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Terai Tea Co Ltd.

BSE: 530533 Sector: Agri and agri inputs
NSE: N.A. ISIN Code: INE390D01011
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VOLUME 4
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OPEN 48.45
CLOSE 48.45
VOLUME 4
52-Week high 52.00
52-Week low 30.30
P/E
Mkt Cap.(Rs cr) 33
Buy Price 46.95
Buy Qty 1.00
Sell Price 50.95
Sell Qty 10.00

Terai Tea Co Ltd. (TERAITEACO) - Auditors Report

Company auditors report

To

The Members of

Terai Tea Company Limited

10 Govt. Place (East)

Kolkata - 700 069

REPORT ON THE AUDIT OF THE STANDALONE FINANCIAL STATEMENTS

Opinion

We have audited the standalone financial statements of Terai Tea Company Limited ("theCompany") which comprise the Standalone Balance Sheet as at 31March 2019 thestandalone Statement of Profit and Loss (including other comprehensive income) standalonestatement of changes in equity and standalone statement of cash flows for the year thenended and notes to the standalone financial statements including a summary ofsignificant accounting policies and other explanatory information.

In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid Standalone Financial Statements give the information requiredbythe Companies Act 2013 ("the Act") in the manner so required and givea trueand fair view in conformity with the accounting principles generally acceptedin India ofthe State of Affairs of the Company as at 31 March 2019 and its Profit and OtherComprehensive income changes in equity and its cash flows for the year ended on thatdate.

Basis for Opinion

We conducted our audit in accordance with the Standards on Auditing (SAs) specifiedunder section 143(10) of the Act. Our responsibilities under those standards arefurtherdescribed in the Auditor's Responsibilities for the Audit of the StandaloneFinancial Statementssection of our Report. We are independent of the Company in accordancewith the Code of Ethics issued by the Institute of Chartered Accountants of India("ICAI") together with ethical requirements that are relevant to our audit ofthe standalone 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 Code of Ethics. We believe that the audit evidencewe haveobtained is sufficient and appropriate to provide a basis for our opinion.

Key Audit Matters

Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the standalone financial statements of the current period.These matters were addressed in the context of our audit of the standalone financialstatements as a whole and in forming our opinion thereon and we do not provide aseparate opinion on these matters.

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 theAuditor's responsibilities for the audit of the standalone financial statements section ofour report including in relation to these matters. Accordingly our audit included theperformance of procedures designed to respond to our assessment of the risks of materialmisstatement of the Standalone Financial Statements. The results of our audit proceduresincluding the procedures performed to address the matters below provide the basis for ouraudit opinion on the accompanying standalone financial statements.

Estimation of Useful Life of Bearer Plants

See note 3(a) to the standalone financial statements

The key audit matter How the matter was addressed in our audit
Useful life of Bearer Plants requires the management to exercise significant judgement in relation to the estimate thereof. Nature timing and likelihood of changes to the natural factors may affect the useful life expectancy of the assets and therefore could have a material impact on the depreciation expense for the year. a Assessed the management's estimates of the useful life of Bearer Plants with reference to: (a) the consistency with the Company's pattern of economic benefits embodied in such assets and future operating plans including acquisitions and retirements of the Bearer Plants; (b) the comparison to the useful life estimates adopted by the comparable tea producers; and (3) consideration of the Company's historical experience.
As per the Ind AS 16 - "Property Plant and Equipment" the management reviews the estimated useful life and the residual value of Bearer Plants annually and adjust for changes where appropriate. Accordingly the matter has been identified as key audit matter.
The written down value of such Bearer Plants as on March 312019 is Rs. 1449.63 lakhs. a Evaluated the assumptions and critical judgements used by the management through testing of underlying documents/details.
aAssessed the related disclosures included in the standalone financial statements in this regard.

Other Information

The Company's Management and Board of Directors are responsible for the otherinformation. The other information comprises the information included in the Company'sAnnual Report but does not include the financial statements and our auditors' reportthereon. The information included in the annual report is expected to be made available tous after the date of the auditor's report.

Our opinion on the standalone financial statements does not cover the other informationand we do not express any form of assurance conclusion thereon.

In connection with our audit of the standalone financial statements our responsibilityis to read the other information identified above when it becomes available and in doingso consider whether the other information is materially inconsistent with the standalonefinancial statements or our knowledge obtained in the audit or otherwise appears to bematerially misstated.

When we read the other information if we conclude that there is a materialmisstatement therein we are required to communicate the matter to those charged withgovernance and take necessary actions as applicable under the applicable laws andregulations.

Responsibilities of Management and Those Charged with Governance for the FinancialStatements

The Company's management and Board of Directors are 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 state of affairs profit and othercomprehensive income changes in equity and cash flows of the Company in accordance withthe accounting principles generally accepted in India including the Indian AccountingStandards (Ind AS) specified under section 133 of the Act. 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 designimplementation andmaintenance of adequate internal financial controls that were operatingeffectively for ensuring the accuracy and completeness of the accounting records relevantto the preparation and presentation of the standalone financial statements that give atrue and fair view and are free from material misstatementwhether due to fraud or error.

In preparing the Standalone Financial Statements management and Board of Directors areresponsible 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 the management either intends to liquidate the Company or tocease operations or has no realistic alternative but to do so. Board of Directors is alsoresponsible for overseeing the Company's financial reporting process.

Auditor's Responsibilities for the Audit of the Standalone Financial Statements

Our objectives are to obtain reasonable assurance about whether the standalonefinancial statements as a whole are free from material misstatement whetherdue to fraudor error and to issue an auditor's report that includes our opinion.Reasonable assuranceis a high level of assurance but is not a guarantee that an audit conducted in accordancewith SAs will always detect a material misstatement when it exists. Misstatements canarise from fraud or error and are considered material if individually or in theaggregate they could reasonably be expected to influence the economic decisions of userstaken on the basis of these standalone financial statements.

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

1. 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.

2. 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 theAct we are also responsible for expressing our opinion on whether the company hasadequate internal financial controls with reference to standalone financial statements inplace and the operating effectiveness of such controls.

3. Evaluate the appropriateness of accounting policies used and the reasonableness ofaccounting estimates and related disclosures made by management.

4. 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 standalone 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 conditions may cause the Company to cease tocontinue as a going concern.

5. Evaluate the overall presentation structure and content of the standalonefinancialstatements including the disclosures and whether the standalone financial statementsrepresent the underlying transactions and events in a manner that achieves fairpresentation.

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

We also provide those charged with governance with a statement that we have compliedwith relevant ethical requirements regarding independence and tocommunicate with them allrelationships and other matters that may reasonably bethought to bear on our independenceand 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 standalone financial statementsof the current period and are therefore the key audit matters. We describe these mattersin our auditors' report unless law or regulation precludes public disclosure about thematter or when 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 in terms of sub-section (11) of section 143 of the Actwe give in the "Annexure A" statement on the matters specified in paragraphs 3and 4 of the Order to the extent applicable.

2. As required by Section 143(3) of the Act we report that:

a) We have sought and obtained all the information and explanations which to the bestof our knowledge and belief were necessary for the purposes of our audit.

b) In our opinion proper books of account as required by law have been kept by theCompany so far as it appears from our examination of those books.

c) The Balance Sheet the Statement of Profit and Loss including the Statement of OtherComprehensive Income the Statement of Changes in Equity and the Cash Flow Statement dealtwith by this Report are in agreement with the books of account.

d) In our opinion the aforesaid Standalone Financial Statements comply with theAccounting Standards specified under Section 133 of the Act.

e) On the basis of the written representations received from the directors as on 31March 2019 taken on record by the Board of Directors none of the directors isdisqualified as on 31 March 2019 from being appointed as a director in terms of Section164(2) of the Act.

f) With respect to the adequacy of the internal financial controls with reference tothese standalone financial statements of the Company and the operating effectiveness ofsuch controls refer to our separate Report in "Annexure B".

g) With respect to the other matters to be included in the Auditor's Report inaccordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 in our opinionand to the best of our information and according to the explanations given to us:

i) The Company does not have any significant pending litigations which would impact itsfinancial position.

ii) The Company did not have any long-term contracts including derivative contracts forwhich there were any material foreseeable losses.

iii) There has been no delay in transferring amounts required to be transferred tothe Investor Education and Protection Fund by the Company.

iv) With respect to the matter to be included in the auditors' report under Section197(16) in our opinion and according to the information and explanations given to us theremuneration paid by the Company to its directors during the current year is in accordancewith the provisions of Section 197 of the Act. The remuneration paid to any director isnot in excess of the limit laid down under Section 197 of the Act. The Ministry ofCorporate Affairs has not prescribed other details under Section 197(16) which arerequired to be commented upon by us.

For SAHA & MAJUMDER
Chartered Accountants
Place : Kolkata FRN : 303087E
Date : May 29 2019 Sd/-
S.N. Bhattacharjee
Partner
Membership No. 010767

Annexure - "A" to the Independent Auditors' Report

With reference to the Annexure A referred to in paragraph 1 in Report on Other Legaland Regulatory Requirements of the Independent Auditor's Report to the Members of theCompany on the standalone financial statements for the year ended 31 March 2019 we reportthat:

(i) (a) The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets.

(b) The Company has a regular programme of physical verification of its fixed assets bywhich all fixed assets are verified in a phased manner over a period of three years. Inour opinion this periodicity of physical verification is reasonable having regard to thesize of the Company and the nature of its assets. Pursuant to the programme certain fixedassets were physically verified during the year. No material discrepancies were observedon such verification.

(c) In our opinion and according to the information and explanations given to us and onthe basis of our examination of the records of the Company the title deeds of immovableproperties included in property plant and equipment are held in the name of the Company.

(ii) The inventories except stocks lying at warehouse or consignment agents have beenphysically verified by the Management during the year. In our opinion the frequency ofsuch verification is reasonable. The discrepancies noticed on verification between thephysical stock and the book records were not material and have been appropriately dealtwith in the books of accounts.For stocks lying at warehouse or consignment agents at theyear-end has been verified on the basis of subsequent sales.

(iii) According to information and explanations given to us the Company has notgranted any loans secured or unsecured to companies firms Limited LiabilityPartnerships or other parties covered in the register maintained under section 189 of theCompanies Act 2013 (‘the Act').

(iv) In our opinion and according to the information and explanations given to us theCompany has complied with the provisions of Sections 185 and 186 of the Act with respectto the loans given investments made guarantees and security given.

(v) The Company has not accepted any deposits from the public. Hence paragraph 3 (v)of the order is not applicable.

(vi) We have broadly reviewed the books of account maintained by the Company pursuantto the rules made by the Central Government for the maintenance of cost records undersection 148(1) of the Companies Act 2013 related to manufacture of goods and are of theopinion that prima facie the specified accounts and records have been made andmaintained. We have not however made a detailed examination of the same.

(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 Goods and Services tax Duty of customs cessand any other materialstatutory dues have generally been regularly deposited during the year by the Company withthe appropriate authorities.

According to the information and explanations given to us no undisputed amountspayable in respect of Provident fund Employee State Insurance Income-tax Goods andServices taxDuty of customs cess and any other material statutory dues were in arrearsas at 31 March 2019 for a period of more than six months from the date they becamepayable except sum of Rs. 696092/- outstanding against Agricultural Income Tax which hasbeen paid in the month of April 2019.

(b) According to the information and explanations given to us there are no dues whichhave not been deposited by the Company on account of disputes except for the following :

Name of statute Nature of dues Amount (') Period for which it relates Forum where dispute pending
Income Tax Act 1961 Income Tax 227730 AY: 2013-2014 Commissioner (Appeals)
Income Tax Act 1961 Income Tax 230169 AY: 2014-2015 Commissioner (Appeals)
West Bengal Sales Tax Act 1994 Sales Tax/Value Added Tax 2724449* FY: 2004-2005 Appellate and Revisional Board (High Court)
West Bengal Sales Tax Act 1994 Sales Tax / Value Added Tax 5534200* FY: 2006-2007 2009-2010 and 2011-2012 Appellate and Revisional Board
West Bengal Sales Tax Act 1994 Sales Tax / Value Added Tax 1261694* FY: 2007-2008 and 2008-2009 Commissioner (Appeals)
Central Sales Tax Act 1956 Sales Tax / Value Added Tax 1310610* FY: 2004-2005 Appellate and Revisional Board (High Court)
Central Sales Tax Act 1956 Sales Tax / Value Added Tax 3538934* FY: 2005-2006 2006-2007 and 2011-2012 Appellate and Revisional Board (High Court)
Central Sales Tax Act 1956 Sales Tax / Value Added Tax 1095010* FY: 2007-2008 and 2008-2009 Commissioner (Appeals)

*Demand stayed by High Court.

(viii) In our opinion and according to the information and explanations given to usthe Company has not defaulted in repayment of loans or borrowings to the financialinstitution and bank. The Company does not have any outstanding loans or borrowings fromthe debenture holder during the year.

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

(x) According to the information and explanations given to us no material fraud by theCompany or on the Company by its officers or employees has been noticed or reported duringthe year.

(xi) According to the information and explanations given to us and based on examinationof the records of the Company the Company has paid/ provided for managerial remunerationin accordance with the requisite approvals mandated by the provisions of Section 197 readwith Schedule V to the Act.

(xii) In our opinion and according to the information and explanation given to us theCompany is not a Nidhi Company. Accordingly paragraph 3(xii) of the Order is notapplicable

(xiii) 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 alltransactions have been disclosed in the standalone Ind AS financial statements as requiredby the applicable accounting standards.

(xiv) According to the information and explanations given to us and based on ourexamination of the records of the Company the Company has not made preferential allotmentor private placement of shares or fully or partly convertible debentures during the year.

(xv) 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.

(xvi) According to the information and explanation given to us and in our opinion theCompany is not required to be registered under Section 45-IA of the Reserve Bank of IndiaAct 1934.

For SAHA & MAJUMDER
Chartered Accountants
Place : Kolkata FRN : 303087E
Date : May 29 2019 Sd/-
S.N. Bhattacharjee
Partner
Membership No. 010767

Annexure B to the Independent Auditor's Report of even date on the financial statementsof Terai Tea Company Limited

Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section143 of the Companies Act 2013 ("the Act")

We have audited the internal financial controls with reference to the financialstatements of Terai Tea Company Limited ("the Company") as of 31 March 2019 inconjunction with our audit of the financial statements of the Company for the year endedon 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 with reference to the financialstatements criteria established by the Company considering the essential components ofinternal control stated in the Guidance Note on Audit of Internal Financial Controls overFinancial Reporting (‘Guidance Note') issued by the Institute of CharteredAccountants of India (‘ICAI'). These responsibilities include the designimplementation and maintenance of adequate internal financial controls that were operatingeffectively for ensuring the orderly and efficient conduct of its business includingadherence to Company's policies the safeguarding of its assets the prevention anddetection of frauds and errors the accuracy and completeness of the accounting recordsand the timely preparation of reliable financial information as required under the Act.

Auditors' Responsibility

Our responsibility is to express an opinion on the Company's internal financialcontrols with reference to the financial statements based on our audit.We conducted ouraudit in accordance with the Guidance Note and the Standards on Auditing issued by ICAIand deemed to be prescribed under Section 143(10) of the Act to the extent applicable toan audit of internal financial controls both applicable to an audit of Internal FinancialControls and both issued by the ICAI. Those Standards and the Guidance Note require thatwe comply with ethical requirements and plan and perform the audit to obtain reasonableassurance about whether adequate internal financial controls with reference to thefinancial statements was established and maintained and if such controls operatedeffectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls system with reference to the financial statements andtheir operating effectiveness. Our audit of internal financial controls with reference tofinancial statements included obtaining an understanding of internal financial controlswith reference to the financial statements assessing the risk that a material weaknessexists and testing and evaluating the design and operating effectiveness of internalcontrol based on the assessed risk. The procedures selected depend on the auditor'sjudgement including the assessment of the risks of material misstatement of the financialstatements whether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the Company's internal financial controls systemwith reference to the financial statements.

Meaning of Internal Financial Controls with reference to the financial statements

A company's internal financial control with reference to the financial statements is aprocess designed to provide reasonable assurance regarding the reliability of financialreporting and the preparation of financial statements for external purposes in accordancewith generally accepted accounting principles. A company's internal financial control withreference to the financial statements includes those policies and procedures that:

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

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

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

Inherent Limitations of Internal Financial Controls with reference to the financialstatements

Because of the inherent limitations of internal financial controls with reference tothe financial statements including the possibility of collusion or improper managementoverride of controls material misstatements due to error or fraud may occur and not bedetected. Also projections of any evaluation of the internal financial controls withreference to the financial statements to future periods are subject to the risk that theinternal financial control with reference to the financial statements may becomeinadequate because of changes in conditions or that the degree of compliance with thepolicies or procedures may deteriorate.

Opinion

In our opinion the Company has in all material respects an adequate internalfinancial controls system with reference to the financial statements and such internalfinancial controls with reference to the financial statements were operating effectivelyas at 31 March 2019 based on the internal control with reference to the financialstatements criteria established by the Company considering the essential components ofinternal control stated in the Guidance Note issued by ICAI.

For SAHA & MAJUMDER
Chartered Accountants
Place : Kolkata FRN : 303087E
Date : May 29 2019 Sd/-
S.N. Bhattacharjee
Partner
Membership No. 010767