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MLG Industries Ltd.

BSE: 513619 Sector: Industrials
NSE: N.A. ISIN Code: N.A.
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MLG Industries Ltd. (MLGINDUSTRIES) - Auditors Report

Company auditors report

MLG INDUSTRIES LIMITED AUDITOR'S REPORT To THE MEMBERS OF MLG INDUSTRIES LIMITED We report that we have audited the attached Balance Sheet of MLG Industries Limited as at 31st March, 1998 and also the Profit and Loss Account of the Company for the year ended on that date, both of which we have signed under reference of this report. As required by the Manufacturing and Other Companies (Auditor's Report) Order, 1988 issued by the Company Law Board in terms of Section 227 (4A) of the Companies Act, 1 g56, we enclose in the Annexure 'A' a statement on the matters specified in paragraphs 4 and 5 of the said order. Further to our comments in the Annexure referred to in paragraph above, we report that: i) We have obtained all the information and explanations which, to the best of our knowledge and belief, were necessary for the purpose of our audit: ii) In our opinion, proper books of account as required by law have been kept by the company so for as appears from our examination of the books: iii) The Balance Sheet and Profit and Loss Account dealt with by this report are in agreement with the books of account: iv) In our opinion and to the best of our information and according to the explanations given to us, the said statements of accounts subject to Notes Nos. 3 to 7 of Schedule 15 regarding non-provision of interest and other payments due and impact of these on the loss of the company and read together with other notes in schedule 15 give information required by the Companies Act, 1g56 in the manner so required and give a true and fair view: a) in the case of the Balance Sheet, of the state of affairs of the Company as at 31st March. 1998, and b) in the case of the Profit and Loss Account, of the loss of the company for the period ended on that date. For Deepak Bansal & Associates Chartered Accountants Place: Delhi. Deepak Bansal Date : 2nd April, 1998 Partner ANNEXURE 'A' REFERRED TO IN PARAGRAPH 1 OF THE AUDITORS' REPORT TO THE MEMBERS OF MLG INDUSTRIES LIMITED ON THE ACCOUNTS FOR THE PERIOD ENDED ON 31ST MARCH, 1998. (a) The Company is generally maintaining proper records showing full particulars including quantitative details and situation of fixed assets. All fixed assets have been physically verified by the management at reasonable intervals and no material discrepancies were noticed on such verification. (b) None of the fixed assets have been revalued during the year. (c) The finished goods, raw materials components, stores and spares have been physically verified by the Management at reasonable intervals. (d) The procedure of 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 (e) The discrepancies noticed on physical verification of stocks as compared to book records were not material and have been properly dealt with in the books of account (f) On the basis of our examination of stocks records, we are of the opinion that the valuation of the stocks is fair and proper, in accordance with the normally accepted accounting principles, and is on the same basis as in the preceeding year. (g) The company has not taken any loans, secured or unsecured, from companies, firms or persons listed in the register maintained under section 301 of the Companies, Act, 1956 and/ or from bodies corporate under the same management as defined under sub section (1 B) of section 370 of the Companies Act. 1956. (h) The company has not granted any loans, secured or unsecured, to companies, firms, or other parties listed in the register maintained under section 301 and/or to the companies under the same managements defined under sub section (1B) of Section 370 of the Companies Act, 1956. (i) The parties to whom loans or advances in the nature of loans have been given by the company are generally regular in repayment of the principal amount and interest thereon as per stipulations. j) In our opinion and according to the explanations given to us, there are adequate internal control procedures commensurate with the size of the company and the nature of its business of purchase of stores, raw material including components, plant and machinery, equipment and other assets and for the sale of goods. In respect of raw material purchases, the Company is not inviting quotations from other parties as according to the explanation given to us, the material are of a specialized nature. (k) According to the information and explanations given to us, there is no contract or arrangement of purchase or sale of goods, materials and services entered in the registers maintained under section 301 of the Companies Act, 1956, however, purchase, sale of goods and services were rendered to such parties which have been made at prices which are reasonable having regard to the prices at which transactions for similar goods, material or services have been made with other parties, except in the cases where a comparison could not be made as, according to the information given to us, there were no transaction for similar goods with other parties. (I) As explained to us, unserviceable or damaged stores, raw materials and finished goods have been determined by the management and adequate provisions for the loss has been made in the accounts. (m) The company has not accepted any deposits form the public within the meaning of section 58A of the Companies Act, 1956. (n) Reasonable records have been maintained by the company for the sale and disposal of production and scraps. The Company has no by-product. (o) In our opinion and according to the information and explanations given to us, there are adequate internal control procedures commensurate with the size and nature of its business with regard to purchase of stores, raw materials, including components, plant and machinery, equipments and other assets and for the sale of goods. (p) The Central Government has not prescribed maintenance of cost records under section 209 (1 ) (d) of the Companies Act, 1956 for any of the products of the company. (q) Employees State Insurance and Provident Fund dues have generally been regularly deposited with the appropriate authorities. (r) As on the last day of the financial year, there were no amounts outstanding in respect of undisputed income-Tax, Wealth Tax, Sales Tax, Custom Duty and Excise duty which were due for more than six months from date they become payable. (s) The company has a policy of authorizing expenditure based on reasonable checks and controls. This policy is intended to ensure that expenses are authorized on the basis of contractural obligations or accepted business needs and requirements. In terms of these information and explanations given to us, we have not come across any expenses charged, to the best of our knowledge and belief, could be personal expenses. (t) That if provision of expenses are made as stated in Notes no. 3 to 7 of Schedule 15 of the Balance Sheet, the Company shall become a stick industrial company within the meaning of clause (o) of sub section (1 ) of section 3 of the Sick Industrial Companies (Special Provisions) Act. 1985. (u) In respect of the Company's service activity, in our opinion the Company has a reasonable system of recording receipts, issues and consumption of materials and stores commensurate with the size and nature of its business The allocation of materials consumed and manhours utilised to the relative jobs has not been considered necessary by the Company, since the services rendered are billed to customers at predetermined prices. In our opinion and according to the information and explanations given to us, there is reasonable system of authorization at proper levels, and an adequate system of internal control commensurate with the size of the Company and the nature of its business, on issue of stores and allocation of stores to jobs. (v) In respect of Company's trading activity, as explained to us, damaged goods have been determined and adequate provision for the loss, which is not significant, has been made in the accounts. For Deepak Bansal & Associate Chartered Accountants Place: Delhi. Deepak Bansal Date : 2nd April, 1998 Partner