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Thejo Engineering Ltd.

BSE: 500492 Sector: Engineering
NSE: THEJO ISIN Code: INE121N01019
BSE 05:30 | 01 Jan Thejo Engineering Ltd
NSE 14:07 | 25 Feb 1336.00 54.00
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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 standalone financial statements of Thejo Engineering Limited("the Company") which comprise the balance sheet as at 31st March 2020 and thestatement of Profit and Loss and statement of cash flows for the year then ended andnotes to the financial Statements including a summary of significant accounting policiesand other explanatory information.

In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid financial Statements give the information required by the Actin the manner so required and give a true and fair view in conformity with the accountingprinciples generally accepted in India of the state of affairs of the Company as at March31 2020 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) specifiedunder section 143(10) of the Companies Act 2013. Our responsibilities under thoseStandards are further described in the Auditor's Responsibilities for the audit of thefinancial Statements section of our report. We are independent of the Company inaccordance 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 judgment were of mostsignificance in our audit of the financial statements of the current period. These matterswere addressed in the context of our audit of the financial Statements as a whole and informing our opinion thereon and we do not provide a separate opinion on these matters. Wehave determined that there are no key audit matters to be communicated in our report.

4. Emphasis of matter

We draw attention to Note No.24.13.7 of the Financial Statements wherein the Companyhas disclosed its Assessment of the Covid-19 pandemic. As mentioned therein theassessment of the Management does not indicate any material effect on the carrying valueof the assets of the Company on the reporting date or any adverse change in the ability ofthe Company to continue as a Going Concern. The assessment of the Management is dependenton the circumstances as they evolve considering the uncertainties prevailing in theeconomic situation.

Our opinion is not modified in respect of this matter

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

The Company's Board of Directors are responsible for the preparation of the otherinformation. The other information comprises the information included in the ManagementDiscussion and Analysis Board's Report including Annexures to Board's Report andShareholder's Information but does not include the financial statements and our auditor'sreport thereon.

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 thefinancial statements our responsibility is to read the other information and in doingso consider whether the other information is materially inconsistent with the financialstatements or our knowledge obtained in the audit or otherwise appears to be materiallymisstated. If based on the work we have performed we conclude that there is a materialmisstatement of this other information we are required to report that fact. We havenothing to report in this regard.

6. Responsibility of Management for Standalone Financial Statements

The Company's Board of Directors are 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 of the Company in accordance withthe accounting principles generally accepted in India including the Accounting Standardsspecified under section 133 of the Act. This responsibility also includes maintenance ofadequate accounting records in accordance with the provisions of the Act for safeguardingof the assets of the Company and for preventing and detecting frauds and otherirregularities; selection and application of appropriate accounting policies; makingjudgments and estimates that are reasonable and prudent; and design implementation andmaintenance of adequate internal financial controls that were operating effectively forensuring the accuracy and completeness of the accounting records relevant to thepreparation and presentation of the financial statement that give a true and fair view andare free from material misstatement whether due to fraud or error.

In preparing the financial Statements management is responsible for assessing theCompany's ability to continue as a going concern disclosing as applicable mattersrelated to going concern and using the going concern basis of accounting unless managementeither intends to liquidate the Company or to cease operations or has no realisticalternative but to do so.

The Board of Directors are also responsible for overseeing the company's financialreporting process.

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

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 conducted 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 the aggregate theycould reasonably be expected to in uence the economic decisions of users taken on thebasis of these financial Statements.

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

a) Identify and assess the risks of material misstatement 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 for one resulting from error as fraud may involve collusion forgeryintentional omissions misrepresentations or the override of internal control.

b) Obtain an understanding of internal control relevant to the audit in order to designaudit procedures that are appropriate in the circumstances. Under section 143(3)(i) of theCompanies Act 2013 we are also responsible for expressing our opinion on whether thecompany has adequate internal financial controls system in place and the operatingeffectiveness of such controls.

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

d) Conclude on the appropriateness of management's use of the going concern basis ofaccounting 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.

e) 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.

We communicate with those charged with governance regarding among other matters theplanned scope and timing of the audit and significant audit findings including anysignificant de ciencies in internal control that we identify during our audit. We alsoprovide those charged with governance with a statement that we have complied with relevantethical requirements regarding independence and to communicate with them allrelationships 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 financial statements of thecurrent period and are therefore the key audit matters. We describe these matters in ourauditor's report unless law or regulation precludes public disclosure about the matter orwhen 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.

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 ofthe Companies Act 2013 we give in the "Annexure A" to this report astatement on the matters specified in paragraphs 3 and 4 of the Order to the extentapplicable.

ii) 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 and the Cash Flow Statementdealt 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 Rule 7 of theCompanies (Accounts) Rules 2014.

e) On the basis of the written representations received from the directors as on 31stMarch 2020 taken on record by the Board of Directors none of the directors isdisqualified as on 31st March 2020 from being appointed as a director in terms of Section164 (2) of the Act.

f) With respect to the adequacy of the internal financial controls over financialreporting of the Company and the operating effectiveness of such controls refer to ourseparate Report in "Annexure B".

g) 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 in our opinionand to the best of our information and according to the explanations given to us:

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

(ii) The Company did not have any long-term contracts including derivative contractsfor which there were any material foreseeable losses

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

For BRAHMAYYA & CO.
Chartered Accountants
Firm Regn. No. 000511S
P. BABU
Place : Chennai Partner
Date : 18th June 2020 Membership No. 203358
UDIN: 20203358AAAALL6667

"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 full particulars includingquantitative details and situation of fixed assets

(b) Fixed assets have been physically verified by the Management during the year inaccordance with an annual plan of verification which in our opinion is reasonable havingregard to the size of the Company and the nature of the fixed assets. The discrepanciesnoticed on such verification were not material and have been properly dealt with in thebooks of account.

(c) The Title deeds of immovable properties owned by the company are held in the nameof the Company.

(ii) The inventories have been physically verified by the management at reasonableintervals during the year. In our opinion the frequency of such verification isreasonable. The discrepancies noticed on verification between the physical stocks and thebook records which were not material have been properly dealt with in the books ofaccount.

(iii) The Company has granted an unsecured advance to one of its subsidiary companycovered in the Register maintained under section 189 of the Act for which there are noterms of repayment of advance or payment of interest. The Company had also grantedunsecured loan to one subsidiary covered in the Register maintained under section 189 ofthe Act which was fully repaid during the year:

a) The terms and conditions of the grant of such loans are not prejudicial to theCompany's interest.

b) The repayment of principal and payment of interest has been stipulated and therepayments and receipts are regular

c) There is no overdue amount in respect of the loans mentioned in para (a) above.

(iv) In our opinion and according to the information and explanations given to us theCompany has not advanced any loan given any guarantee or provided any security to theparties covered under Section 185 and the Company has not given any loan or made anyinvestment covered under section 186 of the Companies Act 2013. Accordingly reportingunder clause 3 (iv) of the Order does not arise.

(v) According to the information and explanations given to us the Company has notaccepted any deposits within the meaning of sections 73 to 76 or any other relevantprovisions of the Companies Act 2013 and the rules framed thereunder. Accordinglyreporting under clause 3 (v) of the Order does not arise

(vi) The Maintenance of cost records has been specified by the Central Government undersub-section (1) of section 148 of the Act in respect of the products manufactured by theCompany and we have broadly reviewed the cost records and are of the opinion that primafacie the prescribed cost records have been so made and maintained. We have however notmade a detailed examination of the cost records with a view to determine whether they areaccurate or complete.

(vii) a) According to the information and explanations given to us and on the basis ofour examination of the records of the Company the Company is generally regular indepositing undisputed statutory dues including provident fund employees' state insuranceincome tax goods and services tax duty of customs and other statutory dues applicableto it during the year with appropriate authorities. According to the information andexplanations given to us there were no undisputed amounts payable in respect of providentfund employees' state insurance income-tax goods and services tax duty of customs andother dues outstanding as at 31 March 2020 for a period of more than six months from thedate they became payable.

(b) According to the information and explanations given to us in case dues of incometax or sales tax or service tax or duty of customs or goods and service tax or duty ofexcise or value added tax or cess have not been deposited on account of any dispute theamounts involved and the forum where dispute is pending are mentioned below:

Rs in Lakhs
Name of statute Disputed Amount Period to which it relates Forum where dispute is pending
Commercial Taxes 54.90 Various assessment years Various Forums
Customs Duty 12.50 2001 Commissioner of Customs
Income-taxes 67.88 Various assessment years
Various Forums
Total 13528

(viii) According to the records of the Company examined by us and the information andexplanations given to us the Company has not defaulted in repayment of loans or borrowingto a bank/ financial institution during the year. The Company has not taken any loans orborrowing from Government or raised any money through placement of debentures during theyear.

(ix) The Company did not raise any money by way of initial public offer or furtherpublic offer (including debt instruments). According to information and explanations givento us money raised through term loans during the year has been utilised for the purposefor which they were raised.

(x) To the best of our knowledge and belief and according to the information andexplanations given to us no fraud by the Company or on the Company by its officers oremployees were noticed or reported during the course of our audit.

(xi) According to the information and explanations given to us and the records of theCompany examined by us in our opinion managerial remuneration to Directors has been paidin accordance with the requisite approvals mandated by the provisions of section 197 readwith Schedule V to the Companies Act 2013.

(xii) In our opinion and according to the information and explanations given to us theCompany is not a nidhi company.

(xiii) According to the information and explanations given to us and based on ourexamination of the records of the Company all transactions with the related parties arein compliance with sections 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 give 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 duringthe year.

(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 them.

(xvi) According to the information and explanations given to us the Company is notrequired to be registered under section 45-IA of the Reserve Bank of India Act 1934.

For BRAHMAYYA & CO.
Chartered Accountants
Firm Regn. No. 000511S
P. BABU
Place : Chennai Partner
Date : 18th June 2020 Membership No. 203358
UDIN: 20203358AAAALL6667

"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) of Sub-section 3 of Section143 of the Companies Act 2013 ("the Act")

We have audited the internal financial controls over financial reporting of ThejoEngineering Limited ("the Company") as of 31 March 2020 in conjunction withour audit of the financial statements of the Company for the year ended 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 Reporting("the Guidance Note") issued by the Institute of Chartered Accountants of India(‘ICAI'). These responsibilities include the design implementation and maintenanceof adequate internal financial controls that were operating effectively for ensuring theorderly and ef cient conduct of its business including adherence to company's policiesthe safeguarding of its assets the prevention and detection of frauds and errors theaccuracy and completeness of the accounting records and the timely preparation ofreliable financial information as required under the Companies Act 2013 ("theAct").

Auditors' Responsibility

Our responsibility is to express an opinion on the Company's internal financialcontrols over financial reporting based on our audit. We conducted our audit in accordancewith the Guidance Note on Audit of Internal Financial Controls over Financial Reporting(the "Guidance Note") and the Standards on Auditing issued by ICAI and deemedto be prescribed under section 143(10) of the Companies Act 2013 to the extentapplicable to an audit of internal financial controls both applicable to an audit ofInternal Financial Controls and both issued by the Institute of Chartered Accountants ofIndia. Those Standards and the Guidance Note require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetheradequate internal financial controls over financial reporting was established andmaintained and if such controls operated effectively in all material respects. Our auditinvolves performing procedures to obtain audit evidence about the adequacy of the internalfinancial controls system over financial reporting and their operating effectiveness. Ouraudit of internal financial controls over financial reporting included obtaining anunderstanding of internal financial controls over financial reporting assessing the riskthat a material weakness exists and testing and evaluating the design and operatingeffectiveness of internal control based on the assessed risk. The procedures selecteddepend on the auditor's judgment including the assessment of the risks of materialmisstatement of the financial statements whether due to fraud or error. We believe thatthe audit evidence we have obtained is sufficient and appropriate to provide a basis forour audit opinion on the Company's internal financial controls system over financialreporting.

Meaning of Internal Financial Controls over Financial Reporting

A company's internal financial control over financial reporting is a process designedto provide reasonable assurance regarding the reliability of financial reporting and thepreparation of financial statements for external purposes in accordance with generallyaccepted accounting principles. A company's internal financial control over financialreporting includes those policies and procedures that (1) pertain to the maintenance ofrecords that in reasonable detail accurately and fairly reflect the transactions anddispositions of the assets of the company; (2) provide reasonable assurance thattransactions are recorded as necessary to permit preparation of financial statements inaccordance with generally accepted accounting principles and that receipts andexpenditures of the company are being made only in accordance with authorisations ofmanagement and directors of the company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorised acquisition use or disposition of thecompany's assets that could have a material effect on the financial statements.

Inherent Limitations of Internal Financial Controls Over Financial Reporting

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

Opinion

In our opinion the Company has in all material respects an adequate internalfinancial controls system over financial reporting and such internal financial controlsover financial reporting were operating effectively as at 31 March 2020 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 Institute of CharteredAccountants of India.

For BRAHMAYYA & CO.
Chartered Accountants
Firm Regn. No. 000511S
P. BABU
Place : Chennai Partner
Date : 18th June 2020 Membership No. 203358
UDIN: 20203358AAAALL6667

 

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