216 (72- B), Lane # 12
East Azad Nagar, Krishna Nagar
Delhi –110051
Tel: 22093230 Telefax: 22096533
Email: akgarg@vsnl.com
AUDITORS’ REPORT
To the Members of
ESCORTS ASSET MANAGEMENT LIMITED
We have audited the attached Balance Sheet of ESCORTS ASSET MANAGEMENT LIMITED, as at March 31, 2007, the Profit and Loss Account and the Cash Flow Statement for the year ended on that date annexed there to. 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.
We 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 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 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, to the extent applicable, 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 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, the Profit & Loss Account and the Cash Flow Statement dealt with by this report are in agreement with the books of account.
(iv) In our opinion, the Balance Sheet, the Profit & Loss Account and the Cash Flow Statement of the Company dealt with by this report comply with the
(v) Accounting Standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956 to the extent applicable.
(vi) On the basis of written representations received from the directors, as on March 31, 2007 and taken on record by the Board of Directors, we report that none of the directors is disqualified as on March 31, 2007 from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956.
(vii) In our opinion and to the best of our information and according to the explanations given to us, the said accounts, read with significant accounting policies and notes to 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 March 31, 2007 and
(b) In the case of the Profit and Loss Account, of the profit for the year ended on that date.
(c) In the case of the Cash Flow Statement, of the cash flows for the year ended on that date.
For Arun K.Garg & Associates
Chartered Accountants
(Arun K.Garg) Partner
M. No. 84580
Place: New Delhi
Date: 05-09-2007
ANNEXURE REFERRED TO IN PARAGRAPH 3 OF OUR REPORT OF EVEN DATE ON THE ACCOUNTS OF ESCORTS ASSET MANAGEMENT LIMITED FOR THE YEAR ENDED MARCH 31, 2007
(i) (a) The Company has maintained proper records showing full particulars including quantitative details and situation of fixed assets.
(b) All the assets have been physically verified by the management during the year and there is a regular programme of verification which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. No material discrepancies were noticed on such verification.
(c) According to the information and explanations given to us, the Company has not disposed off a substantial part of its fixed assets during the year.
(ii) (a) As explained to us, Investments were physically verified during the year by the management at reasonable intervals.
(b) In our opinion and according to the information and explanations given to us, the procedures of physical verification of Investments followed by the management are reasonable and adequate in relation to the size of the Company and the nature of its business.
(c) On the basis of our examination of the records, we are of the opinion that the Company is maintaining proper records in respect of the transactions and contracts in respect to its dealing in shares, securities, debentures and other Investments and timely entries have been made therein. All the Investments have been held by the Company in its own name. No discrepancies were noticed on verification between the physical stocks and the book records.
(iii)(a) The Company has granted unsecured loan to a company covered in the register maintained under Section 301 of the Companies Act, 1956. The Maximum amount involved during the year and the year-end balance of such loan was Rs.465.48 lacs.
(b) In our opinion the rate of interest charged and other terms and conditions on which unsecured loans have been given, are prima facie not prejudicial to the interest of the Company.
(c) There are no terms are stipulated as regards to repayment of principal amount. However the payment of interest is regular.
(d) There is no overdue amount of principal and interest.
(e) According to the information and explanations given to us, the Company has not taken any loan from companies, firms or other parties covered in register maintained under Section 301 of the Companies Act, 1956. Therefore, the provisions of clause (iii) (e), (f) and (g) of Paragraph 4 of Order are not applicable.
(iv) In our opinion and according to the information and explanations given to us, there are adequate internal control procedures commensurate with the size of the Company and the nature of its business with regard to purchase of Investments/ Stock in Trade and Fixed Assets. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in the internal control system.
(v) (a) In our opinion and according to the information and explanations given to us, 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, as there are no transactions that need to be entered into the register maintained under Section 301 of the Companies Act 1956. Therefore, the provisions of clause 4 (v) (b) of Order are not applicable to the Company.
(vi) In our opinion and according to the information and explanations given to us, the Company has not accepted any deposit from public within the meaning of section 58A, 58AA or any other relevant provisions of the Companies Act, 1956 and the Companies (Acceptance of Deposits) Rules 1975.
(vii) In our opinion and according to the information and explanations given to us the Company has an internal audit system commensurate with the size and nature of its business.
viii) According to information and explanations given to us, the Central Government has not prescribed the maintenance of cost records under Section 209(1) (d) of the Companies Act, 1956.
(ix)(a) According to the records of the Company, the Company is regular in depositing with appropriate authorities undisputed statutory dues including income tax, and other statutory dues applicable to it.
(b) According to the information and explanations given to us, no undisputed amounts payable in respect of income tax, wealth tax and service tax were outstanding, as at March 31, 2007 for a period of more than six months from the date they became payable.
(c) According to the records of the Company, there are no dues of income tax, wealth tax and service tax that have been not deposited on account of any dispute.
(x) There are no accumulated losses of the Company as at March 31, 2006 and it has not incurred any cash losses during the financial year covered by our audit and in the immediately preceding financial year.
(xi) According to the information and explanations given to us, the Company has not taken any loan from financial institution or bank or debenture holders. Therefore, the provisions of clause 4 (xi) of the Order, are not applicable to the Company.
(xii) According to the information and explanations given to us, the Company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities.
(xiii) In our opinion, the Company is not a chit fund or a nidhi or mutual benefit fund/society. Therefore, the provisions of clause 4 (xiii) of the Order, are not applicable to the Company.
(xiv) The Company has maintained proper records of transactions and contracts in respect of trading in securities, debentures and other investments and timely entries have been made therein. All shares, debentures and other investments have been held by the Company in its own name.
(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, the Company has not taken any term loan. Therefore, provisions of clause 4 (xvi) of the Order are not applicable to the Company.
(xvii) According to the information and explanations given to us and on an overall examination of the Balance Sheet of the Company, we report that no funds raised on short term basis have been used for long term investment.
(xviii) According to the information and explanations given to us, 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.
(xix) The Company has not issued any debentures during the year. Therefore, the provisions of clause 4 (xix) of the Order, are not applicable to the Company.
(xx) The Company has not raised any money by public issue during the year under review.
(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 Arun K. Garg & Associates,
Chartered Accountants,
(Arun K. Garg) Partner
M. No. 84580
Place: New Delhi
Date: 05-09-2007