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Andrew Yule & Company Ltd.

BSE: 526173 Sector: Others
NSE: ANDREWYU ISIN Code: INE449C01025
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VOLUME 90163
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OPEN 25.00
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VOLUME 90163
52-Week high 33.75
52-Week low 18.70
P/E
Mkt Cap.(Rs cr) 1,142
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Andrew Yule & Company Ltd. (ANDREWYU) - Auditors Report

Company auditors report

To the Members of Andrew Yule & Company Limited

Report on the Audit of Standalone IND-AS Financial Statements

(1) Qualified Opinion

We have audited the Standalone Ind AS Financial Statements of AndrewYule and Company Limited ("The Company") which comprise the Balance Sheet as at31st March 2021 and the Statement of Profit and Loss (Including other comprehensiveincome) the Statement of Changes in Equity and Statement of Cash Flows for the year thenended and notes to the financial statements including a summary of significantaccounting policies and other explanatory information.

In our opinion and to the best of our information and according to theexplanations given to us subject to the qualifications mentioned hereinafter in thisreport the aforesaid standalone IND AS Financial statements give the informationrequired by the Act in the manner so required and give a true and fair view in conformitywith the accounting principles generally accepted in India. of the state of affairs of theCompany as at 31st March 2021 profit and other comprehensive income changes in equityand its cash flows for the year ended on that date.

(2) Basis for Qualified Opinion

In the absence of Balance confirmation certificates from a considerablenumber of Sundry Debtors and Sundry Creditors from all divisions of the Company noopinion can be formed about the correctness of the balances of Sundry Debtors and SundryCreditors. Effect of the above if any on profit and loss is not ascertainable.

We have conducted our auditing in accordance with the Standards onAuditing (SAs) specified under Section 143(10) of the Companies Act 2013. Ourresponsibilities under those standards are further described in the AuditorsResponsibilities for the Audit of Financial Statements section of our report. We areindependent of the Company in accordance with the Code of Ethics issued by The Instituteof Chartered Accountants of India (ICAI) together with the ethical requirements that arerelevant to our audit of the financial statements under the provisions of the CompaniesAct 2013 and the rules thereunder and we have fulfilled our other ethicalresponsibilities in accordance with the requirement of the ICAI's Code of ethics. Webelieve that the audit evidence we have obtained is sufficient and appropriate to providea basis for our opinion.

(3) Emphasis of Matter:

Without qualifying our audit report we draw attention to thefollowing:

a. In the absence of IT system audit security ofaccounting/operational data recovery of data through IT disaster management system andmanual intervention at crucial levels of data transfer and at the time of consolidationresult in high audit risk.

b. The absence of exercise of adequate controls in the process ofmaintaining the records of the companies lease deeds and title deeds enhances the auditrisk.

c. Electrical Division has not contributed an amount of Rs. 742.70lakhs and Tea Division has not contributed an amount of Rs. 604.11 lakhs to the Company'sgratuity fund which is utilised towards payment of gratuity to employees on retirement.

d. Provident Fund recoverable of Rs. 42.97 Lakhs (Refer note No.56 ofthe financial statements) pending over 10 years from PF department of Government of Indiahas been provided for in the accounts.

e. Lease agreement of three tea gardens namely Banarhat Choonabhuttiand Haritalguri-3(of New Dooars) and Brent ford Unit of Electrical Division Kolkata hasnot been renewed since long. However lease rent is being paid by the Company. Salamiasked for by the West Bengal Government amounting to Rs.177.66 lakhs (PY-Rs. 177.66 lakhs)as per Note No. 54 is shown under "Claims not acknowledged as debts". The mattershould be resolved immediately as it disputes the Company's ownership of the tea gardensunder its operation.

f. All the inoperative bank accounts of the Company in its variousdivisions should be closed to mitigate the fraud risk. Also many bank accounts haveauthorized signatories who have retired/resigned from the Company. These former employeesshould be replaced as signatories by the officials who are currently in the employment ofthe Company.

g. BSE has imposed a fine for every quarter of 2020-21 on the Companyfor non compliance of the requirements of the Regulation 17(1) of the SEBI ( LODR)Regulations 2015 pertaining to the composition of the Board including failure to appointa woman director. These fines have not been paid by the Company as appointment ofDirectors is done by the Companies administrative ministry. The Company has taken up thematter with its administrative ministry and BSE pursuant to which the fines for the firstthree quarters have been waived by BSE and the fine for the fourth quarter of the yearamounting to Rs. 531000/- is pending . No provision for the same has been made in theaccounts.

h. Hooghly Printing Company Limited (HPCL) (transferor company)haddeclared closure of its business operations with effect from 21st January 2019 pursuantto its merger with the Andrew Yule and Company Limited (Transferee company) under a schemeof amalgamation. The matter had been referred to NCLT under Section 232 of The CompaniesAct 2013. NCLT has granted its approval vide its Order dated 3rd May 2021. Pursuant tothis order all properties assets rights powers and undertakings of the transferorcompany as well as the liabilities obligations duties of the transferor company will betransferred to the transferee company. All suits and legal proceedings for and against thetransferor company will also be valid against the transferee company from the"effective date" of transfer. As per Note No: 58 the effective date oftransfer being 04th June 2021 the merger of assets and liabilities of the transferorcompany with the transferee company will impact the standalone accounts of Andrew Yule andCompany Limited when it is given effect in the financial year 2021-22.

i. The Company has assessed the effect on its operations due to thenationwide lockdown arising out of COVID 19 and concluded that no material adjustment arerequired for the same in the accounts as per Note No.57 of the financial statements.

j. The Company has made an interest payment of Rs. 45.82 Lakhs to GSTdepartment mainly due to not making timely (monthly) reconciliation of GST Input Creditamong other reasons during the Financial year 2018-19 and such irregularities due to nonreconciliation continue till date.

k. There are a large number of debit balances in Trade Payablesaccounts which should be reconciled and adjusted with relevant heads of account.

l. The Company held preference shares in WEBFIL amounting to Rs. 204.40lakhs and accumulated dividend amounting to Rs. 161.68 lakhs is receivable. WEBFIL has notpaid dividend since inception and has defaulted in redemption of its preference shares ondue date i.e 1st April 2021. They have communicated vide letter no AY/PREF/96 dated31.03.2021 requesting deferment of payment in four annual instalments due to stress in thecompany due to ongoing pandemic out of which the first instalment amounting to Rs. 91.52lakhs has already been paid on 1.4.21.No evaluation of Expected Credit Loss (ECL) has beenmade by the Company and no resulting provision has been created.

m. Unadjusted advances of tea division include Rs 6.98 crores forpaying gratuity to workers remained outstanding for the last one year and has not beenrecovered from the Yule Group Gratuity Fund. Also an amount of Rs. 62 lakhs forelectricity duty remained outstanding for more than three years which was included underBills receivable account which has been provided for . There are old outstanding advanceslying in all divisions of the Company which should be adjusted after scrutiny.

n. The Company had a practice of charging interest on inter gardenbalances which has been discontinued since long. However interest accrued and due onthese amounting to Rs. 15 lakhs approx are still being carried forward. The same should beadjusted after scrutiny.

o. The Company should implement procedures for physical verification ofassets at reasonable intervals commensurate with the size and nature of its business.

p. In tea division an amount of Rs.82.36 lakhs paid by the Company onbehalf of the employees on account of electricity charges and labour line electrificationare not being recovered and the same has been provided for in the accounts.

q In tea division an amount of Rs.1.30 lakhs being unpaid bonus toworkers pertaining to financial years 2014-15 to 2017-18 has not been deposited in LabourWelfare Fund (LWF). The amount of interest and penalty if payable on the same could not beascertained.

r In some cases the income tax deducted at source required to be madeas perthe Income Tax Act is overlooked or delayed. Control over TDS deductions needs to beimproved upon both manually and by the system.

s In the 242nd meeting of the Board of Directors held on 2nd June 2021 the recommendation to the Board for consideration/ approval of the proposal for closureof Electrical-Kolkata operations through VRS/VSS route from own resources by September2021 have been approved by the Audit Committee and recommended to the Board for itsapproval subject to the approval of the ministry concerned and other necessaryapprovals. The effect of the same on the financials is yet to be ascertained by themanagement.

(4) Information other than the Standalone Ind AS Financial Statementsand Auditors Report thereon:

The Company's Board of Directors are responsible for the information.The other information comprises the information included in the Management Discussion andAnalysis Boards Report including the Annexure to Boards Report Business ResponsibilityReport Corporate Governance and Shareholders Information but does not include thestandalone financial statements and our auditors report thereon. The report is expected tobe made available to us after the date of this audit report.

(5) Key Audit matters

Key audit matters are those matters that in our professional judgmentwere of most significance in our audit of the standalone financial statements of thecurrent period.These matters were addressed in the context of our audit of the standalonefinancial statements as a whole and in forming our opinion thereon and we do not providea separate opinion in these matters. For each matter below our description of how ouraudit addressed the matter is provided in that context.

We have determined the matters described below to be the key auditmatters to be communicated in this report.

S.N. KEY AUDIT MATTER AUDITORS RESPONSE
1. Revenue Recognition Our audit procedures included the following:
Revenue from the sale of goods (hereinafter referred to as revenue) is recognized when the significant risks and rewards of ownership of goods is passed to the buyer. Assessed the Company's Revenue Recognition policies in line with IND AS 115 (Revenue from Contracts with Customers) and tested thereof:
Revenue from sale of goods is measured at the fair value of the consideration received or receivable net of returns or allowances trade discounts and volume rebates. Evaluated the integrity of the general information and technology control environment and testing the operating effectiveness of controls over recognition of revenue.
The timing of revenue recognition is relevant to the reported performance of the Company. Revenue is a key measure for evaluation of performance. There is a risk of revenue being recorded before control is transferred. Evaluated the design implementation and operating effectiveness of Company's controls in respect of revenue recognition.
Tested the effectiveness of such controls over revenue cut off at year end.
On a sample basis tested supporting documents for sales transactions recorded during the period closer to the year end and subsequent to the year end.
Compared revenue with historical trends where appropriate conducted further enquiries and testing.
2. Provisions and Contingent Liabilities Assessed disclosures in financial statements in respect of revenue as specified in IND AS 115.
The Company is subject to a number of legal regulatory and tax cases for which final outcome cannot be easily predicted and which could potentially result in significant liabilities. In order to get a sufficient understanding of litigations and contingent liabilities we have discussed the process of identification implemented by the Management for such provisions through various discussions with Company's legal and finance departments.
Management's disclosures with regards to contingent liabilities are presented in Note No.36-to the Standalone Ind AS Financial Statements. The assessment of the risks associated with the litigations is based on complex assumptions. We read the summary of litigation matters provided by the Company's / Unit's Legal and Finance Team.
The amounts involved and the application of accounting standards to determine the amount if any to be provided as a liability or disclosed as a contingent liability are inherently subjective. We read where applicable external legal or regulatory advice sought by the Company.
This requires use of judgment to establish the level of provisioning increases the risk that provisions and contingent liabilities may not be appropriately provided against or adequately disclosed. We discussed with the Company's / Unit's Legal and Finance Team certain material cases noted in the report to determine the Company's assessment of the likelihood magnitude and accounting of any liability that may arise.
Accordingly this matter is considered to be a key audit matter. In light of the above we reviewed the amount of provisions recorded and exercised our professional judgment to assess the adequacy of disclosures in the Standalone Ind AS financial statements
3. Delegation of Powers: We followed audit procedures to assess vulnerability of the internal financial control due to some instances of non adherence to delegation of financial authority and consequent risk involved.
Delegation of financial authority to various cadres of Management is essential for approving day to day affairs of the Company including disbursement of funds. The existing delegation of Authority of various cadres was from the Chief Executive Grade F to Manager C2. The said delegation of powers was not exhaustive and also not followed strictly resulting in vulnerability in internal financial control. Considering the risks of violation of delegated authority we have considered the delegation of power as a Key Audit Matter. We used substantive procedures on a larger sample to mitigate the said risk.
We discussed with the Management our findings regarding the risks involved.
Consequently the Committee of the Board of Directors amended the schedule of authorized signatories including delegation of powers on 19th February 2021 to cover the total structure of delegation.

(6) Responsibility of the Management and those charges with Governanceforthe Standalone Ind-AS financial statements:

The Company's Board of Directors is responsible for the matters statedin Section 134(5) of the Companies Act 2013 ("the Act") with respect to thepreparation of these standalone financial statements that give a true and fair view of thefinancial position financial performance changes in equity and cash flows of the Companyin accordance with the accounting principles generally accepted in India including theaccounting standards specified under Section 133 of the Act.

This responsibility also includes maintenance of adequate accountingrecords in accordance with the provisions of this Act for safeguarding of the assets ofthe Company and for preventing and detecting frauds and other irregularities; selectionand application of appropriate accounting policies; making judgments and estimates thatare reasonable and prudent; and design implementation and maintenance of adequateinternal financial controls that were operating effectively for ensuring the accuracy andcompleteness of the accounting records relevant to the preparation and presentation ofthe financial statements that give a true and fair view and are free from materialmisstatement whether due to fraud or error.

In preparing the financial statements management is responsible forassessing the Company's ability to continue as a going concern disclosing asapplicable matter related to going concern and using the going concern basis ofaccounting unless management either intends to liquidate the company or to ceaseoperations or has no realistic alternative but to do so.

Those Board of Directors are also responsible for overseeing theCompanies financial reporting process.

(7) Auditor's responsibilities for the Audit of the Standalone IndAs Financial statements:

Our objectives are to obtain reasonable assurance about whether thestandalone IND AS financial statements as a whole are free from material misstatementswhether due to fraud or error and to issue an auditor's report that includes our opinion.Reasonable assurance is a high level of assurance but is not a guarantee that an auditconducted in accordance with SAs will always detect a material misstatement when itexists. Misstatements can arise from fraud or error and are considered material ifindividually or in the aggregate they could reasonably be expected to influence theeconomic decisions of users taken on the basis of these IND AS financial statements.

As part of our audit in accordance with SAs we exercise professionaljudgment and maintain professional skepticism throughout the audit. We also:

Identify and assess the risks of material misstatement of the IND ASfinancial statements whether due to fraud or error design and perform audit proceduresresponsive to those risks and obtain audit evidence that is sufficient and appropriate toprovide a basis for our opinion. The risk of not detecting a material misstatementresulting from fraud is higher than one resulting from error as fraud may involvecollusion forgery intentional omissions misrepresentations or the override of internalcontrol.

Obtain an understanding of internal control relevant to the audit inorder to design audit procedures that are appropriate in the circumstances. Under Section143(3)(i) of The Companies Act 2013 we are also responsible for expressing an opinion onwhether the Company has adequate internal financial control system in place and theoperating effectiveness ofsuch controls.

Evaluate the appropriateness of the accounting policies used and thereasonableness of the accounting estimates and related disclosures made by the management.

Conclude on the appropriateness of the managements use of going concernbasis of accounting and based on the audit evidence obtained whether a materialuncertainty exists related to events or conditions that may cast a significant doubt onthe Company's ability to continue as a going concern. If we conclude that a materialuncertainty exists we are required to draw attention in our auditors report to therelated disclosures in the IND AS financial statements or if such disclosures areinadequate to modify our opinion. Our conclusions are based on the audit evidenceobtained up to the date of our auditors' report .However future events or conditions maycause the Company to cease to continue as a going concern.

Evaluate the overall presentation structure and content of the IND ASfinancial statements including the disclosures and whether the IND AS financialstatements represent the underlying transactions and events in a manner that achieves fairpresentation.

We communicate with those charged with governance regarding amongstother matters the planned scope and timing of the audit and significant audit findings.including any significant deficiencies in internal control that we identify during ouraudit.

We also provide those charged with governance with a statement that wehave complied with relevant ethical requirements regarding independence and tocommunicate with them all relationships and other matters that may reasonable be thoughtto bear on our independence and where applicable related safeguards.

(8) Other Matters;

Due to the COVID-19 pandemic nationwide lockdown and other travelrestrictions imposed by the Government/local administration some of the audit processeswere carried out by electronically by remote access. The necessary records were madeavailable by the management through digital media and were accepted as audit evidencewhile reporting for the current period.

(9) Report on Other Legal and Regulatory Requirements:

(1) As required by The Companies (Auditors Report) Order 2016 (TheOrder) issued by the Central Government of India in terms of sub section 11 of section143 of The Companies Act 2013 we give in the Annexure "A" a statement on thematters specified in paragraphs3 and 4 of the Order to the extent applicable.

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

(a) Read with our comments in Emphasis of matter paragraph we havesought and obtained all the information and explanations which to the best of ourknowledge and belief were necessary for the purposes of our audit.

(b) In our opinion proper books of account as required by law havebeen kept by the Company so far as it appears from our examination of those books andproper returns adequate for the purposes of our audit have been received from units notvisited by us.

(c) The Balance Sheet the Statement of Profit and Loss including TheStatement of Other Comprehensive Income and Statement of Cash Flows dealt with by thisReport are in agreement with the books of account

(d) In our opinion the aforesaid standalone IND AS financialstatements comply with the Accounting Standards specified under Section 133 of the Actread with the Companies (Indian Accounting Standard) Rules 2015.

(e) Section 164 (2) of the Act regarding disqualification forappointment of Director is not applicable to Government Companies vide notification no.GSR.463E dated 5th June 2015.

(f) With respect to the adequacy of the internal financial controlsover financial reporting of the Company and the operating effectiveness of such controlsrefer to our report in "Annexure B".

(g) With respect to the matters required to be reported upon as perdirections of The Comptroller and Auditor General of India as per the provisions ofSection 143(5) of The Companies Act 2013 refer to our report in Annexure C.

(h) With respect to the other matters to be included in the Auditor'sReport in accordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 inour opinion and to the best of our information and according to the explanations given tous:

(i) The Company has disclosed the impact of pending litigations on itsfinancial position in its IND AS financial statements - Refer Note 36 to the IND ASfinancial statements;

(ii) The Company has not entered into any long-term contracts includingderivative contracts for which there were material foreseeable losses.

(iii) There were no amounts which were required to be transferred tothe Investor Education and Protection Fund by the Company.

Annexure-A to the Independent Auditors Report:

Referred to in Para 9(1) of our report of even date:

(1) (a) The Company has maintained proper records showing fullparticulars including quantitative details and situation of fixed assets.

(b) No laid down procedures of physical verification of fixed assets atreasonable intervals were made available to us. The Company provided signed copies of theassets registers as evidence of physical verification which in our opinion was notcommensurate with the size and nature of business of the Company.

(c) According to the information and explanations given to us and therecords examined by us the title deeds of immovable properties are held in the name ofthe Company. However title deeds of three properties located in Kolkata were lost out ofwhich certified copies of two title deeds of Min to Park property have been obtained andone at Pearl Apartments is still pending. Further two lease deeds in respect of two teagardensTinkong and Basmatia are reportedly lying with the Allahabad Bank but the bank hasnot issued any certificate confirming possession of those lease deeds by them.

(2) According to the information and explanations given to us theinventory has been physically verified by the management at reasonable intervals and nomaterial discrepancies were noticed on such verification.

(3) According to the information and explanations given to us theCompany has not granted any loans secured or unsecured to companies firms limitedliability partnerships or other parties covered in the Register maintained under Section189 of The Companies Act 2013 except advances given to the subsidiaries of HooghlyPrinting Company Limited -Rs. 281.05 lakhs Yule Electrical Ltd. RS.4.51 lakhs and YuleEngineering Ltd. Rs. 2.84 Lakhs which are interest free in nature.

(4) According to the information and explanations given to us theCompany has not given loans guarantees made investments in and or purchased securitiesin respect of which provisions of Section 185 and 186 of The Companies Act 2013 areapplicable except advances given to subsidiaries of Hooghly Printing Company Ltd. -Rs.281.05 lakhs Yule Electrical Ltd. RS.4.51 lakhs and Yule Engineering Ltd. Rs. 2.84 Lakhswhich are interest free in nature.

(5) According to the information and explanations given to us theCompany has not accepted any deposits from the public within the meaning of sections 73 to78 or any other relevant provisions of the act and rules framed thereunder.

(6) According to the information and explanations given to us the CostRecords are maintained by the Company for all the products as per requirements of therelevant act and rules framed thereunder.

(7) (a) According to the information and explanations given to us andon the basis of examination of the books of accounts and records the Company has beenregular in depositing undisputed statutory dues including provident Fund Employees StateInsurance Income Tax Sales tax service tax GST customs duty excise duty VAT cessand any other statutory dues with the appropriate authorities. According to theinformation and explanations given to us there were no undisputed amounts payable whichwere outstanding at the year end for a period of more than six months from the date theybecame payable.

7 (b) According to the information and explanations given to us theCompany has not deposited the following dues on account of disputes with the appropriateauthorities.

Name of the Statute Nature of Dues Amount (Rs. Lakhs) Period to which the amount relates Forum where the amount is pending.
Income tax act Penalty 4.65 2004-05 CIT(Appeals)
Income Tax Act Income Tax 1929.53 2010-11to 2014-15 NCLT and CIT(Appeals)
WB Sales Tax and VAT West Bengal Sales Tax & VAT 1802.31 1979- 80 to 2006-07- Rs.462.14 Lakhs 1973-74 to 2003-04- Rs.366.79 Lakhs 1985-86 to 2003-04- Rs.908.04 Lakhs 1980- 81 to 1984-85- Rs.49.33 Lakhs 2016-17- Rs. 16.01 Lakhs Appelate& Revision Board WBTaxation Tribunal Calcutta High Court SOD Sr.Joint Commissioner
Assam Sales tax and VAT Assam Sales Tax & VAT 152.93 1996-97 to 1998-99- Rs.152.93 Lakhs Appellate Authority Revenue Board
Orissa Sales Tax and VAT Orissa Sales Tax & VAT 111.88 1999-2000 -Rs.106.24 Lakhs 2001-02-Rs.5.64 Lakhs Appelate Authority Tribunal Cuttack 2ndAppellate Authority Berhampore
Central Excise Central Excise 513.59 2006-07 to 2009-10- Rs.331.98 Lakhs 2013-14 to 2016-17- Rs.181.61 lakhs Appeal to CESTAT Commissioner of Central Excise
Service tax Service Tax 1.45 2006-07 to 2007-08-Rs.1.45 Lakhs Appeal at CESTAT
Total 4516.34

(8) According to the information and explanations given to us and basedon the examination of the books and records of the company the Company has not defaultedin the repayment of dues to banks and financial institutions.

(9) Based on the information and explanations given by the managementthe Company has not raised moneys by way of initial public offer or further public offerincluding debt instruments and term loans. Accordingly the provisions of Clause 3 (ix) ofCARO are not applicable to the company.

(10) Based on the audit procedures performed and according to theinformation and explanations given by the management no fraud on or by the Company or itsofficers/employees has been committed noticed or reported during the year.

(11) Section 197 of The Companies Act 2013 regarding payment ofmanagerial remuneration is not applicable to the Company being a government company videnotification no. GSR. 463€ dated 5th June 2015.

(12) As per information and explanations given to us the Company isnot a NIDHI Company. Therefore the provisions of Clause 3(xii) are not applicable to theCompany.

(13) As per information and explanations given to us the transactionswith the related parties are in compliance with Section 177 and 188 of The Companies Act2013 and the details have been disclosed in the Note No. 39 of the Standalone FinancialStatements as required bythe applicable Ind-AS.

(14) Based on the audit procedures performed and according to theinformation and explanations given by the management the Company has not made anypreferential allotment or private placement of shares or fully or partly convertibledebentures during the year under review. Accordingly the provisions of Clause 3(xiv) ofCARO are not applicable to the Company and hence not commented upon.

(15) Based on the audit procedures performed and according to theinformation and explanations given by the management the company has not entered into anynon cash transactions with directors or persons connected with him. Accordingly theprovisions of Clause 3(xv) of CARO are not applicable to the Company.

(16) in our opinion and according to the information and explanationsgiven to us the Company is not required to be registered under section 45IA of theReserve Bank of India act 1934 and accordingly the provisions of Clause 3 (xvi) of theorder are not applicable to the Company.

Annexure B to the Independent Auditors Report

Referred to in Para 9(2)(f) of our report of even date:

Report on the Internal Financial Controls under Clause(i) of SubSection 3 of Section 143 of the Companies Act 2013 (The Act).

(1) We have audited the internal financial controls over financialreporting of Andrew Yule and Company Limited (The Company) as on 31st March 2021 inconjunction with our audit of the standalone IND AS financial statements of the Companyfor the year ended on that date.

Managements Responsibility for Internal Financial controls

(2) The Board of Directors are responsible for establishing andmaintaining internal financial controls based on the internal control over financialreporting criteria established by the Company considering the essential components ofinternal control stated in the Guidance Note on Audit of Internal Financial Controls overfinancial reporting issued by The Institute of Chartered Accountants of India (ICAI).These responsibilities include the design implementation and maintenance of adequateinternal financial controls that were operating effectively for ensuring the orderly andefficient conduct of its business including adherence to companies policies thesafeguarding of its assets the prevention and detection of frauds and errors theaccuracy and completeness of the accounting records and the timely preparation ofreliable financial information as required under the Companies Act 2013.

Auditors Responsibility

(3) Our responsibility is to express an opinion on the Company'sinternal financial controls over financial reporting based on our audit. We conducted ouraudit in accordance with Guidance Note on Audit of Internal Financial Controls overFinancial Reporting (the " Guidance Note") and the Standards on Auditing issuedby ICAI and the Standards on Auditing as specified under Section 143 (10) of the Act tothe extent applicable to an audit of internal financial controls both applicable to anaudit of internal financial controls .Those Standards and Guidance Notes require that wecomply with ethical requirements and plan and perform the audit to obtain reasonableassurance about whether adequate internal financial controls over financial reporting wasestablished and maintained if such controls operated effectively in all material respects.

(4) Our audit involves performing procedures to obtain audit evidenceabout the adequacy of the internal financial controls system over financial reporting andtheir operating effectiveness. Our audit of internal financial controls over financialreporting include obtaining an understanding of internal financial controls over financialreporting assessing a risk that a material weakness exists and testing and evaluatingthe design and operating effectiveness of internal control based on assessed risk. Theprocedures selected depend on the auditors judgment including the assessment of therisks of material misstatement of the IND AS financial statements whether due to fraudor error.

(5) We believe that the audit evidence we have obtained is sufficientand appropriate to provide a basis for our audit opinion on the Company's internalfinancial control system over financial reporting.

Meaning of Internal Financial Controls over Financial Reporting

(6.) The Company's internal financial controls over financialreporting is a process designed to provide reasonable assurance regarding the reliabilityof financial reporting and the preparation of IND AS financial statements for externalpurposes in accordance with generally accepted accounting principles. The Company'sinternal financial controls over financial reporting includes those policies andprocedures that

(1) pertain to the maintenance of records that in reasonable detailaccurately and fairly reflect the transactions and dispositions of the assets of theCompany

(2) provide reasonable assurance that transactions are recorded asnecessary to permit preparation of IND AS financial statements in accordance withgenerally accepted accounting principles and that receipts and expenditures of theCompany are being made only in accordance with authorization of management and directorsof the Company and

(3) provide reasonable assurance regarding prevention or timelydetection of unauthorized acquisition use or disposition of the Company's assetsthat could have a material effect on the IND AS financial statements.

Inherent Limitations of Internal Financial Controls over FinancialReporting

(7) Because of the inherent limitations of internal financial controlsover financial reporting including the possibility of collusion or improper managementoverride of controls material misstatements due to fraud or error may occur and not bedetected. Also projections of any evaluation of the internal financial controls overfinancial reporting to future periods are subject to the risk that the internal financialcontrols over financial reporting may become inadequate because of changes in conditionsor that the degree of compliance with the policies or procedures may deteriorate.

Opinion

(8) Based on our audit and the information and explanations given tous we are of the opinion that:

(a) The flow of financial data from divisions units and gardens arenot seamlessly integrated with Head office accounts. It involves manual interventions atvarious stages of accounting.

(b) Absence of guidelines of IT general controls and segregation ofduties does not give reasonable assurance regarding fair maintenance and accuratereflection of records with reasonable details for transactions and disposition of assetsof the Company.

(c) Since the inception of computerization IT systems audit has notbeen carried out.

(d) IT disaster recovery plan has not been defined.

(e) The company has not obtained balance confirmation certificates froma considerable number of sundry debtors and creditors.

(f) At the time of payment of medical bills providing a doctorsprescription as per Company's rule no. 6 is not followed in some cases.

(g) Brokerage of sale of tea is charged at 1% of the sale value beforetaxes. The program for recording sales of tea division (Crop book) gives a misleadingpicture in the crop book and is ignored for the purpose of brokerage payment. Thisirregularity should be rectified at the earliest to give the correct picture in the cropbook.

(h) In tea division the system of recording and creating provisions onexpenses and liabilities should be improved upon.

(i) In some cases the income tax deducted at source required to bemade as per the Income Tax Act is overlooked or delayed. Control over TDS deductions needsto be improved upon both manually and by the system.

In view of the above observations Internal financial Controls of thecompany as at 31st March 2021 is inadequate with respect to its size diversity andcomplexity of operations based on internal control over financial reporting criteria asstated in the Guidance Note on audit of Internal Financial Controls over FinancialReporting issued by the ICAI.

Annexure C to the Independent Auditors Report

Directions under Section 143(5) of The Companies Act 2013 on the basisof our audit of standalone financial statements of Andrew Yule and Company Limited for theFY 2020-21.

We give below the answer to the questions and information asked for inthe above mentioned directions:

S.N. Directions Our Answer
1. Whether the Company has system in place to process all the accounting transactions through IT system.? If yes the implications of processing the accounting transactions outside IT system on the integrity of the accounts along with the financial implications if any may be stated. The Company does not presently possess an ERP accounting system or a fully integrated IT system among its units and Head Office and as such necessary accounting integration is being done through separate data entry mode and by applying standalone IT software. The method adopted by the Company leaves a scope of absence of data integrity thereby increasing the risk.
2. Whether there is any restructuring of an existing loan or cases of waiver/write off of debts/loans/interests etc. made by a lender to the Company due to the Companies inability to repay the loan? If yes the financial impact may be stated. There is no instance of restructuring/waiver/write offs of existing loans availed by the Company.
3. Whether funds received/receivable for specific schemes from Central/State agencies were properly accounted for/utilized as per its terms and conditions? List the cases of deviation. All funds received/receivable for specific schemes from Central/State agencies were properly accounted for under Note No. 20 relating to the head of "Other non current liabilities"

COMPLIANCE CERTIFICATE

We have conducted the audit of the Standalone accounts of Andrew Yuleand Company Limited for the Year ended 31st March 2021 in accordance with the directions/ sub-directions issued by The Comptroller and Auditor General of India under Section143(5) of the Companies Act 2013 and certify that we have complied with all directions /sub-directions issied to us.

For S. K. BASU & CO.
CHARTERED ACCOUNTANTS
(FIRM NO: 301026E)
(S. Basu)
PARTNER
(MN: 053225)
(UDIN : 21053225AAAAAH2981

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