harita seating systems limited report 2018...3 harita seating systems limited notice of annual...

HARITA SEATING SYSTEMS LIMITEDRegistered Office

“Jayalakshmi Estates”, 29, Haddows Road, Chennai - 600 006, Tamil Nadu, IndiaTel. : 044-28272233 Fax : 044-28257121

CIN : L27209TN1996PLC035293E-mail : [email protected] | Website : www.haritaseating.com Pr

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HARITA SEATING SYSTEMS LIMITED23rd Annual Report 2018-2019

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HARITA SEATING SYSTEMS LIMITED

Contents Page No.

Financial highlights 2

Notice of Annual General Meeting 3

Directors’ Report to the shareholders 8

Standalone Financial Statements 59

Consolidated Financial Statements 105

Registered Office“Jayalakshmi Estates”, 29, Haddows Road,Chennai - 600 006, Tamil Nadu, IndiaTel. : 044-2827 2233CIN : L27209TN1996PLC035293E-mail : [email protected]

Website: www.haritaseating.com

Plant Locations1. Belagondapalli, Thally Road,

Hosur - 635 114, Tamil Nadu, IndiaTel. : 04347-233445

2. Plot A2 MIDC Industrial areaRanjangaon, Koregaon village, Shirur taluk,Pune - 412210, Maharashtra, IndiaTel. : 02138-610700

3. Plot No.553-D, 2nd

Stage,Belur Industrial Area,Dharwad - 580 011, Karnataka, IndiaTel. : 0836 2486625

4. Plot No.35, Sector 4,Integrated Industrial Estate, Pantnagar,Rudrapur, Udham Singh Nagar District,Uttarakhand - 263 153, IndiaTel. : 5944 250889

5. Survey No.29, 30, 31,Vellanthangal Village,No.55,Thandalam Group,Irrungattukottai, Sriperumpudur - 602 105Tamil Nadu, India.Tel : 044-67121380/381

6. 39/2, Gram, Sonwai - Ner Sti,Rau Pithampur Road, Tehsil Mhow,District Road, Indore,Madhya Pradesh - 453 441

Subsidiary companyHarita Fehrer Limited, Chennai

Board of DirectorsH Lakshmanan, ChairmanS I Jaffar AliMartin GrammerC N PrasadL BhadriSasikala VaradachariAudit Committee, Stakeholders’ RelationshipCommittee and Corporate Social ResponsibilityCommitteeH Lakshmanan, ChairmanS I Jaffar AliC N PrasadNomination and Remuneration CommitteeC N Prasad, ChairmanH LakshmananS I Jaffar AliChief Executive OfficerA G GiridharanChief Financial OfficerS JagannathanCompany SecretaryN Iswarya LakshmiBankersState Bank of IndiaCorporate Accounts Group Branch18/3, Sigapi Achi Building,3rd Floor, Rukmani Lakshmipathi Road,Egmore, Chennai-600008, Tamil Nadu, India.Statutory AuditorsRaghavan, Chaudhuri & NarayananChartered Accountants,No. 17/12, II Floor, Casa CapitolWood Street, Ashok Nagar, Bengaluru 560 025.Tel.: 080-2556 7578 / 2551 4771E-mail: [email protected] AuditorB ChandraPractising Company SecretaryAG 3, Ragamalika,No. 26, Kumaran Colony Main Road,Vadapalani, Chennai-600 026, Tamil Nadu, India.Tel.: 044-2362 0157E-mail: [email protected] listed withNational Stock Exchange of India Ltd., MumbaiShare Transfer AgentSundaram-Clayton Limited"Jayalakshmi Estates", 1st Floor,29, Haddows Road,Chennai - 600 006 Tamil Nadu, India.Tel. : 044 - 2828 4959E-mail : [email protected]

[email protected]

Harita Seating Systems 23.05.2019 Page 1 to 65.p65 7/17/2019, 11:15 AM1

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Financial Highlights

Details 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

Statement of Profit & LossSales 22356.35 24,078.27 30,664.18 27,616.68 25,012.53 27,375.54 30,781.08 37,717.38 44,428.13 47,759.52Other income 893.51 153.53 225.85 226.18 341.86 643.71 973.75 1,061.75 1,041.95 1,342.71Total income 23249.86 24,231.80 30,890.03 27,842.86 25,354.39 28,019.25 31,754.83 38,779.13 45,470.08 49,102.23Gross profit before interest, depreciation & tax 1487.56 594.85 2,516.04 2,295.52 1,558.39 1,692.60 3,432.33 3,660.39 4,748.42 4,022.15Depreciation 883.52 431.66 434.38 422.14 463.24 407.78 438.76 515.42 719.13 938.54Profit / (Loss) before interest & tax 604.04 163.19 2,081.66 1,873.38 1,095.15 1,284.82 2,993.57 3,144.97 4,029.29 3,083.61Interest 704.44 747.29 663.70 559.36 505.92 470.99 147.95 44.01 111.17 178.37Profit / (Loss) before taxation (100.40) (584.10) 1,417.96 1,314.02 589.23 813.83 2,845.62 3,100.96 3,918.12 2,905.24Profit / (Loss) after taxation 8.81 (509.99) 1,122.01 1,067.15 465.72 709.27 2,531.71 2,454.19 3,079.87 2,202.00

Balance SheetNet fixed assets 4705.11 4,652.63 3,577.92 4,101.30 4,072.18 4,031.81 3,470.03 4,562.47 5,775.76 10,829.16Investment 2988.76 2,759.00 2,759.00 2,857.03 2,857.03 2,857.03 2,857.03 2,819.50 2,817.32 2,817.32Net current assets 900.36 1,064.00 2,374.75 2,041.49 2,983.28 1,709.84 935.43 2,788.15 4,692.63 3,176.42Total 8594.23 8,475.63 8,711.67 8,999.82 9,912.49 8,598.68 7,262.49 10,170.12 13,285.71 16,822.90Share capital 776.90 776.90 776.90 776.90 776.90 776.90 776.90 776.90 776.90 776.90Reserves & Surplus 2072.98 1,561.79 2,407.25 3,250.84 3,600.02 4,061.93 6,109.38 8,172.04 10,792.21 12,616.96Net worth 2849.88 2,338.69 3,184.15 4,027.74 4,376.92 4,838.83 6,886.28 8,948.94 11,569.11 13,393.86Loan funds 5422.27 5,888.97 5,282.64 4,757.69 5,313.67 3,568.26 477.14 1,130.61 1,688.75 3,167.57Deferred tax liability 322.08 247.97 244.88 214.39 221.90 191.59 (100.93) 90.57 27.85 261.47Total 8594.23 8,475.63 8,711.67 8,999.82 9,912.49 8,598.68 7,262.49 10,170.12 13,285.71 16,822.90Earnings per share (Rs.) 0.11 (6.56) 14.44 13.74 5.99 9.13 32.59 31.59 39.64 28.34

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.) 36.68 30.10 40.99 51.84 56.34 62.28 88.64 115.19 148.91 172.40

Return on capital employed %(ROCE)* 7.31 1.92 25.88 22.40 11.51 15.71 47.22 34.76 33.72 19.70

Return on networth % (RONW)** 0.31 (19.66) 40.63 29.59 11.08 15.39 43.18 31.00 30.02 17.64

Fixed asset turnover (No. of times) # 3.52 5.15 7.45 7.19 6.12 6.76 8.21 9.39 8.59 5.75

Working capital turnover (No. of times) @ 7.31 24.52 17.83 12.51 9.96 11.67 23.27 20.26 11.88 12.14

Gross profit as % of total income 6.40 2.45 8.15 8.24 6.15 6.04 10.81 9.44 10.44 8.19

Profit/(Loss) before tax as % of total income (0.43) (2.41) 4.59 4.72 2.32 2.90 8.96 8.00 8.62 5.92

Notes:* ROCE is profit before interest and taxation divided by average networth plus loan funds.** RONW is profit after tax divided by average networth.# Fixed assets turnover is sales divided by average net fixed assets as at the end of the year.@ Working capital turnover is sales divided by average net current assets as at the end of the year.

Rs. in lakhs


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NOTICE OF ANNUAL GENERAL MEETINGNOTICE is hereby given that the 23rd AnnualGeneral Meeting of the Company (AGM) will be heldon Tuesday, the 13th August 2019 at 10.35 a.m. atKasturi Srinivasan Hall (Mini Hall) 'The MusicAcademy', New No. 168 (Old No. 306) T.T.K. Road,Royapettah, Chennai 600 014 to transact thefollowing business:

ORDINARY BUSINESS1. To consider passing the following resolution as

an ordinary resolution:RESOLVED THAT the standalone andconsolidated audited financial statements forthe year ended 31st March 2019, together withthe Directors' Report and the Auditors' Reportthereon as circulated to the Members andpresented to the meeting be and are herebyapproved and adopted.

2. To consider passing the following resolution asan ordinary resolution:RESOLVED THAT Mr Martin Grammer (holdingDIN 00061786), Director, who retires by rotationand being eligible offers himself for re-appointment, be and is hereby re-appointed asa Director of the Company.

By order of the Board of Directors

Chennai N Iswarya Lakshmi8th May 2019 Company SecretaryRegistered Office:"Jayalakshmi Estates"29, Haddows RoadChennai - 600 006Proxy:1) A Member entitled to attend and vote at the

meeting is entitled to appoint one or moreProxies to attend and vote instead of himselfand the Proxy or Proxies so appointed neednot be a Member or Members, as the casemay be, of the Company. The instrumentappointing the Proxy and the power ofattorney or other authority, if any, underwhich it is signed or a notarially certifiedcopy of that power of attorney or other

authority shall be deposited at the registeredoffice of the Company, not later than 48hours before the time fixed for holding themeeting.A person shall not act as a Proxy for morethan 50 Members and holding in aggregatenot more than ten percent of the total votingshare capital of the Company. However, asingle person may act as a Proxy for aMember holding more than ten percent ofthe total voting share capital of the Companyprovided that such person shall not act as aProxy for any other person.

2. During the period beginning 24 hours beforethe time fixed for commencement of AGM andending with the conclusion of the AGM, aMember is entitled to inspect the proxies lodged,at any time during the business hours of theCompany.

Unclaimed Dividend3. In terms of Section 124 of the Companies Act,

2013 (the Act, 2013) the dividend declared bythe Company, for earlier years, which remainunclaimed for a period of seven years will betransferred on due dates to the InvestorEducation and Protection Fund (IEPF),established by the Central Government.The particulars of due dates for transfer of suchunclaimed dividends to IEPF are furnished inthe Report on Corporate Governance, formingpart of the Annual Report.

4. Members who have not encashed their dividendwarrants in respect of the above period arerequested to make their claim(s) bysurrendering the un-encashed warrantsimmediately to the Company.Pursuant to The Investor Education andProtection Fund Authority (Accounting, Audit,Transfer and Refund) Rules, 2016, theCompany is providing / hosting the requireddetails of unclaimed amount referred to underSection 124 of the Act, 2013 on its website andalso on the website of the Ministry of CorporateAffairs (MCA) viz., www.iepf.gov.in.

General5. With a view to serving the Members better and

for administrative convenience, Members who


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hold shares in identical names and in the sameorder of names in more than one folio arerequested to write to the Company toconsolidate their holdings in one folio.

6. A Corporate Member, intending to send itsauthorised representative to attend the meetingin terms of Section 113 of the Act, 2013 isrequested to send to the Company a certifiedcopy of the Board Resolution / Power ofAttorney authorizing such representative toattend and vote on its behalf at the meeting.

7. Members may also note that the Notice ofAGM and the Annual Report will alsobe available on the Company's website viz.,www.haritaseating.com for their download. Thephysical copies of the aforesaid documentsincluding annexures along with Notice will alsobe available at the Company's Registered Officefor inspection during 10.00 a.m. to 12.00 Noonon all working days, from 6th July 2019 till thedate of AGM.

8. As a measure of economy, copies of the AnnualReport will not be distributed at the venue ofAGM. Members are, therefore, requested tobring their copies of the Annual Report to themeeting.

9. Members are requested to affix their signaturesat the space provided in the Attendance Slipannexed to Proxy Form. Members / Proxies /Authorised Representatives are requested tobring the Attendance Slips duly filled in forattending the meeting. Members are requestedto write their Folio Number in the AttendanceSlip for attending the meeting and handover theSlip at the entrance of the meeting hall.

Members holding shares in electronic form10. The Securities and Exchange Board of India

(SEBI) has mandated the submission ofPermanent Account Number (PAN) by everyparticipant in securities market. Members arerequested to submit their PAN to the DepositoryParticipant(s) (DP) with whom they aremaintaining their demat accounts.

11. Members are requested to intimate all changespertaining to their bank details such as bankaccount number, name of the bank and branchdetails, MICR code and IFSC Code, Mandates,Nominations, Power of Attorney, Change ofAddress / Name / e-mail Address / ContactNumbers, etc., to their DP.

12. The Company will not entertain any directrequest from such Members for deletion orchange of such bank details. Instructions, if any,already given by Members in respect of sharesheld in physical form will not be automaticallyapplicable to the dividend paid on shares inelectronic form.

13. Electronic copy of the Annual Report and theNotice of the AGM inter-alia indicating theprocess and manner of e-Voting alongwithAttendance Slip and Proxy Form are being sentto all the Members whose e-mail IDs areregistered with the Company / DPs forcommunication purposes, unless any Memberhas requested for a hard copy of the same.

14. Even after registering for e-communication,Members are entitled to receive suchcommunication in physical form, uponmaking a request for the same, by post,free of cost. For any communication, theMembers may also send their requests [email protected].

Members holding shares in physical form15. Members can submit their PAN details to the

Company / Share Transfer Agent (STA).16. Members are requested to intimate all changes

pertaining to their bank details such as bankaccount number, name of the bank and branchdetails, MICR code and IFSC code, Mandates,Nomination as per Section 72 of the Act, 2013by filling Form SH-13, Power of Attorney,Change of Address / Name / e-mail Address /Contact Numbers, etc., with the Company /STA. Blank forms (SH-13) will be supplied onrequest.


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17. Members holding shares in physical form, intheir own interest, are requested todematerialize the shares to avail the benefitsof electronic holding / trading.For members who have not registered their e-mail address, physical copies of Annual Reportand the Notice of the AGM inter-alia indicatingthe process and manner of e-Voting alongwithAttendance Slip and Proxy Form are being sentin the permitted mode.

Voting18. The business set out in the Notice will be

transacted through electronic voting system andthe Company is providing facility for voting byelectronic means.The Members may cast their votes using anelectronic voting system from a place other thanthe venue of the meeting ('remote e-Voting').

19. The facility for voting through Ballot Papers shallbe made available at the venue of AGM andthe Members attending the AGM who have notcast their vote by remote e-Voting shall be ableto vote at AGM.

20. In case of joint holders attending AGM, theMember whose name appears as the firstholder in the order of names as per the Registerof Members of the Company will be entitled tovote.

21. In terms of Section 108 of the Act, 2013 readwith Rule 20 of the Companies (Managementand Administration) Rules, 2014, as amended('the Rules') and Regulation 44 of Securities andExchange Board of India (Listing Obligationsand Disclosure Requirements) Regulations2015 (Listing Regulations), the Company hasprovided facility to exercise votes throughelectronic voting system to Members holdingshares as on 6th August 2019 being the "Cut-off Date"("Cut-Off" for the purpose of Rule20(4)(vii) of the Rules) fixed for determiningvoting rights of Members entitled to participatein the remote e-Voting process through theplatform provided by NSDL viz.,www.evoting.nsdl.com.

The voting rights of the Members / beneficialowners will be reckoned on the Equity Sharesheld by them as on the Cut-off Date. Membersas on the cut-off date only shall be entitled toavail the facility of remote e-Voting or Ballotpaper.

The instructions for remote e-Voting are asunder:

(A) For members - who receive Notice of AGMthrough e-mail:

(i) Launch internet browser -www.evoting.nsdl.com;

(ii) Enter the login credentials, i.e., User ID andPassword mentioned in your e-mail.However, if you have already registeredwith NSDL for e-Voting, you can use yourexisting User ID and Password for castingyour votes;

(iii) Initial Password is provided in the body ofthe e-mail;

(iv) After entering the details appropriately, clickon LOGIN;

(v) You will reach the Password Change menuwherein you are required to mandatorilychange your Password. The new Passwordshall comprise of minimum 8 characters withat least one upper case (A-Z), one lowercase (a-z), one numeric value (0-9) and aspecial character (@,#,$ etc). It is stronglyrecommended not to share your Passwordwith any other person and take utmost careto keep your Password confidential;

(vi) You need to login again with the newcredentials;

(vii) On successful login, the system will promptyou to select the EVEN, i.e Harita SeatingSystems Limited;

(viii)On the voting page, the number of shares(which represents the number of votes) asheld by the Member as on the Cut-off datewill appear. If you desire to cast all the votes


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assenting / dissenting to the resolutions,then enter all the number of shares and click"FOR"/ "AGAINST", as the case may be orpartially in "FOR" and partially in"AGAINST", but the total number in "FOR /AGAINST" taken together should notexceed your total shareholding as on the'Cut-off date'. You may also choose theoption "ABSTAIN" and the shares held willnot be counted under either head;

(ix) Members holding multiple folios / demataccounts shall choose the voting processseparately for each folio / demat account;

(x) Cast your votes by selecting an appropriateoption and click on "SUBMIT". Aconfirmation box will be displayed. Click 'OK'to confirm or 'CANCEL' to modify. Once youconfirm, you will not be allowed to modifyyour vote subsequently. During the votingperiod, you can login multiple times till youhave confirmed that you have voted on theresolutions;

(xi) Corporate / Institutional Members arerequired to send scanned copy (PDF/JPGFormat) of the relevant Board Resolution/ Authority letter etc. together with attestedspecimen signature of the duly authorisedsignatory(ies) who are authorised to vote,to the Scrutinizer through e-mail [email protected], with a copy markedto [email protected];

(xii) Members can cast their vote online from10th August 2019 (Saturday) (9 a.m.) till 12th

August 2019 (Monday) (5 p.m.) throughremote e-Voting, thereafter the remote e-Voting module will be disabled by NSDLfor voting and hence e-Voting will not beallowed after the aforesaid date and time.Only Members as on the Cut-Off date,attending the AGM who have not cast theirvote by remote e-Voting will be able toexercise their voting right at the AGMthrough ballot paper.The Members who have cast their vote byremote e-Voting prior to the AGM may also

attend the AGM but will not be entitled tocast their vote again;A person who is not a Member as on theCut Off date should treat this Notice forinformation purposes only; and

(xiii) In case of any query, the Member may referto the Frequently Asked Questions (FAQs)and remote e-Voting user manual forMembers available at the downloadsSection of www.evoting.nsdl.com or call ontoll free no.: 1800-222-990.

(B) For Members who receive the Notice ofAGM in physical form:

(i) Initial Password is provided as below / atthe bottom of the Attendance Slip for theAGM.

EVEN (remote e-Voting USER ID PASSWORD /Event Number) PIN

(ii) Please follow steps from Sl. No. (ii) to (xiii)under heading (A) above to vote throughe-Voting platform.

(C) General Instructions:(i) The Notice of AGM is being sent (by e-mail

where e-mail ID is available and in physicalform in other cases) to the Membersholding shares of the Company as on 6th

July 2019;Where Notice is sent by e-mail, User IDand Password are sent in the e-mail itself.Where Notice is sent in physical form, UserID and Password are printed at the bottomof the Attendance Slip for the AGM sentalongwith the Notice;Shareholders who become Members of theCompany, after despatch of Notice andhold shares as on 6th August 2019 mayobtain the User ID and Password fore-Voting by sending an e-mail, intimatingDP ID and Client ID / Folio No. [email protected] or Member may send ane-mail request to [email protected] or can


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vote through Ballot Paper distributed at thevenue of AGM;

(ii) M/s B. Chandra & Associates, CompanySecretaries (Firm No. P2017TN065700),Chennai has been appointed by the Boardof Directors as Scrutinizer for conductingthe remote e-Voting process and votingthrough Ballot Papers at the AGM, in a fairand transparent manner;

(iii) The Scrutinizer shall, immediately after theconclusion of the voting at AGM, first countthe votes cast at the meeting, thereafterunlock the votes through remote e-Votingin the presence of atleast two witnesses,not in employment of the Company andmake, within 48 hours from the conclusionof AGM, a consolidated Scrutinizer's reportof the total votes cast in favour or against,if any, to the Chairman of the Company orany other Director, who shall countersignthe same; and

(iv) The Scrutinizer will submit their report tothe Chairman, or any other Director of theCompany, who will declare the resultof the voting. The results declaredalongwith the Scrutinizer's report will beplaced on the Company's websitewww.haritaseating.com & on the websiteof NSDL www.evoting.nsdl.com and shallalso be communicated to the StockExchange. All the resolutions, subject toreceipt of requisite number of votes, shallbe deemed to be passed at the AGMscheduled to be held on 13th August 2019.

22. Route-map to the venue of AGM is provided inthe Attendance Slip;

23. Any query relating to financial statements mustbe sent to the Company's Registered Officeatleast 7 days before the date of AGM;

24. In accordance with the provisions of Article 132of the Articles of Association of the Company,Mr Martin Grammer will retire by rotation atAGM and being eligible, offer himself for re-appointment; and

25. In terms of the Regulation 36(3) of the ListingRegulations, read with Secretarial Standards

on General Meeting, brief profile of the Director,who is proposed to be re-appointed / appointedin this AGM, nature of his expertise in specificfunctional areas, other Directorships andCommittee Memberships, his shareholding andrelationship with other Directors of the Companyare given below:

I. Mr Martin GrammerBorn on 5th June, 1960 in Amberg, Germany,Mr Martin Grammer holds a degree in BusinessEconomics from University Nuremberg,Germany. He was co-opted as a Director on21st January 2004.He has vast experience in internationalmarketing and consultancy areas. He hasserved in internationally renowned companieswhich include Magna International Inc., Toronto,Canada, a leading supplier to the globalautomotive industry and Roland Berger &Partner, a leading international managementconsultant in Germany and Europe.He held the position as Managing Director andMember of Executive Committee Board ofGrammer AG, Germany for ten years, a leadingsupplier to the global automotive industry.During 2003 - 2008, he served as a Member ofthe Board of Directors of GHE S.P.A, Milano,Italy, a leading supplier of European bus andtrain interiors industry with manufacturinglocations in Italy, Germany, Spain, UK, CzechRepublic and Mexico.He does not hold position as a Director in anyother Indian Company or a Member of anycommittee of Directors of any other Companyand he is not related to any Director of theCompany.He has attended four board meetings heldduring the year 2018-19. He holds 10,87,600equity shares of the Company.

By order of the Board

Chennai N Iswarya Lakshmi8th May 2019 Company Secretary


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DIRECTORS’ REPORT TO THE SHAREHOLDERS

The Directors have pleasure in presenting the twentythird annual report and the audited accounts for theyear ended 31st March 2019.

1. FINANCIAL HIGHLIGHTS($ in lakhs)

ParticularsYear ended Year ended

31.3.2019 31.3.2018

Sales and other income 49,102.23 45,470.08

Profit before financialcosts, depreciation andamortization expenses 4,022.15 4,748.42

Less : Finance costs 178.37 111.17

Depreciation 938.54 719.13

Profit before tax 2,905.24 3,918.12

Less : Provision for:

Income tax 538.01 740.34

Deferred tax 185.86 (66.12)

Tax relating toearlier years (20.63) 164.03

Profit after tax 2,202.00 3079.87

Other ComprehensiveIncome 88.92 6.42

Total Comprehensiveincome for the year 2,290.92 3,086.29

Appropriations:

First interim Dividend paid 233.07 155.38

Second interimDividend paid 233.07 310.76

Balance carried toBalance Sheet 1,824.78 2,620.15

Total 2,290.92 3,086.29

2. DIVIDEND

The Board of Directors of the Company (theBoard) at its meeting held on 6th February 2019,declared a first interim dividend of $ 3.00 pershare (30%) for the year 2018-19 absorbing a

sum of $ 2.33 cr. The same was paid to theshareholders on 19th February 2019.

The Board at its meeting held on 26th March 2019declared a second interim dividend of $ 3.00 pershare (30%) for the year 2018-19 absorbing asum of $ 2.33 cr. The same was paid to theshareholders on 8th April 2019.

Thus, the total amount of both dividends for theyear ended 31st March 2019 aggregated to$ 6.00 per share (60%) thereby absorbing a sumof $ 4.66 cr on 77,69,040 equity shares of facevalue of $ 10/- each.

The Company has set-off its dividend distributiontax payable under Section 115-O(1A) of theIncome Tax Act, 1961 against the dividenddistribution tax paid by its subsidiary Companyviz., Harita Fehrer Limited on its dividenddeclared.The board does not recommend any furtherdividend for the year under consideration.

3. SCHEME OF ARRANGEMENTThe Board at their meeting held on 14th February2019 approved a draft Composite Scheme ofAmalgamation amongst Harita Limited("Transferor Company 1"), Harita Venu PrivateLimited ("Transferor Company 2"), HaritaCheema Private Limited ("Transferor Company3"), Harita Financial Services Limited("Transferor Company 4"), Harita SeatingSystems Limited ("Transferor Company 5") andMinda Industries Limited ("TransfereeCompany") and their respective shareholders("Scheme").The aforesaid Scheme under Section 230 to 232of the Companies Act, 2013, inter-alia, providesfor the following:(i) Amalgamation of the Transferor Company

1, Transferor Company 2, TransferorCompany 3 and Transferor Company 4(collectively referred as "TransferorCompanies") with the Transferee Company;and


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(ii) Amalgamation of the Transferor Company5 with the Transferee Company.

In consideration for amalgamation, theshareholders of the Transferor Companies andthe Transferor Company 5 (at the optionexercised by the shareholder) shall receiveequity shares or non-convertible redeemablepreference shares of the Transferee Companyfor the proposed Scheme.The Scheme is subject to necessary statutoryand regulatory approvals under applicable lawsand the approval of the shareholders, creditorsand others.The "Appointed Date" for the Scheme, ifapproved will be 1st April 2019.

4. MANAGEMENT DISCUSSION AND ANALYSISREPORTThe Company provides complete seatingsolutions for driver and cabin seating forcommercial vehicles, tractors and constructionequipment, as well as passenger seats for busesacross all segments and has established itselfas a leader in these segments in the country.

INDUSTRY STRUCTURE AND DEVELOPMENTSIn 2018-19, the economy grew by 6.8% (revisedseries) as against 6.9% (revised series) previousyear.The following table highlights the segmentwise industry sales in vehicle units for the year2018-19.

Category 2018-19 2017-18 Variance(in Nos) (in Nos) (in %)

Medium andHeavy CommercialVehicles (M & H CV) 4,39,164 3,84,408 14.2Light CommercialVehicles (LCV) 6,67,883 5,69,010 17.4Buses - M & H CV 47,707 47,827 (0.3)Tractors 8,93,495 7,90,673 13.0

[ Source: SIAM, CRISIL, internal estimates]

The Company registered sales at $ 477.60 Cr in2018-19 as against $ 444.28 Cr in 2017-18. Duringthe year, efficiency in supply chain was improvedthrough inter-plant coordination, horizontaldeployment of lean and other improvementinitiatives across all plants.

These initiatives, along with the implementationof various other cost reduction projects acrossfunctions have enabled the Company to post aprofit before tax of $ 29.05 Cr in 2018-19.

OPPORTUNITIES AND THREATSThe Company has initiated new productdevelopment activities to maintain the leadershipposition in the tractor segment in the domesticmarket and grow the export market. TheCompany continues to strengthen its position inexport markets and has won significant neworders from overseas customer. The supplies arescheduled in 2019-20. The Company also hasdeveloped high end pneumatic and mechanicalsuspension seats as platform product offerings.It continues to actively seek orders from globalOEMs in the current year. As a leader in the buspassenger seats with a wide range of seats, theCompany has further strengthened its positionwith new product launches in North India. Themarket has well responded to these new launchesand the Company is gaining market share in thisregion.

A significant competitive threat is the entry ofoverseas manufacturers and the Indian bus bodybuilders getting into seat manufacturing. TheCompany continues to invest in strengthening thedesign and testing capabilities to retain the marketleadership status.

The Company aims to take advantage of thegrowing Tractor industry by offering platformproducts to leading tractor OEMs and therebylooks forward to win a large share of domesticsales. With respect to the CV OEMs, theCompany is taking steps to retain the sales growth


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by expanding customer base and increasingshare of business in existing domestic customers.

PRODUCT-WISE PERFORMANCEDuring the year, the Company posted a growthof 9% in overall sales. The Company's salesgrew in the commercial vehicle segment and inthe bus passenger seats better than the marketgrowth. Export sales grew by 15% in currentproducts and new products customers. In thecase of domestic tractor segment, the Companycatered to the existing base of customers andexperienced 9% growth. The Companypositively looks forward to improve new productdevelopment lead time and effectively establishgrowth in domestic tractor market in 2019-20.

AWARDS & RECOGNITIONThe Company received the award for "Supplierof the Year" from TAFE during the year. Further,the Company performance was recognised byJohn Deere with an award of "Partner" levelrecognition at their Global Vendor Conference.

BUSINESS OUTLOOK AND OVERVIEWIndian economy is expected to grow at 6.5%-7.1%in 2019-20. The M&HCV segment is expected togrow at 6% and LCV >3.5T segment at 7%. Bussegment is also expected to grow at 4% andtractor segment at 2% in 2019-20 (based onSIAM, CRISIL and internal estimates).

RISKS AND CONCERNSThe Indian commercial vehicle industry hasstrong correlation with the agricultural growth,infrastructure development and the miningindustry and is cyclical. The Company'spresence across the segments of auto industrywill largely mitigate the segment specific risks.

The Company plans to develop additionalproducts to maintain its growth plans. TheCompany has also put in place initiatives toimprove product quality to support the growthplans.

The Rupee has depreciated sharply in the lastyear against the US dollar. There may not be amajor change in 2019-20, nor any furtherdepreciation. The Company will continue to takesuitable forex cover to mitigate the risk in foreignexchange fluctuations.

RISK MANAGEMENT POLICYThe Board has established a Risk MinimizationPolicy which formalizes the Company'sapproach to overview and manage materialbusiness risks. The policy is implementedthrough a top down and bottom up approachidentifying, assessing, monitoring and managingkey risks across the Company's business units.

Risks and effectiveness of their management areinternally reviewed and reported regularly to theBoard. The management has reported to the Boardthat the Company's risk management and internalcompliance and control systems are operatingefficiently and effectively in all material respects.

The Board is satisfied that there are adequatesystems and procedures in place to identify,assess, monitor and manage risks. The AuditCommittee also reviews reports by Members ofthe management team and recommendssuitable action. Risk Minimization Policy hasbeen approved by the Board.

OPERATIONS REVIEWa. Manufacturing:

The Company has continued its focus onhaving best manufacturing processes andfacilities. It has also imparted training to keyemployees in an effort to reskill people andupgrade the manufacturing processes, apartfrom improvements in the facility by meansof automation. Further improvements of LeanManufacturing / Flow Management initiativeswill help the Company in containingmanufacturing costs.The Company's initiatives to introduce newrefresh ideas in existing products was wellreceived by leading customers both in OEMand aftermarket segment.


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b. Quality:

The Company continues to take steps toimprove further the quality of its products.The Final Product Audit (FPA) initiative takenby the Company has brought appreciationfrom customers. The quality system at thefactories aims at achieving total customersatisfaction through its focus on improvingproduct quality. Consistently, the Companyhas been achieving improved Quality levelsat the customer-end, both in their line andwarranty quality.

The Company's plants are certified for IATF16949. In addition, the Quality laboratory aswell as the R&D test facility at the Companyis certified by National Accreditation Boardfor Testing and Calibration Laboratories(NABL) for conformance to ISO/IEC 17025.

100% employee participation in theCompany's improvement programmes likesuggestion schemes, quality control circleprojects, supervisory improvement teamprojects, cross functional team projects andtask force team projects continuedsuccessfully for the 18th year in succession.

c. Focus on Vendor Development:

The Company continued its vendordevelopment initiative through VisionarySmall and Medium Enterprise programme.

INTERNAL CONTROL AND THEIR ADEQUACYThe Company has a proper and adequateinternal control system to ensure that all theassets of the Company are safeguarded andprotected against any loss and that all thetransactions are properly authorized andrecorded. Information provided to managementis reliable and timely. The Company ensuresadherence to all statutes.

INTERNAL FINANCIAL CONTROLThe Company has an established internalfinancial control framework including internal

controls over financial reporting, operatingcontrols and anti-fraud framework. The frameworkis reviewed regularly by the management andtested by internal audit team and presented tothe audit committee. Based on the periodicaltesting, the framework is strengthened, from timeto time, to ensure adequacy and effectiveness ofInternal Financial Controls.

KEY FINANCIAL RATIOS

Particulars Unit of Standalone ConsolidatedMeasurement 2017-18 2018-19 2017-18 2018-19

InterestCoverage Ratio Times 36.25 17.29 58.43 20.42Debt Equity Ratio % 14.60% 23.65% 14.50% 17.76%OperatingProfit Margin % 8.86% 6.28% 6.45% 7.96%Net Profit Margin % 8.62% 5.92% 7.82% 6.13%Return onNet worth % 30.08% 18.35% 36.04% 24.80%

HUMAN RESOURCE DEVELOPMENTThe Company has achieved a good financialperformance, through the concerted and goal-aligned efforts by employees across thehierarchy. The Company places on record itsdeep appreciation for the exemplary contributionof the employees at all levels.The Company continued to induct fresh talent.The Company has upgraded the training needsidentification based on the role requirements andgaps in this identification are closed by providingtraining to improve employee competencies. TheCompany's industrial relations continue to becordial.As of 31st March 2019, the Company had 358employees on its rolls.

Profit before tax in 2018-19 was $ 29.05 Cr asagainst previous year’s $ 39.18 Cr, resulting inchange in profit related ratios.

Working capital borrowing has increased duringthe year which has impacted the Interest coverageand Debt equity ratios.


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CAUTIONARY STATEMENTStatements in the management discussion andanalysis report describing the Company'sobjectives, projections, estimates, expectationsmay be forward looking statements within themeaning of applicable Securities Laws andRegulations. Actual results could differ materiallyfrom those expressed and implied. Importantfactors that could make a difference to theCompany's operations include, among otherthings, economic conditions affecting thedemand, supply and price conditions in themarkets in which the Company operates,changes in government regulations, tax laws andother statutes and incidental factors.

5. DIRECTORS' RESPONSIBILITY STATEMENTIn accordance with the provisions of Section134(5) of the Companies Act, 2013 (the Act,2013) with respect to Directors' ResponsibilityStatement, it is hereby stated that -

i. in the preparation of annual accounts for thefinancial year ended 31st March 2019, theapplicable Accounting Standards had beenfollowed along with proper explanationrelating to material departures if any;

ii. the Directors had selected such accountingpolicies and applied them consistently andmade judgments and estimates that werereasonable and prudent so as to give a trueand fair view of the state of affairs of theCompany at the end of the financial year andprofit of the Company for the year underreview;

iii. the Directors had taken proper and sufficientcare for the maintenance of adequateaccounting records in accordance with theprovisions of the Act, 2013 for safeguardingthe assets of the Company and forpreventing and detecting fraud and otherirregularities;

iv. the Directors had prepared the annualaccounts for the financial year ended31st March 2019 on a "going concern basis";

v. that the Directors had laid down internalfinancial controls to be followed by theCompany and that such internal financialcontrols are adequate and are operatingeffectively; and

vi. that the Directors had devised propersystems to ensure compliance with theprovisions of all applicable laws and that suchsystems were adequate and operatingeffectively.

6. CORPORATE SOCIAL RESPONSIBILITY(CSR)CSR activities have already been textured intothe Company's value system through SrinivasanServices Trust (SST), established in 1996 withthe vision of building self-reliant rural community.

Over 23 years of service, SST has played apivotal role in changing lives of people in ruralIndia by creating self-reliant communities thatare models of sustainable development.

The Company is eligible to spend on theirongoing projects / programs, falling within theCSR activities specified under the Act, 2013 asmandated by the Ministry of Corporate Affairsfor carrying out the CSR activities.

The Committee formulated and recommendeda CSR policy in terms of Section 135 of the Act,2013 along with a list of projects / programmesto be undertaken for CSR spending inaccordance with the Companies (CorporateSocial Responsibility Policy) Rules, 2014.

Based on the recommendation of the CSRCommittee, the Board has approved the projects /programmes carried out as CSR activities bySST, constituting more than 2% of the averagenet profits of the Company, made during the


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three immediately preceding financial years,towards CSR spending for the financial year2018-19 amounting to $ 52 Lakhs.

Presently, SST is working in 5,000 villagesspread across Tamil Nadu, Karnataka,Maharashtra, Himachal Pradesh and AndhraPradesh covering a population of about 31 lakhsand 7 lakh families. SST has focussed on theareas of economic development, health care,education, environment and infrastructure inaround 3000 villages so far. SST will focus inthe other 2000 villages also, so that all the areasare covered in the next 3 years.

As required under Section 135 of the Act, 2013read with Rule 8 of the Companies (CorporateSocial Responsibility Policy) Rules, 2014, theannual Report on CSR, containing the particularsof the projects / programmes approved andrecommended by CSR Committee andapproved by the Board for the financial year2018-19 are given by way of Annexure IVattached to this Report.

7. FINANCIAL PERFORMANCE AND POSITIONOF THE SUBSIDIARY COMPANYAs on the date of this report, Harita FehrerLimited, Chennai (HFRL) is the only subsidiaryof the Company.

HFRL is a material un-listed Indian subsidiaryin terms of Regulation 24 read with Regulation16(1)(c) of Securities and Exchange Board ofIndia (Listing Obligations and DisclosureRequirements) Regulations, 2015 (ListingRegulations), as the total turnover of thesubsidiary exceeds 10% of the consolidatedturnover of the Company.

During the year, HFRL achieved a turnover of$ 548.80 cr and earned a profit after tax of$ 23.33 cr (before Other comprehensiveIncome). HFRL declared two interim dividendsfor the year ended 31st March 2019 aggregatingto $ 5.00 per share (50%) on 2,00,98,040 equity

shares of $ 10/- each absorbing a sum of$ 12.12 cr including dividend distribution tax.

8. CONSOLIDATED FINANCIAL STATEMENTSThe consolidated financial statements of theCompany are prepared in accordance with theprovisions of Section 129 of the Act, 2013 readwith the Companies (Accounts) Rules, 2014 andRegulation 33 of the Listing Regulations alongwith a separate statement containing the salientfeatures of the financial performance of thesubsidiary. The audited consolidated financialstatements together with Auditors' Report formpart of the Annual Report.

The audited financial statements in respect ofthe subsidiary Company will be made availableto the shareholders, on receipt of a request fromany shareholder and it has also been placed onthe website of the Company. This will also beavailable for inspection by the shareholders atthe registered office during the business hours.

The consolidated profit after tax of the Companyand its subsidiary amounted to $ 40.23 cr forthe financial year 2018-19 as compared to$ 49.13 cr in the previous year.

9. DIRECTORS & KEY MANAGERIAL PERSONNELIndependent Directors (IDs)All IDs hold office for a fixed term and are notliable to retire by rotation.

At the Annual General Meeting (AGM) held on6th August 2014, M/s H Lakshmanan, S I JaffarAli and C N Prasad were appointed as IDs forthe first term of five consecutive years from theconclusion of the Eighteenth AGM and to receiveremuneration by way of fees, reimbursement ofexpenses for participation in the meetings of theBoard and / or Committees and profit relatedcommission in terms of applicable provisions ofthe Act, 2013 as determined by the Board fromtime to time.


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At the AGM of the Company held on 13th August2018, Mr L Bhadri and Ms Sasikala Varadachariwere appointed as IDs for the second term ofthree consecutive years effective 13th October2018 and 22nd March 2019 respectively.

Subject to the approval of Nomination andRemuneration Committee and Board,M/s H Lakshmanan, S I Jaffar Ali and C N Prasadare proposed to be re-appointed for the secondterm of three consecutive years from 6th August2019 as IDs of the Company in terms of Section149 of the Act, 2013 on the same terms ofappointment and remuneration by way of feesand profit related commission, if any, subject toapproval of Shareholders through Postal Ballot.

On appointment, each ID has acknowledged theterms of appointment as set out in their letter ofappointment. The terms cover inter alia, theduties, rights of access to information, disclosureof their interest / concern, dealing in Company'sshares, remuneration and expenses, insuranceand indemnity. The IDs are provided with copiesof the Company's policies and charters of variouscommittees of the Board.

In accordance with Section 149(7) of the Act2013, all IDs have declared that they meet thecriteria of independence as provided underSection 149 (6) of the Act, 2013 and Regulation25 of the Listing Regulations.

The detailed terms of appointment of IDs isdisclosed on the Company's website in thefollowing linkwww.haritaseating.com/PDF/HSSL-TermsofAppointmentofIDs.pdf

Separate meeting of Independent Directors:During the year under review, a separatemeeting of IDs was held on 20th March, 2019and all the Independent Directors were presentat the Meeting.

Based on the set of questionnaires completefeedback on Non-Independent Directors and

details of various activities undertaken by theCompany were provided to IDs to facilitate fortheir review / evaluation.

a) Non-Independent Directors (Non-IDs)IDs used various criteria and methodologypracticed in Industry, prescribed by NRC forevaluation of Mr Martin Grammer Non-ID,Chairman of the Board and the Board as a whole.

IDs evaluated the performance of Mr MartinGrammer individually, through a set ofquestionnaires. They reviewed his interactionduring the board meetings and strategic inputsgiven by him to improve the risk management,internal controls and contribution to theCompany's growth.

IDs were satisfied fully with the performance ofMr Martin Grammer.

b) ChairmanThe IDs reviewed the performance of Chairmanof the Board after taking in to account hisperformance and bench marked theachievement of the Company with industry underthe stewardship of Chairman.

The IDs also placed on record, their appreciationof Chairman's visionary leadership, setting tone,pace and opportunity for positive change andpassion for constant improvement and admiredthe high standards of integrity and probity, qualityand adequacy of leadership of Chairman andhis versatile performance.

The IDs also endorsed that the Chairman is avery accomplished leader and is exceptionallywell informed about the state of economy.

c) BoardIDs also evaluated Board's composition, size, mixof skills and experience, its meeting sequence,effectiveness of discussion, decision making,


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follow up action, so as to improve governanceand enhance personal effectiveness of Directors.

The evaluation process focused on BoardDynamics and upon evaluation, IDs concludedthat the Board is well balanced in terms of diversityof experience with expert in each domain viz.,Banking, Finance, Operations, Legal,Administration and International economy. TheCompany has a Board with wide range ofexpertise in all aspects of business.

The IDs unanimously evaluated the prerequisitesof the Board viz., formulation of strategy,acquisition & allocation of overall resources,setting up policies, directors's election processand cohesiveness on key issues and satisfiedthemselves that they were adequate.

They were satisfied with the Company'sperformance in all fronts and finallyconcluded that the Board operates with globalbest practices.

IDs have also ensured that the skills / expertise /competence of the Board of Directors are in linewith the Company's business requirement toenable it to function effectively.

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

All IDs have expressed their overall satisfactionwith the support received from the managementand the excellent work done by the managementduring the last year and also relationshipbetween the top management and Board issmooth and seamless.

Directors appointment / re-appointmentIn terms of the provisions of sub-section (6) readwith explanation to Section 152 of the Act, 2013,two-thirds of the total number of directors i.e.,excluding IDs, are liable to retire by rotation andout of which, one-third is liable to retire by rotationat every Annual General Meeting.

Mr Martin Grammer, Director is liable to retireby rotation at the AGM, and being eligible, offershimself for re-appointment.

The Directors have recommended his re-appointment. A brief resume of the Directorproposed to be re-appointed and other relevantinformation have been furnished in the Noticeof AGM. Appropriate resolution for his re-appointment is being placed for approval of theshareholders at the AGM.

Key Managerial Personnel (KMP)In terms of Section 2(51) and Section 203 of theAct, 2013, Mr A G Giridharan, President & CEO,Mr S Jagannathan, Chief Financial Officer andMs N Iswarya Lakshmi, Company Secretary areKMPs of the Company.

Nomination and Remuneration PolicyNRC reviews the composition of the Board, toensure an appropriate mix of abilities,experience and diversity to serve the interestsof all shareholders and the Company.

Nomination and Remuneration Policy wasapproved by the Board at its meeting held on22nd September, 2014 and amended from time-to-time in terms of Section 178 of the Act, 2013.The objective of such policy shall be to attract,retain and motivate executive management anddevise remuneration structure to link toCompany's strategic long term goals,appropriateness, relevance and risk appetite.

NRC will identify, ascertain the integrity,qualification, appropriate expertise andexperience, having regard to the skills that thecandidate will bring to the Board / Company,whenever the need arises for appointment ofDirectors / KMP.

Criteria for performance evaluation, disclosureson the remuneration of directors, criteria ofmaking payments to non-executive directorshave been disclosed as part of CorporateGovernance Report attached herewith.


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Evaluation of Directors and CommitteesIn terms of Section 134 of the Act, 2013 and theCorporate Governance requirements asprescribed under the Listing Regulations, theBoard reviewed and evaluated all Directors(excluding the Director being evaluated) andvarious Committees viz., Audit Committee,Nomination and Remuneration Committee,Corporate Social Responsibility Committee andStakeholders Relationship Committee, based onthe evaluation criteria laid down by the NRC i.e.,through a set of questionnaires.

DirectorsThe performance of all Directors were assessedagainst a range of criteria such as contributionto the development of business strategy andperformance of the Company, understanding themajor risks affecting the Company, cleardirection to the management and contributionto the Board cohesion. The performanceevaluation has been done by the entire Boardof Directors, except the Director concerned beingevaluated.

The Board noted that all Directors haveunderstood the opportunities and risks to theCompany's strategy and are supportive to thedirection articulated by the management teamtowards consistent improvement.

On the basis of the report of performanceevaluation of directors, the Board noted andrecorded that all the directors should extend andcontinue their term of appointment as Directors /Independent Directors, as the case may be.

CommitteesBoard delegates specific mandates to itsCommittees, to optimize Directors' skills andtalents besides complying with key regulatoryaspects.- Audit Committee for overseeing financial

Reporting;- Risk Management Committee for overseeing

the risk management framework;

- Nomination and Remuneration Committeefor selecting and compensating Directors /KMPs / SMPs;

- Stakeholders' Relationship Committee forredressing investors grievances; and

- Corporate Social Responsibility Committeefor overseeing CSR initiatives and inclusivegrowth.

The performance of each Committee wasevaluated by the Board after seeking inputs fromits Members on the basis of specific terms ofreference, its charter, time spent by theCommittees in considering key issues, quality ofinformation received, major recommendations /action plans and work of each Committee.

The Board is satisfied with overall effectivenessand decision making of all Committees. TheBoard reviewed each Committee's terms ofreference to ensure that the Company's existingpractices remain appropriate.

Recommendations from each Committee wereconsidered and approved by the Board prior toits implementation, wherever necessary andthere were no items where the board had notaccepted any recommendation of any committeeof the board in the relevant financial year.

Details of Committees, its charter, functions areprovided in the Corporate Governance Reportattached to this Report.

Number of board meetings heldThe number of Board meetings held during thefinancial year 2018-19 is provided as part ofCorporate Governance Report prepared in termsof the Listing Regulations.

10. AUDITORS

Statutory AuditorsThe Company at its twenty first AGM held on9th August 2017 appointed M/s Raghavan,Chaudhuri & Narayanan, CharteredAccountants, Bengaluru, having Firm


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Registration No. 007761S allotted by TheInstitute of Chartered Accountants of India, asstatutory auditors of the Company to hold office,for the first term of five consecutive years, fromthe conclusion of the said AGM, at suchremuneration in addition to applicable taxes, outof pocket expenses, travelling and otherexpenses as may be mutually agreed betweenthe Board of Directors of the Company and theAuditors.

The Statutory Auditors will continue to hold officefor the 3rd year in the first term of five consecutiveyears, from the conclusion of this AGM.

The Company has obtained necessarycertificate under Section 141 of the Act, 2013conveying their eligibility for being statutoryauditors of the Company for the year 2019-20.

The Auditors' Report for the financial year 2018-19 does not contain any qualification, reservationor adverse remark and the same is attached withthe annual financial statements.

Secretarial AuditorAs require under Section 204 of the Act, 2013,and the Companies (Appointment andRemuneration of Managerial Personnel) Rules2014, the Company is required to appoint aSecretarial Auditor for auditing secretarial andrelated records of the Company.

The Secretarial Audit Report for the year 2018-19 given by Ms B Chandra, Practicing CompanySecretary, Chennai is attached to this report. TheSecretarial Audit Report does not contain anyqualification, reservation or other remarks.

The Board at its meeting held on 8th May, 2019has re-appointed Ms B Chandra, PractisingCompany Secretary, Chennai as SecretarialAuditor for carrying out the secretarial audit forthe financial year 2019-20.

11. CORPORATE GOVERNANCEThe Company has been practicing the principlesof good governance over the years and lays

strong emphasis on transparency, accountabilityand integrity.

A separate section on Corporate Governanceand a certificate from the statutory auditors ofthe Company regarding compliance ofconditions of Corporate Governance asstipulated under SEBI LODR Regulations, 2015forms part of this Annual Report.

The CEO & CFO of the Company have certifiedto the board on financial statements and othermatters in accordance with Regulation 17 (8) ofthe Listing Regulations pertaining to CEO/CFOcertification for the financial year ended31st March 2019.

12. POLICY ON VIGIL MECHANISM

The Company has adopted a Policy on VigilMechanism in accordance with the provisions ofAct, 2013 and Regulation 22 of the ListingRegulations, which provides a formal mechanismfor all Directors, Employees and otherStakeholders of the Company to report to themanagement, their genuine concerns orgrievances about unethical behaviour, actual orsuspected fraud and any violation of theCompany's Code of Business Conduct andEthics.

The Code also provides a direct access to theChairman of the Audit Committee to makeprotective disclosures to the management aboutgrievances or violation of the Company's Code.

The Board at its meeting held on 8th May 2019made certain amendments to the Whistle BlowerPolicy for reporting any allegations of materialnature on any leakage of Unpublished PriceSensitive Information.

The Policy is disclosed on the Company's websitewith the following linkwww.haritaseating.com/PDF/WhistleBlowerPolicy.pdf


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13. PUBLIC DEPOSITSThe Company has not accepted any depositfrom the public within the meaning of Section76 of the Act, 2013, for the year ended 31st

March 2019.

14. STATUTORY STATEMENTSInformation on conservation of energy,technology absorption, foreign exchange, etc.Information on conservation of energy,technology absorption and foreign exchangeearnings and outgo are given in Annexure I tothis report, in terms of the requirements ofSection 134(3)(m) of the Act, 2013 read with theCompanies (Accounts) Rules 2014.

Material changes and commitmentsThere have been no material changes andcommitments affecting the financial position ofthe Company, which have occurred between theend of the financial year of the Company to whichthe financial statements relate and the date ofthis report.

Significant and material orders passed by theRegulators or Courts or Tribunals impactingthe going concern status of the CompanyThere are no significant and material orderspassed by the Regulators or Courts or Tribunals,which would impact the going concern status ofthe Company and its future operations.

Annual ReturnExtract of the Annual Return in prescribed formis given as Annexure-II to this Report, in termsof the requirements of Section 134(3)(a) of theAct, 2013 read with the Companies (Accounts)Rules, 2014.The same is available on the company's websitein the following linkhttp://www.haritaseating.com/PDF/Annual_Return_2018-19.pdf

Employee's remunerationDetails of employees receiving the remunerationin excess of the limits prescribed under Section

197 of the Act 2013 read with Rule 5(2) of theCompanies (Appointment and Remuneration ofManagerial Personnel) Rules, 2014 are annexedas a statement and given in Annexure III.In terms of first proviso to Section 136(1) of theAct, 2013 the Annual Report, excluding theaforesaid annexure is being sent to theshareholders of the Company. The annexure isavailable for inspection at the Registered Officeof the Company during business hours and anyshareholder interested in obtaining a copy of thesaid annexure may write to the CompanySecretary at the Registered Office of theCompany.

Comparative analysis of remuneration paidA comparative analysis of remuneration paid toDirectors and employees with the Company'sperformance is given as Annexure V to thisreport.

Details of material related party transactions

Details of material related party transactionsunder Section 188 of the Act, 2013 read withthe Companies (Meetings of Board and itsPowers) Rules, 2014, are given in Annexure VIto this report in the prescribed form.

Details of loans / guarantees / investmentsmadeDuring the year under review, the Company hadnot granted any loans or guarantees coveredunder Section 186 of the Act 2013.Please refer note no.3 to Notes on accounts forthe financial year 2018-19, for details ofinvestments made by the Company.

Reporting of fraudThe Auditor's of the Company have not reportedany fraud as specified under Section 143(12) ofthe Act, 2013.

Disclosure in terms of Sexual Harassmentof Women at workplace (Prevention,Prohibition and Redressal) Act, 2013


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The Company has Internal ComplaintsCommittees as required under The SexualHarassment of Women at Workplace(Prevention, Prohibition and Redressal) Act,2013.

During the year under review, there were nocases filed pursuant to the provisions of SexualHarassment of Women at Workplace(Prevention, Prohibition and Redressal) Act2013.

15. ACKNOWLEDGEMENTThe Directors acknowledge the support and co-operation received from the promoters, Harita

Group and Mr Martin Grammer. The Directorsthank the customers, suppliers, financialinstitutions and bankers for their valuablesupport and assistance.

The Directors wish to place on record theirappreciation of the sincere efforts of all theemployees of the Company during the yearunder review.

The Directors also thank the shareholders fortheir continued faith in the Company.

For and on behalf of the Board

Chennai H Lakshmanan8th May 2019 Chairman


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Annexure - I to Directors' Report to the shareholdersInformation pursuant to Section 134(3)(m) of the Companies Act, 2013

A. CONSERVATION OF ENERGY

1. Measures taken in the year 2018-19 forreduction of energy consumption• Replacement of LED fittings;• Assembly line light / fan automation;• Compressor Auto ON / OFF with loading

pattern; and• Air audit & automationThe above measures had resulted in an annualsaving of $ 15 lakhs.

2. Proposed measures during the year 2019 - 20reducing energy consumption• Energy conservation of office lighting by LED

conversion;• Solar thermal panel implementation for LPG

vapouriser heating;• Reduce energy consumption in canteen

water pumps;• Energy conservation by centralised drinking

RO plant; and• Auto cut off system in paint plant blower.The above measures will result in an annualsaving of $ 10 lakhs.

3. Steps taken for utilizing alternate sources ofenergySolar thermal heating system for CED (CathodicElectro Deposition Coating) painting process hasbeen fully operational during the year underreview at Hosur plant which will continue to yieldthe benefits and a similar facility which becameoperational in the second half of 2018-19 atRanjangaon plant will yield full year benefits.

4. Capital investment in Energy ConservationEquipment

The Company is planning to invest $ 15 lakhsfor electrical equipments as energy efficientmeasures and $ 20 lakhs for conserving energyby investing in Solar thermal heating.

B. TECHNOLOGY ABSORPTION FOR 2018-19

Research & Development (R&D)

1. Specific areas in which R&D is carried out in theCompany:

• Mechanical suspended seat developed fortractors;

• 18" single pan seat developed;

• Compact tractor seat developed;

• Pneumatic suspended driver seats for trucks& buses;

• Mechanical suspended driver seatdeveloped for trucks;

• Staff bus seats developed;

• Deluxe seats developed;

• 2R Suspension kit development; and

• X700 suspended seat development.

2. Benefits derived as a result of above measures:

• Growth in Export business

• Additional sales through new products

• Expansion of product portfolio with high endseating

3. Future plan of action:

• Development of identified new technologiesfor Tractor, CVs and BPS; and

• Introduction of product upgrade / refresh forthe identified seats.

Expenditure on R&D: $ 1074.88 Lakhs (includingCapex)

Technology absorption, adaptation andinnovation:

(i) Efforts in brief:

• Development of modular / platform seatsto enter into global markets;


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• New products to existing customers; and• Established CNC foam carving and 3D

printing machine.

(ii) Benefits derived as a result of the above are:a. Price competitiveness; andb. Lead time reduction for proto samples.

(iii) Details relating to imported technology:Technology imported during the last threeyears reckoned from the beginning of thefinancial year - NIL

C. FOREIGN EXCHANGE EARNINGS ANDOUTGOExport activities during the year ended31st March 2019 amounted to $ 7386.50 lakhsincluding tool invoice of $ 403.95 lakhs asagainst $ 6264.90 lakhs for the year ended31st March 2018.

1. Activities relating to export:• During the year 2018-19, the Company

has pursued multiple opportunities fornew orders for tractor seats; and

• The Company has been continuing itsefforts to increase the current volume ofexport of tractor seats to USA andGermany.

2. Total foreign exchange earned and used(actual):Foreign exchange earned : $ 7386.50 lakhsForeign exchange used : $ 1634.59 lakhs


Chennai H LAKSHMANAN8th May 2019 Chairman


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Annexure - II to Directors' Report

Form No. MGT-9EXTRACT OF ANNUAL RETURN

for the financial year ended 31st March 2019[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 : Listed Public Company

v) Address of the Registered office and : "Jayalakshmi Estates",contact details 29, Haddows Road, Chennai - 600 006

Tel. : 044 - 2827 2233Fax : 044 - 2825 7121

vi) Whether listed company Yes / No : Yes

vii) Name, Address and Contact details of : Sundaram-Clayton LimitedRegistrar and Transfer Agent Share Transfer Agent

"Jayalakshmi Estates", 1st Floor,29, Haddows Road, Chennai - 600 006Tel. : 044 - 2828 4959; 2827 2233Fax : 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 turnoverNo main products HSS code of the Company

1 Seats used for Motor vehicle 94012000 97.87%

III. PARTICULARS OF HOLDING, SUBSIDIARY AND ASSOCIATE COMPANIES

Sl. Name and AddressCIN / GLN

Holding / % of Applicable

No of the Company Subsidiary / shares Section of theAssociate held Companies Act, 2013

1 Harita Fehrer Limited,"Jayalakshmi Estates",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 ofNo. 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 2018) (as on 31st March 2019) shareholdingDemat Physical Total % of total shares Demat Physical Total % of total shares during the year

A. PromotersIndian

- 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 ofPromoter (A) 51,44,962 – 51,44,962 66.22 51,44,962 – 51,44,962 66.22 –B. Public Shareholding

1. Institutionsa) Mutual Funds – – – – 30,008 – 30,008 0.39 0.39b) Banks / FI 1,315 200 1,515 0.02 1,454 200 1,654 0.02 –c) Foreign Portfolio

Investor- Corporates 6,77,205 – 6,77,205 8.72 51,175 – 51,175 0.66 (8.06)Sub–total (B)(1) 6,78,520 200 6,78,720 8.74 82,637 200 82,837 1.07 (7.67)2. Non-Institutions

a) Bodies Corp.- Indian 4,65,875 3,880 4,69,755 6.05 5,35,603 3,880 5,39,483 6.94 0.89

b) Individualsi) Individual share-

holders holdingnominal share capitalupto Rs. 1 lakh 9,95,553 3,33,743 13,29,296 17.11 13,36,418 2,65,802 16,02,220 20.62 3.51

ii) Individual share-holders holdingnominal share capitalin excess of Rs.1 lakh 1,12,998 – 1,12,998 1.45 3,30,051 – 3,30,051 4.25 2.80

c) Others (specify)(c-i) Directors & relatives 2,020 – 2,020 0.03 2,020 – 2,020 0.03 –(c-ii) NRI Repatriable 13,472 – 13,472 0.17 27,476 – 27,476 0.35 0.18(c-iii)NRI-Non Repatriable 12,935 – 12,935 0.17 17,153 – 17,153 0.22 0.05(c-iv) Clearing member 4,760 – 4,760 0.06 21,417 – 21,417 0.28 0.22(c-v) Limited Liability

Partnership 122 – 122 – 1,421 – 1,421 0.02 0.02Sub-total (B)(2) 16,07,735 3,37,623 19,45,358 25.04 22,71,559 2,69,682 25,41,241 32.71 7.67Total PublicShareholding (B)=(B)(1)+ (B)(2) 22,86,255 3,37,823 26,24,078 33.78 23,54,196 2,69,882 26,24,078 33.78 –C. Shares held by

Custodian forGDRs & ADRs – – – – – – – – –

Grand Total (A+B+C) 74,31,217 337,823 77,69,040 100.00 74,99,158 2,69,882 77,69,040 100.00 –


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Vidhar Management And Consultancy Services LLPNIL 01-04-2018

21-01-2019 Transfer / Purchase 4,79,762 6.17 4,79,762 6.1731-03-2019 4,79,762 6.17

(ii) Shareholding of Promoters & Promoters' Group

Shareholding at the beginning of the year Shareholding at the end of the year % change inSl. Shareholder’s name

No. of % to total % of shares No. of % to total % of shares shareholdingNo. shares shares of Pledged / shares shares of Pledged / during

as on the Company Encumbered as on the Company Encumbered the year1st April 2018 to total shares 31st March 2019 to total shares

1 Harita Limited 18,00,500 23.18 – 18,00,500 23.18 – –

2 Harita Financial ServicesLimited

2,92,700 3.77 – 2,92,700 3.77 – –

3 Harita Gopal Private Limited* 4,79,762 6.17 – – – – (6.17)

4 Harita Sheela Private Limited 4,85,000 6.24 – 4,85,000 6.24 – –

5 Harita Malini Private Limited 4,67,800 6.02 – 4,67,800 6.02 – –

6 Harita Venu Private Limited 4,67,800 6.02 – 4,67,800 6.02 – –

7 Harita Cheema PrivateLimited

27,000 0.35 – 27,000 0.35 – –

8 Harita Prema Private Limited 27,000 0.35 – 27,000 0.35 – –

9 Harita Balaji Private Limited 9,800 0.12 – 9,800 0.12 – –

10 Vidhar Management andConsultancy Services LLP – – – 4,79,762 6.17 – 6.17

11 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 – –

* A Scheme of Amalgamation ("Scheme") between Harita Gopal Private Limited (HGPL), the transferor company and Vidhar Management andConsultancy Services Private Limited (VMCSPL), the transferee company was sanctioned by the Hon'ble National Company Law Tribunal(NCLT) vide its Order No. CP / 135 & 136 / CAA / 2018.Consequent to the Scheme becoming effective, the 6.18% of equity shares held by HGPL, was transferred to VMCSPL on 21st January 2019.Subsequently, VMCSPL converted into LLP effective 27th March 2019

(iii) Change in Promoters and Promoters' Group Shareholding (please specify, if there is no change)

Opening % to total Cumulative Closing BalanceBalance Date of Purchase or No. of shares of the No. of % to total No. of % to total

(% of share dealing Sales shares Company shares shares of the shares shares of thecapital) Company Company

Harita Gopal Private Limited4,79,762 01-04-2018(6.17%) 21-01-2019 Transfer / Sold 4,79,762 6.17 4,79,762 6.17 – –

31-03-2019 – –


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(iv) Shareholding Pattern of top ten Shareholders (other than Directors, Promoters and Holders of GDRs andADRs):

LCI Estates LLP 3,65,000 01-04-2018

(4.70%) 31-03-2019 3,65,000 4.70

Abhay Shyamsunder Chandak NIL 01-04-2018

31-08-2018 Transfer / Purchase 14,998 0.19 14,998 0.1912-10-2018 Transfer / Purchase 65,000 0.83 79,998 1.0331-03-2019 79,998 1.03

Aditya S. ChandakNIL 01-04-2018

31-08-2018 Transfer / Purchase 10,000 0.13 10,000 0.1312-10-2018 Transfer / Purchase 65,000 0.83 75,000 0.9614-12-2018 Transfer / Purchase 1 – 75,001 0.9631-03-2019 75,001 0.96

SI Investments and Broking Private LimitedNIL 01-04-2018

17-08-2018 Transfer / Purchase 34,436 0.44 34,436 0.4414-09-2018 Transfer / Sold 32,505 0.42 1,931 0.0228-09-2018 Transfer / Sold 1,931 0.02 – –07-12-2018 Transfer / Purchase 40,000 0.51 40,000 0.5131-03-2019 40,000 0.51

The Indiaman Fund (Mauritius) Limited3,49,962 01-04-2018(4.50%) 27-07-2018 Transfer / Sold 45,000 0.58 3,04,962 3.93

03-08-2018 Transfer / Sold 1,23,964 1.60 1,80,998 2.3306-08-2018 Transfer / Sold 35,000 0.45 1,45,998 1.8810-08-2018 Transfer / Sold 85,000 1.09 60,998 0.7917-08-2018 Transfer / Sold 28,403 0.37 32,595 0.4231.03.2019 32,595 0.42

Edelweiss Trusteeship Co LtdNIL 01-04-2018

01-03-2019 Transfer / Purchase 25,200 0.32 25,200 0.3222-03-2019 Transfer / Purchase 4,808 0.06 30,008 0.3931-03-2019 30,008 0.39


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Kalpesh Dayalbhai Vaghani28,863 01-04-2018

(0.37%) 23-11-2018 Transfer / Purchase 2,974 0.03 31,837 0.4030-11-2018 Transfer / Purchase 1,000 0.01 32,837 0.4222-02-2019 Transfer / Purchase 4,765 0.06 37,602 0.4822-03-2019 Transfer / Sold 8,275 0.10 29,327 0.3729-03-2019 Transfer / Sold 2,726 0.03 26,601 0.3431-03-2019 26,601 0.34

Ashwani Kumar / Sonu Kumar27,900 01-04-2018

(0.36%) 31-03-2019 27,900 0.36

Nikunj Dhanvantrai Mehta14,435 01-04-2018

(0.19%) 18-01-2019 Transfer / Purchase 5,500 0.07 19,935 0.2631-03-2019 19,935 0.26

Shri Gautam Ghandhar Advisors LLPNIL 01-04-2018

13-04-2018 Transfer / Purchase 15,807 0.20 15,807 0.2020-04-2018 Transfer / Sold 15,807 0.20 – –11-05-2018 Transfer / Purchase 1,807 0.02 1,807 0.0218-05-2018 Transfer / Purchase 71 – 1,878 0.0205-10-2018 Transfer / Purchase 11,393 0.14 13,271 0.1716-11-2018 Transfer / Sold 735 0.01 12,536 0.1608-02-2019 Transfer / Sold 7,304 0.09 5,232 0.0622-02-2019 Transfer / Sold 2,010 0.02 3,222 0.0415-03-2019 Transfer / Purchase 4,237 0.05 7,459 0.0922-03-2019 Transfer / Purchase 373 – 7,832 0.1029-03-2019 Transfer / Purchase 10,312 0.13 18,144 0.2331-03-2019 18,144 0.23


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(v) Shareholding of Directors and Key Managerial Personnel (KMP):Opening % to Cumulative Closing Balance 31-03-2019

Name of the Balance total % to total % to totalDirector / 1st April 2018 Date of Purchase / No. of shares No. of shares of No. of shares of

KMP (% to 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

C N Prasad – – – – – – – Nil –

S I Jaffar Ali – – – – – – – Nil –

Martin Grammer 10,87,600 – – – 14.00 – – 10,87,600 14.00

L Bhadri – – – – – – – Nil –

SasikalaVaradachari – – – – – – – Nil –

A G Giridharan – – – – – – – Nil –

S Jagannathan – – – – – – – Nil –

N Iswarya Lakshmi – – – – – – – Nil –

V. INDEBTEDNESSIndebtedness of the Company including interest outstanding/accrued but not due for payment

(Rs. in Lakhs)Particulars Secured Loans Unsecured Total

excluding deposits Loans IndebtednessIndebtedness at the beginning of the financial year

i) Principal Amount 1,688.75 – 1,688.75

ii) Interest due but not paid – – –

iii) Interest accrued but not due – – –

Total (i) 1,688.75 – 1,688.75

Change in Indebtedness during the financial year

• Addition 478.82 1,000.00 1,478.82

• Reduction – – –

Net Change (ii) 478.82 1,000.00 1,478.82

Indebtedness at the end 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 + ii) 2,167.57 1,000.00 3,167.57


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VII.PENALTIES / PUNISHMENT/ COMPOUNDING OF OFFENCES: Nil

C. Remuneration to Key Managerial Personnel other than MD / MANAGER / WTD (Rs. in lakhs)Sl. Particulars of Remuneration Key Managerial Personnel TotalNo. CEO CS Amount1. Gross salary

(a) Salary as per provisions contained in Section 17(1)of the Income-tax Act, 1961 128.79 8.54 137.33

(b) Value of perquisites under Section 17(2)of the Income-tax Act, 1961 0.07 – 0.07

(c) Profits in lieu of salary under Section 17(3)of the Income tax Act, 1961 – – –

2. Stock Option – – –3. Sweat Equity – – –4. Commission

- as % of profit – – –- others – – –

5. Others - Contributions to provident and other funds 5.61 0.59 6.20Total 134.47 9.13 143.60

Remuneration for Chief Financial Officer is paid by the subsidiary company.

VI. REMUNERATION OF DIRECTORS AND KEY MANAGERIAL PERSONNEL

A. Remuneration to Managing Director, Whole-time Directors and / or Manager: Not ApplicableB. Remuneration to other Directors: (Rs. in lakhs)

Particulars of Remuneration Name of Directors TotalHL CNP SIJ LB SKV Amount

Independent DirectorsFee for attending board / committee meetings 0.90 0.85 0.90 0.30 0.25 3.20Commission – – 10.00 – 7.00 17.00Total (1) 0.90 0.85 10.90 0.30 7.25 20.20

MGOther Non-Executive DirectorsFee for attending board / committee meetings 0.20 0.20Commission – –Total (2) 0.20 0.20Total Managerial Remuneration = (1) + ( 2) 20.40Overall Ceiling as per the Act 87.15

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




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1. A brief outline of the Company's CSR Policy:This policy encompasses the Company'sphilosophy for giving back to society as acorporate citizen and lays down the guidelinesand mechanism for undertaking socially usefulprograms for the transformation and sustainabledevelopment of the rural communities at large.

2. Overview of projects or programs proposed tobe undertaken:Focus areas relate to economic development,quality education, empowerment of women,health care, conservation of environment andthe creation, maintenance of infrastructure, art,culture and protection of places of public andhistorical importance.

Annexure - IV to Directors' ReportParticulars of Corporate Social Responsibility activities carried out by the

Company in terms of Section 135 of the Companies Act, 2013

1 Name of the Implementing Srinivasan Services Trust (SST)Agency Jayalakshmi Estates, 29, Haddows Road, Chennai - 600 006, Tamil Nadu

Phone No: 044-2827 2233 mail id: [email protected]

2 CSR Project or activity (i) Eradicating hunger, poverty, promoting preventive healthcare and sanitationidentified and making available safe drinking water;

(ii) Promoting Education, including special education and employment enhancingvocation skills especially among children, women and livelihood enhancementprojects;

(iii) Promoting gender equality, empowering women and measures for reducinginequalities 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; and

(v) Rural development project

3 Sector in which Projects /Programmes undertaken: Economic Development, Education, Environment, Health and Infrastructure

4 Local Area / Others • Shirur Block, Pune• Hosur

3. Web-link to the CSR policy and projects orprograms -www.haritaseating.com/PDF/CSRPolicyHSSL.pdf

4. Composition of the CSR Committee consists ofthe following independent directors.

# Name of the Director (M/s.) Status1. H Lakshmanan Chairman2. C N Prasad Member3. S I Jaffar Ali Member

5. Average net profit of the Companyfor last three financial years Rs. 25.92 crores

6. Prescribed CSR Expenditure(2% of the amount as in item5 above) Rs. 52 lakhs

7. Details of CSR spent during the financial year(a) Total amount spent for the financial year Rs. 52 lakhs(b) Amount unspent, if any Not Applicable(c) Manner in which the amount spent during the financial year is detailed below.


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8. In case, the Company has failed to spend the2% of the average net profit of the last threefinancial years or any part thereof, the companyshall provide the reasons for not spending theamount in its Board report.

- Not applicable -

9. A responsibility statement of the CSR Committeethat the implementation and monitoring of CSRPolicy, is in compliance with CSR objectives andPolicy of the Company.

To discharge the duties cast under provisionsof the Companies Act, 2013, members of theCSR Committee visit places where SST is doingservices.


Chennai H LAKSHMANAN8th May 2019 Chairman of CSR Committee

State & district Maharashtra : PuneTamilnadu : Hosur

Amount outlay (budget)project or program-wise:

Rs. 1,940 Lakhs

5. Amount spent on theprojects or programmes:

Rs. 52 Lakhs

6. Sub-heads:

Direct expenses On Rs. 1,652.99 Lakhsprojects / programs: (including contribution of the Company of Rs. 52 lakhs)

Overheads: Nil

Cumulative expenditure Rs. 1,652.99 lakhsupto the reporting period: (including contribution of the Company of Rs. 52 Lakhs)


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Name of the Director (M/s.) Designation Ratio to Median % increase inRemuneration remuneration

1. H Lakshmanan NEID – –C N Prasad NEID – –Martin Grammer NED – –L Bhadri NEID – –S I Jaffar Ali NEID 1:2 –Sasikala Varadachari NEID 1:1 –A G Giridharan CEO NA 7%S Jagannathan* CFO NA –N Iswarya Lakshmi CS NA NA

*Salary paid by subsidiary company2. The percentage increase in the median remuneration of

employees in the financial year; 8%The number of permanent employees on the rolls ofCompany; 358a. Average percentile increase already made in the

salaries of employees other than the managerialpersonnel in the financial year 2018-19 6%

b. Average percentile increase in the managerialremuneration in the financial year 2018-19 NA

There are no exceptional circumstances for increase inthe managerial remuneration.Affirmation that the remuneration is as per theremuneration policy of the company.

Annexure - V to Directors’ Report

COMPARATIVE ANALYSIS OF REMUNERATION PAID TO DIRECTORS AND EMPLOYEES WITHTHE COMPANY’S PERFORMANCE



Remuneration paid during the year2018-19 is as per the Remuneration Policyof the Company

S.No.


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1. Details of contracts or arrangements ortransactions not at arm's length basis:

NIL

2. Details of material contract, arrangement ortransaction at arm's length:

(a) Name of the related party Harita FehrerLimited

(b) Nature of relationship Subsidiary

(c) Duration of the contracts /arrangements / 2018-19transactions

(d) Date (s) of approval by 6th

February 2018 andthe Board, if any: 6

th February 2019

Annexure - VI to Directors’ Report

Form for disclosure of particulars of contracts/arrangements entered into by the Company with relatedparties referred to in sub-section (1) of Section 188 of the Companies Act, 2013 including certainarms length transactions under third proviso thereto.

Nature of Salient terms of Amount ofcontracts / Goods / the contracts or contract or

arrange Services arrangements arrangementments / or transactions (Rs. in lakhs)

transactionsSale Rexine Purchase

price 17.35

Purchase Foams Cost plus 4,737.44Capital Goods- Mark-up 94.93

MoldsServices Lease rent 65.00availed Other services 125.42

Electricity, Manpower, Rent,

Rendering Telephoneof services Management At Cost 825.09

service charges,salary, canteenand Lease rent




33


1. Company’s philosophy on Code ofGovernanceThe Company believes in ensuring corporatefairness, transparency, professionalism,accountability and propriety in total functioning ofthe Company, which are pre-requisite for attainingsustainable growth in this competitive corporateworld. Obeying the law, both in letter and in spirit,is the foundation on which the Company's ethicalstandards are built. The Company wouldconstantly endeavour to improve on these aspects.The Company's corporate governance philosophyhas been further strengthened by adopting a Codeof Business Conduct and Ethics and Code ofConduct to Regulate, Monitor and Report Tradingby Insiders for prevention of insider trading by theDirectors and Designated Persons and Code ofpractices for fair disclosure of unpublished pricesensitive information.

2. Board of DirectorsThe Board of Directors (the Board), which consistsof eminent persons with considerable professionalexpertise and experience, provides leadership andguidance to the management, thereby enhancingStakeholders' value.

2.1 Composition and category of directors:As on 31st March 2019, the total strength ofthe Board consists of six Directors. All theDirectors are non-executive Directors. Out ofthe six non-executive Directors, five Directorsare independent Directors.Chairman is a non-executive and Independentdirector (NE-ID). The number of independentDirectors is more than one third of its totalstrength.The composition of the Company's Board is inconformity with SEBI (Listing Obligations andDisclosure Requirements) Regulations, 2015(Listing Regulations).Mr H Lakshmanan, Mr C N Prasad andMr S I Jaffar Ali, Non - Executive IndependentDirectors (NE-ID) have been appointed by theshareholders at the annual general meetingheld on 6th August 2014 for a term of five

Report on Corporate Governance

consecutive years. Their present tenure is upto5th August 2019.Based on the performance evaluation by boththe Nomination and Remuneration Committeeand the Board, all the aforesaid IDs areproposed to be re-appointed for the secondterm of 3 consecutive years from 6th August2019 as IDs of the Company in terms of Section149 of the Companies Act, 2013 (the Act 2013)on the same terms of appointment andremuneration by way of fees and profit relatedcommission, if any, subject to the approval ofshareholders through postal ballot.Mr L Bhadri and Ms Sasikala Varadachari wereappointed as Non-executive IndependentDirectors of the Company for the second termof three consecutive years effective 13th

October 2018 and 22nd March 2019respectively, with the approval of shareholdersby way of special resolutions passed at theannual general meeting held on 13th August2018.As required under Regulation 16 of the ListingRegulations, it is also ensured thatIndependent Directors do not hold non-independent Directorship position in anothercompany, where any non-independent directorof the Company is an independent director.

2.2 Board Meetings:The Company, in consultation with theDirectors, prepares and circulates a tentativeannual calendar for meetings of thecommittees / Board in order to assist theDirectors for planning their schedules well inadvance to participate in the meetings.Board and Committee meetings through videoconferencing or other audio visual means wasmade available to the Directors. For restricteditems of businesses Directors participationthrough VC are permitted in the discussionswherever necessary quorum of Directors wasphysically present at the meeting.The Company regularly places, before theBoard for its review, all the information asrequired under Part A of Schedule II to Listing


34


Regulations such as annual operating plans,capex budget and its quarterly updates,quarterly results, minutes of meetings of AuditCommittee and other committees of the Board,information on recruitment and remunerationof senior officers just below the level of Board,any significant development in humanresources / industrial relations, show cause,demand and prosecution notices and penaltynotices which are materially important,quarterly details of foreign exchangeexposures, risk management and mitigationmeasures, report on compliance of all lawsapplicable to the Company, prepared by theCompany as well as steps taken by theCompany to rectify instances of non-compliances, if any, etc.Comprehensively drafted notes for eachagenda item alongwith pre-agenda materials,wherever necessary, are circulated well inadvance to the committee / Board, to enablethem for making value addition as well as

exercising their business judgment in theCommittee / Board meetings.Presentations are also being made by thebusiness heads on the Company's operations,marketing strategy, Risk Management, InternalFinancial Control, etc in Board / AuditCommittee meetings.The meetings are convened through i-Padsas an eco-friendly measure. All agenda papersfor convening meetings of the Board /Committees are being uploaded in digital modewell in advance.During the year 2018-19, the Board met sixtimes on 10th May 2018, 13th August 2018,8th November 2018, 6th February 2019,14th February 2019 and 26th March 2019 andthe gap between two meetings did not exceedone hundred and twenty days. Besides, theNE-IDs held a separate meeting on 11th March2019, as per the applicable provisions of theAct, 2013 and Regulation 25(3) of ListingRegulations. All the NE-IDs were present atthe 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 annualgeneral meeting held on 13th August 2018 and also the number of other Directorships and committeememberships / chairmanships as on 31st March 2019 are as follows:

Attendance Number of other directorships,

Name of the DirectorDIN

particulars committee memberships /chairmanships

(M/s) Category Board Last Annual Other Committee CommitteeMeetings General director- member- chairman-

Meeting ships** ships@ shipsH Lakshmanan 00057973 NE-ID 6 Yes 18 3 –S I Jaffar Ali 00058955 NE-ID 6 Yes 1 1 –C N Prasad 01950656 NE-ID 5 Yes 4 – –Martin Grammer 00061786 NE-NID 4 Yes – – –L Bhadri 06829886 NE-ID 6 Yes 6 4 –Sasikala Varadachari 07132398 NE-ID 5 Yes 6 2 –

** Includes private companies and bodies corporate.@ Includes committees where the director is also Chairman.NE-ID Non Executive - Independent directorNE-NID Non Executive - Non independent director

None of the Directors on the Board is a member of more than ten committees or chairman of more than fivecommittees across all the companies in which they are Directors. Chairmanships / memberships of committeesinclude only Audit and Stakeholders Relationship Committees as covered under Regulation 26 of Listing


35


Regulations, as per the disclosures made by theDirectors. None of the Directors on the Board isrelated to any other Director on the board.

2.4 Listed entities in which the directors holdposition as director other than Harita SeatingSystems Limited and category ofDirectorship:

Name of the Name of the Category ofDirector (M/s.) Company Directorship

H Lakshmanan TVS Motor Non-Executive -Company Limited Non-Independent

DirectorS I Jaffar Ali - -C N Prasad - -Martin Grammer - -L Bhadri - -Sasikala Sundaram - Clayton Non-Executive -Varadachari Limited Independent Director

None of the non-executive director holdsdirectorships in more than eight listed entitiesand serves as an Independent director inmore than seven listed entities.

2.5 Access to information and updation toDirectors:The Board reviews all the informationprovided periodically for discussion andconsideration at its meetings in terms ofListing Regulations. Functional heads arepresent whenever necessary and apprise allthe Directors about the developments. Theyalso make presentations to the Board andAudit Committee of Directors.Apart from this, the observations on the auditcarried out by the internal auditors and thecompliance report on payment of statutoryliabilities submitted by the statutory auditorsof the Company are placed and discussedwith functional heads, by the AuditCommittee / Board. The Board also reviewsthe declarations made by the chief executiveofficer and the company secretary regardingcompliance of all applicable laws on quarterlybasis. Decisions taken at the meetings of theBoard / Committees are communicated to

the functional heads. Action taken reportson decisions of previous meetings is placedat every succeeding meeting of the Board /committees for reporting the compliance.

2.6 Familiarization programA familiarization program is made availableto Directors covering such topics as theBoard's role, Board composition and conduct,and the risks and responsibilities of theCompany Directors, to ensure that they arefully informed on current governance issues.The program also includes briefings on theculture, values and business model of theCompany, the roles and responsibilities ofsenior executives and the Company'sfinancial, strategic, operational and riskmanagement position. The induction processfor NE-IDs include plant visit for detailedunderstanding of manufacturing process /activities of the Company. The details offamiliarization program are available on theCompany's website in the following link: http://www.haritaseating.com/PDF/HSSL-ID-Familiarisation-Prog.pdf.

2.7 Chart setting out the skills/expertise/competence of the Board of Directors:

While evaluating the Board as a whole, it wasensured that the existing board membershave relevant core skills/expertise/competencies as required in the context ofits business(es) and sector(s) to functioneffectively.Skill Description

Leadership/ Strategy Experience of playing leadership rolesin large businesses, withcompetencies around strategydevelopment & implementation, sales& marketing, business administration/operations and Organisations andpeople management.

Engineering Experience Strong knowledge and experience inengineering and in managingbusiness operations of a sizeableorganization in the business ofmanufacture and sale of automobiles.


36


Financial Practical knowledge and experiencein Corporate Finance, accounting andreporting and internal financialcontrols, including strong ability toasses financial impact of decisionmaking and ensure profitable andsustainable growth.

Governance Board level experience in reputedorganisations, with strongunderstanding of and experience indirecting the management in the bestinterests of the Company and itsstakeholders and in upholding highstandards of governance.

Regulatory Strong expertise and experience incorporate law and regulatorycompliance in India and overseas(including industry specific laws).

2.8 Code of Business Conduct and Ethics formembers of the Board and SeniorManagement Personnel:The Company has in place the Code ofBusiness Conduct and Ethics for memberof the Board and Senior ManagementPersonnel (the Code) approved by theBoard.The Code has been communicated toDirectors and the Senior ManagementPersonnel. The Code has also been displayedon the Company's website in the following link:h t tp : / /www.har i taseat ing.com/PDF/CodeofBusinessConductandEthics.pdf.All the members of the Board and SeniorManagement Personnel have confirmedcompliance with the Code for the year ended31st March 2019. The annual report containsa declaration to this effect signed by the chiefexecutive officer.

2.9 Appointment / Re-appointment of Directors:In terms of Regulation 36(3) of ListingRegulations, a brief resume of directorproposed to be re-appointed, nature of hisexpertise in specific functional areas, otherDirectorships and committee memberships,shareholding and relationship, if any, with

other Directors are provided in the noticeconvening the ensuing AGM of theCompany.

2.10 Committees of the Board:The Board has, in order to make a focusedattention on business and for bettergovernance and accountability, constitutedthe following mandatory committees, viz.,Audit Committee, Stakeholders'Relationship Committee, Nomination andRemuneration Committee and CorporateSocial Responsibility Committee and non-mandatory Committee, viz., AdministrativeCommittee. The terms of reference of theseCommittees are determined by the Boardand their performance reviewed. Meetingsof each of these Committees are convenedby the respective Chairman of theCommittee, who also informs the Boardabout the summary of discussions held inthe Committee Meetings. The minutes ofthe Committee Meetings are placed beforethe subsequent Board meetings.

3. Audit CommitteeThe primary objective of the Audit Committee isto monitor and provide effective supervision ofthe management's financial reporting processwith a view to ensure accurate, timely and properdisclosure and transparency, integrity andquality of financial reporting.

3.1 Brief description of terms of reference:The Audit Committee is entrusted with theresponsibility to supervise the Company'sinternal control and financial reportingprocess and inter alia performs the followingfunctions:a. Overviewing the Company's financial

reporting process and the disclosure ofits financial information to ensure that thefinancial statement is correct, sufficientand credible;

b. Recommending the appointment,remuneration and terms of appointmentof auditors of the Company;

c. Reviewing, with the management, theannual financial statements and auditor's

Skill Description


37


report thereon before submission to theBoard for approval, with particularreference to:

• Matters required to be included in theDirector's Responsibility Statement interms of clause (c) of sub-section 3 ofSection 134 of the Act 2013;

• Changes, if any, in accounting policiesand practices and reasons for thesame;

• Major accounting entries involvingestimates based on the exercise ofjudgment by management;

• Significant adjustments made in thefinancial statements arising out of auditfindings;

• Compliance with listing and other legalrequirements relating to financialstatements;

• Disclosure of any related partytransactions; and

• Modified opinions, if any, in the draftaudit report,

d. Reviewing, with the management, thequarterly financial statements beforesubmission to the Board for approval;

e. Reviewing and monitoring the auditor'sindependence and performance, andeffectiveness of audit process;

f. Approving or subsequently modifying anytransactions of the company with relatedparties;

g. Scrutinizing the inter-corporate loans andinvestments;

h. Reviewing valuation of undertakings orassets of the Company, wherever it isnecessary;

i. Evaluating of internal financial controlsand risk management systems;

j. Reviewing, with the management,performance of statutory and internalauditors and adequacy of the internalcontrol systems;

k. Reviewing the adequacy of internal auditfunction, if any, including the structure ofthe internal audit department, staffingand seniority of the official heading thedepartment, reporting structure coverageand frequency of internal audit;

l. Discussing with internal auditors of anysignificant findings and follow up there on;

m. Reviewing the findings of any internalinvestigations by the internal auditors intomatters where there is suspected fraudor irregularity or a failure of internalcontrol systems of a material nature andreporting the matter to the Board;

n. Discussing with statutory auditors beforethe audit commences, about the natureand scope of audit as well as post-auditdiscussion to ascertain any area ofconcern;

o. Looking into the reasons for substantialdefaults, if any, in the payment to thedepositors, debenture holders,shareholders (in case of non-payment ofdeclared dividends) and creditors;

p. Reviewing the functioning of the WhistleBlower mechanism;

q. Approving the appointment of CFO afterassessing the qualifications, experienceand background of the candidate; and

r. Reviewing the utilisation of loans and /or advances from / investments / by theholding company in the subsidiaryexceeding Rs. 100 Cr , or 10% of theasset size of the subsidiary, whicheveris lower.

In addition, reviewing of such other functionsas envisaged under Section 177 of the Act2013 read with the Companies (Meetings ofBoard and its Powers) Rules 2014 asamended and Regulation 18 of ListingRegulations.The subjects reviewed and recommendedin the meetings of the Audit Committee wereapprised to the Board by the Chairman ofthe Audit Committee, for its approval. All therecommendations made by the Committee


38


during the year under review, were acceptedby the Board.

3.2 Composition, names of members and thechairman:

As at 31st March 2019, the Audit Committeeconsists of the following non-executiveindependent Directors:M/s. H Lakshmanan, C N Prasad and S IJaffar Ali.

The composition of the Committee is inaccordance with the requirements ofRegulation 18 of Listing Regulations readwith Section 177 of the Act, 2013.Mr H Lakshmanan is the Chairman andMs N Iswarya Lakshmi, company secretaryis the secretary of the Committee.Chairman of the Committee was present atthe last Annual General Meeting held on13th August 2018.

3.3 The particulars of meetings and attendanceby the members of the Committee, during theyear under review, are given in the table below:

Date of the Members presentmeeting (M/s.)

10.05.201813.08.201808.11.2018 H Lakshmanan,06.02.2019 C N Prasad and S I Jaffar Ali11.02.201914.02.2019

4. Subsidiary companies

The Company's Subsidiary, Harita FehrerLimited is covered within the definition of"unlisted material subsidiary" incorporated inIndia in terms of Regulation 16(1)(c) read withRegulation 24 of Listing Regulations.

The Board of Directors of the said subsidiaryCompany consists of four Independent Directorsrepresenting the Company viz.,Mr H Lakshmanan, Mr C N Prasad, Mr S I JaffarAli and Mr L Bhadri in terms of Regulation 24(1)of Listing Regulations.

The Audit Committee reviews the financialstatements and in particular the investmentsmade by the said unlisted subsidiary.

The minutes of the Board meetings of the saidunlisted subsidiary are periodically placed beforethe Board. The Board is periodically informedabout all significant transactions andarrangements entered into by the unlistedsubsidiary.

Material Subsidiaries Policy

The Board has duly formulated a policy fordetermining 'material' subsidiaries. The Boardhas duly formulated a policy for determining'material subsidiaries'. The Board at its meetingheld on 8th May 2019 redefined the term"material subsidiary" in line with the amendedListing Regulations 2015 and thereby materialsubsidiary mean a subsidiary whose income ornet worth exceeds 10% of the consolidatedincome or net worth respectively, of the listedentity and its subsidiaries in the immediatelypreceding accounting year.Copy of the said policy is available in theCompany's website in the following link http://w w w . h a r i t a s e a t i n g . c o m / P D F /MaterialSubsidiaryPolicy.pdf.Based on the above criteria, Harita FehrerLimited (HFRL) continues to be the 'materialsubsidiary' as at 31st March 2019. The Companyhas ensured that HFRL has obtained secretarialaudit report from a Company Secretary inPractice and annexed with its annual report forthe year 2018-19.

5. Disclosures5.1 Materially significant related party transactions:

All transactions entered into with RelatedParties, as defined under the Act, 2013 andListing Regulations during the financial year2018-19 were in the ordinary course ofbusiness and on an arms' length pricing anddo not attract the provisions of Section 188 ofthe Act, 2013 and the rules madethereunder.


39


There were no materially significanttransactions with the related parties, duringthe year, which were in conflict with theinterests of the Company and no approvalwas required for the Company in terms ofListing Regulations.The transactions with the related parties,namely its promoters, its holding, subsidiaryand associate companies etc., of routinenature have been reported elsewhere in theannual report, as per Indian AccountingStandard 24 (IND AS 24) notified vide theCompanies (Indian Accounting Standard)Rules, 2015.Details of material related party transactionsare enclosed as Annexure VI to the Directors'report for the year ended 31st March 2019.

Related Party Transactions Policy:The Board has formulated a policy on relatedparty transactions. The Audit Committeereviews and approves transactions betweenthe Company and related parties, as definedunder the Listing Regulations, to ensure thatthe terms of such RPTs would reasonablybe expected of transactions negotiated or atarm's length and in the ordinary course ofbusiness. The audit committee meets priorto each scheduled board meeting to reviewall RPTs of the Company on a quarterlybasis.In terms of Regulation 23 of ListingRegulations, all RPTs for the succeedingfinancial year, with clear threshold limit, areregularly placed before the Audit Committeemeeting convened on last quarter of thefinancial year for its approval andrecommendation to the Board for itsapproval, wherever required. RPTs enteredduring the financial year are reviewed at themeeting for any upward revision in thethreshold limit.It is also ensured that none of the RPTsinvolving payments with respect to brandusage or royalty during the financial year,exceed two percent of the annualconsolidated turnover of the Company as per

the previous audited financial statements ofthe Company.As per the Companies Act, 2013, anyunforeseen RPT involving amount notexceeding Rs.1 Cr per transaction is enteredinto by a director or officer of the Companywithout obtaining prior approval of the AuditCommittee and such RPTs are ratified bythe Audit Committee within three monthsfrom the date of such transaction.Copy of the said policy is available on theCompany's website with the following link:h t tp : / /www.har i taseat ing.com/PDF/RelatedPartyTransactionPolicy.pdf.

5.2 Disclosure of accounting treatment:Pursuant to the notification, issued by theMinistry of Corporate Affairs dated February16, 2015 relating to the Companies (IndianAccounting Standard) Rules, 2015, theCompany has adopted "IND AS" with effectfrom 1st April 2017. Accordingly, the financialstatements for the year 2018-19 have beenprepared in compliance with the said Rules.

5.3 Risk Management:The Company has an established RiskManagement Policy which formalizes itsapproach to the oversight and managementof material business risks. The policy isimplemented through a top down and bottomup approach for identifying, assessing,monitoring and managing key risks acrossthe Company's business units.Risks and effectiveness of management areinternally reviewed and reported regularly tothe Board. As a process, the risks associatedwith the business are identified andprioritized based on severity, likelihood andeffectiveness of current detection. Such risksare reviewed by the senior management onquarterly basis. Process owners areidentified for each risk and metrics aredeveloped for monitoring and reviewing therisk mitigation.The Board is satisfied that there areadequate systems and procedures in place


40


to identify, assess, monitor and managerisks. The Company's Audit Committeereviews reports given by members of themanagement team and recommendssuitable action.

5.4 Instances of non-compliances, if any:There was no instance of non-compliance bythe Company, penalty and stricture imposedon the Company by the Stock Exchanges orSEBI or any other statutory authorities on anymatter related to the capital markets, duringthe last three years.

5.5 Disclosure by senior management personnel:The Senior Management Personnel havemade disclosures to the Board relating to allmaterial, financial and other transactionsstating that they did not have personal interestthat could result in a conflict with the interest ofthe Company at large.

5.6 CEO and CFO Certification:The CEO and CFO of the Company havecertified to the Board on financial and othermatters in accordance with Regulation 33 ofthe Listing Regulations for the financial yearended 31st March 2019.

5.7 Compliance with mandatory / non-mandatoryrequirements:The Company has complied with all applicablemandatory requirements in terms of ListingRegulations. The non-mandatory requirementshave been adopted to the extent and in themanner as stated under the appropriateheadings detailed elsewhere in this report.

5.8 Code of Conduct for Prevention of InsiderTrading:In compliance with the SEBI (Prohibition ofInsider Trading) Regulations 2015, theCompany has a comprehensive Code ofconduct for prevention of insider trading andthe same is being strictly adhered to by theDesignated Persons as defined under thisCode.

In terms of recent amended SEBI (Prohibitionof Insider Trading) Regulations, 2015, theboard at its meeting held on 8th May 2019approved a policy for determination oflegitimate purposes for which disclosure ofUnpublished Price Sensitive Information(UPSI) is permissible in the ordinary course ofbusiness and maintaining Structured DigitalDatabase of Designated persons (DP) forenhanced accountability and controlmechanisms for preventing insider trading.The Company has amended its Code ofPractices and Procedures for fair disclosureof "Unpublished Price Sensitive Information"(UPSI) and a Code of Conduct to regulate,monitor and report trading by insiders at itsmeeting held on 8th May 2019, in accordancewith the requirements of SEBI (Prohibition ofInsider Trading) Regulations 2015, vide itsNotification dated 31st December 2018.The Code expressly lays down the guidelinesand the procedures to be followed anddisclosures to be made, while dealing with theshares of the Company.The Company follows closure of tradingwindow from the end of every quarter till 48hours after the declaration of financial results.The Company has been advising theDesignated Persons covered by the Code notto trade in Company's securities during theclosure of trading window period.

5.9 Management discussion and analysis report,familiarization programme and whistleblower policy:All the above report / policies forms part of theDirectors' report.

5.10 Amendment to Whistle Blower Policy.The Company has at its meeting dated 8th

May 2019 amended the Whistle Blower Policyto enable the employees to report instancesof leak or suspected leak of UPSI immediatelyto the Compliance officer or Chairman of theAudit Committee.


41


Upon receipt of complaint relating to suchleakage / suspected leakage of UPSI, thesame would be investigated in accordancewith the procedure as detailed in theCompany's Code of conduct under InsiderTrading Regulations.Copy of the said Policy is available in theCompany's website in the following link:

6. Nomination and Remuneration Committee(NRC)6.1 Composition of the Committee:

As at 31st March 2019, the NRC consists ofM/s. C N Prasad, H Lakshmanan and S IJaffar Ali all of whom are Non-ExecutiveIndependent Directors. Mr C N Prasad is theChairman and Ms N Iswarya Lakshmi,company secretary is the secretary of theCommittee.All the Members were present at themeeting of the Committee held on 10th May2018.Chairman of the Committee was present atthe AGM held on 13th August 2018 to answerthe shareholders queries.

6.2 The broad terms of reference of the NRCare as under:

- Guiding the Board for laying down theterms and conditions in relation toappointment and removal of director(s),Key Managerial Personnel (KMP) andSenior Management Personnel (SMP) ofthe Company.

- Evaluating the performance of thedirector(s) and providing necessaryreport to the Board for its furtherevaluation and consideration.

- Recommending to the Board onremuneration payable to the Director(s)and KMP of the Company based on(i) the Company's structure and financialperformance and (ii) remuneration trends

and practices that prevail in peercompanies across automobile industry.

- Retaining, motivating and promotingtalent among the employees andensuring long term sustainability oftalented SMP by creation of competitiveadvantage through a structured talentreview.

6.3 The role / scope of the NRC is as follows:

- To make recommendations to the Boardwith respect to incentive compensationplans for Executive Director(s) andremuneration of Non-ExecutiveDirector(s) of the Company.

- To identify persons who are qualified tobecome Director(s), KMP and SMP of theCompany.

- To recommend to the Board for theappointment / removal of director(s),KMP and SMP of the Company.

- To formulate criteria for determiningqualification, positive attributes andindependence of a director.

- To recommend to the Board a policy forremuneration of Director(s), KMP andSMP of the Company.

6.4 Evaluation CriteriaThe NRC lays down the criteria for evaluatingthe performance of every Director,Committees of the Board and the Board asa whole and also the performance of KMPand SMP.

The performance evaluation of the Board asa whole was assessed based on the criterialike its composition, size, mix of skills andexperience, its meeting sequence,effectiveness of discussion, decision making,follow-up action, quality of information,governance issues, performance andreporting by various committees set up bythe board.


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NRC prescribed a peer evaluationmethodology by way of set of questionnaireto evaluate the performance of individualDirectors, Committee(s) of the Board,Chairman and the Board as a whole', andthe Board carried out the performanceevaluation as per the methodology.

The performance evaluation of individualdirector was carried out based on his / hercommitment to the role and fiduciaryresponsibilities as a board member,attendance and active participation, strategicand lateral thinking, contribution andrecommendations given professionally,heading / acting as member of variousCommittees etc.

The performance of SMP was measuredagainst their achievement of the businessplans approved by the Board during and atthe completion of the financial year and theirannual 'at-risk' remuneration which reflectstheir business plan achievements. Anevaluation of performance has beenundertaken based on the criteria for all SMPfor 2018-19 and this has been in accordancewith the above process.

NRC has the overall responsibility forevaluating and approving the compensationplans, policies and programmes applicableto SMP. NRC also delegated its authority toChairman of the Board, whereverappropriate, for this purpose.

6.5 Remuneration Policy:

The Nomination and Remuneration Policyhas been placed on the website of theCompany in the following link: http://w w w . h a r i t a s e a t i n g . c o m / P D F /Nomination_and_Remuneration_Policy.pdf.The salient features of the policy are asfollows:NRC formulate policies to ensure that:- the level and composition of

remuneration are reasonable and

sufficient to attract, retain and motivateDirector(s) of the quality required to runthe Company successfully;

- the relationship of remuneration toperformance is clear and meetsappropriate performance benchmarks;and

- the remuneration to Director(s), KMP andSMP of the Company involve a balancebetween fixed and incentive payreflecting short and long-termperformance objectives appropriate tothe working of the Company and itsgoals.

6.6 Remuneration to Non-Executive Directors:

Sitting feesRs.5,000/- each is paid to the Non- ExecutiveDirectors for every meeting of the Board and/ or Committee thereof attended by them,which is within the limits, prescribed underthe Act, 2013.CommissionThe Company benefits from the expertise,advise and inputs provided by the IDs. TheIDs devote their valuable time in deliberatingstrategic and critical issues in the course ofthe Board / Committee meetings of theCompany and give their valuable advice,suggestions and guidance to themanagement of the Company, from time totime and hence IDs are being paid by wayof sitting fees and commission.As approved by the shareholders at the AGMheld on 8th August 2016, Non-Executive andIndependent Directors are being paidcommission, not exceeding the limitsprescribed under the Act, 2013, asdetermined by the Board for each financialyear.

A commission of Rs. 10 lakhs per annum ispayable to each such IDs, who serve asMembers of the Audit Committee as well andRs. 7 lakhs per annum to other IDs for theyear 2018-19. The amount of commission


43


for every financial year will be decided bythe Board, as approved by the shareholdersat the AGM, subject to the limit of 1% in theaggregate of net profits of the Company, ascalculated pursuant to Section 198 of the Act,2013. The above compensation structure iscommensurate with the best practices interms of remunerating NE-IDs andadequately compensates for the time andcontribution made by NE-IDs.

At the AGM held on 6th August 2014,M/s H Lakshmanan, C N Prasad andS I Jaffar Ali were appointed to hold office forthe first term of five consecutive years fromthe conclusion of that AGM. Their presenttenure is upto 5th August 2019. Approval ofthe shareholders by way of special resolutionis being sought by way of postal ballot forappointment of the aforesaid directors asIndependent Directors for the second term of3 consecutive years effective 6th August 2019.

At the AGM of the Company held on 13th

August 2018, Mr L Bhadri and Ms SasikalaVaradachari, were appointed as Non-Executive Independent Directors of theCompany for the second term of threeconsecutive years effective 13th October2018 and 22nd March 2019 respectively andto receive remuneration by way of fees,reimbursement of expenses for participationin the meetings of the Board and / orCommittees and also profit relatedcommission, in terms of Section 197 of theAct, 2013 in addition to sitting fees.

Presently, the Company does not have ascheme for grant of stock options either tothe Directors or Employees of the Company.

6.7 Particulars of sitting fees / Commission paidto the non-executive and independent / non-

independent directors during the financialyear 2018-19 are as follows:

(Rs. in lakhs)Name of the Sitting Commi-

Directors fees ssion Total(M/s.) (*)

H Lakshmanan 0.90 – 0.90

C N Prasad 0.85 – 0.85

S I Jaffar Ali 0.90 10.00 10.90

Martin Grammer 0.20 – 0.20

L Bhadri 0.30 – 0.30

SasikalaVaradachari 0.25 7.00 7.25

Total 3.40 17.00 20.40

(*) - Includes fees for attending meetings ofthe Board and committees.

6.8 Details of shareholdings of non-executiveDirectors in the Company as on 31st March2019:

Name of the No. of shares heldDirectors (face value of

(M/s.) Rs.10/- each)

H Lakshmanan 2,020

Martin Grammer 10,87,600

S I Jaffar Ali –

C N Prasad –

L Bhadri –

SasikalaVaradachari –


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7. Stakeholders’ Relationship Committee7.1 The Stakeholders' Relationship Committee of

Directors (SRC) consists of three membersviz., M/s. H Lakshmanan, C N Prasad andS I Jaffar Ali, non-executive and independentdirectors. Mr H Lakshmanan, non-executivedirector is the chairman of the Committee andhe was present at the AGM held on13th August 2018.

7.2 As required by Listing Regulations,Ms N Iswarya Lakshmi, company secretaryis the compliance officer of the SRC whooversees the redressal mechanism forinvestor grievances. For any clarification /complaint, the shareholders may contact thecompany secretary.

7.3 The meetings of the Committee were held on10th May 2018, 13th August 2018, 8th

November 2018 and 6th February 2019. Allthe members of the Committee attended themeeting held during the year.

7.4 SRC oversees and reviews all the mattersconnected with share transfers, issue ofduplicate share certificates and other issuespertaining to shares. SRC also looks intovarious aspects of interests:• The transfer / transmission of shares, non-

receipt of Annual Report, non-receipt ofdeclared dividends, issue of new/duplicatecertificates, general meetings etc. etc.

• Review of measures taken for effectiveexercise of voting rights by shareholders.

• Review of adherence to the servicestandards adopted by the listed entity inrespect of various services being renderedby the Registrar & Share Transfer Agent.

• Review of the various measures andinitiatives taken by the listed entity forreducing the quantum of unclaimeddividends and ensuring timely receipt ofdividend warrants/annual reports/statutory notices by the shareholders ofthe Company.

The Company, in order to expedite theprocess of share transfers delegated thepower of share transfers to an officer of theShare Transfer Agent (STA). The Company,as a matter of policy, disposes of investors'complaints within a span of seven days.

7.5 During the year 2018-19, the only onecomplaint pertaining to non-receipt ofdividend warrant and the same was dulyredressed and no queries were pending atthe year end.

7.6 All requests for dematerialization of shareswere carried out within the stipulated timeperiod and no share certificate was pendingfor dematerialization.

7.7 Reconciliation of Share Capital Audit:A Practising Company Secretary carries outReconciliation of Share Capital (RSC) Auditon a quarterly basis to reconcile the totaladmitted capital with National SecuritiesDepository Limited (NSDL) and CentralDepository Services (India) Limited (CDSL).The reports are being regularly placed beforethe board for its perusal.The RSC audit reports confirmed that thetotal issued and listed capital was inagreement with the total number of sharesin physical form and in dematerialized formheld with NSDL and CDSL.

8. Corporate Social Responsibility CommitteeThe Corporate Social Responsibility Committeeconsists of three directors viz., M/s H Lakshmanan,S I Jaffar Ali and C N Prasad. Mr H Lakshmananis the Chairman of the Committee.The details of CSR Policy, initiatives and spendingare spelt out in the Directors Report.During the year, the Committee met on 10th May2018 and all the members were present at themeeting.

9. Administrative CommitteeThe Administrative Committee consists of threeDirectors viz., M/s H Lakshmanan, C N Prasadand S I Jaffar Ali. Mr H Lakshmanan, Non-


45


Executive Director, is the Chairman of theCommittee.

During the year the Committee met on 13th August2018 and all the Members were present at themeeting.

10. General Body Meeting10.1 Location and time where the AGMs were

held during the last three years:

Year Location Date Time

2015-16 Kasturi Srinivasan Hall 08.08.2016 2.30 p.m.(Mini Hall)

2016-17 The Music Academy, 09.08.2017 10.00 a.m.No.168 (Old No.306),

2017-18 T.T.K. Road, 13.08.2018 10.00 a.m.Chennai 600 014.

10.2 Special resolutions passed in the previousthree AGMs:During the last three years, namely 2015-16 to 2017-18 approvals of theshareholders were obtained by passingspecial resolutions as follows:

YearSubject matter of Date ofspecial resolution AGM

2015-16 Approving the payment of commissionto non-executive Directors of theCompany effective 1st April 2015. 08.08.2016

2017-18 Nil 09.08.2017

2018-19 1. Approving the re-appointment ofMr L Bhadri as an IndependentDirector for the second term ofthree years effective 13th October2018.

13.08.20182. Approving the re-appointment ofMs Sasikala Varadachari as anIndependent Director for thesecond term of three yearseffective 22nd March 2019.

10.3 None of the subjects placed before theshareholders in the last / ensuing AGMrequired / requires approval by PostalBallot. However, in terms of the Regulation44 of Listing Regulations and Section 108of the Act, 2013 read with the Companies

(Management and Administration) Rules,2014, the Company facilitated its membersto exercise their right to vote throughRemote e-Voting and through Ballot Paperat the meeting for all the items at the AGMheld on 13th August 2018.

11. Means of communication to shareholdersThe Board believes that effective communicationof information is an essential component ofcorporate governance. The Company regularlyinteracts with shareholders through multiplechannels of communication such as resultsannouncement, annual report, media releases,Company's website and specific communicationsto Stock Exchanges, where the Company'sshares are listed.

11.1 Quarterly results:The unaudited quarterly financial results ofthe Company were published in Englishand Regional newspapers.

11.2 Newspapers wherein results are normallypublished:The results are normally published inEnglish newspaper, viz., Business Line andRegional Newspaper, viz., Makkal Kural.

11.3 Website:The Company has in place a websiteaddressed as www.haritaseating.com. Thiswebsite contains the basic informationabout the Company viz., details of itsbusiness, financial information,shareholding pattern, compliance withcorporate governance, contact informationof the designated officials of the Company,who are responsible for assisting andhandling investor grievances, such otherdetails as may be required underRegulation 46 of SEBI LODR Regulations.The Company ensures that the contentsof this website are periodically updated.

11.4 Press Release & Investor / Analysts meet:In addition, the Company makes use of thiswebsite for publishing official news releaseand presentations, if any, made toinstitutional investors / analysts.


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12. General shareholder information12.1 Annual General Meeting:

Date and time : Tuesday, the 13th August2019 at 10.35 a.m.

Venue : Kasturi Srinivasan Hall (Mini Hall)The Music Academy,No. 168, (Old No. 306),T.T.K. Road, Royapettah,Chennai - 600 014.

12.2 Financial year : 1st April to 31st MarchFinancial Calendar : 2019-20Financial reporting forthe quarter ending30th June 2019 : On or before

14th August 201930th September 2019 : On or before

14th November 201931st December 2019 : On or before

14th February 202031st March 2020 : On or before

30th May 2020

12.3 Particulars of dividend payment:Particulars of dividend declaration / paymentare disclosed in the Directors' Report.

12.4 Listing on Stock Exchanges:Name and Address of Stock Code /the Stock Exchange SymbolNational Stock Exchange of India Limited HARITASEATExchange Plaza, Plot No. C/1, (Stock Symbol)G-Block, Bandra Kurla Complex,Bandra (East), Mumbai 400 051. IndiaTel.: 91 22 2659 8100Fax : 91 22 2659 8120ISIN allotted by Depositories INE 939D01015(Company ID Number)

(Note: Annual listing fees and custodialcharges for the year 2019-2020 were dulypaid to the above Stock Exchange andDepositories)

12.5 Market price data: (in Rs.)

MonthNational Stock Exchange of

India LimitedHigh Low

April 2018 1025 961

May 2018 1034 912

June 2018 989 801

July 2018 841 548

August 2018 771 596

September 2018 665 537

October 2018 664 490

November 2018 609 552

December 2018 595 499

January 2019 557 476

February 2019 492 376

March 2019 492 436

12.6 Share price performance in comparison to broadbased indices - NSE Nifty:

SHARE PRICE MOVEMENTNSE NIFTY VS HSSL (HIGH)

Apr. 2018 May June July Aug Sept Oct Nov Dec Jan 2019 Feb March

NSE NIFTY HSSL Price (in Rs.)

1025

10739 10736 1071411357 11681

1093010387

10878 10863 10831 1079311624

1034 989

841771

665 664609 595 557

492 492


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12.7 Share Transfer Agents and share transfersystem:

a. With a view to render prompt andefficient service to the shareholders,Sundaram-Clayton Limited (SCL), whichhas been registered with SEBI as sharetransfer agents in Category II, has beenappointed as the Share Transfer Agentof the Company (STA) with a view torendering prompt and efficient serviceto the investors and in compliance withRegulation 7 of the Listing Regulations2015. The shareholders were alsoadvised about this appointment of STAto handle share registry work pertainingto both physical and electronic segmentsof the Company, effective 1st October2004.

b. All matters connected with the sharetransfer, dividends and other matters arehandled by the STA located at theaddress mentioned elsewhere in thisreport.

c. Shares lodged for transfers are normallyprocessed within 15 days from the dateof lodgement, if the documents are clearin all respects.

d. All requests for dematerialization ofsecurities are processed and theconfirmation is given to the depositorieswithin 15 days. Grievances receivedfrom investors and other miscellaneouscorrespondences relating to change ofaddress, mandates, etc., are processedby the STA within 7 days.

e. Certificates are being obtained andsubmitted to Stock Exchanges, on half-

yearly basis, from a CompanySecretary-in-practice towards duecompliance of share transfer formalitiesby the Company within the due dates,in terms of Regulation 40(9) of ListingRegulations.

f. Certificates have also been receivedfrom a Company Secretary-in-practiceand submitted to the Stock Exchanges,on a quarterly basis, for timelydematerialization of shares of theCompany and for reconciliation of theshare capital of the Company, asrequired under SEBI (Depositories andParticipants) Regulations, 1996.

g. The Company, as required underRegulation 6(2)(d) of Listing Regulations,has designated the following e-mail IDs,namely [email protected]/ [email protected] for the purpose ofregistering complaints, if any, by theinvestors and expeditious redressal of theirgrievances.

h. Certificate signed by the ComplianceOfficer of STA and the CompanySecretary towards maintenance of sharetransfer facility by STA in compliancewith Regulation 7(3) of the ListingRegulations has been submitted to theStock Exchange.

i. Shareholders are requested tocorrespond with the STA for transfer /transmission of shares, change ofaddress and queries pertaining to theirshareholding, dividend, etc., at theiraddress given in this report.


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12.8 Shareholding pattern of the Company as on 31st March 2019:

Category of Shareholder No. of%shares held

Promoter and Promoter GroupBodies Corporate & Individual 51,44,962 66.22

Total (A) 51,44,962 66.22Public ShareholdingMutual Funds 30,008 0.39

Banks / Financial Institutions 1,654 0.02

Foreign Portfolio Investors 51,175 0.66

Total Institutions (B) 82,837 1.07Bodies Corporate 1,74,483 2.25

Individuals holding nominal capital inexcess of Rs.2 lakhs 2,09,500 2.70

Individuals holding nominal capitalupto Rs.2 lakhs 17,22,771 22.16

NRI Repatriable 27,476 0.35

NRI Non - Repatriable 17,153 0.22

Directors & their relatives 2,020 0.03

Clearing members 21,417 0.28

LLP 3,66,421 4.72Total Non-Institutions (C ) 25,41,241 32.71Total Public Shareholding D = (B + C) 26,240,78 33.78Grand Total (A+D) 77,69,040 100.00

12.9 Distribution of Shareholding as on 31st March2019:

Shareholding No. of % No. of %(Range) shares members

Up to 500 8,52,955 10.98 9,984 93.56

501 - 1000 3,07,734 3.96 389 3.64

1001 - 2000 2,41,612 3.11 169 1.58

2001 - 5000 2,51,591 3.24 79 0.74

5001 - 10000 1,55,820 2.00 22 0.21

10001 and above 59,59,328 76.71 29 0.27

Total 77,69,040 100.00 10,672 100.00

12.10 Dematerialization of shares and liquidity:All the promoters’ holding consisting of51,44,962 equity shares of Rs.10/- each havebeen fully dematerialised.Out of 26,24,078 equity shares of Rs.10/-each held by persons other than Promoters,23,06,722 shares have been dematerialisedas on 31st March 2019 accounting for 96.54%in total.

12.11 The Company has not issued any GlobalDepository Receipt / American DepositoryReceipt / Warrant or any convertibleinstrument, which is likely to have impact onthe Company's equity.


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D) Pant Nagar : Plot No.35, Sector - 4,Integrated Estate,Pantnagar, Rudrapur,Udham Singh Nagar District,Uttarakhand - 263 153.Tel : +91-5944-250889Email : [email protected]

E) Chennai : Survey No.29, 30, 31,Vellanthangal Village,No.55,Thandalam Group,Irrungattukottai,Sriperumpudur - 602 105Tamil NaduTel : 044-67121380/381Email : [email protected]

F) Pithampur : 39/2, Gram, Sonwal,Ner Sti, Rau Pithampur Road,The M How, Indore district,Madhya Pradesh - 453 441Email : [email protected]

12.14 Address for investor correspondence:(i) For transfer / demate- : Sundaram-Clayton Limited

rialization of shares, Share Transfer Agent (STA)payment of dividend on Unit : Harita Seatingshares and any other Systems Limitedquery relating to the “Jayalakshmi Estates”,shares of the Company I Floor, No. 29,

Haddows Road,Chennai - 600 006.

(ii) For non-receipt of Emailannual report [email protected]

[email protected]

(iii) For investors’ grievance : Emailand general [email protected] [email protected]

12.15 List of Credit Rating:The Company is maintaining the existingcredit rating viz., CARE A for long termborrowings and CARE A1 for short termborrowings.

12.16 Certificate from Practicing CompanySecretary:The Company has received a certificate fromthe Secretarial Auditor of the Company statingthat none of the directors on the board of thecompany have been debarred or disqualifiedfrom being appointed or continuing asdirectors of companies by the Board/Ministryof Corporate Affairs or any such statutoryauthority.

12.12 Other Disclosuresa. Pecuniary relationships or transactions

with NE-IDs vis-a-vis the Company duringthe year under review, do not exceed thethreshold limit as laid down under theListing Regulations.

b. During the year, there were no materiallysignificant transactions with related partiesthat may have potential conflict with theinterests of the Company at large.

c. Company is a net exporter. Company hasa forex hedging policy and covers areappropriately taken to cover the currencyrisk. The exposure and cover taken arereviewed by the Audit Committee onregular basis.

d. Company is not a dealer in Commodities.Prices payable to vendors for rawmaterials and components are negotiatedbased on internationally available data.Cost of manufacture of all products arereviewed at regular intervals and whereverrequired suitable price changes are donebased on market conditions.The Company has not entered into anycommodity derivatives with any of thebankers and hence the disclosure ofexposure in commodity risks faced by thecompany is not required, as directedin the SEBI Circular dated 15th November2018.

12.13 Plant Locations:A) Hosur : Belagondapalli, Thally Road

Hosur 635 114, Tamil Nadu.Tel : 04347 - 233445Email : [email protected]

B) Ranjangaon : Plot No.A2, MIDC Industrial areaRanjangaon, Koregaon VillageShirur taluk,Pune District - 412 210.MaharashtraTel : 02138 - 610700Email : [email protected]

C) Dharwad : Plot No-553-D, 2nd Stage,Belur Industrial Area,Dharwad - 580 011,KarnatakaTel : +91-0836-2486625Email:[email protected]


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avoid risks while dealing in securities of theCompany.

14.1 Demat of Shares:Shareholders are requested to convert theirphysical holding to demat/ electronic formthrough any of the DPs to avoid any possibilityof loss, mutilation etc., of physical sharecertificates and also to ensure safe andspeedy transaction in securities.

14.2 Registration of Electronic Clearing Service(ECS) mandate:SEBI has made it mandatory for allcompanies to use the bank account detailsfurnished by the Depositories for payment ofdividend through ECS to investors whereverECS and bank details are available. TheCompany will not entertain any direct requestfrom Members holding shares in electronicmode for deletion of / change in such bankdetails. Members who wish to change suchbank account details are therefore requestedto advise their DPs about such change, withcomplete details of bank account.

ECS helps in quick remittance of dividendwithout possible loss/delay in postal transit.Shareholders, who have not earlier availedthis facility, are requested to register theirECS details with the STA or their respectiveDPs.

14.3 Consolidation of Multiple Folios:Shareholders, who have multiple folios inidentical names, are requested to apply forconsolidation of such folios and send therelevant share certificates to the Company.

14.4 Registration of Nominations:Nomination in respect of shares, as perSection 72 of the Act, 2013 provides facilityfor making nominations by shareholders inrespect of their holding of shares. Suchnomination greatly facilitates transmission ofshares from the deceased shareholder to his /her nominee without having to go through theprocess of obtaining succession certificate /probate of the Will, etc.

12.17 Fees paid to Statutory Auditor on aconsolidated basis:During the year, the Company has paidRs. 44.40 lakhs to the statutory Auditors forall services received by the listed entity andits subsidiary, on a consolidated basis.

12.18 Sexual Harassment at workplace:During the year under review, the Companyhas not received any complaints in terms ofSexual Harassment of Women at Workplace(Prevention, Prohibition and Redressal) Act,2013.

13. Non-Mandatory DisclosureThe non-mandatory requirements have beenadopted to the extent and in the manner asstated under the appropriate headings detailedbelow:

13.1 The Board:The Non-Independent Directors of theCompany are liable to retire by rotationand if eligible, offer themselves for re-appointment.Specific tenure has been fixed for theindependent Directors in terms of Section149 of the Act, 2013 and during thisperiod, they will not be liable to 'retire byrotation' as per Sections 150(2), 152(2)read with Schedule IV of the Act, 2013.

13.2 Shareholder rights:The half-yearly results of the Companyare published in newspapers as soon asthey are approved by the Board and arealso uploaded in the Company's websitenamely www.haritaseating.com. Theresults are not sent to the shareholdersindividually.

13.3 Audit Qualifications:The financial statements of the Companyare unmodified.

14. Request to shareholdersShareholders are requested to follow thegeneral safeguards / procedures as detailedhereunder in order to serve them efficiently and


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It would therefore be in the best interest ofthe shareholders holding shares in physicalform registered as a sole holder to make suchnominations. Shareholders, who have notavailed nomination facility, are requested toavail the same by submitting the nominationin Form SH-13. This form will be madeavailable on request. Investors holding sharesin demat form are advised to contact their DPsfor making nominations.

14.5 Updation of address:Shareholders are requested to update theiraddresses registered with the Company,directly through the STA, to receive allcommunications promptly.Shareholders, holding shares in electronicform, are requested to deal only with their DPsin respect of change of address and furnishingbank account number, etc.

14.6 SMS Alerts:Shareholders are requested to note thatNSDL and CDSL have announced the launchof SMS alert facility for demat account holderswhereby shareholders will receive alerts fordebits / credits (transfers) to their demataccounts a day after the transaction. Thesealerts will be sent to those account holderswho have provided their mobile numbers totheir DPs. No charge will be levied by NSDL/ CDSL on DPs providing this facility toinvestors. This facility will be available toinvestors who request for the same andprovide their mobile numbers to the DPs.Further information is available on the websiteof NSDL and CDSL namely www.nsdl.co.inand www.cdslindia.com, respectively.

14.7 Timely encashment of dividends:Shareholders are requested to encash theirdividends promptly to avoid hassles ofrevalidation / losing your right of claim owingto transfer of unclaimed dividends beyondseven years to Investor Education andProtection Fund (IEPF).

As required by SEBI, shareholders arerequested to furnish details of their bankaccount number and name and address ofthe bank for incorporating the same in thewarrants. This would avoid wrong creditsbeing obtained by unauthorized persons.

Shareholders, who have not encashed theirdividend warrants, in respect of dividendsdeclared after 31st March, 2011 may contactthe Company and surrender their warrantsfor payment.

Shareholders are requested to note that thedividends, not claimed for a period of sevenyears from the date they first became due forpayment, shall be transferred to IEPF in termsof Section 125(6) of the Companies Act, 2013read with Investor Education & ProtectionFund (IEPF) Authority (Accounting, Audit,Transfer and Refund) Rules, 2016.

Information in respect of unclaimed dividendsdue for remittance into IEPF is given below:

Date of Due date forFinancial Date of transfer to transfer to

Year declaration special the IEPFaccount

2011-12 (interim) 30.05.2012 29.06.2012 29.06.20192012-13 (interim) 22.05.2013 21.06.2013 21.06.20202013-14 (interim) 22.05.2014 21.06.2014 21.06.20212014-15 (interim) 19.05.2015 18.06.2015 18.06.20222015-16 (interim) 02.11.2015 02.12.2015 02.12.20222015-16(1st interim) 14.03.2016 13.04.2016 13.04.2023

2016-17(1st interim) 02.11.2016 02.12.2016 02.12.2023

2016-17(2nd interim) 03.03.2017 02.04.2017 02.04.2024

2017-18(1st interim) 08.11.2017 08.12.2017 08.12.2024

2017-18(2nd interim) 06.02.2018 08.03.2018 08.03.2025

2018-19(1st interim) 06.02.2019 08.03.2019 08.03.2026

2018-19(2nd interim) 26.03.2019 25.04.2019 25.04.2026


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15. Transfer of Shares to Investor Educationand Protection Fund (IEPF) authorityAs per Section 124(6) of the Act, 2013 readwith the Investor Education and Protection FundAuthority (Accounting, Audit, Transfer andRefund) Rules, 2016 ("IEPF Rules") asamended from time to time, all the shares inrespect of which dividend has remained unpaid/unclaimed for seven consecutive years or moreare required to be transferred to a DematAccount opened in the name of IEPF Authoritywith Punjab National Bank by the Ministry ofCorporate Affairs.

During the year, the Company has sentindividual notices to all the shareholders whosedividends are lying unpaid / unclaimed againsttheir name for seven consecutive years or moreand also advertised on the Newspapers seekingaction from the shareholders. The list of suchshareholders were also displayed on thewebsite of the Company.

In case the dividends are not claimed within thedue date(s) mentioned above, necessary stepswill be initiated by the Company to transfershares held by the members to IEPF. Pleasenote that no claim shall lie against the Companyin respect of the shares so transferred to IEPF.As required under the said provisions, allsubsequent corporate benefits that accrues inrelation to the above shares will also be creditedto the said IEPF Account.

In the event of transfer of shares and theunclaimed dividends to IEPF, shareholders areentitled to claim the same from IEPF bysubmitting an online application in theprescribed Form IEPF-5 available on thewebsite www.iepf.gov.in and sending a physicalcopy of the same duly signed to the Companyalong with the requisite documents enumeratedin the Form IEPF-5, as per the followingprocedures:

1. Download the Form IEPF - 5 from thewebsite of IEPF (http://www.iepf.gov.in) forfilling the claim for refund of shares anddividends.

2. Read the instructions provided on thewebsite / instructions kit along with the e-form carefully before Filling the form.

3. After filling / completing the form save it onyour computer and submit the dulycompleted form by following the instructionsgiven in the upload link on the website.

4. On successful uploading theacknowledgment will be generatedindicating the SRN. This SRN is to be usedfor future tracking of the form.

5. Printout of the duly completed IEPF - 5 andthe acknowledgment issued after uploadingthe form will have to be submitted togetherwith an Indemnity Bond in original alongwith the other documents as mentioned inthe Form IEPF-5 to the Nodal Officer of theCompany in an envelope marked "Claimfor refund from IEPF Authority".

In the process, general information aboutthe Company which have to be providedare as under.

(a) Corporate Identification Number (CIN) ofCompany:- L27209TN1996PLC035293

(b) Name of the company:- Harita SeatingSystems Limited

(c) Address of registered office of thecompany: Jayalakshmi Estates, 29,Haddows Road, Chennai 600 006.

(d) email ID of the Company:[email protected].

Pursuant to Investor Education and ProtectionFund (Uploading of information regardingunpaid and unclaimed amount lying withcompanies) Rules, 2012, the Company shall


53


provide / host the required details of unclaimeddividend amount referred in relevant sectionsof the Act, 2013 on its website and also in theMinistry of Corporate Affairs (MCA) website inthe relevant form every year.

Disclosure in respect of equity sharestransferred in the Company's unclaimedsuspense account

Pursuant to the requirement of Regulation 34(3)and Schedule V Part F of SEBI LODR 2015,the following table provides details in respectof the equity shares lying in the suspenseaccount. The Company has already sent threeremainders to the shareholders for claimingthose shares at their latest availableaddress(es) with the Company or Depository,as the case may be.

All the corporate benefits in terms of securitiesaccruing on those shares like bonus shares,split etc would also be credited to unclaimedsuspense account of the Company. The votingrights on shares lying in unclaimed suspenseaccount shall remain frozen till the rightful ownerclaims the shares.

No. of No. ofDetails share- shares

holdersNo. of shares in the Unclaimed suspenseaccount as on 31st March 2018. 200 37,493No. of shares transferred to the shareholders onrequest from 1st April 2018 to 31st March 2019. 5 1,000No. of shares in the Unclaimed suspenseaccount as on 31st March 2019. 195 36,493

Green initiative in corporate governance:Rule 11 of the Companies (Accounts) Rules, 2014,permits circulation of Annual Report to shareholdersthrough electronic means to such of the memberswhose e-mail addresses are registered with NSDL orCDSL or the shareholders who have registered theirE-mail ID with the Company to receive the documentsin electronic form and physical copies to thoseshareholders whose e-mail ids have not been eitherregistered with the Company or with the depositories.

To support this green initiative of the Government,Members are requested to register their e-mailaddresses, with the DPs, in case shares are held indematerialized form and with the STA, in case theshares are held in physical form and also intimatechanges, if any, in their registered e-mail addressesto the Company / DPs, from time to time.


54


COMPLIANCE WITH CODE OF BUSINESS CONDUCT AND ETHICS

To

The Shareholders ofHarita Seating Systems Limited, Chennai

On the basis of the written declarations received from members of the Board and Senior Management Personnelin terms of the relevant provisions of SEBI (Listing Obligations and Disclosure Requirements) Regulation2015, it is hereby certified that both the members of the Board and the Senior Management Personnel of theCompany have affirmed compliance with the respective provisions of the Code of Business Conduct andEthics of the Company as laid down by the Board for the year ended 31st March 2019.

Place : Chennai A G GIRIDHARANDate : 8th May 2019 Chief Executive Officer

CHIEF EXECUTIVE OFFICER (CEO) AND CHIEF FINANCIAL OFFICER (CFO)CERTIFICATION

To


We certify that we have reviewed the financialstatements prepared based on the IndianAccounting Standards for the year ended 31st March2019 and to the best of our knowledge and belief:

(1) these statements do not contain any materiallyuntrue statement or omit any material fact orcontain statements that might be misleading;

(2) these statements together present a true andfair view of the Company's affairs and are incompliance with applicable Indian AccountingStandards, Laws and Regulations.

(3) no transactions entered into by the Companyduring the year are fraudulent, illegal or violativeof the Company's code of conduct.

(4) We accept responsibility for establishing andmaintaining internal controls for financialreporting and we have evaluated theeffectiveness of internal control systems of theCompany pertaining to financial reporting andhave disclosed to the Auditors and the Audit

Committee, deficiencies in the design oroperation of such internal controls, if any, ofwhich we are aware and steps taken or proposedto be taken for rectifying these deficiencies.

(5) We have indicated to the Auditors and the AuditCommittee:

a) significant changes, if any, in internal controlover financial reporting during the year;

b) significant changes in accounting policies, ifany, during the year and that the same havebeen disclosed in the notes to the financialstatements; and

c) that there were no instances of significantfraud of which we have become aware andthe involvement therein, of the managementor an employee having a significant role inthe Company's internal control system overfinancial reporting.

A G Giridharan S JagannathanChief Executive Officer Chief Financial Officer

Place : ChennaiDate : 8th May 2019


55


AUDITORS' CERTIFICATE ON COMPLIANCE OF THE PROVISIONS OF THE CODEOF CORPORATE GOVERNANCE

To


We have examined the compliance of conditions ofCorporate Governance by Harita Seating SystemsLimited, Chennai - 600 006 (the Company) for theyear ended 31st March 2019 as per the relevantprovisions of Securities and Exchange Board ofIndia (Listing Obligations and DisclosureRequirements) Regulations, 2015 [ListingRegulations].

The compliance of conditions of CorporateGovernance is the responsibility of Company'smanagement. Our examination was limited toprocedures and implementation thereof, adopted bythe Company for ensuring the compliance of theconditions of the Corporate Governance. It is neitheran audit nor an expression of opinion on the financialstatements of the Company.

In our opinion and to the best of our informationand according to the explanations given to us, wecertify that the Company has complied with theconditions of Corporate Governance as stipulatedin the above-mentioned Listing Regulations, asapplicable.

We further state that such compliance is neither anassurance as to the future viability of the Companynor the efficiency or effectiveness with which themanagement has conducted the affairs of theCompany.

For RAGHAVAN, CHAUDHURI & NARAYANANCHARTERED ACCOUNTANTS

Firm Regn No. 007761S

V SATHYANARAYANANPlace : Chennai PartnerDate : 8th May 2019 Membership No.027716

CERTIFICATE FROM COMPANY SECRETARY IN PRACTICE(In terms of Regulation 34(3) and Schedule V Para C Clause (10)(i) of the SEBI (Listing Obligations and

Disclosure Requirements) Regulations, 2015)

To

The Members ofHarita Seating Systems Limited,Jayalakshmi Estates, 29, Haddows Road,Chennai 600 006

Dear SirI have examined the relevant registers, records, forms,returns and disclosures received from the Directors ofHarita Seating Systems Limited having CINL27209TN1996PLC035293 and having registered officeat Jayalakshmi Estates, No 29 (8) HaddowsRoad,Chennai 600 006 (hereinafter referred to as 'theCompany'), produced before me/us by the Company forthe purpose of issuing this Certificate, in accordance withRegulation 34(3) read with Schedule V Para-C Sub clause10(i) of the Securities Exchange Board of India (ListingObligations and Disclosure Requirements) Regulations,2015.In my opinion and to the best of my information andaccording to the verifications (including DirectorsIdentification Number (DIN) status at the portal

www.mca.gov.in) as considered necessary andexplanations furnished to me by the Company & itsofficers, I hereby certify that none of the Directors on theBoard of the Company for the Financial Year ending on31st March, 2019 have been debarred or disqualified frombeing appointed or continuing as Directors of companiesby the Securities and Exchange Board of India, Ministryof Corporate Affairs, or any such other Statutory AuthorityEnsuring the eligibility of for the appointment / continuityof every Director on the Board is the responsibility of themanagement of the Company. Our responsibility is toexpress an opinion on these based on our verification.This certificate is neither an assurance as to the futureviability of the Company nor of the efficiency oreffectiveness with which the management has conductedthe affairs of the Company.

B ChandraPractising Company Secretary

Place : Chennai ACS No.: 20879Date : 8th May, 2019 C P No.: 7859


56


Form No. MR-3

SECRETARIAL AUDIT REPORTfor the financial year ended 31.03.2019

[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

Harita Seating Systems Limited,Jayalakshmi Estates,No. 29 (8) Haddows Road,Chennai - 600006.

I have conducted the secretarial audit of the compliance ofapplicable statutory provisions and the adherence to goodcorporate practices by M/s HARITA SEATING SYSTEMSLIMITED bearing CIN L27209TN1996PLC035293(hereinafter called the Company). Secretarial Audit wasconducted in a manner that provided me a reasonable basisfor evaluating the corporate conducts / statutory compliancesand expressing my opinion thereon.

Based on my verification of the Company's books, papers,minute books, forms and returns filed and other recordsmaintained by the company and also the information providedby the Company, its officers, agents and authorizedrepresentatives during the conduct of secretarial audit, Ihereby report that, in my opinion, the company has, duringthe audit period covering the financial year ended on31.03.2019, complied with the statutory provisions listedhereunder and also that the Company has proper Board-processes and compliance-mechanism in place to the extent,in the manner and subject to the reporting made hereinafter:

I have examined the books, papers, minute books, formsand returns filed and other records maintained by theCompany for the financial year ended on 31.03.2019,according to the provisions of:

(i) The Companies Act, 2013 (the Act) and the rulesmade thereunder;

(ii) The Companies Act 1956 (to the extent applicable)

(iii) The Securities Contracts (Regulation) Act, 1956('SCRA') and the rules made thereunder;

(iv) The Depositories Act, 1996 and the Regulations andBye-laws framed thereunder;

(v) Foreign Exchange Management Act, 1999 and therules and regulations made thereunder to the extentof Foreign Direct Investment, Overseas DirectInvestment and External Commercial Borrowings;

(vi) The following Regulations and Guidelines prescribedunder the Securities and ExchangeBoard of India Act,1992 ('SEBI Act'):-

a) The Securities and Exchange Board of India(Substantial Acquisition of Shares andTakeovers)Regulations, 2011;

b) The Securities and Exchange Board of India(Prohibition of Insider Trading) Regulations 2015;

c) The Securities and Exchange Board of India(Registrars to an Issue and Share TransferAgents)Regulations, 1993 regarding the Companies Actand dealing with client;

d) The Securities and Exchange Board of India (Listingobligations and Disclosure requirements)Regulations 2015.

I am informed that the company, during the year, wasnot required to comply with the following regulationsand consequently not required to maintain any books,papers, minute books or other records or file anyforms / returns under:

a) The Securities and Exchange Board of India (Issueof Capital and Disclosure Requirements)Regulations 2009

b) The Securities and Exchange Board of India(Employee Stock Option Scheme and EmployeeStock Purchase Scheme) Guidelines, 1999


57


c) The Securities and Exchange Board of India (Issueand Listing of Debt securities) Regulations 2008

d) The Securities and Exchange Board of India(Delisting of Equity Shares) Regulations,2009; and

e) The Securities and Exchange Board of India(Buyback of Securities) Regulations, 1998;

(vii) In addition to the compliance with Factory and LabourLaws as is applicable to a factory, based on the studyof the systems and processes in place and a reviewof the reports of (1) the heads of the Departments (2)Occupier/Manager of the factories located in Hosur,Pune, Dharwad, Uttarkhand and Sriperumbudur whichmanufacture seating system for automotive and non-automotive applications(3) the compliance reports madeby the functional headsof various departments whichare submitted to the Board of Directors of theCompany(4) test check on compliances under otherlaws, I report that the Company has complied with theprovisions of the following Industry specific statutes andthe rules made thereunder to the extent it is applicableto them:

The Legal Metrology Act, 2009

I have also examined compliance with the applicableclauses of the following:

(i) Secretarial Standards issued by The Institute ofCompany Secretaries of India.

(ii) The Listing Agreements entered into by theCompany with National Stock Exchange of IndiaLimited.

During the period under review, the Company hascomplied with the provisions of the Act, Rules,Regulations, Guidelines, Standards, etc. mentionedabove.

I further report that:

The Board of Directors of the Company is duly constitutedwith proper balance of Non-Executive Directors andIndependent Directors.

Adequate notice is given to all directors to schedule theBoard Meetings, agenda and detailed notes on agendawere sent at least seven days in advance, and a systemexists for seeking and obtaining further information andclarifications on the agenda items before the meeting andfor meaningful participation at the meeting.

Based on the minutes made available to us, I report thatmajority decision is carried through and that there were nodissenting votes from any Board member that was requiredto be captured and recorded as part of the minutes.

I further report that there are adequate systems andprocesses in the company commensurate with the size andoperations of the company to monitor, report deviations, ifany, to the Board, take corrective actions and ensurecompliance with applicable laws, rules, regulations andguidelines.

I further report that pursuant to scheme of amalgamationof Harita Gopal Private Limited ( one of the promoters) withVidhar Management & Consultancy Services Private Limited,approved by Hon'ble National Company Law Tribunal, videorder no. CP/135 & 136/ CAA/2018 dated 21.1.2019,4,79,762 shares held by Harita Gopal Private Limited isvested in the transferee Company, M/sVidhar Management& Consultancy Services Private Limited.


Place : Chennai ACS No.: 20879Date : 8th May, 2019 C P No.: 7859


58


ToThe MembersHarita Seating Systems Limited,Jayalakshmi Estates,29, Haddows Road,Chennai - 600006.

Our report of even date is to be read along with this letter.

1. Maintenance of secretarial record is the responsibilityof the management of the company. Our responsibilityis to express an opinion on these secretarial recordsbased on our audit.

2. We have followed the audit practices and processesas were appropriate to obtain reasonable assuranceabout the correctness of the contents of the Secretarialrecords. The verification was done on test basis toensure that correct facts are reflected in secretarialrecords. We believe that the processes and practices,we followed provide a reasonable basis for our opinion.

3. We have not verified the correctness andappropriateness of financial records and Books ofAccounts of the company.

4. Wherever required, we have obtained the Managementrepresentation about the compliance of laws, rules andregulations and happening of events etc.

5. The compliance of the provisions of Corporate andother applicable laws, rules, regulations, standards isthe responsibility of management. Our examinationwas limited to the verification of procedures on testbasis.

6. The Secretarial Audit report is neither an assurance asto the future viability of the company nor of the efficacyor effectiveness with which the management hasconducted the affairs of the Company.


Place : Chennai ACS No.: 20879Date : 8th May 2019 C P No.: 7859


59


INDEPENDENT AUDITORS' REPORT FOR THE YEAR ENDED 31ST MARCH 2019

To the Members ofHarita Seating Systems Limited,29 Haddows Road, Chennai.

Report on the Audit of the Standalone Financial Statements

OpinionWe have audited the standalone financial statements of HaritaSeating Systems Limited ("the Company"), which comprise theBalance Sheet as at 31st March 2019, the Statement of Profit andLoss(including Other Comprehensive Income), the Statement ofChanges in Equity and Statement of Cash Flows for the year thenended, and notes to the financial statements, including a summaryof significant accounting policies and other explanatory information(hereinafter referred to as "the standalone financial statements").

In our opinion and to the best of our information and accordingto the explanations given to us, the aforesaid standalone financialstatements give the information required by the Act in the mannerso required and give a true and fair view in conformity with theIndian Accounting Standards prescribed under Section 133 of theCompanies Act, 2013 (the Act) read with the Companies (IndianAccounting Standards) Rules, 2015, as amended, ("Ind AS") andother accounting principles generally accepted in India, of thestate of affairs of the company as at 31st March 2019, the profitand total comprehensive income, changes in equity and its cashflows for the year ended on that date.

Basis for OpinionWe conducted our audit of the standalone financial statements inaccordance with Standards on Auditing (SAs) specified under Section143(10) of the Companies Act, 2013. Our responsibilities underthose Standards are further described in the Auditor's Responsibilitiesfor the Audit of the Financial Statements section of our report.We are independent of the Company in accordance with the Codeof Ethics issued by the Institute of Chartered Accountants of Indiatogether with ethical requirements that are relevant to our audit ofthe financial statements under the provisions of the Companies Act,2013 and the Rules thereunder, and we have fulfilled our otherethical responsibilities in accordance with these requirements andthe Code of Ethics. We believe that the audit evidence we haveobtained is sufficient and appropriate to provide a basis for ouropinion.

Key Audit MattersKey audit matters are those matters that, in our professionaljudgement, were of most significance in our audit of the standalonefinancial statement of the current period. These matters were

addressed in the context of our audit of the standalone financialstatements as a whole, and in forming our opinion thereon, andwe do not provide a separate opinion on these matters. We havedetermined the matters described below to be the key auditmatters to be communicated in our report.

Sl.No. Key Audit Matter Auditor's Response1. Tax Litigations and Principal Audit Procedures

ProvisionsThe Company hasmaterial uncertaintax positions,including mattersunder dispute, whichinvolves significantjudgment todetermine thepossible outcome ofthese disputes.

Information Other than the Standalone Financial Statementsand Auditor's Report ThereonThe Company's Board of Directors is responsible for the preparationof the other information. The other information comprises theinformation included in the Management Discussion and Analysis,Board's Report including Annexures to Board's Report, BusinessResponsibility Report, Corporate Governance and Shareholder'sInformation, but does not include the standalone financial statementsand our auditor's report thereon.Our opinion on the standalone financial statements does not coverthe information and we do not express any form of assuranceconclusion thereon.In connection with our audit of the standalone financial statements,our responsibility is to read the other information and, in doing so,consider whether the other information is materially inconsistent withthe standalone financial statements or our knowledge obtained

We have obtained details ofcompleted assessments anddemands relating to direct tax andindirect tax, for the year ended 31st

March 2019. Our audit proceduresinvolved discussion with thecompany's experts on the expectedoutcome of these disputes incomparison with precedent caselaws presenting similar facts.Additionally, we have consideredthe effect of any new informationin respect of uncertain tax positionsas at April 1, 2019 to evaluatewhether any change was requiredto management's position on theseuncertainties.On the basis of the aboveevaluations, we have analysed theadequacy of provisions made inbooks against such disputed taxpositions.


60


during the course of audit or otherwise appears to be materiallymisstated.If, based on the work we have performed, we conclude that thereis a material misstatement of this other information, we are requiredto report that fact. We have nothing to report in this regard.

Management's Responsibility for the Standalone FinancialStatementsThe Company's Board of Directors is responsible for the mattersstated in Section 134(5) of the Companies Act, 2013 ("the Act") withrespect to the preparation of these standalone financial statementsthat give a true and fair view of the financial position, financialperformance, total comprehensive income, changes in equity andcash flows of the Company in accordance with the accountingprinciples generally accepted in India, including the accountingStandards specified under Section 133 of the Act.This responsibilityalso includes maintenance of adequate accounting records inaccordance with the provisions of the Act for safeguarding of theassets of the Company and for preventing and detecting frauds andother irregularities; selection and application of appropriate accountingpolicies; making judgements and estimates that are reasonable andprudent; and design, implementation and maintenance of adequateinternal financial controls, that were operating effectively for ensuringthe accuracy and completeness of the accounting records, relevantto the preparation and presentation of the standalone financialstatement that give a true and fair view and are free from materialmisstatement, whether due to fraud or error.In preparing the standalone financial statements, management isresponsible for assessing the Company's ability to continue as agoing concern, disclosing, as applicable, matters related to goingconcern and using the going concern basis of accounting unlessmanagement either intends to liquidate the Company or to ceaseoperations, or has no realistic alternative but to do so.The Board of Directors are also responsible for overseeing theCompany's financial reporting process.

Auditor's Responsibilities for the Audit of the FinancialStatementsOur objectives are to obtain reasonable assurance about whetherthe standalone financial statements as a whole are free from materialmisstatements, whether due to fraud or error, and to issue anauditor's report that includes our opinion. Reasonable assurance isa high level of assurance, but is not a guarantee that an auditconducted in accordance with SAs will always detect a materialmisstatement when it exists. Misstatements can arise from fraud orerror and are considered material if, individually or in the aggregate,they could reasonably be expected to influence the economicdecisions of users taken on the basis of these standalone financialstatements.

As part of an audit in accordance with SAs, we exercise professionaljudgment and maintain professional scepticism throughout the audit.We also:• Identify and assess the risks of material misstatement of the

standalone financial statements, whether due to fraud or error,design and perform audit procedures responsive to those risks,and obtain audit evidence that is sufficient and appropriate toprovide a basis for our opinion. The risk of not detecting amaterial misstatement resulting from fraud is higher than forone resulting from error, as fraud may involve collusion, forgery,intentional omissions, misrepresentations, or the override ofinternal control.

• Obtain an understanding of internal financial controls relevantto the audit in order to design audit procedures that areappropriate in the circumstances. Under section 143(3)(i) of theAct, we are also responsible for expressing our opinion onwhether the Company has adequate internal financial controlssystem in place and the operating effectiveness of such controls.

• Evaluate the appropriateness of accounting policies used andthe reasonableness of accounting estimates and relateddisclosures made by management.

• Conclude on the appropriateness of management's use of thegoing concern basis of accounting and, based on the auditevidence obtained, whether a material uncertainty exists relatedto events or conditions that may cast significant doubt on theCompany's ability to continue as a going concern. If we concludethat a material uncertainty exists, we are required to drawattention in our auditor's report to the related disclosures in thestandalone financial statements or, if such disclosures areinadequate, to modify our opinion. Our conclusions are basedon the audit evidence obtained up to the date of our auditor'sreport. However, future events or conditions may cause theCompany to cease to continue as a going concern.

• Evaluate the overall presentation, structure and content of thestandalone financial statements, including the disclosures, andwhether the standalone financial statements represent theunderlying transactions and events in a manner that achievesfair presentation.

Materiality is the magnitude of misstatements in the standalonefinancial statements that, individually or in aggregate, makes itprobable that economic decisions of a reasonably knowledgeableuser of the financial statements may be influenced. We considerquantitative materiality and qualitative factors in (i) planning thescope of our audit work and in evaluating the results of our work;and (ii) to evaluate the effect of any identified misstatements inthe financial statements.We communicate with those charged with governance regarding,among other matters, the planned scope and timing of the audit


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and significant audit findings, including any significant deficienciesin internal control that we identify during our audit.We also provide those charged with governance with a statementthat we have complied with relevant ethical requirementsregarding independence, and to communicate with them allrelationships and other matters that may reasonably be thoughtto bear on our independence, and where applicable, relatedsafeguards.From the matters communicated with those charged withgovernance, we determine those matters that were of mostsignificance in the audit of the standalone financial statementsof the current period and are therefore the key audit matters.We describe these matters in our auditor's report unless law orregulation precludes public disclosure about the matter or when,in extremely rare circumstances, we determine that a mattershould not be communicated in our report because the adverseconsequences of doing so would reasonably be expected tooutweigh the public interest benefits of such communication.

Report on Other Legal and Regulatory RequirementsAs required by the companies (Auditor's Report) Order, 2016 ("theOrder"), issued by the Central Government of India in terms of sub-section (11) of section 143 of the Companies Act, 2013, we givein the "Annexure A" a statement on the matters specified in theparagraphs 3 and 4 of the Order, to the extent applicable.As required by the Section 143(3) of the Act, we report that:(a) We have sought and obtained all the information and the

explanations which to the best of our knowledge and beliefwere necessary for the purposes of our audit.

(b) In our opinion, proper books of account as required by law havebeen kept by the Company so far as it appears from ourexamination of those books.

(c) The Balance Sheet, the Statement of Profit and Loss includingOther Comprehensive Income, Statement of Changes in Equityand the Cash Flow Statement dealt with by this Report are inagreement with book of accounts.

(d) In our opinion, the aforesaid standalone financial statementcomply with Accounting Standards specified under Section 133of the Act, read with Rule 7 of the Companies (Accounts) Rule,2014.

(e) On the basis of written representations received from the directorsas on 31st March 2019 taken on record by the Board ofDirectors, none of the directors is disqualified as on 31st March2019 from being appointed as directors in term of Section 164(2) of the Act.

(f) With respect to the adequacy of the financial controls over thefinancial reporting of the Company and the operatingeffectiveness of such controls, refer to our separate Report in"Annexure B". Our report expresses an unmodified opinion onthe adequacy and operating effectiveness of the Company'sinternal financial controls over financial reporting.

(g) With respect to the other matters to be included in the Auditor'sReport in accordance with the requirements of Section 197(16)of the Act, as amended:In our opinion and to the best of our information and accordingto the explanations given to us, the remuneration paid by theCompany to its directors during the year is in accordance withthe provisions of Section 197 of the Act.

(h) With respect to other matters to be included in the Auditor'sReport in accordance with Rule 11 of the Companies (Auditand Auditors) Rules, 2014, as amended in our opinion and tothe best of our information and according to the explanationsgiven to us:i. The Company has disclosed the impact of pending

litigations on the financial position in its standalonefinancial statements- Refer Note 40 (4) to the financialstatements;

ii. The Company did not have any long-term contractsincluding derivatives contracts for which there were anymaterial foreseeable losses;

iii. There has been no delay in transferring amounts,required to be transferred, the Investor Education andProtection Fund by the Company.

For Raghavan, Chaudhuri & NarayananChartered Accountants

FRN.: 007761S

V. SathyanarayananPlace : Chennai PartnerDate : 8th May 2019 Membership No.: 027716


62


viii) Based on our verification and according to the informationand explanations given by the management, the companyhas not defaulted in repayment of dues to its banks. Thecompany has not borrowed from any financial institutionor Government nor has issued any debentures;

ix) The Company has not raised any money by way of initialpublic offer or further public offer including (including debtinstruments) during the year. Hence, reporting on utilizationof such money does not arise. In our opinion and accordingto the information and explanations given to us, the termloans availed by the Company have been utilised for thepurpose for which they were obtained;

x) Based on the audit procedures adopted and the informationand explanation given to us, no fraud by the Company or

i) a) The Company has maintained proper records showingfull particulars including quantitative details andsituation of fixed assets;

b) Fixed assets are physically verified by themanagement in accordance with a regular programmeat reasonable intervals. In our opinion the interval isreasonable having regard to the size of the companyand nature of its assets. No material discrepancieshave been noticed on such verifications;

c) The title deeds of the immovable properties of thecompany are held in the name of the company;

ii) The inventory, other than in-transit, has been physicallyverified at reasonable intervals during the year under reviewby the management. The discrepancies noticed betweenthe book stock and physical stock were not material andhave been properly dealt with in the books of account;In respect of inventories with third parties, which have notbeen physically verified, there is a process of obtainingconfirmation from such parties;

iii) During the year, the Company has not granted any loan toa company, firm or other parties covered in the registermaintained under Section 189 to the Companies Act, 2013;

iv) During the year, the company has not granted any loansnor has furnished any guarantee nor provided any securityor made any investments which attracts provisions ofSection 185 and 186 of the Companies Act, 2013. Hence,reporting under sub-clause (iv) of paragraph 3 of the Orderdoes not arise;

v) The Company has not accepted any deposits from the publicwithin the meaning of Section 73 to 76 of the CompaniesAct, 2013. Hence, reporting under sub-clause (v) ofparagraph 3 of the Order is not applicable to the Company;

vi) We have broadly reviewed the books of account maintainedby the Company pursuant to the rules made by the CentralGovernment under Section 148(1) of the Companies Act,2013 for the maintenance of cost records and we are ofthe opinion that, prima facie, the prescribed accounts andrecords have been made and maintained. We have,however, not made a detailed examination of the costrecords with a view to determine whether they are accurateor complete;

vii) a) According to the information and explanation given tous, and on the basis of our examination of the recordsof the company, the Company is generally regular indepositing undisputed statutory dues includingprovident fund, employees state insurance, Income-tax, sales tax, custom duty, excise duty, service tax,value added tax, cess, goods and services tax andany other material statutory dues with the appropriateauthorities except for few marginal delays. Further,there are no statutory dues in arrears as at 31st March,2019 for a period of more than six months from thedate they became payable;

b) According to the information and explanations givento us, following are the details of the disputed duesthat were not been deposited on account of any disputeas on 31st March 2019:

Period of Nature of Amount of Forum where

Dues Dues dispute dispute is(Rs. in lakhs) pending

Commissioner of2015-16 Service Tax 2.10 Appeals- Central

Excise Salem2013-14 Commercial Tax 295.16 Supreme Court2013-14 Commercial Tax 97.75 High Court Madras

2014-15 Commercial Tax 29.60Commercial Tax

Department

Annexure 'A' to Independent Auditors' Report - 31st March 2019 (Referred to in ourreport of even date)


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on the Company by its officers and employees has beennoticed or reported during the course of our audit;

xi) In our opinion and according to the information andexplanations given to us, Managerial remuneration paid/provided are in accordance with the requisite approvalsmandated by the provisions of Section 197 read withSchedule V of the Companies Act. Hence, reporting sub-clause (xi) of paragraph 3 of the Order does not arise;

xii) The Company is not a Nidhi Company and as such thisclause of the order is not applicable;

xiii) In our opinion and according to the information andexplanations given to us, all transactions with the relatedparties are in compliance with Section 177 and 188 of theact and details of such transactions have been disclosedin standalone financial statements as required by theapplicable accounting standards;

xiv) According to the information and explanation given to usand in our opinion, the company has not made anypreferential or private placement of shares or fully or partlyconvertible debentures during the year under review;

xv) According to the information and explanation given to usand in our opinion, the company has not entered into anynon-cash transactions with directors or persons connectedwith them;

xvi) The Company is not required to be registered under Section45-IA of the Reserve Bank Act, 1934.


FRN.: 007761SV. Sathyanarayanan

Place : Chennai PartnerDate : 8th May 2019 Membership No.: 027716


64


Annexure 'B' to the Independent Auditors' Report for the year ended 31st March2019Report on the Internal Financial Controls Over FinancialReporting under Clause (i) of Sub-section 3 of Section 143of the Companies Act, 2013 ("the Act")We have audited the internal financial controls over financialreporting of Harita Seating Systems Limited ("the Company"),Jayalakshmi Estates, #29, Haddows Road, Chennai - 600006,as of 31st March, 2019 in conjunction with our audit of thestandalone financial statements of the Company for the yearended on that date.

Management's Responsibility for Internal Financial ControlsThe Company's management is responsible for establishing andmaintaining internal financial controls based on the GuidanceNote on Audit of Internal Financial Controls over FinancialReporting issued by the Institute of Chartered Accountants ofIndia. These responsibilities include the design, implementationand maintenance of adequate internal financial controls thatwere operating effectively for ensuring the orderly and efficientconduct of its business, including adherence to company'spolicies, the safeguarding of its assets, the prevention anddetection of frauds and errors, the accuracy and completenessof the accounting records, and the timely preparation of reliablefinancial information, as required under the Companies Act,2013.

Auditors' ResponsibilityOur responsibility is to express an opinion on the Company'sinternal financial controls over financial reporting based on ouraudit. We conducted our audit in accordance with the GuidanceNote on Audit of Internal Financial Controls over FinancialReporting (the "Guidance Note") and the Standards on Auditing,issued by Institute of Chartered Accountants of India and deemedto be prescribed under Section 143(10) of the Companies Act,2013, to the extent applicable to an audit of internal financialcontrols. Those Standards and the Guidance Note require thatwe comply with ethical requirements and plan and perform theaudit to obtain reasonable assurance about whether adequateinternal financial controls over financial reporting was establishedand maintained and if such controls operated effectively in allmaterial respects.

Our audit involves performing procedures to obtain audit evidenceabout the adequacy of the internal financial controls system overfinancial reporting and their operating effectiveness. Our auditof internal financial controls over financial reporting includedobtaining an understanding of internal financial controls overfinancial reporting, assessing the risk that a material weaknessexists, and testing and evaluating the design and operatingeffectiveness of internal control based on the assessed risk. Theprocedures selected depend on the auditor's judgment, includingthe assessment of the risks of material misstatement of thestandalone financial statements, whether due to fraud or error.We believe that the audit evidence we have obtained is sufficientand appropriate to provide a basis for our audit opinion on theCompany's internal financial controls system over financialreporting.

Meaning of Internal Financial Controls Over FinancialReportingA company's internal financial control over financial reporting isa process designed to provide reasonable assurance regardingthe reliability of financial reporting and the preparation ofstandalone financial statements for external purposes inaccordance with generally accepted accounting principles.A company's internal financial control over financial reportingincludes those policies and procedures that;

(1) Pertain to the maintenance of records that, in reasonabledetail, accurately and fairly reflect the transactions anddispositions of the assets of the Company;

(2) Provide reasonable assurance that transactions are recordedas necessary to permit preparation of financial statementsin accordance with generally accepted accounting principles,and that receipts and expenditures of the company arebeing made only in accordance with authorisations ofmanagement and directors of the Company; and

(3) Provide reasonable assurance regarding prevention or timelydetection of unauthorised acquisition, use, or disposition ofthe company's assets that could have a material effect onthe standalone financial statements.


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Limitations of Internal Financial Controls over FinancialReportingBecause of the inherent limitations of internal financial controlsover financial reporting, including the possibility of collusion orimproper management override of controls, materialmisstatements due to error or fraud may occur and not bedetected. Also, projections of any evaluation of the internalfinancial controls over financial reporting to future periods aresubject to the risk that the internal financial control over financialreporting may become inadequate because of changes inconditions, or that the degree of compliance with the policies orprocedures may deteriorate.

OpinionIn our opinion, to the best of our information and according tothe explanations given to us, the Company has, in all material

respects, an adequate internal financial controls system overfinancial reporting and such internal financial controls overfinancial reporting were operating effectively as at 31st March2019, based on the internal control over financial reportingcriteria established by the Company considering the essentialcomponents of internal control stated in the Guidance Note onAudit of Internal Financial Controls over Financial Reportingissued by the Institute of Chartered Accountants of India.


FRN.: 007761S



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Balance Sheet as at 31st March, 2019(Rs. in Lakhs)

Note As at As atNo 31.03.2019 31.03.2018

ASSETSI Non-Current Assets

a) Property, Plant and Equipment 2 9,333.81 5,549.44b) Capital Work-in-progress 2 1,405.65 138.76c) Other Intangible Assets 2 89.70 87.56d) Financial Assets

i) Investments 3 2,817.32 2,817.32ii) Loans 4 125.54 59.43iii) Other financial assets 5 – 2.49

e) Other non current assets 6 62.79 268.45f) Deferred Tax Assets (Net) 16 – –

II Current Assetsa) Inventories 7 2,250.58 1,690.49b) Financial Assets

i) Investmentsii) Trade Receivables 8 10,506.42 12,419.60iii) Cash and Cash equivalents 9 66.73 26.28iv) Bank balances other than (iii) above 10 34.19 31.03v) Other financial assets 5 453.42 358.81

c) Current Tax assets 189.24 133.63d) Other Current Assets 11 1,167.05 1,145.46 Total Assets 28,502.44 24,728.75

EQUITY AND LIABILITIESEquitya) Equity Share Capital 12 776.90 776.90b) Other Equity 13 12,616.96 10,792.21 LiabilitiesI Non-Current Liabilities

a) Provisions 15 415.42 488.57b) Deferred Tax Liabilities (Net) 16 261.47 27.85c) Deferred income 17 – 2.57

II Current Liabilitiesa) Financial Liabilities

i) Borrowings 18 3,167.57 1,688.75ii) Trade Payables 19 9,805.43 9,467.41iii) Other Financial Liabilities 14 498.00 720.22

b) Other Current Liabilities 20 797.03 591.09c) Provisions 15 163.66 172.89d) Deferred income 17 – 0.29

Total Equity and Liabilities 28,502.44 24,728.75Significant Accounting Policies 1

for and on behalf of Board of Directors In terms of our Reports AttachedFor RAGHAVAN, CHAUDHURI & NARAYANAN

H LAKSHMANAN A G GIRIDHARAN Chartered AccountantsChairman Chief Executive Officer Firm Regn. No: 007761S

V SATHYANARAYANANPlace : Chennai S JAGANNATHAN N ISWARYA LAKSHMI PartnerDate : 8th May 2019 Chief Financial Officer Company Secretary Membership No.027716


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Statement of Profit and Loss for the year ended 31st March, 2019(Rs. in Lakhs)

Note Year ended Year endedNo 31.03.2019 31.03.2018

IncomeI Revenue from Operations 21 47,759.52 44,428.13II Other Income 22 1,342.71 1,041.95III Total Income (I+II) 49,102.23 45,470.08IV Expenses

a) Cost of Material Consumed 23 35,552.81 31,535.19b) Changes in Inventory of Finished Goods and

Work-in-Progress 24 (245.27) (147.36)c) Excise duty & Service tax 25 – 742.28d) Employee Benefits Expense 26 4,880.94 4,354.23e) Finance Costs 27 178.37 111.17f) Depreciation and Amortization expenses 28 938.54 719.13g) Other Expenses 29 4,891.60 4,237.32Total Expenses (IV) 46,196.99 41,551.96

V Profit before Exceptional Items and Tax (III-IV) 2,905.24 3,918.12VI Exceptional Items – –VII Profit Before Tax (V-VI) 2,905.24 3,918.12VIII Tax Expense

a) Total of Current tax 517.38 904.37 i. Current Tax 538.01 740.34ii. Prior period income tax (20.63) 164.03

b) Deferred Tax 185.86 (66.12)703.24 838.25

IX Profit for the period (VII-VIII) 2,202.00 3,079.87X Other Comprehensive Income

Items that will not be reclassified to profit or loss- Remeasurement of post employment benefit obligations 136.68 9.82- Income tax relating to these items (47.76) (3.40)Other comprehensive income for the year, net of tax 88.92 6.42

XI Total Comprehensive Income for the Year (IX + X) 2,290.92 3,086.29Earnings Per Equity Sharea) Basic 36 28.34 39.64b) Diluted 28.34 39.64

Significant Accounting Policies 1





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Statement of changes in equity(Rs. in lakhs)

I) Equity Share Capital

Particulars Notes Amounts

Balance as at 31st March, 2018 776.90

Changes in equity share capital during the year 12 –


II) Other equity

Reserves and surplus

General CapitalParticulars Notes reserve redemption Retained Total

reserve earnings

Balance as at 31st March,2018 (A) 2,260.96 10.00 8,521.22 10,792.21

Profit for the period (i) 13 2,202.00 2,202.00

Other comprehensive income (ii) 13 88.92 88.92

Sub Total (i)+(ii) (B) – – 2,290.92 2,290.92

Transaction with owners in the capacitywith owners

Dividend paid (C ) 13 (466.14) (466.14)

Balance as at 31st March, 2019 (A)+(B)+(C ) 2,260.96 10.00 10,346.00 12,616.96




Notes to Financial Statements


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Cash flow statement for the year ended 31st March, 2019Rs. in Lakhs

Year ended Year ended31.03.2019 31.03.2018

A. CASH FLOW FROM OPERATING ACTIVITIES

Profit before tax and extra ordinary items 2,905.24 3,918.12

Add: Depreciation (net) 938.54 719.13

Dividend income (512.50) (512.50)

Interest Income (19.02) (16.45)

Interest Expenditure 178.37 111.17

Net loss on sale of Fixed Assets 1.28 8.27

Net loss on sale of investments – 2.17

Increase in fair valuation of employeebenefit obligation 136.68 9.82

Operating profit before working capital changes 3,628.59 4,239.73

Adjusted for: Working Capital changes

Trade Payables 338.01 3,711.87

Other Current Liabilities 205.94 (448.42)

Short Term Provisions (9.23) 32.39

Current Liability - Deferred income (0.29) –

Other Current Financial Liabilities (222.23) 464.49

Long Term Provisions (73.15) 15.34

Non Current Liability - Deferred income (2.57) (0.29)

Investment – 2.18

Long Term Loans and Advances (66.11) (7.55)

Inventories (560.09) (269.11)

Trade Receivables 1,913.18 (5,279.37)

Other Current Assets (21.59) (556.08)

Current tax assets (55.61) 208.70

Other Current Financial Assets (94.61) (2.36)

Other Non Current Financial Assets 2.48 1.44

Other non current assets 205.66 (43.70)

Cash generated from operations 5,188.38 2,069.26

Adjusted for: Tax Liability

Direct tax paid (net of refund) (517.38) (695.64)

Net cash from operating activities (A) 4,671.00 1,373.62


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Cash flow statement for the year ended 31st March, 2019 (Contd.)Rs. in Lakhs


B. CASH FLOW FROM INVESTING ACTIVITIES

Purchase of fixed assets (5,993.23) (1,941.53)

Sale of fixed assets – 0.84

Sale of investments 19.03 –

Profit / (Loss) Sale of Investments – (2.17)

Interest received – 16.45

Dividend received 512.50 512.50

Net cash used in investing activities (B) (5,461.70) (1,413.91)

C. CASH FLOW FROM FINANCING ACTIVITIES

Short Term Borrowings 1,478.82 558.14

Interest paid (178.37) (111.17)

Dividend and dividend tax paid (466.14) (466.14)

Net cash flow from/ (used in) financing activities (C) 834.31 (19.17)

D. NET INCREASE / (DECREASE) IN CASH ANDCASH EQUIVALENTS (A)+(B)+(C) (43.61) (59.47)

Cash and Cash Equivalents at the beginning of the year

Cash and Cash equivalents 26.28 85.26

Bank balances other than above 31.03 31.52

57.31 116.78

Cash and Cash Equivalents at the end of the year



100.92 57.31





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1. SIGNIFICANT ACCOUNTING POLICIES

The accounting policies mentioned herein are relating to the standalone financial statements of theCompany.

a) Brief description of the CompanyHarita Seating Systems Limited('the Company') is a public limited company incorporated in India.The company's equity shares are listed on NSE. The registered office is located at "JayalakshmiEstates", 29, Haddows Road, Nungambakkam, Chennai - 600006, Tamil Nadu, India.

The Company manufactures seating systems for various segments such as Original EquipmentManufacturers, Bus Passenger, Tractors, Off road vehicles etc. The Company has seven plantsacross India.

During the year the Board of Directors of the Company have approved draft composite scheme ofAmalgamation on 14th February, 2019 with Minda Industries Limited. The scheme is subject tonecessary statutory and regulatory approvals under applicable laws and the approval of the share-holders, creditors and others.

The "Appointed Date" for the Scheme, if approved will be 1st April 2019.

b) Basis of preparation and presentationThe 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 Ac-counting 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 willbe 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 pru-dence 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 certainfinancial assets and liabilities (as per the accounting policy below), which have been measure at fairvalue.

c) Use of estimates and judgmentsThe preparation of financial statements requires management to make certain estimates and as-sumptions that affect the amounts reported in the financial statements and notes thereto. The man-agement believes that these estimates and assumptions are reasonable and prudent. However,actual results could differ from these estimates. Any revision to accounting estimates is recognisedprospectively 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 estimatesand assumptions turning out to be different than those originally assessed. Detailed informationabout each of these estimates and judgments is included in the relevant notes together with informa-tion about the basis of calculation for each affected line item in the financial statements.

d) Significant estimates and judgementsThe areas involving significant estimates or judgments are:

i) Estimation of defined benefit obligation - (Refer Note 30)

ii) Estimation of useful life of Property, Plant and Equipment (Refer Note 1(f) and 1(g))

Notes to Financial Statements


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Notes to Financial Statements - (continued)

1. SIGNIFICANT ACCOUNTING POLICIES - (continued)

e) Going concernThe board of directors have considered the financial position of the Company at 31 March 2019 andprojected cash flows and financial performance of the Company for at least twelve months from thedate of approval of these financial statements as well as planned cost and cash improvement ac-tions, 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 inplace at the date of signing the accounts to fund the Company's operations.

f) Revenue recognitionRevenue 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 productsRevenue 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 thedealer / customer, as per terms of contract.

ii) Revenue from serviceRevenue from Services is recognised in the accounting period in which the services are ren-dered and when invoices are raised.

iii) Dividend IncomeDividends are recognised in the Statement of Profit and Loss only when the right to receivepayment is established and it is probable that the economic benefits associated with the divi-dend will flow to the Company, and the amount of dividend can be reliably measured.

The Company has adopted Ind AS 115 from April 1, 2018 and had opted for retrospectiveapplication with the cumulative effect of initially applying this standard recognized at the date ofinitial application. The standard has been applied to all open contracts as on 1st April 2018, andsubsequent contracts with customers from that date. There is no impact on the retained earn-ings as on the date of adoption of the standard.

g) Property, plant and equipmentFreehold Land is stated at historical cost. All other items of Property, Plant and Equipment are statedat cost of acquisition/construction less accumulated depreciation / amortization and impairment, ifany. 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 creditof the duty or tax is availed of.

Subsequent costs are included in the asset's carrying amount or recognised as a separate asset, asappropriate, only when it is probable that future economic benefits associated with the item will flow


73




to the Company and the cost of the item can be measured reliably. The carrying amount of anycomponent accounted for as separate asset is derecognised when replaced. All other repairs andmaintenance are charged to the Statement of Profit and Loss during the reporting period in whichthey 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).

h) Depreciationi) 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 Engineerand followed by the Company is furnished below:

Particulars Useful life in years (Nos.)

Buildings 5 to 30

Plant & Machinery 2 to 15

Tools 8

Moulds 8

Vehicles 8

Computer hardware 3

Office equipment 5

iii) The residual value for all the above assets are retained at 5% of the cost Residual values anduseful 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 at100%.

i) Amortization of Intangible assetsIntangible assets acquired are accounted at their acquisition cost and are amortised over its usefullife, viz., 2 years in the case of software.

j) Impairment of tangible and intangible assetsAt the end of each reporting period, the Company reviews the carrying amounts of its tangible andintangible assets to determine whether there is any indication that those assets have suffered animpairment loss. If any such indication exists, the recoverable amount of the asset is estimated inorder 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 assessingvalue in use, the estimated future cash flows are discounted to their present value using a pre-taxdiscount rate that reflects current market assessments of the time value of money and the risksspecific to the asset for which the estimates of future cash flows have not been adjusted.


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k) Foreign currency translation

i) Functional and presentation currencyItems included in the financial statements are measured using the currency of the primary eco-nomic environment in which the company operates ('the functional currency'). The financialstatements are presented in Indian rupee, and all values are rounded off to nearest lakhs exceptwhere otherwise indicated.

ii) Transactions and balancesForeign currency transactions are translated into the functional currency using the exchangerates at the dates of the transactions. Foreign exchange gains and losses resulting from thesettlement of such transactions and from the translation of monetary assets and liabilities de-nominated in foreign currencies at year end exchange rates are generally recognized in profit orloss.

l) InventoriesInventories are valued at the lower of cost and net realizable value.

The cost of finished goods and work in progress comprises raw materials, direct labor, other directcosts and appropriate proportion of variable and fixed overhead expenditure. Overhead expendi-tures are being allocated on the basis of normal operating capacity. Raw materials are valued atweighted average cost. Cost of inventories also include all other costs incurred in bringing the inven-tories to their present location and condition. Costs of purchased inventory are determined afterdeducting rebates and discounts. Net realizable value is the estimated selling price in the ordinarycourse of business, less the estimated costs of completion and the estimated costs necessary tomake the sale.

Non- production inventory (other than those supplied along with main plant and machinery, whichare capitalized and depreciated accordingly) are charged to profit or loss on consumption.

m) Employee Benefits

i. Short term obligationsLiabilities for wages and salaries, including non-monetary benefits that are expected to be settledwholly within 12 months after the end of the period in which the employees render the relatedservice are recognized in respect of employees' services upto the end of the reporting periodand 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 obligationsThe liabilities for earned leave are not expected to be settled wholly within 12 months after theend of the period in which the employees render the related service. They are, therefore, recog-nized and provided for at the present value of the expected future payments to be made inrespect of services provided by employee upto the end of reporting period using the projectedunit credit method. The benefits are discounted using the market yields at the end of the report-ing period that have terms approximating to the terms of the related obligation. Remeasurementsas a result of experience adjustments and changes in actuarial assumptions are recognised inthe Statement of Profit and Loss. The obligations are presented as current liabilities in the bal-ance sheet if the entity does not have an unconditional right to defer settlement for at least


75




twelve months after the reporting period, regardless of when the actual settlement is expected tooccur.

iii. Post-employment obligationThe Company operates the following post-employment schemes:

a) Defined benefit plans such as gratuity 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 andgratuity plan is the present value of the defined benefit obligation at the end of the reportingperiod less the fair value of plan assets. The defined benefit obligation is calculated annually byActuaries using the projected unit credit method. The present value of the defined benefit obliga-tion denominated in INR is determined by discounting the estimated future cash outflows byreference to market yields at the end of the reporting period on the government bonds that haveterms approximating to the terms of the related obligation. The net interest cost is calculated byapplying the discount rate to the net balance of the defined benefit obligation and the fair valueof plan assets. This cost is included in employee benefit expense in the Statement of Profit andLoss. Remeasurement gains and losses arising from experience adjustments and changes inactuarial assumptions are recognised in the period in which they occur, directly in other compre-hensive income (net of deferred tax). They are included in retained earnings in the statement ofchanges in equity and in the balance sheet. Changes in the present value of the defined benefitobligation resulting from plan amendments or curtailments are recognised immediately in theStatement of Profit or Loss as past service cost.

Provident fund:The eligible employees of the Company are entitled to receive benefits in respect of providentfund, a defined contribution plan, in which both employees and the Company make monthlycontributions at a specified percentage of the covered employees' salary. The provident fundcontributions are made to an irrevocable trust set up by the Company. The Company is gener-ally liable for annual contributions and any shortfall in the fund assets based on the Governmentspecified minimum rates of return and recognises such contributions and shortfall, if any, as anexpense in the year in which it is incurred.

iv. Bonus plansThe Company recognizes a liability and an expense for bonus. The Company recognizes aprovision where contractually obliged or where there is a past practice that has created a con-structive obligation

n) Taxes on incomeTax expense comprises of (i) current tax and (ii) deferred tax. The income tax expense or credit forthe period is the tax payable on the current period's taxable income based on the applicable incometax rate adjusted by changes in deferred tax assets and liabilities attributable to temporary differ-ences and to unused tax losses. The current income tax charge is calculated on the basis of the taxlaws enacted or substantively enacted at the end of the reporting period. Management periodicallyevaluates positions taken in tax returns with respect to situations in which applicable tax regulation issubject to interpretation. It establishes provisions, where appropriate, on the basis of amounts ex-


76




pected to be paid to the tax authorities. Deferred income tax is provided in full, using the liabilitymethod, on temporary differences arising between the tax bases of assets and liabilities and theircarrying amounts in the financial statements. However, deferred tax liabilities are not recognised ifthey arise from the initial recognition of goodwill. Deferred income tax is also not accounted for if itarises from initial recognition of an asset or liability in a transaction other than a business combina-tion 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 substan-tially enacted by the end of the reporting period and are expected to apply when the related deferredincome tax asset is realised or the deferred income tax liability is settled. Deferred tax assets arerecognised only if it is probable that future taxable amounts will be available to utilise those tempo-rary differences and losses. Deferred tax assets and liabilities are offset when there is a legallyenforceable right to offset current tax assets and liabilities and when the deferred tax balances relateto the same taxation authority. Current tax assets and tax liabilities are offset where the entity has alegally enforceable right to offset and intends either to settle on a net basis, or to realise the assetand settle the liability simultaneously. Current and deferred tax is recognised in profit or loss, exceptto 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, respec-tively. Where the Company is entitled to claim special tax deductions for investments in qualifyingassets or in relation to qualifying expenditure (the Research and Development or other investmentallowances), the Company accounts for such allowances as tax credits, which means that the allow-ance reduce income tax payable and current tax expense. A deferred tax asset is recognised forunclaimed 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 atMarch 31st 2019 has been considered in this financial year as the certainty for utilization has nowbeen ascertained.

p) Provisions and contingencies

i) Provisions:Provisions are recognized when there is a present obligation or constructive obligation as aresult of a past event and it is probable that an outflow of resources embodying economic ben-efits will be required to settle the obligation and there is a reliable estimate of the amount of theobligation. Provisions are determined by discounting the expected future cash flows at a pretaxrate that reflects current market assessment of the time value of money and the risks specific tothe 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 ormore uncertain future events not wholly within the control of the company or a present obligationthat arises from past events where it is either not probable that an outflow of resources will berequired to settle or a reliable estimate of the amount cannot be made.


77




q) Segment reportingOperating segments are reported in a manner consistent with the internal reporting provided to thechief operating decision maker.

r) LeasesBased on Ind AS Transition Facilitation Group (ITFG) Clarification Bulletin 7, leases of property,plant and equipment where the Company, as a lessee, has substantially all the risks and rewards ofownership, are classified as finance leases. Finance leases are capitalized at the inception of leaseat fair value of the leased property or, if lower, the present value of the minimum lease payments.

The corresponding rental obligations, net of finance charges, are included in other short-term andlong-term payables. Each lease payment is allocated between the liability and finance cost.The finance cost is charged to the profit or loss over the lease period so as to produce a constantperiodic rate of interest on the remaining balance of the liability for each period.

The property, plant and equipment acquired under finance leases is depreciated over the asset'suseful life or over the shorter of the asset's useful life and the lease term, if there is no reasonablecertainty that the Company will obtain ownership at the end of the lease term.

Leases in which a significant portion of the risks and rewards of ownership are not transferred to theCompany as lessee are classified as operating lease

s) Financial instrumentsA financial instrument is any contract that gives rise to a financial asset of one entity and a financialliability or equity instrument of another entity. Financial assets and financial liabilities are recognisedwhen 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 aredirectly attributable to the acquisition or issue of financial instruments (other than financial assetsand financial liabilities at fair value through profit or loss) are added to or deducted from the fair valueof the financial assets or financial liabilities, as appropriate, on initial recognition. Transaction costsdirectly attributable to the acquisition of financial assets or financial liabilities at fair value throughprofit or loss are recognized immediately in profit or loss. Subsequently, financial instruments aremeasured according to the category in which they are classified.

t) Financial assetsAll 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 ofassets 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 costor fair value, depending on the classification of the financial assets.

i) Classification of financial assetsClassification of financial assets depends on the nature and purpose of the financial assets andis 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 in-come, or through profit or loss), and


78




• those measured at amortized cost

The classification depends on the Company's business model for managing the financial assetsand the contractual terms of the cash flows.

A financial asset that meets the following two conditions is measured at amortised cost unlessthe 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 financialasset to collect the contractual cash flows.

• Cash flow characteristic test: the contractual term of the financial asset give rise on speci-fied dates to cash flows that are solely payments of principal and interest on the principalamount outstanding.

A financial asset that meets the following two conditions is measured at fair value through othercomprehensive income unless the asset is designated at fair value through profit or loss underthe fair value option:

• Business model test: the financial asset is held within a business model whose objective isachieved by both collecting cash flows and selling financial assets.

• Cash flow characteristic test: the contractual term of the financial asset gives rise on speci-fied dates to cash flows that are solely payments of principal and interest on the principalamount 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)Investment in equity instrument are classified at fair value through profit or loss, unless theCompany irrevocably elects on initial recognition to present subsequent changes in fair value inother comprehensive income for investments in equity instruments which are not held for trad-ing.

Financial assets that do not meet the amortised cost criteria or fair value through other compre-hensive income criteria are measured at fair value through profit or loss. A financial asset thatmeets the amortised cost criteria or fair value through other comprehensive income criteria maybe designated as at fair value through profit or loss upon initial recognition if such designationeliminates or significantly reduces a measurement or recognition inconsistency that would arisefrom measuring assets and liabilities or recognizing the gains or losses on them on differentbases.

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 endof each reporting period, with any gains or losses arising on re measurement recognized in profitor loss.

iii) Trade receivablesTrade receivables are recognized initially at fair value and subsequently measured at amortizedcost less provision for impairment.


79




iv) Cash and cash equivalents

For the purpose of presentation in the statement of cash flows, cash and cash equivalentsinclude cash on hand, deposits held at call with financial institutions, other short-term, highlyliquid investments with original maturities of three months or less that are readily convertible toknown amounts of cash and which are subject to an insignificant risk of changes in value, andbank overdrafts. Bank overdrafts are shown within borrowings in current liabilities in the balancesheet.

v) Impairment of financial assetsThe Company assesses impairment based on expected credit losses (ECL) model to the follow-ing:

• 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 de-fault events on the financial instruments that are possible within twelve months after thereporting date); or

• full life time expected credit losses (expected credit losses that result from all possible de-fault events over the life of the financial instrument).

For trade receivables or any contractual right to receive cash or another financial asset thatresult from transactions that are within the scope of Ind AS 18, the Company always measuresthe 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 ratemethod or at fair value through profit or loss.

i) Trade and other payablesTrade and other payables represent liabilities for goods or services provided to the Companyprior to the end of financial year which are unpaid.

ii) BorrowingsBorrowings are initially recognised at fair value, net of transaction costs incurred. Borrowingsare subsequently measured at amortised cost. Any difference between the proceeds (net oftransaction costs) and the redemption amount is recognised in profit or loss over the period ofthe borrowings using the effective interest rate method.

Borrowings are removed from the balance sheet when the obligation specified in the contract isdischarged, cancelled or expired. The difference between the carrying amount of a financialliability 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.


80




iii) Foreign exchange gains or losses

For financial liabilities that are denominated in a foreign currency and are measured at amor-tised cost at the end of each reporting period, the foreign exchange gains and losses are deter-mined 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 thatforeign currency and translated at the exchange rate at the end of the reporting period. Forfinancial liabilities that are measured as at fair value through profit or loss, the foreign exchangecomponent forms part of the fair value gains or losses and is recognised in profit or loss.

iv) Borrowing costs

General and specific borrowing costs that are directly attributable to the acquisition, constructionor production of a qualifying asset are capitalised during the period of time that is required tocomplete and prepare the asset for its intended use or sale. Qualifying assets are assets thatnecessarily 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 theirexpenditure on qualifying assets is deducted from the borrowing costs eligible for capitalization.

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 assurancethat 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 theperiod necessary to match them with the costs that they are intended to compensate and presentedwithin 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 theexpected lives of the related assets and presented within other income.

x) Earnings Per Share

Basic earnings per share have been computed by dividing the net income by the weighted averagenumber of shares outstanding during the year. Diluted earnings per share has been computed usingthe weighted average number of shares and diluted potential shares, except where the result wouldbe 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-currentclassification.


81




Cash or cash equivalent is treated as current, unless restricted from being exchanged or used tosettle a liability for at least twelve months after the reporting period. In respect of other assets, it istreated 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 monthsafter 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 realizationin cash and cash equivalents. In Company's considered view, twelve months is its operating cycle.

aa) Recent accounting pronouncements

The Ministry of Corporate Affairs has notified Ind AS 116 Leases, which is applicable to the Com-pany from accounting periods beginning 1st April 2019. This Standard changes the classification andaccounting for leases and also provides transition guidance. The Company expects the Standard toaffect the accounting for assets that are taken on operating lease and is currently in the process ofassessing the impact of this Standard on its transactions.


82


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83



Rs. in LakhsAs at As at

31.03.2019 31.03.2018

3. INVESTMENTSInvestments in Equity Instrumenta) Investment in Subsidiary

(1,02,50,000 fully paid-up equity shares in Harita Fehrer LimitedMarch 31, 2018 : 1,02,50,000 Equity SharesApril 1, 2017 : 1,02,50,000 Equity Shares) 2,759.00 2,759.00

b) Other Investments carried at amortised costLife Insurance Corporation of India, Chennai 58.32 58.32Group annuity policy for pension to employees

Total 2,817.32 2,817.32

4. LOANSNon CurrentUnsecured and Considered GoodSecurity Deposits 125.54 59.43

Total 125.54 59.43

5. OTHER FINANCIAL ASSETSNon CurrentInterest receivable – 2.49

Total – 2.49

Currenta) Claims Receivable 369.19 277.48b) Employee advance 44.26 38.38c) MTM gain on forward contracts 35.23 0.33d) MEIS received - scrip 4.74 42.62

Total 453.42 358.81

6. OTHER NON CURRENT ASSETSAdvances for Capital Goods 62.79 268.45

Total 62.79 268.45

7. INVENTORIES** Valued at Lower of Cost or Net Realisable Valuea) Raw materials and components 1,128.06 915.34

b) Work-in-Process 388.57 274.64

c) Finished Goods 471.19 339.84

d) Stores & Consumables 262.76 160.67

Total 2,250.58 1,690.49


84




31.03.2019 31.03.2018

8. TRADE RECEIVABLESUnsecureda) Considered good 10,506.42 12,419.60b) Considered doubtful 58.78 58.78c) Provision for expected credit loss (58.78) (58.78)

Total 10,506.42 12,419.60

9. CASH AND CASH EQUIVALENTSa) Balance with Banks

- in Current account 58.88 20.13- in Fixed deposit 0.38 0.35

b) Cash on hand 7.47 5.80

Total 66.73 26.28

10. BANK BALANCES OTHER THAN (9) ABOVEUnpaid dividend 34.19 31.03

Total 34.19 31.03

11. OTHER CURRENT ASSETSa) Advance to suppliers 321.73 563.35b) Balance with government authorities 386.90 447.65c) Advances for tool development 344.46 8.12d) Prepaid expenses 113.96 126.34

Total 1,167.05 1,145.46

12. Notes to balance sheet - Equity share capital and other equity

Equity share capital

Authorised equity share capital Rs. in Lakhs

Particulars Number of shares Amount

As at 31st March 2018 7,769,040 776.90

Increase during the year – –

As at 31st March 2019 7,769,040 776.90

(i) Movements in equity share capital

Particulars Number of sharesEquity share

capital (par value)

As at 31st March 2018 7,769,040 776.90

Increase during the year – –

As at 31st March 2019 7,769,040 776.90


85



Rs. in Lakhs

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 iseligible for one vote per share held. In the event of liquidation, the equity shareholders are eligible toreceive the remaining assets of the company after distribution of all preferential amounts. The distributionwill be in proportion to the number of equity shares held by the shareholders.

(ii) Details of shareholders holding more than 5% shares in the Company

As at 31st March 2019 As at 31st March 2018Particulars Number of

% holdingNumber of

% holdingshares shares

Harita Limited, Chennai 1,800,500 23.18% 1,800,500 23.18%

Harita Gopal Private Limited, Chennai – – 479,762 6.18%

Vidhar Management And ConsultancyServices LLP 479,762 6.18% – –

Harita Sheela private Limited, Chennai 485,000 6.24% 485,000 6.24%

Harita Malini Private Limited, Chennai 467,800 6.02% 467,800 6.02%

Harita Venu Private Limited, Chennai 467,800 6.02% 467,800 6.02%

Mr. Martin Grammer, Amberg 1,087,600 14.00% 1,087,600 14.00%

4,788,462 61.64% 4,788,462 61.64%

13. OTHER EQUITYGeneral reserve 2,260.96 2,260.96Capital redemption reserve 10.00 10.00Retained earnings 10,346.00 8,521.22

Total Other Equity 12,616.96 10,792.21

a) General reserveOpening balance 2,260.96 2,260.96Additions during the year – –Deductions / Adjustments during the year – –

Closing balance 2,260.96 2,260.96

b) Capital redemption reserveOpening balance 10.00 10.00Additions during the year – –Deductions / Adjustments during the year – –Closing balance 10.00 10.00

Rs. in Lakhs

As at As at31.03.2019 31.03.2018


86



31.03.2019 31.03.2018c) Retained earnings

Opening balance 8,521.22 5,901.07Net profit for the period 2,202.00 3,079.87Dividend paid (466.14) (466.14)Items of other comprehensive income recognised directlyin retained earnings- Remeasurements of post-employment benefit obligation, net of tax 88.92 6.42

Closing balance 10,346.00 8,521.22

Nature and purpose of reserves

i) General reserve: Part of retained earnings was earlier utilised for declaration of dividends as per theerstwhile Companies Act, 1956. This is available for distribution to share holders.

ii) Retained earnings: Company's cumulative earnings since its formation minus the dividends/capitalisation and earnings transferred to general reserve

14. OTHER FINANCIAL LIABILITIESCurrenta) Payable to Employees 22.35 26.69b) Security deposit from dealers 92.11 97.61c) Payable for Fixed Asset 349.35 564.89d) Unpaid dividends 34.19 31.03

Total 498.00 720.22

15. PROVISIONSNon Current

Provision for Employee Benefitsa) Pension 330.82 349.06b) Leave encashment 65.12 74.36c) Gratuity (11.51) 3.09

Other Provisionsd) Warranty 30.99 62.06

Total 415.42 488.57

CurrentProvision for Employee Benefitsa) Pension 2.42 2.27b) Leave encashment 9.01 3.32c) Bonus 118.48 118.09Other Provisionsd) Warranty 33.75 49.21

Total 163.66 172.89



87



31.03.2019 31.03.201816. DEFERRED TAX LIABILITIES / (ASSETS) (NET)

The balance comprises temporary differences attributable to:

MAT credit entitlement (200.90) (248.01)

Expenses allowed on payment basis (275.86) (328.40)

Total deferred tax (assets) (476.76) (576.41)


Net deferred tax Liabilities / (Assets) 261.47 27.85

Movement in deferred tax assets

MAT CreditExpenses

Particulars DepreciationEntitlement

allowed on Totalpayment basis

At 31st March 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

At 31st March 2019 738.23 (200.90) (275.86) 261.47

17. DEFERRED INCOMEOpening Balance 2.86 3.14Released to P&L (2.86) (0.28)

Closing Balance – 2.86

Non Current – 2.57Current – 0.29

Total – 2.86

18. BORROWINGSFrom BanksSecured

Working Capital Demand Loan 2,167.57 1,688.75Primary security (for CC): First charge (hypothecation) on all thecurrent assets of the company including stock, work-in -progress,book debt (both current and non-current), both present and future

UnsecuredShort term loans 1,000.00 –

Total 3,167.57 1,688.75

As at As at31.03.2019 31.03.2018



88


19. TRADE PAYABLES

Unsecured

a) Dues of micro enterprises and small enterprises** (Refer note 38) 186.64 629.32b) Dues to enterprises other than micro enterprises and small enterprises 7,271.56 8,838.09c) Purchase bills accepted and payable 2,347.23 –

Total 9,805.43 9,467.41** Dues to Micro and Small Enterprises have been determined to

the extent such parties have been identified on the basis of infor-mation collected by the management. The entire closing balancerepresents the principal amount payable to these enterprises.There are no interest due or outstanding on the same.

20. OTHER CURRENT LIABILITIES

a) Statutory Dues 82.28 77.65

b) Advances from customers 199.12 157.51

c) Other Payables 515.63 355.93

Total 797.03 591.09


31.03.2019 31.03.2018


21. REVENUE FROM OPERATIONS

a) Sale of Products - Gross 47,739.48 44,364.17

Less: Rate Discount – –

Sale of Products 47,739.48 44,364.17

b) Revenue from trading activities

Sale of traded goods 4,749.24 3,494.78

Less: Purchases (4,729.20) (3,430.82)

Net 20.04 63.96

Total (a)+ (b) 47,759.52 44,428.13



89


Rs. in LakhsYear ended Year ended31.03.2019 31.03.2018

22. OTHER INCOME

a) Interest Income 19.03 16.45

b) Dividend Income ( From Subsidiary Company) 512.50 512.50

c) Net gain / (loss) on sale of investments – (2.17)

d) Lease rent 167.52 159.12

e) Other non-operating income 4.51 0.87

f) Revenue from services rendered 78.75 78.75

g) Other operating revenues 556.06 274.40

h) Net gain / loss on foreign currency fluctuation 4.34 2.03

Total 1,342.71 1,041.95

23. COST OF MATERIAL CONSUMED

Opening Stock of Raw materials 915.33 881.55

Purchase of Raw Materials and Components 35,765.54 31,568.97

Closing Stock of Raw Materials (1,128.06) (915.33)

Total 35,552.81 31,535.19

24. Changes in Inventory of Finished Goods and Work-in-Progress

Opening Stock of Finished Goods and Work-in-progress 614.48 467.12

Less: Closing Stock of Finished Goods and Work-in-progress (859.75) (614.48)

Changes In Inventory (245.27) (147.36)

25. EXCISE DUTY & SERVICE TAX – 742.28

– 742.28

26. EMPLOYEE BENEFITS EXPENSE

a) Salary, Wages and Bonus * 3,976.63 3,514.37

b) Contribution to provident and other funds* 270.37 224.33

c) Staff welfare expenses* 633.94 615.53

Total 4,880.94 4,354.23

27. FINANCE COSTS

Interest Expense 178.37 111.17

Total 178.37 111.17

28. DEPRECIATION AND AMORTIZATION EXPENSE


Amortization 33.42 45.70

Total 938.54 719.13



90


29. OTHER EXPENSES

Consumption of stores and spare parts 175.39 253.34

Power and fuel * 416.63 327.75

Rent including lease rentals * 256.32 249.66

Payments to auditors

- 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 5.03 11.14

Repairs and maintenance *

- Buildings 45.71 56.36

- Machinery 452.47 439.82

- Computers 160.66 92.92

- Others 9.27 7.79

Transportation Expenses 789.66 608.14

Research and Development Expenses 500.68 474.13

Travelling and Conveyance 492.99 458.27

Packing charges 391.45 342.39

Legal and professional Charges 261.50 256.50

Other Administrative Expenses* 279.19 238.80

Security detective Charges 110.11 89.04

Insurance 71.26 69.26

Donation and Contributions 91.77 20.00

Sales promotion 106.21 46.27

Printing and Stationery 39.36 40.01

Bank Charges 88.85 31.49

Telephone Charges 24.85 30.07

Rates and taxes * 48.96 25.90

Corporate Social Responsibility Expenses 52.00 40.00

Loss on fixed assets sold / scrapped / written off 1.28 8.27

Total 4,891.60 4,237.32

* Net of recoveries and government grants




91


Rs. in Lakhs30. EMPLOYEE BENEFIT OBLIGATIONS

As at 31st March, 2019 As at 31st March, 2018Particulars

Current Non-current Total Current Non-current Total

Pension 2.42 330.82 333.24 2.27 349.06 351.33

Gratuity – (11.51) (11.51) – 3.09 3.09

Compensated absences 9.01 65.12 74.13 3.32 74.36 77.68

Less: Net asset position

Total employee benefit obligations 11.43 384.43 395.86 5.59 426.51 432.10

(i) Compensated absences

31st March, 31st March,2019 2018

Current leave obligations expected to be settled within the next 12 months 9.34 3.08

(ii) Gratuity

The Company extends defined benefit plans in the form of gratuity to employees. The Company hasformed "Harita Seating Systems Limited Employees Group Gratuity Scheme" with Life InsuranceCorporation of India (LIC). Contribution to gratuity is made to LIC in accordance with the schemeframed by the corporation. The Company has made contribution towards Gratuity based on the actu-arial valuation.

(iii) Defined contribution plans

Contribution to provident fund is in the nature of defined contribution plan and are made to providentfund account maintained by the Government on its account.

Gratuity Pension Leave salaryPresent Fair Present Fair Present Fair

Particulars value of value of Net value of value of Net value of value of Netobligation plan amount obligation plan amount obligation plan amount

assets assets assets

Position as at 31st March 2018 (A) 409.98 406.89 3.09 351.35 – 351.35 77.68 – 77.68Current service cost 106.96 – 106.96 6.11 – 6.11 – – –Interest expense / (income) 33.49 33.58 (0.09) 23.87 – 23.87 5.99 – 5.99Total amount recognised in profit or loss (B) 140.45 33.58 106.87 29.98 – 29.98 5.99 – 5.99Remeasurements(Gain) / loss from change in financial assumptions – – – – – – (3.54) – (3.54)Experience (gains) / losses (88.61) (88.61) (48.08) – (48.08) 21.16 – 21.16Total amount recognised in othercomprehensive 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) 333.25 – 333.25 74.13 – 74.13



92


Rs. in Lakhs30. EMPLOYEE BENEFIT OBLIGATIONS - (continued)

The net liability disclosed above relates to funded plans are as follows:

GratuityParticulars As at As at

31.03.2019 31.03.2018

Present value of funded obligations 432.14 409.98

Fair value of plan assets 443.65 406.89

(Excess) / Deficit of funded plan (11.51) 3.09

The net liability disclosed above relates to unfunded plans are as follows:

PensionParticulars As at As at

31.03.2019 31.03.2018


(iv) Post-Employment benefits

Significant estimates: actuarial assumptions and sensitivity

The significant actuarial assumptions were as follows:

Gratuity Pension Leave SalaryDetails As at As at As at As at As at As at

31.03.2019 31.03.2018 31.03.2019 31.03.2018 31.03.2019 31.03.2018

Discount rate 7.8% 7.7% 7.3% 7.0% 7.64% 7.72%

Salary growth rate 5.5% 6.0% 5.5% 6.0% 5.50% 6.00%

Attrition rate 3.0% 3.0% – – 3.00% 3.00%

Mortality rate IALM (2006-08) Ultimate

Assumptions regarding future mortality for pension and medical benefits are set based on actuarialadvice in accordance with published statistics and experience. These assumptions translate into an aver-age 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 is:

Impact on defined benefit obligation

Gratuity Change in Impact on defined benefit obligationassumption Increase in assumption Decrease in assumption

DetailsAs at As at As at As at As at As at

31.03.2019 31.03.2018 31.03.2019 31.03.2018 31.03.2019 31.03.2018

Discount rate 0.50% 0.50% 17.69 17.74 (19.07) (19.15)

Salary growth rate 0.50% 0.50% (19.38) (19.37) 18.12 18.10



93


Rs. in Lakhs

Pension Change in Impact on defined benefit obligationassumption Increase in assumption Decrease in assumption


31.03.2019 31.03.2018 31.03.2019 31.03.2018 31.03.2019 31.03.2018

Discount rate 1.00% 0.50% 46.99 35.54 (57.30) (15.45)

Salary growth rate 1.00% 0.50% (59.77) 22.09 49.43 0.19

30. EMPLOYEE BENEFIT OBLIGATIONS - (continued)

Leave salary Change in Impact on defined benefit obligationassumption Increase in assumption Decrease in assumption


31.03.2019 31.03.2018 31.03.2019 31.03.2018 31.03.2019 31.03.2018

Discount rate 0.50% 0.50% 2.86 3.98 (3.09) (4.35)


(vi) Risk exposure

Through its defined benefit plans, The company is exposed to a number of risks, the most significantof which are detailed below:

Asset volatility

The plan liabilities are calculated using a discount rate set with reference to bond yields; if plan assetsunderperform 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 in-crease in the value of the plans’ bond holdings.

The following payments are expected contributions to the defined benefit plan in future years:


31.03.2019 31.03.2018

Within the next 12 months (next annual reporting period) 48.99 16.89

Between 2 and 5 years 117.54 149.89

Beyond 5 years 250.32 223.80



94


31. FINANCIAL INSTRUMENTS AND RISK MANAGEMENT

Fair value measurements

Financial instruments by category

Financial assets

Investments 58.32 58.32

Security deposits 125.54 59.43

Interest receivable – 2.49

Claims Receivable 369.19 277.48

Trade receivables 10,506.42 12,419.60

Cash and cash equivalents 66.73 26.28

Premium on forward contracts 35.23 0.33

MEIS received - script 4.74 42.62

Employee advance 44.26 38.39

Total financial assets 11,210.43 12,924.94

Financial liabilities

Security deposits 92.11 97.61

Employee payables 22.36 26.69

Short Borrowings 3,167.57 1,688.75

Trade payables 9,805.43 9,467.41

Payable for Fixed Asset 349.35 564.89

Unpaid dividends 34.19 31.03

Total financial liabilities 13,471.01 11,876.38

Fair value hierarchy

This section explains the judgements and estimates made in determining the fair values of the financialinstruments that are (a) recognised and measured at fair value and (b) measured at amortised cost andfor which fair values are disclosed in the financial statements.

Level 1: Level 1 hierarchy includes financial instruments measured using quoted prices. This includeslisted equity instruments, traded bonds and mutual funds that have quoted price. The fair value of allequity instruments (including bonds) which are traded in the stock exchanges is valued using the closingprice 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, tradedbonds, over-the-counter derivatives) is determined using valuation techniques which maximise the use ofobservable market data and rely as little as possible on entity-specific estimates. If all significant inputsrequired 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 isincluded in level 3. This is the case for unlisted equity securities, contingent consideration and indemnifi-cation asset included in level 3.

Rs. in Lakhs

Amortised cost

As at As at31.03.2019 31.03.2018



95


Rs. in Lakhs31. FINANCIAL INSTRUMENTS AND RISK MANAGEMENT - (continued)

There are no transfers between levels 1 and 2 during the year.

The company’s policy is to recognise transfers into and transfers out of fair value hierarchy levels as at theend of the reporting period.

The carrying amounts of trade receivables, trade payables, loans, deposits, advances, borrowings, cashand cash equivalents and other current financial liabilities are considered to be the same as their fairvalues, due to their short-term nature.

32. FINANCIAL RISK MANAGEMENT

The company’s activities expose it to market risk, liquidity risk and credit risk.

(A) Credit riskCompany faces credit risk from cash and cash equivalents, deposits with banks and financial institu-tions and unsecured trade receivables. The company doesn't face any credit risk with other financialassets.

(i) Credit risk managementCredit risk on deposit is mitigated by the depositing the funds in reputed private sector bank.For trade receivables, the primary source of credit risk is that these are unsecured. The Companysells the products to customers only when the collection of trade receivables is certain and whetherthere has been a significant increase in the credit risk on an on-going basis is monitored through-out each reporting period. As at the balance sheet date, based on the credit assessment thehistorical trend of low default is expected to continue. An impairment analysis is performed at eachreporting date on an individual basis for major clients. Any recoverability of receivables is providedfor based on the impairment assessment.

(ii) Provision for expected credit losses for trade receivablesThe company provides for expected credit loss based on the following:

Year ended 01st April 2016:Expected credit loss for trade receivables under simplified approach

AgeingLess than 180 More than 180

Totaldays past due days past due

Gross carrying amount 5,661.76 90.63 5,752.39

Expected loss rate – 100% –

Expected credit losses – 90.63 90.63

Carrying amount of trade receivables (net of impairment) 5,661.76 181.26 5,843.02

Year ended 31st March 2017:









96


Rs. in Lakhs32. FINANCIAL RISK MANAGEMENT - (continued)





Expected loss rate 0% 100% –







Expected loss rate 0% 100% –



(iii) Reconciliation of loss allowance provision - Trade receivables

Amount

Loss allowance on 01st April 2016 90.63

Changes in loss allowance (0.10)

Loss allowance on 31st March 2017 90.53

Changes in loss allowance (31.74)


Changes in loss allowance –


(B) Liquidity risk

Objective of liquidity risk management is to maintain sufficient cash and marketable securities and theavailability of funding through an adequate amount of committed credit facilities to meet obligationswhen due. Management monitors rolling forecasts of The company’s liquidity position (comprising theundrawn borrowing facilities below) and cash and cash equivalents on the basis of expected cashflows. The company’s liquidity management policy involves projecting cash flows in major currenciesand considering the level of liquid assets necessary to meet these, monitoring balance sheet liquidityratios against internal requirements.



97



(i) Financing arrangements

The Company had access to the following undrawn borrowing facilities at the end of the reportingperiod:

As at As at31.03.2019 31.03.2018

Floating rate

- Expiring within one year (bank overdraft and other facilities) 612.43 1,091.25

The bank overdraft facilities may be drawn at any time and may be terminated by the bank withoutnotice. Subject to the continuance of satisfactory credit ratings, the bank loan facilities may bedrawn 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 basedon their contractual maturities for:

a) all non-derivative financial liabilities, and

b) net and gross settled derivative financial instruments for which the contractual maturities areessential for an understanding of the timing of the cash flows.

The amounts disclosed in the table are the contractual undiscounted cash flows. Balances due within12 months equal their carrying balances as the impact of discounting is not significant.

Contractual maturities of financial liabilities

As at 31st March 2019 As at 31st March 2018Maturing within

TotalMaturing within

TotalNon-derivatives

3 months 3 months

Borrowings 3,167.57 3,167.57 1,688.75 1,688.75

Trade payables 9,805.43 9,805.43 9,467.41 9,467.41

Payable for Fixed Assets 349.34 349.34 564.89 564.89

Security deposits 34.19 34.19 97.61 97.61

Total non-derivative liabilities 13,356.53 13,356.53 11,818.66 11,818.66

(C) Market risk

(i) Foreign currency risk

The company activities exposes it to foreign exchange risk arising from foreign currency transac-tions, primarily with respect to the USD and EURO Foreign exchange risk arises from future com-mercial transactions and recognised assets and liabilities denominated in a currency that is not thecompany’s functional currency (INR). The risk is measured through a forecast of highly probableforeign currency cash flows.



98



The company's exposure to foreign currency risk at the end of the reporting period expressed in INR, areas follows:

As at 31st March 2019 As at 31st March 2018Particulars

USD EUR USD EUR

Financial assets

Trade receivables 1,811.80 74.03 2,236.76 –

Exposure to foreign currency risk (assets) 1,811.80 74.03 2,236.76 –


Trade payables 49.72 (29.63) (86.39) –

Exposure to foreign currency risk (liabilities) 49.72 (29.63) (86.39) –

Net exposure to foreign currency risk 1,861.52 44.40 2,150.37

SensitivityThe 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 taxAs at As at As at As at

31.03.2019 31.03.2018 31.03.2019 31.03.2018

USD sensitivity EURO sensitivity

INR/USD Increases by 5% 60.55 70.31 INR/EURO 1.44 –(31 March 2016 - 5%) Increases by 5%

(31 Mar 2016 - 5%)

INR/USD Decreases by 5% INR/EURO(31 March 2016 - 5%) (60.55) (70.31) Decreases by 5% 1.44 –

(31 Mar 2016 - 5%)

* Holding all other variables constant

33. 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 returnsfor 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 dividendspaid to shareholders, return capital to shareholders, issue new shares or sell assets to reduce debt.

Particulars Particulars



99


Rs. in LakhsYear ended Year ended31.03.2019 31.03.201833. CAPITAL MANAGEMENT - (continued)

(b) Dividends

(i) Equity shares

Interim dividend for the year ended 31st March 2018 of INR 6.00 466.14(31st March 2017 – INR 5.00) per fully paid share

Interim dividend for the year ended 31st March 2019 of INR 6.00 466.14(31st March 2018 – INR 6.00) per fully paid share

34. RELATED PARTY DISCLOSUREDisclosure is made as per the requirements of the standard and the same is furnished below:

A) List of Related PartiesReporting entity : Harita Seating Systems LtdHolding Company : NilSubsidiary Company : Harita Fehrer LimitedKey Management Personnel : Non-executive Independent Directors

M/s. H Lakshmanan, S I Jaffar Ali, C N Prasad, L Bhadri,Sasikala VaradachariNon-executive Non-Independent DirectorMartin Grammer

B) Particulars of transactions with related parties Sl. Particulars Year ended Year endedNo. 31.03.2019 31.03.2018

(i) Purchases madeSubsidiary companyfrom Harita Fehrer Limited, Chennai- Components 4737.44 4444.64- Capital goods 94.93 160.57

(ii) Services availedSubsidiary companyfrom Harita Fehrer Limited, Chennai- Interest paid – –- Lease rent paid 65.00 62.26- Others 125.42 106.55

(iii) Sale of MaterialsSubsidiary companyfrom Harita Fehrer Limited, Chennai 17.35 6.11

(iv) Services renderedSubsidiary companyto Harita Fehrer Limited, Chennai- Lease rent 167.52 159.12- Management Service 78.76 78.75- Canteen 196.60 196.08- Others 382.21 304.97



100


Rs. in Lakhs

34. RELATED PARTY DISCLOSURE - (continued)

b) Particulars of transactions with related parties - (continued)

Sl. Particulars As at As atNo. 31.03.2019 31.03.2018(v) Dividend received from subsidiary company 512.50 512.50(vi) Amount outstanding as at Balance sheet date

Subsidiary companyfrom Harita Fehrer Limited, ChennaiTrade payables 613.36 1541.55Other payables 4.86 16.49Trade receivables 0.71 5.95Other receivables 157.30 334.16

(vii) Remuneration to Key Management Personnel 20.40 20.05

As at As at31.03.2019 31.03.2018

35. LEASES

a) The total of future minimum lease payments under non cancellable op-erating lease for each of the following periods

- Not later than one year 69.61 140.88

- Later than one year and not later than five years 11.55 86.63

- Later than five years – –

b) Total of minimum sub-lease payments expected to be received undernon-cancellable subleases at the Balance sheet date NA NA

c) Lease payments recognized in the statement of profit and loss for theperiod under the head Rent paid 121.72 121.92


36. EARNING PER SHARE

Profit after tax 2,202 3,080

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.) 28.34 39.64

Diluted Earnings per share (Rs.) 28.34 39.64



101



37. GOVERNMENT GRANTS

During the financial year under review the Company has received and recognised following governmentgrants:-

a. Duty drawback on exports 94.74 111.41

b. Merchandise Exports from India Scheme (MEIS) benefits on exports 269.56 120.85

c. Pradhan Mantri Rojgar Protsahan Yojana (PMRPY) scheme benefits(the amount is credited to PF Employer Contribution) 1.89 0.85

d. Board of Apprenticeship Training (BOAT) 29.00 –

e. EPCG (Export Promotion Capital Goods) Scheme 2.86 0.29

38. Trade payables include amount due to micro and small scale industrial units

Disclosure under Micro,Small and Medium Enterprises Development Act, 2006

i) The principal amount and interest due thereon remaining unpaid toany supplier at the end of each accounting year:

a) Principal (all are within agreed credit period and not due forpayment) 186.64 629.32

b) Interest (as no amount is overdue) – –

ii) The amount of interest paid by the buyer in terms of Section 16 ofthe Micro, Small and Medium Enterprises Development Act, 2006along with the amount of payment made to the supplier beyond theappointed day during each accounting year. – –

iii) The amount of interest due and payable for the period of delay inmaking payment (which have been paid but beyond the appointedday during the year) but without adding the interest specified underthe Micro, Small and Medium Enterprises Development Act, 2006 – –

iv) The amount of interest accrued and remaining unpaid at the end ofeach accounting year – –

v) The amount of further interest remaining due and payable even inthe succeeding years,until such date when the interest dues asabove are actually paid to the small enterprise,for the purpose ofdisallowance as deductible expenditure under Section 23 of theMicro, Small and Medium Enterprises Development Act, 2006 – –



102


Rs. in Lakhs39. 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 vari-ous performance indicators of the Company as a single unit. Therefore there is no reportable segmentfor 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 INR 7936.50 (31 March 2018 – INR 6980.00) are derived from a singleexternal customers.


40. PROVISIONS, CONTINGENT LIABILITIES AND CONTINGENT ASSETS

1. Provisions

In respect of warranty obligations provision is made in accordance withterms of sale of seat assemblies.

Provision for warranty at beginning of the year 110.47 90.48

Provided during the year 16.58 48.84

Total 127.05 139.32

Provision utilised during the year 62.32 28.86

Net Provision as on balance date 64.74 110.47

2. Contingent liabilities Nil Nil

3. Contingent assets

Contingent assets which are likely to give rise to the possibility of inflowof economic benefits Nil Nil

4. Contested liabilities Nil Nil

Contingent liabilities not provided for

a. On counter guarantee furnished to Customs – –

b. On account of bill discounted Nil Nil

c. Contracts remaining to be executed on capital account – –



103



40. PROVISIONS, CONTINGENT LIABILITIES AND CONTINGENT ASSETS - (continued)

Liability contested and not provided for

a. Income tax 462.88 424.50

b. Service tax 2.10 2.10

c. Central excise – –

d. Value added Tax 422.51 422.51

e. Customer claim – –

41. OTHER DISCLOSURES

i) Expenditure incurred on Corporate social responsibility activities

a) Gross amount to be spent by the company during the year 51.83 31.82

b) Amount spent during the the year in cash

i) Construction / Acquisition of asset – –

ii) On purposes other than above 52.00 40.00

ii) Research and development expenditure incurred and claimed underIncome Tax Act 1961

a) Revenue expenditure

Salary and wages 650.70 569.06

Power 19.91 12.30

Foreign and inland travel 76.36 68.52

Design and testing charges 68.69 88.85

Proto tools, fixtures & Moulds 54.02 61.07

AMC Charges 60.93 39.31

Product & Process Development Expenses 10.79 9.85

Sample, Machinery Spare and Other Expenses 93.79 92.04

Admin and other expenses 2.84 4.21

Total 1,038.03 945.21

b) Capital expenditure

Plant and Machinery, Workstations, Laptops 20.61 62.55

Catia License – 70.30

Total 20.61 132.85



104


Rs. in Lakhs42. Disclosure made in terms of regulation 34(3) of SEBI (LODR) regulations 2015

Particulars Name of the Company As at As at31.03.2019 31.03.2018

a) Loans and advances

(i) Loans and advances in the nature of loansmade to subsidiary company Nil – –

(ii) Loans and advances in the nature of loansmade to associate company Nil – –

(iii) Loans and advances in the nature of loanswhere there is

1) no repayment schedule or repaymentbeyond seven years (or) Nil – –

2) no interest or interest below Section 186of the Companies Act, 2013 Nil – –

(iv) Loans and advances in the nature of loansmade to firms / companies in which directorsof the Company are interested Nil – –

b) Investments by the Company

(i) In subsidiary companies Harita Fehrer Limited 2,759.00 2,759.00

(1,02,50,000 fullypaid-up equity sharesof Rs. 10/- each)

Maximum amountheld at any time

During the year 2,759.00During the previousyear 2,759.00

ii) In associate company Nil






Consolidated Financial Statementsof

Harita Seating Systems Limited

Harita Seating Systems 23.05.2019 Page 105 to.p65 7/17/2019, 11:16 AM105

106

CONSOLIDATED FINANCIAL STATEMENTS OF HARITA SEATING SYSTEMS LIMITED

Independent Auditors' Report for the year ended 31st March 2019

To

The Members of Harita Seating Systems Limited,

Chennai - 600006.

Report on the Audit of the Consolidated FinancialStatements

Opinion

We have audited the accompanying consolidatedfinancial statements of Harita Seating Systems Limited(hereinafter referred to as the "Holding Company") andits subsidiary (Holding Company and its subsidiarytogether referred to as "the Group"), which comprisethe consolidated Balance Sheet as at 31st March,2019, and the consolidated Statement of Profit andLoss (including Other Comprehensive Income), theconsolidated Statement of Changes in Equity and theconsolidated Statement of Cash Flows Statement forthe year then ended, and notes to the consolidatedfinancial statements, including a summary of significantaccounting policies and other explanatory information(hereinafter referred to as "the consolidated financialstatements").

In our opinion and to the best of our information andaccording to the explanations given to us, the aforesaidconsolidated financial statements give the informationrequired by the Companies Act, 2013, ("the Act") inthe manner so required and give a true and fair viewin conformity with Indian Accounting Standardsprescribed under Section 133 of the Act read with theCompanies (Indian Accounting Standards) Rules,2015, as amended ('Ind AS') and other accountingprinciples generally accepted in India, of theconsolidated state of affairs of the Group as at 31st

March, 2019, the consolidated profit, consolidated totalcomprehensive Income, consolidated changes inequity and its consolidated cash flows for the year thenended.

Basis for Opinion

We conducted our audit of the consolidated financialstatements in accordance with the Standards on

Auditing (SAs) specified under Section 143(10) of theCompanies Act, 2013. Our responsibilities under thosestandards are further described in the Auditor'sResponsibilities for the Audit of the ConsolidatedFinancial Statements section of our report. We areindependent of the Group in accordance with the Codeof Ethics issued by Institute of Chartered Accountantsof India (ICAI), together with the independencerequirements that are relevant to our audit of theconsolidated financial statements under the provisionsof the Act and the rules made thereunder, and we havefulfilled our other ethical responsibilities in accordancewith the provisions of the Companies Act, 2013 andthe ICAI's Code of Ethics. We believe that the auditevidence we have obtained is sufficient andappropriate to provide a basis of our opinion on theconsolidated financial statements.

Key Audit Matters

Key audit matters are those matters that, in ourprofessional judgement, were of the most significantin our audit of the consolidated financial statements ofthe current period. These matters were addressed inthe context of our audit of the consolidated financialstatements as a whole, and in forming our opinionthereon, and we do not provide a separate opinion onthese matters. We have determined that there are nokey audit matters to be communicated in our report.

Information Other than the Consolidated FinancialStatements and Auditor's Report Thereon

The Company's Board of Directors is responsible forthe preparation of the other information. The otherinformation comprises the information included in theManagement Discussion and Analysis, Board's Reportincluding Annexures to Board's Report, BusinessResponsibility Report, Corporate Governance andShareholder's Information, but does not include theconsolidated financial statements and our auditor'sreport thereon.

Our opinion on the consolidated financial statementsdoes not cover the other information and we do notexpress any form of assurance conclusion thereon.


In connection with our audit of the consolidatedfinancial statements, our responsibility is to read theother information and, in doing so, consider whetherthe other information is materially inconsistent with theconsolidated financial statements or our knowledgeobtained during the course of our audit or otherwiseappears to be materially misstated.

If, based on the work we have performed, we concludethat there is a material misstatement of this otherinformation, we are required to report that fact. Wehave nothing to report in this regard.

Responsibilities of Management and ThoseCharged with Governance for the ConsolidatedFinancial Statements

The Holding Company's Board of Directors isresponsible for the preparation and presentation ofthese consolidated financial statements in term of therequirements of the Companies Act, 2013 that give atrue and fair view of the consolidated financial position,consolidated financial performance, consolidated totalcomprehensive income, consolidated changes inequity and consolidated cash flows of the Group inaccordance with the Ind AS and other accountingprinciples generally accepted in India, including theAccounting Standards specified under Section 133 ofthe Act. The respective Board of Directors of thecompanies included in the Group are responsible formaintenance of adequate accounting records inaccordance with the provisions of the Act forsafeguarding the assets of the Group and forpreventing and detecting frauds and other irregularities;selection and application of appropriate accountingpolicies; making judgments and estimates that arereasonable and prudent; and the design,implementation and maintenance of adequate internalfinancial controls, that were operating effectively forensuring accuracy and completeness of the accountingrecords, relevant to the preparation and presentationof the respective financial statements that give a trueand fair view and are free from material misstatement,whether due to fraud or error, which have been usedfor the purpose of preparation of the consolidatedfinancial statements by the Directors of the Holdingcompany, as aforesaid.

In preparing the consolidated financial statements, therespective Board of Directors of the companiesincluded in the Group are responsible for assessingthe ability of the Group to continue as a going concern,disclosing, as applicable, matters related to goingconcern and using the going concern basis ofaccounting unless management either intends toliquidate the Group or to cease operations, or has norealistic alternative but to do so.

The respective Board of Directors of the companiesincluded in the Group are responsible for overseeingthe financial reporting process of the Group.

Auditor's Responsibilities for the Audit of theConsolidated Financial Statements

Our objectives are to obtain reasonable assuranceabout whether the consolidated financial statementsas a whole are free from material misstatement,whether due to fraud or error, and to issue an auditor'sreport that includes our opinion. Reasonableassurance is a high level of assurance, but is not aguarantee that an audit conducted in accordance withSAs will always detect a material misstatement whenit exists. Misstatements can arise from fraud or errorand are considered material if, individually or in theaggregate, they could reasonably be expected toinfluence the economic decisions of users taken onthe basis of these consolidated financial statements.

As part of an audit in accordance with SAs, we exerciseprofessional judgment and maintain professionalscepticism throughout the audit. We also:

• Identify and assess the risks of materialmisstatement of the consolidated financialstatements, whether due to fraud or error, designand perform audit procedures responsive to thoserisks, and obtain audit evidence that is sufficientand appropriate to provide a basis for our opinion.The risk of not detecting a material misstatementresulting from fraud is higher than for one resultingfrom error, as fraud may involve collusion, forgery,intentional omissions, misrepresentations, or theoverride of internal control.

• Obtain an understanding of internal financialcontrols relevant to the audit in order to design

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audit procedures that are appropriate in thecircumstances. Under Section 143(3)(i) of the Act,we are also responsible for expressing our opinionon whether the Company, its subsidiary company,incorporated in India, has adequate internalfinancial controls system in place and theoperating effectiveness of such controls.

• Evaluate the appropriateness of accountingpolicies used and the reasonableness ofaccounting estimates and related disclosuresmade by management.

• Conclude on the appropriateness ofmanagement's use of the going concern basis ofaccounting and, based on the audit evidenceobtained, whether a material uncertainty existsrelated to events or conditions that may castsignificant doubt on the ability of the Group tocontinue as a going concern. If we conclude thata material uncertainty exists, we are required todraw attention in our auditor's report to the relateddisclosures in the consolidated financialstatements or, if such disclosures are inadequate,to modify our opinion. Our conclusions are basedon the audit evidence obtained up to the date ofour auditor's report. However, future events orconditions may cause the Group to cease tocontinue as a going concern.

• Evaluate the overall presentation, structure andcontent of the consolidated financial statements,including the disclosures, and whether theconsolidated financial statements represent theunderlying transactions and events in a mannerthat achieves fair presentation.

• Obtain sufficient appropriate audit evidenceregarding the financial information of the entitiesor business activities within the Group to expressan opinion on the consolidated financialstatements. We are responsible for the direction,supervision and performance of the audit of thefinancial statements of such entity included in theconsolidated financial statements of which we arethe independent auditors.

Materiality is the magnitude of misstatements in theconsolidated financial statements that, individually orin aggregate, makes it probable that the economic

decisions of a reasonably knowledgeable user of thefinancial statements may be influenced. We considerquantitative materiality and qualitative factors in (i)planning the scope of our audit work and in evaluatingthe results of our work; and (ii) to evaluate the effect ofany identified misstatements in the financialstatements.

We communicate with those charged with governanceof the Holding Company and such other entity includedin the consolidated financial statements of which weare the independent auditors regarding, among othermatters, the planned scope and timing of the auditand significant audit findings, including any significantdeficiencies in internal control that we identify duringour audit.

We also provide those charged with governance witha statement that we have complied with relevant ethicalrequirements regarding independence, and tocommunicate with them all relationships and othermatters that may reasonably be thought to bear onour independence, and where applicable, relatedsafeguards.

From the matters communicated with those chargedwith governance, we determine those matters thatwere of most significance in the audit of theconsolidated financial statements of the current periodand are therefore the key audit matters. We describethese matters in our auditor's report unless law orregulation precludes public disclosure about the matteror when, in extremely rare circumstances, wedetermine that a matter should not be communicatedin our report because the adverse consequences ofdoing so would reasonably be expected to outweighthe public interest benefits of such communication.

Report on Other Legal and RegulatoryRequirements

As required by Section 143(3) of the Act, We report, tothe extent applicable, that:

(a) We have sought and obtained all the informationand explanations which to the best of ourknowledge and belief were necessary for thepurposes of our audit of the aforesaid consolidatedfinancial statements;

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(b) In our opinion, proper books of account asrequired by law relating to preparation of theaforesaid consolidated financial statements havebeen kept so far as it appears from ourexamination of those books;

(c) The Consolidated Balance Sheet, theConsolidated Statement of Profit and Loss, andthe Consolidated Cash Flow Statement dealt withby this Report are in agreement with the relevantbooks of account maintained for the purpose ofpreparation of the consolidated financialstatements;

(d) In our opinion, the aforesaid consolidated financialstatements comply with the Accounting Standardsspecified under Section 133 of the Act;

(e) On the basis of the written representationsreceived from the directors of the HoldingCompany as on 31st March, 2019 taken on recordby the Board of Directors of the Holding Company,and the subsidiary company, none of the directorsof the Group, incorporated in India is disqualifiedas on 31st March, 2019 from being appointed asa director in terms of Section 164(2) of the Act.

(f) With respect to the adequacy of internal financialcontrols over financial reporting of the Groupincorporated in India, and the operatingeffectiveness of such controls, refer to ourseparate report in "Annexure A".

(g) With respect to the other matters to be includedin the Auditor's Report in accordance with Rule11 of the Companies (Audit and Auditor's) Rules,2014, in our opinion and to the best of ourinformation and according to the explanationsgiven to us:

i. The consolidated financial statements disclosethe impact of pending litigations on theconsolidated financial position of the Groupincorporated in India - Refer Note 38 (4) to theconsolidated financial statements;

ii. The Group did not have any long-termcontracts including derivatives contracts forwhich there were any material foreseeablelosses;

iii. There has been no delay in transferringamounts, required to be transferred, to theInvestor Education and Protection Fund by theHolding Company and its subsidiary companyincorporated in India.


FRN.: 007761S



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Report on the Internal Financial Controls OverFinancial Reporting under Clause (i) of Sub-section 3 of Section 143 of the Companies Act,2013 ("the Act")

In conjunction with our audit of the consolidatedfinancial statements of the Company as of and forthe year ended 31st March 2019, we have auditedthe internal financial controls over financial reportingof Harita Seating Systems Limited (hereinafterreferred to as the "Holding Company"), JayalakshmiEstates, #29, Haddows Road, Chennai - 600006, andits subsidiary company incorporated in India,as of thatdate.

Management's Responsibility for InternalFinancial Controls

The respective Board of Directors of the Companyand its subsidiary company incorporated in India, areresponsible for establishing and maintaining internalfinancial controls based on the Guidance Note onAudit of Internal Financial Controls over FinancialReporting issued by the Institute of CharteredAccountants of India ("the ICAI"). Theseresponsibilities include the design, implementationand maintenance of adequate internal financialcontrols that were operating effectively for ensuringthe orderly and efficient conduct of its business,including adherence to the respective company'spolicies, the safeguarding of its assets, the preventionand detection of frauds and errors, the accuracy andcompleteness of the accounting records, and thetimely preparation of reliable financial information, asrequired under the Companies Act, 2013.

Auditors' Responsibility

Our responsibility is to express an opinion on theinternal financial controls over financial reporting ofthe Company and its subsidiary companyincorporated in India, based on our audit. Weconducted our audit in accordance with the GuidanceNote on Audit of Internal Financial Controls over

Financial Reporting (the "Guidance Note") issued bythe Institute of Chartered Accountants of India andthe Standards on Auditing, prescribed under Section143(10) of the Companies Act, 2013, to the extentapplicable to an audit of internal financial controls.Those Standards and the Guidance Note require thatwe comply with ethical requirements and plan andperform the audit to obtain reasonable assuranceabout whether adequate internal financial controlsover financial reporting was established andmaintained and if such controls operated effectivelyin all material respects.

Our audit involves performing procedures to obtainaudit evidence about the adequacy of the internalfinancial controls system over financial reporting andtheir operating effectiveness. Our audit of internalfinancial controls over financial reporting includedobtaining an understanding of internal financialcontrols over financial reporting, assessing the riskthat a material weakness exists, and testing andevaluating the design and operating effectiveness ofinternal control based on the assessed risk. Theprocedures selected depend on the auditor'sjudgment, including the assessment of the risks ofmaterial misstatement of the financial statements,whether due to fraud or error.

We believe that the audit evidence we have obtainedis sufficient and appropriate to provide a basis forour audit opinion on the internal financial controlssystem over financial reportingof the company andits subsidiary company, incorporated in India.

Meaning of Internal Financial Controls OverFinancial Reporting

A company's internal financial control over financialreporting is a process designed to provide reasonableassurance regarding the reliability of financialreporting and the preparation of financial statementsfor external purposes in accordance with generallyaccepted accounting principles. A company's internal

Annexure 'A' to the Independent Auditors' Report on the Consolidated FinancialStatements for the year ended 31st March 2019


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financial control over financial reporting includesthose policies and procedures that;

(1) Pertain to the maintenance of records that, inreasonable detail, accurately and fairly reflect thetransactions and dispositions of the assets of thecompany;

(2) Provide reasonable assurance that transactionsare recorded as necessary to permit preparationof financial statements in accordance withgenerally accepted accounting principles, and thatreceipts and expenditures of the company arebeing made only in accordance withauthorisations of management and directors ofthe company; and

(3) Provide reasonable assurance regardingprevention or timely detection of unauthorisedacquisition, use, or disposition of the company'sassets that could have a material effect on thefinancial statements.

Inherent Limitations of Internal Financial Controlsover Financial Reporting

Because of the inherent limitations of internal financialcontrols over financial reporting, including thepossibility of collusion or improper managementoverride of controls, material misstatements due toerror or fraud may occur and not be detected. Also,projections of any evaluation of the internal financial

controls over financial reporting to future periods aresubject to the risk that the internal financial controlover financial reporting may become inadequatebecause of changes in conditions, or that the degreeof compliance with the policies or procedures maydeteriorate.

Opinion

In our opinion and to the best of our information andaccording to the explanations given to us, theCompany and its subsidiary company, incorporatedin India have, in all material respects, an adequateinternal financial control system over financialreporting and such internal financial controls overfinancial reporting were operating effectively as at31st March 2019, based on internal control overfinancial reporting criteria established by therespective companies considering the essentialcomponents of internal control stated in the guidancenote on audit of internal financial controls overfinancial reporting issued by Institute of CharteredAccountants of India.


FRN.: 007761S



111



112

Consolidated Balance Sheet as at 31st March, 2019(Rs. in Lakhs)

Note As at As atNo 31.03.2019 31.03.2018

ASSETSI Non-Current Liabilities

a) Property, Plant and Equipment 2 22,102.22 15,022.25b) Capital Work-in-progress 2 1,898.60 870.80c) Other Intangible Assets 2 143.60 128.49d) Financial Assets

i) Investments 3 113.95 113.69ii) Loans 4 251.63 161.66iii) Other financial assets 5 – 2.49

e) Other non-current assets 6 132.32 392.64f) Deferred Tax Assets (Net)

II Current Assetsa) Inventories 7 5,073.30 5,027.00b) Financial Assets

i) Investments 3 – 672.97ii) Trade Receivables 8 19,246.20 21,799.24iii) Cash and Cash equivalents 9 996.99 186.22iv) Bank balances other than (iii) above 10 34.19 31.03v) Other financial assets 5 559.02 417.80

c) Current Tax assets (Net) 225.80 174.82d) Other Current Assets 11 1,999.46 1,635.00 Total Assets 52,777.29 46,636.09

EQUITY AND LIABILITIESEquitya) Equity Share Capital 12 776.90 776.90b) Other Equity 13 17,059.45 14,655.82Non-controlling interest 14 7,607.05 7,050.90I Non-Current Liabilities

a) Provisions 16 464.40 538.44b) Deferred Tax Liabilities (Net) 15 1,135.05 723.74c) Deferred income 17 – 2.57

II Current Liabilitiesa) Financial Liabilities

i) Borrowings 18 3,167.57 2,237.42ii) Trade Payables 19 19,654.00 18,268.71iii) Other Financial Liabilities 20 1,540.76 1,235.24

b) Other Current Liabilities 21 985.63 743.17c) Provisions 16 386.48 402.89d) Deferred income 17 – 0.29

Total Equity and Liabilities 52,777.29 46,636.09Accompanying notes to Consolidated financial statements 1 to 40for and on behalf of Board of Directors In terms of our Reports Attached

For RAGHAVAN, CHAUDHURI & NARAYANANH LAKSHMANAN A G GIRIDHARAN Chartered AccountantsChairman Chief Executive Officer Firm Regn. No: 007761S




Statement of Consolidated Profit and Loss for the period ended 31st March 2019(Rs. in Lakhs)

Note Year ended Year endedNo 31.03.2019 31.03.2018

IncomeI Revenue from Operations 22 97,495.92 88,408.00II Other Income 23 955.69 852.30III Total Income (I+II) 98,451.61 89,260.30IV Expenses

a) Cost of Material Consumed 24 70,424.94 60,965.94b) Changes in Inventory of Finished Goods and

Work-in-Progress 25 (348.79) (247.98)c) Excise duty & Service tax – 2,059.68d) Employee Benefits Expense 26 10,438.04 9,301.54e) Finance Costs 27 310.94 121.56f) Depreciation and Amortization expenses 28 2,289.60 1,846.57g) Other Expenses 29 9,299.97 8,231.10Total Expenses (IV) 92,414.70 82,278.42

V Profit before exceptional Items and tax (III-IV) 6,036.91 6,981.89VI Exceptional Items – –VII Profit Before Tax (V-VI) 6,036.91 6,981.89VIII Tax Expense

a) Total of Current taxi. Current Tax 1,678.55 1,951.55ii. Prior period income tax (20.63) 164.03

b) Deferred Tax 356.38 (46.42)703.24 838.25

2,104.30 2,069.16IX Profit for the period (VII-VIII) 4,022.61 4,912.73X Other Comprehensive Income

Items that will not be reclassified to profit or loss- Remeasurement of post employment benefit obligations 157.22 12.59- Income tax relating to these items (54.94) (4.36)Other comprehensive income for the year, net of tax 102.28 8.23

XI Total Comprehensive Income for the Year (IX + X) 4,124.89 4,920.96Profit attributable to:Owners of Harita Seating Systems Limited 2,879.38 3,763.51Non-controlling interests 1,143.23 1,149.22

4,022.61 4,912.73Other comprehensive income attributable to:Owners of Harita Seating Systems Limited 95.74 7.35Non-controlling interests 6.54 0.88

102.28 8.23Total comprehensive income attributable to:Owners of Harita Seating Systems Limited 2,975.12 3,770.86Non-controlling interests 1,149.77 1,150.10

4,124.89 4,920.96Earnings Per Equity Sharea) Basic 37.06 48.44b) Diluted 37.06 48.44

Accompanying notes to Consolidated Financial statements 1 to 40




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Consolidated Statement of changes in equity(Rs. in lakhs)

I) Equity Share Capital

Particulars Amounts


Changes in equity share capital during the year –


II) Other equity

Reserves and surplus

General CapitalSecurities Capital

Total Non-Particulars

reserve earningspremium redemption

Other controlling Total

account reserveEquity interest

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 2,879.39 2,879.39 1,149.77 4,029.16

Other comprehensive income 95.73 95.73 – 95.73

Non-Controlling InterestAdjustment for Earlier Year – – –

Transaction in the capacityas owners – – –

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




Notes to Consolidated Financial Statements



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Consolidated Cash flow statement for the year ended 31st March, 2019Rs. in Lakhs


A. CASH FLOW FROM OPERATING ACTIVITIES

Profit after tax and extra ordinary items 6,036.91 6,981.89

Add: Depreciation (net) 2,289.60 1,846.57

Dividend income – –

Interest Income (25.43) (23.67)

Interest Expenditure 310.94 121.56

Net Loss on sale of Fixed Assets 1.28 67.68

Net gain on sale of investments (9.53) (144.92)

Profit on sale of Fixed Assets (2.04) -

Increase / (Decrease) in fair valuation ofemployee benefit obligation 157.22 12.59

Operating profit before working capital changes 8,758.95 8,861.70

Adjusted for: Working Capital changes

Trade Payables 1,385.29 6,363.29

Other Current Liabilities 242.45 (468.53)

Short Term Provisions (16.41) 61.41

Current Liability - Deferred income (0.29) -

Other Current Financial Liabilities 305.52 539.86

Long Term Provisions (74.04) 14.69

Non-Current Liability - Deferred income (2.57) (0.29)

Investment 672.97 719.91

Long Term Loans and Advances (89.98) (7.55)

Inventories (46.30) (1,717.02)

Trade Receivables 2,553.04 (8,598.42)

Other Current Assets (141.22) (23.18)

Other Current Financial Assets (364.46) (261.86)

Other Non-Current Financial Assets 2.49 16.47

Other Non-Current Assets 260.32 (129.19)

Cash generated from operations 13,445.76 5,371.29

Adjusted for: Tax Liability

Direct tax paid (net of refund) (1,708.90) (1,897.74)

Net cash from operating activities (A) 11,736.86 3,473.55



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B. CASH FLOW FROM INVESTING ACTIVITIES

Purchase of fixed assets (10,412.49) (4,045.11)

Sale of fixed assets 2.04 1.94

Purchase of investments (0.26) 24.61

Loss on sale of fixed asset (1.28)

Profit on sale of investments 9.53 144.92

Interest received 25.42 23.67

Dividend received – –

Net cash used in investing activities (B) (10,377.04) (3,849.97)

C. CASH FLOW FROM FINANCING ACTIVITIES

Share Capital – –

Share Premium – –

Non-controlling interest (593.61) (592.64)

Short Term Borrowings 930.15 1,106.82

Interest paid (310.94) (121.56)

Dividend and dividend tax paid (571.49) (570.47)

Net cash flow from/ (used in) financing activities (C) (545.89) (177.85)

D. NET INCREASE / (DECREASE) IN CASH ANDCASH EQUIVALENTS (A)+(B)+(C) 813.93 (554.27)

Cash and Cash Equivalents at the beginning of the year



217.25 771.55

Cash and Cash Equivalents at the end of the year



1,031.18 217.25

Consolidated Cash flow statement for the year ended 31st March, 2019 (Contd.)Rs. in Lakhs







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1. SIGNIFICANT ACCOUNTING POLICIES

The accounting policies mentioned herein are relating to the consolidated financial statements of theCompany.

a) Brief description of the CompanyHarita Fehrer Limited ('the Company') is a public limited company incorporated in India. The regis-tered office is located at "Jayalakshmi Estates", 29, Haddows Road, Nungambakkam, Chennai -600006, Tamil Nadu, India.

The Company manufactures seat foams for the automotive industry. The Company has four manu-facturing plants located across India

b) Basis of preparation and presentationThe 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 Ac-counting 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 willbe 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 pru-dence 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 certainfinancial assets and liabilities (as per the accounting policy below), which have been measure at fairvalue.

c) Use of estimates and judgmentsThe preparation of financial statements requires management to make certain estimates and as-sumptions that affect the amounts reported in the financial statements and notes thereto. The man-agement believes that these estimates and assumptions are reasonable and prudent. However,actual results could differ from these estimates. Any revision to accounting estimates is recognisedprospectively 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 estimatesand assumptions turning out to be different than those originally assessed. Detailed informationabout each of these estimates and judgments is included in the relevant notes together with informa-tion about the basis of calculation for each affected line item in the financial statements.

d) Significant estimates and judgementsThe areas involving significant estimates or judgments are:

i) Estimation of defined benefit obligation (Note- 30)

ii) Estimation of useful life of Property, Plant and Equipment Note -1(g) and 1(h)

e) Going concernThe board of directors have considered the financial position of the Company at 31 March 2019 andprojected cash flows and financial performance of the Company for at least twelve months from thedate of approval of these financial statements as well as planned cost and cash improvement ac-tions, and believe that the plan for sustained profitability remains on course.

Notes to Consolidated Financial Statements



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Notes to Consolidated Financial Statements - (continued)


The board of directors have taken actions to ensure that appropriate long-term cash resources are inplace 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 productsRevenue 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 thedealer / customer, as per terms of contract.

ii) Revenue from serviceRevenue from Services is recognised in the accounting period in which the services are ren-dered and when invoices are raised.

g) Property, plant and equipment

Freehold Land is stated at historical cost. All other items of Property, Plant and Equipment are statedat 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 extentcredit ofthe duty or tax is availed of.

Subsequent costs are included in the asset's carrying amount or recognised as a separate asset, asappropriate, only when it is probable that future economic benefits associated with the item will flowto the Company and the cost of the item can be measured reliably. The carrying amount of anycomponent accounted for as separate asset is derecognized when replaced. All other repairs andmaintenance are charged to the Statement of Profit and Loss during the reporting period in whichthey 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).

h) Depreciation

i) Depreciation on tangible fixed assets is charged over the estimated useful life of the asset orpart 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.



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ii) The estimated useful life of the tangible fixed assets as assessed by the Chartered Engineerand followed by the Company is furnished below:

Particulars Useful life in years (Nos.)

Buildings 30

Plant & Machinery 3 to 15

Amortisation of Moulds 10

Vehicles 8

Computer hardware 3

Furniture and Fittings 10

Office Equipment's 3

iii) The residual value for all the above assets are retained at 5% of the cost Residual values anduseful 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 at100%.

i) Amortization of Intangible assetsIntangible assets acquired are accounted at their acquisition cost and are amortised over its usefullife, viz., 2 years in the case of software.

j) Impairment of tangible and intangible assetsAt the end of each reporting period, the Company reviews the carrying amounts of its tangible andintangible assets to determine whether there is any indication that those assets have suffered animpairment loss. If any such indication exists, the recoverable amount of the asset is estimated inorder 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 assessingvalue in use, the estimated future cash flows are discounted to their present value using a pre-taxdiscount rate that reflects current market assessments of the time value of money and the risksspecific to the asset for which the estimates of future cash flows have not been adjusted.

k) Foreign currency translation

i) Functional and presentation currencyItems included in the financial statements are measured using the currency of the primary eco-nomic environment in which the company operates ('the functional currency'). The financialstatements are presented in Indian rupee, and all values are rounded off to nearest lakhs exceptwhere otherwise indicated.

ii) Transactions and balancesForeign currency transactions are translated into the functional currency using the exchangerates at the dates of the transactions. Foreign exchange gains and losses resulting from the



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settlement of such transactions and from the translation of monetary assets and liabilities de-nominated in foreign currencies at year end exchange rates are generally recognized in profit orloss.

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 labor, other directcosts and appropriate proportion of variable and fixed overhead expenditure. Overhead expendi-tures are being allocated on the basis of normal operating capacity. Raw materials are valued atweighted average cost. Cost of inventories also include all other costs incurred in bringing the inven-tories to their present location and condition. Costs of purchased inventory are determined afterdeducting rebates and discounts. Net realizable value is the estimated selling price in the ordinarycourse of business, less the estimated costs of completion and the estimated costs necessary tomake the sale.

Non-production inventory (other than those supplied along with main plant and machinery, which arecapitalized and depreciated accordingly) are charged to profit or loss on consumption.

m) Employee Benefits

i. Short term obligationsLiabilities for wages and salaries, including non-monetary benefits that are expected to be settledwholly within 12 months after the end of the period in which the employees render the relatedservice are recognized in respect of employees' services upto the end of the reporting periodand 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 benefitThe liabilities for earned leave are not expected to be settled wholly within 12 months after theend of the period in which the employees render the related service. They are, therefore, recog-nized and provided for at the present value of the expected future payments to be made inrespect of services provided by employee upto the end of reporting period using the projectedunit credit method. The benefits are discounted using the market yields at the end of the report-ing period that have terms approximating to the terms of the related obligation. Remeasurementsas a result of experience adjustments and changes in actuarial assumptions are recognized inthe Statement of Profit and Loss. The obligations are presented as current liabilities in the bal-ance sheet if the entity does not have an unconditional right to defer settlement for at leasttwelve months after the reporting period, regardless of when the actual settlement is expected tooccur.

iii. Post-employment obligationThe Company operates the following post-employment schemes:

a) Defined benefit plans such as gratuity for its eligible employees, and

b) Defined contribution plans such as provident fund.



121



Gratuity obligation:The liability or asset recognised in the balance sheet in respect of defined benefit pension andgratuity plan is the present value of the defined benefit obligation at the end of the reportingperiod less the fair value of plan assets. The defined benefit obligation is calculated annually byActuaries using the projected unit credit method. The present value of the defined benefit obliga-tion denominated in INR is determined by discounting the estimated future cash outflows byreference to market yields at the end of the reporting period on the government bonds that haveterms approximating to the terms of the related obligation. The net interest cost is calculated byapplying the discount rate to the net balance of the defined benefit obligation and the fair valueof plan assets. This cost is included in employee benefit expense in the Statement of Profit andLoss. Remeasurement gains and losses arising from experience adjustments and changes inactuarial assumptions are recognised in the period in which they occur, directly in other compre-hensive income (net of deferred tax). They are included in retained earnings in the statement ofchanges in equity and in the balance sheet. Changes in the present value of the defined benefitobligation resulting from plan amendments or curtailments are recognised immediately in theStatement of Profit or Loss as past service cost.

Provident fund:The eligible employees of the Company are entitled to receive benefits in respect of providentfund, a defined contribution plan, in which both employees and the Company make monthlycontributions at a specified percentage of the covered employees' salary. The provident fundcontributions are made to an irrevocable trust set up by the Company. The Company is gener-ally liable for annual contributions and any shortfall in the fund assets based on the Governmentspecified minimum rates of return and recognises such contributions and shortfall, if any, as anexpense in the year in which it is incurred.

iv. Bonus plansThe Company recognizes a liability and an expense for bonus. The Company recognizes aprovision where contractually obliged or where there is a past practice that has created a con-structive obligation.

n) Taxation

Tax expense comprises of (i) current tax and (ii) deferred tax. The income tax expense or credit forthe period is the tax payable on the current period's taxable income based on the applicable incometax rate adjusted by changes in deferred tax assets and liabilities attributable to temporary differ-ences and to unused tax losses. The current income tax charge is calculated on the basis of the taxlaws enacted or substantively enacted at the end of the reporting period. Management periodicallyevaluates positions taken in tax returns with respect to situations in which applicable tax regulation issubject to interpretation. It establishes provisions, where appropriate, on the basis of amounts ex-pected to be paid to the tax authorities. Deferred income tax is provided in full, using the liabilitymethod, on temporary differences arising between the tax bases of assets and liabilities and theircarrying amounts in the financial statements. However, deferred tax liabilities are not recognised ifthey arise from the initial recognition of goodwill. Deferred income tax is also not accounted for if it



122



arises from initial recognition of an asset or liability in a transaction other than a business combina-tion 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 substan-tially enacted by the end of the reporting period and are expected to apply when the related deferredincome tax asset is realised, or the deferred income tax liability is settled. Deferred tax assets arerecognised only if it is probable that future taxable amounts will be available to utilise those tempo-rary differences and losses. Deferred tax assets and liabilities are offset when there is a legallyenforceable right to offset current tax assets and liabilities and when the deferred tax balances relateto the same taxation authority. Current tax assets and tax liabilities are offset where the entity has alegally enforceable right to offset and intends either to settle on a net basis, or to realise the assetand settle the liability simultaneously. Current and deferred tax is recognised in profit or loss, exceptto 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, respec-tively. Where the Company is entitled to claim special tax deductions for investments in qualifyingassets or in relation to qualifying expenditure (the Research and Development or other investmentallowances), the Company accounts for such allowances as tax credits, which means that the allow-ance reduce income tax payable and current tax expense. A deferred tax asset is recognised forunclaimed tax credits that are carried forward as deferred tax assets.

o) Provisions and contingencies

i) Provisions:Provisions are recognised when there is a present obligation or constructive obligation as aresult of a past event and it is probable that an outflow of resources embodying economic ben-efits will be required to settle the obligation and there is a reliable estimate of the amount of theobligation. Provisions are determined by discounting the expected future cash flows at a pre taxrate that reflects current market assessment of the time value of money and the risks specific tothe 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 ormore uncertain future events not wholly within the control of the company or a present obligationthat arises from past events where it is either not probable that an outflow of resources will berequired to settle or a reliable estimate of the amount cannot be made.

p) Segment reporting

Operating segments are reported in a manner consistent with the internal reporting provided to thechief operating decision maker.

q) Leases

Leases of property, plant and equipment where the Company, as a lessee has substantially all therisks and rewards of ownership, are classified as finance leases. Finance leases are capitalised atthe lease's inception at the fair value of the leased property or, if lower, the present value of the



123



minimum lease payments. The corresponding rental obligations, net of finance charges, are in-cluded in borrowings or other financial liabilities as appropriate. Each lease payment is allocatedbetween the liability and finance cost. The finance cost is charged to the profit or loss over the leaseperiod so as to produce a constant periodic rate of interest on the remaining balance of the liabilityfor each period.

Leases in which a significant portion of the risks and rewards of ownership are not transferred to theCompany as lessee are classified as operating leases. Payments made under operating leases (netof any incentives received from the lessor) are charged to profit or loss on a straight-line basis overthe period of the lease unless the payments are structured to increase in line with expected generalinflation to compensate for the lessor's expected inflationary cost increases.

r) Financial instruments

A financial instrument is any contract that gives rise to a financial asset of one entity and a financialliability or equity instrument of another entity. Financial assets and financial liabilities are recognisedwhen 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 aredirectly attributable to the acquisition or issue of financial instruments (other than financial assetsand financial liabilities at fair value through profit or loss) are added to or deducted from the fair valueof the financial assets or financial liabilities, as appropriate, on initial recognition. Transaction costsdirectly attributable to the acquisition of financial assets or financial liabilities at fair value throughprofit or loss are recognized immediately in profit or loss. Subsequently, financial instruments aremeasured according to the category in which they are classified.

s) 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 ofassets 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 costor fair value, depending on the classification of the financial assets.

i) Classification of financial assetsClassification of financial assets depends on the nature and purpose of the financial assets andis 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 in-come, or through profit or loss), and

• those measured at amortised cost

The classification depends on the Company's business model for managing the financial assetsand the contractual terms of the cash flows.



124



A financial asset that meets the following two conditions is measured at amortised cost unlessthe 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 financialasset to collect the contractual cash flows.

• Cash flow characteristic test: the contractual term of the financial asset give rise on speci-fied dates to cash flows that are solely payments of principal and interest on the principalamount outstanding.

A financial asset that meets the following two conditions is measured at fair value through othercomprehensive income unless the asset is designated at fair value through profit or loss underthe fair value option:

• Business model test: the financial asset is held within a business model whose objectiveisachieved by both collecting cash flows and selling financial assets.

• Cash flow characteristic test: the contractual term of the financial asset gives rise on speci-fied dates to cash flows that are solely payments of principal and interest on the principalamount 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)Investment in equity instrument are classified at fair value through profit or loss, unless theCompany irrevocably elects on initial recognition to present subsequent changes in fair value inother comprehensive income for investments in equity instruments which are not held for trad-ing.

Financial assets that do not meet the amortised cost criteria or fair value through other compre-hensive income criteria are measured at fair value through profit or loss. A financial asset thatmeets the amortised cost criteria or fair value through other comprehensive income criteria maybe designated as at fair value through profit or loss upon initial recognition if such designationeliminates or significantly reduces a measurement or recognition inconsistency that would arisefrom measuring assets and liabilities or recognising the gains or losses on them on differentbases.

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 endof each reporting period, with any gains or losses arising on re measurement recognized in profitor loss.

iii) Trade receivablesTrade receivables are recognised initially at fair value and subsequently measured at amortisedcost less provision for impairment.

iv) Cash and cash equivalentsFor the purpose of presentation in the statement of cash flows, cash and cash equivalentsinclude cash on hand, deposits held at call with financial institutions, other short-term, highly



125



liquid investments with original maturities of three months or less that are readily convertible toknown amounts of cash and which are subject to an insignificant risk of changes in value, andbank overdrafts. Bank overdrafts are shown within borrowings in current liabilities in the balancesheet.

v) Impairment of financial assetsThe Company assesses impairment based on expected credit losses (ECL) model to the follow-ing:

• 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 thosedefault events on the financial instruments that are possible within twelve months after thereporting date); or

• Full life time expected credit losses (expected credit losses that result from all possibledefault events over the life of the financial instrument).

For trade receivables or any contractual right to receive cash or another financial asset thatresult from transactions that are within the scope of Ind AS 18, the Company always measuresthe loss allowance at an amount equal to lifetime expected credit losses.

t) Financial liabilitiesAll financial liabilities are subsequently measured at amortised cost using the effective interest ratemethod or at fair value through profit or loss.

i) Trade and other payablesTrade and other payables represent liabilities for goods or services provided to the Companyprior to the end of financial year which are unpaid.

ii) BorrowingsBorrowings are initially recognised at fair value, net of transaction costs incurred. Borrowingsare subsequently measured at amortised cost. Any difference between the proceeds (net oftransaction costs) and the redemption amount is recognised in profit or loss over the period ofthe borrowings using the effective interest rate method.

Borrowings are removed from the balance sheet when the obligation specified in the contract isdischarged, cancelled or expired. The difference between the carrying amount of a financialliability 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 lossesFor financial liabilities that are denominated in a foreign currency and are measured at amor-tised cost at the end of each reporting period, the foreign exchange gains and losses are deter-mined based on the amortised cost of the instruments and are recognised in profit or loss.



126



The fair value of financial liabilities denominated in a foreign currency is determined in thatforeign currency and translated at the exchange rate at the end of the reporting period. Forfinancial liabilities that are measured as at fair value through profit or loss, the foreign exchangecomponent forms part of the fair value gains or losses and is recognised in profit or loss.

u) Borrowing costs

General and specific borrowing costs that are directly attributable to the acquisition, construction orproduction of a qualifying asset are capitalised during the period of time that is required to completeand prepare the asset for its intended use or sale. Qualifying assets are assets that necessarily takea 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 expen-diture 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.

v) Government grants

Grants from the government are recognised at their fair value where there is a reasonable assurancethat 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 theperiod necessary to match them with the costs that they are intended to compensate and presentedwithin 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 theexpected lives of the related assets and presented within other income.

w) Earnings Per Share

Basic earnings per share have been computed by dividing the net income by the weighted averagenumber of shares outstanding during the year. Diluted earnings per share has been computed usingthe weighted average number of shares and diluted potential shares, except where the result wouldbe anti-dilutive.

x) Dividends

Final dividends on shares are recorded on the date of approval by the shareholders of the Company.

y) Recent accounting pronouncements

The Ministry of Corporate Affairs has notified Ind AS 116 Leases, which is applicable to the Com-pany from accounting periods beginning 1st April 2019. This Standard changes the classification andaccounting for leases and also provides transition guidance. The Company expects the Standard toaffect the accounting for assets that are taken on operating lease and is currently in the process ofassessing the impact of this Standard on its transactions.



127

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128


31.03.2019 31.03.2018

3. NON-CURRENT INVESTMENTSInvestment in Equity Instruments:3,15,523 equity shares of Rs.10/- each inGreen Infra Wind Energy Theni LimitedMarch 31, 2019 : 7,50,000 equity sharesApril 1, 2018 : 7,50,000 equity shares 52.59 52.60

Shree Cap Fin Serve Private Limited 0.17 0.17

Equity of M/s. Paras Green Power LLP, Chennai 2.60 2.60

Semb Corp Mulanur Wind Energy Limited 0.27 –

Unquoted :

Life Insurance Corporation of India, Chennai(Group annuity policy for pension to employees) 58.32 58.32

Total 113.95 113.69

Current

Investment in Mutual Funds

Quoted carried at FVTPL

a) Aditya Birla Sunlife Mutual Fund (March 31, 2019 :No. of Units - Nil; March 31, 2018 : No. of Units - 26896.214) – 62.15

b) Idfc Mutual Fund (March 31, 2019 : No. of Units - Nil;March 31, 2018 : No. of Units - 14520.93) – 305.43

c) Sundaram Money Fund Collection (March 31, 2019 :No. of Units - Nil; March 31, 2018 : No. of Units - 836925.137] – 305.39

Total – 672.97

4. LOANSUnsecured and Considered GoodDeposits:Security Deposit 251.63 161.66

Total 251.63 161.66

5. OTHER FINANCIAL ASSETSNon-currentInterest receivable – 2.49

Total – 2.49



129


31.03.2019 31.03.2018


Current

a) Claims Receivable 460.76 305.64

b) Employee advance 58.29 69.21

c) MTM gain on forward contracts 35.23 0.33

d) MEIS received - scrip 4.74 42.62

Total 559.02 417.80

6. OTHER NON CURRENT ASSETS

Advances for Capital Goods 132.32 392.64

Total 132.32 392.64

7. INVENTORIES** Valued at cost or net realizable value which is lowera) Raw materials and components 2,500.81 2,987.02

b) Work-in-Process 630.82 476.61

c) Finished Goods 987.59 793.00

d) Stores & Consumables 954.08 770.37

Total 5,073.30 5,027.00

8. TRADE RECEIVABLESUnsecured

a) Considered good 19,246.20 21,799.24

b) Considered doubtful 71.44 66.89

c) Provision for expected credit loss (71.44) (66.89)

Total 19,246.20 21,799.24

9. CASH AND CASH EQUIVALENTSa) Balance with Banks

- in Current account 987.21 178.63

- in Fixed deposit 0.38 0.35

b) Cash on hand 9.40 7.24

Total 996.99 186.22

10. BANK BALANCES OTHER THAN (9) ABOVEUnpaid dividend 34.19 31.03

Total 34.19 31.03

5. OTHER FINANCIAL ASSETS - (continued)





31.03.2019 31.03.2018

11. OTHER CURRENT ASSETS

a) Advances to suppliers 928.81 786.05b) Prepaid expenses 169.77 154.00c) Balance with Statutory authorities 427.72 569.31d) Advances

i) Tool development 344.46 8.12ii) Others 128.70 117.52

Total 1,999.46 1,635.00

12. EQUITY SHARE CAPITALAuthorised1,00,00,000 Equity Shares of Rs. 10 each 1,000.00 1,000.00

Issued, Subscribed & fully Paid up77,69,040 Equity Shares of Rs 10/- each 776.90 776.90Total 776.90 776.90

13. OTHER EQUITYA. Capital Redemption Reserve

Opening Balance 10.00 10.00Additions during the year – –Deductions during the year – –

Total A 10.00 10.00

B. Securities premiumOpening Balance 2,982.88 2,982.88Additions during the year – –Deductions during the year – –

Total B 2,982.88 2,982.88

C. General Reserve (State subsidy)Opening Balance 41.10 41.10Additions during the year – –Deductions during the year – –

Total C 41.10 41.10

D. General ReserveOpening Balance 2,261.52 2,261.52Less: Transfer to Non-controlling interests – –Less: Depreciation charge consequent to application ofSchedule II of Companies Act, 2013 – –Deferred tax impact on the above – –

Total D 2,261.52 2,261.52

130





31.03.2019 31.03.2018

131

13. OTHER EQUITY - (continued)

E. Surplus i.e balance as per Statement of profit and loss:

Opening balance 9,360.32 5,806.82

Non-controlling interest Adjustment for Earlier Year – 353.12

Add: Net Profit for the year 2,879.39 3,763.51

Add: Other comprehensive income 95.73 7.34

12,335.44 9,930.79

Less: Interim Dividend payable – –

Interim Dividend Paid (466.14) (466.14)

Dividend Distribution Tax (105.35) (104.33)

(571.49) (570.47)

Total E 11,763.95 9,360.32

Total (A+B+C+D+E) 17,059.45 14,655.82

14. 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 up to year 2017-18 1,494.17 936.71

Profit for the year 2018-19 1,149.77 1,150.10

Total B 2,643.94 2,086.81

Total A+B 8,200.67 7,643.54

Less: Dividend declared last year paid during the year – –

Dividend paid during the year (492.40) (492.40)

Dividend distribution tax (101.22) (100.24)

Total 7,607.05 7,050.90

15. DEFERRED TAX LIABILITIES (NET)

Deferred Tax Liability 1,135.05 723.74

Total 1,135.05 723.74




132


31.03.2019 31.03.201816. PROVISIONS

Non Current

Provision for Employee Benefits

a) Pension 330.82 349.07

b) Leave encashment 114.10 124.23

c) Gratuity (11.51) 3.09

Other Provisions

d) Warranty 30.99 62.05

Total 464.40 538.44

Current

Provision for Employee Benefits

a) Pension 2.42 2.27

b) Bonus 344.81 345.34

c) Gratuity (7.79) 0.45

d) Leave Encashment 13.29 5.62

Other Provisions

e) Warranty 33.75 49.21

Total 386.48 402.89

17. DEFERRED INCOME

Opening Balance 2.86 3.14

Released to P&L (2.86) (0.28)

Closing Balance – 2.86

Current – 2.57

Non-Current – 0.29

18. BORROWINGSFrom bankSecuredWorking Capital Demand Loan 2,167.57 2,237.42Primary security (for CC): First charge (hypothecation) on all the currentassets of the company including stock, work-in-progress, book debts (bothcurrent and non-current), both present and future.UnsecuredShort term loans 1,000.00 –Total 3,167.57 2,237.42




31.03.2019 31.03.201819. TRADE PAYABLES

a) Dues to Micro and Small Enterprises ** (refer note 39) 2,091.64 2,787.72

b) Dues to enterprises other than Micro and Small Enterprises 14,187.39 15,480.99

c) Purchase bills discounted 3,374.97 –

Total 19,654.00 18,268.71

** Dues to Micro and Small Enterprises have been determined to theextent such parties have been identified on the basis of informationcollected by the management. The entire closing balance representsthe principal amount payable to these enterprises. There are no inter-ests due or outstanding on the same.

20. OTHER FINANCIAL LIABILITIES

a) Payable to Employees 115.84 81.19

b) Security deposit 94.21 99.71

c) Payable for Fixed Asset 1,107.74 658.40

d) Unpaid dividends 34.19 31.03

e) Others 188.78 364.91

Total 1,540.76 1,235.24

21. OTHER CURRENT LIABILITIES

a) Statutory Dues 156.71 160.06

b) Advances from customers 313.28 227.18

c) Other Payables 515.64 355.93

Total 985.63 743.17


133


22. REVENUE FROM OPERATIONS

a) Sale of Products - Gross 97,467.41 88,307.23

Less: Rate Discount – –

Sale of Products 97,467.41 88,307.23

b) Revenue from trading activities

Sales of traded goods 5,669.71 5,033.21

Less: Purchase of traded goods (5,641.20) (4,932.44)

Net revenue from trading activities 28.51 100.77

Total 97,495.92 88,408.00




23. OTHER INCOME

a) Interest Income 25.43 23.67

b) Net gain on sale of investments / fixed assets 11.57 144.92

c) MEIS Income 44.53 44.98

d) Lease rent 0.02 (0.07)

e) Duty Drawback 14.83 3.00

f) Other non-operating income 4.51 0.87

g) Other operating revenues 850.46 632.90

h) Net Gain on foreign currency fluctuation 4.34 2.03

Total 955.69 852.30

24. COST OF MATERIAL CONSUMED

Opening Stock of Raw materials 2,987.01 1,791.04

Purchase of Raw Materials and Components 69,938.74 62,161.91

Less: Closing Stock of Raw Materials (2,500.81) (2,987.01)

Total 70,424.94 60,965.94

25. Changes in Inventory of Finished Goods and Work-in-Progress

Opening Stock of Finished Goods and Work-in-progress 1,269.61 1,021.63

Less: Closing Stock of Finished Goods and Work-in-progress (1,618.40) (1,269.61)

Changes In Inventory (348.79) (247.98)

26. EMPLOYEE BENEFITS EXPENSE

a) Salary, Wages and Bonus* 8,478.36 7,351.97

b) Contribution to provident and other funds* 436.83 426.79

c) Staff welfare expenses* 1,522.85 1,522.78

Total 10,438.04 9,301.54

27. FINANCE COSTS

Interest expense 310.94 121.56

Total 310.94 121.56

28. DEPRECIATION AND AMORTIZATION EXPENSE

Depreciation 2,230.49 1,780.06

Amortization 59.11 66.51

Total 2,289.60 1,846.57


134



29. OTHER EXPENSES

Consumption of stores and spare parts 841.50 1,056.67

Power and fuel 1,241.80 1,106.74

Rent including lease rentals 214.28 196.16

Audit fees - 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 8.39 16.10

Repairs & Maintenance

- Buildings 93.43 112.49

- Plant and Equipment 1,383.76 1,354.04

- Computers 227.14 147.30

- Other assets 65.84 66.11

Insurance 113.75 114.98

Transportation charges 1,477.80 951.94

Packing charges 391.44 342.39

Legal and professional charges 462.57 504.37

Research & Development 500.68 474.13

Travelling and Conveyance 730.42 667.41

Security detective Charges 269.34 211.17

Other Administrative Expenses* 404.42 322.34

Printing & stationery 85.44 83.13

Net Loss on foreign currency fluctuation 96.13 40.33

Bank Charges 122.93 67.17

Rates and Taxes, excluding taxes on income 95.70 65.54

Sales Promotion 116.65 77.74

Telephone charges 24.85 30.07

Donations and contributions 173.77 27.00

Loss on PPE sold / scrapped / written off * 1.28 67.68

Trade and other receivables written off 12.66 8.10

Corporate social responsibility expenditure 108.00 84.00

Total 9,299.97 8,231.10

* Net of recoveries and government grants



135



Rs. in Lakhs30. EMPLOYEE BENEFIT OBLIGATIONS

As at 31st March, 2019 As at 31st March, 2018Particulars

Current Non-current Total Current Non-current Total

Pension 2.43 330.82 333.25 2.27 349.06 351.33

Gratuity (7.79) (11.51) (19.30) 0.45 3.09 3.54

Compensated absences 13.29 114.10 127.39 5.62 124.23 129.85

Total employee benefit obligations 7.93 433.41 441.34 8.34 476.38 484.72

(i) Compensated absences

31st March, 31st March,2019 2018

Current leave obligations expected to be settled within the next 12 months 13.79 5.52

(ii) Gratuity

The Company extends defined benefit plans in the form of gratuity to employees. The Company hasformed "Harita Seating Systems Limited Employees Group Gratuity Scheme" with Life InsuranceCorporation of India (LIC). Contribution to gratuity is made to LIC in accordance with the schemeframed by the corporation. The Company has made contribution towards Gratuity based on the actu-arial valuation.

(iii) Defined contribution plans

Contribution to provident fund is in the nature of defined contribution plan and are made to providentfund account maintained by the Government on its account.

Gratuity Pension Leave encashment

Present Fair Present Fair Present FairParticulars value of value of Net value of value of Net value of value of Net

obligation plan amount obligation plan amount obligation plan amountassets assets assets

Position as at April 1, 2017 (A) 602.31 538.58 63.73 324.41 – 324.41 124.52 – 124.52

Current service cost 54.47 – 54.47 23.90 – 23.90 3.32 – 3.32

Interest expense / (income) 50.03 42.67 7.36 19.64 – 19.64 7.62 – 7.62

Total amount recognised in profit or loss (B) 104.50 42.67 61.83 43.54 – 43.54 10.94 – 10.94

Remeasurements – –

(Gain) / loss from change in financial assumptions 3.94 (3.94) – – (11.36) – (11.36)

Experience (gains) / losses (35.05) (36.78) 1.73 (16.60) – (16.60) 5.74 – 5.74

Total amount recognised in othercomprehensive income (C) (35.05) (32.84) (2.21) (16.60) – (16.60) (5.62) – (5.62)

Employer contributions – 127.67 (127.67) – – – – – –

Benefit payments (36.01) (36.01) – – – – – – –

Total cash flow (D) (36.01) 91.66 (127.67) – – – – – –

March 31, 2018 (A)+(B)+(C)+(D) 635.75 640.07 (4.32) 351.35 – 351.35 129.84 – 129.84


136





137

Gratuity Pension Leave encashment

Present Fair Present Fair Present FairParticulars value of value of Net value of value of Net value of value of Net

obligation plan amount obligation plan amount obligation plan amountassets assets assets

Position as at April 1, 2018 (A) 635.75 640.08 (4.33) 351.35 – 351.35 129.84 – 129.84

Current service cost 152.52 – 152.52 6.11 – 6.11 – – –

Interest expense / (income) 52.51 52.33 0.18 23.87 – 23.87 9.87 – 9.87

Total amount recognised in profit or loss (B) 205.03 52.33 152.70 29.98 – 29.98 9.87 – 9.87

Remeasurements

(Gain) / loss from change in financial assumptions – – – – – (6.62) – (6.62)

Experience (gains) / losses (109.14) (109.14) (48.08) – (48.08) 48.50 – 48.50

Total amount recognised in othercomprehensive 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 (66.42) – – – (54.20) – (54.20)

March 31, 2019 (A)+(B)+(C)+(D) 688.15 715.33 (27.17) 333.25 – 333.25 127.39 – 127.39

The net liability disclosed above relates to funded plans are as follows:

GratuityParticulars As at As at

31.03.2019 31.03.2018


Fair value of plan assets 715.33 640.08

Deficit of funded plan (27.18) (4.33)

The net liability disclosed above relates to unfunded plans are as follows:


31.03.2019 31.03.2018

Present value of unfunded obligations 333.25 351.35





138

(iv) Post-Employment benefits

Significant estimates: actuarial assumptions and sensitivity

The significant actuarial assumptions were as follows:

Gratuity Pension Leave SalaryDetails As at As at As at As at As at As at

31.03.2019 31.03.2018 31.03.2019 31.03.2018 31.03.2019 31.03.2018

Discount rate 7.76% 7.72% 7.25% 7.00% 7.64% 7.72%

Salary growth rate 5.50% 6.00% 5.50% 6.00% 5.50% 6.00%

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 ad-vice in accordance with published statistics and experience. These assumptions translate into an averagelife 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 is:

Impact on defined benefit obligation

Gratuity Change in Impact on defined benefit obligationassumption Increase in assumption Decrease in assumption


31.03.2019 31.03.2018 31.03.2019 31.03.2018 31.03.2019 31.03.2018

Discount rate 0.50% 0.50% 31.11 30.11 (33.70) (32.66)


Pension Change in Impact on defined benefit obligationassumption Increase in assumption Decrease in assumption


31.03.2019 31.03.2018 31.03.2019 31.03.2018 31.03.2019 31.03.2018

Discount rate 0.50% 0.50% 46.99 35.54 (57.31) (15.45)

Salary growth rate 0.50% 0.50% (59.77) 22.09 49.43 0.19

Leave encashment Change in Impact on defined benefit obligationassumption Increase in assumption Decrease in assumption


31.03.2019 31.03.2018 31.03.2019 31.03.2018 31.03.2019 31.03.2018

Discount rate 0.50% 0.50% 5.19 7.09 (5.61) (7.78)




31. FINANCIAL INSTRUMENTS AND RISK MANAGEMENTFair value measurementsFinancial instruments by category

FVTPL Amortised costParticulars March 31, March 31, March 31, March 31,

2019 2018 2019 2018Financial assetsInvestments 113.95 786.67 –Security deposits 251.63 161.66Interest receivable – 2.49Claims Receivable 460.76 305.64Trade receivables 19,246.20 21,799.24Cash and cash equivalents 996.99 186.22Bank Balances 34.19 31.03Premium on forward contracts 35.23 0.33MEIS received - script 4.74 42.62Employee advance 58.29 69.21Total financial assets 113.95 786.67 21,088.03 22,598.44Financial liabilitiesSecurity deposits 94.21 99.71Employee payables 115.84 81.19Short Borrowings 3,167.57 2,237.42Trade payables 19,654.00 18,268.71Payable for Fixed Asset 1,107.74 658.40Unpaid dividends 34.19 31.03Other Payables 188.78 364.92Total financial liabilities – – 24,362.33 21,741.38

Rs. in Lakhs


139

(vi) Risk exposureThrough its defined benefit plans, The company is exposed to a number of risks, the most significantof which are detailed below:

Asset volatilityThe plan liabilities are calculated using a discount rate set with reference to bond yields; if plan assetsunderperform this yield, this will create a deficit.

Changes in bond yieldsA decrease in bond yields will increase plan liabilities, although this will be partially offset by an in-crease in the value of the plans’ bond holdings.

The following payments are expected contributions to the defined benefit plan in future years:

ParticularsAs at As at

31.03.2019 31.03.2018

Within the next 12 months (next annual reporting period) 59.65 25.62Between 2 and 5 years 178.97 205.16Beyond 5 years 363.94 317.46



Rs. in Lakhs31. FINANCIAL INSTRUMENTS AND RISK MANAGEMENT - (continued)


140

Fair value hierarchy

This section explains the judgements and estimates made in determining the fair values of the financialinstruments that are (a) recognised and measured at fair value and (b) measured at amortised cost andfor which fair values are disclosed in the financial statements.

Financial assets and liabilities measured at fair value - recurring fair value measurements

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

At 31 March 2019 Notes Level 1 Level 2 Level 3 Total

Financial assets

Financial Investments at FVTPL 3 672.97 113.69 786.66

Total financial assets 672.97 – 113.69 786.66

Level 1: Level 1 hierarchy includes financial instruments measured using quoted prices. This includeslisted equity instruments, traded bonds and mutual funds that have quoted price. The fair value of allequity instruments (including bonds) which are traded in the stock exchanges is valued using the closingprice 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, tradedbonds, over-the-counter derivatives) is determined using valuation techniques which maximise the use ofobservable market data and rely as little as possible on entity-specific estimates. If all significant inputsrequired 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 isincluded in level 3. This is the case for unlisted equity securities, contingent consideration and indemnifi-cation asset included in level 3.

There are no transfers between levels 1 and 2 during the year.

The company’s policy is to recognise transfers into and transfers out of fair value hierarchy levels as at theend of the reporting period.

The carrying amounts of trade receivables, trade payables, loans, deposits, advances, borrowings, cashand cash equivalents and other current financial liabilities are considered to be the same as their fairvalues, due to their short-term nature.



32. FINANCIAL RISK MANAGEMENT

The company’s activities expose it to market risk, liquidity risk and credit risk.

(A) Credit riskCompany faces credit risk from cash and cash equivalents, deposits with banks and financial institu-tions and unsecured trade receivables. The company doesn't face any credit risk with other financialassets

(i) Credit risk management

Credit risk on deposit is mitigated by the depositing the funds in reputed private sector bank.

For trade receivables, the primary source of credit risk is that these are unsecured. The Companysells the products to customers only when the collection of trade receivables is certain and whetherthere has been a significant increase in the credit risk on an on-going basis is monitored through-out each reporting period. As at the balance sheet date, based on the credit assessment thehistorical trend of low default is expected to continue. An impairment analysis is performed at eachreporting date on an individual basis for major clients. Any recoverability of receivables is providedfor 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:

Year ended 01st April 2018:Expected credit loss for trade receivables under simplified approach






Carrying amount of trade receivables(net of impairment) 21,736.38 62.86 21,799.24

Rs. in Lakhs


141

Year ended 1st April 2019:






Carrying amount of trade receivables(net of impairment) 19,049.03 54.29 19,103.32



(i) Financing arrangements

The Company had access to the following undrawn borrowing facilities at the end of the reportingperiod:

Floating rateAs at As at

31.03.2019 31.03.2018

- Expiring within one year (bank overdraft and other facilities) 2,112.43 2,041.27

The bank overdraft facilities may be drawn at any time and may be terminated by the bank withoutnotice. Subject to the continuance of satisfactory credit ratings, the bank loan facilities may bedrawn 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 basedon their contractual maturities for:

a) all non-derivative financial liabilities, and

b) net and gross settled derivative financial instruments for which the contractual maturities areessential for an understanding of the timing of the cash flows.

The amounts disclosed in the table are the contractual undiscounted cash flows. Balances due within12 months equal their carrying balances as the impact of discounting is not significant.


(iii) Reconciliation of loss allowance provision - Trade receivables

Amount


Changes in loss allowance 4.56


(B) Liquidity risk

Objective of liquidity risk management is to maintain sufficient cash and marketable securities and theavailability of funding through an adequate amount of committed credit facilities to meet obligationswhen due. Management monitors rolling forecasts of The company’s liquidity position (comprising theundrawn borrowing facilities below) and cash and cash equivalents on the basis of expected cashflows. The company’s liquidity management policy involves projecting cash flows in major currenciesand considering the level of liquid assets necessary to meet these, monitoring balance sheet liquidityratios against internal requirements


142




Contractual maturities of financial liabilities

As at 31st March 2019 As at 31st March 2018Maturing within

TotalMaturing within

TotalNon-derivatives

3 months 3 months

Borrowings 3,167.57 3,167.57 2,237.42 2,237.42

Trade payables 19,654.01 19,654.01 18,268.71 18,268.71

Payable for Fixed Asset 1,107.74 1,107.74 658.40 658.40

Security deposits 94.21 94.21 99.71 99.71

Total non-derivative liabilities 24,023.53 24,023.53 21,264.24 21,264.24

(C) Market risk

(i) Foreign currency risk

The Company activities exposes it to foreign exchange risk arising from foreign currency transac-tions, primarily with respect to the USD,EURO and GBP. Foreign exchange risk arises from futurecommercial transactions and recognised assets and liabilities denominated in a currency that isnot the company’s functional currency (INR). The risk is measured through a forecast of highlyprobable foreign currency cash flows.


143

The company's exposure to foreign currency risk at the end of the reporting period expressed in INR, areas follows:

As at 31st March 2019 As at 31st March 2018Particulars

USD EUR GBP USD EUR

Financial assets

Trade receivables 2,204.99 210.18 2,348.88 75.91

Exposure to foreign currency risk (assets) 2,204.99 210.18 2,348.88 75.91


Trade payables 143.31 (79.54) (4.10) (1,222.74) (136.88)

Exposure to foreign currency risk (liabilities) 143.31 (79.54) (4.10) (1,222.74) (136.88)

Net exposure to foreign currency risk 2,348.30 130.64 (4.10) 1,126.14 (60.97)



(b) Dividends

(i) Equity shares

Interim dividend for the year ended 31 March 2018 of INR 6.00 466.14

(31 March 2017 – INR 5.00) per fully paid share

Interim dividend for the year ended 31 March 2019 of INR 6.00 466.14

(31 March 2018 – INR 6.00) per fully paid share


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 Impact on profit after taxUSD 31 March, 31 March, EURO 31 March, 31 March, GBP 31 March, 31 March,

sensitivity 2019 2018 sensitivity 2019 2018 sensitivity 2019 2018

INR/EURO INR/GBP

INR/USD Increases by 5% 70.30 73.13

Increases by 4.25 (1.99)

Increases by(0.13) –

(31 March 2019 - 5%) 5% (31 Mar 5% (31 Mar

2019 - 5%) 2019 - 5%)

INR/EURO INR/GBP

INR/USD Decreases by 5%Decreases Decreases

(31 March 2019 - 5%) (70.30) (73.13) by 5% (31 (4.25) 1.99 by 5% (31 0.13 –

Mar 2019 Mar 2019

- 5%) - 5%) -

* Holding all other variables constant

33. 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 returnsfor 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 dividendspaid to shareholders, return capital to shareholders, issue new shares or sell assets to reduce debt.


144




Rs. in Lakhs

34. RELATED PARTY DISCLOSUREDisclosure is made as per the requirements of the standard and the same is furnished below:

A) List of Related PartiesReporting entity : Harita Seating Systems LtdHolding Company : NilSubsidiary Company : Harita Fehrer LimitedKey Management Personnel : Non-executive Independent Directors

M/s. H Lakshmanan, S I Jaffar Ali, C N Prasad, L Bhadri,Sasikala VaradachariNon-executive Non-Independent DirectorMartin Grammer

b) Particulars of transactions with related parties Sl. Particulars Year ended Year endedNo. 31.03.2019 31.03.2018(i) Purchases made

Subsidiary company

from Harita Fehrer Limited, Chennai

- Components 4737.44 4444.64

- Capital goods 94.93 160.57

(ii) Services availed

Subsidiary company


- Interest paid – –

- Lease rent paid 65.00 62.26

- Others 125.42 106.55

(iii) Sale of Materials

Subsidiary company

from Harita Fehrer Limited, Chennai 17.35 6.11

(iv) Services rendered

Subsidiary company

to Harita Fehrer Limited, Chennai

- Lease rent 167.52 159.12

- Management Service 78.76 78.75

- Canteen 196.60 196.08

- Others 382.21 304.97

(v) Dividend received from subsidiary company 512.50 512.50


145



Rs. in Lakhs

34. RELATED PARTY DISCLOSURE - (continued)

b) Particulars of transactions with related parties - (continued)

Sl. Particulars As at As atNo. 31.03.2019 31.03.2018

(vi) Amount outstanding as at Balance sheet date

Subsidiary company


Trade payables 613.36 1541.55

Other payables 4.86 16.49

Trade receivables 0.71 5.95

Other receivables 157.30 334.16

(vii) Remuneration to Key Management Personnel 20.40 20.05

As at As at31.03.2019 31.03.2018

35. LEASE COMMITMENT

a) The total of future minimum lease payments under non cancellableoperating lease for each of the following periods

237.13 300.20

- Later than one year and not later than five years 346.59 405.27

- Later than five years – –

b) Total of minimum sub-lease payments expected to be received undernon-cancellable subleases at the Balance sheet date NA NA

c) Lease payments recognised in the statement of profit and loss for theperiod under the head Rent paid 289.23 281.24


36. EARNING PER SHARE

Profit attributable to the equity holders of the companyused in calculating basic earnings per share: 2,879.38 3,763.51

No. of equity shares 7,769,040 7,769,040

Face value per share (Rs.) 10 10

Weighted average number of equity shares 7,769,040 7,769,040

Earnings per share (EPS) (Rs.) 37.06 48.44

Diluted Earnings per share (Rs.) 37.06 48.44


146



Rs. in Lakhs37. 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 vari-ous performance indicators of the Company as a single unit. Therefore there is no reportable segmentfor 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 INR 7936.50 (31 March 2018 – INR 6980.00) are derived from a singleexternal customers.

As at As at31.03.2019 31.03.2018

38. Provisions, contingent liabilities and contingent assets

1. Provisions

In respect of warranty obligations provision is made in accordance withterms of sale of seat assemblies.

Provision for warranty at beginning of the year 110.46 90.48

Provided during the year – 48.84

Total 110.46 139.32

Provision utilised during the year (45.72) (28.86)

Net Provision as on balance date 64.74 110.46

2. Contingent liabilities -Nil- -Nil-

3. Contingent assets

Contingent assets which are likely to give rise to the possibility of inflowof economic benefits -Nil- -Nil-

4. Contested liabilities

Contingent liabilities not provided for

a) On counter guarantee furnished to bank

b) On account of bill discounted -Nil- -Nil-

c) Customs duty as per EPCGS – –

d) Contracts remaining to be executed on capital account – –

e) on account of counter guarantees furnished to Customs

f) on account of UP State Micro & small enterprises facilitation councilorder towards supplier liability – 3.39


147




31.03.2019 31.03.2018


148

38. Provisions, contingent liabilities and contingent assets - (continued)

Liability contested and not provided for

a) Income tax 620.10 571.41

b) Service tax 2.10 2.10

c) Central excise – 5.84

d) Value added Tax 446.52 446.52

e) Customer claim – –

f) on account of The Payment of Bonus (Amendment) Act, 2015 amendedbonus eligibility limit and extended the minimum wage limit for Bonuswith retrospective effect from April 2014. The Company has obtaineda Stay Order from High court of Chennai with respect to the retrospec-tive applicability and hence no provision for the same has been madefor the period prior to this financial year. 28.18 28.18

39. Trade payables include amount due to micro and small scale industrial units

Disclosure under Micro, Small and Medium Enterprises Development Act, 2006

i) The principal amount and interest due thereon remaining unpaid to anysupplier at the end of each accounting year:

a) Principal (all are within agreed credit period and not due for payment) 2,091.64 2,787.72

b) Interest (as no amount is overdue)

ii) The amount of interest paid by the buyer in terms of Section 16 of theMicro, Small and Medium Enterprises Development Act, 2006 alongwith the amount of payment made to the supplier beyond the appointedday during each accounting year. – –

iii) The amount of interest due and payable for the period of delay in mak-ing payment (which have been paid but beyond the appointed day dur-ing the year) but without adding the interest specified under the Micro,Small and Medium Enterprises Development Act, 2006 – –

iv) The amount of interest accrued and remaining unpaid at the end of eachaccounting year – –

v) The amount of further interest remaining due and payable even in thesucceeding years, until such date when the interest dues as above areactually paid to the small enterprise, for the purpose of disallowance asdeductible expenditure under Section 23 of the Micro, Small andMedium Enterprises Development Act, 2006 – –




149

40. IND-AS-112 INTERESTS IN OTHER ENTITIES

(a) Subsidiaries

The group’s subsidiary at 31st March 2019 are set out below. Unless otherwise stated, they haveshare capital consisting solely of equity shares that are held directly by the group, and the proportionof ownership interests held equals the voting rights held by the group. The country of incorporation orregistration is also their principal place of business.

Name of entity

Place ofOwnership interest

Ownership interestPrincipalbusiness /

held by the groupheld by non-controlling

activitiescountry of interestsincorporation 31-Mar-19 31-Mar-18 31-Mar-19 31-Mar-18

Harita Fehrer Limited India 51% 51% 49% 49% Automotive

Rs. in Lakhs

(b) Non-Controlling Interest

Harita Fehrer Limited

Summarised balance sheet 31-Mar-19 31-Mar-18

Current assets 13,927.54 15,356.71

Current liabilities 11,762.98 11,465.02

Net current assets 2,164.56 3,891.70

Non-current assets 14,282.60 11,243.65

Non-current liabilities 922.56 745.75

Net non-current assets 13,360.04 10,497.90

Net assets 15,524.60 14,389.59

Accumulated NCI 7,607.05 7,050.90


Summarised statement of profit and loss 31-Mar-19 31-Mar-18

Revenue 55,022.87 49,053.59

Profit for the year 2,333.10 2,345.33

Other comprehensive income 20.53 1.81

Total comprehensive income 2,346.46 2,347.14

Profit allocated to NCI 1,143.23 1,149.22

Dividends paid to NCI 492.40 492.40


Summarised cash flow statement 31-Mar-19 31-Mar-18

Cash flow from operating activities 6,517.18 2,650.80

Cash flow from investing activities (4,402.83) (1,925.75)

Cash flow from financing activities (1,344.03) (1,219.88)

Net increase / (decrease) in cash and cash equivalents 770.32 (494.83)



Rs. in Lakhs41. OTHER DISCLOSURES

Particulars Year ended Year ended31.03.2019 31.03.2018

i) Expenditure incurred on Corporate social responsibility activitiesa) Gross amount to be spent by the company during the year 106.79 74.77b) Amount spent during the year in cash

i) Construction / Acquisition of asset – –ii) On purposes other than above 108.00 84.00

ii) Research and development expenditure incurred and claim under IncomeTax Act, 1961a) Revenue expenditure

Salary and wages 650.70 569.06Power 19.91 12.30Foreign and inland travel 76.36 68.52Design and testing charges 68.69 88.85Proto tools, fixtures & Moulds 54.02 61.07AMC Charges 60.93 39.31Product & Process Development Expenses 10.79 9.85Sample, Machinery Spare and Other Expenses 93.79 92.04Admin and other expenses 2.84 4.21

Total 1,038.03 945.21b) Capital expenditure

Plant and Machinery, Workstations, Laptops 20.61 62.55Catia License – 70.30

Total 20.61 132.85iii) Government grants

During the financial year under review the Company has received and recognisedfollowing government grants:-a) Duty drawback on exports 109.57 114.42b) Merchandise Exports from India Scheme (MEIS) benefits on exports 314.09 165.83c) Pradhan Mantri Rojgar Protsahan Yojana (PMRPY) scheme benefits

(the amount is credited to PF Employer Contribution) 16.51 5.49d) Board of Apprenticeship Training (BOAT) 75.50 –e) EPCG (Export Promotion Capital Goods) Scheme 2.86 0.29

Total 518.53 286.03





150



151

AnnexureForm AOC - 1 for the year 2018-19

Statement containing salient features of the financial statement of subsidiary(Pursuant to first proviso to sub-section (3) of Section 129 of the Companies Act, 2013

read with Rule 5 of Companies (Accounts) Rules, 2014)

Part "A": Subsidiary(Rs. in lakhs)

S. No Particulars Indian Subsidiary


1 Date of becoming subsidiary 05-11-2008

2 Share capital 2,009.80

3 Reserves & Surplus 13,514.79

4 Total assets 28,210.13

5 Total Liabilities 28,210.13

6 Investments 55.62

7 Turnover including other income 55,022.87

8 Profit before taxation 3,644.17

9 Provision for taxation 1,311.06

10 Profit after taxation 2,333.11

11 Proposed Dividend –

12 % 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






Notes


HARITA SEATING SYSTEMS LIMITEDRegistered Office

“Jayalakshmi Estates”, 29, Haddows Road, Chennai - 600 006, Tamil Nadu, IndiaTel. : 044-28272233 Fax : 044-28257121

CIN : L27209TN1996PLC035293E-mail : [email protected] | Website : www.haritaseating.com Pr

inte

d at

LSG

P 98

4101

1561

HARITA SEATING SYSTEMS LIMITED23rd Annual Report 2018-2019

harita seating systems limited report 2018...3 harita seating systems limited notice of annual...

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