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Bhoruka Aluminium Ltd.

BSE: 506027 Sector: Metals & Mining
NSE: N.A. ISIN Code: INE866G01013
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VOLUME 46785
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Bhoruka Aluminium Ltd. (BHORUKAALUM) - Auditors Report

Company auditors report

To the Members

Bhoruka Aluminium Limited Mysuru

Report on the Audit of the Financial Statements

We have audited the financial statements of Bhoruka Aluminium Limited ("theCompany") which comprise the balance sheet as at March 31 2020 and the statementof profit and loss (including other comprehensive income) the statement of changes inequity and the statement of cash flows for the year then ended and notes to the financialstatements including a summary of significant accounting policies and other explanatoryinformation.

In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid financial statements give the information required by theCompanies Act 2013 ("Act") in the manner so required and give a true and fairview in conformity with the accounting principles generally accepted in India of thestate of affairs of the Company as at March 31 2020 and its profit total comprehensiveincome the changes in equity and cash flows for the year ended as on that date.

Basis for Opinion

We conducted our audit in accordance with the standards on auditing specified undersection 143 (10) of the Companies Act 2013. Our responsibilities under those Standardsare further described in the auditor's responsibilities for the audit of the financialstatements section of our report. We are independent of the Company in accordance with thecode of ethics issued by the Institute of Chartered Accountants of India together with theethical requirements that are relevant to our audit of the financial statements under theprovisions of the Act and the rules thereunder and we have fulfilled our other ethicalresponsibilities in accordance with these requirements and the code of ethics.

We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our opinion.

Key audit matters

Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the financial statements of the current period. These matterswere addressed in the context of our audit of the financial statements as a whole and informing our opinion thereon and we do not provide a separate opinion on these matters.

(A) Contingent Liabilities

Details of the Key Audit Matter

The Company has significant tax litigations for both direct and indirect taxes. Thereis a high level of judgement required in estimating the level of provisioning andappropriateness of disclosure of those litigations in the financial statements.

The Value of the litigations together with the level of judgement involved make itsaccounting treatment a significant matter for our audit.

Auditors' Response to the Key Audit Matter

Our audit procedures included the following:

- Reviewing the list of outstanding litigation against the company.

- Inquiring and obtaining explanation during the year.

- Reading the latest correspondence between the Company and the various tax / legalauthorities for significant matters for evaluation.

- Review external opinions if any obtained by the management of the Company fromexternal advisors.

- Assessing the decisions and rationale for provisions made or for decisions not torecord provisions or make disclosures.

Information other than the financial statements and auditors' report thereon

The Company's board of directors is responsible for the preparation of the otherinformation. The other information comprises the information included in the ManagementDiscussion and Analysis Board's Report including Annexures to Board's Report BusinessResponsibility Report Corporate Governance and Shareholder's Information but does notinclude the financial statements and our auditor's report thereon.

Our opinion on the financial statements does not cover the other information and we donot express any form of assurance conclusion thereon.

In connection with our audit of the financial statements our responsibility is to readthe other information and in doing so consider whether the other information ismaterially inconsistent with the standalone financial statements or our knowledge obtainedduring the course of our audit or otherwise appears to be materially misstated.

If based on the work we have performed we conclude that there is a materialmisstatement of this other information we are required to report that fact. We havenothing to report in this regard.

Management's responsibility for the financial statements

The Company's board of directors is responsible for the matters stated in section 134(5) of the Act with respect to the preparation of these financial statements that give atrue and fair view of the financial position financial performance including othercomprehensive income cash flows and changes in equity of the Company in accordance withthe Indian Accounting Standards (Ind AS) prescribed under section 133 of the Act read withthe Companies (Indian Accounting Standards) Rules 2015 and Companies (Indian AccountingStandards) Rules

2016 as amended from time to time and other accounting principles generally acceptedin India.

This responsibility also includes maintenance of adequate accounting records inaccordance with the provisions of the Act for safeguarding of the assets of the Companyand for preventing and detecting frauds and other irregularities; selection andapplication of appropriate accounting policies; making judgments and estimates that arereasonable and prudent; and design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the accuracy andcompleteness of the accounting records relevant to the preparation and presentation ofthe financial statement that give a true and fair view and are free from materialmisstatement whether due to fraud or error.

In preparing the financial statements management is responsible for assessing theCompany's ability to continue as a going concern disclosing as applicable mattersrelated to going concern and using the going concern basis of accounting unless managementeither intends to liquidate the Company or to cease operations or has no realisticalternative but to do so.

The board of directors are also responsible for overseeing the Company's financialreporting process.

Auditor's responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financialstatements as a whole are free from material misstatement whether due to fraud or errorand to issue an auditor's report that includes our opinion. Reasonable assurance is a highlevel of assurance but is not a guarantee that an audit conducted in accordance with SAswill always detect a material misstatement when it exists.

Misstatements can arise from fraud or error and are considered material ifindividually or in the aggregate they could reasonably be expected to influence theeconomic decisions of users taken on the basis of these financial statements.

As part of an audit in accordance with SAs we exercise professional judgment andmaintain professional skepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of the financialstatements whether due to fraud or error design and perform audit procedures responsiveto those risks and obtain audit evidence that is sufficient and appropriate to provide abasis for our opinion. The risk of not detecting a material misstatement resulting fromfraud is higher than for one resulting from error as fraud may involve collusionforgery intentional omissions misrepresentations or the override of internal control.

• Obtain an understanding of internal control relevant to the audit in order todesign audit procedures that are appropriate in the circumstances. Under section 143(3)(i)of the Companies Act 2013 we are also responsible for expressing our opinion on whetherthe company has adequate internal financial controls system in place and the operatingeffectiveness of such controls

• Evaluate the appropriateness of accounting policies used and the reasonablenessof accounting estimates and related disclosures made by management.

• Conclude on the appropriateness of management's use of the going concern basisof accounting and based on the audit evidence obtained whether a material uncertaintyexists related to events or conditions that may cast significant doubt on the Company'sability to continue as a going concern. If we conclude that a material uncertainty existswe are required to draw

attention in our auditor's report to the related disclosures in the financialstatements or if such disclosures are inadequate to modify our opinion. Our conclusionsare based on the audit evidence obtained up to the date of our auditor's report. Howeverfuture events or conditions may cause the Company to cease to continue as a going concern.

• Evaluate the overall presentation structure and content of the financialstatements including the disclosures and whether the financial statements represent theunderlying transactions and events in a manner that achieves fair presentation.

We communicate with those charged with governance regarding among other matters theplanned scope and timing of the audit and significant audit findings including anysignificant deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have compliedwith relevant ethical requirements regarding independence and to communicate with themall relationships and other matters that may reasonably be thought to bear on ourindependence and where applicable related safeguards. From the matters communicated withthose charged with governance we determine those matters that were of most significancein the audit of the financial statements of the current period and are therefore the keyaudit matters. We describe these matters in our auditor's report unless law or regulationprecludes public disclosure about the matter or when in extremely rare circumstances wedetermine that a matter should not be communicated in our report because the adverseconsequences of doing so would reasonably be expected to outweigh the public interestbenefits of such communication.

Report on other Legal and Regulatory

Requirements

1. As required by the Companies (Auditor's Report) Order 2016 issued by the CentralGovernment of India in terms of sub-section (11) of Section 143 of the Act ("theOrder') and on the basis of such checks of the books and records of the Company as weconsidered appropriate and according to the information and explanations given to us wegive in the Annexure A statement on the matters specified in paragraphs 3 and 4 of theOrder.

2. As required by sub-section 3 of Section 143 of the Act we report that:

a. We have sought and obtained all the information and explanations which to the bestof our knowledge and belief were necessary for the purposes of our audit.

b. In our opinion proper books of account as required by law have been kept by theCompany so far as it appears from our examination of those books.

c. The Balance Sheet the Statement of Profit and Loss (including other comprehensiveincome) the Cash Flow Statement and the Statement of Changes in Equity dealt with by thisReport are in agreement with the books of account.

d. In our opinion the aforesaid Ind AS financial statements comply with the IndianAccounting Standards specified under Section 133 of the Act read with relevant rulesissued thereunder.

e. On the basis of the written representations received from the director as on March31 2020 taken on record by the Board of Directors none of the director is disqualifiedas on March 312020 from being appointed as a director in terms of Section 164 (2) of theAct.

f. With respect to the adequacy of the internal financial controls over financialreporting of the Company and the operating

effectiveness of such controls refer to our separate report in Annexure B.

g. With respect to the other matters to be included in the Auditor's Report inaccordance with the requirements of section 197 (16) of the Act as amended in ouropinion and to the best of our information and according to the explanations given to usthe remuneration paid by the Company to its directors during the year is in accordancewith the provisions of section 197 of the Act; and

h. With respect to the other matters to be included in the Auditor's Report inaccordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 in our opinionand to the best of our knowledge and belief and according to the information andexplanations given to us.

I. The Company has disclosed the impact if any of pending litigations as at March 312020 on its financial position in its Ind AS financial statements - Refer Note No. 26

II. The Company did not have any long-term contracts as at March 31 2020.

III. There has been no delay in transferring amounts required to be transferred tothe Investor Education and Protection Fund by the Company during the year ended March312020.

For E.S. & Associates

ICAI Firm Reg.No.011236S Chartered Accountants S.K. Sanjay Partner

Membership No.200763 UDIN: 20200763AAAADF4792

Place: Mysuru

Date: 31st July 2020

Annexure A to Independent Auditors' Report

(Referred to in paragraph 1 under ‘Report on other legal and regulatoryrequirements' section of our report to the members of Bhoruka Aluminium Limited of evendate)

1. In respect of the Company's fixed assets: (Company does not hold any fixed assetsnow)

a. The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets.

b. The fixed assets of the Company were physically verified in full by the managementduring the year. According to the information and explanations given to us and as examinedby us no material discrepancies were noticed on such verification.

c. According to the information and explanations given to us the records examined byus and based on the examination of the conveyance deeds provided to us we report thatthere are no immovable properties of land and buildings which are freehold held in thename of the Company as at the balance sheet date. In respect of immovable properties ofland and building that have been taken on lease the Company has not taken any propertiesof land and building on lease.

2. The Company does not hold any inventory.

3. Accord i ng to info rmatio n and exp lan ation given to us the company has grantedunsecured interest free loans given in earlier years and outstanding as on 31stMarch 2020 of Rs.206235407/- to companies firms limited liability partnerships orother parties covered in the register required under section 189 of the Companies Act2013. The Company during the FY 2017-18 has transferred due to non-recovery Rs.193311217/- to Other Comprehensive Income. The Outstanding balance as at the end of thefinancial year i.e. 31st March 2020 is Rs. 12924190/-.In our opinion therate of interest not charged and other terms and conditions of

such loans are prima facie prejudicial to the interest of the company as per section186 of the Companies Act 2013.In respect of the aforesaid loans there are no stipulationas to the dates of the repayment of the loan.

A. The Company during the Board Meeting held

on 30th May 2019 and in the Annual General Meeting held on 27th Sept 2019resolved to write off loans given to related parties (parties covered in the registerrequired under section 189 of the Companies Act 2013) i.e. Rock Strong

Investments Pvt. Ltd. a sum of Rs.89310000/- Sunbright Investments Private Ltd asum of Rs.67960000/- and Maverick Infotec private Ltd a sum of Rs. 2772040/-. TheCompany has not taken any action in this matter as at the Balance Sheet date.

B. The Company during the Board Meeting held on 30th May 2019 resolved towrite off loans given to bodies corporate (parties covered in the register required undersection 189 of the Companies Act 2013) i.e. M/s. Kakti Trading and Commercials Pvt Ltd.a sum of Rs. 2230807/- and M/s. Sukhy Commercial and Trading Pvt. Ltd. a sum of Rs.13310410/-. The Company has not taken any action in this matter as at the Balance Sheetdate.

In our opinion and according to information and explanation given to us during theyear the company has not granted any loans or provided any guarantees or given anysecurity or made any investments to which the provision of section 185 and 186 of theCompanies Act 2013. Accordingly paragraph 3 (iv) of the order is not applicable.

4. In our opinion and according to the information and explanations given to us thecompany has not accepted any deposits and accordingly paragraph 3 (v) of the order is notapplicable.

5. The Central Government of India has not prescribed the maintenance of cost records

under sub-section (1) of section 148 of the Act for any of the activities of thecompany and accordingly paragraph 3 (vi) of the order is not applicable.

6. In respect of statutory dues:

(a) According to the information and explanations given to us and on the basis of ourexamination of the records of the Company amounts deducted/ accrued in the books ofaccount in respect of undisputed statutory dues including provident fund employees' stateinsurance income-tax sales- tax service tax goods and service tax duty of customsduty of excise value added tax cess and other material statutory dues have beengenerally regularly deposited during the year by the company with the appropriateauthorities.

According to the information and explanations given to us no undisputed amountspayable in respect of provident fund employees' state insurance income-tax sales- taxservice tax goods and service tax duty of customs duty of excise value added tax cessand other material statutory dues were in arrears as at March 31 2020 for a period ofmore than six months from the date they became payable.

(b) According to the information and explanations given to us and the records of thecompany examined by us there are no dues of income-tax sales- tax service tax goodsand service tax duty of customs duty of excise and value added tax which have not beendeposited on account of any dispute except:

Statute Nature of dues Amount (In Rs.) Period to which the amou nt relates Forum where the dispute is pending
Excise Duty Excise Duty 23990442 July 2007 to June 2008 Customs Excise & Service Tax Tribunal South Zonal Bench at Bangalore -Appeals
Excise Duty Excise Duty 11354141 July 2007 to June 2008 Customs Excise & Service Tax Tribunal South Zonal Bench at Bangalore -Appeals
Service Tax Service Tax 195186 Jan 07 to Mar 07 Customs Excise & Service Tax Tribunal South Zonal Bench at Bangalore - Appeals
Service Tax Service Tax 1442000 May 2011 to May 12 SCN issued by the Commissi oner of Central Excise Customs and Service
Tax Mysore
Service Tax Service Tax 6180000 May - 13 SCN issued by the Commissi oner of Central Excise Customs and Service Tax Mysore
Excise Duty Excise Duty 8761078 Year 2008 to 2011 SCN issued by the Commissi oner of Central Excise Customs and Service Tax Mysore
Income Tax' Income Tax 36114180 AY 2014 15 CIT (Appeals) Mysuru

7. According to the information and explanation given to us and records examined by usthe Company has defaulted in repayment of dues to banks financial institutions andgovernment as detailed in Appendix - I to this report. The Company does not have any duesto debenture holders during the year.

8. The Company has not raised any money by way of initial public offer or furtherpublic offer (including debt instruments) and has not taken any term loans during theyear. Accordingly paragraph 3 (ix) of the order is not applicable.

9. To the best of our knowledge and according to the information and explanations givento us no fraud by the Company or no material fraud on

the Company by its officers or employees has been noticed or reported during the year.

10. In our opinion and according to the information and explanations given to us theCompany has not paid/ provided managerial remuneration in accordance with the requisiteapprovals mandated by the provisions of section 197 read with Schedule V to the Act.

11. The Company is not a Nidhi Company and accordingly paragraph 3 (xii) of the orderis not applicable to the Company.

12. According to the information and

explanations given to us and based on our examination of the records of the companytransactions with the related parties are in compliance with section 177 and 188 of theAct. Where applicable the details of such transactions have been disclosed in thefinancial statements as required by the applicable accounting standards.

13. According to the information and

explanations given to us and based on our examination of the records of the companythe company has not made any preferential allotment or private placement of shares orfully or partly convertible debentures during the year. Accordingly paragraph 3(xiv) ofthe order is not applicable.

14. According to the information and

explanations given to us and based on our examination of the records of the companythe company has not entered into any non-cash transactions with directors or personsconnected with them. Accordingly paragraph 3(xv) of the order is not applicable.

15. According to the information and explanations given to us and based on ourexamination of the records of the company the company is not required to be registeredunder section 45-IA of the Reserve Bank of India Act 1934.

Appendix - I

Details of default in payment of dues to banks financial institutions and government

I. Name of the bank/ Financial Institution: KSDC

II. Nature of default: Loan

III. Amount of default: Rs. 923000.00

IV. Period of default: Before 01.04.2014

V. Present status: Not Paid

For E.S. & Associates

ICAI Firm Reg.No.011236S Chartered Accountants S.K. Sanjay Partner

Membership No.200763 UDIN: 20200763AAAADF4792

Place: Mysuru Date: 31st July 2020

Annexure "B" to the Independent Auditor's Report

(Referred to in paragraph 2 (f) under ‘Report on other legal and regulatoryrequirements' section of our report to the Members of Bhoruka Aluminium Limited of evendate)

Report on the internal financial controls over financial reporting under clause (i) ofsub - section 3 of section 143 of the Companies Act 2013 ("the Act")

We have audited the internal financial controls over financial reporting of BhorukaAluminium Limited ("the Company") as at March 31 2020 in conjunction with ouraudit of the Ind AS financial statements of the Company for the year ended on that date.

Management's responsibility for internal financial controls

The board of directors of the Company is responsible for establishing and maintaininginternal financial controls based on the internal control over financial reportingcriteria established by the Company considering the essential components of internalcontrol stated

in the Guidance Note on Audit of Internal Financial Controls Over Financial Reportingissued by the Institute of Chartered Accountants of India. These responsibilities includethe design implementation and maintenance of adequate internal financial controls thatwere operating effectively for ensuring the orderly and efficient conduct of its businessthe safeguarding of its assets the prevention and detection of frauds and errors theaccuracy and completeness of the accounting records and the timely preparation ofreliable financial information as required under the Companies Act 2013.

Auditors' responsibility

Our responsibility is to express an opinion on the internal financial controls overfinancial reporting of the Company based on our audit. We conducted our audit inaccordance with the Guidance Note on Audit of Internal Financial Controls Over FinancialReporting (the "Guidance Note") issued by the Institute of Chartered Accountantsof India and the standards on auditing prescribed under Section 143 (10) of the CompaniesAct 2013 to the extent applicable to an audit of internal financial controls. Thosestandards and the guidance note require that we comply with ethical requirements and planand perform the audit to obtain reasonable assurance about whether adequate internalfinancial controls over financial reporting were established and maintained and if suchcontrols operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls system over financial reporting and their operatingeffectiveness. Our audit of internal financial controls over financial reporting includedobtaining an understanding of internal financial controls over financial reportingassessing the risk that a material weakness exists and testing and evaluating the

design and operating effectiveness of internal control based on the assessed risk. Theprocedures selected depend on the auditor's judgement including the assessment of therisks of material misstatement in the financial statements whether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the Company's internal financial control systemover financial reporting.

Meaning of internal financial controls over financial reporting

A company's internal financial control over financial reporting is a process designedto provide reasonable assurance regarding the reliability of financial reporting and thepreparation of financial statements for external purposes in accordance with generallyaccepted accounting principles. A company's internal financial control over financialreporting includes those policies and procedures that (i) pertain to the maintenance ofrecords that in reasonable detail accurately and fairly reflect the transactions anddispositions of the assets of the company; (ii) provide reasonable assurance thattransactions are recorded as necessary to permit preparation of financial statements inaccordance with generally accepted accounting principles and that receipts andexpenditures of the company are being made only in accordance with authorizations ofmanagement and directors of the company; and (iii) provide reasonable assurance regardingprevention or timely detection of unauthorized acquisition use or disposition of thecompany's assets that could have a material effect on the financial statements.

Inherent Limitations of internal financial controls over financial reporting

Because of the inherent limitations of internal financial controls over financialreporting including the possibility of collusion or improper management of override ofcontrols material misstatements due to error or fraud may occur and not be detected.Also projections of any evaluation of the internal financial controls over financialreporting to future periods are subject to the risk that the internal financial controlover financial reporting may become inadequate because of changes in conditions or thatthe degree of compliance with the policies or procedures may deteriorate.

Opinion

In our opinion and according to the information and explanations given to us theCompany has in all material respects an adequate internal financial control system overfinancial reporting and such internal financial controls over financial reporting wereoperating effectively as at March 31 2020 based on the internal control over financialreporting criteria established by the Company considering the essential components ofinternal control stated in the Guidance Note on Audit of Internal Financial Controls OverFinancial Reporting issued by the Institute of Chartered Accountants of India.

For E.S. & Associates

ICAI Firm Reg.No.011236S Chartered Accountants S.K. Sanjay Partner

Membership No.200763 UDIN: 20200763AAAADF4792

Place: Mysuru Date: 31st July 2020

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