New Delhi: Effective use of technology for in-house audit processes could help prevent accounting fraud in a company, as it will be easier to monitor the flow of data online, says global consultant PricewaterhouseCoopers (PWC), reports PTI.
A new PwC report, '2010 Internal Audit State of the Productivity of the Profession Survey', said that about 48% of Indian companies lack skill and knowledge of data tools used in internal audit softwares, while 18% have no access to these tools.
"With a predicted increase in scope and responsibility and heightened focus on risks, it is essential that internal audit functions prioritise focus, employ smarter resourcing and skill models and use technology as an enabler," PwC India executive director Satyavati Berera told PTI.
However, a number of internal auditors in India are not convinced that technology has a measurable benefit, with 38% of the respondents to PwC's survey unable to calculate the benefit.
Of the companies that saw benefits in the use of information technology, 38% said it provides greater coverage, 28% talked about targeted risk testing, 18% were eyeing efficiency and 17% were keen on the ability for continuous monitoring, the study said.
PwC suggested that companies can initiate a pilot project for a technology-enabled audit methodology or audit lifecycle so that an assessment can be made about the opportunity for technology to enhance and streamline that process.
"It is important for raising the performance bar because this year's survey results indicate that auditors at present are not convinced that technology has a clear benefit," PwC said.
The role of internal audit processes hold significance in India in the aftermath of the Rs10,000 crore accounting scam at Satyam Computer Services that was brought to light in January last year by the IT firm's founder and the fraud's perpetrator, B Ramalinga Raju.
The firm's internal audit team head V S Prabhakar Gupta, who is not out on bail, was booked by the Central Bureau of Investigation (CBI) for being party to the crime - the largest in India's corporate history.
New Delhi: State-owned Steel Authority of India Ltd (SAIL) today said it will invest Rs100 crore to revive its Uttar Pradesh unit, formerly known as Malvika Steel, which the steelmaker acquired last year, reports PTI.
"The total cost of Jagdishpur SAIL Unit's (JSU) phase-1 revival has been estimated to be Rs100 crore," the company said in a statement here. SAIL acquired the defunct Malvika Steel for Rs209 crore last year and rechristened it as JSU.
As part of the revival plan, SAIL will set up a steel mill at a cost of Rs46 crore to produce items required by infrastructure and construction companies.
"The entire team of JSU has to work with exemplary dedication, zeal and commitment to fulfil the objectives of acquiring the unit," said steel secretary Atul Chaturvedi, who along with SAIL chairman C S Verma laid the foundation stone for the mill.
The TMT bar mill has an annual production capacity of 1.5 lakh tonnes per annum (TPA).
"The proposed facilities and product-mix envisaged in phase-1 also include a 10,000 TPA cold forming line and a 13,000 TPA corrugation line," the statement added.
Verma said SAIL also envisages resumption of integrated iron and steel production at JSU under the second phase of its revival plan, for which a feasibility report has been prepared.
Going forward, SAIL said it will also set up a 475-MW gas-based power plant at Jagdishpur through a joint venture.
"The process for identification of a suitable partner has started," it added.
The country's largest steel-maker plans to enhance its annual production capacity to about 23 million tonnes from the current output of around 14 million tonnes with an estimated investment of Rs 70,000 crore by 2012. SAIL plans to further enhance its annual capacity to 60 million tonnes by 2020 to cater to anticipated demand on account of rapid growth of the infrastructure sector.
The government will raise Rs1,100-Rs1,200 crore by divesting its 10% stake in the engineering company. Is the FPO worth participating?
State-run Engineers India Ltd (EIL) is slated to hit the markets on 27 July 2010 with its follow-on public offer (FPO). EIL is offering 3.36 crore shares with a face value of Rs5 each. The company has set the price band at Rs270-Rs290 per share. On Monday, the stock has plunged 6.2% at Rs316.75 on the Bombay Stock Exchange (BSE).
The issue opens for qualified institutional buyers (QIBs) on 27th July and for retail and non-institutional investors from 30th July. The government is expecting to raise Rs1,100-1,200 crore through a 10% stake dilution. Post-FPO, government's stake will reduce to 80.40% from the current level of 90.4%.
EIL has provided consultancy and project implementation services to refineries, petrochemical complexes, offshore platforms, pipelines, ports, fertilizer and mining and metallurgy projects. In infrastructure, it has provided engineering consultancy services to airports, highways, flyovers, bridges and water projects. While EIL has a good track record and is the pre-eminent engineering and consultancy firm in the country, it continues to be hampered by government controls.
EIL posted a net profit of Rs114.56 crore for the quarter ended 30 June 2010 on net sales of Rs606 crore. For the year ended 31st March 2010, it reported a net profit of Rs439 crore. It had a negative cash flow of Rs130 crore as on 31 March 2010.
Its price earnings ratio (P/E) stands at 20.47 (lower band) and 22 (at the upper band) based on the EPS of 31st March, 2010 and 21.32 (annualised) as per the EPS of quarter ended 31st June, 2010.
Its net profit has dipped by 8% in the first quarter of this fiscal at Rs114 crore compared to Rs125 crore in the fourth quarter of FY 2009-10. Its net sales also saw a decline of 5% in the June quarter 2010 at Rs606 crore from Rs640.34 crore during the fourth quarter of FY2009-10.
Similarly, during the March quarter, EIL's net profit plunged 22% at Rs125 crore compared to Rs159 crore during the corresponding period last year. The company's net sales have grown at an average of 39% over the last five quarters while its operating profit has increased at an average rate of 69% over the same period.
The company has an order book of Rs6,236 crore as on 31 March 2010. HSBC Holdings Plc, ICICI Securities, SBI Capital Markets and IDFC Capital are lead book running managers to the FPO.
The company has set aside 7.12 lakh shares for employees and 1.15 crore shares are reserved for retail investors. Retail investors and employees will be entitled to the same discount through the book building route.