GOOD VALUE IRRIGATION LIMITED
ANNUAL REPORT 2007-2008
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
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
(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
(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,
(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
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
(b) The management during the year has not physically verified the fixed
(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
(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
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
(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
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,
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
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
Place : Mumbai Partner
Dated : 14.11.2007 Membership No. 4047