BHOR INDUSTRIES LIMITED
ANNUAL REPORT 2004-2005
BHOR INDUSTRIES LTD.
1. We have audited the attached Balance Sheet of BHOR INDUSTRIES LTD. as at
31st March 2005 and also the annexed Profit and Loss Account of the Company
for the year ended on that date and the Cash Flow statement for the year
ended on that date. These financial statements are the responsibility of
the Company's management. Our responsibility is to express an opinion on
these financial statements based on our audit.
We conducted our audit in accordance with auditing standards generally
accepted in India. Those standards require that we plan and perform the
audit to obtain reasonable assurance about whether the financial statements
are free of material misstatement(s). An audit includes examining, on a
test basis, evidence supporting the amounts and the disclosures in the
financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that
our audit provides a reasonable basis for our opinion and we report that
i) The Company has closed the operations of Its existing activities by
shutting down the plants over the years and have dismantled some plant even
after the Balance sheet date. Moreover, the accumulated losses of the
company have exceeded its networth and the company is not in a position to
receive any financial support from any sources for the revival. All these
factors raise a substantial doubt whether the company will be able to
continue as a Going concern. Consequently, adjustments may be required to
the recorded amounts of the assets & liabilities Including classification
there of. The financial statement (and Notes thereto) do not disclose this
ii) The Company has not compiled with As 29 'Provisions, Contingent
Liabilities and contingent Assets' and in view of non availability of
required information, the amount of contingent liabilities to be provided
In the books is in determinate.
iii) The Company has not compiled with the requirement of AS 24
'Discontinuing Operation' in view of which we are unable to determine Its
Impact on the financial statements.
iv) Deferred Taxation reserve is not created as required by the AS 22
'Deferred Taxation' issued by The Institute of Chartered Accountants of
India, the amount of which is not ascertainable.
2. Further, subject to our comments referred to in paragraph 1, we report
i) We have obtained all the information and explanations except as stated
In para 1(ii) above, which to the best of our knowledge and belief were
necessary for the purpose of our audit.
ii) In our opinion, proper books of accounts, as required by law, have been
kept by the Company except as stated In pare 1(i) above so far as it
appears from our examination of books.
iii) The Balance Sheet and Profit and Loss Account dealt with by this
Report are in agreement with the books of accounts.
iv) In our opinion, the Profit and Loss Account and the Balance Sheet
comply with the Accounting Standards as referred in the Section 211(3C) of
the Companies Act, 1956 except those stated In pare 1 (ii), (iii) and (iv)
v) On the basis of written representations from the Directors, taken on
record by the Board of Directors, none of the Directors are disqualified as
on 31st March 2005 from being appointed as a Director under Section
274(1)(g) of the Companies Act, 1956.
3. We further report that the aggregate effect of the items mentioned in
para 1 above on the Profit for the year and on the Profit and Loss Account,
Current Assets and Current Liabilities at the end of the year, to the
extent the resultant impact could be determined / quantified / ascertained,
without considering wholly the effects of the items mentioned in para 1(i),
(ii), (iii) and (iv) being not ascertainable / quantified / determinable.
4. Subject to the above, in our opinion and to the best of our information
and according to the explanations given to us, the said accounts, read with
the notes thereon, give the information required by the Companies Act, 1956
in the manner so required and give a true and fair view:
i) In case of the Balance Sheet of the state of affairs of the company as
at 31st March, 2005 and
ii) In the case of the Profit & Loss Account of the profit for the year
ended on that date.
iii) In the case of the Cash flow statement, of the cash flows for the year
ended on that date.
5. Further, as required by the Companies (Auditor's Report) Order 2003
issued by the Central Government in terms of Section 227(4A) of the
Companies Act, 1956 and on the basis of the information and explanations
given to us and such checks as we considered appropriate, we report that:
1. (a) The records of fixed assets maintained by the Company are
incomplete except at the Feeds Division.
(b) Assets have not been physically verified during the year and therefore
the discrepancies cannot be ascertained.
(c) The Company has disposed off substantial part of Fixed Assets.
Therefore the Going Concern status of the Company is affected.
2.(a) We are informed that the stocks of stores, spare parts and raw
materials have been physically verified by the Management at reasonable
(b) In our opinion, the procedure of physical verification of stocks
followed by the Management is reasonable and adequate in relation to the
size of the Company and the nature of its business.
(c) As per the information and explanations given to us the discrepancy
between physical stocks and book records noticed on detailed physical
verification was not material compared to the stocks being carried and has
been written off.
3.(a) The register under section 301 is not updated. Hence we are unable to
comment whether any loans & advances are taken /granted by the Company.
However, we are informed by the Company that they had taken loans amounting
to Rs.1,26,10,000/- from associated companies and firms in the past, repaid
during the year with interest and had granted an amount of Rs.1,64,768/- to
(b) In the absence of any written agreement we are unable to comment upon
the rate of interest and other terms of advances granted. However, we are
informed by the Company that these advances are interest free and therefore
in our opinion are prejudicial to the interest of the Company as far as it
relates to granting of advances.
(c) The overdue amount of advances granted to each party is not exceeding
One Lakh Rupees.
4. In our opinion, there are adequate internal control procedures
commensurate with the size of the Company and the nature of its business
with regard to the purchase of stores, raw materials including components,
plant and machinery, equipment and for the sale of goods.
5. (a) We are informed that there were no transactions of purchase of
goods and materials and services and sale of goods, materials and services
made in pursuance of contracts or arrangements which are required to be
entered in the register, to be maintained under section 301 of the
Companies Act, 1956 and aggregating during the year to Rs. 5,00,000 or more
in respect of each party.
(b) Since there are no transactions of purchase and sale required to be
listed in register maintained under section 301. This clause is not
applicable during the year under audit.
6. According to the information and explanations given to us, and in our
opinion, the Company has not accepted / renewed any deposits from the
public. Hence the provisions of section 58A of the Companies Act, 1956 and
the Rules framed thereunder with regard to the deposits are not applicable.
7. The Company does not have the system of internal audit commensurate with
the size of the Company and the nature of its business.
8. The Central Government has not prescribed maintenance of cost records
under section 209(1)(d) of the Companies Act, 1956 for any of the products
of the Company.
9. (a) The Company is generally regular in depositing the undisputed
statutory dues. According to the information and explanation given to us,
no undisputed amounts payable in respect of Income Tax and custom duty that
have not been deposited on account of matters pending before appropriate
authorities as follows.
(b) According to the records of the Company, the disputed statutory dues
that have not been deposited on account of matter pending before
appropriate authorities are as given below except for Customs duty
liability for which the Company is served with notices, (the details as per
note no B: 2 d of Schedule 7 amount of which is unascertainable).
No Particular (in Lakhs) Forum where cases is pending
1 Cen. Excise 349.24 Dy. Comm. of Cen. Excise.
2. Cen. Excise 25.36 CEGAT
3 Cen. Excise 247.45 High Court
4 Cen. Excise 7.01 Dy. Comm. of Cen.
5 Income Tax 145.67 Income Tax Appellate Tribunal
6 Income Tax 984.68 CIT (Appeals)
7 Income Tax 98.86 IT Dept. for Appeal Effect
10. The Companies Accumulated Losses have exceeded its net worth. This is
despite profits earned by the company during last two years.
11. The outstanding defaulted dues of the financial institutions as on
Balance sheet date are amounting to Rs. 4,61,04,079/-
12. According to the information and explanation given to us, the Company
has not granted any loans and advances by way of pledge of shares,
Debentures and other securities and hence the question of documentation is
not applicable during the year under audit.
13. In our opinion the Company is not a chit fund and nidhi / mutual
benefit fund / society. Therefore, the provisions of clause 4(13) of the
order are not applicable to the Company.
14. In our opinion and according to the information and explanation given
to us the Company is not a dealer or a trader in securities.
15. According to the information and explanations given to us, the Company
has not given any guarantee for loans taken by others from banks or
16. According to the information and explanations given to us by the
Company, term loans were applied for the purpose for which the loans were
17. During the year company has not taken any long term and short term
loans. Therefore, application of such funds during the year does not arise.
18. The Company has not made any preferential allotment of shares during
the year under audit to parties or companies covered in the register
maintained under section 301 of the Companies Act, 1956.
19. According to the records of the Company, the Company has not raised any
funds by way of debentures.
20. The Company has not raised any money through a public issue during the
21. According to the information and explanations given to us, we report
that no fraud on or by the Company has been noticed or reported during the
For JCR & Co.
V. V. Shenoy
July 20, 2005