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BWL Ltd.

BSE: 504643 Sector: Engineering
NSE: N.A. ISIN Code: N.A.
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BWL Ltd. (BWL) - Director Report

Company director report

Dear Members

Your Directors hereby present the 44th Annual Report of your Company for thefinancial year ended 31st March 2016.

FINANCIAL RESULTS

The financial performance of your Company for the year ended 31st March 2016 issummarized below:

Financial year Ended 31st March 2016 Financial year ended 31st March 2015
(Rs.) (Rs.)
Turn Over -
Profit / (Loss) before interest Depreciation & Taxes (2443916) (2237847)
Add: Depreciation 462002 435405
Profit / (Loss) for the year (2905918) (2673252)
Balance Brought forward from last year (424025213) (420328159)
Depreciation Charged to Opening retained Earning - (1023802)
(Loss) carried to Balance Sheet (426931131) (424025213)

2. DIVIDEND:

In view of accumulated loss your Directors regret their inability to recommend anydividend.

3 OVERVIEW OF COMPANY’S FINANCIAL PERFORMANCE:

The Scheme of Rehabilitation of the company under consideration of BIFR provides interalia road map of commencing production at commercial level gradual capacity build up andestablishment of viability of the company in long term prospective. The management aspiresto pursue said road map after the same being approved by the Apex Body.

The para hardly calls for addressal considering prolonged closure of the unit.

4. DISCLOSURES:

Related Party Transactions including those covered u/s 188 (1) of Companies Act2013

There was no related party transaction during the year within the meaning of Section188 (1) of Companies Act2013 .The Company has formulated a Policy on materiality ofRelated Party Transactions and other parapharnarials while dealing in Related PartyTransactions in accordance with relevant provisions of Companies Act 2013 and Clause 49of the earstwhile Listing Agreement and Regulation 29 of SEBI (Listing Obligations &Disclosure requirements ) Regulations 2015( herein after referred as SEBI Regulations2015 ) which have been put in the Company’s web site.

Disclosures by Senior Management & Key Managerial Personnel

The Senior Management Personnel make disclosures to the Board periodically regarding:their dealings in the Company‘s shares if any; and all material financial andcommercial and other transactions with the company if any. where they have personalinterest stating that the said dealings and transactions if any had no potentialconflict with the interest of the Company at large.

The material financial and commercial transactions where Key Managerial Personnel havepersonal interest forms part of the disclosure on related parties referred to in Notes toAnnual Accounts which was reported to the Board of Directors.

Disclosure of accounting treatment in preparation of financial statements

The Company has followed prescribed Accounting Standards as laid down by the Instituteof Chartered Accountants of India (ICAI) in preparation of its financial statements exceptfor two treatments reasons for the deviations have been explained in Note 24 and 30 of thefinancial statements.

Details of non-compliance by the Company

BWL has generally complied with all the requirements of regulatory authorities. Nopenalties/ strictures were imposed on the Company by Stock Exchanges or SEBI or anyStatutory Authority on any matter related to capital market during the last three years.However during the financial year 2015-16 BSE Limited has imposed penalty for delayedsubmission of Audited Financial Result for the year ended 31st March2015 . Company hasapplied for waiver of penalty amount on the ground of it’s Sick Status which ispending before the appropriate Forum.

Code for Prevention of Insider-Trading Practices

In compliance with the SEBI regulations for Insider Trading and the provisions ofCompanies Act 2013 the Company has in place a comprehensive Code of Conduct forPrevention of Insider Trading for its management and staff. The Code lays down guidelinesadvising them on procedures to be followed and disclosures to be made while dealing withthe shares of BWL and cautioning them of the consequences of violations. The CFO has beenappointed as the Compliance Officer.

The Company has also formulated a Code of Conduct for Prevention of Insider Trading anda Code of Practices and Procedures for Fair Disclosure of Unpublished Price SensitiveInformation in accordance with SEBI (Prohibition of Insider Trading) Regulations 2015which has been effective from 15th May 2015.

Whistle-Blower Policy / Vigil Mechanism

BWL has established a forum to which Directors employees business associates mayreport unethical behaviour malpractices wrongful conduct fraud violation ofCompany’s code of conduct without fear of reprisal through direct Touch initiative.All Directors employees business associates have been enabled to have direct access tothe Chairman of the Audit Committee the forum of this has been named Direct Touch team .The Whistle-Blower Protection Policy aims to:

• Allow and encourage stakeholders to bring to the management notice concernsabout unethical behaviour malpractice wrongful conduct actual or suspected fraud orviolation of policies.

• Ensure timely and consistent organizational response.

• Build and strengthen a culture of transparency and trust.

• Provide protection against victimization.

The Audit Committee periodically reviews the existence and functioning of themechanism. It reviews the status of complaints received under this policy on a quarterlybasis. The Committee has in its Report affirmed that no person has been denied access tothe Audit Committee.

CEO/ CFO certification

The CEO and CFO certification on the financial statements and the cash flow statementfor the year is placed at the end of this Report.

Legal Compliance Reporting

The Board of Directors reviews in detail on a quarterly basis the report ofcompliance with respect to all applicable laws and regulations. Any non-compliance istaken up by the Board with utmost sincerity with fixation of accountability and reportingof steps taken for rectification of non-compliance.

5. PUBLIC DEPOSIT: Not applicable

6. DIRECTORS:

During the year under review Smt. Sahin Basu Majumdar has joined as member of Board inthe capacity of Woman Independent Director. There is no other change in the other directorand Key managerial personnel during the year.

7. BUSINESS RESPONSIBILITY REPORT: Not applicable

8. INDUSTRIAL RELATION:

Industrial relations remain more or less cordial during the year.

9. DISCLOSURE RELATING TO REMUNERATION OF DIRECTORS KEY MANAGERIAL PERSONNELAND PARTICULARS OF EMPLOYEES

Please refer Annexure (A) to this Report.

10. ANNUAL EVALUATION OF BOARD’S PERFORMANCE:

The Board of Directors upon recommendation of Nomination and Remuneration Committee haslaid down the criteria for performance evaluation of Board of the Company its Committeesand the individual Board members including Independent Directors.

Performance of each Independent Director is subject to evaluation by the entire Boardexcluding the Director being evaluated.

Performance evaluation by the Board in terms of criteria laid down is the determiningfactor of extending continuing discontinuing and revisioning terms of appointment of adirector after expiry of his term.

11. NUMBER OF MEETINGS OF THE BOARD

4 (Four)

12. DECLARATION OF INDEPENDENCE

Your Company has received declarations from all the Independent Directors confirmingthat they meet the criteria of independence as prescribed under the provisions ofCompanies Act 2013 read with the Schedules and Rules issued there under as well as Clause49 of the earst while Listing Agreement.

13. DIRECTORS’ RESPONSIBILITY STATEMENT

Pursuant to Section 134(3) (c) of the Companies Act 2013 the Directors confirm that:(a) in the preparation of the annual accounts for the financial Year ended 31st March2016 the applicable accounting standards and Schedule III of the Companies Act 2013have been followed and there are no material departures from the same; (b) the Directorshave selected such accounting policies and applied them consistently and made judgmentsand estimates that are reasonable and prudent so as to give a true and fair view of thestate of affairs of your Company as at 31st March 2016 and of the profit and loss of theCompany for the financial year ended 31st March 2016; (c) proper and sufficient care hasbeen taken for the maintenance of adequate accounting records in accordance with theprovisions of the Companies Act 2013 for safeguarding the assets of the Company and forpreventing and detecting fraud and other irregularities; (d) the annual accounts have beenprepared on a ‘going concern’ basis; (e) proper internal financial controls laiddown by the Directors were followed by the Company and that such internal financialcontrols are adequate and were operating effectively; and (f) Proper systems to ensurecompliance with the provisions of all applicable laws were in place and that such systemswere adequate and operating effectively.

14. AUDITORS AND AUDITOR’S REPORT:

Auditors

M/s. G.Basu & Co. Chartered Accountants who retire at the ensuing AGM of yourCompany are eligible for re-appointment. Your Company has received written consent and acertificate stating that they satisfy the criteria provided under Section 141 of theCompanies Act 2013 read with the Companies (Audit and Auditors) Rules 2014 and that theappointment if made shall be in accordance with the applicable provisions of theCompanies Act 2013 and rules issued there under. As required under Regulations 33 (d) ofSEBI Regulations 2015 M/s. G.Basu & Co. Chartered Accountants have also confirmedthat they hold a valid certificate issued by the Peer Review Board of ICAI.

The Audit Committee and the Board of Directors recommended the appointment of M/sG.Basu & Co. Chartered Accountants as the Auditors of your Company for the Financialyear 2016-17 till conclusion of the next AGM.

The observations of the Auditors when read with the corresponding reference in Notes onAccounts will be found self explanatory.

Secretarial Audit:

Pursuant to the provisions of Section 204 of the Companies Act 2013 read with theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 your Companyhas appointed Pooja Agarwal Practising Company Secretary to conduct the SecretarialAudit of your Company as M/s V.P.Mahipal & Co. Practising Company Secretary who wasthe Auditor for the year 2014-15has declined to continue as an Auditor for the year2015-16 due to his personal reason. The Secretarial Audit Report is annexed herewith as "Annexure- [B]" to this Report. The observations of the Auditors and further commentsthereon will be found self explanatory.

15. EXTRACT OF ANNUAL RETURN:

Pease refer Annexure [C] to this Report.

16. RELATED PARTY TRANSACTIONS:

The details of related party transactions as required under Accounting Standard -18 areset out in Note 21 to the Financial Statement forming part of this Annual Report.

The Form AOC – 2 pursuant to Section 134 (3) (h) of the Companies Act 2013 readwith Rule 8 (2) of the Companies (Accounts) Rules 2014 is set out as Annexure (D) to thisReport.

17. LOANS AND INVESTMENTS:

Not applicable.

18. RISK MANAGEMENT:

The Rist Management Committee constituted on 6th August2015 and the role ofthe committee is as under :

1. Preparation of Risk Management Plan reviewing and monitoring the same on regularbasis.

2. To update Risk Register on quarterly basis.

3. To review appropriateness of risk factors identified by management.

4. To take cognizance of internal and extraneous situation in domestic and globalcontext with propersity to aggravate risk factors.

5. To review critical risks identified by Joint Chief Risk Officer(s) and ManagementCommittee on quarterly basis.

6. To report key changes in critical risks to the Board on quarterly basis.

7. To report critical risks to Audit Committee in detail on yearly basis.

8. To perform such other functions related to risk scenario as may be deemed orprescribed fit by the Board.

19. CORPORATE SOCIAL RESPONSIBILITY:

Not applicable.

20. CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNING AND OUTGO:

Please refer Annexure [E] to this Report.

21. SIGNIFICANT / MATERIAL ORDERS PASSED BY THE REGULATORS:

Nil

22. Details in respect of adequacy of internal financial control (IFC) with referenceto the financial statements ( Rule 8 (5) (viii) of Companies (Accounts) Rules 2014

Despite meagre activity level due to prolonged suspension of work IFC mechanism issound enough to ensure true and fairness of financial statements. In limited contextCompany’s functioning .

Details of control mechanism in existence include :

a) Periodic physical verification of Fixed Assets and comparison there of withbook records at least once in a year.

b) Periodic physical verification of inventories at least once in a year and comparisonthere of with book records.

c) Quarterly physical verification of cash.

d) Keeping Bank Reconciliation statement up to date on monthly basis.

e) Keeping accounts up to date on regular basis.

f) Timely payment of all statutory dues without default.

g) Regular assessment of Risk factors on possible crystallisation of liabilities underdispute by way of consultation with concerned legal Practitioners.

h) Restricting issuance of Cheque under joint authority of whole Time Director and CFO.

i) Compliance of all formalities laid down under Companies Act and Listing Obligationswith out any default.

j) Ensuring proper Security arrangement for safe - guarding the assets and regularinspection by WTD (also a qualified engineer) of Assets to take measure against possibledetoriation in their operability. True that control metrixs could not be developed to plugevery loopholes which is attributed to dismal financial standing of the company includingrestriction on usability of available fund as well imposed by authorities.

k) Gearing up financial control through cost curtailment measure which includessacrifice of lion’s share of eligible remuneration on the part of whole timedirectors.

23. Self evolution of Board including it’s Committee and Individual memberssection ( 134 (3) (P) of Companies Act2013 )

Being under prolonged closure time is not ripe to assess performance of overall Boardor any Committee of Board or any individual member of Board except for effort ofmanagement to overcome present impasse arising due to pending decision from BIFR theprogress of proceedings at the end of directorate being observed miserably slow.

BIFR proceedings being virtually dysfunctional and National Company Law Tribunal ispending formation it is a hapless situation which can be helped neither by the Board norany of it’s Committees/ members. Considering these the evolution exercise has beenpredominantly resricted to adherences’ of statutory compliances’.

a) Board met and took up issues in due cognigence of statutory requirement and otherutilitarian objection without default or negligence.

b) Each committee of the Board performed duties entrusted to each by Board listingobligations and Companies Act2013 and no deficiencies in prima facie noticeable in theirfunctioning .

c) Each of Independent members of the Board did their best to assist Board inperformance of it’s duties and responsibilities according to exigency of situation– legal and practical operational or otherwise.

Each Whole Time Director did their best to perform responsibilities conferred on themin executive capacity as well as member of the Board.

24. Risk Management Policy - Development & Identification of Risk that mayJeopardise Company’s existence (134 (3) (N) of Companies Act 2013)

a) Statutory Liabilities in dispute as refereed to in financial statement : Legalopinions are practically in favour of absence of any Risk on account of Vicariousness ofgrounds of demands raised by the Directorates. As such these do not deserve to be reckonedas genuine risk factor in the opinion of the management.

b) Ensuing BIFR verdict : This no doubt exposes the company to unforeseen predicamentabout it’s future.

Unfortunately the company despite exclusively financed from promoter source of fundhaving liquidated entire external borrowing is in cross road of dilemma about it’sfuture. The effort of the management to liquidate all bank/institutional and determinedues crystallisation of any statutory over due forms part of risk mitigation measure as tobe favourably placed arising the course of pronounancement of judgement by BIFR. c)Comprehensive Business Continuity Plan (CBCP) and Disaster Recovery Plan (DRP) :

i) CBCP

True that due to prolong closure market contract has suffered to some extend. Howeverconsidering years old track record of the Company read with absence of new competitor Unitcoming up in big way during interim period establishing impact in market in terms ofit’s former-is unlikely to face any serious challenge. However formation of such planin comprehensive context is awaited.

ii) DRP

Issues which may prove disastrous to the destiny of Company include Govt. PolicyTechnological metamorphosis and cyber risk.

Notwithstanding absence of any definite remedial plan on aforesaid risk predicamentsthe company is trying to save it’s existing fund base to enable of adjust with newdispensation in days ahead after it commences business.

However cyber protection measure is too costly a device to initiate at this point offinancial standing of the Company.

25. APPRECIATION:

Your Directors express their appreciation for support extended by the employeescustomers vendors and other agencies. The members wish to place on record their sincereappreciation for the wise council guidance and cooperation extended by all .The Boardexpress as thanks and gratitude to share holders for their continued confidence reposed onthe management.

For and on behalf of the Board
Place: Kolkata (SUNIL KHETAWAT)
Date:30th May 2016 Managing Director

Annexure [A] to Board’s Report

Information required under Section 197 of the Companies Act 2013 read with rule 5 ofCompanies (Appointment & Remuneration of Managerial Personnel) Rules 2014 A. Ratio ofremuneration of each Director to the median remuneration of all the employees of yourCompany for the financial year 2015-16 is as follows:

Name of Director Total Ratio of remuneration of director Remuneration to (the) Median remuneration
(Rs)
Sunil Khetawat
(Net of Remuneration waived Rs. 528000/-) 228146 77.34
Sandeep Khetawat
(Net of Remuneration waived Rs. 485760/-) 195618 69.35

Notes:

1. The remuneration to Directors does not include sitting fees paid to them for thefinancial year 2015-16.

2. Median remuneration of the Company for all its employees is Rs. 2 84106 for thefinancial year 2015-16.

B. Details of percentage increase in the remuneration of each year 2015-16 are asfollows:

(Amount in Rs)
Name Remuneration (in Increase) (%)
2015-16 2014-15
Sunil Khetawat Managing Director & CEO 228146 218146 4.58
Sandeep Khetawat Whole Time Director 195618 195618 -

C. Percentage increase in the median remuneration of all employees in the financialyear 2015-16 :

2015-16 2014-15 Increase
(‘Rs) (Rs) (%)
Median remuneration of all employees per annum 284106 282057 0.72

D. Number of permanent employees on the rolls of the company as on 31.03.2016:

2015-16 2014-15
Executive/Manager cadre 2 2
Staff 1 2
Operators/Workmen - -
Total 3 4

E. Explanation on the increase in remuneration and Company Performance:

(Rs. in Rs)
2015-16 2014-15 Increase in loss
(%)
Net Revenue from Operations - - -
Loss Before Tax and Exceptional Items (2894468) (2673252) 8.78
Loss After Tax (2894468) (2673252) 8.78

F. Comparison of the remuneration of the key managerial Personnel against theperformance of the company:

The remuneration of key Managerial Personnel increased by around 5 % in 2015-16 whereas the loss before Tax and Exceptional items increased by 9% in 2015-16 compared to2014-15.

G. Details of share price and Market Capitalization:

Though the shares of your company is Listed with BSE Limited were not traded during theyear as such the data could not be furnished as required under Rule 5 (1) (VII) of theCompanies (Appointment and Remuneration ) Rules 2014. .

H. Comparison of average percentage increased in salary of employees Other than the KeyManagerial Personnel and the percentage increased in the Key Managerial Remuneration:

(Amount in Rs)
2015-16 2014-15 Increase %
Average Salary of all employees (Other than Key Managerial Personnel) 190324 188275 1.09
Key Managerial Personnel
Salary of MD & CEO (Net of remuneration waived Rs. 5 28000/-) 228146 218146 4.58
Salary of Whole Time Executive Director (Net of remuneration waived Rs. 485760/-) 195618 195618 -
Salary of CFO 537500 511500 5.08

I. Key parameters for any variable component of Remuneration Availed by the Directors:

No variable component of Remuneration has been availed by the Directors.

The Nomination and Remuneration Committee approves the compensation package of theManaging Director & CEO and Whole Time Executive Director. The committee ensures thatthe compensation package is in accordance with applicable Laws in line with thecompany’s objectives share holder’s interest and Industry standards and havean adequate balance between fixed and variable components.

J. There are no employees of the Remuneration in excess of the highest paid /approved Remuneration of the Directors of the company.

K. Affirmation:

Pursuant to Rule 5 (1) (XII) of the Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014 it is affirmed that the Remuneration paid to theDirectors Key Managerial Personnel and Senior Management is as per the Remunerationpolicy of your company.

2 PARTICULRS OF EMPLOYEES:

No one was employed during the whole or part of the year drawing remunerationattracting disclosure under Rule 5 (2) of the Companies (Appointment and Remuneration OfManagerial Personnel) Rules 2014.

ANNEXURE (E) TO BOARD’S REPORT

CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUT GO

Section 134 of the Companies Act 2013 read with Rule 8 (3) of Companies (Accounts )Rules 2014

1. CONSERVATION OF ENERGY:

a) As suggested by petroleum Conservation Research Association (under the ministry ofPetroleum and Natural Gas Government of India) few modifications have been done in theGalvanizing Plant in earlier years.

b) Additional investment and proposals if any for reducing consumption of energy: Thecompany intend to make investment during the current financial year after restart of theunit as suggested by the energy auditor to reduce the energy consumption.

c) Impact of measures at (a) & (b) above for reducing energy consumption andconsequent impact on the cost of production of goods. The impact is expected during thecurrent fiscal once the units restart.

d) Total energy consumption per unit of production are given below :-

A. POWER AND FUEL CONSUMPTION

Financial Year Ended 31st March 2016 Financial Year ended 31st March 2015
(Rs.) (Rs.)
Electricity:
a) Purchased
Unit (in KWH) 53478 54283
Total Amount (Rs.in Lacs) 5.44 5.05
Rate per Unit (in Rs.) 10.18 9.30
b) Own generation:
(I) Through Diesel Generator:
Unit (in KWH)
Unit generated/lr.of diesel
Cost/Unit (in Rs.)
(II) Furnace Oil:
Quantity (in K.Ltr)
Total Amount (Rs.in Lacs)
Average rate/K.Ltr (in Rs.)

B. CONSUPTION PER UNIT OF PRODUCTION:

Steel Wire Division: As there was no production in the unit the power has beenconsumed for lighting load of Administrative office and Factory shed.

2. TECHNOLOGY ABSORPTION:

a) Benefit derived as a result of above R&D.

The brightness in the finished wires have been improved during the period when theplant was under operation.

b) Future plan on R&D:

R&D activities will be continued in the specific areas for production of variousqualities of wire in wide range of Hardware Fixture required for installation of OpticFibre Cable and Transmission Tower etc.

c) Expenditure on R&D: NIL

3. FOREIGN EXCHANGE EARNINGS AND OUTGO:

Earned Rs. Nil
Out go Rs. Nil

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