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Sixty-Seventh Annual Report 2011-2012
ANNEXURETOTHEAUDITORS’REPORT
(Referred to in paragraph 3 of our report of even date)
(i)
The nature of the Company’s business activities during the year are such that clauses (xiii), and (xiv) of paragraph 4 of the Companies
(Auditors’ Report) Order, 2003 are not applicable to the Company.
(ii)
In respect of its fixed assets:
(a)
The Company has maintained proper records showing full particulars including quantitative details and situation of fixed assets;
(b)
The fixed assets were physically verified during the year by the Management in accordance with a regular programme of
verification which, in our opinion, provides for physical verification of all the fixed assets at reasonable intervals. According to
the information and explanation given to us, no material discrepancies were noticed on such verification;
(c)
The fixed assets disposed off during the year, in our opinion, do not constitute a substantial part of the fixed assets of the
Company and such disposal, in our opinion, has not affected the going concern status of the Company.
(iii)
In respect of its inventory:
(a)
As explained to us, the stock of finished goods (other than a significant part of the spare parts held for sale) and work-in-progress
in the Company’s custody have been physically verified by the Management as at the end of the financial year, before the year-
end or after the year-end, and in respect of stocks of stores and spares, the aforesaid spare parts held for sale, and raw materials
in the Company’s custody, there is a perpetual inventory system and a substantial portion of the stocks have been verified
during the year. In our opinion, the frequency of verification is reasonable. In case of materials and spare parts held for sale lying
with the third parties, certificates confirming stocks have been received in respect of a substantial portion of the stocks held
during the year or at the year-end;
(b)
In our opinion and according to the information and explanation 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;
(c)
In our opinion and according to the information and explanations given to us, the Company is maintaining proper records of
inventory. The discrepancies noticed on verification between the physical stocks and the book records were not material
having regard to the size of the operations of the Company and have been properly dealt with in the books of account.
(iv)
In respect of loans, secured or unsecured, granted by the Company to companies, firms or other parties covered in the Register under
Section 301 of the Companies Act, 1956, according to the information and explanations given to us:
(a)
the Company has granted unsecured loans aggregating
`
521.33 Crores to four parties covered in the register maintained
under Section 301 of the Companies Act, 1956 (including
`
86.92 Crores granted during the year to two parties). At the year-
end, the outstanding balances of such loans aggregated `579.36 Crores and maximum amount outstanding during the year was
`
579.36 Crores.
(b)
the rate of interest and other terms and conditions of such loans are, in our opinion,
prima facie
not prejudicial to the interest
of the Company having regard to the market yields and the business relationship with the Company to whom loans have been
granted.
(c)
The receipts of principal amount have been as per stipulations. However, there have been delays in receipts of interest.
(d)
There are no overdue amounts in respect of principal amount outstanding. In respect of overdue interest amounts of more
than rupees one lakh remaining outstanding as at the year-end, except in respect of interest outstanding from a subsidiary
company for which the provision has been made, the Management has taken reasonable steps for the recovery of the overdue
interest amounts.
In respect of loans, secured or unsecured, taken by the Company from companies, firms or other parties covered in the Register
maintained under Section 301 of the Companies Act, 1956, according to the information and explanations given to us: