TO THE MEMBERS OF ARCUTTIPORE TEA COMPANY LIMITED
Report on the Financial Statements
We have audited the accompanying Financial Statements of ARCUTTIPORE TEA COMPANY
LIMITED ("the company") which comprise the Balance Sheet as at 31st March,
2018 the Statement of Profit and Loss and the Cash Flow Statement of the Company for the
year ended on that date, and a summary of significant accounting policies and other
explanatory information.
Managements 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 and
presentation of these financial statements that give a true and fair view of the financial
position, financial performance and cash flows of the Company in accordance with the
accounting principles generally accepted in India, including the Indian Accounting
Standards specified under Section 133 of the Act, read with relevant rules issued there
under . This responsibility also includes maintenance of adequate accounting records in
accordance with the provisions of the Act for safeguarding 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 financial
controls, that are operating effectively for ensuring the accuracy and completeness of the
accounting records relevant to the preparation and presentation of the financial
statements that give a true and fair view and are free of material misstatement, whether
due to fraud or error.
Auditors Responsibility
Our responsibility is to express an opinion on these financial statements based on our
audit.
We have taken into accounts 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 financial statements in accordance with the Standards on
Auditing specified 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 of material misstatement.
An Audit involves performing procedures to obtain audit evidence about the amounts and
disclosures in the financial statements. The procedures selected depend on the Auditors
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 financial control relevant to the companys 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 accounting policies used and the reasonableness of the accounting
estimates made by Companys Directors, as well as evaluating the overall presentation of
the financial 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.
Basis for Qualified Opinion: -
i. Note 12.4 regarding, non-provision / non-ascertainment of diminution in value of
shares held as stock in trade, the eventual shortfall that may arise there from cannot be
commented upon by us.
ii. Note 12.5 regarding non-availability of shares held as stock in trade for
physical verification.
iii. Note 21.1 regarding non-provision of interest on loan taken.
iv. Note 28 regarding non-provision and basis of ascertainment of gratuity liability on
the managements estimate, which may be different if ascertained on the basis of actuarial
valuation and the impact of which is not ascertainable. This is not in consonance with
Accounting Standard-15 on Accounting of Retirement benefits issued by the Institute of
Chartered Accountants of India (ICAI).
Due to non provision for interest and for gratuity liability, the Loss for the year is
lower by Rs.21,59,364/- (Previous year Rs.16,46,534/-), Reserve and Surplus (Debit Balance
) are lower and current liabilities at the year end are lower by Rs.2,07,15,440/-
(Previous year Rs.1,85,56,076/-) (to the extent ascertained).
Opinion
In our opinion and to the best of our information and according to the explanations
given to us, except for the effects of the matters described in the Basis for Qualified
Opinion paragraph, 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 31st
March, 2018 and its loss and its Cash Flows for the year ended on that date.
Emphasis of Matters
We draw attention to the following matters in the Notes to the Financial Statements:
Note 12.4 regarding, non-provision / non-ascertainment of diminution in value of shares
held as stock in trade, the eventual shortfall that may arise there from.
Our opinion is not modified in respect of these matters.
Note 21.1 regarding non-provision of interest on loan taken.
Our opinion is not modified in respect of these matters.
Note 28 regarding non-provision and basis of ascertainment of gratuity liability on the
managements estimate, which may be different if ascertained on the basis of actuarial
valuation and the impact of which is not ascertainable. This is not in consonance with
Accounting Standard-15 on Accounting of Retirement benefits issued by the Institute of
Chartered Accountants of India (ICAI) i.e. on Actuarial basis.
Our opinion is not modified in respect of these matters.
Report on Other Legal and Regulatory Requirements
1. 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 & 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 financial statements comply with the Accounting
Standards specified under Section 133 of the Act, read with Rule 7 of the Companies
(Accounts) Rules, 2014
e. On the basis of written representations received from the directors and taken on
record by the Board of Directors, none of the Directors is disqualified as on 31st March
2018 from being appointed as a Director in terms of Section 164(2) of the Act.
f. With respect to the adequacy of the internal financial controls over financial
reporting of the Company and the operating effectiveness of such controls, refer to our
separate Report in "Annexure A".
g. With respect to the other matters to be included in the Auditors 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 does not have any pending litigations which would impact its financial
position except to Note No 8.2 & 8.3 (Refer) to the 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.
2. As required by the Companies (Auditors 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 B", a statement on the matters specified in
paragraphs 3 and 4 of the Order to the extent applicable.
|
For MRK & ASSOCIATES |
|
Chartered Accountants |
|
FRN 007726C |
|
Sanjiv Kumar Tiwai |
| Place: Kolkata |
(Partner) |
| Date: 29th May 2018 |
Membership No. 308983 |
"Annexure B" to the Independent Auditors Report of even date
Statement under Companies (Auditors Report) Order, 2016
i. (a) Proper records showing full particulars including quantitative details and
situation of its fixed assets are being updated from time to time by the company.
(b) As explained to us, the fixed assets of the Company have been physically verified
by the management during the year. No material discrepancies were noticed on such physical
verification. In our Opinion, this periodicity of physical verification is reasonable
having regard to the size of company and nature of its assets.
(c) According to information and explanations given to us and on the basis of our
examination of the records of the company, the title deeds of immovable properties are
held in the name of the company read with
Note No.9.4.
ii. (a) The Inventories of the Company have been physically verified by the management
at regular intervals. There is inventory of finished stock of tea at the year end
with the Company . In our opinion and according to the information and explanations given
to us, no discrepancies were noticed on physical verification.
(b) In our opinion and according to the information and explanations given to us, the
procedures of physical verification of inventory followed by the management are reasonable
and adequate in relation to the size of the company and nature of its business.
iii. (a) The company has taken/granted certain unsecured loan and /or advances in the
nature of loans from/to the companies, firms, parties covered under the register
maintained under Section 189 of the Companies Act 2013. In the absence of relevant
information and related documents/records, we are unable to quantify the number of
companies and amount involved in the transactions. There is however, interest free loan of
Rs.4,20,95,956/- outstanding at the year end with the company from companies other than
the companies and parties covered in the said register. The Company has interest free loan
of Rs. 22,85,196/-taken from directors and their relatives at the year end . The company
has also taken, and has at the year end outstanding of interest bearing unsecured loans
amounting Rs 3,31,21,062/- in aggregate (previous year Rs 2,24,19,994/-) from several
companies ,parties and including of Rs…1,00,78, 671/- from an individual under pledge
of shares by the promoters on the company ‘s behalf .. Moreover, the company has
given interest free advance in the nature of unsecured loan amounting Rs.
21,50,000/-(previous year Rs. 5,87,068/-) to bodies corporate at the year end and the same
are receivable on demand. The Company has made related parties transactions which are
stated in Note 26 of the Financial Statements.
(b) In our opinion and according to the information and explanations given to us, the
rate of interest and other terms and conditions of the said unsecured loans taken and
given by the company, are not prima facie prejudicial to the interest of the company.
(c) In respect of the said loans and interest thereon , there are no overdue amounts
and the principal loan amounts are repayable on demand, except for the interest free long
term loan Rs.1,58,00,000/- which has been renewed for re payment for a further a period of
3 years.
(d) In case of other loans taken and or given, there is no stipulation for payment of
principal and interest amount except as stated in Para iii(a) and iii(c). As such, we are
unable to ascertain whether such terms are prejudicial to the interest of the company and
whether the said loan is overdue for repayment.
iv. In our opinion and according to the information and explanations given to us, the
Company has complied with the provisions of sections 185 and 186 of the Companies Act,
2013 in respect of loans excepting loan taken from the individual pursuant to the terms
and conditions of the loan agreement dated 21.01.2017 made by the individual and the
companies and investment made.
v The Company has not accepted any deposit from the public during the year.
vi. To the best of our knowledge and as explained, the Central Government has not
prescribed the maintenance of cost records under clause 148 (1) of the Companies Act,
2013, for the year for the products of the Company. No Cost Audit has been conducted
during the year.
vii. As given in Note 7.2 , 7.3 & 7.4 and according to the
information and explanations given to us in respect of statutory dues:
(a) The Company has been regular in depositing with the appropriate authorities
undisputed statutory dues including Provident Fund, Income Tax, Sales-Tax, Value Added
tax, GST, Professional Tax. Cess on Green leaf and other statutory dues with the
appropriate authorities during the year. The old statutory dues on these accounts for the
earlier years, as stipulated, are being deposited with the concerned authorities (read
with Note 7.4 ) .
(b)According to information and explanations given to us, there are no dues of
Provident Fund excepting Rs.27,39,093.70/-- (previous year Rs.49,57,652.92/-). income tax
& sales tax excepting Rs.6,31,497/-- (previous year Rs.6,26,594/-), Value Added tax
excepting Rs.2,60,359/- ( previous year Rs. 2,84,778/-) wealth tax, service tax,
professional tax excepting Rs,1,184,465/- (Previous year Rs.1,21,322/-)., custom duty,
excise duty or cess on green leaf excepting Rs.28,15,798/-- (Previous year Rs.36,71,077/-)
GST Rs. 16,33,312/- ( Previous Year NA ), land Revenue tax Rs.14,61,073/- (previous year
Rs.14,05,943/-) as at 31st March, 2018 (including the outstanding for a period
of more than six months from the date they became payable), outstanding on account of any
dispute, other than the following:
| Name of Statute |
Nature of Dues |
Amount Rs. |
Period to which the amount relates |
Forum where dispute is pending |
| Income tax Act 1961 |
Income tax |
Assessment per CIT (A) –IV Order dated 17.12.2013 in appeal |
Asst Year 2002- 03 |
Appettate Tribunal |
| Income tax Act 1961 |
Income tax |
Assessment per CIT (A) -2 Order dated 21.07.2015 in appeal |
Asst year 2003- 04 |
Appettate Tribunal |
| Wealth Tax Act |
Demand raised in the Order of regular assessment u/s 17& 16(5) |
5,370 |
Asst Year 2002- 03 |
|
| Wealth Tax Act |
Demand raised in the Order of regular assessment u/s 17& 16(5) |
15,303 |
Asst Year 2003- 04 |
|
| Wealth Tax Act |
Demand raised on the Order f regular assessment u/s 17& 16(5) |
12,921 |
Asst Year 2004- 05 |
|
viii. In our opinion and according to the information and explanations given to us, the
Company has not defaulted in the repayment of dues to banks and Financial institution
excepting overdue installments in aggregate of Rs. 5,83,875/-( including overdue interest
Rs.3,64,302/-) at the year end .The Company has not taken any loan from the government and
has not issued any debentures.
ix. Based upon the audit procedures performed and the information and explanations
given by the management, the company has not raised moneys by way of initial public offer
or further public offer including debt instruments and term Loans. Accordingly, the
provisions of clause 3 (ix) of the Order are not applicable to the Company and hence not
commented upon.
x. Based upon the audit procedures performed and the information and explanations given
by the management, we report that no fraud by the Company or on the company by its
officers or employees has been noticed or reported during the year.
xi. Based upon the audit procedures performed and the information and explanations
given by the management, no managerial remuneration has been paid or provided in
accordance with the requisite approvals mandated by the provisions of section 197 read
with Schedule V to the Companies Act as the same have been waived by the Managing Director
due to persisting losses and or loss for the year . xii In our opinion, the Company is not
a Nidhi Company. Therefore, the provisions of clause 4 (xii) of the Order are not
applicable to the Company.
xiii According to the information and explanations given to us and based on our
examination of the record of the Company , transactions with the related parties are in
compliance with section 177 and 188 of Companies Act, 2013 and the details thereof have
been disclosed in the Financial Statements as required by the applicable accounting
standards.
xiv Based upon the audit procedures performed and the information and explanations
given by the management, the company has not made any preferential allotment or private
placement of shares or fully or partly convertible debentures during the year under
review. Accordingly, the provisions of clause 3 (xiv) of the Order are not applicable to
the Company and hence not commented upon. xv Based upon the audit procedures performed and
the information and explanations given by the management, the company has not entered into
any non-cash transactions with directors or persons connected with him. Accordingly, the
provisions of clause 3 (xv) of the Order are not applicable to the Company and hence not
commented upon.
xvi The company is not required to be registered under section 45 IA of the Reserve
Bank of India Act, 1934 and accordingly, the provisions of clause 3 (xvi) of the Order are
not applicable to the Company and hence not commented upon.
|
For M R K ASSOCIATES |
|
Chartered Accountants |
|
FRN 007726C |
|
Sanjiv Kumar Tiwai |
| Place: Kolkata |
(Partner) |
| Date: 29th May 2018 |
Membership No. 3038983 |
"Annexure A" to the Independent Auditors 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 financial controls over financial reporting of Arcuttipore
Tea Company Limited ("the Company") as of March 31, 2018 in conjunction with our
audit of the financial statements of the Company for the year ended on that date.
Managements Responsibility for Internal Financial Controls
The Companys management is responsible for establishing and maintaining internal
financial 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
issued by the Institute of Chartered Accountants of India".] These responsibilities
include the design, implementation and maintenance of adequate internal financial controls
that were operating effectively for ensuring the orderly and efficient conduct of its
business, including adherence to companys 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.
Auditors Responsibility
Our responsibility is to express an opinion on the Companys 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 financial controls system over financial 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 auditors judgement including the assessment of the risks of
material misstatement of the financial statements, whether due to fraud or error.
We believe that the audit evidence we have obtained is sufficient and appropriate to
provide a basis for our audit opinion on the Companys internal financial controls system
over financial reporting.
Meaning of Internal Financial Controls Over Financial Reporting
A companys internal financial control over financial reporting is a process designed
to provide reasonable assurance regarding the reliability of financial reporting and the
preparation of financial statements for external purposes in accordance with generally
accepted accounting principles. A companys 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 reflect 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 authorizations of
management and directors of the company; and (3) provide reasonable assurance regarding
prevention or timely detection of unauthorized acquisition, use, or disposition of the
companys 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 March 31, 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 M R K ASSOCIATES |
|
Chartered Accountants |
|
FRN 007726C |
|
Sanjiv Kumar Tiwai |
| Place: Kolkata |
(Partner) |
| Date: 29th May 2018 |
Membership No. 3038983 |
+91-9892691696
