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Parenteral Drugs (India) Ltd.

BSE: 524689 Sector: Health care
NSE: PDPL ISIN Code: INE904D01019
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VOLUME 1359
52-Week high 32.00
52-Week low 17.75
P/E
Mkt Cap.(Rs cr) 59
Buy Price 0.00
Buy Qty 0.00
Sell Price 19.80
Sell Qty 600.00
OPEN 19.00
CLOSE 0.00
VOLUME 1359
52-Week high 32.00
52-Week low 17.75
P/E
Mkt Cap.(Rs cr) 59
Buy Price 0.00
Buy Qty 0.00
Sell Price 19.80
Sell Qty 600.00

Parenteral Drugs (India) Ltd. (PDPL) - Auditors Report

Company auditors report

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 March312016 the Profit and Loss Statement and the Cash Flow Statement for the year then endedand 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 Section134(5) of the Companies Act 2013 ("the Act") with respect to the preparation ofthese standalone financial statements that give a true and fair view of the financialposition financial performance and cash flows of the Company in accordance with theaccounting principles generally accepted in India including the Accounting Standardsspecified under Section 133 of the Act read with Rule 7 of the Companies (Accounts)Rules 2014. This responsibility also includes maintenance of adequate accounting recordsin accordance with the provisions of the Act for safeguarding the assets of the Companyand for preventing and detecting frauds and other irregularities; selection andapplication of appropriate accounting policies; making judgments and estimates that arereasonable and prudent; and design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the accuracy andcompleteness of the accounting records relevant to the preparation and presentation ofthe financial statements that give a true and fair view and are free from materialmisstatement whether due to fraud or error.

AUDITORS' RESPONSIBILITY

Our responsibility is to express an opinion on these standalone financial statementsbased on our audit.

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

We conducted our audit in accordance with the Standards on Auditing specified underSection 143(10) of the Act. Those Standards require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetherthe financial statements are free from material misstatements.

An audit involves performing procedures to obtain audit evidence about the amounts anddisclosures in the financial statements. The procedures selected depend on the auditor'sjudgment including the assessment of the risks of material misstatement of the financialstatements whether due to fraud or error. In making those risk assessments the auditorconsiders internal financial control relevant to the Company's preparation of thefinancial statements that give a true and fair view in order to design audit proceduresthat are appropriate in the circumstances but not for the purpose of expressing anopinion on whether the Company has in place an adequate internal financial controls systemover financial reporting and the operating effectiveness of such controls. An audit alsoincludes evaluating the appropriateness of accounting policies used and the reasonablenessof the accounting estimates made by the Company's directors as well as evaluating theoverall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate toprovide 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 explanationsgiven to us the aforesaid standalone financial statements give the information requiredby the Act in the manner so required and give a true and fair view in conformity with theaccounting principles generally accepted in India of the state of affairs of the Companyas at March 312016 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 theAct we give the"Annexure A" statement on the matters specified in paras 3 and 4of 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 bestof 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 theCompany 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 dealtwith by this Report are in agreement with the books of account;

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

e) On the basis of the written representations received from the directors as on March312016 taken on record by the Board of Directors none of the directors is disqualifiedas on March 312016 from being appointed as a director in terms of Section 164 (2) of theAct;

f) With respect to the adequacy of the internal financial controls over financialreporting of the Company and the operating effectiveness of such controls refer to ourseparate report in"Annexure B"; and

g) With respect to the other matters to be included in the Auditor's Report inaccordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 in our opinionand 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 financialposition in its financial statements as referred to in Note 27 to the financialstatements;

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

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

Place: Indore For T.N.Unni & Co.
Date: 30th May 2016 Chartered Accountants
Firm Regn No. 004890C
T.N.Unni
(Partner)
M. No. 014520

Annexure A to the Independent Auditor's Report

The Annexure referred to in our Independent Auditor's Report to the members of theCompany on the standalone Statements for the year ended March 312016 we report that:

(i) a) The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets.

b) The Company has a regular programme of physical verification of its fixed assets bywhich fixed assets are verified in a phased manner over a period of three years. Inaccordance with this programme certain fixed assets were verified during the year and nomaterial discrepancies were noticed on such verification. In our opinion this periodicityof physical verification is reasonable having regard to the size of the Company and thenature of its assets. c)According to information and explanations given by the managementthe title deed of immovable properties included in fixed assets is held in the name of thecompany.

(ii) a) The Inventory of finished goods stores spares parts and raw material lying atits location has been physically verified by the management at intervals during thefinancial year and the frequency of verification is considered reasonable.

b) In our opinion and according to the information and explanations given to us theprocedures of physical verification of inventory followed by the management are reasonableand 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 Companyhas maintained proper records of inventory. The discrepancies noticed on physicalverification between the physical stocks and the books of records were not material.

(iii) During the year the Company has not granted loans to corporates covered in theregister 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 notprejudicial to the interest of the Company.

(iv) In our opinion and according to the information and explanation given to us theCompany has not made any fresh loans investments guarantees and security during the yearunder 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 notprejudicial 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 ofthe company by the Central Government under Section 148 (1) of the Companies Act 2013and according to the information and explanations given to us we are of the opinion thatprima 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 ofour examination of the records of the Company amounts deducted/accrued in the books ofaccount in respect of undisputed statutory dues including provident fund income taxsales tax wealth tax service tax duty of customs value added tax cess and othermaterial statutory dues have been regularly deposited during the year by the Company withthe appropriate authorities. According to the information and explanation given to us noundisputed amounts payable in respect of provident fund income tax sales tax wealthtax service tax duty of customs value added tax cess and other material statutory dueswere in arrears as at 31 March 2016 for a period of more than six months from the date ofthey became payable.

(b) As at March 312016 according to the records of the Company and the information andexplanations given to us the disputed demands of excise duty to the tune of Rs. 274.40lacs has been challenged by the Company and show cause notices are pending foradjudication Show cause notice issued by Excise department of Rs. 1849.13 lacs which arequashed by Hon'ble High Court of Indore department has preferred an appeal in the SupremeCourt which is pending one demand of entry tax of Rs. 165.54 lacs for which the Companyhas filed write petition in the High Court and demand stayed by the H'ble High Court onedemand of penalty on entry tax of Rs. 387.88 lacs for which the Company has filed appealbefore Commissioner (Appeal). Income tax demands of Rs. 8684.28 lacs raised but notadmitted and rectification/appeal is pending. Three demand of sales tax of Rs. 8.64 lacsfor which company has filed appeal before Deputy Commissioner (Appeal). One demand underDPCO Act of Rs. 19.31 lacs for which the Company has filed writ petition in the High Courtof 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 isfiled with H'ble High Court of M.P..

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

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 furtherpublic offer (including debt instrument) and availed a term loan of Rs. 80.63 Crores and aCorporate loan of Rs. 13.10 Crores. The loans were applied for the purpose for which thoseare raised.

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

(xi) According to the information and explanations given to us and based on ourexamination of the records of the company the company has paid/provided the managerialremuneration of Rs. 57.64 lacs during the financial year 2015-16 which is not excess inthe 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 ofclause 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 ourexamination of the record of the company transaction with the related parties are incompliance with section 177 and 188 of the Act where applicable and details of suchtransactions have been disclosed in the financial statement as required by the applicableaccounting standards.

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

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

(xvi) The Company is not required to be registered under section 45 IA of the ReserveBank of India Act1934 and accordingly the provision of clause 3(xvi) of the order arenot applicable to the company.

Place: Indore For T.N.Unni & Co.
Date: 30th May 2016 Chartered Accountants
Firm Regn No. 004890C
T.N.Unni
(Partner)
M. No. 014520

"Annexure B" to the Independent Auditor's Report of even date on thefinancial Statements of

Parenteral Drugs (India) Limited

Report on the Internal Financial Controls under Clause (i) of Sub-Section 3 of Section143 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 ParenteralDrugs (India) Limited ("the Company") as of March 312016 in conjunction withour audit of the standalone financial statements of the Company for the year ended on thatdate. Management's Responsibility for Internal Financial Controls

The Company's Management is responsible for establishing and maintaining internalfinancial controls based on the internal control over financial reporting criteriaestablished by the Company considering the essential components of internal control statedin the Guidance Note on Audit of Internal Financial Controls Over Financial Reportingissued by the Institute of Chartered Accountants of India. These responsibilities includethe design implementation and maintenance of adequate internal financial controls thatwere operating effectively for ensuring the orderly and efficient conduct of its businessincluding adherence to the Company's policies the safeguarding of its assets theprevention and detection of frauds and errors the accuracy and completeness of theaccounting records and the timely preparation of reliable financial information asrequired under the Companies Act 2013.

Auditor's Responsibility

Our responsibility is to express an opinion on the Company's internal financialcontrols over financial reporting based on our audit. We conducted our audit in accordancewith the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting(the "Guidance Note") and the Standards on Auditing as specified under section143 (10) of the Companies Act 2013 to the extent applicable to an audit of internalfinancial controls both applicable to an audit of Internal Financial Controls and bothissued by the Institute of Chartered Accounts of India. Those Standards and the GuidanceNote require that we comply with ethical requirements and plan and perform the audit toobtain responsible assurance about whether adequate internal financial controls overfinancial reporting was established and maintained and if such controls operatedeffectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls system over financial reporting and their operatingeffectiveness. Our audit of internal financial controls over financial reporting includedobtaining an understanding of internal financial controls over financial reportingassessing the risk that a material weakness exists and testing and evaluating the designand operating effectiveness of internal control based on the assessed risk. The proceduresselected depend on the auditor's judgment including the assessment of the risks ofmaterial misstatement of the financial statements whether due to fraud or error.

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

Meaning of Internal Financial Controls over Financial Reporting

A Company's internal financial control over financial reporting is a process designedto provide reasonable assurance regarding the reliability of financial reporting and thepreparation of financial statements for external purposes in accordance with generallyaccepted accounting principles. A Company's internal financial control over financialreporting includes those policies and procedures that (1) pertain to the maintenance ofrecords that in reasonable detail accurately and fairly reflect the transactions anddispositions of the assets of the company' (2) provide reasonable assurance thattransactions are recorded as necessary to permit preparation of financial statements inaccordance with generally accepted accounting principles and that receipts andexpenditures of the company are being made only in accordance with authorities ofmanagement and directors of the Company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorized acquisition use or disposition of thecompany'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 financialreporting including the possibility of collusion or improper management override ofcontrols material misstatements due to error or fraud may occur and not be detected. Alsoprojections of any evaluation of the internal financial controls over financial reportingto future periods are subject to the risk that the internal financial control overfinancial reporting may become inadequate because of changes in conditions or that thedegree of compliance with the policies or procedures may deteriorate.

Opinion

In our opinion the Company has in all material respects an adequate internalfinancial controls system over financial reporting and such internal financial controlsover financial reporting were operating effectively as at March 312016 based on theinternal control over financial reporting criteria established by the Company consideringthe essential components of internal control stated in the Guidance Note on Audit ofInternal Financial Controls Over Financial Reporting issued by the Institute of CharteredAccountants of India.

Place: Indore For T.N.Unni & Co.
Date: 30th May 2016 Chartered Accountants
Firm Regn No. 004890C
T.N.Unni
(Partner)
M. No. 014520