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1. Internal controls in relation to sales, debtors, sales return, purchases, creditors, purchase returns, production, inventory, Internal audit and expenditure needs to be strengthened to make the same commensurate with the size of the company and nature of the business.
2. Due to non-availability of audit trail and absence of satisfactory cutoff procedures in respect of:
(a) Sales and sales returns, purchase and purchase returns, interest income, discounts, rebates & allowances, non-reconciliation of Excise Duty Accounts with the Excise records, non compliance of provisions of Cenvat Credit Rules in some cases and also non adjustment of Sales Tax rates differentials in case of inter depot transfers which in the opinion of the management will be appropriately reconciled / accounted, we are unable to comment on the consequential impact arising out of the same.
(b) Transactions in relation to traded goods entered into by the company and due to absence of confirmation of balance in respect thereof, the Auditors are unable to comment on the consequential impact of the same. Moreover no Sales Tax Return is submitted till date in relation to this sale.
3. As no Audit Trail was established, due to non availability of documents at the time of Capitalization of UnitII, therefore the Auditors cannot express their opinion on the depreciation charged amounting to Rs 14.36 Lacs in current quarter. Moreover Company was not able to produced sufficient records / explanation in relation to physical existence of CWIP-P&M purchased during the current quarter amounting to Rs 1725.59 Lacs.
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