BOARD'S REPORT To, The Members SNL Bearings Limited Your Directors have pleasure in presenting their Thirty Sixth Annual Report together with Audited Accounts for the year ended 31st March, 2016. 2. Operations Net sales during the year at Rs. 3006.67 lakhs (previous year Rs.2648.29 lakhs) are higher by 13.53%. Despite the challenging environment in the Indian economy, your Company has achieved sales growth. Manufacturing and industrial activity remained sluggish for a large part of the year as demand was subdued across most sectors. Profit before tax (PBT) has increased by 26.33% from Rs.673.47 lakhs (Previous year) to Rs.850.83 lakhs on account of higher volumes helped by global decline in prices of crude oil and other commodities. Your Company is confident of further capitalizing on growth opportunities during the current year and widening its ability to serve customers with emphasis on improving quality and productivity. 3. Dividend Directors are pleased to recommend a maiden equity dividend @ Rs.2/- per share of Rs. 10/- each involving an outgo of Rs.86.93 lacs and payable to members/beneficial owners as per the Register of Members as on 19th July, 2016. All Preference Dividend arrears on the 11% Redeemable Preference shares for the period 1st April, 2011 to 17th June, 2016 aggregating to Rs. 90.50 lacs is being cleared by the last date of redemption viz. 18th June, 2016. 4. Corporate Social Responsibility activities (CSR) The CSR Committee has defined the areas which will be the preferred activities for the Company. For the year ended 31.3.2016 an amount of Rs.12.00 lacs has been contributed to Pratham Education and Sankalp - A pledge to Change, organizations who have been doing commendable work for the under privileged sections of society, particularly in the state of Jharkhand where Company's activities are located. The details of the same are available on the Company's website. Detailed report on CSR activities including amount spent is given in Annexure I. 5. Safety, Healthy & Environment The Company's plant at Ranchi has been awarded internationally recognized external certification viz. ISO14001:2004 (for adherence to environmental processes), OHSAS:18001:1999(for Health & Safety) and ISO/TS:16949:2002 (quality management). Work force is trained at regular intervals in preventive aspects of safety and prevention of work related accidents. Besides creating general awareness among employees towards environmental protection, the management encourages initiatives which are targetted towards conserving natural resources and improvements in resource eficiency across all processes. 6. Public Deposits During the year, the Company has not accepted any deposits from the public/ Members under Section 73 of the Companies Act, 2013 read with Companies (Acceptance of Deposits) Rules, 2014. As on 31.3.2016 there are no fixed deposits with the Company. 7. Extract of Annual Return: The details forming part of the extract of the Annual Return as required under the Companies Act, 2013 is given in Annexure I I . 8. Related Party transactions Transactions between the Holding Company, NRB Bearings Ltd and co-subsidiary, NRB Bearings (Thailand) Ltd have taken place in the ordinary course of business. All transactions entered with the related parties have been at arms length and are in compliance with the applicable provisions of the Companies Act, 2013 and the Listing Regulations. The individual transactions have been regularly placed before the audit committee and the Board of Directors on a quarterly basis and have been approved in advance. Details of the remuneration/sitting fees paid to the Directors and KMP as applicable and all transactions appear under Notes to accounts as note no. 24 (c) to the Annual Accounts. The Related Party Transactions Policy as approved by the Board is uploaded on the Company's website. The particulars of contracts or arrangements with related parties referred to in Section 188 (1) of the Companies Act, 2013 in Form AOC-2pursuant to Section 134 (3) (h) of the Act and Rule 8(2) of the Companies (Accounts) Rules, 2014 is attached as Annexure-111 to this Report. 9. Corporate Governance Pursuant to clause 27 of the listing Regulations with the stock exchanges, a Management Discussion and Analysis, Corporate Governance Report and Auditors' Certificate regarding compliance of conditions of Corporate Governance are made part of the Annual Report. Details of Board meetings held during the year under review and the composition of the various committees are included therein. The Code of Conduct for directors and Senior Management personnel of the Company, as approved by the Board, has been affirmed on an annual basis by all the directors and the Plant Head of the Company. All independent directors have also submitted the declaration of independence conirming that they meet the criteria of independence as provided under section 149 of the Companies Act, 2013. The relevant certification on the various matters specified under Regulation 17 (8) of SEBI (LODR) Regulations, 2015 has been done by the Assistant General Manager/Plant Head as (CEO) and a Director of the Company as (CFO). 10. Internal Control System There are adequate internal financial controls in place with reference to the financial statements. Your Company has implemented ERP system for better internal finance controls. The Report of the internal Auditors is placed before the Audit Committee, and its recommendations are implemented to further improve the efficiency. During the year under review, these controls were evaluated and no significant weakness was identified either in the design or operation of the controls. This formalized system of internal control facilitates effective compliance of Section 138 of the Companies Act, 2013 and the Listing Regulations. Your Company's Statutory Auditors have, in their report, confirmed the adequacy of the internal control procedures. 11. Vigil Mechanism The Company has formulated and implemented the whistle Blower Policy/vigil mechanism. This has provided a mechanism for Directors and employees of the Company, and other persons dealing with the Company to report to the Chairman of the Audit Committee, any instance of unethical behavior, actual or suspected fraud or violation of the Company's code of conduct. More details about this Policy are given in the Corporate Governance Report, which forms part of this Annual Report. The Whistle Blower Policy is available on the Company website. Some complaints on anonymous basis, received have been reviewed and investigated by management and found to have no substantial basis. 12. Directors and Key Managerial Personnel Retirement by Rotation In accordance with the provisions of Section 152, Mr. S C Rangani (DIN 00209069) will retire by rotation at the ensuing Annual General Meeting of the Company and being eligible, has offered himself for re-appointment. The Board recommends his re-appointment. His brief profile is the part of the Corporate Governance Report annexed to this report. Independent Directors Declaration The Independent Directors have submitted the Declaration of Independence, as required pursuant to Section 149 of the Companies Act, 2013 and the provisions of Listing Regulations, stating that they meet the criteria of independence provided therein. The proile of the Independent Directors forms part of the Corporate Governance Report. The independent directors have also met separately in March 2016. Key Managerial Personnel The Board of Directors, based on the recommendation of the Nomination and Remuneration Committee appointed Mr. Bankim Purohit as the Company Secretary of the Company w.e.f. 24th April, 2015. 13. Directors' Responsibility Statement Pursuant to the requirements under Section 134 (3) (c) of the Companies Act, 2013, your Directors state that: i. in the preparation of annual accounts, the applicable Accounting Standards have been followed along with proper explanations relating to material departures, if any, have been furnished; ii. The accounting policies have been selected and these have been applied consistently and judgments and estimates made thereon are reasonable and prudent, so as to give a true and fair view of the state of affairs of the Company as at 31st March, 2016 and of the profit of the Company for that period; iii. proper and sufficient care for the maintenance of adequate accounting records accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; iv. the Annual Accounts have been prepared on a going concern basis. v. internal financial controls have been laid down and being followed by the Company and that such financial controls are adequate and are operating effectively. vi. proper systems to ensure compliance with the provisions of all applicable laws have been devised and that such systems are adequate and operating effectively. 14. Particulars of Loans, Guarantees or Investments: Your Company has been rated 'CRI SI L A2' for the Short-term Bank facility and the Company's long-term facilities have been re-affirmed as 'CRI SI L BBB+ / STABLE' as on April, 2015. During the year under review, the Company has not advanced any loans, given guarantees and made investments. 15. Orders passed by the Regulators or the Courts or the Tribunals There are no material orders passed by the Regulators or Courts or Tribunals impacting the going concern status of the Company's operation. 16. Particulars of Employees In terms of the provisions of Section 197(12) of the Act, there are no employees of the Company drawing remuneration in excess of the limits set out in the said provision. The disclosure pertaining to remuneration and other details as required under Section 197(12) of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are annexed to this report at Annexure IV. 17. Information pursuant to Section 134(3)(m) of the Companies Act, 2013 and Rule no.8 of Companies (Accounts) Rules 2014 a. Measures taken for conservation of energy The Company is making all efforts for conservation of energy on a continuous basis. i) Improved power factor from 0.85 to 0.965, with resultant cost saving of Rs. 2.85 lacs on Energy bills. ii) Saving by replacing 250 Watts M.V. Lamps with CFL lights is Rs. 0.52 lacs. The resultant cost savings as a result of these measures are Rs.3.38 lakhs p.a. b. Technology absorption With the objective of improving productivity as well as quality, during the year the Company has continued its efforts on development of special purpose machines and toolings, improvements in process parameters and reduction in cycle times. The Company has developed new products with improved functionalities which would contribute to better efficiencies in use. c. Foreign exchange earnings & outgo Details regarding expenditure and earnings in foreign exchange have been given in Note No. 24(g) and 24(h) respectively of the audited accounts of the Company. 18. Auditors Statutory Auditors Appointment of M/s. Deloitte Haskins & Sells, Chartered Accountants as Auditors is approved till 31st March'2017 and is subject to annual ratification by the shareholders. The board recommends their re-appointment. A certificate from the auditors have been received to the effect that their appointment, if made would be within the limits prescribed under section 139 of the Companies Act, 2013. Secretarial Auditors The Board had appointed Mr. Upendra Shukla, Company Secretary in whole-time practice, to carry out Secretarial Audit under the provisions of Section 204 of the Companies Act, 2013 for the Financial Year 2015-16. The report of the Secretarial Auditor is annexed to this report as Annexure V. Cost Auditor Pursuant to the provisions of Section 148 of the Companies Act, 2013 and the Companies (Cost Records and Audit) Rules, 2014 the products manufactured by the Company and based on the criteria laid down under the aforesaid rules, your Company is not covered for Cost Audit or maintenance of Cost Records. Explanation or Comments on disqualifications, reservations, adverse remarks or disclaimers in the auditor's reports There have been no disqualifications, reservations, adverse remarks or disclaimers in the auditor's reports, requiring explanation or comments by the Board 19. Acknowledgements The Board wishes to acknowledge and thank all stakeholders for their whole hearted support and contribution by the Company's bankers, customers, suppliers and all employees of the Company. Your Directors also acknowledge the valuable support and active involvement and encouragement by all members of the management team of NRB Bearings Ltd., towards the improved efficiencies of the Company. On behalf of the Board (Ms.) H S ZAVERI Chairman Place : Mumbai date : April 29, 2016 |