Mar 31, 2013
Report on the Financial Statements
We have audited accompanying financial statements of BIRLA PACIFIC
MEDSPA LIMITED ("the Company"), which comprise the Balance Sheet as at
March 3 I, 2013 and the Statement of Profit and Loss and Cash Flow
Statement for the period then ended, and a summary of significant
accounting policies and other explanatory information.
Management'' 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 subsection (3C) of section 21 I
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.
Auditor''s 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.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 auditor''s 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 the 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 qualified audit opinion.
Basis for Qualified Opinion
Trade receivables, trade payables, loans & advances, other current
assets and other current liabilities are subject to confirmation &
reconciliation if any.
Opinion
In our opinion and to the best of our information and according to the
explanations given to us, except for the effects of the matters
described in the Basis for Qualified Opinion paragraph, 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 3 1,2013;
b) in the case of the Statement of Profit and Loss, of the profit for
the period ended on that date; and
c) in the case of Cash Flow Statement, of the cash flows for the period
ended on that date.
Emphasis of Matter
We draw attention to note no. 37 of the financial statements, regarding
appointment of Company Secretary and Managing Director. Our opinion is
not qualified in respect of this matter.
Report on other Legal and Regulatory Requirements
Subject to matters described in the Basis for Qualified Opinion
paragraph, we report that
1. As required by the Companies (Auditor''s Report) Order, 2003,("the
order") as amended by the Companies (Auditor''s Report) (Amendment)
Order, 2004, 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 said
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 21 I of the Companies Act, 1956.
e) On the basis of the written representations received from the
directors, as on March 31, 2013 and taken on record by the Board of
Directors, we report that none of the directors is disqualified as on
March 3 1,2013 from being appointed as a director in terms of clause
(g) of sub-section (I) of Section 274 of the Companies Act, 1956.
ANNEXURE TO THE AUDITOR''S REPORT
(Referred to in paragraph I of Report on other Legal and Regulatory
Requirements of our Report of even date on the accounts of Birla
Pacific Medspa Limited for the period ended March 3 1,2013)
(i) a. The Company has maintained proper records showing full
particulars, including quantitative details and situation of fixed
assets.
b. As explained to us, the company has not physically verified any of
the fixed assets during the year. However, there is a phased programme
of verification which, in our opinion, is reasonable having regard to
the size of the Company and the nature of its assets.
c. There has been no disposal of substantial part of fixed assets
during the period, which may affect the going concern status of the
company.
(ii) a. As explained to us, inventories were physically verified during
the period by the management at reasonable intervals.
b. In our opinion and according to the information and explanation
given to us, the procedures of physical verification of inventories
followed by the management were reasonable and adequate in relation to
the size of the Company and the nature of its business.
c. In our opinion and according to the information and explanation
given to us, the company has maintained proper records of its
inventories and no material discrepancies were noticed on such physical
verification.
(iii) a. The Company has granted unsecured loans to one company covered
in the register maintained under section 301 of the Companies Act,
l956.The maximum amount involved during the period is Rs. 2,00,000 and
the period end balance is Rs. Nil.
b. In our opinion, interest and other terms and conditions on which
loans have been given from parties listed in the register maintained
under section 301 of the Companies Act, 1956 are not, prima facie,
prejudicial to the interest of the Company;
c. In our opinion, principal amount and interest were received
regularly as per the terms of the agreement except interest accrued &
due but not received amounting to Rs. 385,169.
d. In our opinion, the Company has taken reasonable step to recover
overdue amount.
e. The Company has taken interest free unsecured loans from one
company covered in the register maintained under section 301 of the
Companies Act, 1956The maximum amount involved during the period is Rs.
54,91,952 and the period end balance is Rs. 54,91,952.
f. In our opinion, the terms and conditions on which loans have been
taken from parties listed in the register maintained under section 301
of the Companies Act, 1956 are not, prima facie, prejudicial to the
interest of the Company;
g. In the absence of stipulations in respect of the terms of repayment
of principal amount of the aforesaid loans, we are unable to comment
whether payment of principal is regular.
(iv) 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 with regard to purchase of fixed assets and with regard to
sale of goods and services. During the course of our audit we have not
observed any continuing failure to correct major weaknesses in internal
control system.
(v) a. In respect of transactions entered in the register maintained in
pursuance of section 301 of the Companies Act, 1956, to the best of our
knowledge and belief and according to the information and explanations
given to us, particulars of contracts or arrangements that needed to be
entered into the register have been so entered.
b. In the absence of comparables in certain transactions, we are unable
to comment whether the transactions made in pursuance of contracts or
arrangements entered in the register maintained under section 301 of
the Companies Act, 1956 and exceeding Rs.5,00,000/- in respect of each
party during the period have been made at prices which are reasonable
having regard to prevailing market price at the relevant time.
(vi) The Company has not accepted any deposits from the public within
the meaning of the provisions of Section 58A and 58AA or any other
relevant provisions of the Companies Act, 1956 and rules made
thereunder. Hence, the clause (vi) of the order is not applicable.
(vii) In our opinion, the internal audit functions carried out during
the year by a firm of Chartered Accountants appointed by the management
have been commensurate with the size of the Company and nature of its
business.
(viii) According to the information and explanations given to us, the
Central Government has not prescribed maintenance of cost records under
section 209 (I) (d) of the Companies Act, 1956 for any of the products
of the Company and hence clause 4 (viiii) of the Order is not
applicable to the Company.
(ix) (a) According to the information and explanations given to us and
on the basis of records produced before us, the Company is generally
regular in depositing with appropriate authorities undisputed statutory
dues including provident fund, employees'' state insurance, income tax,
sales tax, wealth tax, service tax, custom duty, excise duty, cess and
other material statutory dues applicable to it.According to the
information and explanations given to us, no undisputed arrears of
statutory dues were outstanding as at March 31,2013 for a period of
more than six months from the date they became payable.
(b) There are no cases of non deposit with appropriate authorities of
disputed dues of sales tax / income tax / custom tax / wealth tax /
service tax/ excise authorities.
(x) The Company has been registered for a period of less than five
years and hence we are not required to comment on the accumulated
losses.The company has not incurred cash losses in the current
financial year but has incurred in the immediately preceding financial
year.
(xi) In our opinion and according to the information and explanations
given to us, the Company has not defaulted in repayment of dues to a
financial institution, bank or debenture holders.
(xii) According to the information and explanations given to us, the
Company has not granted any loans or advances on the basis of security
by way of pledge of shares, debentures and other securities.
(xiii) In our opinion, the provisions of any special statute applicable
to Chit Fund, Nidhi or Mutual Benefit Fund/Societies are not applicable
to the Company.
(xiv) In our opinion and according to the information and explanations
given to us, the Company is not dealing or trading in shares,
securities, debentures and other investments other than temporary
deployment hence the provisions of the clause 4(xiv) of the Companies
(Auditor''s Report) Order, 2003 are not applicable to the Company.
(xv) According to the information and explanations given to us and the
record examined by us, the Company has not given any guarantee for
loans taken by others from banks or financial institutions.
(xvi) The Company has not taken any term loan during the period.
(xvii) On the basis of an overall examination of the Balance Sheet of
the Company and according to the information and explanations given to
us, in our opinion there are no funds raised on short-term basis, which
have been used for long-term investment.
(xviii) 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 during the period, hence the
provisions of the clause 4(xviii) of the Companies (Auditor''s Report)
Order, 2003 are not applicable to the Company.
(xix) The Company has not issued debentures during the period and
hence, the question of creating securities in respect thereof does not
arise.
(xx) In the absence of sufficient audit evidence we are unable to
comment on end use of money raised by public issues as disclosed in the
notes to the financial statements.
(xxi) On the basis of our examination and according to the information
and explanation given to us, no fraud, on or by the Company, has been
noticed or reported during the course of our audit.
For Kanu Doshi Associates
Chartered Accountants
Firm registration No. 104746W
Jayesh Parmar
Partner
Membership No.: 45375
Place: United Kingdom
Date : May 23, 2013
Mar 31, 2012
1. We have audited the attached Balance Sheet of Birla Pacific Medspa
Limited as at March 31, 2012 and the Statement of Profit and Loss and
also the Cash Flow Statement for the year ended on that date annexed
thereto. These financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on
these financial statements based on our audit.
2. We conducted our audit in accordance with the auditing standards
generally accepted in India. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for
our opinion.
3. As required by the Companies (Auditor's Report) Order, 2003, as
amended by the Companies (Auditor's Report) (Amendment) Order, 2004,
issued by the Central Government of India in terms of sub-section (4A)
of section 227 of the Companies Act, 1956, according to the information
and explanations given to us during the course of the audit and on the
basis of such checks as we considered appropriate, we enclose in the
Annexure a statement on the matters specified in paragraphs 4 and 5 of
the said Order.
4. Further to our comments in the Annexure referred to above, we
report that:
(i) We have obtained all the information and explanations, which to the
best of our knowledge and belief were necessary for the purposes of our
audit;
(ii) 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
these books subject to our observation mentioned in paragraph (vi)
below;
(iii) 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;
(iv) In our opinion, the Balance Sheet, Profit and Loss Account and
Cash Flow Statement dealt with by this report comply with the Companies
(Accounting Standards) rules, 2006 and / or Accounting Standards
referred to in sub-section (3C) of section 211 of the Companies Act,
1956 subject to our observation mentioned in paragraph (vi) below;
(v) On the basis of written representations received from the
directors, as on March 31, 2012 and taken on record by the Board of
Directors, we report that none of the directors are disqualified as on
March 31, 2012 from being appointed as a director in terms of clause
(g) of sub-section (1) of Section 274 of the Companies Act, 1956;
(vi) The Company has deferred the accumulated revenue expenditure of
Rs. 89,755,020 (previous period Rs. 55,638,638 plus current period Rs.
34,116,382) being in the nature of Brand Building Expenses which is not
in accordance with Accounting Standard 26 "Accounting for
Intangibles". Due to the above, the loss as reported by the profit and
loss account is understated by Rs. 34,116,382 and reserve of the
company is overstated to the extent of Rs. 89,755,020. Our report for
the earlier period contained similar observation;
(vii) In our opinion and to the best of our information and according
to the explanations given to us, the said accounts, subject to our
observation in paragraph (vi) above and the other notes thereon, give
the information required by the Companies Act, 1956, 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 on March 31, 2012; and
(b) in the case of the Statement of Profit and Loss, of the loss for
the year ended on that date.
(c) in the case of Cash Flow Statement, of the cash flows for the year
ended on that date;
ANNEXURE TO THE AUDITOR'S REPORT
(Referred to in paragraph 3 of our Report of even date on the accounts
of Birla Pacific Medspa Limited for the period ended March 31, 2012)
(i) a. The Company has maintained proper records showing full
particulars, including quantitative details and situation of fixed
assets.
b. As explained to us, the company has not physically verified any of
the fixed assets during the year. However, there is a phased programme
of verification which, in our opinion, is reasonable having regard to
the size of the Company and the nature of its assets.
c. There has been no disposal of substantial part of fixed assets
during the period, which may affect the going concern status of the
Company.
(ii) a. As explained to us, inventories were physically verified during
the period by the management at reasonable intervals.
b. In our opinion and according to the information and explanation
given to us, the procedures of physical verification of inventories
followed by the management were reasonable and adequate in relation to
the size of the Company and the nature of its business.
c. In our opinion and according to the information and explanation
given to us, the company has maintained proper records of its
inventories and no material discrepancies were noticed on such physical
verification.
(iii) a. The Company has granted unsecured loans to 7 companies covered
in the register maintained under section 301 of the Companies
Act, 1956.The maximum amount involved during the period is
Rs.211,750,000 and the period end balance is Rs.211,750,000.
b. In our opinion, rate of interest and other terms and conditions of
such loan are not prima facie prejudicial to the interest of the
Company.
c. In our opinion, principal amount and interest were received
regularly as per the terms of the agreement except interest accrued &
due but not received amounting to Rs.382,432.
d. In our opinion, the Company has taken reasonable steps to recover
overdue amount.
e. The Company has taken interest free unsecured loans from two
companies covered in the register maintained under section 301 of the
Companies Act, 1956. The maximum amount involved during the period is
Rs. 2,500,000 and the period end balance is Rs. 1,562,450.
f. In our opinion, the terms and conditions on which loans have been
taken from parties listed in the register maintained under section 301
of the Companies Act, 1956 are not, prima facie, prejudicial to the
interest of the Company;
g. In the absence of stipulations in respect of the terms of repayment
of principal amount of the aforesaid loans, we are unable to comment
whether payment of principal is regular.
(iv) 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 with regard to purchase of fixed assets and with regard to
sale of goods and services. During the course of our audit we have not
observed any continuing failure to correct major weaknesses in internal
control system.
(v) a. In respect of transactions entered in the register maintained in
pursuance of section 301 of the Companies Act, 1956, to the best
of our knowledge and belief and according to the information and
explanations given to us, particulars of contracts or arrangements that
needed to be entered into the register have been so entered.
b. In the absence of comparables in certain transactions, we are
unable to comment whether the transactions made in pursuance of
contracts or arrangements entered in the register maintained under
section 301 of the Companies Act, 1956 and exceeding Rs.5,00,000/- in
respect of each party during the period have been made at prices which
are reasonable having regard to prevailing market price at the relevant
time.
(vi) The Company has not accepted any deposits from the public within
the meaning of the provisions of Section 58A and 58AA or any other
relevant provisions of the Companies Act, 1956 and rules made
thereunder. Hence, the clause (vi) of the order is not applicable.
(vii) The Company has no formal internal audit department as such.
However, its control procedures ensure reasonable internal checking of
its financial and other records.
(viii) We have been informed that the Central Government has not
prescribed maintenance of cost records under section 209 (1) (d) of the
Companies Act, 1956.
(ix) (a) According to the information and explanations given to us and
on the basis of records produced before us, the Company is
generally regular in depositing with appropriate authorities undisputed
statutory dues including provident fund, employees' state insurance,
income tax, sales tax, wealth tax, service tax, custom duty, excise
duty, cess and other material statutory dues applicable to it.
According to the information and explanations given to us, no
undisputed arrears of statutory dues were outstanding as at March 31,
2012 for a period of more than six months from the date they became
payable.
(b) There are no cases of non deposit with appropriate authorities of
disputed dues of sales tax / income tax / custom tax / wealth tax /
service tax/ excise authorities.
(x) The Company has been registered for a period of less than five
years and hence we are not required to comment on the accumulated
losses. The company has incurred cash losses in the current financial
period as well as the immediately preceding financial period.
(xi) In our opinion and according to the information and explanations
given to us, the Company has not defaulted in repayment of dues to
financial institution, bank or debenture holders.
(xii) According to the information and explanations given to us, the
Company has not granted any loans or advances on the basis of security
by way of pledge of shares, debentures and other securities.
(xiii) In our opinion, the provisions of any special statute applicable
to Chit Fund, Nidhi or Mutual Benefit Fund/Societies are not applicable
to the Company.
(xiv) In our opinion and according to the information and explanations
given to us, the Company is not dealing or trading in shares,
securities, debentures and other investments other than temporary
deployment hence the provisions of the clause 4(xiv) of the Companies
(Auditor's Report) Order, 2003 are not applicable to the Company.
(xv) According to the information and explanations given to us and the
record examined by us, the Company has not given any guarantee for
loans taken by others from banks or financial institutions.
(xvi) The Company has not taken any term loan during the period.
(xvii)On the basis of an overall examination of the Balance Sheet of
the Company and according to the information and explanations given to
us, in our opinion there are no funds raised on short-term basis, which
have been used for long-term investment.
(xviii)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 during the period, hence the provisions
of the clause 4(xviii) of the Companies (Auditor's report) Order, 2003
are not applicable to the Company.
(xix) The Company has not issued debentures during the period and
hence, the question of creating securities in respect thereof does not
arise.
(xx) We have verified the end use of money raised by public issues as
disclosed in the notes to the financial statements. (See note 40)
(xxi) On the basis of our examination and according to the information
and explanation given to us, no fraud, on or by the Company, has been
noticed or reported during the course of our audit.
For Kanu Doshi Associates
Chartered Accountants
Place: Mumbai Jayesh Parmar
Date: May 25, 2012 Partner
Mem. No.: 45375 Firm registration No. 104746W
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