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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 CompanyLimited

Report on the Standalone Ind AS Financial Statements

Opinion

We have audited the accompanying standalone Ind

AS financial Statements of The Peria Karamalai Tea and Produce CompanyLimited ("the Company") which comprise the Balance Sheet as at 31st March 2021the Statement of Profit and Loss (including Other Comprehensive Income) the Statement ofChanges in Equity and Statement of Cash Flows for the year then ended and notes to thefinancial statements including a summary of significant accounting policies and otherexplanatory information. In our opinion and to the best of our information and accordingto the explanations given to us the aforesaid standalone Ind AS financial Statements givethe information required by the Companies Act2013 ("the Act") in the manner sorequired and give a true and fair view in conformity with the Indian Accounting Standardsprescribed under section 133 of the Act read with the Companies (Indian AccountingStandards) Rules 2015 as amended ("Ind AS") and other accounting principlesgenerally accepted in India of the state of affairs of the Company as at March 31 2021the Profit and total comprehensive income changes in equity and its cash flows for theyear ended on that date.

Basis for Opinion

We conducted our audit of the standalone Ind AS financial Statements inaccordance with the Standards on Auditing (SAs) specified under section 143(10) of theAct.

Our responsibilities under those Standards are further described in theAuditor's Responsibilities for the Audit of the standalone Ind AS financialStatements section of our report. We are independent of the Company in accordance with theCode of Ethics issued by the Institute of Chartered Accountants of India together with theethical requirements that are relevant to our audit of the standalone Ind AS financialstatements under the provisions of the Act and the Rules thereunder and we have fulfilledour other ethical responsibilities in accordance with these requirements and the Code ofEthics. We believe that the audit evidence we have obtained is and appropriate to providea basis for our opinion.

Key Audit Matters

Key audit matters are those matters that in our professional judgmentwere of most significance in our audit of the standalone Ind AS financial statements ofthe current period. These matters were addressed in the context of our audit of thestandalone Ind AS financial statements as a whole and in forming our opinion thereon andwe do not provide a separate opinion on these matters. We have determined the mattersdescribed below to be the key audit matters to be communicated in our report.

Key Audit Matter Auditor's Response
Reversal of MAT credit Entitlement of Earlier years: This decision was taken during the period 1.4.20 to 31.3.21 at the time of filing the Tax return in September 2020 for the year ended 31.3.2020.
The Company has opted for the New Tax Regime as per the Income Tax Act w.e.f financial year ended 31.03.2020. Hence MAT credit entitlements of earlier year Rs.624 lakhs has been written off during the year. Hence the impact of the same is recognized presently and it is in line with the provision of Income tax Act 1961.
As the Company has opted for VSV Scheme as per the income tax for the Appeal pending for the Assessment year 2012-13 (Financial year 2011-12) and the same has been accepted by the Income Tax Authorities .Hence Mat credit pertaining to that dispute has been written off during the year. The Company opted to settle a pending legal issue under the scheme as it was beneficial to the Company and the tax paid determined to be in excess have been quantified to be refunded.
Refer Note no. 32(A)(2) of other notes to the standalone financial statements. The above write off in Taxations is only consequential.

Information Other than the Standalone Ind AS Financial Statements andAuditor's Report Thereon

The Company's Board of Directors is responsible for thepreparation of other information. The other information comprises the information includedin the Management Discussion and Analysis Board's Report including Annexures toBoard's Report Business Responsibility Report Corporate Governance andShareholder's Information but does not include the standalone Ind AS financialStatements and our auditor's report thereon.

Our opinion on the standalone Ind AS financial statements does notcover the other information and we do not express any form of assurance conclusionthereon. In connection with our audit of the standalone Ind AS financial statements ourresponsibility is to read the other information and in doing so consider whether theother information is materially inconsistent with the standalone

Ind AS statements or our knowledge obtained during the course of ouraudit or otherwise appears to be materially misstated.

If based on the work we have performed we conclude that there is amaterial misstatement of this other information; we are required to report that fact. Wehave nothing to report in this regard.

Responsibility of the Management and Those charged with Governance forthe Standalone Ind AS Financial Statements

The Company's Board of Directors is responsible for the mattersstated in section 134(5) of the Act with respect to the preparation of these FinancialStatements that give a true and fair view of the financial position financialperformance total comprehensive income changes in equity and cash flows of the Companyin accordance with the Ind AS prescribed under Section 133 of the Act read with theCompanies (Indian Accounting Standards) Rules 2015 as amended and other accountingprinciples generally accepted in India .This responsibility also includes maintenance ofadequate accounting records in accordance with the provisions of the Act for safeguardingthe assets of the Company and for preventing and detecting frauds and otherirregularities; selection and application of appropriate accounting policies; makingjudgments and estimates that are reasonable and prudent; and design implementation andmaintenance of adequate internal financial controls that were operating effectively forensuring the accuracy and completeness of the accounting records relevant to thepreparation and presentation of the standalone Ind AS financial statements that give atrue and fair view and are free from material misstatement whether due to fraud or error.

In preparing the standalone Ind AS financial statements management isresponsible for assessing the Company's ability to continue as a going concerndisclosing as applicable matters related to going concern and using the going concernbasis of accounting unless management either intends to liquidate the Company or to ceaseoperations or has no realistic alternative but to do so.

The Board of Directors are also responsible for overseeing theCompany's financial reporting process.

Auditor's Responsibilities for the Audit of the Standalone Ind ASFinancial Statements

Our objectives are to obtain reasonable assurance about whether thestandalone Ind AS financial statements as a whole are free from material misstatementwhether due to fraud or error and to issue an auditor's report that includes ouropinion. Reasonable assurance is a high level of assurance but is not a guarantee that anaudit conducted in accordance with SAs will always detect a material misstatement when itexists. Misstatements can arise from fraud or error and are considered material ifindividually or in aggregate they could reasonably be expected to influence the economicdecisions of users taken on the basis of these standalone Ind AS financial statements.

As part of an audit in accordance with SAs we exercise professionaljudgment and maintain professional skepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of thestandalone Ind AS financial statements whether due to fraud or error design and performaudit procedures responsive to those risks and obtain audit evidence that is sufficientand appropriate to provide a basis for our opinion. The risk of not detecting a materialmisstatement resulting from fraud is higher than for one resulting from error as fraudmay involve collusion forgery intentional omissions misrepresentations or the overrideof internal control.

• Obtain an understanding of internal controls relevant to theaudit in order to design audit procedures that are appropriate in the circumstances. Undersection 143(3)(i) of the Act we are also responsible for expressing our opinion onwhether the company has adequate internal financial controls system in place and theoperating effectiveness of such controls.

• Evaluate the appropriateness of accounting policies used and thereasonableness of accounting estimates and related disclosures made by management.

• Conclude on the appropriateness of management's use of thegoing concern basis of accounting and based on the audit evidence obtained whether amaterial uncertainty exists related to events or conditions that may cast significantdoubt on the

Company's ability to continue as a going concern. If we concludethat a material uncertainty exists we are required to draw attention in ourauditor's report to the related disclosures in the standalone financial statementsor if such disclosures are inadequate to modify our opinion. Our conclusions are basedon the audit evidence obtained up to the date of our auditor's report. Howeverfuture events or conditions may cause the Company to cease to continue as a going concern.

• Evaluate the overall presentation structure and content of thestandalone Ind AS financial statements including the disclosures and whether thestandalone

Ind AS financial statements represent the underlying transactions andevents in a manner that achieves fair presentation. Materiality is the magnitude ofmisstatements in the standalone Ind AS financial Statements that individually or inaggregate makes it probable that the economic decisions of a reasonably knowledgeableuser of the standalone Ind AS financial statements may be influenced. We considerquantitative materiality and qualitative factors in

(i) planning the scope of our audit work and in evaluating the resultsof our work; and

(ii) to evaluate the effect of any identified misstatements in thestandalone financial statements.

We communicate with those charged with governance regarding amongother matters the planned scope and timing of the audit and significant audit findingsincluding any significant deficiencies in internal control that we identify during ouraudit.

We also provide those charged with governance with a statement that wehave complied with relevant ethical requirements regarding independence and tocommunicate with them all relationships and other matters that may reasonably be thoughtto bear on our independence and where applicable related safeguards. From the matterscommunicated with those charged with governance we determine those matters that were ofmost significance in the audit of the standalone Ind AS financial statements of thecurrent period and are therefore the key audit matters. We describe these matters in ourauditor's report unless law or regulation precludes public disclosure about thematter or when in extremely rare circumstances we determine that a matter should not becommunicated in our report because the adverse consequences of doing so would reasonablybe 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 2016("the Order") issued by the Central Government of India in terms of sub-section(11) of section 143 of the Companies Act 2013 we give in the Annexure "A" astatement on the matters specified in paragraphs 3 and 4 of the Order to the extentapplicable.

2. As required by Section 143(3) of the Act based on our audit wereport that:

(a) We have sought and obtained all the information and explanationswhich to the best of our knowledge and belief were necessary for the purposes of ouraudit.

(b) In our opinion proper books of account as required by law havebeen 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 OtherComprehensive Income Statement of Changes in Equity and the Statement of Cash Flow dealtwith by this Report are in agreement with the books of account.

(d) In our opinion the aforesaid standalone financial statementscomply with the Ind AS 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 thedirectors as on 31st March 2021 taken on record by the Board of Directors none of thedirectors is disqualified as on 31st

March 2021 from being appointed as a director in terms of Section164(2) of the Act.

(f) With respect to the adequacy of the internal financial controlsover financial reporting of the Company and the operating effectiveness of such controlsrefer to our separate Report in Annexure "B". Our report expresses an unmodifiedopinion on the adequacy and operating effectiveness of the Company's internalfinancial controls over financial reporting.

g) With respect to the other matters to be included in theAuditor's Report in accordance with the requirements of section 197(16) of the Actas amended:

In our opinion and to the best of our information and according to theexplanations given to us the remuneration paid by the Company to its directors during theyear is in accordance with the provisions of section 197 of the Act.

(h) With respect to the other matters to be included in theAuditor'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 theexplanations given to us:

i) The Company has disclosed the impact of pending litigations on itsfinancial position in its standalone Ind AS financial statements.

Refer Note no.32(B)(2))

ii) The Company did not have any long-term contracts includingderivative contracts for which there were any material foreseeable losses.

iii) There has been no delay in transferring amounts required to betransferred to the Investor Education and Protection Fund by the Company except thatcertain dividend amounts has been kept on hold as per the stay orders issued by the Court.Refer Note no.32(B)(7).

Annexure - A referred to in paragraph 1 of Report on Other Legal andRegulatory Requirements

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

(i) (a) The Company has maintained proper records showing fullparticulars including quantitative details and situation of fixed assets.

(b) The fixed assets of the company have been physically verified in aphased periodical manner by the management which in our opinion is reasonable havingregard to the size of the Company and the nature of its assets. No material discrepancieswere noticed on such verification.

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

(ii) The physical verification of inventory has been conducted by themanagement at reasonable intervals. The Company has maintained proper record of inventoryand the material discrepancies noticed if any on the physical verification of inventorieshave been properly dealt with in the books of account.

(iii) The Company has not granted any loans secured or unsecured tofirms limited liability partnerships or other parties covered in the register maintainedunder section 189.

The Company has granted unsecured loan to Companies covered in theRegister maintained 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 notprejudicial to the company's interest.

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

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

(iv) The Company has not advanced any loans to its directors or anyother person in whom the directors are interested or given any guarantee or provided anysecurity in connection with any loan taken by the directors or such other person ascontemplated under section 185 of the Act.

In respect of loans and investments the provisions of section 186 ofthe Companies Act 2013 have been complied with. The company has not given any guaranteeor provided any security in connection with any loan as contemplated under section 186 ofthe Act.

(v) The Company has not accepted any deposits and therefore paragraph3(v) of the CARO is not applicable to the Company.

(vi) The Central Government has prescribed the maintenance of costrecords under section 148(1) of the Act in respect of manufacture of tea as well asgeneration and transmission of electricity by the company. We have broadly reviewed theaccounts and records of the company in this connection and are of the opinion that primafacie the prescribed accounts and records have been made and maintained. We have nothowever carried out a detailed examination of the same.

(vii) (a) The Company is regular in depositing undisputed statutorydues including Provident fund Income-tax Goods and service tax Duty of customs cessand other material statutory dues have been regularly deposited during the year by theCompany with the appropriate authorities.

There are no undisputed arrears of statutory dues which wereoutstanding as at 31 March 2021 for a period of more than six months from the date theybecame payable

b) According to the information and explanations given to us there areno disputed statutory dues which have not been deposited by the Company.

c) The details of disputed statutory dues are as under

Name of the Statute Nature of dues Amount disputed (Rs. in lakhs) Amount paid (Rs. in lakhs) Forum where the dispute is pending CIT
Income Tax Act 1961 Income Tax 20.82 4.17 (Appeals) Coimbatore.

(viii) The Company has not borrowed from any financial institution andhas not issued any debentures till date. The Company has not defaulted in repayment ofloans and borrowings to banks.

(ix) The Company did not raise any money by way of initial public offeror further public offer (including debt instruments). The term loans raised during theyear were applied for the purpose for which it is availed.

(x) No fraud by the Company or fraud on the Company by its officers oremployees has been noticed or reported during the year.

(xi) In our opinion the managerial remuneration has been paid inaccordance with the requisite approval mandated by the provisions of section 197 readwith schedule V of the Act.

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

(xiii) In our opinion the transactions with the related parties are incompliance with sections 177 and 188 of the Act and details of such transactions have beendisclosed in the financial statements as required by the applicable accounting standards.

(xiv) The Company has not made preferential allotment or privateplacement of shares or issued any debentures during the year.

(xv) The Company has not entered into non-cash transactions withdirectors or persons connected with him.

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

Annexure - B to the Auditors' Report

(Referred to in Paragraph 2(f) of Report on Other Legal and RegulatoryRequirements)

Report on the Internal Financial Controls Over Financial Reportingunder Clause (i) of Sub-section 3 of Section 143 of the Companies Act 2013 ("theAct")

We have audited the internal financial controls over financialreporting of The Peria Karamalai Tea and Produce Company Limited ("the Company")as of March 31 2021 in conjunction with our audit of the financial Statements of theCompany for the year ended on that date.

Management's Responsibility for Internal Financial Controls

The Board of Directors of the Company is responsible for establishingand maintaining Internal financial controls based on the internal control over financialreporting criteria established by the Company considering the essential components ofinternal control stated in the Guidance Note on Audit of Internal Financial Controls overFinancial Reporting issued by the Institute of Chartered Accountants of India. Theseresponsibilities include the design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the orderly and efficientconduct of its business including adherence to respective company's policies thesafeguarding of its assets the prevention and detection of frauds and errors theaccuracy and completeness of the accounting records and the timely preparation ofreliable financial information as required under the Companies Act 2013.

Auditors' Responsibility

Our responsibility is to express an opinion on the internal financialcontrols over financial reporting of the Company based on our audit. We conducted ouraudit in accordance with the Guidance Note on Audit of Internal Financial Controls OverFinancial Reporting (the "Guidance Note") issued by the Institute of CharteredAccountants of India and the Standards on Auditing prescribed under Section 143(10) of theCompanies Act 2013 to the extent applicable to an audit of internal financial controls.Those Standards and the Guidance

Note require that we comply with ethical requirements and plan andperform the audit to obtain reasonable assurance about whether adequate internal financialcontrols over financial reporting was established and maintained and if such controlsoperated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence aboutthe adequacy of the internal financial controls system over financial reporting and theiroperating effectiveness. Our audit of internal financial controls over financial reportingincluded obtaining an understanding of internal financial controls over financialreporting assessing the risk that a material weakness exists and testing and evaluatingthe design and operating effectiveness of internal control based on the assessed risk.

The procedures selected depend on the auditor's judgmentincluding the assessment of the risks of material misstatement of the financialstatements whether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient andappropriate to provide a basis for our audit opinion on the internal financial controlssystem over financial reporting of the Company.

Meaning of Internal Financial Controls Over Financial Reporting

A company's internal financial control over financial reporting isa process designed to provide reasonable assurance regarding the reliability of financialreporting and the preparation of financial statements for external purposes in accordancewith generally accepted accounting principles.

A company's internal financial control over financial reportingincludes those policies and procedures that

(1) Pertain to the maintenance of records that in reasonable detailaccurately and fairly reflect the transactions and dispositions of the assets of thecompany;

(2) Provide reasonable assurance that transactions are recorded asnecessary to permit preparation of financial statements in accordance with generallyaccepted accounting principles and that receipts and expenditures of the company arebeing made only in accordance with authorizations of management and directors of thecompany; and

(3) Provide reasonable assurance regarding prevention or timelydetection of unauthorized acquisition use or disposition of the company's assetsthat could have a material effect on the financial statements.

Inherent Limitations of Internal Financial Controls over FinancialReporting

Because of the inherent limitations of internal financial controls overfinancial reporting including the possibility of collusion or improper managementoverride of controls material misstatements due to error or fraud may occur and not bedetected. Also projections of any evaluation of the internal financial controls overfinancial reporting to future periods are subject to the risk that the internal financialcontrol over financial reporting may become inadequate because of changes in conditionsor that the degree of compliance with the policies or procedures may deteriorate.

Opinion

In our opinion to the best of our information and according to theexplanations given to us 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 March 31 2021 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 SRIKISHEN & CO
Chartered Accountants Registration No: 004009S
K. Murali Mohan
Proprietor Auditor Membership No. 014328 (UDIN: 21014328AAAAIY5603)
Coimbatore 11th June 2021

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