Mar 5, 2008

MTNL - Limited Review for the quarter ended Dec 31, 2007

Mahanagar Telephone Nigam Ltd (MTNL) has informed that in the limited review report of the Company for the quarter ended December 31, 2007, the Auditors of the Company have made the following observations:

"1. The Company has adopted the basis for valuing Fixed Assets, Capital Work in Progress & Depreciation and expenditure on replacement on cables, apparatus & plants installation and rehabilitation work is capitalized as per Significant Accounting Policy of the Company, which in the Auditors opinion, is not in agreement with Accounting Standard - 10 - 'According for Fixed Assets', and Accounting Standard - 6 - 'Accounting for Depreciation', issued by the Institute of Chartered Accountants of India.

2. The Company has adopted the basis of valuation of inventories (except for WLL Handsets) as per Significant Accounting Policy of the Company which is not in accordance with the Accounting Standard - 2 on 'Valuation of Inventories' issued by the Institute of Chartered Accountants of India. Further the Company has not done compliance of AS - 28 'Impairment of Assets'.

3. The provision for Bonus / Ex-Gratia, Liabilities of post retirement benefits as per AS - 15, accrual income & depreciation has been made on estimated basis Pending actual determination of the liability, the impact of the same on the accounts for the quarter under review is not ascertainable.

4. The sundry debtors control account, subscriber account and interest accrued thereon unlinked receipts from subscribers balance with DOT & BSNL are subject to reconciliation and consequent adjustments.

5. To the best of Auditors knowledge and belief and according to the explanation given to them the Company is in process of giving effect of the qualifications made by the Auditors in respect of previous accounting years therefore disclosure w.r.t. qualification made by the Auditor in respect of previous accounting year and the impact of these qualification on the Profit and loss in the un-audited quarterly results for the quarter under report, as required under the provisions of clause 41 of the Listing Agreement is not ascertained."

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