To the Members
Your Directors are pleased to present the Fifty-fifth Annual Report with the AuditedStatement of Accounts for the year ended 31st March 2016.
| ||Year ended 31.03.2016 ||Year ended 31.03.2015 |
| ||Rs. in Lacs ||Rs. in Lacs |
|Gross Profit before Interest Depreciation and Tax ||2787.65 ||2215.27 |
|Less: Finance Costs ||697.84 ||562.28 |
|Depreciation ||1251.49 ||1172.09 |
|Profit before Tax ||838.32 ||480.90 |
|Less: Provision for tax || || |
|Current Tax ||180.00 ||97.00 |
|MAT credit entitlement ||(172.98) ||(96.25) |
|Deferred Tax (Charge)/Credit ||283.35 ||62.02 |
|Profit after Tax ||547.95 ||418.13 |
|Add: Balance brought forward from previous year ||998.51 ||988.36 |
|Less: Carrying amount of Fixed Assets adjusted as per Companies Act 2013 ||- ||59.95 |
|Amount available for appropriations ||1546.46 ||1346.54 |
|Appropriations: || || |
|Proposed Dividend ||231.00 ||231.00 |
|Tax on proposed dividend ||47.03 ||47.03 |
|Transfer to General Reserves ||100.00 ||70.00 |
|Balance carried to Balance Sheet ||1168.43 ||998.51 |
| ||1546.46 ||1346.54 |
With improved traction on the sales front the overall Commercial Vehicle sector hasreturned positive numbers in 2015-16 due to the increase in spending on infrastructure andbenign fuel prices. During fiscal 2015-16 Heavy and Medium Commercial Vehicles maintainedtheir growth curve. The strong sales was attributed to fleet operators replacing theiraging fleets. After struggling for more than two years the LCV segment has seen the greenshoots of recovery and entered positive territory.
Indian Tractor Industry 2015-2016:
Farm sentiments continue to remain weak. The decline which started in October 2014continued during the year registering a degrowth of 9% for domestic sales. The demand inthe market continues to be marred by weak farm sentiments a result of stressed farmincomes on account of consecutive crop failures and a second consecutive year of weaksouth-west monsoon.
Despite of the sluggish tractor industry & marginal growth in LCV segment theCompany was able to achieve top line growth with the help of M&HCV segment growth andvarious initiatives taken for increasing the after market sales and getting approvals forIndustrial Bearings.
Industrial Bearing and Big Bearing Division:
Though the market for Industrial Bearings in India is large the challenges faced aredifficult than those faced in the automotive segment.
There are more than 2000 varieties of bearing part numbers with low volumes. Theapplications are very wide and critical needing very long validation periods sometimesmore than a year or two. Being a late entrant it poses the challenge of replacing anestablished supplier.
In spite of the above your Company has inched up in overcoming the challenges in manyindustries such as material handling construction agricultural process and wind energyand products are slowly but surely getting customer acceptance.
Your Company is confident of increasing volumes for Industrial Bearings in the comingyears thereby reducing its dependence on its traditional markets the Commercial Vehicleand Tractors.
The Directors recommend a dividend of R 2/- (20%) per Share for the financial yearended 31st March 2016 if approved at the forthcoming Annual General Meeting will bepaid to (i) all those Equity Shareholders whose names appear on the Register of Members ason 27th July 2016 and (ii) to those whose names as beneficial owners are furnished byNational Securities Depository Limited and Central Depository Services (India) Limited ason that date.
The Technical Assistance Agreement with NSK Ltd. Japan expired on 31st March 2016.Since the Company has absorbed substantial technology in the respective areas has chosennot to extend the same.
During the year the Company has not accepted any fixed deposits under the CompaniesAct 2013.
Your Company continues to enjoy the TS 16949 as well as the ISO 14001 certifications.The OE customers continue to repose their confidence with self-certification status forthe Company.
DIRECTORS' RESPONSIBILITY STATEMENT:
Based on the framework of internal financial controls and compliance systemsestablished and maintained by the Company the work performed by the internal statutorycost and secretarial auditors and the reviews performed by the Management and the relevantBoard Committees including the Audit Committee the Board is of the opinion that theCompany's internal financial controls were adequate and effective during the year ended31st March 2016. Accordingly pursuant to Section 134(5) of the Companies Act 2013based on the above and the representations received from the Operating Management theBoard of Directors to the best of their knowledge and ability confirm that:
i. in the preparation of the annual accounts the applicable accounting standards havebeen followed and that there were no material departures therefrom;
ii. they have in the selection of the accounting policies consulted the statutoryauditors and have applied their recommendations consistently and made judgements andestimates that are reasonable and prudent so as to give a true and fair view of the stateof affairs of the Company as at 31st March 2016 and of the profit of the Company for theyear ended on that date;
iii. they have taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of the Companies Act 2013 forsafeguarding the assets of the Company and for preventing and detecting fraud and otherirregularities;
iv. they have prepared the annual accounts on a going concern basis;
v. they have laid down internal financial controls to be followed by the Company andthat such internal financial controls are adequate and were operating effectively duringthe year ended 31st March 2016; and
vi. proper system has been devised to ensure compliance with the provisions of allapplicable laws and that such systems were adequate and operating effectively during theyear ended 31st March 2016.
In accordance with the provisions of Section 152 of the Companies Act 2013 Mr. S. M.Patel retires by rotation and being eligible offers himself for reappointment. Necessaryresolution is being proposed for his reappointment as Director at the ensuing AnnualGeneral Meeting of the Company. A brief resume and particulars relating to him are givenseparately under the report on Corporate Governance.
KEY MANAGERIAL PERSONNEL (KMP):
Pursuant to provisions of Sections 2(51) and 203 of Companies Act 2013 read with Rule8 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014following persons are acting as KMP as on 31st March 2016:
Mr. P.M. Patel Managing Director
Mr. S.K. Choudhary Chief Financial Officer
Mr. S.B. Desai Company Secretary
None of the Key Managerial Personnel has resigned during the year ended 31st March2016.
FORMAL ANNUAL EVALUATION:
Pursuant to the provisions of the Companies Act 2013 and Regulation 25(4) of SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015 the IndependentDirectors have carried out annual performance evaluation of the Board of Directors as awhole and have come to the conclusion that the Board meets expectations.
INDEPENDENT DIRECTORS' DECLARATION:
The Company has received the declarations in the prescribed format from eachIndependent Director confirming that they meet the criteria of independence as envisagedin the provisions of Section 149 of the Companies Act 2013 read with Regulation 16 ofSEBI (Listing Obligations and Disclosure Requirements) Regulations 2015.
CORPORATE SOCIAL RESPONSIBILITY:
Your Company has formulated a Comprehensive CSR policy in line with the Companies Act2013. In line with the CSR policy the following activities are undertaken by the Company:
Shouldering Education Responsibility.
In this field we are supporting an English Medium School in rural area of Gujaratwhich has an enrolment of approximately 600 students.
We provide facility for Outdoor and Indoor sports and activities through aSports Complex at Bharuch.
For the Youth:
An Academy is established to coach youngsters in cricket and other outdoor sports.
Providing shelter and food to the needy in disaster situation.
We have established facility for processing part of the waste generated by theCompany to produce organic fertilizer. We assist neighbouring establishments to set upsuch facilities. The fertilizer produced is not only used by the Company but also publicat large and whoever requires the same.
The Annual Report on CSR activities in accordance with the Companies (Corporate SocialResponsibility) Rules 2014 is set out as "Annexure (A)" to this Report.
The Statutory Auditors M/s. Parikh & Shah Chartered Accountants Mumbai (FirmRegistration Number: 107528W) were appointed as Statutory Auditors of the Company in the53rd Annual General Meeting of the Company held on 17th July 2014 for a period of threeconsecutive years subject to ratification by members every year in the Annual GeneralMeeting. Based upon the declaration on their eligibility consent and terms of engagementyour Directors propose ratification of their appointment in 55th Annual General Meetinguntil conclusion of 56th Annual General Meeting of the Company.
Mr. D.M. Dalal a Practising Company Secretary was appointed as Secretarial Auditorto carry out Secretarial Audit of the Company. In terms of provisions of Section 204 ofthe Companies Act 2013 a Secretarial Audit Report has been annexed to this Report "(AnnexureB)".
M/s. B.J.D. Nanabhoy & Co. Cost Accountants were appointed as Cost Auditors tocarry out the audit of the cost records of the Company for the Financial Year ended 31stMarch 2016. Based upon the declaration on their eligibility consent and terms ofengagement your Directors propose their appointment for the year ending 31st March 2017.
Explanation or Comments on disqualifications reservations adverse remarks ordisclaimers in the auditors' reports:
There have been no disqualifications reservations adverse remarks or disclaimers inthe auditors' reports requiring explanation or comments by the Board.
ENERGY CONSERVATION TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO:
The information on conservation of energy technology absorption and foreign exchangeearnings and outgo stipulated under Section 134(3)(m) of the Companies Act 2013 read withRule 8 of the Companies (Accounts) Rules 2014 is set out as "Annexure (C)" tothis Report.
EXTRACT OF ANNUAL RETURN:
The details forming part of the extract of the Annual Return in Form MGT-9 inaccordance with Section 92(3) of the Companies Act 2013 read with the Companies(Management and Administration) Rules 2014 are set out herewith as "Annexure(D)" to this Report.
PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES:
In terms of the provisions of Section 197(12) of the Companies Act 2013 read with Rule5(2) and 5(3) of Companies (Appointment and Remuneration of Managerial Personnel) Rules2014 the names of employees drawing remuneration in excess of the limits set out in thesaid rules forming part of this report is given in the Annexure to this Report. Howeverpursuant to provisions of Section 136(1) of The Companies Act 2013 all reports andaccounts are sent to all the shareholders of the Company except this annexure. Anyshareholder interested in inspecting this report can visit our registered office orwrite to the Company Secretary for a copy of it.
Disclosures pertaining to remuneration and other details as required under Section197(12) of the Companies Act 2013 read with Rule 5(1) of Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 have been appended to this Report "(AnnexureE)".
MANAGEMENT'S DISCUSSION AND ANALYSIS:
Pursuant to Regulation 34 read with Schedule V of the SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 detailed review of operations performance andfuture outlook of the Company is covered under separate Annexure to this report asManagement's Discussion and Analysis "(Annexure F)".
A separate Section on Corporate Governance is included in the Annual Report inaccordance with SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015along with Auditors' Certificate confirming the compliance of conditions on CorporateGovernance and the same is annexed thereto "(Annexure G)".
The Audit Committee comprises of Mr. Jal R. Patel Chairman Mr. Nalin M. Shah and Mr.S.M. Patel are members. Further details relating to the Audit Committee are provided inthe Corporate Governance Report which forms part of this report.
The Board has accepted all the recommendations made by Audit Committee during the year.
POLICY ON NOMINATION AND REMUNERATION:
The Company's policy on Nomination and Remuneration is framed with objectives as under:
1. To formulate criteria and advise the Board in matters of determining qualificationscompetencies positive attributes and independence of Directors and policies relating totheir appointment and removal;
2. To review corporate goals and objectives to set norms of performance evaluation andto lay out remuneration principles for Directors KMP and Senior Management linked totheir effort performance and contribution towards achievement of organisational goals;
3. To evaluate performance and give recommendations to the Board on remunerationpayable to the Directors KMP and Senior Management; and
4. To review and recommend to the Board measures to retain and motivate talentincluding KMP and Senior Management Personnel with a view to ensuring long termsustainability and competitiveness of the organisation.
Criteria and Qualification for Nomination and Appointment:
A person to be appointed as Director KMP or at Senior Management level should possessadequate and relevant qualification expertise and experience for the position that he/sheis being considered for. The Nomination and Remuneration Committee (NRC) will evaluatewhether qualification expertise and experience possessed by a person issufficient/satisfactory for the concerned position and the NRC will make appropriaterecommendations to the Board of Directors.
Policy on Remuneration:
1. The remuneration (including revisions) to Directors is recommended by NRC to theBoard for approval. The remuneration (including increments) to the Directors sorecommended by NRC to the Board should be within the limits under the Companies Act 2013read with the Rules thereunder and as approved by the shareholders of the Company.
2. None of the Directors (including Independent Directors) shall be entitled to anystock option of the Company.
3. While determining Remuneration to KMP Senior Management Personnel and otheremployees the Company encourages superior performance. The objective is to set the totalremuneration at levels to attract motivate and retain high-calibre and high potentialpersonnel in a competitive market.
During the year four Board Meetings and four Audit Committee Meetings were convened andheld. The details of which are given in the Corporate Governance Report. The interveninggap between the meetings was within the period prescribed under the Companies Act 2013.
RELATED PARTY TRANSACTIONS:
No related party transactions were entered into during the financial year.
The policy on Related Party Transactions as approved by the Board is posted on theCompany's website.
PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS BY COMPANY:
Details of Loans Guarantees and Investments covered under the provisions of Section186 of the Companies Act 2013 are given in the notes to Financial Statements.
DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION PROHIBITIONAND REDRESSAL) ACT 2013:
The Company has in place a Sexual Harassment Policy in line with the requirement of TheSexual Harassment of Women at the Workplace (Prevention Prohibition & Redressal) Act2013. Internal Complaints Committee (ICC) has been set up to redress complaints receivedregarding sexual harassment. All employees (permanent contractual temporary trainees)are covered under the policy. No complaints have been received by the Committee during theyear.
The Directors wish to place on record their deep sense of appreciation for thecommitted services of the employees of the Company at all levels. The Directors alsoexpress their sincere appreciation for the assistance and co-operation received fromBanks Customers and Dealers during the year.
| ||For and on behalf of the Board |
|Place : Mumbai ||S. M. PATEL |
|Date : 10th May 2016. ||Chairman |