alsa marine harvests ltd Auditors report

ALSA MARINE & HARVESTS LIMITED ANNUAL REPORT 2000-2001 AUDITORS REPORT To The Members of ALSA MARINE & HARVESTS LIMITED We have audited the attached Balance Sheet of ALSA MARINE & HARVESTS LIMITED as at 31st December, 2000 and also the annexed Profit and Loss Account of the company for the period ended on that date and report that: 1. As required by Manufacturing and other Companies (Auditors Report) Order, 1988, issued by the Company Law Board in terms of Section 227 (4A) of the Companies Act, 1956, We enclose in the annexures, a statement of the matters specified in paragraphs 4 & 5 of the said order. 2. Further to our comments in the Annexure referred to in paragraph (1) above. (a) 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. (b) In our opinion, proper books of accounts as required by law, have been kept by the Company so far as it appears from our examination of those books. (c) The Balance Sheet and the Profit and Loss Account, dealt with by this report, are in agreement with books of accounts of the company. (d) Subject to matters stated in para (e) below, the companys Balance Sheet & Profit & Loss account comply with the Accounting standards laid down under section 211(3c) of the companies Act, 1956. (e) In our opinion and to the best of our information and according to the explanations given to us, the said accounts, read with the schedules attached thereto and the notes thereon, give the information required by the Companies Act, 1956, in the manner so required and subject to note 15 & 21 of Schedule 16 regarding debtors/ advances and note 12 of schedule 16 regarding subsidiary and subject to . (1) Remarks in Note no.8 of schedule 16 regarding the extra ordinary amount of Rs.2,69,23,427/- written off of the entire stock of finished goods on account of depletion of stocks by considering its unsuitability for human consumption and perishable nature of the product. (2) Note no.13 of schedule 16 regarding the Exchange rate fluctuations on the export advance balance amount repayable to M/s. Alsa Europe, amounting to Rs.1,59,74,358/- not recognized as additional liability in the accounts. Such omission is not in accordance with the Accounting Standard As-11 issued by the Institute of Chartered Accountants of India. (3) Note No. 18 & 19 of Schedule 16 regarding non-provision towards interest on outstanding to Banks, Hire Purchases and Bills discounting and non-representation of liability to Institution (ICICI). (4) Note No.20 of schedule 16 regarding non provision of liability towards Gratuity and Leave encashment entitlement. Such omission is not in accordance with the Accounting Standard AS 15 issued by the Institute of Chartered Accountants of India. give a true and fair view (i) In the case of Balance Sheet, of the state of affairs of the company as at 31st December, 2000 and (ii) In the case of the Profit and Loss Account of the Loss for the period ended on that date. For VENKATESH & CO CHARTERED ACCOUNTANTS V.DASARATY Partner. Place:Chennai Date :30th June, 2001 ANNEXURE REFERRED TO IN PARAGRAPH (1) OF THE AUDIT REPORT OF EVEN DATE TO THE SHARE HOLDERS OF ALSA MARINE & HARVESTS LIMITED ON THE ACCOUNTS FOR THE PERIOD ENDED 31st DECEMBER, 2000. (i) The company has maintained proper records showing particulars including quantitative details and situation of fixed assets. However the records maintained requires updating. As explained to us, the management has physically verified its fixed assets during the period and no serious discrepancies were noticed on such verification. In our opinion, the frequency of physical verification of fixed asset is reasonable having regard to size of the company and nature of assets. (ii) None of the fixed assets have been revalued during the period. (iii) The stock of finished goods, stores, spare parts and raw material have been physically verified by the management at reasonable intervals during the period. (iv) In our opinion, the procedures of physical 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. (v) Material discrepancies were noticed on physical verification of stocks as compared to book records and the same have been properly dealt with in the books of accounts subject to matters referred under para 2(e)(1) of our Audit Report. (vi) On the basis of our examination of stock records, we are of the opinion that the valuation of stocks is fair and proper and is in accordance with the normally accepted accounting principles and the basis of the valuation is same as in the preceding year except with the regard to depletion in value of stocks as stated in Note 8 of Schedule 16 of notes to accounts. (vii) The company has not obtained any loans secured or unsecured to companies, firms or other parties listed in the register maintained under section 301 of the Companies Act, 1956. According to the information given to us no loans have been taken from the companies under the same management. (viii) The company has not granted any loans secured or unsecured to companies, firms or other parties listed in the registered maintained under section 301 and/or to the companies under the same management as defined under sub-section (ib) of section 370 of the Companies Act, 1956. (ix) Interest free loans or advances in the nature of loans have been given by the company to its employees, and they are generally regular in repaying the principal amounts as stipulated. (x) In our opinion and according to the information and explanations given to us, there are adequate internal control procedures commensurate with the size of the company and the nature of its business, for the purchase of stores, raw materials, plants and machinery, equipment and the assets and for the sale of goods. (xi) In our opinion and according to the information and explanations given to us, there were no transactions of purchase of goods, materials and sale of goods, materials and services made in pursuance of contracts or arrangements entered in the register maintained under section 301 of the Companies Act, 1956 and aggregating during the period to Rs.50,000 or more in respect of each party. (xii) According to the information given to us, the company has a regular procedure for determination of unserviceable or damaged stores, and materials. (xiii) The company has accepted deposits from the public during the period under review which are in accordance with the provisions of section 58A of the companies Act, 1956. (xiv) In our opinion the company has maintained reasonable records for the sale and disposal of scraps. According to information furnished to us, the company has no by-products. (xv) Even though the companys paid up capital exceeds Rs.25,00,000/- the company has no internal audit system at present. However, the existing internal control is adequate considering the size of the company and the nature of its business. (xvi) 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. (xvii) According to the records of the Company, the provident Fund and ESI dues have not been regularly deposited with appropriate authorities. Arrears of PF and ESI amounting to Rs. 12,57,599/- was yet to be paid as on the date of the Balance Sheet. As informed to us by the management, a sum of Rs.65,565/- has been subsequently paid and the remaining dues will be paid at the earliest. (xviii) According to the information and explanations given to us the following undisputed amounts were outstanding at 31.12.2000 for a period of more than six months from the date they became payable. Professional Tax Rs.1,37,612 Tax Deducted at Source (I.T.) Rs.31,84,880 Excise Duty Rs.31,345 (xix) No personal expenses of the Employees of Directors have been charged to revenue account, other than those payable under contractual obligations or in accordance with generally accepted business practice. (xx) The company is a sick industrial company within the meaning of clause (o) of sub section (1) of section 3 of the Sick Industrial Companies (Special Provisions) Act, 1985. The company has been registered with BIFR as a sick company. Place:Chennai For VENKATESH & CO Date :30th June, 2001 CHARTERED ACCOUNTANS V.DASARATY Partner.