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Auditor Report of Parenteral Drugs (India) Ltd.

Mar 31, 2016

To,

The Members of

PARENTERAL DRUGS (INDIA) LIMITED MUMBAI

REPORT ON THE STANDALONE FINANCIAL STATEMENTS

We have audited the accompanying standalone financial statements of Parenteral Drugs (India) Limited ("the Company"), which comprises the Balance Sheet as at March 31, 2016, the Profit and Loss Statement and the Cash Flow Statement for the year then ended and a summary of significant accounting policies and other explanatory information.

MANAGEMENT''S RESPONSIBILITY FORTHE STANDALONE FINANCIAL STATEMENTS

The Company''s Board of Directors are responsible for the matters stated in Section 134(5) of the Companies Act, 2013 ("the Act") with respect to the preparation of these standalone 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 principles generally accepted in India including the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, 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 standalone financial statements based on our audit.

We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made there under.

We conducted our audit in accordance with the Standards on Auditing specified under Section 143(10) of the Act. 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 misstatements.

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 financial control relevant to the Company''s preparation of the financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on whether the Company has in place an adequate internal financial controls system over financial reporting and the operating effectiveness of such controls. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by the Company''s directors, 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 on the standalone financial statements.

OPINION

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone 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, of the state of affairs of the Company as at March 31,2016, and its loss and its cash flows for the year ended on that date.

REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS

1. As required by the Companies (Auditor''s Report) Order, 2016 (“the Order") issued by the Government of India in terms of the Sub Section (11) of Section 143 of the Act we give the “Annexure A" statement on the matters specified in paras 3 and 4 of the Order, to the extent and as applicable.

2. As required by Section 143(3) of the Act, we report that;

a) We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit;

b) In our opinion, proper books of account 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, the Profit and Loss Statement, and the Cash Flow Statement dealt with by this Report are in agreement with the books of account;

d) In our opinion, the aforesaid standalone financial statements comply with the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014;

e) On the basis of the written representations received from the directors as on March 31, 2016, taken on record by the Board of Directors, none of the directors is disqualified as on March 31,2016, from being appointed as a director in terms of Section 164 (2) of the Act;

f) With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate report in “Annexure B"; and

g) With respect to the other matters to be included in the Auditor''s Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us:

i. The Company has disclosed the impact of pending litigations on its financial position in its financial statements as referred to in Note 27 to the financial statements;

ii. The Company did not have any long term contracts including derivative contracts for which there were any material foreseeable losses; and

iii. There has been no delay in transferring any amounts, required to be transferred to the Investor Education and Protection Fund by the Company.

The Annexure referred to in our Independent Auditor''s Report to the members of the Company on the standalone Statements for the year ended March 31, 2016, we report that:

(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 physical verification of its fixed assets by which fixed assets are verified in a phased manner over a period of three years. In accordance with this programme, certain fixed assets were verified during the year and no material discrepancies were noticed on such verification. In our opinion, this periodicity of physical verification is reasonable having regard to the size of the Company and the nature of its assets.

c)According to information and explanations given by the management, the title deed of immovable properties included in fixed assets is held in the name of the company.

(ii) a) The Inventory of finished goods, stores, spares parts and raw material lying at its location has 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.

(iii) During the year the Company has not granted loans to corporate covered in the register maintained under section 189 of the Companies Act, 2013 (“the Act"). However the balance due from one of the group company amounting to Rs. 4.94 Crores is not prejudicial to the interest of the Company.

(iv) In our opinion and according to the information and explanation given to us, the Company has not made any fresh loans, investments, guarantees and security during the year under review, hence the provision of section 185 and 186 of the act are not applicable. However, the old guarantee given for one of the group company for Rs. 12.79 Crores is not prejudicial to the interest of the Company.

(v) The Company has not accepted any deposits from the public.

(vi) Maintenance and cost audit of cost records has been prescribed for the products of the company by the Central Government, under Section 148 (1) of the Companies Act, 2013 and according to the information and explanations given to us, we are of the opinion that prima facie, the specified accounts and records have been made and maintained.

(vii) (a) According to the information and explanation given to us and on the basis of our examination of the records of the Company, amounts deducted/accrued in the books of account in respect of undisputed statutory dues including provident fund, income tax, sales tax, wealth tax, service tax, duty of customs, value added tax, cess and other material statutory dues have been regularly deposited during the year by the Company with the appropriate authorities. According to the information and explanation given to us, no undisputed amounts payable in respect of provident fund, income tax, sales tax, wealth tax, service tax, duty of customs, value added tax, cess and other material statutory dues were in arrears as at 31 March, 2016 for a period of more than six months from the date of they became payable.

(b) As at March 31, 2016 according to the records of the Company and the information and explanations given to us, the disputed demands of excise duty to the tune of Rs. 274.40 lacs has been challenged by the Company and show cause notices are pending for adjudication, Show cause notice issued by Excise department of Rs. 1849.13 lacs which are quashed by Hon''ble High Court of Indore, department has preferred an appeal in the Supreme Court which is pending, 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, one demand of penalty on entry tax of Rs. 387.88 lacs for which the Company has filed appeal before Commissioner (Appeal). Income tax demands of Rs. 8684.28 lacs raised but not admitted and rectification/appeal is pending. Three demand of sales tax of Rs. 8.64 lacs for which company has filed appeal before Deputy Commissioner (Appeal). One demand under DPCO Act of Rs. 19.31 lacs for which the Company has filed writ petition in the High Court of M.P. and demand is stayed by H''ble High Court. Three month demand of Electricity board (MPPKVVCL) for Rs. 26.81 lacs not paid due to surrender of connection for which case is filed with H''ble High Court of M.P..

(viii) On the basis of information and explanation given to us, during the year the company has defaulted in repayment of dues to banks .The details of such default are as follows:

Particular

Amount of default as on 31stMarch 2016

Period of Default

Remark, if any

Banks:

1. State Bank of India

Rs. 79.27C rore

Less than One Year

Includes part of principal of long term loan and interest on long term loans & CCL, fallen overdue which the lenders bank has classified as NPA

2. Punjab National Bank

17.06Crore

Less than One Year

Includes part of principal of long term loan and interest on long term loans & CCL, fallen overdue which the lenders bank has classified as NPA

(ix) The Company did not raise any money by way of initial public offer or further public offer (including debt instrument) and availed a term loan of Rs. 80.63 Crores and a Corporate loan of Rs. 13.10 Crores. The loans were applied for the purpose for which those are raised.

(x) According to the information and explanations given by management, we report that no fraud by the company or no fraud on the company by the officer and employees of the company has been noticed or reported during the year.

(xi) According to the information and explanations given to us and based on our examination of the records of the company, the company has paid/provided the managerial remuneration of Rs. 57.64 lacs during the financial year 2015-16 which is not excess in the limit as mandated under section 197 read with schedule V of the act.

(xii) In our opinion, the company is not a Nidhi company; therefore, the provision of clause 3(xii) of the order is not applicable to the company and hence not commented upon.

(xiii) According to the information and explanation given to us and based on our examination of the record of the company, transaction with the related parties are in compliance with section 177 and 188 of the Act where applicable and details of such transactions have been disclosed in the financial statement as required by the applicable accounting standards.

(xiv) According to the information & explanation given to us and on an overall examination of the balance sheet, the company has made allotment of 0% Non-cumulative, Non convertible redeemable preference share of Rs. 30 Crores (including premium of Rs. 27.50 Crores) and the amount raised have been used for the purpose for which the funds were raised.

(xv) According to the information and explanation given to us and based on our examination of the records of the company, the company has not entered into non cash transaction with directors or persons connected with him. Accordingly paragraph 3(xv) of the order is not applicable.

(xvi) The Company is not required to be registered under section 45 IA of the Reserve Bank of India Act,1934 and accordingly, the provision of clause 3(xvi) of the order are not applicable to the company.

Report on the Internal Financial Controls under Clause (i) of Sub-Section 3 of Section 143 of the Companies Act, 2013 (“the Act")

To the Members of Parenteral Drugs (India) Limited

We have audited the internal financial controls over financial reporting of Parenteral Drugs (India) Limited (“the Company") as of March 31, 2016 in conjunction with our audit of the standalone financial statements of the Company for the year ended on that date. Management''s Responsibility for Internal Financial Controls

The Company''s Management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India. These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to the Company''s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, 2013.

Auditor''s Responsibility

Our responsibility is to express an opinion on the Company''s internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the “Guidance Note") and the Standards on Auditing as specified under section 143 (10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls both applicable to an audit of Internal Financial Controls and, both issued by the Institute of Chartered Accounts of India. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain responsible assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. 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.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the internal financial controls systems over financial reporting.

Meaning of Internal Financial Controls over Financial Reporting

A Company''s internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A Company''s internal financial control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company'' (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles and that receipts and expenditures of the company are being made only in accordance with authorities of management and directors of the Company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company''s assets that could have a material effect on the financial statements.

Inherent Limitations of Internal Financial Controls over Financial Reporting

Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions or that the degree of compliance with the policies or procedures may deteriorate.

Opinion

In our opinion, the Company has, in all material respects an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at March 31, 2016, based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India.

. For T.N.Unni & Co.

Place: Indore

Date: 30th May, 2016 Chartered Accountants

Firm Regn No. 004890

C T.N.Unni (Partner)

M. No. 014520


Mar 31, 2015

We have audited the accompanying standalone financial statements of Parenteral Drugs (India) Limited ("the Company"), which comprise the Balance Sheet as at March 31,2015, the Profit and Loss Statement, the Cash Flow Statement for the year then ended and a summary of significant accounting policies and other explanatory information.

MANAGEMENT''S RESPONSIBILITY FORTHE STANDALONE FINANCIAL STATEMENTS

The Company''s Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 ("the Act") with respect to the preparation of these standalone 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 principles generally accepted in India including the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, 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 standalone financial statements based on our audit. We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made thereunder.

We conducted our audit in accordance with the Standards on Auditing specified under Section 143(10) of the Act. 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 misstatements.

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 financial control relevant to the Company''s preparation of the financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on whether the Company has in place an adequate internal financial controls system over financial reporting and the operating effectiveness of such controls. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by the Company''s directors, 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 on the standalone financial statements.

OPINION

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone 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, of the state of affairs of the Company as at March 31,2015, and its loss and its cash flows for the year ended on that date.

REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS

1. As required by the Companies (Auditor''s Report) Order, 2015 ("the Order") issued by the Government of India in terms of the Sub Section (11) of Section 143 of the Act we give the Annexure a statement on the matters specified in paras 3 and 4 of the Order, to the extent and as applicable.

2. As required by Section 143(3) of the Act, we report that;

a. a) We have sought and obtained all the information and explanations which to the best of or knowledge and belief were necessary for the purposes of our audit;

b) In our opinion, proper books of account 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, the Profit and Loss Statement, and the Cash Flow Statement dealt with by this Report are in agreement with the books of account;

d) In our opinion, the aforesaid standalone financial statements comply with the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014;

e) On the basis of the written representations received from the directors as on March 31,2015, taken on record by the Board of Directors, none of the directors is disqualified as on March 31,2015, from being appointed as a director in terms of Section 164 (2) of the Act; and

f) With respect to the other matters to be included in the Auditor''s Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us:

i. The Company has disclosed the impact of pending litigations on its financial position in its financial statements as referred to in Note 27 to the financial statements;

ii. The Company has made provision, as required under the applicable law or accounting standards, for material foreseeable losses, if any, and as required on long-term contracts including derivative contracts; and

iii. There has been no delay on the part of the Management in transferring amounts, required to be transferred. to the Investor Education and Protection Fund by the Company.

Annexure to the Independent Auditor''s Report The Annexure referred to in our independent Auditor''s Report to the members of the Company on the standalone Statements for the year ended March 31,2015, we report that :

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 physical verification of its fixed assets by which fixed assets are verified in a phased manner over a period of three years. In accordance with this programme, certain fixed assets were verified during the year and no material discrepancies were noticed on such verification. In our opinion, this periodically of physical verification is reasonable having regard to the size of the Company and the nature of its assets.

ii. a) The stock of finished goods, stores, spares 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.

iii. The Company has not granted loans to corporate covered in the register maintained under section 189 of the Companies Act, 2013 ("the Act")

iv. In our opinion and according to the information and explanation given to us, there is an adequate internal control system commensurate with the size of the Company and the nature of its business with regard to purchase of fixed assets and sale of services. The activities of the Company do not involve purchase of inventory and the sale of goods. We have not observed any major weakness in the internal control system during the course of the audit.

v. The Company has not accepted any deposits from the public.

vi. Maintenance and cost audit of cost records has been prescribed for the products of the company by the Central Government, under Section 148 (1) of the Companies Act, 2013, and in our opinion prima facie, all cost records are being maintained by the Company.

vii. (a) According to the information and explanation given to us and on the basis of our examination of the records of the Company, amounts deducted/accrued in the books of account in respect of undisputed statutory dues including provident fund, income tax, sales tax, wealth tax, service tax, duty of customs, value added tax, cess and other material statutory dues have been regularly deposited during the year by the Company with the appropriate authorities.

According to the information and explanation given to us, no undisputed amounts payable in respect of provident fund, income tax, sales tax, wealth tax, service tax, duty of customs, value added tax, cess and other material statutory dues were in arrears as at 31 March 2015 for a period of more than six months from the date of they became payable.

(b) As at March 31,2015 according to the records of the Company and the information and explanations given to us, the disputed demands of excise duty to the tune of Rs. 274.40 lacs has been challenged by the Company and show cause notices are pending for adjudication, Show cause notice issued by Excise department of Rs. 1849.13 lacs which are quashed by Hon''ble High Court of Indore, department has preferred an appeal in the Supreme Court which is pending, 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, one demand of penalty on entry tax of Rs. 387.88 lacs for which the Company has filed appeal before Commissioner (Appeal). Income tax demands of Rs. 101.65 lacs raised but not admitted and rectification/appeal is pending. Three demand of sales tax of Rs. 8.64 lacs for which company has filed appeal before Deputy Commissioner (Appeal). One demand under DPCO Act of Rs. 19.31 lacs for which the Company has filed writ petition in the High Court of M.P. and demand is stayed by H''ble High Court.

viii. The Company has accumulated losses of Rs. 18764.02 lacs as at March 31,2015 and has incurred cash losses of Rs. 4576.53 lacs during the financial year ended on that date and Rs. 3732.95 lacs during immediately preceding financial year.

ix. On the basis of information and explanation given by the Management in our opinion that the Company has not defaulted in making payments towards repayment of dues to bank for term loans.

x. The Company has assumed the Corporate Guarantee for loans taken by its subsidiary company Parenteral Surgicals Limited and has taken counter guarantee. The terms and condition of Corporate Guarantee are not prejudicial to the interest of the Company.

xi. The Company has not availed any fresh term loan during the current financial year 2014-15.

xii. 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 Management.

Place: Indore For T.N.Unni & Co.

Date : 30 May, 2015 Chartered Accountants

Firm Regn No. 004890C T.N.Unni (Partner) M.No. 014520


Mar 31, 2014

We have audited the accompanying financial statements of Parenteral Drugs (India) Limited ("the Company"), which comprise the Balance Sheet as at March 31,2014, 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 are 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.

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 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, but not for the purpose of expressing an opinion on the effectiveness of the Company''s internal control. 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.

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 31,2014;

(b) In case of Statement of Profit and Loss, of the loss for the year ended on that date; and

(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 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 the law have been kept by the Company so far as appears from our examination of those books;

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 31,2014 according to the records of the Company and the information and explanations given to us, the disputed demands of excise duty to the tune of Rs. 274.40 lacs has been challenged by the Company and show cause notices are pending for adjudication, show cause notice issued by excise department of Rs. 1849.13 lacs which are quashed by H''ble High Court of Indore, department has preferred an appeal in the H''ble Supreme Court which is pending, one demand of entry tax of Rs. 165.54 lacs for which the Company has filed writ petition in the High Court and demand stayed by the H''ble High Court, one demand of penalty on entry tax of Rs. 387.88 lacs for which the Company has filed appeal before Commissioner (Appeal). Income tax demand of Rs. 100.49 lacs raised but not admitted and rectification/appeal is pending. Three demand of sales tax of Rs. 8.64 lacs for which company has filed appeal before Deputy Commissioner (Appeal). One demand under DPCO Act of Rs. 19.31 lacs for which the Company has filed writ petition in the High Court of M.P. and demand is stayed by H''ble High Court.

10. The Company has accumulated losses of Rs. 13355.54 lacs as at March 31,2014 and has incurred cash losses of Rs. 3732.95 lacs during the financial year ended on that date and Rs. 6436.15 lacs during immediately preceding financial year.

11. On the basis of information and explanations given by the management, in our opinion, the Company has not defaulted in repayment of dues to financial institutions.

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 company Parenteral Surgicals 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 obtained.

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 converted preference shares, held by one of the company covered in the Register maintained under section 301 of the Companies Act, into equity shares during the year. In our opinion and according to the information and explanation given to us conversion 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 Management.

Place: Indore For T.N.Unni & Co.

Date: 30 May, 2014 Chartered Accountants

Firm Regn No. 004890C T.N.Unni (Partner) M. No. 014520


Mar 31, 2013

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 31st, 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.

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 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.

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, 2013:

(b) In case of Profit and Loss Account, of the profit/loss for the year ended on that date: and

(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 31st, 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.

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 Act, 1956.

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 system.

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 Company.

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 obtained.

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 Management.



Udaipur For T.N.Unni & Co.

Date: 30th May, 2013 Chartered Accountants

Firm Regn No. 004890C

T.N.Unni

(Partner)

M. No. 014520


Mar 31, 2012

1. We have audited the attached Balance Sheet of Parenteral Drugs (India) Limited as at March 31, 2012 and the related Profit and Loss Account and the Cash Flow Statement for the year ended on that date, which we have signed under reference to this report. 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 have conducted our audit in accordance with 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 mis-statement. 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 (Auditors' Report) Order, 2003 issued by the Central Government of India in terms of Section 227(4A) of the Companies Act, 1956 of India (the Act) and on the basis of such checks as we considered appropriate and according to the information and explanation given to us, we set out 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 in paragraph 3 above, 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 purposes of our audit;

b) In our opinion, proper books of accounts as required by law have been kept by the Company so far as appears from our examination of those books;

c) The Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this report are in agreement with the books of accounts;

d) In our opinion, the Balance Sheet, Profit and Loss account and Cash Flow Statement dealt with by this report comply with the accounting standards referred to in Section 211(3C) of the Act;

e) On the basis of written representation 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 is 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 Act;

f) In our opinion and to the best of our information and according to the explanations given to us, the said Accounts together with the notes attached thereto given in the prescribed manner the information required by the Act and give a true and fair view in conformity with the accounting principles generally accepted in India;

(i) In so far as it relates to Balance Sheet, of the state of affairs of the Company as at March 31, 2012;

(ii) In so far as it relates to the Profit and Loss Account, of the loss for the year ended on that date.

(iii) In so far as it relates to the Cash Flow Statement, of the cash flows of the Company for the year ended on that date.

[Referred to in paragraph 3 of the Auditors' Report of even date to the Members of Parenteral Drugs (India) Limited on the accounts for the year ended March 31, 2012]

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 Act, 1956.

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. 50.07 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 system.

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 Company.

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, 2012 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, disputed demand of CST to the tune of Rs. 255.94 lacs has been challenged by the Company and appeal filed with DC (Appeal). Income tax demand of Rs. 12.83 lacs raised but not admitted and rectification is pending.

10. The Company does not have accumulated losses as at March 31, 2012 but has incurred cash losses of Rs. 3035.73 lacs during the financial year ended on that date.

11. On the basis of information and explanations given by the Management and 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 obtained.

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 not made any preferential allotment of shares during the year.

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 Management.

Place: Indore For T.N.Unni & Co.

Date: 30 May, 2012 Chartered Accountants

Firm Regn No. 004890C

T.N.Unni

(Partner)

M.No. 014520


Mar 31, 2011

1. We have audited the attached Balance Sheet of Parenteral Drugs (India) Limited as at 31st March, 2011 and the related Profit and Loss Account and the Cash Flow Statement for the year ended on that date, which we have signed under reference to this report. 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 have conducted our audit in accordance with 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 mis-statement. 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 (Auditors' Report) Order, 2003 issued by the Central Government of India in terms of Section 227(4A) of the Companies Act, 1956 of India (the Act) and on the basis of such checks as we considered appropriate and according to the information and explanation given to us, we set out 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 in paragraph 3 above, 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 purposes of our audit;

b) In our opinion, proper books of accounts as required by law have been kept by the Company so far as appears from our examination of those books;

c) The Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this report are in agreement with the books of accounts;

d) In our opinion, the Balance Sheet, Profit and Loss account and Cash Flow Statement dealt with by this report comply with the accounting standards referred to in Section 211(3C) of the Act;

e) On the basis of written representation received from the directors as on 31st March, 2011 and taken on record by the Board of Directors, we report that none of the directors is disqualified as on 31st March, 2011 from being appointed as a director in terms of clause (g) of sub- section (1) of section 274 of the Act;

f) In our opinion and to the best of our information and according to the explanations given to us, the said Accounts together with the notes thereon attached thereto give in the prescribed manner the information required by the Act and give a true and fair view in conformity with the accounting principles generally accepted in India;

(I) In so far as it relates to Balance Sheet, of the state of affairs of the Company as at 31st March, 2011;

(ii) In so far as it relates to the Profit and Loss Account, of the profit for the year ended on that date.

(iii) In so far as it relates to the Cash Flow Statement, of the cash flows of the Company for the year ended on that date.

ANNEXURE TO AUDITORS' REPORT

[Referred to in paragraph 3 of the Auditors' Report of even date to the Members of Parenteral Drugs (India) Limited on the accounts for the year ended 31st March, 2011]

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 Act, 1956.

b) The Company has taken unsecured loans from 7 (seven) 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. 785.44 lacs and the year end balance of such loans aggregated to Rs. 49.91 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 system.

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 Company.

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 31st March, 2011 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.

10. The Company neither has accumulated losses as at 31st March, 2011 nor has incurred any cash losses during the financial year ended on that date or in the immediately preceding financial year.

11. On the basis of information and explanations given by the Management, in our opinion, the Company has not defaulted in repayment of dues to any financial institution or banks.

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 and Parenteral Surgicals 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 obtained.

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 not made any preferential allotment of shares during the year.

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 Management.

For T.N.Unni & Co. Chartered Accountants Firm Regn No. 004890C

T.N.Unni (Partner) M. No. 014520

Place: Indore Date : 22nd August 2011


Mar 31, 2010

1. We have audited the attached Balance Sheet of Parenteral Drugs (India) Limited as at March 31, 2010 and the related Profit and Loss Account and the Cash Flow Statement for the year ended on that date, which we have signed under reference to this report. These financial statements are the responsibility of the Companys Management. Our responsibility is to express an opinion on these financial statements based on our audit.

2. We have conducted our audit in accordance with 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 mis-statement. 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 (Auditors Report) Order, 2003 issued by the Central Government of India in terms of Section 227(4A) of the Companies Act, 1956 of India (the Act) and on the basis of such checks as we considered appropriate and according to the information and explanation given to us, we set out 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 in paragraph 3 above, 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 purposes of our audit;

b) In our opinion, proper books of accounts as required by law have been kept by the Company so far as appears from our examination of those books;

c) The Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this report are in agreement with the books of accounts;

d) In our opinion, the Balance Sheet, Profit and Loss account and Cash Flow Satement dealt with by this report comply with the accounting standards referred to in Section 211(3C) of the Act;

e) On the basis of written representation received from the directors as on March 31, 2010 and taken on record by the Board of Directors, we report that none of the directors is disqualified as on March 31, 2010 from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Act;

f) In our opinion and to the best of our information and according to the explanations given to us, the said Accounts together with the notes thereon attached thereto give in the prescribed manner the information required by the Act and give a true and fair view in conformity with the accounting principles generally accepted in India;

(i) In so far as it relates to Balance Sheet, of the state of affairs of the Company as at March 31, 2010;

(ii) In so far as it relates to the Profit and Loss Account, of the profit for the year ended on that date.

(iii) In so far as it relates to the Cash Flow Statement, of the cash flows of the Company for the year ended on that date.

ANNEXURE TO AUDITORS REPORT

[Referred to in paragraph 3 of the Auditors Report of even date to the Members of Parenteral Drugs (India) Limited on the accounts for the year ended March 31, 2010]

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 Act, 1956.

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. 785.44 lacs and the year end balance of such loans aggregated to Rs. 785.44 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 system.

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 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 Company.

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, 2010 according to the records of the Company and the information and explanations given to us, the 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.

10. The Company neither has accumulated losses as at March 31, 2010 nor has incurred any cash losses during the financial year ended on that date or in the immediately preceding financial year.

11. On the basis of information and explanations given by the Management, in our opinion, the Company has not defaulted in repayment of dues to any financial institution or banks.

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 company Goa Formulations Limited. 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 obtained.

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 issued 12,00,000 Fresh Equity Shares against share warrants upon option exercised by the share warrant holder and accordingly paid up capital has been increased by Rs. 1,20,00,000/-.

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 Management.

Camp : Udaipur For T.N.Unni & Co.

Date: 2nd September, 2010 Chartered Accountants

T.N.Unni (Partner)

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