Annual Report-FY 2011-12 - Timex Group India

Annexure referred to in para 3 of the Auditors’ report to the members of Timex Group India Limited on the financialstatements for the year ended 31 March 2012(i) (a) The Company has maintained proper records showing full particulars, including quantitative details and situation offixed assets.(b) As explained to us, the Company has a regular programme of physical verification of its fixed assets by which allfixed assets are verified in a phased manner over a period of three years. According to this programme, the Companyhas verified certain fixed assets at its factory at Baddi and its corporate office during the year. In our opinion, thisperiodicity of physical verification is reasonable having regard to the size of the Company and the nature of itsassets. As informed to us, no material discrepancies were noticed on such verification. For assets lying with thirdparties at the year-end, written confirmations have been obtained.(c) In our opinion, and according to information and explanations given to us, fixed assets disposed off during the yearare not substantial and therefore, do not affect the going concern assumption.(ii) (a) According to the information and explanations given to us, the inventories, except goods-in-transit and stockslying with third parties, have been physically verified by the management during the year. In our opinion, thefrequency of such verification is reasonable. For stocks lying with third parties at the year-end, written confirmationshave been obtained.(b) In our opinion and according to the information and explanations given to us, the procedures for the physicalverification of inventories followed by the management are reasonable and adequate in relation to the size of theCompany and the nature of its business.(c) On the basis of our examination of the records of inventories, we are of the opinion that the Company is maintainingproper records of inventories. As confirmed to us, the discrepancies noticed on physical verification of inventoriesas compared to book records were not material and have been properly dealt with in the books of account.(iii) According to the information and explanations given to us, the Company has neither granted nor taken any loans,secured or unsecured, to or from companies, firms or other parties covered in the register maintained under section 301of the Companies Act, 1956. Accordingly, paragraphs 4(iii)(b) to (g) of the Order are not applicable.(iv) In our opinion and according to the information and explanations given to us, and having regard to the explanation thatpurchases of certain items of inventories and fixed assets are for the Company’s specialised requirements and similarly certaingoods and services sold are for the specialised requirements of the buyers and suitable alternative sources are not availableto obtain comparable quotations, there is an adequate internal control system commensurate with the size of the Company andthe nature of its business with regard to purchase of inventories and fixed assets and with regard to the sale of goods andservices. Further, on the basis of our examination and according to the information and explanations given to us, we haveneither come across nor have been informed of any instances of major weaknesses in the aforesaid internal control system.(v) (a) In our opinion and according to the information and explanations given to us, the particulars of contracts orarrangements referred to in section 301 of the Companies Act, 1956 have been entered in the register required to bemaintained under that section.(b) In our opinion, and according to the information and explanations given to us, the transactions made in pursuanceof contracts and arrangements referred to in (a) above and exceeding the value of Rs. 5 lakh are for the specializedrequirements of the Company/buyers for which suitable alternative sources are not available to obtain comparablequotations. However, on the basis of information and explanations provided, the same appear to be reasonable.(vi) The Company has not accepted any deposits from public during the year.(vii) In our opinion and according to the information and explanations given to us, the Company has an internal auditsystem commensurate with the size and nature of its business.(viii) We have broadly reviewed the books of account maintained by the Company pursuant to the rules prescribed by theCentral Government for maintenance of cost records under Section 209(1)(d) of the Companies Act, 1956 in respect ofthe products covered and are of the opinion that, prima facie, the prescribed accounts and records have been made andmaintained. However, we have not made a detailed examination of the records with a view to ensure whether they areadequate or complete.27