1. We have audited the attached balance sheet of Unichem Laboratories
Limited as at 31st March, 2009, the profit & loss account and also the
cash flow statement for the year ended on that date annexed thereto.
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 the 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 misstatement. 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 the management, as well as evaluating the overall financial
statements presentation. We believe that our audit provides a
reasonable basis for our opinion.
3. As required by the Companies (Auditors Report) Order, 2003 (as
amended) (the order) issued by the Central Government of India in
terms of sub-section (4A) of section 227 of the Companies Act, 1956, we
enclose in the Annexure a statement on the matters specified in
paragraph 4 & 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
(b) In our opinion, proper books of account as required by law have
been kept by the company so far as appears from our examination of
(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 cash
flow statement dealt with by this report comply with the accounting
standards referred to in sub-section (3C) of section 211 of the
Companies Act, 1956.
(e) On the basis of the written representations received from the
directors, as on 31st March, 2009 and taken on record by the Board of
Directors, we report that none of the directors is disqualified as on
March 31st, 2009 from being appointed as a director in terms of clause
(g) of sub-section (1) of section 274 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 said Financial statements, read with
the notes thereon give the information required by the Companies Act,
1956 in the manner so required and give a true and fair view 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 31st March, 2009 ;
ii) in the case of the profit and loss account, of the profit for the
year ended on that date; and
iii) in the case of cash flow statement, of the cash flows for the year
ended on that date.
Annexure referred to in paragraph 3 of our report of even date
1. (a) The Company has maintained proper records showing full
particulars including quantitative details and situation of fixed
(b) As explained to us, some of the fixed assets of the Company have
been physically verified during the year by the management in
accordance with a phased program of verification designed to cover all
assets over a period of three years, which in our opinion, is
reasonable having regard to the size of the Company and the nature of
its assets. The discrepancies noticed on such verification were not
material and have been properly dealt with in the books of account.
(c) There was no substantial disposal of fixed assets during the year.
2. (a) As explained to us, the inventories of the Company except
stocks in transits have been physically verified by the management at
reasonable intervals during the year. In our opinion, the frequency of
verification is reasonable.
(b) In our opinion and according to the information and explanations
given to us, the procedures of physical verification of inventories
followed by the management were reasonable and adequate in relation to
the size of the Company and the nature of the business.
(c) The Company is maintaining proper records of inventory and no
material discrepancies were noticed on physical verification.
3. (a) The Company has granted an unsecured loan to a Company covered
in the register maintained under section 301 of the Companies Act,
1956. The maximum amount involved during the year was Rs. 64,102,500/-
and the year end balance was Rs. Nil.
(b) In our opinion, the rate of interest and other terms and conditions
of such loans are not prima facie prejudicial to the interest of the
(c) We are informed that the party was regular in payment of interest
and the principal amount was converted into investment during the year.
(d) There being no overdue amount, this sub-clause is not applicable.
(e) The Company has not taken any loans, secured or unsecured from
companies, firms or other parties covered in the register maintained
under Section 301 of the Companies Act, 1956. Consequently, clauses
4(iii)(e), 4(iii)(f) and 4(iii)|g) of the Order are not applicable.
4. 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 for the
purchase of inventory and fixed assets and for the sale of goods and
services. In our opinion and according to the information and
explanations given to us, there is no continuing failure to correct
major weaknesses in such internal control systems.
5. To the best of our knowledge and belief and as explained to us the
Company has not entered into any transactions required to be entered in
the register maintained under Section 301 of the Companies Act, 1956.
Therefore, clause 4(v)(b) of the order is not applicable.
6. In our opinion, and according to the information and explanations
given to us, the Company has complied with the provisions of Section
58A, 58AA or any relevant provisions of the Companies Act, 1956 and the
rules framed there under and the directives issued by the Reserve Bank
of India, where applicable, with regard to the deposits accepted from
the public. We have been informed that no order has been passed by
Company Law Board or National Company Law Tribunal or Reserve Bank of
India or any Court or any other tribunal.
7. In our opinion, the internal audit system is commensurate with the
size of the company and the nature of its business.
8. We have broadly reviewed the books of account and records
maintained by the Company pursuant to the rules made by the Central
Government for the maintenance of cost records under Section 209 (1)
(d) of the Companies Act, 1956 relating to the manufacture of Bulk
drugs and pharmaceutical specialties and are of the opinion that, prima
facie, the prescribed accounts and records have been maintained. We
have, however, not made a detailed examination of the said records with
a view to determine whether they are accurate or complete.
9. (a) The Company is regular in depositing undisputed statutory dues
payable in respect of provident fund, investor education and protection
fund, employees state insurance, income-tax, sales-tax, wealth tax,
custom duty, excise duty, cess and any other material statutory dues
with the appropriate authorities during the year. There were no
undisputed statutory dues as mentioned above in arrears as at 31st
March, 2009 for a period of more than six months from the date they
became payable. (b) According to the information & explanations given
to us, the dues in respect of excise duty and custom duty that have not
been deposited with the appropriate authorities on account of dispute
and the forum where the disputes are pending as on 31st March, 2009 are
as given below:
Name of the Nature of Amount
Statutes the dues (Rs. in lacs)
Central Excise Penalty 11.61
Custom Act, Custom duty 400.00
1962 including interest
Forum where Period to which
dispute is pending it relates
Customs Excise and Service Tax 2003-04
Appellate Tribunal (CESTAT),
Jt. Director General of 1997-98
Foreign Trade, Bhopal
10. The Company does not have any accumulated losses at the end of the
financial year and it has not incurred any cash losses in the current
or in the immediately preceding financial year.
11. According to the information and explanations given to us the
Company has not defaulted in repayment of dues to banks and financial
12. According to the information and explanations given to us the
Company has not granted loans and advances on the basis of security by
way of pledge of shares, debentures and other securities. Therefore,
the provisions of clause 4(xii) of the order are not applicable to the
13. The Company is not a chit fund or a nidhi mutual benefit fund
/society. Therefore, the provisions of clause 4(xiii) of the order are
not applicable to the Company.
14. As informed to us, the Company is not dealing in or trading in
shares, securities, debentures and other investments. Accordingly the
provisions of clause 4(xiv) of the order are not applicable to the
15. In our opinion, the terms and conditions on which the Company has
given guarantee for loans taken by others from banks or financial
institutions are not prejudicial to the interest of the Company.
16. To the best of our knowledge and belief and according to the
information and explanations given to us the term loans have been
applied for the purpose for which they were raised.
17. According to the cash flow statement and other records examined by
us and the information and explanations given to us, on an overall
basis, funds raised on short term basis, have prima facie, not been
used during the year for long term investments.
18. According to the information and explanations given to us no
preferential allotment of shares has been made by the Company to
companies, firms or other parties listed in the register maintained
under Section 301 of the Companies Act, 1956.
19. The Company has not issued any secured debentures and accordingly
the provisions of clause 4(xix) of the order are not applicable.
20. The company has not raised any money through a public issue during
21. Based upon the audit procedures for the purpose of reporting the
true and fair view of financial statements and as per the information
and explanations given to us by the management, no fraud on or by the
Company has been noticed or reported during the year.
For B. D. Jokhakar & Co.
May 21, 2009 Membership No. 103241