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Peria Karamalai Tea & Produce Company Ltd.

BSE: 531044 Sector: Agri and agri inputs
NSE: PKTEA ISIN Code: INE431F01018
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Peria Karamalai Tea & Produce Company Ltd. (PKTEA) - Auditors Report

Company auditors report

To the Members of The Peria Karamalai Tea and Produce Company Limited

Report on the Standalone Financial Statements

We have audited the accompanying standalone financial statements of The Peria KaramalaiTea & Produce Company Limited ('the Company') which comprise the Balance Sheet as at31st March 2017 the Statement of Profit and Loss the Cash Flow Statement for the yearthen ended and a summary of significant accounting policies and other explanatoryinformation.

Management's Responsibility for the Standalone Financial Statements

The Company's Board of Directors is responsible for the matters stated in Section134(5) of the Companies Act 2013 ("the Act") with respect to the preparation ofthese standalone financial statements that give a true and fair view of the financialposition financial performance and cash flows of the Company in accordance with theaccounting principles generally accepted in India including the Accounting Standardsspecified under Section 133 of the Act read with Rule 7 of the Companies (Accounts)Rules 2014. This responsibility also includes maintenance of adequate accounting recordsin accordance with the provisions of the Act for safeguarding the assets of the Companyand for preventing and detecting frauds and other irregularities; selection andapplication of appropriate accounting policies; making judgments and estimates that arereasonable and prudent; and design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the accuracy andcompleteness of the accounting records relevant to the preparation and presentation ofthe financial statements that give a true and fair view and are free from materialmisstatement whether due to fraud or error.

Auditor's Responsibility

Our responsibility is to express an opinion on these standalone financial statementsbased on our audit.

We have taken into account the provisions of the Act the accounting and auditingstandards and matters which are required to be included in the audit report under theprovisions of the Act and the Rules made thereunder.

We conducted our audit in accordance with the Standards on Auditing specified underSection 143(10) of the Act. Those Standards require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetherthe financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts andthe disclosures in the financial statements. The procedures selected depend on theauditor's judgment including the assessment of the risks of material misstatement of thefinancial statements whether due to fraud or error. In making those risk assessments theauditor considers internal financial control relevant to the Company's preparation of thefinancial statements that give a true and fair view in order to design audit proceduresthat are appropriate in the circumstances. An audit also includes evaluating theappropriateness of the accounting policies used and the reasonableness of the accountingestimates made by the Company's Directors as well as evaluating the overall presentationof the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate toprovide 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 explanationsgiven to us the aforesaid standalone financial statements give the information requiredby the Act in the manner so required and give a true and fair view in conformity with theaccounting principles generally accepted in India

a) In the case of the Balance Sheet the state of affairs of the Company as at 31stMarch 2017

b) In the case of the Statement of Profit and Loss of the profit for the year ended onthat date and

c) In the case of the Cash Flow Statement of the cash flows for the year ended on thatdate.

Report on other Legal and Regulatory Requirements

1. As required by the Companies (Auditor's Report) Order 2016 ("the Order")issued by the Central Government of India in terms of sub-section (11) of section 143 ofthe Act we give in the Annexure A a statement on the matters specified in the paragraph3 and 4 of the Order to the extent applicable.

2. 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 bestof 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 theCompany 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 statementdealt with by this Report are in agreement with the books of account;

(d) In our opinion the aforesaid standalone financial statements comply with theAccounting Standards specified under Section 133 of the Act read with Rule 7 of theCompanies (Accounts) Rules 2014;

(e) On the basis of the written representations received from the directors as on 31March 2016 taken on record by the Board of Directors none of the directors isdisqualified as on 31 March 2016 from being appointed as a director in terms of Section164 (2) of the Act;

(f) With respect to the adequacy of the internal financial controls over financialreporting of the Company and the operating effectiveness of such controls refer to ourseparate report in "Annexure B"; and

(g) with respect to the other matters to be included in the Auditor's Report inaccordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 in our opinionand to the best of our information and according to the explanations given to us:

i. the Company does not have any pending litigations which would impact its financialposition;

ii. the Company did not have any long-term contracts including derivative contracts forwhich there were any material foreseeable losses;

iii. There has been no delay in transferring amounts required to be transferred tothe Investor Education and Protection Fund by the Company

iv. the company has provided requisite disclosures in its financial statements as toholdings as well as dealings in Specified Bank Notes during the period from 8th November2016 to 30th December 2016 and these are in accordance with the books of accountsmaintained by the Company;

For S. KRISHNAMOORTHY & CO For SRIKRISHEN & CO
Chartered Accountants Chartered Accountants
Registration No: 001496S Registration No: 004009S
K.N. Sreedharan K. Murali Mohan
Partner Auditors Proprietor Auditors
Membership No. 12026 Membership No. 014328
Coimbatore
26th May 2017

Annexure - A referred to in paragraph 1 of Report on Other Legal and RegulatoryRequirements

According to the information and explanations sought by us and given by the Company andthe books and records examined by us during the course of our Audit and to the best of ourknowledge and belief we report the following:

(i) (a) The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets

(b) The fixed assets of the company have been physically verified in a phasedperiodical manner by the management which in our opinion is reasonable having regard tothe size of the Company and the nature of its assets. No material discrepancies werenoticed on such verification.

(c) The title deeds of all the immovable properties of the company shown under theFixed Assets schedule are held in the name of the company.

(ii) The physical verification of inventory has been conducted by the management atreasonable intervals. The Company has maintained proper record of inventory and nomaterial discrepancies were noticed on the physical verification of inventories ascompared to the book records.

The Company has not granted any loans secured or unsecured to firms limitedliability partnerships or other parties covered in the register maintained under section189.The Company has granted unsecured loan to two Companies covered in the Registermaintained under section 189 of the Act.

In respect of the above loan given in our opinion

a) The terms and conditions of the grant of such loans are not prejudicial to thecompany's interest.

b) No schedule of repayment of principal and payment of interest has been stipulated.

c) No amount is overdue warranting taking steps for recovery of principal and interest.

(iii) The Company has not advanced any loans to its directors or any other person inwhom the directors are interested or given any guarantee or provided any security inconnection with any loan taken by the directors or such other person as contemplated undersection 185 of the Act.

The investment made in the capital of the subsidiary companies is within the overalllimit prescribed under section186 of the Act.

(iv) The Company has not accepted any deposits and therefore paragraph 3(v) of the CAROis not applicable to the Company.

(v) The Central Government has prescribed the maintenance of cost records under section148(1) of the Act in respect of manufacture of tea as well as generation and transmissionof electricity by the company. We have broadly reviewed the accounts and records of thecompany in this connection and are of the opinion that prima facie the prescribedaccounts and records have been made and maintained. We have not however carried out adetailed examination of the same.

(vi) (a) The Company is regular in depositing undisputed statutory dues includingprovident fund employee's state insurance income-tax sales tax service tax duty ofcustoms duty of excise value added tax cess and other material statutory dues with theappropriate authorities.

There are no undisputed arrears of statutory dues which were outstanding as at 31March 2017 for a period of more than six months from the date they became payable

(b) According to the information and explanations given to us there are no disputedstatutory dues which have not been deposited by the Company .

(vii) The Company has not borrowed from any financial institution and has not issuedany debentures till date. The Company has not defaulted in repayment of loans andborrowings to banks.

(viii) The Company did not raise any money by way of initial public offer or furtherpublic offer (including debt instruments) . The term loans were applied for the purposefor which it is availed.

(ix) No fraud by the Company or fraud on the Company by its officers or employees hasbeen noticed or reported during the year.

(x) In our opinion the managerial remuneration has been paid in accordance with therequisite approval mandated by the provisions of section 197 read with schedule V of theAct.

(xii) The Company is not a Nidhi Company. Accordingly paragraph 3(xii) of the Order isnot applicable.

(xiii) In our opinion the transactions with the related parties are in compliance withsections 177 and 188 of the Act and details of such transactions have been disclosed inthe financial statements as required by the applicable accounting standards.

(xiv) The Company has not made preferential allotment or private placement of shares orissued any debentures during the year.

(xv) The Company has not entered into non-cash transactions with directors or personsconnected with him.

(xvi) The Company is not required to be registered under section 45-IA of the ReserveBank of India Act 1934.

For S. KRISHNAMOORTHY & CO For SRIKRISHEN & CO
Chartered Accountants Chartered Accountants
Registration No: 001496S Registration No: 004009S
K.N. Sreedharan K. Murali Mohan
Partner Auditors Proprietor Auditors
Membership No. 12026 Membership No. 014328
Coimbatore
26th May 2017

Annexure - B to the Auditors' Report

Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section143 of the Companies Act 2013 ("the Act")

We have audited the internal financial controls over financial reporting of PeriaKaramalai Tea and Produce Co. Limited ("the Company") as of 31 March 2017 inconjunction with our audit of the standalone financial statements of the Company for theyear ended on that date.

Management's Responsibility for Internal Financial Controls

The Company's management is responsible for establishing and maintaining internalfinancial controls based on the internal control over financial reporting criteriaestablished by the Company considering the essential components of internal control statedin the Guidance Note on Audit of Internal Financial Controls over Financial Reportingissued by the Institute of Chartered Accountants of India ('ICAI'). These responsibilitiesinclude the design implementation and maintenance of adequate internal financial controlsthat were operating effectively for ensuring the orderly and efficient conduct of itsbusiness including adherence to company's policies the safeguarding of its assets theprevention and detection of frauds and errors the accuracy and completeness of theaccounting records and the timely preparation of reliable financial information asrequired under the Companies Act 2013.

Auditors' Responsibility

Our responsibility is to express an opinion on the Company's internal financialcontrols over financial reporting based on our audit. We conducted our audit in accordancewith the Guidance Note on Audit of Internal Financial Controls over Financial Reporting(the "Guidance Note") and the Standards on auditing issued by ICAI and deemedto be prescribed under section 143(10) of the Companies Act 2013 to the extentapplicable to an audit of internal financial controls both issued by the Institute ofChartered Accountants of India

Those Standards and the Guidance Note require that we comply with ethical requirementsand plan and perform the audit to obtain reasonable assurance about whether adequateinternal financial controls over financial reporting was established and maintained and ifsuch controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls system over financial reporting and their operatingeffectiveness. Our audit of internal financial controls over financial reporting includedobtaining an

understanding of internal financial controls over financial reporting assessing therisk that a material weakness exists and testing and evaluating the design and operatingeffectiveness of internal control based on the assessed risk. The procedures selecteddepend on the auditor's judgment including the assessment of the risks of materialmisstatement of the financial statements whether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the Company's internal financial controls systemover financial reporting.

Meaning of Internal Financial Controls over Financial Reporting

A company's internal financial control over financial reporting is a process designedto provide reasonable assurance regarding the reliability of financial reporting and thepreparation of financial statements for external purposes in accordance with generallyaccepted accounting principles. A company's internal financial control over financialreporting includes those policies and procedures that

(1) Pertain to the maintenance of records that in reasonable detail accurately andfairly reflect the transactions and dispositions of the assets of the company;

(2) provide reasonable assurance that transactions are recorded as necessary to permitpreparation of financial statements in accordance with generally accepted accountingprinciples and that receipts and expenditures of the company are being made only inaccordance with authorizations of management and directors of the company; and

(3) Provide reasonable assurance regarding prevention or timely detection ofunauthorized acquisition use or disposition of the company's assets that could have amaterial effect on the financial statements.

Inherent Limitations of Internal Financial Controls over Financial Reporting

Because of the inherent limitations of internal financial controls over financialreporting including the possibility of collusion or improper management override ofcontrols material misstatements due to error or fraud may occur and not be detected.Also projections of any evaluation of the internal financial controls over financialreporting

to future periods are subject to the risk that the internal financial control overfinancial reporting may become inadequate because of changes in conditions or that thedegree of compliance with the policies or procedures may deteriorate.

Opinion

In our opinion the Company has in all material respects an adequate internalfinancial controls system over financial reporting and such internal financial controlsover financial reporting were operating effectively as at 31 March 2017 based on theinternal control over financial reporting criteria established by the Company consideringthe essential components of internal control stated in the Guidance Note on Audit ofInternal Financial Controls Over Financial Reporting issued by the Institute of CharteredAccountants of India.

For S. KRISHNAMOORTHY & CO For SRIKRISHEN & CO
Chartered Accountants Chartered Accountants
Registration No: 001496S Registration No: 004009S
K.N. Sreedharan K. Murali Mohan
Partner Auditors Proprietor Auditors
Membership No. 12026 Membership No. 014328
Coimbatore
26th May 2017