SDP & ASSOCIATES

3A, Rammohan Mullick Garden Lane,3rdFloor, Flat

No.10B, RAIKVA, Kolkata 700010
Phone: 033 66041506/07
Email: info@[Link]
Chartered Accountants Visit us at [Link]

STOCK & BOOK DEBTS (SBD) AUDIT REPORT

OF
M/s ARIHANT ISPAT
Name of the Borrower M/s ARIHANT ISPAT
Name of the Bank THE HONGKONG AND SHANGHAI BANKING CORPORATION
Date of Audit Visit 14.04.2025
Date of Audit Report 09-May-2025
UDIN 25060183BMIAAA7227

Summary of the observations:

Critical Observations:

1. Reconciliation of figures as per Books of Accounts and as per Stock Statements of Feb-2024: (Rs. In lacs)
Particulars Creditors
As per books of accounts of M/s Arihant Ispat 1730.43
As per Stock & Book Debts Statements Submitted to Bank 1478.80
Deviation 251.63
% of Deviation 14.54%
Reason for Deviation: - As explained by the management, the deviation is due to the borrower not reporting creditors related to
expenses amounting to Rs. 116.01 Lakhs in the stock statement submitted to the bank. Rest deviation is due to some entries
updated after submission of stock statement to bank.

2. Bank statement of Bank of Baroda for the period from Sept 24 to Feb 25 has not been provided.

3. The Company needs to enhance its insurance coverage in relation to its Stocks as the same is under-insured to the tune of Rs. 477.99
Lacs in respect of Fire & Burglary risk associated with the inventories

Non-Critical Observation: - None

Bangalore Office: Office No. S-503, 5th Floor, South Block, Manipal Centre, 47, Dickenson Road, Bangalore 560 042
Kolkata Office 2: 46C Chowringhee Road, Flat No 14G, 14 th Floor, Kolkata - 700071
Mumbai Office: Office No. 1005, 10th Floor, East Point, 90 Feet Road, Ghatkopar East, Mumbai 400075
Delhi Office: Office No. 507, Front Area, 5th floor,53-54 Goverdhan Building, Nehru Place, New Delhi-110019
Page 1 of 14
SDP & ASSOCIATES
3A, Rammohan Mullick Garden Lane,3rdFloor, Flat
No.10B, RAIKVA, Kolkata 700010
Phone: 033 66041506/07
Email: info@[Link]
Chartered Accountants Visit us at [Link]

A) CUSTOMER BASIC DETAILS

Particulars Remarks
Name of the Borrower M/s ARIHANT ISPAT

Addresses of Registered Offices: REGISTER CUM ADMINISTRATION OFFICE ADDRESS-

Plot No 115, 7th Main, 3rd Cross, 3rd Phase, Peenya Industrial Area,
Bangalore, Karnataka 560058

Address Other than Registered Office Where all or any Accounts maintained in registered office, which is mentioned in above.
books of account and Papers are Maintained:
Stockyard/Plant Address: Stockyard Address:
Plot No 115, 7th Main, 3rd Cross, 3rd Phase, Peenya Industrial Area,
Bangalore, Karnataka 560058
Unit(s) Visited Plot No 115, 7th Main, 3rd Cross, 3rd Phase, Peenya Industrial Area,
Bangalore, Karnataka 560058

Year of establishment Since 2004

Constitution Partnership Firm
Nature of Business / Activities/ Product/ Brief Profile M/s ARIHANT ISPAT was incorporated in the Year of 2004 as a
Partnership Firm which is exclusively engaged in Wholesale and Export
trading of Iron Steel such as Stainless-Steel Ingot, Carbon steel ring, Meta
Cutting Machine, Stainless Steel plate.
Major Product:

Shareholding Pattern/Profit Sharing Ratio Partners Name Profit Sharing Ratio

DHANLABH STEEL SUPPLIER PVT LTD 50 %

MEENA JAIN 50 %
Total 100.00 %
Any change in Management None.

Name of Group Companies AS PER BALANCE SHEET FYE-2024: NONE

AS PER MCA CHECK: NA

Bangalore Office: Office No. S-503, 5th Floor, South Block, Manipal Centre, 47, Dickenson Road, Bangalore 560 042
Kolkata Office 2: 46C Chowringhee Road, Flat No 14G, 14 th Floor, Kolkata - 700071
Mumbai Office: Office No. 1005, 10th Floor, East Point, 90 Feet Road, Ghatkopar East, Mumbai 400075
Delhi Office: Office No. 507, Front Area, 5th floor,53-54 Goverdhan Building, Nehru Place, New Delhi-110019
Page 2 of 14
SDP & ASSOCIATES
3A, Rammohan Mullick Garden Lane,3rdFloor, Flat
No.10B, RAIKVA, Kolkata 700010
Phone: 033 66041506/07
Email: info@[Link]
Chartered Accountants Visit us at [Link]

B) SITE CHECK
Company name as per the MCA site
N.A. (Being a Partnership firm).
Confirmation on filing of annual returns for last 3 years
CA Membership number check of the concern’s Auditor YES.
LMP & Associates (Chartered Accountant)
CA Parvesh Sharma (Partner)
Mem. No.: 305013
FRN No.: 015450S
GSTN Check Done Yes,
29ABBFA9779L1ZM - Karnataka
Details of Client’s Website None

C) BANKING DETAILS
Particulars Name No. of Years of Relationships
The HSBC Bank Limited More than 2 Years
Existing Bankers of the Clients
Bank of Baroda
Out of Above banks with whom the Client have Credit The HSBC Bank Limited More than 2 Years
Relationship. Bank of Baroda

1. BANKING ARRANGEMENT (SINGLE/MULTIPLE/CONSORTIUM): MUTIPLE BANKING

2. DETAILS OF FACILITIES WITH BANKS:

Name of the Bank Sanctioned Facility Limits Rs. In Amount O/s Securities Cove
Lacs as on nants
28.02.2025
(Rs. In Lacs)
HSBC Limited as per Sanction Combined Limit: 1,500.00 Refer to The HSBC
Letter Dated on 21.08.2023 Overdraft (1,500.00) Limited Sanction Letter
Import/Buyer Facility: Import
Documentary Credit Facility –
(500.00)
Import Documentary Credit
Issuance
Import Controlling Line (500.00)
Import/Buyer Facility: Post
Shipment buyer loan – (500.00) 1423.31
(Nostro)
Import/Buyer Facility: Buyers
(500.00)
Credit
Import/Buyer Facility: Post
Shipment buyer loan – Loan (500.00)
Against Import
Guarantee/Bonds facility (500.00)
Working Capital Term Loan 129.20
Total 1,629.20 1423.31
Regular dealer finance 985.00 595.58 Refer to The Bank of
Bank of Baroda Overdraft limit Baroda Sanction Letter
As on 21.11.2024 Ad-hoc Limit 135.00
1120.00 595.58

Bangalore Office: Office No. S-503, 5th Floor, South Block, Manipal Centre, 47, Dickenson Road, Bangalore 560 042
Kolkata Office 2: 46C Chowringhee Road, Flat No 14G, 14 th Floor, Kolkata - 700071
Mumbai Office: Office No. 1005, 10th Floor, East Point, 90 Feet Road, Ghatkopar East, Mumbai 400075
Delhi Office: Office No. 507, Front Area, 5th floor,53-54 Goverdhan Building, Nehru Place, New Delhi-110019
Page 3 of 14
SDP & ASSOCIATES
3A, Rammohan Mullick Garden Lane,3rdFloor, Flat
No.10B, RAIKVA, Kolkata 700010
Phone: 033 66041506/07
Email: info@[Link]
Chartered Accountants Visit us at [Link]

*Utilization as on 28.02.2025 considered as per Utilization certificate provide by the client.

3. DETAILS OF SECURED LOAN:

SL. No. Loan Details Amount O/s as on
28.02.2025
1 DAIMLER FINANCIAL SERVICES INDIA PVT LTD 23.32
TOTAL 23.32

3A. DETAILS OF UNSECURED LOAN: -

SL. No Particulars Amount O/s as on
28.02.2025
1 KOTAK MAHINDRA BANK CSG154995590 33.60
2 PADMAVATHI APPARELS (BINOD SURANA) 10.00
3 SMFG INDIA CREDIT COMPANY LIMITED, 48.56
Total 92.16

4. BANK STATEMENT ANALYSIS: NOT REQUESTED BY THE BANKER

D) DEBTORS VERIFICATION
Total value of Book Debts declared as on 28.02.2025. Rs. 2415.24 Lacs (Net of Advances) (Refer Annexure “I”)
Particulars Debit balance Advance received
from customer
Closing Debtors 2479.89 64.65

Percentage of export debtors None.

Comments on whether there are inter firm / intra firm None
debtors and are declared separately in the stock statement
submitted to the bank. Whether all debtors are arising out
of commercial transactions.
Collection period as tested by the Auditor Averagely 103 Days based on last 6 months data.
Breakup of party wise outstanding who constitute 25% of Name of the Customer Amount O/s as
the Total Debtors as on 28.02.2025. on 28.02.2025
(Rs. In Lacs)
STEEL PROFILES INDIA 390.19
M.E. FORGE TECH 271.29
SAIRAM ENGINEERING 233.51
INNOFORGE PVT LTD 157.25
OM STEEL & FORGING 106.72
Total 1,158.96
Total Value of Book debts of the company O/s
2,415.24
as on 28.02.2025
% as to the Total Value of Book debts of the
47.99%
company O/s as on 28.02.2025
Amount of Book Debts stated as Recoverable, Doubtful of Recovery and Bad Debts as on 28.02.2025
Ageing of the Debtors of the company were not generated by the accounting system installed within the premises of the company.

Hence, as per the given Age Analysis of Debtors of the company as on 28.02.2025 by collection debtor’s records and analysis of the
Sales Register and Statement of Accounts of the major customers of the company for previous 6 months on manual basis by using
Roll Back Method.
Bangalore Office: Office No. S-503, 5th Floor, South Block, Manipal Centre, 47, Dickenson Road, Bangalore 560 042
Kolkata Office 2: 46C Chowringhee Road, Flat No 14G, 14 th Floor, Kolkata - 700071
Mumbai Office: Office No. 1005, 10th Floor, East Point, 90 Feet Road, Ghatkopar East, Mumbai 400075
Delhi Office: Office No. 507, Front Area, 5th floor,53-54 Goverdhan Building, Nehru Place, New Delhi-110019
Page 4 of 14
SDP & ASSOCIATES
3A, Rammohan Mullick Garden Lane,3rdFloor, Flat
No.10B, RAIKVA, Kolkata 700010
Phone: 033 66041506/07
Email: info@[Link]
Chartered Accountants Visit us at [Link]

Amount o/s as on 28.02.2025

Days Bracket
(Rs. In Lacs)
A. 0-90 Days 1,666.16
B. 91-120 Days 171.87
C. 121 – 180 Days 247.76
D. > 180 Days** 99.13
E. > 180 Days*** 230.32
F. Bad Debts 0.00
Total value of Book debts of the Company O/s as on 2,415.24
28.02.2025
*Book debts of the Company outstanding for more than 6 months as on 28.02.2025 but having regular business transactions with
the company are considered within “Slow in Recovery” debts of the company.
(Refer to the Details of Slow in Recovery Debtors (exceeding the age of more than 6 months) of the Company, as on 28 th Feb
2025.

**On the other hand, Book debts exceeding the age of more than 6 months as on 28.02.2025 having no business with the Company
during the period of said 6 months, are considered as “Doubtful of Recovery” debts of the Company.
(Refer to the Details of Doubtful of Recovery Debtors of the Company as on 28 TH Feb 2025 as listed at Page-07 below)

Whether provision of doubtful debtors made is adequate NIL, Provision has been booked in the audited financial for doubt full
debtors.
Amount of Bad debts last year NIL, Bad debts in the FYE-2024
Major reasons for bad debts N.A.
Whether there are any disputes in respect of Book Debts None (As explained by the Management)

Whether the debtor’s figure in stock and Book Debt Particular Amount o/s as on
statement matching with audited financials as on 31st 31.03.2024
March 2024 (Yes/No, if No please provide the reason) (Rs. In Lacs)
Debtors as per Audited Balance sheet 2024 2657.29
Debtors as per Stock and Book Debts
Statements Submitted to The HSBC Bank 2517.94
Limited as on 31.03.2024
Deviation 139.35
Deviation In % 5.24%
Reason for Deviation: - We were explained by the management the
deviation is due to some adjustment made at the time of finalisation
of financial statement.
Recovery mechanism in place Adequate

1) COMPARISON BETWEEN THE DEBTORS’ AGEING AS PER SYSTEM VERIFICATION AND AS PER THE FIGURES SUBMITTED UNDER
THE STOCK AND DEBTORS STATEMENT FOR THE MONTH OF FEB- 2025:
Particulars Debtors as per Debtors Debtors as per System Deviation Reason for deviation
Statement submitted Verification (cross
to The HSBC Bank verified by physical
Limited as on invoices on sample
28.02.2025. basis) as on 28.02.2025.
A. 0-90 Days* 1,833.94 1,666.16 The overall deviation is of
B. 91-120 Days** 275.02 171.87 (64.71) 2.68%, as explained by
C. 121-180 Days*** 244.74 247.76
Bangalore Office: Office No. S-503, 5th Floor, South Block, Manipal Centre, 47, Dickenson Road, Bangalore 560 042
Kolkata Office 2: 46C Chowringhee Road, Flat No 14G, 14 th Floor, Kolkata - 700071
Mumbai Office: Office No. 1005, 10th Floor, East Point, 90 Feet Road, Ghatkopar East, Mumbai 400075
Delhi Office: Office No. 507, Front Area, 5th floor,53-54 Goverdhan Building, Nehru Place, New Delhi-110019
Page 5 of 14
SDP & ASSOCIATES
3A, Rammohan Mullick Garden Lane,3rdFloor, Flat
No.10B, RAIKVA, Kolkata 700010
Phone: 033 66041506/07
Email: info@[Link]
Chartered Accountants Visit us at [Link]

D. >181 Days*** 99.13 the Management that the

126.25
E. >181 Days**** 230.32 deviation in debtors is
F. Doubtful Debts 0.00 0.00 due to the Advance
Total value of Book debts of the 2,479.95 2,415.24 received from customer
Company o/s as on 28.02.2025. were not adjusted while
reporting Debtors in the
Stock Statement
submitted to the Bank.

1B. OVERALL COMMENTS ON RECEIVABLES: AUDITOR’S OVERALL COMMENTS ON THE QUALITY OF BOOK DEBTS, CLASSIFICATION
AND RECOVERABILITY: SATISFACTORY
*Almost 68.99% to the Total Value of Book debts of the company O/s amounting to Rs. 1666.16 lacs as on 28.02.2025 are goods in
nature & are realizable in less than 90 Days period.

**Debtors Considered as “Overdue debts” were amounting to Rs. 171.87 lacs, forming to 7.12 % to the total value of Book debts of
the company O/s as on 28.02.2025 as the same is coming under the age analysis of 91-120 Days.

*** Debtors considered as “Slow in Recovery” were amounting to Rs. 346.89 lacs, forming to 4.10 % to the Total value of the Book
debt of the company O/s as on 28.02.2025. and are inclusive of Amount of Rs. 99.13 Lacs, which stand outstanding for a period of
more than 6 months as on 28.02.2025 but also considered within “Slow in Recovery debts” of the company on the ground that these
customers having regular business with the company and the company is expected to realize these dues in its normal course of
business. (Refer to the Details of Slow in Recovery Debtors (exceeding the age of more than 6 months) of the Company, as on 28 th
Feb 2025 as listed in Page-08 below).

****Rest of the Outstanding Debts amounting of Rs.230.32 Lacs, forming to 9.54% to the Total value of Book debt of the company
O/s as on 28.02.2025 are considered as “Doubtful of Recovery” debts of the company on the grounds that these book debts exceeded
the age of more than 6 months as on 28.02.2025 and having no business transaction with the company during the period of said 6
months.
(Refer to the Details of Doubtful of Recovery Debtors of the Company as on 28 th Feb 2025 as listed in Page-08 below)

Overall comment on quality of debtors of the concern Satisfactory

Summary of discrepancies found None

2. TOP 5 DEBTORS ANALYSIS

Sr. No. Name of the Debtors Amount O/s as Payment Terms No. of Years of
on 28.02.2025 Relationship
1. STEEL PROFILES INDIA 390.19
2. M.E. FORGE TECH 271.29 Maximum 95 to Long Term Relationship
3. SAIRAM ENGINEERING 105 Days
233.51
4. INNOFORGE PVT LTD 157.25
5. OM STEEL & FORGING 106.72

2A. DETAILS OF THE ORIGINAL INVOICES OF TOP 5 DEBTORS AGAINST THE CURRENT OUTSTANDING REPORTED:
Name of the Customer Total Amount o/s as on
Invoice Amount
28.02.2025. Invoice Date Invoice No.
(Rs. In Lacs)
(Rs. In Lacs)

STEEL PROFILES INDIA 390.19 20-Sep-24 INV/1135/24-25 26.23

Bangalore Office: Office No. S-503, 5th Floor, South Block, Manipal Centre, 47, Dickenson Road, Bangalore 560 042
Kolkata Office 2: 46C Chowringhee Road, Flat No 14G, 14 th Floor, Kolkata - 700071
Mumbai Office: Office No. 1005, 10th Floor, East Point, 90 Feet Road, Ghatkopar East, Mumbai 400075
Delhi Office: Office No. 507, Front Area, 5th floor,53-54 Goverdhan Building, Nehru Place, New Delhi-110019
Page 6 of 14
SDP & ASSOCIATES
3A, Rammohan Mullick Garden Lane,3rdFloor, Flat
No.10B, RAIKVA, Kolkata 700010
Phone: 033 66041506/07
Email: info@[Link]
Chartered Accountants Visit us at [Link]

25-Sep-24 INV/1163/24-25 48.16

M.E. FORGE TECH 271.28 23-Nov-24 INV/1453/24-25 14.21

26-Nov-24 INV/1471/24-25 30.32

SAIRAM ENGINEERING 233.51 29-Jan-25 INV/1872/24-25 25.33

30-Jan-25 INV/1879/24-25 20.06

INNOFORGE PVT LTD 157.25 28-Nov-24 INV/1486/24-25 32.38

27-Feb-25 INV/2066/24-25 28.27

OM STEEL & FORGING 106.72 30-Nov-24 INV/1504/24-25 14.26

11-Sep-24 INV/1075/24-25 45.54

3. MONTH WISE INFORMATION ON TOTAL SALES AND DEBTORS (FOR PREVIOUS 6 MONTHS):
Month & Year Consolidated Sales Consolidated Closing Debtors as % of Comments
(Rs in Lacs) Debtors Sales
(Rs in Lacs)
September’24
858.69 2331.03 271.46%
October’24 Past trends indicate that the
467.53 2040.97 436.54% collection form customers of
November’24 the company are received in
557.53 2049.90 367.68%
December’24 a period of 103 Days. (Based
545.94 2052.26 375.92%
on previous 6 months’ data)
January’25
547.64 2024.25 369.63%
February’25
777.53 2415.24 310.63%

NOTE: COMPARISON BETWEEN GST RETURNS SALES AND BOOKS OF ACCOUNTS SALES:
Month & Year Book Sales GST Sales Difference Reason for Difference
(Rs in Lacs) (Rs in Lacs)
December’24 545.94 545.94 0.00
January’25 547.64 547.65 0.00 Deviation is immaterial
February’25 777.53 777.54 (0.02)

4. SLOW IN RECOVERY DEBTORS OF THE COMPANY, AS ON 28TH FEBRUARY 2025:

S. No. Name of the Debtors Amount O/s as on

28.02.2025 Remark
(Rs in Lacs)
Refer to Annexure “I” Book debts of the Company
Total 99.13 outstanding for more than 6
Total value of Outstanding Book Debts of the company as on 2415.24 months as on 28.02.2025 but
28.02.2025 having regular business
transactions with the company
% of Slow in Recovery Debtors as to Total Outstanding Book Debts of 4.10%
are considered within “Slow in
the company as on 28.02.2025
Recovery” debts of the company.

Bangalore Office: Office No. S-503, 5th Floor, South Block, Manipal Centre, 47, Dickenson Road, Bangalore 560 042
Kolkata Office 2: 46C Chowringhee Road, Flat No 14G, 14 th Floor, Kolkata - 700071
Mumbai Office: Office No. 1005, 10th Floor, East Point, 90 Feet Road, Ghatkopar East, Mumbai 400075
Delhi Office: Office No. 507, Front Area, 5th floor,53-54 Goverdhan Building, Nehru Place, New Delhi-110019
Page 7 of 14
SDP & ASSOCIATES
3A, Rammohan Mullick Garden Lane,3rdFloor, Flat
No.10B, RAIKVA, Kolkata 700010
Phone: 033 66041506/07
Email: info@[Link]
Chartered Accountants Visit us at [Link]

4. A. DETAILS OF DOUBTFUL OF RECOVERY DEBTORS OF THE COMPANY, AS ON 28 TH FEBRUAY 2025:

S. No. Amount O/s as

on 28.02.2025 Remark
(Rs in Lacs)
Refer to Annexure “I” Book debts of the Company
Total 230.32 outstanding for more than 6 months as
Total value of Outstanding Book Debts of the company as on 2415.24 on 28.02.2025 but having no regular
28.02.2025 business transactions with the
company are considered within
% of Doubtful of Recovery Debtors as to Total Outstanding Book 9.54%
“Doubtful of Recovery” debts of the
Debts of the company as on 28.02.2025
company.

E) STOCK VERIFICATION-

1). STOCK POSITION AS PER STOCK STATEMENT SUBMITTED TO THE HSBC BANK.
Stock reported as per Last month end 2nd Last month end 3rd Last Month end
stock statement (I.e. as on 28.02.2025.) Rs. In (i.e. as on 31.01.2025) Rs. In (i.e. as on 31.12.2024) Rs. In
lacs lacs lacs
Quantity in Nos. Amount Quantity in Amount Quantity in Amount
Rs. In Lacs Kgs Rs. In Lacs Kgs Rs. In Lacs
Raw Materials NA NA NA NA NA NA
WIP NA NA NA NA NA NA
Consumables Stores/
NA NA NA NA NA NA
Spares
Finished Goods -- 2503.42 -- 2530.23 -- 2400.33
Total -- 2503.42 -- 2530.23 -- 2400.33

2). REASONS FOR SUDDEN INCREASE /DECREASE OF INVENTORY: The above visible increase/decrease in the Inventory level is due to
the variation in production requirement of the business of the Company which depends upon the different sizes of orders being
received by the company by its main clients/customers over the months.

3). OTHER DETAILS:

TOTAL VALUE OF INVENTORY DECLARED AS ON 28.02.2025
Particular Amount as on
28.02.2025
(Rs. In Lacs)
Raw Material Stock 0.00
WIP 0.00
Consumables 0.00
Finished Goods 2547.31
Total 2547.31
Refer to annexure III
Note: Comparison between the Stock as per system verification and as per the figures submitted under the stock and debtors’
statement for the month of Feb 2025:
Particulars Amount as on 28.02.2025
(Rs. In Lacs)
Stock as per Books as on 28.02.2025 2547.31

Bangalore Office: Office No. S-503, 5th Floor, South Block, Manipal Centre, 47, Dickenson Road, Bangalore 560 042
Kolkata Office 2: 46C Chowringhee Road, Flat No 14G, 14 th Floor, Kolkata - 700071
Mumbai Office: Office No. 1005, 10th Floor, East Point, 90 Feet Road, Ghatkopar East, Mumbai 400075
Delhi Office: Office No. 507, Front Area, 5th floor,53-54 Goverdhan Building, Nehru Place, New Delhi-110019
Page 8 of 14
SDP & ASSOCIATES
3A, Rammohan Mullick Garden Lane,3rdFloor, Flat
No.10B, RAIKVA, Kolkata 700010
Phone: 033 66041506/07
Email: info@[Link]
Chartered Accountants Visit us at [Link]

Stock as per Stock & Book Debts Statements Submitted to The HSBC
2503.42
Limited in the month of Feb 2025
Deviation: 43.89
% 1.72%
Reason for Deviation : Deviation is Immaterial
Percentage of Stock covered (In case of Multiple
At Single Location (100 % Stock Covered)
Location)
Holding level for various components of inventory as
Holding Periods 122 Days Approx.
on 28.02.2025.
Observations regarding movement of inventory On scrutiny of stock records maintained in Tally Prime and as per
holding level & details of Non- moving & slow moving discussions held with Company’s officials, we observed that the items of
stocks (if any) inventories are regular and fast moving in nature. However, in the
absence of stock ageing we are not able to verify and report the slow
and non-moving stock.
Value of materials Imported None
Trading Stock v/s Manufacturing Stock Trading Stock Only
Valuation methodology for Raw material, WIP, and Yes: Adhered to AS-2 “Valuation of Inventories”
Finished goods, Stores, consumables etc. & checking The methods of valuation adopted by the company are as under & the
with adherence to generally accepted valuation same is consistently followed in last 3 years.
methods (AS-2). Whether the same is consistently
Inventories are valued at lower of Cost or Net Realizable Value.
followed in last 3 years.
Whether consumption of raw material is Not Applicable as the borrower is a trading concern.
commensurate to the production activity
Input-output ratio Not Applicable as the borrower is a trading concern.
Details and Amount of Scrap generated
Details of inventory held on behalf of third parties and There is no such Inventory are held on the behalf of Third Parties.
whether the same is included in stock
Details of inventory held by borrowers with third Not Applicable as the borrower is a trading concern.
parties / job workers for processing and whether the
same is included in stock
System of physical verification (internally/external At regular interval by internal team however copy of the same not
agency) in place & frequency of verification. Copy of provided to us.
evidence to be given
Whether inventory register is maintained and Yes, Inventory register is being updated on daily basis in Stock Register
updated (Whether ERP has been implemented) which is maintained in Tally Prime Accounting Software.
Whether inventory hypothecated includes any parts/ No such instance has been found.
spares which can be used only as part of fixed assets?
If yes whether the same is deducted from the stock
statements submitted to the bank.

Whether the stock figure in stock statement matching Particulars Amount as on

with audited financials as on 31st March 2024 (Yes/No, 31.03.2024
if No please provide the reason) (Rs. In Lacs)
Stocks as per Audited Financial Statements 2,623.87
FYE-2024

Bangalore Office: Office No. S-503, 5th Floor, South Block, Manipal Centre, 47, Dickenson Road, Bangalore 560 042
Kolkata Office 2: 46C Chowringhee Road, Flat No 14G, 14 th Floor, Kolkata - 700071
Mumbai Office: Office No. 1005, 10th Floor, East Point, 90 Feet Road, Ghatkopar East, Mumbai 400075
Delhi Office: Office No. 507, Front Area, 5th floor,53-54 Goverdhan Building, Nehru Place, New Delhi-110019
Page 9 of 14
SDP & ASSOCIATES
3A, Rammohan Mullick Garden Lane,3rdFloor, Flat
No.10B, RAIKVA, Kolkata 700010
Phone: 033 66041506/07
Email: info@[Link]
Chartered Accountants Visit us at [Link]

Stocks as per Stock & Book Debts Statements 2,624.30

Submitted to existing bank for March-24.
Deviation (0.43)
Deviation in % (0.02%)
Reason for Deviation: Deviation is immaterial
Comments on storage of Goods Adequate

4). STOCKS VERIFIED: We have visited at # Plot No 115, 7th Main, 3rd Cross, 3rd Phase, Peenya Industrial Area, Bangalore, Karnataka
560058 and carried out the physical verification of stock, However, the stock produced to us during our visit to the unit was tallied
with the record maintained by the borrower and lying with the physical stock available at site.
Item Name Stock reported Physical Stock Stock purchased Stock sold Deviation
as per stock verified by between the date between the
statement as Auditor as on of stock statement date of stock
on 14.04.2025 14.04.2025
and date of statement and
(Kgs) (Kgs)
verification by date of
Auditor verification by
Auditor
ROUNDS BARS 722830 930118.89 930118.89 NIL NIL NA
ALLOY STEEL ROUNDS /RCS - 72281090 378441.53 378441.53 NIL NIL NA
ROUNDS - 72041000 191483.50 191483.50 NIL NIL NA
ALLOY STEEL ROUND BAR - 72284000 131202.40 131202.40 NIL NIL NA
ALLOY STEEL BARS 722830 67935.95 67935.95 NIL NIL NA
STEEL ROUND - 721499 124661.20 124661.20 NIL NIL NA
STEEL BARS 72155010 81888.00 81888.00 NIL NIL NA
CEMENTED CARBIDE BUTTONS 1768.28 1768.28 NIL NIL NA
ALLOY STEEL PIPE - 730459 53518.00 53518.00 NIL NIL NA
ALLOY STEEL ROUND BARS -722490 74737.83 74737.83 NIL NIL NA

5). MANAGEMENT RESPONSE FOR THE DEVIATION: N.A.

6). AGEING OF STOCK: (AS ON 28.02.2025.) On scrutiny of stock records maintained in Tally ERP Software and as per discussions held
with Company’s officials, we observed that the items of inventories are regular and fast moving in nature. However, in the absence of
stock ageing we are not able to verify and report the slow and non-moving stock.

7). INSURANCE VERIFICATION: Reliance General Insurance Company Limited

Policy Nature & No. Location Insured Value Insured Expiring on
(Stock) Value (Other)
(Rs in Lacs)
140162421260050904– NO. 115, 7TH MAIN 3RD PHASE, PEENYA 2000.00 0.00 22.11.2025
Fire Policy INDUSTRIAL AREA, BANGALORE, KARNATAKA -
1401224291 10000525 – 560058 2000.00 0.00 22.11.2025
Burglary Policy
Is Insurance Adequate? No, Refer
below note
Whether Agreed Bank's Clause includes HSBC Bank name in Insurance policy Yes

Bangalore Office: Office No. S-503, 5th Floor, South Block, Manipal Centre, 47, Dickenson Road, Bangalore 560 042
Kolkata Office 2: 46C Chowringhee Road, Flat No 14G, 14 th Floor, Kolkata - 700071
Mumbai Office: Office No. 1005, 10th Floor, East Point, 90 Feet Road, Ghatkopar East, Mumbai 400075
Delhi Office: Office No. 507, Front Area, 5th floor,53-54 Goverdhan Building, Nehru Place, New Delhi-110019
Page 10 of 14
SDP & ASSOCIATES
3A, Rammohan Mullick Garden Lane,3rdFloor, Flat
No.10B, RAIKVA, Kolkata 700010
Phone: 033 66041506/07
Email: info@[Link]
Chartered Accountants Visit us at [Link]

Whether goods sent to processors on job work basis are covered under insurance N.A.
Insurance claims history for damage of stocks None.

NOTE:
Particular Fire Risk Burglary Risk
Average Closing Stock as on 28.02.2025 of last 3 months 2477.99 2477.99
Less Insurance Coverage 2000.00 2000.00
Under Insured 477.99 477.99
Note: The Company needs to enhance its insurance coverage in relation to its Stocks as the same is under-insured by Rs. 477.99 Lacs
in respect of Fire & Burglary risk associated with the inventories

8). OVERALL COMMENTS ON INVENTORY: -

Auditor’s overall comments on the maintenance of Stock records The company has installed proper internal control procedures
in relation to the maintenance of Stock Records. Proper Stock
records were maintained by the Store-In Charge except Ageing
of Stock.
Are Internal control systems with regard to stocks are Yes, except Ageing of Stock.
satisfactory?
Possible concerns with regard to the stocks, if any No
Summary of discrepancies found in stock verification None

F) CREDITORS VERIFICATION-
Amount of creditors as on 28.02.2025. Rs. 1730.43 lacs (Net off Advances) Refer Annexure IV
Particular Credit Balance Advance to
supplier
SUNDRY CREDITORS 1764.48 (34.06)
Note: Comparison between the Creditors as per system verification
and as per the figures submitted under the stock and debtors’
statement for the month of Feb2025:
Particulars Amount O/s
as on
28.02.2025
(Rs. In Lacs)
Creditors as per Books as on 28.02.2025 1730.43
Creditors as per stock statement submitted to 1478.80
HSBC Bank as on 28.02.2025
Deviation 251.63
% of Deviation 14.54%
Reason for deviation: As explained by the management, the deviation
is due to the borrower not reporting creditors related to expenses
amounting to Rs. 116.01 Lakhs in the stock statement submitted to
the bank. Rest deviation is due to some entries updated after
submission of stock statement to bank.
Average aging of creditors Averagely 0 to 90 days based on 6 months data.
Actual payment period as tested 89 Days
Percentage of group company Creditors None.

Bangalore Office: Office No. S-503, 5th Floor, South Block, Manipal Centre, 47, Dickenson Road, Bangalore 560 042
Kolkata Office 2: 46C Chowringhee Road, Flat No 14G, 14 th Floor, Kolkata - 700071
Mumbai Office: Office No. 1005, 10th Floor, East Point, 90 Feet Road, Ghatkopar East, Mumbai 400075
Delhi Office: Office No. 507, Front Area, 5th floor,53-54 Goverdhan Building, Nehru Place, New Delhi-110019
Page 11 of 14
SDP & ASSOCIATES
3A, Rammohan Mullick Garden Lane,3rdFloor, Flat
No.10B, RAIKVA, Kolkata 700010
Phone: 033 66041506/07
Email: info@[Link]
Chartered Accountants Visit us at [Link]

Is Creditors for capital goods shown separately There is no Such Capital Goods Creditors
What percentage of purchase invoices have been verified 20-25%
with creditors
Whether the creditors figure in stock and Book Debt Particular Amount o/s as on
statement matching with audited financials as on 31 st 31.03.2024
March 2024 (Yes/No, if No please provide the reason) (Rs. In Lacs)
Creditors as per Audited Balance sheet
2256.48
2024
Creditors as per Stock and Book Debts
Statements Submitted to The HSBC Bank 2294.13
Limited as on 31.03.2024
Deviation (37.65)
Deviation in % (1.67%)
Reason for Deviation- Deviation is Immaterial

1. MONTH WISE INFORMATION ON TOTAL PURCHASES AND CREDITORS (FOR PREVIOUS 6 MONTHS):
Month & Year Purchase Closing Creditors Creditor as % of Comments
(Rs in Lacs) (Credit Balance) Purchase
(Rs in Lacs)
September’24 657.96 1,668.77 253.63%

October’24 291.73 1,408.45 482.80%

Past trend indicates that the
November’24 427.86 1,458.56 340.89% outstanding creditor of the
company are averagely equal
December’24 324.75 1,215.06 374.15% almost 90 Days Purchase of the
company (Based on previous 6
January’25 568.39 1,382.51 243.23% months data)
February’25 698.88 1,730.43 247.60%

2. TOP CREDITORS ANALYSIS-

Sr. No. Name of the Creditor Amount O/s as on Payment Terms No of Years of
28.02.2025 Relationship
1. DEVKI NANDAN J. GUPTA METALS LLP 321.82
2. G.A STEELS 316.25 Usually, 0 to 90 Days
Long-term
3. TURAKHIA INTERNATIONAL PVT LTD 196.29 as explained by the
Relationship
4. PANAMA ALLOYS (INC) 483.47 management
5. EDGE STEELS [Link] (SALEM) 157.73

G) STATUTORY COMPLIANCE DETAILS-

Company Registration No Not Applicable as the borrower is a Partnership firm.
GST Registration No. 29ABBFA9779L1ZM
PAN ABBFA9779L
Importer Exporter Code (IEC number) Not Available
Pollution Control License No & comment on validity Not Applicable as the borrower is a trading concern.
Factory License & comment on validity Not Applicable as the borrower is a trading concern.

Bangalore Office: Office No. S-503, 5th Floor, South Block, Manipal Centre, 47, Dickenson Road, Bangalore 560 042
Kolkata Office 2: 46C Chowringhee Road, Flat No 14G, 14 th Floor, Kolkata - 700071
Mumbai Office: Office No. 1005, 10th Floor, East Point, 90 Feet Road, Ghatkopar East, Mumbai 400075
Delhi Office: Office No. 507, Front Area, 5th floor,53-54 Goverdhan Building, Nehru Place, New Delhi-110019
Page 12 of 14
SDP & ASSOCIATES
3A, Rammohan Mullick Garden Lane,3rdFloor, Flat
No.10B, RAIKVA, Kolkata 700010
Phone: 033 66041506/07
Email: info@[Link]
Chartered Accountants Visit us at [Link]

ESI Registration Number / date

PF Registration Number Not Registered (i.e. Not Applicable)
PT Registration Number/Date
Any other license applicable for the business of the company Not Applicable

G.1 DETAILS OF STATUTORY PAYMENTS / RETURNS

Period Description Due Date Actual Date Remark
December’24 GSTR 3B 20.01.2025 20.01.2025 Paid on time
January’25 GSTR 3B 20.02.2025 18.02.2025 Paid on time
Februaty’25 GSTR 3B 20.03.2025 19.03.2025 Paid on time

H. FACTORY VISIT INFORMATION

Power
●Sanc oned Load
●Cap ve load
Power Consumption, detail for last three months (In case of
Not Applicable as the borrower is a trading concern.
mfg. units)
Water
●Municipal Supply
●Cap ve Supply
Safety Norms
 Production Process Related Safety Measures, If Any  NA
 Fire Extinguishers  YES
 Alarm Systems  YES
 Hydrants  YES
 Fire Exits  YES
No of Security Guards if any 2/1 Day/ Night
No. of Shifts Single Shifts
Benefits provided to staff & Workers Bonus
Certifications/Accreditations GST, Income tax, etc.
Whether excise duty, sales tax, octroi/ cess etc. are paid in time YES, Paid timely
Whether Real Time Accounting System is in use YES – Tally Prime.

Audit/visit Information

Officials from CA Firm Reeja John

Date of Audit/ Visit 14.04.2025
Person contacted Kavitha A (Accounts Department)
Cont.: +91 9483004844
Locations Visited Plot no. 115 7th main 3rd Phase 3rd Cross Peenya Industrial Area,
Bangalore 560058

Bangalore Office: Office No. S-503, 5th Floor, South Block, Manipal Centre, 47, Dickenson Road, Bangalore 560 042
Kolkata Office 2: 46C Chowringhee Road, Flat No 14G, 14 th Floor, Kolkata - 700071
Mumbai Office: Office No. 1005, 10th Floor, East Point, 90 Feet Road, Ghatkopar East, Mumbai 400075
Delhi Office: Office No. 507, Front Area, 5th floor,53-54 Goverdhan Building, Nehru Place, New Delhi-110019
Page 13 of 14
SDP & ASSOCIATES
3A, Rammohan Mullick Garden Lane,3rdFloor, Flat
No.10B, RAIKVA, Kolkata 700010
Phone: 033 66041506/07
Email: info@[Link]
Chartered Accountants Visit us at [Link]

DISCLAIMER:

This audit has been conducted as per the limited scope of the assignment (As per Bank’s report format) and in a limited time frame.
Hence, we have collected and verified requisite information on a sample basis and are not responsible for accuracy and correctness
of the overall financial information of the Borrower whether provided or not provided to us during the audit. Also, our audit is limited
to the level of cooperation by both Bank and the Borrower.

DECLARATION:
We declare that we have no direct or indirect interest in this Audit activity. This has been carried out as requested by Bank and not
influenced by any person whosoever and the above report has been compiled based on the information available to us & explanation
provided by the management of the Concern.

CONCLUSION

1. Overall site visit was satisfactory.

2. Almost 68.99% to the Total Value of Book debts of the company O/s amounting to Rs. 1666.16 lacs as on 28.02.2025 are goods in
nature & are realizable in less than 90 Days period.

3. The Company needs to enhance its insurance coverage in relation to its Stocks as the same is under-insured to the tune of Rs.
477.99 Lacs in respect of Fire & Burglary risk associated with the inventories.

The above report has been compiled on the basis of records produced before us and the information provided by the management.

For SDP & Associates

Chartered Accountant
FRN: 322176E

Manish Poddar
Partner
Membership No. 60183
Place: Kolkata

Bangalore Office: Office No. S-503, 5th Floor, South Block, Manipal Centre, 47, Dickenson Road, Bangalore 560 042
Kolkata Office 2: 46C Chowringhee Road, Flat No 14G, 14 th Floor, Kolkata - 700071
Mumbai Office: Office No. 1005, 10th Floor, East Point, 90 Feet Road, Ghatkopar East, Mumbai 400075
Delhi Office: Office No. 507, Front Area, 5th floor,53-54 Goverdhan Building, Nehru Place, New Delhi-110019
Page 14 of 14