You are here » Home » Companies » Company Overview » South Asia Financial Exchange Ltd

South Asia Financial Exchange Ltd.

BSE: 511158 Sector: Financials
NSE: N.A. ISIN Code: N.A.
BSE 05:30 | 01 Jan South Asia Financial Exchange Ltd
NSE 05:30 | 01 Jan South Asia Financial Exchange Ltd

South Asia Financial Exchange Ltd. (SOUTHASIANFIN) - Auditors Report

Company auditors report

South Asian Financial Exchange Limited Auditors' Report To the Members of South Asian Financial Exchange Limited 1. We report that we have audited the attached balance Sheet of South Asian Financial Exchange Limited as at March 31, 1998 and the relative Profit and Loss Account for the year ended that date, both of which we have signed under reference to this report. 2. Attention is drawn to the following: 2.1 Note 3 on Schedule 16 regarding the change in the depreciation policy of the Company resulting in a lower depreciation charge to the extent indicated therein. 2.2 Note 4 on Schedule 16 regarding allowability of provision made in respect of non performing assets as a deductible expenditure and the consequential shortfall in tax provision estimated at Rs.42.14 lakhs relating to the financial year 1996-97. 2.3 Note 5 on Schedule 16 regarding non provision for diminution in the value of certain investments to the extent indicated therein. 2.4 No provision has been made in respect of Income tax liability and interest thereon related to the assessment year 1995-96 aggregating Rs.71.89 lakhs included in the amount disclosed under Note 7(c) on Schedule 16, on account of disallowance of depreciation by the concerned authorities in respect of sale and leaseback transactions for which an appeal has been preferred to the Commissioner of Income tax. Further the effect of similar disallowances for the subsequent assessment years cannot be estimated with any degree of accuracy, pending disposal of the appeals. 2.5 Sundry debtors include Rs.60.26 lakhs representing debts assigned in favour of certain parties for which no agreements / documentation etc., are available. In the absence of relevant information we are unable to ascertain the extent to which these balances will be ultimately recovered. 2.6 Current assets and loans and advances include Rs.402.78 lakhs representing amounts receivable on account of sale of investment, consultancy charges, overdue charges, bills purchased etc., against which a provision of Rs.40.28 lakhs exists in the books. From the available information we are unable to ascertain the extent to which these balances will be ultimately realised. 3. In our opinion and to the best of our information and according to the explanations given to us, the Balance Sheet and Profit and Loss Account together with the notes thereon and attached thereto give in the prescribed manner the information required by the Companies Act, 1956 and also subject to the observations set out in paragraphs 2.1 to 2.6 above and paragraph 5.8 below give respectively a true and fair view of the state of the Company's affairs as at March 31, 1998 and its loss for the year ended on that date. 4. Subject to the observations in paragraphs 2.4 to 2.6 above we have obtained all the information and explanations which to the best of our knowledge and belief, were necessary for our audit. In our opinion, proper books of account have been kept as required by law so far as appears from our examination of the books and the abovementioned accounts are in agreement therewith. 5.- As required by the Manufacturing and Other Companies (Auditor's Report) Order, 1988, issued by the Central Government and on the basis of such checks, as we considered appropriate and according to the information and explanations given to us, we further report that: 5.1 The Company has maintained proper records to show full particulars including quantitative details and situation of its fixed assets. The fixed assets of the Company have been physically verified by the management pursuant to a phased programme and no material discrepancies have been noticed on such verification. 5.2 The fixed assets of the Company have not been revalued during the year. 5.3 Except for Stocks on Hire, the legal ownership of which will be transferred to the Hirers on receipt of the final instalment from them, the Company does not have any stocks of raw materials, stores and spares and finished goods and therefore clauses (iii), (iv), (v) and (vi) of paragraph 4(A) of the Manufacturing and Other Companies (Auditor's Report) Order,1988 are not applicable. 5.4 The Company has not taken any loans, secured or unsecured from companies, firms or other parties listed in the register maintained under Section 301 of the Companies Act, 1956 and/ or from the companies under the same management as defined under sub section (1-B) of Section 370 of the Companies Act, 1956. 5.5 In our opinion, the rates of interest and other terms and conditions of unsecured loans granted by the Company to companies listed in the register maintained under Section 301 of the Companies Act, 1956 are not prima facie prejudicial to the interests of the Company. The Company has not granted any loans, secured or unsecured, to companies, under the same management as defined under sub section (1-B) of Section 370 of the Companies Act, 1956. 5.6 Subject to the remarks in paragraph 2.6 above, the parties to whom loans or advances in the nature of loans have been given by the Company are repaying the principal amounts where stipulated and are also regular in payment of interest where applicable in most cases. In those cases where principal amounts and / or interests are not being repaid, reasonable steps are being taken by the Company for recovery of the principal and/ or Interest. 5.7 In our opinion, the internal control procedures of the Company relating to purchase of asset is commensurate with the size of the Company and the nature of in business. 5.8 In the case of public deposits received by the Company the directives issued by Reserve Bank of India and the provisions of Section 58A of the Companies Act, 1956 and the rules framed thereunder have been complied with except in respect of the following: a) non-maintenance of liquid assets. b) non-repayment of principal amounts to the depositors on their due dates. 5.9 In our opinion, the Company's present internal audit system is commensurate with its size and nature of its business. 5.10 The Company has generally been regular in depositing during the year, the Provident Fund and Employees' State Insurance dues with the appropriate authorities. At the year end an amount of Rs.149,894 was in arrears in respect of Provident Fund dues which was subsequently remitted on April 17, 1998. 5.11 At the last day of the financial year, there were no amounts outstanding in respect of undisputed Income Tax, Wealth Tax, Sales Tax, Customs Duty and Excise Duty which were due for more than six months from the date they became payable. 5.12 During the course of our examination of the books of account carried out in accordance with the generally accepted auditing practices, we have not come across any Personal expenses which have been charged to Profit and Loss Account, other than those payable under contractual obligations or in accordance with generally accepted business practice. 5.13 The other provisions of the Manufacturing and Other Companies (Auditor's Report) Order, 1988, are not applicable to the Company, being a finance company S DATTA Partner For and on behalf of Chennai PRICE WATERHOUSE November 30, 1998 Chartered Accountants