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Josts Engineering Company Ltd.

BSE: 505750 Sector: Engineering
NSE: N.A. ISIN Code: INE636D01025
BSE 00:00 | 27 Jan 477.45 2.45
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NSE 05:30 | 01 Jan Josts Engineering Company Ltd
OPEN 451.10
PREVIOUS CLOSE 475.00
VOLUME 115
52-Week high 663.90
52-Week low 255.53
P/E 18.24
Mkt Cap.(Rs cr) 89
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 451.10
CLOSE 475.00
VOLUME 115
52-Week high 663.90
52-Week low 255.53
P/E 18.24
Mkt Cap.(Rs cr) 89
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Josts Engineering Company Ltd. (JOSTSENGGCO) - Auditors Report

Company auditors report

To the Members of Jost's Engineering Company Limited Report on the Audit of theStandalone Financial Statements Opinion

We have audited the accompanying standalone financial statements of Jost'sEngineering Company Limited ("the Company") which comprise the BalanceSheet as at March 31 2021 the Statement of Profit and Loss including the statement ofother comprehensive income the Cash Flow Statement and the Statement of Changes in Equityfor the year then ended and notes to the standalone financial statements including asummary of significant accounting policies and other explanatory information.

In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid standalone financial statements give the information requiredby the Companies Act 2013 ("the Act") in the manner so required and give a trueand fair view in conformity with the accounting principles generally accepted in India ofthe state of affairs of the Company as at March 31 2021 its profit including othercomprehensive income its cash flows and the changes in equity and for the year ended onthat date.

Basis for Opinion

We conducted our audit of the standalone financial statements in accordance with theStandards on Auditing (SAs) as specified under section 143(10) of the Act. Ourresponsibilities under those SAs are further described in the ‘Auditor'sResponsibilities for the Audit of the Standalone Financial Statements' section of ourreport. We are independent of the Company in accordance with the ‘Code of Ethics'issued by the Institute of

Chartered Accountants of India together with the ethical requirements that are relevantto our audit of the financial statements under the provisions of the Act and the Rulesthere under and we have fulfilled our other ethical responsibilities in accordance withthese requirements and the Code of Ethics. We believe that the audit evidence we haveobtained is sufficient and appropriate to provide a basis for our audit opinion on thestandalone financial statements.

Key Audit Matters

Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the standalone financial statements for the financial yearended March 31 2021. These matters were addressed in the context of our audit of thestandalone financial statements as a whole and in forming our opinion thereon and we donot provide a separate opinion on these matters. For each matter below our description ofhow our audit addressed the matter is provided in that context.

We have determined the matters described below to be the key audit matters to becommunicated in our report. We have fulfilled the responsibilities described in theAuditor's responsibilities for the audit of the standalone financial statements section ofour report including in relation to these matters. Accordingly our audit included theperformance of procedures designed to respond to our assessment of the risks of materialmisstatement of the standalone financial statements. The results of our audit proceduresincluding the procedures performed to address the matters below provide the basis for ouraudit opinion on the accompanying standalone financial statements.

Key audit matters How our audit addressed the key audit matter
Revenue recognition - Refer Note 3.6 of the standalone financial statements Our Audit procedure included the followings:
The company deals in manufactured goods traded goods provide AMC services & representing principal on a commission basis. It sells a number of equipment's and services to its customers mainly in domestic market through its own sales & distribution network. Sales contracts contain various performance obligations and other terms including warranties and after sales services. The determination of when significant performance obligations have been met varies can be the key consideration for revenue recognition service and the warranty cost. a. Read the Company's revenue recognition accounting policies and assessed compliance of the policies with Ind AS 115
The company has analysed its various sales contracts and concluded on the principles for deciding in which period or periods the company's sales transactions should be recognized as revenue.The accounting policies and the note to the standalone financial statement provide additional information on how the company accounts for its revenue. b. Assessed the design and tested the operating effectiveness of internal controls relating to revenue recognition
c. Assessed the appropriateness of Company's identification of performance obligations in its contracts with customers its determination of transaction price including allocation thereof to performance obligations and accounting policies for revenue recognition in accordance with the accounting principles laid down in Ind AS 115
d. Scrutinized sales ledgers to verify completeness of sales transactions
e. Tested the revenue recognized on a sample basis including testing of cut off assertion as at the year end. Our testing included tracing the information to agreements price lists invoices proof of dispatches/deliveries
f. Assessed the revenue recognized with substantive analytical procedures including review of price and quantity
g. Performed analytical procedures for reasonableness of revenues disclosed by type and service offerings.
Trade receivables (Refer Note 9 of Standalone Financial Statement)
Trade receivable balances are significant to the Company as they amounted to Rs.2961.04 lakhs representing 59.68 % of the total current assets and 34.46% of the total revenue of the Company for the year ended 31st March 2021. During the current financial year the Company has recognized bad debts Rs 96.62 lakhs. The collectability of trade receivables is a key element of the working capital management which is managed on an ongoing basis by management. The determination as to whether a trade receivable is collectable involves management judgement. Specific factors management considers include the age of the balances category of customers existence of disputes recent historical payments and any other available information concerning the creditworthiness of customers. Our procedures included the following:
Management uses the information to assist in their judgement to determine whether allowance for expected credit loss bad debts is required. a. Obtained an understanding of the company's processes and controls relating to the monitoring of trade receivables and review of credit risks of customers.
b. On a sample basis requesting trade receivable confirmations and evidence of receipts from the customers subsequent to balance sheet date.
c. Analyses of ageing profile of the trade receivables to identify credit risks reviewing historical Payment patterns and correspondence with customers on expected settlement dates.
d. Also evaluated the assumptions and estimates used by management to determine the recoverability provision for doubtful and trade receivables.
e. Evaluated the provisions made for expected credit loss as per ECL model as specified by Ind AS 109.
f. Review of documents and other records for trade receivables considered as doubtful and bad.

Information Other than the Financial Statements and Auditor's Report Thereon

The Company's Board of Directors is responsible for the other information. The otherinformation comprises the information included in the Company's Annual report but doesnot include the standalone financial statements and our auditor's report thereon.

Our opinion on the standalone financial statements does not cover the other informationand we do not express any form of assurance conclusion thereon.

In connection with our audit of the standalone financial statements our responsibilityis to read the other information and in doing so consider whether the other informationis materially inconsistent with the standalone financial statements or our knowledgeobtained in the audit or otherwise appears to be materially misstated. If based on thework we have performed we conclude that there is a material misstatement of this otherinformation; we are required to report that fact. We have nothing to report in thisregard.

Responsibilities of Management for the standalone Financial Statements

The Company's Board of Directors are responsible for the matters stated in section134(5) of the Act with respect to the preparation of these standalone financial statementsthat give a true and fair view of the financial position financial performance includingother comprehensive income cash flows and changes in equity of the Company in accordancewith the accounting principles generally accepted in India including the IndianAccounting Standards (Ind AS) specified under section 133 of the Act read with theCompanies (Indian Accounting Standards) Rules 2015 as amended. This responsibility alsoincludes maintenance of adequate accounting records in accordance with the provisions ofthe Act for safeguarding of the assets of the Company and for preventing and detectingfrauds and other irregularities; selection and application of appropriate accountingpolicies; making judgments and estimates that are reasonable and prudent; and the designimplementation 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 standalone financialstatements that give a true and fair view and are free from material misstatement whetherdue to fraud or error.

In preparing the standalone financial statements the Management is responsible forassessing the Company's ability to continue as a going concern disclosing as applicablematters related to going concern and using the going concern basis of accounting unlessmanagement either intends to liquidate the Company or to cease operations or has norealistic alternative but to do so.

Those charged with governance are also responsible for overseeing the Company'sfinancial reporting process.

Auditor's Responsibilities for the Audit of the Standalone Financial Statements

Our objectives are to obtain reasonable assurance about whether the standalonefinancial statements as a whole are free from material misstatement whether due to fraudor error and to issue an auditor's report that includes our opinion. Reasonable assuranceis a high level of assurance but is not a guarantee that an audit conducted in accordancewith SAs will always detect a material misstatement when it exists. Misstatements canarise from fraud or error and are considered material if individually or in theaggregate they could reasonably be expected to influence the economic decisions of userstaken on the basis of these standalone financial statements.

As part of an audit in accordance with SAs we exercise professional judgment andmaintain professional skepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of the standalonefinancial statements whether due to fraud or error design and perform audit proceduresresponsive to those risks and obtain audit evidence that is sufficient and appropriate toprovide a basis for our opinion. The risk of not detecting a material misstatementresulting from fraud is higher than for one resulting from error as fraud may involvecollusion forgery intentional omissions misrepresentations or the override of internalcontrol.

• Obtain an understanding of internal control relevant to the audit in order todesign audit procedures that are appropriate in the circumstances. Under section 143(3)(i)of the Act we are also responsible for expressing our opinion on whether the Company hasadequate internal financial controls system in place and the operating effectiveness ofsuch controls.

• Evaluate the appropriateness of accounting policies used and the reasonablenessof accounting estimates and related disclosures made by Management.

• Conclude on the appropriateness of Management's use of the going concern basisof accounting and based on the audit evidence obtained whether a material uncertaintyexists related to events or conditions that may cast significant doubt on the Company'sability to continue as a going concern. If we conclude that a material uncertainty existswe are required to draw attention in our auditor's report to the related disclosures inthe financial statements or if such disclosures are inadequate to modify our opinion.Our conclusions are based on the audit evidence obtained up to the date of our auditor'sreport. However future events or conditions may cause the Company to cease to continue asa going concern.

• Evaluate the overall presentation structure and content of the standalonefinancial statements including the disclosures and whether the standalone Ind ASfinancial statements represent the underlying transactions and events in a manner thatachieves fair presentation.

We communicate with those charged with governance regarding among other matters theplanned scope and timing of the audit and significant audit findings including anysignificant deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have compliedwith relevant ethical requirements regarding independence and to communicate with themall relationships and other matters that may reasonably be thought to bear on ourindependence and where applicable related safeguards.

From the matters communicated with those charged with governance we determine thosematters that were of most significance in the audit of the standalone financial statementsfor the financial year ended March 31 2021 and are therefore the key audit matters. Wedescribe these matters in our auditor's report unless law or regulation precludes publicdisclosure about the matter or when in extremely rare circumstances we determine that amatter should not be communicated in our report because the adverse consequences of doingso would reasonably be expected to outweigh the public interest benefits of suchcommunication.

Other Matter

Due to COVID-19 related lock-down restrictions management was able to perform year endphysical verification of Inventories subsequent to the year end. Also we were not ableto physically observe the stock verification where carried out by management.Consequently we have performed alternate procedure to audit the existence of inventory asper the guidance provided in SA 501 "Audit Evidence – Specific Consideration forSelected Items" and have obtained sufficient appropriate audit evidence to issue ourunmodified opinion on these Standalone Financial Statement.

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 sub-section (11) of section 143 ofthe Act we give in the "Annexure A" statement on the matters specified inparagraphs 3 and 4 of the Order.

2. 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 bestof 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 theCompany so far as it appears from our examination of those books;

(c) The Balance Sheet the Statement of Profit and Loss including the Statement ofOther Comprehensive Income the Cash Flow statement and Statement of Changes in Equitydealt with by this Report are in agreement with the books of account;

(d) In our opinion the aforesaid standalone financial statements comply with theAccounting Standards specified under Section 133 of the Act read with Companies (IndianAccounting Standards) Rules 2015 as amended;

(e) On the basis of the written representations received from the directors and takenon record by the Board of Directors none of the directors is disqualified as on March 312021 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 financialreporting of the Company with reference to these standalone financial statements and theoperating effectiveness of such controls refer to our separate Report in "AnnexureB" to this report;

(g) With respect to the matter to be included in the Auditors' Report under Section197(16) of the Act in our opinion and according to the information and explanations givento us the remuneration paid by the Company to its directors during the current year is inaccordance with the provisions of Section 197 read with schedule V to the Act .

(h) With respect to the other matters to be included in the Auditor's Report inaccordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 as amended inour opinion and to the best of our information and according to the explanations given tous:

i. The Company has disclosed the impact of pending litigations on its financialposition in its standalone financial statements – Refer Note 31 to the standalonefinancial statements;

ii. The Company did not have any long-term contracts including derivative contracts forwhich there were any material foreseeable losses.

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

Annexure – A to the Independent Auditor's Report

(Referred to in paragraph 1 with the heading ‘Report on Other Legal and RegulatoryRequirements' section of our report of even date)

We report that:

i. In respect of its fixed assets:

a) The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets.

b) As explained to us the fixed assets have been physically verified by management atreasonable interval under a phase programme of verification and no material discrepancieshave been noticed on such verification. In our opinion this periodicity of physicalverification is reasonable having regard to the size of company and nature of its assets.

c) According to the information and explanations given to us and on the basis of ourexamination in respect of immovable properties taken on lease and disclosed as right ofuse assets are in name of the Company

ii. As explained to us the physical verification of inventories has been conducted bythe management at reasonable intervals during the year (including verification donesubsequently due to Covid lockdown) . The discrepancies noticed on physical verificationof inventories as compared to books records were not material and have been properly dealtin the books of accounts.

iii. The Company has granted loan to Companies covered in the register maintained underSection 189 of the Companies Act 2013. According to the information and explanationsgiven to us and based on the audit procedures conducted by us we are of the opinion that:

a) The terms and conditions of loans granted by the Company to the parties covered inthe register maintained under section 189 of the Companies Act 2013 are not prejudicialto the Company's interest.

b) The schedule for repayment of loan and interest has been stipulated at the time ofsanction and no repayment has fallen due for loan and interest amount respectively

c) There is no amount which are overdue for more than ninety days.

iv. In our opinion and according to the information and explanations given to us theCompany has complied with the provision of Section 185 and 186 of the Companies Act 2013in respect of grant of loans making investments and providing guarantees as applicable.

v. In our opinion and according to the information and explanations given to us theCompany has not accepted any deposits from the public within the meaning of directivesissued by Reserve Bank of India provisions of sections 73 to 76 of the Act and theCompanies (Acceptance of Deposits) rules 2014 (as amended).

vi. We have broadly reviewed the books of account maintained by the Company in respectof products for which maintenance of prescribed cost record is mandated by Government ofIndia U/s 148 (1) of the Act. We have however not made a detailed examination of theserecords with a view to determine whether they are accurate or complete.

vii. According to the information and explanations given to us and the records of theCompany examined by us:

a) The Company has been generally regular in depositing amounts deducted/accrued in thebooks of accounts in respect of undisputed statutory dues including Provident FundEmployees' State Insurance Investor Education and Protection Fund Income tax CustomDuty cess Goods & Service Tax and other statutory dues as applicable except forsome minor delay in case of TDS.

b) No undisputed amount payable in respect of Provident Fund Investor Education andProtection Fund Employees' State Insurance Income Tax Sales Tax Service Tax CustomsDuty Excise Duty Cess Goods

& Service Tax and other material statutory dues is outstanding as at 31st March2021 for a period of more than six months from the date they became payable.

c) There are no dues of Income tax sales tax Wealth tax Service tax Customs dutyExcise duty and Cess Goods & Service Tax which have not been deposited with theappropriate authorities on account of any dispute except as mentioned below:

Name of the Statue Period to which the amount relates Forum where dispute is pending Amount in dispute (In Lakhs)
The Central Sales Tax Act1956 AY 2012-13 Joint Commissioner of State tax appeals Mumbai 126.21
The Central Sales Tax Act1956 AY 2010-11 Assistant Commissioner of Commercial Tax Bengaluru 3.09
The Central Sales Tax Act1956 AY 2012-13 Sales Tax Officer VOTA Delhi 1.26

viii. According to the information and explanations give to us and based on ourexamination of the records of the Company the Company has not defaulted in repayment ofloans or borrowings to any financial institution bank or Government. The Company hadneither any outstanding debenture at the beginning of the year nor has it issued anydebenture during the year.

ix. According to the information and explanations given to us and based on ourexamination of the records of the Company the Company has not raised any money by way ofinitial public offer or further public offer (including debt instruments) and term loanduring the year. Accordingly paragraph 3(ix) of the Order is not applicable to theCompany

x. According to the information and explanations given to us no material fraud by theCompany or on the Company by its officers or employees has been noticed or reported duringthe year.

xi. According to the information and explanations give to us and based on ourexamination of the records of the Company the Company has paid/provided for managerialremuneration in accordance with the requisite approvals mandated by the provisions ofsection 197 read with Schedule V to the Act.

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

xiii. According to the information and explanations given to us and based on ourexamination of the records of the

Company transactions with the related parties are in compliance with sections 177 and188 of the Act where applicable and details of such transactions have been disclosed inthe financial statements as required by the applicable Indian accounting standards.

xiv. 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 or private placement of shares or fully or partly convertible debentures.Accordingly paragraph 3 (xiv) of the Order is not applicable to the Company..

xv. 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.

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 ReserveBank of India Act 1934. Accordingly paragraph 3 (xvi) of the Order is not applicable tothe Company.

Annexure - B to the Independent Auditor's Report

(Referred to in paragraph 2 (f) with the heading ‘Report on Other Legal andRegulatory Requirements' section of our report of even date)

Report on the Internal Financial Controls under Clause (i) of Subsection 3 of Section143 of the Companies Act 2013 (‘the Act')

1. We have audited the internal financial controls over financial reporting of Jost'sEngineering Company Limited (‘the Company') as of 31st March 2021 inconjunction with our audit of the standalone Ind AS financial statements of the Companyfor the year ended on that date

Management's Responsibility for Internal Financial Controls

2. 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'). Theseresponsibilities include the design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the orderly and efficientconduct of its business including adherence to Company's policies the safeguarding ofits assets the prevention and detection of frauds and errors the accuracy andcompleteness of the accounting records and the timely preparation of reliable financialinformation as required under the Act.

Auditor's Responsibility

3. Our responsibility is to express an opinion on the Company's internal financialcontrols over financial reporting with reference to these standalone financial statementsbased on our audit. We conducted our audit in accordance with the Guidance Note on Auditof Internal Financial Controls over Financial Reporting (the ‘Guidance Note') and theStandards on Auditing issued by ICAI and deemed to be prescribed under section 143(10) ofthe Companies Act 2013 to the extent applicable to an audit of internal financialcontrols both applicable to an audit of Internal Financial Controls and both issued bythe Institute of Chartered Accountants of India.. Those Standards and the Guidance Noterequire that we comply with ethical requirements and plan and perform the audit to obtainreasonable assurance about whether adequate internal financial controls with reference tofinancial statements were established and maintained and if such controls operatedeffectively in all material respects.

4. Our audit involves performing procedures to obtain audit evidence about the adequacyof the internal financial controls over financial reporting with reference to thesestandalone Ind AS financial statements and their operating effectiveness. Our audit ofinternal financial controls with respect to standalone financial statements includedobtaining an understanding of internal financial controls over financial reporting withrespect to standalone financial statements assessing the risk that a material weaknessexists and testing and evaluating the design and operating effectiveness of internalcontrol based on the assessed risk. The procedures selected depend on the auditor'sjudgment including the assessment of the risks of material misstatement of the standalonefinancial statements whether due to fraud or error.

5. We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the Company's internal financial controls systemwith respect to standalone financial statements

Meaning of Internal Financial Controls over Financial Reporting with reference toStandalone Financial Statements

6. A Company's internal financial control over financial reporting with reference tothese standalone financial statements is a process designed to provide reasonableassurance regarding the reliability of financial reporting and the preparation offinancial statements for external purposes in accordance with generally acceptedaccounting principles. A Company's internal financial control over financial reportingwith respect to financial statements includes those policies and procedures that (1)pertain to the maintenance of records that in reasonable detail accurately and fairlyreflect the transactions and dispositions of the assets of the Company; (2) providereasonable assurance that transactions are recorded as necessary to permit preparation offinancial statements in accordance with generally accepted accounting principles and thatreceipts and expenditures of the Company are being made only in accordance withauthorizations' of management and directors of the Company; and (3) provide reasonableassurance regarding prevention or timely detection of unauthorized acquisition use ordisposition of the Company's assets that could have a material effect on the financialstatements.

Inherent Limitations of Internal Financial Controls over Financial Reporting withreference to Standalone Financial Statements

7. Because of the inherent limitations of internal financial controls over financialreporting with reference to these standalone financial statements including thepossibility of collusion or improper management override of controls materialmisstatements due to error or fraud may occur and not be detected. Also projections ofany evaluation of the internal financial controls over financial reporting with respect tostandalone financial statements to future periods are subject to the risk that theinternal financial control over financial reporting may become inadequate because ofchanges in conditions or that the degree of compliance with the policies or proceduresmay deteriorate.

Opinion

8. In our opinion the Company has in all material respects an adequate internalfinancial controls system over financial reporting with reference to these standalonefinancial statements and such internal financial controls over financial reporting wereoperating effectively as at March 31 2021 based on the internal control over financialreporting with reference to standalone financial statements criteria established by theCompany considering the essential components of internal control stated in the GuidanceNote on Audit of Internal Financial Controls Over Financial Reporting issued by theInstitute of Chartered Accountants of India.

For Singhi & Co.

Chartered Accountants

Firm Registration Number: 302049E

Sudesh Choraria

Partner

Membership No:204936

UDIN: 21204936AAAAEV2828

Date: May 6 2021

Place: Mumbai

.