TO THE MEMBERS OF KANCO TEA & INDUSTRIES LIMITED REPORT ON THE STANDALONE Ind ASFINANCIAL STATEMENTS OPINION
We have audited the accompanying standalone financial statements of KANCO TEA &INDUSTRIES LIMITED (the Company') which comprises the Balance Sheet as at 31stMarch 2021 and the Statement of Profit and Loss (including Other ComprehensiveIncome)the Cash Flow Statement and the Statement of Changes in Equity for the year thenended and notes to the financial statements including a summary of significant accountingpolicies for the year ended on that date (hereinafter referred to as "Standalone IndAS Financial Statements"). In our opinion and to the best of our information andaccording to the explanations given to us the aforesaid IndAS financial statements givethe information required by the Companies Act 20l3 ("the Act') in the manner sorequired and give a true and fair view in conformity with the Indian Accounting Standardsprescribed under section 133 of the Act read with the Companies (Indian AccountingStandards) Rules 2015 as amended and other accounting principles generally accepted inIndia of the state of affairs of the Company as at 31st March 2021 itsprofit including other comprehensive loss its cash flow and the changes in equity for theyear ended on that date
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 CharteredAccountants of India (ICAI) together with the ethical requirements that are relevant toour audit of the financial statements under the provisions of the Act and the Rulesthereunder and we have fulfilled our other ethical responsibilities in accordance withthese requirements and the ICAI's Code of Ethics. We believe that the audit evidence wehave obtained is sufficient and appropriate to provide a basis for our audit opinion onthe financial statements.
KEY AUDIT MATTERS
Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the financial statements for the financial year ended 31stMarch 2021. These matters were addressed in the context of our audit of financialstatements as a whole and in forming our opinion thereon and we do not provide aseparate opinion on these matters. For each matter below our description of how our auditaddressed the matter is provided in that context.
We have determined the matters described below to be the key audit matters to becommunicated in our report. We have fulfilled the responsibilities described in Auditor'sresponsibilities for the audit of the financial statements section of our reportprocedures designed to respond to our assessment of the risks of material misstatement ofthe financial statements. The results of our audit procedures including the proceduresperformed to address the matters below provide the basis for audit opinion on theaccompanying financial statements.
The Company's Board of Directors is responsible for the other information. The otherinformation comprises the information included in the Management Discussion and AnalysisBoard's Report including Annexures to Board's Report Business Responsibility ReportCorporate Governance and Shareholders' Information but does not include financialstatements and our auditors' report thereon.
Our opinion on the financial statements does not cover the other information and we donot express any form of assurance and 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 in theaudit or otherwise appears to be materially misstated. If based on the work we haveperformed we conclude that there is a material misstatement of this other information weare required to report that fact. We have nothing to report in this regard.
RESPONSIBILITY OF MANAGEMENT FOR THE INDAS 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 IndAS financial statements that give a true and fair view of the financial positionfinancial performance changes in equity and cash flows of the Company in accordance withthe accounting principles generally accepted in India including the Indian AccountingStandards specified under section 133 of the Act. This responsibility also includesmaintenance of adequate accounting records in accordance with the provisions of the Actfor safeguarding of the assets of the Company and for preventing and detecting frauds andother irregularities; selection and application of appropriate implementation andmaintenance of accounting policies; making judgments and estimates that are reasonable andprudent; and design implementation and maintenance of adequate internal financialcontrols that were operating effectively for ensuring the accuracy and completeness ofthe accounting records relevant to the preparation and presentation of the financialstatement that give a true and fair view and are free from material misstatement whetherdue to fraud or error.
In preparing the financial statements management is responsible for assessing theCompany's ability to continue as a going concern disclosing as applicable mattersrelated to going concern and using the going concern basis of accounting unless managementeither intends to liquidate the Company or to cease operations or has no realisticalternative but to do so. Those Board of Directors are also responsible for overseeing thecompany's financial reporting process.
AUDITOR'S RESPONSIBILITY FOR THE AUDIT OF THE FINANCIAL STATEMENTS
Our objectives are to obtain reasonable assurance about whether the financialstatements as a whole are free from material misstatement whether due to fraud or errorand to issue an auditors' 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:
a) Identify and assess the risks of material misstatement of the financial statementswhether due to fraud or error design and perform audit procedures responsive to thoserisks and obtain audit evidence that is sufficient and appropriate to provide a basis forour opinion. The risk of not detecting a material misstatement resulting from fraud ishigher than for one resulting from error as fraud may involve collusion forgeryintentional omissions misrepresentations or the override of internal control;
b) Obtain an understanding of internal control relevant to the audit in order to designaudit procedures that are appropriate in the circumstances. Under section 143(3)(i) of theCompanies Act 2013 we are also responsible for expressing our opinion on whether thecompany has adequate internal financial controls system in place and the operatingeffectiveness of such controls;
c) Evaluate the appropriateness of accounting policies used and the reasonableness ofaccounting estimates and related disclosures made by management;
d) Conclude on the appropriateness of management's use of the going concern basis ofaccounting and based on the audit evidence obtained whether a material uncertaintyexists related to events or conditions that may cast significant doubt on the Company'sability to continue as a going concern. If we conclude that a material uncertainty existswe are required to draw attention in our auditor's report to the related disclosures inthe 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 Company to cease to continue asa going concern; and
e) Evaluate the overall presentation structure and content of the financialstatements including the disclosures and whether the financial statements represent theunderlying transactions and events in a manner that achieves fair presentation.Materiality is the magnitude of misstatements in the financial statements thatindividually or in aggregate makes it probable that the economic decisions of areasonably knowledgeable user of the financial statements may be influenced. We considerquantitative materiality and qualitative factors in
(i) planning the scope of our audit work and in evaluating the results of our work; and
(ii) to evaluate the effect of any identified misstatements in the financialstatements.
We communicate with those charged with governance regarding among other matters theplanned scope and timing of the audit and significant audit findings including anysignificant deficiencies in internal control that we identify during our audit. We alsoprovide those charged with governance with a statement that we have complied with relevantethical requirements regarding independence and to communicate with them allrelationships and other matters that may reasonably be thought to bear on ourindependence and where applicable related safeguards. From the matters communicated withthose charged with governance we determine those matters that were of most significancein the audit of the financial statements for the financial year ended 31stMarch 2021 and are therefore the key audit matters. We describe these matters in ourauditor's report unless law or regulation 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 communication.
REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS
1. As required by the Companies (Auditor's Report) Order 2016 ("the Order")issued by the Government of India Ministry of Corporate Affairs dated 29thMarch 2016 in terms of sub-section 11 of section 143 of the Act we give in the Annexurea statement on the matters specified therein refer to Annexure "A".
2. As required by Section143(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 purpose of our audit.
b) In our opinion proper books of account as required by law have been kept by theCompany so far as it appears from our examination of those books.
c) The Balance Sheet the Statement of Profit and Loss including the Statement ofOther Comprehensive Income Cash Flow Statement and Statement of Changes in Equity dealtwith by this Report 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 read with Rule 7 of theCompanies (Accounts) Rules 2014.
e) On the basis of written representations received from the directors as on 31stMarch 2021 and taken on record by the Board of Directors none of the directors isdisqualified as on 31st March 2021 from being appointed as a director in termsof Section 164(2) of the Act.
f ) In our opinion there exists adequacy of internal financial controls with referenceto financial statements of the Company and the operating effectiveness of such controlsrefer to our separate report in Annexure "B" and
g) With respect to the other matters to be included in the Auditors Report inaccordance with the requirements of the section 197(15) of the Act as amended: In ouropinion and to the best of our information & according to the explanation given to usthe remuneration paid to the directors by the company is in accordance with the saidprovision of the Act.
h) With respect to other matters to be included in the Auditor's Report in accordancewith Rule 11 of the Companies (Audit and Auditors) Rules 2014 in our opinion and to thebest 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 financial statements- refer note 37 of the financial statements.
(ii) The Company did not have any long term contracts including derivative contractsfor which there were any material foreseeable losses.
(iii) There has been no delay in transferring amounts required to be transferred tothe Investor Education and Protection Fund by the Company.
Annexure "A" to the Independent Auditors' Report
REFERRED TO IN PARAGRAPH 1 UNDER THE HEADING" REPORT ON OTHER LEGAL AND REGULATORYREQUIREMENTS" OF OUR REPORT OF EVEN DATE:
On the basis of such checks as we considered appropriate and according to theinformation and explanation given to us during the course of our audit wereport that:
1. a) The company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets.
b) As explained to us some of the fixed assets have been physically verified by themanagement at reasonable intervals.
We have been informed that no material discrepancies were noticed on such verification.
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.
2. a) As explained to us inventory has been physically verified during the year by themanagement at reasonable intervals.
b) In our opinion and according to the information and explanations given to us theprocedures of physical verification of inventory followed by the management are reasonableand adequate in relation to the size of the company and the nature of its business.
c) Inventory lying with third parties has been confirmed by them as at 31stMarch 2021 and no material discrepancies were noticed in respect of such confirmations;
d) No material discrepancy was noticed on physical verification of stocks by themanagement as compared to book records.
3. The Company has granted loan to a body corporate in earlier years covered in theregister maintained under Section 189 of the Companies Act 2013 for which provision forbad and doubtful debts has been made as on 1st April 2016 in the financialstatement as reflected in note no. 10.
Accordingly the paragraphs 3(iii) (a) and (b) of the order are not applicable.
4. In our opinion and according to the information and explanations given to us theCompany has complied with the provisions of Section 185 and 186 of the Act with respectto loans and investments made.
5. The Company has not accepted deposits from the public covered within the meaning ofdirectives issued by the Reserve Bank of India and provisions of Sections 73 to Section 76or any other relevant provisions of the Act and rules framed there under are notapplicable.
6. As per information & explanation given by the management maintenance of costrecords has been specified by the Central Government under sub section (1) of Section 148of the Act and we are of the opinion that prima facie the prescribed accounts and recordshave been made and maintained. We have not however made a detailed examination of therecords with a view to determine whether they are accurate or complete.
7. a) According to the records of the company undisputed statutory dues includingProvident Fund Employees State Insurance Income-tax Sales-tax Wealth Tax Service TaxCustom Duty Excise Duty Value Added Tax Goods and Service Tax and Cess to the extentapplicable and any other statutory dues have generally been regularly deposited with theappropriate authorities. According to the information and explanations given to us therewere no outstanding statutory dues as on 31st March 2021 for a period of morethan six months from the date they became payable.
b) According to the information and explanations given to us and on the basis of thedocuments and records the disputed statutory dues which have not been deposited with theappropriate authorities are as under:
|Serial No Name of Statute ||Nature of Dues ||Financial Year to which the matter pertains ||Amount in Rs ||Forum where dispute is pending |
|1. West Bengal Value Added Tax Act 2013 ||Sales Tax ||2009-2010 ||794960/- ||West Bengal Commercial Taxes Appellate & Revision Board West Bengal |
|2. Income Tax Act1961 ||Income Tax Demand ||2009-10 ||124257/- ||D.C.I.T. Circle 4(1) |
|3 Income Tax Act1961 ||Income Tax Demand ||2016-17 ||4041850/- ||D.C.I.T. Circle 4(1) |
|4 Income Tax Act1961 ||Income Tax Demand ||2018-19 ||19810390/- ||D.C.I.T. Circle 4(1) |
8. Based on our audit procedures and on the information and explanations given by themanagement we are of the opinion that the Company has not defaulted in repayment ofloans or borrowings to any bank during the year. Further the Company does not have anydebentures and loan from financial institution or government.
9. The Company has not raised any money by way of initial public offer or furtherpublic offer (including debt instruments) and term loans during the year;
10. Based on the audit procedures performed and the information and explanations givento us we report that no fraud on or by the Company has been noticed or reported duringthe year nor have we been informed of such case by the management.
11. According to the information and explanations given to us and based on ourexamination of the records of the Company the Company has paid/provided for managerialremuneration in accordance with the requisite approvals mandated by the provisions ofSection 197 read with Schedule V to the said Act.
12. In our opinion and according to the information and explanations given to us theCompany is not a Nidhi Company.
13. According to the information and explanations given to us and based on ourexamination of the records of the Company transactions with the related parties are incompliance with sections 177 and 188 of the Act where applicable and details of suchtransactions have been disclosed in the notes to financial statements as required by theapplicable accounting standards.
14. According to the information and explanations give to us and based on ourexamination of the records of the Company the Company has not made any preferentialallotment or private placement of shares or fully or partly convertible debentures duringthe year.
15. According to the information and explanations given to us and based on ourexamination of the records of the Company the Company has not entered into non-cashtransactions with directors or persons connected with him.
16. The Company is not required to be registered under section 45-IA of the ReserveBank of India Act 1934.
(Referred to in Paragraph (f) under "Report on other Legal and RegulatoryRequirements" of our Report of Even Date.) REPORT ON THE INTERNAL FINANCIAL CONTROLSOVER FINANCIAL REPORTING UNDER CLAUSE
(i) OF SUB-SECTION 3 OF SECTION 143 OF THE COMPANIES ACT 2013 ("THE ACT")
We have audited the internal financial controls over financial reporting of KANCOTEA & INDUSTRIES LIMITED ("the Company") as of 31 March 2021 inconjunction with our audit of the standalone Ind AS Financial Statements of the Companyfor 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 .These responsibilities includethe design implementation and maintenance of adequate internal financial controls thatwere operating effectively for ensuring the orderly and efficient conduct of its businessincluding adherence to company's policies the safeguarding of its assets the preventionand detection of frauds and errors the accuracy and completeness of the accountingrecords and the timely preparation of reliable financial information as required underthe Companies Act 2013.
Our responsibility is to express an opinion on the Company's internal financialcontrols over financial reporting based on our audit. We conducted our audit in accordancewith the Guidance Note on Audit of Internal Financial Controls over Financial Reporting(the "Guidance Note") issued by the institute of chartered accountants of Indiaand the Standards on Auditing prescribed under section 143(10) of the Companies Act2013 to the extent applicable to an audit of internal financial controls. Those Standardsand the Guidance Note require that we comply with ethical requirements and plan andperform the audit to obtain reasonable assurance about whether adequate internal financialcontrols over financial reporting was established and maintained and if such controlsoperated 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. Webelieve that the audit evidence we have obtained is sufficient and appropriate to providea basis for our audit opinion on the Company's internal financial controls system overfinancial 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 standalone financial statements for external purposes in accordance withgenerally accepted accounting principles. A company's internal financial control overfinancial reporting 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 authorisations of management and directors of the company; 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 standalone financial statements.
Inherent Limitations of Internal Financial Controls over Financial Reporting
Because of the inherent limitations of internal financial controls over financialreporting including the possibility of collusion or improper management override ofcontrols material misstatements due to error or fraud may occur and not be detected.Also projections of any evaluation of the internal financial controls over financialreporting to future periods are subject to the risk that the internal financial controlover financial reporting may become inadequate because of changes in conditions or thatthe degree of compliance with the policies or procedures may deteriorate.
In our opinion to the best of our information and according to the explanations givento us the Company has in all material respects an adequate internal financial controlssystem over financial reporting and such internal financial controls over financialreporting were operating effectively as at 31st March 2021 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 the Institute of Chartered Accountants ofIndia.
| ||For NKSJ & Associates |
| ||Chartered Accountants |
| ||Firm Registration No- 329563E |
| ||UDIN : 21234454AAAAAY3839 |
|Flat No. 1B 1st Floor Embassy Building || |
|4 Shakespeare Sarani ||(CA Sneha Jain) |
|Kolkata 700 071 ||Partner |
|Dated the 28th day of June 2021 ||Membership No. 234454 |