Mar 31, 2017
To
The Members of
Diana Tea Company Limited
Report on the Standalone Financial Statements
We have audited the accompanying standalone financial statements of Diana Tea Company Limited (''the Company''), which comprise the Balance Sheet as at 31st March, 2017, the Statement of Profit and Loss and the Cash Flow Statement for the year then ended, and a summary of the significant accounting policies and other explanatory information.
Management''s Responsibility for the Standalone Financial Statements
The Company''s Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 ("the Act") with respect to the preparation and presentation of these standalone financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
Auditor''s Responsibility
Our responsibility is to express an opinion on these standalone financial statements based on our audit.
We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made there under.
We conducted our audit in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the financial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Company''s preparation of the financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Company''s Directors, as well as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the standalone financial statements.
Opinion
In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at 31st March, 2017, and its profit and its cash flows for the year ended on that date.
Emphasis of Matter
We draw attention to following:
a) The Company has not made provision for part of gratuity liability as per actuarial valuation as per Accounting Standard 15-Employee Benefits.
b) The loans and advances include amounts receivable from three parties, standing since long, in respect of which no confirmation/acknowledgement, schedule of delivery and agreement was available and no provision has been made in the books for such loans and advances. However as per information and explanation given to us, the Company has initiated process of recovery of the same and as per management no provision for such advances is required to be made in the current year ended 31st March 2017.
c) The Company has made long term investments in shares of various companies. The said investments continue to be valued at cost. The market value of said investment are lower than cost, however the Company has not made diminution in value of its investments as required under Accounting Standard 13 -Accounting for Investments, as it considers such investment was as long term investment and in view of the management such diminution are temporary in nature. Accordingly, impact, if any, on the financial statements is currently not ascertainable.
Our Opinion is not modified in respect of these matters Report on Other Legal and Regulatory Requirements
As required by the Companies (Auditor''s Report) Order, 2016 ("the Order"), issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act, we give in the Annexure A, a statement on the matters specified in paragraphs 3 and 4 of the Order.
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 best of 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 the Company so far as it appears from our examination of those books ;
c. the Balance Sheet, the statement of profit and loss, and the cash flow statement dealt with by this Report are in agreement with the books of account;
d. in our opinion, the aforesaid standalone financial statements comply with the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014;
e. The matter described in Emphasis of Matters paragraph above, in our opinion, may not have an adverse effect on the functioning of the Company;
f. on the basis of the written representations received from the directors as on 31st March, 2017 taken on record by the Board of Directors, none of the directors is disqualified as on 31st March, 2017 from being appointed as a director in terms of Section 164 (2) of the Act;
g. with respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate report in "Annexure B"; and
h. with respect to the other matters to be included in the Auditors'' Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us:
i. The Company has disclosed the impact of pending litigations on its financial position in its financial statements as stated in Note no 26 (i) to the financial statements;
ii. The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses;
iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company; and
iv. The Company has provided requisite disclosures in its financial statements as to holdings as well as dealings in Specified Bank Notes during the period from 8th November, 2016 to 30th December, 2016 and these are in accordance with the books of accounts maintained by the Company. Refer Note no 26(xii) to the financial statements.
The Annexure referred to Independent Auditors'' Report to the members of the Company on the standalone financial statements for the year ended 31st March 2017, we report that:
(i) (a) The Company has maintained proper records showing full particulars, including quantitative details and situation of the fixed assets;
(b) the fixed assets were physically verified during the year under audit by the Management in accordance with a regular programme of verification which, in our opinion, provides for physical verification of all the fixed assets at reasonable intervals. According to the information and explanation given to us, no material discrepancies were noticed on such verification;
(c) as per information and explanation given to us by the management, and the records verified by us and based on the examination of the registered sale deed provided to us, we report that all the immovable properties are held in the name of the Company.
(ii) In our opinion the inventories were physically verified during the year by the Management at reasonable intervals and as explained to us, no material discrepancies were noticed on physical verification.
(iii) According to the information and explanations given to us and on the basis of our examination of the books of account, the Company has not granted any loans, secured or unsecured, to companies, firms, limited liability partnerships or other parties covered in the register maintained under section 189 of the Companies Act, 2013. Consequently, the provisions of paragraph iii(a),(b) and (c) of the Order are not applicable to the Company and hence, not commented upon.
(iv) In our opinion and according to information and explanations given to us, the Company has not given any loans, or made investments, guarantees and security, hence the provision of this paragraph is not applicable to the Company.
(v) The Company has not accepted any deposit from the public covered under Section 73 to 76 of the Companies Act, 2013. Therefore, the provisions of paragraph 3(v) of the Order are not applicable to the Company.
(vi) The maintenance of cost records has been specified by the Central Government under section 148(1) of the Act. We have broadly reviewed the cost records maintained by the Company pursuant to the Companies (Cost Records and Audit) Rules, 2014 prescribed by the Central Government under Section 148(1)(d) of the Act and are of opinion that, prima facie, the prescribed - cost records have been maintained. We have, however, not made a detailed examination of cost records with a view to determine whether they are accurate or not.
(vii) (a) According to the records of the Company, undisputed statutory dues including Provident Fund, Income Tax, Sales
Tax, Service Tax, Value Added Tax, cess or other material statutory dues have been generally regularly deposited during the year by the Company with appropriate authorities. According to the information and explanation given to us no undisputed statutory dues including Provident Fund, Income Tax, Service Tax, Value Added Tax, cess or other material statutory dues were in arrears as at 31st March 2017 for a period of more than six months from the date they become payable except Income tax payable amounting to Rs.1.20 lakhs relating to AY 2011-12.
(b) According to the information and explanation given to us, the following dues not been deposited by the Company on account of dispute as at 31st March 2017 :
Name of the Statute |
Nature of dues |
Amount (in Rs. Lakhs) |
Period to which the amount relates |
Forum where dispute is pending |
West Bengal Value Added Tax Act, 2003 |
Sales Tax |
12.31 |
FY 2010-2011 |
Senior Joint Commissioner of Commercial Taxes, Chowringhee Circle, Kolkata |
Central Sales Tax Act, 1956 |
CST |
15.28 |
FY 2010-2011 |
Senior Joint Commissioner of Commercial Taxes, Chowringhee Circle, Kolkata |
Income Tax Act, 1961 |
Income Tax |
0.59 |
AY 2007-2008 |
Deputy Commissioner of Income Tax |
(viii) In our opinion and according to the information given to us, the Company has not defaulted in repayment of dues to banks. There were no debentures outstanding during the year.
(ix) According to information and explanation given to us, the Company has not raised moneys by way of initial public offer or further public offer (including debt instruments) and term loans during the year ended 31st March, 2017. Accordingly paragraph 3(ix) of the Order is not applicable.
(x) Based on the audit procedures performed and the information and explanations given to us, we report that no fraud on or by the Company has been noticed or reported during the year ended 31st March, 2017, nor have we been informed of such case by the management.
(xi) According to information and explanation given to us, the Company has paid or provided managerial remuneration in accordance with the provisions of section 197 read with Schedule V to the Act.
(xii) In our opinion and according to the information and explanation given to us, the Company is not a Nidhi Company and hence the paragraph 3(xii) is not applicable.
(xiii) In our opinion and on the basis of information and explanation given to us by the management, all transactions with the related parties are in compliance with sections 177 and 188 of Companies Act, 2013 where applicable and the details have been disclosed in the Financial Statements etc., as required by the applicable accounting standards.
(xiv) According to information and explanation given to us the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year under review.
(xv) According to information and explanation given to us, the Company has not entered into any non-cash transactions with directors or persons connected with him. Accordingly the paragraph 3(xv) is not applicable to the Company.
(xvi) In our opinion and on the basis of information and explanation given to us by the management, the Company is not required to be registered under section 45-IA of the Reserve Bank of India Act, 1934.
Report on the Internal Financial Controls 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 Diana Tea Company Limited ("the Company") as of 31st March, 2017 in conjunction with our audit of the standalone financial statements of the Company for the year ended on that date.
Management''s Responsibility for Internal Financial Controls
The Company''s management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting issued by the Institute of Chartered Accountants of India (''ICAI''). These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to Company''s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, 2013.
Auditors'' Responsibility
Our responsibility is to express an opinion on the Company''s internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls over Financial Reporting (the "Guidance Note") and the Standards on Auditing, issued by ICAI and deemed to be prescribed under section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls, both applicable to an audit of Internal Financial Controls and, both issued by the Institute of Chartered Accountants of India. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects.
Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Company''s internal financial controls system over financial reporting.
Meaning of Internal Financial Controls over Financial Reporting
A Company''s internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A Company''s internal financial control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the Company''s assets that could have a material effect on the financial statements.
Inherent Limitations of Internal Financial Controls Over Financial Reporting
Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Opinion
In our opinion, the Company has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at 31st March, 2017, based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting issued by the Institute of Chartered Accountants of India.
For DAS & PRASAD
Chartered Accountants
Firm Registration No. 303054E
Sd/-
4, Chowringhee Lane A. K. Agarwal
Kolkata - 700 016 Partner
Date : 17th May, 2017 Membership No. 062368
Mar 31, 2016
To
The Members of
Diana Tea Company Limited
Report on the Standalone Financial Statements
We have audited the accompanying standalone financial statements of Diana Tea Company Limited (''the Company''), which comprise the Balance Sheet as at 31st March, 2016, the Statement of Profit and Loss and the Cash Flow Statement for the fifteen months period then ended, and a summary of the significant accounting policies and other explanatory information. Management''s Responsibility for the Standalone Financial Statements
The Company''s Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 ("the Act") with respect to the preparation and presentation of these standalone financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act, for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
Auditor''s Responsibility
Our responsibility is to express an opinion on these standalone financial statements based on our audit.
We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made there under.
We conducted our audit in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the financial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Company''s preparation of the financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Company''s Directors, as well as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the standalone financial statements.
Opinion
In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at 31st March, 2016, and its loss and its cash flows for the period ended on that date.
Emphasis of Matter
We draw attention to following:
a) The Company has not made provision for part of gratuity liability as per actuarial valuation as per Accounting Standard 15-Employee Benefits.
Tea is a rich source of anti-oxidant called Flavonoids, which improves blood circulation and health of skin.
b) The loans and advances include amounts receivable from three parties, standing since long, in respect of which no confirmation/acknowledgement, schedule of delivery and agreement was available and no provision has been made in the books for such loans and advances. However as per information and explanation given to us, the Company has initiated process of recovery of the same and as per management no provision for such advances is required to be made in the current fifteen months period ended March 31, 2016.
c) The Company has made long term investments in shares of various companies. The said investments continue to be valued at cost. The market value of said investments are lower than cost, however the Company has not made diminution in value of its investments as required under Accounting Standard 13 - Accounting for Investments, as it considers such investment was as long term investment and in view of the management such diminution are temporary in nature. Accordingly, impact, if any, on the financial statements is currently not ascertainable.
Our Opinion is not modified in respect of these matters
Report on Other Legal and Regulatory Requirements
As required by the Companies (Auditor''s Report) Order, 2016 ("the Order"), issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act, we give in the Annexure A, a statement on the matters specified in paragraphs 3 and 4 of the Order.
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 best of 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 the Company so far as it appears from our examination of those books ;
c. the Balance Sheet, the Statement of Profit and Loss, and the Cash Flow Statement dealt with by this Report are in agreement with the books of account;
d. in our opinion, the aforesaid standalone financial statements comply with the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014;
e. The matter described in Emphasis of Matters paragraph above, in our opinion, may not have an adverse effect on the functioning of the Company.
f. on the basis of the written representations received from the directors as on March 31, 2016 taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2016 from being appointed as a director in terms of Section 164 (2) of the Act;
g. with respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate report in "Annexure B"; and
h. With respect to the other matters to be included in the Auditor''s Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us:
i. The Company has disclosed the impact of pending litigations on its financial position in its financial statements as stated in Note no 26 (i) to the financial statements;
ii. The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses.
iii. There were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Company.
The Annexure referred to in Independent Auditors'' Report to the members of the Company on the standalone financial statements for the fifteen months period ended March 31, 2016, we report that:
(i) (a) The Company has maintained proper records showing full particulars, including quantitative details and situation of the fixed assets;
(b) The fixed assets were physically verified during the period under audit by the Management in accordance with a regular programme of verification which, in our opinion, provides for physical verification of all the fixed assets at reasonable intervals. According to the information and explanation given to us, no material discrepancies were noticed on the such verification;
(c) As per information and explanation given to us by the management, and the records verified by us and based on the examination of the registered sale deed provided to us, we report that all the immovable properties are held in the name of the Company.
(ii) In our opinion the inventories were physically verified during the period by the Management at reasonable intervals and as explained to us, no material discrepancies were noticed on physical verification.
(iii) According to the information and explanations given to us and on the basis of our examination of the books of account, the Company has not granted any loans, secured or unsecured, to companies, firms, limited liability partnerships or other parties covered in the register maintained under section 189 of the Companies Act, 2013. Consequently, the provisions of paragraph iii(a) and iii(b) of the Order are not applicable to the Company and hence, not commented upon.
(iv) In our opinion and according to information and explanations given to us, the Company has not given any loans, or made investments, guarantees and security, hence the provision of this paragraph is not applicable to the Company.
(v) The Company has not accepted any deposit from the public covered under Section 73 to 76 of the Companies Act, 2013. Therefore, the provisions of paragraph 3(v) of the Order are not applicable to the Company.
(vi) The maintenance of cost records has been specified by the Central Government under section 148(1) of the Act. We have broadly reviewed the cost records maintained by the Company pursuant to the Companies (Cost Records and Audit) Rules, 2014 prescribed by the central Government under Section 148(1)(d) of the Act and are of opinion that, prima facie, the prescribed - cost records have been maintained. We have, however, not made a detailed examination of cost records with a view to determine whether they are accurate or not.
(vii) a) According to the records of the Company, undisputed statutory dues including Provident Fund, Income Tax, Sales Tax, Service Tax, Value Added Tax, cess or other material statutory dues have been generally regularly deposited during the period by the Company with appropriate authorities. According to the information and explanation given to us no undisputed statutory dues including Provident Fund, Income Tax, Service Tax, Value Added Tax, cess or other material statutory dues were in arrears as at March 31, 2016 for a period of more than six months from the date they become payable.
b) According to the information and explanation given to us, the following dues not been deposited by the Company on account of dispute as at 31st March 2016:
Name of the Statute |
Nature of dues |
Amount (in Rs. Lakhs) |
Period to which the amount relates |
Forum where dispute is pending |
West Bengal Value Added Tax Act, 2003 |
Sales Tax |
12.31 |
FY 2010-2011 |
Senior Joint Commissioner of Commercial Taxes, Chowringhee Circle, Kolkata |
Central Sales Tax Act, 1956 |
CST |
15.28 |
FY 2010-2011 |
Senior Joint Commissioner of Commercial Taxes, Chowringhee Circle, Kolkata |
Income Tax Act, 1961 |
Income Tax |
0.59 |
AY 2007-2008 |
Deputy Commissioner of Income Tax |
(viii) In our opinion and according to the information given to us, the Company has not defaulted in repayment of dues to banks. There were no debentures outstanding during the period.
(ix) According to information and explanation given to us, the Company has not raised moneys by way of initial public offer or further public offer (including debt instruments) and term loans during the fifteen months period ended March 31,
2016. Accordingly paragraph 3(ix) of the Order is not applicable.
(x) Based on the audit procedures performed and the information and explanations given to us, we report that no fraud on or by the Company has been noticed or reported during the fifteen months period ended March 31, 2016, nor have we been informed of such case by the management.
(xi) According to information and explanation given to us, the Company has paid or provided managerial remuneration in accordance with the provisions of section 197 read with Schedule V to the Act.
(xii) In our opinion and according to the information and explanation given to us, the Company is not a Nidhi Company and hence the paragraph 3(xii) is not applicable.
(xiii) In our opinion and on the basis of information and explanation given to us by the management, all transactions with the related parties are in compliance with sections 177 and 188 of Companies Act, 2013 where applicable and the details have been disclosed in the Financial Statements etc., as required by the applicable accounting standards.
(xiv) According to information and explanation given to us, the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the period under review.
(xv) According to information and explanation given to us, the Company has not entered into any non-cash transactions with directors or persons connected with him. Accordingly the paragraph 3(xv) is not applicable to the Company.
(xvi) In our opinion and on the basis of information and explanation given to us by the management, the Company is not required to be registered under section 45-IA of the Reserve Bank of India Act, 1934.
Report on the Internal Financial Controls 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 Diana Tea Company Limited ("the Company") as of March 31, 2016 in conjunction with our audit of the standalone financial statements of the Company for the period ended on that date.
Management''s Responsibility for Internal Financial Controls
The Company''s management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting issued by the Institute of Chartered Accountants of India (''ICAI''). These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to Company''s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, 2013.
Auditors'' Responsibility
Our responsibility is to express an opinion on the Company''s internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls over Financial Reporting (the "Guidance Note") and the Standards on Auditing, issued by ICAI and deemed to be prescribed under section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls, both applicable to an audit of Internal Financial Controls and, both issued by the Institute of Chartered Accountants of India. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects.
Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Company''s internal financial controls system over financial reporting.
Meaning of Internal Financial Controls over Financial Reporting
A Company''s internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A Company''s internal financial control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the Company''s assets that could have a material effect on the financial statements.
Inherent Limitations of Internal Financial Controls Over Financial Reporting
Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Opinion
In our opinion, the Company has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at March 31, 2016, based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India.
For DAS & PRASAD
Chartered Accountants
Firm Registration No. 303054E
Sd/-
A. K. Agarwal
Place : Kolkata Partner
Date : May 30, 2016 Membership No. 062368
Dec 31, 2013
1. We have audited the accompanying financial statements of Diana Tea
Company Limited ("the Company"), which comprise the Balance Sheet as at
31st December, 2013, the Statement of Profit and Loss and the Cash Flow
Statement for the year then ended, and a summary of the significant
accounting policies and other explanatory information.
MANAGEMENT''S RESPONSIBILITY FOR THE FINANCIAL STATEMENTS
2. The Company''s Management is responsible for the preparation of
these financial statements that give a true and fair view of the
financial position, financial performance and cash flows of the Company
in accordance with the Accounting Standards referred to in Section
211(3C) of the Companies Act, 1956 ("the Act") and in accordance with
the accounting principles generally accepted in India. This
responsibility includes the design, implementation and maintenance of
internal control relevant to the preparation and presentation of the
financial statements that give a true and fair view and are free from
material misstatement, whether due to fraud or error.
AUDITORS'' RESPONSIBILITY
3. Our responsibility is to express an opinion on these financial
statements based on our audit. We conducted our audit in accordance
with the Standards on Auditing issued by the Institute of Chartered
Accountants of India. Those Standards require that we comply with
ethical requirements and plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free
from material misstatement.
4. An audit involves performing procedures to obtain audit evidence
about the amounts and the disclosures in the financial statements. The
procedures selected depend on the auditor''s judgment, including the
assessment of the risks of material misstatement of the financial
statements, whether due to fraud or error. In making those risk
assessments, the auditor considers internal control relevant to the
Company''s preparation and fair presentation of the financial statements
in order to design audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion on the
eff ectiveness of the Company''s internal control. An audit also
includes evaluating the appropriateness of the accounting policies used
and the reasonableness of the accounting estimates made by the
Management, as well as evaluating the overall presentation of the
financial statements.
5. We believe that the audit evidence we have obtained is suffi cient
and appropriate to provide a basis for our audit opinion.
OPINION
6. In our opinion and to the best of our information and according to
the explanations given to us, the aforesaid financial statements give
the information required by the Act in the manner so required and give
a true and fair view in conformity with the accounting principles
generally accepted in India:
(a) in the case of the Balance Sheet, of the state of aff airs of the
Company as at 31st December, 2013;
(b) in the case of the Statement of Profit and Loss, of the loss of the
Company for the year ended on that date; and
(c) in the case of the Cash Flow Statement, of the cash flows of the
Company for the year ended on that date.
EMPHASIS OF MATTER
7. Refer to (i) Note No. 15(b) for non-provision of Sundry Debtors
considered doubtful of recovery, (ii) Note No. 17 (a) & (b) for
non-provision of loans and advances receivable which is doubtful of
recovery, (iii) Note No. 18 for non-provision of Interest and
Replantation Subsidy Receivable which is doubtful of recovery,(iv) Note
No. 28-8(b) for non-provision of Gratuity liability, (v) Note No. 28-9
for non-provision of diminution in value of long term investments in
respect of quoted investments and, (vi) non-provision of Entry Tax.
Our opinion is not qualifi ed in respect of above matters.
REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS
8. As required by the Companies (Auditor''s Report) Order, 2003 ("the
Order") issued by the Central Government in terms of Section 227(4A) of
the Act, we give in the Annexure a statement on the matters specified
in paragraphs 4 and 5 of the Order.
9. As required by Section 227(3) of the Act, we report that :
(a) We have obtained all the information and explanations which to the
best of 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 the Company so far as it appears from our examination of
those books.
(c) The Balance Sheet, the Statement of Profit and Loss and the Cash
Flow Statement dealt with by this Report are in agreement with the
books of account.
(d) In our opinion, the Balance Sheet, the Statement of Profit and Loss
and the Cash Flow Statement comply with the Accounting Standards
referred to in Section 211(3C) of the Act except for Accounting
Standard 15 (Revised 2005), in respect of non- provision of part of
gratuity liability as mentioned in point no. 8(b) of Note 28.
(e) On the basis of the written representations received from the
directors as on 31st December, 2013 taken on record by the Board of
Directors, none of the directors is disqualified as on 31st December,
2013 from being appointed as a director in terms of Section 274(1)(g)
of the Act.
Annexure to the Independent Auditors'' Report
(Referred to in paragraph 1 under ''Report on Other Legal and Regulatory
Requirements'' section of our report of even date)
(i) In respect of its fixed assets :
(a) The Company has maintained proper records showing full particulars,
including quantitative details and situation of the fixed assets.
(b) As explained to us, fi xed assets have been physically verifi ed by
the management at reasonable intervals; no material discrepancies were
noticed on such verifi cation.
(c) The fixed assets disposed off during the year, in our opinion, do
not constitute a substantial part of the fixed assets of the Company
and such disposal has, in our opinion, not aff ected the going concern
status of the Company.
(ii) In respect of its inventory :
(a) The management has conducted physical verifi cation of inventory at
reasonable intervals during the year except stock of tea lying with
third party.
(b) In our opinion and according to the information and explanations
given to us, the procedures of physical verifi cation of inventories
followed by the management are reasonable and adequate in relation to
the size of the Company and the nature of its business.
(c) In our opinion and on the basis of our examination of the records,
the Company is generally maintaining proper records of its inventories.
No material discrepancy was noticed on physical verifi cation of stocks
by the management as compared to book records.
(iii) (a) According to the information and explanations given to us and
on the basis of our examination of the books of account, the Company
has not granted any loans, secured or unsecured, to companies, fi rms
or other parties listed in the register maintained under Section 301 of
the Companies Act, 1956. Consequently, the provisions of clauses iii
(b), iii(c) and iii (d) of the order are not applicable to the Company
and hence, not commented upon.
(e) The Company has taken interest free unsecured loan from holding
company. The amount of loan taken by the Company during the year was Rs.
44,50,000/-, at the year end the outstanding balance of such loan taken
was Rs. 47,55,000/- and maximum amount involved during the year was Rs.
1,90,70,000/-.
(f) In our opinion, terms and conditions of such loans are prima facie
not prejudicial to the interest of the Company.
(g) In respect of aforesaid loan the Company is regular in repayment of
the principal amount as stipulated.
(iv) In our opinion and according to the information and explanations
given to us there is generally an adequate internal control procedure
commensurate with the size of the Company and the nature of its
business, for the purchase of inventories and fixed assets and payment
for expenses and for sale of goods. During the course of our audit, no
major instance of continuing failure to correct any weakness in the
internal controls has been noticed.
(v) In respect of contracts or arrangements entered in the Register
maintained in pursuance of Section 301 of the Companies Act, 1956, to
the best of our knowledge and belief and according to the information
and explanations given to us:
(a) The particulars of contracts or arrangements referred to Section
301 that needed to be entered in the Register maintained under the said
Section have been so entered.
(b) Where each of such transaction is in excess of Rupees five lacs in
respect of any party, the transactions have been made at prices which
are prima facie reasonable having regard to the prevailing market
prices at the relevant time.
(vi) The Company has not accepted any deposit from the public covered
under Section 58A and 58AA of the Companies Act, 1956.
(vii) As per information and explanations given by the management, the
Company has an adequate internal audit system commensurate with the
size and the nature of its business.
(viii) We have broadly reviewed the cost records maintained by the
Company pursuant to the Companies (Cost Accounting Records) Rules, 2011
prescribed by the Central Government under Section 209(1)(d) of the
Companies Act, 1956 and are of the opinion that, prima facie, the
prescribed cost records have been maintained. We have, however, not
made a detailed examination of the cost records with a view to
determining whether they are accurate or complete.
(ix) (a) Undisputed statutory dues including Provident Fund, Investor
Education and Protection Fund, Employees'' State Insurance, Income Tax,
Sales Tax, Wealth Tax, Service Tax, Customs Duty, Excise Duty, cess to
the extent applicable and any other statutory dues have generally been
regularly deposited with the appropriate authorities.
(b) According to information and explanation given to us, the disputed
amounts payable in respect of income tax, wealth tax, service tax,
sales tax, customs duty and excise duty that have not been deposited on
account of matters pending before appropriate authorities are as
follows :
Name of the Statute Nature of dues Amount (inRs.) Period to which
the amount
relates
West Bengal Sales Tax Sales Tax 80,543/- 2000-2001
Act, 1994
West Bengal Value Added Sales Tax 15,56,546/- 2010-2011
Tax Act, 2003
Central Sales Tax Act, CST 25,28,836/- 2003-2004
1956
Central Sales Tax Act, CST 6,24,243/- 2010-2011
1956
Income Tax Act, 1961 Income Tax 59,206/- 2007-2008
Income Tax Act, 1961 Income Tax 14,43,100/- 2010-2011
Income Tax Act, 1961 Income Tax 15,94,320/- 2011-2012
Name of the Statute Forum where dispute is pending
West Bengal Sales Tax Act, 1994 Commercial Tax Officer
West Bengal Value Added Tax Act, Joint Commissioner of Commercial
2003 Taxes, Chowringhee Circle, Kolkata
Central Sales Tax Act, 1956 Joint Commissioner of Commercial
Taxes, Chowringhee Circle, Kolkata
Central Sales Tax Act, 1956 Joint Commissioner of Commercial
Taxes, Chowringhee Circle, Kolkata
Income Tax Act, 1961 Deputy Commissioner of Income Tax
Income Tax Act, 1961 Deputy Commissioner of Income Tax
Income Tax Act, 1961 Deputy Commissioner of Income Tax
(x) The Company does not have any accumulated losses at the end of the
accounting year and has not incurred cash losses in the current year
and the immediately preceding accounting year.
(xi) Based on our audit procedures and on the information and
explanations given by the management, we are of the opinion that the
Company has not defaulted in the repayment of dues to financial
institutions, banks or debenture holders.
(xii) According to Information and explanation given to us, the Company
has not granted loans and advances on the basis of security by way of
pledge of shares, debentures and other securities.
(xiii) The Company is not a chit fund or a nidhi / mutual benefit
fund/ society. Therefore, the provisions of this clause of the
Companies (Auditor''s Report) Order, 2003 (as amended) are not
applicable to the Company.
(xiv) (a) In our opinion, the Company is not dealing in shares,
securities, debentures and other investments. Accordingly, the
provisions of clause 4(xiv) of the order are not applicable.
(b) According to the information and explanations given to us,
long-term investments have been held by the Company in its own name.
(xv) According to the information and explanations given to us, the
Company has not given any guarantees for loan taken by others from a
bank or fi nancial institution.
(xvi) Based on our audit procedures and on the information given by the
management, we report that the term loans have been applied by the
Company during the year for the purposes for which they were obtained.
(xvii) Based on the information and explanations given to us, and on an
overall examination of the Balance Sheet of the Company as at 31st
December, 2013, we report that funds raised on short-term basis have,
prima facie, not been used during the year for long-term investment.
(xviii) Based on the audit procedures performed and the information and
explanations given to us by the management, the Company has not made
preferential allotment of shares to parties and companies covered in
the Register maintained under Section 301 of the Companies Act, 1956.
(xix) The Company did not have any outstanding debentures during the
period.
(xx) The Company has not raised any money through public issue during
the year.
(xxi) Based on the audit procedures performed and the information and
explanations given to us, we report that no fraud on or by the Company
has been noticed or reported during the year, nor have we been informed
of such case by the management.
For DAS & PRASAD
Chartered Accountants
Firm Registration No. 303054E
P. K. Agarwal
Place : Kolkata Partner
Dated : March 01, 2014 Membership No.056921
Dec 31, 2012
1. We have audited the attached Balance Sheet of Diana Tea Company
Limited as at 31st December, 2012 and the Statement of Profit and Loss
& Cash Flow Statement for the year ended on that date both annexed
thereto, which we have signed under reference to this report. These
financial statements are the responsibility of the Company''s
Management. Our responsibility is to express an opinion on these
financial statements based on our audit.
2. We conducted our audit in accordance with the auditing standards
generally accepted in India. Those Standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts
and disclosure in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made
by the management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable
basis for our opinion.
3. As required by the Companies (Auditors'' Report) Order, 2003, as
amended by Companies (Auditors'' Report) (Amendment) Order, 2004 issued
by the Central Government of India in terms of sub-Section (4A) of
Section 227 of "the Companies Act, 1956" we enclose in the annexure a
statement on the matters specified in paragraphs 4 & 5 of the said
order.
4. Further to our comments in paragraph 3 above, we report that:
a) We have obtained all the information and explanations, which to the
best of 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 the Company so far as appears from our examination of those
books.
c) The Balance sheet, the Statement of Profit and Loss & the Cash Flow
Statement dealt with by this report are in agreement with the books of
accounts.
d) In our opinion, the Balance Sheet, the Statement of Profit and Loss
& the Cash Flow Statement dealt with by this report comply with the
accounting standards referred to in sub-Section (3C) of Section 211 of
the Companies Act, 1956 except for Accounting Standard 15(Revised
2005), in respect of non-provision of part of gratuity liability as
mentioned in point no. 8 (b) of Note. 28.
e) On the basis of the written representation received from the
Directors as on 31st December, 2012 and taken on record by the Board of
Directors we report that none of the Directors is disqualified as on
31st December, 2012 from being appointed as a Director in terms of
Clause (g) of sub-Section (1) of Section 274 of the Act.
f) In our opinion and to the best of our information and according to
the explanations given to us, the said statement of accounts read
together with Significant Accounting Policies and Notes there on and
subject to (a) Note No. 15 for non provision of sundry debtors
considered as doubtful of recovery, (b) Note No. 17(1) & (2) for non
provision for loans and advances receivable which is doubtful of
recovery, (c) Note No. 18 for non provision of interest & Replantation
subsidy receivable which is doubtful of recovery (d) Note No. 28-8 (b)
for non provision of gratuity liability, (e) Note No. 28-9 for non-
provision of diminution in value of long term investments in respect of
quoted investments, (f) Note No. 28-11 for non- provision of
professional tax liability. Had the effect of above Notes Nos. (a) to
(f) been taken in the books, the profit for the year and reserves of
the company would have been lower by the net of sum of the amounts
referred in above notes; give the information required by the Companies
Act, 1956 in the manner so required and give a true and fair view in
conformity with the accounting principles generally accepted in India.
i) in the case of Balance Sheet, of the state of affairs of the Company
as at 31st December, 2012;
ii) in the case of Statement of Profit and Loss, of the PROFIT for the
year ended on that date; and
iii) in the case of the Cash Flow Statement of the Cash Flow for the
year ended on that date.
(Referred to in paragraph 3 of our report of even date)
As required by the Companies (Auditors'' Report) (Amendment) Order 2004,
we report that:
i) a) The Company has maintained proper records showing full
particulars including quantitative details and situation of fixed
assets.
b) The fixed assets of the Company at all its locations were physically
verified by the Management at reasonable intervals during the year. As
informed, no material discrepancies were noticed on such verification.
c) In our opinion and according to the information and explanations
given tc us, the Company has not disposed off any substantial part of
fixed asset during the year.
ii) a) As explained to us, the Management has conducted physical
verification of inventory at reasonable intervals during the year
except stock of tea lying with third party .
b) In our opinion and according to the information and explanations
given to us, the procedures of physical verification of inventory
followed by the Management are reasonable and adequate in relation to
the size of the Company and nature of its business.
c) In our opinion and according to the information and explanations
given to us, the Company is maintaining proper records of inventory and
no material discrepancies were noticed on physical verification.
iii) In respect of loans granted/obtained by the Company to companies,
firms or other parties covered in the register maintained under Section
301 of the Companies Act, 1956, according to the information and
explanations given to us :
(a) The Company had granted inter-corporate loans to one company. At
the year end the outstanding balance of such loan granted was NIL and
maximum amount involved during the year was Rs. 8,00,000/-.
(b) In our opinion, the rate of interest and other terms and conditions
of such loans are prima facie not prejudicial to the interest of the
Company.
(c) The receipt of principal amounts and interest has been regular
during the year.
(d) There was no overdue amount in respect of above inter-corporate
loans.
(e) The Company has taken interest free unsecured loan from holding
company. The amount of loan taken by the Company during the year was
Rs. 69,62,000/- at the year end the outstanding balance of such loan
taken was Rs. 1,90,70,000/- and maximum amount involved during the year
was Rs. 1,92,15,000/-
(f) In our opinion, terms and conditions of such loans are prima facie
not prejudicial to the interest of the Company.
(g) In respect of aforesaid loan the Company is regular in repayment of
the principal amount as stipulated.
iv) In our opinion and according to the information and explanations
given to us, there are adequate internal control procedures
commensurate with the size of the Company and the nature of its
business, for purchase of inventory, fixed assets and for the sale of
goods & services. During the course of audit, no major weakness has
been noticed in the internal control in respect of these areas.
v) a) To the best of our knowledge and belief and according to the
information and explanation given to us, we are of the opinion that the
particulars of the transactions that need to be entered into the
register maintained under Section 301 of the Companies Act, 1956 have
been so entered.
b) In our opinion and according to the information and explanations
given to us, the transactions made in pursuance of such contracts or
arrangements in respect of any party during the year have been made at
prices which are reasonable having regard to the prevailing market
prices at the relevant time where such market prices are available.
vi) The Company has not accepted any deposits from the public under
Sections 58A and 58AA of the Act and the rules framed thereunder.
vii) In our opinion, the Company has an internal audit system which
need to be further strengthened in order to make it commensurate with
the size and nature of its business.
viii) We have broadly reviewed the books of account maintained by the
Company in respect of products where, pursuant to the rules made by the
Central Government of India, the maintenance of cost records has been
prescribed under clause (d) of sub Section (i) of Section 209 of the
Act and are of opinion that prima facie, the prescribed accounts and
records have been made and maintained. We have not, however, made a
detailed examination of the records with a view to determine whether
they are accurate or complete.
ix) According to the information and explanations given to us and the
records of the Company examined by us in respect of Statutory and other
dues
(a) In our opinion, Undisputed Statutory dues including Provident Fund,
Investor Education & Protection Fund, Employees'' State Insurance, Sales
Tax, Wealth Tax and any other statutory dues has been regularly
deposited with the appropriate authorities during the year except:
1. West Bengal Professional Tax Liability of Rs. 3,27,417/- in respect
of interest for which the Company had applied for waiver as mentioned
in point no 11 of Note. 28.
2. Dividend Distribution Tax Liability of Rs. 18,23,937/- as mentioned
in point no 5 of Note no. 28.
(b) According to the records of the Company, the disputed statutory
dues on account of sales tax, income tax, wealth tax, service tax,
excise duty and cess that have not been deposited on account of matters
pending before appropriate authorities are as follows :
Name of the
Statute Nature of
Dues Amount Period to which Forum where
(in Rs.) the Amount dispute is
relates pending
West Bengal
Sales Tax
Act, 1994 Sales Tax 80,543/- 2000-2001 Commercial
Tax Officer
Central
Sales Tax
Act, 1956 CST 25,28,836/- 2003-2004 Deputy
Commissioner
Income Tax
Act, 1961 Income Tax 7,92,584/-# 2007-2008 Commissioner of
Income Tax
(Appeal)
Income Tax
Act, 1961 Income Tax 14,08,126/- 2008-2009 Commissioner of
Income Tax
(Appeal)
Income Tax
Act, 1961 Income Tax 98,810/- 2009-2010 Commissioner of
Income Tax
(Appeal)
#The company has paid Rs. 8,00,000/- against the same on protest.
x) The Company does not have any accumulated losses at the financial
year ended 31st December 2012 and it has not incurred cash losses in
the current and immediate preceding financial year.
xi) According to the information and explanations given to us, the
Company has not defaulted in repayment of dues to the Financial
Institutions.
xii) According to the information and explanations given to us and
based on the documents and records produced to us, the Company has not
granted loan or advances on the basis of security by way of pledge of
shares, debentures and other securities.
xiii) In our opinion, the nature of activities of the Company is such
that the provisions of any special statute including chit
fund/nidhi/mutual benefit fund/societies are not applicable to it.
xiv) (a) According to the information and explanations given to us,
Company is not dealing/trading in shares, securities or debentures and
other investments. Therefore, the provisions of Clause 4 (xiv) of the
Companies (Auditors'' Report) Order, 2003 are not applicable to the
Company.
(b) According to the information and explanations given to us,
long-term investments have been held by the Company in its own name.
(xv) According to the information and explanations given to us, the
Company has not given any guarantee for loans taken by others from the
Bank or Financial Institutions during the year.
(xvi) In our opinion and according to the information and explanations
given to us, on an overall basis, the term loans have been applied for
the purposes for which they were obtained.
(xvii) According to the information and explanations given to us and on
an overall examination of the Balance Sheet and Cash Flow Statement of
the Company, we report that no fund raised on short term basis have
been used for long term investment and no long term fund have been used
to finance the short term assets.
(xviii) The Company has not made any preferential allotment of shares
to parties or companies covered in the register maintained under
Section 301 of the Companies Act, 1956 during the year and hence the
question of the price at which shares have been issued is prejudicial
to the interest of the Company does not arise.
(xix) The Company has not raised debentures during the year and hence
question of any security in respect of debentures does not arise.
(xx) The Company has not raised any money through public issue during
the year.
(xxi) During the course of our examination of the books and records of
the Company and based upon the audit procedures performed for the
purpose of reporting the true and fair view of the financial statements
and as per the information and explanations given to us by the
management, we have neither come across any instance of fraud on or by
the Company noticed or reported during the year nor have been informed
of such case by the management.
For DAS & PRASAD
Chartered Accountants
Firm Regn. No. 0303054E
4, Chowringhee Lane P. K. Agarwal
Kolkata - 700 016 Partner
Date : March 26, 2013 Membership No.056921
Dec 31, 2009
1. We have audited the attached Balance Sheet of DIANA TEA COMPANY
LIMITED as at 31st December, 2009 and the Profit & Loss Account and
Cash Flow Statement for the year ended on that date both annexed
thereto, which we have signed under reference to this report. These
financial statements are the responsibility of the Companys
Management. Our responsibility is to express an opinion on these
financial statements based on our audit.
2. We conducted our audit in accordance with the auditing standards
generally accepted in India. Those Standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts
and disclosure in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis of
our opinion.
3. As required by the Companies (Auditors Report) Order, 2003, as
amended by the Companies (Auditors Report) Amendment Order, 2004
(CARO) issued by the Central Government of India in terms of
sub-section (4A) of Section 227 of "the Companies Act, 1956" of India
(the Act) and on the basis of such checks of the books and records of
the Company as we considered appropriate and on the basis of
information and explanations given to us during the course of audit we
state that:
i) a) The Company has maintained proper records showing full
particulars including quantitative details and situation of fixed
assets.
b) The fixed assets of the Company at all its locations were physically
verified by the Management at reasonable intervals during the year. As
informed, no material discrepancies were noticed on such verification.
c) In our opinion and according to the information and explanations
given to us, the Company has not disposed off any substantial part of
fixed assets during the year.
ii) a) As explained to us, the Management has conducted physical
verification of inventory at reasonable intervals during the year
except stock of tea lying with third party .
b) In our opinion and according to the information and explanations
given to us, the procedures of physical verification of Inventory
followed by the Management are reasonable and adequate in relation to
the size of the Company and nature of its business.
c) In our opinion and according to the information and explanations
given to us, the Company is maintaining proper records of inventory and
no material discrepancies were noticed on physical verification.
iii) In respect of loans granted/obtained by the Company to companies,
firms or other parties covered in the register maintained under Section
301 of the Companies Act, 1956, according to the information and
explanations given to us :
a) The Company has granted inter-corporate loans to one Company. At the
year end the outstanding balance of such loan granted was Rs.
8,00,000/- and maximum amount involved during the year was Rs.
8,00,000/-.
b) In our opinion, the rate of interest and other terms and conditions
of such loans are prima-facie not prejudicial to the interest of the
Company.
c) The receipt of principal amounts and interest has been regular
during the year.
d) There was no overdue amount in respect of above inter-corporate
loans.
e) The Company has taken interest free unsecured loan from holding
Company. At the year end the outstanding balance of such loan taken was
Rs. 10,000/- and maximum amount involved during the year was Rs.
20,00,000/-.
f) In our opinion, terms and conditions of such loans are prima-facie
not prejudicial to the interest of the Company.
g) In respect of aforesaid loan the Company is regular in repayment of
the principal amount as stipulated and is also regular in payment of
interest where applicable.
iv) In our opinion and according to the information and explanations
given to us, there are adequate internal control procedures
commensurate with the size of the Company and the nature of its
business, for purchase of inventory, fixed assets and for the sale of
goods & services. During the course of audit, no major weakness has
been noticed in the internal control in respect of these areas.
v) a) To the best of our knowledge and belief and according to the
information and explanations given to us, we are of the opinion that
the particulars of the transactions that need to be entered into the
register maintained under Section 301 of the Companies Act, 1956 have
been so entered.
b) In our opinion and according to the information and explanations
given to us, the transactions with parties, with whom transactions
exceeding the value of Rupees Five Lacs in respect of each party have
been entered into during the financial year, are at prices, which are
reasonable, having regard to the prevailing market prices at the
relevant time where such market prices are available.
vi) The Company Has not accepted any deposits from the public under
Sections 58A and 58AA of the Act and the rules framed thereunder.
vii) According to the information and explanations given to us, Company
has an internal audit system commensurate with the size and nature of
its business.
viii) We have broadly reviewed the books of account maintained by the
Company in respect of products where, pursuant to the rules made by the
Central Government of India, the maintenance of cost records has been
prescribed under clause (d) of sub-section (i) of Section 209 of the
Act and are of opinion that prima facie, the prescribed accounts and
records have been made and maintained. We have not, however, made a
detailed examination of the records with a view to determine whether
they are accurate or complete.
ix) According to the information and explanations given to us and the
records of the Company examined by us in respect of Statutory and other
dues :-
a) In our opinion, undisputed Statutory dues including Provident Fund,
Investor Education & Protection Fund, Employees State Insurance, Sales
Tax, Wealth Tax and any other statutory dues has been regularly
deposited with the appropriate authorities during the year except:
West Bengal Professional Tax of Rs. 4,25,807/- including interest, out
of the same principal amount Rs. 98,390/- has been paid and the Company
has applied waiver for interest.
b) According to the records of the Company, the disputed statutory dues
on account of sales tax, income tax, wealth tax, service tax, excise
duty and cess that have not been deposited on account of matters
pending before appropriate authorities are as follows :
Name of the Statute Nature ofDues Amount Period to which Forum where
dispute
(in Rs.) the Amount is pending
relates
West Bengal Sales Tax 80,543/- 2000-2001 Assistant
Commissioner
Sales Tax Act, 1994
Central Sales Tax
Act, 1956 CST 25,28,836/- 2003-2004 Assistant
Commissioner
Central Sales Tax
Act, 1956 CST 1,94,968/- 2004-2005 Assistant
Commissioner
Income Tax
Act, 1961 Income Tax 47,71,575/- 2005-2006 Income Tax
Appellate
Tribunal
Income Tax
Act, 1961 Income Tax 94,181/- 2006-2007 Commissioner
ofIncome
Tax (Appeal)
Income Tax
Act, 1961 Income Tax 31,00,689/- 2007-2008 Commissioner of
income Tax
(Appeal)
x) The Company does not have any accumulated losses at the financial
year ended 31st December, 2009 and it has not incurred cash losses in
the current and immediate preceding financial year.
xi) According to the information and explanations given to us, the
Company has not defaulted in repayment of dues to the Financial
Institutions.
xii) According to the information and explanations given to us and
based on the documents and records produced to us, the Company has not
granted loan or advances on the basis of security by way of pledge of
shares, debentures and other securities.
xiii) In our opinion the Company is not a chit fund or nidhi/mutual
benefit fund/societies. Therefore, the provisions of clause 4(xiii) of
the Companies (Auditors Report) Order, 2003 are not applicable to the
Company.
xiv) (a) According to the information and explanations given to us,
Company is not dealing/trading in shares, securities or debentures and
other investments. Therefore, the provisions of clause 4 (xiv) of the
Companies (Auditors Report) Order, 2003 are not applicable to the
Company.
(b) According to the information and explanations given to us,
long-term investments have been held by the Company in its own name.
xv) According to the information and explanations given to us, the
Company has not given any guarantee for loans taken by others from the
Bank or Financial Institutions during the year.
xvi) In our opinion, and according to the information and explanations
given to us, on an overall basis, the term loans have been applied for
the purposes for which they were obtained.
xvii) According to the information and explanations given to us and on
an overall examination of the Balance Sheet and Cash Flow Statement of
the Company, we report that no fund raised on short term basis have
been used for long term investment and no long term fund have been used
to finance the short term assets.
xviii) The Company has not made any preferential allotment of shares to
parties or Companies covered in the register maintained under Section
301 of the Companies Act, 1956, during the year and hence the question
of the price at which shares have been issued is prejudicial to the
interest of the Company does not arise.
xix) The Company has not raised debentures during the year and hence
question of any security in respect of debentures does not arise.
xx) The Company has not raised any money through public issue during
the year.
xxi) During the course of our examination of the books and records of
the company and based upon the audit procedures performed for the
purpose of reporting the true and fair view of the financial statements
and as per the information and explanations given to us by the
management, we have neither come across any instance of fraud on or by
the Company noticed or reported during the year nor have been informed
of such case by the management.
4. Further to our comments in paragraph 3 above, we report that :
a) We have obtained all the information and explanations, which to the
best of 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 the Company so far as appears from our examination of those
books.
c) The Balance sheet, Profit and Loss Account and Cash Flow Statement
dealt with by this report are in agreement with the books of accounts.
d) In our opinion, the Balance Sheet, Profit & Loss Account and the
Cash Flow Statement dealt with by this report comply with the
accounting standards referred to in sub-section (3C) of Section 211 of
the Companies Act, 1956, except for Accounting Standard 15 (Revised
2005), in respect of non-provision of part of gratuity liability
indicated in Note No. B-8 of Schedule 13.
e) On the basis of the written representation received from the
Directors as on 31st December, 2009 and taken on record by the Board of
Directors we report that none of the Directors is disqualified as on
31st December, 2009 from being appointed as a Director in terms of
Clause (g) of sub-section (1) of Section 274 of the Act.
f) In our opinion and to the best of our information and according to
the explanations given to us, the said statement of accounts read
together with Notes as appearing in Schedule 13 to the Accounts
particularly (a) Note No.B-5 for non provision of sundry debtors
considered as doubtful of recovery, (b) Note No.B-8 for non provision
of gratuity liability, (c) Note No.B-9 for non-provision of diminution
in value of investments, (d) Note No.B-12 for non provision of
professional tax liability and (e) Note No.B-13 for non provision of
loan receivable. Had the effect of above Notes Nos. (a) to (e) been
taken in the books the profit as well as carried forward profit would
have been reduced by the net of sum of the amounts referred in above
notes; give the information required by the Companies Act, 1956, in the
manner so required and give a true and fair view in conformity with the
accounting principles generally accepted in India.
i) in the case of Balance Sheet, of the state of affairs of the Company
as at 31st December, 2009;
ii) in the case of Profit & Loss Account, of the Profit for the year
ended on that date; and
iii) in the case of the Cash Flow Statement of the Cash Flow for the
year ended on that date.
For DAS & PRASAD
Chartered Accountants
Registration No. 303054E
4, Chowringhee Lane P. K. Agarwal
Kolkata - 700 016 Partner
Date : March 30, 2010 Membership No. 056921
Dec 31, 2000
We have audited the attached Balance Sheet of DIANA TEA COMPANY
LIMITED, Kolkata as at 31st December, 2000 and the Profit & Loss
Account annexed thereto for the period ended on that date and we report
that :-
1) As required by the Manufacturing and Other Companies (Auditors
Report) Order, 1988 issued by the Central Government and on the basis
of such checks as we considered appropriate and information and
explanations given to us during the course of audit, we state that:-
1.1) The Company has maintained proper records showing full particulars
including quantitative details and situation of Fixed Assets. As
explained to us all these Fixed Assets have been physically verified by
the Management at reasonable intervals during the year and no material
discrepancies were noticed on such verification.
1.2) Land & Plantation of Companys Diana, Baintgoorie and Goodhope Tea
Estates has been revalued during the year.
1.3) The stock of Finished Goods except lying with other parties,
Stores and Spare Parts and Raw Materials have been physically verified
by the Management at reasonable intervals during the period including
at the period end.
1.4) As explained to us the procedures of physical verification of the
above referred stocks followed by the Management are, in our opinioa
reasonable and adequate in relation to the size of the Company and
nature of its business.
1.5) The discrepancies noticed on physical verification of stocks as
compared to book records were not material and have been properly dealt
with in the books of account.
1.6) In our opinion and on the basis of our examination the valuation
of stock is fair and proper in accordance with normally accepted
accounting principles.
1.7) The Company has not taken any loans secured or unsecured from
firms, companies and other parties listed in the Register maintained
under section 301 of the Companies Act, 1956 and / or from the
Companies under the same management within the meaning of Section
370(1-B) of the Companies Act, 1956.
1.8) The Company has not granted any loans secured or unsecured to
firms and other parties listed in the Register maintained under section
301 of the Companies Act, 1956. However, as per information and
explanations given to us the rates of interest and terms and conditions
on which loans have been granted to Companies under Section 301 of the
Companies Act, 1956 and/or to the companies under the same management
within the meaning of section 370(1-B) of the Companies Act, 1956 are
not prima facie prejudicial to the interest of the Company.
1.9) The principal amount and interest wherever charged in respect of
loans and advances in the nature of loans, given by the company to body
corporates, employees and others have been recovered/adjusted in
accordance with the stipulations.
1.10) Having regard to the greater degree of personal supervision
exercised by the Directors, in our opinion and according to the
information and explanations given to us during the course of the
audit, the internal control procedure of the Company relating to
purchase of stores, raw materials and fixed assets and sale of goods
are commensurate with the size and the nature of business of the
Company.
1.11) According to informations and explanations given to us there are
no transaction of purchase of goods, materials and sales of goods and
services aggregating during the year to Rs. 50,000/- or more in
respect of each party made in pursuance of contracts or arrangement
entered in the register maintained under section 301 of the Companies
Act, 1956.
1.12) As explained to us, the Company has a regular procedure for the
determination of unserviceable or damaged stores, raw materials and
finished goods. Adequate provision has been made in the accounts for
the loss, if any, arising on the items so determined.
1.13) The company has not accepted any deposit from the public during
the year under Section 58A of the Companies Act, 1956.
1.14) As per the informations and explanations given to us, the Company
has maintained reasonable records for the sale and disposal of old
materials. The company has no by-products.
1.15) The company has appointed a firm of Chartered Accountants for
carrying out the internal audit periodically and the same is
commensurate with the size and nature of its business.
1.16) We are informed that the Company has not been required to
maintain cost records under Section 209(l)(d) of the Companies Act,
1956.
1.17) According to the records of the Company, the Provident Fund and
the Employees State Insurance dues wherever applicable, have been
regularly deposited during the year with the appropriate authorities.
1.18) According to the informations and explanations given to us, there
are no undisputed amounts payable in respect of Income-tax, Sales-tax,
Wealth-tax, Custom Duty and Excise Duty outstanding for a period of
more than six months as at 31st December, 2000 from the date they
became payable.
1.19) According to the informations and explanations given to us and
the records examined by us, no personal expenses have been charged to
revenue account, other than those payable under contractual obligations
or in accordance with generally accepted business practice.
1.20) In our opinion, the Company is not a sick industrial Company
within the meaning of Clause (O) of sub Section (1) of Section 3 of the
Sick Industrial Companies (Special Provisions) Act, 1985 (1 of 1986).
1.21) In respect of investment activities the Company has maintained
proper records of transactions and contracts and timely entries thereof
have been maintained therein.
2) Subject to the above we further report that -.-
2.1) We have obtained all informations and explanations which to the
best of our knowledge and belief were necessary for the purpose of our
audit.
2.2) In our opinion proper books of accounts, as required by law, have
been kept by the Company so far as appears from our examination of
these books.
2.3) The Balance Sheet and Profit & Loss Account referred to in this
report are in agreement with the books of account as submitted to us.
2.4) In our opinion, the Balance Sheet and the Profit & Loss Account
have been drawn up in accordance with the Accounting Standards referred
to in clause 3(C) of section 211 of the Companies Act, 1956 except for
Accounting Standard- 15, in respect of Non-provision of part of
gratuity liability indicated in Note No. A 10 (a) of Schedule 13.
2.5) According to the information and explanations given to us and on
the basis of the written declarations received from the directors of
the Company, we report that none of the directors is disqualified as on
31st December, 2000 from being appointed as a director in terms of
clause (g) of sub- section (1) of Section 274 of the Companies Act,
1956.
2.6) On our opinion and to the best of our information and according to
the explanation given to us the said statement of accounts read
together with Notes as appearing in Schedule 13 to the Accounts
particularly (a) Note No.B- 6 for non-provision of sundry debtors
considered as doubtful of recovery (b) Note No. B-8 non-provision of
part of gratuity liability (c) Note No. B-9 for non-provision for
diminution in value of investment and (d) Note No. B-10 for change in
treatment of borrowing cost due to Accounting Standard 16. Had the
effect of above Note a,b,c and d been taken in the books the Profit as
well as carried forward Profit would have been reduced by the net of
the above referred amounts, give the information required by the
Companies Act, 1956 in the manner so required and give a true and fair
view :
i) In the case of Balance Sheet of the state of affairs of the Company
as at 31st December, 2000
AND
ii) In the case of the Profit & Loss Account of the PROFIT for the
period ended on that date.
For Das & Prasad
9, Jagmohan Mullick Lane, Chartered Accountants
Kolkata - 700 007 P. K. Agarwal
Dated, the 5th July, 2001. Partner
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