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Bharat Wire Ropes Ltd.

BSE: 539799 Sector: Metals & Mining
NSE: BHARATWIRE ISIN Code: INE316L01019
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OPEN 49.05
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VOLUME 144730
52-Week high 56.50
52-Week low 38.00
P/E 163.50
Mkt Cap.(Rs cr) 220.48
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 49.05
CLOSE 49.25
VOLUME 144730
52-Week high 56.50
52-Week low 38.00
P/E 163.50
Mkt Cap.(Rs cr) 220.48
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Bharat Wire Ropes Ltd. (BHARATWIRE) - Director Report

Company director report

To

The Members

Bharat Wire Ropes Limited

Your Directors are pleased to present the 30th Annual Report of the Companytogether with the Audited Accounts and Auditors’ report for the financial year endedMarch 31 2016.

1. THE COMPANY’S FINANCIAL PERFORMANCE FOR THE YEAR ENDED MARCH 31 2016 ISSUMMARIZED AS BELOW:

Financial Particulars

For the Year Ended March 31

2016 2015
Income from Business Operations 607028472 767221483
Total Revenue 607028472 767221483
Profit before Tax and Depreciation 45092101 55269713
Less Depreciation 22917158 24459413
Profit before Tax 22174943 30810300
Less: Extra-ordinary Item (Goodwill Written Off) - 19951368
Less Current Income Tax 7463897 9251050
Less Minimum Alternative Tax Credit Entitlement - -
Less Deferred Tax 1283324 (1660597)
Profit after Tax available for appropriation 13427722 3268479
Add Balance Brought forward from previous year 101026532 97758052
Balance carried to Balance Sheet 114454254 101026531
Earnings per share (Basic) 0.46 0.11
Earnings per Share(Diluted) 0.46 0.11

2. THE STATE OF COMPANY’S AFFAIRS:

Bharat Wire Ropes Ltd. ("Your Company") is one of the largest manufacturersof Wires Wire Ropes Stranded Wires and Slings in India with an ever growing globalpresence catering more than 20 countries globally by way of exports to South AfricaKuwait New Zealand Vietnam USA Singapore Australia and Nepal. The Profit before taxhas improved on account of improved efficiency and benefit of reduction of Raw Materialprices. Your Company’s ‘Revenue from Operations’ was in line with previousyear however there has been a marginal dip during the year mainly on account of reductionof prices of final products. Your Company has been continuously striving to increase itsefficiency and productivity. The management hopes that this scenario will improve in thenext year.

3. RESERVES AND DIVIDEND:

During the year under review your Company has transferred Rs. 544444425/- toReserves and Surplus that is Rs. 35/- per equity shares on 15555555 equity shares ofRs. 10/- each received under Initial Public Offering ("IPO"). NoDividend was declared for the current financial year due to conservation of Profits by theCompany.

4. STATUTORY AUDITORS:

Your Company’s Auditor M/s. Sureka Associates Chartered AccountantsMumbai (Firm Registration No.: 110640W) who have been re-appointed as StatutoryAuditor 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 asthe Auditor of your Company for the remaining tenure.

5. EXPANSION:

Your Company has started project for expansion of wire ropes manufacturing facilities66000 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 Croresfrom banks under Consortium arrangement and by issuing fresh equity shares of Rs. 70Crores through Initial Public Offer and is listed on National Stock Exchange of IndiaLimited (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 KeyManagerial Personnel:

• Mr. Asit Pal was appointed as the additional director of the Company on February14 2015 and his designation was changed to Non-Executive Independent Director in theExtra Ordinary General Meeting held on April 25 2015.

• Ms. Ruhi Mittal was appointed as the additional director of the Company on April16 2015 and her designation was changed to Non-Executive Non Independent Director in theExtra 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 2015for 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 282015 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-timeDirector on December 28 2015 for a period of Five (5) years w.e.f. January 1 2016 toDecember 31 2020.

• Mr. Sumit Kumar Modak was re- appointed as a Whole-time director on December 282015 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 Companybelieves that managing risks helps in maximizing returns. The Company’s approach toaddressing business risks is comprehensive and includes periodic review of such risks anda framework for mitigating controls and reporting mechanism of such risks. The riskmanagement 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 otheremployees are sufficiently compensated for their performance. The Policy seeks to providecriteria for determining qualifications positive attributes and independence of adirector and also recommend a policy relating to the remuneration for the directors andkey managerial personnel.

9. CORPORATE SOCIAL RESPONSIBILITY:

Your Company does not fall under the criteria of undertaking Corporate SocialResponsibility (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 thefinancial 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 Section186 of the Companies Act 2013 are given in the schedule no. 2.26.6 of notes to FinancialStatements.

12. DECLARATION OF INDEPENDENT DIRECTORS:

The Independent Directors have submitted their disclosures to the Board that theyfulfill all the requirements as stipulated in Section 149 of the Companies Act 2013 so asto qualify themselves to be appointed as Independent Directors under the provisions of theCompanies 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 Rule12 of the Companies (Management and Administration) Rules 2014 is furnished in AnnexureA 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 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 as under.

Conservation of Energy:

Your Company has procured various latest and advance machinery having latest technologywhich is already in erection stage with minimum power consumption features with lot moreother features for its new plant at MIDC Chalisgaon Maharashtra which will result insaving 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 butCompany is under process to bring technological revolution by installing high endtechnology for its new plant at MIDC Chalisgaon Maharashtra.

Foreign exchange earnings and Outgo:

Particulars 2015-2016 2014-2015
a. Foreign Exchange Earnings 32790308 100699170
b. Value of Direct Import (C. I. F Value) 680410076 128330259
c. Expenditure in Foreign Currency 3329197 725117

15. NUMBER OF BOARD MEETINGS CONDUCTED DURING THE YEAR UNDER REVIEW:

During the year under review 9 Meeting of the Board of Directors have been conducteddetails of which are given below:

Quarter Date of the Meeting Time of the Meeting
First Quarter April 16 2015 5.30 p.m.
(April - June) April 25 2015 5.30 p.m.
June 15 2015 11.00 a.m.
Second Quarter July 13 2015 11.00 a.m.
(July - September) July 21 2015 3.00 p.m.
September 1 2015 12.00 p.m.
Third Quarter (October - December) December 28 2015 12.30 p.m.
Fourth Quarter March 7 2016 8.30 a.m.
(January - March) March 28 2016 11.00 a.m.

16. DIRECTORS RESPONSIBILITY STATEMENT:

In accordance with the provisions of Section 134(5) of the Companies Act 2013 theBoard hereby submits its responsibility statement:-

(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 the Companies Act 2013 forsafeguarding the assets of the Company and for preventing and detecting fraud and otherirregularities;

(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 theCompany and those internal financial controls were adequate and were operatingefficiently; and

(f) The directors had devised proper systems to ensure compliance with the provisionsof 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 andof individual directors by seeking their inputs on various aspects of Board/Committees.The aspects covered in the evaluation included the contribution to and monitoring ofcorporate governance practices participation in the long-term strategic planning and thefulfillment of Directors’ obligations and fiduciary responsibilities including butnot limited to active participation at the Board and Committee meetings. The members ofthe Independent Directors Committee evaluated Board’s performance in the IndependentDirectors Committee meetings held on March 28 2016.

18. AUDIT COMMITTEE

The Audit Committee consists of the following members:

Name of the Director Status in Committee Nature of Directorship
Mr. Asit Pal Chairman Non-Executive Independent Director
Mr. Supratik Chatterjee Member Non-Executive Independent Director
Mr. Anthony D’Souza Member Non-Executive Independent Director
Mr. Murarilal Mittal Member Managing Director

None of the recommendations made by the Audit Committee were rejected by the Board. 19.NOMINATION AND REMUNERATION COMMITTEE

The Nomination and Remuneration Committee consists of the following members:

Name of the Director Status in Committee Nature of Directorship
Mr. Supratik Chatterjee Chairman Non-Executive Independent Director
Mr. Asit Pal Member Non-Executive Independent Director
Mr. Anthony D’Souza Member Non-Executive Independent Director

20. REMUNERATION TO DIRECTORS

A. Remuneration to Managing Director Whole-time Directors and/or Manager:

Particulars of

Name of MD/WTD/Manager

Total Amount
Remuneration Mr. Murarilal Mittal Managing Director Mr. Sushil R. Sharda Whole-Time Director Mr. Venkateswararao Kandikuppa WholeTime Director Mr. Sumit Kumar Modak Whole-time Director (Rs.)
1 Total Salary (P.A) 3300000 2332800 2368347 2691715 10692862
Total (A) 3300000 2332800 2368347 2691715 10692862

B. Remuneration to other Directors:

Name of Directors

Total Amount
Sr. Particulars of No. Remuneration Mr. Supratik Chatterjee Independent Director Mr. Anthony D’Souza Independent Director Mr. Asit Pal Independent Director Ms. Ruhi Mittal Non- Executive Non - Independent Director (Rs.)
1 Independent Directors
• Fees for attending board committee meetings 58500 49500 57750 28500 194250
• Commission - - - - -
• Others please specify - - - - -
Total (1) 58500 49500 57750 28500 194250
2 Other NonExecutive Directors - - - - -
• Fees for attending board committee meetings
• Commission - - - - -
• Others please specify - - - - -
Total (2) - - - - -
Total (B) = (1+2) 58500 49500 57750 28500 194250
Total Managerial Remuneration (A+B) 10858312

21. STAKEHOLDERS RELATIONSHIP COMMITTEE:

The Stakeholders Relationship Committee consists of the following members:

Name of the Director Status in Committee Nature of Directorship
Mr. Anthony D’Souza Chairman Non-Executive Independent Director
Mr. Asit Pal Member Non-Executive Independent Director
Mr. Sushil R. Sharda Member Whole-time Director

22. INITIAL PUBLIC OFFERING (IPO) COMMITTEE:

The IPO Committee consists of the following members:

Name of the Director Status in Committee Nature of Directorship
Mr. Sushil R. Sharda Chairman Whole-time Director
Mr. Murarilal Mittal Member Managing Director
Mr. Asit Pal Member Non-Executive Independent Director

The above composition of the IPO Committee consists of Independent Director Mr. AsitPal.

23. INDEPENDENT DIRECTOR’S COMMITTEE:

The Independent Director’s Committee consists of the following members:

Name of the Director Status in Committee Nature of Directorship
Mr. Supratik Chatterjee Chairman Non-Executive Independent Director
Mr. Anthony D’Souza Member Non-Executive Independent Director
Mr. Asit Pal Member Non-Executive Independent Director

24. VIGIL MECHANISM:

The Company has established a vigil mechanism and oversees through the Audit Committeethe genuine concerns expressed by the employees and other Directors. The Company has alsoprovided adequate safeguards against victimization of employees and Directors who expresstheir concerns. The Company has also provided direct access to the chairman of the AuditCommittee on reporting issues concerning the interests of employees and the Company.

An Internal Complaints Committee has been formed for each location of your Companyunder the Sexual Harassment of Women at Workplace (Prevention Prohibition and Redressal)Act 2013. No case of Sexual harassment was reported to the Internal Complaints Committeeduring 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 onarm’s length basis. The Particulars of Contracts or Arrangements with Related Partiesin 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 15555555 Equity Shares of Rs. 10/-each per shares for a premium of Rs. 35/- per share to the public at the end of thefinancial year 2015-16 and got listed on National Stock Exchange of India Limited and BSELimited.

• No significant and material order was passed by the regulators or courts ortribunals which would have impacted the oing concern status and the Company’soperation in future.

• None of the employees has received remuneration exceeding the limit as stated inrule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules2014.

• During the year under report no shares with differential rights were issued byyour Company nor did your Company allot any equity shares as sweat equity shares or bonusshares.

27. DETAILS IN RESPECT OF ADEQUACY OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO THEFINANCIAL STATEMENTS:

Your Company has a robust internal control system commensurate with the size and scaleof its operations. Roles and responsibilities are clearly defined and assigned. Standardoperating procedures are in place by way of built in controls in ERP system and have beendesigned to provide a reasonable assurance. A reputed CA firm has also been engaged forinternal audit covering all units and business operations. The Audit Committee reviewsthe adequacy and effectiveness of internal

control systems and provides guidance for further strengthening them. Apart from havingall policies procedures and internal audit mechanism in place your Company alsoperiodically engages outside experts to carry out an independent review of theeffectiveness of various business processes. The observations and good practices suggestedare reviewed by the Management and Audit Committee and appropriately implemented with aview to continuously strengthen internal controls.

28. PARTICULARS OF EMPLOYEES:

The information required under Section 197 of the Act read with Rule 5(1) of theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 are givenbelow.

i. The ratio of the remuneration of each director to the median remuneration of theemployees of the Company for the Financial Year 2015-16:

Name of the Directors Ratio to the median Remuneration
Non-Executive directors
Mr. Supratik Chatterjee 0.257
Mr. Anthony D’Souza 0.217
Mr. Asit Pal 0.253
Ms. Ruhi Mittal 0.125
Executive directors
Mr. Murarilal Mittal 14.479
Mr. Sushil R. Sharda 10.235
Mr. Sumit Kumar Modak 11.810
Mr. Venkateswararao Kandikuppa 10.391

ii. The percentage increase in remuneration of each Director Chief Financial OfficerCompany Secretary in the financial year 2015-16:

Directors Chief Financial Officer and Company Secretary % Increase in remuneration in the financial year
Mr. Supratik Chatterjee 290
Mr. Anthony D’Souza 230
Mr. Asit Pal 670
Ms. Ruhi Mittal -
Mr. Murarilal Mittal -
Mr. Sushil R. Sharda 0.03
Mr. Sumit Kumar Modak 43.41
Mr. Venkateswararao Kandikuppa 4.42
Mr. Rakesh Kumar Jain -
Mr. Shailesh Rakhasiya 31.05

* Mr. Rakesh Kumar Jain was appointed on April 16 2015 therefore increase in hisremuneration not provided.

* Ms. Ruhi Mittal was appointed to Non-Executive Non Independent Director in the ExtraOrdinary General Meeting held on April 25 2015 therefore increase in her remunerationnot provided.

iii. The percentage increase in the median remuneration of employees in the financialyear 2015-16: 22.47%

iv. The number of permanent employees on the rolls of Company:

There were 319 permanent employees as on March 31 2016.

v. The explanation on the relationship between average increase in remuneration andCompany performance:

On an average employees received an annual increase of 4.71%. The individualincrements are based on individual performance. The increase in remuneration is in linewith the market trends in India. In order to ensure that remuneration reflects Companyperformance the performance pay is also linked to organization performance apart from anindividual’s performance.

vi. Comparison of the remuneration of the Key Managerial Personnel against theperformance of the Company:

Aggregate remuneration of key managerial personnel (KMP) in FY 15-16 12714701
Revenue 607028472
Remuneration of KMPs (as % of revenue) 2.09
Profit before Tax (PBT) 22174943
Remuneration of KMP (as % of PBT) 57.34

Note: KMP includes Managing Director Whole-Time director Company Secretary &Chief Financial Officer as per Section 203 of Companies Act 2013.

vii. Variations in the market capitalization of the Company price earnings ratio as atthe closing date of the current financial year and previous financial year:

Particulars March 31 2016
Market capitalization (NSE) 2022851160
Price Earnings Ratio 97.82

* The Market Capitalization of the Company and Price Earnings Ratio for the previousfinancial year is not provided as The Company got listed on April 1 2016 on NationalStock Exchange of India Limited and BSE Limited

viii. Percentage increase over decrease in the market quotations of the shares of theCompany in comparison to the rate at which the Company came out with the last publicoffer:

Nil*

* The Company got listed on April 1 2016 on National Stock Exchange of India Limitedand BSE Limited.

ix. Average percentile increase already made in the salaries of employees otherthan the managerial personnel in the last financial year and its comparison with thepercentile increase in the managerial remuneration and justification thereof and point outif there are any exceptional circumstances for increase in the managerial remuneration.

The average annual increase was around 4.71% in the salaries of the employees.

x. Comparison of each remuneration of the Key Managerial Personnel against theperformance of the Company:

PARTICULARS Mr. Murarilal Mittal (Managing Director) Mr. Sushil Sharda (Whole -Time Director) Mr. Sumit Kumar Modak (Whole-Time Director)
Remuneration in FY 15-16 3300000 2332800 2691715
Revenue (Rs. in lakhs) 607028472
Remuneration as % of revenue 0.54 0.38 0.44
Profit before Tax (PBT) (Rs. in lakhs) 22174943
Remuneration (as % of PBT) 14.88 10.51 12.13

 

PARTICULARS Mr. Venkateswarao Kandikuppa (Whole-Time Director) Mr. Rakesh Kumar Jain (Chief Financial Officer) Mr. Shailesh Rakhasiya (Company Secretary)
Remuneration in FY 15-16 2368347 1741389 280450
Revenue (Rs. in lakhs) 607028472
Remuneration as % of revenue 0.39 0.29 0.05
Profit before Tax (PBT) (Rs. in lakhs) 22174943
Remuneration (as % of PBT) 10.68 7.85 1.26

xi. The key parameters for any variable component of remuneration availed by thedirectors:

The sitting fees paid to the Non - Executive Directors are in the ceiling limit asprovided in the Companies Act 2013.

The said fees are decided each year by the board of directors based on their attendanceand contribution at the Board and certain Committee Meeting.

xii. The ratio of the remuneration of the highest paid director to that of theemployees who are not directors but receive remuneration in excess of the highest paiddirector during the year:

None

xiii. Affirmation that the remuneration is as per the remuneration policy of theCompany:

The Company affirms remuneration is as per the remuneration policy of the Company.

29. ACKNOWLEDGEMENT:

Your Directors place on record their sincere thanks to its bankers businessassociates consultants and various Government Authorities for their continued supportextended to your Company’s activities during the year under review. Your Directorsgratefully acknowledge the support and confidence reposed by the shareholders on yourCompany.

For Bharat Wire Ropes Limited For Bharat Wire Ropes Limited
Murarilal Mittal Sushil R. Sharda
Managing Director Whole-time Director
DIN: 00010689 DIN: 03117481
Date : May 29 2016
Place: Mumbai

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