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AUDIT CHECKLIST

Name of the Company


Address of company
Year ended
PAN No.
Partner

Name

Signature

Manager

Name

Signature

Prepared by

Name

Signature

Date of commencement of Audit


Date of Report
Financial statements
Detail of Audit Team

1.
2.
3.
4.

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AUDIT CHECKLIST

FIXED ASSETS

Yes/No/
NA

Please summarise your audit approach to:

Verifying the completeness of property, plant


equipment and other tangible assets e.g. by
vouching additions and disposals and inter
group transfers;

Verifying the existence and ownership of:


properties; and other assets e.g. physical
inspection of assets and examination of title
deeds.

Verifying the valuation (including method of


valuation) of fixed assets

If any documents of title are held other than by


bankers and mortgagees, please give details and the
reason why such documents are so held.
Is the company's policy of capitalisation and
depreciation in accordance with applicable
Accounting Standards, if any, and consistent with
the previous year?
If no, please provide further details
Have the details of leases that should be capitalised
been reported in the [financial statements].
If no, please provide further details
Are you satisfied that there is no permanent
impairment (AS-28) in the value of the company's
fixed assets below the net book amounts?
Please give brief summary of verification procedure.
If no, please provide further details
Please give details of asset revaluations during the
year and indicate whether based on professional
valuation or director's estimate.
Is depreciation provided on all items of Fixed
Assets (other than land) not fully written off or
carried at salvage value?
If no, please provide further details
Are you satisfied that there are no exceptional or
additional depreciation charges, or circumstances
that could warrant such charges in the future?
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AUDIT CHECKLIST

FIXED ASSETS

Yes/No/
NA

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Yes/No/
NA

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Have idle facilities been separately identified and


accounting treatment for such assets disclosed in
the company's [financial statements]?
If no, please provide further details
Have the details of any assets which are the subject
of an instalment purchase arrangement been
reported in the financial statements or supporting
data?
If no, please provide further details
Did you encounter any difficulties in assessing the
estimated lives of fixed assets?
If yes, please give details including situations where
a permanent diminution has occurred.
Are you satisfied that costs of repairs and
maintenance are properly charged to operations and
have not been carried as an asset?
If no, please provide further details
Where the company has assets in the course of
construction, can you confirm that you are satisfied
that the basis used for capitalising interest and/or
indirect expenses is appropriate.
If you are unable to confirm, please provide further
details.
Have you reviewed transactions recorded as
construction in progress and reasonably determined
that there are no amounts that should have been
charged to operations?
If no, please provide further details
Are you satisfied th

INVESTMENTS
Did you verify the existence and ownership of
significant investments?
If no, provide details of the alternative procedures
performed

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AUDIT CHECKLIST

How have you satisfied yourself as to the valuation


of unquoted investments?
How have you satisfied yourself as to the valuation
of quoted investments?
Are you satisfied that there has been no other-thantemporary impairment requiring the write-down of
the carrying amounts of any investments?
Have investments where the company is able to
exercise significant influence over the operating and
financial policies of the investee corporation been
properly accounted for in accordance with [AS/
GAAP]
If no, please provide details.
In respect to the investee corporation financial
statements that were used as a basis for current
year's earnings under the equity method of
accounting:
a. Did the statements cover the same period as
that for the company upon which you are
reporting?
b. Were the financial statements audited and an
unqualified opinion expressed?
Please
provide a copy of the statements. Have you
reviewed the transactions with the company's
investees and confirmed balances with them?
c. Have inter company profits been eliminated
before including the company's proportionate
share of operations?
Have marketable equity securities been accounted
for in accordance with [AS/ GAAP], and have the
disclosures required been given in the [financial
statements]?
If no, provide details.
Have significant gains or losses on disposals, or
changes in market value, between the dates of the
balance sheet and your opinion, been disclosed in the
company's financial statements or the consolidation
accounting package?
If no, provide details.
INTANGIBLE ASSETS

Yes/No/
NA
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AUDIT CHECKLIST

Have goodwill and other intangible assets been


appropriately accounted for in accordance with
[AS/GAAP]
Have you verified the ownership of assets, such as
patents and trademarks?
If no, please provide details of the alternative
procedures performed
How have you satisfied yourselves that the
company's intangible assets have been appropriately
tested for impairment and their carrying values
adjusted, if necessary, in accordance with [AS/
GAAP]
If no, provide details
Have all intangible assets been correctly classified
and disclosed in the [financial statements],?
If no, provide details
Is the amortisation policy consistent with prior years
and reasonable with regards to residual values and
useful lives?
If no, provide details
Are the residual values and useful lives assigned to
intangible assets reasonable with regard to the nature
of the asset and in accordance with AS/GAAP].
If no, provide details

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AUDIT CHECKLIST

I NVENTORY

Yes/No/
NA

Was a physical inventory count carried out at the


balance sheet date?
If no, please provide details of the methods used by
the company to verify inventory at the balance sheet
date and the audit procedures performed.
If yes, was a comparison made between inventory
records and quantities counted, were differences
investigated, explained, and adjusted on the records,
and did you test such comparisons?
If no, please provide details
Did you attend the physical inventory count(s)
If yes, please give details of the locations visited
If no, please provide details as to how you have
satisfied yourself as to the physical quantities existing
at the balance sheet date
Did you satisfy yourselves, by observations during
the physical inventory count, that the company's
methods were satisfactory?
Did you perform test counts and check the results
with final inventory listings, to establish the reliability
of the company's counting?
If not, provide details of the alternative procedures
performed.

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AUDIT CHECKLIST

If the year-end inventory figures are determined


wholly or in part from perpetual inventory records,
did your procedures include:
a. Observation of cycle
appropriate testing?

counts

and

b. Checking of test counts to the records to


determine that the records have been
adjusted to agree with the physical counts?
c. Substantiation of the quantities on hand of
selected items at year-end by physical
inspection and checking with records?
d. Determining that a proper cut-off was
made?
e. Testing
arithmetic
accuracy
and
compilation of records from receiving and
shipping documents relating to the receipt
and transfer of goods?
If not, provide details of the alternative procedures
performed.

Were any inventories held by third parties at the


balance sheet date?
If yes, have you obtained direct confirmation of
inventories held by third parties at the balance sheet
date, or, if material, did you observe the counting of
such inventory?
If no confirmation obtained, provide details of the
alternative procedures performed.
Did you test cut-off with particular reference to sales
and purchases, work in progress transfers, and
intercompany or interdepartmental transfers?
If not, provide details of the alternative procedures
performed.
Have you tested the arithmetical accuracy of final
inventory figures, including computations, footings,
checking from original count sheets, and
reconciliation with the general ledger?
If not, provide details of the alternative procedures
performed.

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AUDIT CHECKLIST

Are the bases of inventory valuation (i.e., raw


materials, work in progress, and finished goods):
Consistent with the prior year?
In accordance with [AS/GAAP]
Have full details of these bases been supplied to us?
If not, provide details, including the audit procedures
performed.
Were there any areas where you has difficulty
establishing whether the value of inventory is fairly
stated and in accordance with [AS/GAAP]?
If yes, provide further details
Do costs include an appropriate proportion of
manufacturing, but not administrative or selling
overhead, and is the allocation of expense between
manufacturing overhead, administration, and selling
expenses on a reasonable and consistent basis?
Does the inventory valuation exclude research and
development expenditure?
If not, provide details, including the audit procedures
performed.
If standard costs are used:
a. Have they been updated to reflect current
operations?
b. Is an adjustment to actual made where
variances appear to require it?
c. Have you tested computations
product specifications?

from

If not, provide details, including the audit procedures


performed.
If job order or process costs are used, have you
tested the build-up of costs from records of
expenditure on labour, materials, and overhead?
If not, provide details, including the audit procedures
performed.

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AUDIT CHECKLIST

Have you tested to ascertain that inventories have


been valued at the lower of cost or market?
i) Market should not exceed the net realizable
value (i.e., estimated selling price in the
ordinary course of business less reasonably
predictable costs of completion and
disposal) and
ii)

Market should not be less than net


realizable value reduced by an allowance for
an approximately normal profit margin.

Please provide details of all provisions made against


inventory, including any general provisions.
Have satisfactory explanations been given to you
regarding material fluctuations in rates of gross
profit, inventory levels, and differences between
book and physical quantities?
If not, provide details, including the audit procedures
performed.
Long Term Contracts
Are you satisfied that long term contracts and any
resulting provisions have been properly accounted
for under [AS/GAAP]
If not, please provide details, including the audit
procedures performed
Are you satisfied that inventory has been correctly
classified between raw materials, work in progress
and finished goods?
If no, provide further details

RECEIVABLES

Yes/No/
NA

Are you satisfied with the procedures for cut off and
have you tested for periods just before and after
year-end?
If not, provide details of alternative procedures
performed
Have you performed an accounts receivable
circularisation?
If yes, please provide a summary of the results of the
circularisation.
If no, please provide details of the alternative
procedures performed to satisfy yourself as to the
validity of accounts receivable
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AUDIT CHECKLIST

RECEIVABLES

Yes/No/
NA

If confirmation procedures were carried out at other


than the balance sheet date, please provide details of
the rollforward procedures undertaken?
How have you satisfied yourself that the company
has a satisfactory procedure for identification,
control, and recovery of past due accounts?
Does the company have a consistent policy of
providing allowances for uncollectible and doubtful
debts, and do you consider the provision adequate,
but not excessive?
If not, provide details of alternative procedures
performed
Have you obtained reasonable explanations of trends
in the ages of the receivables, and ratios of sales to
receivables, allowances, and bad debts?
If not, provide details of alternative procedures
performed
If any receivables have arisen other than as a result
of normal operations, provide details as to how have
you adequately satisfied yourself as to their validity
and collectibility?
Have you obtained third party confirmation in
instances where material amounts have been
factored?
If not, provide details of alternative procedures
performed
How have you satisfied yourself that the provision
for credits issued post year end and other write-offs
is adequate at the balance sheet date?
Are any goods sold on approval or on a sale or
return basis?
If yes, how have you satisfied yourself that these
transactions have been accounted for correctly under
[AS/GAAP], including any resulting provisions.
Have you determined through normal audit
procedures that no receivables are pledged or
hypothecated except as disclosed?
If not, provide details of alternative procedures
performed

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AUDIT CHECKLIST

RECEIVABLES

Yes/No/
NA

Have long-term loans been confirmed by the


borrower?
If not, provide details of alternative procedures
performed.
If any receivables are the result of sales on
instalment agreements, have details been provided
in the financial statements.
Have you obtained third party confirmation in
instances where material amounts have been
factored?
Have receivables and sales for goods in the hands of
customers on a contingent basis (e.g., on approval,
on sale or return) at year-end been eliminated from
the receivables and sales and has the value of such
goods been included in inventories?
If the company bills customers before shipping the
merchandise:
Have you ascertained that billings for unshipped
goods at year-end have been eliminated from
receivables and sales and has the inventory value of
such goods been included in inventories?
In those unusual cases under "bill and hold"
arrangements with customers where title has passed
to the customer for such unshipped goods, have
you ascertained that such "bill and hold" accounting
is appropriate and have been confirmed?
Please provide details of any other receivables in the
financial statements, along with details of the audit
procedures performed.

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AUDIT CHECKLIST

CASH & BANK

Yes/No/
NA

Have you obtained direct confirmation of all bank


balances, bank facilities and related guarantees and
that there was no other information contained in the
bank's reply which should be brought to our
attention.
If no, please provide further details.
Provide details of the audit procedures performed to
ensure that bank cut-off procedures have been
performed correctly.
Have any large or unusual transfers between bank
accounts, affiliates, subsidiaries, or other unusual
transactions, occurring just before or after year-end,
been adequately explained.
Please give brief summary of your verification
procedure.
Where material cash in hand balances existed at the
balance sheet date, were such balances (or a sample
of them) were counted by you at that date. Please
give details of the locations visited and the results
obtained.
If no physical counts were undertaken, please give
details of the verification work carried out.
Please give details of any right of set-off in respect
of the company's balances with those of other
members of the group.
Are you satisfied with daily cash balances
Please explain the reason for any unusual balance
during the year
Are you aware of any restrictions, which might limit
the company's ability to remit funds to the country
in which its parent company is registered?
If yes, please give further details.
Are cash balances, overdrafts and loans are
correctly classified and full disclosure of any
security given has also been disclosed in the
financial statements.
If no, please give further details.
Have bank balances been verified and have other
related matters confirmed by the banks been properly
reflected in the financial statements
If no, please provide details of alternative procedures
performed

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AUDIT CHECKLIST

LIABILITIES AND PROVISIONS

Yes/No/
NA

How have you verified accounts payable?


How have you satisfied yourself that there are no
recorded liabilities or provisions that are materially
less than or in excess of requirements?
Have you made tests of un-entered invoices, cash
disbursements, and unmatched receiving reports for
the period after the balance sheet to determine that
adequate accruals were provided?
If no, provide details of alternative procedures
performed.
Have all liabilities or contingent liabilities relating to
employee benefits (e.g., termination pay, etc.) been
recorded or disclosed in the financial statements.
If no, provide further details
Are all material liabilities and accruals recorded
disclosed in the financial statements
If no, provide further details.
Is the basis of deferring income in compliance with
[AS/GAAP], reasonable and consistent with the
prior year?
If no, provide details.
With respect to provisions established for specified
purposes, have you ascertained that charges against
those provisions are in accordance with the intent of
the account and should not have been charged
directly against income?
Have costs associated with exit from or disposal of
activities been properly accounted for and recorded
in accordance with [AS/GAAP]?
If no, provide details
If the company has received any government grants
in purchasing fixed assets, are you satisfied that no
event has occurred which could render such grants
liable to repayment?
If no, please provide further details.

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AUDIT CHECKLIST

LIABILITIES AND PROVISIONS

Yes/No/
NA

Where the company has assets held under finance


leases, please give details of how such assets and
the related liabilities have been treated in the
accounts.
Please give details of any creditors which are
secured and the nature of the security. Please
include items covered by reservation of title clauses.
Does the client have any debt?
If yes, have confirmations been obtained from
lenders for material loans?
If no confirmations have been obtained, please
provide details of alternative procedures.
Have you agreed new debt transactions to authorizations and cash receipts?
If no, provide details of alternative procedures
performed.
Have you confirmed debt paid off or otherwise
extinguished during the period?
If no, provide details of alternative procedures
performed.
If debts have been extinguished, have any resulting
gains and been properly accounted for and recorded
in accordance with [AS/GAAP]?
If no, provide details
How have you satisfied yourself as to un-issued
debentures, bonds, notes, etc.?
Has the company complied with restrictions or
covenants imposed either by regulations or by the
terms of the lending agreements?
If no, provide details of any breaches, including any
resulting action taken by the company.
Are you satisfied that the company have not
breached any borrowing restrictions contained in
their
[Memorandum
and
Articles
of
Association/other documents]?
If no, please give further details.
Is all debt adequately disclosed in accordance with
[AS/GAAP] in the financial statements.
If no, provide details.

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AUDIT CHECKLIST

LIABILITIES AND PROVISIONS

Yes/No/
NA

Does the company's financial statements provide full


details of:
Interest rates?
Repayment terms?
Security and guarantees?
Restrictive covenants?
If no, provide details.
Does the company make regular provision for costs
of repairs and replacements required under the
terms of any long-term leases?
Please provide details of any other liabilities or
provisions in the financial statements, along with
details of the audit procedures performed.

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AUDIT CHECKLIST

DERIVATIVES AND OTHER FINANCIAL


Yes/No/
INSTRUMENTS
NA
Does the client have any derivative transactions as
defined by [AS/GAAP]?,

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If yes, how have you satisfied yourself that all


derivative transactions, as defined by [AS/GAAP]?,
including embedded derivatives, were identified and
captured in the accounting system?
Did you obtain (a) an understanding of the clients
control environment and the specific controls
surrounding derivative transactions and (b) any
written client policy statement?
If no, please provide details of the alternative
procedures performed.
Are all derivatives recorded as assets or liabilities at
their fair values and has the clients methods of
valuing derivative instruments been evaluated?
If no, provide details.
For derivatives accounted for as hedges under
[AS/GAAP], is there adequate contemporaneous
documentation and has a quarterly reassessment
been made?
If no, provide details.
Have appropriate derivative disclosures been made,
as required by [AS/GAAP]
If no, provide details
INTERCOMPANY/RELATED
TRANSACTIONS

PARTY

Have all group balances been shown separately


within debtors and creditors?
If no, please give further details.
Please give details of balances due from
related/connected parties that are not part of the
group.
Please give details of any right of set-off in respect
of the company's balances with those of other
members of the group.
Are there:

Emoluments paid or credited to directors who


are also directors of the parent company and/or;

Capital commitments with group companies.


If yes, please give further details.
Page 16 of 21

Yes/No/
NA

AUDIT CHECKLIST

INTERCOMPANY/RELATED
TRANSACTIONS

PARTY

Yes/No/
NA

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Yes/No/
NA

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Does the company require financial support from


the holding company or another group company to
continue trading?
If yes, please confirm that you have received the
necessary confirmation of financial support in
writing and name the company giving the support.
Is this sufficient to enable you to issue an
unqualified audit report in respect of this matter?
TAXATION
Please provide copies of:

The tax computations for the current year;

The taxation account; and

The reconciliation of the actual tax charge to


the profit before taxation.
Have the tax provisions been audited by the audit
engagement team.
If no, provide details of alternative procedures
performed
Has adequate, but not excessive, provision been
made for taxes payable, and in particular in relation
to profits, distributions, and capital gains?
If no, provide details
Has the company complied with regulations of the
taxing authorities that could have a material effect on
its financial statements?
If no, provide details
Have previous years' liabilities been agreed to returns
filed with the taxing authorities?
Have you reviewed correspondence with the taxing
authorities, returns filed with them, and payments
made during the year?
If no, provide details as to the alternative procedures
performed to satisfy yourself as to the status of
taxation liabilities from prior years.
Is the client in dispute with the tax authorities?
If yes, please provide details, including the audit
procedures performed to ensure that all relevant
items are accrued or disclosed in the financial
statements.
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AUDIT CHECKLIST

TAXATION

Yes/No/
NA

Further
information/details
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Yes/No/
NA

Further
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Are you satisfied that deferred tax has been provided


for in accordance with [AS/GAAP].
Provide details of the procedures performed,
including a summary schedule supporting the
deferred tax amounts in the financial statements.

SHAREHOLDERS EQUITY
Are the amounts and descriptions of share capital
authorized, issued, and outstanding in accordance
with the legal instruments, that regulate the
company, and in accordance with statutory requirements?
If no, provide details
Have there been any changes in share capital in the
year
If yes, were the changes:
Properly authorized as required by regulations of the company and by statute?
Adequately disclosed in the [financial statements /consolidation package]?
Vouched by you with cash proceeds or
disbursements, or other receipts or distributions of property?
If no, provide details.
Where an independent transfer agent keeps the
companys share register, have you obtained
confirmation of shares issued and outstanding?
If no, provide details of the alternative procedures
performed.
If share capital has been issued for consideration
other than cash, how have you been able to satisfy
yourselves that a fair value has been attributed to the
shares and that additional paid-in capital has been
appropriately treated?
If shares or share options have been issued to
employees, have these transactions been accounted
for and adequately disclosed in accordance with
[AS/GAAP], as applicable?
Has the company complied with and disclosed in its
financial statements any restrictions imposed by the
directors, company by-laws, statute, or third parties
regarding the classification of reserves, the creation
of special reserves, or restrictions on the application
of such reserves?
If no, provide details
Page 18 of 21

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AUDIT CHECKLIST

SHAREHOLDERS EQUITY

Yes/No/
NA

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Yes/No/
NA

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Have the tax consequences of any changes in reserve


balances been appropriately treated?
If no, provide details
With respect to special reserves set up through
appropriation of retained earnings, have you
ascertained that they are still required?
If reserves are no longer required, provide details of
the procedures performed to ensure that this
movement in reserves has been correctly accounted
for and disclosed under [AS/GAAP].
Are there any dividends in arrears?
If yes, provide details along with the audit work
performed.
In the case of dividends accrued but not paid at the
date of the balance sheet, have you supplied us with
particulars of the dates or anticipated dates of
authorization, declaration, and payment?
If no, provide details
If applicable, have financial instruments with both
characteristics of liabilities and equity been
appropriately accounted for and disclosed in the
financial statements in accordance with [AS/GAAP]?
If no, provide details

INCOME STATEMENT
Have you after an analysis of the income statement
accounts received satisfactory explanations of
unusual variations as compared to previous years
and expectations?
If no, provide details of alternative procedures
performed
Have extraordinary items or exceptional charges and
credits been disclosed in the financial statements.
Provide details as to the procedures performed to
satisfy yourself as to the completeness and validity of
the amounts and disclosures
Please summarise the approach you adopted to
verify the completeness and accuracy of turnover
and cost of sales.
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AUDIT CHECKLIST

PENSIONS

Yes/No/
NA

Please give details of any pension schemes operated


by the company.
Have all amounts relating to the companys pension
scheme(s) been correctly accounted for and
disclosed in accordance with [AS/GAAP]?
If no, please provide further details.
Have you placed reliance on an actuarial valuation?
If so, provide details as to how you have verified
the professional standing of the actuary and how
you have understood the basis on which the
valuation was prepared and the scope of the work
performed.

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AUDIT CHECKLIST

COMMITMENTS AND CONTINGENCIES

Yes/No/
NA

Have loss contingencies been provided and/or has


appropriate disclosure been made in accordance with
[AS/GAAP]?
Have you determined that contingent liabilities have
been properly accounted for and disclosed, including,
for example, the following:
a. Current or imminent litigation, including
written inquiry and response from the
company's legal counsel as to the nature of
the matter and the expected outcome?
b. Guarantees given to third parties?
c. Financial instruments (foreign exchange
transactions)?
d. Long-term contracts for purchases or
sales?
e. Product guarantees and warranties?
f. Claims
employees?

for

back

compensation

by

g. Possible additional taxes for prior periods?


h. Sale, pledge, or assignment of accounts
receivable with recourse?
i. Endorsement, discount, sale, or transfer of
notes, trade, or bank acceptances?
j. Employment agreements?
k. Inadequacy of the company's insurance?
Can you confirm that all material capital and expense
commitments disclosed in the financial statements.
If no, provide details

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