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Kesar Enterprises Ltd.

BSE: 507180 Sector: Agri and agri inputs
NSE: KESARENT ISIN Code: INE133B01019
BSE 00:00 | 17 Feb 31.70 -1.30
(-3.94%)
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34.00

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NSE 05:30 | 01 Jan Kesar Enterprises Ltd
OPEN 33.80
PREVIOUS CLOSE 33.00
VOLUME 1574
52-Week high 62.50
52-Week low 25.95
P/E
Mkt Cap.(Rs cr) 32
Buy Price 31.70
Buy Qty 100.00
Sell Price 35.55
Sell Qty 50.00
OPEN 33.80
CLOSE 33.00
VOLUME 1574
52-Week high 62.50
52-Week low 25.95
P/E
Mkt Cap.(Rs cr) 32
Buy Price 31.70
Buy Qty 100.00
Sell Price 35.55
Sell Qty 50.00

Kesar Enterprises Ltd. (KESARENT) - Auditors Report

Company auditors report

To the Members of Kesar Enterprises Limited

Report on the Audit of the Ind AS Financial Statements

Opinion

We have audited the accompanying Ind AS financial statements of Kesar EnterprisesLimited ("the Company") which comprise the Balance Sheet as at March 31 2019the Statement of Profit and Loss (including Other Comprehensive Income) the Statement ofChanges in Equity and the Statement of Cash Llows for the year then ended and notes to theInd AS financial statements including a summary of significant accounting policies andother explanatory information (hereinafter referred to as "Ind AS financialstatements").

In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid Ind AS financial statements give the information required bythe Companies Act 2013 ("the Act") in the manner so required and give a trueand fair view in conformity with the accounting principles generally accepted in Indiaincluding the Indian Accounting Standards ("Ind AS") of the state of affairs ofthe Company as at March 31 2019 its loss (including other comprehensive income) changesin equity and its cash hows for the year ended on that date.

Basis for Opinion

We conducted our audit in accordance with Standards on Auditing (SAs) specified undersection 143(10) of the Act. Our responsibilities under those Standards are furtherdescribed in the Auditor's Responsibilities for the Audit of the 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("ICAI") together with the ethical requirements that are relevant to our auditof the Ind AS financial statements under the provisions of the Act and Rules thereunderand we have fulfilled our other ethical responsibilities in accordance with theserequirements and the Code of Ethics. We believe that the audit evidence we have obtainedis sufficient and appropriate to provide a basis for our opinion.

Material Uncertainty Related to Going Concern

We draw attention to Note 49 in the Ind AS financial statements. For the reasons statedin the said note the financial statements have been prepared on the assumption of goingconcern despite accumulated losses resulting in erosion of its net worth.

Our opinion is not modified in respect of this matter.

Key Audit Matters

Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the Ind AS financial statements of the current period. Thesematters were addressed in the context of our audit of the Ind AS financial statements as awhole and in forming our opinion thereon and we do not provide a separate opinion onthese matters. In addition to the matter described in the Material Uncertainty Related toGoing Concern section we have determined the matters described below to be the key auditmatters to be communicated in our report.

Key Audit Matter Our Response
As on March 31 2019 the Company has inventory of sugar with the carrying value Rs. 9332.66 lakhs. The inventory of sugar is valued at the lower of cost and net realizable value. We understood and tested the design and operating effectiveness of controls as established by the Management in determination of net realizable value of inventory of sugar.
We considered the value of the inventory of sugar as a key audit matter given the relative size of the balance in the financial statements and significant judgment involved in the consideration of factors such as minimum sale price monthly quota fluctuation in selling prices and the related notifications of the Government in determination of net realizable value. We considered various factors including the actual selling price prevailing around and subsequent to the year end minimum selling price & monthly quota and other notifications of the Government of India.

Other Information

1. The Company's Board of Directors is responsible for the other information. The otherinformation comprises the information included in the Annual Report but does not includethe financial statements and our auditor's report thereon. The said information isexpected to be made available to us afterthe date of this auditor's report.

2. Our opinion on the financial statements does not cover the other information and wewill not express any form of assurance conclusion thereon.

3. In connection with our audit of the financial statements our responsibility is toread the other information identified above when it becomes available and in doing soconsider whether the other information is materially inconsistent with the financialstatements or our knowledge obtained in the audit or otherwise appears to be materiallymisstated.

4. When we read the Annual Report if we conclude that there is a material misstatementtherein we are required to communicate the matter to those charged with governance.

Responsibilities of Management and Those Charged with Governance for the Ind ASFinancial 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 statementsthat give a true and fair view of the financial position financial performance includingother comprehensive income changes in equity and cash flows of the Company in accordancewith the accounting principles generally accepted in India including Ind AS specifiedunder section 133 of the Act read with relevant rules issued thereunder. Thisresponsibility also includes maintenance of adequate accounting records in accordance withthe provisions of the Act for safeguarding of the assets of the Company and for preventingand detecting frauds and other irregularities; selection and application of appropriateaccounting policies; making judgments and estimates that are reasonable and prudent; anddesign implementation and maintenance of adequate internal financial controls that wereoperating effectively for ensuring the accuracy and completeness of the accountingrecords relevant to the preparation and presentation of the Ind AS financial statementsthat give a true and fair view and are free from material misstatement whether due tofraud or error.

In preparing the Ind AS financial statements management is responsible for assessingthe Company's ability to continue as a going concern disclosing as applicable mattersrelated to going concern and using the going concern basis of accounting unless managementeither intends to liquidate the Company or to cease operations or has no realisticalternative but to do so. Those Board of Directors are also responsible foroverseeingtheCompany's financial reporting process.

Auditor's Responsibilities for the Audit of the Ind AS Financial Statements

Our objectives are to obtain reasonable assurance about whether the Ind AS 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 the aggregate theycould reasonably be expected to influence the economic decisions of users taken on thebasis of this Ind AS financial statements. As partofan audit in accordance with SAs weexercise professional judgmentand maintain professional skepticism throughout the audit.We also:

• Identify and assess the risks of material misstatement of the Ind AS financialstatements whether due to fraud or error design and perform audit procedures responsiveto those risks and obtain audit evidence that is sufficient and appropriate to provide abasis for our opinion. The risk of not detecting a material misstatement resultingfromfraud is higher than for one resulting from error as fraud may involve collusionforgery intentional omissions misrepresentations or the override of internal control.

• Obtain an understanding of internal control relevant to the audit in order todesign 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 hasadequate internal financial controls with reference to financial statements in place andthe operating effectiveness 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 Ind AS financial statements or if such disclosures are inadequate to modify ouropinion. Our conclusions are based on the audit evidence obtained up to the date of ourauditor's report. However future events or conditions may cause the Company to cease tocontinue as a going concern.

• Evaluate the overall presentation structure and content of the Ind AS financialstatements including the disclosures and whether the Ind AS financial statementsrepresent the underlying transactions and events in a manner that achieves fairpresentation.

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.

From the matters communicated with those charged with governance we determine thosematters that were of most significance in the audit of the Ind AS financial statements ofthe current period and are therefore the key audit matters. We describe these matters inour auditor's report unless law or regulation precludes public disclosure about the matteror when in extremely rare circumstances we determine that a matter should not becommunicated in our report because the adverse consequences ofdoing so would reasonably beexpected to outweigh the public interest benefits ofsuch 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 section 143(11) of the Act we givein "Annexure 1" a statement on the matters specified in paragraphs 3 and 4 ofthe 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) the Statement of Changes in Equity and the Statement of Cash Flows dealt with bythis report are in agreement with the books of account;

d. In our opinion the aforesaid Ind AS financial statements comply with the IndianAccounting Standards specified under section 133 of the Act read with relevant rulesissued thereunder;

e. The matter described under the Material Uncertainty Related to Going Concern sectionof our report in our opinion may have an adverse effect on the functioning of theCompany;

f. On the basis of the written representations received from the directors as on March31 2019 and taken on record by the Board of Directors none of the directors isdisqualified as on March 31 2019 from being appointed as a director in terms of section164(2) of the Act;

g. With respect to the adequacy of the internal financial controls with reference tofinancial statements of the Company and the operating effectiveness of such controls wegive our separate report in "Annexure 2".

h. 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;

The Company has not paid/provided for any managerial remuneration to its directorsduringthe year.

i. 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 Ind AS financial statements - Refer Note 34 on Contingent Liabilities IndAS 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 bythe Company.

For Haribhakti & Co. LLP
Chartered Accountants
ICAI Firm Registration No.103523W/W100048
Sumant Sakhardande
Place: Mumbai Partner
Date: May 17 2019 Membership No. 034828

ANNEXURE 1 TO THE INDEPENDENT AUDITOR'S REPORT

[Referred to in paragraph 1 under 'Report on Other Legal and Regulatory Requirements'in the Independent Auditor's Report of even date to the members of Kesar EnterprisesLimited on the Ind AS financial statements for the year ended March 31 2019]

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

(b) During the year fixed assets have been physically verified by the management asper the regular programme ofverification which in our opinion is reasonable havingregard to the size of the Company and the nature of its assets. As informed no materialdiscrepancies were noticed on such verification.

(c) The title deeds of immovable properties recorded as fixed assets in the books ofaccount of the Company are held in the name of the Company except for the details givenbelow:

(Rs. in Lakhs)

Land/ Building Total number of cases Leasehold/ Freehold Gross Block as on March 31 2019 Net Block as on March 31 2019 Remarks
Land 12 Freehold 476.71 476.71 Mutation pending with Local Authority

(ii) The inventory has been physically verified by the management during the year. Inour opinion the frequency of verification is reasonable. As informed no materialdiscrepancies were noticed on physical verification carried out duringthe year.

(iii) As informed the Company has not granted any loans secured or unsecured tocompanies firms Limited Liability Partnerships or other parties covered in the registermaintained under section 189 of the Act. Accordingly paragraph 3 (iii)(a) 3 (iii)(b) and3 (iii)(c) of the Order are not applicable to the Company.

(iv) Based on information and explanation given to us the Company has not granted anyloans or provided any guarantees or security to the parties covered under Section 185 ofthe Act. Further the Company has complied with the provisions of Section 186 of the Act.

(v) In our opinion and according to the information and explanations given to us theCompany has not accepted any deposits from the public within the provisions of sections 73to 76 of the Act and the rules framed there under.

(vi) We have broadly reviewed the books of account maintained by the Company in respectof products where the maintenance of cost records has been specified by the CentralGovernment under sub-section (1) of section 148 of the Act and the rules framed thereunder and we are of the opinion that prima facie the prescribed accounts and records havebeen made and maintained. We have not however made a detailed examination of the recordswith a view to determine whether they are accurate or complete.

(vii) (a) The Company is generally regular in depositing with appropriate authoritiesundisputed statutory dues including provident fund employees' state insurance incometax goods and service tax customs duty cess and any other material statutory duesapplicable to it however there have been slight delay in few cases.

According to the information and explanations given to us no undisputed amountspayable in respect of provident fund employees' state insurance income tax sales taxservice tax value added tax goods and service tax customs duty excise duty cess andany other material statutory dues applicable to it were outstanding at the year end fora period of more than six months from the date they became payable.

(b) According to the information and explanation given to us the dues outstanding withrespect to sales tax value added tax excise duty on account of any dispute are asfollows:

Name of the statute Nature of dues Amount (Rs. in Lakhs) Period to which the amount relates Forum where dispute is pending
Central Sales Tax Act 1956 Central Sales Tax 59.93 1989-90 and 1996-97 to 1997-98 and 200203 to 2004-05 High Court Allahabad
U.P. Tax on Entry of Goods into Local Area Act 2007 Entry Tax 1221.13 2001-02 to 2010-11 and 2013-14 to 201415 and 2016-17 D.C. (A) - Bareily
Central Excise Act 1944 Excise Duty Spirits 1.08 2005-06 Supreme Court
Central Excise Act 1944 Arrears of Overtime of Excise Personnel 15.72 2006-07 2007-08 & 2008-09 High Court Allahabad
Central Excise Act 1944 License Fee Payable 0.48 2007-08 A.E.C. (U.P.)
U.P.TradeTaxAct 1948 Trade Tax 41.31 1987-88 to 1989-90 and 1991-92 to 199798 2008-09 HIGH COURT ALLAHABAD
Central Excise Act 1944 CenvatCredit ofSteel Materials 1.44 2012-2013 AC AEX Barailly
Central Excise Act 1944 Cenvat Credit on Molasses Received 3286.21 2012-2013 Commissioner CEX Meerut
Central Excise Act 1944 Cenvat Credit on Steel Materials 3.35 2014-2015 AC AEX Barailly
Central Excise Act 1944 Cenvat Credit on Steel Materials 6.67 2011-2012 Add Commissioner CEX Meerut
Central Excise Act 1944 Cenvat Credit on Steel Materials 10.46 2012-2013 Joint Commissioner CEX Meerut
Central Excise Act 1944 Cenvat Credit on Steel Materials Received 5.13 2012-2013 AC AEX Hapur
Central Excise Act 1944 Demand of reversal of Cenvat CreditSteel materials 3.48 2008-2009 Dy Comm CEX Bareilly
Central Excise Act 1944 Demand on Service Tax on Commission 148.15 2014-2015 AC AEX Hapur
Central Excise Act 1944 Denial ofCenvaton molasses received 273.85 2015-2016 AC AEX Barailly
Central Excise Act 1944 Excise Duty - Sale of Bagasse & Press Mud 17.04 2007-2008 A.E.C. (U.P.)
Central Excise Act 1944 Excise Duty Sale of Bagasse & Press Mud 362.50 2015-162016 20172017-2018 CESTAT Allahabad
Central Excise Act 1944 Shortage of Sugar/Molasses/ Scrap 308.62 2011-2012 & 20122013 A.E.C. (U.P.)
Central Excise Act 1944 Wrong Reversal Of CENVAT Credit 243.71 2007-08 to 2016-2017 A.E.C. (U.P.)
Central Excise Act 1944 Wrong Reversal Of CENVAT Credit 24.14 2004-2005 CESTATNew Delhi
Central Excise Act 1944 Wrong Reversal Of CENVAT Credit- Iron & Steel Welding Electrodes 5.49 2005-2006 Supreme Court SLP No. 24645
Central Excise Act 1944 ServiceTax onSelling Commission to Agents etc. 32.12 2011-2012 to 20142015 Joint Commissioner CEX Meerut
Central Excise Act 1944 Service Tax on Sugar Export Quota 43.89 2011-2012 Addl. Commissioner CEX Meerut
Central Excise Act 1944 Cenvat Credit on Sale of Bagasses 2.79 2015-2016 AC AEX Barailly
Central Excise Act 1944 CENVAT Creditavailed on Molasses 634.45 2012-2013 AC AEX Barailly
Central Excise Act 1944 Demand of reversal of Cenvat Credit on Civil Construction Work 91.01 2012-2013 Commissioner CEX Meerut
Central Excise Act 1944 & Central Excise Rules 2002 Demand of reversal of Cenvat CreditSteel materials/Welding Electrode 19.94 2005-2006 to 20082009 and 2011-2012 CESTAT Allahabad

(viii) According to the information and explanations given to us the Company has notdefaulted in repayment of loans or borrowings to financial institution bank governmentor dues to debenture holder except for details given below:

(Rs. in Lakhs)

Particulars Amount of default as at March 31 2019 (Less than 12 months) (Excluding Interest) Amount of default as at March 31 2019 (more than 12 months) (Excluding Interest)
Banks - 10528.72
Government- (Sugar Development Fund) 727.28 2067.97

(ix) The Company has neither raised money by way of public issue offer nor has obtainedany term loans. Therefore paragraph 3(ix) of the Order is not applicable to the Company.

(x) During the course of our examination of the books and records of the Companycarried out in accordance with the generally accepted auditing practices in India andaccording to the information and explanations given to us we have neither come across anyinstance of fraud by the Company or any fraud on the Company by its officers or employeesnoticed or reported during the year nor have we been informed of any such instance by themanagement.

(xi) According to the information and explanations given to us the Company has notpaid/provided for managerial remuneration during the year. Therefore paragraph 3(xi) ofthe Order is not applicable to the Company.

(xii) In our opinion and according to the information and explanations given to us theCompany is not a Nidhi Company. Therefore paragraph 3(xii) of the Order is not applicableto the Company.

(xiii) According to the information and explanation given to us all transactionsentered into by the Company with the related parties are in compliance with sections 177and 188 of Act where applicable and the details have been disclosed in the FinancialStatements etc. as required by the applicable accounting standards.

(xiv) The Company has not made any preferential allotment or private placement ofshares or fully or partly convertible debentures during the year under review. Thereforeparagraph 3(xiv) of the Order is not applicable to the Company.

(xv) According to the information and explanations given to us the Company has notentered into any non-cash transactions with directors or persons connected with himduringthe year.

(xvi) According to the information and explanation given to us the Company is notrequired to be registered under section 45-IA of the Reserve Bank of India Act 1934.

For Haribhakti & Co. LLP
Chartered Accountants
ICAI Firm Registration No.103523W/W100048
Sumant Sakhardande
Place: Mumbai Partner
Date: May 17 2019 Membership No. 034828

ANNEXURE 2 TO THE INDEPENDENT AUDITOR'S REPORT

[Referred to in paragraph 2 under 'Report on Other Legal and Regulatory Requirements'in the Independent Auditor's Report of even date to the members of Kesar EnterprisesLimited on the Ind AS financial statements for the year ended March 31 2019]

Report on the Internal Financial Controls with reference to Financial Statements underclause (i) of sub-section 3 of section 143 of the Companies Act 2013 ("theAct")

We have audited the internal financial controls with reference to financial statementsof Kesar Enterprises Limited ("the Company") as of March 312019 in conjunctionwith our audit of the Ind AS financial statements of the Company for the year ended onthat 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 with reference to financial statementscriteria established by the Company considering the essential components of internalcontrol stated in the Guidance Note on Audit of Internal Financial Controls Over FinancialReporting (the "Guidance Note") issued by the Institute of Chartered Accountantsof India ("ICAI"). These responsibilities include the design implementation andmaintenance of adequate internal financial controls that were operating effectively forensuring the orderly and efficient conduct of its business including adherence tocompany's policies the safeguarding of its assets the prevention and detection of fraudsand errors the accuracy and completeness of the accounting records and the timelypreparation of reliable financial information as required under the Act.

Auditors' Responsibility

Our responsibility is to express an opinion on the Company's internal financialcontrols with reference to financial statements based on our audit. We conducted our auditin accordance with the Guidance Note and the Standards on Auditing specified under section143(10) of the Act to the extent applicable to an audit of internal financial controlsboth issued by the ICAI. Those Standards and the Guidance Note require that we comply withethical requirements and plan and perform the audit to obtain reasonable assurance aboutwhether adequate internal financial controls with reference to financial statements wasestablished and maintained and if such controls operated effectively in all materialrespects.

Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls with reference to financial statements and their operatingeffectiveness.

Our audit of internal financial controls with reference to financial statementsincluded obtaining an understanding of internal financial controls with reference tofinancial statements assessing the risk that a material weakness exists and testing andevaluating the design and operating effectiveness of internal controls based on theassessed risk. The procedures selected depend on the auditor's judgement including theassessment of the risks of material misstatement of the financial statements whether dueto 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 withreference to financial statements.

Meaning of Internal Financial Controls with reference to Financial Statements

A company's internal financial control with reference to financial statements is aprocess 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 withreference to financial statements includes those policies and procedures that (1) pertainto the maintenance of records that in reasonable detail accurately and fairly reflectthe transactions and dispositions of the assets of the company; (2) provide reasonableassurance that transactions are recorded as necessary to permit preparation of financialstatements in accordance with generally accepted accounting principles and that receiptsand expenditures of the company are being made only in accordance with authorisations ofmanagement and directors of the company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorised acquisition use or disposition of thecompany's assets that could have a material effect on the financial statements.

Inherent Limitations of Internal Financial Controls with reference to FinancialStatements

Because of the inherent limitations of internal financial controls with reference tofinancial statements 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 withreference to financial statements to future periods are subject to the risk that theinternal financial controls with reference to financial statements may become inadequatebecause of changes in conditions or that the degree of compliance with the policies orprocedures may deteriorate.

Opinion

In our opinion the Company has in all material respects an adequate internalfinancial controls with reference to financial statements and such internal financialcontrols with reference to financial statements were operating effectively as at March 312019 based on the internal control with reference to financial statements criteriaestablished by the Company considering the essential components of internal controlsstated in the Guidance Note issued by the ICAI.

For Haribhakti & Co. LLP
Chartered Accountants
ICAI Firm Registration No.103523W/W100048
Sumant Sakhardande
Place: Mumbai Partner
Date: May 17 2019 Membership No. 034828