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Bhoruka Aluminium Ltd.

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Annual Report

For Year :
2014 2013 2012 2011 2010 2009 2008 2007

Director’s Report

Dear Members, 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. (Rs.) Particulars For the year ended For the period ended 31st March 2014 31st March 2013 (6 months) 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) 2. Operations 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 liabilities. 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 challenging situation. 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 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 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 Report. 7. Depositories 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 Independent Director. 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. Resignation Shri Rajat Agarwal ceased to be the Executive Director of the Company with effect from 17.06.2013. Retirement 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 that: 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. 11. 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 this Annual General Meeting and are eligible for re-appointment. 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 activities. 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 funds. 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 not apply. 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 Report. 17. Acknowledgement 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 phase. For and on behalf of the Board Place : Mysore R.K. Aggarwal Date : 29th May, 2014 Chairman & Managing Director (DIN: 01559120)

Director’s Report