ALACRITY ELECTRONICS LIMITED
ANNUAL REPORT 2001-2002
THE MEMBERS OF
ALACRITY ELECTRONICS LIMITED
I have audited the attached Balance Sheet of ALACRITY ELECTRONICS LIMITED,
as at 31st December 2002 and also the Profit and Loss Account for the
period 1st October 2001 to 31st December 2002 annexed thereto, together
with the Notes thereon. These financial statements are the responsibility
of the Company's Management. My responsibility is to express an opinion on
these financial statements based on my audit.
I have conducted my audit in accordance with the Auditing Standards
generally accepted in India, which feature that I plan and perform the
audit to obtain reasonable assurance about whether the financial statements
are free of material mis-statement. The audit includes examining, on test
basis, evidence supporting the amounts and disclosures in the financial
statements and also assessing the accounting principles used and
significant estimates made by the Management, as well as evaluating the
overall financial statements presentation. I believe that my audit provides
a reasonable basis for my opinion.
As required by the Manufacturing and Other Companies (Auditor's Report)
Order, 1988, issued by the Central Government under section 227(4A) of the
Companies Act, 1956, have to further state that:
1. The company has maintained proper records showing full particulars
including quantitative details and of fixed assets. There is a regular
programme of verification of fixed assets which in my opinion is reasonable
having regard to the size of the company and the nature of its business. No
material discrepancies have been noticed on such verification.
2. None of the fixed assets has been revalued during the period.
3. (a) Physical verification of the stock of trading items, finished goods
and components have been conducted by the management at the close of the
financial year and as informed by the management, no significant
discrepancies have been noticed on such verification as compared with the
book records. (b) The discrepancies noticed on verification between the
physical stock and book records have been properly dealt with, in the books
of account. (c) The procedure of physical verification of stock followed by
the management is generally found to be reasonable and adequate in relation
to the size of the company and the nature of its business. (d) In my
opinion, the valuation of inventory is fair and proper, and in accordance
with the normally accepted accounting principles and is on the same basis
as in the preceding year.
4. The company has taken loans from a party as listed in the register
maintained under section 301 of the Companies Act, 1956, The rate of
interest and terms and conditions of such loans are not prima facie
prejudicial to the interest of the company. The provisions of section
370(1C) of Companies Act, 1956 the not applicable after 31st October 1998
by virtue of section 370(6) of the said Act.
5. The company has not granted any loans, secured or unsecured to
companies, firms or other parties listed in the register maintained Linder
section 301 of the Companies Act, 1956. The provisions of section 370(1C)
of Companies Act, 1956 are not applicable after 31.10,1998 by virtue of
section 370(6) of the said Act.
6. In respect of loans and advances, in the nature of loans given by the
company, the parties have repaid the principal amounts as stipulated and
have also been regular in the payment of interest wherever applicable.
7. In my opinion and according to the information and explanations given to
me, there are adequate internal control procedures commensurate with the
size of the company, and the nature of its business with regard to the
purchase of stores, components, goods, fixed assets etc., and with regard
to the sale of goods.
8. In my opinion, the prices of goods and services from and to companies
entered in the register maintained under section 301 of the Companies Act,
1956 and aggregating during the year to Rs.50,000/- or more in respect of
each party are reasonable having regard to prevailing market prices for
similar goods, components and services.
9. The company has a regular procedure for determination of unserviceable
of damaged components, spares, accessories and finished goods. Adequate
provision has been made in the accounts for the loss arising on the items
10. As per the information and explanations given to me, the company has
not accepted any fixed deposit from the public during the period,
11. Reasonable records have been maintained by the company for sale and
disposal of scrap.
12. In my opinion, the company has an internal audit system commensurate
with the size of the company and the nature of its business.
13. The Central Government has not prescribed maintenance of cost records
under Section 209(1)(d) of the Companies Act, 1956.
14. Provident Fund clues relating to the period from 1st October 2001 to
31st December 2002 and aggregating to Rs.20,73,442/- which has fallen due
for deposit with the appropriate authorities has not been so deposited as
at 31/12/2002. The company has neither collected nor remitted Employees'
State Insurance dues during the financial year.
15. The Company is yet to pay undisputed income-tax dues in respect of the
return filed for the assessment year 2000-01 (financial year ended
31/3/2000) the liability of which as at 31/12/2002 is Rs.20,97,313/-.
Further a sum of Rs.4,45,448/- is outstanding in respect of income-tax
deducted at source payable for a period exceeding six months prior to the
financial year ended 31st December 2002. Apart from this, there ate no
undisputed amounts ' payable in respect of wealth-tax, sales-tax, customs
duty and exceed duty outstanding as at the last clay of the financial year
for a period of more than six months from the, date they became payable.
16. According to the information and explanations given to me, no personal
expenses of employees or directors have been charged to the revenue
accounts, other than those payable under contractual obligations or in
accordance with generally accepted business practices.
17. The company is not a Sick Industrial Company, within the meaning of
clause (o) of sub-section I of Section 3 of the Sick Industrial Companies
(Special Provisions) Act, 1985.
18. In case of trading activities of the company, there have been no
19. In respect of service activities, the company has a reasonable system
of recording receipts, issues and consumptions of materials and stores and
allocating consumables to the relative jobs, commensurate with the size and
nature of its business.
Further to the comments referred to above, I report that:
1. I have obtained all the information and explanations which, to the best
of my knowledge and belief were necessary for the purposes of my audit.
2. In my opinion, proper books of accounts as required by law have been
kept by the Company so far as appears from my examination of these books.
3. The Company's Balance Sheet and Profit and Loss Account read with the
Notes forming part thereof, dealt with by this Report, are in agreement
with the books of account.
4. In my opinion, the Profit and Loss Account and Balance Sheet comply with
the Accounting Standards referred to in sub-section (3C) of Section 211 of
the Companies Act, 1956.
5. Based on the written representations made by the Directors and taken on
record by the Board of Directors, I state that none of the Directors is
disqualified from being appointed as a Director in terms of Section
274(1)(g) of the Companies Act, 1956.
6. In my opinion and to the best of my information and according to the
explanations given to me, the said accounts read with the Notes forming
part thereof, give the information required by the Companies Act, 1956 in
the manner so required and give a true and fail- view:
(a) In the case of the Balance Sheet, of the state of the Company's affairs
as at the end of the financial year,- and
(b) In the case of the Profit and Loss Account, the LOSS for the financial
Chennai RAJAN VERGHESE CHACKO
January 30, 2003 Chartered Accountant