LIMITED HYDERABAD. Report on the Financial Statements:
We have audited the accompanying financial statements of INCON ENGINEERS LIMITED("the Company") which comprise the Balance Sheet as at 31st March 2017 andthe Statement of Profit and Loss and Cash Flow Statement for the year then ended and asummary of significant accounting policies and other explanatory information.
Management's Responsibility for the Financial Statements:
The company's Board of Directors is responsible for the matters states in Section134(5) of the Companies Act 2003 ("the Act") with respect to the preparation ofthe financial statements that give a true and fair view of the financial positionfinancial performance and cash flows of the Company in accordance with the accountingprinciples generally accepted in India including the Accounting standard specified undersection 133 of the Act read with rule7 of Companies (Accounts) Rules 2014. Thisresponsibility also includes maintenance of adequate accounting records in accordance withthe provisions of the Act for safeguarding of the assets of the Company and for preventingand detecting frauds and other irregularities; selection and application of appropriateaccounting policies; making judgments and estimates that are reasonable and prudent; anddesign implementation and maintenance of adequate internal financial controls that wereoperating effectively for ensuring the accuracy and completeness of the accountingrecords relevant to the preparation and presentation of the financial statements thatgive a true and fair view and are free from material misstatement whether due to fraud orerror.
Our responsibility is to express an opinion on these financial statements based on ouraudit.
We have taken into account to provisions of the Act the accounting and auditingstandards and matters which are required to be included in the audit report under theprovisions of the Act and the Rules made there under.
We conducted our audit in accordance with the Standards on Auditing specified undersection 143(10) of the Act. Those Standards require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetherthe financial statements are free from material misstatement. As audit involves performingprocedures to obtain audit evidence about the amounts and disclosure in the financialstatements. The procedures selected depend on auditor's judgment including the assessmentof the risk of material misstatement of financial statements whether due to fraud orerror. In making those risk assessments the auditor considers internal financial controlrelevant to the Company's preparation of the financial statements that give a true andfair view in order to design audit procedures that are appropriate in the circumstances.An audit also includes evaluating the appropriateness of accounting polices used and thereasonableness of the accounting estimates made by Company's Directors as well asevaluating the overall presentation of the financial statements. We believe that the auditevidence we have obtained is sufficient and appropriate to provide a basis for auditopinion on the financial statements.
In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid financial statements give the information required by the Actin the manner so required and give a true and fair view in conformity with the accountingprinciples generally accepted in India of the state of affairs of the Company as at 31stMarch2017 its loss and its cash flow for the year ended on the date.
Report on Other Legal and Regulatory Requirements:
1. As required by the Companies (Auditors' Report) Order 2016("the Order")issued by the Central Government of India in terms of sub-section (11) of Section 143 ofthe Act we give in the Annexure A a statement on the matters specified in paragraphs 3and 4 of the Order.
2. As required by section 143(3) of the Act we report that: (a) We have sought andobtained all the information and explanations which to the best of our f our knowledge andbelief were necessary for the purposes of our audit. (b) In our opinion proper books ofaccount as required by law have been kept by the Company so far as appears from ourexamination of those books.
(c) The Balance Sheet Statement of Profit and Loss and Cash Flow statement dealt withby this Report are in agreement with the books of account.
(d) In our opinion the the aforesaid financial statements comply with the AccountingStandards Specified under Section 133 of Act read with Rule 7 of the Companies (Accounts)Rule 2014 (e) On the basis of the written representations received from the Directors ason 31st March 2017 taken on record by the Board of Directors none of the Directors isdisqualified as on March 31 2017 from being appointed as a Director in terms of Section164(2) of the Act.
(f) With respect to the adequacy of the internal financial controls over financialreporting of the Company and the operating effectiveness of such controls refer to ourseparate Report in Annexure B" (g) With respect to the other matters to be includedin the Auditor's Report in accordance with Rule 11of the Companies (Audit and Auditors)Rules2014 in our opinion and to the best of our information and according to theexplanations given to us; (i) The Company has disclosed the impact of pending litigationson its financial positions in its i) Financial statements- Refer Note 27 to the financialstatements. ii) The Company did not have any long-term contracts including derivativecontracts for which There were any material foreseeable losses. iii) There were no amountswhich were required to be transferred to the investor education and Protection Fund by theCompany. iv) The Company has provided requisite disclousurers in the financial statementsas to holding as well as dealings in Specified Bank Notes during the period from 8thNovember 2016 to 30th December 2016. Based on audit procedures and relying on themanagement representation we report that the disclosures are in accordance with books ofaccount maintained by the Company and as produced to us by the Management - Refer Note 37
For Brahmayya & Co; Chartered Accountants (P. CHANDRAMOULI) Place: HyderabadPartner Date : 29.05.2017 Membership Number 025211
Annexure-A to the Auditor's Report:
The Annexure referred to Para 1 under the heading of "Report on Other Legal andRegulatory Requirements" of our report of even date to the members INCON ENGINEERSLIMITED HYDERABAD for the year ended 31st March 2017.
1. a) The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets. b) As explained to us the managementhas physically verified most of the fixed assets during the year and there is a regularprogramme of verification which in our opinion is reasonable having regard to the sizeof the Company and the nature of the assets. No discrepancies were noticed on suchverification. c) According to the information and explanations given to us and on thebasis of our examination of the records of the Company the title deeds of immovableproperties are held in the name of the Company.
2. The inventory has been physically verified during the year by the management. In ouropinion the frequency of verification is reasonable. No material discrepancies werenoticed on such verification between the physical stocks and book records.
3. a) During the year the Company has not granted any loans secured or unsecured toCompanies firms limited liability partnerships or other parties covered in the registermaintained under section 189 of the Companies Act 2013. b) In view of our comment inparagraph (a) above Clause (III)(a) (b) and (c) of the paragraph 3 (Auditor's Report)Order 2016 are not applicable to the Company.
4. In our opinion and according to the information and explanations given to us theCompany has not advanced any loan to any Director and no investments were made during theyear as referred to in section 185 and 186 of the Act. Therefore the provision ofparagraph 3 (iv) of the Companies (Auditor's Report) Order 2016 are not applicable to theCompany.
5. The Company has not accepted deposits from the public .Hence the provisions ofSection 73 to 76 any other relevant provisions of the Companies Act 2013 and the rulesframed there under do not apply to this Company.
6 The Central Government has not prescribed the maintenance of cost records undersub-section (1) of 148 section of the Companies Act 2013 for the activities of theCompany.
7 a) According to the records the Company is regular in depositing undisputedstatutory dues including provident fund employees 'state insurance income - tax servicetax duty of customs duty of excise value added tax cess and all other materialstatutory dues with the appropriate authorities and there were no arrears of statutorydues as at March 31 2017 for a period of more than six months from the date they becomepayable. b) According to the records of the Company and the information and explanationsgiven to us there were no dues of Income or sales tax or duty of customs or duty exciseor value added tax have not been deposited an account of any dispute.
8 As the company has no borrowings the provision of paragraph 3(viii) of the Companies(Auditor's Report) Order 2016 are not applicable.
9 The Company did not raise any money by way of initial public or further offer(including debit instruments) and term loans during the year. Accordingly paragraph 3(ix) of the companies (Auditor's Report) Order 2016 is not applicable.
10 According the information and explanations given to us no material fraud by theCompany or on the Company by its officers or employee has been noticed or reported duringthe course of our audit.
11 During the year the company did not pay any remuneration to its Directors.
Therefore the provision of paragraph 3(xi) of the Companies (Auditor's Report) order2016 are not applicable to the Company.
12. In our opinion and according to the information an explanations given to us theCompany is not a Nidhi Company.
Accordingly paragraph 3(xii) of the Order is not applicable.
13. According to the information and explanations given to us and bases on ourexaminations of the records of the Company transactions with the related parties incompliance with sections 177 and 188 of the Act where applicable and details of suchtransactions have been disclosed in the financial statements as required by applicableaccounting standards.
14. According to the information and explanations given to us and based on ourexamination of the records of the Company the company has not made any preferentialallotment of private placement of shares or fully or partly convertible debentures duringthe year. 15. According to the information and explanations given to us and based on ourexamination of the records of the Company the company has not entered into non-cashtransactions with directors or persons connected with him. According paragraph 3(xv) ofCompanies (Auditor's Report) Order 2016 is not applicable.
16. The Company is not required to be registered under section 45-IA of Reserve Bank ofIndia Act 1934.
For Brahmayya & Co; Chartered Accountants Firms Registration No. 000513S
(P. CHANDRAMOULI) Place: Hyderabad Partner Date : 29.05.2017 Membership Number 025211
Annexure - B to the Auditors' Report Report on the Internal Financial Controls underClause (i) of Sub-section 3 of Section 143 of the Companies Act 2013 ("theAct")
We have audited the internal financial controls over financial reporting of INCONENGINEERS LIMITED HYDERABAD ("the Company") as of 31 March 2017 in conjunctionwith our audit of the financial statements of the Company for the year ended on that date.
Management's Responsibility for Internal Financial Controls
The Company's management is responsible for establishing and maintaining internalfinancial controls based on the internal control over financial reporting criteriaestablished by the Company considering the essential components of internal control statedin the Guidance Note on Audit of Internal Financial Controls over Financial Reportingissued by the Institute of Chartered Accountants of India ('ICAI'). These responsibilitiesinclude the design implementation and maintenance of adequate internal financial controlsthat were operating effectively for ensuring the orderly and efficient conduct of itsbusiness including adherence to company's policies the safeguarding of its assets theprevention and detection of frauds and errors the accuracy and completeness of theaccounting records and the timely preparation of reliable financial information asrequired under the Companies Act 2013.
Our responsibility is to express an opinion on the Company's internal financialcontrols over financial reporting based on our audit. We conducted our audit in accordancewith the Guidance Note on Audit of Internal Financial Controls over Financial Reporting(the "Guidance Note") and the Standards on Auditing to the extent applicable toan audit of internal financial controls both applicable to an audit of Internal FinancialControls and both issued by the Institute of Chartered Accountants of India. ThoseStandards and the Guidance Note require that we comply with ethical requirements and planand perform the audit to obtain reasonable assurance about whether adequate internalfinancial controls over financial reporting was established and maintained and if suchcontrols operated effectively in all material respects. Our audit involves performingprocedures to obtain audit evidence about the adequacy of the internal financial controlssystem over financial reporting and their operating effectiveness. Our audit of internalfinancial controls over financial reporting included obtaining an understanding ofinternal financial controls over financial reporting assessing the risk that a materialweakness exists and testing and evaluating the design and operating effectiveness ofinternal control based on the assessed risk. The procedures selected depend on theauditor's judgment including the assessment of the risks of material misstatement of thefinancial statements whether due to fraud or error.
We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion.
Meaning of Internal Financial Controls over Financial Reporting
A company's internal financial control over financial reporting is a process designedto provide reasonable assurance regarding the reliability of financial reporting and thepreparation of financial statements for external purposes in accordance with generallyaccepted accounting principles. A company's internal financial control over financialreporting includes those policies and procedures that: 1. pertain to the maintenance ofrecords that in reasonable detail accurately and fairly reflect the transactions anddispositions of the assets of the company; 2. provide reasonable assurance thattransactions are recorded as necessary to permit preparation of financial statements inaccordance with generally accepted accounting principles and that receipts andexpenditures of the company are being made only in accordance with authorisations ofmanagement and directors of the company; and 3. provide reasonable assurance regardingprevention or timely detection of unauthorised acquisition use or disposition of thecompany's assets that could have a material effect on the financial statements.
Inherent Limitations of Internal Financial Controls Over Financial Reporting
Because of the inherent limitations of internal financial controls over financialreporting including the possibility of collusion or improper management override ofcontrols material misstatements due to error or fraud may occur and not be detected.Also projections of any evaluation of the internal financial controls over financialreporting to future periods are subject to the risk that the internal financial controlover financial reporting may become inadequate because of changes in conditions or thatthe degree of compliance with the policies or procedures may deteriorate.
In our opinion the Company has in all material respects an adequate internalfinancial controls system over financial reporting and such internal financial controlsover financial reporting were operating effectively as at 31 March 2017 based on theinternal control over financial reporting criteria established by the Company consideringthe essential components of internal control stated in the Guidance Note on Audit ofInternal Financial Controls Over Financial Reporting issued by the Institute of CharteredAccountants of India.
For Brahmayya & Co; Chartered Accountants Firm's Registration Number. : 000513S
(P. CHANDRAMOULI) Place: Hyderabad Partner Date : 29.05.2017 Membership Number 025211
BALANCE SHEET AS AT 31ST MARCH 2017
| ||31.03.2017 ||31.03.2016 |
|PARTICULARS || || |
| ||Rs. ||Rs. |
|EQUITY AND LIABILITIES || || |
|Share holders funds || || |
|Share Capital ||57137500 ||57137500 |
|Reserves and Surplus ||(53283193) ||(50569376) |
| ||3854307 ||6568124 |
|Non - Current liabilities || || |
|Long Term Provisions ||90010 ||78048 |
| ||90010 ||78048 |
|Current liabilities || || |
|Trade Payables ||521409 ||415642 |
|Other Current Liabilities ||2209201 ||287985 |
|Short Term Provisions ||1486668 ||1471622 |
| ||4217278 ||2175249 |
| ||8161595 ||8821421 |
|ASSETS || || |
|Non - Current assets || || |
|Fixed assets : || || |
|Tangible ||6163866 ||6450123 |
|Intangible ||2009 ||9356 |
|Long Term Loans and Advances ||116223 ||116223 |
| ||6282098 ||6575702 |
|Current Assets || || |
|Inventories ||831433 ||327304 |
|Trade Receivables ||- ||116850 |
|Cash and Cash Equivalents ||584354 ||1367603 |
|Short Term Loans and Advances ||59483 ||66852 |
|Other Current Assets ||404227 ||367110 |
| ||1879497 ||2245719 |
| ||8161595 ||8821421 |
STATEMENT OF PROFIT AND LOSS FOR THE YEAR ENDED 31 MARCH 2017
| ||31.03.2017 ||31.03.2016 |
|PARTICULARS || || |
| ||Rs. ||Rs. |
|INCOME || || |
|Revenue from operations ||1782181 ||5125075 |
|Other Income ||998139 ||903406 |
|TOTAL REVENUE ||2780320 ||6028481 |
|EXPENSES || || |
|Cost of Raw Materials and Stores Consumed 20 ||721266 ||1276116 |
|(Increase)/Decrease in Inventories ||(509650) ||21722 |
|Employee Benefit Expense ||2927691 ||3242050 |
|Finance Costs ||1685 ||4860 |
|Depreciation expense ||294954 ||465196 |
|Other Expenses ||2058191 ||2621105 |
| ||5494137 ||7631049 |
|TOTAL EXPENSES ||5494137 ||7631049 |
|PROFIT / (Loss) BEFORE TAX ||(2713817) ||(1602568) |
|TAX EXPENSES ||- - - ||- - - |
|PROFIT / (Loss) FOR THE YEAR AFTER TAX ||(2713817) ||(1602568) |
|Earnings per Share of face Value of ||(0.63) ||(0.37) |
|Rs.10/- each: Basic and diluted || || |
|NOTES FORMING PART OF FINANCIAL STATEMENTS || || |
CASH FLOW STATEMENT FOR THE YEAR ENDED 31ST MARCH 2017
|31.03.2017 ||31.03.2016 |
|Particulars || || |
| ||Rs. ||Rs. |
|A. CASH FLOW FROM OPERATING ACTIVITIES || || |
|Net Profit before tax and extraordinary items ||(2713817) ||(1602568) |
|Adjustments for: || || |
|Excess Provisions written back ||(98673) || |
|Depreciation ||294594 ||465196 |
|Interest Received ||(53424) ||(76183) |
|Bad Debts written off ||3450 ||- |
|Warranty Period Maintenance ||- ||75000 |
|Operating profit before Working Capital changes ||(2567510) ||(1138555) |
|Adjustments for : || || |
|Increase/(Decrease) in Long Term Provisions ||11962 ||16845 |
|Increase/(Decrease) in Trade Payables ||105767 ||10734 |
|Increase/(Decrease) in Other Current Liabilities Payables 1921216 ||(610118) |
|Increase/(Decrease) in Short Term Provisions ||113719 ||142025 |
|(Increase)/Decrease in Short Term Loans & Advances ||7369 ||61196 |
|(Increase)/Decrease in Trade Receivables ||113400 ||610862 |
|(Increase)/Decrease in Inventories ||(504129) ||467814 |
|(Increase)/Decrease in Other Current Assets ||(90793) ||76874 |
|Cash generated from operations ||(888999) ||(362323) |
|Income tax ||(3547) ||125947 |
|NET CASH FROM OPERATING ACTIVITIES ||(892546) ||(236376) |
|B. CASH FLOW FROM INVESTING ACTIVITIES || || |
|Purchase of fixed assets ||(1350) ||(4800) |
|NET CASH USED IN INVESTING ACTIVITIES ||(1350) ||(4800) |
|C. CASH FLOW FROM FINANCING ACTIVITIES || || |
|Interest Received ||110647 ||45541 |
|NET CASH GENERATED IN FINANCING ACTIVITIES ||110647 ||45541 |
|Net increase in cash and cash equivalents (A+B+C) ||(783249) ||(195635) |
|Cash and Cash equivalents as at the beginning of the year ||1367603 ||1563238 |
|Cash and Cash equivalents as at the end of the year # ||584354 ||1367603 |
|# including restricted amount of || ||645090 |