| We have audited the attached Balance Sheet of Elcon Finlease and
Industries Limited, 304, Kaling, Behind Bata, Ashram Road, Ahmedabad -
380 009 as at 31st March, 2002 and the Profit & Loss Account for the
year ended on that date annexed thereto. 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.
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 management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for
our opinion.
As required by the Manufacturing and Other Companies (Auditors Report)
Order, 1988 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 a statement on the matters specified in paragraphs 4
and 5 of the said Order.
Further to our comments in the Annexure referred to above, we report
that:
(i) We have obtained all the information & explanations, which to the
best of our knowledge and belief were necessary for the purpose of
audit;
(ii) In our opinion, proper books of account as required by law have
been kept by the company so far as appears from examination of such
books;
(iii) The Balance Sheet and Profit & Loss Account dealt with by this
report are in agreement with the books of account;
(iv) In our opinion and accordingto the information & explanations
made available to us, the Balance Sheet and Profit & Loss Account dealt
with by this report comply with the Accounting Standards referred to in
sub-section (3C) of section 211 of the Companies Act, 1956, as
applicable;
(v) According to the information & explanations made available to us
and on the basis of written representations received from the
directors, as at 31st March, 2002, and taken on record by the Board of
Directors, we report that none of the directors is disqualified as at
31st March 2002, from being appointed as a director in terms of clause
(g) of sub section (1) of section 274 of the Companies Act, 1956;
(vi) In our opinion and to the best of our information and according to
the explanations made available to us, the said accounts 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:
(a) in the case of the Balance Sheet, of the state of affairs of the
company as at 31st March, 2002; and
(b) in the case of the Profit & Loss Account, of the loss of the
company for the year ended on that date.
For H K Maheshwari Associates
Chartered Accountants
H K Maheshwari
Proprietor
Ahmedabad
August 8, 2002
Annexure to the Auditors Report
Referred to in paragraph 1 of our report of even date
1. According to the information & explanations made available to us,
the company has generally maintained proper records showing full
particulars including quantitative details and situation of fixed
assets. We were informed that the fixed assets of the company, other
than those leased out have been physically verified by the management
during the year at reasonable intervals. The company has practice of
having the leased assets inspected by the field staff and as such the
programme of verification of fixed assets was reasonable having regard
to the size of the company and nature of its assets. No material
discrepancies were noticed on such verification.
2. None of the fixed assets have been revalued during the year.
3. In our opinion, the terms and conditions on which interest free
loans were taken from parties listed in the register maintained under
section 301 of the Companies Act, 1956, were not, prirna facie,
prejudicial to the interest of the company. Further, in terms of
section 370(6) of the Companies Act, 1956, provisions of the section
are not applicable after the commencement of the Companies (Amendment)
Act, 1999.
4. Company has not granted any loan to companies, firms or other
parties listed in the register maintained under section 301 of the
Companies Act, 1956. Further, in terms of section 370(6) of the
Companies Act, 1956, provisions of the section are not applicable after
the commencement of the Companies (Amendment) Act, 1999.
5. In respect of loans and advances in the nature of loans given by
the company to parties including employees are repaying principal
amount as stipulated and are also regular in the payment of interest,
wherever applicable,
6. In our opinion and according to the information & explanations made
available to us, there were adequate internal control procedures
commensurate with the size of the company and the nature of its
business with regard to purchase and sale of assets.
7. In our opinion and according to the information & explanations made
available to us, the transactions made with different parties for
purchase and sale of assets and services made in pursuance of contracts
and arrangements entered in the register maintained under section 301
of the Companies Act, 19.56, and aggregating during the year to rupees
50,000 or more in respect of each party, have been made at prices which
were reasonable having regard to prevailing market prices.
8. According to the information & explanations made available to us,
company has not accepted any deposit from public.
9. In our opinion, company has an internal audit system commensurate
with the size and nature of its business.
10. To the best of our knowledge Central Government has not prescribed
maintenance of cost records under section 209(1)(d) of the Companies
Act, 1956, for the company.
11. According to the information & explanations made available to us,
the provisions of Employees Provident Fund (Misc.Provisions) Act,
1952, and Employees State Insurance Act, 1948, were not applicable to
the company.
12. According to the information & explanations made available to us,
no undisputed amounts payable in respect of income tax, sales tax,
wealth tax, custom duty and excise duty were outstanding as at 31st
March, 2002, for a period of more than six months from the date they
became payable.
13. According to the information & explanations made available to us,
no personal expenses of employees or directors have been charged to
revenue account, other than those payable under contractual obligations
or in accordance with generally accepted business practice.
14. Companys activities are such that the question of material and
stores issued and allocation of material and man-hours to the job and
consequently a system to provide for such allocation and authorisation
does not arise.
15. According to the information & explanations made available to us,
the company has not granted any loan or advance against security by way
of pledge of shares, debentures and other similar securities.
16. According to the information & explanations made available to us
and to the best of our knowledge, the provisions of any special statute
applicable to chit fund, nidhi or mutual benefit society were not
applicable to the company as the company is not engaged in chit fund,
nidhi or mutual benefit societys activities.
17. According to the information & explanations made available to us,
the company has maintained proper records regarding transactions in
shares.
18. Nature of companys activities is such that requirements of para
number (iii), (iv), (v), (vi), (xii), (xiv) and (xvi) of clause A of
the paragraph 4 of the MAOCARO are not applicable to the company.
For H K Maheshwari Associates
Chartered Accountants
H K Maheshwari
Proprietor
Ahmedabad
August 8, 2002 | 