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2009 2008 2009 2008Note$'000 $'000 $'000 $'000Revenue 330,710 26,398 0 0Changes in inventories of finished goodsand work in progress526 625 0 0Raw materials and consumables used(19,968) (15,150) 0 0Royalty expenses (527) (1,244)0 0Employee benefits expense4 (4,771) (3,710) 0 0Occupancy expenses (556) (528) 0 0Event expenses (1,062) (1,297) 0 0Advertising expenses (393) (372)0 0Freight expenses (705) (494) 0 0Travel expenses (357) (315) 0 0Depreciation and amortisation expenses 4 (741)(538) (3) 0Professional fees 1,546) (1,183) (758) (680)Finance costs 4 (1,020) (1,724) (59) 347Write down of related party loan 4 (20) (81) (742) 4,746Discount on acquisition 0 1,662 0 0Other expenses (1,747) (1,299) 0 (4)Profit/ (Loss) before tax(2,177) 750 (1,562) 4,409Income tax benefit 5 1,600 2,400 1,600 2,400Profit /(Loss) for the year attributable to membersof the parent entity (577) 3,150 38 6,809Earnings per shareBasic (cents per share) 28(0.23) 1.96Diluted (cents per share) 28 (0.22) 1.84Balance SheetAs at 30 June 2009Consolidated Company2009 2008 2009 2008Notes $'000 $'000$'000 $'000AssetsCurrent assetsCash and cash equivalents 7 388 744 0 0Trade and other receivables 8 5,016 3,111 12 91Inventories 9 3,327 3,854 0 0Other current assets 10 233 90 0 0Total current assets 8,964 7,799 12 91Non-current assetsDeferred tax assets 5 4,000 2,400 4,0002,400Financial assets 11 75 75 12,411 11,971Property plant and equipment 12 3,191 3,51426 0Goodwill 13 4,184 3,743 0 0Intangible assets 14 8,178 8,178 0 0Total non-current assets 19,628 17,910 16,437 14,371Total assets 28,592 25,709 16,449 14,462Current liabilitiesTrade and other payables 158,973 9,396 295 1,375Borrowings 16 6,700 4,847 0 0Provisions 17 528 787 0 0Current tax liabilities 0 44 0 0Total current liabilities 16,201 15,074 295 1,375Non-current liabilitiesBorrowings 16 2,110 2,6480 0Provisions 17 107 6 0 0Total non-current liabilities 2,217 2,6540 0Total liabilities 18,418 17,728 295 1,375Net assets 10,174 7,981 16,154 13,087EquityIssued capital 18 38,312 35,283 38,312 35,283Reserves 19 (199) 60 161 161Accumulated losses 20 (27,939) (27,362) (22,319) (22,357)Total equity 10,174 7,981 16,154 13,087Retrieved from Beyond Sportswear International Limited ACN 108 042 593 Annual Report 30 June 2009Part 11.

Cash HandlingAs indicated, free cash flows increased by 101.84% therefore there is a high risk in handling such a large amount of hard cash. In addition, it shows that company has not made investments and surplus cash is possible.

Because cash is the most susceptible item in the account balances, its auditing process involve the tracing out of all cash associated transactions and activities. A variation in the reported cash in the balance sheet would lead to decreased or increased assets level (Mitchell & Scott para8). 2. Stock Management: BSI manufactures and distributes its product to a large number of people and therefore, it should always hold heavy stock in its warehouses at a given period. This means that effective stock management is necessary. The company must maintain stock level follow up.

Continuous examination of stock should be guaranteed. As the company’s operations are highly stock- based the company’s management should develop internal systems where accountability is high (Mitchell & Scott para8)a) Minimum stock: this is the stock level that BSI Ltd has to maintain at all time, such levels of stocks must always be in stores. Inventory systems should be modeled in a way to address this problem effectively. b) Maximum stock: to avoid over-stocking, maximum stock level should be clearly defined. It will ensure that stock is within the control of management.

Here as well, the point is the same where the inventory system should be well designed. c) Lead stock: this is stock level, which company should maintain during lead-time i. e. amount of time taken by supplier from the date of order to the date of supply. Lead-time or cycle time for any company is identified as the basic yield indicator. The objective is to be productive and profitable so that the business accomplish its purpose (William, p 458)d. Reordering levels: this is the most significant level of stock. It is the level that when reached order for the supply of goods should be placed with supplier.

Correspondingly, the auditor can safely presume that no form of inventory system would be efficient without pre-determined reorder levels.

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