DIRECTORS' REPORT The Board of Directors of your company hereby present the 35th Annual Report together with the audited statement of accounts for the financial year ended 31st March, 2015. 1. Review of Financial Results The financial statements of the Company are prepared in compliance with Section 133 of the Companies Act 2013 read with Rule 7 of the Companies (Accounts) Rules 2014 and Generally Accepted Accounting Principles (GAAP) in India and mandatory accounting standards issued by the Institute of Chartered Accountants of India (ICAI). The Company discloses standalone unaudited financial results on a quarterly and audited financial results on an annual basis. 2. Operations and State of Affairs of the Company There is no manufacturing operations since 1st June, 2013 after the Company has transferred the Aluminium Extrusion Business division to an Indian subsidiary of YKK Holding Asia Pte Ltd Singapore as part of restructuring in accordance with the approval granted by the Shareholders through postal ballot pursuant to Section 293(1)(a) of the Companies Act, 1956. The Company is exploring new business opportunities in the coming years. The Company is carrying on with minimal activities. 3. Subsidiary Company The Company was looking to monetize assets that will help in meeting the outstanding liabilities and also looking for winding up of any loss making segments. Accordingly, Wholly Owned Subsidiary Company "Bhoruka Aluminium FZE" established in Hamriyah Free Zone, UAE, has been wound up during the year and hence the Company does not have any subsidiary as on March 31, 2015. 4. Compliance under Companies Act, 2013: Pursuant to Section 134 of the Companies Act, 2013 read with the Companies (Accounts) Rules, 2014, the Company has complied with the requirements and the details of compliances under the Companies Act, 2013 and Listing Agreement are furnished forms part of this Annual Report. 5. Corporate Governance Report The Company is committed to maintain the highest standards of corporate governance and adhere to the corporate governance requirements set out by SEBI. The Company is in compliance of all mandatory requirements of Corporate Governance as stipulated under Clause 49 of the Listing Agreement with the Stock Exchange. A certificate issued by the Statutory Auditors of the Company on confirming compliance of the conditions of Corporate Governance stipulated in Clause 49 of the Listing Agreement with the Stock Exchange forms part of this Director's Report. 6. Management's Discussion and Analysis Report Management's Discussion and Analysis Report for the year under review, as stipulated under Clause 49 of the Listing Agreement with the Stock Exchange, is presented in a separate section forming part of the Annual Report. 7. Secretarial Auditor Pursuant to Section 204 (1) of the Companies Act, 2013 read with Rule 9 of The Companies ( Appointment and Remuneration of Managerial Personnel) Rules, 2014 Mr.Sunil Kumar B.G. of M/s. Sunil B. G. & Associates, Practising Company Secretaries, Mysore, a Fellow Member of "The Institute of Company Secretaries of India" holding FCS Membership No.7910 and valid Certificate of Practice No. 8900 has been appointed as Secretarial Auditor of the Company to conduct Secretarial Audit for the Financial Year 2014-2015. 8. Secretarial Audit Report Secretarial Audit Report as per Section 204 of the Companies Act, 2013 is placed as Annexure-I to this Report. Secretarial Auditor observation, please refer Sl. No. 5 b) to d) of Secretarial Auditor Report. Management's Reply: 5 b) The Management was of the view that OR had been advised that there was no requirement to file the Quarterly Returns with RBI since there were no GDRs still outstanding and no amount raised under the GDR Issue was pending to be repatriated to India. c) The Management has already initiated compliance through legal counsel. d) The Company is in process of doing the necessary Reporting compliances subsequent to dissolution of Wholly Owned Subsidiary (WOS) of the Company viz. Bhoruka Aluminium FZE after obtaining legal advice for the same. 9. Cost Compliance Since there is no manufacturing activities carried out by the Company consequent to slump sale of aluminium extrusion business division effective 30th May, 2013, the maintenance of cost records does not apply. 10. Extract of Annual Return and other disclosures under Companies (Appointment and Remuneration) Rules, 2014 The Extract of Annual Return in Form No. MGT-9 as per Section 134(3)(a) of the Companies Act, 2013 read with Rule 8 of Companies (Accounts) Rules, 2014 and Rule 12 of Companies (Management and Administration) Rules, 2014 is annexed hereto and forms part of this report. Refer Annexure II Further, the Disclosure in the Board's Report under Rule 5 of Companies (Appointment and Remuneration) Rules, 2014 is also furnished and forms part of this report. 11. Directors Appointment For the purpose of compliance with section 152 of the Companies Act, 2013 and for determining the director liable to retire by rotation, Shareholders have accorded their consent for amending Article 206 of Articles of Association to enable office of Managing Director or Whole Time Director be subject to retirement by rotation. Hence Shri R.K. Aggarwal, Managing Director (DIN: 01559120) retires by rotation and being eligible offers himself for re-appointment. Shri R. K. Aggarwal has been re-appointed as Managing Director for a period of 3 years effective 1st April, 2015 by the Board of Directors on the recommendation of Nomination and Remuneration Committee subject to the approval of Shareholders at the ensuing Annual General Meeting. Pursuant to the provisions of Section 161(1) of the Companies Act, 2013 and the Articles of Association of the Company, Smt. Srinivas Chandrakala was appointed as a Woman Additional Director designated as an Independent Director w.e.f. 30th March, 2015 in compliance with Clause 49(II) (A) (1) of the Listing Agreement and in alignment with Section 149 of the Companies Act, 2013 and she shall hold office up to the date of the ensuing Annual General Meeting. In view of the provisions of section 149 of the Companies Act, 2013, the Board of your Company has proposed the appointment of Smt .Srinivas Chandrakala as Woman Independent Director at the ensuing Annual General Meeting of the Company. The Company has received notice in writing from a member along with requisite deposit proposing her candidature for appointment as a Woman Independent Director of the Company. The Company has received declaration from her confirming that she meets the criteria of independence as prescribed under sub-section (6) of Section 149 of the Companies Act, 2013. The brief resume of the aforesaid Directors and other information has been detailed in the Corporate Governance Section of this report. 12. Declaration by independent directors The Company has received necessary declaration from each independent director under Section 149(7) of the Companies Act, 2013, that he/she meets the criteria of independence laid down in Section 149(6) of the Companies Act, 2013 and Clause 49 of the Listing Agreement. 13. Board evaluation Pursuant to the provisions of the Companies Act, 2013 and Clause 49 of the Listing Agreement, Independent Directors at their meeting held on 13th February, 2015 without the participation of the Non-independent Directors and Management, considered/evaluated the Boards' performance, Performance of the Chairman and other Non-independent Directors. Clause 49 of the Listing Agreement mandates that the Board shall monitor and review the Board evaluation framework. The Companies Act, 2013 states that a formal annual evaluation needs to be made by the Board of its own performance and that of its committees and individual directors. Schedule IV of the Companies Act, 2013 states that the performance evaluation of independent directors shall be done by the entire Board of Directors, excluding the director being evaluated. The evaluation of all the directors and the Board as a whole was conducted based on the criteria and framework adopted by the Board. The evaluation process has been explained in the Corporate governance report section in this Annual Report. The Board approved the evaluation results as collated by the nomination and remuneration committee. None of the independent directors are due for re-appointment. 14. Policy on directors' appointment and remuneration The current policy is to have an appropriate combination of executive and independent directors to maintain the independence of the Board, and separate its functions of governance and management. As on March 31, 2015, the Board consists of 6 members, two of whom are executive or whole-time directors, and four are independent directors. The Board will annually evaluates the need for change in its composition and size. The policy of the Company on directors' appointment and remuneration, including criteria for determining qualifications, positive attributes, independence of a director and other matters provided under Sub-section (3) of Section 178 of the Companies Act, 2013, adopted by the Board. The remuneration paid to the directors is as per the terms laid out in the Nomination and Remuneration policy of the Company. The Nomination and Remuneration Policy is available in our website <http://www.bhorukaaluminium.com/investors/corporate> governance and also annexed hereto. Refer Annexure III 15. Number of meetings of the Board The Board met four times during the financial year, the details of which are given in the Corporate Governance Report that forms part of this Annual Report. The intervening gap between any two meetings was within the period prescribed by the Companies Act, 2013. 16. Directors' responsibility statement as required under Section 134(3) (c) of the Companies Act, 2013 i) in the preparation of the Accounts for the year ended 31st March, 2015, the applicable accounting standards read with requirements set out under Schedule III to the Companies Act, 2013 have been followed and there are no material departures from the same; ii) the Directors have selected such accounting policies and applied them consistently and made judgment and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company as at 31st March, 2015 and of the Loss of the company for the year ended on that date; iii) the Directors have 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 ; and iv) the Directors have prepared the annual accounts of the Company on a 'going concern' basis; v) the Directors have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and are operating effectively; and vi) the Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively. 17. Public Deposits: The company has not accepted deposits from public as envisaged under Sections 73 to 76 of Companies Act, 2013 read with Companies (Acceptance of Deposits) Rules, 2014 during the year under review. 18. Auditors M/s. R.S. Agarwala & Co., (Firm Reg.No. 00049S) Chartered Accountants who are the statutory auditors of the Company, hold office till the conclusion of the ensuing Annual General Meeting and are eligible for re-appointment. They have confirmed their eligibility to the effect that their re-appointment, if made, would be within the prescribed limits under Section 141(3)(g) of the Companies Act, 2013 and that they are not disqualified for re-appointment 19. Auditors Observations Please refer Sl.No. 8 (a), (b) and (c) of Independent Auditors Report Management's Reply: 8(a) The Company has certain transactions with associate companies in previous years that have been classified as interest free loan based on the recommendations of experts. The Company is in the process of recovering such dues, but the likelihood of this is challenging given the difficult economic scenario. Legal notice has been sent to these Companies for recovery of dues. (b) The Company has given interest free loan to its 100% wholly owned overseas subsidiary Bhoruka Aluminium FZE UAE for its principle business activities. Since the said subsidiary has been wound up, the Company has written off loan in the Profit and Loss account. The Company is in the process of initiating action of reporting to RBI after completion of due legal compliances. (c) The Loan of Rs.4,16,67,054/= given in the earlier years has been written off in the Profit and Loss account which is not recoverable consequent to wound up of 100% wholly owned overseas Subsidiary Bhoruka Aluminium FZE, UAE. Due to losses of the Company, no Capital Gain Tax payable and no provision has been made in the profit and loss account. 20. Audit Committee The Audit Committee comprises of Independent Directors and KMP namely Shri Saligrama Paraswannath Shanthinath (Chairman), Shri Ram Ekbal Singh, Shri Shroff Puttabasappa Manjunath and Shri R.K.Aggarwal Executive - Managing Director as other members. All the recommendations made by the Audit Committee were accepted by the Board. 21. Risk Management Policy The Company has formulated a Risk Management Policy. The main aim of risk management policy is to identify, monitor, evaluate and take precautionary measures in respect of the events that may pose risks for the business activities. Pursuant to section 134 (3) (n) of the Companies Act, 2013, the Company regularly maintains a proper check in normal course of its business regarding Risk Management. At present the Company has not identified any element of risk which may threaten the existence of the company. 22. Whistleblower Policy Pursuant to Section 177(9) of the Companies Act, 2013 read with Rule 7 of the Companies (Meetings of Board and its Powers) Rules, 2014 and Clause 49 of the Listing Agreement, the Board of Directors had approved the Policy on Whistle Blower. This Policy inter-alia provides a direct access to the Chairman of the Audit Committee. Your Company hereby affirms that no Director/ employee has been denied access to the Chairman of the Audit Committee and that no complaints were received during the year. Whistleblower Policy approved and adopted by the Board of Directors can be accessed in our website: <http://www.bhorukaaluminium.com/corporate> governance. 23. Significant and material orders There are no significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and Company's operations in future 24. Particulars of Employees and related disclosures A) Details of the ratio of the remuneration of each director to the median employees' remuneration and other details as required pursuant to Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014: There were no confirmed employees on the rolls of the Company as on 31st March 2015. ii) Median remuneration of employees of the Company during the financial year 2014-2015 was NIL. iii) Median remuneration of employees of the Company during the financial year 2013-2014 was Rs.1,20,000/-. In the said financial year i.e. only for 2 months April and May 2013 the Company was in operation due to Company has transferred the Aluminium Extrusion Business division by way of slump sale to Indian Subsidiary of YKK Holding Asia Pte Ltd. Singapore alongwith its employees on 30th May, 2013 hence there were no employees in the Company. iv) Relationship between average increase in remuneration and company performance- Average Remuneration decreased during the year 2014-2015. There is no increase in remuneration . Loss before tax and loss after tax of the Company increased by 132.06% during the financial year 2014-15. v) Comparison of Remuneration of the Key Managerial Personnel(s) against the performance of the company:- There was no increase in the remuneration of Key Management Personnel. vi) a) Variation in the market capitalization of the company: The market capitalization as on 31st March 2015 was Rs. 2.75 Crores (Rs.3.41 Crores as on 31st March 2014) b) Price Earning Ratio of the Company was 0.10 as at 31st March 2015 and was -8.3 as at 31st March 2014. c) Percentage increase over decrease in the market quotations of the shares of the company in comparison to the rate at which the company came out with the last public offer: Not Applicable vii) Average percentile increase already made in the salaries of employees other than the managerial personnel in the last financial year and its comparison with the percentile increase in the managerial remuneration and justification thereof and point out of there are any exceptional circumstances for increase in the managerial remuneration: Not Applicable viii) The key parameters for the variable component of remuneration availed by the directors are considered by the Board of Directors based on the recommendations of the Nomination and Remuneration Committee as per the Remuneration Policy for Directors, Key Managerial Personnel and other Employees. ix) The ratio of the remuneration of the highest paid director to that of the employees who are not directors but receive remuneration in excess of the highest paid director during the year:- Not Applicable x) It is hereby affirmed that the remuneration paid is as per the Remuneration Policy for Directors, Key Managerial Personnel and other Employees. B) Details of every employee of the Company as required pursuant to rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014: During the year under consideration, none of the employees of the company was in receipt of remuneration in excess of limits prescribed under clause 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 hence particulars as required under 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are not given. Details of conservation of energy, technology absorption, foreign exchange earnings and outgo The details of conservation of energy, technology absorption, foreign exchange earnings and outgo are as follows: A) Conservation of energy: N.A. (i) the steps taken or impact on conservation of energy; (ii) the steps taken by the company for utilising alternate sources of energy; (iii) the capital investment on energy conservation equipments; (B) Technology absorption: N.A. (i) the efforts made towards technology absorption; (ii) the benefits derived like product improvement, cost reduction, product development or import substitution; (iii) in case of imported technology (imported during the last three years reckoned from the beginning of the financial year)- (a) the details of technology imported; (b) the year of import; (c) whether the technology been fully absorbed; (d) if not fully absorbed, areas where absorption has not taken place, and the reasons thereof; and (iv) the expenditure incurred on Research and Development. (C) Foreign exchange earnings and Outgo: The Company had no foreign exchange earnings and outgo during the financial year 25. Particulars of Loans, Guarantees or Investments During the Financial year under review, the company has not directly or indirectly a) given any loan to any person or other body corporate b) given any guarantee or provide security in connection with a loan to any other body corporate or person and acquired by way of subscription purchase or otherwise, the securities of any other body corporate exceeding sixty percent, of its paid-up share capital, free reserve and securities premium account or one hundred percent of its free reserves and securities premium account whichever is more; However, details of loans , guarantees, and investments given in previous years covered under the provisions of Section 186 of the Companies Act, 2013 and outstanding as at 31st March, 2015 are furnished in the note no.11 <http://no.11> to the Standalone Financial Statements. 26. Related Party Transaction The Company had not entered into any material contract / arrangement with related parties during the year under review. No material contracts or arrangements with related parties were entered into during the year under review. Accordingly, no transactions are being reported in Form No. AOC-2 in terms of Section 134 of the Act read with Rule 8(2) of the Companies (Accounts) Rules, 2014. Please refer Note No 11 to financial statements which sets out related party disclosures as per AS-18. The Policy on materiality of related party transactions and dealing with related party transactions as approved by the Board may be accessed on the Company's website <http://www.bhorukaaluminium.com/investors/corporate> governance. All contracts / arrangements / transactions with related parties are placed before the Audit Committee as also the Board, as may be required, for approval. 27. Internal financial control The Board has adopted the policies and procedures for ensuring the orderly and efficient conduct of its business, including adherence to the Company's policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial disclosures. 28.Corporate Social Responsibility As per Section 135 of Companies Act, 2013, read with Companies (Corporate Social Responsibility Policy) Rules, 2014 the Company does not fulfill the criteria of net worth or turnover for Corporate Social Responsibility, hence the same is not applicable to the Company. However, the company tries to play its part in being a good corporate citizen. 29. Material changes and commitments affecting the financial position of the Company which have occurred between the financial year ended March 31, 2015 and May 29,2015 (date of the Report). There were no material changes and commitments affecting the financial position of the Company between the end of financial year (March 31,2015) and the date of Report (May 29, 2015). Acknowledgement Your Directors wish to place on record their appreciation for the whole hearted and sincere co-operation the Company has received from its bankers, various Government departments, shareholders and investors during our difficult times. For and on behalf of the Board R.K. Aggarwal Chairman & Managing Director (DIN: 01559120) Place : Mysore Date : 29th May, 2015 |