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Bengal Tea & Fabrics Ltd.

BSE: 532230 Sector: Industrials
NSE: BENGALTEA ISIN Code: INE665D01016
BSE 00:00 | 22 Sep 61.55 0.45
(0.74%)
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63.80

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63.80

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NSE 05:30 | 01 Jan Bengal Tea & Fabrics Ltd
OPEN 63.80
PREVIOUS CLOSE 61.10
VOLUME 505
52-Week high 86.45
52-Week low 27.00
P/E 10.76
Mkt Cap.(Rs cr) 55
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 63.80
CLOSE 61.10
VOLUME 505
52-Week high 86.45
52-Week low 27.00
P/E 10.76
Mkt Cap.(Rs cr) 55
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Bengal Tea & Fabrics Ltd. (BENGALTEA) - Auditors Report

Company auditors report

To the members of Bengal Tea & Fabrics Limited

Report on the Audit of the Financial Statements

Opinion

We have audited the accompanying financial statements of Bengal Tea& Fabrics Limited ("the Company") which comprise the balance sheet as atMarch 31 2021 the statement of profit and loss (including other comprehensive income)the cash flow statement and the statement of changes in equity for the year then endedand notes to the financial statements including a summary of significant accountingpolicies and other explanatory information (hereinafter referred to as the "financialstatement").

In our opinion and to the best of our information and according to theexplanations given to us the aforesaid financial statements give the information requiredby the Companies Act 2013("the Act") in the manner so required and give a trueand fair view in conformity with the Indian Accounting Standards prescribed under section133 of the Act read with the Companies (Indian Accounting Standards) Rules 2015 asamended and other accounting principles generally accepted in India of the state ofaffairs of the Company as at March 31 2021 its profit including other comprehensiveincome its cash flows and the changes in equity for the year ended on that date.

Basis for Opinion

We conducted our audit of the financial statements in accordance withthe Standards on Auditing (SAs) as specified under section 143(10) of the Act. Ourresponsibilities under those Standards are further described in the 'Auditor'sResponsibilities for the Audit of the 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 Act and theRules there under and we have fulfilled our other ethical responsibilities in accordancewith these requirements and the ICAI's Code of Ethics. We believe that the audit evidencewe have obtained is sufficient and appropriate to provide a basis for our audit opinion onthe financial statements.

Emphasis of Matter

We draw your attention to note 53 of the financial statements whichexplains the uncertainties and management's assessment of the financial impact on the IndAS financial statement of the company due to the lockdown and other restrictions imposedby the Government of India and other conditions related to the COVID-19 pandemicsituation for which a definitive assessment in the subsequent period is highly dependentupon circumstances as they evolve.

Our opinion is not modified in respect of this matter.

Key Audit Matters

Key audit matters are those matters that in our professional judgmentwere of most significance in our audit of the financial statements for the financial yearended March 31 2021. These matters were addressed in the context of our audit of thefinancial statements as a whole and in forming our opinion thereon and we do not providea separate opinion on 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 our report. We have fulfilled the responsibilities describedin the Auditor's responsibilities for the audit of the financial statements section of ourreport including in relation to these matters. Accordingly our audit included theperformance of procedures designed to respond to our assessment of the risks of materialmisstatement of the financial statements. The results of our audit procedures includingthe procedures performed to address the matters below provide the basis for our auditopinion on the accompanying financial statements.

Sr. No. Key Audit Matter Auditor's Response
1 Disclosure of Contingency litigation & Taxation Principal Audit Procedures
The Company has material uncertain tax positions including matters under dispute which involves significant judgement to determine the possible outcome of these disputes. > Understanding and assessing the internal control environment relating to the identification recognition and measurement of provisions for disputes potential claims and litigation and contingent liabilities;
The Company is exposed to different laws regulations and interpretations thereof. The company is also subject to number of significant claims litigations regulatory including Income tax {refer note no. 40} and various matters require legal interpretation that arises from time to time in the ordinary course of business. The assessment of the likelihood and quantum of any liability in respect of these matters can be judgmental due to the uncertainty inherent in their nature. The Company is required to assesses the need to make provision or disclose a contingency on a case-to-case basis considering the underlying facts of each litigation
> Analysed significant changes/update from previous periods and obtained a detailed understanding of such items. Assessed recent judgments passed by the court authorities affecting such change;
> Discussed the status of significant known actual and potential litigations with the management & noted that information placed before the board for such cases and
> Assessment of the management's assumptions and estimates related to the recognized provisions for disputes and disclosures of contingent liabilities in the financial statements.
We have considered this to be a key audit matter since the accounting and disclosure of claims and litigations is complex and judgmental and the amounts involved are or can be material to the financial statements.

Information other than the financial statements and Auditor's Reportthereon

The Company's Board of Directors is responsible for the otherinformation. The other information comprises the information included in the Annual Reportfor example corporate overview Management Discussion and Analysis Board's Reportincluding Annexures to Board's Report Corporate Governance and Shareholders' Informationbut does not include financial statements and our auditors' report thereon. Our opinion onthe financial statements does not cover the other information and we do not express anyform of assurance and conclusion thereon.

In connection with our audit of the financial statements ourresponsibility is to read the other information and in doing so consider whether theother information is materially inconsistent with the financial statements or ourknowledge obtained in the audit or otherwise appears to be materially misstated. If basedon the work we have performed we conclude that there is a material misstatement of thisother information; we are required to report that fact. We have nothing to report in thisregard.

Responsibilities of Management and those charged with governance forthe Financial Statements

The Company's Board of Directors is responsible for the matters statedin section 134(5) of the Act with respect to the preparation of these financial statementsthat give a true and fair view of the financial position financial performance includingother comprehensive income cash flows and changes in equity of the Company in accordancewith the accounting principles generally accepted in India including the IndianAccounting Standards (Ind AS) specified under section 133 of the Act read with theCompanies (Indian Accounting Standards) Rules 2015 as amended. This responsibility alsoincludes maintenance of adequate accounting records in accordance with the provisions ofthe Act for safeguarding of the assets of the Company and for preventing and detectingfrauds and other irregularities; selection and application of appropriate accountingpolicies; making judgments and estimates that are reasonable and prudent; and the designimplementation 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 statement that givea true and fair view and are free from material misstatement whether due to fraud orerror.

In preparing the financial statements management is responsible forassessing the Company's ability to continue as a going concern disclosing as applicablematters related to going concern and using the going concern basis of accounting unlessmanagement either intends to liquidate the Company or to cease operations or has norealistic alternative but to do so.

Board of Directors are also responsible for overseeing the Company'sfinancial reporting process.

Auditor's Responsibilities for the Audit of the Financial Statements

Our objectives are to obtain reasonable assurance about whether thefinancial statements as a whole are free from material misstatement whether due to fraudor error and to issue an auditors' report that includes our opinion. Reasonable assuranceis a high level of assurance but is not a guarantee that an audit conducted in accordancewith SAs will always detect a material misstatement when it exists. Misstatements canarise from fraud or error and are considered material if individually or in theaggregate they could reasonably be expected to influence the economic decisions of userstaken on the basis of these financial statements.

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

a. Identify and assess the risks of material misstatement of thefinancial 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 for one resulting from error as fraud may involvecollusion forgery intentional omissions misrepresentations or the override of internalcontrol;

b. 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 our opinionon whether the company has adequate internal financial controls system in place and theoperating effectiveness of such controls;

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

d. Conclude on the appropriateness of management's use of the goingconcern basis of accounting and based on the audit evidence obtained whether a materialuncertainty exists related to events or conditions that may cast significant doubt on theCompany's ability to continue as a going concern. If we conclude that a materialuncertainty exists we are required to draw attention in our auditor's report to therelated disclosures in the financial statements or if such disclosures are inadequate tomodify our opinion. Our conclusions are based on the audit evidence obtained up to thedate of our auditor's report. However future events or conditions may cause the Companyto cease to continue as a going concern; and

e. Evaluate the overall presentation structure and content of thefinancial statements including the disclosures and whether the financial statementsrepresent the underlying transactions and events in a manner that achieves fairpresentation.

Materiality is the magnitude of misstatements in the financialstatements that individually or in aggregate makes it probable that the economicdecisions of a reasonably knowledgeable user of the financial statements may beinfluenced. We consider quantitative materiality and qualitative factors in (i) planningthe scope of our audit work and in evaluating the results of our work; and (ii) toevaluate the effect of any identified misstatements in the financial statements.

We communicate with those charged with governance regarding amongother matters the planned scope and timing of the audit and significant audit findingsincluding 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 reasonably be thoughtto bear on our independence and where applicable related safeguards.

From the matters communicated with those charged with governance wedetermine those matters that were of most significance in the audit of the financialstatements for the financial year ended March 31 2021 and are therefore the key auditmatters. We describe these matters in our auditor's report unless law or regulationprecludes public disclosure about the matter or when in extremely rare circumstances wedetermine that a matter should not be communicated in our report because the adverseconsequences of doing so would reasonably be expected to outweigh the public interestbenefits of such communication.

Other Matters

We did not audit total revenue of Rs.4325 Lakhs and Rs. NIL and totalcomprehensive income of Rs. (447) Lakhs and Rs. NIL of Textile Division & Real EstateDivision for the year ended March 31 2021 respectively and the total assets of Rs. 4521Lakhs and Rs. 2032 Lakhs of Textile Division & Real Estate Division as at March 312021 respectively (including Revenue amounting to Rs. NIL profit before tax of Rs. (7)Lakhs and assets of Rs. 40 Lakhs for the discontinued operations as disclosed in theFinancial Statement- Refer Note 39) whose financial information have been audited by theother auditor and whose report has been furnished to us and our opinion in so far as itrelates to the affairs of these divisions is based solely on the report of the otherauditor. Our conclusion is not modified in respect of this matter.

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 of the Act we give in the "Annexure A" a statement on thematters specified in paragraphs 3 and 4 of the Order to the extent applicable.

2. Further to our comments in the annexure referred to in the paragraphabove as required by Section 143(3) of the Act we report that:

a) We have sought and obtained all the information and explanationswhich to the best of our knowledge and belief were necessary for the purposes of ouraudit;

b) In our opinion proper books of account as required by law have beenkept by the Company so far as appears from our examination of those books and properreturns adequate for the purpose of our audit have been received from the branch notvisited by us;

c) The balance sheet the statement of profit and loss the cash flowstatement and statement of changes in equity dealt with by this Report are in agreementwith the books of account and with the returns received from the branch not visited by us;

d) In our opinion the aforesaid financial statements comply with theIndian Accounting Standards prescribed under section 133 of the Act;

e) On the basis of the written representations received from thedirectors as on March 31 2021 taken on record by the Board of Directors none of thedirectors is disqualified as on March 31 2021 from being appointed as a director interms of section 164 (2) of the Act;

f) With respect to the adequacy of the internal financial controls overfinancial reporting of the Company and the operating effectivenessof such controls referto our separate Report in "Annexure B". Our report expresses an unmodifiedopinion on the adequacy and operating effectiveness of the Company's internal financialcontrols over financial reporting;

g) With respect to the other matters to be included in the Auditor'sReport in accordance with the requirements of the section 197(16) of the Act as amendedin our opinion and to the best of our information and according to the explanation givento us the remuneration paid by the company to its directors for the year ended March 312021 is in accordance with the provisions of section 197 of the Act read with Schedule Vof the Act.

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 financial statements - refer note 40 to the financialstatements;

ii. The Company did not have any long term contracts includingderivative contracts for which there were any material foreseeable losses;

iii. There has been no delay in transferring amounts required to betransferred to the Investor Education and Protection Fund by the Company.

For Singhi & Co.
Chartered Accountants
Firm Registration No.302049E
Sd/-
(Aditya Singhi)
Partner
Place: Kolkata Membership No. 305161
Dated: 25th June 2021 UDIN:21305161AAAAAV7373

Annexure "A" to the Auditors' Report of even date

(Referred to in paragraph 2 (vi) under 'Report on Other Legal andRegulatory Requirements' section of our report to the Members of Bengal Tea & FabricsLimited of even date)

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

b. During the year fixed assets have been physically verified by themanagement according to a regular programme of verification in a phased manner which inour opinion is reasonable having regard to the size of the Company and the nature of itsassets. As informed no material discrepancies were noticed on such verifications.

c. According to the information and explanations given to us and on thebasis of our examination of the records of the Company the title deeds of immovableproperties are held in the name of the company.

2. As informed to us the inventories of the Company except formaterials in transit and finished goods lying with third parties have been physicallyverified by the management and/or by an independent agency at the reasonable intervals.The year-end physical verification of inventories was carried out by a firm of CharteredAccountants in textile division and by the management in tea division at the Balance sheetdate. For stocks lying with third parties at the year-end written confirmations have beenobtained and in respect of goods-in-transit subsequent goods receipts have been verifiedor confirmations have been obtained from the parties. The discrepancies noticed onverification between the physical stocks and the book records were not material.

3. The Company has not granted any loans secured or unsecured tocompanies firms or parties covered in the register maintained under section 189 of theAct. Accordingly clause 3 (iii) of the Order is not applicable to the Company.

4. In our opinion and according to the information and explanationsgiven to us the Company has complied with the provisions of section 185 and 186 of theAct with respect to the loans and investments made.

5. The Company has not accepted any deposits from public covered underSections 73 to 76 or any other relevant provisions of the Act and rules framed thereunder.

6. We have broadly reviewed the books of account maintained by thecompany pursuant to the Rules made by the Central Government for the maintenance of costrecords under Section 148 (1) of the Act in respect of the Company's products to which thesaid rules are made applicable and are of the opinion that prima facie the prescribedrecords have been maintained. We have however not made a detailed examination of the saidrecords with a view to determine whether they are accurate or complete.

7. a. According to the information and explanations given to us duringthe year the Company has generally been regular in depositing with appropriateauthorities undisputed statutory dues including Provident Fund Employees' StateInsurance Income Tax Goods & Service Tax Custom duty Cess and other materialstatutory dues as applicable to it with the appropriate authorities.No undisputedstatutory dues as above were outstanding as at March 31 2021 for a period of more thansix months from the date they became payable except as mentioned below:

Name of the Statute Nature of the Dues Amount (Rs. in lakhs) Period to which the amount relates Date of Payment
Gujarat Industrial Development Act 1962 Water cess 0.46 March'19 Unpaid

b. According to the information and explanations given to usthedetails of disputed dues of sales tax income tax customsduty excise duty service taxand Cess if any which have not been deposited as atMarch 31 2021 are as follows:

Name of theStatute Nature ofDues Amount (Rs. in lakhs) Period to which the Amount relates Forum where dispute is pending
Employee State Insurance E.S.I Contribution 1.86 1.04 2004-2005 2010-2011 High Court Gujarat
Central Excise Excise Duty 26.93 2014-15 The commission of Central Excise (Appeal) Ahmedabad
Central Excise Excise Duty 9.19 2016- 17 2017- 18 The Commissioner of Central GST-Audit Ahmedabad

8. In our opinion and on the basis of information and explanationsgiven to us by the management we are of the opinion that the Company has not defaulted inrepayment of dues to financial institutions banks or debenture holders.

9. In our opinion and according to the information and explanationsgiven to us the company did not raise any money by way of initial public offer or furtherpublic offer (including debt instruments) the term loans obtained during the year wereprima facie applied by the company for the purpose for which they were obtained otherthan temporary deployment pending application.

10. During the course of our examination of books of account carriedout in accordance with generally accepted auditing practices in India we have neithercome across any incidence of fraud on or by the Company nor have we been informed of anysuch cases by the management.

11. According to the information and explanations given to us and basedon our examination of the records of the Company the Company has paid/provided formanagerial remuneration in accordance with the requisite approvals mandated by theprovisions of section 197read with Schedule V to the said Act.

12. In our opinion and according to the information and explanationsgiven to us the Company is not a Nidhi company. Accordingly paragraph 3(xii) of theOrder is not applicable.

13. According to the information and explanations given to us and basedon our examination of the records of the Company transactions with the related partiesare in compliance with sections 177 and 188 of the Act where applicable and details ofsuch transactions have been disclosed in the financial statements as required by theapplicable accounting standards.

14. According to the information and explanations given to us and basedon our examination of the records of the Company the Company has not made anypreferential allotment or private placement of shares or fully or partly convertibledebentures during the year.

15. According to the information and explanations given to us and asrepresented to us by the management and based on our examination of the records of theCompany the Company has not entered into non-cash transactions with directors or personsconnected with him. Accordingly paragraph 3(xv) of the Order is not applicable.

16. The Company is not required to be registered under section 45-IA ofthe Reserve Bank of India Act 1934.

For Singhi & Co.
Chartered Accountants
Firm Registration No.302049E
Sd/-
(Aditya Singhi)
Partner
Place: Kolkata Membership No. 305161
Dated: 25th June 2021 UDIN:21305161AAAAAV7373

Annexure "B" to the Indepedent Auditors' Report

(Referred to in paragraph (h) under 'Report on Other Legal andRegulatory Requirements' of our report of even date)

Report on the Internal Financial Controls Over Financial Reportingunder Clause (i) of Sub-section 3 of Section 143 of the Companies Act 2013 ("theAct")

We have audited the internal financial controls over financialreporting of Bengal Tea & Fabrics Limited ("the Company") as of March 312021 in conjunction with our audit of the financial statements of the Company for the yearended on that date.

Management's Responsibility for Internal Financial Controls

The Company's management is 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. 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.

Auditor's Responsibility

Our responsibility is to express an opinion on the Company's internalfinancial controls over financial reporting based on our audit. We conducted our audit inaccordance with the Guidance Note on Audit of Internal Financial Controls Over FinancialReporting (the "Guidance Note") issued by the Institute of Chartered Accountantsof India and the Standards on Auditing prescribed under Section 143(10) of the CompaniesAct 2013 to the extent applicable to an audit of internal financial controls. ThoseStandards and the Guidance Note require that we comply with ethical requirements and planand perform the audit to obtain reasonable assurance about whether adequate internalfinancial controls over financial reporting was established and maintained and if suchcontrols operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence aboutthe adequacy of the internal financial controls system over financial reporting and theiroperating effectiveness. Our audit of internal financial controls over financial reportingincluded obtaining an understanding of internal financial controls over financialreporting assessing the risk that a material weakness exists and testing and evaluatingthe design and operating effectiveness of internal control based on the assessed risk.Theprocedures selected depend on the auditor's judgement including the assessment of therisks of material misstatement of the financial statements whether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient andappropriate to provide a basis for our audit opinion on the Company's internal financialcontrols system over financial reporting.

Meaning of Internal Financial Controls over Financial Reporting

A company's internal financial control over financial reporting is aprocess designed to provide reasonable assurance regarding the reliability of financialreporting and the preparation of financial statements for external purposes in accordancewith generally accepted accounting principles. A company's internal financial control overfinancial reporting includes those policies and procedures that (1) pertain to themaintenance of records that in reasonable detail accurately and fairly reflect thetransactions and dispositions of the assets of the company; (2) provide reasonableassurance that transactions are recorded as necessary to permit preparation of financialstatements in accordance with generally accepted accounting principles and that receiptsand expenditures 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 FinancialReporting

Because of the inherent limitations of internal financial controls overfinancial reporting including the possibility of collusion or improper managementoverride of controls material misstatements due to error or fraud 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 financialcontrol over financial reporting may become inadequate because of changes in conditionsor that the degree of compliance with the policies or procedures may deteriorate.

Opinion

In our opinion and to the best of our information and according to theexplanations given to us 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 2021 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 Institute of CharteredAccountants of India.

Other Matter

Our aforesaid reports under section 143(3)(i) of the Act on theadequacy and operating effectiveness of the Internal finance controls over financialreporting in so far as it relates to Textile Division & Real Estate Division(including discontinued operations as disclosed in the Financial Statements - Refer note39) is based on the corresponding reports of the other auditors of the branches notvisited by us. Our opinion is not modified in respect of this matter.

For Singhi & Co.
Chartered Accountants
Firm Registration No.302049E
Sd/-
(Aditya Singhi)
Partner
Place: Kolkata Membership No. 305161
Dated: 25th June 2021 UDIN:21305161AAAAAV7373

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