DIRECTORS" REPORT Dear Members, Your Directors have pleasure in presenting the 29th Annual Report and the audited Accounts of the Company for the financial year ended 31st March 2015. DIVIDEND Company has suffered loss and therefore no dividend was declared. OPERATIONAL HIGHLIGHT [A] Despite the economic disturbances continued to bring challenges to the electronics industry during the year under consideration your company has recorded revenue of Rs.761.45 lacs thereby showing an increase by 36.68% in comparison to the previous year turnover of Rs.557.09 lacs. Your company contribution to central government revenue also increased 30.87% to Rs.75.42 lacs. Cost of material consumed also decreased by 4% to Rs.510.05 lacs. Improved financial performance, increase in turnover and reduction in consumption of raw material predicts better future of the company. However level of production is much below the Break Even point (BEP) is a matter of worry and we have to increase the production beyond the BEP to meet out the fixed cost of expenses. Your Board of Directors will leave no stone unturned to achieve the target level of production beyond the BEP level. [B] Recommendation to write off Bad Debt and Debit Balance Audit committee in their report to the Board of Directors pointed out that there is several debts outstanding in the books of the company whose realization could not be done despite of the several sincere efforts made by the company. It was therefore decided to write off the total outstanding debt of Rs.3,58,398/- DIRECTORS In accordance with the provisions of the Companies Act, 2013 and the Articles of Association of the Company, Shri Veenu Pasricha (holding DIN - 00246807), Director of the Company retire by rotation at the ensuing Annual General Meeting. He, being eligible, has offered himself for re-appointment. As his continued presence on the board is of immense importance to the company, your directors recommended their re-appointment. Mr. R. M. Mehta, Independent Director of the Company tendered his resignation from the Board of Directors of the Company on 12.03.2015 due to his other assignment. The Board places on record its sincere appreciation for all the valuable guidance, support and contributions provided by Mr. R.M. Mehta during his tenure as the Directors of the Company. Your Board is in process to fill the gap created by resignation of Mr. R. M. Mehta in order to have suitable no. of Independent Director on the Board as guided by Listing Agreements. As per the provisions of the Companies Act, 2013, Independent Directors are required to be appointed for a term of five consecutive years, but shall be eligible for reappointment on passing of an ordinary resolution by the Company and shall not be liable to retire by rotation. All other Directors, except the Managing Director, will retire at the ensuing Annual General Meeting and, being eligible, offer themselves for re-election. The Independent Directors of your Company have given the certificate of independence to your Company stating that they meet the criteria of independence as mentioned under Section 149 (6) of the Companies Act, 2013. The policy on Director's appointment and remuneration including criteria for determining qualifications, positive attributes, independence of Director, and also remuneration for Key Managerial Personnel and other employees forms part of this Annual Report as Annexure-A. CAPITAL STRUCTURE: During the year under review, the share capital of your company remained unchanged. AUDITORS REPORT The observations of the auditors are self-explanatory and, therefore, do not call for any further comments. A] STATUTORY AUDITORS M/s. Jawahar Kalra & Co. Chartered Accountants, New Delhi (ICAI Registration No.FRN004008N), are proposed to be appointed as Auditors of the Company from the conclusion of the ensuing Annual General Meeting till the conclusion of the fifth Annual General Meeting of the Company held thereafter, subject to ratification of the appointment by the members at every AGM held after the ensuing AGM. As required under Section 139 of the Companies Act, 2013, the Company has obtained a written Consent from M/s. Jawahar Kalra & Co. Chartered Accountants, New Delhi (ICAI Registration No.FRN:004008N), to such appointment and also a certificate to the effect that their appointment; if made, would be in accordance with Section 139(1) of the Companies Act, 2013 and the rules made there under, as may be applicable. B] COST AUDITOR: Our Board has not appointed any cost Auditor for the financial year ended 31.03.2015 as the financial position of the company is very poor and not able to bear the professional fees of the cost auditor as suggested by the Institute of Cost and Management Accountant of India. As the financial position improves the company will appoint Cost Auditor pursuant to the direction from the Ministry of Corporate Affairs, Government of India. C] Internal Auditors - During the year under review, M/s S. Malhotra & Co., Chartered Accountants, New Delhi carried out the internal audit exercise and submitted their report. D] SECRETARIALAUDITORS: Pursuant to the provisions of Section 204 of the Act and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Board of Directors has appointed M/s Bir Shankar & Co., practicing Company Secretary for conducting secretarial audit of the Company for the financial year 20142015. The Secretarial Audit Report is annexed herewith as Annexure B. The Secretarial Audit report does not contain any qualification, reservation or adverse remark. FIXED DEPOSIT: The company did not accept any deposits covered under section 73 of the Companies Act, 2013 during the year under review. INSURANCE: All the insurable interests of your Company including inventories, buildings, plant and machinery and liabilities under legislative enactments are adequately insured. CORPORATE GOVERNANCE: Your Company has ensured continued compliance of Corporate Governance requirements during the period under review. Your Company lays strong emphasis on transparency, disclosure and independent supervision to increase various stakeholders' value. As required by Clause 49 of the Listing Agreement with the BSE Limited (BSE), the reports on Management Discussion and Analysis, Corporate Governance as well as the Certificate regarding compliance of conditions of corporate governance, are annexed and form an integral part of this report. Further, the company regularly submits the quarterly corporate governance compliance report to the BSE and also uploads the same oil its website. Energy, Technology Absorption and Foreign Exchange Information required under Section 134(3)(m) of the Act read with Rule 8(3) of the Companies (Accounts) Rules, 2014, with respect to conservation of energy, technology absorption and foreign exchange earnings/outgo is included in Annexure C. Particulars of Loans, Guarantees or Investments As on March 31, 2015, there were no outstanding loans or guarantees covered under the provisions of Section 186 of the Act. The details of changes in the Loans, Guarantees and Investments covered under the provisions of Section 186 of the Act are given in the notes to the Financial Statements. Directors' Responsibility Statement Pursuant to Section 134 of the Act, the Directors state that: (a) In the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any; (b) Appropriate accounting policies have been selected and applied consistently and have 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 as at March 31, 2015 and of the profit and loss of the Company for the year ended March 31, 2015; (c) Proper and sufficient care has been taken 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; (d) The annual accounts have been prepared on a ongoing concern basis; (e) Proper internal financial controls were followed by the Company and such internal financial controls are adequate and were operating effectively; (f) Proper systems are devised to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively. Extract of Annual Return The details forming part of the extract of the Annual Return in form MGT 9 is annexed herewith as Annexure D. PARTICULARS OF EMPLOYEES In terms of the provisions of Section 197(12) of the Companies Act, 2013 read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, a statement showing the remuneration and other details is being annexed to this report as Annexure- CONTRACTS/ ARRANGEMENTS WITH RELATED PARTIES All Related Party Transactions are placed before the Audit Committee for review and approval. Prior omnibus approval is obtained for Related Party Transactions on a quarterly basis for transactions which are of repetitive nature and / or entered in the Ordinary Course of Business and are at Arm's length. All Related Party Transactions are subjected to independent review by a reputed accounting firm to establish compliance with the requirements of Related Party Transactions. All Related Party Transactions entered during the year were in Ordinary Course of the Business and on Arm's Length basis. No Material Related Party Transactions, i.e. transactions exceeding ten percent of the annual consolidated turnover as per the last audited financial statements, were entered during the year by your Company. Accordingly, the disclosure of Related Party Transactions as required under Section 134(3) (h) of the Companies Act, 2013 in Form AOC 2 is not applicable. PARTICULARS OF LOANS, GUARANTEES, INVESTMENTS Company has not granted loans, provided security and made investment during the year under consideration. AUDIT COMMITTEE The Audit Committee is comprised of Independent Directors viz. Sh. R M Mehta(till 12/3/2015), Sh.Arul Harris (from 12/3/2015), Sh Veenu Pasricha and Sh. Harun Ansari as members. All recommendations made by the Audit Committee were accepted by the Board. DECLARATION BY INDEPENDENT DIRECTORS The Company has received declaration u/s 149(7) of the Companies Act, 2013 from Independent Director con finming they meet the criteria of independence as prescribed under Companies Act, 2013 and Clause 49 of VIGIL MECHANISM The Company has established a vigil mechanism, incorporating a whistle blower policy in lines with the Clause 49 of the Listing Agreement in order to protect the interest of the employees and executives in reporting their grievances in a protected manner. It also provides for the protection against victimization of directors and employees who avail the mechanism and allows direct communication with the Chairperson of the Audit ACKNOWLEDGEMENT: Yours Directors take the opportunity to offer thanks to the State Bank of Patiala and State Bank of India for their valuable assistance. Yours Directors also wish to place on record their deep sense of appreciation for services of the executives, staff and workers of the company for smooth operations of the Company. By Order of the Board For BCC Fuba India Limited (Renu Bhagat) DIN-00246773 (Arindam Mookkerjee) DIN-00739709 Date : 30th May, 2015 Place : New Delhi |