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Good Value Irrigation Ltd.

BSE: 531997 Sector: Industrials
NSE: N.A. ISIN Code: INE164D01010
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Good Value Irrigation Ltd. (GOODVALUEIRRGN) - Auditors Report

Company auditors report

GOOD VALUE IRRIGATION LIMITED ANNUAL REPORT 2007-2008 AUDITORS' REPORT TO THE MEMBERS OF M/S GOOD VALUE MARKETING COMPANY LIMITED 1) We have audited the attached Balance Sheet of M/s. Good Value Marketing Company Limited as at 31st July, 2007, the Profit and Loss Account for the year ended and the Cash Flow Statement of the Company for the year ended on that date annexed thereto. 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. 2) We have conducted our audit in accordance with the 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 misstatements. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by the management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. 3) As required by the Companies (Auditor's Report) Order, 2003 (as amended) issued by the Central Government of India in terms of Sub-section (4A) of section 227 of the Companies Act, 1956, we enclose in the Annexure hereto a statement on the matters specified in paragraphs 4 and 5 of the said Order. 4) Attention is invited to the following notes: (a) Accumulated arrears of dividend on preference shares (Note No.5). (b) Non Provision of depreciation (Note No.6). (c) The debtors and creditors are subject to confirmation; adjustments and pending reconciliation (Note no. 7) (d) Some on-account payments made to resigned/retired employees are subject to adjustment (Note No.8). (e) No provision of Interest payable amounting to Rs.63,14,02,009/- including Rs.54,02,59,161/- of earlier years on debentures, hire purchase, inter corporate deposit and secured loan have been made in the accounts (Note no. 12). (f) No provision for stock in Trade of Shares of Indo Biotech Foods Limited amounting Rs. 77,71,400/- has been made by the Management, even though the net Worth of the Company is 'negative' and the shares are suspended from trading in the Stock Exchange. The above shares in trade are disclosed under the head 'Current Assets' in the Balance Sheet. The loss for the year has been understated to that extent. 5) Further to our comments in the Annexure referred to in paragraph 4 above, we report that: (a) We have obtained all the information and explanations, which to the best of 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 the Company so far as appears from our examination of those books; (c) The Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this report are in agreement with the books of account; (d) In our opinion, the Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this report comply with the Accounting Standards referred to in subsection (3C) of Section 211 of the Companies Act, 1956; (e) On the basis of the written representations received from the directors, as on July 31st, 2007, and taken on record by the Board of Directors, we report that none of the Directors of the Company are disqualified as on July 31st , 2007 from being appointed as a Director, in terms of Clause (g) of Sub-section (1) of Section 274 of the Companies Act, 1956. (f) In our opinion and to the best of our information and according to the explanations given to us, the said accounts read together with the Significant Accounting Polices subject to our comments in Para 5 above and other notes thereon, give the information required by the Companies Act, 1956, in the manner so required and give a true and fair view in conformity with the Accounting Principles Generally Accepted in India: i. In case of the Balance Sheet, of the state of affairs of the company as at 31st July, 2007; ii. In case of the Profit and Loss Account, of the loss for the year ended on that date; and iii. In the case of the Cash Flow Statement, of the cash flows for the year ended on that date. For BATLIBOI & PUROHIT Chartered Accountants K.K. Kshirsagar Place : Mumbai Partner Dated : 14.11.2007 Membership No. 4047 ANNEXURE TO THE AUDITOR'S REPORT: (Annexure referred to in paragraph 4 of our report of even date): 1. (a) The Company has maintained proper records of fixed assets showing full particulars, including quantitative details and situation of fixed assets. (b) The management during the year has not physically verified the fixed assets. (c) There was no substantial disposal of fixed assets during the year. 2. (a) The inventory has not been physically verified during the year by the management. (b) Since the physical verification of the inventory has not been conducted we can not comment whether the procedure of physical verification is reasonable and adequate in relation to the size of the company. (c) In our opinion and according to the information and explanations given to us the company is maintaining proper records of inventory, but in absence of physical verification we can not comment on the discrepancies if any between book stock and physical stock. 3. a) According to the information and explanations given to us the Company has taken interest free loans from two parties amounting to Rs.6,45,71,355/- listed in the Register maintained under section 301 of the Act. b) As the loan is interest free and there are no other terms and conditions attached to this loan, hence we cannot comment on whether they are prima facie prejudicial to the company. c) The loan taken is repayable on demand. d) The Company has not granted any loan to any party listed in the register maintained under section 301 of the Companies Act, 1956. 4. In our opinion and according to the information and explanations given to us, there is an adequate internal control system commensurate with the size of the Company and the nature of its business with regard to purchase of inventory and fixed assets and for the sale of goods. During the course of our audit, no major weakness has been noticed in the internal control system in respect of these areas. 5. (a) According to the information and explanations provided by the management, we are of the opinion that there are no transactions that need to be entered into the register maintained under Section 301 of the Companies Act, 1956. (b) In our opinion and according to the information and explanations given to us, there are no transactions made in pursuance of contracts or arrangements entered in the Register maintained under Section 301 of the Companies Act, 1956 and exceeding the value of Rupees Five Lacs in respect of any party during the year. 6. The Company has not accepted any deposits during the year from the public within the meaning of the provisions of Section 58A, 58AA or any other relevant provisions of the Companies Act, 1956 and rules made there under. However, old deposits are lying unclaimed. 7. The Company does not require internal audit system as the Net Worth of the Company is less than Rs. 50 Lacs and the average annual turnover is less than Rs. 5 crores. 8. According to the information and explanations given to us the maintenance of cost records has not been prescribed by the Central Government under Clause (d) of Sub-section (1) of Section 209 of the Companies Act, 1956, for the business in which Company is engaged. 9. (a) According to the records of the Company, Provident Fund, Investor Education and Protection Fund, ESIC, Income Tax, Wealth tax, Service Tax, Custom Duty, Excise Duty, Cess and other material statutory dues applicable to it have been generally deposited during the year with the appropriate authorities. According to the information and explanations given to us, no undisputed amounts payable in respect of above were in arrears, as at July 31st, 2007 for a period of more than six months from the date on which they became payable. (b) According to the information and explanations given to us, the dues in respect of sales tax ,income tax, custom duties, wealth tax, excise duty, and cess that have been deposited with the appropriate authorities on account of dispute and the forum whether the dispute are pending are given below Name of the Nature of Amount (Rs.) Forum where dispute is statute the dues pending Income Tax Demands 10,63,19,433.00 Appeal before Income Tax A.Y.1996-97 Appellate Tribunal, Mumbai. 10. (a) There are accumulated losses at the end of the financial year, which exceeds the net worth of the Company. The company has not incurred cash losses during the financial year covered by our audit but there were cash losses during the immediately preceding financial year. (b) In our opinion, the Company has become Sick Company within the meaning of Clause (O) of Sub-section (1) of Section (3) of the Sick Industrial Companies (Special Provisions) Act, 1985. The last application to Board for Industrial & Financial Reconstruction was registered by BIFR on 09.03.2005. BIFR has rejected the application in December, 2006. However, the Company has filed a fresh application to BIFR and was registered by BIFR on 23.05.2007. The related proceedings are in progress. 11. Based on our audit procedure and according to the information and explanations given to us by the management, we are of the opinion that the company. has defaulted in repayment of dues to the Financial Institution, Banks. The Company has kept the Debentures alive and re-issued the same by extending the date of redemption. The said Debentures are to be redeemed on 20th April 2010. 12. The Company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities. 13. The Company is not a chit fund or a Nidhi / Mutual Benefit Fund or Society. Therefore the provisions of clause 4 (xiii) of the Companies (Auditor's Report) Order, 2003 (as amended) are not applicable to the company. 14. In our opinion, the Company is not dealing or trading in shares, securities, debentures and other investments. Accordingly, the provisions of clause 4 (xiv) of the Order are not applicable to the Company. 15. In our opinion and according to the information and explanations given to us, the Company has not given guarantee for loans taken by others from banks or financial institutions. 16. The Company has not applied for any term loans. 17. Based on the information and explanations given to us and on an overall examination of the Balance Sheet of the Company, it has not raised funds on short term basis. 18. During the year, the Company has not made any preferential allotment of shares to parties and companies covered in the register maintained under section 301 of the Companies Act, 1956. 19. The Company has not issued any secured debenture during the year under audit, therefore the provisions of clause 4 (xix) of the Order are not applicable to the Company. 20. The Company has not raised any money by way of public issue during the year, therefore the provisions of clause 4 (xx) of the Order are not applicable to the Company. 21. Based on the audit procedures undertaken by us and according to the information and explanations given to us, no fraud on or by the Company has been noticed or reported during the course of our audit. For BATLIBOI & PUROHIT Chartered Accountants K.K. Kshirsagar Place : Mumbai Partner Dated : 14.11.2007 Membership No. 4047