The Board of Directors of your company hereby present the 34th Annual
Report together with the audited statement of accounts for the
financial year ended 31st March, 2014.
1. Review of Financial Results
The current year''s Financial Statements of your Company have been
prepared for a period of twelve months from 1sl April, 2013 to 31st
March, 2014. Hence, the figures for the current year are not comparable
with the figures of the previous accounting period, which was of 6
months from 1st October, 2012 to 31st March, 2013.
The financial statements of the Company are prepared in compliance with
the Companies Act 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.
Particulars For the year ended For the period ended
31st March 2014 31st March 2013
Revenue from operations 77,312,412 261,318,292
Profit before Finance charges,
depreciation & tax (49,551,754) (62,757,843)
Financial charges 9,675,487 6,913,606
Depreciation 7,734,238 17, 375,953
Profit /(Loss) before tax and
Exceptional items (66,961,479) (87,047,402)
Add: Exceptional items 433,864,727 -
Profit /(Loss) before tax 366,903,248 (87,047,402)
Tax Expense 54,092,377 -
Profit/(Loss) for the year 312,810,871 (87,047,402)
The company continued to work on its restructuring proposal after being
classified as a Non Performing Asset by its principal bankers. As part
of restructuring, to meet the pressing liabilities of secured lenders,
in accordance with the approval granted by the Shareholders through
postal ballot pursuant to Section 293 (1) (a) of the Companies Act,
1956, your Company has transferred the Aluminium Extrusion Business by
way of slump sale to YKK Holding Asia Pte Ltd., Singapore on 30th May,
2013. The company will explore new business opportunities in the coming
months, and will look to monetize assets to meet any outstanding
3. Slump sale of Aluminium Extrusion Business Division
Pursuant to the Business Transfer Agreement (BTA) dated 1st March, 2013
and in accordance with the approval granted by the Shareholders through
Postal Ballot for transfer of Aluminium Extrusion business by way of
slump sale pursuant to Section 293(1 )(a) of the Companies Act, 1956,
the Company has transferred the Aluminium Extrusion Business division
to an Indian subsidiary of YKK Holding Asia Pte Ltd. The sale comprises
of all tangible and intangible assets relating to the aluminium
extrusion business division along with the anodizing and powder coating
lines. The initial lump sum consideration was Rs.98.36 Crore after
payment of consultancy fees and other expenses.
Upon acceptance of the compromised proposal of the Company by the
secured lenders, the Company has repaid a major portion of the
outstanding debt to secure a slump sale transaction. Company has paid
Rs.85 crore out of the total principal outstanding of Rs.92.6 crore.
The interest portion on the loans has been waived off by the creditors.
The remaining Rs.7.6 crore is payable to secured lenders within next 2
years. The company had very limited options while negotiating with its
secured lenders, and company is left with no revenue generating assets
to repay the pending amount. Thus, the company faces a critical and
4. Subsidiary Company
As directed by the Central Government the financial data of the foreign
subsidiary Bhoruka Aluminium FZE have been furnished under ''Details
of Subsidiaries'' forming part of the Annual Report. Pursuant to
Accounting Standard (AS21) issued by the Institute of Chartered
Accountants of India, Consolidated Financial Statements presented by
the Company in this Annual Report includes financial information of its
subsidiary. These documents will be made available upon request by any
member of the Company interested in obtaining the same. The annual
accounts of subsidiary company will also be available for inspection
during business hours at the Registered Office of the Company.
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
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 Directors'' 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
The Company is registered both with the National Securities Depository
Limited (NSDL) and Central Depository Services (India) Limited (CDSL).
8. Directors Appointment
In terms of the Articles of Association of the Company, Shri Ram Ekbal
Singh, Director retires 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, Shri Shroff
Puttabasappa Manjunath was appointed as an Additional Director
designated as an Independent Director w.e.f. 9th November, 2013 and he
shall hold office up to the date of the ensuing Annual General Meeting.
The Company has received requisite notice in writing from a member
proposing Shri Shroff Puttabasappa Manjunath for appointment as an
In view of the provisions of section 149 of the Companies Act, 2013,
the Board of your Company has proposed the appointment of Shri Ram
Ekbal Singh and Shri Saligrama Parswannath Shanthinath as Independent
Directors at the ensuing Annual General Meeting of the Company. The
Company has received requisite notices in writing from members
proposing the candidature of Shri Ram Ekbal Singh and Shri Saligrama
Parswannath Shanthinath for appointment as Independent Directors.
The Company has received declarations from all the Independent
Directors of the Company confirming that they meet with the criteria of
independence as prescribed both 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.
Shri Rajat Agarwal ceased to be the Executive Director of the Company
with effect from 17.06.2013.
Dr. B.L Amla, Chairman retired from the Board and the Audit Committee
with effect from 09.11.2013. The Board has placed on record its
appreciation of the valuable contribution made by him to the Company.
9. Directors'' Responsibility Statement:
Pursuant to sub-section (2AA) of Section 217 of the Companies Act,
1956, the Board of Directors of the Company hereby state and confirm
i) in the preparation of the Accounts for the year ended 31st March,
2014, the applicable accounting standards read with requirements set
out under Schedule VI to the Companies Act, 1956 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, 2014 and of the Profit 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, 1956 and 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;
10. Public Deposits:
The Company has not accepted any public deposits and, as such, no
amount on account of principal or interest on public deposits was
outstanding as on the date of the Balance Sheet.
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 this Annual General Meeting and are eligible for
The Company has received letter from them 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.
12. Auditors Observations
Please refer SI. No. 4 to Auditors Report and 3 a) and b) and 7(a) of
Annexure to Independent Auditors Report Management''s Reply
4 & 3 a) The Company has certain transactions with associate companies
that have been classified as interest free loan based on the
recommendation 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
subsidiary Bhoruka Aluminium FZE UAE for its principle business
7 (a) The Company has made provision for payment of Income tax dues on
capital gains arising out of slump sale of aluminium extrusion business
division. Due to severe financial constraint, the payment of income tax
dues has been deferred and the payment will be made after arranging the
13. Internal Auditor
M/s. Rau & Nathan, Chartered Accountants has been appointed as an
Internal Auditor for the Financial Year 2014-15 to conduct internal
audit functions of the Company.
14. Cost Compliance
Pursuant to Section 209 (1) (d) of the Companies Act, 1956, Cost Audit
Report for the financial period ended 31st March, 2013 (6 months) was
submitted to the Central Government on 27.09.2013.
Further, consequent to slump sale of aluminium extrusion business
division effective 30th May, 2013, there is no manufacturing activities
being carried out by the Company, the maintenance of cost records does
15. Particulars of Employees
As per the provisions of Section 217(2A) of the Companies Act, 1956
read with Companies (Particulars of Employee) Rules, 1975, as amended,
no employees were in receipt of remuneration exceeding the limits as
prescribed under that section and hence your directors has nothing to
report in this regard.
16. Conservation of Energy, Technology Absorption and Foreign Exchange
Earnings / Outgo u/s 217(1)(e)ofthe Companies Act, 1956:
The particulars relating to energy conservation, technology absorption,
foreign exchange earnings and outgo, as required to be disclosed under
Section 217(1) (e) of the Companies Act, 1956 read with the Companies
(Disclosure of Particulars in the Report of Board of Directors) Rules,
1988 as amended are provided in Annexure-I and is attached to this
The Directors acknowledge the support and assistance extended to us by
the Central Government, State Governments, and government departments,
bankers, shareholders, investors and employees in such a difficult
For and on behalf of the Board
Place : Mysore R.K. Aggarwal
Date : 29th May, 2014 Chairman & Managing Director