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Vysali Pharmaceuticals Ltd.

BSE: 524290 Sector: Health care
NSE: N.A. ISIN Code: INE153G01016
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Vysali Pharmaceuticals Ltd. (VYSALIPHARMA) - Auditors Report

Company auditors report

VYSALI PHARMACEUTICALS LIMITED ANNUAL REPORT 2006-2007 AUDITORS' REPORT TO THE SHAREHOLDERS We have audited the attached Balance Sheet of Mls. VYSALI PHARMACEUTICALS LIMITED, CIVIL LINES ROAD, PALARIVATTOM, COCHIN - 682 025 as at 30th June 2007, the Profit and Loss Account for the period ended on that date annexed thereto and the Cash Flow Statement for the period ended on that date. 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. 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 from 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 presentation of the financial statements. 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 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 and 5 of the said Order. 3) Further to our comments in the Annexure referred to 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 purpose 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 such books. c) The Balance Sheet and Profit and Loss account and Cash Flow Statement referred to in the Report are in agreement with the books of accounts. d) In our opinion, the Balance Sheet, Profit and Loss account and the 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 written representations received from the Directors, as on June 30, 2007 and taken on record by the Board of Directors, we report that none of the Director is disqualified from being appointed as a Director of the Company in terms of Clause(g) of Sub Section(1) of Section 274 of the Companies Act, 1956. 4) Attention is invited to the following notes contained in Schedule 19 forming part of the accounts: a) Note No. 9 regarding non-obtaining of permission from Central Government for related party transaction u/s.297 of the Companies Act, 1956. b) Note No. 12 regarding non-provision of interest on loans from KSIDC. c) Note No. 14 regarding non reconciliation and confirmations of Sundry Debtors, Sundry Creditors, Loans & Advances. d) Note No. 15 regarding non-transfer of unclaimed dividend to Investor Education and Protection Fund. e) Note No, 17 regarding Closing Stock. f) Note No. 18 regarding obsolete stock. g) Note No. 19 regarding non-disclosure of information regarding SSI Units. 5) Additional information pursuant to provisions of paragraphs 3 & 4 of Schedule VI to the Companies Act, 1956 are prepared and certified by the management. We have relied on their certificate. 6) In our opinion and to the best of our information and according to the explanations given to us, the accounts read together with the significant accounting policies and other notes thereon give the information required by the Companies Act, in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India. a) In so far as it relates to the Balance Sheet of the Affairs of the company as at 30th June 2007; b) In so far as it relates to the Profit and Loss account, of the Loss of the Company for the period ended on that date; and c) In so far as it relates to the Cash Flow Statement, of the Cash Flows for the period ended on that date. For WARRIER & WARRIER Chartered Accountants Sd/- K. CHITHRABHANU. B.Com. FCA, PARTNER MEMBERSHIP NO : 15682 Place: Cochin - 682 016 Date : 21.09.2007 ANNEXURE TO THE AUDITORS REPORT: i) a) The Company has not updated Fixed Asset Register showing particulars of Fixed Assets including quantitative details and situation of Fixed Assets. b) We are informed that major items of Fixed Assets have been physically verified by the Management at the end of the year. We are unable to comment on reasonability having regard to the size of the company and nature of its assets and discrepancies on such verification. c) In our opinion and according to the information and explanations given to us, the company has not made any substantial disposal of the Fixed Assets during the year. ii) a) All the inventories are stated to have been physically verified by the Management at the end of the year. Since we are relying on the confirmation of the Management, we are not in position to comment on the reasonableness of verification, b) We are informed that the procedure followed by the Management for physical verification 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 for inventory of raw material and packing materials. Obsolete stock found on physical verification of Raw Materials has been written off during the year. iii) in respect of loans secured or unsecured taken by the company front directors covered in the register maintained u/s.301 of the Companies Act 1956, according to the information and explanation given to us: a) The company has taken. loans during the period aggregating to Rs.2,74,4641 b) The company has not given interest for such loans. c) The company has repaid Rs. 1,94,100/- during the year towards such loan, iv) In our opinion and according to the information and explanation given to us Internal Control procedures for the purchase of inventory, fixed assets and sale of goods is to be strengthened. v) a) According to the information and explanations given to us, transaction that needed to be entered into the register U/s.301 of Companies Act, 1956 have been entered. b) In our opinion and according to the explanations given to us, the transactions made in pursuance of contracts or arrangements with parties referred in (a) above exceeding the value of Rs.5 lakhs in respect of each of these transactions have been made at price which are reasonable having regard to the prevailing market price at the relevant time. vi) The company has not accepted deposits from the public during the year except interest free loans from directors. vii) The company does not have Infernal Audit System. viii) The Company has not maintained cost records u/s.209 (1) (d) of the Companies Act, 1956 which has been prescribed by the Central Government. ix) (a) There is a delay in payment of Provident Fund and ESI dues during the period and the balance of dues to be remitted as on 30.06.2007 is Rs.40,41,924/- PF and Rs. 5,30,835/- ESI. There is also delay in remittance of Income-tax deducted of source. The amount to be remitted as on 30th June 2007 is Rs. 58,543/-. b. According to the information and explanations given to us the following are the details of the disputed dues that were not paid to concerned authority. Nature of the Nature of Amount Period to Forum where dispute Statute Dues (Rs. in which pending Lacs) Amount relates Kerala General Sales Tax 26.21 1990-2000 Deputy Commissioner Sales Tax Act (Appeals) remanded the case to Assessing Officer. Kerala General Penalty 9.75 2003-2004 Deputy Commissioner Sales Tax Act (Appeals) x) The company has incurred losses more than 50% of its net worth and it has incurred cash losses during the financial year covered by our audit and also in the immediately preceding financial year. xi) The Company has defaulted repayment to the following Financial Institutions and Banks. Name of Financial Institution/Banks Amount (Rs. in Lacs) Remarks Kerala State Industrial Development 84.33 Interest Corporation Limited xii) The company has not given any loans or advances in the nature of loans on the basis of security by way of pledge of shares and debentures and other securities. xiii) The nature of the company's business activities during the year have been such that clauses xiii and xiv of Paragraph 4 of the Companies (Auditors Report) Order 2003 are not applicable to the company. xiv) According to the information and explanations given to us and based on the records of the company examined by us, the company has not given any guarantee for loans taken by others from banks or financial institutions. xv) The Term Loans availed by the Company were utilized for the purpose for which the loans were obtained. xvi) According to the information and explanations given to us and based on the records of the company examined by us, the company has not raised funds on short term basis during the period. xvii) The company has not made any preferential allotment of shares to parties and companies requiring to be entered in the Register pursuant to Section 301 of the Companies Act, 1956. xviii) The company has not issued any debentures during the year. xix) The company has not raised money by public issue during the year. xx) According to the information and explanations given to us and based on the records of the company examined by us, no fraud either on or by the company, has been noticed or reported during the year. For WARRIER & WARRIER Chartered Accountants Sd/- K. CHITHRABHANU. B.Com. FCA PARTNER MEMBERSHIP NO : 15682 Place: Cochin - 682 016 Date : 21.09.2007