Mideast (India) Limited
To the Members of Mideast (India) Limited,
We have audited the attached balance sheet of M/s MIDEAST (INDIA) LIMITED.
New Delhi, as at 31st March, 1997 and the Profit and Loss Account for the
year ended on that date annexed thereto and report that:-
I. As required by the Manufacturing and Other Companies (Auditor's Report)
Order1988, issued by the Company Law Board in terms of section 227 (4A) of
the Companies Act, 1956. We give the matters specified in Paragraph 4 and 5
of the said order as under :-
1. According to the information and explanation given to us, the company is
maintaining proper records showing full particulars including quantitative
details and situation of fixed assets which were physically verified by the
management at reasonable intervals and no discrepancies were noticed on
such verification as compared with available records.
2. None of the fixed assets have been revalued during the year.
3. According to the explanation given to us, the physical verification has
been conducted by the management at reasonable intervals in respect of
finished goods,stores, spare parts, and raw materials.
4. According to the explanations given to us, the procedures of physical
verification of stocks followed by the management are reasonable and
adequate in relation to the size and nature of its business.
5. Any material discrepancies noticed and found on physical verification of
stocks as compared to books / records have been properly dealt with in the
books of account.
6. In our opinion and according to the statement submitted to us the
valuation of the stocks as referred to in (3) above is fair and proper in
accordance with the normally accepted accounting principles. The basis of
valuation of stocks is the same as in the earlier year.
7. The company has taken unsecured loans from other corporate which are not
under the same management and listed in the register maintained under
Section 301 of the Companies Act, 1956.
8. The company has given short term unsecured loan to companies under the
same management as defined under sub-section 1 (B) of Section 370 of the
Companies Act, 1956 and the same is listed in the register maintained under
section 301 of the Companies Act, 1956.
9. In our opinion the loans & advances in the nature of loan given by the
company to other parties employees are not prejudicial to the interest of
10. In our opinion and according to the information and explanation
submitted to us, there is an adequate internal control procedure
commensurate with the size and nature of its business for the purchase of
machinery, equipment and other assets and for the sale of goods.
11. In our opinion and according to the information and explanations given
to us, the transactions of purchase of goods and materials and sale of
goods materials and services made in pursuance of contracts or arrangement
falling under Section 301 of the Companies Act,1956 and aggregation during
the year to Rs. 50,000/- or more in respect of each party have been made at
prices which are reasonable having regard to specialized nature of items
purchased prevailing market prices of such goods materials or services or
the prices at which transactions Mideast (India) Limited for similar goods
materials or services have been made with other parties.
12. In our opinion and according to the explanation given to us the
unserviceable or damaged stores raw materials or finished goods are
determined and provision for the loss has been made in the accounts.
13. The Company has compiled with the provisions of Section 58A of the
Companies Act, 1956 and Companies (Acceptance of Deposits) Rules, 1975 with
the regard to the deposits accepted by the Company.
a) Company has not maintained (invested/deposited), minimum liquid assets
ratio as prescribed in Rule 3A of the Companies (Acceptance of Deposit)
b) Company is in default in repayment of its deposit as per the terms and
conditions of such deposits.
14. In our opinion the Company is maintaining reasonable records for the
sale and disposal of realizable scrap.
15. The maintenance of cost records has not been prescribed by the Central
Government under Section 209 (1) (d) of the Companies Act, 1956.
16. In our opinion and according to the information and explanation
submitted to us, the Company has an internal audit system commensurate with
the size and nature of its business.
17. According to explanations and information given to us, no undisputed
amount payable in respect of income tax, wealth tax sales tax, custom duty
and excise duty was outstanding, as on the last day of financial year
concerned for a period of more than six months from the date they became
18. The personal expenses of employees or directors have not been charged
to revenue accounts, other than those payable under contractual obligation
and incurred for the business of the Company.
19. According to explanations and information given to us the Company was
regular in depositing Provident Fund and Employees State Insurance dues
with appropriate authorities.
20. The Company is not a Sick Industrial Company within the meaning of
Clause (O) of subsection (1) of Section 3 of the Sick Industrial Companies
(Special Provision) Act 1985.
Further to our comments given in para I above, we report that:
a) We have obtained all the information and explanation which to the best
of our knowledge and belief were necessary for the purpose of our audit.
b) In our opinion proper books of accounts as required by law have been
kept by the company, so far as it appears from our examination of such
c) The Balance Sheet and Profit and Loss Account referred to in this report
are in agreement with the books of accounts.
d) In our opinion and to the best of our information and according the
explanations given to us, the said Balance Sheet and Profit & Loss Account
together with the notes thereon, give the information required by the
Companies Act 1956 and give a fair view, subject to the matters referred in
the schedule `O' Notes on Accounts:
i) in the case of the Balance Sheet of the State of affairs of the Company
as at 31st March, 1997.
ii) in the case of the Profit & Loss Account of the Profit for the year
ended on that date.
for A R & ASSOCIATES
ANIL K ROHATGI
5th December, 1997