TO THE MEMBERS OF GOODRICKE GROUP LIMITED
Report on the Audit of the Financial Statements
We have audited the accompanying financial statements of GoodrickeGroup Limited ("the Company") which comprise the Balance Sheet as at 31st March2021 and the Statement of Profit and Loss (including Other Comprehensive Income) theStatement of Changes in Equity and the Cash Flow Statement for the year then ended and asummary of significant accounting policies and other explanatory information. In ouropinion and to the best of our information and according to the explanations given to usthe aforesaid financial statements give the information required by the Companies Act2013 ("the Act") in the manner so required and give a true and fair view inconformity with the Indian Accounting Standards prescribed under section 133 of the Actread with the Companies (Indian Accounting Standards) Rules 2015 as amended ("IndAS") and other accounting principles generally accepted in India of the state ofaffairs of the Company as at 31st March 2021 and its profit totalcomprehensive income its cash flows and the changes in equity for the year ended on thatdate.
Basis for Opinion
We conducted our audit of the financial statements in accordance withthe Standards on Auditing specified under section 143(10) of the Act (SAs). Ourresponsibilities under those Standards are further described in the Auditor'sResponsibility for the Audit of the Financial Statements section of our report. We areindependent of the Company in accordance with the Code of Ethics issued by the Instituteof Chartered Accountants of India (ICAI) together with the ethical requirements that arerelevant to our audit of the financial statements under the provisions of the Act and theRules made there under and we have fulfilled our other ethical responsibilities inaccordance with these requirements and the ICAI's Code of Ethics. We believe that theaudit evidence obtained by us is sufficient and appropriate to provide a basis for ouraudit opinion on the financial statements.
Key Audit Matters
Key audit matters are those matters that in our professional judgmentwere of most significance in our audit of the financial statements of the current period.These matters were addressed in the context of our audit of the financial statements as awhole and in forming our opinion thereon and we do not provide a separate opinion onthese matters. We have determined the matter described below to be the key audit matter tobe communicated in our report.
|Sr. No. ||Key Audit Matter ||Auditor's Response |
|1 ||Biological assets and Inventory of tea (Valuation) ||With respect to the valuation of biological assets and finished goods of tea (manufactured from green leaves at its estates) as at the year-end: |
| ||Biological assets of the Company represent unharvested green tea leaves which are measured at fair value less costs to sell as per IND AS 41. || Obtained an understanding of the fair value measurement methodologies used and assessing the reasonableness and consistency of the significant assumptions used in the valuation by the Company. In making this evaluation we also assessed the objectivity and independence of Company's internal specialists involved in the process. |
| ||Finished goods of tea produced from agricultural produce are valued at lower of cost arrived at by adding the cost of conversion to the fair value of agricultural produce and the net realisable value. The Company's agricultural produce comprises of harvested green leaves and is valued at fair value less cost to sell at the point of harvest as per IND AS 41. || Evaluated the design and implementation of Company's controls around the valuation of biological assets and inventory of tea and tested the operating effectiveness of same. |
| ||For harvested or unharvested green leaves since there is no active market for own leaves significant estimates are used by management in determining the valuation of biological assets and agricultural produce consumed in manufacture of black tea. || Assessed the plucking yields to analyse the stage of transformation considered for the fair valuation of biological assets. |
| ||The principal assumptions and estimates in the determination of the fair value (as per IND AS 113) include assumptions about the yields stage of transformation and market prices of green leaves which is dependent upon various market conditions and the possible impact of COVID-19. || Assessed the basis reasonableness and accuracy of adjustments made to market prices of green leaves (agricultural produce) considering the quality differential of the Company's production. |
| ||The determination of these assumptions and estimates require careful evaluation by management and could lead to material impact on the financial position and the results of the Company and therefore has been considered as a key audit matter. || Tested the arithmetical accuracy and consistency of application of the fair value approaches and models over the years. |
| ||Refer note no. 3(I) 3(J) 6 and 12 to the financial statements. || Compared the cost of the finished goods of tea with the net realisable value and checked if the finished goods were recorded at net realisable value where the cost was higher than the net realisable value. |
| || || Tested the appropriateness of the disclosure in the financial statements in accordance with the applicable financial reporting framework. |
Information Other than the Financial Statements and Auditor'sReport Thereon
The Company's Board of Directors is responsible for the other information.The other information comprises the information included in the Report of the Directorsand Management Discussion & Analysis Report but does not include the financialstatements and our auditor's report thereon.
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 isto read the other information and in doing so consider whether the other information ismaterially inconsistent with the financial statements or our knowledge obtained during thecourse of our audit or otherwise appears to be materially misstated.
If based on the work we have performed we conclude that there is a materialmisstatement of this other information we are required to report that fact. We havenothing to report in this regard.
Management's Responsibility for the Financial Statements
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 financialstatements that give a true and fair view of the financial position financial performanceincluding other comprehensive income cash flows and changes in equity of the Company inaccordance with the Ind AS and other accounting principles generally accepted in India.This responsibility also includes maintenance of adequate accounting records in accordancewith the provisions of the Act for safeguarding 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 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 financialstatement that give a true and fair view and are free from material misstatement whetherdue to fraud or error.
In preparing the financial statements management is responsible forassessing the Company's ability to continue as a going concern disclosing asapplicable matters related to going concern and using the going concern basis ofaccounting 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 Responsibility for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether thefinancial statements as a whole are free from material misstatement whether due to fraudor error and to issue an auditor's report that includes our opinion. Reasonableassurance is a high level of assurance but is not a guarantee that an audit conducted inaccordance with SAs will always detect a material misstatement when it exists.Misstatements can arise from fraud or error and are considered material if individuallyor in the aggregate they could reasonably be expected to influence the economic decisionsof users taken on the basis of these 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 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 financial control 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 control 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 the management.
Conclude on the appropriateness of management's use of the going concernbasis of accounting and based on the audit evidence obtained whether a materialuncertainty exists related to events or conditions that may cast significant doubt on theCompany's ability to continue as a going concern. If we conclude that a materialuncertainty exists we are required to draw attention in our auditor's report to therelated disclosures in the financial statements or if such disclosures are inadequate tomodify our opinion. Our conclusions are based on the audit evidence obtained up to thedate of our auditor's report. However future events or conditions may cause theCompany to cease to continue as a 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.
Materiality is the magnitude of misstatements in the financialstatements that individually or in aggregate makes it probable that the economicdecisions of a reasonably knowledgeable user of the financial statements may beinfluenced. We consider quantitative materiality and qualitative factors in
(i) planning the scope of our audit work and in evaluating the resultsof our work; and
(ii) to evaluate the effect of any identified misstatements in thefinancial statements.
We communicate with those charged with governance regarding amongother matters the planned scope and timing of the audit and significant audit findingsincluding any significant deficiencies in internal control that we identify during ouraudit.
We also provide those charged with governance with a statement that wehave complied with relevant ethical requirements regarding independence and tocommunicate with them all relationships and other matters that may reasonably be thoughtto bear on our independence and where applicable related safeguards.
From the matters communicated with those charged with governance wedetermine those matters that were of most significance in the audit of the financialstatements of the current period 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.
Report on Other Legal and Regulatory Requirements
1. As required by Section 143(3) of the Act based on our audit wereport 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 the Statement of Changes in Equity and the Cash Flow Statement dealt with by thisReport are in agreement with the books of account.
d) In our opinion the aforesaid financial statements comply with the Ind AS specifiedunder Section 133 of the Act.
e) On the basis of the written representations received from the directors as on 31stMarch 2021 taken on record by the Board of Directors none of the directors isdisqualified as on 31st March 2021 from being appointed as a director in termsof Section 164(2) of the Act.
f) With respect to the adequacy of the internal financial controls over financialreporting of the Company and the operating effectiveness of such controls refer to ourseparate Report in "Annexure A". Our report expresses an unmodified opinion onthe adequacy and operating effectiveness of the Company's internal financial controlsover financial reporting.
g) With respect to the other matters to be included in the Auditor's Report inaccordance with the requirements of section 197(16) of the Act as amended In our opinionand to the best of our information and according to the explanations given to us theremuneration paid by the Company to its directors during the year is in accordance withthe provisions of section 197 of the Act.
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 2014as 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 - Refer Note 30.1(a).
ii. The Company did not have any long-term contracts including derivative contracts forwhich there were any material foreseeable losses.
iii. There has been no delay in transferring amounts required to be transferred tothe Investor Education 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) ofthe Act we give in "Annexure B" a statement on the matters specified inparagraphs 3 and 4 of the Order.
ANNEXURE "A" TO THE INDEPENDENT AUDITOR'S REPORT
(Referred to in paragraph 1(f)under Report on Other Legal andRegulatory Requirements' section of our report of even date)
Report on the Internal Financial Controls Over Financial Reportingunder Clause (i) of Sub-section 3 of Section 143 of the Companies Act 2013 ("theAct")
We have audited the internal financial controls over financialreporting of Goodricke Group Limited ("the Company") as of 31stMarch 2021 in conjunction with our audit of the financial statements of the Company forthe 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 company's policies the safeguardingof its 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'sinternal financial controls over financial reporting based on our audit. We conducted ouraudit in accordance with the Guidance Note on Audit of Internal Financial Controls OverFinancial Reporting (the "Guidance Note") issued by the Institute of CharteredAccountants of India and the Standards on Auditing prescribed under Section 143(10) of theCompanies Act 2013 to the extent applicable to an audit of internal financial controls.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 was established and maintained and if suchcontrols operated effectively in all material respects.
Our audit involves performing procedures to obtain audit evidence aboutthe adequacy of the internal financial controls system over financial reporting and theiroperating effectiveness. Our audit of internal financial controls over financial reportingincluded obtaining an understanding of internal financial controls over financialreporting assessing the risk that a material weakness exists and testing and evaluatingthe design and operating effectiveness of internal control based on the assessed risk. Theprocedures selected depend on the auditor's judgement including the assessment ofthe risks of material misstatement of the financial statements whether due to fraud orerror.
We believe that the audit evidence we have obtained is sufficient andappropriate to provide a basis for our audit opinion on the Company's internalfinancial controls system over financial reporting.
Meaning of Internal Financial Controls Over Financial Reporting
A company's internal financial control over financial reporting isa process 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 controlover financial reporting includes those policies and procedures 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 assetsthat could have a material effect on the financial statements.
Inherent Limitations of Internal Financial Controls Over FinancialReporting
Because of the inherent limitations of internal financial controls overfinancial reporting including the possibility of collusion or improper managementoverride of controls material misstatements due to error or fraud may occur and not bedetected. Also projections of any evaluation of the internal financial controls overfinancial reporting to future periods are subject to the risk that the internal financialcontrol over financial reporting may become inadequate because of changes in conditionsor that the degree of compliance with the policies or procedures may deteriorate.
In our opinion to the best of our information and according to theexplanations given to us the Company has in all material respects an adequate internalfinancial controls system over financial reporting and such internal financial controlsover financial reporting were operating effectively as at 31st March 2021based on the criteria for internal financial control over financial reporting establishedby the Company considering the essential components of internal control stated in theGuidance Note on Audit of Internal Financial Controls Over Financial Reporting issued bythe Institute of Chartered Accountants of India.
ANNEXURE "B" TO THE INDEPENDENT AUDITOR'S REPORT
(Referred to in paragraph 2 under Report on Other Legal andRegulatory Requirements' section of our report of even date)
(i) (a) The Company has maintained proper records showing full particulars includingquantitative details and situation of property plant and equipment.
(b) The Company has a program of verification of property plant and equipment to coverall the items in a phased manner over a period of 3 years which in our opinion isreasonable having regard to the size of the Company and the nature of its assets. Pursuantto the program certain property plant and equipment were physically verified by theManagement during the year. According to the information and explanations given to us nomaterial discrepancies were noticed on such verification.
(c) With respect to immovable properties of land and buildings that are freeholdaccording to the information and explanations given to us and the records examined by usand based on the examination of the registered sale deed/ transfer deed / conveyance deedprovided to us we report that the title deeds of such immovable properties are held inthe name of the Company as at the balance sheet date. In respect of immovable propertiesof leasehold land and disclosed as Property Plant and Equipment in Note 5A to thefinancial statements according to the information and explanations given to us and therecords examined by us and based on the examination of the sale agreement provided to uswe report that the lease deed is not in the name of the Company as the lease deed is yetto be executed.
(ii) As explained to us the inventories other than stocks lying with third parties(which have substantially been confirmed) were physically verified during the year by theManagement at reasonable intervals and no material discrepancies were noticed on suchphysical verification.
(iii) The Company has not granted any loans secured or unsecured to companies firmsLimited Liability Partnerships or other parties covered in the register maintained underSection 189 of the Companies Act 2013.
(iv) In our opinion and according to the information and explanations given to us theCompany has complied with the provisions of Section 185 and 186 of the Companies Act 2013in respect of grant of loans making investments and providing guarantees and securitiesas applicable.
(v) According to the information and explanations given to us the Company has notaccepted any deposit during the year and had no unclaimed deposits at the beginning of theyear as per the provisions of Sections 73 to 76 or any other relevant provisions of theCompanies Act 2013.
(vi) The maintenance of cost records has been specified by the Central Government undersection 148(1) of the Companies Act 2013. We have broadly reviewed the cost recordsmaintained by the Company pursuant to the Companies (Cost Records and Audit) Rules 2014as amended prescribed by the Central Government under sub-section (1) of Section 148 ofthe Companies Act 2013 and are of the opinion that prima facie the prescribed costrecords have been made and maintained.
We have however not made a detailed examination of the cost records with a view todetermine whether they are accurate or complete.
(vii)According to the information and explanations given to us in respect of statutorydues:
(a) The Company has generally been regular in depositing undisputed statutory duesincluding Provident Fund Employees' State Insurance Income-tax Customs Duty Goodsand Services Tax Cess and other material statutory dues applicable to it to theappropriate authorities.
(b) There were no undisputed amounts payable in respect of Provident FundEmployees' State Insurance Income-tax Customs Duty Goods and Services Tax Cessand other material statutory dues in arrears as at 31st March 2021 for aperiod of more than six months from the date they became payable.
(c) Details of dues of Income-tax Sales Tax Service Tax Customs Duty Excise Dutyand Value
Added Tax which have not been deposited as on 31st March2021 on account of disputes are given below:
|Name of Statute ||Nature of Dues ||Forum where Dispute is of Pending ||Period to which the Amount Relates ||Amount (Rs. in Millions) |
|Income-tax Act 1961 ||Central Income -tax ||Commissioner of Income-tax (Appeals) ||2001-2005 2006-2009 2010-20112015-2017 ||68.51 |
|Bengal Agricultural Income Tax 1944 ||Bengal Agricultural Income Tax ||Commissioner of Agricultural Income Tax West Bengal ||1984-1985 1989-1990 ||16.40 |
| || ||The West Bengal Commercial Taxes Appellate and Revision Board ||1990-1991 ||13.33 |
| || ||Agricultural Income Tax officer West Bengal ||2001-2003 ||5.36 |
|Central Excise Act 1944 ||Excise duty ||The Customs Excise and Service Tax Appellate Tribunal ||2010-2017 ||314.12 |
| || ||The Customs Excise and Service Tax Appellate Tribunal ||2016-2018 ||29.66 |
| || ||The Customs Excise and Service Tax Appellate Tribunal ||2013-2018 ||0.52 |
|The West Bengal Value Added Tax Act 2003 ||VAT ||The West Bengal Commercial Taxes Appellate And Revisional Board ||2007-2008 ||0.32 |
|The Madhya Pradesh VAT Act 2002 ||VAT ||The Appellate Authority Additional Commissioner Commercial Tax Indore ||2014-2015 ||1.35 |
|The Central Sales Tax Act 1956 ||Sales tax ||The West Bengal Commercial Taxes Appellate And Revisional Board ||2007-2008 ||1.18 |
| || ||The Appellate Authority Additional Commissioner Commercial Tax Indore ||2014-2018 ||6.98 |
(viii) In our opinion and according to the information and explanationsgiven to us the Company has not defaulted in the repayment of loans or borrowings tobanks. The Company has not taken any loans from financial institutions and government norhas the company issued any debentures.
(ix) In our opinion and according to the information and explanationsgiven to us the Company has utilized the money raised by way of the term loans during theyear for the purposes for which they were raised. The Company has not raised moneys by wayof initial public offer or further public offer (including debt instruments).
(x) To the best of our knowledge and according to the information andexplanations given to us no fraud by the Company and no material fraud on the Company byits officers or employees has been noticed or reported during the year.
(xi) In our opinion and according to the information and explanationsgiven to us the Company has paid / provided managerial remuneration in accordance withthe requisite approvals mandated by the provisions of section 197 read with Schedule V tothe Companies Act 2013.
(xii) The Company is not a Nidhi Company and hence reporting underclause (xii) of the Order is not applicable.
(xiii) In our opinion and according to the information and explanationsgiven to us the Company is in compliance with Sections 177 and 188 of the Companies Act2013 where applicable for all transactions with the related parties and the details ofrelated party transactions have been disclosed in the financial statements etc. asrequired by the applicable accounting standards.
(xiv) During the year the Company has not made any preferentialallotment or private placement of shares or fully or partly convertible debentures andhence reporting under clause (xiv) of the Order is not applicable to the Company.
(xv) In our opinion and according to the information and explanationsgiven to us during the year the Company has not entered into any non-cash transactionswith its directors or directors of its holding company or persons connected with them andhence provisions of section 192 of the Companies Act 2013 are not applicable. The Companydoes not have any subsidiary and associate companies.
(xvi) The Company is not required to be registered under section 45-IAof the Reserve Bank of India Act 1934.
| ||For DELOITTE HASKINS & SELLS LLP |
| ||Chartered Accountants |
| ||(Firm Registration No. 117366W/W-100018) |
| ||A. Bhattacharya |
| ||(Partner) |
|Place : Kolkata ||(Membership No. 054110) |
|Date : 25th June 2021 ||UDIN : 21054110AAAADV9111 |