1. We have Audited the accompanying Balance Sheet of BLUE DIAMOND -
SECURITIES & FINANCE LIMITED at 31st March, 2002 and the statement of
Profit and Loss Account far the year ended, prepared in conformity
with accounting principles generally accepted in India. These
financial statements are the responsibility of the Companys
management. Our responsibility is to express on opinion on these
financial statements based on our audit.
2. We conducted our audit in accordance with auditing standards
generally accepted in India. These 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.
3. We have obtained all the information and explanations which, to the
best of our knowledge and belief, were necessary for the purpose of our
4. In our opinion, and to the best of our information and according to
the explanations given to us, the accompanying financial statements ;
a) give the information required by the Companies Act, 1956, in the
manner so required; and
b) give a true and fair view of the state of affairs of the Company at
March, 31, 2002 and of its Profit and Loss account for the year then
ended, in conformity with the accounting principles accepted in India.
Further, the Balance Sheet and the statement of profit and Loss comply
with the accounting standards referred to in Section 211(3C) of the
Act and are in agreement with the books of account. In our opinion,
the Company has maintained proper books of account as required by law
in so far as appears from our examinations of those books.
5. On the basis of information and explanations given to us and
representations obtained by the Company and taken on record by the
Board of Directors, as on March, 31, 2002 none of the directors are
disqualified from being appointed as directors in terms of Section
274(1)(g) of the Act.
6. As required by the Manufacturing and other Companies (Auditors
Report) order, 1998 issued by the Central Government of India in terms
of Section 217(4A) of the Act, we enclose in the Annexure a statement
on the matters specified in paragraphs 4 and 5 of the said order.
ANNEXURE TO THE AUDITORS REPORT OF BLUE DIAMOND SECURITIES & FINANCE
(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 fixed assets. The fixed
assets of the company have been physically verified by the management
during the year which in our opinion is reasonable, having regard to
the size of the Company and the nature of its assets. According to the
information furnished to us no material discrepancies have been noticed
on such verification.
2. None of the fixed assets of the company have been revalued during
3. The procedure of physical verification of stock followed by the
management are reasonable and adequate in relation to the size of the
company and the nature of its business.
4. We, on the basis of the examinations of stock are satisfied, that
such valuation is fair and proper in accordance with the normally
accepted accounting principles.
5. The company has taken unsecured loans, from the parties listed in
the register maintained under section 301 of the Companies Act 1956.
However, the rate of interest and the terms and condition are not prima
facie prejudicial to the interest of the company. In terms of sub
section (6) of section 370 of the Companies Act, 1956.
6. As informed to us, the party to whom loans and advances in the
nature of loans given, in absence of specified stipulations as regards
to repayment the principal amount and interest thereon are repayable on
7. In our opinion and according to the information given to us internal
control procedure is commensurate with the size of the company and the
nature of its business with regard to the purchase and sale of shares.
8. The Company is dealing in shares and proper records have been
maintained and timely entries have been made therein of the transaction
and contracts. The Company is holding the shares in its own name.
9. The Company has not accepted any deposits from public within the
meaning of Section 58A of the Companies Act, 1956 and rules made
10. No deduction on account of Provident Fund has been made during the
year as the Provident Fund Act is not applicable to the Company.
11. According to the information given to us there were no undisputed
amount payable in respect of income tax, wealth tax, sales tax, custom
duty and excise duty which have remained outstanding as at 31st March
2002 for a period of more than six months from the date on which they
12. During the course of our examination of the books of accounts
carried out in accordance with general accepted auditing practice, we
have not come across any personal expenses which have been charged to
Profit and Loss Account not have been informed of such case by the
13. The other provisions of the order are not applicable in case of
K. M. Gulati & Co.
Dated: 2nd day of September, 2002 Proprietor