Report on the Audit of the Standalone Financial Statements
We have audited the accompanying standalone financial statements of JAMES WARRENNTEA LIMITED (the Company') which comprise the Balance Sheet as at 31stMarch2020 the Statement of Profit and Loss (including Other Comprehensive Income) the CashFlow Statement and the Statement of Changes in Equity for the year then ended and asummary of the significant accoun ng policies and other explanatory informa on.
In our opinion and to the best of our informa on and according to the explana ons givento us the aforesaid standalone financial statements give the informa on required by theCompanies Act 2013 (the Act') in the manner so required and give a true and fairview in conformity with the accoun ng principles generally accepted in India includingIndian Accoun ng Standards (Ind AS') prescribed under sec on 133 of the Act readwith the Companies (Indian Accoun ng Standards) Rules 2015 as amended ("IndAS") of the state of a airs of the Company as at 31stMarch 2020 itsprofit including other comprehensive income its cash flows and the statement of changesin equity for the year ended on that date.
Basis for Opinion
We conducted our audit in accordance with the Standards on Audi ng specified under secon 143(10) of the Act. Our responsibili es under those standards are further described inthe Auditor's Responsibili es for the Audit of the Standalone Financial Statements sec onof our report. We are independent of the Company in accordance with the Code of Ethicsissued by the Ins tute of Chartered Accountants of India (ICAI') together with theethical requirements that are relevant to our audit of the standalone financial statementsunder the provisions of the Act and the rules thereunder and we have fulfilled our otherethical responsibili es in accordance with these requirements and the Code of Ethics. Webelieve that the audit evidence we have obtained is su cient and appropriate to provide abasis for our audit opinion on the standalone financial statements.
Emphasis of Matter Write o of Stock
Refer to Note No. 45 on the Annual Financial Results for the Financial Year 2019-20sta ng their in write o of stock of made tea approximately 1.35 lakh kgs of an es matedcost of Rs. 165 lakhs damaged by fire and that the year end stock does not include thesame.
Our Opinion is not modified in respect of this matter.
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 financial statements as awhole and in forming our opinion thereon and we do not provide a separate opinion onthese matters.
|SL No. Key Audit Matters ||Auditor's Response |
|1. Valua on of biological assets and agricultural produce ||Principal audit procedures performed: |
|Biological assets of the Company include unharvested green tea leaves which are measured at fair value less costs to sell. ||Our audit approach was a combina on of test of internal controls and substan ve procedures including: |
|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. || Obtaining an understanding of the fair value measurement methodologies used and assessing the reasonableness and consistency of the signi ficant assump ons used in the valuation. |
|Finished goods 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. || Evalua ng the procedures and implementa on of Company's controls around the valua on of biological assets and harvested produce. |
|For harvested or unharvested green leaves since there is no ac ve market for own leaves significant es mates are used by management in determining the valua on of biological assets and agricultural produce consumed in manufacture of black tea and therefore has been considered as a key audit matter. || Assessing the plucking yields to analyse the fair valua on of biological assets. |
|The principal assump ons and es mates in the determina on of the fair value include assump ons about the yields and market prices of green leaf and the stage of transforma on. || Assessing the basis reasonableness and accuracy of adjustments made to market prices of green leaves considering the quality di eren al of the Company's produc on. |
|The determina on of these assump ons and es mates require careful evalua on by management and could lead to material impact on the financial posi on and the results of the Company. || Verifying the consistency of applica on of the fair value approaches and models over the years. |
|Refer note no 1.2 and 1.16 to the financial statement. || |
Informa on other than the Standalone Financial Statements and Auditor's Report thereon
The Company's Board of Directors is responsible for the other informa on. The otherinforma on comprises the informa on included in the Annual Report but does not includethe standalone financial statements and our auditor's report thereon.
Our opinion on the standalone financial statements does not cover the other informa onand we do not express any form of assurance conclusion thereon.
In connec on with our audit of the financial statements our responsibility is to readthe other informa on and in doing so consider whether the other informa on is materiallyinconsistent with the financial statements or our knowledge obtained in the audit orotherwise appears to be materially misstated. If based on the work we have performed weconclude that there is a material misstatement of this other informa on we are requiredto report that fact. We have nothing to report in this regard.
Responsibili es of Management for the Standalone Financial Statements
The accompanying standalone financial statements have been approved by the Company'sBoad of Directors. The Company's Board of Directors is responsible for the matters statedin sec on 134(5) of the Act with respect to the prepara on of these standalone financialstatements that give a true and fair view of the state of a airs profit including othercomprehensive income changes in equity and cash flows of the Company in accordance withthe accoun ng principles generally accepted in India including the Ind AS specified undersec on 133 of the Act. This responsibility also includes maintenance of adequate accoun ngrecords in accordance with the provisions of the Act for safeguarding of the assets of theCompany and for preven ng and detec ng frauds and other irregulari es; selec on andapplica on of appropriate accoun ng policies; making judgments and es mates that arereasonable and prudent; and design implementa on and maintenance of adequate internalfinancial controls that were opera ng e ec vely for ensuring the accuracy andcompleteness of the accoun ng records relevant to the prepara on and presenta on of thestandalone financial statements that give a true and fair view and are free from materialmisstatement whether due to fraud or error.
In preparing the standalone financial statements management is responsible forassessing the Company's ability to con nue as a going concern disclosing as applicablematters related to going concern and using the going concern basis of accoun ng unlessmanagement either intends to liquidate the Company or to cease opera ons or has no realisc alterna ve but to do so.
The Board of Directors is also responsible for overseeing the Company's financial reporng process.
Auditor's Responsibili es for the Audit of the Standalone Financial Statements
Our objec ves are to obtain reasonable assurance about whether the standalone 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 withStandards on Audi ng 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 standalone financial statements.
As part of an audit in accordance with Standards on Audi ng we exercise professionaljudgment and maintain professional skep cism throughout the audit. We also:
Iden fy 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 su cient and appropriate to provide abasis for our opinion. The risk of not detec ng a material misstatement resul ng fromfraud is higher than for one resul ng from error as fraud may involve collusion forgeryinten onal omissions misrepresenta ons or the override of internal control.
Obtain an understanding of internal financial controls relevant to the audit inorder to design audit procedures that are appropriate in the circumstances. Under sec on143(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 opera ng e ecveness of such controls.
Evaluate the appropriateness of accoun ng policies used and the reasonablenessof accoun ng es mates and related disclosures made by management.
Conclude on the appropriateness of management's use of the going concern basisof accoun ng and based on the audit evidence obtained whether a material uncertaintyexists related to events or condi ons that may cast significant doubt on the Company'sability to con nue as a going concern. If we conclude that a material uncertainty existswe are required to draw a en on in our auditor's report to the related disclosures in thestandalone 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 condi ons may cause the Company to cease tocon nue as a going concern.
Evaluate the overall presenta on structure and content of the financialstatements including the disclosures and whether the financial statements represent theunderlying transac ons and events in a manner that achieves fair presenta on.
We communicate with those charged with governance regarding among other matters theplanned scope and ming of the audit and significant audit findings including anysignificant deficiencies in internal control that we iden fy 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 rela onships and other matters that may reasonably be thought to bear on ourindependence and where applicable related safeguards.
From the matters communicated with those charged with governance we determine thosematters that were of most significance in the audit of the financial statements of thecurrent period and are therefore the key audit matters. We describe these matters in ourauditor's report unless law or regula on precludes public disclosure about the matter orwhen 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 communica on.
Report on Other Legal and Regulatory Requirements
As required by the Companies (Auditor's Report) Order 2016 (the Order') issuedby the Central Government of India in terms of sec on 143(11) of the Act we give in the AnnexureA a statement on the matters specified in paragraphs 3 and 4 of the Order.
As required by sec on 143(3) of the Act we report that: a. we have sought and obtainedall the informa on and explana ons which to the best of our knowledge and belief werenecessary for the purpose of our audit; b. in our opinion proper books of account asrequired by law have been kept by the Company so far as it appears from our examina on ofthose books; c. the standalone financial statements dealt with by this report are inagreement with the books of account; d. in our opinion the aforesaid standalone financialstatements comply with the Indian Accoun ng Standards specified under Sec on 133 of theAct read with relevant rule issued thereunder; e. on the basis of the wri en representaons received from the directors as on 31st March 2020 and taken on record by the Board ofDirectors none of the directors are disqualified as on 31st March 2020 from beingappointed as a director in terms of Sec on 164(2) of the Act; f. with respect to theadequacy of the internal financial controls over financial repor ng (IFCoFR) of theCompany and the opera ng e ec veness of such controls refer to our separate report in AnnexureB'. g. With respect to the other matters to be included in the Auditor's Reportin accordance with the requirements of sec on 197(16) of the Act as amended: In ouropinion and to the best of our informa on and according to the explana ons given to usthe remunera on paid by the Company to its directors during the year is in accordance withthe provisions of sec on 197 of the Act. h. with respect to the other matters to beincluded in the Auditor's Report in accordance with Rule 11 of the Companies (Audit andAuditors) Rules 2014 in our opinion and to the best of our informa on and according tothe explana ons given to us:
i. the Company does not have any pending li ga ons other than those disclosed in thefinancial statements; which would materially impact its financial posi on. Refer note no.33 to the financial statement;
ii. the Company has made provision as required under the applicable laws or Ind ASfor material foreseeable losses if any on long-term contracts including deriva vecontracts;
iii. there is no amount required to be transferred to the Investor Educa on andProtec on Fund by the Company.
The Annexure referred to in Independent Auditor's Report of even date to the members ofJAMES WARREN TEA LIMITED on the Standalone financial statements for the year ended 31stMarch 2020
Based on the audit procedures performed for the purpose of repor ng a true and fairview on the standalone financial statements of the Company and taking into considera onthe informa on and explana ons given to us and the books of account and other recordsexamined by us in the normal course of audit we report that:
(i) (a) The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets.
(b) As planned a part of the fixed assets have been physically verified by themanagement during the year and no material discrepancies were noticed on suchverification. In our opinion the planned frequency of verification of the fixed assets isreasonable having regard to the size of the Company and the nature of its assets.
(c) According to the information and explanations given to us and on the basis of ourexamination of the records of the Company the title deeds of immovable properties areheld in the name of the Company.
(ii) The inventories have been physically verified at reasonable intervals during theyear by the management. In our opinion the frequency of verification is reasonable. Thediscrepancies noticed on verification between the physical stock and the book stockwherever ascertained were not significant and have been properly dealt in the books ofaccounts.
(iii) The Company has not granted any loan secured or unsecured to companies firmsLLP or other parties covered in the register maintained under Section 189 of the Act.Accordingly the provisions of clauses 3(iii)(a)(b) and (c)of the Order are notapplicable.
(iv) According to the information and explanations given to us in our opinion inrespect of loans investment guarantees and security provisions of section 185 and 186of the Act have been complied with by the company.
(v) The Company has not accepted any deposits within the meaning of Sections 73 to 76of the Act and the Companies (Acceptance of Deposits) Rules 2014 (as amended).Accordingly the provisions of clause 3(v) of the Order are not applicable.
(vi) The Central Government has prescribed maintenance of cost records under section148(1) of the Act for the Company. We have broadly reviewed such accounts and records andare of the opinion that prima facie the prescribed accounts & records have been made& maintained but no detailed examination of such records and accounts have beencarried out by us.
(vii) (a) According to the information and explanations given to us and on the basis ofour examination of the records of the Company amounts deducted accrued in the books ofaccount in respect of undisputed statutory dues including provident fund employees' stateinsurance income-tax sales-tax service tax duty of customs duty of excise valueadded tax Good and Service Tax cess and other material statutory dues as applicablehave generally been regularly deposited to the appropriate authorities. Further noundisputed amounts payable in respect thereof were outstanding on the year-end for aperiod of more than six months from the date they became payable.
(b) According to the information and explanations given to us the following duesoutstanding in respect of income-tax sales-tax service tax duty of customs duty ofexcise value added tax and cess on account of any dispute are as follows:
|Name of the statute ||Nature of dues ||Amount (Rs. Lakh) ||Period to which the amount relates ||Forum where dispute is pending |
|Central Sales Tax Act 1956 ||Sales Tax ||45.77 ||1990-91 & 2004-05 ||Hon'ble High Court Guwaha |
|Central Sales Tax Act 1956 ||Sales Tax ||39.96 ||1990-91 1994-95 1995-96 and 1996-97 ||Deputy Commissioner of Taxes (Appeal) Tinsukia (Assam) |
|Central Sales Tax Act (West Bengal) Rules 1958 ||Sales Tax ||12.91 ||2014-15 ||Deputy Commissioner of Taxes (Appeal) Kolkata (West Bengal) |
|Assam Entry Tax Act 2008 ||Entry Tax ||1.35 ||2008-09 ||Deputy Commissioner of Taxes (Appeal) Doom Dooma (Assam) |
(viii) According to the records of the Company examined by us and the information andexplanation provided to us the company has not availed any term loan from any FinancialInstitution Bank or Government nor has issued any debenture during the year nor isanything outstanding as on the balance sheet date.
(ix) The Company did not raise any money by way of initial public offer or furtherpublic offer (including debt instrument) during the year.
(x) During the course of our examina on of the books and records of the Company carriedout in accordance with generally accepted audi ng prac ces in India and according to theinforma on and explana ons given to us we have neither come across any instances of fraudby the Company or any fraud on the company by its o cer or employees no ced or reportedduring the year nor we have been informed of any such case by the management.
(xi) According to the informa on and explana ons given to us and based on our examinaon of the records of the Company the Company has paid/provided for managerial remunera onin accordance with the requisite approvals mandated by the provisions of sec on 197 readwith schedule V to the Act.
(xii) In our opinion and according to the informa on and explana ons given to us theCompany is not a nidhi company. Accordingly paragraph 3(xii) of the Order is notapplicable.
(xiii) According to the informa on and explana ons given to us and based on our examinaon of the records of the Company transac ons with the related par es are in compliancewith sec on 177 and 188 of the Act where applicable and details of such transac ons havebeen disclosed in the financial statements as required by the applicable Indian accoun ngstandards.
(xiv) According to the informa on and explana ons given to us and based on our examinaon of the records of the Company the Company has not made any preferen al allotment orprivate placement of shares or fully or partly conver ble debentures during the year.
(xv) According to the informa on and explana ons given to us and based on our examinaon of the records of the Company the Company has not entered into noncash transacons with directors or persons connected with them.
(xvi) The Company is not required to be registered under sec on 45-IA of the ReserveBank of India Act 1934.
Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section143 of the Companies Act 2013 ("the Act")
In conjunction with our audit of the standalone financial statements of JAMES WARRENTEA LIMITED ("the Company") as of and for the year ended 31st March 2020 wehave audited the internal financial controls over financial reporting (IFCoFR) of thecompany as of 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 ICAI. These responsibilities include the design implementation and maintenanceof adequate internal financial controls that were operating effectively for ensuring theorderly and efficient conduct of its business including adherence to company's policiesthe safeguarding of its assets the prevention and detection of frauds and errors theaccuracy and completeness of the accounting records and the timely preparation ofreliable financial information as required under the Companies Act 2013.
Our responsibility is to express an opinion on the Company's IFCoFR based on our audit.We conducted our audit in accordance with the Guidance note on Audit of Internal FinancialControls over Financial Reporting (the "Guidance Note") and Standards onAuditing issued by the Institute of Chartered Accountants of India (ICAI) and deemed tobe prescribed under section 143(10) of the Companies Act 2013 to the extent applicableto an audit of IFCoFR and the Guidance Note on Audit of Internal Financial Controls OverFinancial Reporting (the "Guidance Note") issued by the ICAI. Those Standardsand the Guidance Note require that we comply with ethical requirements and plan andperform the audit to obtain reasonable assurance about whether adequate IFCoFR wasestablished and maintained and if such controls operated effectively in all materialrespects.
Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe IFCoFR and their operating effectiveness. Our audit of IFCoFR included obtaining anunderstanding of IFCoFR assessing the risk that a material weakness exists and testingand evaluating the design and operating effectiveness of internal control based on theassessed risk. The procedures selected depend on the auditor's judgment including theassessment of the risks of material misstatement of the financial statements whether dueto fraud or error.
We believe that the audit evidences we have obtained are sufficient and appropriate toprovide a basis for our audit opinion on the Company's IFCoFR.
Meaning of Internal Financial Controls over Financial Reporting
A company's IFCoFR is a process designed to provide reasonable assurance regarding thereliability of financial reporting and the preparation of standalone financial statementsfor external purposes in accordance with generally accepted accounting principles. Acompany's IFCoFR includes those policies and procedures that
(1) pertain to the maintenance of records that in reasonable detail accurately andfairly reflect the transactions and dispositions of the assets of the company;
(2) 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 authorizations of management and directors of the company; and
(3) provide reasonable assurance regarding prevention or timely detection ofunauthorized acquisition use or disposition of the company's assets that could have amaterial effect on the standalone financial statements.
Inherent Limitations of Internal Financial Controls over Financial Reporting
Because of the inherent limitations of IFCoFR including the possibility of collusionor improper management override of controls material misstatements due to error or fraudmay occur and not be detected. Also projections of any evaluation of the IFCoFR to futureperiods are subject to the risk that IFCoFR may become inadequate because of changes inconditions or that the degree of compliance with the policies or procedures maydeteriorate.
In our opinion the Company has in all material respects adequate internal financialcontrols over financial reporting and such internal financial controls over financialreporting were operating effectively as at 31st March 2020 based on the internal controlover financial reporting criteria established by the Company considering the essentialcomponents of internal control stated in the Guidance Note on Audit of Internal FinancialControls Over Financial Reporting issued by ICAI.