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Parsoli Corporation Ltd.

BSE: 530071 Sector: Financials
NSE: N.A. ISIN Code: INE905D01016
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Parsoli Corporation Ltd. (PARSOLICORPN) - Auditors Report

Company auditors report

PARSOLI CORPORATION LIMITED ANNUAL REPORT 2008-2009 AUDITORS' REPORT The Members, 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 Schedule 18. d) The Company has not amortised its preliminary expenses aggregating to Rs. 103.15 lacs as required by Accounting Standard - 26 `Accounting of Intangible Assets'. 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 Chartered Accountants Ambesh A. Dave Partner 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 reasonable. 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 31.03.2009 (Rs.) 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 Total 2,10,95,400 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 Company. 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 services. 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 Company. 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 financial institutions. 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 the year. 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 Chartered Accountants Ambesh A. Dave Partner Membership No.: F 49289 Ahmedabad: November 3, 2009.