We have audited the attached Balance Sheet of ARCUTTIPORE TEA COMPANY
LIMITED as at 31st March, 2014, the Statement of Profit and Loss and
the Cash Flow Statement of the Company for the year ended on that date
and a summary of significant accounting policies and other explanatory
Management''s Responsibility For The Financial Statements
The Company''s Management is responsible for the preparation of these
financial statements that give a true and fair view of the financial
position, and financial performance of the company in accordance with
the Accounting Standards notified under the Companies Act ,1956 (the
Act). read with the General Circular 15/2013 dated 13th September ,
2013 of the Ministry of Corporate Affairs in respect of Section 133 of
the Companies Act,2013 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 of material misstatement, whether due
to fraud or error.
Our responsibility is to express an opinion on these financial
statements based on our audit. We conducted our audit in accordance
with auditing standards 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 of
An Audit involves performing procedures to obtain audit evidence about
the amounts and 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 statement, 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. An audit also
includes evaluating the appropriateness of accounting policies used and
the reasonableness of the accounting estimates made by management, as
well as evaluating the overall presentation of the financial
We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our audit opinion.
Basis for Qualified Opinion: -
i. Note12.4 regarding, non-provision / non-ascertainment of diminution
in value of shares held as stock in trade, the eventual shortfall that
may arise there from cannot be commented upon by us.
ii. Note 12.5 regarding non-availability of shares held as stock in
trade for physical verification.
iii. Note 13.1 regarding sundry receivables, aggregating to Rs.
2,00,069/-/- (Previous year Rs. 1,21,393/-), the eventual recovery of
which and extent of provision there against, if any, cannot be
iv. Note 29 regarding non-provision and basis of ascertainment of
gratuity liability on the management''s estimate, which may be different
if ascertained on the basis of actuarial valuation and the impact of
which is not ascertainable. This is not in consonance with Accounting
Standard-15 on Accounting of Retirement benefits issued by the
Institute of Chartered Accountants of India (ICAI) due to which loss
for the year is lower by Rs 4,12,128/- Previous year Rs. 6,28,517/-),
Reserve and Surplus are higher and current liabilities at the year end
are lower by Rs.1,16,79,382/- (Previous year Rs.1,06,50,382/-) (to the
In our opinion and to the best of our information and according to the
explanations given to us, except for the effects of the matters
described in the Basis for Qualified Opinion paragraph, the Financial
Statements give the information required by 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 the Balance Sheet, of the state of affairs of the
Company as at 31st March, 2014
ii. in the case of the statement of Profit & Loss, of the loss of the
Company for the year ended on that date and
iii. in the case of the Cash Flow Statement, of the Cash Flows of the
Company for the year ended on that date.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor''s Report) Order, 2003 issued
by the Central Government in terms of Section 227(4A) of the Companies
Act, 1956 we give in the Annexure a statement on the matters specified
in paragraphs 4 and 5 of the Order.
2. As required by section 227 (3) of the Act, we report that :
i. We have obtained all the information and explanations which, to the
best of our knowledge and belief, were necessary for the purpose of our
ii. The Balance Sheet, Statement of Profit & Loss and Cash Flow
statement dealt with by this report are in agreement with the books of
iii. 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
iv In our opinion the Statement of Profit & Loss and the Balance Sheet
of the Company dealt with by this report comply with the Accounting
Standards notified under the Act read with the General Circular 15/2013
dated 13th September, 2013 of the Ministry of Corporate Affairs in
respect of Section 133 of the Companies Act, 2013 to the extent
v. On the basis of written representations received from the directors
and taken on record by the Board of Directors, none of the Directors is
disqualified as on 31st March 2014 from being appointed as a Director
in terms of Clause (g) of Sub Section (1) of Section 274 of the
Companies Act, 1956,
ANNEXURE TO THE AUDITORS'' REPORT
(Referred to in paragraph 1 of our report of even date)
Re: ARCUTTIPORE TEA COMPANY LIMITED
On the basis of such checks as we considered appropriate and according
to the information and explanations given to us during the course of
audit, we state that:
i. (a) Proper updated records showing full particulars including
quantitative details and situation of its fixed assets are being
updated by the Company.
(b) As explained to us, the fixed assets of the Company have been
physically verified by the management during the year .No material
discrepancies between the book records and the physical inventory were
(c) The company has not disposed any fixed assets during the year.
ii. (a) As explained to us, physical verification of inventory of
finished stock of Tea and shares has been conducted at reasonable
intervals by the management. There is inventory of finished stock of
tea at the year end with third parties and confirmations for the same
have not been obtained from the concerned parties.
(b) In our opinion, 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) As informed, the Company is maintaining proper records of its
inventories and no discrepancies were noticed on verification of stocks
with book record
iii. (a) The company has taken/granted certain unsecured loan and /or
advances in the nature of loans from/to the companies, firms, parties
covered under the register maintained under Section 301 of the
Companies Act 1956. In the absence of relevant information and related
documents, we are unable to quantify the number of companies and amount
involved in the transactions. There are however, interest free loan of
Rs.1,58,00,000/- taken by the company from a company other than the
aforesaid companies. The maximum amount outstanding at any time during
the year was Rs.1,58,00,000/- ,and at the year end balance is
Rs.1,58,00,000/-. The company has also taken interest bearing unsecured
loans amounting Rs1,71,55,003/- in aggregate .( previous year Rs
96,00,000/-) from several companies other than the aforesaid companies
and the said loan amounts are outstanding at the year end and repayable
on demand. Moreover, the company has given an interest free advance in
the nature of unsecured loan of Rs. 25,00,000/- to a company and the
same is receivable on demand.
(b) In our opinion and according to the information and explanations
given to us, the rate of interest and other terms and conditions of the
said loans taken and given by the company, are not prima facie
prejudicial to the interest of the company.
(c) In respect of the said loans and interest thereon , there are no
overdue amounts and the principal loan amounts are repayable on demand,
except for the interest free long term loan Rs.1,58,00,000/- which is
repayable over a period of 5 years.
(d) In case of other loans taken and or given, there is no stipulation
for payment of principal and interest amount except as stated in Para
iii(a) and iii(c). As such, we are unable to ascertain whether such
terms are prejudicial to the interest of the company and whether said
loan is overdue for repayment.
iv. In our opinion and according to the information and explanations
given to us, the prevailing internal control system needs to be
strengthened, to commensurate with the size of the company and the
nature of its business for purchases/inventory and fixed assets, and
for sale of goods.
v. (a) In our opinion and according to information and explanation
given to us, the particulars of contracts or transactions referred to
in Section 301 of the Companies act 1956 ,if any, are yet to be
recorded in the register required to be maintained under that section.
(b) The Company has made related parties transactions as stated in Note
vi. According to the information and explanation given to us, the
company has not accepted any public deposit within the meaning of the
Section 58A of the Companies Act, 1956 and rules framed there under.
vii. The Company has not been maintaining the cost records as
prescribed by the Central Government under clause (d) of sub-section
(1) of section 209 of the Companies Act, 1956. No Cost Audit has been
conducted during the year.
viii. (a) As given in Note 7.2 & 7.3 and according to the information
and explanations, given to us the company is regular during the year in
depositing with the appropriate authorities undisputed statutory dues
in respect of Provident Fund, Income Tax, Sales-Tax, Cess and
Professional Tax. Provident Fund dues and Cess on Green leaf for the
year and the old statutory dues on these accounts for the earlier
years, as stipulated, are being deposited with the concerned
(b) According to information and explanations given to us, there are no
dues of income tax, sales tax excepting Rs.65,557/- ( previous year
Rs14,065/-), wealth tax, service tax, professional tax excepting Rs,
91,562/- (Previous year Rs.89,855/-)., custom duty, excise duty or cess
on green leaf excepting Rs.49,57,072/--(Previous year Rs.57,73,033/-),
land Revenue tax Rs. 12,18,874/- (previous year Rs.2,04,624/-) as at
31st March, 2014, outstanding on account of any dispute, other than the
Name of Nature of Dues Amount Rs.
Income tax Order U/s 154/251/254/143(3) Refund of
Act 1961 dated24.12.2013 of the Income Rs.
Tax in respect of regular 13,58,214
assessment u/s143(3) of the Act against
as against total demand for Rs. demand For
248.47 lakhs as on 31.03.2013 Rs.
referred by the Department to 2,00,99,643
Income Tax Appellate Tribunal
Notice appeal no 912/ kol/2014
Appeal against Order of regular 39,64,196
assessment u/s143(3) of the Act
as against total demand for Rs.
63.43 lakhs as on 31.03.2013 as
per Tax Recovery Certificate no
223 dated 14.01.2013
Wealth Tax Demand raised in the Order of 5,370
Act regular assessment u/s 17&
Demand raised in the Order of 15,303
regular assessment u/s 17&
Demand raised on the Order Of 12,921
regular assessment u/s 17&
Name of Period to which the Forum where
Statute amount relates dispute is pending
Income tax Asst Year 2002-03 Case is referred
Act 1961 to Appettate
Asst year 2003-04 CIT (A)
Wealth Tax Asst Year 2002-03
Asst Year 2003-04
Asst Year 2004-05
ix. The accumulated losses of the company as at the end of the year
are Rs.12,71,34,103/--. The said amount as shown in the Note 2 are more
than the net worth of the Company. However, the Company has incurred
cash losses during the financial year covered by our audit and in the
immediately preceding financial year.
xi Based on our examination and according to information and
explanations 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.
xii The provisions of any special statute applicable to chit
fund/nidhi/mutual benefit fund/societies are not applicable to the
xiii During the year under audit, the company has not dealt in shares,
securities, debentures. The company has shares of other companies held
as stock in trade at the year end.
xiv According to information and explanations given to us, we are of
the opinion that the company has not given any guarantee for loans
taken by others from bank or financial institutions.
xv. As per the information and explanations given to us, loans taken
from financial company / bank as obtained/ availed by the company were
generally utilised for purpose for which these were obtained/availed.
xvi. During the year under audit, the company has not borrowed any term
loan except for an interest free loan of Rs.1,58,00,000/- for 5 years
from a body corporate.
xvii. The company has not made any preferential allotment of shares to
parties and companies covered in the Register maintained under Section
301 of the Act.
xviii. The company has not issued any debentures and therefore, the
provisions of clause 4(xix) are not applicable to the company.
xix. During the period covered by our audit, the company has not raised
any money by public issue therefore, the provision of clause 4(xx) are
not applicable to the company.
xx. According to the information and explanations given to us and the
audit procedures performed, we have neither come across any instances
of fraud on or by the company noticed or reported during the year nor
have we been informed of such case by the management.
For GORA & COMPANY
Gora Chand Mukherjee
Place: Kolkata (Partner)
Date: 26th May, 2014 Membership No. 17630