Engineers India

1.  We have audited the attached Balance Sheet of Engineers India
 Limited as at 31st March, 2008, the Profit & Loss Account and also the
 Cash Flow Statement of the Company 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 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 the management, as well as evaluating the overall financial
 statement 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-Section (4A) of
 Section 227 of the Companies Act, 1 956, we enclose in the Annexure a
 statement on the matters specified in paragraphs 4 & 5 of the said
 order.
 
 4.  Further to our comments in the Annexure referred to in paragraph 3
 above, we report that :
 
 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 account as required by law have been
 kept by the Company so far as appears for our examination of those
 books;
 
 c) The Balance Sheet, Profit & Loss Account and Cash Flow Statement
 dealt with by this report are in agreement with the books of account;
 
 d) In our opinion, the Balance Sheet, Profit & Loss Account and Cash
 Flow Statement dealt with by this report comply with the Accounting
 Standards referred to in sub-section(3C) of section 211 of the
 Companies Act, 1956;
 
 e) In terms of notification No. G.S.R. 829 (E) dt. 21.10.2003, issued
 by the Ministry of Finance, Department of Company Affairs, Government
 of India, clause (g) of sub-section (I) of section 274 of the Companies
 Act, 1956 is not applicable to Government Companies;
 
 In our opinion and to the best of our information and according to the
 explanation given to us, the said accounts read together with
 significant Accounting Policies as per Schedule V and Notes as per
 Schedule J 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 :-
 
 a) In the case of Balance Sheet, of the state of affairs of the Company
 as at 31st March, 2008;
 
 b) In the case of Profit & Loss Account, of the profit of the Company
 for the year ended on the date; and
 
 c) In the case of Cash Flow statement, of the cash flow for the year
 ended on that date.
 
 Annexure to the Auditors Report
 
 Referred to in paragraph (3) of our report of even date on the Accounts
 of Engineers India Limited for the year ended on 31st March, 2008.
 
 (i) a) The company has maintained proper records showing full
 particulars including quantitative details and situation of its fixed
 assets. ,
 
 b) As informed to us, the fixed assets are verified by the management
 in a phased manner so as to cover each asset at least once in three
 years which, in our opinion, is reasonable having regard to the size of
 the company and the nature of its business. As informed, no material
 discrepancies were noticed on such verification.
 
 c) In our opinion and according to the information and explanations
 given to us, a substantial part of the fixed assets have not been
 disposed off by the company during the year.
 
 (ii) a) As explained to us, the inventories have been physically
 verified during the year by the management.  In our opinion, the
 frequency of verification is reasonable.
 
 b) In our opinion, and according to the information and explanations
 given to us, the procedures of physical verification of inventories
 followed by the management are reasonable and adequate in relation to
 the size of the Company and the nature of its business.
 
 c) On the basis of our examination of the record of inventories, we are
 of the opinion that, the Company is maintaining proper records of
 inventories. The discrepancies noticed on physical verification of
 inventories as compared to book records were not material and have been
 properly dealt with in the books of account.
 
 (iii) a) According to the information and explanations given to us, the
 Company has, during the year, not granted any loans, secured or
 unsecured to companies, firms or other parties covered in the register
 maintained under section 301 of the Companies Act,1956. Accordingly,
 paragraphs 4(iii) (a), (b), (c) and (d) of the Order, are not
 applicable.  b) According to the information and explanations given to
 us, the Company has, during the year, not taken any loans, secured or
 unsecured from companies, firms or other parties covered in the
 register maintained under section 301 of the Companies Act, 1956.
 Accordingly, paragraphs 4 (iii) (e), (f) and (g) of the Order, are not
 applicable.  -
 
 (iv) In our opinion and according to the information and explanations
 given to us, there are adequate internal control systems commensurate
 with the size of the company and the nature of its business for the
 purchase of inventory and fixed assets and for the sale of goods &
 services. During the course of our audit, we have neither come across
 nor have any information of any instances of major weaknesses in the
 aforesaid internal control systems.
 
 (v) a) In our opinion and according to the information and explanations
 given to us, there are no transactions that need to be entered into the
 register maintained under Section 301 of the Companies Act, 1956.
 
 b) In our opinion and according to the information and explanations
 given to us, as there are no transactions that need to be entered into
 the Register maintained under Section 301 of the Companies Act, 1956,
 paragraph 4 (v) (b) of the Order is not applicable.
 
 (vi) The Company has not accepted any deposits from the public within
 the meaning of Section 58A, 58AA and other relevant provisions of the
 Companies Act, 1956 and the rules framed thereunder and hence
 provisions of paragraph 4 (vi) of the Order is not applicable.
 
 (vii) In our opinion, the Company has an adequate internal audit system
 commensurate with the size of the Company and nature of its business.
 
 (viii) According to the information given to us by the Management the
 Central Government has not prescribed the maintenance of cost records
 under Section 209 (1) (d) of the Companies Act, 1956 for the activities
 of the Company.
 
 (ix) a) According the information and explanation given to us and the
 records of the Company examined by us, the company has been generally
 regular in depositing undisputed statutory dues including provident
 fund, investor education and protection fund, income tax, sales tax,
 wealth tax, service tax, custom duty, excise duty, cess and other
 applicable statutory dues with the appropriate authorities during the
 year.  We are informed that there are no undisputed statutory dues as
 at the year end outstanding for a period of more than six months from
 the date they become payable.  b) According to the information and
 explanations given to us and based on records of the company, there are
 no dues in respect of income tax, sales tax, wealth tax, service tax,
 custom duty, excise duty and cess which have not been deposited on
 account of any dispute except the following :-
 
 Particulars     Year        Amount (Rs. In Lakhs)    Forum
 
 Service Tax     2004-05     5.97                     Custom, Excise &
                                                      Service Tax
                                                      Tribunal, Delhi.
 
 (x) The Company does not have accumulated losses as at the year ended
 March 31, 2008. Further, the Company has not incurred any cash losses
 during the year ended March 31, 2008 and in the immediately preceding
 financial year.
 
 (xi) According to the records of the Company examined by us and on the
 information and explanations given to us, the Company has not defaulted
 in repayment of dues to banks, financial institutions during the year.
 The Company has not issued debentures during the year.
 
 (xii) As the Company has not granted any loans and advances on the
 basis of security by way of pledge of shares, debentures and other
 securities, paragraph 4 (xii) of the Order is not applicable.
 
 (xiii) As the Company is not a chit fund / nidhi / mutual benefit funds
 / society to which the provisions of special statute relating to chit
 fund are applicable, paragraph 4(xiii) of the Order is not applicable.
 
 (xiv) As the Company is not dealing or trading in shares, securities,
 debentures and other investments, paragraph 4 (xiv) of the Order is not
 applicable.
 
 (xv) In our opinion and according to the information and explanations
 given to us, the company has not given any guarantee for loans taken by
 others from banks or financial institutions during the year.
 
 (xvi) According to the information and explanations given to us, the
 company has not raised any term loan during the year.
 
 (xvii) According to the information and explanations given to us and on
 an overall examination of the balance sheet of the company, we report
 that short term funds have not been used to finance long term
 investments.
 
 (xviii) During the year the company has not made any preferential
 allotment of shares to parties or companies covered in the Register
 maintained under section 301 of the Companies Act, 1956.
 
 (xix) The company has not issued any debentures during the year.
 
 (xx) The company has not raised any money by way of public issue during
 the year.
 
 (xxi) Based upon the audit procedures performed and information and
 explanations given by the management, we report that, no fraud on or by
 the company has been noticed or reported during the course of our audit
 for the year ended March 31, 2008.
 
                                               For JAGDISH CHAND & CO.
                                               CHARTERED  ACCOUNTANTS
 
                                                  (PRAVEEN KUMAR JAIN) 
 Place : New Delhi                                            PARTNER
 Dated : June 03, 2008                                    M.NO. 85629