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Incorporated Engineers Ltd.

BSE: 522095 Sector: Engineering
NSE: N.A. ISIN Code: INE801D01017
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Incorporated Engineers Ltd. (INCENGINEERS) - Auditors Report

Company auditors report

ANNUAL REPORT 1998-99 INCORPORATED ENGINEERS LIMITED AUDITORS' REPORT TO TH MEMBERS We have audited the attached Balance Sheet of INCORPORATED ENGINEERS LIMITED as at 31st March, 1999 and also the Profit and Loss Account of the Company for the year ending 31st, March 1999 annexed thereto, and report that : 1. As required by the Manufacturing and other Companies (Auditors' Report) Order, 1988 issued by the Company Law Board in terms of Section 227 (4A) of the Companies Act, 1956, we enclose in the Annexure a statement of the matters specified in paragraphs 4 and of the said Order. 2. Further to our comments in the Annexure referred to in paragraph 1. above - 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 those books except for the Jamnagar site where the record of the company are destroyed by the cyclone. We have relied on the statement submitted by the cite engineer. We express no opinion thereof. c) The Balance Sheet and the Profit and Loss Account dealt with by this report are in agreement with books of the act d) In our opinion, the Profit Loss Account and the Balance Sheet comply with the Accounting Standards referred to in Section 211(3C) of the Companies Act, 1956 to the extent applicable. e) In our opinion and to the best of our information and according to the explanations given to us, the said accounts read together with the significant accounting policies in Schedule 18 and the other notes appearing thereon, subject to Note No.4(a) & 4(b) as regards valuation of work-in-progress and realisable value of debtors respectively on which we are unable to express opinion, and note no 5,6 & 7 regarding non provision of interest on secured loans, to the best of our information and explanation given to us, the said accounts give the information required by the Companies Act, 156 in the manner so required and give a true and fair view : (i) in the case of the Balance Sheet, of the state of affirs of the Company as at 31st March, 1999 and (ii) in the case of the Profit & Loss A/c, the Loss for the year ended on that date. For J.G.DALAL & COMPANY Chartered Accountants B.B.MODI PLACE: BARODA DATE : 10.08.1999. ANNEXURE TO THE AUDITORS REPORT (Referred to in Paragraph 1 of our Report of even date) 01. The Company has maintained proper records showing full particulars including quantitative details and situation of fixed assets. A substantial portion of the fixed assets has been physically verified by the management during the year which in our opinion is reasonable. No material discrepancies were noticed on such physical verification. 02. Factory shed, building, land and plant & machinery have been revalued in 1989 and 1994 as per Chartered Valuer's report. 03. The stocks of finished goods, stores, spare parts and raw materials have been physically verified during the period by the Management. In our opinion, the frequency of verification is reasonable. 04. The procedures of physical verification of stocks followed by the management are reasonable and adequate in relation to the size of the company and the nature of its business. 05. The discrepancies noticed on verification between the physical stocks and the book records were not material and have been properly dealt with in the books of account. 06. On the basis of our examination of stock records, we are of the opinion that the valuation of stocks is fair and proper in accordance with the normally accepted accounting principles and is on the same basis as in the preceding year. However we express no opinion on the valuation of work-in- progress. 07. In our opinion and according to the information and explanations given to us, the company has taken interest free loans from companies, firms or other parties listed in the register maintained under Section 301 of the Companies Act, 1956. 08. In our opinion and according to the information and explanations given to us, the company has not granted any loans, secured or unsecured to companies, firms or other parties listed in the register maintained under Section 301 of the Companies Act, 1956. 09. The parties to whom loans and advances in the nature of loans have been given by the company are generally repaying the principal amounts as stipulated and have also been regular in the payment of interest, wherever applicable. 10. 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 for the purchase of stores, raw materials including components, plant and machinery, equipment and other assets and with regard to the sale of goods. 11. In our opinion and according to the information and explanations given to us, the prices in respect of the transactions of purchase of goods, materials and services and for sale of goods, materials and the registers maintained under Section 301 and aggregating during the period to Rs.50,000/- or more in respect of each party are not comparable having regard to the special nature of the equipment and technical knowhow involved in the transactions. The company has purchased Plant and Machinery of Rs.32,01,013/- and Engineering services of Rs.9,69,000/- from a company where some of the Directors are interested as Director 12. As explained to us, the company has a regular procedure for determination of unserviceable or damaged stores, raw materials and finished goods. Adequate provision has been made in the accounts for the loss arising on the items so determined. 13. In our opinion and according to the information and explanations given to us, the company has not accepted any deposits from the public. 14. In our opinion, reasonable records have been maintained by the company for the sale and disposal of realisable scrap. The company does not have any realisable by-products. 15. In our opinion the company's internal audit system requires to be strengthened. 16. The Central Government has not prescribed under Section 209(1) (d) of the Companies Act, 1956, the maintenance of cost records in respect of the products of the Company. 17. According to the records of the company there were defaults in depositing of Provident Fund and Employee's State Insurance dues as prescribed under the respective laws. 18. According to the records of the company Rs.85,70,864/- on account of Central Sales Tax, Gujarat Sales Tax & Turnover tax is outstanding as at 31.03.1999 for a period of more than six months from the date they became payable. 19. There are no undisputed amounts payable in respect of custom duty and excise duty as at 31.03.1999. However in case of PT on salary of Rs.27,256/- and TDS on various payment of Rs.8,70,864/- which were outstanding for a period of more than six months from the date they became payable. 20. According to the information and explanations given to us, no personal expenses of employees or directors have been charged to revenue account, other than those payable under contractual obligations or in accordance with generally accepted business practice. 21. The company is not a sick industrial company within the meaning of clause (o of Sub-section (1) of Section 3 of the Sick Industrial companies Special Provisions Act, 985. 22. In respect of the service activities, in our opinion and according to the information and explanations given to us : (i) the company has a reasonable system of recording receipts, issues and consumption of materials and stores commensurate with the size and the nature of its service activities and the system provides for a reasonable allocation of the materials and labour consumed to the relative jobs; and (ii) there is a reasonable system and authorisation at proper levels with necessary control on the issue of stores and allocation of stores and labour to jobs and there is system of internal control commensurate with the size of the company and the nature of its service activities. For J.G. DALAL & COMPANY Chartered Accountants B.B.MODI PARTNER PLACE: BARODA DATE : 10TH AUGUST,1999.