ISWARYA LAKSHMI V SATHYANARAYANAN Chief Financial Officer Company Secretary Partner Place : Chennai Membership No. 027716 Date : 19th June, 2020
144 CONSOLIDATED FINANCIAL STATEMENTS OF HARITA SEATING SYSTEMS LIMITED
Consolidated Cash flow statement for the year ended 31st March 2020 (Rs. in Lakhs) Year ended Year ended Particulars 31st March 2020 31st March 2019 A. CASH FLOW FROM OPERATING ACTIVITIES Profit before tax and extra ordinary items 2,652.90 6,036.91 Add: Depreciation and amortization 2,712.57 2,289.60 Dividend income – – Interest Income (24.21) (25.43) Interest Expenditure 395.35 310.94 (Profit) / Loss on sale of Fixed Assets 35.08 (0.76) Net gain on sale of investments (8.29) (9.53) Increase / (Decrease) in fair valuation of employee benefit obligation (84.01) 157.22 Operating profit before working capital changes 5,679.39 8,758.95 Adjusted for: Working Capital changes Trade Payables (6,827.83) 1,385.29 Other Current Liabilities (97.51) 242.45 Short Term Provisions 30.08 (16.41) Current Liability - Deferred income 5.55 (0.29) Other Current Financial Liabilities (1,051.54) 305.52 Long Term Provisions 255.92 (74.04) Non-Current Liability - Deferred income – (2.57) Investment (151.05) 672.97 Long Term Loans and Advances – (89.98) Inventories 147.94 (46.30) Trade Receivables 5,563.48 2,553.04 Other Current Assets 674.22 (141.22) Other Current Financial Assets 153.48 (364.46) Current tax assets (63.51) – Other Non-Current Financial Assets (0.51) 2.49 Other Non-Current Assets (83.44) 260.32 Cash generated from operations 4,234.67 13,445.76 Adjusted for: Tax Liability Direct tax paid (net of refund) (743.12) (1,708.90) Net cash from operating activities (A) 3,491.55 11,736.86 B. CASH FLOW FROM INVESTING ACTIVITIES Payment towards property, plant and equipment (including Capital work in progress) (2,049.10) (10,412.48) Payable for fixed asset 262.14 – Proceeds from sale of fixed assets 6.74 0.76 Purchase of investments – (0.26) Profit on sale of investments 1.05 9.53 Interest received 24.21 25.42 Net cash used in investing activities (B) (1,754.96) (10,377.03)
145 CONSOLIDATED FINANCIAL STATEMENTS OF HARITA SEATING SYSTEMS LIMITED
Consolidated Cash flow statement for the year ended 31st March 2020 (continued) (Rs. in Lakhs) Year ended Year ended Particulars 31st March 2020 31st March 2019 C. CASH FLOW FROM FINANCING ACTIVITIES Non-controlling interest (28.59) (593.61) Proceeds / (payments) for borrowings (1,086.85) 930.15 Finance cost (383.98) (310.94) Payment of dividend (including dividend tax liability) – (571.49) Payment towards lease liability (91.15) – Net cash used in financing activities (C ) (1,590.57) (545.89)
D. NET INCREASE / (DECREASE) IN CASH AND CASH EQUIVALENTS (A) + (B) + (C) 146.02 813.94 Cash and Cash Equivalents at the beginning of the year Cash and Cash equivalents 996.99 186.22 Bank balances other than above 34.19 31.03 1,031.18 217.25 Cash and Cash Equivalents at the end of the year Cash and Cash equivalents 1,138.81 996.99 Bank balances other than above 38.39 34.19 1,177.20 1,031.18
for and on Behalf of Board of Directors In terms of our Reports Attached
H LAKSHMANAN A G GIRIDHARAN For RAGHAVAN, CHAUDHURI & NARAYANAN Chairman Chief Executive Officer Chartered Accountants F.R. No: 007761S K SUBRAMANIAN N ISWARYA LAKSHMI V SATHYANARAYANAN Chief Financial Officer Company Secretary Partner Place : Chennai Membership No. 027716 Date : 19th June, 2020
146 CONSOLIDATED FINANCIAL STATEMENTS OF HARITA SEATING SYSTEMS LIMITED
Notes to Financial Statements - (continued) 1. SIGNIFICANT ACCOUNTING POLICIES The accounting policies mentioned herein are relating to the consolidated financial statements of Harita Seating Systems Limited and its subsidiary company.
a) Brief description of the Group Harita Seating Systems Limited ('the Company') is a public limited company incorporated in India. The company's equity shares are listed with NSE. The registered office is located at "Jayalakshmi Estates", 29, Haddows Road, Nungambakkam, Chennai - 600006, Tamil Nadu, India. The Company manufactures seating systems for various segments such as Original Equipment Manufacturers, Bus Passenger, Tractors, Off road vehicles etc. The company has seven plants across India. Harita Fehrer Limited (subsidiary) is a public limited company incorporated in India. The registered office is located at "Jayalakshmi Estates", 29, Haddows Road, Nungambakkam, Chennai - 600006, Tamil Nadu, India. The company manufactures seat foams and seats for the automotive industry. The company has five manufacturing plants in India.
b) Basis of preparation and presentation The financial statements comply in all material aspects with Indian Accounting Standards (Ind AS) notified under Section 133 of the Companies Act, 2013 (the Act) read with Companies (Indian Accounting Standard) Rules, 2015 and other relevant provisions of the Act. Disclosure under Ind AS are made only in respect of material items and in respect of items that will be useful to the users of financial statements in making economic decision. The financial statements have been prepared on the historical basis following the principles of prudence which requires recognition of expected losses and non-recognition of unrealized gains. The financial statements have been prepared under accrual basis of accounting except for certain financial assets and liabilities (as per the accounting policy below), which have been measured at fair value.
c) Use of estimates and judgments The preparation of financial statements requires management to make certain estimates and assumptions that affect the amounts reported in the financial statements and notes thereto. The management believes that these estimates and assumptions are reasonable and prudent. However, actual results could differ from these estimates. Any revision to accounting estimates is recognised prospectively in the current and future period. This note provides an overview of the areas that involved a higher degree of judgment or complexity. It also provides an overview of items which are more likely to be materially adjusted due to estimates and assumptions turning out to be different than those originally assessed. Detailed information about each of these estimates and judgments is included in the relevant notes together with information about the basis of calculation for each affected line item in the financial statements.
d) Significant estimates and judgements The areas involving significant estimates or judgments are: i) Estimation of defined benefit obligation - (Refer Note 29) ii) Estimation of useful life of Property, Plant and Equipment (Refer Note 1(g) and 1(h))
147 CONSOLIDATED FINANCIAL STATEMENTS OF HARITA SEATING SYSTEMS LIMITED
Notes to Financial Statements - (continued) e) Going concern The board of directors have considered the financial position of the Company as at 31 March 2020 and projected cash flows and financial performance of the Company for at least twelve months from the date of approval of these financial statements as well as planned cost and cash improvement actions, and believe that the plan for sustained profitability remains on course. The board of directors have taken actions to ensure that appropriate long-term cash resources are in place at the date of signing the accounts to fund the Company's operations.
f) Revenue recognition Revenue is measured at the fair value of the consideration received or receivable and net of returns, trade allowances and rebates. It excludes Goods and Services Tax.
i) Sale of products Revenue from sale of products is recognized when the products are delivered to the dealer / customer or when delivered to the carrier, when risks and rewards of ownership pass to the dealer / customer, as per terms of contract.
ii) Revenue from service Revenue from Services is recognised in the accounting period in which the services are rendered and when invoices are raised.
iii) Dividend Income Dividends are recognised in the Statement of Profit and Loss only when the right to receive payment is established and it is probable that the economic benefits associated with the dividend will flow to the Company, and the amount of dividend can be reliably measured.
g) Property, plant and equipment Freehold Land is stated at historical cost. All other items of Property, Plant and Equipment are stated at cost of acquisition / construction less accumulated depreciation / amortization and impairment, if any. Cost includes: (i) purchase price, (ii) taxes and duties, (iii) labour cost (iv) directly attributable overheads incurred upto the date the asset is ready for its intended use, and (v) Government grants that are directly attributable to the assets acquired. However, cost excludes excise duty, value added tax and service tax and GST, to the extent credit of the duty or tax is availed of. Subsequent costs are included in the asset's carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Company and the cost of the item can be measured reliably. The carrying amount of any component accounted for as separate asset is derecognised when replaced. All other repairs and maintenance are charged to the Statement of Profit and Loss during the reporting period in which they are incurred. Gains or losses on disposals are determined by comparing proceeds with the carrying amount. These are included in the Statement of Profit and Loss within Other gains / (losses).
148 CONSOLIDATED FINANCIAL STATEMENTS OF HARITA SEATING SYSTEMS LIMITED
Notes to Financial Statements - (continued) h) Depreciation i) Depreciation on tangible fixed assets is charged over the estimated useful life of the asset or part of the asset (after considering double / triple shifts) as evaluated by a Chartered Engineer, on straight line method, in accordance with Part A of Schedule II to the Companies Act, 2013. ii) The estimated useful life of the tangible fixed assets as assessed by the Chartered Engineer and followed by the Company is furnished below: Particulars Useful life in years (Nos.) Buildings 5 to 30 Plant & Machinery 1 to 15 Tools 1 to 15 Moulds 1 to 15 Furniture and Fixtures 10 Vehicles 8 Computer hardware 1 to 15 Office equipment 1 to 10
iii) The residual value for all the above assets are retained at 5% of the cost. Residual values and useful lives are reviewed, and adjusted, if appropriate, for each reporting period. iv) On tangible fixed assets added / disposed off during the year, depreciation is charged on pro-rata basis for the period for which the asset was purchased and used. v) Depreciation in respect of tangible assets costing individually less than Rs.5,000/- is provided at 100%.
i) Amortization of Intangible assets Intangible assets acquired are accounted at their acquisition cost and are amortised over its useful life, viz., 2 years in the case of software.
j) Impairment of tangible and intangible assets At the end of each reporting period, the Company reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Recoverable amount is the higher of fair value less costs of disposal and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.
k) Foreign currency translation i) Functional and presentation currency Items included in the financial statements are measured using the currency of the primary economic environment in which the Company operates ('the functional currency'). The financial statements are presented in Indian rupee, and all values are rounded off to nearest lakhs except where otherwise indicated.
149 CONSOLIDATED FINANCIAL STATEMENTS OF HARITA SEATING SYSTEMS LIMITED
Notes to Financial Statements - (continued) ii) Transactions and balances Foreign currency transactions are translated into the functional currency using the exchange rates at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation of monetary assets and liabilities denominated in foreign currencies at year end exchange rates are generally recognized in profit or loss.
l) Inventories Inventories are valued at the lower of cost and net realizable value. The cost of finished goods and work in progress comprises raw materials, direct labour, other direct costs and appropriate proportion of variable and fixed overhead expenditure. Overhead expenditures are being allocated on the basis of normal operating capacity. Raw materials are valued at weighted average cost. Cost of inventories also include all other costs incurred in bringing the inventories to their present location and condition. Costs of purchased inventory are determined after deducting rebates and discounts. Net realizable value is the estimated selling price in the ordinary course of business, less the estimated costs of completion and the estimated costs necessary to make the sale. Non- production inventory (other than those supplied along with main plant and machinery, which are capitalized and depreciated accordingly) are charged to profit or loss on consumption.
m) Employee Benefits i. Short term obligations Liabilities for wages and salaries, including non-monetary benefits that are expected to be settled wholly within 12 months after the end of the period in which the employees render the related service are recognized in respect of employees' services upto the end of the reporting period and are measured at the amounts expected to be paid when the liabilities are settled. The liabilities are presented as current employee benefit obligations in the balance sheet. ii. Other long term employee benefit obligations The liabilities for earned leave are not expected to be settled wholly within 12 months after the end of the period in which the employees render the related service. They are, therefore, recognized and provided for at the present value of the expected future payments to be made in respect of services provided by employee upto the end of reporting period using the projected unit credit method. The benefits are discounted using the market yields at the end of the reporting period that have terms approximating to the terms of the related obligation. Remeasurements as a result of experience adjustments and changes in actuarial assumptions are recognised in the Statement of Profit and Loss. The obligations are presented as current liabilities in the balance sheet if the entity does not have an unconditional right to defer settlement for at least twelve months after the reporting period, regardless of when the actual settlement is expected to occur. iii. Post-employment obligation The Company operates the following post-employment schemes: a) Defined benefit plans such as gratuity and pension for its eligible employees, and b) Defined contribution plans such as provident fund. Pension and gratuity obligation: The liability or asset recognised in the balance sheet in respect of defined benefit pension and gratuity plan is the present value of the defined benefit obligation at the end of the reporting period
150 CONSOLIDATED FINANCIAL STATEMENTS OF HARITA SEATING SYSTEMS LIMITED
Notes to Financial Statements - (continued) less the fair value of plan assets. The defined benefit obligation is calculated annually by Actuaries using the projected unit credit method. The present value of the defined benefit obligation denominated in INR is determined by discounting the estimated future cash outflows by reference to market yields at the end of the reporting period on the government bonds that have terms approximating to the terms of the related obligation. The net interest cost is calculated by applying the discount rate to the net balance of the defined benefit obligation and the fair value of plan assets. This cost is included in employee benefit expense in the Statement of Profit and Loss. Remeasurement gains and losses arising from experience adjustments and changes in actuarial assumptions are recognised in the period in which they occur, directly in other comprehensive income (net of deferred tax). They are included in retained earnings in the statement of changes in equity and in the balance sheet. Changes in the present value of the defined benefit obligation resulting from plan amendments or curtailments are recognised immediately in the Statement of Profit or Loss as past service cost. Provident fund: The eligible employees of the Company are entitled to receive benefits in respect of provident fund, a defined contribution plan, in which both employees and the Company make monthly contributions at a specified percentage of the covered employees' salary. The contributions are made to the Provident Fund maintained by the Government. iv. Bonus plans The Company recognizes a liability and an expense for bonus. The Company recognizes a provision where contractually obliged or where there is a past practice that has created a constructive obligation.
n) Taxes on income Tax expense comprises of (i) current tax and (ii) deferred tax. The income tax expense or credit for the period is the tax payable on the current period's taxable income based on the applicable income tax rate adjusted by changes in deferred tax assets and liabilities attributable to temporary differences and to unused tax losses. The current income tax charge is calculated on the basis of the tax laws enacted or substantively enacted at the end of the reporting period. Management periodically evaluates positions taken in tax returns with respect to situations in which applicable tax regulation is subject to interpretation. It establishes provisions, where appropriate, on the basis of amounts expected to be paid to the tax authorities. Deferred income tax is provided in full, using the liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the financial statements. However, deferred tax liabilities are not recognised if they arise from the initial recognition of goodwill. Deferred income tax is also not accounted for if it arises from initial recognition of an asset or liability in a transaction other than a business combination that at the time of the transaction affects neither accounting profit nor taxable profit or loss. Deferred income tax is determined using tax rates (and laws) that have been enacted or substantially enacted by the end of the reporting period and are expected to apply when the related deferred income tax asset is realised or the deferred income tax liability is settled.
151 CONSOLIDATED FINANCIAL STATEMENTS OF HARITA SEATING SYSTEMS LIMITED
Notes to Financial Statements - (continued) Deferred tax assets are recognised only if it is probable that future taxable amounts will be available to utilise those temporary differences and losses. Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets and liabilities and when the deferred tax balances relate to the same taxation authority. Current tax assets and tax liabilities are offset where the entity has a legally enforceable right to offset and intends either to settle on a net basis, or to realise the asset and settle the liability simultaneously. Current and deferred tax is recognised in profit or loss, except to the extent that it relates to items recognised in other comprehensive income or directly in equity. In this case, the tax is also recognised in other comprehensive income or directly in equity, respectively. Where the Company is entitled to claim special tax deductions for investments in qualifying assets or in relation to qualifying expenditure (the Research and Development or other investment allowances), the Company accounts for such allowances as tax credits, which means that the allowance reduce income tax payable and current tax expense. A deferred tax asset is recognised for unclaimed tax credits that are carried forward as deferred tax assets.
o) Minimum Alternate Tax (MAT) Credit MAT credit can be carried forward upto a period of 15 years. Hence, outstanding MAT credit as at March 31st 2020 has been considered in this financial year as the certainty for utilization has now been ascertained. p) Provisions and contingencies i) Provisions: Provisions are recognized when there is a present obligation or constructive obligation as a result of a past event and it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and there is a reliable estimate of the amount of the obligation. Provisions are determined by discounting the expected future cash flows at a pretax rate that reflects current market assessment of the time value of money and the risks specific to the liability. ii) Contingent Liabilities: Contingent liabilities are disclosed when there is a possible obligation arising from past events, the existence of which will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the company or a present obligation that arises from past events where it is either not probable that an outflow of resources will be required to settle or a reliable estimate of the amount cannot be made.
q) Segment reporting Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision maker.
r) Leases From 1st April, 2019, leases are recognised as a right-of-use asset and a corresponding liability at the date at which the leased asset is available for use by the Company. Contracts may contain both lease and non-lease components. The Company allocates the consideration in the contract to the lease and non-lease components based on their relative standalone prices. However, for leases of real estate for which the Company is a lessee, it has elected not to separate lease and non-lease components and instead accounts for these as a single lease component.
152 CONSOLIDATED FINANCIAL STATEMENTS OF HARITA SEATING SYSTEMS LIMITED
Notes to Financial Statements - (continued) Assets and liabilities arising from a lease are initially measured on a present value basis. Lease liabilities include the net present value of the following lease payments: • fixed payments (including in-substance fixed payments), less any lease incentives receivable • variable lease payment that are based on an index or a rate, initially measured using the index or rate as at the commencement date • amounts expected to be payable by the Company under residual value guarantees • the exercise price of a purchase option if the Company is reasonably certain to exercise that option, and • payments of penalties for terminating the lease, if the lease term reflects the Company exercising that option Lease payments to be made under reasonably certain extension options are also included in the measurement of the liability. The lease payments are discounted using the interest rate implicit in the lease. If that rate cannot be readily determined, which is generally the case for leases in the Company, the lessee's incremental borrowing rate is used, being the rate that the individual lessee would have to pay to borrow the funds necessary to obtain an asset of similar value to the right-of-use asset in a similar economic environment with similar terms, security and conditions. To determine the incremental borrowing rate, the Company: • where possible, uses recent third-party financing received by the individual lessee as a starting point, adjusted to reflect changes in financing conditions since third party financing was received • uses a build-up approach that starts with a risk-free interest rate adjusted for credit risk for leases held by the Company which does not have recent third party financing, and • makes adjustments specific to the lease, e.g. term, country, currency and security. The Company is exposed to potential future increases in variable lease payments based on an index or rate, which are not included in the lease liability until they take effect. When adjustments to lease payments based on an index or rate take effect, the lease liability is reassessed and adjusted against the right-of-use asset. Lease payments are allocated between principal and finance cost. The finance cost is charged to profit or loss over the lease period so as to produce a constant periodic rate of interest on the remaining balance of the liability for each period. Variable lease payments that depend on sales are recognised in profit or loss in the period in which the condition that triggers those payments occurs. Right-of-use assets are measured at cost comprising the following: • the amount of the initial measurement of lease liability • any lease payments made at or before the commencement date less any lease incentives received • any initial direct costs, and • restoration costs. Right-of-use assets are generally depreciated over the shorter of the asset's useful life and the lease term on a straight-line basis. If the Company is reasonably certain to exercise a purchase option, the right-of-use asset is depreciated over the underlying asset's useful life.
153 CONSOLIDATED FINANCIAL STATEMENTS OF HARITA SEATING SYSTEMS LIMITED
Notes to Financial Statements - (continued)
Payments associated with short-term leases of equipment and all leases of low-value assets are recognised on a straight-line basis as an expense in profit or loss. Short-term leases are leases with a lease term of 12 months or less. Low-value assets comprise IT equipment and small items of office furniture.
s) Financial instruments A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity. Financial assets and financial liabilities are recognised when the Company becomes a party to the contractual provisions of the instruments. Financial assets and financial liabilities are initially measured at fair value. Transaction costs that are directly attributable to the acquisition or issue of financial instruments (other than financial assets and financial liabilities at fair value through profit or loss) are added to or deducted from the fair value of the financial assets or financial liabilities, as appropriate, on initial recognition. Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at fair value through profit or loss are recognized immediately in profit or loss. Subsequently, financial instruments are measured according to the category in which they are classified.
t) Financial assets All purchases or sales of financial assets are recognized and de-recognized on a trade date basis. Regular way purchases or sales are purchases or sales of financial assets that require delivery of assets within the time frame established by regulation or convention in the marketplace. All recognized financial assets are subsequently measured in their entirety at either amortised cost or fair value, depending on the classification of the financial assets. i) Classification of financial assets Classification of financial assets depends on the nature and purpose of the financial assets and is determined at the time of initial recognition. The Company classifies its financial assets in the following measurement categories: • those to be measured subsequently at fair value (either through other comprehensive income, or through profit or loss), and • those measured at amortized cost The classification depends on the Company's business model for managing the financial assets and the contractual terms of the cash flows. A financial asset that meets the following two conditions is measured at amortised cost unless the asset is designated at fair value through profit or loss under the fair value option: • Business model test: the objective of the Company's business model is to hold the financial asset to collect the contractual cash flows. • Cash flow characteristic test: the contractual term of the financial asset gives rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding. A financial asset that meets the following two conditions is measured at fair value through other comprehensive income unless the asset is designated at fair value through profit or loss under the fair value option:
154 CONSOLIDATED FINANCIAL STATEMENTS OF HARITA SEATING SYSTEMS LIMITED
Notes to Financial Statements - (continued)
• Business model test: the financial asset is held within a business model whose objective is achieved by both collecting cash flows and selling financial assets. • Cash flow characteristic test: the contractual term of the financial asset gives rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding. All other financial assets are measured at fair value through profit or loss.
ii) Financial assets at fair value through profit or loss (FVTPL) Investments in equity instrument are classified at fair value through profit or loss, unless the Company irrevocably elects on initial recognition to present subsequent changes in fair value in other comprehensive income for investments in equity instruments which are not held for trading. Financial assets that do not meet the amortised cost criteria or fair value through other comprehensive income criteria are measured at fair value through profit or loss. A financial asset that meets the amortised cost criteria or fair value through other comprehensive income criteria may be designated as at fair value through profit or loss upon initial recognition if such designation eliminates or significantly reduces a measurement or recognition inconsistency that would arise from measuring assets and liabilities or recognizing the gains or losses on them on different bases. Investments in debt based mutual funds are measured at fair value through profit and loss. Financial assets which are fair valued through profit or loss are measured at fair value at the end of each reporting period, with any gains or losses arising on re measurement recognized in profit or loss.
iii) Trade receivables Trade receivables are recognized initially at fair value and subsequently measured at amortized cost less provision for impairment.
iv) Cash and cash equivalents For the purpose of presentation in the statement of cash flows, cash and cash equivalents include cash on hand, deposits held at call with financial institutions, other short-term, highly liquid investments with original maturities of three months or less that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities in the balance sheet.
v) Impairment of financial assets The Company assesses impairment based on expected credit losses (ECL) model to the following: • financial assets measured at amortised cost • financial assets measured at fair value through other comprehensive income Expected credit loss is measured through a loss allowance at an amount equal to: • the twelve month expected credit losses (expected credit losses that result from those default events on the financial instruments that are possible within twelve months after the reporting date); or • full life time expected credit losses (expected credit losses that result from all possible default events over the life of the financial instrument).
155 CONSOLIDATED FINANCIAL STATEMENTS OF HARITA SEATING SYSTEMS LIMITED
Notes to Financial Statements - (continued) For trade receivables or any contractual right to receive cash or another financial asset that result from transactions that are within the scope of Ind AS 18, the Company always measures the loss allowance at an amount equal to lifetime expected credit losses.
u) Financial liabilities All financial liabilities are subsequently measured at amortised cost using the effective interest rate method or at fair value through profit or loss.
i) Trade and other payables Trade and other payables represent liabilities for goods or services provided to the Company prior to the end of financial year which are unpaid.
ii) Borrowings Borrowings are initially recognised at fair value, net of transaction costs incurred. Borrowings are subsequently measured at amortised cost. Any difference between the proceeds (net of transaction costs) and the redemption amount is recognised in profit or loss over the period of the borrowings using the effective interest rate method. Borrowings are removed from the balance sheet when the obligation specified in the contract is discharged, cancelled or expired. The difference between the carrying amount of a financial liability that has been extinguished or transferred to another party and the consideration paid, including any non-cash assets transferred or liabilities assumed, is recognised in profit or loss.
iii) Foreign exchange gains or losses For financial liabilities that are denominated in a foreign currency and are measured at amortised cost at the end of each reporting period, the foreign exchange gains and losses are determined based on the amortised cost of the instruments and are recognised in profit or loss. The fair value of financial liabilities denominated in a foreign currency is determined in that foreign currency and translated at the exchange rate at the end of the reporting period. For financial liabilities that are measured at fair value through profit or loss, the foreign exchange component forms part of the fair value gains or losses and is recognised in profit or loss.
v) Borrowing costs General and specific borrowing costs that are directly attributable to the acquisition, construction or production of a qualifying asset are capitalised during the period of time that is required to complete and prepare the asset for its intended use or sale. Qualifying assets are assets that necessarily take a substantial period of time to get ready for their intended use or sale. Investment income earned on the temporary investment of specific borrowings, pending their expenditure on qualifying assets, is deducted from the borrowing costs eligible for capitalisation. Other borrowing costs are expensed in the period in which they are incurred.
w) Government grants Grants from the government are recognised at their fair value where there is a reasonable assurance that the grant will be received and the Company will comply with all attached conditions. Government grants relating to income are deferred and recognised in the profit or loss over the period necessary to match them with the costs that they are intended to compensate and presented within other income.
156 CONSOLIDATED FINANCIAL STATEMENTS OF HARITA SEATING SYSTEMS LIMITED
Notes to Financial Statements - (continued) Government grants relating to the purchase of property, plant and equipment are included in non- current liabilities as deferred income and are credited to profit or loss on a straight-line basis over the expected lives of the related assets and presented within other income.
x) Earnings Per Share Basic earnings per share is computed by dividing the net income by the weighted average number of shares outstanding during the year. Diluted earnings per share is computed using the weighted average number of shares and diluted potential shares, except where the result would be anti-dilutive.
y) Dividends Final dividends on shares are recorded on the date of approval by the shareholders of the Company.
z) Current and Non-current classification The Company presents assets and liabilities in the balance sheet based on current / non-current classification. Cash or cash equivalent is treated as current, unless restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period. In respect of other assets, it is treated as current when it is: • expected to be realized or intended to be sold or consumed in the normal operating cycle • held primarily for the purpose of trading • Expected to be realized within twelve months after the reporting period. All other assets are classified as non-current. A liability is treated as current when: • it is expected to be settled in the normal operating cycle • it is held primarily for the purpose of trading • it is due to be settled within twelve months after the reporting period, or • 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 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. In Company's considered view, twelve months is its operating cycle.
157 CONSOLIDATED FINANCIAL STATEMENTS OF HARITA SEATING SYSTEMS LIMITED
Notes to Financial Statements - (continued)
2 PROPERTY, PLANT AND EQUIPMENT Rs. in Lakhs
Property, Plant & Equipment Other Intangible Description Land - Land - Plant & Furniture Office Computer Technical Product Total Freehold Leasehold Buildings equipment & Fixtures Vehicles equipment Total Software know how licence fee Intangible assets 12345678 9101112 Cost of assets Gross carrying value as at 01-04-2019 1,201.46 1,574.53 6,923.24 16,916.36 180.10 53.94 587.91 27,437.54 303.39 1.58 4.46 309.43 Addition – – 1,194.74 2,406.66 13.11 – 31.50 3,646.01 2.23 – – 2.23 Sub-total 1,201.46 1,574.53 8,117.98 19,323.02 193.21 53.94 619.41 31,083.55 305.62 1.58 4.46 311.66 Sales/deletion – – – 133.38 – 4.43 6.36 144.17 – – – – Total 1,201.46 1,574.53 8,117.98 19,189.64 193.21 49.51 613.05 30,939.38 305.62 1.58 4.46 311.66 Depreciation / Amortisation upto 31-03-2019 – 17.92 546.69 4,432.04 76.61 20.70 241.36 5,335.32 161.35 – 4.46 165.81 For the year – 16.08 308.87 2,119.89 21.40 8.29 124.30 2,598.83 67.91 – – 67.91 Sub-total – 34.00 855.56 6,551.93 98.01 28.99 365.66 7,934.15 229.26 – 4.46 233.72 Withdrawn on assets sold / deleted – – – 92.73 – 4.22 5.39 102.34 – – – – Total – 34.00 855.56 6,459.20 98.01 24.77 360.27 7,831.81 229.26 – 4.46 233.72 Carrying value as at 31-03-2020 1,201.46 1,540.53 7,262.42 12,730.44 95.20 24.74 252.78 23,107.57 76.36 1.58 – 77.94 Capital work-in-progress (at cost ) as at 31-03-2020 (a) Building 299.46 (b) Plant & equipment – 299.46 Property, Plant & Equipment Other Intangible Description Land - Land - Plant & Furniture Office Computer Technical Product Total Freehold Leasehold Buildings equipment & Fixtures Vehicles equipment Total Software know how licence fee Intangible assets 12345678 9101112 Cost of assets Gross carrying value as at 01-04-2018 1,630.10 80.11 4,891.94 10,945.65 161.45 54.34 457.03 18,220.62 229.15 1.58 4.46 235.19 Addition 1.93 1,063.85 2,032.76 6,047.63 30.70 – 139.71 9,316.58 74.24 – – 74.24 Sub - total 1,632.03 1,143.96 6,924.70 16,993.28 192.15 54.34 596.74 27,537.20 303.39 1.58 4.46 309.43 Sales/deletion – – 1.46 76.92 12.05 0.40 8.83 99.66 – – – – Total 1,632.03 1,143.96 6,923.24 16,916.36 180.10 53.94 587.91 27,437.54 303.39 1.58 4.46 309.43 Depreciation / Amortisation upto 31-03-2018 7.65 1.97 337.22 2,641.19 60.53 11.36 138.42 3,198.34 102.26 – 4.46 106.72 For the year 4.38 3.92 209.73 1,863.05 28.13 9.71 111.57 2,230.49 59.11 – – 59.11 Sub–total 12.03 5.89 546.95 4,504.24 88.66 21.07 249.99 5,428.83 161.37 – 4.46 165.83 Withdrawn on assets sold / deleted – – 0.26 72.20 12.05 0.37 8.63 93.51 – – – – Total 12.03 5.89 546.69 4,432.04 76.61 20.70 241.36 5,335.32 161.37 – 4.46 165.83 Carrying value as at 31-03-2019 1,620.00 1,138.07 6,376.55 12,484.32 103.49 33.24 346.55 22,102.22 142.02 1.58 – 143.60 Capital work-in-progress (at cost ) as at 31-03-2019 (a) Building 414.25 (b) Plant & equipment 1,484.35 1,898.60
158 CONSOLIDATED FINANCIAL STATEMENTS OF HARITA SEATING SYSTEMS LIMITED
Notes to Financial Statements - (continued) Rs. in Lakhs 2(a) RIGHT OF USE ASSET As at 31.03.2020 Particulars Land Building Plant & Total equipment Opening on transition to Ind AS 116 - Leases 34.17 58.34 50.45 142.96 Additions during the year – 16.61 – 16.61 Amortization for the year 0.35 3.31 42.17 45.83 Deletions (Preclosures) – – – – Closing net balance during the year 33.82 71.64 8.28 113.74
3 INVESTMENTS No. of Shares / units Rupees in Lakhs Sl. Subsidiary Face / associate As at As at value Currency As at As at No. Particulars 31-03-2020 31-03-2019 (in Rs.) 31-03-2020 31-03-2019 12 3456789 Non current - Unquoted Investment in equity instruments Fair Value through FVTPL: a) Green Infra Wind Energy Theni Limited 3,15,523 3,15,523 10.00 INR 52.58 52.59 b) Shree Mother Capfin and Securities Private Limited 2,048 2,048 10.00 INR 0.17 0.17 c) Semb Corp Mulanur Wind Energy Limited 2,700 2,700 10.00 INR 0.27 0.27 d) Life Insurance Corporation of India, Mumbai 65.56 58.32 (Group annuity policy for Pension to employees) Investment in LLP: e) Paras Green Power LLP INR 2.60 2.60 121.18 113.95
Current: Investments in Quoted Mutual Funds measured at FVTPL: a) SBI Liquid Fund 1,627.54 – INR 50.34 – b) ICICI Prudential Liquid Fund 17,216.86 – INR 50.36 – c) HDFC Liquid Fund 1,296.35 – INR 50.35 – Total 151.05 – Aggregate amount of quoted investments and market value thereof 151.05 – Aggregate amount of unquoted investments 121.18 113.95 272.23 113.95
159 CONSOLIDATED FINANCIAL STATEMENTS OF HARITA SEATING SYSTEMS LIMITED
Notes to Financial Statements - (continued) Rs. in Lakhs As at As at 31.03.2020 31.03.2019 4 OTHER FINANCIAL ASSETS Non Current Security Deposit 252.14 251.63 Bank Deposit 30.15 30.15 282.29 281.78 Current a) Claims Receivable 120.92 195.80 b) Salary advances 36.96 58.29 c) Derivatives – 35.23 d) Accrued interest & Others 34.29 56.33 192.17 345.65
5 OTHER NON CURRENT ASSETS Advances for Capital Goods 215.76 132.32 215.76 132.32
6 INVENTORIES* * Valued at Lower of Cost or Net Realisable Value a) Raw materials and components 1,914.91 2,157.96 b) Work-in-Progress 1,272.97 973.67 c) Finished Goods 1,042.19 987.59 d) Stores & Consumables 695.29 954.08 4,925.36 5,073.30
7 TRADE RECEIVABLES Unsecured a) Considered good 13,815.49 19,304.98 b) Less:Loss allowance 132.77 58.78 13,682.72 19,246.20
160 CONSOLIDATED FINANCIAL STATEMENTS OF HARITA SEATING SYSTEMS LIMITED
Notes to Financial Statements - (continued) Rs. in Lakhs As at As at 31.03.2020 31.03.2019 8 CASH AND CASH EQUIVALENTS a) Balance with Banks - in Current account 1,129.39 957.06 - in Fixed deposit 0.40 0.38 b) Cash on hand 9.02 9.40 1,138.81 966.84
9 OTHER BANK BALANCES Unpaid dividend 38.39 34.19 38.39 34.19
10 OTHER CURRENT ASSETS (Unsecured, considered good) a) Advances to suppliers and service providers 682.99 930.60 b) Balance with Government authorities 472.39 471.07 c) Advances for tool development 1.59 344.46 d) Prepaid expenses 105.31 169.78 e) Govt, Grant receivable 54.94 54.94 f) MEIS scrips / Export incentive receivable 240.68 241.97 g) Employee benefit asset – 19.30 1,557.90 2,232.12
161 CONSOLIDATED FINANCIAL STATEMENTS OF HARITA SEATING SYSTEMS LIMITED
Notes to Financial Statements - (continued) Rs. in Lakhs 11 EQUITY SHARE CAPITAL (a) Authorised, issued, subscribed and fully paid up As at 31.03.2020 As at 31.03.2019 Particulars Number Amount Number Amount of shares of shares Authorised Equity Shares of Rs.10/- each 1,00,00,000 1,000.00 1,00,00,000 1,000.00 Issued, subscribed and fully paid up Equity Shares of Rs.10/- each 77,69,040 776.90 77,69,040 776.90 77,69,040 776.90 77,69,040 776.90
(b) Reconciliation of equity shares outstanding at the beginning and at the end of the year As at 31.03.2020 As at 31.03.2019 Particulars Number Amount Number Amount of shares of shares Shares outstanding at the beginning of the year 77,69,040 776.90 77,69,040 776.90 Shares issued during the year –––– Shares outstanding at the end of the year 77,69,040 776.90 77,69,040 776.90
(c) Terms and rights attached to equity shares: The company has one class of equity shares having a par value of Rs.10 each. Each shareholder is eligible for one vote per share held. In the event of liquidation, the equity shareholders are eligible to receive the 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.
(d) Details of shareholders holding more than 5% shares in the company As at 31.03.2020 As at 31.03.2019 Particulars Number % Number % of shares holding of shares holding Harita Limited, Chennai 18,00,500 23.18% 18,00,500 23.18% Vidhar Management and Consultancy Services LLP 4,79,762 6.18% 4,79,762 6.18% Harita Sheela private Limited, Chennai 4,85,000 6.24% 4,85,000 6.24% Harita Malini Private Limited, Chennai 4,67,800 6.02% 4,67,800 6.02% Harita Venu Private Limited, Chennai 4,67,800 6.02% 4,67,800 6.02% Mr. Martin Grammer, Amberg 10,87,600 14.00% 10,87,600 14.00% 47,88,462 61.64% 47,88,462 61.64%
162 CONSOLIDATED FINANCIAL STATEMENTS OF HARITA SEATING SYSTEMS LIMITED
Notes to Financial Statements - (continued) Rs. in Lakhs As at As at 31.03.2020 31.03.2019 12 OTHER EQUITY a) General Reserve 2,302.62 2,302.62 b) Capital redemption reserve 10.00 10.00 c) Securities premium account 2,982.88 2,982.88 d) Retained earnings 13,111.38 11,763.95 Total 18,406.88 17,059.45
13 NON-CONTROLLING INTEREST Share capital 984.80 984.80 Securities Premium 4,531.91 4,531.91 General reserve 40.02 40.02 Total A 5,556.73 5,556.73 Add: Profit upto year 2018-19 2,050.32 1,494.17 Initial adoption of Ind AS 116 (28.59) – Profit for the year 2019-20 1,085.96 1,149.77 Total B 3,107.69 2,643.94 Total A + B 8,664.42 8,200.67 Less: Dividend declared last year paid during the year – – Dividend paid during the year – (492.40) Dividend distribution tax – (101.22) Total 8,664.42 7,607.05
14 PROVISIONS Non-Current Provision for Employee Benefits a) Pension 403.18 330.82 b) Leave encashment 176.95 114.10 c) Gratuity 117.95 – Other Provisions d) Warranty 33.75 30.99 731.83 475.91
163 CONSOLIDATED FINANCIAL STATEMENTS OF HARITA SEATING SYSTEMS LIMITED
Notes to Financial Statements - (continued) Rs. in Lakhs As at As at 31.03.2020 31.03.2019 15 PROVISIONS Current Provision for Employee Benefits a) Pension 3.20 2.42 b) Gratuity – – c) Leave Encashment 17.31 13.30 Other Provisions d) Warranty 59.03 33.74 79.54 49.46
16 BORROWINGS From bank Secured Working Capital Demand Loan 1,474.59 2,167.57 Primary security (for CC): First charge (hypothecation) on all the current assets of the company including stock, work-in-progress, book debts (both current and non-current), both present and future. Unsecured Short term loans 606.13 1,000.00 2,080.72 3,167.57
17 TRADE PAYABLES a) Dues to Micro and Small Enterprises ** 1,234.79 2,091.64 b) Dues to enterprises other than Micro and Small Enterprises 11,703.41 14,886.93 c) Purchase bills discounted 587.51 3,374.97 13,525.71 20,353.54
** Dues to Micro and Small Enterprises have been determined to the extent such parties have been identified on the basis of information collected by the management. The entire closing balance repre- sents the principal amount payable to these enterprises. There are no interests due or outstanding on the same.
164 CONSOLIDATED FINANCIAL STATEMENTS OF HARITA SEATING SYSTEMS LIMITED
Notes to Financial Statements - (continued) Rs. in Lakhs As at As at 31.03.2020 31.03.2019 18 OTHER FINANCIAL LIABILITIES a) Payable to Employees 6.56 22.35 b) Security deposit from dealers 93.06 94.21 c) Payable for Fixed Asset 311.63 1,107.72 d) Unpaid dividends 38.39 34.19 e) Derivatives 19.43 – 469.07 1,258.47
19 OTHER CURRENT LIABILITIES a) Statutory Dues 129.65 156.72 b) Advances from customers 332.32 313.28 c) Employee dues 353.69 443.17 815.66 913.17
Year ended Year ended 31.03.2020 31.03.2019
20 REVENUE FROM OPERATIONS Sale of Products - Gross 74,304.79 97,467.41 Sale of Products (A) 74,304.79 97,467.41 Revenue from trading activities Sales of traded goods 3,139.48 5,669.71 Less: Purchase of traded goods (3,078.68) (5,641.20) Net revenue from trading activities (B) 60.80 28.51 (A) + (B) 74,365.59 97,495.92
165 CONSOLIDATED FINANCIAL STATEMENTS OF HARITA SEATING SYSTEMS LIMITED
Notes to Financial Statements - (continued) Rs. in Lakhs Year ended Year ended 31.03.2020 31.03.2019 21 OTHER INCOME a) Interest Income 24.21 25.43 b) Dividend Income ( From Subsidiary Company) – – c) Net gain on sale of investments / fair valuation 1.05 9.53 d) MEIS Income 42.94 44.53 e) Rental income 6.12 0.02 f) Duty Drawback 21.89 14.83 g) Other non-operating income 7.24 4.51 h) Revenue from services rendered – – i) Other operating revenues 501.69 850.46 j) Net gain on sale of fixed assets – 2.04 k) Net Gain on foreign currency fluctuation 13.39 4.34 618.53 955.69
22 COST OF MATERIAL CONSUMED Opening Stock of Raw materials 2,157.96 2,987.01 Purchase of Raw Materials and Components 51,902.84 69,938.75 54,060.80 72,925.76 Less: Closing Stock of Raw Materials 1,914.91 2,157.96 52,145.89 70,767.80
23 CHANGES IN INVENTORY OF FINISHED GOODS AND WORK-IN-PROGRESS Opening stock Work-in-progress 973.67 476.61 Finished goods 987.59 793.00 1,961.26 1,269.61 Closing stock Work-in-progress 1,272.97 973.67 Finished goods 1,042.19 987.59 2,315.16 1,961.26 Changes In Inventory (353.90) (691.65)
166 CONSOLIDATED FINANCIAL STATEMENTS OF HARITA SEATING SYSTEMS LIMITED
Notes to Financial Statements - (continued) Rs. in Lakhs Year ended Year ended 31.03.2020 31.03.2019 24 EMPLOYEE BENEFITS EXPENSE a) Salary, Wages and Bonus 8,104.35 8,446.96 b) Contribution to provident and other funds 397.40 436.83 c) Staff welfare expenses 1,202.82 1,522.85 9,704.57 10,406.64
25 FINANCE COSTS Interest expense 338.46 310.94 Other borrowing cost 45.86 18.51 Interest on lease liabilities 11.03 – 395.35 329.45
26 DEPRECIATION AND AMORTIZATION EXPENSES Depreciation on property, plant and equipment 2,598.83 2,230.49 Depreciation on Right of use asset 45.83 – Amortization 67.91 59.11 2,712.57 2,289.60
167 CONSOLIDATED FINANCIAL STATEMENTS OF HARITA SEATING SYSTEMS LIMITED
Notes to Financial Statements - (continued) Rs. in Lakhs Year ended Year ended 31.03.2020 31.03.2019 27 OTHER EXPENSES Consumption of stores and spare parts 617.19 841.50 Power and fuel 1,187.03 1,241.80 Rent including lease rentals 144.98 214.28 Repairs - buildings 97.02 93.43 Repairs - plant & equipment 1,071.86 1,383.76 Repairs - others 57.39 65.84 Insurance 170.00 113.75 Rates and Taxes, excluding taxes on income 91.26 95.70 Data processing expenses 255.25 227.13 Audit fees and reimbursement of expenses - As auditors - statutory audit 31.00 31.00 - For taxation matters 3.00 3.00 - For other services 2.00 2.00 - Reimbursement of expenses 8.10 8.39 Packing & Freight charges 301.37 391.45 Sales Promotion 197.85 218.65 Transportation charges 1,204.94 1,477.80 Travelling and Conveyance 429.21 730.42 Security detective Charges 220.84 269.33 Bank Charges 88.30 104.42 Telephone charges 15.67 24.85 Printing & stationery 64.88 85.44 Legal and professional charges 487.01 462.57 Net Loss on foreign currency fluctuation 8.51 96.13 Loss on PPE sold / scrapped / written off 35.08 1.28 Research & Development 430.53 500.68 Donations – 173.77 Corporate social responsibility expenditure 130.00 108.00 Other Administrative Expenses 376.47 346.49 7,726.74 9,312.86
168 CONSOLIDATED FINANCIAL STATEMENTS OF HARITA SEATING SYSTEMS LIMITED
Notes to Financial Statements - (continued)
Rs. in Lakhs Year ended Year ended 31.03.2020 31.03.2019 28 TAX EXPENSES Income tax expense (a) Income tax expense Current tax 674.72 1,678.55 Current tax on profits for the year 674.72 1,678.55 Deferred tax Decrease (increase) in deferred tax assets (3.94) 178.27 (Decrease) increase in deferred tax liabilities (501.97) 178.11 Total Deferred Tax expenses (498.03) 356.38 Adjustments recognised in current year tax of prior periods – (20.63) Total Tax expenses 176.69 2,014.30
(b) Reconciliation of tax expense and the accounting profit multiplied by India’s tax rate: Profit before income tax expense 2,638.51 6,549.41 Tax at the Indian tax rate of 25.168% / 34.944% 674.78 2,288.63 Tax effect of amounts which are not deductible (taxable) in calculating taxable income: 1.21 12.37 Corporate social responsibility expenditure 19.29 33.20 Adjustments recognised in current year tax of prior periods – (20.63) Others (518.59) (299.27) Income Tax expense 176.69 2,014.30 29 EMPLOYEE BENEFIT OBLIGATIONS As at 31st March, 2020 As at 31st March, 2019 Particulars Current Non-current Total Current Non-current Total Pension 3.20 403.18 406.38 2.42 330.82 333.24 Gratuity – 117.95 117.95 (19.30) – (19.30) Compensated absences 17.31 176.95 194.26 13.30 114.10 127.40 Total employee benefit obligations 20.51 698.08 718.59 (3.58) 444.92 441.34
169 CONSOLIDATED FINANCIAL STATEMENTS OF HARITA SEATING SYSTEMS LIMITED
Notes to Financial Statements - (continued) Rs. in Lakhs 31st March, 2020 31st March, 2019 29 EMPLOYEE BENEFIT OBLIGATIONS - (continued) (i) Compensated absences Current leave obligations expected to be settled within the next 12 months 17.65 13.79 (ii) Gratuity The company extends defined benefit plans in the form of gratuity to employees. The Company has formed "Harita Seating Systems Limited Employees Group Gratuity Scheme" with Life Insurance Corporation of India (LIC). Contribution to gratuity is made to LIC in accordance with the scheme framed by the corporation. The Company has made contribution towards Gratuity based on the actuarial valuation. (iii)Defined contribution plans Contribution to provident fund is in the nature of defined contribution plan and are made to provident fund account maintained by the Government on its account. Gratuity Pension Leave Salary Present Fair value Present Fair value Present Fair value Particulars Net Net Net value of of plan value of of plan value of of plan amount amount amount obligation assets obligation assets obligation assets Position as at April 1, 2018 (A) 635.75 632.20 3.55 351.35 – 351.35 129.84 – 129.84 Current service cost 152.52 – 152.52 6.10 – 6.10 – – – Interest expense / (income) 52.51 52.33 0.18 23.87 – 23.87 9.88 – 9.88 Total amount recognised in profit or loss (B) 205.03 52.33 152.70 29.97 – 29.97 9.88 – 9.88 Remeasurements (Gain) / loss from change in financial assumptions (20.53) – (20.53) – – – (6.62) – (6.62) Experience (gains) / losses (88.61) – (88.61) (48.08) – (48.08) 48.50 – 48.50 Total amount recognised in other comprehensive income (C) (109.14) – (109.14) (48.08) – (48.08) 41.88 – 41.88 Employer contributions – 66.41 (66.41) – – – – – Benefit payments (43.49) (43.49) (0.01) – – – (54.20) – (54.20) Total cash flow (D) (43.49) 22.92 (66.41) – – – (54.20) – (54.20) March 31, 2019 (A)+(B)+(C)+(D) 688.15 707.45 (19.30) 333.24 – 333.24 127.40 – 127.40
170 CONSOLIDATED FINANCIAL STATEMENTS OF HARITA SEATING SYSTEMS LIMITED
Notes to Financial Statements - (continued) Rs. in Lakhs 29 EMPLOYEE BENEFIT OBLIGATIONS - (continued) Gratuity Pension Leave Salary Present Fair value Present Fair value Present Fair value Particulars Net Net Net value of of plan value of of plan value of of plan amount amount amount obligation assets obligation assets obligation assets Position as at April 1, 2019 (A) 688.15 707.45 (19.30) 333.24 – 333.24 127.40 – 127.40 Current service cost 99.27 – 99.27 – – – – – – Interest expense / (income) 52.91 51.49 1.42 25.28 – 25.28 10.04 – 10.04 Total amount recognised in profit or loss (B) 152.18 51.49 100.69 25.28 – 25.28 10.04 – 10.04 Remeasurements (Gain) / loss from change in financial assumptions 76.19 – 76.19 56.95 – 56.95 14.34 – 14.34 Experience (gains) / losses (31.10) 8.53 (39.63) (9.09) – (9.09) 42.48 – 42.48 Total amount recognised in other comprehensive income (C) 45.09 8.53 36.56 47.86 – 47.86 56.82 – 56.82 Employer contributions – – – – – – – – – Benefit payments (77.56) (77.56) – – – – – – – Total cash flow (D) (77.56) (77.56) – – – – – – – March 31, 20120 (A)+(B)+(C)+(D) 807.86 689.91 117.95 406.38 – 406.38 194.26 – 194.26
Rs. in Lakhs As at As at 31.03.2020 31.03.2019 The net liability disclosed above relates to funded plans are as follows: Gratuity Present value of funded obligations 807.86 688.15 Fair value of plan assets 689.91 707.45 Deficit of funded plan 117.95 (19.30)
The net liability disclosed above relates to unfunded plans are as follows: Pension Present value of unfunded obligations 406.38 333.24
(iv) Post-Employment benefits Significant estimates: actuarial assumptions and sensitivity
171 CONSOLIDATED FINANCIAL STATEMENTS OF HARITA SEATING SYSTEMS LIMITED
Notes to Financial Statements - (continued) Rs. in Lakhs 29 EMPLOYEE BENEFIT OBLIGATIONS - (continued) (iv) Post-Employment benefits - (continued) The significant actuarial assumptions were as follows: Gratuity Pension Leave Salary Details As at As at As at As at As at As at 31.03.2020 31.03.2019 31.03.2020 31.03.2019 31.03.2020 31.03.2019 Discount rate 6.64% 7.76% 6.28% 7.25% 6.63% 7.64% Salary growth rate 5.50% 5.50% 5.50% 5.50% 5.50% 5.50% Attrition rate 3.00% 3.00% 0.00% 0.00% 3.00% 3.00% Mortality rate IALM (2006-08) Ultimate
Assumptions regarding future mortality for pension and medical benefits are set based on actuarial advice in accordance with published statistics and experience. These assumptions translate into an average life expectancy in years for a pensioner retiring at age : 58 years. (v) Sensitivity analysis The sensitivity of the defined benefit obligation to changes in the weighted principal assumptions are: Impact on defined benefit obligation Change in assumption Impact on defined benefit obligation Gratuity Increase in Decrease in assumption assumption Details As at As at As at As at As at As at 31.03.2020 31.03.2019 31.03.2020 31.03.2019 31.03.2020 31.03.2019 Discount rate 0.50% 0.50% 39.46 31.11 (42.92) (33.70) Salary growth rate 0.50% 0.50% (43.19) (34.26) 40.05 31.88
Change in assumption Impact on defined benefit obligation Pension Increase in Decrease in assumption assumption Details As at As at As at As at As at As at 31.03.2020 31.03.2019 31.03.2020 31.03.2019 31.03.2020 31.03.2019 Discount rate 1.00% 0.50% 59.59 46.99 (72.77) (57.31) Salary growth rate 1.00% 0.50% (75.35) (59.77) 62.31 49.43
Change in assumption Impact on defined benefit obligation Leave encashment Increase in Decrease in assumption assumption Details As at As at As at As at As at As at 31.03.2020 31.03.2019 31.03.2020 31.03.2019 31.03.2020 31.03.2019 Discount rate 0.50% 0.50% 8.73 5.19 (9.45) (5.61) Salary growth rate 0.50% 0.50% (9.51) (5.70) 8.86 2.68
172 CONSOLIDATED FINANCIAL STATEMENTS OF HARITA SEATING SYSTEMS LIMITED
Notes to Financial Statements - (continued) Rs. in Lakhs 29 EMPLOYEE BENEFIT OBLIGATIONS - (continued)
(vi)Risk exposure Through its defined benefit plans, the Company is exposed to a number of risks, the most significant of which are detailed below: Asset volatility The plan liabilities are calculated using a discount rate set with reference to bond yields; if plan assets underperform this yield, this will create a deficit. Changes in bond yields A decrease in bond yields will increase plan liabilities, although this will be partially offset by an increase in the value of the plans’ bond holdings. The following payments are expected contributions to the defined benefit plan in future years: Particulars As at As at 31.03.2020 31.03.2019 Within the next 12 months (next annual reporting period) 54.47 59.65 Between 2 and 5 years 210.15 178.97 Beyond 5 years 361.67 363.94
30 FINANCIAL INSTRUMENTS AND RISK MANAGEMENT Fair value measurements Financial instruments by category FVTPL Amortised cost Particulars March 31, 2020 March 31, 2019 March 31, 2020 March 31, 2019 Financial assets Investments 121.18 113.95 – – Mutual funds 151.05 – – – Security deposits 252.14 251.63 Bank deposits 30.15 30.15 Interest receivable 34.29 56.33 Claims Receivable 120.92 195.80 Trade receivables 13,682.72 19,246.20 Cash and cash equivalents 1,138.81 966.84 Bank Balances 38.39 34.19 Derivatives – 35.23 MEIS receivable 240.68 241.97 Salary advance 36.96 58.29 Total financial assets 272.23 113.95 15,575.06 21,116.63
173 CONSOLIDATED FINANCIAL STATEMENTS OF HARITA SEATING SYSTEMS LIMITED
Notes to Financial Statements - (continued) Rs. in Lakhs 30 FINANCIAL INSTRUMENTS AND RISK MANAGEMENT - (continued) Financial instruments by category - (continued) FVTPL Amortised cost Particulars March 31, 2020 March 31, 2019 March 31, 2020 March 31, 2019 Financial liabilities Security deposits 93.06 94.21 Salary payable 6.56 22.35 Short term borrowings 2,080.72 3,167.57 Trade payables 13,525.71 20,353.54 Payable for Fixed Asset 311.63 1,107.72 Unpaid dividends 38.39 34.19 Derivatives 19.43 – Total financial liabilities – – 16,075.50 24,779.58
(i) Fair value hierarchy This section explains the judgements and estimates made in determining the fair values of the financial instruments that are (a) recognised and measured at fair value and (b) measured at amortised cost and for which fair values are disclosed in the financial statements. Financial assets and liabilities measured at fair value - recurring fair value measurements. As at 31 March 2020 Notes Level 1 Level 2 Level 3 Total Financial assets Financial Investments at FVTPL 3 151.05 121.18 272.23 Total financial assets 151.05 – 121.18 272.23
As at 31 March 2019 Notes Level 1 Level 2 Level 3 Total Financial assets Financial Investments at FVTPL: 3 – – 113.95 113.95 Total financial assets – – 113.95 113.95
Level 1: Level 1 hierarchy includes financial instruments measured using quoted prices. This includes listed equity instruments, traded bonds and mutual funds that have quoted price. The fair value of all equity instruments (including bonds) which are traded in the stock exchanges is valued using the closing price as at the reporting period. The mutual funds are valued using the closing NAV. Level 2: The fair value of financial instruments that are not traded in an active market (for example, traded bonds, over-the-counter derivatives) is determined using valuation techniques which maximise the use of observable market data and rely as little as possible on entity-specific estimates. If all significant inputs required to fair value an instrument are observable, the instrument is included in level 2.
174 CONSOLIDATED FINANCIAL STATEMENTS OF HARITA SEATING SYSTEMS LIMITED
Notes to Financial Statements - (continued) Rs. in Lakhs 30 FINANCIAL INSTRUMENTS AND RISK MANAGEMENT - (continued) Level 3: If one or more of the significant inputs is not based on observable market data, the instrument is included in level 3. This is the case for unlisted equity securities, contingent consideration and indemnification asset included in level 3. There are no transfers among the three levels during the year. The company’s policy is to recognise transfers in and transfers out of fair value hierarchy levels as at the end of the reporting period. The carrying amounts of trade receivables, trade payables, loans, deposits, advances, borrowings, cash and cash equivalents and other current financial liabilities are considered to be the same as their fair values, due to their short-term nature.
31 FINANCIAL RISK MANAGEMENT The company’s activities expose it to market risk, liquidity risk and credit risk.
(A) Credit risk Company faces credit risk from cash and cash equivalents, deposits with banks and financial institutions and unsecured trade receivables. The company doesn't face any credit risk with other financial assets.
(i) Credit risk management Credit risk on deposit is mitigated by depositing the funds in reputed bank. For trade receivables, the primary source of credit risk is that these are unsecured. The Company sells the products to customers only when the collection of trade receivables is certain and whether there has been a significant increase in the credit risk on an on-going basis is monitored throughout each reporting period. As at the balance sheet date, based on the credit assessment the historical trend of low default is expected to continue. An impairment analysis is performed at each reporting date on an individual basis for major clients. Any recoverability of receivables is provided for based on the impairment assessment.
(ii) Provision for expected credit losses for trade receivables The company provides for expected credit loss based on the following: Expected credit loss for trade receivables under simplified approach Year ended 31st March 2019: Less than 180 More than 180 Ageing Total days past due days past due Gross carrying amount 19,246.20 58.78 19,304.98 Expected loss rate – 100% – Expected credit losses – 58.78 58.78 Carrying amount of trade receivables (net of impairment) 19,246.20 – 19,246.20
175 CONSOLIDATED FINANCIAL STATEMENTS OF HARITA SEATING SYSTEMS LIMITED
Notes to Financial Statements - (continued) Rs. in Lakhs 31 FINANCIAL RISK MANAGEMENT - (continued) Year ended 31st March 2020: Less than 180 More than 180 Ageing Total days past due days past due Gross carrying amount 13,682.72 132.77 13,815.49 Expected loss rate – 100% – Expected credit losses – 132.77 132.77 Carrying amount of trade receivables (net of impairment) 13,682.72 – 13,682.72
(iii)Reconciliation of loss allowance provision – Trade receivables Particulars Amount Loss allowance as on 31st March 2018 58.78 Changes in loss allowance – Loss allowance as on 31st March 2019 58.78 Changes in loss allowance 73.99 Loss allowance as on 31st March 2020 132.77
(B) Liquidity risk Objective of liquidity risk management is to maintain sufficient cash and marketable securities and the availability of funding through an adequate amount of committed credit facilities to meet obligations when due. Management monitors rolling forecasts of the company’s liquidity position (comprising the undrawn borrowing facilities below) and cash and cash equivalents on the basis of expected cash flows. The company’s liquidity management policy involves projecting cash flows in major currencies and considering the level of liquid assets necessary to meet these, monitoring balance sheet liquidity ratios against internal requirements.
(i) Financing arrangements The company had access to the following undrawn borrowing facilities at the end of the reporting period: Floating rate 31-Mar-2020 31-Mar-2019 - Expiring within one year (bank overdraft and other facilities) 2,805.41 2,112.43 The bank overdraft facilities may be drawn at any time and may be terminated by the bank without notice. Subject to the continuance of satisfactory credit ratings, the bank loan facilities may be drawn at any time in INR and have an average maturity of 1 year.
176 CONSOLIDATED FINANCIAL STATEMENTS OF HARITA SEATING SYSTEMS LIMITED
Notes to Financial Statements - (continued) Rs. in Lakhs 31 FINANCIAL RISK MANAGEMENT - (continued) (ii) Maturities of financial liabilities The tables below analyse the company’s financial liabilities into relevant maturity groupings based on their contractual maturities for: a) all non-derivative financial liabilities, and b) net and gross settled derivative financial instruments for which the contractual maturities are es- sential for an understanding of the timing of the cash flows. The amounts disclosed in the table are the contractual undiscounted cash flows. Balances due within 12 months equal their carrying balances as the impact of discounting is not significant.
Contractual maturities of financial liabilities As at 31st March, 2020 As at 31st March, 2019 Non-derivatives Maturing within Maturing within Total Total 3 months 3 months Borrowings 2,080.72 2,080.72 3,167.57 3,167.57 Trade payables 13,525.71 13,525.71 20,353.54 20,353.54 Payable for Fixed Asset 311.63 311.63 1,107.72 1,107.72 Security deposits 93.06 93.06 94.21 94.21 Total non-derivative liabilities 16,011.12 16,011.12 24,723.04 24,723.04
(C) Market risk (i) Foreign currency risk The company activities expose it to foreign exchange risk arising from foreign currency transactions, primarily with respect to the USD,EURO and GBP. Foreign exchange risk arises from future commercial transactions and recognised assets and liabilities denominated in a currency that is not the company’s functional currency (INR). The risk is measured through a forecast of highly probable foreign currency cash flows. The company's exposure to foreign currency risk at the end of the reporting period expressed in INR, are as follows: As at 31st March, 2020 As at 31st March, 2019 Particulars USD EUR GBP USD EUR GBP Financial assets Trade receivables 942.01 176.98 15.26 1,575.00 210.18 – Exposure to foreign currency risk (assets) 942.01 176.98 15.26 1,575.00 210.18 – Financial liabilities Trade payables 128.05 34.46 – 143.31 20.28 4.10 Exposure to foreign currency risk (liabilities) 128.05 34.46 – 143.31 20.28 4.10 Net exposure to foreign currency risk 813.96 142.52 15.26 1,431.69 189.90 (4.10)
177 CONSOLIDATED FINANCIAL STATEMENTS OF HARITA SEATING SYSTEMS LIMITED
Notes to Financial Statements - (continued) Rs. in Lakhs 31 FINANCIAL RISK MANAGEMENT - (continued) Sensitivity The sensitivity of profit or loss to changes in the exchange rates arises mainly from major foreign currency denominated financial instruments Impact on Impact on Impact on profit after tax* profit after tax* profit after tax* USD sensitivity Euro sensitivity GBP sensitivity 31 March, 31 March, 31 March, 31 March, 31 March, 31 March, 2020 2019 2020 2019 2020 2019 INR/USD Increases by 5% 27.60 67.07 INR/EURO Increases by 5% 5.08 6.18 INR/GBP Increases by 5% 0.57 (0.13) INR/USD Decreases by 5% (27.60) (67.07) INR/EURO Decreases by 5% (5.08) (6.18) INR/GBP Decreases by 5% (0.57) 0.13 * Holding all other variables constant
32 FINANCIAL INSTRUMENTS AND RISK MANAGEMENT Capital management (a) Risk management The company’s objectives when managing capital are to • safeguard their ability to continue as a going concern, so that they can continue to provide returns for shareholders and benefits for other stakeholders, and • maintain an optimal capital structure to reduce the cost of capital. In order to maintain or adjust the capital structure, the Company may adjust the amount of dividends paid to shareholders, return capital to shareholders, issue new shares or sell assets to reduce debt. (b) Dividends Year ended Year ended 31.03.2020 31.03.2019 (i) Equity shares Dividend for the year ended 31st March 2020 - Nil – – (31st March 2019 Rs. 6 per fully paid share) – 466.14
33 NOTE RELATED TO TRANSITION IND AS 116 AND LEASE LIABILITY The Company has adopted Ind AS 116 'Leases' with the date of initial application being April 1, 2019. Ind AS 116 replaces Ind AS 17 – Leases. The Company has applied Ind AS 116 using the modified retrospective approach, under which the cumulative effect of initial application is recognised in retained earnings as at April 1, 2019. The comparative information in the financial statements would not be restated and would be presented based on the requirements of the previous standard i.e. Ind AS 17. In adopting Ind AS 116, the Company has applied the below practical expedients: a) The Company applied a single discount rate to a portfolio of leases with reasonably similar characteristics. b) The Company relied on its assessment of whether leases are onerous applying Ind AS 37, Provisions, Contingent Liabilities and Contingent Assets, immediately before the date of initial application as an alternative to performing an impairment review as per Ind AS 36 Impairment of assets.
178 CONSOLIDATED FINANCIAL STATEMENTS OF HARITA SEATING SYSTEMS LIMITED
Notes to Financial Statements - (continued) Rs. in Lakhs 33 NOTE RELATED TO TRANSITION IND AS 116 AND LEASE LIABILITY - (continued) c) The Company has treated the leases with remaining lease term of less than 12 months as "short term leases". d) The Company has excluded the initial direct costs from measurement of the right-of-use asset at the date of transition. e) The company used hindsight, such as in determining the lease term if the contract contains options to extend or terminate the lease. Effective 1st April 2019, the company has adopted Ind AS 116 “Leases” and applied the Standard to its leases retrospectively and has recognised the effect of the cumulative adjustment (net of taxes) of Rs.14.05 Lakhs in the opening balance of retained earnings, on the date of initial application (1st April 2019). Accordingly, comparatives for the period prior has not been restated. The adoption of the Standard has resulted in recognising “Right-of-Use Asset"" of Rs.113.74 lakhs and a corresponding “Lease Liability” of Rs.181.94 lakhs as at the date of initial application (i.e 1st April 2019). Measurement of lease liabilities The lease liabilities as at 1st April 2019 can be reconciled to the operating lease commitments as of 31st March 2019, as follows: As at / Particulars Year ended 31.03.2020 Operating lease commitments disclosed as at 31st March 2019 302.81 Weighted average incremental borrowing rate as at 1st April 2019 9.00% Discounted using the lessee’s incremental borrowing rate of at the date of initial application 181.94 Add: Lease payments relating to renewal periods not included in operating lease commitments as at 31 March 2019 – Commitments relating to short-term leases – Commitments relating to leases of low-value assets – Lease liabilities as at 1st April 2019 181.94 Lease liability recognised as at 1st April 2019: Current lease liabilities 81.07 Non-current lease liabilities 100.87 181.94 Interest Expenses 11.03 Payment towards liability (97.55) Lease liability recognised as at 31st March 2020: Current lease liabilities 47.46 Non-current lease liabilities 47.96 95.42
179 CONSOLIDATED FINANCIAL STATEMENTS OF HARITA SEATING SYSTEMS LIMITED
Notes to Financial Statements - (continued) Rs. in Lakhs
34 REVENUE FROM CONTRACTS WITH CUSTOMERS A Disaggregated revenue Revenue from contracts with customers are disaggregated into categories that depict how the nature, amount, timing and uncertainty of revenue and cash flows are affected by economic factors. The Company identifies the product lines, amongst others to indicate the factors as mentioned above. The details of revenue from contracts with customers on the basis of various product lines are as under : Particulars Year ended Year ended 31.03.2020 31.03.2019 (a) Type of goods or service (i) Sale of Products 74,365.59 97,495.92 (ii) Revenue from Services – – (iii) Sale of Scraps 241.56 354.57 74,607.15 97,850.19 (b) Timing of recognition of revenue (i) At a point in time 74,607.15 97,850.19 (ii) Over time – – 74,607.15 97,850.19 B The operations of the Company relate to only one segment viz., automotive components and tools. Thus, the information on the relationship between disaggregated revenue under Ind AS 115 and for reportable segment under Ind AS 108 is not required. C Reconciliation of contracts with customers The following schedule gives the movement of contract liabilities for the reporting period. Particulars Year ended Year ended 31.03.2020 31.03.2019
Contract liabilities at the beginning of the period 313.28 227.18 Add / (Less) : Consideration received during the year as advance 332.32 313.28 Revenue recognized from contract liability 313.28 227.18 Contract liabilities at the end of the period 332.32 313.28
Payments are received in advance towards contracts entered with customers, and is recognised as a contract liability. As and when the performance obligation is met the same is recognized as revenue. D Transaction price allocated to the remaining performance obligations The Company's contracts with customers are short term contracts with performance obligations that has an original expected duration of one year or less. Therefore, taking the practical expedient, the details on transaction price allocated to the remaining performance obligations are not disclosed.
180 CONSOLIDATED FINANCIAL STATEMENTS OF HARITA SEATING SYSTEMS LIMITED
Notes to Financial Statements - (continued) Rs. in Lakhs
34 REVENUE FROM CONTRACTS WITH CUSTOMERS - (continued)
E Reconciliation of revenue with contract price: Particulars Year ended Year ended 31.03.2020 31.03.2019 (i) Contract price 75,204.85 98,479.63 (ii) Adjustments: Discounts 597.70 629.44 (iii) Revenue from operations as per Statement of Profit and loss 74,607.15 97,850.19
F There is no impact on the retained earnings as on the date of adoption of the standard. No effect on any financial statement line item due to application of this standard and there is no requirement to disclose the same.
35 RELATED PARTY DISCLOSURE Disclosure is made as per the requirements of the standard and the same is furnished below: A) List of Related Parties where control exists Reporting entity : Harita Seating Systems Ltd Holding Company : Nil Subsidiary Company : Harita Fehrer Limited Joint venture of subsidiary company : FS Fehrer Automotive GmbH Key Management Personnel : Non-executive Independent Directors: H.Lakshmanan, S.I.Jaffar Ali, C.N.Prasad L.Bhadri, Sasikala Varadachari Non-executive Non-independent Director: Martin Grammer B) Particulars of transactions with related parties As at / As at / year ended year ended 31.03.2020 31.03.2019 (i) Purchases made from FS Fehrer Automotive GmbH - Components 1.91 – (ii) Services availed from FS Fehrer Automotive GmbH 66.16 83.94 (iii) Dividend paid to FS Fehrer Automotive GmbH – 512.50 (iv) Amount outstanding as at Balance sheet date Payable to FS Fehrer Automotive GmbH 14.88 14.88 (v) Remuneration / Sitting fees to Key Managerial Personnel 5.50 32.50
181 CONSOLIDATED FINANCIAL STATEMENTS OF HARITA SEATING SYSTEMS LIMITED
Notes to Financial Statements - (continued) Rs. in Lakhs
Year ended Year ended 31.03.2020 31.03.2019 36 EARNING PER SHARE
Profit attributable to the equity holders of the company used in calculating basic earnings per share: 1,380.09 2,879.38
No. of equity shares 77,69,040 77,69,040
Face value per share (Rs.) 10.00 10.00
Weighted average number of equity shares 77,69,040 77,69,040
Earnings per share (EPS) (Rs.) 17.76 37.06
Diluted Earnings per share (Rs.) 17.76 37.06
37 SEGMENT INFORMATION
(a) Description of segments
The Board of Directors of the Company has been identified as the chief operating decision maker (CODM). They evaluate the company performance, allocate resources based on the analysis of various performance indicators of the company as a single unit. Therefore there is no reportable segment for the company. The company is domiciled in India.
(b) Entity wide disclosures
(i) Revenue from geographical areas
The entire revenue from operation are derived from India
All non current assets are with in India.
(ii) Information about major customers
Revenues of approximately Rs.20,055 Lakhs (last year – Rs.22,574 Lakhs) are derived from a single external customer.
182 CONSOLIDATED FINANCIAL STATEMENTS OF HARITA SEATING SYSTEMS LIMITED
Notes to Financial Statements - (continued) Rs. in Lakhs As at As at 31.03.2020 31.03.2019
38 PROVISIONS, CONTINGENT LIABILITIES AND CONTINGENT ASSETS i) Provisions In respect of warranty obligations provision is made in accordance with terms of sale of seat assemblies. Provision for warranty at beginning of the year 64.74 110.46 Provided during the year 34.36 – 99.10 110.46 Provision utilised during the year 6.32 45.72 Net Provision as on Balance Sheet date 92.78 64.74 ii) Contingent liabilities not provided for Contracts remaining to be executed on capital account 332.00 113.78 iii) Liability contested and not provided for a) Income tax 596.24 620.10 b) Service tax 2.10 2.10 c) Sales tax / Value Added Tax 595.95 446.52 d) Others 28.18 28.18
39 TRADE PAYABLES INCLUDE AMOUNT DUE TO MICRO AND SMALL SCALE INDUSTRIAL UNITS 1,234.79 2,091.64 Disclosure under Micro, Small and Medium Enterprises Development Act, 2006 – – i) The principal amount and interest due thereon remaining unpaid to any supplier at the end of each accounting year: a) Principal (all are within agreed credit period and not due for payment) 1,234.79 2,091.64 b) Interest (as no amount is overdue) – – ii) The amount of interest paid by the buyer in terms of Section 16 of the Micro, Small and Medium Enterprises Development Act, 2006 along with the amount of payment made to the supplier beyond the appointed day during each accounting year. – – iii) The amount of interest due and payable for the period of delay in making payment (which have been paid but beyond the appointed day during the year) but without adding the interest specified under the Micro, Small and Medium Enterprises Development Act, 2006 – –
183 CONSOLIDATED FINANCIAL STATEMENTS OF HARITA SEATING SYSTEMS LIMITED
Notes to Financial Statements - (continued) Rs. in Lakhs Year ended Year ended 31.03.2020 31.03.2019 39 TRADE PAYABLES INCLUDE AMOUNT DUE TO MICRO AND SMALL SCALE INDUSTRIAL UNITS - (continued) iv) The amount of interest accrued and remaining unpaid at the end of each accounting year – – v) The amount of further interest remaining due and payable even in the succeeding years, until such date when the interest dues as above are actually paid to the small enterprise, for the purpose of disallowance as deductible expenditure under Section 23 of the Micro, Small and Medium Enterprises Development Act, 2006 – –
40 IND-AS-112 INTERESTS IN OTHER ENTITIES (a) Subsidiaries The group’s subsidiary as at 31 March 2020 is set out below. Unless otherwise stated, they have share capital consisting solely of equity shares that are held directly by the group, and the proportion of ownership interests held equals the voting rights held by the group. The country of incorporation or registration is also their principal place of business.
Place of Ownership interest Ownership interest held by Name of entity business / held by the group non-controlling interests Principal country of activities incorporation 31-Mar-2020 31-Mar-2019 31-Mar-2020 31-Mar-2019 Harita Fehrer Limited India 51% 51% 49% 49% Automotive
(b) Non-Controlling Interest Hartia Fehrer Limited
Summarised Balance Sheet 31-Mar-2020 31-Mar-2019
Current assets 12,014.67 13,920.55 Current liabilities 7,860.08 11,786.14 Net current assets 4,154.59 2,134.41
Non-current assets 14,179.55 14,312.74 Non-current liabilities 651.65 922.56 Net non-current assets 13,527.90 13,390.18
Net assets 17,682.49 15,524.59 Accumulated NCI 8,664.42 7,607.05
184 CONSOLIDATED FINANCIAL STATEMENTS OF HARITA SEATING SYSTEMS LIMITED
Notes to Financial Statements - (continued) Rs. in Lakhs
40 IND-AS-112 INTERESTS IN OTHER ENTITIES - (continued) Hartia Fehrer Limited
Summarised Statement of Profit and Loss 31-Mar-2020 31-Mar-2019
Revenue 43,861.82 55,022.87 Profit for the year 2,236.98 2,333.11 Other comprehensive income (20.73) 13.36 Total comprehensive income 2,216.25 2,346.47 Profit allocated to NCI 1,096.12 1,143.23 Dividends paid to NCI – 492.40
Hartia Fehrer Limited
Summarised Cash Flow Statement 31-Mar-2020 31-Mar-2019
Cash flow from operating activities 1,795.60 6,517.18 Cash flow from investing activities (1,302.26) (4,402.83) Cash flow from financing activities (282.35) (1,344.03) Net increase / (decrease) in cash and cash equivalents 210.99 770.32
Year ended Year ended 31.03.2020 31.03.2019 41 EXPENDITURE INCURRED ON CORPORATE SOCIAL RESPONSIBILITY ACTIVITIES a) Gross amount to be spent by the company during the year 122.06 106.79 b) Amount spent during the year in cash i) Construction / Acquisition of asset – – ii) On purposes other than above 130.00 108.00
185 CONSOLIDATED FINANCIAL STATEMENTS OF HARITA SEATING SYSTEMS LIMITED
Notes to Financial Statements - (continued) Rs. in Lakhs Year ended Year ended 31.03.2020 31.03.2019 42 RESEARCH AND DEVELOPMENT EXPENDITURE INCURRED AND CLAIM UNDER INCOME TAX ACT 1961 a) Revenue expenditure Salary and wages 636.01 650.70 Power – 19.91 Foreign and inland travel 48.11 76.36 Design and testing charges 295.41 68.69 Proto tools, fixtures & Moulds 27.08 54.02 AMC Charges 53.96 60.93 Product & Process Development Expenses 54.38 10.79 Sample, Machinery Spare and Other Expenses 31.43 93.79 Admin and other expenses 1.48 2.84 1,147.86 1,038.03
b) Capital expenditure Plant and Machinery, Workstations, Laptops 243.50 20.61 243.50 20.61
43 GOVERNMENT GRANTS During the financial year under review the Company has received and recognised following government grants:-
a) Duty drawback on exports 109.07 109.57
b) Merchandise Exports from India Scheme (MEIS) benefits on exports 202.57 314.09
c) Pradhan Mantri Rojgar Protsahan Yojana (PMRPY) scheme benefits (the amount is credited to PF Employer Contribution) 2.91 16.51
d) Board of Apprenticeship Training (BOAT) 7.68 75.50
e) EPCG (Export Promotion Capital Goods) Scheme – 2.86
322.23 518.53
186 CONSOLIDATED FINANCIAL STATEMENTS OF HARITA SEATING SYSTEMS LIMITED
Notes to Financial Statements - (continued)
44 COVID 19 The Manufacturing facilities and all offices of the Company were closed on March 23, 2020 following the countrywide lockdown due to COVID 19. The Company has since obtained required permissions and restarted its manufacturing facilities and all offices partially. Based on assessment of the impact of COVID 19 on the operations of the Company and ongoing discussions with customers, vendors and service providers, the Company is confident of obtaining regular supply of raw materials and components, resum- ing supply chain logistics and serving customers. The Company has considered the possible effects of COVID 19 on the carrying amounts of Property, Plant and Equipment, Investments, Inventories, Trade Receivable and Other Current Assets. In develop- ing the assumptions relating to the possible future uncertainties in the economic conditions because of this pandemic, the company, as at the date of approval of the financial results, has used external and internal sources of information / indicators to estimate the future performance of the Company. Based on current estimates, the Company expects the carrying amount of these assets to be recovered. The impact of the COVID 19 on the Company's financial results may differ from that estimated as at the date of approval of these results.
45 Previous year's figures have been regrouped wherever necessary to conform to the Current year's classification.
for and on Behalf of Board of Directors In terms of our Reports Attached
H LAKSHMANAN A G GIRIDHARAN For RAGHAVAN, CHAUDHURI & NARAYANAN Chairman Chief Executive Officer Chartered Accountants F.R. No: 007761S K SUBRAMANIAN N ISWARYA LAKSHMI V SATHYANARAYANAN Chief Financial Officer Company Secretary Partner Place : Chennai Membership No. 027716 Date : 19th June, 2020
187 CONSOLIDATED FINANCIAL STATEMENTS OF HARITA SEATING SYSTEMS LIMITED
Annexure Form AOC - 1 Statement containing salient features of the financial statement of subsidiary (Pursuant to first proviso to sub-section (3) of Section 129 read with rule 5 of Companies (Accounts) Rules, 2014)
Part "A": Subsidiary (Rs. in lakhs) S. No Particulars Indian Subsidiary Harita Fehrer Limited 1 Share capital 2,009.80 2 Reserves & Surplus 15,672.69 3 Total assets 26,194.22 4 Total Liabilities 26,194.22 5 Investments 206.67 6 Turnover including other income 44,683.73 7 Profit before taxation 2,528.95 8 Provision for taxation 291.97 9 Profit after taxation 2,236.98 10 Proposed Dividend – 11 % of shareholding 51 Notes: 1. Subsidiaries which are yet to commence operations - Nil. 2. Subsidiaries which have been liquidated or sold during the year - Nil.
Part "B": Associates and Joint Ventures - NIL
for and on Behalf of Board of Directors In terms of our Reports Attached H LAKSHMANAN A G GIRIDHARAN For RAGHAVAN, CHAUDHURI & NARAYANAN Chairman Chief Executive Officer Chartered Accountants F.R. No: 007761S K SUBRAMANIAN N ISWARYA LAKSHMI V SATHYANARAYANAN Chief Financial Officer Company Secretary Partner Place : Chennai Membership No. 027716 Date : 19th June, 2020
188