Independent Auditors
TO,
THE MEMBERS OF
PLETHICO PHARMACEUTICALS LIMITED
We have audited the attached Balance Sheet of PLETHICO PHARMACEUTICALS LIMITED,
as at 31 March, 2014 and the Profit & Loss Account of the Company for the period ended
on that date annexed thereto and the cash flow statement for the period ended on that date
and report that 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.
1. We conducted our audit in accordance with auditing standards generally accepted in
India. These standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material misstatement. An
audit includes examining on a test basis, evidence supporting the amounts and disclosures
in financial statements. An audit also includes assessing the accounting principles used
and significant estimates made by the management as well as evaluating the overall
financial statement presentation. We believe that our audit provides a reasonable basis
for our opinion.
2. As required by the Companies (Auditors Report) Order, 2003 issued by the Central
Government in terms of Section 227(4A) of the Companies Act, 1956, we enclose in the
Annexure, a statement on the matters specified in paragraphs 4 and 5 of the said Order.
3. In our opinion and to the best of our information and according to information and
explanations given to us, the said accounts read with notes thereon give the information
required by the Companies Act, 1956 in the manner so required and give a true and fair
view and are in conformity with the accounting principles generally accepted in India.
(i) In the case of the Balance Sheet, of the state of affairs of the company as at 31
March, 2014 and
(ii) In the case of Profit and Loss Account, of the loss of the Company for the period
ended on that date and
(iii) In so far as it relates to the cash flow statement, of the cash flow of the
company for the period ended on that date.
4. Further to our comments in the Annexure referred to in paragraph 2 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 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, Profit and Loss Account and Cash flow statement dealt with by
this report are in agreement with the books of account;
(d) In our opinion, the Balance Sheet, Profit and Loss Account and the cash flow
statement dealt with by this report comply, with the requirement of the Accounting
Standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956.
(e) Based on the representations made by the Directors of the Company and the
information and explanation as made available to us, the Directors of the Company do not
prima facie have any disqualification as referred to in clause (g) of sub section (1) of
section 274 of the Companies Act, 1956.
For N.P. GANDHI & CO.
Chartered Accountants
(Firm Reg No: 116574W)
N. P. Gandhi
Proprietor
(M.No.44294)
Mumbai, 28 May, 2014
ANNEXURE TO INDEPENDENT AUDITORS REPORT
STATEMENT REFERRED TO IN PARAGRAPH II OF OUR REPORT OF EVEN DATE TO THE MEMBERS OF
PLETHICO PHARMACEUTICALS LIMITED ON THE ACCOUNTS FOR THE PERIOD ENDED ON 31 MARCH, 2014.
(i) FIXED ASSETS :
(a) The company has maintained proper records showing full particulars, including
quantitative details and situation of fixed assets.
(b) The fixed assets have been physically verified by the management at reasonable
intervals and no material discrepancies were noticed on such verification.
(c) During the period under review, no substantial part of fixed assets has been
disposed off and the going concern status of the company is not affected.
(ii) INVENTORY :
(a) The inventory has been physically verified during the period by the management. In
our opinion, the frequency of verification is reasonable.
(b) The procedures of physical verification of inventories followed by the management
are reasonable and adequate in relation to the size of the company and the nature of its
business.
(c) The company is maintaining proper records of inventories. The discrepancies noticed
on verification between physical stocks and the book records were not material.
(iii) LOAN AND ADVANCES :
(a) The company has not granted any loan, secured or unsecured to Companies, firms or
other parties covered in the register maintained under section 301 of the Act.
(b) Since the company has not granted any secured or unsecured loan to companies, firm
or other parties covered under section 301 of the Act, the question of rate of interest
and other terms & conditions does not arise.
(c) Since the company has not granted any secured or unsecured loan to companies, firm
or other parties covered under section 301 of the Act, the question regarding receipt of
principal and interest and overdue amount does not arise.
(d) The Company has taken unsecured loans from parties covered in the register
maintained under section 301 of the Act. The numbers of parties involved were two and the
maximum amount involved is Rs. 212.96 Million and the period ending balance is Rs. 204.84
Million.
(e) As per the information and explanation provided to us, there are no terms and
conditions with regard to rate of interest to be charged and repayment period, therefore,
in view of the above, the same are not prima facie prejudicial to the interest of the
company.
(f) As per the information and explanation provided to us, since there are no terms
& conditions with regard to rate of interest chargeable and repayment period, the
question of regularity of payment of interest and repayment of principal does not arise.
(iv) INTERNAL CONTROL SYSTEMS :
In our opinion and according to the information & explanation provided to us, 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 our audit, we have not observed any major
weakness in internal controls.
(v) TRANSACTION WITH PARTIES UNDER SECTION 301 OF THE COMPANIES ACT, 1956 :
(a) According to the information & explanation provided to us, the particulars of
contracts or arrangements referred to in Section 301 of the Act have been entered in the
register required to be maintained under that section.
(b) According to information and explanation provided to us, transactions made in
pursuance of such contract or arrangements have been made at prices which are reasonable
having regard to the prevailing market prices at the relevant time where such market
prices are available with the company or the prices at which transactions for similar
goods or services have been made with other parties.
(vi) FIXED DEPOSITS :
The Company has accepted deposits from public amounting to Rs. 86.83 Million during the
period under review, the Directive issued by Reserve Bank of India and the provisions of
Section 58A & Section 58AA or any other relevant provisions of the Act and the rules
framed there under are not complied with.
The Company has defaulted in respect of repayment of the said deposits from public. The
amount of default with respect to principal amount is Rs. 120.56 Million and with respect
to interest amount is Rs. 13.67 Million as on 31 March, 2014.
(vii) INTERNAL AUDIT :
The Company had an internal audit system during the period under review.
(viii)COST RECORDS :
We have broadly reviewed the books of accounts maintained by the Company pursuant to
rules made by the Central Government for the maintenance of cost records under Section
209(1) (d) of the Companies Act, 1956, in respect of manufacturing activities of the
Company to which the Companies (Cost Accounting Record) Rules 2011, are applicable and are
of the opinion that prima facie the prescribed accounts and records have been made and
maintained. We have however not made a detailed examination of the records with the view
to determine whether they are accurate or complete.
(ix) STATUTORY DUES :
(a) According to the records of the Company, and the information and explanations
provided to us the Company is generally regular in depositing undisputed statutory dues
including Provident Fund, Investor Education and Protection Fund, Employees State
Insurance, Sales Tax, Wealth Tax, Service Tax, Customs Duty, Excise Duty, Professional
Tax, Cess and other material statutory dues with the appropriate authorities except for
Income Tax. According to the information and explanation given to us, the undisputed
amount of Rs. 235.89 Million is outstanding as at 31 March, 2014 for a period of more than
six months from the date of becoming payable.
(b) Details of dues of Income Tax which has not been deposited on 31st March, 2014 on
account of disputes are given below:-
| Names of the Statute |
Nature of the Dues |
Amount (Rs in Millions) |
Period to which amount relates |
Forum where dispute is pending |
| Income Tax Act, 1961 |
Income Tax |
Rs.140.53 |
A.Y 2005-06 |
Commissioner of Income Tax (Appeals) |
| Income Tax Act, 1961 |
Income Tax |
Rs.107.17 |
A.Y 2006-07 |
Commissioner of Income Tax (Appeals) |
| Income Tax Act, 1961 |
Income Tax |
Rs.860.95 |
A.Y 2007-08 |
Commissioner of Income Tax (Appeals) |
| Income Tax Act, 1961 |
Income Tax |
Rs.245.14 |
A.Y 2008-09 |
Commissioner of Income Tax (Appeals) |
| Income Tax Act, 1961 |
Income Tax |
Rs.230.23 |
A.Y 2009-10 |
Commissioner of Income Tax (Appeals) |
| Income Tax Act, 1961 |
Income Tax |
Rs.216.19 |
A.Y 2010-11 |
Commissioner of Income Tax (Appeals) |
| Income Tax Act, 1961 |
Income Tax |
Rs.346.65 |
A.Y 2011-12 |
Commissioner of Income Tax (Appeals) |
(x) POTENTIALLY SICK COMPANY :
The company has no accumulated losses, however as per the information and explanation
provided to us, the company has not incurred cash losses during the financial period
covered by our audit and there were no cash losses incurred in the immediately preceding
financial year.
(xi) REPAYMENT OF DUES :
According to the information and explanation provided to us, we have been intimated
that the company has defaulted in repayment of dues to financial institutions or banks.
The default pertains to Interest amounting to Rs. 35.52 Million and principal amounting to
Rs. 576.30 Million. However the Lead Bank has proposed admission of the Company to
Corporate Debt Restructuring ("CDR") forum on 29 March, 2014 for providing debt
restructuring scheme. The proposed debt restructuring scheme is pending approval of CDR
Empowered Group for admission to the CDR forum.
(xii) LOAN AND ADVANCES GRANTED ON THE BASIS OF SECURITIES :
According to the records of the company and according to the information and
explanations provided to us, the company has not granted loans and advances on basis of
security by way of pledge of shares, debentures & other securities.
(xiii)CHIT FUND/NIDHI/MUTUAL BENEFIT SOCIETY :
In our opinion, the company has not a chit fund or Nidhi mutual benefit fund / society.
Therefore, clause 4 (XIII) of the Companies (Auditors Report) order 2003 is not applicable
to the company.
(xiv)INVESTMENT COMPANY :
The company has maintained proper records, transaction and contracts in respect of
dealing in securities and timely entries have been made therein. All such securities have
been held by the Company in its own name.
(xv) GUARANTEES GIVEN :
According to the information and explanations provided to us, the Company has given a
corporate guarantee for loan taken by a company from a bank.
(xvi)TERM LOANS :
According to the records of the company and according to the information and
explanation provided to us, on an overall basis, the term loans have been applied for the
purposes for which they were obtained.
(xvii)SOURCES AND APPLICATION OF FUNDS :
According to the information and explanations given to us and on an overall examination
of the balance sheet of the company, we report that no funds raised on short term basis
have been used for the purpose of long term investment.
(xviii)PREFERENTIAL ALLOTMENT :
The Company has not made any preferential allotment of shares during the period under
review to parties and companies covered in the Register Maintained under section 301 of
the Act.
(xix) DEBENTURE :
The company has not issued/raised any money by issue of Debentures during the period
under review.
(xx) PUBLIC ISSUE :
The Company has not raised any money by a public issue during the period under review.
(xxi) FRAUD :
Based upon the audit procedures performed and the information and explanations provided
to us by the management, we report that no fraud on or by the company has been noticed or
reported during the course of our audit.
For N.P. GANDHI & CO.
Chartered Accountants
(Firm Reg No: 116574W)
N. P. Gandhi
Proprietor
(M.No.44294)
Mumbai, 28 May, 2014
+91-9892691696
