The Members SNL Bearings Limited
Your Directors have pleasure in presenting their Thirty Seventh Annual Report togetherwith Audited Accounts for the year ended 31st March 2017.
1. Financial Results
| ||Year ended 31st March 2017 ||Year ended 31st March 2016 |
| ||Rs in lakhs ||Rs in lakhs |
|Profit before providing for interest & depreciation ||1075.42 ||935.52 |
|Less : Finance costs ||12.94 ||33.28 |
|Less: Depreciation ||70.77 ||51.41 |
|Profit Before Tax ||991.71 ||850.83 |
|Tax expenses ||332.76 ||283.07 |
|Profit After Tax ||658.95 ||567.76 |
|Add/Less: Balance brought forward from previous year ||112.05 ||(235.84) |
|Less: Proposed dividend on Preference Shares ||(0.59) ||(89.91) |
|Less: Additional Income tax on dividend on Preference ||(0.12) ||(18.03) |
|Shares || || |
|Less: Final dividend on Equity Shares ||-- ||(72.23) |
|Less: Interim Dividend on Equity Shares ||(108.35) ||-- |
|Less: Additional Income tax on dividend on Equity ||(22.06) ||(14.70) |
|Shares || || |
|Less: Transfer to capital redemption reserve ||(25.00) ||(25.00) |
|Closing balance of surplus in statement of Profit and loss ||614.88 ||112.05 |
Net revenues during the year at Rs. 3352.78 lakhs (previous year Rs. 3006.67 lakhs) arehigher by 11.51%. Despite the challenging environment in the Indian economypost-demonetization and implementation of new BIS-IV emission control norms your Companyhas achieved sales growth. Manufacturing and industrial activity was affected during thesecond half of the year. However demand forecasts for FY 2017-18 by most customers areencouraging.
Profit before tax (PBT) has increased by 16.56% from Rs.850.83 lakhs (Previous year) toRs.991.71 lakhs on account of higher volumes helped by global decline in commodity prices.Your Company is confident of further capitalizing on growth opportunities during thecurrent year and enhancing its relationships with its customers placing emphasis onimproving quality and productivity.
On 6th February'2017 Directors have declared interim dividend of Rs.3/-per equityshare of Rs.10/- (Rs.2/- per share for previous year) payable to members/beneficial ownersas per the Register of
Members as applicable aggregating Rs. 130.41 lacs. The Directors have not recommendedany final dividend and decided that the interim dividend be treated as final.
4. Corporate Social Responsibility activities (CSR)
The CSR Committee has defined the areas which will be the preferred activities for theCompany.
For the year ended 31.3.2017 an amount of Rs.13.50 lakhs has been contributed toPratham Education and Sankalp A pledge to Change organizations who have been doingcommendable work for the under privileged sections of society particularly in the stateof Jharkhand where Company's activities are located. The details of the same are availableon the Company's website. Detailed report on CSR activities including amount spent isgiven in Annexure I.
5. Safety Healthy & Environment
The Company's plant at Ranchi has been awarded internationally recognized externalcertification viz. ISO14001:2004 (for adherence to environmental processes)OHSAS:18001:1999(for Health & Safety) and ISO/TS:16949:2002 (quality management)
Work force is trained at regular intervals in preventive aspects of safety andprevention of work related accidents.
Besides creating general awareness among employees towards environmental protectionthe management encourages initiatives which are targetted towards conserving naturalresources and improvements in resource efficiency across all processes.
6. Public Deposits
During the year the Company has not accepted any deposits from the public/ Membersunder Section 73 of the Companies Act 2013 read with Companies (Acceptance of Deposits)Rules
2014. As on 31.3.2017 there are no fixed deposits with the Company.
7. Extract of Annual Return:
The details forming part of the extract of the Annual Return as required under theCompanies Act
2013 is given in Annexure II.
8. Related Party transactions
Transactions between the Holding Company NRB Bearings Ltd and co-subsidiary NRBBearings (Thailand) Ltd have taken place in the ordinary course of business. Alltransactions entered with the related parties have been at arms length and are incompliance with the applicable provisions of the Companies Act 2013 and the ListingRegulations. The individual transactions have been regularly placed before the auditcommittee and the Board of Directors on a quarterly basis and have been approved inadvance. Details of the remuneration/sitting fees paid to the Directors and KMP asapplicable and all transactions appear under Notes to accounts as note no. 25 (c) to theAnnual Accounts. The Related Party Transactions Policy as approved by the Board isuploaded on the Company's website.
The particulars of contracts or arrangements with related parties referred to inSection 188 (1) of the Companies Act 2013 in Form AOC-2 pursuant to Section 134 (3) (h)of the Act and Rule 8(2) of the Companies (Accounts) Rules 2014 is attached as Annexure-IIIto this Report.
9. Corporate Governance
Pursuant to SEBI (Listing Obligations and Disclosure Requirements) Regulations2015 aManagement Discussion and Analysis Corporate Governance Report and Auditors' Certificateregarding compliance of conditions of Corporate Governance are made part of the AnnualReport. Details of Board meetings held during the year under review and the composition ofthe various committees are included therein.
The Code of Conduct for directors and Senior Management personnel of the Company asapproved by the Board has been affirmed on an annual basis by all the directors CompanySecretary and the General Manager of the Company. All independent directors have alsosubmitted the declaration of independence confirming that they meet the criteria ofindependence as provided under section 149 of the Companies Act 2013.
The relevant certification on the various matters specifiedunder Regulation 17 (8) ofSEBI (LODR)
Regulations 2015 has been done by the General Manager/Plant Head as (CEO) and aDirector of the Company as (CFO).
10. Internal Control System
There are adequate internal financial controls in place with reference to the financialstatements. During the year your Company has upgraded its ERP system for better internalfinancecontrols.
The Report of the internal Auditors are placed before the Audit Committee andrecommendations have been included in the ERP upgrade implementation to further improveefficiencies. During the year under review these controls were evaluated and nosignificant weakness was identifiedeither in the design or operation of the controls. Thisformalized system of internal control facilitates effective compliance of Section 138 ofthe Companies Act 2013 and the Listing Regulations.
Your Company's Statutory Auditors have in their reportconfirmedthe adequacy of theinternal control procedures.
11. Vigil Mechanism
The Company has formulated and implemented the whistle Blower Policy/vigil mechanism.This has provided a mechanism for Directors and employees of the Company and other personsdealing with the Company to report to the Chairman of the Audit Committee any instance ofunethical behavior actual or suspected fraud or violation of the Company's code ofconduct. More details about this Policy are given in the Corporate Governance Reportwhich forms part of this Annual Report. The Whistle Blower Policy is available on theCompany website. All complaints received are reviewed and investigated by management andwherever required suitable corrective actions are taken.
12. Directors and Key Managerial Personnel Retirement by Rotation
In accordance with the provisions of Section 152 Ms. H S Zaveri (DIN 00003948) willretire by rotation at the ensuing Annual General Meeting of the Company and beingeligible has offered herself for re-appointment. The Board recommends her re-appointment.Her brief profile is the part of the Corporate Governance Report annexed to this report.
Independent Directors Declaration
The Independent Directors have submitted the Declaration of Independence as requiredpursuant to Section 149 of the Companies Act 2013 and the provisions of ListingRegulations stating that they meet the criteria of independence provided therein. Theprofile of the Independent Directors forms part of the Corporate Governance Report. Mr. VS Iyer Director of the Company passed away on 12th January2017.The Board records itsappreciation of the valuable contribution made by Mr. Iyer to the Board/ committeeproceedings during his tenure. The independent directors have also met separately on 29thMarch 2017.
Key Managerial Personnel
Pursuant to the provisions of Sections 2(51) 203 of the Companies Act 2013 read withThe Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 thefollowing are the Key Managerial Personnel:
Mr S C Rangani Director (with financial knowledge & experience) oversees theFinance operations & functions andhascertified Officer certainmattersasChiefFinancial
|Mr. Bankim Purohit ||Company Secretary and Compliance Officer |
|Mr. KKP Sinha ||GM & Plant Head CEO |
13. Directors' Responsibility Statement
Pursuant to the requirements under Section 134 (3) (c) of the Companies Act 2013 yourDirectors state that: i. in the preparation of annual accounts the applicable AccountingStandards have been followed along with proper explanations relating to materialdepartures if any have been furnished; ii. The accounting policies have been selectedand these have been applied consistently and judgments and estimates made thereon arereasonable and prudent so as to give a true and fair view of the state of affairs of theCompany as at 31st March 2017 and of the profit of the
Company for that period; iii. proper and sufficient care for the maintenance ofadequate accounting records accordance with the provisions of the Companies Act 2013 forsafeguarding the assets of the Company and for preventing and detecting fraud and otherirregularities; iv. the Annual Accounts have been prepared on a going concern basis. v.internal financialcontrols have been laid down and being followed by the Company and thatsuch financial controls are adequate and are operating effectively. vi. proper systems toensure compliance with the provisions of all applicable laws have been devised and thatsuch systems are adequate and operating effectively.
14. Particulars of Loans Guarantees or Investments:
Your Company has been rated CRISIL A2' for the Short-term Bank facilityand the Company's long-term facilities have been re-affirmed asCRISILBBB+/STABLE' as on April 2016. During the year under review the Company has notadvanced any loans given guarantees. Certain investments of temporary surplus funds inMutual Funds has been done with Board's approval.
15. Orders passed by the Regulators or the Courts or the Tribunals
There are no material orders passed by the Regulators or Courts or Tribunalsimpacting the going concern status of the Company's operation. 16. Particulars ofEmployees
In terms of the provisions of Section 197(12) of the Act there are no employees of theCompany drawing remuneration in excess of the limits set out in the said provision.
The disclosure pertaining to remuneration and other details as required under Section197(12) of the Companies Act 2013 read with Rule 5(1) of the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 are annexed to this report at AnnexureIV.
17. Information pursuant to Section 134(3)(m) of the Companies Act 2013 andRule no.8 of Companies (Accounts) Rules 2014
a. Measures taken for conservation of energy During the year Energy Audit wasconducted by CII Team of the plant of your Company and the findings reported potentialsavings are likely to be achieved based on the recommendations made by CII team. Thecompany is making all efforts for conservation of energy on a continuous basis and somemajor improvements during the FY16-17 are noted as below:
|Actions taken ||Annual Saving |
| ||(Rs. in Lakhs) |
|1 Power factor improved from 0.85 to 0.96. This has resulted in energy saving and thereby cost saving. ||2.86 |
|2 Replaced 10 H.P. Submersible pump with 3 H.P. Submersible pump. ||2.30 |
|3 Solenoid valve fitted in Air line of ST 1 to ST6 & ||6.50 |
|WB2 machine. Seal changed in MOCF1/2 KF1 SF6 & SD4 machines. || |
|ted in Aida Press which resulted in fit er ||3.24 |
|4 Air bust overall reduction in pressure setting of compressor from 7.5 BAR to 5 Bar due to this there is energy saving of 2kg/cm air and reduction of power -12.30% || |
|Total ||14.90 |
b. Technology absorption
With the objective of improving productivity as well as quality during the year theCompany has continued its efforts on improvements in process parameters and reduction incycle times. Improvements made on press machines for manufacturing cage bearings byreduction in setup time and resetting time. As a result average production quantity hasincreased. c. Foreign exchange earnings & outgo Details regarding expenditure andearnings in foreign exchange have been given in Note No. 25(g) and 25(h)respectively of the audited accounts of the Company.
Appointment of M/s.Deloitte Haskins & Sells Chartered Accountants as Auditors wasapproved till 31st March' 2017. The Audit Committee and the Board of Directors recommendsthe appointment of M/s. Walker Chandiok & Co. LLP Chartered Accountants as statutoryauditors in place of M/s. Deloitte Haskins & Sells retiring Auditors andsuitable resolution for the same has been included in the AGM notice annexed. Acertificate from the incoming auditors have been received to the effect that theirappointment if made would be within the limits prescribed under section 139 of theCompanies Act 2013.
The Board had appointed Mr. Upendra Shukla Company Secretary in whole-time practiceto carry out Secretarial Audit under the provisions of Section 204 of the Companies Act2013 for the Financial Year 2016-17. The report of the Secretarial Auditor is annexed tothis report as
Annexure V. Cost Auditor
Pursuant to the provisions of Section 148 of the Companies Act 2013 and the Companies(Cost Records and Audit) Rules 2014 the products manufactured by the Company andbased on the criteria laid down under the aforesaid rules your Company is not covered forCost Audit or maintenance of Cost Records.
Explanation or Comments on disqualifications reservations adverse remarks ordisclaimers in the auditor's reports
There have been no disqualifications reservations adverse remarks or disclaimers inthe auditor's reports requiring explanation or comments by the Board.
The Board wishes to acknowledge and thank all stakeholders for their whole heartedsupport and contribution by the Company's bankers customers suppliers and all employeesof the Company. Your Directors also acknowledge the valuable support and activeinvolvement and encouragement by all members of the management team of NRB Bearings Ltd.towards the improved efficiencies of the Company.
| ||On behalf of the Board |
| ||H S ZAVERI |
| ||Chairman |
|Mumbai: May 26 2017 || |