United Nilgiri Tea Estates Company Ltd.
|BSE: 530470||Sector: Agri and agri inputs|
|NSE: UNITEDTEA||ISIN Code: INE458F01011|
|BSE 05:30 | 01 Jan||United Nilgiri Tea Estates Company Ltd|
|NSE 00:00 | 05 Mar||316.40||
United Nilgiri Tea Estates Company Ltd. (UNITEDTEA) - Auditors Report
Company auditors report
Report on the Audit of the Financial Statements Opinion
We have audited the accompanying Financial statements of The UnitedNilgiri Tea Estates Company Limited ("the Company") which comprise theBalance Sheet as at 31st March 2020 and the Statement of Profit and Loss (including OtherComprehensive Income) the Statement of changes in Equity and the Statement of Cash Flowfor the year then ended and notes to the 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 theexplanations given to us the aforesaid Financial statements give the information requiredby the Companies Act 2013 ("the Act") in the manner so required and give a trueand fair view in conformity with the Indian Accounting Standards prescribed under section133 of the Act read with the Companies (Indian Accounting Standards) Rules 2015 asamended ("Ind AS") and other accounting principles generally accepted in Indiaof the state of affairs of the Company as at 31st March 2020 and its profit and othercomprehensive income its cash flows and the changes in equity for the year ended on thatdate Basis of Opinion
We conducted our audit of the Financial statements in accordance withthe Standards on Auditing (SA's) specified under section 143(10) of the Act. Ourresponsibilities under those Standards are further described in the Auditor'sResponsibility for the Audit of the Financial Statements section of our report. We areindependent of the Company in accordance with the Code of Ethics issued by the Instituteof Chartered Accountants of India (ICAI) together with the ethical requirements that arerelevant to our audit of the Financial statements under the provisions of the Act and theRules made thereunder and we have fulfilled our other ethical responsibilities inaccordance with these requirements and the Code of Ethics. We believe that the auditevidence obtained by us is sufficient and appropriate to provide a basis for our auditopinion.
Key Audit Matters
Key audit matters are those matters that in our professional judgmentwere of most significance in our audit of the Financial statements of the current period.These matters were addressed in the context of our audit of the financial statements as awhole and in forming our opinion thereon and we do not provide a separate opinion onthese matters. We have determined the matter described below to be the key audit matter tobe communicated in our report.
Information other than Financial Statements and Auditor's ReportThereon
The Company's Board of Directors is responsible for the otherinformation. The other information comprises the information included in the AnnualReport for example Corporate Overview Key Highlights Board's Report Report onCorporate Governance Management Discussion & Analysis Report etc. but does notinclude the Financial statements and our auditor's report thereon.
Our Opinion on the Financial statements does not cover the otherinformation and we do not express any form of assurance conclusion thereon.
In Connection with our audit of the Financial statements ourresponsibility is to read the other information and in doing so consider whether theother information is materially inconsistent with the Financial statements or ourknowledge obtained during the course of our audit or otherwise appears to be materiallymisstated.
If based on the work we have performed we conclude that thereis a material misstatement of this other information we are required to report that fact.We have nothing to report in this regard.
Management's Responsibility for the 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 Financial statementsthat give a true and fair view of the financial position financial performance includingother comprehensive income Cash flows and changes in equity of the Company in accordancewith the Ind AS and other accounting principles generally accepted in India. Thisresponsibility also includes maintenance of adequate accounting records in accordance withthe provisions of the Act for safeguarding the assets of the Company and for preventingand detecting frauds and other irregularities; selection and application of appropriateaccounting policies; making judgements and estimates that are reasonable and prudent; anddesign implementation 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 Financial statements thatgive a true and fair view and are free from material misstatement whether due to fraud orerror.
In preparing the Financial statements management is responsible forassessing the Company's ability to continue as a going concern disclosing as applicablematters related to going concern and using the going concern basis of accounting unlessmanagement either intends to liquidate the Company or to cease operations or has norealistic alternative 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 theFinancial statements as a whole are free from material misstatements whether due to fraudor error and to issue an auditor's report that includes our opinion. Reasonable assuranceis a high level of assurancebut 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 Financial statements.
As part of an audit in accordance with SAs we exercise professionaljudgement and maintain professional skepticism throughout the audit we also:
Identify and assess the risks of material misstatement of thefinancial statements whether due to fraud or error design and perform audit proceduresresponsive to those risks and obtain audit evidence that is sufficient and appropriate toprovide a basis for our opinion. The risk of not detecting a material misstatementresulting from fraud is higher than for one resulting from error as fraud may involvecollusion forgery intentional omissions misrepresentations or the override of internalcontrol.
Obtain an understanding of internal financial control relevantto the audit in order to design audit procedures that are appropriate in thecircumstances. Under section 143(3)(i) of the Act we are also responsible for expressingour opinion on whether the Company has adequate internal financial controls system inplace and the operating effectiveness of such controls.
Evaluate the appropriateness of accounting policies used and thereasonableness of accounting estimates and related disclosures made by the 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 thefinancial statements including the disclosures and whether the financial statementsrepresent the underlying transactions and events in a manner that achieves fairpresentation.
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 financialstatements of the current period and are therefore the key audit matters. We describedthese matters in our auditor's report unless law or regulation precludes public disclosureabout the matter of when in extremely rare circumstances we determine that a mattershould not be communicated in our report because the adverse consequences of doing sowould reasonably be expected to outweigh the public interest benefits of suchcommunication.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor's Report) Order 2016("the Order") issued by
the Central Government in terms of Section 143(11) of the Act we givein "Annexure A"
a statement on the matters specified in paragraphs 3 and 4 of theOrder.
2. As required by Section 143(3) of the Act based on our audit wereport that:
a) We have sought and obtained all the information and explanationswhich to the best of our knowledge and belief were necessary for the purposes of ouraudit.
b) In our opinion proper books of account as required by law have beenkept by the Company so far as it appears from our examination of those books.
c) The Balance Sheet the Statement of Profit and Loss including OtherComprehensive Income the 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 financial statements comply withIndian Accounting Standards (Ind AS) prescribed under Section 133 of the Act.
e) On the basis of the written representations received from thedirectors as on 31st March 2020 taken on record by the Board of Directors none of thedirectors is disqualified as on 31stMarch 2020 from being appointed as a director interms of Section 164(2) of the Act.
f) With respect to the adequacy of the internal financial controls overfinancial reporting of the Company and the operating effectiveness of such controls referto our separate Report in "Annexure B". Our report expresses an unmodifiedopinion on the adequacy and operating effectiveness of the Company's internal financialcontrols over financial reporting.
g) With respect to the other matters to be included in the Auditorsreport in accordance with the requirements of section 197(16) of the Act as amended inour opinion and to the best our information and according to the explanations given to usthe remuneration paid/ provided by the Company to its directors during the year is inaccordance with the provisions of section 197 of the Act.
h) With respect to the other matters to be included in the Auditor'sReport in accordance with Rule 11 of the Companies (Audit and Auditors) Rule 2014 asamended in our opinion and to the best of our information and according to theexplanations given to us:
1) The Company has disclosed the impact of pending litigation on itsfinancial position in its Financial Statements - Refer Note 29 (ii) to the financialstatements;
2) The Company has made provision as required under the applicable lawor accounting standards for material foreseeable losses if any on long-term contractsincluding derivative contracts
3) There has been no delay in transferring amounts required to betransferred to the Investor Education and Protection Fund by the Company.
Annexure A to the Independent Auditors' Report
[Referred to in paragraph 1 under 'Report on other Legal and RegulatoryRequirements'
section of our report of even date to the members of the United NilgiriTea Estates Company Limited]
(i) (a) The Company has maintained proper records showing fullparticulars including quantitative details and situation of fixed assets i.e PropertyPlant and Equipment (PPE)
(b) Some of the fixed assets (PPE) were physically verified during theyear by the Management in accordance with a programme of verification which in ouropinion provides for physical verification of all the fixed assets (PPE) at reasonableintervals. According to the information and explanations given to us no materialdiscrepancies were noticed on such verification.
(c) According to the information and explanations given to us and therecords examined by us and based on the examination of the registered sale deed/transferdeed/ conveyance deed provided to us we report that the title deeds comprising all theimmovable properties of land and buildings which are freehold are held in the name of theCompany as at the balance sheet date.
(ii) As explained to us the inventories were physically verifiedduring the year by the Management at reasonable intervals and no material discrepancieswere noticed on such physical verification.
(iii) The Company has not granted any loans secured or unsecured tocompanies firms Limited Liability Partnerships or other parties covered in the registermaintained under Section 189 of the Act.
(iv) In our opinion and according to the information and explanationsgiven to us the Company has not granted any loans or made investments or providedguarantees and hence the provisions of Section 185 & 186 of the Act is not applicable.
(v) According to the information and explanations given to us theCompany has not accepted any deposits from the public during the year. Therefore thequestion of complying with directives issued by the Reserve Bank of India and theprovisions of sections 73 to 76 or any other relevant provisions of the Act and the rulesframed there under does not arise.
(vi) The maintenance of cost records has been specified by the CentralGovernment under section 148 (1) of the Companies Act 2013 for tea and tea products. Wehave broadly reviewed the cost records maintained by the Company pursuant to the Companies(Cost Records and Audit) Rules 2014 as amended prescribed by the Central Governmentunder sub-section (1) of Section 148 of the Companies Act 2013 and are of the opinionthat prima facie the prescribed cost records have been made and maintained. We have notmade a detailed examination of the cost records with a view to determine whether they areaccurate or complete.
(vii) According to the information and explanations given to us and therecords of the Company examined by us in respect of statutory dues:
(a) The Company has generally been regular in depositing undisputedstatutory dues including Provident Fund Income-tax Goods and Service Tax Customs DutyCess and other material statutory dues applicable to it to the appropriate authorities.
(b) According to the information and explanations given to us and therecords of the Company examined by us there are no undisputed amount payable in respectof Provident Fund Income-tax Goods and Service Tax Customs Duty Cess and othermaterial statutory dues in arrears as at March 31 2020 for a period of more than sixmonths from the date they became payable.
(c) According to the information and explanations given to us dues ofIncome-tax or Sales tax or Service tax or Goods and Services tax or duty of Customs orduty of Excise or Value added tax which have not been deposited by the Company on accountof dispute is as under:
(viii) According to the records of the Company examined by us and theinformation and explanation given to us the Company has not taken any loans or borrowingsfrom financial institution or bank or Government or has not issued any debentures. Hencereporting under clause (viii) of the Order is not applicable to the Company.
(ix) In our opinion and according to the information and explanationsgiven to us the Company has not raised money by way of initial public offer or furtherpublic offer (including debt instruments) or term loans and hence reporting under clause(ix) of the Order is not applicable.
(x) During the course of our examination of the books and records ofthe Company carried out in accordance with the generally accepted auditing practices inIndia and according to the information and explanations given to us we have neither comeacross any instance of material fraud by the Company or on the Company by its officers oremployees noticed or reported during the year nor we have been informed of any such caseby the Management.
(xi) In our opinion and according to the information and explanationsgiven to us the Company has paid or provided for managerial remuneration in accordancewith the requisite approvals mandated by the provisions of Section 197 read with ScheduleV to the Act.
(xii) As the Company is not a Nidhi Company and hence reporting underClause (xii) of the Order is not applicable to the Company.
(xiii) In our opinion and according to the information and explanationsgiven to us the Company is in compliance with the provisions of Sections 177 and 188 ofthe Act where applicable for all the transactions with related parties and the details ofrelated parties transactions have been disclosed in the financial statements as requiredby applicable Indian Accounting Standards .
(xiv) Company has not made any preferential allotment or privateplacement of shares or fully or partly convertible debentures during the year underreview. Accordingly the provisions of Clause (xiv) of the Order are not applicable to theCompany.
(xv) In our opinion and according to the information and explanationsgiven to us during the year the Company has not entered into any non cash transactionswith its directors or persons connected with him/her and hence section 192 of the Act arenot applicable.
(xvi) The Company is not required to be registered under Section 45-I(A) of the Reserve Bank of India Act 1934.
Annexure B to Independent Auditors' Report
[Referred to in paragraph 2 (f) under 'Report on other Legal andRegulatory Requirements' section of our report of even date to the members of the UnitedNilgiri Tea Estates Company Limited]
Report on the Internal Financial Controls Over Financial Reportingunder Clause (i) of Subsection 3 of Section 143 of the Companies Act2013 ("theAct")
We have audited the internal financial controls over financialreporting of The United Nilgiri Tea Estates Company Limited ("the Company") asof March 31 2020 in conjunction with our audit of the 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 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 and maintenance of adequateinternal financial controls that were operating effectively for ensuring the orderly andefficient conduct of its business including adherence to company's policies thesafeguarding of its assets the prevention and detection of frauds and errors theaccuracy and completeness of the accounting records and the timely preparation ofreliable financial information as required under the Act.
Our responsibility is to express an opinion on the Company's internalfinancial controls over financial reporting based on our audit. We conducted our audit inaccordance with the Guidance Note on Audit of Internal Financial Controls Over FinancialReporting (the "Guidance Note") issued by the Institute of Chartered Accountantsof India and the Standards on Auditing prescribed under section 143(10) of the Act to theextent applicable to an audit of internal financial controls. Those Standards and theGuidance Note require that we comply with ethical requirements and plan and perform theaudit to obtain reasonable assurance about whether adequate internal financial controlsover financial reporting was established and maintained and if such controls operatedeffectively in all material respects.
Our audit involves performing procedures to obtain audit evidence aboutthe adequacy of the internal financial controls system over financial reporting and theiroperating effectiveness. Our audit of internal financial controls over financial reportingincluded obtaining an understanding of internal financial controls over financialreporting 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 is sufficient andappropriate to provide a basis for our audit opinion on the Company's internal financialcontrols system over financial reporting.
Meaning of Internal Financial Controls Over Financial Reporting
A Company's internal financial control over financial reporting 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 overfinancial reporting includes those policies and procedures that (1) pertain to themaintenance of records that in reasonable detail accurately and fairly reflect thetransactions and dispositions of the assets of the company; (2) provide reasonableassurance that transactions are recorded as necessary to permit preparation of financialstatements in accordance with generally accepted accounting principles and that receiptsand expenditures of the company are being made only in accordance with authorisations ofmanagement and directors of the company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorised acquisition use or disposition of thecompany's assets that could have a material effect on the financial statements.
Inherent Limitations of Internal Financial Controls Over FinancialReporting
Because of the inherent limitations of internal financial controls overfinancial reporting 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 overfinancial reporting to future periods are subject to the risk that the internal financialcontrol over financial reporting may become inadequate because of changes in conditionsor that the degree of compliance with the policies or procedures may deteriorate.
In our opinion to the best of our information and according to theexplanations given to us the Company has in all material respects an adequate internalfinancial controls system over financial reporting and such internal financial controlsover financial reporting were operating effectively as at March 31 2020 based on theinternal control over financial reporting criteria established by the Company consideringthe essential components of internal control stated in the Guidance Note on Audit ofInternal Financial Controls Over Financial Reporting issued by the Institute of CharteredAccountants of India.