Vishal Exports Overseas Ltd Auditor Reports

VISHAL EXPORTS OVERSEAS LIMITED ANNUAL REPORT 2008-2009 AUDITORS REPORT To The Members of VISHAL EXPORTS OVERSEAS LIMITED We have audited the attached Balance Sheet of VISHAL EXPORTS OVERSEAS LIMITED as at 30th September, 2009 and the related Profit and Loss Account and Cash Flow Statement for the year ended on that date, which we have signed under reference to this report (together referred to as financial statement). These financial statements are the responsibility of the Companys Management. Our responsibility is to express an opinion on these financial statements based on our audit. 1. 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 misstatement. 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. 2. As required by the Companies (Auditors Report) Order, 2003 (CARO) and Companies (Auditors Report) (Amendment) Order 2004 issued by the Central Government of India in terms of sub-section (4A) of Section 227 of The Companies Act, 1956 of India and on the basis of such checks of the books and records as we considered appropriate and according to the information and explanations given to us during the course of audit, we set out in the Annexure, a statement on the matters specified in paragraphs 4 and 5 of the said Order to the extent applicable. 3. Further to our comments in the Annexure referred in paragraph (2) above, we report that: a) We have obtained the information and explanations as provided by the management, which to the best of our knowledge and belief, were partly adequate for the purpose of our audit; b) In our opinion, proper Books of Accounts as required by law, have been kept by the Company so far as appears from our examination of those Books of the Company; 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 of the Company; d) In our opinion, the Balance Sheet and Profit and Loss Account and Cash Flow Statement dealt with by this report, except in some cases, generally comply with the Accounting Standards, referred to in sub-section (3C) of section 211 of the Companies Act, 1956, to the extent applicable. e) On the basis of representations made by the Directors of the Company and taken on record by the Board of Directors of the Company, we report that none of the Directors is disqualified as on 30th September, 2009 from being appointed as a Director of the Company 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, subject to: (i) Note No. 2 of Schedule 18 Notes on Accounts towards going concern. (ii) Note No. 3 of Schedule 18 Notes on Accounts towards non provision of interest on borrowing. (iii) Note No. 4 of Schedule 18 Notes on Accounts towards non-reflection of fixed Assets sold by the bank and non provision of depreciation on fixed assets. (iv) Note No. 6 of Schedule 18 Notes on Accounts the said accounts, read together with significant Accounting Policies and Notes thereon give the information required by the Companies Act, 1956 in the manner so required. Subject to above, i) in the case of Balance Sheet, of the state of the affairs of the Company as at 30th September, 2009, ii) in the 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 flow for the year ended on that date. For H.J. Parikh & Co, Chartered Accountants Place: Ahmedabad Himesh J. Parikh Date : 29th January,2009 Proprietor ANNEXURE TO THE AUDITORS REPORT: (Referred to in Paragraph (2) of our Report of even date): (i) (a) The Company has maintained records showing particulars of fixed assets. (b) As informed by the company to us, some of the fixed assets which are in possession of the Company have been physically verified by the Management at reasonable intervals during the Period. In our opinion, the frequency of physical verification of said fixed assets is reasonable having regard to the size of the operations of the company. As informed to us, no material discrepancies were noticed on such verification. (c) During the year under audit, we are informed by the management that the fixed assets charged to the banks have been sold under Securitization Act 2002. We are also informed by the management that the said banks have not provided details as regard the sale of such fixed assets. (Refer note No. 4 of Schedule 18 Notes on Accounts). (d) Other than as referred above, the company has sold fixed assets of Rs. NIL (P.Y. Rs.4579.84 lacs).and depreciation provided till the date of sale of Rs. NIL Lac (P.Y. Rs.737.19 lacs) during the year under review. (ii) As there are no inventories, this clause is not applicable. (iii) (a) In our opinion and according to the information and explanation given to us, the company had granted unsecured interest free loans to a company covered under section 301 of the Companies Act, 1956. The maximum amount of loans granted during the year was Rs. 290.37 Lacs (P.Y year Rs.185.25 Lacs) and the year end balance of Loans granted to such parties was Rs.290.37 (P.Y. Rs. 185.25 Lacs). (b) As informed by the Company, loan granted to a Company is on interest free basis hence we are of opinion that this clause is not applicable. (c) As informed by the Company, loan granted to a Company is not having any fixed repayment terms and hence we are of the opinion that this clause is not applicable. (d) In our opinion and according to the information and explanation given to us, there are no companies, firms etc. listed under Register maintained a/5 301 of the Companies Act, 1956 where the overdue amount is more than one Lac rupees. (e) The Company has taken unsecured loan from a parties and companies covered in the register maintained under section 301 of the Companies Act,1956.The maximum amount involved during the year was Rs.4506.55 Lacs (P.Y. Rs.4213.21 Lacs) and at the year end balance of loans taken from such parties and companies was Rs.4506.55 Lacs (P.Y. Rs. 4213.21 Lacs). (f) In our opinion and according to the information and explanations given to us, the rate of interest and other terms and conditions on which loans have been taken from Company covered in the register maintained under section 301 of the Companies Act,1956 are not, prima facie, prejudicial to the interest of the Company. (g) As informed by the Company, loan granted by parties and companies are on interest free basis hence we are of opinion that this clause is not applicable. (h) As informed by the Company, loan granted by companies/parties are not having any fixed repayment terms and hence we are of the opinion that this clause is not applicable. (iv) In our opinion and according to information and explanations given to us, during the course of our audit there are adequate internal control procedures commensurate with the size of the Company and the nature of its business. and for the sale of goods. During the course of our audit, we have not observed any continuing failure to correct major weakness in such internal controls. (v) (a) To the best of our knowledge and belief and according to the information and explanations given to us, we are of the opinion that the contracts or arrangements generally entered into the register required to be maintained under section 301 of the Companies Act,1956 have been so entered. (b) In our opinion and according to the information and explanations given to us, transactions made in pursuance of contracts or arrangement entered in the register maintained under section 301 of the Companies Act,1956 are reasonable except in case of some transactions which are technical in nature for which prevailing market prices at the relevant time were not available. We have relied on information and explanations made available to us. (vi) In our opinion and according to the information and explanations given to us, the Company has not accepted deposits from the public during the period covered by our audit report. To the best of our knowledge and according to the information and explanations given to us, no order has been passed by the Company Law Board or National Company Law Tribunal or Reserve Bank of India or any Court or any other Tribunal. (vii) The company has no internal audit system during the year under review. (viii) The Central Government has prescribed maintenance of cost records under section 209(1)(d) of the Companies Act, 1956 in respect of generation of electricity for Wind Power and in our opinion, the Company has been made and maintained proper cost records in connection therewith. (ix) (a) According to information and explanations given to us, the company is not regular in depositing with Appropriate Authorities undisputed statutory dues including Income Tax, Wealth Tax Provident fund, Employees State Insurance, Sales tax, Excise-duty, Custom Duty and other material statutory dues applicable to it. (b) According to the information and explanations given to us, there were no undisputed amounts payable in respect of dues as referred to (ix) (a) above, which were outstanding as on 30th September, 2009 for a period of more than six months from the date they became payable except the following: Fringe Benefit Tax Rs.2.05 Lac. (c) According to information and explanations given to us, details of dues of Income Tax, Sales Tax, and custom Duty which have not been deposited on account of any dispute is given below: Name of Statute Nature of Dues Amt. (Rs. In lacs) Forum where dispute is pending Gujarat Sales Sales Tax dues 71.90 Sales Tax Tribunal Tax Act 1969 of earlier years Gujarat Sales Sales Tax dues 5.37 Sales Tax Tribunal Tax Act 1969 of Earlier years (Interest & Penalty) Custom and Valuation and 50.50 Custom Authorities Excise Act other aspects 1944 (x) The company has accumulated losses at the end of the financial Period and has incurred cash losses in the financial Period under report. (xi) In our opinion and according to the information and explanations given to us, the company has defaulted during the Period, in repayment of dues in respect of Term Loan to financial institution and/or bank(s) and has been designated as Non Performing Assets. During the period under review the Companys working capital borrowings have been designated as non performing assets. (xii) In our opinion the company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities. (xiii) The company is not a chitfund, nidhi/mutual benefit fund/society and therefore the provisions of clause 4(xiii) of the Companies (Auditors Report) Order,2003 are not applicable to the company. (xiv) According to the information and explanations given to us, the company does not deal or trade in shares, securities or debentures. Proper records have been maintained of the transactions and contracts in respect of the investments made by the Company. The investments are held by the Company in its own name. (xv) The Company has given certain guarantees on behalf of its group & associate companies as mentioned in Notes on Accounts no. 17 of schedule 18 Notes on Accounts, to the financial statements. In our opinion based on the information and explanations given to us, the terms and conditions of the guarantees are not prejudicial to the interest of the company. (xvi) In our opinion and according to the information and explanations given to us, no Term Loans is raised during the Period. (xvii) In our opinion and according to the information and explanations given to us, and according to Cash flow statement, on an overall examinations of the Balance Sheet of the Company we report that funds raised on short term basis have been utilized for long term investment and vice-versa. (xviii) 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 during the Period. (xix) The Company has not issued any secured debentures during the period covered by the report. Accordingly, the provisions of clause 4 (xix) of the Companies (Auditors Report) Order,2003 are not applicable to the company. (xx) During the period covered by our audit report, the Company has not raised any money by public issue. (xxi) To the best of our knowledge and belief 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 the year ended 30th September 2009. For H.J. Parikh & Co. Chartered Accountants Place: Ahmedabad Himesh J. Parikh Date : 29th January,2009 Proprietor