We have audited the attached Balance Sheet of KREBS BIOCHEMICALS &
INDUSTRIES LIMITED as at 31.03.2007 and also the Profit and Loss
Account and 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.
We conducted our audit in accordance with 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 management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for
As required by the Companies (Audi-tors Report) Order, 2003, issued
by the Government of India, in terms of Section 227(4A) of the
Companies Act1956, we enclose in the Annexure a statement on the
matters specified in para-graph 4 and 5 of the said order.
Further to our comments in the annexure referred to above, we report
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
b) In our opinion, proper books of accounts as required by law have
been kept by the company so for as it appears from our examination of
c) The Balance Sheet, Profit & Loss account and the Cash Flow statement
dealt with by this report are in agree-ment 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 mandatory
Accounting Standards referred to in Sub-Section 3(C) of Section 211 of
the Compa-nies Act 1956.
e) On the basis of the written representations received from the
directors, as on 31st March 2007 and taken on record by the Board of
Directors, we report that none of the directors is disqualified as on
31st March 2007 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 accounts, 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 Mrach 2007;
ii) In the case of the Profit and Loss Account, of the Loss of the
Company for the year ended on that date; and
iii) In the case of the cash flow statement, of the cash flows for the
year ended on that date.
ANNEXURE TO AUDITORS REPORT
1. (a) The Company has maintained proper records showing full
particulars including quantitative details and situation of fixed
(b) All the assets have not been physically verified by the management
during the year but there is a regular programme of verification which,
in our opinion, is reasonable having regard to the size of the company
and the nature of its business. No material discrepancies were noticed
on such physical verification.
(c) According to the information and explanations furnished to us, the
Company has not disposed of a substantial part of its fixed assets
during the year.
2. (a) The inventories have been physically verified by the management
during the year at reasonable intervals.
(b) The procedures of physical verification of the 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 has maintained proper records of inventories and
discrepancies noticed on physical verification of inventories as
compared to book records were not material.
3. (a) In our opinion, the Company has neither granted nor taken any
loans to/from companies, firms or other parties covered in the
Register, maintained under Section 301 of the Companies Act, 1956;
(b) In our opinion, the rate of interest and other terms and conditions
in respect of unsecured loans given by the company to its employees and
others, are in our opinion, prima facie not prejudicial to the interest
of the Company;
(c) In respect of such loans given by the Company, where stipulations
have been made, they have generally repaid the principal amounts as
stipulated and have been regular in payment of interest, where
(d) In respect of such loans given by the Company, there are no overdue
amounts more than Rs. 1,00,000/-.
4. In our opinion, there are adequate internal control procedures
commensurate with the size of the Company and the nature of its
business with regard to purchase of inventories, fixed assets and for
the sale of goods.
5. (a) In our opinion, there are no transactions made in pursuance of
contracts or arrangements, that need to be entered into the register
maintained under section 301 of the Companies Act, 1956.
(b) In our opinion, there are no transactions of purchase and sale of
goods, materials and services made in pursuance of contracts or
arrangement? entered in the register maintained under Section 301 of
the Companies Act, 1956 aggregating during the year to Rs 5.00.000/- or
more in respect of each party.
6. In our opinion and according to the information and explanation
given to us, the Company has not accepted any deposits as defined under
section 58A of the Companies Act 1956
7. In our opinion, the Company has an adequate internal audit system
commensurate with its size and nature of its business.
8. We have broadly reviewed the Books of Account maintained by the
Company as prescribed by the Central Government for maintenance of cost
records under section 209(1)(d) of the Companies Act, 1956 and are of
the opinion that prima facie the prescribed accounts and records have
been made and maintained. However we have not carried out a detailed
examination of the accounts and records.
9. (a) According to the books and records of the company, the company
is not regular in depositing undisputed statutory dues including
Provident Fund, Investor Education and Protection Fund, Employees
State Insurance, Income Tax and other Statutory dues with appropriate
authorities According to the information and explanations given to us,
there are undisputed amounts payable in respect of such statutory dues
which have remained outstanding as at 31st March, 2007 for a period
exceeding six months from the date they became payable.
(b) Disputed Excise Duty, Income Tax & Sales Tax not deposited, has
been disclosed in point No.7 of Schedule 18(B) as Contingent
Liabilities not provided for.
10. In our opinion, the accumulated losses of the company are not more
than fifty percent of its net worth. The company has not incurred cash
losses during the financial year covered by our audit and has not
incurred cash loss in the immediately preceding financial year
11. In our opinion and according to the information and explanations
given to us, the Company has not defaulted in repayment of its dues to
banks and financial institutions
12. The Company has not granted any loans or advances on the basis of
security by way of edge of shares, debentures or other securities.
13. In our opinion, the company is not a chit fund or a nidhi/mutual
benefit fund/society Therefore the provisions of clause 4(xiii) of the
Companies (Auditors Report) order, 2003 are not applicable to the
14. In our opinion, the Company is not dealing or trading in shares,
securities, debentures or other investments and hence, the requirements
of clause 4(xiv) of the Companies (Auditors Report) order, 2003 are
not applicable to the Company.
15 According to the information and explanations given to us, the
company has not given any guarantee for loans taken by others from
banks, and financial instill.ins.
16. In our opinion, the term loans have been applied for the purpose for
which they were raised.
17. In our opinion and 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 long-term investments. No long-term funds have been used to
finance short-term assets except permanent working capital.
18. According to the information and explanation given to us, the
company has made preferential allotment of shares to parties covered in
the register maintained under Section 301 of the Act. In our opinion,
the price at which shares have been issued is not prejudicial to the
interest of the company
19. No debentures have been issued by the company and hence, the
question of creating securities in respect there of does not arise.
20. The company has not raised any money by way of public issues during
21. On the basis of our examination and according to the information and
explanations given to us, no fraud, on or by the Company, has been
noticed or reported during the year.