krishna engineering works ltd share price Auditors report

AUDITOR

TO THE MEMBERS OF THE COMPANY

1. We have audited the attached balance sheet of M/S KRISHNA ENGINEERING WORKS LTD. as at 31-03-11 and the Profit and Loss 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 auditing standards generally accepted in India. Those standard 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 & the disclosures in the financial statements. An audit also includes assessing the accounting principles used & the significant estimates made by 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 issued by the Central Government of India in terms of sub sec. (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.

4. Further to our comments in the annexure referred to above and the note VII given herein below we report that :

i) We have obtained all the information & explanation, which to the best of our knowledge and belief were necessary for the purpose of our audit.

ii) 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 those books subject to note (vii) below .

iii) The balance Sheet , Profit & Loss and Cash Flow statement dealt with by this report are in agreement with the books of accounts subject to note (vii) below :

iv) In our opinion , the balance sheet, profit and loss and cash flow statements dealt with by this report comply with the accounting standards referred to in sub section .(3C) of section 211 of the Companies Act, 1956 to the extent applicable except accounting standard 15 in regard to Leave encashment benefits to employee, which are accounted for on cash basis and provision for gratuity which has also not been made during the year.

v) On the basis of written representations received from the directors and the information and explanations given to us, none of the directors is as on 31st March 2011, prime facie disqualified from being appointed as a director in terms of clause (g) of sub section (1) of section 274 of the Companies Act, 1956.

vi) In our opinion and to the best of our knowledge and according to the explanation given to us, the said accounts read together with & subject to notes attached therewith and subject to points in clause (iv) & (vii) give the information required by the Companies Act, 1956 , in the manner so required give a true and fair view in conformity with the accounting principles generally accepted in India.

a) In the case of the balance sheet of the state of affairs of the Company as at 31st March, 2011.

b) In case of the profit & loss a/c, of the loss for the year ended on that date.

c) In case of cash flow statement, of the cash flows for the year ended on that date.

vii) a) The Company has shown net loss of Rs. 150.44 Lacs it is less due to non providing for interest to financial institutions and banks . Actual amount of balance outstanding to these financial institutions L.I.C. G.I.C. and PSIDC can not be verified by us due to non availability of information.

b) The quantitative figure with respect to Purchase/sales & stock of trading goods has not been given separately in notes of accounts.

	For Brij Aggarwal & Associates
	Chartered Accountants
Place: Jalandhar	(BRIJ AGGARWAL)
Dated: 12.08.2011	Partner, M.No. 16974

Annexure Referred to in para 3 of our report of even date.

1. a) The company has generally maintained proper records showing full particulars including qantitative details and situation of fixed assets.

b) As explained to us, all the assets have been physically verified by the management at the year end. According to the information and explanation given to us, no material discrepancies were noticed on such verification as compared to book records.

c) The company has not disposed off its fixed assets during the year.

2. a) We have been told that the inventory has been physically verified during the year by the Management at reasonable intervals.

b) In our opinion, the procedures of physical verification of inventory followed by the management are reasonable and adequate in relation to the size of the company and the nature of its business.

c) Discrepancies noticed on verification between the physical stocks & the book record inrespect of manufacturing goods were not material and have been properly dealt within the books of account.

3. As explained to us company has not taken/granted any loan from/to the companies whose name are required to be entered into the register maintained under section 301 of Companies act, 1956.

4. In our opinion and according to the information and explanations given to us, there is adequate internal control procedure commensurate with the size of the company and the nature of its business with regard to purchase of inventory, fixed assets and with regard to the sale of goods. During the course of our audit we have not observed any continuing failure to correct major weakness in internal control.

5. The Company has not maintained any register under sec.301 of the Companies Act,1956.

6. As explained to us the company has not accepted any public deposits during the year.

7. In our opinion , the company has an internal audit system commensurate with its size and nature of its business.

8. As explained to us , the Central Government has not prescribed maintenance of cost records U/s 209 (1) (d) of the Companies Act, 1956 for any of the products of the Company.

9. The Company is not regular in depositing with appropriate authorities. ESI Rs.7,21,440 has not been paid. Detail of undisputed liabilities exceeding six months were in arrears is as under :

S. No.	Particulars	Amount
1.	C.S.T. Payable	59,65,579
2.	P.S.T. Payable	2,47,771
3.	VAT Payable	33,19,668
4.	Gratuity Payable	10,75,070

10. The accumulated losses of the company are more than 50 % of its worth. The Company has not incurred cash losses during the financial year covered by our audit but in the immediately preceeding financial year there were cash losses.

11. The company has defaulted in repayment of dues to Banks , Financial Institutions and Debenture holders complete details with respect to which can not be provided as the necessary records have not been made available to us.

12. According to the information and explanations 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 a nidhi/ mutual benefit fund/society.

14. As explained to us the co. is not dealing or trading in shares, securities, debentures or other investments.

15. As explained to us, the company has not given any guarantee for loans taken by others from Bank or financial institution.

16. During the years, no fresh loans were raised by the company.

17. The company has used short term funds for long term investments during the year.

18. As explained to us, the company has not made any preferential shares to parties and companies whose name is required to be entered in the register u/s 301 of the Company Act,1956

19. As explained to us the company has not issued any debentures during the year.

20. As explained to us, no fraud on or by the company has been noticed or reported during the years.

	For Brij Aggarwal & Associates
	Chartered Accountants
Place : Jalandhar	(BRIJ AGGARWAL)
Dated: 12.08.2011	Partner, M.No. 16974