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Dhunseri Tea & Industries Ltd.

BSE: 538902 Sector: Agri and agri inputs
NSE: DTIL ISIN Code: INE341R01014
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NSE 00:00 | 23 Sep 206.80 -0.95
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OPEN 209.15
PREVIOUS CLOSE 209.30
VOLUME 301
52-Week high 358.00
52-Week low 177.10
P/E 37.06
Mkt Cap.(Rs cr) 218
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 209.15
CLOSE 209.30
VOLUME 301
52-Week high 358.00
52-Week low 177.10
P/E 37.06
Mkt Cap.(Rs cr) 218
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Dhunseri Tea & Industries Ltd. (DTIL) - Auditors Report

Company auditors report

To The Members of

DHUNSERI TEA & INDUSTRIES LIMITED

Report on the Audit of the Standalone Ind AS Financial Statements Opinion

We have audited the accompanying standalone financial statements of Dhunseri Tea &Industries Limited ("the Company") which comprise the Balance sheet as at March31 2021 the Statement of Profit and Loss including the statement of Other ComprehensiveIncome the Cash Flow Statement and the Statement of Changes in Equity for the year thenended and notes to the standalone financial statements including a summary ofsignificant accounting policies and other explanatory information.

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 Companies Act 2013 as amended ("the Act") in the manner so required andgive a true and fair view in conformity with the accounting principles generally acceptedin India of the state of affairs of the Company as at March 31 2021 its profitincluding other comprehensive income its cash flows and the changes in equity for theyear ended on that date.

Basis for Opinion

We conducted our audit of the standalone financial statements in accordance with theStandards 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 Standalone Financial Statements' section of ourreport. We are independent of the Company in accordance with the ‘Code of Ethics'issued by the Institute of Chartered Accountants of India together with the ethicalrequirements that are relevant to our audit of the financial statements under theprovisions of the Act and the Rules thereunder and we have fulfilled our other ethicalresponsibilities in accordance with these requirements and the Code of Ethics. We believethat the audit evidence we have obtained is sufficient and appropriate to provide a basisfor our audit opinion on the standalone financial statements.

Key Audit Matters

Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the standalone financial statements for the financial yearended March 31 2021. These matters were addressed in the context of our audit of thestandalone financial statements as a whole and in forming our opinion thereon and we donot provide a separate opinion on these matters. For each matter below our description ofhow our audit addressed the matter is provided in that context.

We have determined the matters described below to be the key audit matters to becommunicated in our report. We have fulfilled the responsibilities described in theAuditor's responsibilities for the audit of the standalone financial statements section ofour report 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 standalone financial statements. The results of our audit proceduresincluding the procedures performed to address the matters below provide the basis for ouraudit opinion on the accompanying standalone financial statements.

Key audit matter How our audit addressed the key audit matter
Valuation of biological assets and harvested tea leaves (as described in note 2(h) 2(i) and Note 41 of the Standalone Financial Statements)
As on March 31 2021 the Company has biological assets being Our audit procedures included the following:
"Green leaf growing on tea bushes" valued at Rs. 46.85 lakhs. The above biological assets are stated at fair value less costs to sell. Harvested tea leaves of own gardens used for the valuation of finished goods (Tea) are measured at fair value. • We understood evaluated the design and tested the operating effectiveness of controls as established by the management in determination of the fair value of biological assets and harvested tea leaves produced from own gardens.
We considered the fair valuation of biological assets and harvested tea leaves produced from own gardens as a key audit matter given the significant management judgement involved in consideration of factors such as impact of Covid-19 pandemic market sources prevailing selling prices and quality of tea used in the determination of fair value of such agricultural produce and biological assets. • We assessed the significant assumptions used in the valuation model with reference to available market information including the impact of Covid-19.
• We tested the data inputs used in the fair valuation and compared them with underlying supporting documents.
• We assessed the adjustments made to prices of green leaves purchased from outside suppliers considering the quality differential of the Company's production.
• We also compared the Company's valuation methodology with those followed by other companies in the same Industry for consistency with the Industry norms.
• We assessed the adequacy of disclosures in relation to the biological assets and harvested tea leaves.
Impairment testing of Tea Estates (as described in Note 3(a) of the Standalone Financial Statements)
During the year ended March 31 2021 impairment indicators were identified by the management on the assets at various Tea Estates (determined to be separate cash generating units) of the Company aggregating to Rs. 48632.41 lakhs. As a result an impairment assessment was performed by the Company by comparing the carrying values of these assets to their respective recoverable amounts to determine impairment loss if any. Our audit procedures included the following:
Management used external experts to determine the value in use using the discounted future cash flows method on the basis of projections of future operational results and cash flows. The value in use calculation is sensitive to changes in assumptions and inputs used. • We evaluated the valuation methodology applied in determining the value in use. In making this assessment we also assessed the objectivity competence and independence of Company's experts involved in the process.
• We evaluated the assumptions around the key drivers of the cash flow forecasts including estimated tea production discount rates expected growth rates and terminal growth rates used. In performing these procedures we also involved our valuation specialists.
• We performed sensitivity test on the key assumptions used in determining the value in use.
• We tested the arithmetical accuracy of the calculation.
Accordingly the impairment of PPE at Tea Estates is determined to be a key audit matter in our audit of the standalone financial statements. • We assessed the adequacy of disclosures in accordance with Ind AS 36 "Impairment of assets".

Other Information

The Company's Board of Directors is responsible for the other information. The otherinformation comprises the information included in the Annual report but does not includethe standalone financial statements and our auditor's report thereon.

Our opinion on the standalone financial statements does not cover the other informationand we do not express any form of assurance conclusion thereon.

In connection with our audit of the standalone financial statements our responsibilityis to read the other information and in doing so consider whether such other informationis materially inconsistent with the financial statements or our knowledge obtained in theaudit or otherwise appears to be materially misstated. If based on the work we haveperformed we conclude that there is a material misstatement of this other information weare required to report that fact. We have nothing to report in this regard.

Responsibilities of Management for the Standalone Financial Statements

The Company's Board of Directors is responsible for the matters stated in section134(5) of the Act with respect to the preparation of these standalone 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 standalone financialstatements that give a true and fair view and are free from material misstatement whetherdue to fraud or error.

In preparing the standalone 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. Those Board of Directors are also responsible foroverseeing the Company's financial reporting process.

Auditor's Responsibilities for the Audit of the Standalone Financial Statements

Our objectives are to obtain reasonable assurance about whether the standalonefinancial statements as a whole are free from material misstatement whether due to fraudor error and to issue an auditor's 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 standalone financial statements.

As part of an audit in accordance with SAs we exercise professional judgment andmaintain professional skepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of the standalonefinancial 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.

• Obtain an understanding of internal control relevant to the audit in order todesign audit procedures that are appropriate in the circumstances. Under section 143(3)(i)of the Act we are also responsible for expressing our opinion on whether the Company hasadequate internal financial controls with reference to financial statements in place andthe operating effectiveness of such controls.

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

• Conclude on the appropriateness of management's use of the going concern basisof accounting and based on the audit evidence obtained whether a material uncertaintyexists related to events or conditions that may cast significant doubt on the Company'sability to continue as a going concern. If we conclude that a material uncertainty existswe are required to draw attention in our auditor's report to the related disclosures inthe financial statements or if such disclosures are inadequate to modify our opinion.Our conclusions are based on the audit evidence obtained up to the date of our auditor'sreport. However future events or conditions may cause the Company to cease to continue asa going concern.

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

We communicate with those charged with governance regarding among other matters theplanned scope and timing of the audit and significant audit findings including anysignificant deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have compliedwith relevant ethical requirements regarding independence and to communicate with themall relationships and other matters that may reasonably be thought to bear on ourindependence and where applicable related safeguards. From the matters communicated withthose charged with governance we determine those matters that were of most significancein the audit of the standalone financial statements for the financial year ended March 312021 and are therefore the key audit matters. We describe these matters in our auditor'sreport unless law or regulation precludes public disclosure about the matter or when inextremely rare circumstances we determine that a matter should not be communicated in ourreport because the adverse consequences of doing so would reasonably be expected tooutweigh the public interest benefits of such communication.

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 1" 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: (a) We have sought andobtained all the information and explanations which to the best of our knowledge andbelief were necessary for the purposes of our audit; (b) In our opinion proper books ofaccount as required by law have been kept by the Company so far as it appears from ourexamination of those books; (c) The Balance Sheet the Statement of Profit and Lossincluding the Statement of Other Comprehensive Income the Cash Flow Statement andStatement of Changes in Equity dealt with by this Report are in agreement with the booksof account; (d) In our opinion the aforesaid standalone financial statements comply withthe Accounting Standards specified under Section 133 of the Act read with Companies(Indian Accounting Standards) Rules 2015 as amended; (e) On the basis of the writtenrepresentations received from the directors as on March 31 2021 taken on record by theBoard of Directors none of the directors is disqualified as on March 31 2021 from beingappointed as a director in terms of Section 164 (2) of the Act;

(f) With respect to the adequacy of the internal financial controls with reference tothese standalone financial statements and the operating effectiveness of such controlsrefer to our separate Report in "Annexure 2" to this report; (g) In our opinionthe managerial remuneration for the year ended March 31 2021 has been paid / provided bythe Company to its directors in accordance with the provisions of section 197 read withSchedule V to the Act; (h) With respect to the other matters to be included in theAuditor's Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules2014 as amended in our opinion and to the best of our information and according to theexplanations given to us: i. The Company has disclosed the impact of pending litigationson its financial position in its standalone financial statements – Refer Note 34(a)to the standalone financial statements; ii. The Company did not have any long-termcontracts including derivative contracts for which there were any material foreseeablelosses; iii. There were no amounts which were required to be transferred to the InvestorEducation and Protection Fund by the Company.

For S.R. Batliboi & Co. LLP
Chartered Accountants
ICAI Firm Registration Number: 301003E/E300005
per Kamal Agarwal
Partner
Kolkata Membership Number: 058652
June 23 2021 UDIN: 21058652AAAACA3855

ANNEXURE 1 REFERRED TO IN PARAGRAPH 1 OF THE SECTION ON "REPORT ON OTHER LEGAL ANDREGULATORY REQUIREMENTS" OF OUR REPORT ON THE EVEN DATE

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

(b) All fixed assets have not been physically verified by the management during theyear but there is a regular programme of verification which in our opinion is reasonablehaving regard to the size of the Company and the nature of its assets. No materialdiscrepancies were noticed on such verification.

(c) According to the information and explanation given to us and based on theexamination of the scanned copies of registered sale deed/transfer deed/conveyance deedprovided to us we report that the title deeds comprising of immovable propertiesincluded in Property plant and equipments Investment Properties Assets held for saleand Right of use assets are in the name of the Company as at the balance sheet dateexcept the following:

Particulars Class of Assets Gross Block as on March 31 2021 Net Block as on March 31 2021
(Rs. In Lakhs) (Rs. In Lakhs)
2 plots of Freehold Land at Assam Freehold Land 3186.50 3186.50
7 plots of Leasehold Land at Assam Leasehold Land 29932.44 29932.44
5 Premises of Building Buildings 268.25 232.76
1 plot of Freehold Land Investment Property 303.06 303.06
1 plot of Freehold Land Assets Held- for-sale 136.03 136.03
1 plot of Leasehold land Right of use asset 362.70 357.92

(ii) The management has conducted physical verification of inventory at reasonableintervals during the year and no material discrepancies were noticed on such physicalverification. Inventories lying with third parties have been confirmed by them as at yearend and no material discrepancies were noticed in respect of such confirmations.

(iii) According to the information and explanations given to us the Company has notgranted any loans secured or unsecured to Companies firms Limited LiabilityPartnerships or other parties covered in the register maintained under section 189 of theCompanies Act 2013. Accordingly the provisions of clause 3(iii)(a) (b) and (c) of theOrder are not applicable to the Company and hence not commented upon.

(iv) In our opinion and according to the information and explanations given to usthere are no loans investments guarantees and securities given in respect of whichprovisions of section 185 and 186 of the Companies Act 2013 are applicable and hence notcommented upon.

(v) According to the information and explanation given to us the Company has notaccepted any deposits within the meaning of Sections 73 to 76 of the Act and the Companies(Acceptance of Deposits) Rules 2014 (as amended). Accordingly the provisions of clause3(v) of the Order are not applicable. (vi) We have broadly reviewed the books of accountmaintained by the Company pursuant to the rules made by the Central Government for themaintenance of cost records under section 148(1) of the Companies Act 2013 related tothe manufacture of tea and are of the opinion that prima facie the specified accountsand records have been made and maintained. We have not however made a detailedexamination of the same.

(vii) (a) Undisputed statutory dues including provident fund employees' stateinsurance income-tax sales-tax service tax duty of custom duty of excise value addedtax goods and service tax cess and other statutory dues have generally been regularlydeposited with the appropriate authorities though there has been a slight delay in fewcases.

(b) According to the information and explanations given to us no undisputed amountspayable in respect of provident fund employees' state insurance income-tax service taxsales-tax duty of custom duty of excise value added tax goods and service tax cessand other statutory dues were outstanding at the year end for a period of more than sixmonths from the date they became payable. (c) According to the records of the Company thedues of income-tax sales-tax service tax duty of custom duty of excise value addedtax and cess on account of any dispute are as follows:

Name of the statute Nature of dues Amount (Rs. in lakhs) Period to which the amount relates Forum where the dispute is pending
Income Tax Act 1961 Income Tax 47.43 2014-15 Commissioner of of Income Tax (Appeals)

(viii)In our opinion and according to the information and explanations given to us bythe management the Company has not defaulted in repayment of loans or borrowing to abank. The Company did not have any outstanding loans or borrowing in respect of financialinstitution government or dues to debenture holders.

(ix) According to the information and explanations given by the management the Companyhas not raised any money way of initial public offer / further public offer / debtinstruments) and term loans hence reporting under clause (ix) is not applicable to theCompany and hence not commented upon. (x) Based upon the audit procedures performed forthe purpose of reporting the true and fair view of the financial statements and accordingto the information and explanations given by the management we report that no fraud bythe company or no fraud / material fraud on the Company by the officers and employees ofthe Company has been noticed or reported during the year.

(xi) According to the information and explanations given by the management themanagerial remuneration has been paid / provided in accordance with the requisiteapprovals mandated by the provisions of section 197 read with Schedule V to the CompaniesAct 2013.

(xii) In our opinion the Company is not a Nidhi company. Therefore the provisions ofclause 3(xii) of the order are not applicable to the Company and hence not commented upon.

(xiii)According to the information and explanations given by the managementtransactions with the related parties are in compliance with section 177 and 188 ofCompanies Act 2013 where applicable and the details have been disclosed in the notes tothe financial statements as required by the applicable accounting standards.

(xiv)According to the information and explanations given to us and on an overallexamination of the balance sheet the Company has not made any preferential allotment orprivate placement of shares or fully or partly convertible debentures during the yearunder audit and hence reporting requirements under clause 3(xiv) are not applicable tothe company and not commented upon.

(xv) According to the information and explanations given by the management the Companyhas not entered into any non-cash transactions with directors or persons connected withhim as referred to in section 192 of Companies Act 2013. (xvi)According to theinformation and explanations given to us the provisions of section 45-IA of the ReserveBank of India Act 1934 are not applicable to the Company.

For S.R. Batliboi & Co. LLP
Chartered Accountants
ICAI Firm Registration Number: 301003E/E300005
per Kamal Agarwal
Partner
Kolkata Membership Number: 058652
June 23 2021 UDIN: 21058652AAAACA3855

Annexure 2 to the Independent Auditor's Report

Of even date on the Standalone Financial Statements of Dhunseri Tea & IndustriesLimted

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

We have audited the internal financial controls with reference to standalone financialstatements of Dhunseri Tea & Industries Limited ("the Company") as of March31 2021 in conjunction with our audit of the standalone financial statements of theCompany 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 the

Company's policies the safeguarding of its assets the prevention and detection offrauds and errors the accuracy and completeness of the accounting records and the timelypreparation of reliable financial information as required under the Companies Act 2013.

Auditor's Responsibility

Our responsibility is to express an opinion on the Company's internal financialcontrols with reference to these standalone financial statements based on our audit. Weconducted our audit in accordance with the Guidance Note on Audit of Internal FinancialControls Over Financial Reporting (the "Guidance Note") and the Standards onAuditing as specified under section 143(10) of the Act to the extent applicable to anaudit of internal financial controls both issued by 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 controlswith reference to these standalone financial statements was established and maintained andif such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls with reference to these standalone financial statementsand their operating effectiveness. Our audit of internal financial controls with referenceto standalone financial statements included obtaining an understanding of internalfinancial controls with reference to these standalone financial statements assessing therisk that a material weakness exists and testing and evaluating the design and operatingeffectiveness of internal control based on the assessed risk. The procedures selecteddepend on the auditor's judgement including the assessment of the risks of materialmisstatement of the financial statements whether due to fraud or error. We believe thatthe audit evidence we have obtained is sufficient and appropriate to provide a basis forour audit opinion on the Company's internal financial controls with reference to thesestandalone financial statements.

Meaning of Internal Financial Controls With Reference to these Standalone FinancialStatements

A company's internal financial controls with reference to standalone financialstatements is a process designed to provide reasonable assurance regarding the reliabilityof financial reporting and the preparation of financial statements for external purposesin accordance with generally accepted accounting principles. A company's internalfinancial controls with reference to standalone financial statements includes thosepolicies and procedures that (1) pertain to the maintenance of records that in reasonabledetail accurately and fairly reflect the transactions and dispositions of the assets ofthe company; (2) provide reasonable assurance that transactions are recorded as necessaryto permit preparation of financial statements in accordance with generally acceptedaccounting principles and that receipts and expenditures of the company are being madeonly in accordance with authorisations of management and directors of the company; and (3)provide reasonable assurance regarding prevention or timely detection of unauthorisedacquisition use or disposition of the company's assets that could have a material effecton the financial statements.

Inherent Limitations of Internal Financial Controls With Reference to StandaloneFinancial Statements

Because of the inherent limitations of internal financial controls with reference tostandalone financial statements including the possibility of collusion or impropermanagement override of controls material misstatements due to error or fraud may occurand not be detected. Also projections of any evaluation of the internal financialcontrols with reference to standalone financial statements to future periods are subjectto the risk that the internal financial control with reference to standalone financialstatements may become inadequate because of changes in conditions or that the degree ofcompliance with the policies or procedures may deteriorate.

Opinion

In our opinion the Company has in all material respects adequate internal financialcontrols with reference to standalone financial statements and such internal financialcontrols with reference to standalone financial statements were operating effectively asat March 31 2021 based on the internal control over financial reporting criteriaestablished by the Company considering the essential components of internal control statedin the Guidance Note issued by the ICAI.

For S.R. Batliboi & Co. LLP
Chartered Accountants
ICAI Firm Registration Number: 301003E/E300005
per Kamal Agarwal
Partner
Kolkata Membership Number: 058652
June 23 2021 UDIN: 21058652AAAACA3855

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