FUTURE ENGINEERS INDIA Auditors Report

Report on the Standalone Indian Accounting Standards (Ind AS) Financial Statements


We have audited the accompanying standalone Ind AS financial statements of ENGINEERS INDIA LIMITED (“the Company”), which comprise the Balance Sheet as at 31 March, 2017, the Statement of Profit and Loss (including other comprehensive income), the Cash Flows Statement and the statement of changes in equity for the year then ended and a summary of the significant accounting policies and other explanatory information (herein after referred to as “Standalone Ind AS Financial Statements”).


Management’s Responsibility for the Standalone Ind AS Financial Statements


The Company’s Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 (“the Act”) with respect to the preparation and presentation of these standalone Ind AS financial statements that give a true and fair view of the financial position, financial performance (including other comprehensive income), cash flows and changes in equity of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards (Ind AS) specified in the Companies (Indian Accounting Standards) Rules, 2015 (as amended) under Section 133 of the Act.


This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the standalone Ind AS financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.


Auditor’s Responsibility


Our responsibility is to express an opinion on these standalone Ind AS financial statements based on our audit. While conducting our audit, we have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made there under.


We conducted our audit of standalone Ind AS financial statements in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the standalone Ind AS financial statements are free from material misstatement.


An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the standalone Ind AS financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the standalone Ind AS financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Company’s preparation of the standalone Ind AS financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Company’s Directors, as well as evaluating the overall presentation of the standalone Ind AS financial statements.


We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the standalone Ind AS financial statements.


Opinion


In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone Ind AS financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at 31 March, 2017, and its profit (including other comprehensive income), its cash flows and the changes in equity for the year ended on that date.


Emphasis of Matter


We draw attention to the note no. 54 to the standalone Ind AS financial statements of 31 March 2017, regarding claim of the contractor for Rs.40,757 lakhs consequent to termination of the contract. Management does not consider any possible obligation on this account requiring future probable outflow of resources.


Our opinion is not modified in respect of this matter.


Other Matters


The comparative financial information of the Company for the year ended 31 March 2016 and the transition date opening balance sheet as at 01 April 2015 included in these standalone Ind AS financial statements, are based on the previously issued statutory financial statements prepared in accordance with the Companies (Accounting Standards) Rules, 2006 (as amended) for the year ended 31 March 2016 which were audited by us, on which we have expressed an unmodified opinion dated 25 May 2016 and for the year ended 31 March 2015 which were audited by other auditor, on which they have expressed an unmodified opinion dated 27 May 2015, respectively. The adjustments to those financial statements for the differences in accounting principles adopted by the Company on transition to the Ind AS have been audited by us, on which we have expressed an unmodified opinion vide our report dated 22 May 2017. Our opinion is not modified in respect of this matter.


Report on Other Legal and Regulatory Requirements


1. As required by the Companies (Auditor’s Report) Order, 2016 (“the Order”) issued by the Central Government of India in terms of Subsection (11) of section 143 of the Act, we give in the “Annexure A”, a statement on the matters specified in the paragraph 3 and 4 of the Order.


2. The C & AG of India has issued directions indicating the areas to be examined in terms of sub section (5) of section 143 of the companies act 2013, compliance of which are set out in “Annexure B”


3. As required by Section 143 (3) of the Act, we report that:


(a) We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit.


(b) In our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books.


(c) The Balance Sheet, the Statement of Profit and Loss (including other comprehensive income), the Cash Flow Statement and the statement of changes in equity dealt with by this Report are in agreement with the books of account.


(d) In our opinion, the aforesaid standalone Ind AS financial statements comply with the Indian Accounting Standards specified in the Companies (Indian Accounting Standards) Rules, 2015 (as amended) under Section 133 of the Act.


(e) On the basis of the written representations received from the directors as on 31 March, 2017 taken on record by the Board of Directors, none of the directors is disqualified as on 31 March, 2017 from being appointed as a director in terms of Section 164 (2) of the Act.


(f) With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate report in “Annexure C”; and


(g) With respect to the other matters to be included in the Auditor’s Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us:


i. the Company has disclosed the impact of pending litigations on its financial position in its standalone Ind AS financial statements-refer note no. 40 to the standalone Ind AS financial statements of 31 March 2017;


ii. the Company has made provision, as required under the applicable law or accounting standards, for material foreseeable losses, if any, on long term contracts including derivative contracts-refer note no. 53 to the standalone Ind AS financial statements of 31 March 2017;


iii. there has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company; and


iv. the Company has provided requisite disclosures in note no. 16 to the financial statements as to holdings as well as dealings in Specified Bank Notes during the period from 8 November, 2016 to 30 December, 2016. Based on audit procedures and relying on the management representation, we report that the disclosures are in accordance with books of account maintained by the Company and as produced to us by the Management.


Annexure A to Independent Auditors’ Report


Referred to Paragraph 1 under the heading of “Report on Other Legal and Regulatory Requirements” of our report of even date


i. (a) The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets.


(b) The Company has a regular programme of physical verification of its fixed assets by which fixed assets are verified in a phased manner over a period of three years. In accordance with this programme, certain fixed assets were verified during the year and no material discrepancies were noticed on such verification. In our opinion, this periodicity of physical verification is reasonable having regard to the size of the Company and the nature of its assets.


(c) According to the information and explanations given to us and on the basis of our examination of the records of the Company, the title deeds of immovable properties are held in the name of the Company except incase of following:


(Amount in Lakhs)














































PARTICULARS



GROSS BLOCK



NET BLOCK



4 Flats at Naranpura, Ahemdabad



10.31



3.79



Land at Memnagar, Ahemdabad



69.21



56.28



2 Floors at Race Course Road, Vadodara



204.02



158.75



2 Flats at Viman Nagar, Pune



8.45



3.25



84 Flats at Gokuldham Goregaon, Mumbai



238.19



43.81



6 Flats in Andheri East, Mumbai



9.93



0.64



1 Floor at CBD Belapur, Navi Mumbai



101.68



42.23



ii. The Company has carried out a physical verification of inventory at the year end. In our opinion, frequency of physical verification is reasonable. As per the information and explanations given to us, the discrepancies noticed on physical verification of inventories as compared to book records were not material and the same have been dealt with in the books of account.


iii. 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 covered in the register maintained under section 189 of the Companies Act, 2013. Accordingly paragraphs 3 (iii) (a), (b) and (c) of the order are not applicable.


iv. In our opinion and according to the information and explanations given to us, the Company has complied with the provisions of section 185 and 186 of the Act, with respect to the loans and investments made.


v. The Company has not accepted any deposits from the public within the meaning of Sections 73, 74, 75 and 76 of the Companies Act, 2013 and Rules framed there under.


vi. As per the information and explanations given to us, the maintenance of cost records has not been prescribed by the Central Government under section 148(1) of the Companies Act, 2013 for services rendered by the Company.


vii. (a) According to the information and explanations given to us and on the basis of our examination of the books of account of the Company, amount deducted/accrued in the books of account in respect of undisputed statutory dues including Provident Fund, Income Tax, Sales tax, Service Tax, custom duty, value added tax, cess and any other statutory dues have been regularly deposited during the year by the Company with appropriate authorities. As explained to us, the Company did not have any dues on account of employees’ state insurance and duty of excise.


According to the information and explanation given to us and on the basis of our examination of the books of accounts, no undisputed amounts payable in respect of Provident Fund, Income Tax, Sales tax, Service Tax, custom duty, value added tax, cess and any other statutory dues were in arrears as at 31 March 2017 for a period more than six months from the date they became payable.


(b) According to the information and explanations given to us, the following dues of Income tax, sales tax, service tax have not been deposited by the Company on account of disputes:






























Sl. No.



Name of Statue



Nature of dues



Forum where dispute is pending



Period to which amount relates



Amount (Rs. in lakhs)



1.



Income Tax Act, 1961



Income Tax



CIT (Appeals)



F.Y. 2012-13 (A.Y. 2013-14)



89.56



F.Y. 2013-14 (A.Y. 2014-15)



74.65
















































































2.



Income Tax Act, 1961



TDS Under section 201(1)



CIT (Appeals)



F.Y. 2008-09 (A.Y. 2009-10)



0.32



3.



Income Tax Act, 1961



Income Tax



Income Tax Appellate Tribunals



F.Y. 2001-02 (A.Y. 2002-03)



204.22



F.Y. 2003-04 (A.Y. 2004-05)



76.07



F.Y. 2010-11 (A.Y. 2011-12)



50.82



F.Y. 2011-12 (A.Y. 2012-13)



42.72



4.



Sales Tax



Entry Tax



Sales Tax Tribunal Noida



F.Y. 1999-00



13.70



5.



Sales Tax



VAT



Andhra Pradesh High Court



July 2011 to March 2014



6999.17



6.



Sales Tax



VAT



Karnataka High Court



F.Y. 2009-10



2955.19



7.



Sales Tax



VAT



Karnataka High Court



F.Y. 2010-11



23952.56



viii. The Company does not have any loan or borrowings from any financial institution, bank, government or debenture holders during the year. Accordingly, paragraph 3(viii) of the order is not applicable.


ix. The Company did not raise any money by way of initial public offer or further public offer (including debt instruments) and term loans during the year. Accordingly, paragraph 3 (ix) of the Order is not applicable.


x. According to the information and explanation given to us by the management and based on our examination of the records of the Company, no material fraud by the Company or on the Company by its officers or employees has been noticed or reported during the year.


xi. According to the information and explanations give to us and based on our examination of the records of the Company, the Company has paid/provided for managerial remuneration in accordance with the requisite approvals mandated by the provisions of section 197 read with Schedule V to the Act.


xii. In our opinion and according to the information and explanations given to us, the Company is not a nidhi Company. Accordingly, paragraph 3(xii) of the Order is not applicable.


xiii. According to the information and explanations given to us and based on our examination of the records of the Company, transactions with the related parties are in compliance with sections 177 and 188 of the Act where applicable and details of such transactions have been disclosed in the Ind AS financial statements as required by the applicable accounting standards.


xiv. According to the information and explanations give to us and based on our examination of the records of the Company, the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year.


xv. According to the information and explanations given to us and based on our examination of the records of the Company, the Company has not entered into non-cash transactions with directors or persons connected with him. Accordingly, paragraph 3(xv) of the Order is not applicable.


xvi. The Company is not required to be registered under section 45-IA of the Reserve Bank of India Act 1934.



For Arun K Agarwal & Associates


Chartered Accountants


(Firm’s Registration No. 003917N)


Sd/-


Rajesh Surolia


Place: New Delhi (Partner)


Date: 22 May 2017 M. No. 088008

CIN: U67190WB2003PTC096617. Trading in Commodities is done through our Group Company Dynamic Commodities Pvt. Ltd. The company is also engaged in Proprietory Trading apart from Client Business.
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