Arcuttipore Tea Co Ltd Directors Report.

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