TO THE MEMBERS OF DIANA TEA COMPANY LIMITED
Report on the Audit of the Standalone Financial Statements Opinion
We have audited the accompanying standalone financial statements of Diana TeaCompany Limited (the Company) which comprise the Balance Sheet as atMarch 31 2019 the Statement of Profit and Loss (including Other Comprehensive Income)the Statement of Changes in Equity and the Statement of Cash Flows for the year ended onthat date and a summary of the 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 financial statements give theinformation required by the Companies Act 2013 (the Act) in the manner sorequired and give a true and fair view in conformity with the Indian Accounting Standardsprescribed under section 133 of the Act read with the Companies (Indian AccountingStandards) Rules 2015 as amended (Ind AS) and other accounting principlesgenerally accepted in India of the state of affairs of the Company as at March 31 2019the loss and total comprehensive income changes in equity and its cash flows for the yearended on that date.
Basis for Opinion
We conducted our audit of the standalone financial statements in accordance with theStandards on Auditing (SAs) 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 bythe Institute of Chartered Accountants of India (ICAI) together with the independencerequirements that are relevant to our audit of the standalone financial statements underthe provisions of the Act and the Rules made thereunder and we have fulfilled our otherethical responsibilities in accordance with these requirements and the ICAI's Code ofEthics. We believe that the audit evidence we have obtained is sufficient and appropriateto provide a basis for our audit opinion on the standalone financial statements.
Emphasis of Matter
We draw attention to following:
a) The company has not made provision for part of gratuity liability as per actuarialvaluation as per Ind AS 19 - Employee Benefits.
b) The loans and advances include amounts receivable from two parties standing sincelong in respect of which no confirmation/acknowledgement schedule of delivery andagreement was available and no provision has been made in the books for such advances.However as per information and explanation given to us the company has initiated processof recovery of the same and as per management no provision for such advances is requiredto be made in the current year.
Our Opinion is not modified in respect of above matters
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 of the current period.These matters were addressed in the context of our audit of the standalone financialstatements as a whole and in forming our opinion thereon and we do not provide aseparate opinion on these matters. We have determined the matters described below to bethe key audit matters to be communicated in our report.
|Key Audit Matter (KAM) ||Auditor's Response |
|1. Accuracy of recognition measurement presentation and disclosures ||Our audit procedures included the following:- We assessed the Company's process to identify the impact of adoption of the new revenue accounting standard. Our audit approach consisted testing of the design and operating effectiveness of the internal controls and substantive testing as follows: |
|of revenues and other related balances in view of adoption of Ind AS 115 Revenue from Contracts with customers(New Revenue Accounting Standards) || |
|The application of new accounting standards involves certain key judgments relating to identification of distinct performance obligations determination of transaction price of the identified performance obligations the appropriateness of basis used to measure revenue recognized over a period and estimate of variable consideration. || Evaluated the design of internal controls relating to implementation of the new revenue accounting standard. |
| || Selected a sample of continuing and new contracts and tested the operating effectiveness of the internal control relating to identification of the distinct performance obligations and determination of transaction price. We carried out a combination of procedures involving enquiry and observation re-performance and inspection of evidence in respect of operation of these controls. |
|Additionally new revenue accounting standards contains disclosures which involves collation of information in respect of disaggregated revenue and periods over which the remaining performance obligations will be satisfied subsequent to Balance Sheet date. || Tested the relevant information technology systems access and change management controls relating to contracts and related information used in recording and disclosing revenue in accordance with the new revenue accounting standard. |
| || Selected a sample of continuing and new contracts and performed the following procedures : |
| || Read analysed and identified the distinct performance obligations in these contracts. - Compared these performance obligations with that identified and recorded by the Company. |
| || Considered the terms of the contracts to determine the transaction price including any variable consideration to verify the transaction price used to compute revenue and to test the basis of estimation of the variable consideration. Sample of revenues disaggregated by type and service offerings was tested with the performance obligations specified in the underlying contracts. |
| || Performed analytical procedures for reasonableness of revenues disclosed by type and service offerings. |
Information Other than the Standalone Financial Statements and Auditor's Report Thereon
The Company's Board of Directors is responsible for the preparation of the otherinformation. The other information comprises the information included in the ManagementDiscussion and Analysis Board's Report including Annexures to Board's Report CorporateGovernance and Shareholder's Information but does not include the standalone financialstatements and our auditor's report thereon. Our opinion on the standalone financialstatements does not cover the other information and we do not express any form ofassurance conclusion thereon. In connection with our audit of the standalone financialstatements our responsibility is to read the other information and in doing so considerwhether the other information is materially inconsistent with the standalone financialstatements or our knowledge obtained during the course of our audit or otherwise appearsto be materially misstated. If based on the work we have performed we conclude thatthere is a material misstatement of this other information we are required to report thatfact. We have nothing to report in this regard.
Responsibilities of Management and Those Charged With Governance for the StandaloneFinancial Statement
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 totalcomprehensive income changes in equity and cash flow of the Company in accordance withthe Ind AS and other accounting principles generally accepted in India. Thisresponsibility also includes maintenance of adequate accounting records in accordance withthe provisions of the Act for safeguarding the assets of the Company and for preventingand detecting frauds and other irregularities; selection and application of appropriateaccounting policies; making judgments and estimates that are reasonable and prudent; anddesign implementation 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 Board ofDirectors is responsible for assessing the Company's ability to continue as a goingconcern disclosing as applicable matters related to going concern and using the goingconcern basis of accounting unless management either intends to liquidate the Company orto cease operations or has no realistic alternative but to do so. The Board of Directorsare responsible for overseeing 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 inaccordance with SAs we exercise professional judgment and maintain professionalskepticism 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 financial controls relevant to the audit inorder to design audit procedures that are appropriate in the circumstances. Under section143(3)(i) of the Act we are also responsible for expressing our opinion on whether theCompany has adequate internal financial controls system in place and the operatingeffectiveness 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 standalone financial statements or if such disclosures are inadequate to modify ouropinion. Our conclusions are based on the audit evidence obtained up to the date of ourauditor's report. However future events or conditions may cause the Company to cease tocontinue as a 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.
Materiality is the magnitude of misstatements in the standalone financial statementsthat individually or in aggregate makes it probable that the economic decisions of areasonably knowledgeable user of the financial statements may be influenced. We considerquantitative materiality and qualitative factors in (i) planning the scope of our auditwork and in evaluating the results of our work; and (ii) to evaluate the effect of anyidentified misstatements in the financial statements.
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 alsoprovide those charged with governance with a statement that we have complied with relevantethical requirements regarding independence and to communicate with them allrelationships and other matters that may reasonably be thought to bear on ourindependence and where applicable related safeguards.
Report on Other Legal and Regulatory Requirements
1. As required by Section 143(3) of the Act based on our audit we report that:
a) We have sought and obtained all the information and explanations which to the bestof our knowledge and belief were necessary for the purposes of 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 Statement of Changes in Equity and the Statement of Cash Flow dealt with by thisReport are in agreement with the relevant books of account.
d) In our opinion the aforesaid standalone financial statements comply with the Ind ASspecified under Section 133 of the Act read with Rule 7 of the Companies (Accounts)Rules 2014.
e) The matter described in Emphasis of Matters paragraph above in our opinion may nothave an adverse effect on the functioning of the Company.
f) 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 disqualified as on March 31 2019 frombeing appointed as a director in terms of Section 164 (2) of the Act. g) With respect tothe adequacy of the internal financial controls over financial reporting of the Companyand the operating effectiveness of such controls refer to our separate Report inAnnexure A. Our report expresses an unmodified opinion on the adequacy andoperating effectiveness of the Company's internal financial controls over financialreporting.
h) 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 as amended 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 its financialposition in its financial statements as stated in Note No 30 to the Ind AS financialstatements.
ii. The Company did not have any long-term contracts including derivative contracts forwhich there were any material foreseeable losses.
iii. There were no amounts which were required to be transferred to the InvestorEducation and Protection Fund by the Company.
2. As required by the Companies (Auditor's Report) Order 2016 (the Order)issued by the Central Government in terms of Section 143(11) of the Act we give inAnnexure B a statement on the matters specified in paragraphs 3 and 4 of theOrder.
For B Nath & Co
(Firm's Registration No. 307057E) Sd/-
Date: May 28 2019
to the Independent Auditors' Report
Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section143 of the Companies Act 2013 (the Act)
We have audited the internal financial controls over financial reporting of DianaTea Company Limited (the Company) as of March 31 2019 in conjunction withour audit of the Ind AS financial statements of the Company for the year ended on thatdate.
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 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.
Our responsibility is to express an opinion on the Company's internal financialcontrols over financial reporting based on our audit. We conducted our audit in accordancewith the Guidance Note on Audit of Internal Financial Controls over Financial Reporting(the Guidance Note) and the Standards on Auditing issued by ICAI and deemedto be prescribed under section 143(10) of the Companies Act 2013 to the extentapplicable to an audit of internal financial controls both applicable to an audit ofInternal Financial Controls and both issued by the Institute of Chartered Accountants ofIndia. Those Standards and the Guidance Note require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetheradequate internal financial controls over financial reporting was established andmaintained and if such controls operated effectively in all material respects. Our auditinvolves performing procedures to obtain audit evidence about the adequacy of the internalfinancial controls system over financial reporting and their operating effectiveness. Ouraudit of internal financial controls over financial reporting included obtaining anunderstanding of internal financial controls over financial reporting assessing the riskthat 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 judgment including the assessment of the risks of materialmisstatement of the Ind AS financial statements whether due to fraud or error.
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 systemover financial reporting.
Meaning of Internal Financial Controls over Financial Reporting
A Company's internal financial control over financial reporting is a process designedto provide reasonable assurance regarding the reliability of financial reporting and thepreparation of financial statements for external purposes in accordance with generallyaccepted accounting principles. A Company's internal financial control over financialreporting includes those policies and procedures that (1) pertain to the maintenance ofrecords that in reasonable detail accurately and fairly reflect the transactions anddispositions of the assets of the Company; (2) provide reasonable assurance thattransactions are recorded as necessary to permit preparation of financial statements inaccordance with generally accepted accounting principles and that receipts andexpenditures 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 Financial Reporting
Because of the inherent limitations of internal financial controls over financialreporting including the possibility of collusion or improper management override ofcontrols material misstatements due to error or fraud may occur and not be detected.Also projections of any evaluation of the internal financial controls over financialreporting to future periods are subject to the risk that the internal financial controlover financial reporting may become inadequate because of changes in conditions or thatthe degree of compliance with the policies or procedures may deteriorate.
In our opinion 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 2019 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.
For B Nath & Co
(Firm's Registration No. 307057E) Sd/-
Date: May 28 2019
to the Independent Auditors' Report
The Annexure referred to in Independent Auditors' Report to the members of the Companyon the standalone Ind AS financial statements for the period ended March 31 2019 wereport that: (i) (a) The Company has maintained proper records showing full particularsincluding quantitative details and situation of the fixed assets;
(b) The fixed assets were physically verified during the year under audit by theManagement in accordance with a regular programme of verification which in our opinionprovides for physical verification of all the fixed assets at reasonable intervals.According to the information and explanation given to us no material discrepancies werenoticed on the such verification;
(c) As per information and explanation given to us by the management and the recordsverified by us and based on the examination of the registered sale deed provided to us wereport that all the immovable properties are held in the name of the Company.
(ii) In our opinion the inventories were physically verified during the year by theManagement at reasonable intervals and as explained to us no material discrepancies werenoticed on physical verification.
(iii) According to the information and explanations given to us and on the basis of ourexamination of the books of account the Company has not granted any loans secured orunsecured to companies firms limited liability partnerships or other parties covered inthe register maintained under section 189 of the Companies Act 2013. Consequently theprovisions of paragraph iii(a) iii(b) and iii(c) of the Order are not applicable to theCompany and hence not commented upon;
(iv) In our opinion and according to information and explanations given to us theCompany has complied with the provision of Sections 186 of the Companies Act 2013 inrespect of making investments. The Company has not given any loan or granted any securityin terms of Section 185 and 186 of the Act;
(v) The Company has not accepted any deposit from the public covered under Section 73to 76 of the Companies Act 2013. Therefore the provisions of paragraph 3(v) of the Orderis not applicable to the Company;
(vi) According to the information and explanations given to us in our opinion theCompany have prima facie made and maintained the prescribed cost records pursuant to theCompanies (Cost Records and Audit) Rules 2014 as amended prescribed by the CentralGovernment under subsection (1) of Section 148 of the Companies Act 2013. We havehowever not made a detailed examination of the cost records with a view to determiningwhether they are accurate or complete; (vii) a) According to the information andexplanation given to us and on the basis of our examination of the records of the companyamounts deducted/accrued in the books of account in respect of undisputed statutory duesincluding Provident Fund Income Tax Sales Tax Service Tax Value Added Tax GST Cessor other material statutory dues have been generally regularly deposited during the periodby the Company with appropriate authorities.
According to the information and explanation given to us no undisputed statutory duesincluding Provident Fund Income Tax Service Tax Value Added Tax GST cess or othermaterial statutory dues were in arrears as at March 31 2019 for a period of more than sixmonths from the date they become payable;
b) According to the information and explanation given to us the following dues of vatsales-tax central sales tax excise service tax and ESI have not been deposited by thecompany on account of dispute as at March 31 2019:
|Name of the Statute ||Nature of dues ||Amount ||Period to which the amount relates ||Forum where dispute is pending |
| || ||(Rs. In Lakhs) || || |
|West Bengal Value Added Tax Act 2003 ||Sales Tax ||12.31 ||FY 2010-2011 ||Senior Joint Commissioner of Commercial Taxes Chowringhee Circle Kolkata |
|Central Sales Tax Act 1956 ||CST ||15.28 ||FY 2010-2011 ||Senior Joint Commissioner of Commercial Taxes Chowringhee Circle Kolkata |
(viii) In our opinion and according to the information given to us the Company has notdefaulted in repayment of dues to banks. There were no debentures outstanding during theyear.
(ix) According to information and explanation given to us the Company has not raisedmoneys by way of initial public offer or further public offer (including debt instruments)and term loans during the year ended March 31 2019. Accordingly paragraph 3(ix) of theOrder is not applicable.
(x) Based on the audit procedures performed and the information and explanations givento us we report that no material fraud on or by the Company has been noticed or reportedduring the period nor have we been informed of such case by the management;
(xi) According to information and explanation given to us the Company has paid orprovided managerial remuneration in accordance with the provisions of section 197 readwith Schedule V to the Act.
(xii) In our opinion and according to the information and explanation given to us theCompany is not a Nidhi Company and hence the paragraph 3(xii) is not applicable;
(xiii) According to the information and explanations given to us and based on ourexamination of the records of the Company transactions with the related parties are incompliance with section 177 and 188 of the Act where applicable and details of suchtransactions have been disclosed in the financial statements as required by the applicableIndian accounting standards
(xiv) According to information and explanation given to us the Company has not made anypreferential allotment or private placement of shares or fully or partly convertibledebentures during the period under review; (xv) According to information and explanationgiven to us the Company has not entered into any non-cash transactions with directors orpersons connected with him. Accordingly the paragraph 3(xv) is not applicable the Company;
(xvi) In our opinion and on the basis of information and explanation given to us by themanagement the Company is not required to be registered under section 45-IA of theReserve Bank of India Act 1934.
For B Nath & Co
(Firm's Registration No. 307057E) Sd/-
Date: May 28 2019