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Annexure to the Auditor’s Report
(Referred to in paragraph 3 of our report of even date)
(i)
(ii)
(iii)
Having regard to the nature of the Company’s business/activities, clauses (v), (vi), (x), (xii), (xiii), (xiv),
(xix) and (xx) of CARO are not applicable to the Company.
In respect of its fixed assets:
(a)
(b)
(c)
The Company is in the process of re-compiling / updating its fixed asset register with a view
towards reflecting full particulars including description, quantitative details and location / situation
of its fixed assets.
Some of the fixed assets have been physically verified during the period by the Management in
accordance with a programme of verification, which in our opinion provides for physical verification
of all the fixed assets at reasonable intervals. In view of the fact that the fixed asset register is in
the process of re-compilation / updating, management has informed that discrepancies, if any,
arising between the assets verified and the books and records would be dealt with in the year in
which such re-compilation of the register is completed
The fixed assets disposed off during the period, in our opinion, do not constitute a substantial part
of the fixed assets of the Company and such disposal has, in our opinion, not affected the going
concern status of the Company.
In respect of its inventory:
(a)
(b)
(c)
As explained to us, the inventories were physically verified during the period by the Management
at reasonable intervals, except the system of documentation for such verification needs to be
strengthened.
In our opinion and according to the information and explanations given to us, the procedures of
physical verification of inventories followed by the management were reasonable and adequate
in relation to the size of the Company and the nature of its business.
In our opinion and according to the information and explanations given to us, the Company
has maintained proper records of its inventories and no material discrepancies were noticed on
physical verification.
(iv) According to the information and explanations given to us, the Company has neither granted nor
taken any loans, secured or unsecured, to/from companies, firms or other parties listed in the Register
maintained under Section 301 of the Companies Act, 1956.
(v)
In our opinion and according to the information and explanations given to us, additional strengthening
of the internal control procedures with regard to purchases of inventory and fixed assets and for the
sale of goods is recommended so as to be commensurate with the current size of the Company and
nature of its business. However, in our opinion management is taking reasonable steps to correct the
said weaknesses and we have not observed any other continuing failure to correct major weaknesses
in internal controls.
(vi) In our opinion, the internal audit functions carried out during the period by firms of Chartered
Accountants appointed by the Management have been commensurate with the size of the Company
and the nature of its business.
(vii) We have broadly reviewed the books of account maintained by the Company pursuant to the rules
made by the Central Government for the maintenance of cost records under Section 209(1) (d) of the
Companies Act, 1956 in respect of manufacture of steel products and are of the opinion that prima
facie the prescribed accounts and records have been made and maintained. We have, however, not
made a detailed examination of the records with a view to determining whether they are accurate or
complete.
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