DIRECTORS' REPORT To, The Members, Bharat Wire Ropes Limited 1. Your Directors are pleased to present the 30th Annual Report of the Company together with the Audited Accounts and Auditors' report for the financial year ended March 31, 2016. 2. THE STATE OF COMPANY'S AFFAIRS: Bharat Wire Ropes Ltd. ("Your Company") is one of the largest manufacturers of Wires, Wire Ropes, Stranded Wires and Slings in India with an ever growing global presence, catering more than 20 countries globally by way of exports to South Africa, Kuwait, New Zealand, Vietnam, USA, Singapore, Australia, and Nepal. The Profit before tax has improved on account of improved efficiency and benefit of reduction of Raw Material prices. Your Company's 'Revenue from Operations' was in line with previous year however there has been a marginal dip during the year mainly on account of reduction of prices of final products. Your Company has been continuously striving to increase its efficiency and productivity. The management hopes that this scenario will improve in the next year. 3. RESERVES AND DIVIDEND: During the year under review your Company has transferred Rs. 54,44,44,425/- to Reserves and Surplus that is Rs. 35/- per equity shares on 1,55,55,555 equity shares of Rs. 10/- each, received under Initial Public Offering ("IPO"). No Dividend was declared for the current financial year due to conservation of Profits by the Company. 4. STATUTORY AUDITORS: Your Company's Auditor, M/s. Sureka Associates, Chartered Accountants, Mumbai (Firm Registration No.: 110640W) who have been re-appointed as Statutory Auditor for a period of 5 years' subject to ratification by the Members of your Company at every Annual General Meeting, have given their consent to continue to act as the Auditor of your Company for the remaining tenure. 5. EXPANSION: Your Company has started project for expansion of wire ropes manufacturing facilities 66,000 MTPA at MIDC, Chalisgaon, Dist. Jalgaon, Maharashtra, with estimated cost of Rs. 507.17 Crores. The Company has financed the same by way of Term Loan of Rs. 330 Crores from banks under Consortium arrangement and by issuing fresh equity shares of Rs. 70 Crores through Initial Public Offer and is listed on National Stock Exchange of India Limited (NSE) and BSE Limited (BSE). 6. CHANGES IN DIRECTORS AND KEY MANAGERIAL PERSONNEL: Since the last report following changes took place in the Board of Directors and Key Managerial Personnel: • Mr. Asit Pal was appointed as the additional director of the Company on February 14, 2015 and his designation was changed to Non-Executive Independent Director in the Extra Ordinary General Meeting held on April 25, 2015. • Ms. Ruhi Mittal was appointed as the additional director of the Company on April 16, 2015 and her designation was changed to Non-Executive Non Independent Director in the Extra Ordinary General Meeting held on April 25, 2015. • Mr. Vedprakash Sharma resigned as Chief Financial Officer on April 16, 2015. • Mr. Rakesh Kumar Jain was appointed as Chief Financial Officer on April 16, 2015 for a period of One (1) year and was re-appointed on March 28, 2016. • Mr. Sushil R. Sharda was re-appointed as a Whole-time Director on December 28, 2015 for a period of Five (5) years w.e.f. January 1, 2016 to December 31, 2020. • Mr. Venkateswararao Laxmanamurty Kandikuppa was re-appointed as a Whole-time Director on December 28, 2015 for a period of Five (5) years w.e.f. January 1, 2016 to December 31, 2020. • Mr. Sumit Kumar Modak was re- appointed as a Whole-time director on December 28, 2015 for a period of Five (5) years w.e.f. January 1, 2016 to December 31, 2020. 7. BUSINESS RISK MANAGEMENT: Risk management is embedded in your Company's operating framework. Your Company believes that managing risks helps in maximizing returns. The Company's approach to addressing business risks is comprehensive and includes periodic review of such risks and a framework for mitigating controls and reporting mechanism of such risks. The risk management framework is reviewed periodically by the Board and the Audit Committee. 8. POLICY ON DIRECTOR'S AND KEY MANAGERIAL PERSONNEL APPOINTMENT & REMUNERATION: Your Company during the year adopted the policy on Director's Appointment & Remuneration. The objective of the policy is to ensure that Executive Directors and other employees are sufficiently compensated for their performance. The Policy seeks to provide criteria for determining qualifications, positive attributes, and independence of a director and also recommend a policy relating to the remuneration for the directors and key managerial personnel. 9. CORPORATE SOCIAL RESPONSIBILITY: Your Company does not fall under the criteria of undertaking Corporate Social Responsibility (CSR) activities as per the Section 135 of Companies Act, 2013. 10. COMMENTS BY THE BOARD WITH RESPECT TO AUDITORS FINDINGS: No adverse remark has been reported in the auditor's report by the auditor for the financial year 2015-16 which requires explanation and comments by the board. 11. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENT: Particulars of Loans, Guarantees or Investment covered under the provisions of Section 186 of the Companies Act, 2013 are given in the schedule no. 2.26.6 of notes to Financial Statements. 12. DECLARATION OF INDEPENDENT DIRECTORS: The Independent Directors have submitted their disclosures to the Board that they fulfill all the requirements as stipulated in Section 149 of the Companies Act, 2013 so as to qualify themselves to be appointed as Independent Directors under the provisions of the Companies Act, 2013 and the relevant rules. 13. EXTRACT OF ANNUAL RETURN: The extracts of Annual Return pursuant to the provisions of Section 92 read with Rule 12 of the Companies (Management and Administration) Rules, 2014 is furnished in Annexure A and is attached to this Report. 14. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO: The information pertaining to conservation of energy, technology absorption, Foreign exchange Earnings and outgo as required under Section 134 (3)(m) of the Companies Act, 2013 read with Rule 8(3) of the Companies (Accounts) Rules, 2014 is as under. Conservation of Energy: Your Company has procured various latest and advance machinery having latest technology which is already in erection stage with minimum power consumption features with lot more other features for its new plant at MIDC, Chalisgaon, Maharashtra, which will result in saving in power consumption, which will benefit to the Company in the coming years. Technology Absorption: There have been no technology changes in the Company during the year under review, but Company is under process to bring technological revolution by installing high end technology for its new plant at MIDC, Chalisgaon, Maharashtra. 16. DIRECTORS RESPONSIBILITY STATEMENT: In accordance with the provisions of Section 134(5) of the Companies Act, 2013, the Board hereby submits its responsibility statement:- (a) In the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures; (b) The directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit and loss of the Company for that period; (c) The directors had taken proper and sufficient care for the maintenance of adequate accounting records in 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; (d) The directors had prepared the annual accounts on a going concern basis; (e) The directors had laid down internal financial controls to be followed by the Company and those internal financial controls were adequate and were operating efficiently; and (f) The directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively. 17. DIRECTORS' EVALUATION: The Board evaluated the effectiveness of its functioning and that of the Committees and of individual directors by seeking their inputs on various aspects of Board/Committees. The aspects covered in the evaluation included the contribution to and monitoring of corporate governance practices, participation in the long-term strategic planning and the fulfillment of Directors' obligations and fiduciary responsibilities, including but not limited to, active participation at the Board and Committee meetings. The members of the Independent Directors Committee evaluated Board's performance in the Independent Directors Committee meetings held on March 28, 2016. 24. VIGIL MECHANISM: The Company has established a vigil mechanism and oversees through the Audit Committee, the genuine concerns expressed by the employees and other Directors. The Company has also provided adequate safeguards against victimization of employees and Directors who express their concerns. The Company has also provided direct access to the chairman of the Audit Committee on reporting issues concerning the interests of employees and the Company. An Internal Complaints Committee has been formed for each location of your Company under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. No case of Sexual harassment was reported to the Internal Complaints Committee during the year under review. 25. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES: All the transactions entered with Related Parties for the year under review were on arm's length basis. The Particulars of Contracts or Arrangements with Related Parties in terms of Section 134 of the Companies Act, 2013, are given in Form No. AOC 2. 26. MATERIAL CHANGES AND COMMITMENTS: • Your Company raised capital by issuing 1,55,55,555 Equity Shares of Rs. 10/- each per shares for a premium of Rs. 35/- per share to the public at the end of the financial year 2015-16 and got listed on National Stock Exchange of India Limited and BSE Limited. • No significant and material order was passed by the regulators or courts or tribunals which would have impacted the going concern status and the Company's operation in future. • None of the employees has received remuneration exceeding the limit as stated in rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014. • During the year under report, no shares with differential rights were issued by your Company, nor did your Company allot any equity shares as sweat equity shares or bonus shares. 27. DETAILS IN RESPECT OF ADEQUACY OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO THE FINANCIAL STATEMENTS: Your Company has a robust internal control system commensurate with the size and scale of its operations. Roles and responsibilities are clearly defined and assigned. Standard operating procedures are in place by way of built in controls in ERP system and have been designed to provide a reasonable assurance. A reputed CA firm has also been engaged for internal audit, covering all units and business operations. The Audit Committee reviews the adequacy and effectiveness of internal control systems and provides guidance for further strengthening them. Apart from having all policies, procedures and internal audit mechanism in place, your Company also periodically engages outside experts to carry out an independent review of the effectiveness of various business processes. The observations and good practices suggested are reviewed by the Management and Audit Committee and appropriately implemented with a view to continuously strengthen internal controls. 28. PARTICULARS OF EMPLOYEES: The information required under Section 197 of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are given below. 29. ACKNOWLEDGEMENT: Your Directors place on record their sincere thanks to its bankers, business associates, consultants, and various Government Authorities for their continued support extended to your Company's activities during the year under review. Your Directors gratefully acknowledge the support and confidence reposed by the shareholders on your Company. For Bharat Wire Ropes Limited Murarilal Mittal Managing Director DIN: 00010689 Sushil R. Sharda Whole-time Director DIN: 03117481 Date : May 29, 2016 Place: Mumbai |