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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) - Director Report

Company director report

Your Directors have pleasure in presenting the 104th Annual Report for the year ended31st March 2017.

FINANCIAL RESULTS

Rs in lakhs

2016-17 2015-16
Profit / (Loss) before interest depreciation and tax 528.58 134.62
Interest 70.14 117.57
Profit/(Loss) before depreciation 458.44 17.05
Depreciation 224.79 237.24
Profit/(Loss) before Tax 233.65 (220.19)
Provision for tax:
Current tax 66.00 6.00
MAT Credit entitlement of earlier year reversed 17.10
Deferred tax liability / (Asset) (8.37) (7.27)
Profit (Loss) after tax 158.92 (218.92)
Add: Balance brought forward from previous year 711.41 958.28
Profit available for appropriation 870.33 739.36
APPROPRIATIONS
Dividend (last year 0.75 per share) 23.22
Tax on dividend 4.73
Transfer to General Reserve
Surplus carried to Balance Sheet 870.33 711.41
Total 870.33 739.36

Operations

Production

During the financial year 2016-17 your Company produced 3734930 kg of made tea asagainst 3883230 kg of made tea produced in 2015-16.

During the year under review rainfall was inadequate followed by large level ofinfestation of pests and diseases. Anamalai region reported crop loss due to extendeddrought. However your company reported only 3.82% crop loss as compared to last year.

Price & Sales

During the financial year 2016-17 your company maintained average price Rs. 112.89 perkg as against average price of Rs. 93.69 per kg realized during the same period last year.

There was a reduction in the global CTC Black Tea production to the extent of 2% whichinflated the prices in various auction centres.

South Indian Tea prices increased further because of better demand from upcountrybuyers and export front.

During the year the Company has made a total sales realization of Rs. 4377.37 lakhscompared to Rs. 3846.05 lakhs made during the same period last year.

Wind Turbines

During the year under review the Wind Mills generated 3725778 units as against2355637 units generated during the same period last year.

Material Changes and Commitments

There are no material changes affecting the financial position of the company whichhave occurred in between the end of the financial year 2016-17 and the date of the report.

However the registered office of the company has been shifted from"Panchratn" 286 Race Course Road Coimbatore-641018 in the State of Tamilnaduto 7 Munshi Premchand Sarani Hastings Kolkata - 700022 in the State of West Bengal witheffect from 2nd May 2017.

Dividend

The Board of Directors is pleased to recommend a dividend of Re.1.00/- per share (lastyear Rs.0.75/- paisa per share) for the year ended 31st March 2017 subject to the approvalof the shareholders.

The proposed dividend (excluding dividend distribution tax) amounting to Rs.30.96 lakhsis not accounted as liabilities for the financial year 2016-17 in accordance with therevised AS 4 - ‘Contingencies and events occurring after the balance sheet date'.

Transfer to Reserves

No amount has been transferred to the any Reserves during the financial year 2016-17.

Share Capital

The paid up capital of the Company as at 31st March 2017 stood at Rs.30985790/-.During the year under review the Company has not made any fresh issue of shares.

During the year under review the company neither issued shares with differentialvoting rights nor granted any stock options or sweat equity.

Transfer of unclaimed dividend to Investor Education and Protection Fund

The Company has transferred an amount of Rs. 281151/- to the investor Education andProtection Fund established by the Central Government during the financial year 2016-17.In terms of Section 125 of the Companies Act 2013 any unclaimed or unpaid dividendrelating to the financial year 2009-10 will be remitted to the Investor Education andProtection Fund established by the Central Government within stipulated time.

Extract of Annual Return

The extract of Annual Return pursuant to the provisions of Section 92 of the CompaniesAct 2013 read with Rule 12 of the Companies (Management and Administration) Rules 2014in Form MGT-9 is furnished in Annexure A which forms part of this report.

Board Meetings and its Committees

The Board meets at regular intervals to discuss and decide on Company's business Policyand strategy apart from other broad business. However in case of a special and urgentbusiness need the Board's approval is taken by passing resolutions through circulationas permitted by law which are confirmed in the subsequent Board Meeting.

The notice of Board Meeting is given well in advance to all the Directors. The Agendaof the Board / Committee Meetings is circulated at least 7 (seven) days prior to the dateof the meeting as per Secretarial Standard on meeting of the Board of Directors (SS-1).The Agenda for the Board and Committee Meetings includes detailed notes on the items to bediscussed at the meeting to enable the Directors to take an informed decision.

The detailed information chart showing the date of the meeting of the Board and itsvarious Committees as well as details of the Directors who attended the meeting is givenin the Corporate Governance Report forming part of the Annual Report.

Committees of the Board

During the financial year ended March 31 2017 the Company has four committees asmentioned below:

1. Audit Committee

2. Stakeholders Relationship Committee

3. Nomination and Remuneration Committee

4. Corporate Social Responsibility Committee

Details of the Committees along with their charters composition and meetings heldduring the year are provided in the Corporate Governance Report forming part of thisAnnual Report.

Public Deposits

The Company did not accept any fresh deposits during the financial year 2016-17.

Listing

Your Company's shares are listed in National Stock Exchange of India Limited and TheCalcutta Stock Exchange Limited. The Company has paid the Annual Listing Fee to both theStock Exchanges.

Directors' Responsibility Statement

In compliance of Section 134(5) of the Companies Act 2013 as amended by Companies(Amendment) Act 2000 the Directors of your Company confirm that:

1. in the preparation of annual accounts all applicable accounting standards have beenfollowed and that there are no material departure from those standards.

2. such accounting policies have been selected and applied consistently and suchjudgments and estimates made are reasonable and prudent so as to give a true and fair viewof the state of affairs of the Company as at 31st March 2017 and of the profit of theCompany for the year ended on that date.

3. proper and sufficient care has been taken for the maintenance of adequate accountingrecords in accordance with the provisions of the Act for safeguarding the assets of theCompany and for preventing and detecting fraud and other irregularities.

4. the annual accounts have been prepared on a going concern basis.

5. they have laid down internal financial controls to be followed by the Company andsuch internal financial controls are adequate and were operating effectively; and

6. they had devised proper systems to ensure compliance with the provisions of allapplicable laws and such systems were adequate and operating effectively.

Details in respect of frauds reported by auditors under section 143(12) of theCompanies Act 2013 other than those which are reportable to the Central Government

There have been no instances of frauds identified or reported by the statutory auditorsduring the course of their audit pursuant to Section 143 (12) of the Companies Act 2013.

Declaration by Independent Directors

The Company has received declarations from all the independent directors of the Companyconfirming that they meet the criteria of independence as prescribed both under theCompanies Act 2013 and SEBI (Listing Obligation and Disclosure Requirements) Regulations2015.

Company's Policy relating to Directors appointment payment of remuneration and othermatters provided under Section 178 (3) of the Companies Act 2013

The Board on the recommendation of the Nomination and Remuneration Committee framed apolicy for fixing and revising remuneration of Directors Key Managerial Personnel SeniorManagement Personnel and employees of the Company. The criteria for selection ofNonExecutive Directors is stated in Annexure B to this report. The RemunerationPolicy of the Company is annexed herewith as Annexure C and can also be accessed onthe Company's website www.periatea.com

Comments on Auditors' Report

There are no qualifications reservations or adverse remarks or disclaimers made byM/s. S.Krishnamoorthy & Co Statutory Auditors and M/s. Srikishen & Co. StatutoryAuditors in their report.

Particulars of loans guarantees or investments made under Section 186 of the CompaniesAct 2013

Details of loan given investments made guarantees given and securities providedpursuant to Section 186 of the Companies Act 2013 have been given in the notes to thefinancial statements.

Particulars of contracts or arrangements with related parties

All transactions with related parties during the financial year 2016-17 were in theordinary course of business and on arm's length price. Since there were no transactionswhich were on arm's length and material nature Form AOC 2 is not annexed.

The policy on related party transactions as approved by the Board of Directors has beenuploaded on the Company's website and may be accessed at www. periatea.com

Material changes and commitments affecting the financial position of the Company.

No material changes and commitments affecting the financial position of the Companyoccurred between the end of the financial year as on 31.03.2017 and the date of thisreport.

Conservation of energy technology absorption foreign exchange earnings and outgo

The information on foreign exchange earnings and outgo technology absorptionconservation of energy stipulated under Section 134 (3)(m) of the Companies Act 2013 readwith Rule 8 of the Companies (Accounts) Rules 2014 is annexed herewith as Annexure D.

Risk Management

The Company has in place mechanism to identify assess monitor and mitigate variousrisks that may impact key business objectives of your Company. The Company has adopted aRisk Management Policy which is available on the website of the Company www.periatea.com.

The specific objectives of the Risk Management Policy are to ensure that all thecurrent and future material risk exposures of the Company are identified assessedquantified appropriately mitigated and managed to establish a framework for thecompany's risk management process and to ensure company wide implementation to ensuresystematic and uniform assessment of risks and to enable compliance with appropriateregulations wherever applicable through the adoption of best practices and to assurebusiness growth with financial stability.

Major risks identified by the businesses and functions are systematically addressedthrough mitigating actions on a continuous basis. These are discussed at the meetings ofthe Audit Committee and the Board of Directors of the Company. The Company's internalcontrol systems are commensurate with the nature of its business and the size andcomplexity of its operations. These are routinely tested and certified by Statutory andInternal Auditors. Significant audit observations and follow up actions thereon arereported to the Audit Committee.

Annual Evaluation of the Board's performance and of the Individual Directors

On the advice of the Board of Directors and the Nomination and Remuneration Committee the Company formulated criteria for evaluation of the performance of the Board ofDirectors its committees Independent Directors Non-Independent Directors and theManaging Directors. Based on those criteria performance evaluation has been done.

A structured questionnaire was prepared after taking into consideration inputs receivedfrom the Directors covering various aspects of the Board's functioning such as adequacyof the composition of the Board and its Committees Board culture execution andperformance of specific duties obligations ethics and compliances financial reportingprocess and monitoring activities.

Performance parameters for the Board as a collective body included parameters likequalification and diversity of Board members method and criteria for selection ofindependent directors to ensure independence availability appropriateness clarity ofunderstanding on risk scenarios faced by the Company existence sufficiency andappropriateness of policy on dealing with potential conflicts of interest involvement ofBoard members in long-term strategic planning etc. Based on these criteria theperformance of the Board various Board Committees Chairman and Individual Directors(including Independent Directors) was found to be satisfactory.

Independent Directors have reviewed the performance of Board its Committee Chairmanand individual Directors in their separate held meeting without the participation ofother Non-Independent Directors and members of management. Based on their review theIndependent Directors hold an unanimous opinion that the NonIndependent Directorsincluding the Chairman to the Board are experts with sufficient knowledge in theirrespective field of activities.

Directors and Key Managerial Personnel

The Board of Directors of the Company consists of 6 Directors out of which three areindependent directors one is non executive promoter director and two are wholetimedirectors.

Changes in the composition of Board of Directors and other Key Managerial Personnel

Shri R.L.Gaggar Independent Director has resigned from the Board of Directors witheffect from 12th April 2017 due to personal reasons. The Board placed on record itsappreciation of the valuable contribution and guidance provided by Shri R.L.Gaggar to theCompany.

Shri A.Thiagarajan Chief Financial Officer has resigned from the services of theCompany due to personal reasons and the Board has approved the same at its meeting held on26th May 2017.

The Board of Directors at its meeting held on 26th May 2017 approved the appointment ofShri K.Ashokan as Chief Financial Officer effective from 1st June 2017.

Retirement by rotation

Shri Lakshmi Niwas Bangur Director of the Company retires by rotation at the ensuingAnnual General Meeting and being eligible offers himself for re-appointment.

Composition of Audit Committee

The Board has constituted an Audit Committee details of which are enumerated in theCorporate Governance Report. All the recommendations made by the Audit Committee duringthe year were accepted by the Board.

Reports on the performance and financial position of each of the subsidiariesAssociates and Joint Venture Companies included in the Consolidated Financial Statements

The Company has two subsidiaries namely PKT Plantations Ltd and Shivphal VinimayPrivate Limited.

There has been no change in the number of subsidiaries or in the nature of business ofthe subsidiaries during the year under review. In accordance with Section 129(3) of theCompanies Act 2013 the Company has prepared a consolidated financial statement of theCompany consolidating its subsidiary company which is forming part of the Annual Report.A statement containing salient features of the financial statements of the subsidiarycompany in Form AOC-1 is also attached to the Consolidated Financial Statement and formspart of the Annual Report.

In accordance with third proviso of Section 136(1) of the Companies Act 2013 theAnnual Report of the Company containing therein its Standalone and the ConsolidatedFinancial Statements has been placed on the website of the Company at www.periatea.com.Shareholders interested in obtaining a copy of the audited annual accounts of thesubsidiary company may write to the Company Secretary at the Company's registered office.

The Company has adopted a Policy on Material Subsidiaries as approved by the Board. Ithas been posted on the website of the Company at www.periatea. com.

Details of significant and material orders passed by the Regulators or Courts orTribunals impacting the going concern status and Company's operation in future.

There is no significant and material order passed by the Regulators or Courts orTribunals impacting the going concern status and Company's operation in future.

Adequacy of Internal Financial Controls with reference to the financial statements

The Company has implemented and evaluated the Internal Financial Controls which providea reasonable assurance in respect of providing financial and operational informationcomplying with applicable statutes and policies safeguarding the assets prevention anddetection of frauds accuracy and completeness of accounting records. The Company hasappointed Internal Auditor with a dedicated internal audit team. The Internal AuditReports were reviewed periodically by the Audit Committee. Further the Audit Committeeannually reviews the effectiveness of the Company's internal control system. The Directorsand Management confirm that the Internal Financial Controls are adequate with respect tothe operations of the Company. A report of Auditors pursuant to Section 143 (3) (i) of theCompanies Act 2013 certifying the adequacy of Internal Financial Controls is annexed withthe Auditors Report.

Statutory Auditors

Pursuant to the provision of Section 139 of the Companies Act 2013 and the Companies(Audit and Auditors) Rules 2014 M/s. S.Krishnamoorthy & Co. Chartered Accountantsthe Statutory Auditors of the Company hold office up to the conclusion of the 104th AnnualGeneral Meeting.

At the Annual General Meeting held on 12th August 2016 the members have approved theappointment of M/s. Srikishen & Co. Chartered Accountants as statutory auditors for aperiod of 5 years commencing from the 103rd Annual General Meeting till the conclusion of108th Annual General Meeting subject to ratification by members every year.

The Company has received a certificate from M/s. Srikishen & Co. that they areeligible to hold office as the Statutory Auditors of the Company and are not disqualifiedfor being so appointed.

The Board of Directors at its meeting held on 26th May 2017 has ratified theappointment of M/s. Srikishen & Co. as Statutory Auditors of the Company for thefinancial year 2017-18 subject to the approval of the members at the ensuing AnnualGeneral Meeting.

The resolution for ratification of appointment of M/s.Srikishen & Co for thefinancial year 2017-18 is accordingly proposed in the notice of the ensuing Annual GeneralMeeting for ratification by members.

Secretarial Auditors

Pursuant to the provisions of Section 204 of the Companies Act 2013 and the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 the Company hasappointed Mr. M.D.Selvaraj MDS & Associates Company Secretary to undertake theSecretarial Audit of the Company. The report of the Secretarial Auditors in annexedherewith as Annexure E. There are no qualifications reservations or adverse remarkor disclaimer made by the auditor in the report save and except disclaimer made by them indischarge of his professional obligation.

Internal Auditors

The Board of Directors at its meeting held on 30th May 2016 has appointed ShriK.N.Narayanan (having membership No.22965) Chartered Accountant Chennai as InternalAuditor of the Company for the financial year 2016-17.

Industrial Relations

The relation between management and labour was cordial during the year.

Particulars of employees

Statement pursuant to Section 134 of the Companies Act 2013 read with the Companies(Particulars of Employees) Rules 1975 and Section 197 (12) of the Companies Act 2013read with Rule 5 of Companies (Appointment and Remuneration of Managerial Personnel)Rules 2014 is given in Annexure F.

Disclosures under Sexual Harassment of Women at Workplace (Prevention Prohibition andRedressal) Act 2013

The Company has in place policy on Sexual Harassment of Women at workplace in line withthe requirements of Sexual Harassment of Women at Workplace (Prevention Prohibition andRedressal) Act 2013. An Internal Complaint Committee has been set up to redresscomplaints received. All employees (permanent contractual temporary trainees) arecovered under this policy. The Committee has not received any complaint from any employeeduring the financial year 2016-17.

Whistle Blower Policy/Vigil Mechanism

The Company has a Whistle Blower Policy for directors and employees and adopted theWhistle Blower Policy in terms of Section 177 of the Companies Act 2013 and SEBI (ListingObligations & Disclosure Requirements) Regulations 2015 to report concerns aboutunethical behavior wrongful conduct and violation of company's code of conduct or ethics.The whistle blower policy is available on the company's website www.periatea.com

Corporate Social Responsibility (CSR)

The Board has constituted a Corporate Social Responsibility Committee comprising of thefollowing directors as its members:

1. Shri L.N.Bangur

2. Shri P.R.Ramakrishnan

3. Shri N.Swaminathan

The Company has adopted a Corporate Social Responsibility Policy defining therein CSRactivities to be undertaken by the Company in line with the provisions of Schedule VII ofthe Companies Act 2013.

The Corporate Social Responsibility Committee of the Board is responsible for theimplementation and effective monitoring of the CSR activities of the Company.

The Company was not required to spend any amount towards Corporate SocialResponsibility (CSR) during the financial year 2016-17 as the average net profit of theCompany for the financial years 2013-14. 2014-15 and 2015-16 was negative.

The Annual Report on CSR activities of the Company is furnished in Annexure G ofthis report.

Management Discussion and Analysis Report

The Management's Discussion and Analysis Report for the year under review asstipulated under Regulation 34(2)(e) of SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 forms part of the Annual Report.

Corporate Governance

A report on Corporate Governance is annexed and forms part of this report. The Companyhas complied with the conditions relating to Corporate Governance stipulated under SEBI(Listing Obligations & Disclosure Requirements) Regulations 2015.

Managing Directors Certification

The Managing Director of the Company has certified to the Board on the financialstatements and other matters in accordance with SEBI (Listing Obligations & DisclosureRequirements) Regulations 2015 relating to CEO certification for the financial year ended31st March 2017.

Acknowledgements

The Board wishes to thank all the shareholders customers vendors financialinstitutions and banks for the support extended by them.

The Board also wishes to place on record their appreciation of the contribution made bythe employees at all levels during the year.

For and on behalf of the Board
L.N. Bangur
Kolkata Chairman
26th May 2017. (DIN 00012617)