We have audited the accompanying financial statements of Brand house
Retails Limited ("the Company"), which comprise the Balance Sheet as at
March 31, 2013, the Statement of Profit and Loss and the Cash Flow
Statement for the year then ended and a Summary of Significant
Accounting Policies and Other Explanatory Information.
Management's responsibility for the financial statements
Management is responsible for the preparation of these financial
statements that give a true and fair view of the financial position,
financial performance and cash flows of the Company in accordance with
the Accounting Standards referred to in sub-section (3C) of Section 211
of the Companies Act, 1956 ("the Act"). This responsibility includes
the design, implementation and maintenance of internal control relevant
to the preparation and presentation of the financial statements that
give a true and fair view and are free from material misstatement,
whether due to fraud or error.
auditors' responsibility
Our responsibility is to express an opinion on these financial
statements based on our audit. We conducted our audit in accordance
with the Standards on Auditing issued by the Institute of Chartered
Accountants of India (ICAI). Those Standards require that we comply
with ethical requirements and plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free
from material misstatement.
An audit involves performing procedures to obtain audit evidence about
the amounts and disclosures in the financial statements. The procedures
selected depend on the auditors' judgment, including the assessment of
the risks of material misstatement of the Financial statements, whether
due to fraud or error. In making those risk assessments, the auditor
considers internal control relevant to the Company's preparation and
fair presentation of the Financial statements in order to design audit
procedures that are appropriate in the circumstances. An audit also
includes evaluating the appropriateness of accounting policies used and
the reasonableness of the accounting estimates made by management, as
well as evaluating the overall presentation of the financial
statements.
We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our audit opinion.
opinion
In our opinion and to the best of our information and according to the
explanations given to us, the financial statements give the information
required by the Act in the manner so required and give a true and fair
view in conformity with the accounting principles generally accepted in
India:
(a) in the case of the Balance Sheet, of the state of affairs of the
Company as at March 31, 2013;
(b) in the case of the Statement of Profit and Loss, of the loss for
the year ended on that date; and
(c) in the case of the Cash Flow Statement, of the cash flows for the
year ended on that date.
emphasis of Matter
We draw attention to:
1. Note 39 of the financial statements with regard to the Company
facing mismatch in its cash flows and in case the required financial
resources are not raised on a timely basis, the operations of the
Company may get impacted, thereby affecting the assumption of going
concern.
2. Note 29 to the financial statements, wherein in respect of the
outstanding trade receivables, which are pending for confirmation,
reconciliation and consequential adjustments, if any, the Company is of
the opinion that the same are not likely to be material given the
nature and size of its operations and hence no additional provision is
required to be made.
Our opinion is not qualified in respect of the matters stated above
report on other legal and regulatory requirements
1. As required by the Companies (Auditors' Report) Order, 2003 ("the
Order") issued by the Central Government of India in terms of
sub-section (4A) of Section 227 of the Act, we give in the Annexure, a
statement on the matters specified in paragraphs 4 and 5 of the Order.
2. As required by Section 227(3) of the Act, we report that:
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 account as required by law have been
kept by the Company so far as appears from our examination of those
books;
c. the Balance Sheet, Statement of Profit and Loss, and Cash Flow
Statement dealt with by this Report are in agreement with the books of
account;
d. in our opinion, the Balance Sheet, Statement of Profit and Loss and
Cash Flow Statement comply with the accounting standards referred to in
sub-section (3C) of Section 211 of the Act;
e. on the basis of written representations received from the directors
as on March 31, 2013, and taken on record by the Board of Directors,
none of the directors is disqualified as on March 31, 2013, from being
appointed as a director in terms of clause (g) of sub-section (1) of
Section 274 of the Companies Act, 1956.
f. Note 38 to the financial statements, wherein in the Company has not
complied with Section 292A of the Companies Act, 1956 and the same is
pending regularization as at the Balance Sheet date.
annexure To auditors' report
[referred to in paragraph 1 under 'report on other legal and regulatory
requirements' in the independent auditors' report of even date to the
members of brand house retails limited on the financial statements for
the year ended 31st March, 2013]
(i) (a) The Company has maintained proper records showing full
particulars, including quantitative details and situation of fixed
assets.
(b) The Company has a regular programme of verification of fixed assets
wherein all fixed assets are verified once in a period of three years,
which in our opinion, is reasonable having regard to the size of the
Company and the nature of its assets. As informed, no material
discrepancies were noticed on such verification.
(c) In our opinion and according to the information and explanations
given to us, a substantial part of fixed assets has not been disposed
off by the Company during the year.
(ii) (a) The inventories has been physically verified by the management
during the year as well as by an independent Chartered Accountant firm
on which we have relied upon. In our opinion, the frequency of such
verification is reasonable.
(b) The procedures of physical verification of inventories followed by
the management are reasonable and adequate in relation to the size of
the Company and the nature of its business.
(c) The Company is maintaining proper records of inventories and no
material discrepancies were noticed on physical verification carried
out at the end of the year.
(iii) (a) As informed, the Company has not granted any loans, secured
or unsecured to companies, firms or other parties covered in the
register maintained under Section 301 of the Companies Act, 1956.
Accordingly, the provisions stated in paragraph 4 (iii) (b), (c) and
(d) of the order are not applicable.
(e) As informed, the Company has not taken any loans, secured or
unsecured from companies, firms or other parties covered in the
register maintained under Section 301 of the Companies Act, 1956.
Accordingly, the provisions stated in paragraph 4 (iii) (f) and (g) of
the order are not applicable.
(iv) In our opinion and according to the information and explanations
given to us, the internal control system prevailing in the Company
needs to be strengthened so as to make it commensurate with the size of
the Company and the nature of its business with regard to purchase of
inventory, fixed assets and with regard to the sale of goods and
services. During the course of audit, we have not observed continuing
failure to correct any major weaknesses in internal control system of
the Company.
(v) (a) According to the information and explanations given to us, we
are of the opinion that the particulars of contracts or arrangements
referred to in Section 301 of the Companies Act, 1956 that need to be
entered into the register maintained under Section 301 have been so
entered.
(b) In our opinion and according to the information and explanations
given to us, the transactions made in pursuance of such contracts or
arrangements exceeding value of Rs. five lacs have been entered into
during the financial year at prices which are reasonable having regard
to the prevailing market prices at the relevant time.
(vi) In our opinion and according to the information and explanations
given to us, the Company has not accepted any deposits from the public
within the meaning of Sections 58A and 58AA of the Act and the rules
framed there under.
(vii) The Company has an internal audit system, which, in our opinion,
requires to be strengthened to make it commensurate with the size and
nature of its business.
(viii) The Central Government of India has not prescribed the
maintenance of cost records under clause (d) of sub-section (1) of
Section 209 of the Act for any of the products of the Company.
(ix) (a) Undisputed statutory dues including provident fund, investor
education and protection fund, employees' state insurance, income-tax,
sales-tax, wealth-tax, service tax customs duty, excise duty, cess have
not been regularly deposited with the appropriate authorities and there
have been serious delays in many cases.
(b) According to the information and explanations given to us,
undisputed dues in respect of provident fund, investor education and
protection fund, employees' state insurance, income-tax, wealth-tax,
service tax, sales-tax, customs duty, excise duty, cess and other
statutory dues which were outstanding, at the yearend for a period of
more than six months from the date they became payable are as follows.
name of the
statute nature of dues amount Period to which the amount
(Rs,in lacs) relates
The Income
Tax Act, 1961 Tax Deducted
at Source 121.92 FY. 2011-12 and 2012-13
(c) According to the records of the Company, the dues outstanding of
income-tax, sales-tax, wealth-tax, service tax, customs duty, excise
duty and cess on account of any dispute, are as follows:
name of the
statute nature of dues amount Period to
which the forum where
(Rs,in
lacs) amount
relates dispute is
pending
Sales Tax
Act,UP Sales Tax 4.10 F.Y.
2007-08 Deputy
Commissioner
Sales Tax
Act, Mumbai Sales Tax 12.80 F.Y.
2004-05 Deputy
Commissioner
(x) In our opinion, the accumulated losses of the Company are more than
fifty percent of its net worth. Further, the Company has incurred cash
losses during the current year but has not incurred cash losses in the
preceding year.
(xi) In our opinion and according to the information and explanations
given to us, the Company has defaulted in repayment of dues to banks
and debenture holder which are as follows:
(a) In respect of banks, the Company has defaulted in interest payments
as below:
Period of default Amount of interest (Rs. in lakhs)
0- 3 Months 265.29
6- 12 Months 332.61
(b) In respect of debenture holders, the Company has defaulted in
principal repayment, payment of premium and interest amounting to Rs.
6,545 lacs, Rs. 1,309 lacs and Rs. 1720.47 lacs respectively. The said
amount is overdue since 30th September, 2012. Further, the Company has
also defaulted in payment of interest amounting to Rs. 928.41 lacs and
the overdue period ranges from 1 to 6 months.
(xii) According to the information and explanations given to us and
based on the documents and records produced to us, the Company has not
granted loans and advances on the basis of security by way of pledge of
shares, debentures and other securities.
(xiii) In our opinion, the Company is not a chit fund or a nidhi /
mutual benefit fund / society. Therefore, the provisions of clause
(xiii) of paragraph 4 of the Companies (Auditor's Report) Order, 2003
(as amended) are not applicable to the Company.
(xiv) In our opinion, the Company is not dealing in or trading in
shares, securities, debentures and other investments. Accordingly, the
provisions of clause (xiv) of paragraph 4 of the Companies (Auditor's
Report) Order, 2003 (as amended) are not applicable to the Company.
(xv) As per the records verified by us and based on the explanations
given to us the Company has given guarantee amounting to Rs. 5,000 Lacs
for loans taken by Brand house Oviesse Limited from bank of which
facility of Rs. 1,357 lacs only have been availed by them. However, we
are unable to comment on whether the terms and conditions of the same
in the given condition are prejudicial to the interest of the Company
or not.
(xvi) During the year, the Company has not obtained any term loans.
(xvii) According to the information and explanations given to us and on
an overall examination of the Balance Sheet of the Company, we report
that no funds raised on short-term basis have been used for long-term
purpose.
(xviii) According to the information and explanation given to us, the
Company has not made any preferential allotment of shares to parties
and companies covered in the Register maintained under Section 301 of
the Companies Act, 1956.
(xix) According to the information and explanations given to us, no
debentures have been issued by the Company during the year.
(xx) The Company has not raised money by way of public issue during the
year.
(xxi) During the course of our examination of the books and records of
the Company, carried out in accordance with the generally accepted
auditing practices in India, and according to the information and
explanations given to us, we have neither come across any instance of
fraud on or by the Company, noticed or reported during the year, nor
have we been informed of such case by the management.
for shyam Malpani & associates for haribhakti & Co.
Chartered Accountants Chartered Accountants
Firm Registration No. 120438 W Firm Registration No. 103523 W
shyam Malpani Rakesh rathi
Proprietor Partner
Membership No: 034171 Membership No. 045228
Mumbai : 16th July, 2013 Mumbai : 16th July, 2013 |