Notes to Accounts of Thejo Engineering Ltd.

Mar 31, 2023

Provisions and Contingent Liabilities

Provisions are recognized if the Company has a reliably estimated present obligation (legal or
constructive) as a result of a past event and it is probable that an outflow of resources will be
required to settle the obligation. Provisions are measured based on the best estimate of expenditure
required to settle the obligation as at the date of balance sheet. In cases where the effect of the
time value of money is material, provisions are discounted to reflect its present value using current
pre-tax rate reflecting the risk specific to the obligation. When discounting is used, the increase in
the amount of provision due to the passage of time is recognized as finance cost.

When some or all of the economic benefits required to settle a provision are expected to be
recovered from a third party, a receivable is recognised as an asset if it is virtually certain that
reimbursement will be received and the amount of the receivable can be measured reliably.

Contingent liabilities are disclosed when there is a possible obligation arising from past events,
which is contingent upon the occurrence or non-occurrence of one or more uncertain future events,
which are not fully within the control of the Company or when there is a present obligation arising
from past events where it is either not probable that an outflow of resources will be required to
settle the obligation or the amount cannot be reliably estimated.

A contingent asset is not recognised but disclosed in the financial statements where an inflow
of economic benefit is probable. Commitments includes the amount of purchase order (net of
advance) issued to counterparties for supplying/ development of assets and amounts pertaining
to Investments which have been committed but not called for.

Provisions, contingent assets, contingent liabilities and commitments are reviewed at each balance
sheet date.

Notes forming part of the Financial Statements for the year ended 31^st March, 2023

Onerous contracts

A contract is considered to be onerous when the expected economic benefits to be derived by the
Company from the contract are lower than the unavoidable cost of meeting its obligations under
the contract. The provision for an onerous contract is measured at the present value of the lower
of the expected cost of terminating the contract and the expected net cost of continuing with the
contract. Before such a provision is made, the Company recognizes any impairment loss on the
assets associated with that contract.

3.9 Revenue Recognition
Sale of goods

Revenue is recognised when the performance obligations are satisfied and the control of the product
is transferred, being when the goods are delivered as per the relevant terms of the contract at
which point in time the Company has a right to payment for the asset, customer has legal title of the
asset, customer bears significant risk and rewards of ownership and the customer has accepted the
asset or the Company has objective evidence that all criteria for acceptance have been satisfied.
Payment for the sale is made as per the credit terms in the agreements with the customers. The
credit period is generally short term, thus there is no significant financing component.

Rendering of services

The performance obligation under service contracts are provision of various services as set forth
in the contracts. Revenue from rendering of services are recognised over a period of time by
reference to the stage of completion as the customer simultaneously receives and consumes the
benefit provided by the Company’s performance. Payment for the service rendered is made as per
the credit terms in the agreements with the customers. The credit period is generally short term,
thus there is no significant financing component.

Dividend and interest income

Dividend income from investments is recognised when the shareholder’s right to receive payment
has been established (provided that it is probable that the economic benefits will flow to the Company
and the amount of income can be measured reliably).

Interest income from a financial asset is recognised when it is probable that the economic benefits
will flow to the Company and the amount of income can be measured reliably. Interest income
is accrued on a time basis, by reference to the principal outstanding and at the effective interest
rate applicable, which is the rate that exactly discounts estimated future cash receipts through the
expected life of the financial asset to that asset’s net carrying amount on initial recognition.

Revenue disaggregation as per business segment and geography are contained in the segment
information given in Note 26.3.

3.10 Employee Benefits
Short-term benefits

All short-term employee benefit obligations are measured on an undiscounted basis and expensed
as the related services are rendered.

Defined contribution plans

Contribution to defined contribution plans like provident fund, superannuation fund, employee state
insurance, etc are charged as an expense to the extent of periodic contribution required to be made
as and when services are rendered to the Company. The Company has no further obligations
beyond the periodic contribution in respect of defined contribution plans.

Notes forming part of the Financial Statements for the year ended 31^st March, 2023

Defined benefit plans

The Company provides for gratuity, a defined benefit plan, to all eligible employees. The amount
recognized as employee benefit expense in the Statement of Profit and Loss is the cost of accruing
employee benefits promised to the eligible employees over the year and costs of past/future service
benefit changes and similar costs. The defined benefit plan surplus or deficit as on the date of
balance sheet comprises the difference between fair value of plan assets and present value of the
defined benefit liabilities, discounted at the yield rate at the reporting date on risk free government
bonds.

All re-measurements of defined benefit liabilities and assets are recognized in other comprehensive
income and are subsequently not reclassified to the Statement of Profit and Loss. The Company
has an employees’ gratuity fund managed by the Life Insurance Corporation of India.

3.11 Share-based Payments

Equity-settled share-based payments to employees are measured at the fair value of the equity
instruments at the grant date. Details regarding the determination of the fair value of equity-settled
share-based transactions are set out in Note 26.9.

The Company makes equity settled share based payment to selected employees under its ESOP
program. The fair value of options granted as on grant date, calculated by an independent valuer on
the basis of Black Scholes model, is recognized as employee benefit expense with a corresponding
increase in equity over the vesting period. At the end of each reporting period, the expense is
reviewed and adjusted to reflect changes to the level of options expected to vest. Fresh equity
shares are issued upon exercise of vested options.

3.12 Income-tax Expenses

Income-tax expenses comprises current tax and deferred tax and is recognized in the Statement
of Profit and Loss except to the extent that it relates to an item which is recognized directly in
equity or in other comprehensive income. Current tax is the expected tax payable on the taxable
income using applicable tax rates enacted or substantively enacted as at the reporting date and
any adjustments relating to income-tax of previous years.

Deferred tax is recognized in respect of temporary difference between the carrying amounts of
assets and liabilities as per the financial statements and taxation laws. Deferred tax liability is
recognized based on the expected manner of realization or settlement of the difference in carrying
amounts applying tax rates enacted or substantively enacted as at the reporting date. Deferred
tax assets are recognized only to the extent that it is probable that future taxable profits will be
available to utilize the same. Deferred tax assets are reviewed at each reporting date and reduced
to the extent that it is no longer probable that it will be realized.

Current tax assets and liabilities are offset when there is a legally enforceable right to set them off
and there is an intent to settle them on a net basis. Deferred tax assets and liabilities are set off
when they are related to income-tax levied by the same taxation authority and there is a legally
enforceable right to set off current tax assets and liabilities.

3.13 Foreign Currency

In preparing the financial statements of the Company, transactions in currencies other than the
entity’s functional currency (foreign currencies) are recognised at the rates of exchange prevailing at
the dates of the transactions. The income and expense of foreign branch operations are translated
using average exchange rates. At the end of each reporting period, monetary items denominated in
foreign currencies are retranslated at the rates prevailing at that date. Non-monetary items carried

Notes forming part of the Financial Statements for the year ended 31^st March, 2023

at fair value that are denominated in foreign currencies are retranslated at the rates prevailing at
the date when the fair value was determined. Non-monetary items that are measured in terms of
historical cost in a foreign currency are not retranslated. Exchange differences on monetary items
are recognised in the Statement of Profit and Loss in the period in which they arise.

3.14 Earnings Per Share

The Company presents the basic earnings per share by dividing the net profit for the period
attributable to ordinary shareholders by the weighted average number of ordinary shares outstanding
during the period. Where ordinary shares are issued without a corresponding change in resources
like bonus issue, the weighted number of equity shares outstanding during the period as well as
all periods presented are adjusted for such events.

Diluted earnings per share is computed by dividing the net profit after tax by the weighted average
number of equity shares considered for deriving basic earnings per share and also weighted average
number of equity shares that could have been issued upon conversion of all dilutive potential equity
shares. Dilutive potential equity shares are deemed converted as of the beginning of the period,
unless issued at a later date. Dilutive potential equity shares are determined independently for each
period presented. The number of equity shares and potentially dilutive equity shares are adjusted
for bonus shares, consolidation of shares, etc. as appropriate.

3.15 Segment Reporting

The Company reports business and geographic segments in a manner consistent with the reporting
provided to the Chief Operating Decision Maker, in line with Ind-AS 108.

3.16 Dividend Distributed to Equity Shareholders

Dividend distributed to equity shareholders is recognized as distribution to owners of capital in the
Statement of Changes in Equity after it is approved by the Members.

3.17 Borrowings and related costs

Borrowings are initially recognised at fair value, net of transaction costs incurred. Borrowings are
subsequently measured at amortised cost. Any difference between the proceeds (net of transaction
costs) and the redemption amount is recognised in the Statement of Profit and Loss over the
period of the borrowings using the effective interest method. Fees paid on the establishment of
loan facilities are recognised as transaction costs of the loan to the extent that it is probable that
some or all of the facility will be drawn down. In this case, the fee is deferred until the draw down
occurs. To the extent there is no evidence that it is probable that some or all of the facility will be
drawn down, the fee is capitalised as a prepayment for liquidity services and amortised over the
period of the facility to which it relates.

Borrowings are removed from the balance sheet when the obligation specified in the contract is
discharged, cancelled or expired. The difference between the carrying amount of a financial liability
that has been extinguished or transferred to another party and the consideration paid, including
any non-cash assets transferred or liabilities assumed, is recognised in the Statement of Profit
and Loss as other gains/(losses).

Borrowings are classified as current liabilities unless the Company has an unconditional right to
defer settlement of the liability for at least 12 months after the reporting period. Where there is a
breach of a material provision of a long-term loan arrangement on or before the end of the reporting
period with the effect that the liability becomes payable on demand on the reporting date, the entity
does not classify the liability as current, if the lender agreed, after the reporting period and before

Notes forming part of the Financial Statements for the year ended 31^st March, 2023

the approval of the financial statements for issue, not to demand payment as a consequence of
the breach.

Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets,
which are assets that necessarily take a substantial period of time to get ready for their intended
use or sale, are added to the cost of those assets, until such time as the assets are substantially
ready for their intended use or sale. Interest income earned on the temporary investment of specific
borrowings pending their expenditure on qualifying assets is deducted from the borrowing costs
eligible for capitalization. All other borrowing costs are recognised in the Statement of Profit and
Loss in the period in which they are incurred.

3.18 Government Grants

Government grants are not recognised until there is reasonable assurance that the Company will
comply with the conditions attaching to them and that the grants will be received. Government
grants are recognised in the Statement of Profit and Loss on a systematic basis over the periods
in which the Company recognises as expenses the related costs for which the grants are intended
to compensate. Government grants that are receivable as compensation for expenses or losses
already incurred or for the purpose of giving immediate financial support to the company with no
future related costs are recognised in the Statement of Profit and Loss in the period in which they
become receivable. Government grant is recognised either as other operating income, or other
income or adjusted against expenses depending upon the nature of the grant and the same is
followed consistently. The benefit of a government loan at a below-market rate of interest is treated
as a government grant, measured as the difference between proceeds received and the fair value
of the loan based on prevailing market interest rates.

3.19 Cash flow statement

Cash flows are reported using the indirect method, whereby profit/(loss) before tax is adjusted
for the effects of transactions of non-cash nature and any deferrals or accruals of past or future
cash receipts or payments. The cash flows from operating, investing and financing activities of the
Company are segregated based on the available information. Cash and cash equivalents includes
balances in current accounts, cash on hand and cheques/drafts on hand. Bank overdrafts are
shown within borrowings in current liabilities in the balance sheet.

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Mar 31, 2021

Residual value:

In respect of Fixed Assets which have completed the useful life, the carrying amount as on 01.04.2014 or 5% of the cost, whichever is lower, is retained as residual value in the books.

24.13.3 The Company has not received any communication from its suppliers claiming that they are micro, small scale or medium enterprises.

24.13.4 As the estimated recoverable amounts of the assets/cash generating units of the Company are higher than their carrying amount, no impairment of assets has been recognized in the accounts of the Company in line with AS - 28 on Impairment of Assets issued by the Institute of Chartered Accountants of India.

24.13.5 During the FY 2020-21, the Company has incurred a revenue expenditure (excluding depreciation) of '' 128.41 lakhs and capital expenditure of '' 0.37 lakhs in relation to Research & Development. (FY 2019-20: '' 158.29 lakhs and '' 1.31 lakh, respectively).

24.13.6 During the initial weeks of FY 2020-21, there was a nation-wide lockdown announced by the Central Government to tackle COVID-19. The manufacturing operations, which were temporarily closed in the last week of March, 2020, resumed its operations by the first week of April 2020, as the Company manufactures rubber products and adhesives, which were essential for the maintenance and continuous operations of the conveyor systems in the power generation utilities. The Services and O&M divisions of the Company continued to serve its customers, as most of them fell under essential services and continuous process plants. The business momentum which dipped in the first few months of FY 2020-21, gradually bounced back by the second half of the financial year.

During the second wave of COVID-19 in April-May 2021, the lockdowns/restrictions were more localized and the Company carried its operations in line with statutory restrictions/guidelines. As on date, the Company is carrying its operations complying with the applicable statutory guidelines and following all required safety and sanitary norms.

Based on the current trends and estimates, taking into account external and internal information that are available up to the date of the approval of the financial statements, the Company expects the carrying amount of its assets to be recovered and believes that there is no impact on its ability to continue as a going concern. The Company would continue to closely monitor any material changes to future economic/business conditions.

24.13.7 Other income for the year ended 31^st March, 2021 includes an amount of '' 94.80 lakhs (AUD 1.84 lakhs) received by Perth Branch as Jobkeeper Subsidy and ATO (Australian Tax Office) Cash Booster as part of the stimulus/ relief package extended by the Australian/West Australian Government to support the business entities to overcome the adverse impact of COVID-19.

24.13.8 The Board has recommended a dividend of '' 6/- (Rupees Six only) per equity share of face value of '' 10/- each (fully paid) for the FY 2020-21. Dividend will be treated as an appropriation from Reserves & Surplus during the period in which it is approved by the Members. No provision is being made in the accounts for the current financial year in respect of dividend recommended by the Board after the balance sheet date.

Note 25 Previous Year Figures

Previous year''s figures have been regrouped / reclassified wherever necessary to correspond with the current year''s classification / disclosure.

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Mar 31, 2018

CORPORATE INFORMATION

Thejo Engineering Limited (formerly known as Thejo Engineering Services Private Limited) (“the Company”) was incorporated on 26^th March, 1986 as a private limited company, with its Registered Office at Aysha Building, No. 41, Whites Road, Royapettah, Chennai, 600014. The name of the Company was changed to Thejo Engineering Private Limited vide Certificate of Incorporation dated 17^th June, 2008. The Company was subsequently converted into a public limited company with consequent change of name as Thejo Engineering Limited vide special resolution passed by the Members at their meeting held on 20^th June, 2008. Thejo Engineering Limited made an Initial Public Offer (IPO) of 4,72,800 equity shares of the face value of Rs. 10/- each at a premium of Rs. 392/- per share in September 2012 and the shares got listed on the EMERGE SME platform of NSE. The share capital of the Company increased to Rs. 171.68 lakhs in the Financial Year 2012-13. During the year 2013-14, the Company issued Bonus Shares to the existing shareholders in the ratio of 1:1 and the paid-up capital of the Company further increased to Rs. 343.36 lakhs. The Company shifted its Registered Office to VDS House, 41, Cathedral Road, Chennai 600086 with effect from 28^th May, 2018 vide a resolution passed by the Board of Directors at their meeting held on that date.

The Company is an Engineering Solutions provider for Bulk Material Handling, Mineral Processing and Corrosion Protection to the Core Sector Industries like mining, power, steel, cement, ports and fertilizers. The Company’s services include belt conveyor installation, maintenance and operations, while its product portfolio covers design, manufacture and supply of engineering products for Bulk Material Handling, Mineral Processing and Corrosion Protection.

The Company has a Branch in Perth, Australia and four overseas subsidiaries namely, Thejo Hatcon Industrial Services Company, Saudi Arabia, Thejo Australia Pty Ltd, Australia, Thejo Brasil Comercio E Servicos Ltda, Brazil and Thejo Engineering Latinoamerica SpA, Chile. Thejo Hatcon Industrial Services Company is primarily engaged in rubber lagging and industrial services, Thejo Australia Pty Ltd in conveyor splicing, maintenance and related services, Thejo Brasil Comercio E Servicos Ltda and Thejo Engineering Latinoamerica SpA in sale of products used in core sector industries for Bulk Material Handling, Mineral Processing and Corrosion Protection.

1.1.1.Commitments

Estimated amount of contracts remaining to be executed on capital account: Rs. 3.50 lakhs (Previous Year -Rs. 106.37 lakhs

Note 1.2 Employee Benefits

The Company has accounted for the Long term defined benefits and contribution schemes as under:

1.2.1 Defined Contribution Schemes

Contribution to Provident Fund is made monthly to the Provident Fund Authorities. Contribution to Superannuation fund for eligible employees is made by way of premium to Life Insurance Corporation of India through the Trust and charged to the Statement Profit and Loss for the year.

1.2.2 Defined Benefit Scheme

The Company has defined benefit scheme in the form of gratuity to employees.

Contribution to gratuity is made to Life Insurance Corporation of India through the Gratuity Fund as per the scheme framed by the Corporation. The disclosure under AS -15(Revised) in this regard is given hereunder:

Note 1.3 Leases

The Company has taken various commercial premises under cancellable leases. These lease agreements are normally renewed on expiry.

The rentals are expensed with reference to the lease terms and conditions.

Note 1.4 Other Disclosures

1.4.1 The Company has sent letters for confirmation to debtors, based on materiality. While a few parties have confirmed the balance, confirmations from the remaining parties are awaited.

1.4.2 The estimated useful life of the following assets has been arrived at on the basis of technical evaluation/ advice different from prescribed useful life as given in Schedule II and, as approved by the Management.

Residual value:

In respect of Fixed Assets which have completed the useful life, the carrying amount as on 01.04.2014 or 5% of the cost, whichever is lower, is retained as residual value in the books.

1.4.3 The Company has not received any communication from its suppliers claiming that they are micro, small scale or medium enterprises.

1.4.4 As the estimated recoverable amounts of the assets/cash generating units of the Company are higher than their carrying amount, no impairment of assets has been recognized in the accounts of the Company in line with AS - 28 on Impairment of Assets issued by the Institute of Chartered Accountants of India.

1.4.5 During the FY 2017-18, the Company has incurred a revenue expenditure (excluding depreciation) of Rs. 111.65 lakhs and capital expenditure of Rs. 3.60 lakhs in relation to Research & Development. (FY 2016-17: Rs. 96.07 lakhs and Rs. 1.78 lakhs respectively).

1.4.6 The Board has recommended a dividend of Rs. 4/- per equity share of face value of Rs. 10/- each (fully paid) for the FY 2017-18 aggregating to Rs. 137.34 lakhs on the total number of shares outstanding as on 31/3/2018. Dividend and Dividend Distribution Tax will be treated as an appropriation from Reserves & Surplus during the period in which it is approved by the Members. No provision is being made in the accounts for the current financial year in respect of dividend recommended by the Board after the balance sheet date.

Note 2 Previous Year Figures

Previous year’s figures have been regrouped / reclassified wherever necessary to correspond with the current year’s classification / disclosure.

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Mar 31, 2017

Note 1. Employee Benefits

The Company has accounted for the Long term defined benefits and contribution schemes as under:

2. Defined Contribution Schemes

Contribution to Provident Fund is made monthly to the Provident Fund Authorities. Contribution to Superannuation fund for eligible employees is made by way of premium to Life Insurance Corporation of India through the Trust and charged to the Profit & Loss Statement for the year.

3. Defined Benefit Scheme

The Company has defined benefit scheme in the form of gratuity to employees.

Contribution to gratuity is made to Life Insurance Corporation of India through the Gratuity Fund as per the scheme framed by the Corporation. The disclosure under AS -15(Revised) in this regard is given hereunder:

There is no reportable secondary segment, i.e., geographic segment.

Note 4. Related Party Disclosures

List of Related Parties

Name of the Party Relationship

Thejo Hatcon Industrial Services Company Subsidiary

Thejo Australia Pty Ltd Subsidiary

Thejo Brasil Comercio E Servicos Ltda Subsidiary

Thejo Engineering LatinoAmerica SpA Subsidiary

Mr. K.J. Joseph Key Management Personnel

Mr. Thomas John Key Management Personnel

Mr. V.A. George Key Management Personnel

Mr. Manoj Joseph Key Management Personnel

Mr. Rajesh John Key Management Personnel

Mr. M.D. Ravikanth Key Management Personnel

Mr. Manesh Joseph Relative of Key Management Personnel

Mrs. Rosamma Joseph Relative of Key Management Personnel

Mrs. Celinamma John Relative of Key Management Personnel

Note 5. Thejo Employee Stock Option Plan 2015

Information in respect of Options granted under Thejo Employee Stock Option Plan 2015

Name of the Plan Thejo Employee Stock Option Plan 2015 (“ESOP 2015”)

Date of Shareholders’ Approval August 26, 2015

Number of options approved under 3,00,000 options equivalent to 3,00,000 Equity shares of '' 10/- each.

the Scheme

Vesting Schedule 1/6^th of Options granted on completion of one year of grant; balance in 6

equal installments on completion of 18, 24, 30, 36, 42 and 48 months of grant.

Pricing Formula The Members have approved the Board to decide the Pricing in line with

SEBI guidelines. The Board has decided that the pricing will be not less than 75% of the prevailing market value of the Shares on the date of grant of Options as fixed by Compensation Committee based on the closing market price one day prior to date of grant.

Maximum Term of Options granted 60 Months from the date of granting of the Options.

Source of Shares Primary

Method of Settlement Equity Shares

Variation in terms of Options None

Method used for accounting Intrinsic Value Method

Impact of Fair Value Method Had the Company used Fair Value Method (under Black Scholes Method)

to expense the employee compensation cost, the Employee Stock Option Expense would have been Rs, 51.44 lakhs, which is Rs, 21.16 lakhs higher than the expense under Intrinsic Value Method of Rs, 30.28 lakhs. Had fair value been considered for expensing ESOP cost, the profit for the year and EPS (Basic and Diluted. FV of Rs, 10/- each fully paid) would have been Rs, 539.73 lakhs and Rs, 15.72/- respectively (as against Rs, 560.89 lakhs and Rs, 16.34/under intrinsic value method).

Option Movement during the year Number of Options at the beginning of the period - Nil

Number of Options Granted during the year - 1,50,007

Number of Options forfeited/lapsed during the year - 10,451

Number of Options vested during the year - Nil

Number of Options exercised during the year - Nil

Number of Shares arising as a result of exercise of options - Nil

Money Realized by exercise of Option - Nil

Loan Repaid by the Trust from exercise price received - NA

Number of Options outstanding at the end of the year - 1,39,556

Number of Options exercisable at the end of the year - Nil

Weighted Average Exercise Price Rs, 153.75/- per share

Weighted Average Fair Value/Option Rs, 88.87/Details of Options Granted to (A) Senior Managerial Personnel: specified employees Employee-Designation-Options granted-Exercise Price

Mr. M.D. Ravikanth - CfO & Secretary - 12,295 - Rs, 153.75/Mr. S. Premjit - VP (Services) - 7,377 - Rs, 153.75/Mr. Thomas K Abraham - VP (HR & Admin) - 8,607 - Rs, 153.75/Mr. S. Satish - VP (Commercials) - 7,377 - Rs, 153.75/Mr. Dinesh Bennet Fernandez (AVP - Materials) - 6,148 - Rs, 153.75/Mr. S. Suryanarayanan - Sr. Manager (Accounts) - 3,689 - Rs, 153.75/-

(B) Any other employee granted options amounting to 5% or more of option granted during the year

Employee-Designation-Options granted-Exercise Price Mr. Shine James - MD, TAPL - 9,221 - Rs, 153.75/-

(C) There is no identified employee who was granted option during the year __equal to or exceeding 1% of issued capital._

Method and Significant Assumptions Method Used: Black Scholes Method to estimate fair value Significant Assumptions Used:

Weighted Average Value of Share Price: Rs, 205/Weighted Average Price of Exercise Price: Rs, 153.75/Expected Volatility: 35.40%-38.50%

Expected Option Life: 3-4.5 years Expected Dividends: 1.81%

Risk-free interest rate: 6.93%-7.07%

Method to determine Expected Volatility: Standard deviation of the continuously compounded rate of return of the stock during the expected __option life based on historic value._

Note 6.Corporate Social Responsibility

The Company has spent Rs, 20.00 lakhs for various CSR activities.

Note 7. Other Disclosures

8. The Company has sent letters for confirmation to debtors, based on materiality. While few parties have confirmed the balance, confirmations from the remaining parties are awaited.

9. The estimated useful life of the following assets has been arrived at on the basis of technical evaluation different from prescribed useful life as given in Schedule II and, as approved by the Management.

Residual value:

In respect of Fixed Assets which have completed the useful life, the carrying amount as on 01.04.2014 or 5% of the cost, whichever is lower, is retained as residual value in the books.

10. The Company has not received any communication from its suppliers claiming that they are micro, small scale or medium enterprises.

11. As the estimated recoverable amounts of the assets/cash generating units of the Company are higher than their carrying amount, no impairment of assets has been recognized in the accounts of the Company in line with AS - 28 on Impairment of Assets issued by the Institute of Chartered Accountants of India.

12.5 During the FY 2016-17, the Company has incurred a revenue expenditure (excluding depreciation) of Rs, 90.67 lakhs and capital expenditure of Rs, 1.78 lakhs in relation to Research & Development. (FY 15-16: Rs, 88.12 lakhs and Rs, 0.20 lakhs respectively).

13. The Board has recommended a dividend of Rs, 3.50/- per equity share of face value of Rs, 10/- each (fully paid) for the FY 2016-17 aggregating to Rs, 120.17 lakhs on the total number of shares outstanding as on 31/3/2017. Dividend and Dividend Distribution Tax will be treated as an appropriation from Reserves & Surplus during the period in which

Notes forming part of Financial Statements for the year ended 31^st March, 2017

it is approved by the Members. No provision is being made in the accounts for the current financial year in respect of dividend recommended by the Board after the balance sheet date. For the previous year, provision was made in the accounts for the dividend recommended by the Board of Directors, pending approval of the Members at the Annual General Meeting. Provision for Dividend Distribution Tax was made at appropriate rate on the amount of provision made for dividend.

Note 14.Previous Year Figures

Previous year''s figures have been regrouped / reclassified wherever necessary to correspond with the current year’s classification / disclosure.

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Mar 31, 2016

1 Short term employee benefits:

All employee benefits falling due wholly within twelve months of rendering the service are classified as short term employee benefits. The benefits like salaries, wages and short term compensated absences as also the expected cost of bonus and ex-gratia are recognized in the period in which the employee renders the related service.

2 Post employment benefits:

3 Defined Contribution Schemes: Contribution to Provident Fund is made monthly to the Provident Fund Authorities. Contribution to Superannuation Fund for eligible employees is made by way of premium to Life Insurance Corporation of India through the Trust and charged to the Profit and Loss Statement, for the year.

4 Defined Benefit Scheme: The Company extends defined benefit plan in the form of gratuity to eligible employees. Contribution to gratuity is made to Life Insurance Corporation of India through the Gratuity Fund in accordance with the scheme framed and administered by the Corporation. The present value of the obligation is determined based on actuarial valuation using Projected Unit Credit Method as per the report given by the Corporation.

5 Foreign Currency Transactions

Transactions in foreign currency are recorded at the exchange rate prevailing on the date of transaction or the average opening and closing rates. The difference in the rate of exchange, if any, is accounted at the time of realization or settlement and is recognized in the Profit and Loss Statement. Monetary Assets and Liabilities denominated in foreign currencies are translated at year-end rates. The exchange differences for the period end balances are recorded at a group level and are reversed at the beginning of the next accounting period.

6 Taxes on Income

Current tax is determined on the amount of tax payable in respect of taxable income for the year. Deferred Tax is recognized on timing differences, being difference between taxable income and the accounting income that originates in one year and reverses in another. Deferred Tax Assets and liabilities are computed on the timing differences applying the tax rate and tax laws that have been enacted or substantively enacted by the Balance Sheet date. Deferred Tax Asset arising on account of unabsorbed depreciation or carry forward of business loss is recognized only to the extent that there is virtual certainty supported by convincing evidence that sufficient future taxable income will be available against which such deferred tax assets can be realized.

7 Impairment of Assets

Fixed Assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable. Recoverability of assets is measured in line with the relevant Accounting Standard. An impairment loss is recognized in the Profit and Loss Statement if the carrying amount of an asset exceeds its recoverable amount.

8 Provisions, Contingent Liabilities and Contingent Assets

Provisions are recognized when there is a present obligation as a result of a past event and it is probable that outflows will be required to settle the obligation, which can be readily estimated. Contingent liabilities are disclosed after an evaluation of the fact and legal aspects of the matter involved. Even if there is certainty of the obligation not falling on the Company, the same is considered as contingent liability. Contingent assets are neither recognized nor disclosed.

9. Dividend

Provision is made in the accounts for the dividend recommended by the Board of Directors, pending approval of the Shareholders at the Annual General Meeting. Provision for Dividend Distribution Tax is made at appropriate rate on the amount of provision made for dividend.

The Company was sanctioned Working capital facilities by consortium of bankers namely, State Bank of India, Axis Bank Limited and Indian Overseas Bank.

Limit / Liability, Terms of Repayment & Security State Bank of Mysore

Liability - Rs, Nil (Rs, 1,644.22 Lakhs)

Overdues / Defaults : Nil (Nil)

The Company has shifted its working capital facilities to the new consortium -State Bank of India, Axis Bank Limited and Indian Overseas Bank from its earlier consortium comprising State Bank of Mysore and Axis Bank Limited.

State Bank of India

Date of Sanction : 09.01.2015 Ref No. RM1/337

Limit: Cash Credit of Rs, 1,360 Lakhs Stand by CC Rs, 136 Lakhs

Period of Repayment : On Demand

Security :

Charge on all the current assets on pari-passu basis. EM of immovable properties belonging to the Company and of plots nos. 41 & 42 and 39 & 40 at Kuttisseril Lake View Garden, Korattur Village, Saidapet Taluk in the name of Mr. Manesh Joseph and Mrs.Celinamma John respectively on pari-passu basis.

Hypothecation of movable fixed assets on pari-passu basis (Security to be shared with Axis Bank Limited and Indian Overseas Bank)

Personal guarantee of : Mr. K.J. Joseph, Mr.Thomas John, Mr. Manoj Joseph,

Mr. Rajesh John, Mr. Manesh Joseph and Mrs.Celinamma John Rate of Interest - 2.00% above base rate Margin - Cash credit - 25% LC and BG - 15%

Liability - Rs, 1,050.47 Lakhs (Rs, 384.73 Lakhs)

Overdues / Defaults : Nil (Nil)

Axis Bank Limited

Date of Sanction : 03.02.2015 Ref No. AXISB/SME/S/MEG/CHN/2014-15/69 Limit : Cash Credit of Rs, 1,020 Lakhs Stand by CC Rs, 102 Lakhs Period of Repayment : On Demand Security :

Same as given to State Bank of India

Personal guarantee of : Mr. K.J. Joseph, Mr. Thomas John, Mr. Manoj Joseph,

Mr. Rajesh John, Mr. Manesh Joseph and Mrs.Celinamma John Rate of Interest - 1.85% above base rate Margin - Cash credit - 25% LC and BG - 15%

Liability - Rs, 909.79 Lakhs (Rs, 868.39 Lakhs)

Overdues / Defaults : Nil (Nil)

Indian Overseas Bank

Date of Sanction : 03.03.2015 Limit : Cash Credit of Rs, 1,000 Lakhs

Note 10 Employee Benefits

The Company has accounted for the Long term defined benefits and contribution schemes as under:

11 Defined Contribution Schemes

Contribution to Provident Fund is made monthly to the Provident Fund Authorities. Contribution to Superannuation fund for eligible employees is made by way of premium to Life Insurance Corporation of India through the Trust and charged to the Profit & Loss Statement for the year.

12 Defined Benefit Scheme

The Company has defined benefit scheme in the form of gratuity to employees.

Contribution to gratuity is made to Life Insurance Corporation of India through the Gratuity Fund as per the scheme framed by the Corporation. The disclosure under AS -15(Revised) in this regard is given hereunder:

There is no reportable secondary segment, i.e., geographic segment.

Note 13 Related Party Disclosures

List of Related Parties

Name of the Party Relationship

Thejo Hatcon Industrial Services Company Subsidiary

Thejo Australia Pty Ltd Subsidiary

Thejo Brasil Comercio E Servicos Ltda Subsidiary

Thejo Engineering LatinoAmerica SpA Subsidiary

Mr. V.A. George Key Management Personnel

Mr. K.J. Joseph Key Management Personnel

Mr. Thomas John Key Management Personnel

Mr. Manoj Joseph Key Management Personnel

Mr. Rajesh John Key Management Personnel

Mr. M.D. Ravikanth Key Management Personnel

Mr. Manesh Joseph Relative of Key Management Personnel

Mrs. Rosamma Joseph Relative of Key Management Personnel

Mrs. Celinamma John Relative of Key Management Personnel

14 The Company has sent letters for confirmation to debtors, based on materiality. While few parties have confirmed the balance, confirmations from the remaining parties are awaited.

15 The estimated useful life of the following assets has been arrived at on the basis of technical evaluation different from prescribed useful life as given in Schedule II and, as approved by the Management.

Residual value:

In respect of Fixed Assets which have completed the useful life, the carrying amount as on 01.04.2014 or 5% of the cost, whichever is lower, is retained as residual value in the books.

16 The Company has not received any communication from its suppliers claiming that they are micro, small scale or medium enterprises.

17 As the estimated recoverable amounts of the assets/cash generating units of the Company are higher than their carrying amount, no impairment of assets has been recognized in the accounts of the Company in line with AS - 28 on Impairment of Assets issued by the Institute of Chartered Accountants of India.

18 The Company has incurred a revenue expenditure (excluding depreciation) of Rs, 88.12 lakhs and capital expenditure of Rs, 0.20 lakhs in relation to Research and Development.

Note 19 Previous Year Figures

Previous year''s figures have been regrouped / reclassified wherever necessary to correspond with the current year’s classification / disclosure.

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Mar 31, 2015

1. CORPORATE INFORMATION

Thejo Engineering Limited (formerly known as Thejo Engineering Services Private Limited) (the Company) was incorporated on 26th March, 1986 as a private limited company, with its Registered Office at Aysha Building, No. 41, Whites Road, Royapettah, Chennai - 600 014. The name of the Company was changed to Thejo Engineering Private Limited vide Certificate of Incorporation dated 17th June, 2008. The Company was subsequently converted into a public limited company with consequent change of name as Thejo Engineering Limited vide special resolution passed by the Members at their meeting held on 20th June, 2008. Thejo Engineering Limited made an Initial Public Offer (IPO) of 4,72,800 equity shares of the face value of Rs. 10/- each at a premium of Rs. 392/- per share in September 2012 and the shares got listed on the EMERGE SME platform of NSE. The IPO was fully subscribed, and the Company's shares got listed on the EMERGE SME platform of NSE. The share capital of the Company increased to Rs. 171.68 lakhs in the Financial Year 2012-13. During the year 2013-14, the Company issued Bonus Shares to the existing shareholders in the ratio of 1:1 and the paid-up capital of the Company increased to Rs. 343.36 lakhs.

The Company is an Engineering Solutions provider for Bulk Material Handling, Mineral Processing and Corrosion Protection to the Core Sector Industries like mining, power, steel, cement, ports and fertilizers. The Company's services include belt conveyor installation, maintenance and operations, while its product portfolio covers design, manufacture and supply of engineering products for Bulk Material Handling, Mineral Processing and Corrosion Protection. The Company has opened a Branch in Perth, Australia during the year.

The Company has four overseas subsidiaries namely, Thejo Hatcon Industrial Services Company, Saudi Arabia, Thejo Australia Pty Ltd, Australia, Thejo Brasil Comercio E Servicos Ltda, Brazil and Thejo Engineering Latinoamerica SpA, Chile. Thejo Hatcon Industrial Services Company is primarily engaged in rubber lagging and industrial services. Thejo Australia Pty Ltd is primarily engaged in conveyor splicing, maintenance and related services. Thejo Brasil Comercio E Servicos Ltda and Thejo Engineering Latinoamerica SpA are primarily engaged in sale of products manufactured by the Company.

2. ADDITIONAL INFORMATION TO FINANCIAL STATEMENTS

Contingent Liabilities (to the extent not provided for)

Rs. in lakhs

Particulars 2014-15 2013-14

Claims against the company not acknowledged - - as debts

Guarantees issued by the Banks 999.06 1,105.79

Guarantee provided by the Company (for loan availed by

Thejo Australia Pty Ltd) 77.66 -

1,076.72 1,105.79

3.Commitments

Estimated amount of contracts remaining to be executed on capital account: Rs. 236.08 lakhs (Previous Year - Rs. 337.49 lakhs)

4. Employee Benefits

The Company has accounted for the Long term defined benefits and contribution schemes as under:

5. Defined Contribution Schemes

Contribution to Provident Fund is made monthly to the Provident Fund Authorities. Contribution to Superannuation fund for eligible employees is made by way of premium to Life Insurance Corporation of India and charged to the Profit & Loss Statement for the year.

6. Defined Benefit Scheme

The Company has defined benefit scheme in the form of gratuity to employees.

7. Related Party Disclosures

List of Related Parties

Name of the Party Relationship

Thejo Hatcon Industrial Services Company Subsidiary

Thejo Australia Pty Ltd Subsidiary

Thejo Brasil Comercio E Servicos Ltda Subsidiary

Thejo Engineering LatinoAmerica SpA Subsidiary

Mr. V.A. George Key Management Personnel

Mr. K.J. Joseph Key Management Personnel

Mr. Thomas John Key Management Personnel

Mr. Manoj Joseph Key Management Personnel

Mr. Rajesh John Key Management Personnel

Mr. M.D. Ravikanth Key Management Personnel

Mr. Manesh Joseph Relative of Key Management Personnel

Mrs. Rosamma Joseph Relative of Key Management Personnel

Mrs. Celinamma John Relative of Key Management Personnel

8. Leases

The Company has taken various commercial premises under cancellable leases. These lease agreements are normally renewed on expiry.

The rentals are expensed with reference to the lease terms and conditions.

9. The Company has sent letters for confirmation to debtors, based on materiality. While few parties have confirmed the balance, confirmations from the remaining parties are awaited.

10. Pursuant to the enactment of Companies Act, 2013, effective from 01.04.2014, the Company has adopted the useful life of individual tangible assets as specified below. Consequently, the depreciation for the year ended 31.03.2015 was higher by about ' 89.63 lakhs as compared to the depreciation calculated as per Schedule XIV of the Companies Act, 1956.

11. Residual value:

In respect of Fixed Assets which have completed the useful life, the carrying amount as on 01.04.2014 or 5% of the cost, whichever is lower, is retained as residual value in the books.

The Written-down Value of Tangible Assets whose lives have expired as at 01.04.2014 have been adjusted net-off tax, in the opening balance of Retained Earnings amounting to Rs. 91.71 lakhs.

12. The Company has not received any communication from its suppliers claiming that they are micro, small scale or medium enterprises.

13. As the estimated recoverable amounts of the cash generating assets of the Company are higher than their carrying amount, no impairment of assets has been recognized in the accounts of the Company in line with AS - 28 on Impairment of Assets issued by the Institute of Chartered Accountants of India.

14. Previous Year Figures

Previous year's figures have been regrouped / reclassified wherever necessary to correspond with the current year's classification / disclosure.

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Mar 31, 2014

Note: Closing Cash and Cash Equivalents includes Rs. 241.04 lakhs (Previous Year: Rs. 186.23 lakhs) in Fixed Deposits with Banks held as Margin Money for BG & LC.

Note 2 ADDITIONAL INFORMATION TO FINANCIAL STATEMENTS

Note 2.1 Contingent Liabilities (to the extent not provided for)

2.1.1 Claims against the company not acknowledged as debts - -

2.1.2 Guarantees issued by the Banks 1,105.79 895.69

1,105.79 895.69

Note 2.3 Employee Benefits

The Company has accounted for the Long term defined benefits and contribution schemes as under :

2.3.1 Defined Contribution Schemes

Contribution to Provident Fund is made monthly to the Provident Fund Authorities. Contribution to Superannuation fund for eligible employees is made by way of premium to Life Insurance Corporation of India and charged to Statement of Profit & Loss for the year.

2.3.2 Defined Benefit Scheme

The Company has defined benefit scheme in the form of gratuity to employees.

Contribution to gratuity is made to Life Insurance Corporation of India through the Gratuity Fund as per the scheme framed by the Corporation. The disclosure under AS -15(Revised) in this regard is given hereunder

Note 2.4 Related Party Disclosures

List of Related Parties

Name of the Party Relationship

Thejo Hatcon Industrial Services Co LLC, KSA Subsidiary

Thejo Australia Pty Limited Subsidiary

Mr. V.A. George Key ManagementPersonnel

Mr. K.J. Joseph Key Management Personnel

Mr. Thomas John Key Management Personnel

Mr. Manoj Joseph Key Management Personnel

Mr. Rajesh John Key Management Personnel

Mr. Manesh Joseph Relative of Key Management Personnel

Mrs. Rosamma Joseph Relative of Key Management Personnel

Mrs. Celinamma John Relative of Key Management Personnel

Note 2.5 Leases

Financial Leases: The company has not taken financial leases.

Operating Leases:

- The Company has taken various commercial premises and items of plant and equipment under cancellable operating leases. These lease agreements are normally renewed on expiry.

- The company has not entered into any non-cancellable leases.

2.5.1 There was a fire accident at the stores of the manufacturing unit at Ponneri on 21st April, 2013 resulting in damage to / destruction of raw material and finished goods. The stocks have been adequately insured with United India Insurance Company and the insurance claim has been settled for a sum of Rs.305.14 lakhs apart from salvage worth Rs.29.44 lakhs being taken by the Company.The insurance Company has made payment to an extent of Rs.250 lakhs as on 31st March, 2014 and the balance amount of Rs.55.14 lakhs has been received in April 2014. There was an ultimate loss of Rs.24.74 lakhs primarily on account of policy excess and the same has been treated as an exceptional item. There was no major disruption in the operations due to the accident.

2.5.2 The Company has sent letters for confirmation of balances from debtors and creditors based on materiality and the age of receivables and payables. While some parties have confirmed the balance, confirmations from the remaining parties are awaited.

2.5.3 The Company has not received any communication from its suppliers claiming that they are micro, small scale or medium enterprises.

2.5.4 As the estimated recoverable amounts of the cash generating assets of the Company are higher than their carrying amount, no impairment of assets has been recognized in the accounts of the Company in line with AS - 28 on Impairment of Assets issued by the Institute of Chartered Accountants of India.

Note 3 Previous Year Figures

Previous year''s figures have been regrouped / reclassified wherever necessary to correspond with the current year''s classification / disclosure.

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Mar 31, 2013

CORPORATE INFORMATION

Thejo Engineering Limited (formerly known as Thejo Engineering Services Private Limited) (the Company) was incorporated on 26th March, 1986 as a private limited company. The name of the Company was changed to Thejo Engineering Private Limited vide a fresh certificate of incorporation dated 17th June, 2008. The Company was subsequently converted into a public limited company with consequent change of name as Thejo Engineering Limited vide special resolution passed by the Members at their meeting held on 20th June, 2008. Thejo Engineering Ltd made an Initial Public Offer (IPO) of 4,72,800 equity shares of the face value of Rs. 10/- each at a premium of Rs 392/- per share in September 2012 for getting its shares listed on the EMERGE SME platform of NSE. The IPO was fully subscribed and the Company allotted 4,72,800 equity shares of Rs. 10/- each on 12th September, 2012. The shares were listed on 18th September, 2012. Prior to the IPO, the Company had also issued 59,236 equity shares of face value of Rs. 10/- each at a premium of Rs. 327.63/- per share on 27th August, 2012 to SIDBI Venture Capital Ltd A/c India Opportunities Fund on preferential basis. Consequently, the share capital of the Company increased from Rs. 118.47 lakhs to Rs. 171.68 lakhs.

The Registered Office of the Company is situated at Aysha Building, No. 41, Whites Road, Royapettah, Chennai, 600014. The Company is an Engineering Solutions provider for Bulk Material Handling, Mineral Processing and Corrosion Protection to the Core Sector Industries like mining, power, steel, cement, ports, fertilizers etc. The Company''s services include belt conveyor installation, maintenance and operations, while its product portfolio covers design, manufacture and supply of engineering products for Bulk Material Handling, Mineral Processing and Corrosion Protection.

The Company has two overseas subsidiaries outside India namely, Thejo Hatcon Industrial Services LLC, Saudi Arabia and Thejo Australia Pty Limited, Australia. Thejo Hatcon Industrial Services LLC is primarily engaged in rubber lagging and industrial services. Thejo Australia Pty Limited is primarily engaged in conveyor splicing, maintenance and related services.

Note 1.1 Employee Benefits

The Company has accounted for the Long term defined benefits and contribution schemes as under:

A. Defined Contribution Schemes

Contribution to Provident Fund is made monthly to the Provident Fund Authorities. Contribution to Superannuation fund for eligible employees is made by way of premium to Life Insurance Corporation of India and charged to Statement of Profit & Loss for the year.

B. Defined Benefit Scheme

The company has defined benefit scheme in the form of gratuity to employees.

Contribution to gratuity is made to Life Insurance Corporation of India through the Gratuity Fund as per the scheme framed by the Corporation. The disclosure under AS -15(Revised) in this regard is given hereunder:

Note 1.2 Segment Reporting

The Company is primarily engaged in a single segment of activity which encompasses a range of solutions to the maintenance needs of bulk handling equipment, whose risks and rewards do not vary much. However, considering the entry of the company into Saudi Arabian and Australian markets through its subsidiaries focusing on service activities, segment reporting based on manufacturing units and servicing units are presented in both standalone and consolidated accounts.

1.2.2: Subsequent to the Balance Sheet date, there was a fire accident at the stores of the manufacturing unit at Ponneri on 21st April, 2013 resulting in damage to/destruction of raw material and finished goods. The stocks have been adequately insured with United India Insurance Company and insurance claim has been initiated for a sum of Rs.422.02 lakhs (excluding duties and taxes). There is no major disruption in the operations due to the accident.

1.2.3 The Company has sent letters for confirmation of balances from debtors and creditors based on materiality and the age of receivables and payables. While some parties have confirmed the balance, confirmations from the remaining parties are awaited.

1.2.4 The Company has not received any communication from its suppliers claiming that they are micro, small scale or medium enterprises.

1.2.5 As the estimated recoverable amounts of the cash generating assets of the Company are higher than their carrying amount, no impairment of assets has been recognized in the accounts of the Company in line with AS - 28 on Impairment of Assets issued by the Institute of Chartered Accountants of India.

Note 2 Previous Year Figures

Previous year''s figures have been regrouped / reclassified wherever necessary to correspond with the current year''s classification / disclosure.