PARSOLI CORPORATION LIMITED
ANNUAL REPORT 2008-2009
Parsoli Corporation Limited.
1. We have audited the attached Balance Sheet of Parsoli Corporation
Limited as at March 31, 2009 and the Profit & Loss Account 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 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 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 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 issued by
the Company Law Board in terms of Section 227(4A) of the Companies Act
1956, we enclose in the annexure a statement on the matters specified in
the paragraphs 4 and 5 of the said Order.
4. Attention is invited to:
a) Non provision in respect of diminution in the value of investments in
unquoted equity shares of Parsoli UK Ltd., Parsoli Insurance Brokers Ltd.
and Parsoli Capital Markets Ltd to the extent of Rs.923.43 lacs, Rs.18.77
lacs and Rs.64.80 lacs respectively as per Accounting Standards -13
`Accounting for investments'.
b) We are unable to express our opinion on the realisability of loans and
advances aggregating to Rs. 42.00 lacs and the consequential impact that
this would have on the Balance Sheet as at March 31, 2009 and Profit and
Loss Account for the year ended on that date.
c) Debtors, Loans and Advances are subject to reconciliation and
consequential adjustments if any as referred to in Note No. 2(b) of
d) The Company has not amortised its preliminary expenses aggregating to
Rs. 103.15 lacs as required by Accounting Standard - 26 `Accounting of
e) We are unable to express an opinion on the conversion of 29,98,058 fully
convertible debentures into equity shares at a premium of Rs. 262/- per
share (refer Note No. 20 of Schedule 18).
f) SEBI has restrained the Company, its whole time directors and its
associates / group companies from accessing the security market and also
prohibited them from buying, selling or dealing in securities in any manner
till further order as referred to in Note No. 19 of Schedule 18.
Further the Company had incurred loss aggregating to Rs. 4,551.13 lacs
during the year.
In view of above, we are unable to comment whether the Company will be able
to maintain its going concern status in near future.
g) Had the provisions referred to in clause 4 (a and d) above been made,
loss for the year and debit balance of Profit and Loss Account as at March
31, 2009 would have been higher by Rs. 1,110.15 lacs. Effect of our
observations as stated in clause No. 4(b, c, e and f) on the loss for the
year and debit balance of Profit and Loss Account is unascertainable.
5. Subject to our comments given in paragraph 3 and 4 above:
i) 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;
ii) 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;
iii) The Balance Sheet, Profit and Loss Account and Cash Flow Statement
dealt with by this report are in agreement with the books of account;
iv) 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 sub-section (3C) of section 211 of the Companies
Act, 1956 except AS - 13 in respect of Accounting for investments and AS -
26 in respect of Intangible assets.
v) On the basis of written representations received from the directors and
taken on record by the Board of Directors, we report that none of the
directors are disqualified as on March 31, 2009 from being appointed as a
director in terms of clause (g) of sub-section (1) of Section 274 of the
Companies Act, 1956.
6. In our opinion and to the best of our information and according to the
explanations given to us, the Balance Sheet, Profit and Loss Account and
Cash Flow Statement read notes thereon and subject to our comments given in
Para 4 and 5 above, give the information required by the Companies Act,
1956 in the manner so required and give a true and fair view in conformity
with accounting principles generally accepted in India:
a. in the case of the Balance Sheet, of the state of affairs of the Company
as at March 31, 2009;
b. in the case of Profit and Loss Account, of the loss for the year ended
on that date; and
c. in the case of the Cash Flow Statement, of the cash flows for the year
ended on that date.
For and on behalf of
Chandabhoy & Jassoobhoy
Ambesh A. Dave
Membership No.: F 49289
Ahmedabad: November 3, 2009
ANNEXURE TO THE AUDITOR'S REPORT
ANNEXURE REFERRED TO IN PARAGRAPH 3 OF OUR REPORT OF EVEN DATE TO THE
MEMBERS OF PARSOLI CORPORATION LIMITED ON THE ACCOUNTS FOR THE YEAR ENDED
MARCH 31, 2009.
i) a. The Company has maintained proper records showing full particulars
including quantitative details and situation of fixed assets since 2002-03.
Details prior to this period were not available with the Company.
b. We are informed that fixed assets have been physically verified by the
management as at the year end and no material discrepancies have been
noticed in respect of assets so verified during the year. In our opinion
the frequency of verification is reasonable having regard to the size of
the Company and the nature of its assets.
c. During the year the Company has not disposed off any substantial part of
its fixed assets.
ii) a. Securities held as stock in trade have been physically verified by
the management. In our opinion, the frequency of verification is
b. The procedures followed by the management for the physical verification
of stock in trade are, in our opinion, reasonable and adequate in relation
to the size of the Company and the nature of its business.
c. The Company maintain combined records for inventory of its own and of
the clients. Though the same are properly maintained, the same is not
reconciled at the year end.
In view of above, we are unable to comment about the discrepancies between
book stock and actual shares.
iii) a. According to the information and explanations given to us, the
Company has not granted any loan secured or unsecured to companies, firms
or other parties covered in the register maintained under Section 301 of
the Companies Act, 1956. Therefore paragraph 4(iii) (b), (c) and (d) of the
Order are not applicable.
b. The Company has taken unsecured loan aggregating to Rs. 210.95 lacs from
3 parties listed in the register maintained under Section 301 of the
Companies Act, 1956, as listed below:
Name of the Party Balance as on
1. Mr. Zafar Y. Sareshwala 80,67,700
2. Mr. Uves Y. Sareshwala 20,27,700
3. M/s Parsoli Motor Works Pvt. Ltd. 1,10,00,000
c. There are no other stipulations attached to the above loan. In our
opinion the terms and conditions are not prejudicial to the interest of the
iv) In our opinion and according to information and explanations given to
us, there are adequate internal control procedure commensurate with the
size of the company and nature of its business for the purchase of fixed
assets. However internal control is inadequate with regards to purchase and
sale of inventories (refer note no. 2(a) of Schedule 18) and sale of
v) According to the information and explanations given to us, there are no
contracts or arrangements that need to be entered into a register
maintained in pursuance of Section 301 of the Companies Act, 1956.
Therefore paragraph 4(v)(a) and (b) of the Order is not applicable to the
Company for the year under audit.
vi) The Company has not accepted any deposits during the year from the
public within the meaning of the provisions of Section 58A and 58AA of the
Companies Act, 1956 and rules made there under.
vii) In our opinion, the Company has an internal audit system which needs
to be strengthened to be commensurate with the size of the Company and
nature of its business.
viii) According to the information and explanations given to us, the
Central Government has not prescribed maintenance of cost records under
Section 209 (1)(d) of the Companies Act, 1956.
ix) a. According to the information and explanations given to us and the
records of the Company examined by us, the Company is generally regular in
depositing with the appropriate authorities undisputed statutory dues
including provident fund, income tax, service tax and other statutory dues
applicable to it.
b. According to the information and explanations given to us, no undisputed
dues payable in respect of income tax, sales tax, wealth tax, customs duty
and cess were outstanding as at 31st March, 2009 for a period of more than
six months from the date they became payable.
c. According to the information and explanations given to us, there are no
statutory dues outstanding on account of any dispute as of 31st March 2009.
x) Accumulated losses of the Company at the end of financial year are in
excess of 50% of its the net worth as at March 31, 2009. Further, the
Company has incurred cash loss during the current financial year. In view
of our observations stated in the previous year's audit report, we are
unable to express an opinion whether the company has incurred any cash
losses during the immediately preceeding previous year.
xi) The Company has not defaulted in repayment of dues to a financial
institution or bank or debenture holder during the year.
xii) According to the information and explanations given to us, the Company
has not granted loans and advances on the basis of securities by way of
pledge of shares, debentures and other securities.
xiii) The Company is not a chit fund, nidhi, mutual benefit fund or a
society. Clause 4 (xiii) of the Order is, therefore, not applicable to the
xiv) The Company have maintained proper records for dealing or trading in
shares and securities and timely entries have been made therein, however
the same is subject to reconciliation and subsequent adjustments if any.
Apart from above, the shares and securities have been held by the Company
in its own name except to the extent of the exemption granted under Section
49 of the Companies Act, 1956.
xv) According to the information and explanations given to us, the Company
has not given any guarantee for loans taken by others from banks or
xvi) According to the information and explanations given to us and the
records of the Company examined by us, no term loans were obtained during
xvii) On the basis of the records of the Company examined by us and
according to the information and explanations given to us, in our opinion,
the Company has not raised short term funds for long term investments.
xviii) The Company has not made any preferential allotment of shares during
the year to parties or companies covered in the register maintained under
Section 301 of the Companies Act, 1956.
xix) The Company has not issued any debentures during the year.
xx) The Company has not raised any money by public issues during the year.
xxi) According to the information and explanations given to us, no fraud on
or by the Company has been noticed or reported during the year.
For and on Behalf of
Chandabhoy & Jassoobhoy
Ambesh A. Dave
Membership No.: F 49289
Ahmedabad: November 3, 2009.