NRB Industrial Bearings Limited
Mumbai - 400 001
The Directors submit this 8th Annual Report of NRB Industrial Bearings Limited (the"Company" or "NIBL") along with the Audited Financial Statements forthe Financial Year (FY) ended March 31 2019. Consolidated performance of the Company andits Associates has been referred to wherever required.
Mr. Trilochan Singh Sahney Ex-chairman was a veteran of the Bearings Industry and hasplayed a major role in introducing Needle Roller Bearings in India. He has given avaluable contribution for the formation and foundation of NRB Industrial Bearings Limitedand was the business promoter of the Company. He has played a crucial role in the successof the Company through his vision and leadership. Mr. Trilochan Singh Sahney lead theCompany with high ethics and values. He had over 60 years of experience and knowledge ofBearings Industry. His teachings and beliefs will remain forever in the hearts of theDirectors and Employees of the Company.
1. Financial Overview:
a . A summary of the Company's Financial Performance during the Financial Year:
The Economic momentum is expected to remain steady this fiscal year which started inApril. The economy is projected to grow at the rate of 7 % during 2019 expanding furtherto 7.3% during 2020. Under the Make in India initiative the Government of India aims toincrease the share of the manufacturing sector to the gross domestic product (GDP) to 25per cent by 2022 from 16 per cent in previous years.
Your Company has performed well under these market conditions and we are happy toshare the initiatives that we have put in place are paying off your company has madegreat advances in both domestic and international markets and has acquired manydistinguished long-term clients from various sectors. Your Company has participated inmultiple exhibitions both domestic and internationally which will ensure further traction.
At the plant level we have started the TPM journey and with some management shuffles tobe better aligned to customer needs we are hopeful to service you better in line withour core values.
We have renewed our focus on the agricultural segment PAN India. With strong R&Dwe have developed customised solution for this segment in terms of inserts and Units
The Focused segments in OEM business are Textile Machine Tools Material handlingIndustrial Gear box Industrial motors Specialised vibration motors and Jute segment.Your company has taken the approach to work closely with these segment OEM's right fromconceptualization stage.
We are expanding our Distributor foot prints across India in order to cater moreIndustrial parks. Your company has also launched Distributor Portal in order to supportthe Distributors in terms of availability and delivery in time. Distributors can now placeorder by logging onto the portal and booking their orders for the materials.
There has been focus towards the maintenance requirements of the end users which beinga sizable business for our Distributors. Efforts are towards catering into maintenancedemand of cement and steel plants.
Your Company has been continued to be recognized as in-house Research and DevelopmentUnit from Ministry of Science and Technology Government of India.
Such recognition from Department of Scientific and Industrial Research (DSIR) areexpected to be engaged in innovative research & development activities related to theline of business of the company such as development of new technologies design &engineering process/product/design improvements developing new methods of analysis &testing; research for increased efficiency in use of resources such as capitalequipment materials & energy; pollution control effluent treatment & recyclingof
waste products or any other areas of research. This shall enable your company to havepace with new technology and create mark in the growing market.
The Quality Assurance has taken steps in establishing Process capabilities byconducting studies to capture causes of variation & co-ordinate to take Corrective& Preventive measures and set in a process to maintain the same. Interactive meetingvisits trainings & Audits are conducted with Supplier for enhancing their performancewith respect to key deliverable.
Your Company is in process of implementing QM pillar under TPM to strengthenmanufacturing process and minimize the rejections levels.
With regards to ISO standards we are moving into the phase of Effectiveness inpractice by way of implementing the requirements.
1. Corporate Guarantee given by NRB Bearings Ltd.
Corporate Guarantee given by NRB Bearings Limited to third party for loan taken by NRBIndustrial Bearings Limited and outstanding as at 31st March 2018 of Rs. 139.71 lakhs hasbeen repaid the entire loan amount in September 2018 and hence the corporate guaranteegiven by NRB Bearings limited has been revoked.
2. Waiver of excess payment of remuneration made to Mr. Devesh Singh Sahney -Chairmanand Managing director:
In 2012 NRB Bearings Limited demerged its Industrial Bearing division to the Companypursuant to the order dated August 24 2012 of the Honorable High Court of Judicature atBombay approving the Scheme of Demerger ("Scheme") with effect from October 012012. In terms of the said Scheme all the employees of the industrial bearing division ofNRB Bearings Limited were transferred to the Company on terms and conditions not lessfavorable than the terms of NRB Bearings Limited. Mr. Devesh Singh Sahney was in theemployment of NRB Bearings Limited in capacity of Executive Director prior to the demergerand his employment was transferred to the Company pursuant to the said Scheme.
In compliance with the applicable provisions of the Companies Act 1956 the Members ofthe Company had approved the appointment and remuneration of Mr. Devesh Singh Sahney asManaging Director of the Company ("Managing Director") for a term of 5 yearseffective October 01 2012 to September 30 2017 at their meeting held on October 152012.
A Special Resolution by way of Postal Ballot was passed for the Ratification of paymentof Remuneration paid to Mr. Devesh Singh Sahney during Demerger as per the High CourtOrder for period of 18 months from 1st October 2012 to 31st March 2014.
Due to losses incurred by the Company during the period from October 01 2012 uptoMarch 31 2014 the remuneration payable to the Managing Director was in excess of thelimits prescribed under Schedule XIII of the Companies Act 1956 at that point of time.Hence the Company applied for the approval of the Central Government for payment ofremuneration to Managing Director as approved by Members. The Central Government videletter Ref. No. SRNB95768693/2014/ CL-VII dated August 28 2014 approved the appointmentof Managing Director for a term of five years and partially addressed the remunerationpayable (Basic remuneration & Cash allowances) for the period up to March 31 2014 andhas not specifically addressed perquisites payable for that period. The Company hassubmitted an application for obtaining clarification/ approval from the Central Governmentin respect of perquisites paid for the period up to March 31 2014.
Accordingly perquisites paid to the Managing Director of Rs. 34 81000 (Rupees ThirtyLakhs Eighty one Thousand Only) for the period from October 01 2012 to March 31 2014 wassubject to approval by the Central Government.
With the notification of amendment to Section 197 of the Companies Act 2013 vide theCompanies (Amendment) Act 2017 with effective from September 12 2018 any applicationmade to the Central Government for seeking approval for payment of remuneration todirector and is pending as on the date of commencement of the Companies (Amendment) Act2017 such application shall abate and the company shall within one year of suchcommencement obtain approval from the members in accordance with Section 197 of theCompanies Act 2013.
As per Section 197(17) of the Act (as amended by the Companies (Amendment) Act 2017)the members of the Company can waive and ratify the payment of such excess remuneration tothe Managing Director hence pursuant to the provisions of Section 110 of the CompaniesAct 2013 read with Companies (Management and Administration) Rules 2014 as amended fromtime to time the Company had conducted the process of Postal Ballot for seeking approvalof the shareholders for the resolutions and hence same was been approved and ratified byshareholders by approving in postal ballot w.e.f. 20th December 2018.
4. Change in the nature of business:
The Company manufactures bearings for industrial applications.There has been no changein the nature of business activities of the Company during the year under review.
5. Share Capital:
i. Increase in the Authorized Share Capital:
During the year the Company had increased the Authorized capital of the Companypresently from ' 550000000/- (Rupees Fifty Five Crores only) divided into '50000000/- (Rupees Five Crore only) of 25000000 equity share of ' 2/- each and '500000000/- (Rupees Fifty Crore only) of 5.00. 00.000 preference shares of ' 10/- eachto 65.00. 00.000/- (Rupees Sixty Five Crore only) divided into ' 50000000/- (RupeesFive Crore only) of 25000000 equity shares of ' 2/- each and ' 600000000/- (RupeesSixty Crore only) of 6.00. 00.000 preference shares of ' 10/- each.
ii. Allotment and Issuance of Preference shares to Mr . Devesh Singh Sahney Chairmanand Managing Director of the Company:
During the year the Company made an allotment of preference shares to Mr. Devesh SinghSahney Chairman and Managing Director for Rs. 135000000 (Rupees Thirteen Crores FiftyLakh) Cumulative Redeemable Non-Convertible Preference shares.
6. Directors and Key Managerial personnel:
i. The Company had to overcome the unexpected sudden and sad demise of our belovedChairman Late Mr. Trilochan Singh Sahney on 16th October 2018.
ii. Mr. Ashish Chugani (DIN: 00009654) was appointed as an Independent director in theAnnual General Meeting held on 7th July 2015 for a tenure of five consecutive years. Heceased to be an Independent director of the Company w.e.f. 31st October 2018.
iii. Pursuant to Sub-section 6 of Section 149 of the Companies Act 2013 Mr. NikhileshPanchal (DIN:00041080) was appointed as an Additional Director w.e.f. 4th February 2019by Board of Directors.
iv. In accordance with the provisions of Section 152 of Companies Act 2013 read withapplicable rules Mrs. Harshbeena Zaveri (DIN: 00003948) retires by rotation at theensuing 8th Annual General Meeting and being eligible offers herself for re-appointment.
v. Mr. Kaushal Aggarwal (DIN: 00153487) was appointed as an Independent director in 4thAnnual General meeting held on 7th July 2015 for the tenure of five consecutive years. Heceased to be a director of the Company w.e.f. 7th August 2015 hence pursuant to Section161(4) of Companies act 2013 Mr. Gaurav Motwane (DIN: 00746165) was appointed as anIndependent Director in casual vacancy w.e.f. 6th November 2015.
vi. Pursuant to Section 149 of Companies Act 2013 (the "Act") Mr. ManishChoksi (DIN No.: 00026496) Mr. Gaurav Motwane (DIN No: 00746165) and Mr. NikhileshPanchal (DIN No: 00041080) are the Independent Directors of the Company and they havesubmitted declaration that each of them meets the criteria of independence as provided inSection 149(6) of the Act and there has been no change in the circumstances which mayaffect their status as independent director during the year. Further Mr. Ashish Chugani(DIN: 00009654) had resigned w.e.f. 31st October 2018
vii. Pursuant to the provisions of section 203 of Companies Act 2013 the Keymanagerial personnel's (KMPs) of the Company are :
Mr. Devesh Singh Sahney Chairman and Managing Director
Mr. Ratnakar Mehendale Chief Financial Officer*
Mrs. Ratika Gandhi Company Secretary and Compliance Officer
*Mr. Ratnakar Mehendale has been re-appointed as the Chief Financial Officer of theCompany on 4th February 2019 and granted an extension of services by Board of Directorson recommendations of Nomination and Remuneration Committee till 2nd June 2020.
7. Familiarization Programme for Independent Directors:
The Independent Directors are time to time been provided with detailed understanding ofbusiness activities of the Company. All Independent Directors are aware about terms ofappointment duties responsibilities and expected time commitments.
Each newly appointed Independent Director is taken through a formal induction programincluding the presentation from the Managing Director and Chief financial officer ofCompany's Manufacturing Marketing Finance and other important aspects and structures ofthe Company and its functioning.
Independent directors have met separately on 25th March 2019.
8. Board Evaluation:
As per requirement of section 134(3)(p) of the Companies Act 2013 read with Rule 8 (4)of Companies (Accounts) Rules 2014 and other applicable rules and regulations the Boardhas a formal mechanism for evaluating its performance annually based on the criteria laiddown by Nomination and Remuneration Committee which included attendance contribution atthe meetings and otherwise independent judgment safeguarding of minority shareholdersinterest adherence to Code of Conduct and Business ethics monitoring of regulatorycompliance risk assessment and review of Internal Control Systems etc.
The Board carried out annual performance evaluation of the Board of Directors itsCommittees and Individual Directors. The performance of the Board was shared with Boardmembers and suggestions were evaluated in detail. Further the reports on performanceevaluation of the Individual Directors were reviewed by the Chairman of the Board andbased on the evaluation necessary changes in processes and policies were been suggestedfor having an effective Board.
9. Conservation of Energy Technology Absorption Foreign Exchange Earnings And Outgo:
The information pertaining to conservation of energy technology absorption Foreignexchange Earnings and outgo as required under Section 134 (3)(m) of the Companies Act2013 read with Rule 8(3) of the Companies (Accounts) Rules 2014 is furnished in 'AnnexureI' and is attached to this Report.
10. Statement Concerning Development And Implementation of Risk Management Policy ofThe Company
The risk management systems adopted by the Company at various levels inter alia coverbusiness risk statutory compliances and environmental risk. The Risk Management systemis continuously reviewed at appropriate level and corrections are made wherever required.The Company has taken adequate insurance policies to mitigate different kinds of risk.
The Board had on a voluntary basis constituted the Risk Management Committee in orderto implement and monitor the risk management plan for the Company But it was felt by theBoard that this activity should be undertaken by the Board itself and hence the Boarddissolved the Risk Management Committee during the financial year ended 31st March 2019.
11. Details Of Policy Developed And Implemented By The Company On Its Corporate SocialResponsibility Initiatives:
Presently the provisions of the Section 135 read with Schedule VII of Companies Act2013 are not applicable to the Company and hence it has not developed and implemented anyCorporate Social Responsibility initiatives during the year.
12. Particulars of Loans Guarantees or Investments Made Under Section 186 of CompaniesAct 2013:
The particulars of loans guarantees and investments given by the Company in the year2018-19 as per Section 186 of the Companies Act 2013 are stated in the Notes to Accountwhich forms part of this Annual Report.
13. Particulars of Contracts or Arrangements made with Related Party Transactions(RPT):
The contracts or arrangements with related parties which fall under the scope ofSection 188 (1) of the Companies Act 2013 and Section 134(3)(h) of the Act read with rule8(2) of the Companies (Accounts) Rules 2014 are given in 'Annexure II' in Form AOC-2 and the same forms part of this report.
All Related Party Transactions are presented to the Audit Committee and the Board.Omnibus approval is obtained for the transactions which are foreseen and repetitive innature. A statement of all related party transactions is presented before the AuditCommittee on a quarterly basis specifying the nature value and terms and conditions ofthe transactions. Further the details of the transactions with Related Party are providedin the Company's financial statements in accordance with the Accounting Standards.
The Company has adopted a policy known as the 'Related party transactions policy'and the same has been displayed on the Company's website: www. nrbindustrialbearings.com.
14. Subsidiaries/Joint Ventures/Associate Companies:
i. The Company has framed a Policy for determining material subsidiaries. However theCompany does not have any subsidiary as defined under the Companies Act 2013 at present.
ii. A statement containing salient features of the financial statements of theCompany's joint venture/ associate company in Form AOC-1 is attached to the financialstatements of the Company. Company has complied with AS 23 Accounting for Investments inAssociates in Consolidated Financial Statements and AS 27 Financial Reporting ofInterests in Joint Ventures respectively hence company has to provide Standalone andConsolidated financials for FY 2018-19.
NRB-IBC Bearings Private Limited:
NRB Industrial Bearings Limited holds 35% equity participation in NRB-IBC BearingsPrivate Limited (NIBC) which is a joint venture with IBC Industrial Bearings andComponents AG Switzerland. Further pursuant to first proviso to sub-section (3) ofsection 129 read with Rule 5 of the Companies (Accounts) Rules 2014 statement containingthe financial statement of subsidiaries/associate companies/joint ventures is annexed as 'AnnexureIII' in form AOC -1.
The year FY 2018-19 was a landmark year where NIBC has posted third year in a row 43.5%growth. Sales Turnover has increased from Rs. 1165.53 lakhs to Rs. 1656.19 lakhs.
NIBC has reported profit after tax of Rs. 1.53 lakhs.
The target domestic market was very favorable to NIBC products and we have grown themarket share among existing customers as well added new customers this year.
Domestic Sales Turnover increased from Rs. 566.15 lakhs to Rs. 834.09 lakhs. Exportmarket has grown substantially. Today NIBC has reached a place where we have to look aheadand expand the capacity to support the growing needs of the customers. Export SalesTurnover has improved remarkably. NIBC also has been able to register the profit for thefull year.
KORTA ENGINEERING INDIA PRIVATE LIMITED:
NRB Industrial Bearings Limited has invested to the extent of 35% as an equityshareholder in Korta Engineering (India) Private Limited which was part of Korta groupSpain. Investment in Korta was a strategic decision considered by your company inorder tohave diversified market reach and to provide customers with wide range of products.
The year FY 2018-19 was the first year of operations for Korta Engineering under thenew management. Korta Engineering is capable of manufacturing precision class ground ballscrews required for the machine tool industry. Sales Turnover increased from Rs. 630.99lakhs to Rs. 514.25 lakhs. Sales Turnover increased by 23% in FY 2018-19 as compared to FY2017-18. Korta. It has reported a profit after tax of Rs. 70 lakhs.
Domestic market was very favorable on account of New OEM customers and big accounts inaftermarket were added in the customer list which will help the company in coming years toestablish products in other companies as well.
Further pursuant to first proviso to sub-section (3) of section 129 read with Rule 5of Companies (Accounts) Rules 2014 statement containing the financial statement ofsubsidiaries/associate companies/joint ventures is annexed as 'Annexure III' inform AOC -1.
15. Explanation or comments on qualifications reservations or adverse remarks ordisclaimers made by the auditors and the practicing company secretary in their reports andmanagement's reply for the same:
There are no qualifications reservations or adverse remarks made by the StatutoryAuditors in their report on the Financial Statements of the Company for year ended 31stMarch 2019. The notes to the accounts are self-explanatory to comments/observations madeby the Auditors in their report and do not require further explanation.
There are no qualifications reservations or adverse remarks in the Secretarial AuditReport of the Company during the period of review.
16. Company's policy relating to directors appointment payment of remuneration anddischarge of their duties:
The provisions of Section 178(1) of Companies Act 2013 relating to constitution ofNomination and Remuneration Committee are applicable to the Company and have constitutedproper composition of Board & Independent directors for this committee.
The Board has framed Nomination and Remuneration policy which is generally in linewith the existing industry practice and applicable laws and is approved by the Nomination& Remuneration Committee and the Board. The main objective of the said policy is toensure that the level and composition of remuneration is reasonable and sufficient toattract retain and motivate the Directors KMP and Senior management employees. Theremunerations paid to Directors and KMP's forms part of Corporate Governance Reportwherever applicable.
Further pursuant to Section 134 (3) (e) and section 134 (3) (q) of Companies Act 2013the Nomination and Remuneration Policy recommended by Nomination & RemunerationCommittee is duly approved and adopted by the Board of Directors and same is madeavailable on the company's website link: http://nrbindustrialbearings.com/shareholder.php.
There are no material pecuniary benefits to Independent directors from Company or anyPromoter group.
17. Number of Board Meetings conducted during the year under review:
The Board of Directors met 5 (Five) times during the financial year ended 31st March2019 the details of which are given in the Corporate Governance Report which forms partof this Annual Report. A separate meeting of Independent Directors was also held duringthe Financial Year.
The intervening gap between the Meetings was within the period prescribed under theCompanies Act 2013 and SEBI LODR Regulations. The Agenda papers were circulated to theDirectors in advance for each meeting. All relevant information as required under ScheduleII of the SEBI LODR Regulations was placed before the Board from time to time.
18. Cost Audit Compliance Report:
The Cost audit of the Company has not been conducted for the financial year 2018 -19 asprovisions of Section 148 of the Companies Act 2013 are not applicable to the Company.
19. Disclosure of composition of Audit committee and Vigil mechanism:
In accordance with Section 177 of the Companies Act 2013 read with Rule 6 and 7 of theCompanies (Meetings of the Board and its Powers) Rules 2014 the Audit Committee consistsof the following members:
|i Mr. Manish Choksi ||Chairman (Audit Committee) & Independent Director |
|ii Mr. Devesh Sahney ||Chairman and Managing Director |
|iii Mr. Gaurav Motwane ||Independent Director |
|iv Mr. Nikhilesh Panchal ||Independent Director (Appointed w.e.f 4th February 2019) |
|v Mr. Ashish Chugani ||Independent Director (Resigned w.e.f 31st October 2018) |
The Company has established a vigil mechanism through the committee the genuineconcerns expressed by the employees and other Directors are taken on records and areavailable on the Company's website http://nrbindustrialbearings.com/shareholder . php. TheCompany has also provided adequate safeguards against victimization of employees andDirectors who express their concerns. The Company has also provided direct access to theChairman of the Audit Committee on reporting issues concerning the interests ofco-employees and the Company Credit
Rating of Securities:
The Company has obtained following credit ratings for availing various bank facilities:
1) Long term Bank Facilities - Cash Credit is CARE BBB- Stable and
2) Long term Bank Facilities- Working Capital Loan is CARE BBB- Stable.
20. Internal financial control system:
The Company has an internal control system and conducts Internal Audit. The scope andauthority of the Internal Audit function is defined by Audit committee. To maintain itsobjectivity and independence the Internal Audit function reports to the Chairman of theAudit Committee of the Board. Audit committee evaluates the efficiency and adequacy ofinternal control systems in the Company its compliance with operating systems accountingprocedures and policies.
Audit committee reviews the suggestions and comments given by Internal Auditors and putin process accordingly.
21. Details In Respect of Adequacy of Internal Financial Controls With Reference To TheFinancial Statements
The Company has in place adequate internal financial controls with reference to thefinancial statements and are operating effectively. These have been designed for providingreasonable assurance with regard to financial statements prepared complying withapplicable statutes safeguarding assets from un-authorised use executing transactionswith proper authorisation and ensuring compliance of corporate policies. The Company hascontinued its efforts to align all its processes and controls with global best practices.
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. Employees stock option plan
The Company has not formulated any Stock Option Scheme to the employees.
e. Preference Shares:
During the financial year the Company has allotted 13500000 Cumulative RedeemableNon-Convertible Preference Shares on Private Placement to Mr. Devesh Singh Sahney(Chairman and Managing Director) of Rs. 10/- (Rupees Ten) each amounting to Rs.135000000 (Rupees Thirteen crore fifty lakhs only).
The proceeds of the issue were utilized for meeting the day-to -day working capitalrequirements of the Company.
The Statutory Auditors of the Company are M/s. Deloitte Haskins & Sells CharteredAccountants with an ICAI Firm Registration No. ICAI 117365W and have audited the FinancialStatements of the Company for the period between 1st April 2018 to 31st March 2019. TheStatutory Auditors were appointed by the members of the Company at the 4th Annual GeneralMeeting of the Company held on July 7 2015 to hold office from the conclusion of the 7thAnnual General Meeting. In the 7th Annual General Meeting held on 2nd August 2018 themembers re-appointed M/s Deloitte Haskins & Sells Chartered Accountants (ICAI FirmRegistration No. 117365W) for next term of 5 (Five) consecutive years ending at the 12thAnnual General Meeting to be held in year 2023. The requirement of ratification ofappointment of auditors at the AGM has been omitted pursuant to the Companies (Amendment)Act 2017 notified on May 7 2018.
Deloitte Haskins & Sells have confirmed that they satisfy the independencecriteria specified under the Companies Act 2013.
24. Fraud Reporting:
During the year under review no instances of fraud were reported by the StatutoryAuditors of the Company.
25. Secretarial Auditor:
Pursuant to the provisions of section 204 of the Companies Act 2013 and the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 the Company hadappointed CS Ajit Sharma proprietor of AJS & Associates Practicing Company Secretaryto undertake the Secretarial Audit for the financial year 2018-19 of the Company. Thereport forms part of Annual report as 'Annexure IV.
26. Particulars of Employees:
The statement under Section 134(3) (q) and Section 197 (12) of Companies Act 2013 readwith Rule 5(1) of The Companies (Appointment and Remuneration of Managerial Personnel)Rules 2014 forms part of this Report as 'Annexure V'.
27. Disclosure Under The Sexual Harassment Of Women At The Work Place (PreventionProhibition And Redressal) Act 20l3 :
The Company is committed to provide a healthy environment to all employees and thusdoes not tolerate any discrimination or harassment in any form. The Company has in placean Anti-Harassment and Grievance Redressal Policy. All employees (permanent contractualtemporary trainees) are covered under the said Policy. No case has been reported duringthe year under review.
28. Listing With Stock Exchange:
The Equity Shares of the Company continue to be listed on BSE Limited ("BSE")and National Stock Exchange ("NSE"). The Annual Listing Fee for the financialyear 2018-19 has been paid to the Stock Exchanges.
29. Extract of Annual Return:
The extract of Annual Return pursuant to the Section 92 read with Rule 12 of theCompanies (Management and Administration) Rules 2014 MGT-9 is furnished on Company'swebsite: http://www.nrbindustrialbearings . com/shareholder.php.
Since pursuant to the said official notification in Gazette of India by Ministry of Lawand Justice Reference no.: New Delhi Wednesday the 3rd January 2018/Pausha 13 1939(Saka) Company is not required to annex the extract of annual return with this Boardreport.
30. Corporate Governance:
A separate report of the Board of Directors of the Company on Corporate Governance isincluded in the Annual Report and the Certificate from M/s AJS & AssociatesPracticing Company Secretaries confirming compliance with the requirements of CorporateGovernance as stipulated in Schedule V of SEBI (Listing Obligations and DisclosureRequirement) Regulations 2015 forms part of annual report.
31. Management Discussion and Analysis:
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. The Management Discussion and Analysis Report isseparately annexed and forms part of this report.
32. Annexures forming part of this Annual Report:
|Annexure No. ||Particulars |
|I ||Particulars of Conservation of Energy Technology Absorption and Foreign Exchange Earnings and Outgo |
|II ||Form AOC-2 -Related party transactions |
|III ||Form AOC-1 - Joint Ventures/ Associate company details |
|IV ||Secretarial Audit Report for the period under review |
|V ||Particulars of Employees under Section 134(3) (q) and Section 197(12) of the Companies Act 2013. |
33. Cautionary Statement:
Statements in this Report Management Discussion and Analysis Corporate GovernanceNotice to the Shareholders or elsewhere in this Annual Report describing the Company'sobjectives projections estimates and expectations may constitute 'forward lookingstatement' within the meaning of applicable laws and regulations. Actual results mightdiffer materially from those either expressed or implied in the statement depending on themarket conditions and circumstances.
The Company assumes no responsibility in respect of the forward looking statementswhich may undergo changes in future on the basis of subsequent developments informationor events.
34. Directors Responsibility Statement:
Your Directors wish to inform Members that the Audited Accounts containing FinancialStatements for the Financial Year 2018-19 are in conformity with the requirements of theCompanies Act 2013. Your company's financial statements reflect fairly the form andsubstance of transactions carried out during the year and reasonably present the financialcondition and results of operations.
In terms of provisions of Section 134(3)(c) of the Companies Act 2013 your Directorsfurther herby confirms as under:
a) in the preparation of the annual accounts the applicable accounting standards hadbeen followed along with proper explanation relating to material departures;
b) the directors had selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the company at the end of the financial year and ofthe profit and loss of the company for that period;
c) the directors had taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of this Act for safeguarding theassets of the company and for preventing and detecting fraud and other irregularities;
d) the directors had prepared the annual accounts on a going concern basis;
e) the directors have laid down internal financial controls to be followed by thecompany and that such internal financial controls are adequate and were operatingeffectively.
f) Internal financial controls and compliance systems established and maintained by theCompany work performed by the internal statutory and secretarial auditors and externalconsultants including audit of internal financial controls over financial reporting bythe statutory auditors and the reviews performed by management and the relevant boardcommittees including the audit committee the Board is of the opinion that the Company'sinternal financial controls were adequate and effective during FY 2018-19.
g) Company has adopted policies and procedures for ensuring the orderly and efficientconduct of its business including adherence to company's policies the safeguarding ofits assets the prevention and detection of frauds and errors the accuracy andcompleteness of the accounting records and the timely preparation of reliable financialinformation; and
h) The directors had devised proper systems to ensure compliance with the provisions ofall applicable laws and that such systems were adequate and operating effectively.
Your Directors wish to place on records their sincere appreciation to all the Employeesof the Company for the efforts efficient work management loyal services commitment anddedication that developed the culture of professionalism. Your Directors also thank andexpress gratitude to the Company's Customers Vendors and Institutions. Your Directorsalso wish to express deep sense of gratitude to all our Bankers Central and StateGovernments and their departments and the local authorities for the continued support.
|For and on behalf of Board of Directors |
|Devesh Singh Sahney |
|Chairman and Managing Director |
|DIN : 00003956 |
|Place: Mumbai |
|Date : 30 May 2019 |
Information as required under Section 134(3) (m) of the Companies Act 2013 read withRule 8 of the Companies (Accounts) Rules 2014 forming part of Directors' Report for theyear ended March 31 2019:
a) Conservation of Energy:
i. Steps taken or impact on conservation of energy: About 74 tube lights werereplaced by LED tube lights across the plant and warehouse. Total Energy Saving was 19212KWh per year
ii. Steps taken by the company for utilizing alternate sources of energy: Discussionswith various suppliers for installation of solar power is in progress. It is expected tobe operational.
iii. The capital investment on energy conservation equipment's: NIL
b) Additional Investments and proposals if any being implemented for reduction ofconsumption of energy: NIL
c) Impact of the measures at (a) and (b) above for reduction of energy consumption andconsequent impact on the cost of production of goods: Not applicable
d) Total Energy Consumption and Energy Consumption per unit of production as per Form Aof the Annexure in respect of industries specified in the Schedule thereto:
|Sr. No. ||Purchased ||Current Year (2018-19) ||Previous Year (2017-18) |
|1 ||Units ( In KWh) ||4752653 ||3841725 |
|2 ||Total amount (Rs. In lakhs) ||353 ||331 |
|3 ||Rate/unit Rs. per KWh ||7.43 ||8.61 |
|4 ||Own Generation (In KWh) ||6941 ||20148 |
|Through Diesel Generator |
|l ||Unit (In KWh ) ||6941 ||20148 |
|6 ||Diesel Oil consumed (In liters) ||2149 ||4870 |
|7 ||Generation (KWh per liters) ||3.22 ||4.14 |
|Through Steam Turbine/ Generator |
|8 ||Propane gas consumption (in tons) ||15.22 ||14.97 |
|9 ||Tons of steel heat treated per ton of propane gas consumed. ||25.72 ||19.79 |
|10 ||Propane gas per ton cost. ||57720 ||44715 |
|Consumption per unit production |
| ||Purchased ||Current Year (2018-19) ||Previous Year (2017-18) |
|11 ||Production Value of Bearings (Rs. In Lakhs) ||4970.11 ||3316 |
|12 ||Electricity (purchased and own generation) KWh consumed per Rs. Lakh. Value of Bearings produced ||957.64 ||1164.62 |
|13 ||HT Furnace production (In Ton) ||391.63 ||296.31 |
Form A: Power and Fuel Consumption :
1. Electricity: 63503 KWh Units in FY 18-19
During the year the Company has focused more on technology development for differenttypes of products for different application of existing range as well new product like SRBwith brass cages Customized needle bearings. There is a continuous development programfor enhancing products allied parts to meet the future needs by providing solutions forcustomer requirements with an aim to be global player in industrial bearing business.During the year the following activities were carried out by the Research &Development department:
a) Specific areas in which R & D carried out by the Company:
1 91 no's of new product developed.
2. Development of Special Needle bearing for Stone drilling application
3. Development of special products like self-aligning needle bearings.
4. Developed Special CRB for sugarcane crusher application.
5. Developed Spinning machine for Thrust and combined bearing locking arrangement.
6. Enhancement of In house product testing facility for CRB & Ball bearings.
7. Developed new range of Medium size cam followers to expand the Product range
b) Benefits derived as a result of the above R&D:
1. Developed 91 products to enhance business in the area of existing as well newapplication for existing as well as new customer base in domestic and export market.
2. Improved product quality and performance.
c) Future Plan of action:
1. Develop combined bearing to increase existing product range.
2. Widen ACBB range for export as well as for domestic market.
3. New range of Needle bearings for wider of applications.
4. Enhancing in-house product testing facility.
d) Expenditure on R&D:
|1. ||Capital ||FY: 2018-19: NIL ||PY: 2017-18 : NIL |
|2. ||Recurring ||FY: 2018-19: Rs. 118.35 Lakhs ||PY: 2017-18 : Rs. 136.66 Lakhs |
|3. ||Total ||FY: 2018-19: Rs. 118.35 Lakhs ||PY: 2017-18 : Rs. 136.66 lakhs |
|4. ||Total R&D as a percentage of Total turnover || ||FY 2018-19-2.04% |
| || || ||PY 2017-18-3.01% |
Form B: Technology Absorption and Research & Development (R & D)
e) Technology absorption adaption and innovation:
a) Efforts in brief made towards technology absorption adaption and innovation:
1. Adopted technology in process automation assembly of Thrust and combined bearing.
2. Technology adoption to design and develop full complement ball bearing Doubleroller CRB.
b) Benefits derived as a result of the above efforts e.g. Product improvements costreduction product development import substitution etc:
1. Implemented the technology absorbed in development of special housed unit.
2. New design& development thrust bearing outer cages to improve the bearingperformance.
c) in case of imported technology (imported during the last three years reckoned fromthe beginning of the financial year)- NIL
Form C: Foreign Exchange Earnings and Outgo:
Total Foreign Exchange Earnings:
FY 2018-19 - 1668.50 lakhs
PY 2017-18- 1273.66 lakhs
Total Foreign Exchange Outgo:
FY 2018-19 - 46.46 lakhs
PY 2017-18- 144.52 lakhs
|For and on behalf of Board of Directors |
|Devesh Singh Sahney |
|Chairman and Managing Director |
|DIN : 00003956 |
|Place: Mumbai |
|Date : 30 May 2019 |
Form No. AOC-2
(Pursuant to clause (h) of sub-section (3) of section 134 of the Act and Rule 8(2) ofthe 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 arm's length transactions under third provisothereto
1. Details of contracts or arrangements or transactions not at arm's length basis:
All the transactions were at arm's length during the period under review. Company hasnot entered into any contract/ arrangement/transaction with its related parties which arenot in ordinary course of business in the FY 2018-19. All the related party transactionsforms part of the financials note no. 37.
(a) Name(s) of the related party and nature of relationship: N.A
(b) Nature of contracts/arrangements/transactions: N.A
(c) Duration of the contracts / arrangements/transactions: Not Applicable N.A
(d) Salient terms of the contracts or arrangements or transactions including the valueif any: N.A
(e) Justification for entering into such contracts or arrangements or transactions: N.A
(f) Date(s) of approval by the Board: N.A
(g) Amount paid as advances if any: N.A
(h) Date on which the special resolution was passed in general meeting as requiredunder first proviso to section 188: N.A
2. Details of material contracts or arrangement or transactions at arm's length basis:
(a) Name(s) of the related party and nature of relationship:
|Sr. No. ||Nature of relationship ||Names of related parties |
|(a) ||Entity on which the Company can exercise significant influence ||NRB-IBC Bearings Private Limited |
| || ||Korta Engineering (India) Private Limited |
|(b) ||Key Management Personnel (KMP) ||Mr. Devesh Singh Sahney Chairman and Managing Director |
|(c) ||Relative of Key Management Personnel ||* Late Mr. Trilochan S. Sahney Chairman |
| || ||Mrs. Harshbeena Zaveri Non- Executive Non- Independent Director |
| || ||Ms. Mallika Devesh Sahney Assistant General Manager (Strategy) |
|(d) ||A Company over which relatives of ||NRB Bearings Limited |
| ||KMP are able to exercise significant influence. ||NRB Bearings (Thailand) Limited |
| || ||SNL Bearings Limited |
* Trilochan Singh Sahney ceased to be Chairman on 16th October 2018
(b) Nature of contracts/arrangements/transactions: Ongoing business transactionswhich forms part of financial statements in Notes to accounts Note no.: 37
(c) Duration of the contracts/ arrangements/ transactions: As per businessrequirements pre-approval from audit committee taken on quarterly basis.
(d) Salient terms of the contracts or arrangements or transactions including the valueif any: Ongoing business transactions which forms part of financial statements inNotes to accounts Note no.: 37
(e) Date(s) of approval by the Board if any:
Each Quarter approval as per transactions entered. 29th May 2018 31st July 201831st October 2018 4th February 2019.
(f) Amount paid as advances if any: Not applicable.
| ||For and on behalf of Board of Directors |
| ||Devesh Singh Sahney |
| ||Chairman and Managing Director |
| ||DIN : 00003956 |
|Place: Mumbai || |
|Date : 30 May 2019 || |
Form No. AOC-1
(Pursuant to first proviso to sub-section (3) of section 129 read with rule 5 ofCompanies (Accounts) Rules 2014)
Statement containing salient features of the financial statement ofsubsidiaries/associate companies/joint ventures Part "A": Subsidiaries
Company does not have any Subsidiaries as on March 31 2019 hence not applicable.
Part "B": Associates and Joint Ventures
Statement pursuant to Section 129 (3) of the Companies Act 2013 related to AssociateCompanies and Joint Ventures
| || ||(Rs. In Lakhs) |
|Name of associates/Joint Ventures ||NRB-IBC Bearings Private Limited ||Korta Engineering (India) Private Limited |
|1. Latest audited Balance Sheet Date ||31.03.2019 ||31.03.2019 |
|2. Shares of Associate/Joint Ventures held by the company on the year end Number of shares held ||4200000 ||1050000 |
|Amount of Investment in Associates/Joint Venture @ face value of Rs. 10/- each share ||Rs. 42000000/- ||Rs. 10500000/- |
|Extend of Holding% ||35% ||35% |
|3. Description of how there is significant influence ||35% shareholding of NRB Industrial Bearings Limited (NIBL) and 35% shares held by Late Mr. Trilochan Singh Sahney Former Chairman of NIBL and forming part of promoter group of NIBL shareholding. ||35% shareholding of NRB Industrial Bearings Limited (NIBL) and 45.02% shares held by Late Mr. Trilochan Singh Sahney Former Chairman of NIBL and formed part of promoter group of NIBL shareholding. |
|4. Reason why the associate/joint venture is not consolidated ||N.A ||N.A |
|5. Net worth attributable to shareholding as per latest audited Balance Sheet as on March 31 2019. ||607.76 ||0.47 |
|6. Profit/Loss for the year ||153.50 ||68.47 |
|i. Considered in Consolidation ||NIL ||17.52 |
|ii. Not Considered in Consolidation ||54.30 ||NIL |
1. Names of associates or joint ventures which are yet to commence operations: NotApplicable (Refer Note no. 8)
2 Names of associates or joint ventures which have been liquidated or sold during theyear: Not Applicable
A) 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 Rule5(1) ||Details |
|(i) the ratio of the remuneration of each director to the median remuneration of the employees of the company for the financial year; ||Mr. Devesh Singh Sahney - 35 : 1 Chairman & Managing Director |
|(ii) the percentage increase in remuneration of each Director Chief Financial Officer Chief Executive Officer Company Secretary or Manager if any in the financial year; ||Directors: |
| ||Mr. Devesh Singh Sahney CMD - 24% |
| ||Mr. R.G. Mehendale CFO -Nil |
| ||Ms. Ratika Gandhi Company Secretary - 42% |
|(iii) the percentage increase in the median remuneration of employees in the financial year; ||55.08% |
|(iv) the number of permanent employees on the rolls of company; ||272 employees as on 31.03.2019 |
|(v) average percentile increase already made in the salaries of employees other than the managerial personnel in the last financial year and its comparison with the percentile increase in the managerial remuneration and justification thereof and point out if there are any exceptional circumstances for increase in the managerial remuneration; ||Average Salary Increase for KMPs |
(other than CMD and WTD): 42.00%
| ||Average Salary Increase for non KMPs : 10.16% |
|(vi) Affirmation that the remuneration is as per the remuneration policy of the company. ||Remuneration paid during the year ended March 31 2019 is as per the Remuneration Policy of the Company. |
Details of Directors/ KMP/Appointed/Resigned during the Year as per Section 134(3)(q)Read with Rule 8 (5) (iii) Of Companies (Account) Rules 2014: Applicable.
|Sr. No. ||Name of Director/ KMP ||Designation ||Date of Resignation/ Appointment |
|1 ||Late Mr. Trilochan Singh Sahney ||Promoter and Chairman of Board ||Cessation by Death on 16th October 2018. |
|2 ||Mr. Ashish Chugani ||Independent Director ||Ceased w.e.f. 31st October 2018 |
|3 ||Mr. Nikhilesh Panchal ||Independent Director ||Appointed w.e.f 4th February 2019 |
ANNUAL COMPLIANCE WITH THE CODE OF CONDUCT FOR THE FINANCIAL YEAR 2018 - 19
Pursuant to the Schedule V (Part D) of SEBI (Listing Obligation and DisclosureRequirement) Regulation 2015 we hereby confirm that the Company has receivedaffirmations on compliance with the Code of Conduct for the financial year ended 31stMarch 2019 from all the Board Members and Senior Management Personnel. These Codes areavailable on the Company's website.
MD / CFO CERTIFICATION
We the undersigned in our respective as Chairman and Managing Director and ChiefFinancial Officer of NRB Industrial Bearings Limited ("the Company") to the bestof our knowledge and belief certify that:
a) We have reviewed financial statements and the cash flow statement for the financialyear ended 31st March 2019 and that to the best of our knowledge and belief we statethat:
i. These statements do not contain any materially untrue statements or omit anymaterial fact or contain any statements that might be misleading;
ii. These statements together present a true and fair view of the Company's affairs andare in compliance with existing accounting standards applicable laws and regulations.
b. We further state that to the best of our knowledge and belief there are notransactions entered into by the Company during the year which are fraudulent illegal orin violation of the Company's Code of Conduct.
c. We are responsible for establishing and maintaining internal controls for financialreporting and that we have evaluated the effectiveness of internal control systems of theCompany pertaining to financial reporting of the Company and have disclosed to theAuditors and Audit Committee deficiencies in the design or operation of internalcontrols if any of which we are aware and the steps we have taken or proposed to take torectify these deficiencies.
d. We have indicated based in our most recent evaluation wherever applicable to theAuditors and the Audit Committee:
i. Significant changes if any in internal control over financial reporting during theyear;
ii. Significant changes in accounting policies during the period and that the same havebeen disclosed in the notes to the financial statements; and
iii. There are no instances of significant fraud of which we have become aware and theinvolvement therein if any of the management or an employee having significant role inthe Company's internal control system over the financial reporting.
| || |
For and on behalf of Board of Directors
| ||R. G. Mehendale ||D.S.Sahney |
| ||CFO ||Chairman & Managing Director |
| || ||DIN : 00003956 |
|Place: Mumbai || || |
|Date : 30 May 2019 || || |