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Mazda Enterprises Ltd.

BSE: 523172 Sector: Industrials
NSE: N.A. ISIN Code: N.A.
BSE 05:30 | 01 Jan Mazda Enterprises Ltd
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Mazda Enterprises Ltd. (MAZDAENTERPRISE) - Auditors Report

Company auditors report

MAZDA ENTERPRISES LIMITED AUDITORS' REPORT To The Members of MAZDA ENTERPRISES LIMITED We have audited the attached Balance Sheet of Mazda Enterprises Limited as at March 31, 1998 and the Profit and Loss Account for the year ended on that date annexed thereto and report that: 1. 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, except otherwise stated. 2. In our opinion, proper books of account as required by law have been kept by the Company so far as appears from our examination of the books except as stated in paragraphs 5 and 7 below. 3. The balance sheet and profit and loss account dealt with by this report are in agreement with the books of account except as stated in paragraph 5(x) below. 4. The accounts of the Company for the year have been prepared on "going concern" basis. On account of absence of adequate revenue generation cou pled with lack of adequate assets to meet substantial liabilities, and the appointment of Receiver by the High Court of Mumbai to take charge of the Company's goods, debt, and assets, as stated in note 2 of schedule 15, in our opinion it is uncertain that the Company will be able to continue operations in the forseeable future. Consequently, the Company might be unable to realise its assets and discharge its liabilities in the normal course of business. Consequently, the accounts do not include adjustments relating to the recoverability and classification of recorded asset amounts or to the amounts and classification of liabilities that might be necessary should the company be unable to continue as a going concern. For the rea sons stated above, the basis of preparing accounts on "going concern" assumption, in our opinion is incorrect. 5. (i) No provision has been made for: a. Interest amounting to Rs.124.08 lakhs on amounts payable to notified parties. b. Income tax and sales tax demand of Rs.128.34 lakhs and Rs.161.84 lakhs respectively disputed in appeal. c. Rs.209.14 lakhs being dimunition in market value of the Company's quoted Stock-in-trade. The Company has valued Stock-in trade and Investments at cost instead of at lower of cost or market value as recommended by the Institute of Chartered Accountants of India. (ii) Attention is invited to Note No.3 (c) regarding stock-in trade of Rs.24.82 lakhs receivable from a broker representing outstanding deliver ies. We are unable to express our opinion thereon. (iii) To the extent of non provisions stated in paragraph 5 above, the loss of the Company for the year, the debit balance of profit and loss account and current liabilities and provisions have been understated by Rs.648.22 lakhs. (iv) Confirmation were not available in respect of aggregate balances of Rs.11.24 lakhs in current and fixed deposit accounts with certain banks included under cash and bank balances. These balances therefore remain unverified and are subject to adjustment, if any. More over cash in hand aggregating to Rs.0.13 lakhs was not available for our verification. (v) Sundry debtors includes Rs.53.03 lakhs due from a notified broker. We are unable to express an opinion on the recoverability or otherwise of the amounts outstanding. (vi) Sundry Debtors outstanding for a period exceeding six months and considered good Rs.83.59 lakhs are due from brokers and certain packaging parties. We are unable to express an opinion on the recoverability or otherwise of the aforesaid amount. vii) The Company's share of loss in the partnership firm for the year ended March 31, 1998 is based on unaudited accounts of the firm. viii) Attention is invited to Note no.5(a) regarding Managerial remunera tion to the former Managing Director in the earlier years which is subject to the approval of the Central Government. (ix) Attention is invited to Note no.6 regarding confirmation of balances not having been obtained in respect of Sundry Debtors, Sundry Creditors including amount payable to a Company under same management, Loans and Advances and Deposits. Theses balances therefore are subject to adjust ments, if any, on obtaining confirmations from the parties. x) Other liabilities includes Rs.2.49 lakhs being the discrepancy on ac count of difference in accounts relating to the earlier period. 6) In our opinion and to the best our information and according to the explanations given to us, the said accounts, subject to our reservations contained in paragraphs 4 and 5 above and read with notes thereon give the information required by the Companies Act, 1956 in the manner so required and give a true and fair view: i) in the case of the Balance Sheet of the state of affairs of the Company as at March 31, 1998; and ii) in the case of the Profit and Loss Account of the loss for the year ended on that date. 7. As required by the Manufacturing and Other Companies (Auditor's Report) Order, 1988 issued by the Company Law Board and on the basis of such checks of the books and records as we considered appropriate and according to the information and explanations given to us during the course of our audit, we further state that i) The Company has maintained records of fixed year, and explanations given to us, the frequency and procedures of physical verification of stock- investment need to be streamlined so as to be commensurate with the size of the Company and nature of its business. v) In respect of unsecured loan of Rs.41 lakhs from Growmore Research and Assets Management Limited, the rate of interest and other terms and condi tions of the said loan are not known and accordingly we are unable to report on the matters specified in clause (vii) of para 4(A) of the above order. vi) The Company has not granted any loans secured or unsecured to companies, firms or other parties listed in the register maintained under section 301 of the Companies Act, 1956, to transactions in shares and securities are not adequate in so far as certain weaknesses were observed in relation to their authorisation, detailed checks or procedures to ensure control over securities, backup systems, transfers in the name of the Company, physical custody records, reconcilliations and procedures. viii) In our opinion, and according to information and explanation given to us, there were no purchase and sale of shares to the companies listed in the register maintained under section 301 of the Companies Act, 1956 and aggregating to Rs.50,000/- or more in respect of each such Company. ix) The Company has not accepted any deposits from the public. x) The Company did not have an internal audit system during the year...lm6 xi) We are informed that the Central Government has not prescribed mainte nance of cost records under section 209(1)(d) of the Companies Act, 1956 for any of the Company's activities. xii) The Company did not have any employees and therefore the question of depositing provident fund dues and E.S.I.C dues with appropriate authori ties does not arise. iii) According to the information and explanations given to us, there are no undisputed amounts payable in respect of Sales Tax, Wealth Tax, Customs Duty and Excise Duty except Income tax amounting to Rs.5.43 lakhs which were outstanding as at March 31, 1998 for a period of more than six months from the date they became payable. xiv) In the course of our audit we have not come across xv) We are informed that the Company is not a sick Industrial Company within the meaning of clause (0) of sub-section (1) of Section 3 of the Sick Industrial Companies (Special Provisions) Act, 1985. xvi) In respect of the transactions of purchase and sale of shares, adequate records have been maintained by the Company so far as it appears from our verification of the related books of account except as stated in paragraphs (iii) and (vii) above. The shares have been held in the name of the Company except as stated in note no.3 of Schedule 15 and exemption available under section 49 of the Companies Act, 1956. Companies (Auditor's Report) Order, 1988 are not considered applicable for the year under re port. For and on behalf of T M MULLAJI & CO Chartered Accountants Y.N.NAGARWALA Proprietor Place : Mumbai, Date : August 31, 1998