You are here » Home » Companies » Company Overview » Warren Tea Ltd

Warren Tea Ltd.

BSE: 508494 Sector: Agri and agri inputs
NSE: WARRENTEA ISIN Code: INE712A01012
BSE 00:00 | 07 Aug 47.90 2.20
(4.81%)
OPEN

46.00

HIGH

47.90

LOW

46.00

NSE 05:30 | 01 Jan Warren Tea Ltd
OPEN 46.00
PREVIOUS CLOSE 45.70
VOLUME 878
52-Week high 65.80
52-Week low 27.55
P/E
Mkt Cap.(Rs cr) 57
Buy Price 47.00
Buy Qty 18.00
Sell Price 47.20
Sell Qty 8.00
OPEN 46.00
CLOSE 45.70
VOLUME 878
52-Week high 65.80
52-Week low 27.55
P/E
Mkt Cap.(Rs cr) 57
Buy Price 47.00
Buy Qty 18.00
Sell Price 47.20
Sell Qty 8.00

Warren Tea Ltd. (WARRENTEA) - Auditors Report

Company auditors report

To the Members of

Warren Tea Limited

Report on the Audit of the Standalone Financial Statements

Opinion

We have audited the accompanying st andalone financial statements of Warren TeaLimited ("the Company " which comprise the Balance Sheet as at 31st March2019 and the Statement of Profit and Loss (including Other comprehensive Income) theStatement of Changes in Equity and the Cash Flow Statement for the year then ended and asummary of significant 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 statement s 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 2019 and its loss negativetotal comprehensive income its cash flows and the changes in equity for the year ended onthat date.

Basis for Opinion

We conducted our audit of the standalone financial statement s in accordance with theStandards on Auditing specified under section 143(10) of the Act (SAs). Ourresponsibilities under those Standards are further described in the Auditor'sResponsibility for the audit of the Standalone Financial statements section of our report.We are independent of the Company in accordance with the Code of ethics issued by theInstitute of Chartered Accountants of India (ICAI) together with the ethical requirementsthat are relevant to our audit of the standalone financial statements under the provisionsof the act and the Rules made there under and we have fulfilled our other ethicalresponsibilities in accordance with these requirements and the ICAI's Code of ethics. Webelieve that the audit evidence obtained by us is sufficient and appropriate to provide abasis for our audit opinion on the standalone financial statements.

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 matter described below to be thekey audit matter to be communicated in our report.

Sr. No. Key Audit Matter Auditor's Response
1. Developments – context of tea Industry
The company has incurred negative comprehensive income in the previous three consecutive financial years and the future performance of the company is dependent on factors relevant to an agro based industry like climatic conditions mark et s etc. for which judgment was to be made in forming our Audit Opinion. This was considered as a Key Audit Matter taking into consideration t he characteristics of tea industry which is essentially cyclical in nature and presently in a downturn. Our opinion has been formed based on our discussions with the Management and taking into consideration the performance of the company upto the date of this Report and also steps being taken by the company to augment its performance.
2. Valuation of Biological Assets and Agricultural Produce Principal Audit procedures performed:
Biological assets of the company include unharvested green tea leaves which are measured at fair value less cost to sell. Our audit approach was a combination of test of internal controls and substantive procedures including:
The Company's agricultural produce comprises of harvested green leaves and is valued at fair value less cost to sell at the point of harvest. Obtaining an understanding of the fair value measurement methodologies used and assessing the reasonableness and consistency of the significant assumptions used in the valuation.
Finished goods produced from agricultural produce are valued at lower of cost arrived at by adding the cost of conversion to the fair value of agricultural produce and the net realizable value. Evaluating the design and implementation of Company's controls around the valuation of biological assets and agricultural produce.
For harvested or unharvested green leaves since there is no active market for own leaves significant estimates are used by management in determining the valuation of biological assets and agricultural produce consumed in manufacture of black tea. Assessing the plucking yields to analyse the stage of transformation considered for the fair valuation of biological assets.
The principal assumptions and estimates in the determination of the fair value include assumptions about the yields and mark et prices of green leaf and the stage of transformation. Assessing the basis reasonableness and accuracy of adjustments made to market prices of green leaves considering the quality differential of the Company 's production.
The determination of these assumptions and estimates require careful evaluation by management and could lead to material impact on the financial position and the results of the Company. Testing the consistency of application of the fair value approaches and models over the years.

Information Other than the Financial Statements and Auditor's Report Thereon

The Company 's Board of Directors is responsible for the other information. The otherinformation comprises the information included in the Report of the Direct ors andManagement Discussion & Analysis Report but does not include the standalone financialstatements and our auditor's report thereon.

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 and in doing so consider whether the other informationis materially inconsistent with the standalone financial statements or our knowledgeobtained during the course of our audit or otherwise appears to be materially misstated.

If based on the work we have performed we conclude that there is a materialmisstatement of this other information we are required to report the fact. We havenothing to report in this regard.

Management's Responsibility for the Standalone Financial Statements

The Company's Board of Directors is responsible for the matters stated in section134(5) of the act with respect to the preparation of these standalone 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 accounting principles generally accepted in India including the Indian AccountingStandards (Ind –AS) specified in the Companies (Indian Accounting Standards) rules2015 (as amended) 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 frauds and otherirregularities ; selection and application of appropriate accounting policies; makingjudgments and estimates that are reasonable and prudent; and design implementation andmaintenance of adequate internal financial controls that were operating effect ively forensuring the accuracy and completeness of the accounting records relevant to thepreparation and presentation of the standalone financial statement that give a true andfair view and are free from material misstatement whether due to fraud or error.

In preparing the standalone 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 cease operations or has norealistic alternative but to do so.

Those Board of Direct ors are also responsible for overseeing the Company's financialreporting process.

Auditor's Responsibility 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 whether due 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 :

Identify and assess the risks of material misstatement of the standalone financialstatements whet her due to fraud or error design and perform audit procedures responsiveto those risks and obtain audit evidence that is sufficient and appropriate to provide abasis for our opinion. The risk of not detecting a material misstatement resulting fromfraud is higher than for one resulting from error as fraud may involve collusionforgery intentional omissions misrepresentations or the override of internal control.

Obtain an understanding of internal financial control relevant to the audit in order todesign audit procedures that are appropriate in the circumstances. Under section 143(3)(i)of the Act we are also responsible for expressing our opinion on whether the Company hasadequate internal financial controls system in place and the operating effectiveness ofsuch controls.

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

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.

Evaluate the overall presentation structure and content of the standalone financialstatements including the disclosures and whether the standalone financial statementsrepresent the underlying transactions and event s in a manner that achieves fairpresentation.

Materiality is the magnitude of misstatements in the standalone financial statementsthat individually or in aggregate makes it probable that the economic decisions of areasonably knowledgeable user of the standalone financial statements may be influenced. Weconsider quantitative materiality and qualitative factors in (i) planning the scope of ouraudit work and in evaluating the result s of our work ; and (ii) to evaluate the effect ofany identified misstatements in the standalone financial statements.

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 also provide those charged with governance with a statement that we have compliedwith relevant ethical requirement s regarding independence and to communicat e wit h themall relationships and other matters that may reasonably be thought to bear on ourindependence and where applicable related safeguards.

From the matters communicated wit h those charged with governance we det ermine 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 auditor's 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 Section 143(3) of the act based on our audit 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 P rofit and Loss including Other ComprehensiveIncome the statement of Changes in Equity and the Cash Flow Statement dealt with by thisReport are in agreement wit h the relevant books of account.

(d) In our opinion the aforesaid standalone financial statements comply with theInd-As specified under Section 133 of the act.

(e) On the basis of the written representations received from the directors as on 31stMarch 2019 taken on record by the Board of directors none of the directors isdisqualified as on 31st 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 over financialreporting the company and the operating effectiveness of such controls refer to ourseparate Report in "Annexure A". Our report expresses an unmodified opinion onthe adequacy and operating effectiveness of the Company's internal financial controls overfinancial reporting.

(g) With respect to the other matters to be included in the Auditor's Report inaccordance with the requirements of section 197(16) of the act as amended In our opinionand to the best of our information and according to the explanations given to us theremuneration paid by the Company to its directors during the year is in accordance withthe provisions of section 197 of the Act.

(h) 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 as amended inour opinion and to the best of our information and according to the explanations given tous :

i) The company has disclosed the impact of pending litigations of its financialposition in its standalone financial statement s – Refer Note 31(9).

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.

2. 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 give in"Annexure B" a statement on the matters specified in paragraphs 3 and 4 of theOrder.

For B M Chatrath & Co LLP
Chartered Accountants
Firm Registration Number: 301011E/E300025
Sukhpreet S. Sidhu
Place: Kolkata Partner
Date: 30 May 2019 Membership Number 052187

‘ANNEXURE - A' TO THE AUDITORS REPORT

The Annexure referred to in our Independent Auditors' Report to the members of theCompany on the standalone Ind AS financial statements for the year ended March 31 2019 wereport that:

(i). In respect of fixed assets:

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

(b) The fixed assets were physically verified during the year by the Management in aphased programme which in our opinion provides for physical verification of all the fixedassets at reasonable intervals. And as per the information and explanations given to usno 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 tit le deed of immovable properties areheld in the name of the Company as at the Balance Sheet date.

(ii). As explained to us the inventory of the Company has been physically verifiedduring the year by the Management. In our opinion the frequency of such verification isreasonable and no material discrepancies were noticed on such verification.

(iii). The Company has not granted any loans secured or unsecured to companies firmslimited liability partnerships or other parties covered in the register maintained undersection 189 of the Companies Act. Hence clause (iii)(a) (iii)(b) & (iii)(c) of theorder is not applicable to the company.

(iv). In our opinion and according to the information and explanations given to us inrespect of loans guarantees investments and security the company has complied wit h theprovisions of section 185 and 186 of the Companies Act 2013.

(v). The Company has not accepted any deposits from the public hence the clause 3 (v)of the order is not applicable to the company.

(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 of the Act and are of the opinion that prima facie the prescribed accountsand records have been made and maintained.

(vii).(a) According to the information and explanations given to us and the records ofthe Company examined by us in our opinion the Company has been regular in depositing theundisputed statutory dues including Provident Fund Employees State Insurance Income taxSales- tax Service tax Goods & Service Tax Customs duty Excise duty Value addedtax Cess and other statutory dues as applicable with the appropriate authorities.

According to the information and explanations given to us no undisputed amountspayable in respect of the above items were in arrears as at March 31 2019 for a periodexceeding six mont hs from the dat e they became payable.

(b)According to the information and explanation given to us and the records of theCompany examined by us the particulars of dues of Income-Tax Sales Tax Service TaxGoods & Service Tax Customs Duty Excise duty Value added tax as at March 31 2019which have not been deposited on account of Dispute are as follows:

Name of the Statute Nature of the dues Amount (Rs. in Lacs) Period to which the amount relates Forum where dispute is pending
Income Tax Act 1961 Income Tax 33.53 2014 - 2015 Deputy Commissioner of Income Tax
0.09 2012 – 2013 Commissioner of Income Tax - Appeals
24.98 2013 - 2014 Commissioner of Income Tax - Appeals
Cent ral Sales Tax Act 1956 Assam General Sales Tax & Central Sales Tax 1.56 2008 - 2009 Deputy Commissioner of Taxes
66.60 1998 - 1999
Assam General 1.71 1997 - 1998 Commissioner of Taxes
Sales Tax & Central Sales Tax 4.15 1998 - 1999
Assam General Sales Tax Act 1993 Assam General 9.71 2004 – 2005 Gauhati High Court
Sales Tax & Central Sales Tax 0.94 1997 - 1998
6.95 2004 – 2005
Assam Land Revenue Reassessment Act 1936 Land Revenue Tax 28.33 2003-2004 to 2007-2008 Additional Deputy Commissioner

(viii). According to the records of the Company examined by us and the information andexplanations given to us the Company has not defaulted in repayment of dues to any banksat the Balance Sheet date. The Company had neither any outstanding debenture nor has itissued any debenture during the year.

(ix). The Company has not raised money by way of initial public offer or further publicoffer (including debt instruments). Further money raised by way of term loans on anoverall basis have been applied for the purposes for which they were obtained.

(x). During the course of our examination of the books and records of the company andaccording to the information and explanations given to us we have neither come across anyinstances of material fraud on or by the Company by its officers or employees beingnoticed or reported during the year nor have we been informed of such case by theManagement.

(xi). 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 of Shareholders/Central Governmentas mandated by the provisions of Section 197 read with Schedule V to the CompaniesAct2013.

(xii). The company is not a Nidhi Company as per the provisions of section 406 (1) ofthe Companies Act 2013. Hence clause 3 (xii) of the order is not applicable to thecompany.

(xiii). According to the records of the Company examined by us and the information andexplanations given to us all transactions with the related parties are in compliance withsections 177 and 188 of Companies Act 2013 where applicable and the details have beendisclosed in the Financial Statements as required by the applicable Indian AccountingStandards.

(xiv). The company has not made any preferential allotment or private placement ofshares or fully or partly paid debentures during the year under review. Hence clause 3(xiv) of the order is not applicable to the company.

(xv). The company has not entered into any non-cash transactions with directors orpersons connected to its directors and hence provisions of Section 192 of the CompaniesAct 2013 are not applicable to the Company.

(xvi). The company is not required to register itself under section 45-IA of theReserve Bank of India Act 1934.

For B M Chatrath & Co LLP
Chartered Accountants
Firm Registration Number: 301011E/E300025
Sukhpreet S. Sidhu
Place: Kolkata Partner
Date: 30 May 2019 Membership Number 052187

‘ANNEXURE – B' TO THE INDEPENDENT AUDITOR'S REPORT

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 over financial reporting of WarrenTea Limited ("the Company ") as of March 31 2019 in conjunction with ouraudit of the standalone Ind AS financial statements of the Company for the year ended onthat 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 (ICAI). These responsibilitiesinclude the design implementation and maintenance of adequate internal financial controlsthat were operating effectively for ensuring the orderly and efficient conduct of itsbusiness including adherence to company 's policies the safeguarding of its assets theprevention and detection of frauds and errors the accuracy and completeness of theaccounting records and the timely preparation of reliable financial information asrequired under the Companies Act 2013.

Auditors' Responsibility

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") and the Standards on Auditing issued by ICAI and deemedto be prescribed under section 143(10) of the Companies Act 2013 to the extentapplicable to an audit of internal financial controls. Those Standards and the GuidanceNote require that we comply with ethical requirements and plan and perform the audit toobtain reasonable assurance about whether adequate internal financial controls overfinancial reporting 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 over financial reporting and their operatingeffectiveness.

Our audit of internal financial controls over financial reporting included obtaining anunderstanding of internal financial controls over financial reporting assessing the riskthat a material weakness exists and testing and evaluating the design and operatingeffectiveness of internal control based on the assessed risk. The procedures selecteddepend on the auditor's judgement including the assessment of the risks of materialmisstatement of the financial statements 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 systemover financial 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 financial statements for external purposes in accordance with generallyaccepted accounting principles. A company's internal financial control over financialreporting 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 receipt s and expenditures of the company are being made only inaccordance with authorisations of the 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 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.

Opinion

In our opinion and to the best of our information and according to the explanationsgiven to us the Company has in all material respect s an adequate internal financialcontrols system over financial reporting and such int ernal financial controls overfinancial reporting were operating effect ively as at March 31 2019 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.

For B M Chatrath & Co LLP
Chartered Accountants
Firm Registration Number: 301011E/E300025
Sukhpreet S. Sidhu
Place: Kolkata Partner
Date: 30 May 2019 Membership Number 052187