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Dhunseri Tea & Industries Ltd.

BSE: 538902 Sector: Agri and agri inputs
NSE: DTIL ISIN Code: INE341R01014
BSE 13:36 | 27 Jan 244.80 -2.20
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NSE 13:24 | 27 Jan 247.00 -0.05
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249.00

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OPEN 250.00
PREVIOUS CLOSE 247.00
VOLUME 522
52-Week high 305.00
52-Week low 90.10
P/E 6.64
Mkt Cap.(Rs cr) 171
Buy Price 247.60
Buy Qty 4.00
Sell Price 248.65
Sell Qty 4.00
OPEN 250.00
CLOSE 247.00
VOLUME 522
52-Week high 305.00
52-Week low 90.10
P/E 6.64
Mkt Cap.(Rs cr) 171
Buy Price 247.60
Buy Qty 4.00
Sell Price 248.65
Sell Qty 4.00

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 Financial Statements Opinion

1. We have audited the accompanying standalone financial statements of Dhunseri Tea& Industries Limited ("the Company") which comprise the Balance sheet as atMarch 31 2019 and the Statement of Profit and Loss (including Other ComprehensiveIncome) Statement of Changes in Equity and Statement of Cash Flows for the year thenended and notes to the financial statements including a summary of significant accountingpolicies and other explanatory information.

2. 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 ("the Act") in the manner so required and give a trueand fair view in conformity with the accounting principles generally accepted in India ofthe state of affairs of the Company as at March 31 2019 and total comprehensive income(comprising of profit and other comprehensive income) changes in equity and its cashflows for the year then ended.

Basis for opinion

3. We conducted our audit in accordance with the Standards on Auditing (SAs) specifiedunder section 143(10) of the Act. Our responsibilities under those Standards are furtherdescribed in the Auditor's Responsibilities for the Audit of the Financial Statementssection of our report. We are independent of the Company in accordance with the Code ofEthics 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 opinion.

Key audit matters

4. Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the financial statements of the current year. These matterswere addressed in the context of our audit of the financial statements as a whole and informing our opinion thereon and we do not provide a separate opinion on these matters.

Key audit matter How our audit addressed the key audit matter
Assessment of the fair value of biological assets and harvested tea leaves Our procedures included the following :
(Refer to the accompanying note 2 (e) 2 (f) and Note 41 forming integral part of the Standalone Financial Statements) • We understood and tested the design and 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.
As on March 31 2019 the Company has biological assets being "Green leaf growing on tea bushes" with a carrying value of Rs. 48.91 lakhs and Green leaf harvested from own gardens ("agricultural produce") being part of finished goods (Tea) with a carrying value of र.555.77 lakhs. • We considered the following factors in our assessment of the fair value –
a. compared the prices of similar quality tea leaves as obtained from market sources
b. compared the selling prices of the Company's Tea prevailing around year end for completed seasonal cycle
The biological assets and agricultural produce used in the production of finished goods (Tea) are stated at fair value less costs to sell. c. evaluated the appropriateness of technical factors stated by management which determine the quality of the tea leaves produced from the Company's gardens and for arriving at the fair value of biological assets and harvested tea leaves.
We considered the valuation of biological assets and agricultural produce used in the production of finished goods (Tea) as a key audit matter given the significant management judgement involved in the consideration of factors such as market sources prevailing d. Involved auditors' valuation expert to evaluate the reasonableness of the methodology adopted by the Company.
Key audit matter How our audit addressed the key audit matter
selling prices and quality of tea assessed by the management used in the determination of fair value of such agricultural produce and biological assets. • We assessed the appropriateness and adequacy of the disclosures in relation to the biological assets and harvested tea leaves.
Based on the above procedures performed the management's assessment of the fair value of biological assets and harvested tea leaves was considered to be reasonable.

Other Information

5. The Company's Board of Directors is responsible for the other information. The otherinformation comprises the Directors Report and Annexures thereto Form No. MR - 3(Secretarial Audit Report) Corporate Governance Report and Form AOC - 1 included in theAnnual report but does not include the financial statements and our auditor's reportthereon. Our opinion on the financial statements does not cover the other information andwe do not express any form of assurance conclusion thereon.

In connection with our audit of the financial statements our responsibility is to readthe other information and in doing so consider whether the other information ismaterially 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 and those charged with governance for the financialstatements

6. 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 changesin equity and cash flows of the Company in accordance with the accounting principlesgenerally accepted in India including the Accounting Standards specified under section133 of the Act. This responsibility also includes maintenance of adequate accountingrecords in accordance with the provisions of the Act for safeguarding of the assets of theCompany and for preventing and detecting frauds and other irregularities; selection andapplication of appropriate accounting policies; making judgments and estimates that arereasonable and prudent; and design implementation and maintenance of adequate internalfinancial 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.

7. In preparing the financial statements management is responsible for assessing theCompany's ability to continue as a going concern disclosing as applicable mattersrelated to going concern and using the going concern basis of accounting unless managementeither intends to liquidate the Company or to cease operations or has no realisticalternative 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 financial statements

8. Our objectives are to obtain reasonable assurance about whether the financialstatements as a whole are free from material misstatement whether due to fraud or errorand to issue an auditor's report that includes our opinion. Reasonable assurance is a highlevel of assurance but is not a guarantee that an audit conducted in accordance with SAswill always detect a material misstatement when it exists. Misstatements can arise fromfraud or error and are considered material if individually or in the aggregate theycould reasonably be expected to influence the economic decisions of users taken on thebasis of these financial statements.

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

• Identify and assess the risks of material misstatement of the financialstatements whether due to fraud or error design and perform audit procedures responsiveto those risks and obtain audit evidence that is sufficient and appropriate to provide abasis for our opinion. The risk of not detecting a material misstatement resulting fromfraud is higher than for one resulting from error as fraud may involve collusionforgery intentional omissions misrepresentations or the override of internal control.

• 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 financialstatements including the disclosures and whether the financial statements represent theunderlying transactions and events in a manner that achieves fair presentation.

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

11. We also provide those charged with governance with a statement that we havecomplied with relevant ethical requirements regarding independence and to communicatewith them all relationships and other matters that may reasonably be thought to bear onour independence and where applicable related safeguards.

12. From the matters communicated with those charged with governance we determinethose matters that were of most significance in the audit of the financial statements ofthe current period and are therefore the key audit matters. We describe these matters inour auditor's report unless law or regulation precludes public disclosure about the matteror when in extremely rare circumstances we determine that a matter should not becommunicated in our report because the adverse consequences of doing so would reasonablybe expected to outweigh the public interest benefits of such communication.

Report on other legal and regulatory requirements

13. As required by the Companies (Auditor's Report) Order 2016 ("theOrder") issued by the Central Government of India in terms of sub-section (11) ofsection 143 of the Act we give in the Annexure B a statement on the matters specified inparagraphs 3 and 4 of the Order to the extent applicable. 14. As required by Section143(3) of the Act we report that: (a) We have sought and obtained all the information andexplanations which to the best of our knowledge and belief were necessary for the purposesof our audit.

(b) In our opinion proper books of account as required by law have been kept by theCompany so far as it appears from our examination of those books.

(c) The Balance Sheet the Statement of Profit and Loss (including other comprehensiveincome) the Statement of Changes in Equity and Cash Flow Statement dealt with by thisReport are in agreement with the books of account.

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

(e) On the basis of the written representations received from the directors as on March31 2019 taken on record by the Board of Directors none of the directors is disqualifiedas on March 31 2019 from being appointed as a director in terms of Section 164 (2) of theAct.

(f) With respect to the adequacy of the internal financial controls with reference tofinancial statements of the Company and the operating effectiveness of such controlsrefer to our separate Report in "Annexure A".

(g) With respect to the other matters to be included in the Auditor's Report inaccordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 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 itsfinancial statements – Refer Note 33 (a) to the financial statements; ii. The Companyhas long-term contracts as at March 31 2019 for which there were no material foreseeablelosses. There were no derivative contracts. iii. There were no amounts which were requiredto be transferred to the Investor Education and Protection Fund by the Company during theyear ended March 31 2019.

iv. The reporting on disclosures relating to Specified Bank Notes is not applicable tothe Company for the year ended March 31 2019.

For Lovelock & Lewes
Firm Registration No. 301056E
Chartered Accountants
Amitesh Dutta
Kolkata Partner
May 24 2019 Membership No.058507

Annexure - A to Independent Auditors' Report

Referred to in paragraph 14(f) of the Independent Auditors' Report of even date to themembers of Dhunseri Tea & Industries Limited on the standalone financial statementsfor the year ended March 31 2019

Report on the Internal Financial Controls with reference to financial statements underClause (i) of Sub-section 3 of Section 143 of the Act

1. We have audited the internal financial controls with reference to financialstatements of Dhunseri Tea & Industries Limited ("the Company") as of March31 2019 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

2. 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). These responsibilitiesinclude the design implementation and maintenance of adequate internal financial controlsthat were operating effectively for ensuring the orderly and efficient conduct of itsbusiness including adherence to company's policies the safeguarding of its assets theprevention and detection of frauds and errors the accuracy and completeness of theaccounting records and the timely preparation of reliable financial information asrequired under the Act.

Auditors' Responsibility

3. Our responsibility is to express an opinion on the Company's internal financialcontrols with reference to financial statements based on our audit. We conducted our auditin accordance with the Guidance Note on Audit of Internal Financial Controls OverFinancial Reporting (the "Guidance Note") and the Standards on Auditing deemedto be prescribed under section 143(10) of the Act to the extent applicable to an audit ofinternal financial controls both applicable to an audit of internal financial controlsand both issued by the ICAI. Those Standards and the Guidance Note require that we complywith ethical requirements and plan and perform the audit to obtain reasonable assuranceabout whether adequate internal financial controls with reference to financial statementswas established and maintained and if such controls operated effectively in all materialrespects.

4. Our audit involves performing procedures to obtain audit evidence about the adequacyof the internal financial controls system with reference to financial statements and theiroperating effectiveness. Our audit of internal financial controls with reference tofinancial statements included obtaining an understanding of internal financial controlswith reference to 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.

5. We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the Company's internal financial controls systemwith reference to financial statements.

Meaning of Internal Financial Controls with reference to financial statements

6. A company's internal financial controls with reference to financial statements 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 controlswith reference to financial statements includes those policies and procedures that (1)pertain to the maintenance of records that in reasonable detail accurately and fairlyreflect the transactions and dispositions of the assets of the company; (2) providereasonable assurance that transactions are recorded as necessary to permit preparation offinancial statements in accordance with generally accepted accounting principles and thatreceipts and expenditures of the company are being made only in accordance withauthorisations of management and directors of the company; and (3) provide reasonableassurance regarding prevention or timely detection of unauthorised acquisition use ordisposition of the company's assets that could have a material effect on the financialstatements.

Inherent Limitations of Internal Financial Controls with reference to financialstatements

7. Because of the inherent limitations of internal financial controls with reference tofinancial statements 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 withreference to financial statements to future periods are subject to the risk that theinternal financial control controls with reference to financial statements may becomeinadequate because of changes in conditions or that the degree of compliance with thepolicies or procedures may deteriorate.

Opinion

8. In our opinion the Company has in all material respects an adequate internalfinancial controls system with reference to financial statements and such internalfinancial controls with reference to financial statements were operating effectively as atMarch 31 2019 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 Lovelock & Lewes
Firm Registration No. 301056E
Chartered Accountants
Amitesh Dutta
Kolkata Partner
May 24 2019 Membership No.058507

Referred to in paragraph 13 of the Independent Auditors' Report of even date to themembers of Dhunseri Tea & Industries Limited on the standalone financial statements asof and for the year ended March 31 2019 i. (a) The Company is maintaining proper recordsshowing full particulars including quantitative details and situation of fixed assets.

(b) The fixed assets are physically verified by the Management according to a phasedprogramme designed to cover all the items over a period of three years which in ouropinion is reasonable having regard to the size of the Company and the nature of itsassets. Pursuant to the programme a portion of the fixed assets has been physicallyverified by the Management during the year and no material discrepancies have been noticedon such verification.

(c) The title deeds of immovable properties as disclosed in Note 3 on Property Plantand Equipment Note 4 on Investment Properties and Note 5 on Assets held-for-sale to thestandalone financial statements are held in the name of the Company except for thefollowing for reasons set out in Note 3 (a) Note 4 and Note 5 to the standalonefinancial statements.

Particulars Class of Assets Gross Block Net Block
(र. In Lakhs) (र. In Lakhs)
2 plots of Freehold Freehold 3186.50 3186.50
Land at Assam Land
8 plots of Leasehold Leasehold 32185.59 32185.59
Land at Assam Land
4 Premises of Buildings 180.95 164.06
Buildings
1 plot of Freehold Investment 264.23 264.23
Land property
1 plot of Freehold Assets Held 132.12 132.12
Land -for-sale

ii. The physical verification of inventory excluding stocks with third parties havebeen conducted at reasonable intervals by the Management during the year. In respect ofinventory lying with third parties these have substantially been confirmed by them. Thediscrepancies noticed on physical verification of inventory as compared to book recordswere not material. iii. The Company has not granted any loans secured or unsecured tocompanies firms Limited Liability Partnerships or other parties covered in the registermaintained under Section 189 of the Act. Therefore the provisions of Clause 3(iii)(iii)(a) (iii)(b) and (iii)(c) of the said Order are not applicable to the Company. iv.In our opinion and according to the information and explanations given to us the Companyhas complied with the provisions of Section 185 and 186 of the Companies

Act 2013 in respect of the loans and investments made and guarantees and securityprovided by it. v. The Company has not accepted any deposits from the public within themeaning of Sections 73 74 75 and 76 of the Act and the Rules framed there under to theextent notified. vi. Pursuant to the rules made by the Central Government of India theCompany is required to maintain cost records as specified under Section 148(1) of the Actin respect of its products. We have broadly reviewed the same and are of the opinionthat prima facie the prescribed accounts and records have been made and maintained. Wehave not however made a detailed examination of the records with a view to determinewhether they are accurate or complete. vii. (a) According to the information andexplanations given to us and the records of the Company examined by us in our opinionthe Company is generally regular in depositing undisputed statutory dues in respect ofProfession Tax though there has been a slight delay in one case and is regular indepositing undisputed statutory dues including provident fund employees' stateinsurance sales tax income tax service tax duty of customs duty of excise valueadded tax cess goods and service tax and other material statutory dues as applicablewith the appropriate authorities. Also refer note 33 to the Standalone financialstatements regarding management's assessment on certain matters relating to providentfund.

(b) According to the information and explanations given to us and the records of theCompany examined by us there are no dues of sales-tax service-tax duty of customs dutyof excise value added tax or goods and service tax which have not been deposited onaccount of any dispute. The particulars of dues of income tax as at March 31 2019 whichhave not been deposited on account of a dispute are as follows:

Name of the statute Nature of dues Amount Period to which the amount relates Forum where the dispute is pending
(र.)
Income-tax Act 1961 Income Tax 60.82 Lakhs 2014-15 Commissioner of of Income Tax (Appeals)

viii. According to the records of the Company examined by us and the information andexplanation given to us the Company has not defaulted in repayment of loans or borrowingsto any financial institution or bank or Government or dues to debenture holders as at thebalance sheet date.

ix. In our opinion and according to the information and explanations given to us themoneys raised by way of initial public offer or further public offer (including debtinstruments) and term loans have been applied on an overall basis for the purposes forwhich they were obtained. x. During the course of our examination of the books and recordsof the Company carried out in accordance with the generally accepted auditing practicesin India and according to the information and explanations given to us we have neithercome across any instance of material fraud by the Company or on the Company by itsofficers or employees noticed or reported during the year nor have we been informed ofany such case by the Management. xi. The Company has paid/ provided for managerialremuneration in accordance with the requisite approvals mandated by the provisions ofSection 197 read with Schedule V to the Act. xii. As the Company is not a Nidhi Companyand the Nidhi Rules 2014 are not applicable to it the provisions of Clause 3(xii) of theOrder are not applicable to the Company. xiii. The Company has entered into transactionswith related parties in compliance with the provisions of Sections 177 and 188 of the Act.The details of such related party transactions have been disclosed in the standalonefinancial statements as required under Indian Accounting Standard (IND AS) 24 RelatedParty Disclosures specified under Section 133 of the Act. xiv. The Company has not madeany preferential allotment or private placement of shares or fully or partly convertibledebentures during the year under review. Accordingly the provisions of Clause 3(xiv) ofthe Order are not applicable to the Company. xv. The Company has not entered into any noncash transactions with its directors or persons connected with him. Accordingly theprovisions of Clause 3(xv) of the Order are not applicable to the Company. xvi. TheCompany is not required to be registered under Section 45-IA of the Reserve Bank of IndiaAct 1934. Accordingly the provisions of Clause 3(xvi) of the Order are not applicable tothe Company.

For Lovelock & Lewes
Firm Registration No. 301056E
Chartered Accountants
Amitesh Dutta
Kolkata Partner
May 24 2019 Membership No.058507

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