K A Wires Ltd Directors Report.

To the Members,

Your Directors take pleasure in presenting the 7th Annual Report on the business and operations of the company together with the audited statement of Accounts for the financial year ended March 31,2016 and Auditors 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 25,90,14 23,57,54
Less: Excise Duty 2,49,99 2,25,73
Net Sales 23,40,15 21,31,81
Add: Other Income 3,40 2,70
Gross Profit 1,77,72 1,48,88
(Earnings before Depreciation, Interest and Tax) Less: Interest 98,92 85,50
Profit before Depreciation and Tax 78,80 63,38
Less: Depreciation 29,30 21,66
Profit before Tax 49,50 41,72
Provision for Tax 44 -6,43
Profit after Tax 49,06 48,15

State of Companys Affairs and Future Outlook

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

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

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

The ISO 9001:2008 Certification for both its Kolkata Office as well as the Howrah Unit by URS has been successfully renewed during the year. The Renewal further strengthens the confidence of External Certification Agencies on the Quality Systems and Procedures followed 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 quality product to the discerning Customer. We shall use our Singapore subsidiary to further internationalize our Operations and strive to become a Multinational Company in the coming years. 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 increase Market Penetrations in areas that are dominated by European producers.

We would like to inform our Stakeholders that, as planned, we have started our International 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 above Geographies.

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

This shall further strengthen our position in the Asian Markets resulting in increased Revenues 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 of the Company.

Dividend

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

Transfer to Reserves

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

Changes in Share Capital

During the year under review, there were no changes in the share capital of your Company.

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) of Section 149

All the Independent Directors have given declaration of their independence that they meet the criteria of Independence as lay down under Section 149(6) in terms of Section 149(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 financial year 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 to discuss 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 the views of Executive Directors and NonExecutive Directors; and

3. To assess the quality, quantity and timeliness of flow of information between the Company 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 Act, 2013 read with Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, 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 the salient features of the financial statement of companys 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 your Company for a period of three years with effect from the 7th Annual general Meeting of the Company 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 the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Board of Directors of the Company, at its meeting held on February 15, 2016, had appointed CS Abhijeet Jain of M/s. A J & Associates, Practicing Company Secretary to conduct the Secretarial Audit of the Company for the Financial Year 2015-16. CS Abhijeet Jain, Secretarial Auditor had given the Secretarial Audit Report in Form No. MR. 3 and the same has been annexed to the Boards Report and marked as Annexure - C.

Explanation or Comments on Qualifications, Reservations or Adverse Remarks or Disclaimers 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 the Customer and are manufactured and packed as per specific requirements.

Secretarial Auditor

There were no qualifications, reservations or adverse remarks made by the Auditors in their 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 31,2016, Audit Committee comprises of three members, of which majority comprises of Independent Directors. The Composition during the year is given 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
Madhur Agarwal Member Executive Director

Further, there were no such instances wherein the Board had not accepted recommendation of the Audit Committee.

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

Vigil Mechanism

In terms of Section 177 of the Companies Act, 2013 read with rules made there under, the Company has framed a Whistle Blower Policy with an objective to deal with issues pertaining to integrity, encouraging the employees and directors of the Company to raise any concern about Companys operations and working environment, including possible breaches of Companys policies and standards, without fear of adverse managerial action being taken against such employees. It provides a channel to the employees and directors to report to the management concerns about unethical behaviour, actual or suspected fraud or violation of any code of conduct or policy in force. Instances of such suspected or confirmed 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 employees and in exceptional cases direct access to the Chairman of the Audit Committee to report instances of fraud/ misconduct.

Nomination and Remuneration Committee

As on March 31,2016, Nomination and Remuneration Committee comprises of three members, of which majority comprises of Independent Directors. The Composition during the year is given 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 recommendation of the Nomination and Remuneration Committee.

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

Remuneration Policy

The Remuneration Policy of the Company, "K A Wires Remuneration Policy", aims to 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 eligibility criteria but are also well-qualified and have positive attributes needed to fit into the Corporate 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 Remuneration Committee held on August 5, 2016.

A copy of the "K A Wires Remuneration Policy", is annexed to this report and marked 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 the Companies (Management and Administration) Rules, 2014, an extract of annual return in MGT 9 is annexed to the Boards Report and marked as Annexure - E.

Material changes & commitments, if any, affecting the financial position of the company occurred between the ends of the Financial Year to which this Financial Statements relate and the date of this Report

There were no material changes and commitments affecting the financial position of the Company 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 Companys operations in future

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

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

The Company maintains appropriate systems of internal control, including monitoring procedures, to ensure that all assets are safeguarded against loss from unauthorized use or disposition. Company policies, guidelines and procedures provide for adequate checks and balances and are meant to ensure that all transactions are authorized, recorded and reported correctly.

The Head of Internal Audit together with external audit consultants review the effectiveness and efficiency of these systems and procedures to ensure that all assets are protected against loss and that the financial and operational information is accurate and complete in all respects. The Audit Committee of the Board of Directors approves and reviews audit plans for the year based on internal risk assessment. Audits are conducted on an on-going basis and significant deviations are brought to the notice of the Audit Committee of the Board of Directors following which corrective action is recommended for implementation. All these measures facilitate timely detection of any irregularities and early 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 the Companies Act, 2013 and the Companies (Acceptance of Deposits) Rules, 2014 during the year ended March 31,2016.

Particulars of loans, guarantees or investments under section 186

Your Company did not give any loans or guarantee or made any investments under Section 186 of the Companies Act, 2013. Particulars of contracts or arrangements with related parties

During the year, the Company had not entered into any contract/arrangement/transaction with related parties which could be considered material in accordance with the policy of the Company materiality of related party transactions. Hence, the provisions of Section 188 of the Companies Act, 2013 are not attracted. Thus, disclosure in Form AOC-2 is not required. Further, there are no materially significant Related Party Transactions during the year under review made by the Company with Promoters, Directors, Key Managerial Personnel or other designated persons.

Management Discussion and Analysis Report

The Management Discussion & Analysis Report is enclosed as Annexure - F to the Boards 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 its employees and has formulated Policy for Prevention of Sexual Harassment to prohibit, prevent or deter any acts of sexual harassment at workplace and to provide the procedure for the Redressal of complaints pertaining to sexual harassment, thereby providing a safe and 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 WBSEDCL being the supply provider. We have optimised the Operations of the Plant to ensure that we can get many Electricity Intensive Operations done during the "Off Peak" Period to reduce the Electricity Bill. Moreover, a Project is in progress to Install LED light sources in all locations of the Factory - this will help in reduction of the Electricity Consumption.

(A) Electricity Purchased

Financial Year Financial Year
2015-16 2014-15
Total Units in kwh 6,78,738 7,51,970
Total Amount in Rs 53,61,537 66,62,230
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 in reduced wastages and enhanced productivity levels. The same shall be adequately reflected in the next few years operating results.

(C) Foreign Exchange Earning & Outgo

Earnings 3,95,79,475
Outgo 38,947.63

Corporate Social Responsibility (CSR)

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

Directors Responsibility Statement

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

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

(ii) 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;

(iii) the directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the 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 provisions of 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 the company and that such internal financial controls are adequate and were operating effectively.

Acknowledgements

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

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