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HARITA SEATING SYSTEMS LIMITED
Tenth Annual Report 2005-2006
1
HARITA SEATING SYSTEMS LIMITED
Board of Directors
H Lakshmanan, Chairman
S I Jaffar Ali
C Narasimhan
Martin Grammer
President
S Thiagarajan
Secretary and Compliance Officer
A C Padmaja
Bankers
State Bank of India
Industrial Finance Branch
Anna Salai, Chennai 600 002
Shares listed with:
The Madras Stock Exchange Ltd.
The Bangalore Stock Exchange Ltd.
Auditors:
Sundaram & Srinivasan
Chartered Accountants,
23, Sir C.P. Ramaswamy Road,
Alwarpet, Chennai 600 018.
Registered Office:
“Jayalakshmi Estates”
No.29 (Old No.8)
Haddows Road
Chennai 600 006
Tel.: 044-28272233
Fax: 044-28257121
Works:
Hosur - Thally Road
Belagondapalli
Krishnagiri District
Tamilnadu
PIN 635 114
Tel.: 04347-233445
Fax: 04347-233460
Plot A2 MIDC Industrial area
Ranjangaon, Koregaon village,
Shirur taluk, Pune District
Maharashtra
PIN - 412210
Tel.: 02138-560742
Contents Page No.
Financial highlights 2
Notice to the shareholders 3
Directors’ report to the shareholders 5
Management Discussion and
Analysis Report 10
Report on Corporate Governance 14
Autitors’ report to the Shareholders 25
Balance Sheet 28
Profit and Loss Account 29
Schedules 30
Notes on accounts 36
Cash flow statement 47
General business profile 49
2
HARITA SEATING SYSTEMS LIMITED
Financial Highlights(Rs.in lakhs)
Year 2000 2001 2002 2003 2004 2005 2006
Profit & Loss Account
Sales 5983.67 6937.37 6025.27 7873.25 9202.06 11798.82 13736.82
Other income 40.95 40.47 38.45 48.71 90.81 117.93 192.77
Total income 6024.62 6977.84 6063.72 7921.96 9292.87 11916.75 13929.59
Gross profit before
interest,depreciation & tax 751.32 778.99 490.58 730.09 894.03 987.92 1292.85
Depreciation 153.11 138.30 164.11 174.99 212.76 269.39 315.28
Profit before Interest & tax 598.21 640.69 326.47 555.10 681.27 718.53 977.57
Interest 102.87 76.55 39.97 10.11 0.35 0.28 31.78
Profit before taxation 495.34 564.14 286.50 544.99 680.92 718.25 945.79
Profit after taxation 292.34 357.14 182.06 341.80 437.69 451.78 638.79
Balance Sheet
Net fixed assets 1025.52 1226.41 1172.41 1329.35 1564.07 1878.80 2337.96
Investment 0.10 0.08 0.06 0.06 661.12 367.96 407.87
Net Current Assets 1202.43 1167.56 1066.82 924.23 305.29 598.89 1420.19
Miscellaneous expenses 2.78 - - - - - -
Total 2230.83 2394.05 2239.29 2253.64 2530.48 2845.65 4166.02
Share Capital 388.45 388.45 388.45 388.45 388.45 388.45 388.45
Reserves & Surplus 987.31 1236.89 1227.27 1464.20 1767.96 2082.72 2522.17
Net Worth 1375.76 1625.34 1615.72 1852.65 2156.41 2471.17 2910.62
Loan Funds 855.07 768.71 521.02 265.25 240.10 220.04 1091.96
Deferred tax liablity - - 102.55 135.74 133.97 154.44 163.44
Total 2230.83 2394.05 2239.29 2253.64 2530.48 2845.65 4166.02
Earnings per share (Rs.) 7.53 9.19 4.69 8.92 11.20 11.75 16.44
Dividend per share (Rs.) 2.50 2.50 2.50 2.50 3.00 3.20 4.50
Book value per share (Rs.) 35.35 41.84 41.59 47.69 55.51 63.62 74.93
Return on capital employed % *(ROCE) 28.0 28.2 15.2 27.8 30.4 28.4 25.8
Return on net worth % (RONW) ** 22.8 23.8 11.2 19.7 21.8 19.5 23.7
Fixed asset turnover (No. of times) # 6.05 6.16 5.02 6.29 6.36 6.85 6.52
Working capital turnover (No. of times) @ 5.45 5.85 5.39 7.91 14.97 26.10 13.61
Gross profit as % of total income 12.5 11.2 8.1 9.2 9.6 8.3 9.3
Profit before tax as % of total income 8.2 8.1 4.7 6.9 7.3 6.0 6.8
* 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.
3
HARITA SEATING SYSTEMS LIMITED
Notice to the shareholders
NOTICE is hereby given that the Tenth Annual General
Meeting of the shareholders of the company will be held
at Kasturi Srinivasan Hall (Mini Hall),‘The Music Academy’,
New No.168 (Old No.306), TTK Road, Chennai 600 014
on Monday, the 18th September 2006 at 10.15 a.m. to
transact the following business:
ORDINARY BUSINESS
1. To consider and if thought fit to pass with or without
modification the following resolution as an ordinary
resolution:
RESOLVED THAT the audited balance sheet as at
31st March 2006 and the profit and loss account of
the company for the year ended on that date,
together with the directors’ report and the auditors’
report thereon as presented to the meeting be and
the same are hereby approved and adopted.
2. To consider and if thought fit to pass with or without
modification the following resolution as an ordinary
resolution:
RESOLVED THAT pursuant to the recommendation of
the board of directors of the company, a dividend
of Rs. 4.50 per share on 38,84,520 equity shares of
Rs. 10/- each fully paid up absorbing a sum of
Rs. 174.80 lakhs be and is hereby declared for the
year ended 31st March 2006 and the same be paid
to those shareholders whose name appear in the
register of members of the company as at the close
of 13th September 2006.
3. To consider and if thought fit to pass with or without
modification the following resolution as an ordinary
resolution:
RESOLVED THAT Mr S I Jaffar Ali, director, who retires
by rotation and being eligible for re-appointment,
be and is hereby re-appointed as a director of the
company.
4. To consider and if thought fit to pass with or without
modification the following resolution as an ordinary
resolution:
RESOLVED THAT the retiring auditors, Messrs. Sundaram
& Srinivasan, Chartered Accountants, Chennai be
and are hereby re-appointed as auditors of the
company to hold office from the conclusion of this
meeting till the conclusion of the next annual general
meeting of the company on such remuneration as
may be fixed in this behalf by the board of directors
of the company.
SPECIAL BUSINESS
5. To consider and if thought fit, to pass with or without
modification, the following resolution as an ordinary
resolution:
RESOLVED THAT, in supersession of the ordinary
resolution passed by the shareholders in the general
meeting of the company held on 15th January 1997,
the consent of the company be and is hereby
accorded to the board of directors under Section
293(1) (d) and all other applicable provisions of the
Companies Act, 1956 and the Articles of Association
of the Company, for borrowing, from time to time,
as it may consider fit, any sum or sums of moneys
from any person, whether or not the moneys so
borrowed together with the moneys already
borrowed by the company and remaining
outstanding at any one time (apart from temporary
loans obtained from the company’s bankers in the
ordinary course of business) exceed the aggregate
of the paid up capital of the Company and its free
reserves, that is to say, reserves that are not set apart
for any specific purpose, provided that the total
amount so borrowed and outstanding at any one
time, (apart from temporary loans obtained from the
company ’s bankers in the ordinary course of
business) shall not exceed Rs. 40 crores (Rupees forty
crores only) and that the board of directors be and is
hereby empowered and authorized to arrange and
fix the terms and conditions of all such moneys to
be borrowed, from time to time, as to interest,
repayment, security or otherwise as it may think fit.
By order of the Board
Chennai A C PADMAJA
28th July 2006 Secretary
Registered office:
“Jayalakshmi Estates”
29, Haddows Road
Chennai 600 006
Notes:
1. A member entitled to attend and vote at the
meeting is entitled to appoint one or more proxies
to attend and vote instead of himself and the proxy
or proxies so appointed need not be a member
or members as the case may be of the company.
The instrument appointing the proxy and the power
of attorney or other authority, if any, under which
it is signed or a notarially certified copy of that
power or authority shall be deposited at the
registered office of the company not later than 48
hours before the time fixed for holding the meeting.
2. The explanatory statement pursuant to Section 173(2)
of the Companies Act, 1956, in respect of the special
business as set out in the notice is annexed hereto.
4
HARITA SEATING SYSTEMS LIMITED
3. The register of members and the share transfer books
of the company will remain closed from 14 th
September 2006 to 18th September 2006 both days
inclusive.
4. The dividend on the equity shares as recommended
by the board of directors if approved by the
shareholders in the ensuing annual general meeting
will be paid on 20th September 2006 to those
shareholders (or their mandatees) whose names
appear in the register of members of the company
as at the close of 13th September 2006.
5. In terms of Section 205A read with Section 205C of
the Companies Act, 1956, the dividends declared
by the company which remain unclaimed for a
period of seven years will be transferred to the Investor
Education and Protection Fund (IEPF) established by
the Central Government on the due dates. The
particulars of due dates for transfer of such
unclaimed dividends to IEPF are furnished in the
report on corporate governance forming part of the
annual report.
Members who have not encashed their dividend
warrants are requested to make their claim by
surrendering the unencashed warrants immediately
to the company.
6. Members holding shares in physical form, in their own
interest, are requested to dematerialise the shares
to avail the benefits of electronic holding / trading.
7. Members are requested to notify to the company
immediately any change in their address. Members
holding shares in depository are requested to advice
change of address to their depository participants.
8. As a measure of economy, copies of the annual
report will not be distributed at the annual general
meeting. Members are therefore requested to bring
their copies of the annual report to the meeting.
9. Members are requested to affix their signature at the
space provided on the attendance sheet annexed
to the proxy form and hand over the slip at the
entrance of the meeting hall.
10. In terms of clause 49(IV)(G) of the listing agreement
with the stock exchanges, a brief resume of a director,
who is proposed to be re-appointed in this meeting,
nature of his expertise in specific functional areas
and other required particulars are given below:
Mr S I Jaffar Ali
Born on 30th November 1938, Mr S I Jaffar Ali is a post-
graduate in economics from Madras University and also
a law graduate from Madras Law College. He was co-
opted as a director by the board on 22nd January 1997.
He held senior positions in the Indian Police service and
retired in the year 1995 as Inspector General of Police.
He is member of the audit committee of the board of
directors of the company.
He does not hold any position as a director or a member
of any committee of directors of any other company.
He does not hold any share in the company.
The following explanatory statement sets out all the
material facts relating to the special business
mentioned in the accompanying notice dated 28th July
2006 and shall be taken as forming part of the notice.
Item no. 5
In terms of Section 293(1)(d) of the Companies Act, 1956
(the Act), the board of directors have the powers to borrow
moneys, where the moneys to be borrowed together with
moneys already borrowed (other than the temporary loans
obtained from the company’s bankers in the ordinary
course of business) exceeding the aggregate of the paid
up capital and free reserves of the company, with the
consent of the shareholders obtained in a general
meeting.
The shareholders of the company, at the general meeting
held on 15th January 1997 fixed the monetary ceiling for
borrowing in excess of the paid up capital and free
reserves of the Company at Rs.15 crores, taking into
account the then prevailing business volumes.
Considering the growth of the Company since 1997 and
the proposed expansion activities of the company, the
directors have considered it desirable to enhance the
borrowing powers from Rs.15 crores to Rs.40 crores.
Accordingly, the resolution is placed before the
shareholders for their approval.
None of the directors is in anyway concerned / interested
in the resolution.
The directors recommend the resolution to be adopted
as an ordinary resolution by the shareholders.
By order of the Board
Chennai A C PADMAJA
28th July 2006 Secretary
Registered office:
“Jayalakshmi Estates”
29, Haddows Road
Chennai 600 006
Explanatory statement pursuant to Section 173(2) of the Companies Act, 1956.
5
HARITA SEATING SYSTEMS LIMITED
Directors’ report to the shareholdersThe directors herewith present the tenth annual
report of the company and the audited accounts
for the year ended 31st March 2006.
FINANCIAL HIGHLIGHTS
Rs. in lakhs
Year ended Year ended
31.3.2006 31.3.2005
Sales and other income 13,929.59 11,916.75
Gross profit before
interest and depreciation 1,292.85 987.92
Interest 31.78 0.28
Depreciation 315.28 269.39
Profit before tax 945.79 718.25
Provision for taxation 307.00 266.47
Profit after tax 638.79 451.78
Add: Surplus brought forward 158.69 143.93
Tax relating to earlier years (0.02) 4.71
Profit available for appropriation 797.46 600.42
Appropriations:
Dividend 174.80 124.30
Tax on dividend 24.52 17.43
Transfer to general reserve 400.00 300.00
Surplus in profit and loss
account 198.14 158.69
DIVIDEND
The directors recommend a dividend of 45% for
the year ended 31st March 2006. The dividend, if
approved by the shareholders, would absorb a sum
of Rs.174.80 lakhs and wil l be paid to all
shareholders whose names stand on the register
of members as at the close of 13th September 2006.
APPROPRIATIONS
Out of the profits available for appropriation a sum
of Rs.400 lakhs has been transferred to General
Reserve. The surplus of Rs.198.14 lakhs has been
retained in the profit and loss account.
PERFORMANCE
During the year under review, sales increased by 16%
from Rs.117.99 crores to Rs.137.37 crores and net
profit by 41% from Rs.4.52 Crores to Rs.6.39 Crores.
During the year 2005-06, the Indian economy
continued its steady growth of over 7% achieved
in the last few years and the automotive industry
also followed suit with robust growth in all segments.
While tractors grew by 13% in 2005-06 over the
previous year, commercial vehicles registered a
growth of 11% and two wheelers by 15% during
the same period. Cars and multi-utility vehicles
recorded a growth of 7% in the year 2005-06 over
the previous year.
The financial and operational performance of the
company for the year under review along with other
material disclosures are furnished in the
management discussion and analysis report as a
separate statement in terms of clause 49 of the
listing agreement, forming part of the annual report.
DIRECTORS
During the year, Mr H Lakshmanan, director was
appointed as chairman by the Board of Directors
for a period of five years effective 24th April 2006 in
terms of the articles of association of the company.
Mr S I Jaffar Ali, director, retires at the ensuing annual
general meeting of the company and being
eligible offers himself for re-appointment.
AUDITORS
M/s Sundaram and Srinivasan, Chartered
Accountants, Chennai, retire at the ensuing annual
general meeting and are eligible for re-
appointment.
CORPORATE GOVERNANCE
As required by clause 49 of the listing agreement,
a management discussion and analysis report and
a report on corporate governance are enclosed.
The company, in terms of the revised clause 49 of
the Listing agreement, has adopted a ‘Code of
business conduct and ethics’ for the board and
senior management personnel of the company.
A certificate from the auditors of the company
regarding compliance of the conditions of
Corporate governance as stipulated by clause 49
of the listing agreement is attached to this report.
6
HARITA SEATING SYSTEMS LIMITED
STATUTORY STATEMENTS
As per the requirements of section 217(1)(e) of the
Companies Act, 1956, read with the Companies
(Disclosure of Particulars in the Report of Board of
Directors) Rules, 1988, the information regarding
conservation of energy, technological absorption
and foreign exchange earnings and outgo are
furnished in Annexure I to this report.
The particulars required pursuant to section 217(2A)
of the Companies Act, 1956, read with the
Companies (Particulars of Employees) Rules, 1975,
are furnished in Annexure II to this report.
As required under section 217(2AA) of the
Companies Act, 1956, the directors’ responsibility
statement is given in Annexure III to this report.
Cash flow statement for the year 2005-06 is
attached to the Balance Sheet.
ACKNOWLEDGEMENT
The directors acknowledge the support and co-
operation received from the promoters, Harita
Group, Chennai.
The directors thank the customers, suppliers,
financial institutions and bankers for their valuable
support and assistance.
The directors wish to place on record their
appreciation of the sincere efforts of all the
employees of the company during the year under
review.
The directors also thank the shareholders for their
continued faith in the company.
For and on behalf of the Board
Chennai H Lakshmanan
28th July 2006 Chairman
7
HARITA SEATING SYSTEMS LIMITED
A. CONSERVATION OF ENERGY
(1) Measures taken
� Changeover to liquefied petroleum gas
(LPG) from superior kerosene oil for powder
coating pretreatment process system.
� Introduction of high energy efficient
transformer for power and distribution
Systems.
� Introduction of energy saving devices for
compressed air system.
� Introduction of energy saving luminaries for
lighting system.
� Installation of LPG bulk storage facility.
� Introduction of FRP thermal insulation for
heating systems in foaming process.
The above measures have resulted in an annual
savings of Rs. 18 Lakhs.
(2) Proposed measures
� Introduction of high energy efficient motors
for pneumatic systems.
� Energy saving through modifying the heating
system of hydraulic mould fixtures
operations.
� Energy saving luminaries for street lighting.
� Auto switching on-off control systems for
lighting system.
� Energy saving through modifying the control
circuit of the exhaust systems and powder
coating equipment.
The above measures will result in an annual saving
of about Rs. 5.53 lakhs.
B. TECHNOLOGY ABSORPTION
Research & Development
(1) Specific areas in which R&D is carried out inthe Company
i) Developed new generation suspension
system adopted for driver seat to enhance
comfort and safety.
Annexure I to the Directors’ report for the year ended 31st March 2006Information pursuant to section 217(1) (e) of the Companies Act, 1956
ii) Developed driver seats for trucks, agricultural
and garden tractors for exports.
iii) Developed three new variants of bus
passenger seats for domestic market.
iv) Developed new seats for premium
motorcycles.
(2) Benefits derived as a result of above measures
i) Enhanced market share in bus passenger
seat segment.
ii) Established market presence for tractor and
driver seats in overseas market.
iii) Enhanced aesthetics and comfort levels to
passengers and drivers.
(3) Future plan of action
i) Development of new variants of driver seats
for tractors and commercial vehicles.
ii) Development of PU composites for
automobile application.
iii) Development of PU elastomer spring aids
for automobile application.
iv) Development of new generation of city bus
seats.
v) Development of new products for exports.
(4) Expenditure on R&D
Rs. in lakhs
(i) Capital 53.20
(ii) Recurring 129.37
(iii) Total 182.57
(iv) Total expenditure as a
percentage of turnover. 1.31%
(5) Technology absorption, adaptation andinnovation
(i) Efforts in brief:
a) Development of alternate materials and
processes to reduce the material cost.
8
HARITA SEATING SYSTEMS LIMITED
b) Exploration of various technologies in
polyurethane foaming.
(ii) Benefits derived as a result of theabove are :
� Optimisation of raw material usage for
weight reduction and simplif ied
manufacturing/assembly process of
metro bus seats.
� Reduction in weight and elimination of
pre-treatment and painting by using
alternate material in bus passenger
seats.
� Natural resources used in 3-wheeler seats
in place of imported PU chemicals.
(iii) Details relating to imported technology:
(Technology imported during the last 5 years
reckoned from the beginning of the financial
year).
NIL
C. FOREIGN EXCHANGE EARNINGS AND OUTGO
a) Activities relating to export:
i) During the year 2005-06 new orders for
export of driver seats for garden tractors
and seat components for driver seats for
commercial vehicles were received and
executed.
ii) The company is continuing its efforts to
export driver seats to USA, Europe and
Middle East.
b) Total foreign exchange used and earned:
Foreign exchange earnings: Rs. 349.09 lakhs
Foreign exchange outgo:Rs.1222.33 lakhs
For and on behalf of the Board
Chennai H LAKSHMANAN
28th July 2006 Chairman
9
HARITA SEATING SYSTEMS LIMITED
Sl. Name Age Designation Date of Remuneration Qualification Experi- Previous
No. (yrs) employ- (Gross) ence Employment
ment Rs.
1 S Thiagarajan 58 President 27.11.1995 5085774.00 BE (Mech.) 33 Sr. Vice President
PDGBM Fisher Xomox (India) Ltd.
(IIM-A)
2 Y N Kale 48 Vice President 02.03.1988 3299339.00 BE (Mech) 22 Product Designer
(R&D) M.DES (Product Bharat Forge Ltd.
Design)
3 V Thiyagarajan * 45 General Manager 11.02.1998 1381344.00 B.Com, ACA, 20 Manager-Finance
(Finance) ACS, MBA Lakshmi Auto
Components Ltd.
Notes:
* Employed for part of the year only.
1) Years of experience include experience prior to joining the company also.
2) Remuneration comprises of salary, dearness allowance wherever applicable, lease rent paid, special allowance,
performance incentive, leave salary, car/driver perquisites, education allowance, contribution to provident fund and
superannuation fund, medical reimbursement, medical insurance premium, leave travel assistance and other benefits
evaluated under Income Tax Rules.
3) Besides, the employee is entitled to gratuity as per rules.
4) None of the employees is related to any of the directors of the company.
5) Terms of employment is contractual.
6) None of the employees, either individually or together with spouse or children, held more than 2% of the equity
shares of the company.
For and on behalf of the Board
Chennai H LAKSHMANAN
28th July 2006 Chairman
Annexure II to the Directors’ report for the year ended 31st March 2006Particulars of employees as per section 217(2A) of the Companies Act, 1956
Pursuant to the requirement of section 217(2AA) of
the Companies Act, 1956 with respect to Director’s
Responsibility Statement, it is hereby stated:
i. that in the preparation of the annual accounts
for the financial year ended 31st March 2006,
the applicable accounting standards had
been followed along with proper explanation
relating to material departures;
ii. that the directors had selected such
accounting policies and applied them
consistently and made judgements and
estimates that were reasonable and prudent
so as to give a true and fair view of the state
of affairs of the company at the end of the
financial year and of the profit of the company
for the year under review;
Annexure III to the Directors’ report for the year ended 31st March 2006Directors’ Responsibility Statement as required under section 217(2AA) of the Companies Act, 1956
iii. that the directors had taken proper and
sufficient care for the maintenance of
adequate accounting records in accordance
with the provisions of the Companies Act, 1956
for safeguarding the assets of the company
and for preventing and detecting fraud and
other irregularities; and
iv. that the directors had prepared the annual
accounts for the financial year ended 31st
March 2006 on a “going concern basis”.
For and on behalf of the Board
Chennai H LAKSHMANAN
28th July 2006 Chairman
10
HARITA SEATING SYSTEMS LIMITED
The company provides seating solutions for
transport application and it has established
leadership position in the country catering to all
segments of the automotive industry.
INDUSTRY STRUCTURE AND DEVELOPMENTS
Improved industrial production, significant growth
of service sector and growing exports have all
contributed to over 7% growth in the Indian
economy during the year 2005-06. The agricultural
production, though having a marginal growth at
2.6%, also contributed to the growth of the Indian
economy during the year 2005-06. Industrial
production grew by 8% and manufacturing sector
by 9% over the previous year. Foreign direct
investment inflow into India increased considerably
due to sustained growth in economic activity.
The Automotive industry continued to be buoyant
in 2005-06. The commercial vehicles, tractors and
two-wheelers grew by over 10%, while cars & MUVs
registered a growth of 7% over the previous year.
The company has benefited from the strong
economic growth in the country and the same is
reflected in the financial performance of the
company.
PRODUCT- WISE PERFORMANCE
During the year 2005-06, sale of tractor seats
increased by 39% Two-wheeler seats grew by 20%.
Seats for commercial vehicles also achieved 29%
increase in sales. Faced with stiff competition, the
growth of bus passenger seats in 2005-06 was
marginal over the previous year. Exports declined
by 35% during the year at Rs.353 lakhs due to loss
of contract manufacturing business to competition
from China.
OPPORTUNITIES AND THREATS
Company ’s tractor seats are well established
among the OE manufacturers and leading OEM
MANAGEMENT DISCUSSION AND ANALYSIS REPORT
customers have increased purchases from the
company due to consistent quality and quicker
product development. In the last two years tractor
industry has been doing well and on account of
wide spread rains all over the country and average
to good monsoon predicted during this year, this
segment presents further opportunities for
consolidation and growth. Some of the OE
manufacturers, to whom the company has been
supplying seats for their domestic market, are well
established in American and European markets.
They have expressed their interest to source seats
from the company for their global requirements in
view of cost advantage in India. The company
has already commenced/in the process of
commencing supplies to these markets.
The company is putting up its third unit in Solan
District of Himachal Pradesh to cater to the
requirements of OEMs, State Transport Undertakings,
bus body fabricators and bus operators. For this
purpose, the company has acquired land at
Nalagarh and the commercial production is
expected to commence from the third quarter of
the current financial year. This will enable the
company to widen its customer base in northern
India and increase the sales in the coming years,
besides taking advantage of the tax concessions
offered by Himachal Pradesh Government.
In order to add content and value to the vehicles,
the company is adding facilities in Hosur for
adjacencies like bus interiors, for which there is a
good scope in the country. Commercial production
of these is expected to commence by the fourth
quarter of the current financial year.
Further, in view of modernisation of airports and
construction of multiplexes and auditorium across
the country, the company is also actively pursuing
public seating for airports etc. and auditorium
seating business to take advantage of the
emerging opportunities in these segments.
11
HARITA SEATING SYSTEMS LIMITED
As regards threats, in the recent past a few multi-
national seat manufacturing companies have
either established their own manufacturing facilities
in India or joined hands with local seat
manufacturers.
Innovation is the key to success and the company
is fully committed to focus on product innovation
by developing new cost effective products precisely
targeted at customer needs in order to meet the
threats posed by competition and to leverage the
opportunities offered by the market. The company’s
well established products and in-house design
capabilities will enable the company to retain its
market leadership through well defined strategies.
RISKS AND CONCERNS
Input materials used by the company’s products
are dependent on rubber, crude oil and steel. The
prices of these commodities are subjected to
international/national market forces of demand-
supply and other factors that influence price
volatility. Any significant upward price fluctuations
on these will increase the cost of raw materials
putting pressure on operating margins.
BUSINESS OUTLOOK AND OVERVIEW
The leadership position enjoyed by the company
in tractor seats, bus passenger seats and driver
seats will help further consolidation in these
segments and is expected to contribute further
growth in business during the current year 2006-07.
The logistical advantage accruing out of Himachal
Pradesh unit for ensuring speedy supplies with cost
benefits to OEMs, STUs, bus body builders and tourist
bus operators in northern and eastern parts of the
country is expected to add further impetus to
company’s efforts in consolidating business in these
markets. Similarly the new facilities being created
in Hosur plant are expected to widen company’s
product range and customer base, resulting in
increase in business.
The efforts put in by the company in export front,
have started yielding results. The company has
already started supplies of tractor seats and seat
components to overseas customers. Feedback
from these customers being satisfactory, there is
good scope for growth in exports.
OPERATIONS REVIEW
During the year under review, income from
operations increased by 17% to Rs.139.30 crores
from Rs.119.17 crores in the previous year 2004-05,
while profit after tax increased by 41% to Rs.6.39
crores from Rs.4.52 crores during the same period.
a) Quality
� Certification audit of OHSAS 18001:1999
was successfully completed in October.
2005.
� Surveillance audit of ISO/TS 16949 was
successfully completed in December.
2005.
� Surveillance audit of ISO 14001 was
successfully completed in February. 2006.
b) Focus on Cost
In order to stay competitive the company has
undertaken measures like value engineering,
alternate materials and processes, elimination
of non-value added activities, productivity
improvement, waste elimination, process and
material optimisation etc.
During the year under review, through in-house
machine building competency, two high
pressure PU foaming machines were
developed, which has resulted in considerable
savings in capital expenditure.
c) Information technology
Effective 1st April 2005, the company has
implemented SAP system in all areas of its
operation. SAP system integrates all processes
of manufacturing, materials, finance, sales,
quality and plant maintenance across the
company’s manufacturing plants.
12
HARITA SEATING SYSTEMS LIMITED
d) Financial performance
The financial and operational performance of the company for the year 2005-06 as compared to the
previous year 2004-05 is furnished :
Particulars Year ended Year ended
31st March 2006 31st March 2005
Rs.in lakhs % Rs. in lakhs %
Income
Sales 13736.82 98.6 11798.82 99.0
Other income 192.77 1.4 117.93 1.0
Total Income 13929.59 100.0 11916.75 100.0
Raw materials and components consumed 10138.43 72.8 8562.75 71.9
Staff cost 1049.23 7.5 986.00 8.3
Stores and tools consumed 159.82 1.1 186.98 1.5
Power and fuel 159.04 1.1 139.54 1.2
Repairs and maintenance 171.64 1.2 169.14 1.4
Other expenses 958.58 6.9 884.42 7.4
Interest 31.78 0.2 0.28 0.0
Depreciation 315.28 2.3 269.39 2.3
Total expenditure 12983.80 93.1 11198.50 94.0
Profit before tax 945.79 6.9 718.25 6.0
Provision for taxation - current tax 273.00 2.0 246.00 2.1
- deferred tax 9.00 0.1 20.47 0.2
- fringe benefit tax 25.00 0.2 - -
Profit after tax 638.79 4.6 451.78 3.7
Some of the key ratios for the current year are furnished in the following table:
UOM 2005-06 2004-05
EBITDA / turnover % 9.3 8.3
Profit before tax / turnover % 6.8 6.0
Return on capital employed % 25.8 28.4
Return on net worth % 23.7 19.5
Earnings per share Rs. 16.44 11.75
13
HARITA SEATING SYSTEMS LIMITED
e) Internal Control and their adequacy
The company has a proper and adequate
internal control system to ensure that all the
assets of the company are safeguarded and
protected against any loss and that all the
transactions are properly authorised, recorded
and reported.
f) Awards & Accolades
� Won silver trophy in Energy Conservation
Award in general category from the Ministry
of Power, Government of India, for the
second consecutive year.
� Best supplier award received from Tractors
and Farm Equipment Ltd.
� Awarded “Excellent water efficient unit”
certificate by Confederation of Indian
Industry.
HUMAN RESOURCE DEVELOPMENT
In keeping with company’s belief that employees
are the assets of a successful organisation, the
company has a well thought out in-house training
programmes on a continuous basis to improve the
skill of workmen, supervisors and executives.
Continuous productivity improvement efforts and
an employee satisfaction survey are the key HRD
activities carried out during the year. The company
has also recruited young graduates in various
disciplines to meet future needs of man-power
requirements. Through in-house training
programmes the freshers are provided training to
equip them with skill and knowledge in their
respective functional areas to take up responsibilities
for future growth of the company.
As of 31st March 2006, the company had 426
employees on its rolls.
CAUTIONARY STATEMENT
Statements in the management discussion and
analysis report describing the company ’s
objectives, projections, estimates, expectations
may be forward looking statements within the
meaning of applicable securit ies law and
regulations. Actual results could differ materially
from those expressed and implied. Important
factors that could make a difference to the
company’s operations include, among other things,
economic conditions affecting the demand, supply
and price conditions in the domestic and
international markets in which the company
operates, changes in Government regulations, tax
laws and other statutes and incidental factors.
14
HARITA SEATING SYSTEMS LIMITED
1. Company’s philosophy on code ofGovernance
The company truly believes in transparency,
professionalism and accountability, which are
the basic principles of Corporate Governance
and would constantly endeavour to improve on
these aspects.
2. Board of Directors
a. Composition and category of directors
As of 31st March 2006, the board consists of
four directors. All are non-executive directors.
Out of the four directors, three directors are
independent directors.
Chairman is a non-executive director. The
number of independent directors is more
than one third of its total strength. Thus, the
company meets with the requirements of
composition of the board as per the listing
agreement.
During the year, the status of a director,
namely Mr Martin Grammer was changed
REPORT ON CORPORATE GOVERNANCE
from independent to non-independent
director effective 31st December 2005
consequent to the change in the definition
of “independent director” as per the revised
provision of clause 49 of the l ist ing
agreement.
b. Particulars of meetings of board ofdirectors held during the year:
During the financial year 2005-2006, the
Board met 6 times on 28th April 2005,
17th June 2005, 29th July 2005, 25th October
2005, 29th December 2005 and 28th January
2006.
c. Particulars of attendance of directors atthe board meetings held during thefinancial year 2005-2006 and at the lastannual general meeting, number ofdirectorships and committeememberships / chairmanships held by thedirectors in all companies as perdeclaration furnished by them are givenin the table below:
Name Cate Attendance Number of directorships and-gory Particulars committee memberships /
chairmanships
M/s Board Last Other Committee CommitteeMeeting Annual director- memberships** chairman-
General Ships* shipsMeeting
H Lakshmanan(Effective 24.4.2006,
appointed as a Chairman
of the board) NE-I 6 Yes 16 8 4
S I Jaffar Ali NE-I 5 Yes - 2 -
C Narasimhan NE-I 5 No 6 3 1
Martin Grammer NE-NI 1 Yes 1 - -
* includes private companies
** includes committees where the director is also a chairman.
NE-I : Non Executive - independent director
NE-NI : Non Executive - non independent director
None of the directors is a member of more than 10 board level committees or chairman of more than 5
such committees as required under clause 49 of the listing agreement.
15
HARITA SEATING SYSTEMS LIMITED
d. Details of shareholdings of non-executivedirectors in the company as on 31st March2006
Name of the No. of shares Percentagedirector held (face value to the paid upM/s of Rs.10/- each) capital (%)
H Lakshmanan 1,010 0.03
C Narasimhan - -
S I Jaffar Ali - -
Martin Grammer 5,43,800 14.00
e. Access to information and updation to
directors:
The required information as enumerated in
Annexure 1A to Clause 49 of the Listing
Agreement is made available to the board of
directors for discussions and consideration at
board meetings. The board also reviews the
declaration made by the director and the
secretar y of the company regarding
compliance with all applicable laws on a
quarterly basis.
Functional heads are present whenever
necessary. They appraise all the directors about
the developments. Presentations are also made
to the members of board and the audit
committee at each meeting. Apart from this,
the observations of audit carried out by the
internal auditors and the details of payment of
statutory liabilities submitted by the statutory
auditors of the company are placed and
discussed with functional heads.
f. Code of Conduct for Board of Directors and
Senior Management Personnel:
The company has adopted a Code of Conduct
for Board of Directors and Senior Management
Personnel (The Code). The Code has been
communicated to directors and the members
of the senior management of the company.
The Code has also been displayed on the
company’s website www.haritaseating.com. All
the members of the board and senior
management have confirmed compliance
with the Code for the year ended 31st March
2006. The annual report contains a declaration
to this effect signed by the president and the
secretar y of the company who is the
compliance officer for the Code.
g. Subsidiaries
The company does not have any subsidiary and
hence, the appointment of an independent
director of the company and review of matters
specified under sub-clause III of clause 49 of
the Listing Agreement by the board do not arise.
h. Resume of directors
In terms of clause 49 (IV)(G) of the listing
agreement with the stock exchanges, a brief
resume of director, who is proposed to be re-
appointed in the ensuing annual general
meeting, is given in the notice convening the
ensuing annual general meeting of the
company.
3. Audit Committee
3.1Brief description of terms of reference
The terms of reference stipulated by the board of
directors to the audit committee are as contained
in clause 49 of the Listing Agreement. The role and
responsibilities of the Audit Committee include,
inter alia,
a. Oversight of the company ’s financial
reporting process and the disclosure of its
financial information to ensure that the
financial statements are correct, sufficient and
credible.
b. Recommending the appointment / re-
appointment / replacement or and removal of
external auditors, and fixation of audit fees and
payment for any other services rendered by
them.
c. Reviewing with the management the annual
and quarterly financial statements before
submission to the board for approval with
particular reference to the matters specified in
the Listing Agreement.
d. Reviewing of any related party transaction.
e. Review with the management on the
performance of statutory and internal auditors.
f. Reviewing with the management, external and
internal auditors, the adequacy of internal
control systems.
16
HARITA SEATING SYSTEMS LIMITED
g. Reviewing of the adequacy of internal audit
function including the structure of the internal
audit department, appointment, staffing and
seniority of the official heading the department,
reporting structure, coverage and frequency of
internal audit and discussion with internal
auditors any significant findings including
internal investigation and follow-up thereon for
ensuring compliance of internal control system.
h. Discussion with external auditors regarding audit
plan, as well as post-audit discussion to ascertain
any area of concern.
i. Ascertainment of reasons for substantial defaults in
the payment to the shareholders (in case of non
payment of declared dividends) and creditors.
j. Review of management discussion and analysis
of financial conditions and results of operations
and other matters specified under clause 49 of
the Listing Agreement.
k. Other matters as set out in the listing agreement.
3.2 Composition, name of members and thechairman
Name of the Directors StatusM/s
H Lakshmanan, Chairman Independent director
C Narasimhan. Member Independent director
S I Jaffar Ali, Member Independent director
Mr H Lakshmanan, independent director, is the
chairman of the audit committee. The chairman
was present at the annual general meeting held
on 5th September 2005.
3.3 Meetings and attendance during the year
Date of the Members present
meeting M/s
28.04.2005 H Lakshmanan, C Narasimhan
and S I Jaffar Ali
17.06.2005 H Lakshmanan, C Narasimhan
and S I Jaffar Ali
29.07.2005 H Lakshmanan and S I Jaffar Ali
25.10.2005 H Lakshmanan, C Narasimhan
and S I Jaffar Ali
29.12.2005 H Lakshmanan, C Narasimhan
and S I Jaffar Ali
28.01.2006 H Lakshmanan
and C Narasimhan
4. Remuneration to directorsThe board has not set up a remuneration
committee, as the need for the same has not
arisen.
The directors do not draw any remuneration from
the company other than sitting fees for attending
each meeting of the board and committees
thereof.
The company pays sitting fees of Rs.2,500/- each
to all the non-executive directors for attending each
meeting of the board and/or committee thereof
which is within the limits prescribed under the
Companies Act, 1956.
Particulars of sitting fees paid to directors duringthe financial year 2005-2006.
Name of the Directors Sitting fees paidM/S (in Rs.)
H Lakshmanan 45,000
C Narasimhan 37,500
S I Jaffar Ali 35,000
Martin Grammer 2,500
Total 1,20,000
Presently, the company does not have a scheme
for grant of any stock option either to the executive
directors or employees.
5. Investors’ Grievance Committee:
The investors’ grievance committee consists of three
members viz., M/s. H Lakshmanan, C Narasimhan
and S I Jaffar Ali. Mr H Lakshmanan is the chairman
of the committee. The Committee met 4 times
during the year.
The committee oversees and reviews all matters
connected with share transfers, issue of duplicate
share certificates, etc. The committee also looks
into redressal of investors’ grievances pertaining to
transfer of shares, non-receipt of balance sheet,
non-receipt of declared dividends, etc., The
company, as a matter of policy disposes of investor
complaints within a span of seven days.
As required by Securities Exchange Board of India
(SEBI), Ms A C Padmaja, secretary of the company
has been appointed as the compliance officer.
For any clarification / complaint, shareholders
may contact Ms A C Padmaja, secretary or
Mr S Muralidharan, special officer of the company.
17
HARITA SEATING SYSTEMS LIMITED
Complaints received and redressed during thefinancial year 2005-2006:
Nature of Complaints No. ofComplaints
Non receipt of dividend warrants 2
Other complaints 1
Total 3
All the complaints were resolved and as on 31st
March 2006 there was no investor complaint
pending.
All requests for dematerialisation of shares were
carried out within the stipulated time period and
no share certif icates were pending for
dematerialisation as on 31st March 2006.
6. Secretarial audit report regardingreconciliation of capital:
Pursuant to clause 47(c) of the Listing Agreement
with Stock Exchanges, certificates, on half-yearly
basis, have been issued by a Company Secretary-
in-practice for due compliance of share transfer
formalities by the Company. Pursuant to SEBI
(Depositories and Participants) Regulations, 1996,
certificates have also been received from a
Company Secretar y-in-practice for timely
dematerialization of the shares of the Company
and for conducting a secretarial audit on a quarterly
basis for reconciliation of the share capital of the
company.
As on 31st March 2006, there was no difference
between the issued and listed capital and the
aggregate of shares held by investors in both
physical form and in electronic mode with the
depositories.
7. General Body Meeting:
(a) Location and time where the annual general meetings were held during the last three years:
Year Location Date Time
2002-03 The Music Academy, 306, T T K Road 04.08.2003 10.15 A.M.
(Mowbrays Road), Chennai 600 014.
2003-04 Kasturi Srinivasan Hall (Mini Hall) 19.08.2004 10.15 A.M.
The Music Academy, 306, T T K Road
(Mowbrays Road), Chennai 600 014.
2004-05 Kasturi Srinivasan Hall (Mini Hall) 05.09.2005 2.00 P.M.
The Music Academy, 306, T T K Road
(Mowbrays Road), Chennai 600 014.
(b) Special resolutions passed in the previous 3 annual general meetings (AGM)
During the last three years, namely 2002-2003 to 2004-2005, approval of the shareholders obtained
by passing special resolutions as follows:
Year Subject matter of special resolutions Date of AGM
2002-2003 Nil 04.08.2003
2003- 2004 Shareholders of the company approved by way of a special resolution 19.08.2004
for keeping the register of members and index of members and other
documents at a place other than the registered office of the company,
namely at the Share Transfer Department at No.31 Railway Colony,
III Street, Mehta Nagar, Chennai 600 029
2004-2005 Nil 05.09.2005
18
HARITA SEATING SYSTEMS LIMITED
(c) Special resolutions through postal ballot:
1) None of the subjects placed before the
shareholders in the last annual general
meeting required approval of the equity
shareholders by a postal ballot in terms
of section 192A of the Companies Act,
1956 and the Companies (Passing of
Resolution by Postal Ballot) Rules 2001.
2) None of the subjects placed before the
shareholders of the company in the
ensuing annual general meeting require
approval of the shareholders by a postal
ballot.
8. Disclosures :
(a) Disclosures on materially significant related
party transactions that may have potential
conflict with the interest of company at large:
During the year the company has not entered
into any transaction of material nature with the
directors, their relatives or management which
were in conflict with the interest of the
company.
(b) There are no transactions with the related
parties, namely its promoters, associate
companies etc.
(c) The members of the senior management
have made disclosures to the board relating
to all material, financial and other transactions
stating that they did not have any personal
interest, that could result in a conflict with the
interest of the Company at large.
(d) Details of non compliance by the company,
penalties, strictures imposed on the company
by Stock Exchanges or SEBI, or any statutory
authority, on any matter related to capital
markets, during the last three years:
During the year, there was no penalty or
stricture imposed on the company by stock
exchanges or SEBI or any statutory authority
on any matter related to capital markets.
However, Securities and Exchange Board of
India (SEBI) vide its letter No.CFD / DCR / RC/ TO/
23040/04 dated 16th November 2004 has
alleged that the company violated the
provisions of Regulations 6 & 8 of SEBI
(Substantial Acquisition of Shares and Takeovers)
Regulations, 1997 (the said Regulations). It was
alleged in the said notice that the company
has not made the disclosure under Regulation
8(3) of the said Regulations furnishing
particulars of changes, if any in respect of the
holdings of promoters or persons having
control over the company and persons acting
in concert and by persons holding shares in
excess of 15% of the paid up capital of the
company as on the record date fixed for
declaration of dividend on 16th May 2000.
In the said letter, SEBI also has given an option
that it may consider the company’s request
for a consent order, upon payment of an
amount of Rs.25,000/- as penalty for the
aforesaid violation.
The company contended that it has not
violated the provisions of regulation 8(3) of the
said Regulation on the ground that:
1. the payment of interim dividend
approved by the board of directors and
the fixation of record date as 16th May
2000 for this purpose does not fall within
the scope of the said regulation as it did
not amount to declaration of dividend in
terms of Companies Act, 1956, as the
law stood on that date.
2. there were no changes in the
shareholding of the persons referred to
in the said communication and the
regulation requires a declaration to be
filed only when there is change in
shareholding.
However, the company without prejudice to
its stand taken has also given its consent to
pay Rs.25,000 as penalty under Section 15A
of the Securities and Exchange Board of India
Act, 1992 vide its letter No.01/ 04/C/07 dated
24th December 2004.
19
HARITA SEATING SYSTEMS LIMITED
(e) The company follows Accounting Standards
issued by the Institute of Chartered
Accountants of India and in the preparation
of financial statements, the Company has not
adopted a treatment different from that
prescribed in any Accounting Standard.
(f) The President (CEO) and General Manager-
Finance (CFO) have certified to the Board in
accordance with clause 49 (V) of the Listing
Agreement pertaining to CEO/CFO
certification for the financial year ended 31st
March 2006.
(g) The company has complied with all
applicable mandatory requirements in terms
of clause 49 of the Listing Agreement. The non-
mandatory requirements have been adopted
to the extent and in the manner as stated
under the appropriate headings detailed
elsewhere in this report.
9. Means of communication:
(a) Quarterly Results
The unaudited quarterly financial results of the
company were published in the English and
vernacular newspapers. These are not sent
individually to the shareholders.
(b) Newspapers wherein results normally
published
The results are normally being published in the
English newspaper viz The Economic Times
and the Tamil version in a Tamil daily viz.,
Makkal Kural.
(c) Website
The company has created a web site address
as www.haritaseating.com. The unaudited
results and the quarterly distribution schedules
as filed with the stock exchanges are published
in the company’s web site. The company
makes use of its web-site for publishing official
news release and presentations, if any, made
to institutional investors / analysts.
(d) Management Discussion and Analysis report
As required by clause 49 of the listing
agreement, the management discussion and
analysis report is annexed to the annual report.
10. General Shareholder information:
10.1 Annual General Meeting
Date and time : 18th September 2006
at 10.15 A.M
Venue : Kasturi Srinivasan Hall
(Mini Hall)
The Music Academy
306, T T K Road
(Mowbrays Road)
Chennai 600 014
10.2 Financial Calendar (2006-2007) (Tentative)
Annual General : August/ September 2007
Meeting (next year)
Financial reporting for : Date of Board meeting
the quarter ending
Any day between:
30th June 2006 : 28th of July 2006
30th September 2006 : 15th to 31st of October 2006
31st December 2006 : 15th to 31st of January 2007
31st March 2007 : 15th to 30th of April 2007
10.3 Particulars of dividend payment
Rate of Dividend : 45%
To be paid on : 20th September 2006
10.4 Period of book closure
From 14th September 2006 to 18th September
2006 (both days inclusive).
10.5 Listing on Stock Exchanges
Name of the stock exchange Stock code
Madras Stock Exchange (MSE) HARITASEAT
Bangalore Stock Exchange, (BgSE) HARITASEAT
ISIN alloted by Depositories : INE 939D01015(Company ID Number)
Effective 7th January 2005, the equity shares of the
company are regularly traded in BSE-INDONext
under scrip code 590043.
(Note : Annual listing fees for the year 2006-2007
have been duly paid to all the above stock
exchanges)
20
HARITA SEATING SYSTEMS LIMITED
10.6 Market Price Data : High, Low, during eachmonth in the last financial year
The shares of the company were not traded
during the period 1st April 2005 to 31st March
2006 in Madras Stock Exchange and
Bangalore Stock Exchange.
However the shares of the company are
being regularly traded in BSE-INDONext and
the data relating to the trading in BSE –
INDONext is given below:
BSE-INDONext (in Rs.)
Month Month’s Month’shigh price low price
April 2005 139.00 106.30
May 2005 163.00 110.00
June 2005 164.90 116.00
July 2005 136.60 107.00
August 2005 217.00 96.25
September 2005 221.50 157.55
October 2005 209.90 140.25
November 2005 165.00 140.05
December 2005 178.00 144.00
January 2006 252.80 167.05
February 2006 289.00 205.00
March 2006 252.25 170.00
10.7 Changes in Demat scenario
Shareholders are requested to note that as
per circular no. SEBI/MRD/cir-10/2004 dated
10th February 2004 issued by Securities and
Exchange Board of India (SEBI) to the
depositories, the facility of transfer-cum-
demat has since been withdrawn.
Effective from February 1, 2005, SEBI has
issued a circular dated 28th January 2005
rationalising the fee structure for
dematerialisation of securities as follows:
a. No investor shall be required to pay any
charge towards opening of a Beneficiary
Owner (BO) Account except for statutory
charges as may be applicable;
b. No investor shall be required to pay any
charge for credit of securities into his/her
BO account; and
c. No custody charge shall be levied on any
investor who would be opening a BO
account on or after February 1, 2005.
With effect from April 1, 2005 the issuer
companies will bear the custody charges.
The shareholders are requested to make
use of this opportunity and dematerialize
their physical share certificates, through a
depository participant. Shareholders
requiring any further clarif ication /
assistance on the subject may contact the
company’s share transfer agent.
10.8 Share transfer system and RTA:
M/s Sundaram-Clayton Limited (SCL),
Chennai, a registered Share Transfer Agent in
category II with SEBI, is the Share Transfer Agent
(STA) of the company.
Shares lodged for transfer are normally
processed within 10 days from the date of
lodgement, if the documents are clear in all
respects. All requests for dematerialization of
securities are processed and the confirmation
is given to the depositories within 7 days.
Grievances received from investors and other
miscellaneous correspondence on change
of address, mandates etc are processed by
the share transfer department within 7 days.
Shareholders are therefore requested to
correspond with the STA for transfer /
transmission of shares, change of address
and queries pertaining to their shareholding,
dividend etc., at their address given in this
report.
10.9 Shareholding pattern as on 31st March 2006
Particulars No. of %shares held to total
Indian promoters 20,36,200 52.42
Foreign nationals 5,43,800 14.00
Banks, Financial Institutions,
Insurance companies,
(Central, State Government
Institutions, Non-Govt.
Institutions) 100 -
Mutual Funds and UTI 148007 3.81
Private Corporate Bodies 3,31,626 8.54
NRI 3,004 0.08
Indian Public 8,21,783 21.15
Total 38,84,520 100.00
21
HARITA SEATING SYSTEMS LIMITED
10.10 Distribution of Shareholding as on 31st March 2006
Shareholding No. of % to total No. of % to total
(Range) shares shares members members
Upto 500 5,31,510 13.68 3,458 92.14
501-1000 1,49,452 3.85 202 5.38
1001-2000 70,005 1.80 50 1.33
2001-5000 69,019 1.78 22 .59
5001-10000 38,737 1.00 7 .19
10001 & above 30,25,797 77.89 14 .37
Total 38,84,520 100.00 3,753 100.00
10.11 Dematerialisation of shares:Out of 18,48,320 equity shares of Rs.10/- each held by persons other than Promoters, 6,81,669
shares have been dematerialised as on 31st March 2006 accounting for 36.88%.
10.12 Issue of GDRs/ADRsThe company has not issued any Global Depository Receipt / American Depository Receipt / Warrant
or any convertible instrument, which is likely to have impact on the company’s equity.
10.13 Plant LocationsHosur : Belagondapalli, Thally Road
Hosur 635 114.
Tel : 04347 233445
Fax: 04347 233460
Email: st.thiagarajan@haritaseating.com
Ranjangoan : Plot No.A2, MIDC Industrial area
Ranjangaon, Koregaon Village
Shirur taluk, Pune District
Maharashtra
Tel: 02138 560742
10.14 Address for Investor Correspondence
(i) For transfer / dematerialisation of shares, Sundaram-Clayton Limited
payment of dividend on shares and any Share transfer agent
other query relating to the shares of the Unit: Harita Seating Systems LimitedCompany; New No.22, Old No.31
(ii) For any query on annual report. Railway Colony, 3rd Street
Mehta Nagar, Chennai 600 029.
Note: Applicable to all the shareholders Tel : 044 - 2374 1889, 2374 2939
irrespective of their mode of holding. Fax : 044 - 2374 1889
(physical or demat) Email : sclshares@gmail.com
kr.raman@scl.co.in
22
HARITA SEATING SYSTEMS LIMITED
11. Non-Mandatory Disclosure:
The non-mandatory requirements have been adopted to the extent and in the manner as stated
under the appropriate headings detailed below:
The Board
No policy has been fixed on tenure of independent directors.
Remuneration committee
The board has not set up a remuneration committee as the need for the same has not arisen.
Shareholder rights
The half-yearly results of the company are published in English and Vernacular newspapers and are
also displayed on the company’s website namely www.haritaseating.com. The results are not sent to
the shareholders individually.
Audit Qualifications
The statutory financial statements of the company are unqualified.
Training of board members
The present board of directors is already comprised of well-experienced and responsible members of
society. All the directors are well aware of business model as well as the risk profile of the business
parameters of the company and their responsibilities as directors. Hence, in the opinion of the board,
they do not require any further training.
Mechanism for evaluating non-executive board members.
There is no specific mechanism for the reasons mentioned in the clause 5 above.
12. Request to investors:
� Investors holding shares in physical mode are requested to kindly note the following procedure:
o Investors are requested to communicate bank details, the change of address, if any, directly
to the share transfer department of the company located at the address mentioned above.
o In case of loss / misplacement of share certificates, investors should immediately lodge a FIR /
Compliant with the police and inform the company with original or certified copy of FIR /
acknowledged copy of complaint for marking stop transfer of shares.
o For expeditious transfer of shares, investors should fill in complete and correct particulars in
the transfer deed. Wherever applicable, registration number of Power of Attorney should also
be quoted in the transfer deed at the appropriate place.
o Investors, whose signature has undergone any change over a period of time, are requested
to lodge their new specimen signature duly attested by a bank manager to the shares
department of the company.
o Investors of the company who have multiple folios in identical names are requested to apply
for consolidation of such folios and send the relevant share certificates to the company.
� Nomination in respect of shares – Section 109A of the Companies Act,1956 provides facility for
making nominations by shareholders in respect of their holding of shares. Such nomination greatly
facilitates transmission of shares from the deceased shareholder to his / her nominee without
having to go through the process of obtaining succession certificate/ probate of the will etc. It
would therefore be in the best interests of the shareholders holding shares in physical form registered
as a sole holder to make such nominations. Investors, who have not availed nomination facility,
are requested to avail the same by submitting the nomination form. This form will be made available
on request. Investors holding shares in demat form are advised to contact their DP’s for making
nominations.
23
HARITA SEATING SYSTEMS LIMITED
� As required by SEBI, investors may furnish details of their bank account number and name and
address of the bank for incorporating the same in the warrants. This would avoid wrong credits
being obtained by unauthorized persons.
� Investors holding shares in electronic form are requested to deal only with their depository
participants in respect of any change of address, nomination facility and furnishing bank account
number etc.
� Investors, who have not encashed their dividend warrants in respect of dividend declared from
the financial year ended 31st March 1999, are requested to contact the share transfer department
of the company and surrender their warrants for payment.
� Investors are requested to note that the dividend, not claimed for a period of seven years from the
date they become due for payment, shall be transferred to “Investor Education and Protection
Fund” (IEPF) in terms of Section 205C of the Companies Act, 1956.
� Information in respect of the unclaimed dividends due for remittance into IEPF is given below:
PARTICULARS OF UNCLAIMED DIVIDEND
Financial Date of Date of transfer Date ofYear declaration to special account transfer to IEPF
1998-1999 06.09.1999 24.10.1999 24.10.2006
1999-2000 23.05.2000 10.07.2000 10.07.2007
2000-2001 17.09.2001 23.10.2001 23.10.2008
2001-2002 20.09.2002 26.10.2002 26.10.2009
2002-2003 20.06.2003 26.07.2003 26.07.2010
2003-2004 19.08.2004 24.09.2004 24.09.2011
2004-2005 05.09.2005 11.10.2005 11.10.2012
Reminders are sent to Investors periodically advising them to encash the unclaimed dividends before
transferring the unclaimed dividends to IEPF. Investors will be advised well in advance before transferring the
unclaimed dividends to IEPF. Investors are requested to note that, as per the Companies Act, 1956, unclaimed
dividends once transferred to IEPF will not be refunded.
24
HARITA SEATING SYSTEMS LIMITED
To,
The Shareholders of the Company
We hereby declare that all members of the board and the senior management personnel have affirmed
compliance with the respective provisions of the Code of Business Conduct and Ethics of the company
formulated by the board of directors for the financial year ended 31st March 2006.
S THIAGARAJAN A C PADMAJA
President Secretary
Chennai
28th
July, 2006
DECLARATION PURSUANT TO CLAUSE 49 OF THE LISTING AGREEMENT REGARDING
ADHERENCE TO THE CODE OF CONDUCT
AUDITORS CERTIFICATE ON COMPLIANCE OF THE PROVISIONS OF THE CODE OF
CORPORATE GOVERNANCE IN THE LISTING AGREEMENT.
To
The Shareholders of Harita Seating SystemsLimited, Chennai.
We have examined the compliance of conditions
of corporate governance by Harita Seating Systems
Limited, Chennai for the year ended 31st March
2006, as stipulated in Clause 49 of the Listing
Agreement of the said company with Stock
Exchanges.
The compliance of conditions of Corporate
Governance is the responsibility of the company’s
management. Our examination was limited to
procedures and implementation thereof, adopted
by the company for ensuring the compliance of
the conditions of the Corporate Governance. It is
neither an audit nor an expression of opinion on
the financial statements of the company.
In our opinion and to the best of our information
and according to the explanations given to us, we
certify that the company has complied with the
conditions of Corporate Governance as stipulated
in the abovementioned Listing Agreement.
We state that no investor grievances are pending
for a period exceeding one month against the
company as per the records maintained by the
Investors’ Grievances Committee.
We further state that such compliance is neither an
assurance as to the future viability of the company
nor the efficiency or effectiveness with which the
management has conducted the affairs of the
company.
For SUNDARAM & SRINIVASAN
Chartered Accountant
M BALASUBRAMANIYAM
Madurai Partner
28th July, 2006 Membership No.F7945
25
HARITA SEATING SYSTEMS LIMITED
Auditors’ Report to the shareholders of Harita Seating Systems Limited for the year
ended 31st March 2006
We have audited the attached balance sheet of
Harita Seating Systems Limited, Chennai 600 006
as at 31st March 2006, the profit and loss account
for the year ended on that date annexed thereto
and the cash flow statement for the year ended
on that date. These financial statements are the
responsibility of the company’s management. Our
responsibility is to express an opinion on these
financial statements based on our audit.
1. We conducted our audit in accordance with
auditing standards generally accepted in
India. These standards require that we plan and
per form the audit to obtain reasonable
assurance about whether the f inancial
statements are free of material misstatement.
An audit includes examining, on a test basis,
evidence supporting the amounts and
disclosures in the financial statements. An audit
also includes assessing the accounting
principles used and significant estimates made
by management, as well as evaluating the
overall presentation of the financial statements.
We believe that our audit provides a
reasonable basis for our opinion.
2. As required by the Companies (Auditor ’s
Report) Order, 2003 and amended by the
Companies (Auditor ’s report) (Amendment)
Order, 2004 issued by the Central Government
in terms of sub-section (4A) of section 227 of
the Companies Act, 1956, we enclose in the
Annexure a statement on the matters specified
in paragraphs 4 and 5 of the said Order.
3. Further to our comments in the Annexure,
referred to above, we state that
(i) we have obtained all the information and
explanations, which to the best of our
knowledge and belief were necessary for
the purposes of our audit.
(ii) In our opinion, proper books of account,
as required by law, have been kept by the
company so far as appears from our
examination of those books. The
company’s branch accounts were also
audited by us.
(iii) The balance sheet, profit and loss account
and cash flow statement referred to in this
report are in agreement with the books of
account including its branch.
(iv) In our opinion, the balance sheet, profit and
loss account and cash flow statement dealt
with by this report comply with the
accounting standards, referred to in sub-
section (3C) of section 211 of the
Companies Act, 1956.
(v) On the basis of written representations
received from the directors, as on 31st
March 2006 and taken on record by the
board of directors, we report that no director
is disqualified from being appointed as a
director of the company in terms of clause
(g) of sub-section (1) of section 274 of the
Companies Act, 1956 on the said date.
(vi) In our opinion and to the best of our
information and according to the
explanations given to us, the said accounts
read together with the Signif icant
Accounting Policies and other notes thereon
give the information required by the
Companies Act, 1956, in the manner so
required and give a true and fair view in
conformity with the accounting principles
generally accepted in India.
a. In so far as it relates to the balance
sheet, of the state of affairs of the
company as at 31st March 2006,
b. In so far as it relates to the profit and
loss account, of the profit for the year
ended on that date, and
c. In so far as it relates to the cash flow
statement, of the cash flows for the year
ended on that date.
For SUNDARAM & SRINIVASAN
Chartered Accountants
M BALASUBRAMANIYAM
Madurai Partner
28th July 2006 Membership No.F7945
26
HARITA SEATING SYSTEMS LIMITED
(i) (a) The company has maintained proper
records showing full particulars including
quantitative details and situation of fixed
assets.
(b) All the assets have not been physically
verified by the management during the
year but there is a regular programme
of verification at reasonable intervals,
which, in our opinion, is reasonable
having regard to the size of the company
and the nature of its assets. No material
discrepancies were noticed on such
verification.
(c) The assets disposed off during the year are
not substantial and therefore do not affect
the going concern status of the company.
(ii) (a) The inventory other than in-transit have
been physically verified at reasonable
intervals during the year by the
management. In our opinion, the
frequency of such verif ication is
adequate. In respect of inventory with
third parties which have not been
physically verified, there is a process of
obtaining confirmation from such parties.
(b) In our opinion and according to the
information and explanations given to us,
the procedures for physical verification
of inventory followed by the
management were reasonable and
adequate in relation to the size of the
company and the nature of its business.
(c) In our opinion, the company has
maintained proper records of inventory.
The discrepancies between the physical
stocks and the book stocks were not
material and have been properly dealt
with in the books of account.
(iii) (a) During the year, the company has not
granted any loan, secured or unsecured
to companies, firms or other parties
covered in the register maintained under
Section 301 of the Companies Act, 1956.
(b) During the year the company has not
taken any loan, secured or unsecured
from companies, firms or other parties
covered in the register maintained under
Section 301 of the Companies Act, 1956.
(iv) In our opinion and according to the
information and explanations given to us, there
are adequate internal control procedures
commensurate with the size of the company
and the nature of its business with regard to
purchase of inventory, fixed assets and for the
sale of goods and services. During the course
of our audit, no major weakness has been
noticed in the internal control system.
(v) (a) Based on the audit procedures applied
by us and according to the information
and explanations provided by the
management, we are of the opinion that
the contracts or arrangements that need
to be entered in the register maintained
in pursuance of Section 301 of the
Companies Act, 1956 have been
properly entered in the said register;
(b) In our opinion and according to the
information and explanations given to us,
the transactions entered in the register
maintained under Section 301 and
exceeding during the financial year by
Rupees five lakhs in respect of each party
have been made at prices which are
reasonable having regard to prevailing
market prices at the relevant time;
(vi) The company has not accepted any deposit
from the public.
(vii) The company has an internal audit system
which, in our opinion, is commensurate with
the size and nature of its business;
Auditors’ report to the shareholders
Annexure referred to in our report of even date on the accounts for the year ended
31st March 2006
27
HARITA SEATING SYSTEMS LIMITED
(viii) We have broadly reviewed the books of
account maintained by the company
pursuant to the rules made by the Central
Government under Section 209 (1)(d) of the
Companies Act, 1956 for maintenance of cost
records and are of the opinion that, prima
facie, the prescribed accounts and records
have been made and maintained;
(ix) (a) According to the records provided to us,
the company is regular in depositing
undisputed statutory dues including
Provident Fund, Investor Education and
Protection Fund, Income Tax, Sales Tax,
Wealth Tax, Service Tax, Customs Duty,
Excise Duty, Cess and other material
statutory dues with the appropriate
authorities. The provisions of Employees
State Insurance Act are not applicable
to the company.
(b) According to the information and
explanations given to us, no undisputed
amounts payable in respect of Income
Tax, Wealth Tax, Sales Tax, Service Tax,
Customs Duty, Excise Duty and Cess were
in arrears, as at 31st March 2006 for a
period of more than six months from the
date they became payable.
(c) According to information and
explanations given to us, the following is
the detail of the disputed due, that was
not deposited with the concerned
authorities:
Name of the Nature of Amount Forum where
statute dues (Rs. in Lakhs) dispute is pending
Income Income tax 12.55 (net of Commissioner of
Tax Act, 1961 refund due Income-tax
Rs.11.53 lakhs) (Appeals), Chennai
(x) The company neither has accumulated losses
as at the end of the financial year nor has
incurred cash losses during the financial year
and in the immediately preceding year.
(xi) Based on our verification and according to the
information and explanations given by the
management, the company has not
defaulted in repayment of dues to any bank.
(xii) Based on our examination and according to
the information and explanations given to us,
the company has not granted loans and
advances on the basis of security by way of
pledge of shares, debentures and other
securities;
(xiii) The company is not a chit / nidhi / mutual
benefit fund / society and as such clause (xiii)
of the Order is not applicable;
(xiv) The company is not dealing or trading in
shares, securities, debentures and other
investments;
(xv) The company has given guarantee to Housing
Development Finance Corporation Limited,
Mumbai in respect of housing loans availed
by its employees. The terms of such guarantee
are not prejudicial to the interests of the
company.
(xvi) The company has not availed any term loan;
(xvii) On the basis of our examination, the company
has not used funds raised on short term basis
for long term investment.
(xviii) During the year the company has not allotted
any shares on preferential basis to parties and
companies covered in the register maintained
under section 301 of the Companies Act,
1956.
(xix) During the year, the company has not issued
any secured debentures;
(xx) During the year, the company has not raised
any money by public issue;
(xxi) Based on the audit procedures adopted and
information and explanations given to us by the
management, no fraud on or by the company
has been noticed or reported during the course
of our audit.
For SUNDARAM & SRINIVASAN
Chartered Accountants
M BALASUBRAMANIYAM
Madurai Partner
28th July 2006 Membership No.F7945
28
HARITA SEATING SYSTEMS LIMITED
Balance Sheet as at 31st March, 2006(Rupees in Lakhs)
Schedule As at As at
Number 31.03.2006 31.03.2005
I SOURCES OF FUNDS
1. Shareholders’ funds
a) Capital I 388.45 388.45
b) Reserves and surplus II 2,522.17 2,082.722,910.62 2,471.17
2. Loans
a) Secured loans III 219.46 –
b) Unsecured loans IV 872.50 220.041,091.96 220.04
3. Deferred tax liability 163.44 154.44
(net of deferred tax asset)
4,166.02 2,845.65
II APPLICATION OF FUNDS:
1. Fixed assets V
a) Gross block 4,386.70 3,618.64
b) Less: depreciation 2,048.74 1,739.84
Net block 2,337.96 1,878.80
2. Investments VI 407.87 367.96
3. Current assets, loans and advancesa) Interest accrued 0.10 0.08
b) Inventories VII 549.39 330.84
c) Sundry debtors VIII 3,075.22 2,455.64
d) Cash and bank balances IX 162.55 152.95
e) Loans and advances X 1,118.85 741.62
f) Other current assets XI 32.91 28.69
(A) 4,939.02 3,709.82
Less: Current liabilities and provisions
Current liabilities XII 2,257.86 2,224.94
Provisions XIII 1,260.97 885.99
(B) 3,518.83 3,110.93
Net current assets (A)-(B) 1,420.19 598.89
4,166.02 2,845.65
H LAKSHMANAN S I JAFFAR ALI S THIAGARAJAN As per our report annexed
Chairman Director President For SUNDARAM & SRINIVASAN
Chartered Accountants
M. BALASUBRAMANIYAM
Partner
Chennai A C PADMAJA K GOPALA DESIKAN Madurai
28th July, 2006 Secretary General Manager-Finance 28th July, 2006
29
HARITA SEATING SYSTEMS LIMITED
Profit and Loss Account for the year ended 31st March, 2006(Rupees in Lakhs)
Schedule Year ended Year ended
Number 31.03.2006 31.03.2005
Sales - Gross 15,916.95 13,634.37
Less: Excise duty 2,180.13 1,835.55
Net Sales 13,736.82 11,798.82
Other income XIV 192.77 117.93
(A) 13,929.59 11,916.75
Raw materials and components consumed XV 10,138.43 8,562.75
Salaries, wages, stores consumed
and other expenses XVI 2,498.31 2,366.08
(B) 12,636.74 10,928.83
Profit before interest, depreciation
and tax (A)-(B) (C) 1,292.85 987.92
Interest XVII 31.78 0.28
Depreciation 315.28 269.39
(D) 347.06 269.67
Profit before tax (C)-(D) (E) 945.79 718.25
Provision for taxation - Income-tax 273.00 246.00
- Fringe benefit tax 25.00 –
- Deferred tax 9.00 20.47
(F) 307.00 266.47
Profit for the year (after tax) (E)-(F) (G) 638.79 451.78
Balance profit brought forward 158.69 143.93
Profit for the year 638.79 451.78
Tax relating to earlier year (0.02) 4.71
Total 797.46 600.42
Proposed dividend @ 45% (Last year 32%) 174.80 124.30
Provision for dividend tax 24.52 17.43
Transfer to general reserve 400.00 300.00
Balance surplus carried forward to balance sheet 198.14 158.69
Total 797.46 600.42
No. of equity shares 38,84,520 38,84,520
Nominal value of equity shares Rs. 10.00 10.00
Basic and diluted earnings per share Rs. 16.44 11.75
Notes on accounts XVIII
H LAKSHMANAN S I JAFFAR ALI S THIAGARAJAN As per our report annexed
Chairman Director President For SUNDARAM & SRINIVASAN
Chartered Accountants
M. BALASUBRAMANIYAM
Partner
Chennai A C PADMAJA K GOPALA DESIKAN Madurai
28th July, 2006 Secretary General Manager-Finance 28th July, 2006
30
HARITA SEATING SYSTEMS LIMITED
Schedules(Rupees in Lakhs)
As at As at
31.03.2006 31.03.2005
I CAPITAL
Authorised
50,00,000 equity shares of Rs.10/- each 500.00 500.00
Issued, subscribed and paid up
38,84,520 equity shares of Rs.10/- each fully paid up 388.45 388.45
388.45 388.45
II RESERVES AND SURPLUS
a) State Subsidy 15.00 15.00
b) General reserve
As per last balance sheet 1,849.03 1,549.03
Add: transfer from profit and loss account 400.00 300.00
2,249.03 1,849.03
c) Investment allowance reserve 50.00 50.00
d) Capital redemption reserve 10.00 10.00
e) Surplus i.e
Balance in profit and loss account 198.14 158.69
2,522.17 2,082.72
III SECURED LOANS
From banks
Secured by hypothecation of raw materials,
work-in- process, finished goods and book debts 219.46 –
219.46 –
IV UNSECURED LOANS
a) From banks -short term 652.46 –
b) From others -long term 220.04 220.04
872.50 220.04
31
HA
RITA
SEATIN
G S
YSTE
MS LIM
ITED
V FIXED ASSETS(Rupees in Lakhs)
Gross block Depreciation Net block
As at Additions Sales/ As at Upto For the Sales/ Upto As at As at
S.No Particulars 1st April during transfers 31st March 31st March year transfers 31st March 31st March 31st March
2005 the during the 2006 2005 2006 2006 2005
year year
1 Land 48.91 123.37 – 172.28 – – – – 172.28 48.91
2 Building 644.73 15.29 13.94 646.08 169.50 21.36 3.86 187.00 459.08 475.23
3 Plant & machinery 2,125.73 510.43 – 2,636.16 1,117.76 227.93 – 1,345.69 1,290.47 1,007.97
4 Vehicles 30.80 4.90 4.97 30.73 14.34 4.71 2.52 16.53 14.20 16.46
5 Office Equipments 457.51 14.65 – 472.16 297.58 35.86 – 333.44 138.72 159.93
6 Moulds 243.61 114.23 – 357.84 111.84 20.99 – 132.83 225.01 131.77
7 Furniture & fittings 35.32 6.62 – 41.94 20.88 2.72 – 23.60 18.34 14.44
8 Canteen equipments 21.97 5.58 – 27.55 7.94 1.71 – 9.65 17.90 14.03
3,608.58 795.07 18.91 4,384.74 1,739.84 315.28 6.38 2,048.74 2,336.00 1,868.74
9 Capital work-in-progress
- Plant and machinery – 1.96 – 1.96 – – – – 1.96 –
- Electrical installation 10.06 – 10.06 – – – – – – 10.06
Total 3,618.64 797.03 28.97 4,386.70 1,739.84 315.28 6.38 2,048.74 2,337.96 1,878.80
32
HARITA SEATING SYSTEMS LIMITED
Schedules - (Continued)
VI INVESTMENTS (AT COST) (Rupees in lakhs)
1 Non-trade-quoted (short-term)As at Additons Sales/realisa As at
1st April, during the tion during 31st March2005 year the year 2006
A HDFC Mutual Fund, Chennai2000118.885 units in Multiple Yield 211.84 – 211.84 –Fund Growth
2000118.885 units in Multiple Yield
Fund Dividend – 215.84 215.84 –
2000000 units in Multiple yield fund
Growth – 200.00 200.00 –
1434508.390 units in Cash management
Fund savings plan growth – 207.66 99.79 107.87
B ABN AMRO Asset Management, Mumbai
996088.644 units in Floating Rate
Fund-Institutional Growth 56.12 – 56.12 –
C Franklin Templeton Investments, Mumbai
1000000 units in flexi cap fund growth 100.00 – 100.00 –996003.87 units in flexi cap fund growth – 127.39 127.39 –
996003.87 units in flexi cap fund growth – 111.18 111.18 –
D ICICI Prudential Mutual Fund, Chennai977995.110 units PIFG Prudential
infrastructure fund-Growth – 100.00 100.00 –
E SBI Mutual fund, Chennai741003.254 units L031 Magnum
Insta cash fund – 115.00 115.00 –
F UTI Mutual Fund, Chennai
2000000 units of Leadership fund growth – 200.00 – 200.00
G Reliance Mutual Fund, Mumbai
Equity fund growth – 100.00 – 100.00
Total 367.96 1,377.07 1,337.16 407.87
[Market value of investments: Rs.422.71 lakhs]
33
HARITA SEATING SYSTEMS LIMITED
Schedules - (Continued)(Rupees in lakhs)
As at As at
31.03.2006 31.03.2005
VII INVENTORIES (at cost)
* Raw materials and components 366.48 174.04
* Work-in-process 58.72 94.66
* Stores 25.23 11.96
* Finished Goods 42.49 45.33
* Goods in bond 56.47 4.85
549.39 330.84
* as certified by a director
VIII SUNDRY DEBTORS- unsecured considered good
a) Debts outstanding for a period
exceeding six months 60.95 62.06
Less: Provision for doubtful debts 12.34 48.61 62.06 –
b) Other debts 3,026.61 2,455.64
3,075.22 2,455.64
IX CASH AND BANK BALANCES
a) Cash on hand 90.73 44.08
b) With scheduled bank
1) Current account 71.03 107.83
2) Deposit account 0.79 1.04
162.55 152.95
X LOANS AND ADVANCES-unsecured considered good
a) Advance recoverable in cash or in kind or for
value to be received 1,091.15 719.99
b) Deposits 27.70 21.63
1,118.85 741.62
XI OTHER CURRENT ASSETS
a) Prepaid expenses 31.24 27.43
b) Income-tax deducted at source on
labour charges and on interest income 1.67 1.26
32.91 28.69
XII CURRENT LIABILITIES
a) Sundry creditors 2,250.22 2,218.29
b) Investor Education and Protection Fund
- Unpaid dividend 7.64 6.65
2,257.86 2,224.94
34
HARITA SEATING SYSTEMS LIMITED
Schedules - (Continued)(Rupees in lakhs)
As at/year ended As at/year ended
31.03.2006 31.03.2005
XIII PROVISIONS
Dividend proposed 174.80 124.30
Provision for taxation-dividend tax 24.52 17.43
Taxation - income-tax and wealth tax 764.00 491.00
- Fringe benefit tax 25.00 –
Warranty 74.00 69.00
Leave pay 31.05 29.37
Pension 167.60 154.89
1,260.97 885.99
XIV OTHER INCOME
a) Scrap sales 30.08 29.12
b) Labour charges received (gross) 1.67 15.02
(TDS-Rs.0.05 lakh) (Last year Rs.0.09 lakh)
c) Interest on deposits and investments (gross) 4.72 2.53
(TDS-Rs.0.36 lakh) (Last year Rs.0.30 lakh)
d) Miscellaneous income (see note no.8) 156.30 71.26
192.77 117.93
XV RAW MATERIAL AND COMPONENTS CONSUMED
OPENING STOCK
Raw materials 174.04 133.84
Work-in-process 94.66 81.52
Finished goods 45.33 43.22
314.03 258.58
Purchase of raw materials and components 10,292.09 8,618.20
Total (A) 10,606.12 8,876.78
CLOSING STOCK
Raw materials 366.48 174.04
Work-in-process 58.72 94.66
Finished goods 42.49 45.33
Total (B) 467.69 314.03
Consumption (A) - (B) 10,138.43 8,562.75
35
HARITA SEATING SYSTEMS LIMITED
Schedules - (Continued)(Rupees in lakhs)
Year ended Year ended
31.03.2006 31.03.2005
XVI SALARIES, WAGES, STORES CONSUMED AND OTHER EXPENSES
a) Salaries and wages* 834.64 772.87
b) Contribution to provident and other funds* 87.78 115.19
c) Staff welfare expenses* 126.81 97.94
d) Stores and tools consumed 159.82 186.98
e) Power and fuel 159.04 139.54
f) Rent* 11.19 13.32
g) Rates and taxes* 165.45 106.83
h) Repairs and maintenance*
- Building 27.07 28.02
- Machinery 122.77 91.90
- Other assets 21.80 49.22
i) Audit fees - as auditors 4.09 3.86
- tax audit 1.00 1.02
- certification 0.60 0.55
j) Directors’ sitting fee 1.20 0.98
k) Insurance 13.89 14.01
l) Other expenses (see note no.7)* 757.74 740.54
m) Excise duty paid on samples 3.42 1.56
n) Loss on sale of assets – 0.88
o) Loss on sale of investments – 0.87
2,498.31 2,366.08
[* Net of recoveries]
XVII INTEREST
On other loans 31.78 0.28
31.78 0.28
36
HARITA SEATING SYSTEMS LIMITED
Schedules - (Continued)
(Rupees in lakhs)
As at/year ended As at/year ended
31.03.2006 31.03.2005
XVIII NOTES ON ACCOUNTS1 Notes on Accounting Standards prescribed by The Institute
of Chartered Accountants of India
ACCOUNTING STANDARD (1) - Accounting policyThe accounts are maintained on accrual basis as a going
concern.
ACCOUNTING STANDARD (2) - InventoriesInventories are valued in accordance with the method of
valuation prescribed by the Institute of Chartered Accountants
of India at weighted average rates and in applicable cases
at lower of cost or realisable value.
ACCOUNTING STANDARD (3) - Cash flowThe cash flow statement is prepared under “indirect method”
and the same is annexed.
ACCOUNTING STANDARD (4) -Contingencies & eventsoccuring after balance sheet date
Details regarding contested liabilities are furnished in
Note No.2.
ACCOUNTING STANDARD (5) - Prior period itemShort provision of employee cost — (0.06)
Excess provision of employee cost 3.06 1.70
Raw materials and components consumed — 4.61
Retrospective selling price revision 44.46 (1.60)
ACCOUNTING STANDARD (6) - DepreciationDepreciation has been provided under straight line method
in respect of all assets at the rates prescribed under schedule
XIV of the Companies Act, 1956 and on prorata basis on
assets acquired/sold during the year.Depreciation in respect
of computers and vehicles has been provided at 30% and
18% respectively which is higher than the rate prescribed in
schedule XIV of the Companies Act.
Until the year ended 31st March, 2002, moulds were
depreciated applying rates fixed under schedule XIV of the
Companies Act.This method is continued for moulds acquired
before 31st March, 2002 and put to use. In respect of moulds
acquired on and after 1st April, 2002 and put to use, depreciation
is charged based on quantity of seat cushions produced.
Until the year ended 31st March, 2002, tools and fixtures were
depreciated applying rates fixed under schedule XIV of the
Companies Act.This method is continued for tools and fixtures
acquired before 31st March, 2002 and put to use. In respect
of tools and fixtures acquired on and after 1st April, 2002
and put to use, depreciation is charged at 25%.
37
HARITA SEATING SYSTEMS LIMITED
Depreciation in respect of assets acquired during the year whose
actual cost does not exceed Rs.5,000/- has been provided at
100%.
ACCOUNTING STANDARD (7) - Construction contracts Not applicable Not applicable
ACCOUNTING STANDARD (8) - R & D
This standard is deleted from 1st April, 2003.
ACCOUNTING STANDARD (9) - Revenue recognition
The income of the company is derived from manufacture and
sale of seating systems for automotive applications, railways and
fitness equipment and parts thereof. Indigenous sales are
recognised based on raising invoices. Export sales are
recognised on the basis of date of bill of lading. The revenue
and expenditure are accounted on a going concern basis.
Interest income/expenses is recognised using the time proportion
method based on rates implicit in the transaction.
ACCOUNTING STANDARD (10) - Fixed assets
Fixed assets including technical knowhow fees are stated at
cost less accumulated depreciation.
ACCOUNTING STANDARD (11) - Effects of changes in foreign exchange rates
Purchase of imported raw materials, components,spares and
capital goods are accounted based on retirement memos from
banks. Sales include realised exchange fluctuation on exports.
Net exchange difference credited to Profit and loss account (5.23) 0.30
Foreign currency loan or deposit made outside India - Nil -
The company did not have any transaction in derivative
instruments and hence reporting on currency swaping/interest
rate structure do not arise.
ACCOUNTING STANDARD (12) - Government grants
No grant has been received during the year.
ACCOUNTING STANDARD (13) - Investments
Investments are valued at cost. Provision for dimunition in the
carrying cost of long term investments is made if such dimunition
is other than temperory in nature in the opinion of the
management.
ACCOUNTING STANDARD (14) - Amalgamation Not applicable Not applicable
Schedules - (Continued)
(Rupees in lakhs)
As at/year ended As at/year ended
31.03.2006 31.03.2005
XVIII NOTES ON ACCOUNTS-contd.,
38
HARITA SEATING SYSTEMS LIMITED
ACCOUNTING STANDARD (15) - Retirement benefits
a) Contributions to provident fund are made to a
recognised Trust in respect of excluded employees.In
respect of other employees the contribution is made
to Government.
b) Leave salary is provided on actuarial basis
c) The company has evolved a pension policy for the
senior managers. Provision in this regard is made on
actuarial valuation basis for current and past services.
d) Contributions to gratuity and superannuation fund are
made to Life Insurance Corporation of India in
accordance with the scheme framed by the
Corporation.
ACCOUNTING STANDARD (16) - Borrowing cost
The borrowing cost has been treated in accordance with
Accounting Standard on borrowing cost (AS 16) issued by the
Institute of Chartered Accountants of India. During the year, there
were no borrowings attributable to qualifying assets and hence
no borrowing costs were capitalised.
ACCOUNTING STANDARD (17) - Segment reporting
The entire operations of the company relate to only one segment
viz., seating systems.
ACCOUNTING STANDARD (18) - Related party disclosure
I Reporting enterprise Harita Seating Systems Limited
ii Name of the transacting related party Harita Limited, Chennai
iii Description of the relationship The reporting enterprise is an
associate of the related party.
iv Description and nature of transaction Payment of service charges to
related party
v Volume of the transactions either as an amount or as
an appropriate proportion -Nil- (last year Rs. 82.73 lakhs)
vi Any other elements of the related party transactions Service charges for availing
necessary for an understanding of the financial management services from related
statements party.
vii The amounts or appropriate proportion of outstanding Amount payable -Nil-
items pertaining to related parties as at the balance (last year Rs. 78.81 lakhs)
sheet date and provisions for doubtful debts due from Provision for doubtful debts -Nil-
such parties as at that date
viii Amounts written off or written back in the period in
respect of debts due from or to related parties -Nil-
Schedules - (Continued)
(Rupees in lakhs)
As at/year ended As at/year ended
31.03.2006 31.03.2005
XVIII NOTES ON ACCOUNTS-contd.,
39
HARITA SEATING SYSTEMS LIMITED
Schedules - (Continued)
(Rupees in lakhs)
As at/year ended As at/year ended
31.03.2006 31.03.2005
XVIII NOTES ON ACCOUNTS-contd.,
ACCOUNTING STANDARD (19) - Accounting of leases Not applicable Not applicable
ACCOUNTING STANDARD (20) - Earnings per share
Disclosure is made in the Profit & Loss Account as per
the requirement of the standard
ACCOUNTING STANDARD (21) - Consolidatedfinancial statement Not applicable Not applicable
ACCOUNTING STANDARD (22) - Accounting for tax on income
Current tax is determined as the amount of tax payable in
respect of taxable income for the period Deferred tax
liability and asset are recognised based on timing
difference
1 Deferred tax liability consists of:
- tax on Depreciation 146.78 146.20
- tax on R & D expenditure 133.02 118.99
- tax on expenses claimed on payment basis
under Income-tax Act, 1961 89.69 63.01
(A) 369.49 328.20
2 Deferred tax asset consists of:
- tax on provision in respect of expenditure
which will be allowed under the Income-tax
Act, 1961 only on payment basis 206.05 173.76
(B) 206.05 173.76
Deferred tax liability (net of deferred tax asset) (A)-(B) 163.44 154.44
(refer Balance Sheet)
ACCOUNTING STANDARD (23) - Investment in associates -Nil- -Nil-
ACCOUNTING STANDARD (24) - Discontinued operations -Nil- -Nil-
ACCOUNTING STANDARD (25) - Interim financial reporting
As per clause 41 of listing agreement the company is required
to publish the financial results on a quarterly basis. Condensed
form of Profit & Loss is being published for every quarter.
40
HARITA SEATING SYSTEMS LIMITED
Schedules - (Continued)
(Rupees in lakhs)
As at/year ended As at/year ended
31.03.2006 31.03.2005
XVIII NOTES ON ACCOUNTS-contd.,
ACCOUNTING STANDARD (26) - Intangible assets
During the year the company acquired the following asset
falling under the definition of intangible assets as per the
Accounting Standard and the following disclosure is made in
respect of this asset
(1) Software
- Useful life of the asset 2 years 2 years
- Amortisation rates used 50% each year 50% each year
- Gross carrying amount at the beginning and at
the end of the period
Opening balance 18.48 –
Addition during the year – 37.48
Total 18.48 37.48
Amortised as depreciation 18.48 19.00
Closing balance – 18.48
ACCOUNTING STANDARD (27) - Reporting on financials of joint venture Not applicable Not applicable
ACCOUNTING STANDARD (28) - Impairment of assets
As on the Balance Sheet date the carrying amounts of the
assets net of accumulated depreciation is not less than the
recoverable amount of those assets. Hence there is no
impairment loss on the assets of the company.
ACCOUNTING STANDARD (29) - Provisions, contingent liability
and contingent asset
1. Provisions
In respect of warranty obligations provision is made in
accordance with terms of sale of seat assemblies.
2. Contingent liabilities
The amount for which the company is contingently liable
are disclosed in Note No. 2
3. Contingent assets which are likely to give rise to the
possibility of inflow of economic benefits -Nil- -Nil-
4. Contested liabilities are detailed in Note No.3
41
HARITA SEATING SYSTEMS LIMITED
2. Contingent liabilities not provided for
a. On counter guarantee furnished to banks 160.35 250.74
b. On letters of credit opened with banks 29.03 4.06
c. On guarantee furnished to Housing
Development Finance Corporation Ltd,
Mumbai, on loans granted to employees
of the company. 2.55 3.96
3. Liability contested and not provided for
a) On Income tax matters 24.08 16.07
b) On Sales tax matters 5.72 5.72
4. Deposit includes deposit with Central Excise 1.63 0.37
5. Sundry creditors include:
a) Amount liable to be transferred to Investor Education and
Protection fund as and when falls due
- Unpaid dividend 7.64 6.65
b) Dues to small scale industrial undertakings 142.16 111.30
c) Dues of creditors other than small scale industrial
undertaking 2,108.06 2,106.99
Name of small scale industrial undertakings to whom the company
owes an amount which is outstanding for more than 30 days
Autocomps, Bangalore, Aravind Enterprises, Hosur, Asian Packagings,
Hosur, Essaar Tools, Hosur, Ever Bright Products, Hosur, Hari Industries,
Bangalore, India Engineering Works, Kolahpur, Indo German Tools,
Hosur, Jai Guru Fabricators, Hosur, Jit Auto Comp, Hosur, Kamadhenu
Enterprises, Bangalore, Kavia Engineering Pvt Ltd, Bangalore,
L R Industries, Hosur, Magod Laser Machining Pvt Ltd, Bangalore,
Metlok Company, Bangalore, Mecolam Engineering Pvt Ltd,
Bangalore, Micron Precision Plastics, Bangalore, MKV Engineering
Pvt Ltd, Hosur, Numann Industries, Hosur, Paragon Fasteners,
Bangalore, Presscom Products Pvt Ltd, Hosur, Rubber Extrusion and
Moulding Co, Bangalore, Siddhi Foams, Bangalore, Supram
Industries, Bangalore, Sai Kunal Industries, Bangalore, STS Engineering
Services, Hosur, Suriya Plastics, Hosur, Sri Ram Kartthic Polymers,
Coimbatore, Shri Vaari Engineering Enterprises, Hosur, Scintillating
Engineering CNC India Pvt Ltd, Hosur, Vijay Precision Components,
Bangalore, Young Polymers Pvt Ltd, Hosur, Zigma Pressings, Hosur,
Mistry Industries, Pune, Golden Jubilee Corporation, Pune, Gold Seal
Engineering Products, Mumbai.
Payment terms for the above suppliers is 60 days from the date of
invoice. The dues are less than 60 days old and therefore do not
bear any interest
Schedules - (Continued)
(Rupees in lakhs)
As at/year ended As at/year ended
31.03.2006 31.03.2005
XVIII NOTES ON ACCOUNTS-contd.,
42
HARITA SEATING SYSTEMS LIMITED
6. a) Due from an officer of the company – 6.08
b) Maximum balance due at any time during the year – 6.31
7. Other expenses include:
a) reimbursement of expenses to auditors 1.34 1.26
b) legal & retainer fees 141.08 208.90
c) carriage outwards 243.98 165.18
d) warranty claims 6.32 2.82
e) commission 36.32 27.39
f) cash discount 1.13 6.95
8. Miscellaneous income under other income includes:
a) packing cost recoveries 0.45 0.36
b) sale of moulds manufactured – 4.72
c) sale of raw materials 48.97 15.26
d) profit on sale of assets 22.50 0.79
e) dividend income – 1.17
f) profit on sale of investments 60.47 48.58
9. Building (cost Rs.140.29 lakhs) (last year Rs.134.10 lakhs) is
situated on leasehold land alloted by Maharashtra Indus-
trial Development Corporation Limited, Mumbai.The lease
deed is yet to be executed while agreement to lease has
been concluded.
10.Cash & bank balances include:
a) Cheques on hand 89.01 41.49
b) Unpaid dividend 7.56 6.65
11.Expenses, wherever applicable are inclusive of service
tax at appropriate rates and net off service tax set off
permissible
12.R & D revenue expenses for the financial year 2005-06
i) Salary 94.98 Lakhs
ii) Testing charges 23.16 Lakhs
iii) Design development charges 6.87 Lakhs
iv) Field trial expenses 4.36 Lakhs
Schedules - (Continued)
(Rupees in lakhs)
As at/year ended As at/year ended
31.03.2006 31.03.2005
XVIII NOTES ON ACCOUNTS-contd.,
43
HARITA SEATING SYSTEMS LIMITED
13.R & D capital expenditure for the financial year 2005-06
i) Buildings 1.52 lakhs included in total cost of addition of Rs. 15.29 lakhs
ii) Plant and machinery 49.96 lakhs included in total cost of addition of Rs.510.43 lakhs
iii) Office equipment (computers) 1.72 lakhs included in total cost of addition of Rs. 14.65 lakhs
14. Previous year’s figures have been regrouped wherever necessary to conform to the current
year’s classification.
Schedules - (Continued)
XVIII NOTES ON ACCOUNTS-contd.,
H LAKSHMANAN S I JAFFAR ALI S THIAGARAJAN As per our report annexed
Chairman Director President For SUNDARAM & SRINIVASAN
Chartered Accountants
M. BALASUBRAMANIYAM
Partner
Chennai A C PADMAJA K GOPALA DESIKAN Madurai
28th July, 2006 Secretary General Manager-Finance 28th July, 2006
44
HARITA SEATING SYSTEMS LIMITED
15. Information pursuant to the provisions of Part II of Schedule VI of the Companies Act, 1956 (Vide
Notification dated 30th October 1973 of the Department of Company Affairs, Government of India).
(Rupees in lakhs)
I RAW MATERIALS CONSUMEDYear ended 31.03.2006 Year ended 31.03.2005
A. Basic raw materials Unit Quantity Value Quantity Value
a) Polyol Kgs 8,86,827 1,077.04 8,08,210 936.70
b) Isocyanate Kgs 5,71,832 666.69 5,16,066 656.11
c) Others (which include sheets,
tubes,upholstery materials
etc., which individually
do not account for 10% or
more of the total value of
consumption) 8,355.92 6,985.19
10,099.65 8,578.00
B. Consumption of raw materials and components
% of total % of total
consumption Value consumption Value
a) Imported 12.94 1,306.79 5.20 445.71
b) Indigenous 87.06 8,792.86 94.80 8,132.29
100.00 10,099.65 100.00 8,578.00
C. Consumption of machinery spares
% of total % of total
consumption Value consumption Value
a) Imported 5.21 5.31 12.37 11.37
b) Indigenous 94.79 96.55 87.63 80.53
100.00 101.86 100.00 91.90
II IMPORTS - CIF VALUE
a) Raw materials & components 1,038.43 362.81
b) Capital goods 74.14 81.38
c) Spares 2.54 9.10
Schedules - (Continued)
45
HARITA SEATING SYSTEMS LIMITED
III OTHER EXPENDITURE IN FOREIGN EXCHANGE
a) Travel 12.52 20.06
b) Consultancy fee 70.03 87.86
c) Others 7.27 8.61
IV EARNINGS IN FOREIGN EXCHANGEExports - F.O.B 349.09 551.55
V PAYMENT TO NON-RESIDENT SHAREHOLDERS
a) No. of non-resident shareholders 1 2
b) No. of shares held by non-residents 5,43,800 5,43,800
c) Dividend 17.40 16.31
(relating to the (relating to the
year 2004-05) year 2003-04)
VI SALE BY CLASS OF GOODSQuantity Value Quantity Value
(Nos) (Nos)
a) Seats for tractors 1,11,020 1,810.11 83,265 1,265.18
b) Seats for cars 5,442 103.82 83,423 1,605.10
c) Deluxe seating system for 4 wheelers 2,67,914 7,281.59 1,85,078 4,811.78
d) Deluxe seating system for 2 wheelers 17,32,963 4,194.69 17,10,993 3,455.12
e) Deluxe seating system for railways 386 32.96 1,445 74.08
f) Fitness equipment 31,411 224.55 58,589 523.03
g) Others 89.10 64.53
13,736.82 11,798.82
VII LICENSED AND INSTALLED CAPACITY
Information not furnished in view of abolition of industrial licencing
requirements for the products manufactured by the company
Schedules - (Continued)
(Rupees in lakhs)
year ended year ended
31.03.2006 31.03.2005
46
HARITA SEATING SYSTEMS LIMITED
VIII OPENING AND CLOSING STOCK OF GOODS PRODUCED(Rupees in lakhs)
Description Year ended 31st March 2006 Year ended 31st March 2005
Opening Production Closing Opening Production Closing
stock stock stock stock
a) Seats for tractors
Qty (in Nos) 162 1,11,097 239 90 83,337 162
Value 2.29 2.84 1.12 2.29
b) Seats for cars
Qty (in Nos) 201 5,312 71 60 83,564 201
Value 3.50 1.94 1.59 3.50
c) Deluxe seating
system for 4 wheelers
Qty (in Nos) 1,366 2,67,191 643 699 1,85,745 1,366
Value 25.77 29.08 17.56 25.77
d) Deluxe seating system
for 2 wheelers
Qty (in Nos) 450 17,35,316 2,803 237 17,11,206 450
Value 1.08 8.22 0.52 1.08
e) Deluxe seating system
for railways
Qty (in Nos) – 386 – – 1,445 –
Value – – – – –
f) Fitness equipment
Qty (in Nos) 1,725 29,786 100 2,612 57,702 1,725
Value 10.15 0.41 21.74 10.15
Schedules - (Continued)
H LAKSHMANAN S I JAFFAR ALI S THIAGARAJAN As per our report annexed
Chairman Director President For SUNDARAM & SRINIVASAN
Chartered Accountants
M. BALASUBRAMANIYAM
Partner
Chennai A C PADMAJA K GOPALA DESIKAN Madurai
28th July, 2006 Secretary General Manager-Finance 28th July, 2006
47
HARITA SEATING SYSTEMS LIMITED
Cash flow statement for the year ended 31st March, 2006 (Rupees in lakhs)
Year ended Year ended
31.03.2006 31.03.2005
A CASH FLOW FROM OPERATING ACTIVITIES
Profit before tax and extra ordinary items 945.79 718.25
Depreciation 315.28 269.39
Depreciation on assets sold (6.38) (22.49)
Income-tax relating to earlier years (0.02) 4.71
Dividend income – (1.17)
Interest income (4.72) (2.53)
Interest expenditure 31.78 0.28
335.94 248.19
Operating profit before working capital changes 1281.73 966.44
Adjustments for:
Interest accrued (0.02) (0.05)
Inventory (218.55) (49.90)
Trade receivables (619.58) (697.69)
Loans and advances (55.46) 184.33
Other current assets (4.22) (5.48)
Trade payables and provisions 52.31 185.16
(845.52) (383.63)
Cash generated from operations 436.21 582.81
Direct tax paid (321.77) (238.00)
Net cash from operating activities -(A) 114.44 344.81
B CASH FLOW FROM INVESTING ACTIVITIES
Purchase of fixed assets (797.03) (630.93)
Sale of fixed assets 28.97 69.30
Purchase of investments (1,377.07) (3,782.04)
Sale of investments 1,337.16 4,075.20
Interest received 4.72 2.53
Dividend received – 1.17
Net cash used in investing activities -(B) (803.25) (264.77)
C CASH FLOW FROM FINANCING ACTIVITIES
Secured loans 219.46 (0.21)
Unsecured loans 652.46 –
Sales tax deferral loan repaid – (19.85)
Interest paid (31.78) (0.28)
Dividend and dividend tax paid (141.73) (131.47)
Net cash from financing activities -(C) 698.41 (151.81)
48
HARITA SEATING SYSTEMS LIMITED
D NET INCREASE IN CASH AND CASH EQUIVALENTS (A)+(B)+(C) 9.60 (71.77)
Cash and cash equivalents at the beginning of the year 152.95 224.72
Cash and cash equivalents at the end of the year 162.55 152.95
Note: 1) The above statement has been prepared in indirect method except in case of interest,
diividend and purchase and sale of investments, which have been considered on the basis of
actual movement of cash
2) Cash and cash equivalent represents cash and bank balances
Cash flow statement for the year ended 31st March, 2006 (Rupees in lakhs)
Year ended Year ended
31.03.2006 31.03.2005
H LAKSHMANAN S I JAFFAR ALI S THIAGARAJAN As per our report annexed
Chairman Director President For SUNDARAM & SRINIVASAN
Chartered Accountants
M. BALASUBRAMANIYAM
Partner
Chennai A C PADMAJA K GOPALA DESIKAN Madurai
28th July, 2006 Secretary General Manager-Finance 28th July, 2006
49
HARITA SEATING SYSTEMS LIMITED
BALANCE SHEET ABSTRACT AND COMPANY’S BUSINESS PROFILE VIDE NOTIFICATION DATED 15th MAY 1995ISSUED BY MINISTRY OF COMPANY AFFAIRS
I REGISTRATION DETAILS
Registration no. 1 8 - 3 5 2 9 3 Date: 2 4 . 4 . 9 6
Balance sheet date: 3 1 0 3 2 0 0 6 State code: 1 8
Date Month Year
II CAPITAL RAISED DURING THE YEAR (Amount Rs.in thousand)
Public issue: N I L Rights issue: N I L
Bonus issue: N I L Private Placement: N I L
III POSITION OF MOBILISATION AND DEPLOYMENT OF FUNDS (Amount Rs.in thousand)
Total liabilities: 4 1 6 6 0 2 Total assets: 4 1 6 6 0 2
Source of Funds
Paid up capital 3 8 8 4 5 Reserves & surplus 2 5 2 2 1 7
Secured loans 2 1 9 4 6 Unsecured loans 8 7 2 5 0
Deferred tax 1 6 3 4 4
Application of funds
Net fixed assets 2 3 3 7 9 6 Investments 4 0 7 8 7
Net current assets 1 4 2 0 1 9 Misc.expenses N I L
Accumulated loss N I L
IV PERFORMANCE OF THE COMPANY (Amount Rs. in thousand)
Turnover 1 3 9 2 9 5 9 Total expenditure 1 2 9 8 3 8 0
(includes other income)
Profit before tax 9 4 5 7 9 Profit after tax 6 3 8 7 9
Earnings per share Rs 1 6 . 4 4 Dividend rate 4 5 %
V GENERIC NAMES OF THREE PRINCIPAL PRODUCTS/SERVICES OF COMPANY (as per monetary terms)
Item code no. 8 7 0 8
Product description
1 D E L U X E S E A T I N G S Y S T E M F O R
T R A N S P O R T V E H I C L E S
2 S E A T S F O R T R A C T O R S
3 S E A T S F O R C A R S
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