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CLARITY FINANCIAL SERVICES LIMITED.
AUDITORS' REPORT
TO
THE MEMBERS OF CLARITY FINANCIAL SERVICES LIMITED
We have audited the attached Balance Sheet of Clarity Financial Service
Limited as at 31st March, 1998 and the Profit and Loss Account of the
Company for the year ended on that date.
As required by the Manufacturing and Other Companies (Auditor's Report)
Order 1988 issued by the Central Government in terms of section 227(4A) of
the Companies Act 1956, on the basis of the information and explanations
furnished to us and the books and records examined by us in normal course
of audit and to the best of our knowledge and belief we report that:
1. The Company has maintained proper records showing full particulars
including quantitative details and situation of Fixed Assets. The physical
verification of all Fixed Assets, other than leased assets, has been
conducted by the management during the year. No discrepancy was noticed on
such verification.
2. None of the Fixed Assets has been revalued during the year.
3. The Stock in Trade (Shares and Foreign Exchange) have been physically
verified by the management at reasonable intervals and no discrepancies
have been noticed on such verification. The procedure followed by the
Management for the physical verification are, in our opinion, reasonable
and adequate in relation to the size of the Company and the nature of its
business. In our opinion, the valuation of such stocks is fair and proper.
4. The Company has not taken any loans secured or unsecured from companies,
firms or other parties listed in the register maintained pursuant to
provisions of Section 301 of the Companies Act, 1956 or covered by the
companies under the same management within the meaning of Section 370 (1-B)
of the Companies Act.
5. The Company has not given any loans, secured or unsecured to companies,
firms or other parties listed in the register maintained pursuant to
provisions of Section 301 of the companies Act, 1956. or covered by the
companies under the same management within the meaning of Section 370 (1-B)
of the Act.
6. Subject to Note No. B-5 appearing in Schedule No. 16, the parties to
whom Loans & Advances in the nature of loan have been granted by the
Company are generally repaying the principal amount as stipulated wherever
applicable and are also generally regular in the payment of interest,
wherever chargeable.
7. In our opinion and according to explanations given to us. there is
proper internal control procedures commensurate with the size of the
Company and the nature of its business with regard to purchase of foreign
exchange and other assets.
8. As far as we could ascertain, on the basis of selective checking and
according to information and explanation given to us, it appears that the
transactions of purchase of trading stocks and sale of such stocks made in
pursuance to contracts or arrangements entered in the register maintained
under section 301 of the Companies Act, 1956 and aggregating to Rs.
50,000/- or more during the year in respect of each party have been made at
prices which are reasonable having regard to the prevailing market prices
for such goods or services or the prices at which transaction of similar
goods or services have been made with other parties. The company, however,
has transactions with one of the company under the same management. In
respect of such transaction the consideration are prime facie not
prejudicial to the interest of the company.
9. In our opinion and as explained to us the company had not accepted
deposits as defined by section 58A of the Companies Act, 1956 and Companies
(Acceptance of Deposits) Rules, 1975 from the Public.
10. In our opinion and as per explanation given to us there exists no
internal audit system commensurate with the size of the Company and nature
of its business.
11. As explained to us, the Company has been advised that the provision of
Employees Provident Fund and Miscellaneous Provisional Act 1952 and
Employees State Insurance Act are not applicable to the company.
12. According to information and explanation given to us maintenance of
cost records have not been prescribed by the Central Government u/s 209(1)
(d) of the Companies Act, 1956.
13. According to informations and explanations given to us there are no
undisputed amounts payable in respect of Income Tax, Sales Tax, and other
statutory dues outstanding as at 31st March 1998 for a period of more than
six months from the date they became applicable.
14. In terms of our observation we have not come across any expenses
charged to revenue which in our opinion and judgment and to the best of our
knowledge and belief could be regarded as personal expenses, nor has such
expenses been reported to us.
15. Proper records have been maintained by the company in respect of
transactions and contracts for dealing and investment in shares and other
securities and timely entries have been made therein. The investments and
stock of shares are held in the name of the Company or under valid transfer
deeds.
Further to, and in terms of the above, we also report that:
(A) We have obtained all the information and explanations which to the best
of our knowledge and belief were Necessary for the purpose of our audit.
(B) In our opinion. subject to Note no. B-1 and B-4 on Schedule 16, proper
books of account as required by law have been kept by the Company, so far
as appears from our examination of the said books.
(C) The Balance Sheet and the Profit and Loss Account dealt with by this
report are in agreement with the books of account.
(D) Subject to the foregoing observation and also subject to: i) Note no.
B-1 regarding non-provision of diminution in value of the investments
resulting into overstatement of investments to the above extent.
ii) Note no. B-4, regarding non-provision of interest (amount
unascertainable), as appearing in Schedule 16, and read together with other
notes appearing thereon, the said statement of accounts, in our opinion and
to the best of our information and according to the explanations given 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:
(i)in case of Balance Sheet of the state of affairs of the Company as at
31st March 1998; and
(ii)in case of Profit and Loss Account, of the Profit for the year ended on
that date.
FOR PANKAJ KUMAR KEDIA & CO.
Chartered Accountants
Place : Calcutta PANKAJ KUMAR KEDIA
Date : 17th day of August, 1998 Proprietor
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