Dear Shareholders

The Directors have pleasure in presenting the 31st Annual Report together with the Audited Accounts for the year ended 31st March, 2018

FINANCIAL RESULTS Rupees in lakhs

FINANCIAL HIGHLIGHTS AND OPERATIONS

The revenue from operations and other income for the financial year under review was Rs. 100,258.65 lakhs as against Rs 94,925.59 lakhs for the previous financial year, i.e. an increase by 5.62%.The profit before finance costs, depreciation and taxation is Rs.6581.48 lakhs for the financial year under review as against Rs 3839.45 lakhs for the previous financial year, i.e. increase by 71.42%. The profit after tax increased to Rs. 2821.51 lakhs, as compared to Rs. 1217.31 lakhs for the previous financial year, i.e. increase by 131.78%. Total comprehensive income for the year increased to Rs. 2802.30 lakhs as compared to Rs. 1209.72 lakhs for the previous financial year, i.e. increase by 131.65%. This is mainly due to increase in volumes and other cost saving measures taken by the Company.

TPM ACTIVITY

To achieve vision, mission and business objectives, we are practicing TPM which is a proven world class practice and we had experienced the benefits of the same methodology.

We have started TPM activity first time in year 1999 at Gurugram Plant under the able guidance of Yamaguchi san and mentoring of our Chairman and Managing Director, Mr. Rohit Relan and learnt numerous new tools and techniques and achieved positive results and BSL Gurugram plant was awarded with Excellence Award in 2006 by JIPM (Japan Institute of Plant Maintenance).

Now Bharat Seats Limited (BSL) at Group Level has started TPM activity under the able guidance of Kuramitsu san(TPM Consultant from JMAC, Japan) and mentoring of our CMD, Mr. Rohit Relan. We launched the same in July 2017 with total Management commitment. Now Gurugram Plant has started activity for Second Level Award which is Consistence in Excellence and Manesar, Bhorakalan and TRIM plants are going for Excellence Award in 2020.

To achieve the said objective and award, all manufacturing locations of BSL have started working for model machine (one each in each plant) achieved significant improvements and results in terms of PQCDSME (Productivity, Quality, Cost, Delivery, Safety, Morale and Environment).

TPM kick-off happened in February 2018 in the presence of esteemed guest from our valuable customer (MSIL), our Key Suppliers, Mr. Rohit Relan CMD and BSL Team and Pillars. Now we are in the expansion phase to implement TPM Activity at all manufacturing locations with emphasis on Kaizen, Autonomous Maintenance, Focused Improvements and other Improvement project, activities and actions initiated as per the guidelines of Kuramitsu san.

TRANSFER TO GENERAL RESERVE

During the F.Y 2017-18, the Company has not transferred any amount to General Reserve.

DIVIDEND

Your Directors are pleased to recommend for the approval of the shareholders at the 31^st Annual General Meeting, a dividend of 50% (Re 1/- per equity share) for the financial year ended 31.03.2018 . The dividend shall be subject to tax on dividend to be paid by the Company.

TRANSFER TO INVESTOR EDUCATION AND PROTECTION FUND

a. The members of the Company are informed that the dividends that remain unpaid / unclaimed for a period of 7 (seven) years from the date of transfer to the Unpaid / Unclaimed dividend account are required to be transferred to the Investor Education & Protection Fund (IEPF) Authority established by the Central Government.

Accordingly, during the financial year under review, the Company has transferred Unpaid/ Unclaimed dividend amounting to Rs.1,65,740 lying with the Company for a period of seven years pertaining to the financial year ended on March 31^st, 2010.

b. The members of the Company are also informed that as per the new provisions introduced in the year 2016, underlying equity shares on which dividend remain Unpaid/Unclaimed for a period of 7 (seven) consecutive years are required to be transferred to the Investor Education & Protection Fund (IEPF) Authority established by the Central Government.

Accordingly, during the financial year under review, the Company has transferred the following shares to IEPF Authority:

(i) 40,827 equity shares in respect of which dividend have not been claimed by the members for seven consecutive years pertaining to the financial year ended on Marh 31, 2010, upto financial year 2016.

SHARE CAPITAL

There is no change in the capital structure of the Company.

CHANGE IN THE NATURE OF BUSINESS

There was no change in the nature of business during the financial year 2017-2018 under review.

AWARDS AND RECOGNITION

During the year, your Company has been awarded:

1. Certificate for Yield Improvement

2. Shield for Overall Performance at Vendor Conference of Maruti Suzuki India Limited, held in Singapore.

Your Company has been awarded:

- a certificate for Fire Safety at Vendor Conference of Maruti Suzuki India Limited held in May, 2018; and

- a shield for cost reduction from Suzuki Motor Cycle India Private Limited.

MANAGEMENT DISCUSSION AND ANALYSIS

The Management Discussion And Analysis as stipulated under Regulation 34 of the SEBI (Listing Obligations And Disclosure Requirements) Regulations, 2015 is presented in a separate section, forming part of the Annual Report.

CREDIT RATING

ICRA has assigned its Short Term credit rating of A2 and Long term Credit rating of A-, indicating the outlook on the long term rating as ‘Stable’.

RELATED PARTY TRANSACTIONS

All contracts/ transactions entered into by the Company during the financial year with related parties were in the ordinary course of business and on arm’s length basis.

The Related Party Transactions Policy as approved by the Board is uploaded on the Company’s website at the web link: http://www.bharatseats.com/investors/ Policy on Related Party Transactions.

The information relating to particulars of contracts or arrangements with related parties referred to in sub section (1) of section 188 of the Companies Act, 2013 in Form AOC-2 is annexed as Annexure I, forming part of this Report.

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

The information relating to conservation of energy, technology absorption, foreign exchange earnings and outgo pursuant to Section 134(3)( m) of the Companies Act, 2013 read with Rule 8(3) of Companies(Accounts) Rules, 2014 is annexed hereto as Annexure II, forming part of this Report.

BOARD ANNUAL EVALUATION

In compliance with the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, and guidance note dt. 5^th January, 2017, performance evaluation was carried out of the Board, its Committees and individual Directors, including the Chairman of the Board.

Nomination & Remuneration Committee reviewed the evaluation criteria for the Board, its Committees, Executive and non-executive Directors and Chairman of the Company, considering qualification, expertise, attributes and various parameters based on which evaluation of the Board has to be carried out by the Company.

A separate meeting of the independent directors was convened which reviewed the performance of the Board (as a whole), Committees of the Board, the nonindependent directors and the Chairman.

The evaluation of Independent Directors was carried out by the Board.

This exercise was carried out through structured evaluation process covering various aspects of the Board such as composition of the Board/ Committees, experience, competencies, performance of specific duties etc. Separate exercise was carried out to evaluate the performance of individual directors, including Board Chairman who were evaluated on the parameters such as attendance, contribution at the meeting, independent judgment etc. and was found to be satisfactory.

DIRECTORS AND KEY MANAGERIAL PERSONNEL

DIRECTORS:

During the year under review, Mr. T.J. Chacko, Director (Operations) ceased to be Director of the company due to expiry of his tenure as Whole time Director w.e.f. 30.11.2017.

In accordance with the Articles of Association of the Company and relevant provisions of the Companies Act, 2013, Mr. Toshiya Miki (DIN: 07505339) retire by rotation at the ensuing Annual General Meeting.

The Board recommends his re-appointment.

The Company has received declaration from all the Independent Directors confirming that they meet the criteria of Independence as prescribed under Section 149(6) of the Companies Act, 2013 read with the schedules and rules made there under as well as SEBI(Listing Obligations And Disclosure Requirements) Regulations, 2015.

KEY MANAGERIAL PERSONNEL (KMP)

Mr. Rohit Relan, Chairman and Managing Director, Mr. Sanjeev Kumar, CFO and Ms. Ritu Bakshi, Company Secretary continue to be the KMPs of the Company in terms of Section 203 of the Companies Act, 2013 read with the Companies (Appointment & Remuneration of Managerial Personnel) Rules, 2014.

CORPORATE GOVERNANCE

The Company is committed to maintain the highest standards of Corporate Governance and adhere to the Corporate Governance requirements as set out by the Regulators/ applicable laws.

The report on Corporate Governance as stipulated under SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 been included in this Annual Report as a separate section, along with the Auditors’ Certificate.

DETAILS OF DEPOSIT AS PROVIDED UNDER CHAPTER V OF THE COMPANIES ACT, 2013

Your Company has not accepted any deposits under Chapter V of the Companies Act, 2013.

DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGISTRARS OR COURTS OR TRIBUNALS IMPACTING THE GOING CONCERN STATUS AND COMPANY’S OPERATION IN FUTURE

None

DETAILS OF ADEQUACY OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO THE FINANCIAL STATEMENTS

The Directors had laid down internal financial controls to be followed by the Company and such policies and procedures adopted by the Company for ensuring the orderly and efficient conduct of its business, including adherence to Company’s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information. The Audit Committee evaluates the internal financial control system periodically.

LISTING

The Equity shares of the Company are listed at Bombay Stock Exchange. The Company has paid listing fees due to the Stock Exchange.

CORPORATE SOCIAL RESPONSIBILITY (CSR)

The CSR Policy, recommended by the Audit Committee and approved by the Board is uploaded on the Company’s website at the web link: http://www.bharatseats.com/investors/Corporate Social responsibility Policy

The Corporate Social Responsibility Report as provided in Companies (Corporate Social Responsibility Policy) Rules, 2014 and there was no unspent amount during the financial year. The detail is annexed hereto as Annexure III.

EXTRACT OF ANNUAL RETURN

Pursuant to sub section (3) of Section 92 and Sub section (3)(a) of Section 134 of the Companies Act, 2013 read with Rule 12 of Companies (Management And Administration) Rules, 2014, the extract of Annual return as on 31st March, 2018 is annexed hereto as Annexure IV.

MEETINGS OF THE BOARD

Four meetings of the Board of Directors were held during the financial year. For further details, please refer the Report on Corporate Governance to this Annual Report.

AUDIT COMMITTEE

The Audit Committee comprises of Independent Nonexecutive Directors, namely Mr. G.N. Mehra, Chairman, Mr. P.K. Lahiri and Mr. Ravindra Gupta.

Powers and Role of the Audit Committee are included in the Corporate Governance Report. All the recommendations made by the Audit Committee were accepted by the Board.

DIRECTORS’ RESPONSIBILITY STATEMENT

Pursuant to Section 134(3)(c) of the Companies Act, 2013, the Directors confirm that :

(a) In the preparation of the annual accounts, the applicable accounting standards have been followed and no material departures have been made from the same.

(b) Appropriate accounting policies have been selected and applied consistently and judgments and estimates made that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at 31st March, 2018 and of the Profit or Loss of the Company for the year ending 31st March, 2018;

(c) Proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

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

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

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

PARTICULARS OF EMPLOYEES

Disclosure as required under Sub Rule 2 of Rule 5 of Companies (Appointment And Remuneration of Managerial Personnel) Rules, 2014 is annexed hereto as Annexure V.

The ratio of the remuneration of each Director to the median employees’ remuneration and others detail in terms of Sub Section 12 of Section 197 of the Companies Act, 2013, read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is annexed as part of the report to Annexure VI.

COMPANY’S POLICY ON DIRECTORS’ APPOINTMENT AND REMUNERATION INCLUDING CRITERIA FOR DETERMINING QUALIFICATIONS, POSITIVE ATTRIBUTES, INDEPENDENCE OF A DIRECTOR AND OTHER MATTERS AS PROVIDED UNDER SUB SECTION(3) OF SECTION OF THE COMPANIES ACT, 2013

The Company has formulated a Nomination and Remuneration Policy which annexed as part of the report as Annexure VII. Other details are provided in Corporate Governance Report.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS UNDER SECTION 186

There was no transaction falling under the provision of Section 186 during the financial year under review.

RISK MANAGEMENT

The Company has in place the Risk Management Policy to identify and assess the key risk areas and monitor the same.

The Board periodically reviews the risks and suggests steps to be taken to control the risks.

VIGIL MECHANISM

The Company has in place an established Whistle Blower Policy. The Audit Committee and the Board periodically reviews the policy and its implementation. The purpose of this policy is to provide a framework to promote responsible whistle blowing by employees.

The Whistle Blower Policy may be accessed at the Company’s website at web link: http://www. bharatseats. com/investors/policies/Whistle Blower Policy.pdf

HUMAN RESOURCES

Our relations with the employees are very cordial. Your Directors would like to place on record their appreciation of the commitment and efficient services rendered by all employees of the Company, without whose wholehearted efforts, the overall satisfactory performance of the Company would not have been possible

AUDITORS AND AUDITORS’ REPORT

(a) Statutory Auditors

The shareholders of the Company at last AGM held on September 21, 2017 appointed M/s S.R. Batliboi & Co. LLP Chartered Accountants, LLP, (ICAI Firm Registration No. 301003E/E300005, as the Statutory Auditors of the Company for an initial term of 5 years, subject to ratification by members at every Annual General Meeting, if required under the provisions of the Companies Act, 2013. However, the Companies Amendment Act, 2013 has deleted the condition of ratification of statutory auditors and accordingly they hold their office till the conclusion of Annual General Meeting to be held in 2022.

The Auditors’ Report given by M/s S.R. Batliboi & Co. LLP, Statutory Auditors on the financial statements of the Company for the year ended March 31, 2018 is part of the Annual Report. The Auditors’ Report does not contain any qualification, reservation or adverse remark. During the year under review, the Auditors had not reported any matter under Section 143 (12) of the Act, therefore no detail is required to be disclosed under Section 134 (3)(ca) of the Act.

(b) Secretarial Auditors

In accordance with the provisions of the Section 204 read with the Companies (Appointment And Remuneration of Managerial personnel) Rules, 2014, the Secretarial Audit was carried out by Mr. R S Bhatia, Practising Company Secretary for the Financial year: 2017-18. The report of Secretarial Auditor for the financial year 2017-18 is annexed herewith marked as Annexure VIII to this Report. The Secretarial Audit Report does not contain any qualification, reservation or adverse remark.

SAFETY

SAFETY FIRST is what the Company preaches and practise. It is an oath. With the regular guidance from safety team of MSIL, today Bharat Seats Limited (BSL) is among the top companies which has made safe work practices its culture.

Installation of Aerosol Fire Detection and Suppression System at all manufacturing locations for special Hazard Fire Protection is in itself a unique approach pioneered and installed by BSL.

Besides this the environmentally friendly practices, fire extinguishers of MAP 90%, thermography test, adherence to NBC 2016, NOC from fire office and regular third party inspections speaks of the commitment.

The review mechanism, monitoring and mock drills happen periodically and is carried out none other than by the CMD, Mr. Rohit Relan. SHE (Safety, Health and Environment) training is imparted to all employees at all levels.

EFFECIVE MANAGEMENT SYSTEMS

The Company is system certified for IATF (International Automotive Task Force) 16949 for quality, ISO 14001 for Environment and OHSAS for Occupational Health and Safety.

OHSAS is internationally recognized model for occupational Health and Safety Assessment series for Management Systems. The Company focuses to control all the risks involved in all the functions across the company even before they could happen.

Our Chairman and Managing Director, Mr. Rohit Relan focus on effective mitigation of all the likely risks involved, has led to all employees feeling a safe and healthy working environment thus resulting them in performing at their optimum level of competence.

ENVIRONMENT

The Company is committed to the protection of environment and is not involved in any type of activity hazardous to environment. It strictly adheres to the provisions of environmental laws. There is no trade effluent generated by the Company which may cause pollution. Our Company is an ISO14001 certified company.

DISCLOSURE AS REQUIRED UNDER SECTION 22 OF SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013

The Company has in place an Anti Sexual Harassment Policy in line with the requirement of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

The following is the summary of the complaints received and disposed off during the financial year: 2017-18:

a) No. of complaints received: NIL

b) No. of Complaints disposed off: NIL SHARES

a. Buy Back Of Securities

The Company has not bought back any of its securities during the year under review.

b. Sweat Equity

The Company has not issued any Sweat Equity Shares during the year under review.

c. Bonus Shares

No Bonus Shares were issued during the year under review.

d. Issue of Shares with Differential Rights

The Company has not issued any Shares with differential rights during the year under review.

e. Issue of Shares under Employee Stock Option Scheme

No such issue of shares under employee stock option scheme was made.

f. Issue of Shares through Private Placement- Nil

g. Issue of Equity Shares without Differential Voting Rights- Nil

ACKNOWLEDGEMENTS

The Directors place on record their deep appreciation of the valuable assistance and co-operation extended to the Company by Suzuki Motor Corporation, Japan, Maruti Suzuki India Ltd., Suzuki Motorcycle India Private Limited, Toyo Seat Co. Ltd., Japan, Houwa Kogyo Co Ltd., Japan, Inoac Corporation, Japan, State Bank of India, Bank of Tokyo- Mitsubishi UFJ Ltd., Yes Bank Ltd., HDFC Bank Ltd., IDBI Bank Ltd., various departments of Central Government and Haryana State Government. The directors convey their deep appreciation to each and every employee for her/ his efficient service, commitment and collective team work.

Your support as shareholders is greatly valued.

Your Directors thank you and look forward to the future with confidence.

For and on behalf of the Board

Bharat Seats Limited

Place : Gurugram (Rohit Relan)

Dated : 10.8.2018 Chairman and Managing Director