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United Nilgiri Tea Estates Company Ltd.

BSE: 530470 Sector: Agri and agri inputs
NSE: UNITEDTEA ISIN Code: INE458F01011
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United Nilgiri Tea Estates Company Ltd. (UNITEDTEA) - Auditors Report

Company auditors report

TO THE MEMBERS

Report on the Standlone Financial Statements

We have audited the accompanying standalone financial statements of THE UNITEDNILGIRI TEA ESTATES COMPANY LIMITED ("the Company") which comprise theBalance Sheet as at 31st March 2017 the Statement of Profit and Loss and theCash Flow Statement for the year then ended and a summary of the significant accountingpolicies and other explanatory information.

Management's Responsibility for the Standalone 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 standalone financial statements that give a true and fair view of the financialposition financial performance and cash flows of the Company in accordance with theaccounting principles generally accepted in India including the Accounting Standardsprescribed under section 133 of the Act.

This responsibility also includes maintenance of adequate accounting records inaccordance with the provisions of the Act for safeguarding the assets of the Company andfor preventing and detecting frauds and other irregularities; selection and application ofappropriate accounting policies; making judgments and estimates that are reasonable andprudent; and design implementation and maintenance of adequate internal financialcontrols that were operating effectively for ensuring the accuracy and completeness ofthe accounting records relevant to the preparation and presentation of the standalonefinancial statements that give a true and fair view and are free from materialmisstatement whether due to fraud or error.

Auditor's Responsibility

Our responsibility is to express an opinion on these standalone financial statementsbased on our audit.

In conducting our audit we have taken into account the provisions of the Act theaccounting and auditing standards and matters which are required to be included in theaudit report under the provisions of the Act and the Rules made thereunder. We conductedour audit of the standalone financial statements in accordance with the Standards onAuditing specified under Section 143(10) of the Act. Those Standards require that wecomply with ethical requirements and plan and perform the audit to obtain reasonableassurance about whether the standalone financial statements are free from materialmisstatement.

An audit involves performing procedures to obtain audit evidence about the amounts andthe disclosures in the standalone financial statements. The procedures selected depend onthe auditor's judgment including the assessment of the risks of material misstatement ofthe standalone financial statements whether due to fraud or error. In making those riskassessments the auditor considers internal financial control relevant to the Company'spreparation of the standalone financial statements that give a true and fair view in orderto design audit procedures that are appropriate in the circumstances. An audit alsoincludes evaluating the appropriateness of the accounting policies used and thereasonableness of the accounting estimates made by the Company's Directors as well asevaluating the overall presentation of the standalone financial statements.

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

Opinion

In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid standalone financial statements give the information requiredby the Act in the manner so required and give a true and fair view in conformity with theaccounting principles generally accepted in India of the state of affairs of the Companyas at 31st March 2017 and its profit and its cash flows for the year ended onthat date.

Report on Other Legal and Regulatory Requirements

1. As required by Section 143 (3) of the Act based on our audit we report that:

(a) 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.

(b) 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.

(c) 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.

(d) In our opinion the aforesaid standalone financial statements comply with theAccounting Standards prescribed under section 133 of the Act.

(e) On the basis of the written representations received from the directors as on 31stMarch 2017 taken on record by the Board of Directors none of the directors isdisqualified as on 31st March 2017 from being appointed as a director in termsof Section 164(2) of the Act.

(f) 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 A". Our report expresses an unmodified opinion onthe adequacy and operating effectiveness of the Company's internal financial controls overfinancial reporting.

(g) 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 as amended inour opinion and to the best of our information and according to the explanations given tous:

(i) The Company does not have any pending litigations which would impact its financialposition.

(ii) The Company did not have any long-term contracts including derivative contracts.

(iii)There has been no delay in transferring amounts required to be transferred tothe Investor Education and Protection Fund by the Company.

(iv)The Company has provided requisite disclosures in the standalone financialstatements as regards its holding and dealings in Specified Bank Notes as defined in theNotification S.O. 3407(E) dated the 8th November 2016 of the Ministry ofFinance during the period from 8th November 2016 to 30th December2016. Based on audit procedures performed and the representations provided to us by themanagement we report that the disclosures are in accordance with the books of accountmaintained by the Company and as produced to us by the Management.

2. As required by the Companies (Auditor's Report) Order 2016 ("the Order")issued by the Central Government in terms of Section 143(11) of the Act we give in"Annexure B" a statement on the matters specified in paragraphs 3 and 4 of theOrder.

Chartered Accountants

(Firm's Registration No.000829S)

C.R. Rajagopal

Partner

(Membership No.23418)

Place: Coimbatore

Date: 17th May 2017

ANNEXURE ‘A' TO THE INDEPENDENT AUDITORS' REPORT

(Referred to in paragraph 1 (f) under ‘Report on Other Legal and RegulatoryRequirements' section of our report of even date).

Report on the Internal Financial Controls Over Financial Reporting under Clause (i) ofSub-section 3 of Section 143 of the Companies Act 2013 ("the Act")

We have audited the internal financial controls over financial reporting of THEUNITED NILGIRI TEA ESTATES COMPANY LIMITED ("the Company") as of March 312017 in conjunction with our audit of the standalone financial statements of the Companyfor 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. These responsibilities includethe design implementation and maintenance of adequate internal financial controls thatwere operating effectively for ensuring the orderly and efficient conduct of its businessincluding adherence to company's policies the safeguarding of its assets the preventionand detection of frauds and errors the accuracy and completeness of the accountingrecords and the timely preparation of reliable financial information as required underthe Companies Act 2013.

Auditor's 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") issued by the Institute of Chartered Accountants of Indiaand the Standards on Auditing prescribed under Section 143(10) of the Companies Act 2013to the extent applicable to an audit of internal financial controls. Those Standards andthe Guidance Note require that we comply with ethical requirements and plan and performthe audit to obtain reasonable assurance about whether adequate internal financialcontrols over financial reporting was established and maintained and if such controlsoperated effectively 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 ofrecords that in reasonable detail accurately and fairly reflect the transactions anddispositions of the assets of the company; (2) provide reasonable assurance thattransactions are recorded as necessary to permit preparation of financial statements inaccordance with generally accepted accounting principles and that receipts andexpenditures of the company are being made only in accordance with authorisations ofmanagement and directors of the company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorised acquisition use or disposition of thecompany's assets that could have a material effect on the financial statements.

Inherent Limitations of Internal Financial Controls Over Financial Reporting

Because of the inherent limitations of internal financial controls over 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 to the best of our information and according to the explanations givento us the Company has in all material respects an adequate internal financial controlssystem over financial reporting and such internal financial controls over financialreporting were operating effectively as at March 31 2017 based on the internal controlover financial reporting criteria established by the Company considering the essentialcomponents of internal control stated in the Guidance Note on Audit of Internal FinancialControls Over Financial Reporting issued by the Institute of Chartered Accountants ofIndia.

For Fraser & Ross

Chartered Accountants

(Firm's Registration No.000829S)

C.R. Rajagopal

Partner

(Membership No.23418)

Place: Coimbatore

Date: 17th May 2017

ANNEXURE ‘B' TO THE INDEPENDENT AUDITORS' REPORT

(Referred to in paragraph 2 under "Report on Other Legal and RegulatoryRequirements"

Section of our report of even date) (i) (a) The Company has maintained proper recordsshowing full particulars including quantitative details and situation of the fixedassets.

(b) Some of the fixed assets were physically verified during the year by the Managementin accordance with a programme of verification which in our opinion provides for physicalverification of all the fixed assets at reasonable intervals.

According to the information and explanations given to us no material discrepancieswere noticed on such verification.

(c) According to the information and explanations given to us and the records examinedby us and based on the examination of the registered sale deed provided to us we reportthat the title deeds comprising all the immovable properties of land and buildings whichare freehold are held in the name of the Company as at the balance sheet date.

(ii) As explained to us the inventories were physically verified during the year bythe Management at reasonable intervals and no material discrepancies were noticed onphysical verification.

(iii) The Company has not granted loans secured or unsecured to companies firmsLimited Liability Partnerships or other parties covered in the register maintained underSection 189 of the Companies Act 2013.

(iv) The Company has not granted any loans or provided guarantees and hence provisionsof Section 185 is not applicable. The Company has made investments which are within limitsprescribed under of Section 186 of the Companies Act 2013.

(v) According to the information and explanations given to us the Company has notaccepted any deposits during the year.

(vi) The maintenance of cost records has been specified by the Central Government undersection 148(1) of the Companies Act 2013 for tea and tea products. We have broadlyreviewed the cost records maintained by the Company pursuant to the Companies (CostRecords and Audit) Rules 2014 as amended prescribed by the Central Government undersubsection (1) of Section 148 of the Companies Act 2013 and are of the opinion that primafacie the prescribed cost records have been made and maintained. We have howevernot made a detailed examination of the cost records with a view to determine whether theyare accurate or complete.

(vii) According to the information and explanations given to us in respect ofstatutory dues:

(a) The Company has been regular in depositing undisputed statutory dues includingProvident Fund Income-tax Sales Tax Service Tax Customs Duty Excise Duty Value AddedTax Cess and other material statutory dues applicable to it to the appropriateauthorities.

(b) There were no undisputed amounts payable in respect of Provident Fund Income-taxSales Tax Service Tax Customs Duty Excise Duty Value Added Tax Cess and othermaterial statutory dues in arrears as at March 31 2017 for a period of more than sixmonths from the date they became payable.

(c) There are no dues of Income-Tax Sales tax Service tax Custom Duty Excise dutyand Value added tax as on March 31 2017 on account of disputes.

(viii)The Company has not taken any loans or borrowings from financial institutionsbanks and government or has not issued any debentures. Hence reporting under clause (viii)of the Order is not applicable to the Company.

(ix) The Company has not raised moneys by way of initial public offer or further publicoffer (including debt instruments) or term loans and hence reporting under clause (ix) ofthe Order is not applicable

(x) To the best of our knowledge and according to the information and explanationsgiven to us no fraud by the Company and no material fraud on the Company by its officersor employees has been noticed or reported during the year.

(xi) In our opinion and according to the information and explanations given to us theCompany has paid / provided managerial remuneration in accordance with the requisiteapprovals mandated by the provisions of section 197 read with Schedule V to the CompaniesAct 2013

(xii) The Company is not a Nidhi Company and hence reporting under clause (xii) of theOrder is not applicable.

(xiii)In our opinion and according to the information and explanations given to us theCompany is in compliance with Sections 177 and 188 of the Companies Act 2013 whereapplicable for all transactions with the related parties and the details of related partytransactions have been disclosed in the Financial Statements as required by the applicableaccounting standards.

(xiv)During the year the Company has not made any preferential allotment or privateplacement of shares or fully or partly convertible debentures and hence reporting underclause (xiv) of the Order is not applicable to the Company.

(xv)In our opinion and according to the information and explanations given to usduring the year the Company has not entered into any non-cash transactions with itsdirectors or persons connected with them and hence provisions of Section 192 of theCompanies Act 2013 are not applicable.

(xvi)The Company is not required to be registered under section 45-IA of the ReserveBank of India Act 1934.

For Fraser & Ross

Chartered Accountants

(Firm's Registration No.000829S)

C.R. Rajagopal

Partner

(Membership No.23418)

Place: Coimbatore

Date: 17th May 2017