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Directors Report of Sharda Motor Industries Ltd.

Mar 31, 2015

Dear Members,

The Directors have pleasure in presenting the Thirtieth (30th) Annual Report on the business and Operations of the Company together with the Audited Accounts for the year ended on 31st March 2015.

FINANCIAL RESULTS:

(Rs. In Lacs)

Year Ended 31st Year Ended 31st March 2015 March 2014

Revenue from operations 87454.21 81731.57

Other Income 980.36 1320.09

Total Revenue 88434.57 83051.66

Profit before Financial Charges & Depreciation 10183.57 8388.89

Less : Financial Costs 1539.72 1624.81

Profit before Depreciation & Taxes 8643.85 6764.08

A. Depreciation 5200.49 4555.21

B. Exceptional items - -

Taxation

- Current Tax 276.00 -

- Deferred Tax Charged/ (Released) (445.38) 700.80

- Adjustments for earlier years - 6.58

Net Profit after Tax 3612.74 1501.49

Add: Profit brought forward from Previous year 1758.54 1952.75

Profit available for appropriation 5371.28 3454.24

APPROPRIATIONS

Proposed Dividend 297.32 297.32

Tax on Proposed Dividend 60.87 50.53

Interim Dividend 297.32 297.32

Tax on Interim Dividend 59.45 50.53

Transferred to General Reserves 3000.00 1000.00

Depreciation Adjustment as per Schedule II of Companies Act, 2013 137.95 -

Balance carried forward to Balance Sheet 1518.37 1758.54

OPERATIONAL PERFORMANCE

During the year under review, the gross revenue from operations and other Income for the year was Rs. 88434.57 lacs as against Rs. 83051.66 lacs of previous year. The profit before taxation was Rs. 3443.36 lacs as against Rs. 2208.87 Lacs of previous year. The Accumulated Depreciation and Aggregate Fixed Assets Gross Block were Rs. 26691.04 lacs & Rs. 54599.36 lacs respectively as compared to Rs. 21532.96 lacs and Rs. 52107.94 lacs last year. During the year under review, financial charges had been reduced to Rs. 1539.72 lacs from Rs. 1624.81 lacs.

DIVIDEND

Your Directors are pleased to recommend a total dividend of Rs. 10 per Equity Share i.e. @ 100% on the paid-up Equity Share Capital of the Company for the year ended 31st March 2015, this includes an interim dividend of Rs. 5 per Equity Share i.e. @50% on the Paid-up Equity Share Capital of the Company paid during the year under review.

Final dividend of Rs. 5 per Equity Share, if approved at the ensuing Annual General Meeting, shall be paid out of the profit of the Company to those share holders whose name appear on Register of Member on 19th August' 2015. In respect of the shares held in dematerialized form, the dividend will be paid to members whose names are furnished by National Securities Depository Limited and Central Depository Services (India) Limited as beneficial owners as on that date.

The Cash outflow on account of dividend including interim dividend on equity share capital will be Rs. 714.96 Lacs including dividend tax of Rs. 120.32 Lacs.

DIRECTORS AND KEY MANAGERIAL PERSONNEL

The existing composition of the Company's Board is fully in conformity with the applicable provisions of the Companies Act 2013 and Listing Agreement. Your Company has Nine (9) Directors consisting of Three (3) Independent Directors, Three (3) Non-Executive Directors, Three (3) Whole time Executive Directors including Managing Director as on 31st March, 2015.

Shri Ajay Relan, Managing Director, Shri Pradeep Rastogi, President Legal & CFO and Shri Nitin Vishnoi, Company Secretary of the Company are the Key Managerial Personnel as per the provisions of the Companies Act, 2013 and were already in office before the commencement of the Companies Act, 2013.

In terms of the provisions of Section 149 of the Companies Act, 2013 and Clause 49 of the Listing Agreement, a company shall have at least one Woman Director on its Board. Smt. Sharda Relan is the Woman Director on the Board who is the Non-Executive Director.

Pursuant to the provisions of Section 149 of the Companies Act, 2013 and Clause 49 of the Listing Agreement with stock exchange, Shri Kishan N. Parikh, Shri O. P Khaitan and Prof. Ashok Kumar Bhattacharya were appointed as Independent Directors at the Annual General Meeting of the Company held on 3rd September 2014. The terms and conditions of appointment of independent directors are as per the applicable laws.

Further, all the Independent Directors have declared and affirmed their compliance with the independence criteria as prescribed in Section 149(6) of the Companies Act, 2013 and clause 49 of the listing agreement in respect of their position as an "Independent Director" of the Company.

During the year under review Shri Bireswar Mitra (DIN 06958002), was appointed as an additional director w.e.f. 7th August' 2014 and on 3rd September' 2014, also designed as an Executive Director of the Company. Further in November' 2014, members of the Company had accorded their consent through postal ballot and appointed him as a rotational Director and also an Executive Director.

Shri Udayan Banerjee (DIN No 00339754) resigned as whole-time director with effect from 1st October' 2014. The Board places on record its appreciation for the services rendered by Shri Udayan Banerjee during his tenure with the Company.

In terms of Section 152 of the Companies Act, 2013, Shri R P Chowdhry (DIN: 00337775) and Smt. Sharda Relan (DIN: 00252181), Directors of the Company are liable to retire by rotation and being eligible offer themselves for re-appointment at the ensuing Annual General Meeting.

A brief profile of the above-named Directors seeking reappointment at the ensuing Annual General Meeting of the Company has been provided in the notice of the Annual General Meeting.

The Board met five (5) times during the financial year, the detailed information on which is given in the Report on Corporate Governance that forms part of this Annual Report. The intervening gap between any two meetings was within the period prescribed by the Companies Act, 2013.

BOARD LEVEL PERFORMANCE EVALUATION

The Board of Directors has carried out an annual evaluation of its own performance and that of its committees and individual directors pursuant to the provisions of the Companies Act, 2013 and the Clause 49 of the Listing Agreement.

The performance of the Board was evaluated by the Board after seeking inputs from all the directors on the basis of the criteria such as the Board composition and structure, effectiveness of board processes, contribution towards development of the strategy etc.

The performance of the committees was evaluated by the board after seeking inputs from the committee members on the basis of the criteria such as the composition of committees, effectiveness of committee meetings, etc.

The Board in consultation with Nomination and Remuneration Committee ("NRC") reviewed the performance of the individual directors on the basis of the criteria such as the contribution of the individual director to the Board and committee meetings like preparedness on the issues to be discussed, contribution at the meetings and otherwise, independent judgment, etc.

In a separate meeting of independent Directors, performance of non-independent directors, performance of the board as a whole and performance of the Chairman was evaluated, taking into account the views of executive directors and non-executive directors. The same was discussed in the board meeting that followed the meeting of the independent Directors, at which the performance of the Board, its committees and individual directors was also discussed.

COMPANY'S POLICY ON DIRECTOR'S APPOINTMENT AND REMUNERATION INCLUDING CRITERIA FOR DETERMINING QUALIFICATION, ATTRIBUTES, INDEPENDENCE, ETC.

The Policy of the Company on Directors' appointment and remuneration including criteria for determining qualifications, positive attributes, independence of a Director and other matters provided under sub-section (3) of section 178 of the Companies Act, 2013, is appended as Annexure I to this Report.

AUDIT COMMITTEE

The Audit Committee of the Company is constituted in line with the provisions of the Companies Act, 2013 & Clause 49 of the Listing Agreement. The Audit Committee at present comprises one Non-Executive Director viz. Smt. Sharda Relan and two Independent Directors viz. Shri O.P. Khaitan (Committee's Chairman) and Shri Kishan N Parikh. All three members of Committee have adequate financial & accounting knowledge and background.

SECRETARIAL AUDIT

The Board has appointed M/s V. K. Chaudhary & Co. (Company Secretaries in practice holding CP. No 4548) to conduct Secretarial Audit for the financial year 2014-15. The Secretarial Audit Report for the financial year ended March 31,2015 is annexed herewith marked as Annexure II to this Report. The Secretarial Audit Report does not contain any qualification, reservation or adverse remark.

AUDITORS & AUDITORS' REPORT

M/s. S.R. Dinodia & Co. LLP (Formerly Known as M/s S.R. Dinodia & Co.), Chartered Accountants (holding Registration No. 001478N/ N500005), Statutory Auditors of the Company will retire at the conclusion of the forthcoming Annual General Meeting ("AGM") and being eligible, offers themselves for re-appointment, The Company has received the consent from the Auditors and confirmation to the effect that they are not disqualified to be appointed as the Auditors of the Company in terms of the provisions of the Companies Act 2013 ("Act") and rules made thereunder and that their appointment, if made, will be within the prescribed limits under the Act. Accordingly the Audit Committee and the Board of Directors has recommended the re-appointment of M/s. S.R. Dinodia & Co. LLP (Formerly Known as M/s S.R. Dinodia & Co.), Chartered Accountants as the Statutory Auditors of the Company to hold office from the ensuing AGM till the conclusion of the next AGM on remuneration to be decided by the Board or Committee thereof to the shareholders for approval.

Auditors' report is self-explanatory and therefore does not require further comments and explanation.

COST AUDITORS

The Company appointed M/s Gurdeep Singh & Associates as Cost Auditors for the financial year 2014-15, though it was not applicable for that year. Based on the recommendation of Audit Committee, M/s Gurdeep Singh & Associates( holding M No. 9967), Cost Accountants, 3238, Ranjit Nagar, Near Metro Station, Patel Nagar, New Delhi-110008, India, being eligible have been appointed by the Board as the Cost Auditors of the Company for the Financial Year 2015-16 subject to ratification of remuneration by the Members. The Company has received a letter from them to the effect that their reappointment would be within the limits prescribed under Companies Act, 2013 and that they are not disqualified for such re-appointment within the meaning of section 141 of the Companies Act, 2013.

CORPORATE SOCIAL RESPONSIBILITY

A Corporate Social Responsibility Committee was constituted on 22nd May, 2014 comprising of Shri N.D. Relan as Chairman, Smt. Sharda Relan and Shri Kishan N Parikh, as members of the Committee. The Committee met once during the year on 10th February' 2015 to inter-alia finalize the Corporate Social Responsibility Policy ("CSR Policy").

The terms of reference of the Corporate Social Responsibility Committee, number and dates of meetings held, attendance of the Directors are given separately in the attached Corporate Governance Report.

The Company recognizes that its operations impact a wide community of stakeholders, including investors, employees, customers, business associates and local communities and that appropriate attention to the fulfillment of its corporate responsibilities can enhance overall performance. In structuring its approach to the various aspects of Corporate Social Responsibility, the Company takes into account the guidelines and statements issued by various regulatory bodies.

As per the requirements of Section 135 of the Companies Act, 2013, the Company was required to spend at least two per cent of its average net profits of immediate three preceding financial years, in pursuance of its Corporate Social Responsibility (CSR) Policy. Accordingly, the Company had to spend a minimum of Rs. 59.44 Lacs during the current financial year towards CSR activities. During the current year, the Company has adopted a strategy whereby certain long term programmes will be undertaken by the Company for the social and economic welfare. As the process of evaluating and identifying specific programme is in progress, no amount was spent on CSR during the year ended 31st March 2015. The annual report on CSR activities is appended as Annexure III to the Directors' report.

EXTRACT OF ANNUAL RETURN

In accordance with Section 134(3) (a) of the Companies Act, 2013, an extract of the annual return in the prescribed format is appended as Annexure IV to the Directors' report.

PARTICULARS OF EMPLOYEES

The ratio of the remuneration of each Director to the median employee's remuneration and other details in terms of sub-section 12 of Section 197 of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, are forming part of this report as Annexure V.

The statement containing name and particulars of employees as required under Section 197(12) of the Companies Act, 2013 read with Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 forms part of this report as Annexure VI.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

The particulars of Conservation of energy, Technology Absorption and Foreign Exchange Earnings and Outgo as required under Section 134(3) (m) of the Companies Act, 2013 read with Rule 8(3) of the Companies (Accounts) Rules, 2014, are annexed herewith marked as Annexure VII to this Report.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

Loans, guarantees and investments covered under Section 186 of the Companies Act, 2013 form part of the financial statements provided in this Annual Report.

PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES

The particulars of contracts or arrangements with related parties referred to in Section 188(1), in prescribed in Form AOC-2, is appended as Annexure VIII.

CORPORATE GOVERNANCE

We strive to attain high standards of corporate governance while interacting with all our stakeholders. The "Report on Corporate Governance" forms an integral part of this report and is set out as Annexure IX to this report. The certificate of M/s. S.R. Dinodia & Co. LLP (Formerly Known as M/s S.R. Dinodia & Co.), Chartered Accountants, the statutory auditors of the Company certifying compliance with the conditions of corporate governance as stipulated in Clause 49 of the Listing Agreement is annexed with the report on corporate governance.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

The Management Discussion and Analysis Report for the year under review as stipulated under Clause 49 of the Listing Agreement is appended as Annexure X to this Report.

VIGIL MECHANISM

The Company has established a vigil mechanism for Directors and employees to report their genuine concerns. Vigil Mechanism is available on the Company's website www.shardamotor.com.

FIXED DEPOSITS

The Company has not accepted any fixed deposits from the public during the year under review and has nil fixed deposits outstanding. INDUSTRIAL RELATIONS

During the period under review, the Company maintained healthy, cordial and harmonious industrial relations at all levels.

Your Directors wish to place on record their appreciation of the co-operation, valuable contributions, enthusiasm and unstinting efforts made by the employees of the Company at all levels in the organization and they have ensured the accomplishment of excellent results and achievement by the Company.

MATERIAL CHANGES AND COMMITMENTS, IF ANY, AFFECTING THE FINANCIAL POSITION OF THE COMPANY

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

THE DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS IMPACTING THE GOING CONCERN STATUS AND COMPANY'S OPERATIONS IN FUTURE;

During the year under review, no significant and material orders have been passed by the regulators or courts or tribunals impacting the going concern status and company's operations in future.

COMPANIES WHICH HAVE BECOME OR CEASED TO BE SUBSIDIARIES, JOINT VENTURES OR ASSOCIATE COMPANIES

During the year under review, a Joint Venture company with Name and style of "Toyo Sharda (India) Private Limited" has been incorporated in terms of Joint Venture Agreement with Toyo Seat Co. Ltd., Japan.

RISK ASSESSMENT AND RISK MINIMIZATION PROCEDURE

In line with the new regulatory requirements, the Company has formally framed a Risk Assessment and Risk Minimization Procedure to identify and assess the key risk areas and monitor the same. The Board periodically reviews the risks and suggests steps to be taken to control the risks.

Details on the Company's risk management framework, risk evaluation, risk identification etc. is provided in the Mangement Discussion and Analysis Report forming part of this report.

DETAILS OF NUMBER OF CASES FILED, IF ANY, AND THEIR DISPOSAL IN TERMS OF SECTION 22 OF THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013.

The Company values the dignity of individuals and strives to provide a safe and respectable work environment to all its employees. The Company is committed to providing an environment, which is free of discrimination, intimidation and abuse. The Company believes that it is the responsibility of the organisation to protect the integrity and dignity of its employees and also to avoid conflicts and disruptions in the work environment due to such cases.

The Company has put in place a 'Policy on redressal of Sexual Harassment at Work Place' as per the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 ("Sexual Harassment Act"). As per the policy, any employee may report his / her complaint to the Redressal Committee formed for this purpose or their Manager or HR personnel. We affirm that adequate access has been provided to any complainant who wished to register a complaint under the policy, but no complaint was registered during the year under review.

DIRECTORS' RESPONSIBILITY STATEMENT

In terms of Section 134(3) (c) read with 134(5) of the Companies Act, 2013, it is hereby stated that:

(a) In the preparation of the annual accounts, the applicable accounting standards had been followed;

(b) Appropriate accounting policies have been selected and applied consistently and judgments and estimates made are reasonable and prudent so as to give a true and fair view of the state of affairs of the company as at March 31,2015 and of the profit and loss of the company for the year ended on that date;

(c) Proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities;

(d) The annual accounts have been prepared on a going concern basis;

(e) Internal financial controls have been laid down to be followed by the company and that such internal financial controls are adequate and were operating effectively;

(f) Proper systems have been devised to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

ACKNOWLEDGEMENT

Your Company has been able to operate efficiently because of the professionalism, creativity, integrity and continuous improvement in all functional areas to ensure efficient utilization of the Company's resources for sustainable and profitable growth. The Directors acknowledge their deep appreciation to employees at all levels for their total dedication, hard work, commitment and collective team work, which has enabled the Company to remain at the forefront of the industry despite increased competition and challenges.

Your Directors take this opportunity to express their grateful appreciation for the excellent assistance and co-operation received from its customers i.e. M/s Hyundai Motor India Ltd., M/s Mahindra & Mahindra Ltd., M/ s. Tata Motors Ltd., M/s. Samsung Electronics India Ltd. and M/s. Bharat Seats Ltd.

Your Directors also extend their appreciation to Yes Bank Limited, HDFC Bank, Citi Bank, ICICI Bank Limited, State Bank of India, Punjab National Bank and various Departments of Central and State Government(s).

Your Directors also would like to thank all the shareholders for their continued support & Co-operation.

On behalf of the Board of Directors For SHARDA MOTOR INDUSTRIES LTD.

Place : New Delhi N. D. Relan Ajay Relan Dated : 26th May' 2015 Co-Chairman Managing Director (DIN: 00240280) (DIN: 00257584)


Mar 31, 2014

To the Members,

The Directors have pleasure in presenting the Twenty- Ninth Annual Report together with the Audited Accounts for the year ended 31st March'' 2014.

1. FINANCIAL RESULTS: (Rs. In Lacs) Year Ended Year Ended 31.03.2014 31.03.2013

Revenue from operations 81832.88 89833.33

Other Income 1320.09 699.53

Total Revenue 83152.97 90532.86

Profit before Financial Charges, Depreciation 8388.89 9380.93

Less : Financial Costs 1624.81 1093.28

Profit before Depreciation & Taxes 6764.08 8287.65

A. Depreciation 4555.21 576.18

B. Exceptional items - 357.43

C. Taxation – Current Tax - 1270.00 – Deferred Tax Charged/ (Released) 700.80 483.24 – Adjustments for earlier years 6.58 5.82

Net Profit after Tax 1501.49 2594.98

Add: Profit brought forward from Previous year 1952.75 1548.87

Profit available for appropriation 3454.24 4143.85 APPROPRIATIONS

Proposed Dividend 297.32 297.32

Tax on Proposed Dividend 50.53 48.23

Interim Dividend 297.32 297.32

Tax on Interim Dividend 50.53 48.23

Transferred to General Reserves 1000.00 1500.00

Balance carried forward to Balance Sheet 1758.54 1952.75

2. OPERATIONS During the year under review, the gross revenue from operations and other income for the year was Rs. 83152.97 lacs as against Rs. 90532.86 lacs of previous year. The Profit before fnance charges, depreciation and taxation is Rs. 8388.89 Lacs for the financial year under review as against 9380.93 lacs of previous year. The Profit after tax was Rs. 1501.49 lacs as compared to Rs. 2594.98 lacs last year.

3. DIVIDEND

Your Directors are pleased to recommend a total dividend of Rs. 10 per Equity Share i.e. @ 100% on the paid-up Equity Share Capital of the Company for the year ended 31st March 2014, this includes an interim dividend of Rs. 5 per Equity Share i.e. @50% on the Paid-up Equity Share Capital of the Company paid during the year under review.

Final dividend of Rs. 5 per Equity Share, if approved at the ensuing Annual General Meeting, shall be paid out of the Profit of the Company to those share holders whose name appear on Register of Member on 3rd September 2014.

The Cash outflow on account of dividend including interim dividends on equity share capital will be Rs 695.70 Lacs including dividend tax of Rs 101.06 Lacs.

4. DIRECTORS

The newly enacted Companies Act, 2013 and the Revised Clause 49 of Listing Agreements, inter alia, prescribed certain Specific procedures for selection, manner of appointment, roles, functions, duties, remuneration and reappointment of Independent Directors (IDs),

The existing composition of the Company''s board is fully in conformity with the applicable provisions of the Act 2013, and revised

Clause 49 of the Listing Agreement having the following directors as non-executive IDs, namely Shri K N Parikh, Shri O.P Khaitan and Prof. Ashok Kumar Bhattacharya.

In terms of the provisions of Section 149(10) read with Section 149(5) of the Act 2013, IDs are eligible to hold office for a term upto five consecutive years on the Board and eligible for re-appointment for the second term on passing special resolutions by the Company. During the period, they will not be liable to ''retire by rotation'' as per the provisions of Sections 150(2), 152(2) read with Schedule IV to the Act 2013.

It is, therefore, proposed to appoint them as IDs for a consecutive period of five years at the AGM. necessary declarations have been obtained from them, as envisaged under the Act 2013. Both the Nomination and Remuneration Committee and the Board also ensured that their appointments as IDs are in compliance with the requirements under the relevant statutes and that there were appropriate balance of skills, experience and knowledge in the Board, so as to enable the Board to discharge its functions and duties effectively.

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

Shri N.D. Relan (holding DIN 00240280) and Shri Rohit Relan (holding DIN 00257572) Directors of the Company, is therefore, liable to retire by rotation and being eligible offer themselves for re-appointment at the ensuing Annual General Meeting.

The brief resume of these directors proposed to be appointed and re-appointed and other relevant information have been furnished in the Notice convening the AGM. Appropriate resolutions for their appointment / re-appointment are being placed for approval of the members at the AGM.

The Board, therefore, recommends their appointment /re-appointment as directors of the Company.

5. PARTICULARS OF EMPLOYEES

Information in accordance with the provisions of Section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules 1975 regarding employees is given in Annexure-A forming part of the Directors'' Report.

6. CONSERVATION OF ENERGY

Your Company is not covered by the Schedule of Industries which are required to furnish information in Form ''A'' under Section 217(1)(e) of the Companies Act,1956 read with Rule 2 of the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules,1988.

7. TECHNOLOGY ABSORPTION

The detailed information in this regard is mentioned in Form-''B'' of The Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 annexed hereto (Annexure-B).

8. CORPORATE GOVERNANCE

We strive to attain high standards of corporate governance while interacting with all our stakeholders. The Company has complied with the corporate governance code as stipulated under the Listing Agreement with Stock Exchange.

A separate report of the Directors on Corporate Governance is enclosed (Annexure-C) which forms part of this Annual Report.

A certifcate from CEO and CFO of the Company has been received by the Board certifying the compliances as stipulated in Clause 49 (V) of the Listing Agreement and is annexed as a part of this Annual Report.

The requisite certifcate from Auditors of the Company confirming compliance with the conditions of Corporate Governance as stipulated under Clause 49 of the Listing Agreement is annexed to the Report on Corporate Governance.

9. MANAGEMENT DISCUSSION AND ANALYSIS REPORT

Management discussion and analysis report as required under the Listing Agreement with the Stock Exchange as a part of Directors'' Report is annexed as Annexure – ''D''.

10. FOREIGN EXCHANGE EARNINGS AND OUTGO

A statement containing necessary information in respect of foreign exchange earnings and outgo is annexed hereto as Annexure-B and forms an integral part of this Report.

11. DIRECTORS'' RESPONSIBILITY STATEMENT

Pursuant to Section 217(2AA) of the Companies Act, 1956, with respect to Directors'' Responsibility Statement, it is hereby confirmed that:

(I) In the preparation of the annual accounts for the under report, the applicable accounting standards have been followed

(II) Appropriate accounting policies have been selected and applied consistently and judgments and estimates made are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31st March, 2014and of the Profit of the Company for the year ended on that date;

(III) Proper and suffcient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; and

(IV) The annual accounts have been prepared on a "going concern" basis.

12. FIXED DEPOSITS

The Company has not accepted any fixed deposits from the Public during the year under review and has nil fixed deposits outstanding.

13. STOCK EXCHANGE INFORMATION

The Equity Shares of the Company continue to remain listed on the Bombay Stock Exchange Limited and the annual listing fees for the financial year 2014-15, has been paid.

The equity shares of the Company has been Delisted from Delhi Stock Exchange with effect from 28th April, 2014.

14. INDUSTRIAL RELATIONS

During the period under review, the Company maintained healthy, cordial and harmonious industrial relations at all levels.

Your Directors wish to place on record their appreciation of the co-operation, valuable contributions, enthusiasm and unstinting efforts made by the employees of the Company at all levels in the organization and they have ensured the accomplishment of excellent results and achievement by the Company.

15. AUDITORS

M/s S.R. Dinodia & Co. LLP (Formerly Known as M/s S.R. Dinodia & Co.), Statutory Auditors of the Company, hold office until the conclusion of the forthcoming Annual General Meeting and being eligible offer themselves for re-appointment. The Company has received letter from them to the effect that their re-appointment if made, would be within the prescribed limits under Section 141 of the Companies Act, 2013.

The Audit Committee and the Board of Directors recommend the re-appointment of M/s. S. R. Dinodia & Co. LLP (Formerly Known as M/s S.R. Dinodia & Co.), Chartered Accountants as the Statutory Auditors of the Company.

16. AUDITORS'' REPORT

The observations of Auditors in their report read with the relevant Notes to Financial Statement are self-explanatory and therefore do not require further explanation.

17. COST AUDITORS

The Board of Director of the Company appointed M/s. Gurdeep Singh Associates, cost Accountants, as cost auditors of the Company for the year ended 31st March'' 2014. The audit reports of the cost accounts of the Company for the year ended 31st March'' 2014 will be submitted to Central Government in due course.

18. STATUTORY DISCLOSURES

None of the Directors of your Company is disqualified as per the provisions of Section 274(1)(g) of the Companies Act, 1956 (read with Corresponding and Section 164(2) of the Companies Act, 2013. Your Directors have made necessary disclosures, as required under various provisions of the Act and Clause 49 of the Listing Agreement.

19. ACKNOWLEDGEMENTS

Your Company has been able to operate efficiently because of the professionalism, creativity, integrity and continuous improvement in all functional areas to ensure efficient utilization of the Company''s resources for sustainable and Profitable growth. The Directors acknowledge their deep appreciation to employees at all levels for their total dedication, hard work, commitment and collective team work, which has enabled the Company to remain at the forefront of the industry despite increased competition and challenges.

Your Directors take this opportunity to express their grateful appreciation for the excellent assistance and co-operation received from its customers i.e. Hyundai Motor India Ltd., Mahindra & Mahindra Ltd., M/s. Samsung Electronics India Ltd., M/s. Tata Motors Ltd. and M/s. Bharat Seats Ltd.

Your Directors also extend their appreciation to Yes Bank Limited, ICICI Bank Limited, State Bank of India, Punjab National Bank, CITI Bank, HDFC Bank, and various Departments of Central and State Governments.

Your Directors also would like to thank all the shareholders for their continued support & Co-operation.

On behalf of the Board of Directors For SHARDA MOTOR INDUSTRIES LTD.

N. D. Relan Ajay Relan Co-Chairman Managing Director (DIN: 00240280) (DIN: 00257584) Place : New Delhi Dated : 22nd May, 2014


Mar 31, 2013

To the Members,

The Directors have pleasure in presenting the Twenty-Eight Annual Report together with the Audited Accounts for the year ended 31st March, 2013.

1. FINANCIAL RESULTS:

(Rs. In Lacs)

Year Ended Year Ended 31.03.2013 31.03.2012

Revenue from operations 89833.33 75142.19

Other Income 699.53 581.50

Total Revenue 90532.86 75,723.69

Profit before Financial Charges, Depreciation, Exceptional items & Taxes 9380.93 7,066.87

Less: Financial Costs 1093.28 933.10

Profit before Depreciation, Exceptional items & Taxes 8287.65 6133.77

A. Depreciation 3576.18 3,126.00

B. Exceptional items 357.43

C. Taxation

Current Tax 1270.00 450.00

Deferred Tax Charged/(Released) 483.24 (199.54)

Adjustments for earlier years 5.82 (3.78)

Net Profit after Tax 2594.98 2761.09

Add: Profit brought forward from Previous year 1548.87 1478.88

Profit available for appropriation 4143.85 4239.97

APPROPRIATIONS

Proposed Dividend 297.32 297.32

Tax on Proposed Dividend 48.23 48.23

Interim Dividend 297.32 297.32

Tax on Interim Dividend 48.23 48.23

Transferred to General Reserves 1500.00 2000.00

Balance carried forward to Balance Sheet 1952.75 1548.87

2. OPERATIONS

During the year under review, the revenue from operations and other income is Rs. 90532.86 lacs as against Rs. 75,723.69 lacs showing an increase of 19.56.% over the previous year''s total revenue. The profit before finance charges, depreciation and taxation is Rs. 9380.93 Lacs for the financial year under review as against 7066.87 lacs for the previous year showing the increase of 32.76 %. Net Profit after Tax is down by 6% due to the higher tax liabilities during the year under review.

3. DIVIDEND

Your Directors are pleased to recommend a total dividend of Rs. 10 per Equity Share i.e. @ 100% on the paid-up Equity Share Capital of the Company for the year ended 31st March 2013, this includes an interim dividend of Rs. 5 per Equity Share i.e. @50% on the Paid-up Equity Share Capital of the Company paid during the year under review.

Final dividend of Rs. 5 per Equity Share, if approved at the ensuing Annual General Meeting, shall be paid out of the profit of the Company to those share holders whose name appear on Register of Member on 2nd September 2013.

The Cash outflow on account of dividend including interim dividends on equity share capital will be Rs 691.10 Lacs including dividend tax of Rs 96.46 Lacs.

4. CRISIL RATING

Your company continued to enjoy "CRISILA1" (pronounced "CRISILA" one) rating forthe captioned Debt Programme instruments, This rating considered to have very strong degree of safety regarding timely payment of financial obligations. Such instruments carry lowest credit risk

5. DIRECTORS

During the year under review Shri G.L. Tandon cease to be director of the Company, due to his sad demise. The Board place on record it''s sincere appreciation for the contributions made by him during his tenure on the Board. During the year Shri Lekh Raj Channa was appointed as director of the company, he express his inability to continue as a Director of the Company due to his ill health and resigned w.e.f 30th March, 2013.

The Board has approved the re-appointment of Shri N.D. Relan as a Whole Time Director of the Company, subject to the shareholders'' approval, for a further period of five year with effect from 1 st July 2013.

In accordance with the provisions of the Companies Act, 1956 and the Articles of Association of the Company, Smt. Sharda Relan, Shri R. P. Chowdhry and Shri Udayan Banerjee, Directors of the Company retire by rotation and being eligible offer themselves for re-appointment at the ensuing Annual General Meeting. In terms of clause 49 of the Listing Agreements with the Stock Exchanges, the details of the Directors to be re-appointed are being provided in the Notice of the Annual General Meeting.

6. PARTICULARS OF EMPLOYEES

Information in accordance with the provisions of Section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules 1975 regarding employees is given in Annexure-A forming part of the Directors'' Report.

7. CONSERVATION OF ENERGY

Your Company is not covered by the Schedule of Industries which are required to furnish information in Form ''A under Section 217(1)(e) of the Companies Act,1956 read with Rule 2 of the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988.

8. TECHNOLOGY ABSORPTION

The detailed information in this regard is provided in Form-''B'' of The Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 annexed hereto (Annexure-B).

9. CORPORATE GOVERNANCE

We strive to attain high standards of corporate governance while interacting with all our stakeholders. The Company has complied with the corporate governance code as stipulated under the Listing Agreements with Stock Exchanges.

A separate report of the Directors on Corporate Governance is enclosed (Annexure-C) which forms part of this Annual Report.

A certificate from CEO and CFO of the Company has been received by the Board certifying the compliances as stipulated in Clause 49 (V) of the Listing Agreements and is annexed as a part of this Annual Report.

The requisite certificate from Auditors of the Company confirming compliance with the conditions of Corporate Governance as stipulated under Clause 49 of the Listing Agreements is annexed to the Report on Corporate Governance.

10. MANAGEMENT DISCUSSION AND ANALYSIS REPORT

Management discussion and analysis report as required under the Listing Agreements with the Stock Exchanges as a part of Directors'' Report is annexed as Annexure - ''D''.

11. FOREIGN EXCHANGE EARNINGS AND OUTGO

Astatement containing necessary information in respect of foreign exchange earnings and outgo is annexed hereto asAnnexure-B and forms an integral part of this Report.

12. DIRECTORS'' RESPONSIBILITY STATEMENT

Pursuant to Section 217(2AA) of the Companies Act, 1956, with respect to Directors'' Responsibility Statement, it is hereby confirmed that:

(I) In the preparation of the annual accounts for the under report, the applicable accounting standards have been followed

(II) Appropriate accounting policies have been selected and applied consistently and judgments and estimates made are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31st March, 2013 and of the profit of the Company for the year ended on that date;

(III) Proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; and

(IV) The annual accounts have been prepared on a "going concern" basis.

13. FIXED DEPOSITS

The Company has not accepted any fixed deposits from the Public during the year under review and has nil fixed deposits outstanding.

14. STOCK EXCHANGE INFORMATION

The Equity Shares of the Company continue to remain listed on the Delhi Stock Exchange Limited and the annual listing fees for the financial year 2013-14, has been paid. Your directors are pleased to inform that the shares of your companies has got listed on Bombay Stock Exchange on 22nd May, 2013.

15. INDUSTRIAL RELATIONS

During the period under review, the Company maintained healthy, cordial and harmonious industrial relations at all levels.

Your Directors wish to place on record their appreciation of the co-operation, valuable contributions, enthusiasm and unstinting efforts made by the employees of the Company at all levels in the organization and they have ensured the accomplishment of excellent results and achievement by the Company.

16. AUDITORS

M/s S. R. Dinodia & Co. Chartered Accountants, Statutory Auditors of the Company, hold office until the conclusion of the forthcoming Annual General Meeting and being eligible offer themselves for re-appointment. The Company has received letter from them to the effect that their re-appointment if made, would be within the prescribed limits under Section 224(1 B) of the Companies Act, 1956.

The Audit Committee and the Board of Directors recommend the re-appointment of M/s. S. R. Dinodia & Co. Chartered Accountants as the Statutory Auditors of the Company.

17. AUDITORS''REPORT

The observations of Auditors in their report read with the relevant Notes to Financial Statement are self-explanatory and therefore do not require further explanation.

18. COST AUDITORS

The Board of Director of the Company appointed M/s. Gurdeep Singh Associates, Cost Accountants, as cost auditors of the Company for the year ended 31st March, 2013. The audit reports of the cost audit report of the Company for the year ended 31st March, 2013 will be submitted to Central Government in due course.

19. STATUTORY DISCLOSURES

None of the Directors of your Company is disqualified as per the provisions of Section 274(1 )(g) of the Companies Act, 1956. Your Directors have made necessary disclosures, as required under various provisions of the Act and Clause 49 of the Listing Agreements.

20. ACKNOWLEDGEMENTS

Your Directors take this opportunity to express their grateful appreciation for the excellent assistance and co-operation received from its customers i.e. Hyundai Motor India Ltd., Mahinda & Mahindra Ltd., M/ s. Tata Motors Ltd., Carrier Air-conditioning and Refrigeration Ltd., M/s. Bharat Seats Ltd. and M/s. Samsung Electronics India Ltd.

Your Directors also extend their appreciation to Yes Bank Limited, ICICI Bank Limited, State Bank of India, Punjab National Bank, Citi Bank, HDFC Bank and various Departments of Central and State Governments.

Your Directors thank all the shareholders for their continued support & Co-operation.

On behalf of the Board of Directors

For SHARDA MOTOR INDUSTRIES LTD.

Place : New Delhi N. D. Relan Ajay Relan

Dated : 28th May, 2013 Co-Chairman Managing Director


Mar 31, 2012

To the Members,

The Directors have pleasure in presenting the Twenty-Seventh Annual Report together with the Audited Accounts for the year ended 31st March'' 2012.

1. FINANCIAL RESULTS:

(Rs. In Lacs)

Year Ended Year Ended 31.03.2012 31.03.2011

Revenue from operations 75,142.19 70,020.54

Other Income 581.50 386.79

Total Revenue 75,723.69 70,407.33

Profit before Financial Charges, Depreciation 7,066.88 6058.04

Less : Financial Costs 933.10 816.73

Profit before Depreciation & Taxes 6133.78 5241.31

A. Depreciation 3,126.00 2,418.21

B. Taxation

- Current Tax 450.00 231.00

- Deferred Tax Charged/ (Released) (199.54) 495.42

- Adjustments for earlier years (3.79) (0.10)

Net Profit after Tax 2761.09 2,096.78

Add: Profit brought forward from Previous year 1,478.88 1,575.50

Profit available for appropriation 4,239.97 3,672.28

APPROPRIATIONS

Proposed Dividend 297.32 297.32

Tax on Proposed Dividend 48.23 49.38

Interim Dividend 297.32 297.32

Tax on Interim Dividend 48.23 49.38

Transferred to General Reserves 2,000.00 1,500.00

Balance carried forward to Balance Sheet 1,548.87 1,478.88

2. OPERATIONS

During the year under review, the gross revenue from operations and other income for the year was Rs. 75,723.69 lacs as against Rs. 70,407.33 lacs showing a increase of 6.72% over the previous year''s gross revenue. The profit before finance charges, depreciation and taxation is Rs. 7,066.88 lacs for the financial year under review as against Rs. 6,058.04 lacs for the previous year showing the increase of 16.65 %. The profit after tax increase by 31.68 % to Rs. 2,761.09 lacs as compared to Rs. 2,096.78 lacs, last year.

3. DIVIDEND

In January, 2012, your Company had paid an interim dividend of Rs.5.00 per share. Your Directors has further recommended a final Dividend of Rs.5.00 per Equity Share @ 50% on the paid-up Equity Share Capital of the Company for the year ended 31st March'' 2012.

The Final Dividend, if approved at the forthcoming Annual General Meeting, shall be paid out of the profits of the Company to those shareholders whose names appear on 12th September, 2012. Thus, the total dividend for the year 2011-12 would be Rs.10.00 per equity share.

The Cash outflow on account of dividend including interim dividends on equity share capital will be Rs.691.10 Lakhs including dividend tax of Rs.96.46 Lakhs.

4. CRISIL RATING

CRISIL has, after due consideration, reaffirmed the "CRISIL A1" (pronounced "CRISIL A one) rating for the captioned Debt Programme. Instruments with this rating are considered to have very strong degree of safety regarding timely payment of financial obligations. Such instruments carry lowest credit risk.

5. SUBSIDIARY

Your Company has one wholly owned subsidiary viz M/s Sharda Sejong Auto Components (India) Ltd. The Audited Accounts of the subsidiary for the year ended 31st March, 2012 are attached in accordance with Section 212 of the Companies Act, 1956.

Consolidated accounts of its subsidiary and associate for the year under review have also been drawn in accordance with the requirement of Accounting Standard 21 and 23 of ICAI annexed herewith for your review.

However, the scheme of amalgamation of the Company With Sharda Sejong Auto Component (India) Limited (SSACIL) has already been approved by Board of Directors at their meeting held on 24th October'' 2011 and subsequently by the members of the Company through the court convened meeting held on 18th February'' 2012 and further the Hon''ble High Court of Delhi has also approved the said Scheme of Amalgamation on 25th July, 2012 with such term and conditions as laid down in the Scheme of Amalgamation.

6. DIRECTORS

In accordance with the provisions of the Companies Act, 1956 and the Articles of Association of the Company, Shri N. D. Relan, Professor Ashok Kumar Bhattacharya and Shri Rohit Relan Directors of the Company retire by rotation and being eligible offer themselves for re-appointment at the ensuing Annual General Meeting. In terms of clause 49 of the Listing Agreement with the Stock Exchange, the details of the Directors to be re-appointed are being provided in the Notice of the Annual General Meeting.

7. PARTICULARS OF EMPLOYEES

Information in accordance with the provisions of Section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules 1975 regarding employees is given in Annexure-A forming part of the Directors'' Report.

8. CONSERVATION OF ENERGY

Your Company is not covered by the Schedule of Industries which are required to furnish information in Form ''A'' under Section 217(1)(e) of the Companies Act,1956 read with Rule 2 of the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules,1988.

9. TECHNOLOGY ABSORPTION

The detailed information in this regard is mentioned in Form-''B'' of the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 annexed hereto (Annexure-B).

10. CORPORATE GOVERNANCE

We strive to attain high standards of corporate governance while interacting with all our stakeholders. The Company has complied with the corporate governance code as stipulated under the Listing Agreement with Stock Exchange.

A separate report of the Directors on Corporate Governance is enclosed (Annexure-C) which forms part of this Annual Report.

A certificate from CEO and CFO of the Company has been received by the Board certifying the compliances as stipulated in Clause 49 (V) of the Listing Agreement and is annexed as a part of this Annual Report.

The requisite certificate from Auditors of the Company confirming compliance with the conditions of Corporate Governance as stipulated under Clause 49 of the Listing Agreement is annexed to the Report on Corporate Governance.

11. MANAGEMENT DISCUSSION AND ANALYSIS REPORT

Management discussion and analysis report as required under the Listing Agreement with the Stock Exchange as a part of Directors'' Report is annexed as Annexure-''D''.

12. FOREIGN EXCHANGE EARNINGS AND OUTGO

A statement containing necessary information in respect of foreign exchange earnings and outgo is annexed hereto as Annexure-B and forms an integral part of this Report.

13. DIRECTORS'' RESPONSIBILITY STATEMENT

Pursuant to Section 217(2AA) of the Companies Act, 1956, with respect to Directors'' Responsibility Statement, it is hereby confirmed that:

(I) In the preparation of the annual accounts for the under report, the applicable accounting standards have been followed;

(II) Appropriate accounting policies have been selected and applied consistently and judgments and estimates made are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31st March, 2012 and of the profit of the Company for the year ended on that date;

(III) Proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; and

(IV) The annual accounts have been prepared on a "going concern" basis.

14. FIXED DEPOSITS

The Company has not accepted any fixed deposits from the Public during the year under review and has nil fixed deposits outstanding.

15. STOCK EXCHANGE INFORMATION

The Equity Shares of the Company continue to remain listed on the Delhi Stock Exchange Limited and the annual listing fees for the financial year 2012-13, has been paid.

16. INDUSTRIAL RELATIONS

During the period under review, the Company maintained healthy, cordial and harmonious industrial relations at all levels.

Your Directors wish to place on record their appreciation of the co-operation, valuable contributions, enthusiasm and unstinting efforts made by the employees of the Company at all levels in the organization and they have ensured the accomplishment of excellent results and achievement by the Company.

17. AUDITORS

M/s S. R. Dinodia & Co. Chartered Accountants, Statutory Auditors of the Company, hold office until the conclusion of the forthcoming Annual General Meeting and being eligible offer themselves for re-appointment. The Company has received letter from them to the effect that their re-appointment if made, would be within the prescribed limits under Section 224(1B) of the Companies Act, 1956.

The Audit Committee and the Board of Directors recommend the re-appointment of M/s. S. R. Dinodia & Co. Chartered Accountants as the Statutory Auditors of the Company.

18. AUDITORS'' REPORT

The observations of Auditors in their report read with the relevant notes to accounts are self-explanatory and therefore do not require further explanation.

19. STATUTORY DISCLOSURES

None of the Directors of your Company is disqualified as per the provisions of Section 274(1)(g) of the Companies Act, 1956. Your Directors have made necessary disclosures, as required under various provisions of the Act and Clause 49 of the Listing Agreement.

20. ACKNOWLEDGEMENTS

The Directors acknowledge their deep appreciation to employees at all levels for their total dedication, hard work, commitment and collective team work, which has enabled the Company to remain at the forefront of the industry despite increased competition and challenges.

Your Directors take this opportunity to express their grateful appreciation for the excellent assistance and co-operation received from its customers i.e. Hyundai Motor India Ltd., Mahinda & Mahindra Ltd., M/s. Samsung Electronics India Ltd., M/s. Tata Motors Ltd., Carrier Airconditioning & Refrigeration Ltd. and M/s. Bharat Seats Ltd.

Your Directors also extend their appreciation to Yes Bank Limited, ICICI Bank Limited, State Bank of India, Punjab National Bank, Citi Bank, HDFC Bank, ABN Amro Bank and various Departments of Central and State Governments.

Your Directors also would like to thank all the shareholders for their continued support & Co-operation.

By Order of the Board

For SHARDA MOTOR INDUSTRIES LTD.

Place : New Delhi N. D. Relan

Dated : 27th July, 2012 Chairman


Mar 31, 2011

To the Members,

The Directors have pleasure in presenting the Twenty-Sixth Annual Report together with the Audited Accounts for the year ended 31st March'' 2011.

1. FINANCIAL RESULTS:

(Rs. In Lacs)

Year Ended Year Ended 31.03.2011 31.03.2010

Turnover and Inter-unit Transfers 98,280.29 54,811.49

Less: Inter-unit Transfer 17,033.20 3,512.65

Turnover 81,247.09 51,298.84

Profit before Other Income, Depreciation & Financial Charges 5,527.72 5,033.90

Add: Other Income 523.45 423.17

Profit before Depreciation, Financial Charges & Taxes 6,051.17 5,457.07

Less:

a) Depreciation 2,418.21 1,492.05

b) Financial Charges 808.18 825.17

c) Taxation

- Current Tax 232.61 861.33

- Deferred Tax 495.42 165.95

- Adjustments for earlier years - (3.05)

Net Profit after Tax 2,096.75 2,115.62

Add: Profit brought forward from Previous year 1,575.50 2,155.58

Profit available for appropriation 3,672.25 4,271.20

APPROPRIATIONS

Proposed Dividend 297.32 297.32

Tax on Proposed Dividend 49.38 50.53

Interim Dividend 297.32 297.32

Tax on Interim Dividend 49.38 50.53

Transferred to General Reserves 1,500.00 2,000.00

Balance carried forward to Balance Sheet 1,478.85 1,575.50

2. OPERATIONS

During the year under review your Company achieved yet another milestone as "Turnover and Inter-Unit Transfers" touched an all time high of Rs.982.80 Crores as against Rs. 548.11 Crores for the previous Financial Year registering an increase of 79.31 % over the previous year''s turnover.

Since, the current year results include the figure pertaining to Sipcot Unit situated at G-20, Sipcot Industrial Park, Kancheepuram, Chennai due to cancellation of transfer of business vide cancellation deed dated November 20, 2009. All assets and liabilities pertaining to Sipcot Unit hitherto hived off to wholly owned subsidiary M/s Sharda Sejong Auto Components India Ltd. have returned back to the company at their respective book values as on commencement of business on 1st April, 2010. Hence current year''s figures are not comparable with previous year''s figures

3. DIVIDEND

In January, 2011, your Company had paid an interim dividend of Rs.5.00 per share. Your Directors has further recommended a final Dividend of Rs.5.00 per Equity Share @ 50% on the paid-up Equity Share Capital of the Company for the year ended 31st March'' 2011.

The Final Dividend, if approved at the forthcoming Annual General Meeting, shall be paid out of the profits of the Company to those shareholders whose names appear on 8th August, 2011. Thus, the total dividend for the year 2010-11 would be Rs.10.00 per equity share.

The Cash outflow on account of dividend including interim dividends on equity share capital will be Rs.693.39 Lakhs including dividend tax of Rs.98.76 Lakhs.

4. SUBSIDIARY

Your Company has one wholly owned subsidiary viz M/s Sharda Sejong Auto Components (India) Ltd. The Audited Accounts of the subsidiary for the year ended 31 March'' 2011 are attached in accordance with Section 212 of the Companies Act, 1956.

Consolidated accounts of its subsidiary and associate for the year under review have also been drawn in accordance with the requirement of Accounting Standard 21 and 23 of ICAI annexed herewith for your review.

5. DIRECTORS

In accordance with the provisions of the Companies Act, 1956 and the Articles of Association of the Company, Shri O. P. Khaitan, Shri Kishan N Parikh and Shri R. P. Chowdhry (determined by lot), Directors of the Company retire by rotation and being eligible offer themselves for re-appointment at the ensuing Annual General Meeting. In terms of clause 49 of the Listing Agreement with the Stock Exchange, the details of the Directors to be re-appointed are being provided in the Notice of the Annual General Meeting.

Shri Ajay Relan, was reappointed as the Managing Director of the Company for a period of five years with effect from 1st September, 2006 to 31st August, 2011 by the Shareholders. The Board of Directors recommends his reappointment as Managing Director of the Company for a further period of five years with effect from 01st September, 2011

6. PARTICULARS OF EMPLOYEES

Information in accordance with the provisions of Section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules 1975 regarding employees is given in Annexure-A forming part of the Directors'' Report.

7. CONSERVATION OF ENERGY

Your Company is not covered by the Schedule of Industries which are required to furnish information in Form ''A'' under Section 217(1)(e) of the Companies Act,1956 read with Rule 2 of the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules,1988.

8. TECHNOLOGY ABSORPTION

The detailed information in this regard is mentioned in Form-''B'' of The Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 annexed hereto (Annexure-B).

9. CORPORATE GOVERNANCE

We strive to attain high standards of corporate governance while interacting with all our stakeholders. The Company has complied with the corporate governance code as stipulated under the Listing Agreement with Stock Exchange.

A separate report of the Directors on Corporate Governance is enclosed (Annexure-C) which forms part of this Annual Report.

A certificate from CEO and CFO of the Company has been received by the Board certifying the compliances as stipulated in Clause 49 (V) of the Listing Agreement and is annexed as a part of this Annual Report.

The requisite certificate from Auditors of the Company confirming compliance with the conditions of Corporate Governance as stipulated under Clause 49 of the Listing Agreement is annexed to the Report on Corporate Governance.

10. MANAGEMENT DISCUSSION AND ANALYSIS REPORT

Management discussion and analysis report as required under the Listing Agreement with the Stock Exchange as a part of Directors'' Report is annexed as Annexure - ''D''.

11. FOREIGN EXCHANGE EARNINGS AND OUTGO

A statement containing necessary information in respect of foreign exchange earnings and outgo is annexed hereto as Annexure-B and forms an integral part of this Report.

12. DIRECTORS'' RESPONSIBILITY STATEMENT

Pursuant to Section 217(2AA) of the Companies Act, 1956, with respect to Directors'' Responsibility Statement, it is hereby confirmed that:

(I) In the preparation of the annual accounts for the under report, the applicable accounting standards have been followed;

(II) Appropriate accounting policies have been selected and applied consistently and judgments and estimates made are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31st March, 2011 and of the profit of the Company for the year ended on that date;

(III) Proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; and

(IV) The annual accounts have been prepared on a "going concern" basis.

13. FIXED DEPOSITS

The Company has not accepted any fixed deposits from the Public during the year under review and has nil fixed deposits outstanding.

14. STOCK EXCHANGE INFORMATION

The Equity Shares of the Company continue to remain listed on the Delhi Stock Exchange Limited and the annual listing fees for the financial year 2011-12, has been paid.

15. INDUSTRIAL RELATIONS

During the period under review, the Company maintained healthy, cordial and harmonious industrial relations at all levels.

Your Directors wish to place on record their appreciation of the co-operation, valuable contributions, enthusiasm and unstinting efforts made by the employees of the Company at all levels in the organization and they have ensured the accomplishment of excellent results and achievement by the Company.

16. AUDITORS

M/s S. R. Dinodia & Co. Chartered Accountants, Statutory Auditors of the Company, hold office until the conclusion of the forthcoming Annual General Meeting and being eligible offer themselves for re-appointment. The Company has received letter from them to the effect that their re-appointment if made, would be within the prescribed limits under Section 224(1 B) of the Companies Act, 1956.

The Audit Committee and the Board of Directors have recommended the re-appointment of M/s. S. R. Dinodia & Co. Chartered Accountants as the Statutory Auditors of the Company.

17. AUDITORS'' REPORT

The observations of Auditors in their report read with the relevant notes to accounts are self-explanatory and therefore do not require further explanation.

18. STATUTORY DISCLOSURES

None of the Directors of your Company is disqualified as per the provisions of Section 274(1)(g) of the Companies Act, 1956. Your Directors have made necessary disclosures, as required under various provisions of the Act and Clause 49 of the Listing Agreement.

19. ACKNOWLEDGEMENTS

Your Company has been able to operate efficiently because of the professionalism, creativity, integrity and continuous improvement in all functional areas to ensure efficient utilization of the Company''s resources for sustainable and profitable growth. The Directors acknowledge their deep appreciation to employees at all levels for their total dedication, hard work, commitment and collective team work, which has enabled the Company to remain at the forefront of the industry despite increased competition and challenges.

Your Directors take this opportunity to express their grateful appreciation for the excellent assistance and co-operation received from its customers i.e. Hyundai Motor India Ltd., Mahinda & Mahindra Ltd., M/s. Samsung Electronics India Ltd., M/ s. Tata Motors Ltd. and M/s. Bharat Seats Ltd.

Your Directors also extend their appreciation to Yes Bank Limited, ICICI Bank Limited, State Bank of India, Citi Bank, HDFC Bank, ABN Amro Bank and various Departments of Central and State Governments.

Your Directors also would like to thank all the shareholders for their continued support & Co-operation.

By Order of the Board

For SHARDA MOTOR INDUSTRIES LTD.

Place : New Delhi N. D. Relan

Dated : 6th May'' 2011 Chairman


Mar 31, 2010

To the Members,

The Directors have pleasure in presenting the Twenty-Fifth Annual Report together with the Audited Accounts for the year ended 31st March'' 2010.

1. FINANCIAL RESULTS: (Rs. in Lacs)

Year Ended Year Ended 31.03.2010 31.03.2009

Turnover and Inter-unit Transfers 54811.49 43334.37

Less: Inter-unit Transfer 3512.65 4007.57

Turnover 51298.84 39326.80

Profit before Other Income, Depreciation & Financial Charges 5033.90 2310.61

Add: Other Income 423.17 301.73

Profit before Depreciation, Financial Charges & Taxes 5457.07 2612.34

Less:

a) Depreciation 1492.05 1263.22

b) Financial Charges 825.17 295.37

c) Taxation

- Current Tax 861.33 237.20

- Fringe Benefit Tax - 24.00

- Deferred Tax 165.95 37.44

- Adjustments for earlier years (3.05) (14.40)

Add: Profit on sale of Exceptional item -

Net Profit after Tax 2115.62 769.51

Add: Profit brought forward from Previous year 2155.58 3081.77

Profit available for appropriation 4271.20 3851.28

APPROPRIATIONS

Proposed Dividend 297.32 297.32

Tax on Proposed Dividend 50.53 50.53

Interim Dividend 297.32 297.32

Tax on Interim Dividend 50.53 50.53

Transferred to General Reserves 2000.00 1000.00

Balance carried forward to Balance Sheet 1575.50 2155.58

2. OPERATIONS

During the year under review your Company achieved yet another milestone. Turnover and inter-unit transfers touched an all time high of Rs. 548.11 Crores as against Rs.433.34 Crores for the previous Financial Year registering an increase of 26.48%.

3. DIVIDEND

Your Company had paid an interim dividend of Rs.5.00 per share during the year. Your Directors have further recommended a final Dividend of Rs. 5.00 per Equity Share @ 50% on the paid-up Equity Share Capital of the Company for the year ended 31st March'' 2010.

The Final Dividend, if approved at the forthcoming Annual General Meeting, shall be paid out of the profits of the Company to those shareholders whose names appear on the register of members on 18th August, 2010. Thus, the total dividend for the year 2009-10 would be Rs.10.00 per equity share.

The Cash outflow on account of dividend including interim dividends on equity share capital will be Rs.695.69 Lakhs including dividend tax of Rs.101.06 Lakhs.

4. SUBSIDIARY

Your Company has only one wholly owned subsidiary viz M/s Sharda Sejong Auto Components (India) Ltd. The Audited Accounts of the subsidiary for the year ended 31 March'' 2010 are attached in accordance with Section 212 of the Companies Act, 1956.

Consolidated accounts of its subsidiary and associates for the year under review have also been drawn in accordance with the requirement of Accounting Standard 21 and 23 of ICAI annexed herewith for your review.

5. DIRECTORS

Your Board of Directors with heavy heart and deep sorrow inform you the sad demise of Shri S. P. Marwaha, on 14th September'' 2009. Late Shri Marwaha was associated with your company since its inception and continued to serve on the Board of the company since then. The Board of Directors expresses its deep condolence for the departed soul and places on record its appreciation for the valuable services and guidance provided by him during his tenure.

During the year, Professor Ashok Kumar Bhattacharya was appointed as Additional Director w.e.f. 28th October, 2009. He holds office as such upto the date of the forthcoming Annual General Meeting. The Company has received notice in writing pursuant to Section 257 of the Companies Act, 1956, proposing his candidature for appointment as Director subject to retirement by rotation, at the ensuing Annual General Meeting and the Board of Directors also recommended for his appointment.

In accordance with the provisions of the Companies Act, 1956 and the Articles of Association of the Company, Smt. Sharda Relan, Shri G. L. Tandon and Shri Udayan Banerjee, Directors of the Company retire by rotation and being eligible offer themselves for re-appointment at the ensuing Annual General Meeting. In terms of clause 49 of the Listing Agreement with the Stock Exchange, the details of the Directors to be re-appointed are being provided in the Notice of the Annual General Meeting.

6. PARTICULARS OF EMPLOYEES

Information in accordance with the provisions of Section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules 1975 regarding employees is given in Annexure-A forming part of the Directors'' Report.

7. CONSERVATION OF ENERGY

Your Company is not covered by the Schedule of Industries which are required to furnish information in Form ''A'' under Section 217(1)(e) of the Companies Act,1956 read with Rule 2 of the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules,1988.

8. TECHNOLOGY ABSORPTION

The detailed information in this regard is mentioned in Form-''B'' of The Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 annexed hereto (Annexure-B).

9. CORPORATE GOVERNANCE

We strive to attain high standards of corporate governance while interacting with all our stakeholders. The Company has complied with the corporate governance code as stipulated under the Listing Agreement with Stock Exchange.

A separate report of the Directors on Corporate Governance is enclosed (Annexure-C) which forms part of this Annual Report.

A certificate from CEO and CFO of the company has been received by the Board certifying the compliances as stipulated in Clause 49 (V) of the Listing Agreement and is annexed as a part of this Annual Report.

The requisite certificate from Auditors of the Company confirming compliance with the conditions of Corporate Governance as stipulated under Clause 49 of the Listing Agreement is annexed to the Report on Corporate Governance.

10. MANAGEMENT DISCUSSION AND ANALYSIS REPORT

Management discussion and analysis report as required under the Listing Agreement with the Stock Exchange as a part of Directors'' Report is annexed as Annexure - ''D''.

11. FOREIGN EXCHANGE EARNINGS AND OUTGO

A statement containing necessary information in respect of foreign exchange earnings and outgo is annexed hereto as Annexure-B and forms an integral part of this Report.

12. DIRECTORS'' RESPONSIBILITY STATEMENT

Pursuant to Section 217(2AA) of the Companies Act, 1956, with respect to Directors'' Responsibility Statement, it is hereby confirmed that:

(I) In the preparation of the annual accounts for the under report, the applicable accounting standards have been followed;

(II) Appropriate accounting policies have been selected and applied consistently and judgments and estimates made are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31st March, 2010 and of the profit of the Company for the year ended on that date;

(III) Proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; and

(IV) The annual accounts have been prepared on a "going concern" basis.

13. FIXED DEPOSITS

The Company has not accepted any fixed deposits from the Public during the year under review and has nil fixed deposits outstanding.

14. STOCK EXCHANGE INFORMATION

The Equity Shares of the Company continue to remain listed on the Delhi Stock Exchange Limited and the annual listing fees for the financial year 2010-11, has been paid.

15. INDUSTRIAL RELATIONS

During the period under review, the Company maintained healthy, cordial and harmonious industrial relations at all levels.

Your Directors wish to place on record their appreciation of the co-operation, valuable contributions, enthusiasm and unstinting efforts made by the employees of the Company at all levels in the organization and they have ensured the accomplishment of excellent results and achievement by the Company.

16. AUDITORS

M/s S. R. Dinodia & Co. Chartered Accountants, Statutory Auditors of the Company, hold office until the conclusion of the forthcoming Annual General Meeting and being eligible offer themselves for re-appointment. The Company has received letter from them to the effect that their re-appointment if made, would be within the prescribed limits under Section 224(1B) of the Companies Act, 1956.

The Audit Committee and the Board of Directors recommend the re-appointment of M/s. S. R. Dinodia & Co. Chartered Accountants as the Statutory Auditors of the Company.

17. AUDITORS'' REPORT

The observations of Auditors in their report read with the relevant notes to accounts are self-explanatory and therefore do not require further explanation.

18. STATUTORY DISCLOSURES

None of the Directors of your Company is disqualified as per the provisions of Section 274(1)(g) of the Companies Act, 1956. Your Directors have made necessary disclosures, as required under various provisions of the Act and Clause 49 of the Listing Agreement.

19. ACKNOWLEDGEMENTS

Your Company has been able to operate efficiently because of the professionalism, creativity, integrity and continuous improvement in all functional areas to ensure efficient utilization of the Company''s resources for sustainable and profitable growth. The Directors acknowledge their deep appreciation to employees at all levels for their total dedication, hard work, commitment and collective team work, which has enabled the Company to remain at the forefront of the industry despite increased competition and challenges.

Your Directors take this opportunity to express their grateful appreciation for the excellent assistance and co-operation received from its customers i.e. Hyundai Motor India Ltd., Mahinda & Mahindra Ltd., Samsung Electronics India Ltd., Tata Motors Ltd., Carrier Air Conditioning and Refrigeration Ltd. and Bharat Seats Ltd.

Your Directors also extend their appreciation to Yes Bank, Canara Bank, ICICI Bank, State Bank of India, Citi Bank, HDFC Bank, ABN Amro Bank and various Departments of Central and State Governments.

Your Directors also would like to thank all the shareholders for their continued support & Co-operation.

For and On behalf of Board

For SHARDA MOTOR INDUSTRIES LTD.

PLACE : NEW DELHI N. D. Relan

DATED: 22nd May, 2010 Chairman

 
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