Madan Leasing Co. Ltd. is a non-banking leasing company that leases industrial machinery and consumer durables. During the current year, Madan…

Madan Leasing Co. Ltd. is a non-banking leasing company that leases industrial machinery and consumer durables. During the current year, Madan Leasing entered into a lease agreement with Sulekha Engineering Pvt. Ltd. for a Textile machine valued at 10 Crore. Facts gathered by the audit team from the lease files are: (i) The company's object clause in the memorandum authorises leasing of capital goods but is silent about undertaking financing activities. (ii) A credit appraisal file exists for Sulekha Engineering containing their past credit record, capitalisation details and proposed collateral. (iii) The lease agreement describes lessor, lessee, equipment and location. It states that the equipment must not be removed from the location except for repairs and contains timelines for payments and late charges. It does not expressly state who will bear the cost of returning the equipment on termination. (iv) The lease proposal form from Sulekha Engineering is present in the file. (v) The original invoice for the Textile machine is filed in the lease folder. (vi) There is no acceptance letter from the lessee on file confirming the equipment was received in order. (vii) A Board resolution authorising the execution of the lease on behalf of Sulekha Engineering is included. (viii) Copies of the insurance policy for the machine are not found in the lessor's records. Based on above, answer the following MCQs (6-9):