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The Board of Directors,



The purpose of this letter is to set out the basis upon which we are to act as auditors, of the
your following branches :-


1.1 As directors of the company, you are responsible for maintaining proper accounting
records and preparing financial statements, which give a true and fair view
and have been prepared in accordance with the Companies Act, 1956. You
are also responsible for making available to us, as and when required, all the
branch’s accounting records and all other records and related information,
including minutes of all management and shareholders’ meetings.

1.2 We have a statutory responsibility to report to the statutory auditors whether in our
opinion the financial statements give a true and fair view of the state of the
company’s affairs and of the profit or loss for the period and whether they
have been properly prepared in accordance with the Companies Act, 1956. In
arriving at our opinion, we are required to consider

(a) Whether proper books of accounts as required by law have been kept
by the branch and where appropriate proper returns adequate for out
audit have been received from branches not visited by us;

(b) Whether the company’s balance sheet and profit and loss account are
in agreement with the books of accounts;

(c) Whether we have obtain all the information and explanations which we
think necessary for the purpose of our audit; and

(d) Whether the profit and loss account and balance sheet complied with
the accounting standards referred to in sub-section (3C) of section 211;

(e) Whether any director is disqualified from being appointed as director

under clause (g) of sub-section (1) of section 274;

In addition, there are certain other matters, which, according to the

circumstances, may need to be dealt with our report.
1.3 We have a professional responsibility to report if the financial statement do not
comply in any material respect with accounting standards and whether
adequate disclosure has been made concerning the departure from
Accounting Standards and whether the departure is such that the financial
statements do not give a true and fair view of the state of affairs of profit or

Our audit will be conducted in accordance with the Auditing Standards issued
by the Auditing Practices Board and will have regard to relevant Auditing
Guidelines. Further, more, it will be conducted in such manner as we consider
necessary to fulfill our responsibility and will include such tests of transactions
and of the existence, ownership and valuation of assets and liabilities as we
consider necessary.

1.4 We shall obtain an understanding of the accounting system in order to assess its
adequacy as a basis for the preparation of the financial statements and to
establish whether proper accounting records have been maintained. We shall
expect to obtain such relevant and reliable evidence, as we consider sufficient
to enable us to draw reasonable conclusion there from. The nature and extent
of our procedures will vary according to our assessment of the company’s
accounting system and, where we wish to place reliance on it, the system of
internal control and way cover any aspect of the business operations.

1.5 As part of our normal audit procedures, we may request you’re to provide written
confirmation of oral representations which we have received from you during
the course of the audit in matters having a material effect on the financial

1.6 In order to assist us with the examination of your financial statements, we shall
request sight of all documents or statements, including the chairman’s
statement and the director’s report, which are due to be issued with the
financial statements.

1.7 It may be that, at the present time, or in the future, the size of your business renders
it uneconomic to create a system of internal control based on segregation of
duties for different functions within each area of the business. In the running
of your company, we acknowledge that the directors may be closely involved
with the control of the company’s transactions. In planning and performing our
audit words, we shall take account of this situation. Further, we may ask
additionally for confirmation in writing that all transactions undertaken by the
company have been properly reflected and recorded in the accounting
records and our audit report on your company’s financial statements may
refer to the confirmation.

1.8 The responsibility for the prevention and detection of fraud error and non-compliance
with low or regulations rests with you. However, we shall endeavor to plan our
audit so that we have a reasonable expectation of detecting material
misstatements in the financial statements of accounting records resulting from
fraud, error or non-compliance with law or regulations. But our examination
should not be relied upon to disclose frauds, errors or instances of non-
compliance, which may exist.

1.9 We shall not be treated as having notice for the purpose of our audit responsibilities,
of information provided to members of our firm other than those engaged on
the audit (e.g. information provided in connection with accounting, taxation
and other services).
1.10 As directors of the company you are responsible for the filing of financial
statements with Registrar of Companies within the time limits laid down for
delivery. We shall endeavor to carry out our audit to ensure that you are put in
a position to carry out this responsibility but if for whatever reason this is not
possible we will advise you accordingly.

We have agreed a fixed rate fee in respect of the audit of branches of
………… for a consolidated fees of Rs. ……./- Above fees is exclusive of
service Tax & any other Govt. charges, which will be charged extra at the
applicable rate.

2.2 For any additional work our fees are computed on the basis or time spent on your
affairs by partner and staff and on the level of skill and responsibility involved
our compliance rates range from Rs.2 500 per hour far a partners time,
Rs.1000 per hour for a associate, Rs.500 per our for an assistant manager
and Rs.100 per hour for an assistant.

2.3 Our changes will be rendered in accordance with our normal terms of business,
which are set out in the attached appendix. Invoices are raised at regular
intervals and will be due for payment on presentation of our fee not.


3.1 If at any time you wold like to discuss with us how our service to you could be
improved or if you are dissatisfied with the service you are receiving please
let us know by telephoning CA. Rajeev Kumar

3.2 We undertake to look into any complaint carefully and promptly and to do all we can
to resolve the matter.


4.1 This agreement, once signed, will remain effective until it is cancelled or superseded
in writing.

4.2 Where it proves necessary to amend the terms of this agreement because of
legislation or other changes will be regarded as supplementary to the terms of
this agreement and will on issue form an integral part thereof and will form the
date of issue be effective until this agreement is cancelled or superseded in

Appointment accepted on behalf of Khandelia & Sharma

CA.Nitin K. Lohia
………………………….. Partner ………………….. Date

Terms of Appointment Agreed on behalf of M/s …………………. and its directors

……………………….. Director ………………….. Date



This short guide is prepared to assist clients in understanding the terms on which we
accept instructions, the basis for calculation and payment of our fees, and or procedures
for handling any complaints about the quality of service provided.

We pride ourselves on the depth of quality of the personal service, which we provide to
clients. We welcome suggestions on how our service can be improved and if you are not
completely satisfied with the service provided we would be grateful that you let us know.


Your main point of contact will, essentially, be the partner in charge of your assignment.
However, in order to facilitate communication and to ensure continuity and speed of
service in the absence of your main point of contact, you can contact us in our office.

When accepting instruction in any matter, we will let you know who is handling the matter
on a day to day basis and who has overall supervision of the file. Sometimes this will not
be the same person with whom you had first contact, the usual reason being that
handling of a matter and the overall supervision of it will be provided by the appropriate

In dealing with your work, we always try to handle it as quickly and effectively as possible
and we will notify you at reasonable intervals of progress. We will also keep you
informed of any changes in the personnel dealing with the matter.

Our offices are open from 9.30 a.m. to 5.30 p.m. each weekday and all calls and
correspondence are attended too as quickly as possible. Whilst we will make every effort
to see clients when they call in person, this is often not possible if an appointment has
been arranged in advance, as the person you wish to see may be out of the office on
business or engaged with another client.


2.1 General Information

Our fees are based on the recommendations of the Institute of Chartered

Accountants in India and will take account of the degree of responsibility and
skill involved and the time necessarily occupied on work carried out. Where it
is necessary for us to perform word outside the responsibilities set out in our
letter of engagement sent at the start of a matter, this will involve additional
time and fees depending upon the amount of time which has been spent in
dealing with the matter and the seniority of the personnel involved.

Our rates are renewed from time to time to reflect changes in our employment
overhead costs.

Service Tax is added to our charges and taxable disbursements at the rate(s)
applicable at time to time when work is done or the disbursement incurred.
2.2 Disbursements

In many cases it is necessary for us to incur disbursements on behalf (such

as company searches) and it is our practice to ask that such disbursements
be paid in advance although whenever possible, we will try to give an
estimate of any likely disbursements at the time of taking instructions and to
give reasonable notice of where they are likely to be incurred.

2.3 Interim Accounts

We recognise that many of our clients like to have some idea of the amount of
work that is being done on their behalf as a mater progresses and to be able
to budget for the professional costs. Accordingly, it is our practice to deliver
interim accounts regularly.

2.4 Payment of fees and interest

If you disagree on dispute any fee you must raise this with us in writing within
seven days of the date of the fee. If you do not do so you shall be deemed to
accept that the amount stated on the fee is due from you in full.

All fees must be paid in full on presentation of the date of the fees. Overdue
fees shall carry interest at the rate of 1.5% per calender month (a part of a
month being treated as a full month for the purpose of calculating interest)