Annual Report FY 2010-11 - Pipavav Shipyard

Annual Report 2010-11
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ANNEXURE TO AUDITOR’S REPORT
(Referred to in paragraph 3 of our report of even date)
As required by the Companies (Auditor’s Report) Order, 2003 issued by the Central Government of India in terms of Section 227
(4A) of the Companies Act, 1956, and on the basis of such checks as we considered appropriate, we further report that:i.
In respect of its fixed assets:
a. The Company has maintained proper records showing full particulars, including quantitative details and situation of
fixed assets on the basis of available information.
b. As explained to us, the Company has physically verified certain assets, in accordance with a phased program of
verification, which in our opinion is reasonable, having regard to the size of the Company.
c. In our opinion, the Company has not disposed off substantial part of fixed assets during the year and the going
concern status of the Company is not affected.
ii. In respect of its inventories:
a. As explained to us, inventories have been physically verified during the year by the management. In our opinion, the
frequency of verification is reasonable.
b. In our opinion and according to the information and explanations given to us, the procedures of physical verification
of inventories followed by the management are reasonable and adequate in relation to the size of the Company and
the nature of its business.
c. The Company has maintained proper records of inventories. As explained to us, there were no material discrepancies
noticed on the physical verification of inventory as compared to the book records.
iii. In respect of Loans, secured or unsecured, granted or taken by the Company to/ from Companies, firms or other parties
covered in the register maintained under Section 301 of the Companies Act, 1956:
a. The Company has granted unsecured loan to a wholly-owned subsidiary company. The maximum amount
outstanding at any time during the year was Rs. 4011.24 Lacs and the year end balance was Rs. 3790.23 Lacs.
b. In our opinion and according to the information and explanations given to us, the aforesaid loan is interest free and
other terms and conditions, are not prima facie prejudicial to the interest of the Company.
c. The said loan is repayable on demand and there is no repayment schedule.
d. As the said loan is repayable on demand, the question of overdue amount does not arise.
e. The Company has not taken any loans during the year from companies, firms or other parties covered in the Register
maintained under section 301 of the Companies Act, 1956. Consequently, the provisions of sub clauses (f) and (g)
of paragraph 4 of the order are not applicable.
iv. In our opinion and according to the information and explanations given to us, there is an adequate internal control system
commensurate with the size of the Company and the nature of its business for the purchase of inventory, fixed assets and
also for the sale of goods and services. During the course of our audit, we have not observed any continuing failure to
correct major weaknesses in internal controls.
v. In respect of the contracts or arrangements referred to in Section 301 of the Companies Act, 1956:
a. In our opinion and according to the information and explanations given to us, the transactions made in pursuance of
contracts or arrangements, that needed to be entered in the register maintained under section 301 of the Companies
Act, 1956 have been so entered.
b. The transactions, made in pursuance of the contracts or arrangements, entered in the register maintained under
section 301 of the Companies Act, 1956, and aggregating during the year to Rs. Five lacs or more in respect of each
party, have been made at prices, which are reasonable. The Company has not made any similar transactions with
any other party.
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