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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

Opinion

We have audited the standalone Ind AS financial Statements of The Peria Karamalai TeaAnd Produce Company Limited (“the Company”) which comprise the Balance Sheet asat 31st March 2019 the Statement of Profit and Loss (including Other ComprehensiveIncome) the Statement of Changes in Equity and Statement of Cash Flows for the year thenended and notes to the financial statements including a summary of significant accountingpolicies and other explanatory information.

In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid standalone Ind AS financial Statements give the informationrequired by the Companies Act2013 (“the Act”) in the manner so required andgive a true and fair view in conformity with the Indian Accounting Standards prescribedunder section 133 of the Act read with the Companies (Indian Accounting Standards) Rules2015 as amended (“Ind AS”) and other accounting principles generally acceptedin India of the state of affairs of the Company as at March 31 2019 the Profit andtotal comprehensive income changes in equity and its cash flows for the year ended onthat date.

Basis for Opinion

We conducted our audit in accordance with the Standards on Auditing (SAs) specifiedunder section 143(10) of the Act. Our responsibilities under those Standards are furtherdescribed in the Auditor's Responsibilities for the Audit of the standalone Ind ASfinancial Statements section of our report. We are independent of the Company inaccordance with the Code of Ethics issued by the Institute of Chartered Accountants ofIndia together with the ethical requirements that are relevant to our audit of thefinancial statements under the provisions of the Act and the Rules thereunder and we havefulfilled our other ethical responsibilities in accordance with these requirements and theCode of Ethics. We believe that the audit evidence we have obtained is sufficient andappropriate to provide a basis for our opinion.

Key Audit Matters

Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the standalone Ind AS financial Statements of the currentperiod. These matters were addressed in the context of our audit of the standalone Ind ASfinancial Statements as a whole and in forming our opinion thereon and we do not providea separate opinion on these matters. We have determined the matters described below to bethe key audit matters to be communicated in our report

. Key Audit Matter Auditor's Response
1 Reclassification of fair value gains from Investment in mutual funds from Other Comprehensive Income to Statement of Profit And Loss. Our Audit procedure included Evaluating the adequacy of the disclosures in the financial statements with respect to correction of prior period error and checking the appropriate presentation.
As Mutual funds do not qualify to be classified as equity instruments the gains on restatement of Investment in mutual funds to fair value has been retrospectively made through the Statement of Profit and loss instead of Other comprehensive income as per Para 43(b) of Ind AS 8 - Accounting policies Changes in accounting estimates and errors.
The net impact in the other equity shall be nil.
2 Fair value restatement of Investment in Unquoted Equity Instruments not held for trading. Our Audit procedures included checking the appropriateness and reasonableness of the fair valuation approach and assumptions used determining the fair value of investments by external experts through performing the following
As per Ind AS 109 - Financial Instruments Investments held in unquoted equity instruments which are not held for trading shall be restated to fair value .
• Tested the reasonableness of the fair valuation methodology used and the assumptions made for determining the fair value of the investment .
At the initial recognition the unquoted equity instruments were valued at original cost.
The company has now restated the same to fair value providing a retrospective effect in the other comprehensive income as per Para 43(b) of Ind AS 8 - Accounting policies Changes in accounting estimates and errors. • Reconciled the carrying amount of the investment as per the valuation report provided by the management and as per the books.
The net impact in the other equity shall be Rs.28.56 crores (as on 01.04.2017). • Evaluated the adequacy of disclosures in the financial statements with respect to the assumptions and checked whether they were appropriately presented.

Information Other than the Financial Statements and Auditor's Report Thereon

The Company's Board of Directors is responsible for the preparation of otherinformation. The other information comprises the information included in the ManagementDiscussion and Analysis Board's Report including Annexures to Board's Report BusinessResponsibility Report Corporate Governance and Shareholder's Information but does notinclude the consolidated financial statements standalone Ind AS financial Statements andour auditor's report thereon.

Our opinion on the standalone Ind AS financial Statements does not cover the otherinformation and we do not express any form of assurance conclusion thereon.

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 financialStatements or our knowledge obtained in the audit or otherwise appears to be materiallymisstated.

If based on the work we have performed we conclude that there is a materialmisstatement of this other information; we are required to report that fact. We havenothing to report in this regard.

Management's Responsibility for the Standalone Ind AS financial Statements

The Company's Board of Directors is responsible for the matters stated in section134(5) of the Act with respect to

the preparation of these Ind AS Financial Statements that give a true and fair view ofthe financial position financial performance total comprehensive income changes inequity and cash flows of the Company in accordance with the Accounting principlesgenerally accepted in India including the Indian Accounting Standards(“Ind AS”)Prescribed under Section 133 of the Act 2013 read with relevant rules issued there under.

This responsibility also includes maintenance of adequate accounting records inaccordance with the provisions of the Act for safeguarding the assets of the Company andfor preventing and detecting frauds and other irregularities; selection and application ofappropriate accounting policies; making judgments and estimates that are reasonable andprudent; and design implementation and maintenance of adequate internal financialcontrols that were operating effectively for ensuring the accuracy and completeness ofthe accounting records relevant to the preparation and presentation of the standalone IndAS financial Statements that give a true and fair view and are free from materialmisstatement whether due to fraud or error.

In preparing the standalone Ind AS financial statements management is responsible forassessing the Company's ability to continue as a going concern disclosing as applicablematters related to going concern and using the going concern basis of accounting unlessmanagement either intends to liquidate the Company or to cease operations or has norealistic alternative but to do so.

The Board of Directors are also responsible for overseeing the Company's financialreporting process.

Auditor's Responsibilities for the Audit of the Standalone Ind AS financial Statements

Our objectives are to obtain reasonable assurance about whether the financialStatements as a whole are free from material misstatement whether due to fraud or errorand to issue an auditor's report that includes our opinion. Reasonable assurance is a highlevel of assurance but is not a guarantee that an audit conducted in accordance with SAswill always detect a material misstatement when it exists. Misstatements can arise fromfraud or error and are considered material if individually or in aggregate they couldreasonably be expected to influence the economic decisions of users taken on the basis ofthese standalone Ind AS financial statements.

As part of an audit in accordance with SAs we exercise professional judgment andmaintain professional skepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of the standalone Ind ASfinancial statements whether due to fraud or error design and perform audit proceduresresponsive to those risks and obtain audit evidence that is sufficient and appropriate toprovide a basis for our opinion. The risk of not detecting a material misstatementresulting from fraud is higher than for one resulting from error as fraud may involvecollusion forgery intentional omissions misrepresentations or the override of internalcontrol.

• Obtain an understanding of internal financial control relevant to the audit inorder to design audit procedures that are appropriate in the circumstances. Under section143(3)(i) of the Act we are also responsible for expressing our opinion on whether thecompany has adequate internal financial controls system in place and the operatingeffectiveness of such controls.

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

• Conclude on the appropriateness of management's use of the going concern basisof accounting and based on the audit evidence obtained whether a material uncertaintyexists related to events or conditions that may cast significant doubt on the Company'sability to continue as a going concern. If we conclude that a material uncertainty existswe are required to draw attention in our auditor's report to the related disclosures inthe standalone Ind AS financial Statements or if such disclosures are inadequate tomodify 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 goingconcern.

• Evaluate the overall presentation structure and content of the standalone IndAS financial statements including the disclosures and whether the standalone Ind ASfinancial Statements represent the underlying transactions and events in a manner thatachieves fair presentation.

We communicate with those charged with governance regarding among other matters theplanned scope and timing of the audit and significant audit findings including anysignificant deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have compliedwith relevant ethical requirements regarding independence and to communicate with themall relationships and other matters that may reasonably be thought to bear on ourindependence and where applicable related safeguards.

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 Companies Act 2013 we give in the Annexure “A” a statement on the mattersspecified in paragraphs 3 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 including Other ComprehensiveIncome Statement of Changes in Equity and the Statement of Cash Flow dealt with by thisReport are in agreement with the books of account.

(d) In our opinion the aforesaid standalone Ind AS financial Statements comply withthe Ind AS specified under Section 133 of the Act read with Rule 7 of the Companies(Accounts) Rules 2014.

(e) On the basis of the written representations received from the directors as on 31stMarch 2019 taken on record by the Board of Directors none of the directors isdisqualified as on 31st March 2019 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”. Our report expresses an unmodified opinion onthe adequacy and operating effectiveness of the Company's internal financial controls overfinancial reporting.

g) With respect to the other matters to be included in the Auditor's Report inaccordance with the requirements of section 197(16) of the Act as amended:

In our opinion and to the best of our information and according to the explanationsgiven to us the remuneration paid by the Company to its Directors during the year is inaccordance with

the provisions of section 197 of the Act and that the same is not in excess of thelimit laid down under the said section

(h) 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 has disclosed the impact of pending litigations on its financialposition in its Standalone Ind AS financial statements.

ii. The Company did not have any long term contracts including derivative contracts.Hence the question of any material foreseeable losses does not arise.

iii. There has been no delay in transferring amounts required to be transferred tothe Investor Education and Protection Fund by the Company except those amounts which arekept on hold for court cases

For SRIKISHEN & CO
Chartered Accountants
Registration No: 004009S
K. Murali Mohan
Coimbatore Proprietor Auditors
20th May 2019 Membership No. 014328