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Vishal Bearings Ltd.

BSE: 539398 Sector: Engineering
NSE: N.A. ISIN Code: INE060T01024
BSE 00:00 | 19 Nov 19.40 0
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NSE 05:30 | 01 Jan Vishal Bearings Ltd
OPEN 19.45
PREVIOUS CLOSE 19.40
VOLUME 13500
52-Week high 36.00
52-Week low 18.00
P/E 1940.00
Mkt Cap.(Rs cr) 21
Buy Price 23.70
Buy Qty 3375.00
Sell Price 19.40
Sell Qty 6750.00
OPEN 19.45
CLOSE 19.40
VOLUME 13500
52-Week high 36.00
52-Week low 18.00
P/E 1940.00
Mkt Cap.(Rs cr) 21
Buy Price 23.70
Buy Qty 3375.00
Sell Price 19.40
Sell Qty 6750.00

Vishal Bearings Ltd. (VISHALBEARINGS) - Director Report

Company director report

Dear Members

The Directors have pleasure in presenting their 28th Annual Report andAudited Financial Statements for year ended 31st March 2019.

FINANCIAL SUMMARY AND HIGHLIGHTS:

A summary of the Company's financial results for the Financial Year 2018-19 is asunder:

Financial Particulars For the year ended March 31
2019 2018
Revenue from operations 805383819 554410928
Other Incomes 4832239 10566111
Total revenues 810216058 564977039
Cost of Material consumed 534812097 333018460
Changes in Inventory (53865585) 8396798
Employee Benefit expense 86499726 62375314
Finance Costs 33648536 25349247
Depreciation and amortization expense 32188788 27710247
Other expenses 87616019 63056174
Total Expenses 720899581 519906240
Profit before tax 89316476 45070799
Tax expense (25335648) (10827384)
Profit for the year 63980828 34243415

STATE OF COMPANY AFFAIRS:

The total turnover for the financial year under review was Rs. 81.02 Crore(previous year Rs. 56.49 Crore) and Net Profit after Tax of Rs. 6.39 Crore(previous year Rs. 3.42Crore).

Your Company is positive about its short term and medium-term business outlook. We willcontinue to pursue growth strategy in customized as well as high volume product business.Leveraging our customer and application expertise we will provide added value to ourcustomers. At the same time we will accelerate implementation of our operationalexcellence strategy to systematically build on long term competitive advantage in thebusiness.

DIVIDEND:

Pursuant to Regulation 43A of the Securities and Exchange Board of India (ListingObligations and Disclosure Requirements) Regulations 2015 as amended ("ListingRegulations") the Board has approved and adopted a Dividend Distribution Policy forthe last financial Year.

During the year under review the Company as on January 03 2019 declared interimdividend of 5% per equity share (i.e. 50 Paisa per share) amounting to 2997500/- payableto the members as per the Register of Members as on book closure dates. The Company willpay the Tax on dividend as per the provisions of the Income Tax Act 1961.

The Directors have not recommended any final dividend and decided that the interimdividend be treated as final.

Your Company is in compliance with its Dividend Distribution policy as approved by theBoard.

ISSUE OF BONUS EQUITY SHARES:

The Board of Directors at their meeting held on January 18 2019 recommended issue ofbonus equity shares in the proportion of 4:5 i.e. 4 (Four) bonus equity share of Rs.10/- each for every 5 (Five) fully paid-up equity shares held as on the Record Date fixedfor this purpose March 04 2019. The said bonus issue was approved by the Members of theCompany vide resolution dated February 23 2019.

4796000 bonus shares were allotted to the Members whose names appeared on theregister of members as on March 04 2019 being the record date fixed for this purpose.

SHARE CAPITAL:

The paid-up Equity Share Capital as at March 31 2019 stood at Rs. 10.79 crore. Duringthe year under review the Company has issued Bonus issue shares to the existingshareholders of the company As on March 31 2019. None of the Directors of the Companyhold instruments convertible into Equity Shares of the Company.

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 2019 100% of the share capital of the company is dematerialized.

MATERIAL CHANGES AND COMMITMENT IF ANY AFFECTING THE FINANCIAL POSITION OF THECOMPANY OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR TO WHICH THE FINANCIAL STATEMENTSRELATES AND THE DATE OF THE REPORT:

Other than stated elsewhere in this report there are no material changes andcommitments affecting the financial position of the Company between the end of thefinancial year and the date of this report.

CAPITAL EXPENDITURE:

As at 31st March 2019 the gross property plant and equipment investment property andother intangible assets stood at Rs. 35.46 crore and the net property plant andequipment investment property and other intangible assets of Rs.17.86 crore. CapitalExpenditure during the year amounted to Rs.4.07 crore.

DIRECTORS AND 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 directors and Key Managerial Personnel of the Company:

1. Managing Director Mr. Dilipkumar Changela
2. Whole time director Mr. Hiralal Changela
3. Whole time director Mr. Vrajlal Changela
4. Chief Financial Officer Mr. Vishal Changela
5. Chief Executive Officer Mr. Divyesh Changela
6. Company Secretary Ms. Dimpi Sampat*
7. Company Secretary Mr. Ketankumar Savaliya*

Ms. Dimpi Sampat has resigned as a Company Secretary of the Company with effect fromMay 14 2019.

The Company has appointed Mr. Ketankumar Savaliya as a Company Secretary of theCompany with effect from July 05 2019.

As stipulated under the Regulation 36(3) of the SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 (Listing Regulations) and SS-2 issued by ICSIthe brief resume of the Directors proposed to be appointed/re-appointed is given in thenotice convening the 28th Annual General Meeting.

MEETINGS OF THE BOARD:

A calendar of Meetings is prepared and circulated in advance to the Directors. Duringthe year Six (06) meetings of Board were convened and held the details are given in theCorporate Governance Report. The intervening gap between the Meetings was within theperiod prescribed under the Companies Act 2013 and Regulation 17(2) of the SEBIRegulations.

DIRECTOR'S RESPONSIBILITY STATEMENT:

The Board of Directors of the Company confirms:

A. In the preparation of the annual accounts the applicable accounting standard havebeen followed along with proper explanation relating to material departures; if any

B. They have selected such accounting policies and applied them consistently and madejudgments' and estimates that are reasonable and prudent so as to give a true and fairview of the state of affairs of the Company at the end of the financial year 31stMarch 2018 and of the profit of the Company for that period;

C. They have 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. They have prepared the annual accounts on a going concern basis;

E. They have laid down internal financial controls to be followed by the Company andthat such internal financial controls are adequate and were operating effectively; and;

F. They have devised proper systems to ensure compliance with the provisions of allapplicable laws and that such systems were adequate and operating effectively.

DECLARATION OF INDEPENDENCE:

The Company has received Declarations of Independence as stipulated under Section149(7) of the Companies Act 2013 from Independent Directors confirming that he/she is notdisqualified from appointing/continuing as Independent Director. The Independent Directorshave complied with the Code for Independent Directors prescribed in Schedule IV to theCompanies Act 2013.

AUDIT COMMITTEE:

The Company has in place an Audit Committee in terms of the requirements of theCompanies Act 2013 read with the rules made there under and Regulation 18 of the SEBI(Listing Obligations & Disclosure Requirements) Regulations 2015. Composition ofAudit Committee is given in Corporate Governance Report.

There is no such instance during the year under review where the Board had not acceptedany recommendation of Audit of the Audit Committee.

NOMINATION AND REMUNERATION COMMITTEE:

The Company has in place a Nomination and Remuneration Committee in accordance with therequirements of the Companies Act 2013 read with the rules made there under andRegulation 19 of the SEBI (Listing Obligations & Disclosure Requirements) Regulations2015.Composition of Nomination and Remuneration Committee is given in Corporate GovernanceReport.

The Committee has formulated a policy on Directors' appointment and remunerationincluding recommendation of remuneration of the key managerial personnel and otheremployees composition and the criteria for determining qualifications positiveattributes and independence of a Director.

SHAREHOLDER'/INVESTORS RELATIONSHIP COMMITTEE:

The Company has in place a Nomination and Remuneration Committee in accordance with therequirements of the Companies Act 2013 read with the rules made there under andRegulation 20 of the SEBI (Listing Obligations & Disclosure Requirements) Regulations2015. Composition of Shareholder'/Investors Relationship Committee is given in CorporateGovernance Report.

PERFORMANCE EVALUATION OF THE BOARD ITS COMMITTEES DIRECTORS AND CHAIRMAN:

The Nomination & Remuneration Committee and the Board have laid down the manner inwhich formal annual evaluation of the performance of the Board committees individualdirectors and the Chairman has to be made. All Directors responded through a structuredquestionnaire giving feedback about the performance of the Board its CommitteesIndividual directors and the Chairman.

For the year under review the questionnaire was modified suitably based on thecomments and suggestions received from Independent Directors. As in the previous years anexternal consultant was engaged to receive the responses of the Directors and consolidate/analyze the responses.

The Board Performance Evaluation inputs including areas of improvement for theDirectors Board processes and related issues for enhanced Board effectiveness werediscussed in the meeting of the Independent Directors held on March 09 2019 and in thesubsequent Meetings of Nomination and Remuneration Committee and the Board. The GroupChairman had a discussion with all the Independent Directors individually and the Chairmanof Nomination and Remuneration Committee had a discussion with all the Executive Directorsindividually.

ENHANCING SHAREHOLDERS' VALUE:

Your Company believes in the importance of its Members who are among its most importantstakeholders. Accordingly your Company's operations are committed to the goal ofachieving high levels of performance and cost effectiveness growth building enhancingthe productive asset and resource base and nurturing overall corporate reputation. YourCompany is also committed to creating value for its stakeholders by ensuring that itscorporate actions have positive impact on the socio-economic and environmental growth anddevelopment.

COMPLIANCE WITH SECRETARIAL STANDARDS ON BOARD AND GENERAL MEETINGS:

The Company has complied with Secretarial Standards issued by the Institute of CompanySecretaries of India on Board Meetings and General Meetings.

ENVIRONMENT HEALTH AND SAFETY:

The Company is conscious of the importance of environmentally clean and safeoperations. The Company's policy requires conduct of operations in such a manner so as toensure safety of all concerned compliances of environmental regulations and preservationof natural resources.

HUMAN RESOURCE MANAGEMENT:

At Vishal we focus on the workplace of tomorrow that promotes a collaborativetransparent and participative organization culture encourage innovation and rewardsindividual contribution. The focus of human resources management at Vishal is to ensurethat we enable each and every employee to navigate the next not just for clients butalso for themselves. We have re-imagined our employee value proposition to make it moremeaningful to our employees.

PARTICULARS OF EMPLOYEES (STATEMENT OF DISCLOSURE OF REMUNERATION):

Information required pursuant to Section 197(12) of the Companies Act 2013 read withRule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules2014 is provided as Annexure I to this report.

PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES:

The Audit Committee and the Board of Directors have approved the Related PartyTransactions Policy signifying the threshold limits and The Company has a process inplace to periodically review and monitor Related Party Transactions.

All the related party transactions were in the ordinary course of business and at arm'slength. The Audit Committee has approved all related party transactions for the FY 2018-19and estimated transactions for FY 2019-20. Particulars of contracts or arrangements withrelated parties on arm's length basis referred to in Section 188(1) of the Companies Act2013 in the prescribed Form AOC-2 is provided as Annexure II to this report.

There were no materially significant related party transactions that may have conflictwith the interest of the Company.

AUDIT REPORT:

The Auditors' report to the shareholders does not contain any qualificationobservation or adverse comment.

SECRETARIAL AUDIT REPORT:

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 hasappointed M/s. K. P. Ghelani & Associates Practicing Company Secretaries to conductSecretarial Audit of the Company. The Report of the Secretarial Audit in Form MR-3 for thefinancial year ended March 31 2019 is annexed to this report. There are noqualifications reservations or adverse remarks made by the Secretarial Auditor in hisreport.

The observation of the Secretarial Auditor is self-explanatory.

STATUTORY AUDITORS:

In accordance with the provisions of Companies Act 2013 M/s. SVK & AssociatesChartered Accountant Rajkot (Firm Registration No. 118564W) was appointed as StatutoryAuditor for a period of 5 continuous years from the conclusion of 25th Annual GeneralMeeting till the conclusion of 30th Annual General Meeting of the Company.

The Auditors have confirmed that they have subjected themselves to the peer reviewprocess of Institute of Chartered Accountants of India (ICAI) and hold valid certificateissued by the Peer Review Board of the ICAI.

The Auditors have also furnished a declaration confirming their independence as well astheir arm's length relationship with the Company as well as declaring that they have nottaken up any prohibited non-audit assignments for the Company.

The Audit Committee reviews the independence and objectivity of the Auditors and theeffectiveness of the Audit process.

COST RECORDS AND COST AUDIT:

Maintenance of cost records and requirement of cost audit as prescribed under theprovisions of section 148(1) of the Companies Act 2013 are applicable for the businessactivities carried out by the Company. Your company has not applied to cost audit duringthe financial year FY 2018-19.

INTERNAL AUDIT:

An Internal Audit was conducted during the year by the Internal Auditor M/s. P.Ghanshyam & Co. Chartered Accountants appointed as Internal Auditor for the year2018-19.

PUBLIC DEPOSIT:

During the year under review the Company has not accepted any deposits within ofSection 73 and 76 of the Companies Act 2013 read with Companies (Acceptance of Deposits)Rules 2014. As on March 31 2019 there are no fixed deposits with the Company.

Pursuant to the Ministry of Corporate Affairs (MCA) notification dated 22nd January2019 amending the Companies (Acceptance of Deposits) Rules 2014 the Company is requiredto file with the Registrar of Companies (ROC) requisite returns in Form DPT-3 foroutstanding receipt of money/loan by the Company which is not considered as deposits.

The Company would be complying with this requirement within the prescribed timelines.

REPORTING OF FRAUD:

The Auditors of the Company have not reported any instances of fraud committed againstthe Company by its officers or employees as specified under Section 143(12) of theCompanies Act 2013.

PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS:

Details of investments and inter corporate deposits made by the Company are given inthe notes to the Financial Statements. During the year under review your Company did notgive any other loans or guarantees provide any security or made any Investments ascovered under Section 186 of the Companies Act 2013 other than as disclosed above.

CODE FOR PREVENTION OF INSIDER TRADING:

On December 31 2018 Securities and Exchange Board of India amended the Prohibition ofInsider Trading Regulations 2015 prescribing various new requirements with effect fromApril 1 2019. In line with the amendments your Company has adopted an amended Code of

Conduct to regulate monitor and report trading by Designated Persons and theirImmediate Relatives under the Securities and Exchange Board of India (Prohibition ofInsider Trading) Regulations 2015.

ADEQUACY OF INTERNAL FINANCIAL CONTROLS:

The Company has designed and implemented a process driven framework for InternalFinancial Controls ("IFC") within the meaning of the explanation to Section134(5) (e) of the Companies Act 2013. For the year ended 31st March 2019 the Board is ofthe opinion that the Company has sound IFC commensurate with the nature and size of itsbusiness operations and operating effectively and no material weakness exists. The Companyhas a process in place to continuously monitor the same and identify gaps if any andimplement new and/or improved controls wherever the effect of such gaps would have amaterial effect on the Company's operations.

MSME:

The Ministry of Micro Small and Medium Enterprises vide their Notification dated 2ndNovember 2018 has instructed all the Companies registered under the Companies Act 2013with a turnover of more than Rupees Five Hundred crore to get themselves on boarded on theTrade Receivables Discounting system platform (TReDS) set up by the Reserve Bank ofIndia. The Company is not covered under the above Criteria as mentioned in MSME.

VIGIL MECHANISM:

As per the provisions of Section 177(9) of the Companies Act 2013 (‘Act') theCompany is required to establish an effective Vigil Mechanism for directors and employeesto report genuine concerns.

The Company has a Whistle-blower Policy in place since 2015 to encourage and facilitateemployees to report concerns about unethical behavior actual/ suspected frauds andviolation of Company's Code of Conduct or Ethics Policy. The Policy has been suitablymodified to meet the requirements of Vigil Mechanism under the Companies Act 2013. Thepolicy provides for adequate safeguards against victimization of persons who avail thesame and provides for direct access to the Chairperson of the Audit Committee. The policyalso establishes adequate mechanism to enable employees report instances of leak ofunpublished price sensitive information. The Audit Committee of the Company oversees theimplementation of the Whistle-Blower Policy.

During the year no person has been declined access to the Audit Committee whereverdesired.

SUBSIDIARIES ASSOCIATE AND JOINT VENTURE COMPANIES:

The Company does not have any subsidiary Associates or Joint Venture Companies andhence preparation of Consolidated Financial Statements and Statement containing salientfeatures of subsidiary in AOC-1 as per the provisions of Section 129 of the Companies Act2013 is not applicable to the Company.

INFORMATION UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION PROHIBITIONAND REDRESSAL) ACT 2013:

The Company has in place a Policy against Sexual Harassment at workplace in line withthe requirement of Sexual Harassment of Women at Workplace (Prevention Prohibition andRedressal) Act 2013. Complaints Committee has been set-up to redress complaints receivedregarding sexual harassment. All employees (permanent contractual temporary andtrainees) are covered under this policy. No complaints were received by the Committeeduring the year.

DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS ORTRIBUNALS:

During the year under review there were no material and significant orders passed bythe regulators or courts or tribunals impacting the going concern status and the Company'soperations in future.

CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNINGS AND OUTGO:

Information as required to be given under Section 134(3) (m) read with Rule 8(3) of theCompanies (Accounts) Rules 2014 is provided in Annexure ‘III' forming part of thisBoard Report.

CORPORATE SOCIAL RESPONSIBILITY INITIATIVE:

The Company is covered under the Criteria as mentioned in Section 135 of the CompaniesAct 2013. Your company is in process of constituting the Corporate Social ResponsibilityCommittee.

EXTRACT OF ANNUAL RETURN:

As per the provisions of Section 92(3) of the Companies Act 2013 an extract of theAnnual Return in Form MGT-9 is attached as Annexure to this Report.

CORPORATE GOVERNANCE:

Pursuant to SEBI (Listing Obligations & Disclosure Requirements) Regulations 2015a Report on Corporate Governance is enclosed as integral part of the Annual Report.

MANAGEMENT DISCUSSION AND ANALYSIS:

Your Directors also wish to place on record their deep sense of appreciation for thecommitted Services by the Company's executives staff and workers.

ACKNOWLEDGEMENT:

Your Directors take this opportunity to thank the customers supply chain partnersemployees Financial Institutions Banks Central and State Government authoritiesRegulatory authorities Stock Exchanges and all the various stakeholders for theircontinued co-operation and support to the Company. Your Directors also wish to place onrecord their deep sense of appreciation for the committed services by the Company'sexecutives staff and workers.

For and on behalf of the Board of Directors
Dilipkumar Changela
Managing Director
DIN: 00247302
Date: 27.08.2019
Place: Shapar Rajkot

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