Ljb Company

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Date Submitted: 12/10/2011 04:37 PM

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To : Mr. XYZ


LJB Company

From : M F Annigeri,

T.E.L & Company, PA

Date : 01-Oct-2011

Subject : Results of TEL Review of LJB Company Internal Controls


This memorandum transmits the review results for LJB Internal Controls requirement for the upcoming public issue of LJB. Further it also provides the details of current practices of Internal Controls and future recommendation as per the Federal Standards.

Results & Recommendations:

Based on our review we identified certain deficiencies that prevent LJB Company from fully satisfying the standards for Internal Control in the Federal Government. For your information and corrective action we, we have listed the below details. In the future, we anticipate conducting a follow up review to assess the actions you have taken.

Considering your requirement and the fact that LJB Company has planned for IPO and reviewing your company’s information as provided by you, following are some of the details on establishing good strong Internal control for having a successful IPOs. Further keep in mind, while doing so the cost involved in the same should not exceed the desired benefits.

         Implement a light version of SOX with good documented and tested controls.

         Create and enhance current company policies and procedures to include risk management, insider trading, signing authorities and limits.

         SEC Complaint financial reporting.

         Convert Reporting to IFRS standards.

         establishing a board of directors for the company prior to going public. Create and adopt a code of Ethics applicable to all directors, officers and employees.

         Review for Internal Loans. It is unlawful for any issuer, as defined by SOX act 2002 to extend, maintain, and arrange any credit to any of the executives, officers of the company.

         Determine which officers are required to file the ownership...