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Grob Tea Co Ltd.

BSE: 538367 Sector: Agri and agri inputs
NSE: GROBTEA ISIN Code: INE646C01018
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Grob Tea Co Ltd. (GROBTEA) - Auditors Report

Company auditors report

To the Members of The GROB TEA COMPANY LIMITED

Report on the financial statements

We have audited the accompanying financial statements of The Grob Tea CompanyLimited ("the Company") which comprise the Balance Sheet as at 31st March2016 the Statement of Profit and Loss the Cash Flow Statement and a summary of thesignificant accounting policies and other explanatory information for the year then ended.

Management's responsibility for the financial statements

The Company's Board of Directors is responsible for the matters stated in Section134(5) of the Companies Act 2013 ("the Act") with respect to the preparation ofthese financial statements that give a true and fair view of the financial positionfinancial performance and cash flows of the Company in accordance with the accountingprinciples generally accepted in India including the Accounting Standards specified underSection 133 of the Act read with Rule 7 of the Companies (Accounts) Rules 2014. Thisresponsibility also includes maintenance of adequate accounting records in accordance withthe provisions of the Act for safeguarding the assets of the Company and for preventingand detecting frauds and other irregularities; selection and application of appropriateaccounting policies; making judgments and estimates that are reasonable and prudent; anddesign implementation and maintenance of adequate internal financial controls that wereoperating effectively for ensuring the accuracy and completeness of the accountingrecords relevant to the preparation and presentation of the financial statements thatgive a true and fair view and are free from material misstatement whether due to fraud orerror.

Auditor's responsibility

Our responsibility is to express an opinion on these financial statements based on ouraudit.

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

We conducted our audit in accordance with the Standards on Auditing specified underSection 143(10) of the Act. Those standards require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetherthe financial statements are free from material misstatement.

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

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

Opinion

In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid financial statements give the information required by the Actin the manner so required and give a true and fair view in conformity with the accountingprinciples generally accepted in India of the state of affairs of the Company as at 31stMarch 2016 and its profit and its cash flows for the year ended on that date.

Report on other legal and regulatory requirements

1. As required by the Companies (Auditor's Report) Order 2016 ("the Order")issued by the Central Government of India in terms of sub-section (11) of section 143 ofthe Act we give in the "Annexure A" a statement on the matters specified inparagraphs 3 and 4 of the Order.

2. As required by Section 143 (3) of the Act we report that:

i. We have sought and obtained all the information and explanations which to the bestof our knowledge and belief were necessary for the purposes of our audit.

ii. In our opinion proper books of account as required by law have been kept by theCompany so far as it appears from our examination of those books.

iii. The Balance Sheet the Statement of Profit and Loss and the Cash flow Statementdealt with by this Report are in agreement with the books of account.

iv. In our opinion the aforesaid financial statements comply with the AccountingStandards specified under Section 133 of the Act read with Rule 7 of the Companies(Accounts) Rules 2014.

v. On the basis of the written representations received from the directors as at 31stMarch 2016 and taken on record by the Board of Directors none of the directors isdisqualified as at 31st March 2016 from being appointed as a director in terms of Section164 (2) of the Act.

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

vii. With respect to the other matters to be included in the Auditor's Report inaccordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 in our opinionand to the best of our information and according to the explanations given to us:

a. The Company has disclosed the impact of pending litigations on its financialposition in its financial statements - Refer Note No. 27.1 to the financial statements.

b. The Company did not have any long-term contracts including derivatives contracts forwhich there were any material foreseeable losses.

c. There has been no delay in transferring amounts required to be transferred to theinvestor education and protection fund by the Company.

For G. P. AGRAWAL & CO.
CHARTERED ACCOUNTANTS
(F.R No. 302082E)
7A KIRAN SHANKAR RAY ROAD (CA. SUNITA KEDIA)
KOLKATA - 700 001 Membership No. : 60162
Dated : 28th May 2016 Partner

ANNEXURE "A" TO INDEPENDENT AUDITORS' REPORT

Statement referred to in paragraph 1 of 'Report on Other Legal and RegulatoryRequirements' of our report of even date to the members of The Grob Tea Company Limitedon the financial statements for the year ended 31st March 2016.

(i) a) The Company has maintained proper records showing full particulars includingquantitative details and situation of its fixed assets.

b) The fixed assets of the Company have been physically verified at the end of the yearby the management. To the best of our knowledge no material discrepancy was noticed onsuch verification.

c) According to the information and explanations given to us and on the basis of ourexamination of the records of the Company the title deeds of immovable properties areheld in the name of the Company except for one leasehold land and development and onebuilding property having aggregate gross block of Rs. 195749000/- and net block of Rs.176935663/- for which title deed is not in the name of the Company:

Sl. No. Particulars Gross Block Net Block
( Rs ) ( Rs )
1. Leasehold land (Martycherra Tea Esate) 65000000 65000000
2. Building 130749000 111935663
Total 195749000 176935663

(ii) The inventories (excluding stocks lying with third parties) have been physicallyverified during the year by the management at the end of year and no materialdiscrepancies were noticed on such physical verification. In respect of inventory lyingwith third parties these have been verified with reference to subsequent sale.

(iii) The Company has not granted any loan secured or unsecured to companies firmslimited liability partnerships or other parties covered in the register maintained undersection 189 of the Act. Therefore clauses (iii) (a) (b) and (c) of paragraph 3 of thesaid order are not applicable to the Company.

(iv) In our opinion and according to the information and explanations given to usthere are no guarantees and securities granted in respect of which provisions of Section185 and 186 of the Companies Act 2013 are applicable. Based on our audit proceduresperformed and according to information and explanations given by the management theCompany has complied with provisions of Section 186 of the Act in respect of loans grantedand investments made during the year.

(v) The Company has not accepted any deposit within the meaning of section 73 to 76 orany other relevant provisions of the Act and the rules framed there under. The directivesissued by the Reserve Bank of India are not applicable to the Company.

(vi) We have broadly reviewed the books of account maintained by the Company in respectof products where pursuant to the rules made by the Central Government the maintenance ofCost records has been prescribed under section 148(1) of the Act and are of the opinionthat prima facie the prescribed accounts and records have been made and maintained. Wehowever as not required have not made a detailed examination of such records.

(vii) (a) On the basis of our examination the Company is regular in depositingundisputed statutory dues including provident fund employees' state insurance incometax sales tax service tax duty of customs duty of excise value added tax cess andother statutory dues to the extent applicable with appropriate authorities.

According to the records the following statutory dues were outstanding as at 31stMarch 2016 for a period of more than six months from the date they became payable:

Name of the statute Nature of dues Amount ( Rs ) Period to which it pertains Paid on
Employee State Insurance Act 1948 ESI 109439 2012-13 - 2015-16 29.04.2016

(b) The disputed statutory dues aggregating to Rs 14901496/- that have not beendeposited on account of matters pending before appropriate authorities are as under:

Sl. No. Name of the Statute Nature of dues Period to which pertain Amount (Rs.) Forum where the dispute is pending
1 Income Tax Act 1961 Income Tax 2008-09 1547530 Commissioner of Income Tax (Appeals)
2 Income Tax Act 1961 Income Tax 2011-12 1937270 Commissioner of Income Tax (Appeals)
3 Income Tax Act 1961 Income Tax 2012-13 10591520 Commissioner of Income Tax (Appeals)
4 Income Tax Act 1961 Income Tax 2013-14 407800 Commissioner of Income Tax (Appeals)
5 Finance Act 1994 Service Tax and Penalty 2012-13 72840 Central Excise & Services Tax Appellate Tribunal
6 Central Sales Tax (Assam) Rules 1957 Central Sales Tax 2012-13 76394 Superintendent of Taxes
7 Central Sales Tax (Assam) Rules 1957 Central Sales Tax 2013-14 264142 Superintendent of Taxes
8 Assam Value Added Tax 2005 Penalty 2012-13 2000 Superintendent of Taxes
9 Assam Value Added Tax 2005 Penalty 2013-14 2000 Superintendent of Taxes
TOTAL 14901496

(viii) The Company has not defaulted in repayment of loans or borrowings to banks. TheCompany has not taken any loans and borrowings from financial institutions or Governmentand has not issued any debentures.

(ix) In our opinion and according to the information and explanations given to us theCompany has neither raised any money by way of initial public offer or further publicoffer (including debt instruments) nor taken any term loans during the year.

(x) According to the information and explanations given to us no material fraud by theCompany or on the Company by its officers or employees has been noticed or reported duringthe year.

(xi) According to the information and explanations give to us and based on ourexamination of the records of the Company the Company has paid/provided for managerialremuneration in accordance with the requisite approvals mandated by the provisions ofsection 197 read with Schedule V to the Act.

(xii) In our opinion the Company is not a Nidhi company. Therefore clause (xii) ofparagraph 3 of the said order is not applicable to the Company.

(xiii) According to the information and explanations given to us and based on ourexamination of the records of the Company transactions with the related parties are incompliance with sections 177 and 188 of the Act where applicable and details of suchtransactions have been disclosed in the financial statements as required by the applicableaccounting standards.

(xiv) According to the information and explanations give to us and based on ourexamination of the records of the Company the Company has not made any preferentialallotment or private placement of shares or fully or partly convertible debentures duringthe year.

(xv) According to the information and explanations given to us and based on ourexamination of the records of the Company the Company has not entered into non-cashtransactions with directors or persons connected with them. Accordingly clause (xv) ofparagraph 3 of the said order is not applicable to the Company.

(xvi) According to the information and explanations given to us the provisions ofSection 45-IA of the Reserve Bank of India Act 1934 are not applicable to the Company.

For G. P. AGRAWAL & CO.
CHARTERED ACCOUNTANTS
(F.R No. 302082E)
7A KIRAN SHANKAR RAY ROAD (CA. SUNITA KEDIA)
KOLKATA - 700 001 Membership No. : 60162
Dated : 28th May 2016 Partner

"ANNEXURE B" TO THE INDEPENDENT AUDITOR’S REPORT OF EVEN DATE ON THEFINANCIAL STATEMENTS OF THE GROB TEA COMPANY LIMITED

Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section143 of the Companies Act 2013 ("the Act")

We have audited the internal financial controls over financial reporting of The GrobTea Company Limited ("the Company") as of March 312016 in conjunction withour audit of the financial statements of the Company for the year ended on that date.

Management’s Responsibility for Internal Financial Controls

The Company's management is responsible for establishing and maintaining internalfinancial controls based on the internal control over financial reporting criteriaestablished by the Company considering the essential components of internal control statedin the Guidance Note on Audit of Internal Financial Controls Over Financial Reportingissued by the Institute of Chartered Accountants of India ("ICAI"). Theseresponsibilities include the design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the orderly and efficientconduct of its business including adherence to Company's policies the safeguarding ofits assets the prevention and detection of frauds and errors the accuracy andcompleteness of the accounting records and the timely preparation of reliable financialinformation as required under the Companies Act 2013.

Auditors’ Responsibility

Our responsibility is to express an opinion on the Company's internal financialcontrols over financial reporting based on our audit. We conducted our audit in accordancewith the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting(the "Guidance Note") and the Standards on Auditing to the extent applicable toan audit of internal financial controls both issued by the ICAI. Those Standards and theGuidance Note require that we comply with ethical requirements and plan and perform theaudit to obtain reasonable assurance about whether adequate internal financial controlsover financial reporting were established and maintained and if such controls operatedeffectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls system over financial reporting and their operatingeffectiveness. Our audit of internal financial controls over financial reporting includedobtaining an understanding of internal financial controls over financial reportingassessing the risk that a material weakness exists and testing and evaluating the designand operating effectiveness of internal control based on the assessed risk. The proceduresselected depend on the auditor's judgement including the assessment of the risks ofmaterial misstatement of the financial statements whether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the Company's internal financial controls systemover financial reporting.

Meaning of Internal Financial Controls Over Financial Reporting

A company's internal financial control over financial reporting is a process designedto provide reasonable assurance regarding the reliability of financial reporting and thepreparation of financial statements for external purposes in accordance with generallyaccepted accounting principles. A company's internal financial control over financialreporting includes those policies and procedures that

(1) Pertain to the maintenance of records that in reasonable detail accurately andfairly reflect the transactions and dispositions of the assets of the Company;

(2) Provide reasonable assurance that transactions are recorded as necessary to permitpreparation of financial statements in accordance with generally accepted accountingprinciples and that receipts and expenditures of the Company are being made only inaccordance with authorisations of management and directors of the Company; and

(3) Provide reasonable assurance regarding prevention or timely detection ofunauthorised acquisition use or disposition of the Company's assets that could have amaterial effect on the financial statements.

Inherent Limitations of Internal Financial Controls Over Financial Reporting

Because of the inherent limitations of internal financial controls over financialreporting including the possibility of collusion or improper management override ofcontrols material misstatements due to error or fraud may occur and not be detected.Also projections of any evaluation of the internal financial controls over financialreporting to future periods are subject to the risk that the internal financial controlover financial reporting may become inadequate because of changes in conditions or thatthe degree of compliance with the policies or procedures may deteriorate.

Opinion

In our opinion the Company has in all material respects an adequate internalfinancial controls system over financial reporting and such internal financial controlsover financial reporting were operating effectively as at March 31 2016 based on theinternal control over financial reporting criteria established by the Company consideringthe essential components of internal control stated in the Guidance Note on Audit ofInternal Financial Controls Over Financial Reporting issued by the ICAI.

For G. P. AGRAWAL & CO.
CHARTERED ACCOUNTANTS
(F.R No. 302082E)
7A KIRAN SHANKAR RAY ROAD (CA. SUNITA KEDIA)
KOLKATA - 700 001 Membership No. : 60162
Dated : 28th May 2016 Partner