1) We have audited the attached Balance Sheet of Kilitch Drugs (India)
Limited as at March 31, 2007 together with the Profit and Loss Account
and Cash Flow Statement of the Company for the year ended on that date
annexed thereto 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.
2) We conducted our audit in accordance with auditing standard
generally accepted in India. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit
includes examining on test basis evidence supporting the amounts and
disclosures in the financial statement. 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 Company Law board in terms of Sections 227 (4A) of the Companies
Act 1956, we annex hereto a statement on the matters specified in
paragraphs 4 and 5 of the said order.
4) Further to our comment referred to in paragraph (1) above, we state
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 appears from examination of the books.
c) The Balance Sheet and Profit and Loss Account, referred to in this
report are in agreement with the books of accounts.
d) In our opinion, the Balance Sheet and the Profit and Loss Account
are prepared in accordance with Accounting Standard issued by the
Institute of Chartered Accountants of India referred to in Section 211
(3C) of the Companies Act, 1956.
e) On the basis of written representation from the Directors as on
March 31, 2007 and taken on record by the Board of Directors, we report
that none of the Directors are disqualified as on 31st March, 2007 from
being appointed as Directors in term of Section 274( 1 )(g) of the
Companies Act, 1956.
f) In our opinion and to the best of our information and according to
the explanations given to us, the accounts read with the notes thereon,
given the information required by the Companies Act, 1956, in the
manners so required and give a true and fair view:
i) In the case of the Balance Sheet of the state of affairs of the
Company as at March 31, 2007 and
ii) In the case of Profit and Loss Account, of the profit for the year
ended on that date,
iii) In case of the Cash Flow Statement, of the cash flow for the year
ended on that day.
ANNEXTURE TO AUDITORS REPORT : Referred to para (1) of our report of
even date.
1) (a) The Company has maintained proper records showing full
Particulars including Quantitative Details and situations of Fixed
Assets.
(b) All the Assets have been Physically Verified by the Management
during the year and there is a regular program to the size of the
Company and the nature of its assets. No material discrepancies were
noticed on such verifications.
(c) No fixed assets have been disposed of during the year by the
Company.
2) (a) The Inventory have been physically verified during the year by
the management. In our opinion the frequency of the verification is
reasonable.
(b) The procedure for physical verification of inventory followed by
the Company are reasonable & adequate in relation to the size of the
Company & the nature of its business.
(c) In our opinion and according to the information and explanation
given to us the company is maintaining proper records of inventory.
The Discrepancies noticed on physical verification of Stock as compared
to book records were not material and the same have been properly dealt
within the books of Accounts.
3) (a) In our opinion and according to the information and explanations
given to us, the Company has not granted or accepted any loans /
advances from the companies, firms or other parties listed in the
registers maintained under section 301 of the Companies Act, 1956
except the following.
Name of the Party Relation Particulars Amount (Rs.)
NBZ Pharma Limited Related Party Advance Accepted 15,77,71,894.30
(b) According to the information and explanations given to us by the
management, we are of opinion that terms and conditions on which loan
or advances, secured or unsecured, have been granted are not
prejudicial to the interest of company. Since, the advances have been
given/ taken in normal course of business, therefore no interest have
been paid / received on the same.
(c) All payments/receipts in respect of advances taken/given were
regular during the year.
(d) In our opinion and as per the information and explanation given to
us by the management, reasonable steps have been taken by the company
for recovery/payment of advances.
4) In our opinion and according to the information and explanations
given to us, there are adequate internal control procedures
commensurate with the size of the company and the nature of its
business, plant and machinery, equipment and other assets.
5) (a) In our opinion and according to the information and explanations
given to us, the transactions that need to be entered in the register
maintained under section 301 of Companies Act, 1956 have been so
entered.
(b) In our opinion and as per Information and explanations given to us,
transactions during the year in respect of each party have been made at
prices which are reasonable having regard to the prevailing market
prices at which similar goods, materials or services have been made
with other parties.
Following Transactions have taken place with the Related Party during
Accounting Year 2006 - 07 :
Name of the Party Relation Particulars Amount (Rs.)
NBZ Pharma Limited Related Party Job Work Done 1,38,93,447/-
6) The Company has not accepted deposits from the public & therefore,
the directive issued by the Reserve Bank of India & provisions of
Section 58A and 58AA of the Companies Act, 1956 and the rules framed
there under do not apply to the Company.
7) In our opinion the company has an internal audit system commensurate
with the size and nature of its business.
8) According to the information and explanations given to us, the
provision for maintenance of the Cost Records as prescribed by the
Central Government is not applicable to the company.
9) (a) According to the records of the company Income Tax, Sales Tax,
Custom Duty, Excise Duty, Cess, Provident Fund, E.S.I.C. and other
material statutory dues applicable to company, are generally regularly
deposited during the year. According to the information and
explanations given to us no undisputed amounts payable in respect of
above were in arrears as at 31st March, 2006 for a period of more than
Six Months from the date on which they become payable.
10) The company does not have any accumulated losses at the end of
financial year and has not incurred cash losses during the financial
year covered by our audit and the immediately preceding financial year.
11) In our opinion and according to information and explanation given
to us the company has not defaulted in repayment of any dues to
financial Institutions and banks.
12) In our opinion and according to the information and explanation
given to us 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 the company is not a Chit Fund or Nidhi or Mutual
Benefit Fund or Society. Therefore the Provisions of Clause 4(xiii) of
the Companies (Auditors report) Order 2003 are not applicable to the
company.
14) In our opinion the company is not dealing in or trading in shares,
securities, debentures and other investments. Accordingly the
Provisions of Clause 4(xiv) of Companies (Auditors Report) Order 2003
are not applicable to the company.
15) In our opinion and according to the information and explanation
given to us, the company has not given any guarantee for loans taken by
others from banks or financial institutions.
16) As per the information and explanation given to us and on overall
examination of the balance sheet of the company has raised Term Loan of
Rs. 7,00,00,000/- from State Bank of India, Commercial Branch, Fort and
Rs.2,00,00,000/-from Shamrao Vithal Co.op Bank Limited, Chembur Branch
17) According to the information and explanation given to us and on
over all examination of the balance sheet we report that, no funds
raised on short term basis have been used for long term investments and
vice-versa.
18) According to the information and explanation given to us the
company has made a preferential allotment of Rs. 33,54,120/- by issuing
3,35,412 Equity Shares of Rs. 10/- each at the rate Rs. 27/- each to
Directors.
19) The Company has not created any securities in respect of debentures
issued.
20) The company has not made any public issue during the financial
year.
21) According to the information and explanation given to us no fraud
on or by the company has been noticed or reported during the course of
our audit.
FOR M. P. KALA & CO.
CHARTERED ACCOUNTANTS
Sd/-
Place : Mumbai KRUNAL SHAH
Date : 30.06.2007 PARTNER
