The Members of
M/s. PARENTERAL DRUGS (INDIA) LIMITED
Report on the Financial Statements
We have audited the accompanying financial statements of Parenteral Drugs (India)
Limited ("the Company"), which comprise the Balance Sheet as at March 31 , 2013,
and the Statement of Profit and Loss and 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
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 reparation
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.
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 upon auditor`s judgment, including
the assessment of risk 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 audit evidence we
have obtained is sufficient and appropriate to provide a basis for our audit 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 true and fair view in conformity with the accounting principle
generally accepted in India:
(a) In case of Balance Sheet, of the state of affairs of the Company as at March 31,
(b) In case of Profit and Loss Account, of the profit/loss for the year ended on that
(c) In case of Cash Flow Statement, the cash flows for the year ended on that date.
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 277 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 obtain 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 the 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, the Statement of Profit and Loss account, and
Cash Flow Statement comply with the Accounting Standards referred to in sub section (3C)
of section 211 of the Companies Act, 1956;
e. On the basis of written representations received from the directors 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. Since the Central Government has not issued any notification as to the rate at which
the cess is to be paid under section 441A of the Companies Act, 1956 nor has it issued any
Rules under the said section, prescribing the manner in which such cess is to be paid, no
cess is due and payable by the Company.
||Forming as Opinion and Reporting on Financial Statements
||For T.N.Unni & Co.
|Date: 30 May, 2013
||Firm Regn No. 004890C
||M. No. 014520
ANNEXURE TO INDEPENDENT AUDITORS` REPORT
[Referred to in paragraph 1 under the heading `Report on Other Legal and Regulatory
Requirement` of our audit report of even date]
1. a) The Company is maintaining proper records to show full particulars including
quantitative details and situation of fixed assets.
b) The Fixed assets of the Company have been physically verified by the management at
reasonable intervals. No material discrepancies were noticed on such verification.
c) In our opinion, and according to the information and explanations given to us, the
Company has not disposed off a substantial part of fixed assets during the year.
2. a) The stock of finished goods, stores, spare parts and raw material lying at its
location have been physically verified by the management at intervals during the financial
year and the frequency of verification is considered reasonable.
b) In our opinion and according to the information and explanations given to us, the
procedures of physical verification of inventory followed by the management are reasonable
and adequate in relation to the size of the Company and the nature of its business.
c) On the basis of our examination of records of inventory, in our opinion, the Company
has maintained proper records of inventory. The discrepancies noticed on physical
verification between the physical stocks and the books of records were not material.
3. a) The Company has not granted any loans, secured or unsecured to companies, firms
and other parties covered in the Register maintained under Section 301 of the Companies
b) The Company has taken unsecured loans from 8 (eight) companies, firms and other
parties covered in the Register maintained under Section 301 of the Companies Act, 1956.
The maximum amount involved during the year was Rs. 50.07 lacs and the year end balance of
such loans aggregated to Rs. 39.80 lacs.
c) The rate of interest and other terms and conditions of unsecured loan taken by the
company, are prima facie not prejudicial to the interest of the Company.
d) Payment of the principal amount and interest are also regular during the year.
4. In our opinion there is an adequate internal control system commensurate with the
size of the Company and the nature of its business, for the purchase of inventory and
fixed assets and for the sale of goods and services. During the course of audit, we have
not observed any continuing failure to correct major weaknesses in internal control
5. (a) In our opinion and according to the information and explanations given to us,
the particulars of contracts or arrangements that need to be entered into the Register
maintained under Section 301 of Act, have been so entered.
b) In our opinion, and according to the information and explanations given to us, the
transactions made in pursuance of contracts or arrangements entered in the register
maintained under Section 301 of Act, and exceeding the value of five lacs rupees in
respect of any party during the year have been made at prices which are reasonable having
regard to the market prices prevailing at the relevant time.
6. In our opinion and according to the information and explanations given to us, the
Company has not accepted deposits from the public, and the provisions of Section 58A, 58AA
or any other relevant provisions of the Act and the Companies (Acceptance of Deposits)
Rules, 1975 with regard to the deposits are not attracted in case of borrowings made by
the Company. No order under the aforesaid sections has been passed by the Company Law
Board on the Company.
7. The Company has appointed a firm of Chartered Accountants to carry out the internal
audit, and the scope of audit is commensurate with its size and nature of business.
8. Maintenance and cost audit of cost records has been prescribed for the products of
the company by the Central Government, under Section 209(1) (d) of the Companies Act,
1956, and in our opinion prima facie, all cost records are being maintained by the
9. (a) According to the information and explanations given to us and according to the
books and records as produced and examined by us, in our opinion, the undisputed statutory
dues in respect of provident fund, income-tax, sales tax, wealth tax, service tax, customs
duty, excise duty, cess and other material dues as applicable, have been regularly
deposited by the Company during the year with the appropriate authorities.
(b) As at March 31, 2013 according to the records of the Company and the information
and explanations given to us, the disputed demand of excise duty to the tune of Rs. 230.20
lacs has been challenged by the Company and show cause notices are pending for
adjudication, one demand of entry tax of Rs. 165.54 lacs for which the Company has filed
write petition in the High Court and demand stayed by the H`ble High Court. Income tax
demand of Rs. 100.49 lacs raised but not admitted and rectification/appeal is pending.
10. The Company have accumulated losses of Rs. 7485.41 lacs as at March 31, 2013 and
has incurred cash losses of Rs. 6436.15 lacs during the financial year ended on that date.
11. On the basis of information and explanations given by the Management, in our
opinion, the Company has repaid all the loan installments.
12. The company has not granted any loans and advances on the basis of security by way
of pledge of shares, debentures and other securities.
13. In our opinion, considering the nature of activities carried on by the Company
during the year, the provisions of any special statute applicable to chit
fund/nidhi/mutual benefit fund/societies are not applicable to the Company.
14. The Company is not dealing or trading in Shares, securities, debentures and other
investments and the investment made by the Company in shares and other securities has been
held in its own name in respect of which the Company has maintained adequate records.
15. The Company has assumed the Corporate Guarantee for loans taken by its subsidiary
companies Goa Formulations Limited, Parenteral Surgicals Limited and Parentech Healthcare
Limited and has taken counter guarantee. The terms and condition of Corporate Guarantee
are not prejudicial to the interest of the Company.
16. In our opinion and according to the information and explanations given to us the
term loans taken by the Company were applied for the purpose for which the loans were
17. Based on the information and explanations given to us and on examination of the
books of the Company, in our opinion the funds raised on a short-term basis have not been
used for long-term investment.
18. The Company has allotted 52,11,000 0% Redeemable Preference Shares fully paid up
& 18,26,898 shares partly paid up to one of the company covered in the Register
maintained under section 301 of the Companies Act. In our opinion and according to the
information and explanation given to us price of shares issued is not prejudicial to the
interest of the Company.
19 No debentures have been issued by the Company during the year.
20. During the year, the Company has not raised money by way of public issue.
21. According to the information and explanations given to us and the examination of
the records 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 any such case by the
||For T.N.Unni & Co.
|Date: 30 May, 2013
||Firm Regn No. 004890C
||M. No. 014520