To the Members of
Jay Shree Tea & Industries Limited
Report on the Audit of the Standalone Financial Statements Opinion
We have audited the accompanying standalone financial statements of JayShree Tea & Industries Limited ("the Company") which comprise the BalanceSheet as at March 312022 the Statement of Profit and Loss including the statement ofOther Comprehensive Income the Cash Flow Statement and the Statement of Changes in Equityfor the year then ended and notes to the standalone financial statements including asummary of significant accounting policies and other explanatory information in which isincluded the financial information for the year ended on that date audited by the branchauditor of the Company's branch (sugar division) located at Majhaulia India.
In our opinion and to the best of our information and according to theexplanations given to us and based on the consideration of reports of other auditor onseparate financial statements and on the other financial information of the branch theaforesaid standalone financial statements give the information required by the CompaniesAct 2013 as amended ("the Act") in the manner so required and give a true andfair view in conformity with the accounting principles generally accepted in India of thestate of affairs of the Company as at March 312022 its profit including othercomprehensive income its cash flows and the changes in equity for the year ended on thatdate.
Basis for Opinion
We conducted our audit of the standalone financial statements inaccordance with the Standards on Auditing (SAs) as specified under section 143(10) of theAct. Our responsibilities 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' issuedby the Institute of Chartered Accountants of India together with the ethical requirementsthat are relevant to our audit of the financial statements under the provisions of the Actand the Rules thereunder and we have fulfilled our other ethical responsibilities inaccordance with these requirements and the Code of Ethics. We believe that the auditevidence we have obtained is sufficient and appropriate to provide a basis for our auditopinion on the standalone financial statements.
Key Audit Matters
Key audit matters are those matters that in our professional judgmentwere of most significance in our audit of the standalone financial statements for thefinancial year ended March 31 2022. These matters were addressed in the context of ouraudit of the standalone financial statements as a whole and in forming our opinionthereon and we do not provide a separate opinion on these matters. For each matter belowour description of how our audit addressed the matter is provided in that context.
We have determined the matters described below to be the key auditmatters to be communicated in our report. We have fulfilled the responsibilities describedin the Auditor's responsibilities for the audit of the standalone financial statementssection of our report including in relation to these matters. Accordingly our auditincluded the performance of procedures designed to respond to our assessment of the risksof material misstatement of the standalone financial statements. The results of our auditprocedures including the procedures performed to address the matters below provide thebasis for our audit opinion on the accompanying standalone financial statements.
|Key audit matters ||How our audit addressed the key audit matter |
|Valuation of biological assets and agriculture produce || |
|(as described in Note 3.9 and 12(b) of the standalone financial statements) ||Our audit procedures included the following: |
|As required by Ind AS 41 "Agriculture" management estimates the fair value of unplucked tea leaves (biological assets) and plucked tea leaves (agriculture produce) as at the balance sheet date through the use of valuation model and recent transaction prices. As at March 31 2022 the carrying value of biological assets in respect of unharvested tea leaves included under current assets is Rs. 106.48 lakhs. 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. || Understood the process evaluated the design and tested the operating effectiveness of internal controls over valuation of biological assets and agriculture produce inventory. |
|The biological assets are stated at fair value less costs to sell. || Assessed the significant assumptions used in the valuation model with reference to available market information. |
|Since there is no active market for harvested or unharvested tea leaves significant judgement is involved in considering key assumptions used in determining average prevalent selling prices of tea leaves average quality of tea leaves and quantity of unplucked leaves. Accordingly this matter is identified as a key audit matter. || Tested the data inputs used in the fair valuation and compared them with underlying supporting documents. |
| || Assessed the adequacy of related disclosures in the standalone financial statements for compliance with disclosure requirements. |
|Impairment assessment of the carrying value of net assets identified as a single cash generating unit (CGU) relating to the sugar business of the Company || |
|(as described in Note 3.13 and 45 of the standalone financial statements) ||The branch auditor has performed the following audit procedures: |
|Considering the losses in the sugar business the management has performed an impairment assessment of the carrying value of net assets identified as a single cash generating unit (CGU) relating to the sugar business of the Company as at March 31 2022. This involves significant judgements and estimates in assessing the recoverable value. || |
|As at March 312022 the carrying value of net assets relating to sugar business CGU was Rs. 33563.73 lakhs. Considering significant estimates involved in forecasting of cashflows including key assumptions such as future sales volumes prices margins growth rates discount rates etc. this matter has been identified as a key audit matter. || Understood the process evaluated the design and tested the operating effectiveness of internal controls over impairment assessment of the carrying value of net assets identified as a single cash generating unit (CGU) relating to the sugar business of the Company. |
| || Obtained management's assessment of recoverable amounts of the CGU including future cash flow projections and other key assumptions such as discount rate growth rate etc. |
| || Tested the arithmetical accuracy of the model prepared by the management and compared the recoverable amount of the assets relating to sugar business CGU to the corresponding carrying value in books. |
| || Assessed the adequacy of related disclosures in the standalone financial statements for compliance with disclosure requirements. |
|Assessment of recoverability of Deferred Tax Asset || |
|(as described in Note 3.17 and 9 of the standalone financial statements) ||Our audit procedures included the following: |
|As per Ind AS 12 - Income taxes deferred tax is to be recognised for all deductible temporary differences between the tax bases of assets and liabilities and their carrying amount and any unused tax losses. As at March 312022 the Company has recognised deferred tax assets (net) amounting to Rs. 4009.76 lakhs on deductible temporary differences and unused tax losses. || Obtained an understanding of the process evaluated the design and tested the operating effectiveness of the controls on the process of assessment of recoverability of deferred tax asset. |
|Deferred tax asset is recognised to the extent that it is probable that taxable profits will be available against which the deductible temporary differences and the carry forward of unused tax credits and unused tax losses can be utilised. This requires significant judgment and estimation by the management including estimation of long-term future profitability likely timing and level of future taxable profits etc. || Obtained and assessed the management's assumptions and estimates like projected revenue growth etc. in relation to the probability of generating future taxable income to support the recognition of deferred income tax asset with reference to forecast taxable income and performed sensitivity analysis. |
|Given the degree of estimation based on the projection of future taxable profits recognition of deferred tax asset has been identified as a key audit matter. || Tested the arithmetical accuracy of the deferred tax model prepared by the management. |
| || Assessed the adequacy of related disclosures in the standalone financial statements. |
The Company's Board of Directors is responsible for the otherinformation. The other information comprises the information included in the ManagementDiscussion and Analysis Report of Directors including Annexures to the Report ofDirectors Corporate Governance and Statement pursuant to Section 129 of the CompaniesAct 2013 but does not include the standalone financial statements and our auditor'sreport thereon.
Our opinion on the standalone financial statements does not cover theother information and we do not express any form of assurance conclusion thereon.
In connection with our audit of the standalone financial statementsour responsibility is to read the other information and in doing so consider whethersuch other information is materially inconsistent with the financial statements or ourknowledge obtained in the audit or otherwise appears to be materially misstated. If basedon the work we have performed we conclude that there is a material misstatement of thisother information we are required to report that fact. We have nothing to report in thisregard.
Responsibilities of Management for the Standalone Financial Statements
The Company's Board of Directors is responsible for the matters statedin section 134(5) of the Act with respect to the preparation of these standalone 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 accounting principles generally accepted in India including theIndian Accounting Standards (Ind AS) specified under section 133 of the Act read with theCompanies (Indian Accounting Standards) Rules 2015 as amended. This responsibility alsoincludes maintenance of adequate accounting records in accordance with the provisions ofthe Act for safeguarding of the assets of the Company and for preventing and detectingfrauds and other irregularities; selection and application of appropriate accountingpolicies; making judgments and estimates that are reasonable and prudent; and the designimplementation 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 management isresponsible for assessing the Company's ability to continue as a going concerndisclosing as applicable matters related to going concern and using the going concernbasis of accounting 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 Responsibilities for the Audit of the Standalone FinancialStatements
Our objectives are to obtain reasonable assurance about whether thestandalone financial statements as a whole are free from material misstatement whetherdue to fraud or error and to issue an auditor's report that includes our opinion.Reasonable assurance is a high level of assurance but is not a guarantee that an auditconducted in accordance with SAs will always detect a material misstatement when itexists. Misstatements can arise from fraud or error and are considered material ifindividually or in the aggregate they could reasonably be expected to influence theeconomic decisions of users taken on the basis of these standalone financial statements.
As part of an audit in accordance with SAs we exercise professionaljudgment and maintain professional skepticism throughout the audit. We also:
Identify and assess the risks of material misstatement of thestandalone financial statements whether due to fraud or error design and perform auditprocedures responsive to those risks and obtain audit evidence that is sufficient andappropriate to provide a basis for our opinion. The risk of not detecting a materialmisstatement resulting from fraud is higher than for one resulting from error as fraudmay involve collusion forgery intentional omissions misrepresentations or the overrideof internal control.
Obtain an understanding of internal control relevant to theaudit in order to design audit procedures that are appropriate in the circumstances. Undersection 143(3) of the Act we are also responsible for expressing our opinion on whetherthe Company has adequate internal financial controls with reference to financialstatements in place and the operating effectiveness of such controls.
Evaluate the appropriateness of accounting policies used and thereasonableness of accounting estimates and related disclosures made by management.
Conclude on the appropriateness of management's use of the goingconcern basis 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 the Companyto cease to continue as a going concern.
Evaluate the overall presentation structure and content of thestandalone financial statements including the disclosures and whether the standalonefinancial statements represent the underlying transactions and events in a manner thatachieves fair presentation.
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 standalonefinancial statements for the financial year ended March 312022 and are therefore the keyaudit matters. We describe these matters in our auditor's report unless law or regulationprecludes public disclosure about the matter or when in extremely rare circumstances wedetermine that a matter should not be communicated in our report because the adverseconsequences of doing so would reasonably be expected to outweigh the public interestbenefits of such communication.
a) We did not audit the financial statements and other financialinformation of one (1) branch included in the accompanying standalone financial statementsof the Company whose financial statements and other financial information reflect totalassets of Rs. 35324.46 lakhs as at March 312022 and the total revenues of Rs. 14771.47lakhs for the year ended on that date as considered in the financialstatements/information of such branch has been audited by the branch auditor whose reporthas been furnished to us and our opinion in so far as it relates to the amounts anddisclosures included in respect of branch and our report in terms of sub-sections (3) ofSection 143 of the Act in so far as it relates to the aforesaid branch is based solelyon the report of such branch auditor. Our opinion is not modified in respect of thismatter.
b) The Company has prepared these standalone financial statements aftergiving effect to the Scheme of Amalgamation of Majhaulia Sugar Industries Private Limited("MSIPL") a wholly owned subsidiary with the Company having an appointed dateof April 12020 (the "Scheme"). Accordingly the standalone financial statementsof the Company for the year ended March 31 2021 have been restated as per therequirements of Ind AS 103 to include the financial statements and other information oferstwhile MSIPL for the year ended March 312021. The financial statements and otherinformation of MSIPL without giving effect to elimination of intra-group transactionsreflect total assets of Rs. 39208.37 lakhs as at March 312021 and total revenues of Rs.24383.27 lakhs total net loss after tax of Rs. 4915.31 lakhs and total comprehensiveloss of Rs. 4880.73 lakhs for the year ended on that date and net cash outflows of Rs.1128.91 lakhs for the year ended March 31 2021. These financial statements were auditedby other auditor whose report has been furnished to us and our opinion in so far as itrelates to the amounts and disclosures in respect of MSIPL included in the year endedMarch 312021 is based solely on the report of such other auditor. Our opinion is notmodified in respect of this matter.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor's Report) Order 2020("the Order") issued by the Central Government of India in terms of sub-section(11) of section 143 of the Act based on our audit and on the consideration of report ofthe other auditor on separate financial statements and other financial information of thebranch as noted in the 'Other Matters' paragraph we give in the "Annexure 1" astatement on the matters specified in paragraphs 3 and 4 of the Order.
2. As required by Section 143(3) of the Act based on our audit and onthe consideration of report of the other auditors on separate financial statements and theother financial information of the branch as noted in the 'other matter' paragraph wereport to the extent applicable that:
(a) We / the branch auditor whose report we have relied upon havesought and obtained all the information and explanations which to the best of ourknowledge and belief were necessary for the purposes of our audit;
(b) In our opinion proper books of account as required by law havebeen kept by the Company so far as it appears from our examination of those books andproper returns adequate for the purposes of our audit have been received from the branchesnot visited by us;
(c) The report on the accounts of the branch office of the Companyaudited under Section 143(8) of the Act by branch auditor has been sent to us and havebeen properly dealt with by us in preparing this report;
(d) The Balance Sheet the Statement of Profit and Loss including theStatement of Other Comprehensive Income the Cash Flow Statement and Statement of Changesin Equity dealt with by this Report are in agreement with the books of account and withthe returns received from the branch not visited / audited by us;
(e) In our opinion the aforesaid standalone financial statementscomply with the Accounting Standards specified under Section 133 of the Act read withCompanies (Indian Accounting Standards) Rules 2015 as amended;
(f) On the basis of the written representations received from thedirectors as on March 312022 taken on record by the Board of Directors none of thedirectors is disqualified as on March 312022 from being appointed as a director in termsof Section 164 (2) of the Act;
(g) With respect to the adequacy of the internal financial controlswith reference to standalone financial statements and the operating effectiveness of suchcontrols refer to our separate Report in "Annexure 2" to this report;
(h) In our opinion the managerial remuneration for the year endedMarch 31 2022 has been paid / provided by the Company to its directors in accordance withthe provisions of section 197 read with Schedule V to the Act;
(i) With respect to the other matters to be included in the Auditor'sReport in accordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 asamended in our opinion and to the best of our information and according to theexplanations given to us and based on consideration of the report of the branch auditor:
a. The Company has disclosed the impact of pending litigations on itsfinancial position in its standalone financial statements - Refer Note 19 and Note 35 tothe standalone financial statements;
b. The Company did not have any long-term contracts includingderivative contracts for which there were any material foreseeable losses;
c. There has been no delay in transferring amounts required to betransferred to the Investor Education and Protection Fund by the Company.
d. a) The management has represented that to the best of its knowledgeand belief as disclosed in the note 48 to the standalone financial statements no fundshave been advanced or loaned or invested (either from borrowed funds or share premium orany other sources or kind of funds) by the company to or in any other person(s) orentity(ies) including foreign entities ("Intermediaries") with theunderstanding whether recorded in writing or otherwise that the Intermediary shallwhether directly or indirectly lend or invest in other persons or entities identified inany manner whatsoever by or on behalf of the company ("Ultimate Beneficiaries")or provide any guarantee security or the like on behalf of the Ultimate Beneficiaries;
b) The management has represented that to the best of its knowledgeand belief as disclosed in the note 48 to the standalone financial statements no fundshave been received by the company from any person(s) or entity(ies) including foreignentities ("Funding Parties") with the understanding whether recorded inwriting or otherwise that the company shall whether directly or indirectly lend orinvest in other persons or entities identified in any manner whatsoever by or on behalf ofthe Funding Party ("Ultimate Beneficiaries") or provide any guarantee securityor the like on behalf of the Ultimate Beneficiaries; and
c) Based on such audit procedures that were considered reasonable andappropriate in the circumstances nothing has come to our notice that has caused us tobelieve that the representations under sub-clause (a) and (b) contain any materialmisstatement.
d) No dividend has been declared or paid during the year by theCompany. The Board of Directors of the Company has not proposed any dividend for thefinancial year 2021-2022.
Annexure 1 to the Independent Auditors Report
"Annexure 1" referred to in paragraph under the heading'Report on other legal and regulatory requirements' of our report of even date
In terms of the information and explanations sought by us and given bythe Company and the books of account and records examined by us in the normal course ofaudit and to the best of our knowledge and belief and based on the consideration of thereport by the branch auditor we state that:
(i) (a) (A) The Company has maintained proper records showing fullparticulars including quantitative details and situation of property plant andequipment.
(B) The Company has maintained proper records showing full particularsof intangibles assets.
(b) The Company has a program of verification of property plant andequipment to cover all the items in a phased manner over a period of three years whichin our opinion is reasonable having regard to the size of the Company and the nature ofits assets. Pursuant to the program certain property plant and equipment were physicallyverified by the management during the year and according to the information andexplanations given to us no material discrepancies were identified on such verification.
(c) The title deeds of immovable properties (other than propertieswhere the Company is the lessee and the lease agreements are duly executed in favour ofthe lessee) disclosed in note 4(b) to the financial statements included in property plantand equipment are held in the name of the Company. Certain title deeds of the immovableproperties as indicated in the below mentioned cases are not individually held in thename of the Company -
|Description of Property ||Gross Carrying Value Rs. in lakhs ||Title Deeds held in the name of ||Whether title deed holder is a promoter director or relative of promoter/ director or employee of promoter/director ||Property held since when ||Reason for not being held in the name of Company |
|Right of use Land ||0.02 ||Prior to expiry of lease (renewal of which is under process) the underlying land was registered in the name of the Company. ||No ||24th December 2004 ||Pending renewal of lease deed |
|Plantations ||0.47 || || || || |
|Buildings ||55.74 || || || || |
|Right of use Land ||20.77 ||Prior to expiry of lease (renewal of which is under process) the underlying land was registered in the name of erstwhile Darjeeling Consolidated Tea Company Limited which was amalgamated with the Company. ||No ||1st April 2007 ||Pending renewal of lease deed |
|Plantations ||368.35 || || || || |
|Buildings ||50.87 || || || || |
|Right of use Land ||19.08 ||Prior to expiry of lease (renewal of which is under process) the underlying land was registered in the name of erstwhile Sungma Tea Company Limited which was amalgamated with the Company. ||No ||1st April 2007 ||Pending renewal of lease deed |
|Plantations ||362.55 || || || || |
|Buildings ||136.61 || || || || |
|Right of use Land ||75.51 ||Prior to expiry of lease (renewal of which is under process) the underlying land was registered in the name of erstwhile Sahabad Tea Company Limited which was amalgamated with the Company. ||No ||1st April 2008 ||Pending renewal of lease deed |
|Plantations ||1614.47 || || || || |
|Buildings ||203.03 || || || || |
|Freehold Land (Tea Estates) ||45.44 ||Various Parties ||No ||1992 - 1998 ||Registration for long term lease from State Government is under process. |
|Freehold Land ||3847.98 ||Jay Shree Sugar Mill ||No ||2010/ 1st April 2020 ||The transfer of the title deeds in the name of Majhaulia Sugar Industries Private Limited (erstwhile MSIPL) was initiated and mutation of 958.55 acres of land valued Rs. 3834.18 Lakhs (23 deeds) had been completed. Properties acquired through amalgamation of MSIPL the name change in the name of the Company is pending. |
|Plantations ||63.86 ||Various Parties ||No ||1992 onwards ||Registration for long term lease of underlying land from State Government is under process. |
|Buildings ||4695.83 ||Majhaulia Sugar Industries Private Limited ||No ||1st April 2020 ||Properties acquired through amalgamation of Majhaulia Sugar Industries Private Limited the name change in the name of the Company is pending. |
(d) The Company has not revalued its Property Plant and Equipment(including Right of use assets) or intangible assets during the year ended March 31 2022.
(e) As represented to us by the management there are no proceedingsinitiated or are pending against the Company for holding any benami property under theProhibition of Benami Property Transactions Act 1988 and rules made thereunder.
(ii) (a) The management has conducted physical verification ofinventory during the year at reasonable intervals during the year. In our opinion thefrequency of verification by the management is reasonable and the coverage and procedurefor such verification is appropriate. Inventories lying with third parties have beenconfirmed by them as at March 312022 and no discrepancies were noticed in respect of suchconfirmations. Discrepancies of 10% or more in aggregate for each class of inventory werenot noticed on such physical verification.
(b) As disclosed in note 16(b) to the financial statements the Companyhas been sanctioned working capital limits in excess of Rs. five crores in aggregate frombanks during the year on the basis of security of current assets of the Company. Based onthe records examined by us in the normal course of audit of the financial statements thequarterly returns/statements filed by the Company including branch with such banks are notin agreement with the books of accounts of the Company and the details are as follows:
|Quarter ending ||Value per books of account ||Value per quarterly return / statement |
| ||(Rs. in lakhs) ||(Rs. in lakhs) |
|Inventories * || || |
|June 30 2021 ||14247.19 ||15457.12 |
|September 30 2021 ||14638.13 ||17600.99 |
|December 312021 ||17021.83 ||18467.82 |
|March 312022 ||14516.25 ||14358.95 |
|Trade Receivables ** || || |
|June 30 2021 ||4875.72 ||5483.70 |
|September 30 2021 ||7200.84 ||8377.28 |
|December 312021 ||8094.78 ||8086.24 |
|March 312022 ||4229.39 ||4298.34 |
* As informed by the management the discrepancy is on account of thedetails being submitted on the basis of provisional books/financial statements.Adjustments pertaining to cut offs goods in transit overhead allocation onwork-in-progress and finished goods etc. are done only on finalisation of books ofaccounts/financial statements.
** As informed by the management the discrepancy is on account of thedetails being submitted on the basis of provisional books/financial statements.Adjustments pertaining to cut offs forex restatements etc. are done only on finalisationof books of accounts/financial statements.
(iii) (a) During the year the Company has provided loans to subsidiarycompanies as follows:
| ||Loans (Rs. in lakhs) |
|Aggregate amount granted/ provided during the year || |
|- Subsidiaries ||40.48 |
|Balance outstanding as at balance sheet date in respect || |
|- Subsidiaries ||145.45 |
(b) During the year the terms and conditions of the loans to itssubsidiary companies are not prejudicial to the Company's interest. The Company has notmade investments provided guarantees or security to companies firms Limited LiabilityPartnerships or any other parties during the year.
(c) In respect of loans granted to five companies the schedule ofrepayment of principal and payment of interest has not been stipulated in the agreement.Hence we are unable to make a specific comment on the regularity of repayment ofprincipal and payment of interest in respect of such loans.
(d) There are no amounts of loans and advances in the nature of loansgranted to companies firms limited liability partnerships or any other parties which areoverdue for more than ninety days.
(e) There were no loans or advance in the nature of loan granted tocompanies firms Limited Liability Partnerships or any other parties which was fallen dueduring the year that have been renewed or extended or fresh loans granted to settle theoverdues of existing loans given to the same parties.
(f) As disclosed in note 7 to the financial statements the Company hasgranted loans or advances in the nature of loans either repayable on demand or withoutspecifying any terms or period of repayment to companies firms Limited LiabilityPartnerships or any other parties. Of these following are the details of the aggregateamount of loans or advances in the nature of loans granted to promoters or related partiesas defined in clause (76) of section 2 of the Companies Act 2013:
| ||All Parties ||Promoters ||Related Parties |
|Aggregate amount of loans/ advances in nature of loans - Repayable on demand ||145.45 ||- ||145.45 |
|Percentage of loans/ advances in nature of loans to the total loans ||27% ||0% ||27% |
(iv) Loans and investments guarantees and security in respect of whichprovisions of sections 185 and 186 of the Companies Act 2013 are applicable have beencomplied with by the Company.
(v) The Company has neither accepted any deposits from the public noraccepted any amounts which are deemed to be deposits within the meaning of Sections 73 to76 of the Companies Act and the rules made thereunder to the extent applicable.Accordingly the requirement to report on clause 3(v) of the Order is not applicable tothe Company.
(vi) We have broadly reviewed the books of account maintained by theCompany pursuant to the rules made by the Central Government for the maintenance of costrecords under section 148(1) of the Companies Act 2013 related to manufacture of goodsand are of the opinion that prima facie the specified accounts and records have been madeand maintained. We have not however made a detailed examination of the same.
(vii) (a) The Company is generally regular in depositing withappropriate authorities undisputed statutory dues including goods and service taxprovident fund employees' state insurance income-tax duty of custom cess and otherstatutory dues applicable to it. During the year sales-tax service tax duty of exciseand value added tax are not applicable to the company. According to the information andexplanations given to us and based on audit procedures performed by us no undisputedamounts payable in respect of these statutory dues were outstanding at the year end fora period of more than six months from the date they became payable.
(b) The dues outstanding of goods and services tax provident fundemployees' state insurance income-tax sales-tax service tax duty on custom duty ofexcise value added tax and other statutory dues have not been deposited on account of anydispute are as follows:
|Name of the statute ||Nature of Dues ||Amount (Rs. In Lakhs) ||Period to which the amount relates ||Forum where dispute is pending |
|Income Tax Act 1961 ||Income tax ||124.84 ||2007-08 2013-14 2016-17 ||Commissioner of Income Tax (Appeals) |
|Income Tax Act 1961 ||Income tax ||45.30 ||2005-06 to 2008-09 ||Hon'ble High Court Calcutta |
|WB Value Added Tax Act 2003 / Central Sales Tax Act 1956 ||Sales Tax/Central Sales Tax ||71.63 ||2005-07 2010-11 2012-13 to 2014-15 ||West Bengal Appellate & Revisional Board |
|W.B. Value Added Tax Act 2003 / The Central Sales Tax Act 1956 ||Sales Tax/Central Sales Tax ||0.73 ||1999-00 and 2001-02 ||DC Commercial Taxes and Assistant Commissioner of Sales Tax |
|W.B. Value Added Tax Act 2003 ||Sales Tax ||25.52 ||2003-04 2005-06 to 2007-08 2011-12 ||W.B. Taxation Tribunal |
|The Central Excise Act 1944 ||Excise Duty ||50.05 ||2004-05 ||CESTAT Kolkata |
|Entry of Goods into Local Area Act 2012 ||Entry Tax ||879.73 ||2013-14 to 2017-18 ||Tribunal |
|Bihar Excise Act ||Trade & Commerce and Molasses Licence fee ||28.58 ||2010-11 ||Hon'ble High Court Patna |
|Bihar Electricity Duty Regulation Authority ||Electricity Duty ||103.10 ||2011-12 ||Hon'ble High Court Patna |
(viii) As represented to us by the management the Company has notsurrendered or disclosed any transaction previously unrecorded in the books of accountin the tax assessments under the Income Tax Act 1961 as income during the year.Accordingly the requirement to report on clause 3(viii) of the Order is not applicable tothe Company.
(ix) (a) Loans taken amounting to Rs. 2325.00 lakhs are repayable ondemand and terms and conditions for payment of interest thereon have not been stipulated.Such loans and interest thereon have not been demanded for repayment during the relevantfinancial year. The Company has not defaulted in repayment of other borrowings or paymentof interest thereon to any lender.
(b) As represented to us by the management the Company has not beendeclared wilful defaulter by any bank or financial institution or government or anygovernment authority.
(c) Term loans were applied for the purpose for which the loans wereobtained.
(d) On an overall examination of the financial statements of theCompany the Company has used funds raised on shortterm basis in the form ofinter-corporate deposits and cash credit facility from banks aggregating to Rs. 20572.97lakhs as disclosed in note 48 to the financial statements for long-term purposesrepresenting acquisition of property plant and equipment.
(e) On an overall examination of the financial statements of theCompany the Company has not taken any funds from any entity or person on account of or tomeet the obligations of its subsidiaries or associate. The Company does not have jointventures.
(f) The Company has not raised loans during the year on the pledge ofsecurities held in its subsidiaries or associate companies. Hence the requirement toreport on clause (ix)(f) of the Order is not applicable to the Company.
(x) (a) The Company has not raised any money during the year by way ofinitial public offer / further public offer (including debt instruments) and hence therequirement to report on clause 3(x)(a) of the Order is not applicable to the Company.
(b) The Company has not made any preferential allotment or privateplacement of shares /fully or partially or optionally convertible debentures during theyear under audit and hence the requirement to report on clause 3(x)(b) of the Order isnot applicable to the Company.
(xi) (a) As represented to us by the management no fraud / materialfraud by the Company or no fraud / material fraud on the Company has been noticed orreported during the year.
(b) During the year no report under sub-section (12) of section 143 ofthe Companies Act 2013 has been filed by secretarial auditor or by us in Form ADT - 4 asprescribed under Rule 13 of Companies (Audit and Auditors) Rules 2014 with the CentralGovernment.
(c) As represented to us by the management there are no whistle blowercomplaints received by the Company during the year.
(xii) The Company is not a nidhi company as per the provisions of theCompanies Act 2013. Therefore the requirement to report on clause 3(xii)(a) (b) and (c)of the Order is not applicable to the Company.
(xiii) Transactions with the related parties are in compliance withsection 177 and 188 of Companies Act 2013 where applicable and the details have beendisclosed in the notes to the standalone financial statements as required by theapplicable accounting standards.
(xiv) (a) The Company has an internal audit system commensurate withthe size and nature of its business.
(b) The internal audit reports of the Company issued till the date ofthe audit report for the period under audit have been considered by us.
(xv) The Company has not entered into any non-cash transactions withits directors or persons connected with its directors and hence requirement to report onclause 3(xv) of the Order is not applicable to the Company.
(xvi) (a) The provisions of section 45-IA of the Reserve Bank of IndiaAct 1934 (2 of 1934) are not applicable to the Company.
Accordingly the requirement to report on clause (a) of the Order isnot applicable to the Company.
(b) The Company has not conducted any Non-Banking Financial or HousingFinance activities.
(c) The Company is not a Core Investment Company as defined in theregulations made by Reserve Bank of India. Accordingly the requirement to report onclause 3(xvi) of the Order is not applicable to the Company.
(d) The Company is part of the Group which has one Core InvestmentCompany as part of its Group.
(xvii) The Company has incurred cash losses amounting to Rs. 467.15lakhs in the current year. The Company has not incurred cash losses in the immediatelypreceding financial year.
(xviii) There has been no resignation of the statutory auditors duringthe year and accordingly requirement to report on Clause 3(xviii) of the Order is notapplicable to the Company.
(xix) On the basis of the financial ratios disclosed in note 42 to thefinancial statements the ageing and expected dates of realisation of financial assets andpayment of financial liabilities other information accompanying the financial statementsour knowledge of the Board of Directors and management plans and based on our examinationof the evidence supporting the assumptions and considering the Company's currentliabilities exceeds the current assets by Rs. 27905.79 lakhs and also considering thatthe Company has obtained the letter of financial support from its Promoters nothing hascome to our attention which causes us to believe that Company is not capable of meetingits liabilities existing at the date of balance sheet as and when they fall due within aperiod of one year from the balance sheet date.
We further state that this is not an assurance as to the futureviability of the Company and our reporting is based on the facts up to the date of theaudit report and we neither give any guarantee nor any assurance that all liabilitiesfalling due within a period of one year from the balance sheet date will get dischargedby the Company as and when they fall due.
(xx) (a) In respect of other than ongoing projects there are nounspent amounts that are required to be transferred to a fund specified in Schedule VII ofthe Companies Act (the Act) in compliance with second proviso to sub section 5 of section135 of the Act. This matter has been disclosed in note 30.2 to the standalone financialstatements.
(b) There are no unspent amounts in respect of ongoing projects thatare required to be transferred to a special account in compliance of provision of subsection (6) of section 135 of Companies Act. This matter has been disclosed in note 30.2to the standalone financial statements.
Annexure 2 to the Independent Auditors Report
ANNEXURE 2 TO THE INDEPENDENT AUDITOR'S REPORT OF EVEN DATE ON THESTANDALONE FINANCIAL STATEMENTS OF JAY SHREE TEA & INDUSTRIES LIMTED
Report on the Internal Financial Controls under Clause (i) ofSub-section 3 of Section 143 of the Companies Act 2013 ("the Act")
We have audited the internal financial controls with reference tostandalone financial statements of Jay Shree Tea & Industries Limited ("theCompany") as of March 31 2022 in conjunction with our audit of the standalonefinancial 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 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("ICAI"). These responsibilities include the design implementation andmaintenance of adequate internal financial controls that were operating effectively forensuring the orderly and efficient conduct of its business including adherence to theCompany's policies the safeguarding of its assets the prevention and detection of fraudsand errors the accuracy and completeness of the accounting records and the timelypreparation of reliable financial information as required under the Companies Act 2013.
Our responsibility is to express an opinion on the Company's internalfinancial controls with reference to these standalone financial statements based on ouraudit. We conducted our audit in accordance with the Guidance Note on Audit of InternalFinancial Controls Over Financial Reporting (the "Guidance Note") and theStandards on Auditing as specified under section 143(10) of the Act to the extentapplicable to an audit of internal financial controls both issued by ICAI. ThoseStandards and the Guidance Note require that we comply with ethical requirements and planand perform the audit to obtain reasonable assurance about whether adequate internalfinancial controls with reference to these standalone financial statements was establishedand maintained and if such controls operated effectively in all material respects.
Our audit involves performing procedures to obtain audit evidence aboutthe adequacy of the internal financial controls with reference to these standalonefinancial statements and their operating effectiveness. Our audit of internal financialcontrols with reference to standalone financial statements included obtaining anunderstanding of internal financial controls with reference to these standalone financialstatements 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 of therisks of material misstatement of the financial statements whether due to fraud or error.
We believe that the audit evidence we have obtained and the auditevidence obtained by the branch auditor in terms of his report referred to in the OtherMatter paragraph below is sufficient and appropriate to provide a basis for our auditopinion on the Company's internal financial controls with reference to these standalonefinancial statements.
Meaning of Internal Financial Controls With Reference to theseStandalone Financial Statements
A company's internal financial controls with reference to standalonefinancial statements is a process designed to provide reasonable assurance regarding thereliability of financial reporting and the preparation of financial statements forexternal purposes in accordance with generally accepted accounting principles. A company'sinternal financial controls with reference to standalone financial statements includesthose policies and procedures that (1) pertain to the maintenance of records that inreasonable detail accurately and fairly reflect the transactions and dispositions of theassets of the company; (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 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 With Reference toStandalone Financial Statements
Because of the inherent limitations of internal financial controls withreference to standalone financial statements including the possibility of collusion orimproper management override of controls material misstatements due to error or fraud mayoccur and not be detected. Also projections of any evaluation of the internal financialcontrols with reference to standalone financial statements to future periods are subjectto the risk that the internal financial control with reference to standalone financialstatements may become inadequate because of changes in conditions or that the degree ofcompliance with the policies or procedures may deteriorate.
In our opinion the Company has in all material respects adequateinternal financial controls with reference to standalone financial statements and suchinternal financial controls with reference to standalone financial statements wereoperating effectively as at March 31 2022 based on the internal control over financialreporting criteria established by the Company considering the essential components ofinternal control stated in the Guidance Note issued by the ICAI.
Our report under Section 143(3)? of the Act on the adequacy andoperating effectiveness of the internal financial controls with reference to standalonefinancial statements in so far it relates to one branch (sugar division) located atMajhaulia India is based on the report of the branch auditor. Our opinion is notmodified in respect of this matter.
| ||For S.R. Batliboi & Co. LLP |
| ||Chartered Accountants |
| ||ICAI Firm Registration Number: 301003E/E300005 |
| ||per Sanjay Kumar Agarwal |
| ||Partner |
|Place of Signature: Kolkata ||Membership Number: 060352 |
|Date: May 28 2022 ||UDIN: 22060352AJUODY6057 |