To the Members of Andrew Yule & Company Limited
Revised Report on the Audit of Standalone IND-AS Financial Statements
Report on the Standalone financial results
On the basis of observation made by the Comptroller & Auditor General of India, the revised audit report is being issued in lieu of the earlier audit report dated 29.05.2024 to comply with the observation of the Comptroller & Auditor General Of India, on CARO Report 2020 [Clause (i)(c)]
Opinion
We have audited the accompanying Standalone Financial Statements of Andrew Yule & Co. Ltd. (“the Company”), which comprise the Standalone Balance Sheet as at 31st March, 2024, the Standalone Statement of Profit and Loss (Including Other Comprehensive Income), the Standalone Statement of Changes in Equity and the Statement of Cash Flows for the year ended, and notes to the Standalone Financial Statements, including a summary of the significant accounting policies and other explanatory information (hereinafter referred to as “Standalone financial statements”),
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 Companies Act, 2013, as amended (“the Act”) in the manner so required and give a true and fair view in conformity with the Indian Accounting Standards prescribed under section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015, as amended, (“Ind AS”) and other accounting principles generally accepted in India, of the state of affairs of the Company as at 31st March, 2024, the Loss including other comprehensive income, changes in equity and its cash flows for the year ended on that date.
Basis for Qualified Opinion
We conducted our audit of the Standalone Financial Statements in accordance with the Standards on Auditing (SAs) specified under section 143(10) of the Act. Our responsibilities under those Standards are further described in the Auditor's Responsibilities for the Audit of the Standalone Financial Statements section of our report. We are independent of the Company in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India (ICAI) together with the ethical requirements that are relevant to our audit of the Standalone Financial Statements under the provisions of the Act and the Rules made there under, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the ICAI's Code of Ethics. 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.
Emphasis of Matter:
We draw attention to the following: -
i. In note no. 60 absence of balance confirmation certificates and sufficient and appropriate audit evidence from Debtors and Creditors, we are unable to comment regarding adequacy of provision required to be made.
ii. In note no. 2.11.3 and Note No. 10, The company has no policy to provide for receivables on the basis of age. Debtors outstanding for more than 36 months of the company are as follows:
|
(Rs. In Lakhs)
|
|
Total Receivables
|
Receivables
|
Provisions available
|
|
as on 31.03.2024
|
over 36 months
|
as on 31.03.2024
|
|
11,244.70
|
1,466.33
|
1,250.77
|
iii. In note no. 59 Lease agreement of three tea gardens namely Banerhat, Choonabhutti and Haritalguri-3 (of New Dooars) have not been renewed since long. Salami asked for by the West Bengal Government for renewal of lease of tea gardens amounting to Rs.177.66 lakhs (P.Y.- Rs.177.66 lakhs) is treated as “Claims not acknowledged as debts” by the Company. The matter should be resolved immediately as it disputes the Company's ownership of the tea gardens under its operation.
iv. In note no. 15 There are old outstanding advances of the Company which remained unadjusted. Under “Other Current Assets” total amount of Rs.3999. 86 lakhs have been given as advance under various heads of expenses against which provision for doubtful advances exist amounting to Rs. 366.67 lakhs only.
Loss if any for the above are not ascertained and accounted for.
v. In note no. 35 There was delay in deposit of PF, DLI and PF Administration charges of the Company for various months. Penalty/demurrage if any has not been considered and accounted for.
vi. In note no. 63 In Tea Division, expenses on Tea Nursery Rs.187.92 Lakhs included in Advance (Garden) given in various years has not been segregated into capital and revenue. Loss for the non-segregation of revenue item has not been considered.
Our opinion is not modified in respect of the above matters.
Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the Standalone Financial Statements for the financial year ended 31st March 2024. These matters were addressed in the context of our audit of the Standalone Financial Statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. For matters described below, our description of how our audit addressed the matters is provided in that context.
We have determined the matters described below to be the key audit matters to be communicated in our report. We have fulfilled the responsibilities described in the Auditors' responsibilities for the audit of the Standalone Financial Statements section of our report, including in relation to these matters. Accordingly, our audit included the performance of procedures designed to respond to our assessment of the risks of material misstatement of the Standalone Financial Statements. The results of our audit procedures, including the procedures performed to address the matters below, provide the basis for our audit opinion on the accompanying Standalone Financial Statements.
|
Sl.
No.
|
Key Audit Matter
|
Auditors Response
|
|
1.
|
Revenue Recognition
Revenue from sale of goods (hereinafter referred to as revenue) is recognized when the significant risks and rewards of ownership of goods is passed to the buyer. Revenue from sale of goods is measured at the fair value of the consideration received or receivable, net of returns or allowances, trade discounts and volume rebates.
The Timing Of Revenue Recognition Is Relevant To The Reported Performance Of The Company. Revenue Recognition Was Determined To Be A Key Audit Matter And A Significant Risk Of Material Misstatement Due To The Aforesaid Risk Related To The Recognition Of Revenue.
|
Our audit procedures included the following: Assessed the Company's Revenue Recognition policies in line with IND AS 115 (Revenue from Contracts with Customers) and tested thereof: Evaluated the integrity of the general information and technology control environment and testing the operating effectiveness of controls over recognition of revenue.
Evaluated the design, implementation and operating effectiveness of Company's controls in respect of revenue recognition.
Tested the effectiveness of such controls over revenue cut off at year end.
On a sample basis tested supporting documents for sales transactions recorded during the period closer to the year end and subsequent to the year end.
Compared revenue with cyclical trends where appropriate, conducted further enquiries and testing.
Assessed disclosures in financial statements in respect of revenue as specified in IND AS 115.
|
|
2.
|
Provisions and Contingent Liabilities
The company is subject to a number of legal, regulatory and tax cases for which final outcome cannot be easily predicted and which could potentially result in significant liabilities.
Management's disclosures with regards to Contingent liabilities are presented in note no. 40 - to the Standalone Ind AS financial statements.
The assessment of the risks associated with the litigations is based on complex assumptions. The amounts involved and the application of Accounting Standards to determine the amount if any to be provided as a liability or disclosed as a contingent liability are inherently subjective. This requires use of judgment to establish the level of provisioning, increases the risk that provisions and contingent liabilities may not be appropriately provided against or adequately disclosed. Accordingly, this matter is considered to be a key audit matter.
|
In order to get a sufficient understanding of litigations and contingent liabilities, we have discussed the process of identification implemented by the Management for such provisions through various discussions with Company's legal and finance departments.
We read the summary of litigation matters provided by the Company's/ Unit's Legal and Finance Team.
We read, where applicable, external legal or regulatory advice sought by the Company.
We discussed with the Company's/ Unit's Legal and Finance Team certain material cases noted in the report to determine the Company's assessment of the likelihood, magnitude and accounting of any liability that may arise.
In light of the above, we reviewed the amount of provisions recorded and exercised our professional judgment to assess the adequacy of disclosures in the Standalone Ind AS financial statements
|
|
3.
|
IT System Audit
In the absence of IT system audit, security of accounting/ operational data, recovery of data through IT disaster management system and manual intervention at crucial levels of data transfer and at the time of consolidation result in high audit risk.
|
Our audit procedures included the following: The objective of this procedure is to mitigate audit risks associated with the absence of IT system audits, security vulnerabilities in accounting/operational data, and inadequate data recovery mechanisms during IT disasters. This procedure aims to ensure compliance with SA 701 (Communicating Key Audit Matters in the Independent Auditor's Report) and enhance the reliability and integrity of financial reporting.
|
|
4.
|
Exercise Of Adequate Controls Over Lease Deeds
Absence of exercise of adequate controls in the process of maintaining the records of the company's lease deeds and title deeds enhances the audit risk.
|
In response to this key audit matter, we performed the following procedures to address the heightened audit risk and obtain sufficient appropriate audit evidence:
1. Evaluation of Internal Controls:
o Assessed the design and implementation of internal controls over the maintenance of lease deeds and title deeds.
o Identified control deficiencies or weaknesses contributing to the heightened audit risk.
2. Substantive Procedures:
o Conducted substantive testing to verify the existence, completeness, and accuracy of lease deeds and title deeds.
o Examined supporting documentation, such as lease agreements, property titles, and related correspondence.
|
| |
|
o Verified the consistency of recorded lease and title information with external sources and legal documentation.
We intend to communicate this key audit matter in our auditor's report in accordance with SA 701. The communication will provide stakeholders with insights into the significant audit risks related to the maintenance of lease deeds and title deeds, our audit approach, and the implications for the financial statements.
|
|
5.
|
Valuation of defined benefits obligation for employees
Accounting for defined benefit plans is based on actuarial assumptions which require measuring the obligation, evaluating the planed assets and calculating the corresponding actuarial gain or loss. All future cash flows discounted to present value for arriving at the obligation.
Significant estimates including the discount rates, the inflation rates, escalation of salary and the mortality rate are made in valuing the company's defined benefits obligations. The company engages external actuarial specialist to assist them in selecting appropriate assumptions and calculate the obligations. The effect of these matters is a part of the risk assessment and valuation of the defined benefit obligations has a high degree of estimation as it is based on assumptions. (Refer Notes 39.2 to the Standalone Financial Statements.)
|
Principal audit procedures:
Our audit procedures include:
• Evaluated the key assumptions applied (discount rates, inflation rate, mortality rate) as per the Guidance Note applicable.
• Assessed the competence, independence, and integrity of the company's actuarial expert.
• The controls over the review and approval of actuarial assumptions, the completeness and accuracy of data provided to external actuary, and the reconciliation to data used in expert's calculation were tested.
• Discussed with the Management about the liability accrued due to defined benefit plan and to understand the business and assessed if there was any inconsistency in the assumptions.
• Adequacy of the company disclosure as per Ind AS 19 in the notes is verified.
Based on the audit procedures involved, we
observed that the assumptions made by the
management in relation to the valuation were
supported by available evidence.
|
Information Other than the Standalone Financial Statements and Auditor’s Report Thereon
The Company's Board of Directors is responsible for the preparation of the other information. The other information comprises the information included in the Director's Report including Annexures to Director's Report, CSR Report, R&D and Report on Corporate Governance and Management Discussion and Analysis Report, but does not include the Standalone Financial Statements and our auditor's report thereon. The Director's Report including Annexures to Director's Report, CSR Report, R&D and Report on Corporate Governance and Management Discussion and Analysis Report, is not made available to us till the date of this report and is expected to be made available to us after the date of this Audit Report.
Our opinion on the financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.
In connection with our audit of the Standalone Financial Statements, our responsibility is to read the other information identified above when it becomes available and, in doing so, consider whether the other information is materially inconsistent with the Standalone Financial Statements or our knowledge obtained during the course of our audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.
Management’s Responsibility for the 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 of these Standalone Financial Statements that give a true and fair view of the financial position, financial performance including Other Comprehensive Income, changes in equity and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards (Ind AS) specified under section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015, as amended.
This responsibility also includes maintenance of adequate accounting records in accordance with the provision of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of the appropriate accounting policies; making judgements 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 fair presentation of the Standalone Financial Statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
In preparing the Standalone Financial Statements, management is responsible for assessing the Company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless Board of Directors either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so
The Board of Directors are also responsible for overseeing the company's financial reporting process.
Auditor’s Responsibility for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the Standalone Financial Statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with SAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these Standalone Financial Statements.
As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:
• Identify and assess the risks of material misstatement of the Standalone Financial Statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
• Obtain an understanding of internal financial controls relevant to the audit in order to design audit procedures that are appropriate in the circumstances. Under section 143(3)(i) of the Act, we are also responsible for expressing our opinion on whether the Company has adequate internal financial controls system in place and the operating effectiveness of such controls.
• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
• Conclude on the appropriateness of management's use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor's report to the related disclosures in the Standalone Financial Statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor's report. However, future events or conditions may cause the Company to cease to continue as a going concern.
• Evaluate the overall presentation, structure and content of the Standalone Financial Statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
Materiality is the magnitude of misstatements in the financial statements that, individually or in aggregate, makes it probable that the economic decisions of a reasonably knowledgeable user of the Standalone Financial Statements may be influenced.
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.
From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the Standalone Financial Statements of the current year and are therefore the key audit matters. We describe these matters in our auditor's report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor's Report) Order, 2020 (“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 to the extent applicable for the year under audit.
2. As required by Section 143 (3) of the Act, based on our audit we report that:
(a) We have sought and obtained all the information and explanations which to the 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 including Other Comprehensive Income, Statement of Changes in
Equity and the Statement of Cash Flow 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 Indian Accounting Standards specified under Section 133 of the Act.
(e) On the basis of written representations received from the Directors as on 31st March, 2024 taken on record by the Board of Directors, none of the directors is disqualified as on 31st March, 2024, from being appointed as a director in terms of Section 164(2) of the Act;
(f) With respect to the adequacy of the internal financial controls with reference to Standalone Financial Statements of the Company and the operating effectiveness of such controls, refer to our separate Report in “Annexure- B”.
(g) With respect to the matters required to be reported upon as per directions of The Comptroller and Auditor General of India as per the provisions of Section 143(5) of The Companies Act 2013, refer to our report in Annexure- C
(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, as amended, 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 Standalone financial statements - Refer Note 40 to the Standalone 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.
iv. (a) The management has represented that, to the best of it's knowledge and belief, other than as disclosed in the notes
to the accounts, no funds have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) by the Company to or in any other person(s) or entity(ies), including foreign entities ("Intermediaries"), with the understanding , whether recorded in writing or otherwise, that the Intermediary shall, whether, directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by
or on behalf of the Company ("Ultimate Beneficiaries”) or provide any guarantee, security or the like on behalf of the ultimate beneficiaries;
(b) The management has represented, that, to the best of it's knowledge and belief, other than as disclosed in the notes to the accounts, no funds have been received by the company from any person(s) or entity(ies), including foreign entities ("Funding Parties"), with the understanding, whether recorded in writing or otherwise, that the Company shall, whether, directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party ("Ultimate Beneficiaries") or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries; and
(c) Based on such audit procedures we have considered reasonable and appropriate in the circumstances; nothing has come to our notice that has caused us to believe that the representations under sub-clause (a) and (b) contain any material misstatement.
v. No dividend is declared or paid by the Company during the year and hence compliance with section 123 of the Companies Act, 2013 is not applicable to the Company.
vi. As proviso to Rule 3(1) of the Companies (Accounts) Rules, 2014 (as amended), which provides for maintaining books of account in accounting software having a feature of recording audit trail of each and every transaction, creating an edit log of each change made in books of account along with the date when such changes were made and ensuring that the audit trail cannot be disabled is applicable to the Company only, with effect from financial year beginning April 1,2023, audit trail is implemented in case of cash and bank transaction not for whole transactions, the reporting under clause (g) of Rule 11 of the Companies (Audit and Auditors) Rules, 2014 (as amended) is applicable to company.
Other Matters
We did not audit the Standalone financial statements/information of as at 31st March, 2023, total income of Rs. 40,578.87 lakhs and total asset of Rs.54,328.50 lakhs for the year ended on that date, as considered in the financial statements. The financial statements/ information of financial year ended 31st March, 2023 and our opinion in so far as it relates to the amounts and disclosures included in respect of financial statements/information, is based solely on the report of previous auditors.
Our opinion is not modified in respect of the above matter.
For N. C. BANERJEE & CO. Place : KOLKATA
Chartered Accountants Date : 29th July, 2024
(Firm Regn. No: 302081E)
(CA. M.C.Kodali)
Partner
Membership No. -056514 (UDIN:- 24056514BKAUIL1204)
|