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Thejo Engineering Ltd.

BSE: 0 | NSE: THEJO | Series: SM | ISIN: INE121N01019 | SECTOR: Engineering

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Annual Report

For Year :
2018 2017 2016

Auditor's Report

1. Report on the Financial Statements

We have audited the accompanying financial statements of Thejo Engineering Limited (“the Company”),which comprise the Balance Sheet as at March 31, 2018, and the Statement of Profit and Loss, Cash Flow statement for the year then ended, and a summary of significant accounting policies and other explanatory information.

2. Management’s Responsibility for the Financial Statements

The Company’s Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 (“the Act”) with respect to the preparation of these f i nancial statements that give a true and fair view of financial position, financial performance and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Accounting Standards specif i ed under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014 and the Companies (Accounting Standards) Amendment Rules, 2016, as amended. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal fi nancial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the fi nancial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

3. Auditor’s Responsibility

Our responsibility is to express an opinion on these fi nancial statements based on our audit.

We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made there under.

We conducted our audit of the fi nancial statements in accordance with the Standards on Auditing specif ed under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal fi nancial control relevant to the Company’s preparation of the financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Company’s Directors, as well as evaluating the overall presentation of the fi nancial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the financial statements.

4. Opinion

In our opinion and to the best of our information and according to the explanations given to us, the financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at March 31, 2018, and its prof t and its Cash Flows for the year ended on that date.

5. 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 Act, we give in the “Annexure A” to this Report, a statement on the matters specified in paragraphs 3 and 4 of the said Order.

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 best of our knowledge and belief were necessary for the purpose of our audit;

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

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

d. In our opinion, the aforesaid fi nancial statements comply with the Accounting Standards specif ed under section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules 2014 and the Companies (Accounting Standards) Amendment Rules, 2016, as amended.

e. On the basis of written representations received from the directors as on March 31, 2018 taken on record by the Board of Directors, none of the directors is disqualif ed as on March 31, 2018 from being appointed as a director in terms of Section 164 (2) of the Act.

f. With respect to the internal fi nancial controls with reference to fi nancial statements of the Company and the Operating Effectiveness of such controls, refer to our separate report in “Annexure - B.”

g. With respect to the other matters to be included in the Auditor’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 the explanations given to us:

i) The Company has disclosed the impact of pending litigations on its financial position as referred to in note 25.1.4 to the standalone financial statements.

ii) The Company did not have any long term contracts including derivative contracts for which there were any material foreseeable losses.

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

ANNEXURE-A TO THE AUDITORS’ REPORT

Referred to in Paragraph 5 of Our Report of Even Date

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

(b) Fixed assets have been physically verified by the Management during the year, in accordance with an annual plan of verification, which in our opinion is reasonable 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 properly dealt with in the books of account.

(c) The title deeds of immovable properties owned by the company are held in the name of the Company based on the documents produced for our verification.

(ii) Inventories have been physically verif ed by the management at reasonable intervals during the year. In our opinion, the frequency of such verification is reasonable. The discrepancies noticed on verification between the physical stocks and the book records which were not material, have been properly dealt with in the books of account.

(iii) The Company has granted an unsecured advance to one of its subsidiary company, covered in the Register maintained under Section 189 of the Act for which there are no terms of repayment of advance or payment of interest. The Company has also granted unsecured loan to two subsidiaries, covered in the Register maintained under Section 189 of the Act.

(a) The terms and conditions of the grant of such loans are not prejudicial to the Company’s interest.

(b) The repayment of principal and payment of interest has been stipulated and the repayments 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, the Company has not advanced any loan, given any guarantee or provided any security to the parties covered under Section 185 and the Company has not given any loan or made any investment covered under section 186 of the Companies Act, 2013. Accordingly, reporting under clause 3 (iv) of the Order does not arise.

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

(vi) We have broadly reviewed the cost record maintained by the company prescribed by the Central Government under Section 148(1) of the act and are of the opinion, that prim facie, the prescribed cost records have been maintained. We have however not made a detailed examination of cost records with a view to determine whether they are accurate or complete.

(vii) (a) According to the information and explanations given to us and on the basis of our examination of the records of the Company, the Company is generally regular in depositing undisputed statutory dues including provident fund, employees’ state insurance, income tax, sales tax, service tax, goods and services tax, duty of customs, value added tax and other statutory dues applicable to it during the year with appropriate authorities. According to the information and explanations given to us, there were no undisputed amounts payable in respect of provident fund, employees’ state insurance, income-tax, sales tax, service tax, goods and services tax, duty of customs, value added tax and other, dues outstanding as at 31 March 2018 for a period of more than six months from the date they became payable.

(b) According to the information and explanations given to us, in case dues of income tax or sales tax or service tax or duty of customs or goods and service tax or duty of excise or value added tax or cess have not been deposited on account of any dispute, the amounts 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

APGST

7.40

2002-03

Commercial Tax Officer, Naidupet, Andhra Pradesh

APGST

9.92

2003-04

Commercial Tax Officer, Naidupet, Andhra Pradesh

Central Excise

18.25

July 2000 - June 2004

CESTAT, Bangalore

Central Excise

3.49

July 2004 - Jan 2005

CESTAT, Bangalore

Central Excise

1.23

Feb 2005 - Aug 2005

CESTAT, Bangalore

Central Excise

0.66

Jan 2007 - April 2007

CESTAT, Bangalore

CST

1.36

2002 - 03

Commercial Tax Officer, Naidupet, Andhra Pradesh

CST

16.18

2000 - 01

High Court of Judicature at Andhra Pradesh

Customs

12.50

Oct - 01

Commissioner of Customs

Income Tax

5.43

AY 2003-04 to 200809

Income Tax Department

Service Tax

5.33

2011-12

Service Tax Department

Central Excise

0.23

Sep 2005 - March 2006

CESTAT, Bangalore

CST

0.42

2004 - 05

Joint Commissioner of Commercial Taxes (Appeals), Jharkhand

Central Excise

0.68

April - Dec. 2006

CESTAT, Bangalore

Jharkhand Sales Tax

5.31

2004 - 05

Joint Commissioner of Commercial Taxes (Appeals), Jharkhand

Income Tax

28.47

AY 2001-02

CIT(A)

MP Sales Tax

1.04

2013-14

Commissioner of Commercial Taxes

IT - TDS - Salary

0.45

AY 2010-11

TDS - AO

Service Tax

5.62

Apr-Sep 2014

Assistant Commissioner - Service Tax

West Bengal VAT

2.95

2015-16

VAT Tribunal

Uttar Pradesh VAT

3.91

2011-12

Assistant Commissioner - Appeals

Jharkhand

VAT

12.21

2010-11

Deputy Commissioner - Appeals

Jharkhand

VAT

22.03

2011-12

Deputy Commissioner - Appeals

Income Tax

4.95

AY 2014-15

CIT (Appeals)

(viii) According to the records of the Company examined by us and the information and explanations given to us, the Company has not defaulted in repayment of loans or borrowing to banks and fi nancial institutions. The Company has not taken any loans or borrowing from Government or through placement of debentures during the year.

(ix) The Company has neither raised any money by way of initial public offer or further public offer (including debt instruments) during the year. The Company has availed term loans during the year and utilized for the purpose for which they have been obtained.

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

(xi) According to the information and explanations given to us and the records of the Company examined by us, in our opinion, managerial remuneration including sitting fees to Directors has been paid in accordance with the requisite approvals mandated by the provisions of Section 197 read with Schedule V to the Companies Act, 2013.

(xii) In our opinion and according to the information and explanations given to us, the Company is not a nidhi company. Accordingly, paragraph 3(xii) of the Order is not applicable.

(xiii) According to the information and explanations given to us and based on our examination of the records of the Company, all transactions with the related parties are in compliance with sections 177 and 188 of the Act where applicable and details of such transactions have been disclosed in the financial statements as required by the applicable accounting standards.

(xiv) According to the information and explanations give to us and based on our examination of the records of the Company, the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year.

(xv) According to the information and explanations given to us and based on our examination of the records of the Company, the Company has not entered into non-cash transactions with directors or persons connected with them. Accordingly, paragraph 3(xv) of the Order is not applicable.

(xvi) According to the information and explanations given to us, the Company is not required to be registered under Section 45-IA of the Reserve Bank of India Act, 1934. Accordingly, reporting under clause 3 (xvi) of the Order does not arise.

Referred to in Paragraph 5 of Our Report of Even Date Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 (“the Act”)

We have audited the internal fi nancial controls over fi nancial reporting of Thejo Engineering Limited (“the Company”) as of 31 March 2018 in conjunction with our 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 internal fi nancial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in 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 maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and eff cient conduct of its business, including adherence to company’s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, 2013 (“the Act”).

Auditors’ Responsibility

Our responsibility is to express an opinion on the Company’s internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls over Financial Reporting (the “Guidance Note”) and the Standards on Auditing, issued by ICAI and deemed to be prescribed under Section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls, both applicable to an audit of Internal Financial Controls and, both issued by the Institute of Chartered Accountants of India. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal fi nancial controls system over fi nancial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the AS financial statements, whether due to fraud or error.

Meaning of Internal Financial Controls over Financial Reporting

A company’s internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of fi nancial reporting and the preparation of fi nancial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal financial control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly ref i ect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorisations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorised acquisition, use, or disposition of the company’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 financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Opinion

In our opinion, the Company has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at 31 March 2018, based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India.

For BRAHMAYYA & CO.

Chartered Accountants

Firm Regn. No. : 000511S

P. BABU

Place : Chennai Partner

Date : 28.05.2018 Membership No. : 203358