ONIDA FINANCE LIMITED
ANNUAL REPORT 2001-2002
THE MEMBERS OF
ONIDA FINANCE LIMITED
We have audited the attached Balance Sheet of Onida Finance Limited as at
31st March, 2002 and Profit and Loss Account of the Company for the year
ended on the date annexed thereto. These financial statements are the
responsibility of the Company's Management. Our responisbility is to
express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with auditing standards generally acc
-epted in India. Those Standard 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.
1. As required by the Manufacturing and other Companies (Auditors Report)
Order, 1988 issued by the Company Law Board in terms of Sections 227 (4A)
of the Companies Act, 1956 and on the basis of such checks as we considered
appropriate and according to the information and explanations given to us
we enclose in the Annexure a statement of the matters specified in Para-
graphs 4 & 5 of the said order to the extent applicable.
2. Further to our comments in the annexure referred in paragraph 1 above,
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 books of account as required by law have been kept by the
Company so far as appears from our examination of the books;
c) the Balance Sheet and Profit and Loss Account as referred to in this
report are in agreement with the books of account;
d) On the basis of the written representation received from the directors
of the Company as at 31.03.2002 and taken on record by the board of direc-
tors we report that no director is disqualified from being appointed as a
director of the Company under clause (g) of sub-section (1) of section 274
of the Companies Act, 1956 except Mr. K.D.Dwivedi, Director of the Company.
e) In our opinion, the Profit and Losss Account and balance sheet comply
with the mandatory accounting standards referred to in sub-section (3C) of
Section 211 of the Companies Act, 1956.
f) We report that had the observations made by us in note no. 3, 4, 5 & 9
given in Schedule 15 been considered, the loss for the year would have been
Rs. (4,60,92,375/-) (as against the reported loss of Rs. 1,72,72,657/-)
accumulated losses would have been Rs. 25,79,85,147/- (as against the
reported figure of Rs. 22,91,65,429/-). We further report that impact of
our observations given is note no. 5 in schedule 15 in respect of
confirmation of balances can not be ascertained.
g) In our opinion and the best of our information and according to the expl
-anations given to us, the accounts read with the accounting policies and
notes attached there to or appearing there on, subject to our comments on
notes no. 3 regarding debentures, no. 4(b) regarding value of secured loan
as the securities pledged/hypothecated are diminished substantially for
which amount is not ascertainable no. 4(c) regarding valuation of long term
investment where we are unable to comment at this stage whether it is a
permanent fall in the value of the investment no. 9 regarding non provision
of interest amounting to Rs 2,88,19,718 and the loss for the year is lower
to that extent, no. 11 regarding non provision of debentures redemption
reserves, no. 18 regarding compliance of RBI directives, no. 19, regarding
non-adjustments of fixed assets and no. 20 regarding deferred tax gives the
information required by the Companies Act, 1956 in the manner so required
and give a true and fair view
i. In the case of the Balance Sheet, of the state of affairs of the Company
as at 31st March, 2002.
ii. In the case of the Profit and Loss Account of the Loss for the year
ended on that date.
FOR J.L. GARG & CO.
Place : New Delhi
Dated : 16-07-2002
ANNEXURE TO THE AUDITORS REPORT
(Referred to in Paragraph 1 of our Report of Even Date)
1. The Company has maintained proper records showing full particulars
including quantitative details and situation of its fixed assets.During the
year no physical verification of the assets was done by the management,
hence we are unable to comment on any discrepancies between books records
and physical verification. Further confirmation certificates from the
lessee regarding existence and condition of such assets have also not been
2. None of the fixed assets has been revalued during the year.
3. The Stocks of shares have been physically verified by the management
during the year.
4. In our opinion and according to the information and explanations given
to us, the procedures of physical verification of stock of shares followed
by the management is reasonable and adequate in relation to the size of
company and the nature of its business.
5. According to information and explanations given to us no discrepanceis
was noticed on physical verification of stocks as compare to the stock
6. In our opinion and on the basis of our examination of the stock records,
the valuation is fair and proper in accordance with the normally accepted
accounting principles and is on the same basis as in the previous year.
7. The company has not taken loans from the companies,firms or other
parties listed in the register maintained under Section 301 of the
Companies Act, 1956 or from companies under the same management within the
meaning of Section 370 (1B) of the Companies Act, 1956.
8. No Loans and advances in the nature of loans have been given by the
companies, firms and other parties listed in the register maintained under
Section 301 of the Companies Act, 1956 and/or to the Companies under the
same management as defined under Section 370 (1B) of companies Act, 1956
except to subsidiries where there is no stipulation for repayment of inte-
rest and principal.
9. In respect of Loans and advances given to the employees and other cor-
porate bodies we are unable to comment on recovery of principal and
recovery of interest as there is no stipulation in this regard.
10. 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 for the purchase of
plant and machinery, equipment and other assets including shares and deben-
tures and, for the sale of shares and debentures. There is no transactions
of purchase of stores and raw materials including components.
11. In our opinion and according to the information and explanations given
to us, the transactions for the purchase and sales of goods, materials and
services made in pursuance of contracts and arrangements entered in the
register maintained under section 301 and aggregating during the year to
Rs. 50,000 or more in respect of each party, have been made at prices,
which in our opinion, are reasonable having regard to prevailing market
prices for such goods, materials or services or the prices at which similar
transactions have been made with other parties, and the company's business
needs and exigencies.
12. In our opinion and according to the information and explanations given
to us, the company has generally complied with the directives issued by the
Reserve Bank of India and the provisions of section 58A of the Companies
Act 1956 to the extent applicable with regard to the deposits accepted form
the public except that
(a)The Reserve Bank of India its letter no. DNBS.ND.N0.306126.96.36.19956/98-99
dt. 14.12.98 rejected the application of the Company for registration for
carrying on its existing business as a non-banking finance company, in
exercise of its powers conferred under section 45-1A of RBI Act, 1934.
(b) Pursuant to the directives issued by RBI in October, 1998, the company
stopped acceptance of fresh public deposits. Out of total principal
outstanding amounts of Fixed Deposits from public of Rs. 1,13,77,648/- as
on 31.03.2002 (Rs. 3,53,42,873 as on 31.03.2001). The aforesaid amount
excludes an interest of Rs. 14,80,000(previous Rs. 44,66,000/-) not
provided in the books of account.
(c) The company could not maintain SLR requirement as envisaged as per the
provisions of RBI directives.
(d) The Company Law Board in exercise of the powers conferred by section
450A of the Reserve Bank of India Act, 1934 passed an order on 13.10.98.
which was not complied by the Company.
(e) The Company has not filed required periodic returns with the Reserve
Bank of India.
(f) The Deposits due thereon aggregating to Rs. 1,13,77,648/- principal,
claimed and remained not paid as at 31st March, 2002. The aforesaid amount
excludes an interest of Rs. 14,80,000/- (Rs. 44,66,000/-) not provided in
the books of account. The Company has not complied with the prescribed
liquidity requirement as required in paragraph 6(1) of the non banking fina
-ncial companies acceptance of public deposits (Reserve Bank) Directions,
13. The Company's internal audit system need to be further strengthened
with the size and nature of its business.
14.According to the records of company, Provident Fund and Employee's State
Insurance dues have generally been regularly deposited during the year with
15.According to the information and explanations given to us, no undisputed
amounts payable in respect of Income Tax, Wealth Tax, Sale 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, except tax deducted
16. According to the information and explanations given to us and on the
basis of books of account of the company examined by us, no personal
expenses have been charged to revenue account, other than those payable
under contractual obligations or in accordance with generally accepted
16. The Company is not a Sick Industrial Company within the meaning of
clause (O) of Sub-Section (1) of Section 3 of the Sick Industrial companies
(Special provisions), Act, 1985.
17. The Company has not granted any loans and advances on the basis of sec-
urity by way of pledge of shares, debentures and other similar securities.
18. In our opinion and according to the information and explanations given
to us, the Company has maintained proper records of transactions and con-
tracts as to dealings in shares, securities, debentures and other
investments and timely entries have been made therein. The same have been
held by the Company in its own name except to the extent of exemption gran-
ted under Section 49 of the Companies Act, 1956 or in the process of
transfer to its name.
FOR J.L. GARG & CO.
Place : New Delhi
Date : 16-07-2002