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Thakral Services (India) Ltd.

BSE: 509015 Sector: Engineering
NSE: N.A. ISIN Code: INE190F01028
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NSE 05:30 | 01 Jan Thakral Services (India) Ltd
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OPEN 12.62
CLOSE 12.62
VOLUME 220
52-Week high 12.62
52-Week low 5.13
P/E
Mkt Cap.(Rs cr) 15
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Thakral Services (India) Ltd. (THAKRALSERVICES) - Auditors Report

Company auditors report

To the Members of

Thakral Services (India) Limited

Report on Audit of the Financial Statements

Qualified Opinion

1. We have audited the accompanying Financial Statements of M/s. Thakral Services(India) Limited (the "Company") which comprises the Balance Sheet as atMarch 31 2021 the statement of Profit and Loss (including Other Comprehensive Income)Statement of Changes in Equity and the statement of Cash flows for the year then endedand notes to the financial statements including a summary of the significant accountingpolicies and other explanatory Information. (herein after referred as "FinancialStatements")

2. In our Opinion and to the best of our information and according to the explanationsgiven to us except for the possible effects of the matters described in the Basis forQualified Opinion Paragraph below the aforesaid Financial Statements give the informationrequired by the Companies Act 2013 (‘Act') in the manner so required and give a trueand fair view in conformity with the accounting principles generally accepted in Indiaincluding Indian Accounting Standards (‘Ind AS') specified under section 133 of theAct of the state of affairs (financial position) of the company as at March 31 2021 andits loss (including other comprehensive income) its cash flows & the changes inequity for the year ended on that date.

Basis for Qualified Opinion

3. The company has Trade Receivables Retention Money receivable from the Customers andEarnest Money Deposits amounting to Rs. 111801175/- as on March 31 2021 for whichCompany has neither obtained balance confirmations nor statement of account from itscustomers to reconcile the receivables. Further significant trade receivables amounting toRs.61969003/- is outstanding for a period of more than six months. As a result of thiswe are unable to comment on provision to be accrued for the doubtful receivables/expectedcredit losses in respect of Trade receivables deposits other advances leasereceivables retention money etc. as on the Balance Sheet Date and its consequentialimpact on the Financial Statements.

4. The company has closing stock amounting to Rs.20127445/- as on March 31 2021 outof which inventory amounting to Rs.1618313/- are with customers. However Company hasneither conducted physical verification nor obtained supporting documents from thecustomers to confirm that stock is available with them. Accordingly we are unable tocomment on the existence of the stock lying with the customers as per books of account andits impact on the carrying value of the inventory as on March 31 2021.

5. We conducted our audit in accordance with the Standards on Auditing (SAs) specifiedunder section 143(10) of the Act. Our responsibilities under those Standards are furtherdescribed in the Auditor's Responsibilities for the Audit of the Financial Statementssection of our report. We are independent of the Company in accordance with the Code ofEthics issued by the Institute of Chartered Accountants of India ("ICAI")together with the ethical requirements that are relevant to our audit of the financialstatements under the provisions of the Companies Act 2013 and the Rules thereunder andwe have fulfilled our other ethical responsibilities in accordance with these requirementsand the Code of Ethics. We believe that the audit evidence we have obtained is sufficientand appropriate to provide a basis for our opinion on the financial statements.

Emphasis of Matter

6. Without qualifying our opinion we draw attention to the following matters:

i. We draw attention to Note No. 42 to the Financial Statements which deals withsubsequent events and specifically the possible effects of the future implications ofCOVID- 19 Pandemic on the company's future prospects performance and cash flows.Management have also described how they plan to deal with these events and circumstances.

ii. The Company has prepared its financial statements by applying the going concernassumption notwithstanding fact that the Company has accumulated losses of Rs.33263229/- as on March 31 2021 is more than 90% of the company's Net worth.

The said assumption of going concern is essentially dependent on its recovery of theoverdue trade receivables other dues and the ability of the Management to raiseadditional funds for meeting its obligations.

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

7. The Company's Board of Directors is responsible for the other information. The otherinformation comprises the information included in the Annual Report but does not includethe financial statements and our auditor's report thereon. The Annual report is expectedto be made available to us after the date this auditor's report.

Our opinion on the financial statements does not cover the other information and we donot express any form of assurance conclusion thereon.

In connection with our audit of the financial statements our responsibility is to readthe other information identified above when it becomes available and in doing soconsider whether the other information is materially inconsistent with the financialstatements or our knowledge obtained in the audit or otherwise appears to be materiallymisstated.

When we read the Annual report if we conclude that there is a material misstatementtherein we are required to communicate the matters to those charged with governance.

Management's Responsibility for the Financial Statements

8. The company's Board of Directors is responsible for the matters stated in Section134(5) of the Companies Act 2013 (the "Act") with respect to the preparation ofthese financial statements that give a true and fair view of the financial positionfinancial performance changes in equity and cash flows in accordance with the accountingprinciples generally accepted in India including the Indian Accounting Standards (Ind AS)specified under section 133 of the Act read with Companies (Indian Accounting Standards)Rules 2015 as amended. This responsibility also includes maintenance of adequateaccounting records in accordance with the provisions of the Act for safeguarding of theassets of the Company and for preventing and detecting frauds and other irregularities;selection and application of appropriate accounting policies; making judgements andestimates that are reasonable and prudent; and design implementation and maintenance ofadequate internal financial controls that were operating effectively for ensuring theaccuracy and completeness of the accounting records relevant to the preparation andpresentation of the financial statements that give a true and fair view and are free frommaterial misstatement whether due to fraud or error.

9. In preparing the financial statements management is responsible for assessing thecompany's ability to continue as going concern disclosing as applicable matters relatedto going concern and using the going concern basis of accounting unless management eitherintends to liquidate the Company or to cease operations or has no realistic alternativebut to do so.

10. The Board of Directors are also responsible for overseeing the company's financialreporting process. Auditor's Responsibility for the Audit of the Financial Statements:

11. Our objectives are to obtain reasonable assurance about whether the financialstatements as a whole are free from material misstatement whether due to fraud or errorand to issue an auditor's report that includes our opinion. Reasonable assurance is a highlevel of assurance but is not a guarantee that an audit concluded in accordance with SAswill always detect a material misstatement when it exists. Misstatements can arise fromfraud or error and are considered material if individually or in aggregate they couldreasonably be expected to influence the economic decisions of the users taken on the basisof these financial statements.

12. As a part of an Audit in accordance with the SA's we exercise professionaljudgement and maintain professional skepticism throughout the audit. We also;

i. Identify and assess the risk of material misstatements of the financial statementswhether due to fraud or error design and perform audit procedures responsive to thoserisks and obtain audit evidence that is sufficient and appropriate to provide a basis forour opinion. The risk of not detecting a material misstatement resulting from fraud ishigher than from one resulting from error as fraud may involve collusion forgeryintentional omissions misrepresentations or the override of the internal control.

ii. 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 Companies Act 2013 we are also responsible for expressing our opinion on whetherthe company has adequate internal financial controls system in place and the operatingeffectiveness of such controls.

iii. Evaluate the appropriateness of accounting policies used and the reasonableness ofaccounting estimates and related disclosures made by management.

iv. Conclude on the appropriateness of the 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 a significant doubt on the company'sability to continue as 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.

v. Evaluate the overall presentation structure and content of the financialstatements including the disclosures and whether the financial statements represent theunderlying transactions and events in a manner that achieves fair presentation.

13. Materiality is the magnitude of misstatements in the standalone financialstatements that individually or in aggregate make it probable that the economicdecisions of a reasonably knowledgeable user of the financial statements may beinfluenced. We consider quantitative materiality and quantitative factors in (i)Planningthe scope of our audit work and in evaluating the results of our work; and (ii) toevaluate the effect of any identified misstatements in the financial statements.

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

15. We also provide those charged with governance with a statement that we havecomplied with relevant ethical requirements regarding independence and to communicatewith them all relationships and other matters that may reasonably be thought to bear onour independence and where applicable related safeguards.

16. From the matters communicated with those charged with governance we determinethose matters that were of most significance in the audit of the financial statements ofthe current period and are therefore the key audit matters. We describe these matters inour auditors report unless law or regulation precludes public disclosure about the matteror when in extremely rare circumstances we determine that a matter should not becommunicated in our report because the adverse consequences of doing so would reasonablybe expected to outweigh the public interest benefits of such communication.

Report on Other Legal and Regulatory Requirements:

17. As required by the Companies (Auditor's Report) Order 2016 ("theOrder") issued by the Central Government of India in terms of sub section (11) ofsection 143 of the Companies Act 2013 we give in "Annexure-A" astatement on the matters specified in paragraphs 3 and 4 of the Order to the extendapplicable.

18. 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 purpose of our audit.

b) Except for the matters described in the Basis for Qualified opinion proper books ofaccounts as required by law have been kept by the company so far as it appears from ourexamination of those books.

c) The Balance Sheet the Statement of Profit and Loss (Including Other ComprehensiveIncome) Statement of Changes in Equity and the Statement of Cash Flow dealt with by thisReport are in agreement with the books of account.

d) Except for the possible effects of the matters described in the Basis for Qualifiedopinion paragraph above in our opinion the aforesaid financial statements comply withthe Ind AS specified under Section 133 of the Act.

e) The matters specified in the basis for the qualified opinion paragraph mentionedabove in our opinion may have an adverse effect on the functioning of the company.

f) On the basis of written representations received from the directors as on March 312021 taken on record by the Board of directors none of the directors are disqualified ason March 31 2021 from being appointed as directors in terms of Section 164(2) of the Act.

g) With respect to the Adequacy of the internal financial controls with reference tofinancial statements of the company and the operating effectiveness of such controls werefer our separate report in "Annexure B". Our report expresses anQualified opinion on the adequacy and the operating effectiveness of the company'sinternal financial controls with reference to financial statements.

h) With respect to the other matters to be included in the Auditor's Report inaccordance with the requirements of section 197(16) of the Act as amended:

In our opinion and to the best of our information and according to the explanationsgiven to us the remuneration paid by the Company to its directors during the year is inaccordance with the provisions of section 197 read with schedule V of the Act.

i) 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 Financial Statements - (Refer Note No 35 to the financial statements)

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

iii. There were no amounts required to be transferred to the Investor Education andProtection Fund by the Company.

For K.S. Rao & Co.
Chartered Accountants
ICAI Firm registration no: 003109S
Hitesh Kumar P
Partner
Place: Bengaluru Membership number: 233734
Date: June 30 2021 UDIN: 21233734AAAAJZ9536

Annexure - A to the Independent Auditor's Report:

The Annexure referred to in the Independent Auditor's Report to the members of thecompany on the financial statements for the year ended March 31 2021 we report that:

i. In respect of the Company's Fixed Assets (Property Plant and Equipment)

a) As per the information and explanations provided to us the company has notmaintained proper records showing full particulars including quantitative details andsituation of Fixed Assets.

b) The Management has conducted the physical verification of Fixed Assets (PropertyPlant and Equipment) during the year.

c) According to the information and explanations given to us and on the basis of ourexamination of the records of the Company the title deeds of immovable properties areheld in the name of the Company.

ii. The company has conducted physical verification of inventories at reasonableintervals except for the stock lying with customers.

iii. According to the information and explanations given to us the company has notgranted any loans secured or unsecured to any company firm Limited LiabilityPartnership or other parties listed in the register maintained u/s 189 of the CompaniesAct 2013 ("the Act"). Accordingly the clauses from (iii) (a) to (iii) (c) ofparagraph 3 of the order is not applicable to the company.

iv. In our opinion and according to the information and explanations given to us thecompany has no loans investments guarantees and security which meet the requirements ofsection 185 & 186 of the Act.

v. According to the information and explanations given to us the company has notaccepted deposits and does not have any unclaimed deposits within the meaning of Section73 to 76 of the Act and Companies (Acceptance of Deposits) Rules 2014 (as amended).Accordingly the provisions of clause 3 (v) of the order are not applicable.

vi. The central government has not prescribed the maintenance of cost records undersection 148(1) of the Act for any of the services rendered by the company.

vii. According to the Information and Explanations given to us in respect of statutorydues:

a) In our opinion according to the records as produced and examined by us the companyis not regular in depositing with appropriate authorities the undisputed statutory duesincluding income tax sales tax service tax value added tax goods and service taxcustoms duty excise duty cess and other statutory dues applicable to it. Arrears ofoutstanding statutory dues as at March 31 2021 for a period of more than six months fromthe date they become payable are as follows:

Name of The Statute Nature of Dues Amount in Rs.
Employee Provident Fund Act 1952 EPF 6885309
Employee State Insurance Act 1948 ESI 994466

b) According to the information and explanations given to us there are no dues inrespect of income tax sales tax service tax value added tax goods and service taxcustoms duty excise duty cess which have not been deposited on account of dispute exceptfor the below:

Name of the Statute Nature of Dues Amount Involved Period for which the amount relates Forum where dispute is pending
Tamil Nadu value added Tax Act 2006 Disallowance of Input Tax Credit 512625/-* FY 2011-12 Appellate Deputy Commissioner of Commercial Taxes
West Bengal Value Added Tax Act 2003 VAT Dues 717810/-** FY 2010-11 Joint Commissioner of Commercial Taxes
Central Sales Tax (West Bengal) CST Dues 181478/-*** FY 2009-10 Joint Commissioner of Commercial Taxes

* Amount includes penalty of Rs 170875/-. The Company has deposited Rs. 85438/-under protest.

** Amount includes penalty of Rs 14044/-. The Company has deposited Rs. 30068/- underprotest.

***Amount includes penalty of Rs.157985/-.

viii. According to the information and explanations given by the management we are ofthe opinion that the company has not defaulted in repayment of dues to a financialinstitution bank and government. The company has not issued any debentures during theyear and does not have any outstanding dues in respect of debenture holders.

ix. According to the information and explanations given by the management money raisedby the way of term loans has been applied by the Company during the year for the purposesfor which they were raised. The Company has not raised moneys by way of initial publicoffer or further public offer or debt instruments.

x. According to the information and explanations given to us no fraud by the companyor on the company by its officers or employees has been noticed or reported during thecourse of our audit.

xi. According to the information and explanations given to us and based on ourexamination of records of the company the company has paid/provided for managerialremuneration in accordance with requisite approvals mandated by the provisions of thesection 197 of the Act 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.

xiii. According to the information and explanations given to us and based on ourexamination of records of the company the transactions with the related parties are incompliance with section 177 and 188 of the Act where applicable and details of suchtransactions have been disclosed in the financial statements as required by the applicableaccounting standards.

xiv. According to the information and explanations given to us and based on ourexamination of records of the company the company has not made any preferential allotmentor private placement of shares of fully or partly convertible debentures during the year.

xv. According to the information and explanations given to us and based on ourexamination of records of the company the company has not entered into non-cashtransactions with directors or persons connected with him. Accordingly paragraph 3(xv) ofthe order is not applicable.

xvi. According to the information and explanations given to us and based on ourexamination of the records of the Company the Company is not required to be registeredunder section 45-IA of the Reserve Bank of India Act 1934.

For K.S. Rao & Co.
Chartered Accountants
ICAI Firm registration no: 003109S
Hitesh Kumar P
Partner
Place: Bengaluru Membership number: 233734
Date: June 30 2021 UDIN: 21233734AAAAJZ9536

Annexure - B to the Independent Auditor's Report:

Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of section143 of the Companies Act 2013 ("the Act")

We have audited the internal financial controls with reference to financial statementsof M/s Thakral Services (India) Limited ("the company") as of March 312021 in conjunction with our audit of the financial statements of the company for the yearended and as 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"). Theseresponsibilities include 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

Our responsibility is to express an opinion on the Company's internal financialcontrols with reference to financial reporting based on our audit. We conducted our Auditin accordance with the Standards on Auditing issued the Institute of Chartered Accountantsof India (‘ICAI') prescribed under section 143(10) of the Act to the extentapplicable to an audit of internal financial controls and the Guidance Note issued byICAI. Those Standards and the Guidance note require that we comply with ethicalrequirements and plan and perform the Audit to obtain reasonable assurance whetheradequate internal financial controls over financial reporting was established andmaintained and if such controls operated effectively in all material aspects.

Our Audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls system over financial reporting and their operatingeffectiveness. Our Audit of Internal financial controls over financial reportingassessing the risk that a material weakness exists and testing and evaluating the designand operating effectiveness of internal control based on the assessed risk. The proceduresselected depends on the auditor's professional judgement including the assessment of therisk of material misstatements of the financial 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 on the company's internal financial controls systemover financial reporting of financial statements.

Meaning of Internal Financial Controls over Financial Reporting with reference tofinancial statements.

A Company's internal financial controls over financial reporting is a process designedto provide reasonable assurance regarding the reliability of financial reporting and thepreparation of the financial statements for external purposes in accordance with thegenerally accepted accounting principles. A company's internal financial controls overfinancial reporting includes those policies and procedures that

(1) Pertain to the maintenance of records that in reasonable detail accurately andfairly reflect 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 the 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 the Internal Financial Controls over Financial Reporting withreference to Financial Statements

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 evaluations of the internal financial controls over financialreporting to future periods are subject to the risk that the internal financial controlsover financial reporting may become inadequate because of the changes in conditions orthat the degree of compliance with the policies or procedures may deteriorate.

Qualified Opinion on adequacy and operating effectiveness of internal financialcontrols over financial reporting with reference to financial statements.

According to the information and explanation given to us and based on our audit thefollowing material weaknesses has been identified as at March 31 2021:

a) The Company did not have adequate internal control system for collection/recovery ofthe trade receivables within the due dates periodical balance confirmation andreconciliation adjusting of amounts received from customers with respect to respectiveinvoices recording of due dates for receipt of retention money and earnest money depositswithheld by the customer and other than retention money which may result innon-recognition of the bad debts and incorrect estimation of provision for bad anddoubtful debts/expected credit losses in respect of trade receivables deposits otheradvances lease receivables retention monies etc. and which may affect the funds for theworking capital.

A ‘Material Weakness' is a deficiency or a combination of deficiencies ininternal financial control over financial reporting such that there is a reasonablepossibility that a material misstatement of a Company's annual or interim FinancialStatements will not be prevented or detected on a timely basis.

In our opinion the Company has maintained in all material respects adequate internalfinancial control system over financial reporting as at March 31 2021 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 ICAI and except forthe possible effects of the material weakness described above on the achievement of theobjective of control criteria the Company's internal financial controls over financialreporting were operating effectively as at March 31 2021.

We have considered the material weaknesses identified and reported above in determiningthe nature timing and extent of audit tests applied in our audit of the FinancialStatements of the company as at and for the year ended March 31 2021 and the materialweaknesses has affected our opinion on the Financial statements of the Company and we haveissued a qualified opinion on the Financial statements.

For K.S. Rao & Co.
Chartered Accountants
ICAI Firm registration no: 003109S
Hitesh Kumar P
Partner
Place: Bengaluru Membership number: 233734
Date: June 30 2021 UDIN: 21233734AAAAJZ9536

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