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The Grob Tea Co Ltd.

BSE: 538367 Sector: Agri and agri inputs
NSE: GROBTEA ISIN Code: INE646C01018
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The Grob Tea Co Ltd. (GROBTEA) - Auditors Report

Company auditors report

To The Members of

The Grob Tea Company Limited

Report on the Indian Standard (Ind AS) Financial Statements

Opinion

In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid Ind AS financial statements give the information required bythe Act in the manner so required and give a true and fair view in conformity with theaccounting principles generally accepted in India of the state of affairs of the Companyas at March 31 2019 and its total comprehensive income (comprising of Profit and OtherComprehensive Income) its cash flows and the changes in equity for the year ended on thatdate.

We have audited the accompanying Ind AS financial statements of THE GROB TEA COMPANYLIMITED("the Company") which comprise the Balance Sheet as at March 31 2019and the Statement of Profit and Loss (including Other Comprehensive Income) the Statementof Changes in Equity and the Statement of Cash Flows for the year then ended and a summaryof the significant accounting policies and other explanatory information.

Basis for Opinion

We conducted our audit in accordance with the Standards on Auditing (SAs) specifiedunder section 143(10) of the Companies Act 2013. Our responsibilities under thoseStandards are further described in the Auditor's Responsibilities for the Audit of theFinancial Statements section of our report. We are independent of the Company inaccordance with 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 Companies Act 2013 and the Rules thereunder and we have fulfilled our other ethical responsibilities in accordance with theserequirements and the Code of Ethics. We believe that the audit evidence we have obtainedis sufficient and appropriate to provide a basis for our opinion.

Key Audit Matters

Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the financial statements of the current period. 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. Wehave determined the matters described below to be the key audit matters to be communicatedin our report.

Key Audit Matter Auditor's Response
1 Accuracy of recognition measurement presentation and disclosures of revenues and other related balances in view of adoption of IND AS 115 " Revenue from contracts with customers "( New revenue accounting standard) Principal Audit procedures
We assessed the Company's process to identify the impact of adoption of the new revenue accounting standard. Our audit approach consisted testing of design and operating effectiveness of the Internal controls and substantive testing as follows:
• Evaluated the design of internal controls relating to implementation of new revenue accounting standard
• Selected a sample accounting 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
• Selected a sample of continuing and new contracts and performed the following procedures :
— In respect of fixed time contracts progress towards satisfaction of performance obligation used to compute recorded revenue was verified with actual and estimated efforts.
— Reviewed a sample of contracts with unbilled revenues to identify possible delays in achieving milestones which require change in estimated efforts to complete the remaining performance obligations.

Information Other than the 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 BusinessResponsibility Report Corporate Governance and Shareholder's Information but does notinclude the financial statements and our auditor's report thereon.

Our opinion on the financial statements does not cover the other information and we donot 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 during thecourse of our audit or otherwise appears to be materially misstated. If based on the workwe have performed we conclude that there is a material misstatement of this otherinformation we are required to report that fact. We have nothing to report in thisregard.

Management's Responsibility for the Ind AS Financial Statements

The Company's Board of Directors is responsible for the matters stated in Section134(5) of the Companies Act 2013 ("the Act") with respect to the preparation ofthese 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 Indian Accounting Standards (Ind AS)prescribed under section 133 of the Act read with the Companies (Indian AccountingStandards) Rules 2015 as amended and other accounting principles generally accepted inIndia.

This responsibility also includes maintenance of adequate accounting records inaccordance with the provisions of the Act for safeguarding the assets of the Company andfor preventing 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 financialstatements that give a true and fair view and are free from material misstatement whetherdue to fraud or error.

Auditor's Responsibility

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.

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

• Identify and assess the risks of material misstatement of the 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 but not for the purposeof expressing an opinion on the effectiveness of the entity's internal control.

• 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 entity'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 entity 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.

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

We also provide those charged with governance with a statement that we have compliedwith relevant ethical requirements regarding independence and to communicate with themall relationships and other matters that may reasonably be thought to bear on ourindependence and where applicable related safeguards.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor's Report) Order 2016 ("the Order")issued by the Central Government of India in terms of sub-section (11) of section 143 ofthe Companies Act 2013. We enclose in the Annexure A statement on the matters specifiedin paragraphs 3 and 4 of the said Order.

2. As required by section 143(3) of the Act 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 appears from our examination of those books;

c) The balance sheet statement of profit and loss (including Other ComprehensiveIncome) and cash flow statement and the Statement of Changes in Equity dealt with by thisreport are in agreement with the books of account;

d) In our opinion the aforesaid Ind AS financial statements comply with the IndianAccounting Standards specified under Section 133 of the Act.

e) On the basis of the written representations received from the directors as on 31stMarch 2019 taken on record by the Board of Directors none of the directors isdisqualified as on 31st March 2019 from being appointed as a director in terms of Section164 (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 B"; and

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. The Company has disclosed the impact of pending litigations on its financialposition in its Ind AS financial statements – Refer Note 27 to the financialstatements.

ii. The Company did not have any long-term contracts including derivatives contractsfor which there were any material foreseeable losses.

iii. The company has transferred unclaimed dividend to Investor Education andProtection Fund.

UMESH BARASIA FCA PARTNER
(Membership No: 53158)
For & On behalf of
DHANDHANIA & ASSOCIATES
Place : Kolkata Chartered Accountants
Date : 23rd May 2019 Registration No. 316052E

"ANNEXURE A" TO THE INDEPENDENT AUDITOR'S REPORT

The Annexure referred to in our report to the members of the Company for the year endedon 31st March 2019. We report that.

i. (a) The company maintains the proper records showing full particulars includingquantitative details and situation of fixed assets.

(b) As per the information and explanation given to us and as verified by usmanagement has physically verified fixed assets during the year and no materialdiscrepancy was noticed on such verification.

(c) The title deeds of immovable properties are held in the name of the company exceptfor one building property of gross block of Rs. 130749000/- and net block of Rs.96371919/- .

ii. As per the information and explanation given to us and as verified by us themanagement is verifying inventory at regular intervals the frequency of verification ofwhich in our opinion is reasonable and no material discrepancies were noticed. Inrespect of inventory lying with third parties these have been verified with reference tosubsequent sale.

iii. The Company has not granted loans secured or unsecured to companies firms orother parties covered in the register maintained under section 189 of Companies Act 2013.Accordingly the provisions of clause (iii) (a) (b) & (c) of the order are notapplicable to the company.

iv. In our opinion and according to the information and explanation given to us thereare no guaranties and securities granted in respect of which provisions of section 185and 186 of the Companies Act 2013 are applicable. Based on our audit procedures performedand according to information and explanations given by the management the company hascomplied with provisions of Section 186 of the Act in respect of loans granted andinvestments made during the year.

v. The company has not accepted deposits within the meaning of provisions of sections73 to 76 or any other relevant provisions of the Companies Act 2013 and the rules framedthere under.

vi. We have broadly reviewed the books of account maintained by the company in respectof products where pursuant to the rules made by the Central Government the maintenance ofcost records has been prescribed u/s 148(1) of the Act and are of the opinion that primafacie the prescribed accounts and records have been made and maintained. We howeverhave not made a detailed examination of such records with a view to determine whether theyare accurate and complete.

vii. a) On the basis of our examination the Company is generally regular in depositingundisputed statutory dues including provident fund employees' state insurance incometax sales tax service tax Goods and Service Tax duty of customs duty of excise valueadded tax cess and other statutory dues to the extent applicable with appropriateauthorities.

b) Details of disputed Statutory dues which has not been deposited as on 31st March2019 on account of matters pending before appropriate authorities are given below:

Sl. No. Name of the Statute Nature of dues Period to which pertain Amount Forum where the dispute is pending
(Rs.)
1 Income Tax Act 1961 Income Tax 2012-13 7364052 Commissioner of Income Tax (Appeals)
2 Central Sales Tax (Assam) Rules 1967 Central 2012-13 76394 Superintendent of Taxes
Sales Tax 2013-14 264142 Superintendent of Taxes
3 Assam Value Added Tax 2005 Penalty 2012-13 2000 Superintendent of Taxes
2013-14 2000 Superintendent of Taxes
TOTAL 7708588

viii. The company has not defaulted in repayment of loans or borrowings to banks. TheCompany has not taken any loans and borrowings from financial institutions or Governmentand has not issued any debentures.

ix. The Company did not raise any money by way of initial public offer or furtherpublic offer(including debt instruments) and term loans during the year. Accordinglyparagraph 3 (ix) of the Order is not applicable.

x. During the course of our examination of the books and records of the Companycarried out in accordance with the generally accepted auditing practices in India andaccording to the information and explanations given to us we have neither come across anyinstance of material fraud by the Company or on the Company by its officers or employeesnoticed or reported during the year nor have we been informed of any such case by theManagement.

xi. Managerial remuneration has been paid or provided in accordance with the provisionsof section 197 read with Schedule V to the Companies Act.

xii. The company under review is not a Nidhi Company and accordingly the provisions ofclause (xii) of the order are not applicable to the company.

xiii. All transactions with the related parties are in compliance with sections 177 and188 of Companies Act 2013 where applicable and the details have been disclosed in theFinancial Statements etc. as required by the applicable accounting standards.

xiv. The company has not made any preferential allotment or private placement of sharesor fully or partly convertible debentures during the year under review and accordingly theprovisions of clause

(xiv) of the order are not applicable to the company.

xv. The company has not entered into any non-cash transactions with directors orpersons connected with them and accordingly the provisions of clause (xv) of the order arenot applicable to the company.

xvi. The company is not required to be registered under section 45-IA of the ReserveBank of India Act 1934. Accordingly the provisions of Clause 3(xvi) of the Order are notapplicable to the Company.

UMESH BARASIA FCA PARTNER
( M embership No: 53158)
For & On behalf of
DHANDHANIA & ASSOCIATES
Place : Kolkata Chartered Accountants
Date : 23rd May 2019 Registration No. 316052E

"ANNEXURE B" TO THE INDEPENDENT AUDITOR'S 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 The GrobTea Company Limited ("the Company") as at 31st March 2019 in conjunction withour audit of the financial statements of the company for the year ended on that date.

Management's Responsibility for Internal Financial Controls

The Company's management is responsible for establishing and maintaining internalfinancial controls based on the internal control over financial reporting criteriaestablished by the Company considering the essential components of internal control statedin the Guidance Note on Audit of Internal Financial Controls over Financial Reportingissued by the Institute of Chartered Accountants of India (‘ICAI'). Theseresponsibilities include the design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the orderly and efficientconduct of its business including adherence to 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.

Auditors' Responsibility

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 audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls system over financial reporting and their operatingeffectiveness. Our audit of internal financial controls over financial reporting includedobtaining an understanding of internal financial controls over financial reportingassessing the risk that a material weakness exists and testing and evaluating the designand operating effectiveness of internal control based on the assessed risk. The proceduresselected depend on the auditor's judgment including the assessment of the risks ofmaterial misstatement of the 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 in cludes those policies and procedures that :

(i) pertain to the maintenance of records that in reasonable detail accurately andfairly reflect the transactions and dispositions of the assets of the company;

(ii) provide reasonable assurance that transactions are recorded as necessary to permitpreparation of financial statements in accordance with generally accepted accountingprinciples and that receipts and expenditures of the company are being made only inaccordance with authorisations of management and directors of the company; and

(iii) provide reasonable assurance regarding prevention or timely detection ofunauthorised acquisition use or disposition of the company's assets that could have amaterial 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.

Opinion

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 31 March 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.

UMESH BARASIA FCA PARTNER
( M embership No: 53158)
For & On behalf of
DHANDHANIA & ASSOCIATES
Place : Kolkata Chartered Accountants
Date : 23rd May 2019 Registration No. 316052E

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