1. The Company has maintained proper records showing full particulars including quantitative details and situation of fixed assets. As explained to us, the Company has a phased programme of physical verification of fixed assets, which in our opinion is reasonable having regard to the size of the Company and the nature of the assets.

2. None of the fixed assets have been revalued during the year.

3. During the year, stock of finished goods, stores and spares and raw materials have been physically verified by the Management. In our opinion, the frequency of physical verification is reasonable.

4. The procedures of physical verification of stocks followed by the Management are reasonable and adequate in relation to the size of the Company and the nature of its business.

5. Having regard to the size of the operations of the Company and the nature of stocks held, the discrepancies noticed on physical verification of stocks as compared to the book records were not material.

6. On the basis of our examination of stock records, we are of the opinion that valuation of stock is fair and proper in accordance with the normally accepted accounting principles and is on the basis as in the preceding year.

7. The Company has not taken any loans from Companies, firms or other parties listed in the Register maintained under Section 301 of the Companies Act, 1956. As informed to us, there are no companies under the same management as defined under Section 370(1B) of the Companies Act, 1956.

8. The Company has granted a loan to a Company listed in the Register maintained under Section 301 of the Companies Act, 1956. As informed to us, there are no companies under the same management as defined under Section 370(1B) of the Companies Act, 1956.

9. In respect of loans or advances in the nature of loans, other than those which are provided for, the parties are generally repaying the principal amounts as stipulated and are also generally regular in the payment of interest.

10. In our opinion and according to the information and explanations given to us there are adequate internal control procedures commensurate with the size of the Company and the nature of its business with regard to purchase of stores, raw material including components, plant and machinery, equipment and other assets (including purchases of specialised goods and materials) and with regard to sale of goods.

11. Transactions of sale and purchase of goods made in pursuance of contracts or arrangements entered in Register maintained under Section 301 of the Companies Act, 1956 aggregating during the year to Rs.50,000 or more in respect of each party have been made at rates which are reasonable having regard to prevailing market rates for such goods, where available.

12. Unserviceable or damaged stores, raw materials and finished goods were determined and adequate provision has been made in the accounts.

13. In our opinion and according to the information and explanations given to us, the Company has complied with the provisions of Section 58A of the Companies Act, 1956 and the Companies (Acceptance of Deposits) Rules, 1975 with regard to deposits accepted from the public.

14. The Company has maintained proper records for the sale and disposal of scrap and for captive consumption of by-products.

15. In our opinion, the internal audit as conducted during the year by an independent firm of Chartered Accountants is commensurate with the size of the Company and the nature of its business.

16. We have broadly reviewed the books of account maintained by the Company pursuant to the Order made by the Central Government for the maintenance of cost records under Section 209(1)(d) of the Companies Act, 1956 in respect of its Fertiliser product and are of the opinion that prima facie the prescribed accounts and records have been maintained. We have not, however, made a detailed examination of the records.

17. According to the records of the Company during the year, Provident Fund and Employees' State Insurance dues have been regularly deposited with the appropriate authorities.

18. According to the information and explanations given to us, there were no undisputed amounts payable in respect of Income-tax, Wealth-tax, Sales-tax, Customs and Excise Duty which were outstanding as
on 31st March, 2003 for a period of more than six months from the date they became payable.

19. According to the information and explanations given to us, no personal expenses of employees or Directors have been charged to revenue account, other than those payable under contractual obligations or in accordance with generally accepted business practices.

20. The Company is not a sick industrial company within the meaning of Section 3(1)(o) of the Sick Industrial Companies (Special Provisions) Act, 1985.

21. In respect of trading activities of the Company, appropriate provision has been made in respect of damaged goods.