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Thejo Engineering Ltd.

BSE: 500492 Sector: Engineering
NSE: THEJO ISIN Code: INE121N01019
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Thejo Engineering Ltd. (THEJO) - Auditors Report

Company auditors report

TO THE MEMBERS OF THEJO ENGINEERING LIMITED

Report on the Audit of the Standalone Financial Statements

1. Opinion

We have audited the financial statements of Thejo Engineering Limited("the Company") which comprise the balance sheet as at 31st March2021 and the statement of Profit and Loss and statement of cash flows for the year thenended and notes to the financial Statements including a summary of significantaccounting policies and other explanatory information.

In our opinion and to the best of our information and according to theexplanations given to us the aforesaid financial Statements give the information requiredby the Act in the manner so required and give a true and fair view in conformity with theaccounting principles generally accepted in India of the state of affairs of the Companyas at March 31 2021 and Profit and its cash flows for the year ended on that date.

2. Basis for Opinion

We conducted our audit in accordance with the Standards on Auditing(SAs) specified under section 143(10) of the Companies Act 2013. Our responsibilitiesunder those Standards are further described in the Auditor's Responsibilities for theaudit of the financial Statements section of our report. We are independent of the Companyin accordance with the Code of Ethics issued by the Institute of Chartered Accountants ofIndia together with the ethical requirements that are relevant to our audit of thefinancial statements under the provisions of the Companies Act 2013 and the Rulesthereunder 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 opinion.

3. Key Audit Matters

Key audit matters are those matters that in our professional judgmentwere of most significance in our audit of the financial statements of the current period.These matters were addressed in the context of our audit of the financial Statements as awhole and in forming our opinion thereon and we do not provide a separate opinion onthese matters. We have determined that there are no key audit matters to be communicatedin our report.

4. Emphasis of matter

We draw attention to Note No.24.13.6 of the financial statementswherein the Company has disclosed its Assessment of the Covid-19 pandemic. As mentionedtherein the assessment of the Management does not indicate any material effect on thecarrying value of its assets and liabilities of the Company on the reporting date or anyadverse change in the ability of the Company to continue as a Going Concern.

The assessment of the Management is dependent on the circumstances asthey evolve considering the uncertainties prevailing in the economic situation.

Our opinion is not modified in respect of this matter.

5. Information Other than the Financial Statements andAuditor's Report Thereon

The Company's Board of Directors are responsible for thepreparation of the other information. The other information comprises the informationincluded in the Management Discussion and Analysis Board's Report includingAnnexures to Board's Report and Shareholder's Information but does not includethe financial statements and our auditor's report thereon.

Our opinion on the financial statements does not cover the otherinformation and we do not express any form of assurance conclusion thereon. In connectionwith our audit of the financial statements our responsibility is to read the otherinformation and in doing so consider whether the other information is materiallyinconsistent with the financial statements or our knowledge obtained in the audit orotherwise appears to be materially misstated. If based on the work we have performed weconclude that there is a material misstatement of this other information we are requiredto report that fact. We have nothing to report in this regard.

6. Responsibility of Management for Standalone FinancialStatements

The Company's Board of Directors are responsible for the mattersstated in section 134(5) of the Companies Act 2013 ("the Act") with respect tothe preparation of these financial Statements that give a true and fair view of thefinancial position financial performance changes in equity and cash flows of the Companyin accordance with the accounting principles generally accepted in India including theAccounting Standards specified under section 133 of the Act. 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 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 financial statement that givea true and fair view and are free from material misstatement whether due to fraud orerror.

In preparing the financial Statements management is responsible forassessing the Company's ability to continue as a going concern disclosing asapplicable matters related to going concern and using the going concern basis ofaccounting unless management either intends to liquidate the Company or to ceaseoperations or has no realistic alternative but to do so.

The Board of Directors are also responsible for overseeing thecompany's financial reporting process.

7. Auditor's Responsibilities for the Audit of theFinancial Statements

Our objectives are to obtain reasonable assurance about whether thefinancial 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. Reasonableassurance is a high level of assurance but is not a guarantee that an audit conducted inaccordance with SAs will always detect a material misstatement when it exists.Misstatements can arise from fraud or error and are considered material if individuallyor in the aggregate they could reasonably be expected to influence the economic decisionsof users taken on the basis of these financial Statements.

As part of an audit in accordance with Standards on Auditing weexercise professional judgment and maintain professional skepticism throughout the audit.We also:

a) Identify and assess the risks of material misstatement of thefinancial 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.

b) Obtain an understanding of internal control relevant to the audit inorder to design audit procedures that are appropriate in the circumstances. Under section143(3)(i) of the Companies Act 2013 we are also responsible for expressing our opinionon whether the company has adequate internal financial controls system in place and theoperating effectiveness of such controls.

c) Evaluate the appropriateness of accounting policies used and thereasonableness of accounting estimates and related disclosures made by management.

d) Conclude on the appropriateness of management's use of thegoing concern basis of accounting and based on the audit evidence obtained whether amaterial uncertainty exists related to events or conditions that may cast significantdoubt on the Company's ability to continue as a going concern. If we conclude that amaterial uncertainty exists we are required to draw attention in our auditor'sreport to the related disclosures in the financial statements or if such disclosures areinadequate to modify our opinion. Our conclusions are based on the audit evidenceobtained up to the date of our auditor's report. However future events or conditionsmay cause the Company to cease to continue as a going concern.

e) Evaluate the overall presentation structure and content of thefinancial statements including the disclosures and whether the financial statementsrepresent the underlying transactions and events in a manner that achieves fairpresentation.

We communicate with those charged with governance regarding amongother matters the planned scope and timing of the audit and significant audit findingsincluding any significant deficiencies in internal control that we identify during ouraudit. 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.

From the matters communicated with those charged with governance wedetermine those matters that were of most signifi cance in the audit of the financialstatements of the current period and are therefore the key audit matters. We describethese 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.

8. Report on Other Legal and Regulatory Requirements

i) 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 of the Companies Act 2013 we give in the "Annexure A"to this report a statement on the matters specified in paragraphs 3 and 4 of the Order tothe extent applicable.

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

a) We have sought and obtained all the information and explanationswhich to the best of our knowledge and belief were necessary for the purposes of ouraudit.

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

c) The Balance Sheet the Statement of Profit and Loss and the CashFlow Statement dealt with by this Report are in agreement with the books of account.

d) In our opinion the aforesaid standalone financial statements complywith the Accounting Standards specified under Section 133 of the Act read with Rule 7 ofthe Companies (Accounts) Rules 2014.

e) On the basis of the written representations received from thedirectors as on 31st March 2021 taken on record by the Board of Directorsnone of the directors is disqualified as on 31st March 2021 from beingappointed as a director in terms of Section 164 (2) of the Act.

f) With respect to the adequacy of the internal financial controls overfinancial reporting of the Company and the operating effectiveness of such controls referto our separate Report in "Annexure B".

g) With respect to other matters to be included in Auditors Report inaccordance with the requirement of Section 197(16) of the Act as amended:

In our opinion and to the best of our information and according to theexplanations given to us the remuneration paid by the company to its Directors during theyear is in accordance with provisions of Section 197 of the Act.

h) With respect to the other matters to be included in theAuditor'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 theexplanations given to us:

(i) The Company has disclosed the impact of pending litigations on itsfinancial position in its financial statements – Refer Note 24.1.4 to the financialstatements.

(ii) The Company did not have any long-term contracts includingderivative contracts for which there were any material foreseeable losses.

(iii) There were no amounts which were required to be transferred tothe Investor Education and Protection Fund by the Company.

For BRAHMAYYA & CO.
Chartered Accountants
Firm Regn. No. 000511S
P. BABU
Place : Chennai Partner
Date : 14th June 2021 Membership No. 203358
UDIN: 21203358AAAAKA4715

"ANNEXURE-A" TO THE AUDITORS' REPORT

Referred to in Paragraph 8 of Our Report of Even Date

(i) (a) The Company is maintaining proper records showing fullparticulars including quantitative details and situation of fixed assets.

(b) Fixed assets have been physically verified by the Management duringthe year in accordance with an annual plan of verification which in our opinion isreasonable having regard to the size of the Company and the nature of the fixed assets.The discrepancies noticed on such verification were not material and have been properlydealt with in the books of account.

(c) The Title deeds of immovable properties owned by the company areheld in the name of the Company.

(ii) The inventories have been physically verified by the management atreasonable intervals during the year. In our opinion the frequency of such verificationis reasonable. The discrepancies noticed on verification between the physical stocks andthe book records which were not material have been properly dealt with in the books ofaccount.

(iii) The Company has granted an unsecured advance which was repaidduring the year to one of its subsidiary company covered in the Register maintainedunder section 189 of the Act for which there are no terms of repayment of advance orpayment of interest.

(iv) In our opinion and according to the information and explanationsgiven to us the Company has not advanced any loan given any guarantee or provided anysecurity to the parties covered under Section 185 and the Company has not given any loanor made any investment covered under section 186 of the Companies Act 2013. Accordinglyreporting under clause 3 (iv) of the Order does not arise.

(v) According to the information and explanations given to us theCompany has not accepted any deposits within the meaning of sections 73 to 76 or any otherrelevant provisions of the Companies Act 2013 and the rules framed thereunder.Accordingly reporting under clause 3 (v) of the Order does not arise.

(vi) The Maintenance of cost records has been specified by the CentralGovernment under sub-section (1) of section 148 of the Act in respect of the productsmanufactured by the Company and we have broadly reviewed the cost records and are of theopinion that prima facie the prescribed cost records have been so made and maintained.We have however not made a detailed examination of the cost records with a view todetermine whether they are accurate or complete.

(vii) (a) According to the information and explanations given to us andon the basis of our examination of the records of the Company the Company is generallyregular in depositing undisputed statutory dues including provident fund employees'state insurance income tax goods and services tax customs duty and other statutory duesapplicable to it during the year with appropriate authorities. According to theinformation and explanations given to us there were no undisputed amounts payable inrespect of provident fund employees' state insurance income-tax goods and servicestax customs duty and other statutory dues outstanding as at 31 March 2021 for a period ofmore than six months from the date they became payable.

(b) According to the information and explanations given to us in casedues of income tax sales tax customs duty have not been deposited on account of anydispute the amounts involved and the forum where dispute is pending are mentioned below:

in Lakhs

Name of statute Disputed Amount Period to which it relates Forum where dispute is pending
Commercial Taxes 54.90 Various years Various forums
Customs 12.50 2001 Commissioner of Customs
Income-tax 78.38 Various years Various forums
Total 145.78

(viii) According to the records of the Company examined by us and theinformation and explanations given to us the Company has not defaulted in repayment ofloans or borrowing to a bank/fi financial institution during the year. The Company has nottaken any loans or borrowing from Government or raised any money through placement ofdebentures during the year.

(ix) The Company did not raise any money by way of initial public offeror further public offer (including debt instruments).

According to information and explanations given to us money raisedthrough term loans during the year has been utilised for the purpose for which they wereraised.

(x) To the best of our knowledge and belief and according to theinformation and explanations given to us no fraud by the Company or on the Company by itsofficers or employees were noticed or reported during the course of our audit.

(xi) According to the information and explanations given to us and therecords of the Company examined by us in our opinion managerial remuneration toDirectors has been paid in accordance with the requisite approvals mandated by theprovisions of section 197 read with Schedule V to the Companies Act 2013.

(xii) In our opinion and according to the information and explanationsgiven to us the Company is not a nidhi company.

(xiii) According to the information and explanations given to us andbased on our examination of the records of the Company all transactions with the relatedparties are in compliance with sections 177 and 188 of the Act where applicable anddetails of such transactions have been disclosed in the financial statements as requiredby the applicable accounting standards.

(xiv) According to the information and explanations give to us andbased on our examination of the records of the Company the Company has not made anypreferential allotment or private placement of shares or fully or partly convertibledebentures during the year.

(xv) According to the information and explanations given to us andbased on our examination of the records of the Company the Company has not entered intonon-cash transactions with directors or persons connected with them.

(xvi) According to the information and explanations given to us theCompany is not required to be registered under section 45-IA of the Reserve Bank of IndiaAct 1934.

For BRAHMAYYA & CO.
Chartered Accountants
Firm Regn. No. 000511S
P. BABU
Place : Chennai Partner
Date : 14th June 2021 Membership No. 203358
UDIN: 21203358AAAAKA4715

"ANNEXURE-B" TO THE AUDITORS' REPORT

Referred to in Paragraph 8 of Our Report of Even Date

Report on the Internal Financial Controls under Clause (i) ofSub-section 3 of Section 143 of the Companies Act 2013 ("the Act")

We have audited the internal financial controls over financialreporting of Thejo Engineering Limited ("the Company") as of 31 March2021 in conjunction with our audit of the financial statements of the Company for the yearended on that date.

Management's Responsibility for Internal Financial Controls

The Company's management is responsible for establishing andmaintaining internal financial controls based on the internal control over financialreporting criteria established by the Company considering the essential components ofinternal control stated in the Guidance Note on Audit of Internal Financial Controls overFinancial Reporting ("the Guidance Note") issued by the Institute of CharteredAccountants of India (‘ICAI'). These responsibilities include the designimplementation and maintenance of adequate internal financial controls that were operatingeffectively for ensuring the orderly and efficient conduct of its business includingadherence to company's policies the safeguarding of its assets the prevention anddetection of frauds and errors the accuracy and completeness of the accounting recordsand the timely preparation of reliable financial information as required under theCompanies Act 2013 ("the Act").

Auditors' Responsibility

Our responsibility is to express an opinion on the Company'sinternal fi financial controls over fi financial reporting based on our audit. Weconducted our audit in accordance with the Guidance Note on Audit of Internal FinancialControls over Financial Reporting (the "Guidance Note") and the Standards onAuditing issued by ICAI and deemed to be prescribed under section 143(10) of theCompanies Act 2013 to the extent applicable to an audit of internal financial controlsboth applicable to an audit of Internal Financial Controls and both issued by theInstitute of Chartered Accountants of India. Those Standards and the Guidance Note requirethat we comply with ethical requirements and plan and perform the audit to obtainreasonable assurance about whether adequate internal financial controls over financialreporting was established and maintained and if such controls operated effectively in allmaterial respects. Our audit involves performing procedures to obtain audit evidence aboutthe adequacy of the internal financial controls system over financial reporting and theiroperating effectiveness. Our audit of internal financial controls over financial reportingincluded obtaining an understanding of internal financial controls over financialreporting assessing the risk that a material weakness exists and testing and evaluatingthe design and operating effectiveness of internal control based on the assessed risk. Theprocedures selected depend on the auditor's judgment including the assessment of therisks of material misstatement 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 controlssystem over financial reporting.

Meaning of Internal Financial Controls over Financial Reporting

A company's internal financial control over financial reporting isa process designed to provide reasonable assurance regarding the reliability of financialreporting and the preparation of financial statements for external purposes in accordancewith generally accepted accounting principles. A company's internal financial controlover financial reporting includes those policies and procedures that

(1) pertain to the maintenance of records that in reasonable detailaccurately and fairly reflect the transactions and dispositions of the assets of thecompany;

(2) provide reasonable assurance that transactions are recorded asnecessary to permit preparation of financial statements in accordance with generallyaccepted accounting principles and that receipts and expenditures of the company arebeing made only in accordance with authorisations of management and directors of thecompany; and

(3) provide reasonable assurance regarding prevention or timelydetection of unauthorised acquisition use or disposition of the company's assetsthat could have a material effect on the financial statements.

Inherent Limitations of Internal Financial Controls Over FinancialReporting

Because of the inherent limitations of internal financial controls overfinancial reporting including the possibility of collusion or improper managementoverride of controls material misstatements due to error or fraud may occur and not bedetected. Also projections of any evaluation of the internal financial controls overfinancial reporting to future periods are subject to the risk that the internal fifinancial control over financial reporting may become inadequate because of changes inconditions or that the degree of compliance with the policies or procedures maydeteriorate.

Opinion

In our opinion the Company has in all material respects an adequateinternal financial controls system over financial reporting and such internal financialcontrols over financial reporting were operating effectively as at 31 March 2021 based onthe internal control over financial reporting criteria established by the Companyconsidering the essential components of internal control stated in the Guidance Note onAudit of Internal Financial Controls Over Financial Reporting issued by the Institute ofChartered Accountants of India.

For BRAHMAYYA & CO.
Chartered Accountants
Firm Regn. No. 000511S
P. BABU
Place : Chennai Partner
Date : 14th June 2021 Membership No. 203358
UDIN: 21203358AAAAKA4715

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