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K A Wires Ltd.

BSE: 532581 Sector: Metals & Mining
NSE: KAWIRES ISIN Code: INE372S01017
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K A Wires Ltd. (KAWIRES) - Director Report

Company director report

To the Members

Your Directors take pleasure in presenting the 7th Annual Report on the business andoperations of the company together with the audited statement of Accounts for thefinancial year ended March 312016 and Auditor's Report thereon.

Financial Results

The Summary of the financial results is as below:

Rs in thousands

Financial Year 2015-16 Financial Year 2014-15
Gross Sales 259014 235754
Less: Excise Duty 24999 22573
Net Sales 234015 213181
Add: Other Income 340 270
Gross Profit 17772 14888
(Earnings before Depreciation Interest and Tax) Less: Interest 9892 8550
Profit before Depreciation and Tax 7880 6338
Less: Depreciation 2930 2166
Profit before Tax 4950 4172
Provision for Tax 44 -643
Profit after Tax 4906 4815

State of Company's Affairs and Future Outlook

Your Company achieved important mile stones in the year 2015-16. During the year theCompany has scaled new heights and set several benchmarks in terms of net worth andturnover.

Net Sales of the Company increased from Rs 21.31 crores to Rs 23.40 crores an increaseof 10%. This resulted in an increase in the PBT from Rs 41.72 lakhs to Rs 49.50 lakhs anincrease of 19%.

Your Company has continued to focus on the Export Market where the Customer is morequality conscious and resultant returns are better. Exports increased from Rs 309.87 lakhsto Rs 395.79 lakhs an increase of 27.73%. We project to further increase the Exportfigures going forward.

The ISO 9001:2008 Certification for both its Kolkata Office as well as the Howrah Unitby URS has been successfully renewed during the year. The Renewal further strengthens theconfidence of External Certification Agencies on the Quality Systems and Proceduresfollowed by your Company.

We are projecting a very exciting future for your Company in the coming years.

As envisaged in our Quality Policy we continue to concentrate on providing a qualityproduct to the discerning Customer. We shall use our Singapore subsidiary to furtherinternationalize our Operations and strive to become a Multinational Company in the comingyears. We will market our products in select Geographies through Euro Global Pte Ltd -this will not only result in better price realization it shall also help to increaseMarket Penetrations in areas that are dominated by European producers.

We would like to inform our Stakeholders that as planned we have started ourInternational journey as below:

• Sales Office in Bangkok Thailand

• Distributor in Kuala Lampur Malaysia

• Distributor in Ho Chi Minh City Vietnam

• Agent in Dhaka Bangladesh

• Agent in Lahore Pakistan

During the Financial Year 16-17 we plan to build Customers and Branding in the aboveGeographies.

We continue to participate in Trade Fairs and Seminars all over the World to find ourmost Opportunities and Customers for the Company. We plan to increase the Sales base inmany other countries in the coming years.

This shall further strengthen our position in the Asian Markets resulting in increasedRevenues and Margins.

Change(s) in the nature of business if any

During the year under review there were no changes in the nature of the business ofthe Company.

Dividend

In view of the substantial growth opportunities available to your Company and aresultant need to conserve resources; your Directors do not propose to recommend anydividend during the year.

Transfer to Reserves

The company has not transferred any amount out of the profit to General ReserveAccount.

Changes in Share Capital

During the year under review there were no changes in the share capital of yourCompany.

Directors and Key Managerial Personnel

The following are the directors & KMP of the company:

Sl. No. Name Designation Date of Appointment /Reappointment
1. Mr. Sandip Kejriwal Managing Director 01/04/2015
2. Mr. Madhur Agarwal Whole Time Director & Chief Financial Officer 01/04/2015 & 09/11/2015
3. Mr. Manoj Kumar Agrawal Independent Director 30/09/2015
4. Mr. Ashok Kumar Sanghi Independent Director 30/09/2015
5. Mrs. Krishna Singhania Independent Director 30/09/2015
6. Miss Ankita Agarwal Company Secretary 09/11/2015

During the year there is no other change in the directorship of the company.

Statement on declaration given by Independent directors under sub-section (7) ofSection 149

All the Independent Directors have given declaration of their independence that theymeet the criteria of Independence as lay down under Section 149(6) in terms of Section149(7) of the Companies Act 2013

Number of Board Meetings Conducted During The Year Under Review

The following numbers of meetings of the Board of Directors held during the financialyear 2015-16 were on 24.06.2015; 18.08.2015; 13.10.2015; 09.11.2015 & 15.02.2016.

Meeting of Independent Directors

During the year under review the Independent Directors met on 29th January 2016 todiscuss the following:

1. Review the performance of Non-Independent Directors & the Board as a whole;

2. Review the performance of the Chairperson of the Company taking into account theviews of Executive Directors and NonExecutive Directors; and

3. To assess the quality quantity and timeliness of flow of information between theCompany Management & the Board that is necessary for the Board to effectively &reasonably perform their duties.

Managerial Remuneration

Disclosure of the particulars as required under Section 197(12) of the Companies Act2013 read with Companies (Appointment and Remuneration of Managerial Personnel) Rules2014 for the Financial Year 2015-16 in respect of employees of the Company is attached as'Annexure - A'.

Details of Subsidiary

Your Company has a Wholly Owned Overseas Subsidiary - M/s Euro Global Pte Ltd.

Pursuant to sub-section (3) of section 129 of the Act the Statement containing thesalient features of the financial statement of company's subsidiary is given as Annexure -B' furnished in Form AOC - 1.

Statutory Auditors

M/s S. N. Kedia & Associates has been appointed as the statutory auditor of yourCompany for a period of three years with effect from the 7th Annual general Meeting of theCompany till the expiry of 10th Annual General Meeting of the Company.

Secretarial Audit Report

Pursuant to the provisions of Section 204 of the Companies Act 2013 read with theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 the Board ofDirectors of the Company at its meeting held on February 15 2016 had appointed CSAbhijeet Jain of M/s. A J & Associates Practicing Company Secretary to conduct theSecretarial Audit of the Company for the Financial Year 2015-16. CS Abhijeet JainSecretarial Auditor had given the Secretarial Audit Report in Form No. MR. 3 and the samehas been annexed to the Board's Report and marked as Annexure - C'.

Explanation or Comments on Qualifications Reservations or Adverse Remarks orDisclaimers made by the Auditors in their Reports

Statutory Auditor

We value our inventory at Market Prices to reflect the current state of the business.This is done as the Products manufactured by us are customised to suit the needs of theCustomer and are manufactured and packed as per specific requirements.

Secretarial Auditor

There were no qualifications reservations or adverse remarks made by the Auditors intheir report.

Disclosure on Employee Stock Option/Purchase Scheme

Presently your Company does not have any Employee Stock Option/Purchase scheme.

Audit Committee

As on March 312016 Audit Committee comprises of three members of which majoritycomprises of Independent Directors. The Composition during the year is given in the tablebelow:

Name of Member Position Category
Manoj Kumar Agrawal Chairman Non-Executive and Independent Director
Ashok Kumar Sanghi Member Non-Executive and Independent Director
Madhur Agarwal Member Executive Director

Further there were no such instances wherein the Board had not accepted recommendationof the Audit Committee.

Ms Ankita Agarwal Company Secretary is the Secretary to the Audit Committee and theCompliance Officer of the Company.

Vigil Mechanism

In terms of Section 177 of the Companies Act 2013 read with rules made there underthe Company has framed a 'Whistle Blower Policy' with an objective to deal with issuespertaining to integrity encouraging the employees and directors of the Company to raiseany concern about Company's operations and working environment including possiblebreaches of Company's policies and standards without fear of adverse managerial actionbeing taken against such employees. It provides a channel to the employees and directorsto report to the management concerns about unethical behaviour actual or suspected fraudor violation of any code of conduct or policy in force. Instances of such suspected orconfirmed incident of fraud/misconduct may be reported on the designated email id.

Audit Committee looks into the complaints raised and their Redressal.

The mechanism also provides for adequate safeguards against victimization of employeesand in exceptional cases direct access to the Chairman of the Audit Committee to reportinstances of fraud/ misconduct.

Nomination and Remuneration Committee

As on March 312016 Nomination and Remuneration Committee comprises of three membersof which majority comprises of Independent Directors. The Composition during the year isgiven in the table below:

Name of Member Position Category
Manoj Kumar Agrawal Chairman Non-Executive and Independent Director
Ashok Kumar Sanghi Member Non-Executive and Independent Director
Sandip Kejriwal Member Executive Director

Further there were no such instances wherein the Board had not accepted recommendationof the Nomination and Remuneration Committee.

Ms. Ankita Agarwal Company Secretary is the Secretary to the Nomination andRemuneration Committee and the Compliance Officer of the Company.

Remuneration Policy

The Remuneration Policy of the Company "K A Wires Remuneration Policy" aimsto enable the company to attract retain and motivate qualified people at all the levels.The Remuneration Policy seeks to employ people who not only fulfil the eligibilitycriteria but are also well-qualified and have positive attributes needed to fit into theCorporate Culture of the Company. The remuneration policy is consistent with the"pay-for-performance" principle.

The Remuneration policy was approved at the meeting of the Nomination and RemunerationCommittee held on August 5 2016.

A copy of the "K A Wires Remuneration Policy" is annexed to this report andmarked as 'Annexure - D'.

Extract of the Annual Return

As required pursuant to section 92(3) of the Companies Act 2013 and rule 12(1) of theCompanies (Management and Administration) Rules 2014 an extract of annual return in MGT9 is annexed to the Board's Report and marked as Annexure - E'.

Material changes & commitments if any affecting the financial position of thecompany occurred between the ends of the Financial Year to which this Financial Statementsrelate and the date of this Report

There were no material changes and commitments affecting the financial position of theCompany between the end of financial year and the date of the Report.

Details of significant and material orders passed by the regulators / courts /tribunals impacting the going concern status and the Company's operations in future

No such significant and material order had been passed by any regulator/ court againstthe Company.

Statement in respect of adequacy of internal financial controls with reference to theFinancial Statements

The Company maintains appropriate systems of internal control including monitoringprocedures to ensure that all assets are safeguarded against loss from unauthorized useor disposition. Company policies guidelines and procedures provide for adequate checksand balances and are meant to ensure that all transactions are authorized recorded andreported correctly.

The Head of Internal Audit together with external audit consultants review theeffectiveness and efficiency of these systems and procedures to ensure that all assets areprotected against loss and that the financial and operational information is accurate andcomplete in all respects. The Audit Committee of the Board of Directors approves andreviews audit plans for the year based on internal risk assessment. Audits are conductedon an on-going basis and significant deviations are brought to the notice of the AuditCommittee of the Board of Directors following which corrective action is recommended forimplementation. All these measures facilitate timely detection of any irregularities andearly remedial steps.

Particulars of loans/advances/investments outstanding during the financial year

There is no such occurrence took place during the year under review.

Deposits

Your Company has not accepted any deposit within the meaning of Section 73 of theCompanies Act 2013 and the Companies (Acceptance of Deposits) Rules 2014 during the yearended March 312016.

Particulars of loans guarantees or investments under section 186

Your Company did not give any loans or guarantee or made any investments under Section186 of the Companies Act 2013. Particulars of contracts or arrangements with relatedparties

During the year the Company had not entered into any contract/arrangement/transactionwith related parties which could be considered material in accordance with the policy ofthe Company materiality of related party transactions. Hence the provisions of Section188 of the Companies Act 2013 are not attracted. Thus disclosure in Form AOC-2 is notrequired. Further there are no materially significant Related Party Transactions duringthe year under review made by the Company with Promoters Directors Key ManagerialPersonnel or other designated persons.

Management Discussion and Analysis Report

The Management Discussion & Analysis Report is enclosed as 'Annexure - F' to theBoard's Report.

Disclosures under Sexual Harassment of Women at Workplace (Prevention Prohibition& Redressal) Act 2013

The Company is committed to provide a safe and conducive work environment to itsemployees and has formulated 'Policy for Prevention of Sexual Harassment' to prohibitprevent or deter any acts of sexual harassment at workplace and to provide the procedurefor the Redressal of complaints pertaining to sexual harassment thereby providing a safeand healthy work environment.

There were no such incidences during the period under review.

Conservation of energy technology absorption foreign exchange earnings and outgo

The Howrah Plant of your Company operates using Electricity from the grid with WBSEDCLbeing the supply provider. We have optimised the Operations of the Plant to ensure that wecan get many Electricity Intensive Operations done during the "Off Peak" Periodto reduce the Electricity Bill. Moreover a Project is in progress to Install LED lightsources in all locations of the Factory - this will help in reduction of the ElectricityConsumption.

(A) Electricity Purchased

Financial Year Financial Year
2015-16 2014-15
Total Units in kwh 678738 751970
Total Amount in Rs 5361537 6662230
Rate per Unit in Rs 7.9 8.86

(B) Technology Absorption

Your Howrah Unit has Modernised and Expanded in the last few months resulting inreduced wastages and enhanced productivity levels. The same shall be adequately reflectedin the next few years operating results.

(C) Foreign Exchange Earning & Outgo

Earnings 39579475
Outgo 38947.63

Corporate Social Responsibility (CSR)

Provisions of Section 135 of the Companies Act 2013 is not applicable to the companyduring the financial year 2015-16

Directors' Responsibility Statement

In terms of provisions of Section 134(5) of the Companies Act 2013 your Directorsconfirm that:

(i) in the preparation of the annual accounts the applicable accounting standards hadbeen followed along with proper explanation relating to material departures;

(ii) 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;

(iii) the directors had taken proper and sufficient care for the maintenance ofadequate accounting records in accordance with the provisions of this Act for safeguardingthe assets of the company and for preventing and detecting fraud and other irregularities;

(iv) the directors had prepared the annual accounts on a going concern basis; and

(v) the directors had devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems were adequate and operating effectively.

(vi) the directors had laid down internal financial controls to be followed by thecompany and that such internal financial controls are adequate and were operatingeffectively.

Acknowledgements

An acknowledgement to all with whose help cooperation and hard work the Company isable to achieve the results.

For & on behalf of the Board
Place : Kolkata SANDIP KEJRIWAL MADHURAGARWAL
Date : 5th August 2016 Managing Director Whole Time Director