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Dhunseri Tea & Industries Ltd.

BSE: 538902 Sector: Agri and agri inputs
NSE: DTIL ISIN Code: INE341R01014
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OPEN 517.25
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VOLUME 5317
52-Week high 607.80
52-Week low 152.00
P/E 7.40
Mkt Cap.(Rs cr) 365
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 517.25
CLOSE 517.25
VOLUME 5317
52-Week high 607.80
52-Week low 152.00
P/E 7.40
Mkt Cap.(Rs cr) 365
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 Ind AS financial statementsof Dhunseri Tea & Industries Limited ("the Company") which comprise theBalance sheet as at March 31 2020 the Statement of Profit and Loss including thestatement of Other Comprehensive Income the Cash Flow Statement and the Statement ofChanges in Equity for the year then ended and notes to the standalone Ind AS financialstatements including a summary of significant accounting policies and other explanatoryinformation.

In our opinion and to the best of our information and according to theexplanations given to us the aforesaid standalone Ind AS financial statements give theinformation required by the Companies Act 2013 as amended ("the Act") in themanner so required and give a true and fair view in conformity with the accountingprinciples generally accepted in India of the state of affairs of the Company as at March31 2020 its profit including other comprehensive income its cash flows and the changesin equity for the year ended on that date.

Basis for Opinion

We conducted our audit of the standalone Ind AS financial statements inaccordance with the Standards on Auditing (SAs) as specified under section 143(10) of theAct. Our responsibilities under those Standards are further described in the‘Auditor's Responsibilities for the Audit of the Standalone Ind AS FinancialStatements' section of our report. We are independent of the Company in accordancewith the ‘Code of Ethics' issued by the Institute of Chartered Accountants ofIndia together with the ethical requirements that are relevant to our audit of thefinancial statements under the provisions of the Act and the Rules thereunder and we havefulfilled our other ethical responsibilities in accordance with these requirements and theCode of Ethics. We believe that the audit evidence we have obtained is sufficient andappropriate to provide a basis for our audit opinion on the standalone Ind AS financialstatements.

Key Audit Matters

Key audit matters are those matters that in our professional judgmentwere of most significance in our audit of the standalone Ind AS financial statements forthe financial year ended March 31 2020. These matters were addressed in the context ofour audit of the standalone Ind AS financial statements as a whole and in forming ouropinion thereon and we do not provide a separate opinion on these matters. For eachmatter below our description of how our audit addressed the matter is provided in thatcontext.

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 standalone Ind AS financialstatements section of our report including in relation to these matters. Accordingly ouraudit included the performance of procedures designed to respond to our assessment of therisks of material misstatement of the standalone Ind AS financial statements. The resultsof our audit procedures including the procedures performed to address the matters belowprovide the basis for our audit opinion on the accompanying standalone Ind AS financialstatements.

Key audit matter How our audit addressed the key audit matter
Assessment of the fair value of biological assets and harvested tea leaves
The raw materials in the form of harvested tea leaves produced from own gardens are measured at fair value for the purpose of valuation of finished goods inventory (i.e. Tea). As on March 31 2020 the Company has biological assets being "Green leaf growing on tea bushes" valued at Rs. Nil. (as described in note 2(h) 2(i) and Note 42 of the Standalone Financial Statements)
The biological assets are stated at fair value less costs to sell and harvested tea leaves used for the valuation of finished goods (Tea) are measured at fair value. We considered the valuation of biological assets and harvested tea leaves produced from own gardens as a key audit matter given the significant management judgement involved in the consideration of factors such as impact of Covid-19 pandemic market sources prevailing selling prices and quality of tea assessed by the management used in the determination of fair value of such agricultural produce and biological assets. Following procedures have been performed to address this key audit matter:
• We understood evaluated 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 assessed the significant assumptions used in the valuation model with reference to available market information including the impact of Covid-19.
• We tested the selection of data inputs used against appropriate supporting documents.
• We also compared the practice followed by other companies in the same Industry to determine consistency of company's practice with the Industry norms.
• We also assessed the adjustments made to prices of green leaves purchased from outside suppliers considering the quality differential of the Company's production.
• We assessed the disclosures in relation to the biological assets and harvested tea leaves.

Other Information

The Company's Board of Directors is responsible for the otherinformation. The other information comprises the information included in the Annualreport but does not include the standalone Ind AS financial statements and ourauditor's report thereon. Our opinion on the standalone Ind AS financial statementsdoes not cover the other information and we do not express any form of assuranceconclusion thereon.

In connection with our audit of the standalone Ind AS financialstatements our responsibility is to read the other information and in doing so considerwhether such other information is materially inconsistent with the financial statements orour knowledge obtained in the audit or otherwise appears to be materially misstated. Ifbased on the work we have performed we conclude that there is a material misstatement ofthis other information we are required to report that fact. We have nothing to report inthis regard.

Responsibilities of Management for the Standalone Ind AS FinancialStatements

The Company's Board of Directors is responsible for the mattersstated in section 134(5) of the Act with respect to the preparation of these standaloneInd AS financial statements that give a true and fair view of the financial positionfinancial performance including other comprehensive income cash flows and changes inequity of the Company in accordance with the accounting principles generally accepted inIndia including the Indian Accounting Standards (Ind AS) specified under section 133 ofthe Act read with the Companies (Indian Accounting Standards) Rules 2015 as amended.This responsibility also includes maintenance of adequate accounting records in accordancewith the provisions of the Act for safeguarding of the assets of the Company and forpreventing and detecting frauds and other irregularities; selection and application ofappropriate accounting policies; making judgments and estimates that are reasonable andprudent; and the design implementation and maintenance of adequate internal financialcontrols that were operating effectively for ensuring the accuracy and completeness ofthe accounting records relevant to the preparation and presentation of the standalone IndAS financial statements that give a true and fair view and are free from materialmisstatement whether due to fraud or error.

In preparing the standalone Ind AS financial statements management isresponsible for assessing the Company's ability to continue as a going concerndisclosing as applicable matters related to going concern and using the going concernbasis of accounting 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 theCompany's financial reporting process.

Auditor's Responsibilities for the Audit of the Standalone Ind ASFinancial Statements

Our objectives are to obtain reasonable assurance about whether thestandalone Ind AS financial statements as a whole are free from material misstatementwhether due to fraud or error and to issue an auditor's report that includes ouropinion. Reasonable assurance is a high level of assurance but is not a guarantee that anaudit conducted 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 standalone Ind AS financialstatements.

As part of an 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 thestandalone Ind AS financial statements whether due to fraud or error design and performaudit procedures responsive to those risks and obtain audit evidence that is sufficientand appropriate to provide a basis for our opinion. The risk of not detecting a materialmisstatement resulting from fraud is higher than for one resulting from error as fraudmay involve collusion forgery intentional omissions misrepresentations or the overrideof internal control.

• Obtain an understanding of internal control relevant to theaudit in order to design audit procedures that are appropriate in the circumstances. Undersection 143(3)(i) of the Act we are also responsible for expressing our opinion onwhether the Company has adequate internal financial controls with reference to financialstatements in place and the operating effectiveness of such controls.

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

• Conclude on the appropriateness of management's use of thegoing concern basis of accounting and based on the audit evidence obtained whether amaterial uncertainty exists related to events or conditions that may cast significantdoubt on the Company's ability to continue as a going concern. If we conclude that amaterial uncertainty exists we are required to draw attention in our auditor'sreport to the related disclosures in the 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 auditor's report. However future events or conditionsmay cause the Company to cease to continue as a going concern.

• Evaluate the overall presentation structure and content of thestandalone Ind AS financial statements including the disclosures and whether thestandalone Ind AS financial statements represent the underlying transactions and events ina manner that achieves fair presentation.

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 matterscommunicated with those charged with governance we determine those matters that were ofmost significance in the audit of the standalone Ind AS financial statements for thefinancial year ended March 31 2020 and are therefore the key audit matters. We describethese matters in our auditor's report unless law or regulation precludes publicdisclosure about the matter or when in extremely rare circumstances we determine that amatter should not be communicated in our report because the adverse consequences of doingso would reasonably be expected to outweigh the public interest benefits of suchcommunication.

Other Matter

The Ind AS financial statements of the Company for the year ended March31 2019 included in these standalone Ind AS financial statements have been audited bythe predecessor auditor who expressed an unmodified opinion on those statements on May 242019.

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 1" a statement on thematters specified in paragraphs 3 and 4 of the Order.

2. As required by Section 143(3) of the Act we report that: (a) Wehave sought 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 opinionproper books of account as required by law have been kept by the Company so far as itappears from our examination of those books;

(c) In our opinion the aforesaid standalone Ind AS financialstatements comply with the Accounting Standards specified under Section 133 of the Actread with Companies (Indian Accounting Standards) Rules 2015 as amended; (d) On thebasis of the written representations received from the directors as on March 31 2020taken on record by the Board of Directors none of the directors is disqualified as onMarch 31 2020 from being appointed as a director in terms of Section 164 (2) of the Act;(e) With respect to the adequacy of the internal financial controls over financialreporting of the Company with reference to these standalone Ind AS financial statementsand the operating effectiveness of such controls refer to our separate Report in"Annexure 2" to this report; (f) In our opinion the managerial remuneration forthe year ended March 31 2020 has been paid / provided by the Company to its directors inaccordance with the provisions of section 197 read with Schedule V to the Act; (g) Withrespect to the other matters to be included in the Auditor's Report in accordancewith Rule 11 of the

Companies (Audit and Auditors) Rules 2014 as amended in our opinionand to the best of our information and according to the explanations given to us: i. TheCompany has disclosed the impact of pending litigations on its financial position in itsstandalone Ind AS financial statements – Refer Note 34(a) to the standalone Ind ASfinancial statements; ii. The Company did not have any long-term contracts includingderivative contracts for which there were any material foreseeable losses; iii. There wereno amounts which were required to be transferred to the Investor Education and ProtectionFund by the Company.

ANNEXURE 1 REFERRED TO IN PARAGRAPH 1 OF THE SECTION ON "REPORT ONOTHER LEGAL AND REGULATORY REQUIREMENTS" OF OUR REPORT ON THE EVEN DATE

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

(b) All fixed assets have not been physically verified by themanagement during the year but there is a regular programme of verification which in ouropinion is reasonable having regard to the size of the Company and the nature of itsassets. No material discrepancies were noticed on such verification.

(c) According to the information and explanation given to us and basedon the examination of the scanned copies of registered sale deed/transfer deed/conveyancedeed provided to us we report that the title deeds comprising of immovable propertiesincluded in Property plant and equipments Investment Properties and Assets held forsale are in the name of the Company as at the balance sheet date except the following:

Particulars Class of Assets Gross Block as on March 31 2020 Net Block as on March 31 2020
(Rs. In Lakhs) (Rs. In Lakhs)
2 plots of Freehold Land at Assam Freehold Land 3186.50 3186.50
8 plots of Leasehold Land at Assam Leasehold Land 32185.59 32185.59
4 Premises of Buildings Buildings 180.95 160.67
1 plot of Freehold Land Investment property 303.06 303.06
1 plot of Freehold Land Assets Held -for-sale 136.03 136.03

(ii) The management has conducted physical verification of inventory atreasonable intervals during the year and no material discrepancies were noticed on suchphysical verification. Inventories lying with third parties have been confirmed by them asat year end and no material discrepancies were noticed in respect of such confirmations

(iii) 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. Accordingly the provisions of clause 3(iii)(a) (b) and(c) of the Order are not applicable to the Company and hence not commented upon.

(iv) In our opinion and according to the information and explanationsgiven to us provisions of section 185 and 186 of the Companies Act 2013 in respect ofloans to directors including entities in which they are interested and in respect of loansand advances given investments made and guarantees and securities given have beencomplied with by the company.

(v) According to the information and explanation given to us theCompany has not accepted any deposits within the meaning of Sections 73 to 76 of the Actand the Companies (Acceptance of Deposits) Rules 2014 (as amended). Accordingly theprovisions of clause 3(v) of the Order are not applicable.

(vi) 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 Companies Act 2013 related to the manufacture oftea and are of the opinion that prima facie the specified accounts and records have beenmade and maintained. We have not however made a detailed examination of the same.

(vii) (a) Undisputed statutory dues including provident fundemployees' state insurance income-tax sales-tax service tax duty of custom dutyof excise value added tax goods and service tax cess and other statutory dues havegenerally been regularly deposited with the appropriate authorities though there has beena slight delay in a few cases.

(b) According to the information and explanations given to us noundisputed amounts payable in respect of provident fund employees' state insuranceincome-tax service tax sales-tax duty of custom duty of excise value added tax goodsand service tax cess and other statutory dues were outstanding at the year end for aperiod of more than six months from the date they became payable.

(c) According to the records of the Company the dues of income-taxsales-tax service tax duty of custom duty of excise value added tax and cess onaccount 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 51.32 2014-15 Commissioner of of Income Tax (Appeals)

(viii)In our opinion and according to the information and explanationsgiven to us by the management the Company has not defaulted in repayment of loans orborrowing to a bank. The Company did not have any outstanding loans or borrowing inrespect of financial institution government or dues to debenture holders.

(ix) According to the information and explanations given by themanagement the Company has not raised any money by way of initial public offer / furtherpublic offer / debt instruments.

The term loans have been applied for the purpose for which they wereraised.

(x) Based upon the audit procedures performed for the purpose ofreporting the true and fair view of the financial statements and according to theinformation and explanations given by the management we report that no fraud by thecompany or no fraud / material fraud on the Company by the officers and employees of theCompany has been noticed or reported during the year.

(xi) According to the information and explanations given by themanagement the managerial remuneration has been paid / provided in accordance with therequisite approvals mandated by the provisions of section 197 read with Schedule V to theCompanies Act 2013.

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

(xiii)According to the information and explanations given by themanagement transactions with the related parties are in compliance with section 177 and188 of Companies Act 2013 where applicable and the details have been disclosed in thenotes to the financial statements as required by the applicable accounting standards.

(xiv)According to the information and explanations given to us and onan overall examination of the balance sheet the Company has not made any preferentialallotment or private placement of shares or fully or partly convertible debentures duringthe year under audit and hence reporting requirements under clause 3(xiv) are notapplicable to the company and not commented upon.

(xv) According to the information and explanations given by themanagement the Company has not entered into any non-cash transactions with directors orpersons connected with him as referred to in section 192 of Companies Act 2013.

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

Annexure 2 to the Independent Auditor's Report

of even date on the Standalone Ind AS Financial Statements of DhunseriTea & Industries Limted

Report on the Internal Financial Controls under Clause (i) ofSubsection 3 of Section 143 of the Companies Act 2013 ("the Act")

We have audited the internal financial controls over financialreporting of Dhunseri Tea & Industries Limited ("the Company") as of March31 2020 in conjunction with our audit of the standalone Ind AS financial statements ofthe Company for the year ended 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 the Company's 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.

Auditor's Responsibility

Our responsibility is to express an opinion on the Company's internalfinancial controls over financial reporting with reference to these standalone Ind ASfinancial statements based on our audit. We conducted our audit in accordance with theGuidance Note on Audit of Internal Financial Controls Over Financial Reporting (the"Guidance Note") and the Standards on Auditing as specified under section143(10) of the Companies Act 2013 to the extent applicable to an audit of internalfinancial controls and both issued by the Institute of Chartered Accountants of India.Those Standards and the Guidance Note require that we comply with ethical requirements andplan and perform the audit to obtain reasonable assurance about whether adequate internalfinancial controls over financial reporting with reference to these standalone Ind ASfinancial statements was established and maintained and if such controls operatedeffectively in all material respects.

Our audit involves performing procedures to obtain audit evidence aboutthe adequacy of the internal financial controls over financial reporting with reference tothese standalone Ind AS financial statements and their operating effectiveness. Our auditof internal financial controls over financial reporting included obtaining anunderstanding of internal financial controls over financial reporting with reference tothese standalone Ind AS financial statements assessing the risk that a material weaknessexists and testing and evaluating the design and operating effectiveness of internalcontrol based on the assessed risk. The procedures selected depend on the auditor'sjudgement including the assessment of the risks of material misstatement of the financialstatements 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 internal financial controlsover financial reporting with reference to these standalone Ind AS financial statements.

Meaning of Internal Financial Controls Over Financial Reporting WithReference to these Standalone Ind AS Financial Statements

A Company's internal financial control over financial reporting withreference to these standalone Ind AS financial statements is a process designed to providereasonable assurance regarding the reliability of financial reporting and the preparationof financial statements for external purposes in accordance with generally acceptedaccounting principles. A company's internal financial control over financial reportingwith reference to these standalone Ind AS financial statements 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 financial statements in accordance with generallyaccepted accounting principles and that receipts and expenditures of the company arebeing made only in accordance with authorisations of management and directors of thecompany; and

(3) provide reasonable assurance regarding prevention or timelydetection of unauthorised acquisition use or disposition of the company's assets thatcould have a material effect on the financial statements.

Inherent Limitations of Internal Financial Controls Over FinancialReporting With Reference to these Standalone Ind AS Financial Statements

Because of the inherent limitations of internal financial controls overfinancial reporting with reference to these standalone Ind AS financial statementsincluding the possibility of collusion or improper management override of controlsmaterial misstatements due to error or fraud may occur and not be detected. Alsoprojections of any evaluation of the internal financial controls over financial reportingwith reference to these standalone Ind AS financial statements to future periods aresubject to the risk that the internal financial control over financial reporting withreference to these standalone Ind AS financial statements may become inadequate because ofchanges in conditions or that the degree of compliance with the policies or proceduresmay deteriorate.

Opinion

In our opinion the Company has in all material respects adequateinternal financial controls over financial reporting with reference to these standaloneInd AS financial statements and such internal financial controls over financial reportingwith reference to these standalone Ind AS financial statements were operating effectivelyas at March 31 2020 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.

For S.R. Batliboi & Co. LLP
Chartered Accountants
ICAI Firm Registration Number: 301003E/E300005
per Kamal Agarwal
Kolkata Partner
June 26 2020 Membership Number: 058652

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