To The Members
Your Directors are pleased to present herewith the 25th Annual Report on the businessand operations of your Company and the Audited Financial Statements of the Company for theyear ended 31st March 2016 together with the Auditors Report thereon.
|Financial Particulars ||For the year ended March 31 |
| ||2016 ||2015 |
|Revenue from operations ||231460040 ||272000414 |
|Other Incomes ||228174 ||10831067 |
|Total revenues ||231231866 ||282831481 |
|Cost of Material consumed ||127748689 ||142025792 |
|Changes in Inventory ||(27083347) ||3511821 |
|Employee Benefit expense ||44490176 ||37122804 |
|Finance Costs ||16600474 ||22313799 |
|Depreciation and amortization expense ||22299467 ||16584734 |
|Other expenses ||41746759 ||36330932 |
|Total Expenses ||225802218 ||257889883 |
|Profit before tax ||5429648 ||24941598 |
|Tax expense ||1984645 ||14906776 |
|Profit for the year ||3445003 ||17400934 |
During the year under review your Company has achieved total revenue of Rs.231231866/- as against Rs. 282831481/- in the previous year.
Profit before tax during the year worked out to Rs. 5429648 as compared to Rs.24941598 in the previous year.
SUB-DIVISION OF SHARES
During the year under review the Company has sub-divide its Equity Share of theCompany having Face value of Rs.100/- (Rupees Hundred only) each into 10(Ten) EquityShares of Face value of Rs. 10/- (Rupee Ten only) each fully paid-up and consequently theAuthorized Share Capital of the Company of Rs. 2500000/- (Rupees Twenty-Five Lakh only)would comprise of 250000 (Two Lakh Fifty Thousand) Equity Shares of Rs. 10/- (Rupee Tenonly) each.
INCREASE IN AUTHORISED SHARE CAPITAL
During the year under review the Authorised Share Capital of the Company was increasedfrom Rs. 2500000 (Rupees Twenty Five Lakhs Only) consisting of 250000 Equity shares ofRs. 10 Each to Rs. 50000000 (Rupees Five Crore Only) consisting of 5000000 Equityshares of Rs. 10 Each.
During the year under review the Company made a bonus allotment of 3250000 bonusshares of face value of Rs. 10/- each in ratio of1:13 (i.e. thirteen equity shares forevery one equity share already held) to the Members on May 30 2015 by capitalizing apart of the reserves.
In view of requirement of financial resources and considering the future requirementsof funds your directors are unable to recommend any Dividend for the year ended on March31 2016.
CONVERSION OF COMPANY INTO A PUBLIC LIMITED COMPANY
During the year under review the company was converted into a public limited companyand the name of the company has been changed to "VISHAL BEARINGS LIMITED".Pursuant to conversion issue of fresh certificate of incorporation dated June 05 2015.
DEMATERIALIZATION OF SHARES
The shares of your Company are being traded in electronic form and the Company hasestablished connectivity with both the depositories i.e. National Securities DepositoryLimited (NSDL) and Central Depository Services (India) Limited (CDSL). Pursuant todematerialization of shares the company has entered into an agreement with NSDL &CDSL. As on March 31 2016 100% of the share capital of the company is dematerialized.
INITIAL PUBLIC OFFERING AND LISTING OF SHARES ON BSE (SME PLATFORM)
During the year under review company has come out with an Initial Public Offering ofRs. 1296000 Equity shares of the Face Value of Rs. 10 Each for cash at a price of Rs.25/- per share (including a share premium of Rs. 15/- each).
The Companys shares are listed with the Bombay Stock Exchange (BSE SME) witheffect from October 15 2015 pursuant its initial public offering (IPO). The company haspaid its Listing fees for the year 2016-17.
UNIFORM LISTING AGREEMENT
The Securities and Exchange Board of India (SEBI) on September 2 2015 issued SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015 with the aim toconsolidate and streamline the provisions of the Listing Agreement for different segmentsof capital markets to ensure better enforceability. The said regulators were effectiveDecember 1 2015. Accordingly all listed entities were required to enter into the UniformListing Agreement within the six months from the effective date. The Company entered intoListing Agreement with BSE (SME Platform) Limited.
DIRECTORS AND KEY MANAGERIAL PERSONNEL
The Board of Directors of the Company at its meeting held on May 02 2015 confirmed andapproved the appointment of the following as "Key Managerial Personnel" pursuantto the provisions of Section 203 of the Companies Act 2013:
Mr. Dilipkumar Changela Chairman and Managing Director
Mr. Hiralal Changela whole time director
Mr. Vrajlal Changela whole time director
Mr. Vishal Changela Chief Financial Officer
The members at its Meeting held on May 28 2015 had appointed Mr. Rakesh Savani Mr.Niteshkumar Patel and Ms. Urja Ghetiya as Independent Directors of the Company for aPeriod of five consecutive years. The Company has received declarations from allIndependent Directors that they meet the criteria of independence as laid down underSection 149(6) of the Act and Clause 49 of the Listing Agreement.
The Board of Directors of the Company at its meeting held on May 30 2015 confirmed andapproved the appointment of the following as "Key Managerial Personnel" pursuantto the provisions of Section 203 of the Companies Act 2013:
Ms. Dimpi Sampat Company Secretary
Necessary resolutions for the re-appointment or Change of Designation of the aforesaidDirectors have been included in the Notice convening the ensuing EGM and details of theproposal for re-appointment are mentioned in the Explanatory Statement to the Notice.
INDEPENDENT DIRECTORS DECLARATION
The Independent Directors have confirmed and declared that they are not disqualified toact as an Independent Director in compliance with the provisions of Section 149 of theCompanies Act 2013 and confirmed that the fulfill all the conditions specified in theCompanies Act 2013 making them eligible to act as Independent Directors.
EVALUATION OF THE BOARDS PERFORMANCE
In compliance with the Companies Act 2013 and Regulation 17(10) of SEBI (ListingObligations and Disclosure Requirements) Regulations 2015 mandate that the Boardevaluation framework. The framework includes the evaluation of directors on variousparameters such as:
Board dynamics and relationships
Relationship with stakeholders
Company performance and strategy
Tracking Board and Committees effectiveness
The Companies Act 2013 states that a formal annual evaluation needs to be made by theBoard of its own performance and that of its committees and individual directors. ScheduleIV of the Companies Act 2013 states that the performance evaluation of independentdirectors shall be done by the entire Board of Directors excluding the director beingevaluated.
The evaluation of all the directors and the Board as a whole was conducted based on thecriteria and framework adopted by the Board. The evaluation process has been explained inthe Corporate Governance report. The Board approved the evaluation results ascollated by the nomination and remuneration committee.
The Audit Committee comprises of Sh. Rakesh Savani as Chairman and Sh. Urja Ghetiya andSh. Vrajlal Changela as members. The details of term of reference of the Audit Committeemember dates of meeting held and attendance of the Directors are given separately in theCorporate Governance Report.
NOMINATION AND REMUNERATION COMMITTEE
The Nomination and Remuneration Committee comprises of Sh. Rakesh Savani as Chairmanand Sh. Urja Ghetiya and Sh. Niteshkumar Patel as members. The details of term ofreference of the Committee member dates of meeting held and attendance of the Directorsare given in the Corporate Governance Report.
SHAREHOLDER/INVESTORS RELATIONSHIP COMMITTEE
The Shareholder/Investors Relationship Committee comprises of Sh. Urja Ghetiya asChairman and Sh. Rakesh Savani and Sh. Dilipkumar Changela as members. The details of termof reference of the Committee member dates of meeting held and attendance of theDirectors are given separately in the Corporate Governance Report.
During the year under review the Board Meetings convened and held the details ofwhich are given in the Corporate Governance Report.
CODE OF CONDUCT
Directors Key Managerial Personnel and senior management of the Company have confirmedcompliance with the Code of Conduct applicable to the Directors and employees of theCompany and the declaration in this regard made by the Whole Time Director is attached as AnnexureI which forms a part of this Report of the Directors.
PREVENTION OF INSIDER TRADING
The Company has adopted a code of conduct for prevention of Insider Trading with a viewto regulate trading in securities by the directors and designated employees of thecompany. The code requires pre-clearance for dealing in the Companys shares andprohibits the purchase or sale of company shares by the directors and the designatedemployees while in possession of unpublished price sensitive information in relation tothe Company and during the period when the Trading Window is closed. The Board isresponsible for implementation of the code. All board of directors and the designatedemployees have confirmed compliance with the code.
INTERNAL CONTROL SYSTEM
The Company has adequate internal control systems and procedures designed toeffectively control the operations at its Head Office Plants and Depots. The internalcontrol systems are designed to ensure that the financial and other records are reliablefor the preparation of financial statements and for maintaining assets. The Company haswell designed Standard Operating Procedures. Independent Internal Auditors conduct auditcovering a wide range of operational matters and ensure compliance with specifiedstandards. Planned periodic reviews are carried out by Internal Audit. The findings ofInternal Audit are reviewed by the top management and by the Audit Committee of the Boardof Directors. Based on the deliberations with Statutory Auditors to ascertain their viewson the financial statements including the Financial Reporting System and Compliance toAccounting Policies and Procedures the Audit Committee was satisfied with the adequacyand effectiveness of the Internal Controls and Systems followed by the company.
The Company has established a Whistle Blower Policy to encourage and facilitateemployees to report genuine concerns about unethical behaviors actual / suspected fraudsand violations of companys code of conduct or ethical Policy. The Whistle Blower Policy provides for (a) adequate safeguards against victimization of persons whouse the Vigil Mechanism; and (b) direct access to the Chairperson of the Audit Committeeof the Board of Directors of the Company in appropriate or exceptional cases. The AuditCommittee of the company oversees the implantation of the Whistler Blower Policy.
DISCLOSURE AS PER THE SEXUAL HARRASMENT OF WOMEN AT WORKPLACE (PREVENTION PROHIBITIONAND REDRESSAL) ACT 2013
The Company has in place a Prevention of Sexual Harassment policy in line with therequirements of the Sexual Harassment of Women at the Workplace (Prevention Prohibitionand Redressal) Act 2013. An Internal Complaints Committee has been set up to redresscomplaints received regarding sexual harassment. All employees (permanent contractualtemporary trainees) are covered under this policy.
During the year 2015-2016 no complaints were received by the Company related to sexualharassment.
M/s P. Ghanshyam & Co. Chartered Accountants Statutory Auditors of the Companyhas resigned from the company w.e.f. May 20 2016.
M/s. SVK & Associates Chartered Accountants Statutory Auditors of the Companyhold office upto the conclusion of this Annual General Meeting who were appointed in theBoard Meeting due to causal vacancy to hold office on May 26 2016 until the conclusion ofthis AGM. Your company seeks re-appointment of Statutory Auditors at the ensuing AnnualGeneral Meeting.
There are no qualifications or reservation or remarks made by the Auditors in theirReport.
A Internal Audit was conducted during the year by the Internal Auditor Mr. MayurRaiyani Chartered Accountants appointed as Internal Auditor for the year 2015-16.
A Secretarial Audit was conducted during the year by the Secretarial Auditor M/s. K. P.Ghelani & Associates Practicing Company Secretaries. The Secretarial Auditors Reportis attached as Annexure VI.
There are no qualifications or observations or remarks made by the Secretarial Auditorin their Report.
CORPORATE SOCIAL RESPONSIBILITY
The Company is not covered under the Criteria as mentioned in Section 135 of theCompanies Act 2013 which specifies the requirement of constituting the Corporate SocialResponsibility Committee.
PARTICULARS OF EMPLOYEES
Information in accordance with the provisions of Section 134(3)(q) and Section 197(12)of the Companies Act 2013 read with Rule 5(1) of the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 regarding employees is given in AnnexureII.
PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS
The details of Loans Guarantees and Investments covered under the provisions ofSection 186 of the Act are given in the notes to the Financial Statements.
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNING AND OUTGO
The particulars required to be furnished under Section 134(3)(m) of the Companies Act2013 read with Companies (Disclosure of particulars of Board of Directors) Rules 1988 areset out in Annexure III which forms part of the report.
RELATED PARTY TRANSACTIONS
In line with the requirements of the Companies Act 2013 and Listing Regulations yourCompany has formulated a Policy on Related Party Transactions. The Policy intends toensure that proper reporting approval and disclosure processes are in place for alltransactions between the Company and Related Parties. All Related Party Transactions areplaced before the Audit Committee for review and approval.
Prior omnibus approval is obtained for Related Party Transactions on a quarterly basisfor transactions which are of repetitive nature and / or entered in the Ordinary Course ofBusiness and are at Arms Length. All Related Party Transactions entered during theyear were in Ordinary Course of the Business and on Arms Length basis. Theparticulars of the every contract or arrangements entered into by the company with relatedparties referred to in sub-section (1) of section 188 of the companies act 2013 includingcertain arms length transactions under third proviso thereto is disclosed in FormNo. AOC-2 annexed as Annexure IV.
Your company has not accepted any fixed deposit from public and accordingly no amountwas outstanding as at the Balance Sheet date.
The company has framed a Policy for determining Material Subsidiaries. However thecompany does not have any subsidiary within the meaning of the Companies Act 2013.
EXTRACT OF ANNUAL RETURN
The particulars required to be furnished under Section 134(3)(a) of the Companies Act2013 an extract of Annual Return as prescribed in Form No. MGT-9 is given in
MANAGEMENT DISCUSSION & ANALYSIS REPORT
The Management Discussion and Analysis Report as required by Schedule V of the SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015 are already dealtwith in various sections of this Report is annexed as Annexure VII.
A separate report of the Board of Directors of the Company on Corporate Governance isincluded in the Annual Report as an integral part of this part and the Certificate fromM/s K. P. Ghelani & Associates Practicing Company Secretaries confirming compliancewith the requirements of Corporate Governance as stipulated in Schedule V of SEBI (ListingObligations and Disclosure Requirement) Regulations 2015 is annexed as Annexure"VIII" & IX respectively.
DIRECTORS RESPONSIBILITY STATEMENT
Your Directors wish to inform Members that the Audited Accounts containing FinancialStatements for the Financial Year 2015-16 are in conformity with the requirements of theCompanies Act 2013. They believe that the Financial Statements reflect fairly the formand substance of transactions carried out during the year and reasonably present theCompanys financial condition and results of operation.
In terms of provisions of Section 134(3)(c) of the Companies Act 2013 your Directorsfurther confirm as under: i) That in preparation of the annual accounts the applicableaccounting standards have been followed along with proper explanation relating to materialdepartures;
ii) That the Directors had selected such accounting policies and applied themconsistently and made judgments and estimates that are reasonable and prudent so as togive a true and fair view of the state of affairs of the Company at the end of financialperiod and of profit or loss of the Company for that period;
iii) That the Directors had taken proper and sufficient care for the maintenance ofadequate accounting records in accordance with the provisions of the Act for safeguardingthe assets of the Company and for preventing and detecting fraud and other irregularities;iv) That the Directors have prepared the annual accounts on a "going concernbasis".
v) That the Directors had laid down internal financial controls to be followed by thecompany and that such internal financial controls are adequate and were operatingeffectively; and
vi) That the Directors had devised proper system to ensure compliance with theprovision of all applicable laws and that such systems were adequate and operatingeffectively.
MATERIAL CHANGES EFFECTING FINANCIAL POSITIONS OF THE COMPANY
No material changes have occurred and commitments made affecting the financialposition of the company between the end of the financial year of the company and the dateof this report.
There is no order passed by any regulator or court or tribunal against the companyimpacting the going concern concept or future operations of the company.
ANNEXURES FORMING A PART OF DIRECTORS REPORT
The Annexure referred to in this Report and other information which are required to bedisclosed are annexed herewith and form a part of this Report:
|Annexure ||Particulars |
|I ||Whole Time Directors Certificate under Schedule V Part D of SEBI (Listing Obligations and Disclosure Requirement) Regulations 2015 on compliance of Code of Conduct |
|II ||Particulars of Employees under Section 134(3)(q) and Section 197(12) of the Companies Act 2013 |
|III ||Particulars of Conservation of Energy Technology Absorption and Foreign Exchange Earnings and Outgo |
|IV ||Form No. AOC-2 |
|V ||Extract of the Annual Return in Form MGT-9 |
|VI ||Secretarial Audit Report |
|VII ||Management discussion and Analysis Report |
|VIII ||Corporate Governance Report |
|IX ||Certificate from Practicing Company Secretary on Corporate Governance Report |
|X ||Whole Time Director / CFO Certification |
Your Directors wish to place on record their appreciation for the continuous supportreceived from the Members customers suppliers bankers various statutory bodies of theGovernment of India and the Companys employees at all levels.
| ||For and on behalf of the Board of Directors |
| ||Sd/- |
| ||Dilipkumar Changela |
|Date: August 01 2016 ||Chairman & Managing Director |
|Place: Shapar (Veraval) ||DIN: 00247302 |
PARTICULARS OF EMPLOYEES PURSUANT TO SECTION 134(3)(q) AND SECTION 197 (12) OF THECOMPANIES ACT 2013 READ WITH RULE 5(1) OF THE COMPANIES (APPOINTMENT AND REMUNERATION OFMANAGERIAL PERSONNEL) RULES 2014
|REQUIREMENTS OF RULE 5(1) ||DETAILS |
|the ratio of the remuneration of each director to the median remuneration of the employees of the company for the financial year; ||Director ||During the F.Y. |
| || ||2015-2016 |
| ||Mr. Dilipkumar ||-- |
| ||Changela || |
| ||Mr. Vrajlal ||-- |
| ||Changela || |
| ||Mr. Hiralal ||-- |
| ||Changela || |
|The company has appointed the Managing director and whole time director in May 11 2015 remuneration received part of the year hence not calculated. the percentage increase in remuneration of each director Chief Financial Officer Chief Executive Officer Company Secretary or Manager if any in the financial year; ||Director ||F.Y. 2015-16 |
| ||Mr. Dilipkumar Changela ||-- |
| ||Mr. Vrajlal Changela ||-- |
| ||Mr. Hiralal Changela ||-- |
| ||Key Managerial Personnel |
| ||Mr. Vishal Changela CFO ||-- |
| ||Ms. Dimpi Sampat CS ||-- |
* The remuneration paid to Non Executive Directors which includes sitting feesis to their attendance in Board and Committee Meetings.
** The company has appointed the Managing director whole time director and CFOin May 11 2015 and Company Secretary in May 30 2015 remuneration received part of theyear hence not calculated.
|the number of permanent employees on 170 employees as on 31.03.2016 the rolls of company; || |
|the explanation on the between increase in remuneration company performance; ||relationship Increase in remuneration of key and managerial personnel for the year 2016 which is partly based on the results of the Company for the year ended 31.03.2015 and partly on the individual performance. |
|comparison of the remuneration of Key Managerial Personnel against performance of the company; ||the Increase in remuneration of key the managerial personnel for the year 2016 which is partly based on the results of the Company for the year ended 31.03.2015 and partly on the individual performance. |
|The key parameters for any variable component of remuneration availed by the directors; ||All employees including Managing Director and Whole Time Directors not entitlement to incentive. Remuneration which is based on the individuals performance and companys financial performance. |
|the ratio of the remuneration of the highest paid director to that of the employees who are not directors but receive remuneration in excess of the highest paid director during the year; ||The Managing Director & Whole time director are the highest paid directors. No employee received remuneration higher than Managing Director & Whole time director. |
|affirmation that the remuneration is as per the remuneration policy of the company. ||Remuneration paid during the year ended March 31 2016 is as per the Remuneration Policy of the Company. |
Details of employees under section 134(3)(q) of the Companies Act 2013
|Name ||Designation ||% of equity shares ||Remuneration ||Date of Appointment ||Total Experience |
|Dilipkumar G Changela ||Chairman & Managing Director ||10.80 ||1500000 ||24.07.1991 ||More than 20 Years |
|Hiralal G. Changela ||Whole time Director ||10.80 ||1500000 ||24.07.1991 ||More than 20 Years |
|Vrajlal G. Changela ||Whole time Director ||10.80 ||1500000 ||16.10.1991 ||More than 20 Years |
INFORMATION AS PER COMPANIES [DISCLOSURE OF PARTICULARS IN THE REPORT OF BOARD OFDIRECTORS] RULES 1988 AND FORMING PART OF DIRECTORS REPORT FOR THE YEAR ENDED MARCH31 2016 CONSERVATION OF ENERGY:
The Company continues its efforts to improve methods for energy conservation andutilization by
(1) More usage of electricity purchased from GEB. (2) Intensified vigil on wastagecontrol.
|Power Consumption ||Year Ended 31.03.2016 ||Year Ended 31.03.2015 |
|Electric Power ||Rs. 16666918/- ||Rs. 13450972/- |
CONSUMPTION PER UNIT OF PRODUCTION:
The company manufactures different types of Rollers. Thus power and fuel consumptionper unit of production cannot be appropriated separately.
Operations of the company do not involve any kind of special technology and there wasno expenditure on research & development during this financial year. However yourcompany continues to upgrade its technology (computer technology and telecominfrastructure) in ensuring it is connected with its clients across the globe.
FOREIGN EXCHANGE EARNINGS AND OUTGO:
|Particulars ||2015-2016 ||2014-2015 |
|Foreign Exchange earned during the year ||NIL ||Rs. 477540/- |
|Foreign Exchange outgo during the year ||NIL ||Rs. 696886/- |
FORM NO. AOC-2
(Pursuant to clause (h) of sub-section (3) of section 134 of the Act and Rule8(2) of the Companies (Accounts) Rules 2014)
Form for disclosure of particulars of contracts/arrangements entered into by thecompany with related parties referred to in sub-section (1) of section 188 of theCompanies Act 2013 including certain arms length transactions under third proviso thereto
1. Details of contracts or arrangements or transactions not at arms lengthbasis:
There were no contracts or arrangements or transactions entered into during the yearended 31st March 2016 which were not at arms length basis.
2. Details of material contracts or arrangement or transactions at arms lengthbasis: The Details of material contracts or arrangements or transactions at armslength basis for the year ended 31st March 2016 are as follows:
|Name of Related Party and Nature of Relationship ||Nature of contracts/arr angements / transactions ||Duration of the contracts/ arrangements / transactions ||Salient terms of the contracts or arrangements or transactions including the value if any ||Justification for entering into such contracts or arrangements or transactions ||Date(s) of approval by the Board ||Amount paid as advances if any |
|(a) ||(b) ||(c) ||(d) ||(e) ||(f) ||(g) |
|1 Virdeep Engineering Private Limited Group Company ||Sales Transfer or purchase of products materials services or other obligations ||Ongoing ||Rs. 2 Crore ||Transactions are at arms length in ordinary course of business ||18.05.2015 ||Nil |
| ||For and on behalf of the Board of Directors |
| ||Sd/- |
| ||Dilipkumar Changela |
|Date: May 30 2016 ||Chairman & Managing Director |
|Place: Shapar (Veraval) ||DIN: 00247302 |