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KSE Ltd.

BSE: 519421 Sector: Agri and agri inputs
NSE: KSE ISIN Code: INE953E01014
BSE 16:01 | 21 Oct 2218.75 17.65
(0.80%)
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NSE 05:30 | 01 Jan KSE Ltd
OPEN 2224.00
PREVIOUS CLOSE 2201.10
VOLUME 793
52-Week high 2250.00
52-Week low 870.00
P/E 12.23
Mkt Cap.(Rs cr) 710
Buy Price 2202.00
Buy Qty 1.00
Sell Price 2218.75
Sell Qty 13.00
OPEN 2224.00
CLOSE 2201.10
VOLUME 793
52-Week high 2250.00
52-Week low 870.00
P/E 12.23
Mkt Cap.(Rs cr) 710
Buy Price 2202.00
Buy Qty 1.00
Sell Price 2218.75
Sell Qty 13.00

KSE Ltd. (KSE) - Auditors Report

Company auditors report

To the Members of M/S KSE Limited

(CIN: L15331KL1963PLC002028)

Irinjalakuda Kerala – 680121

Report on the Audit of the Standalone Financial Statements

Opinion

1. We have audited the accompanying standalone financial statements of M/s KSE Limited(CIN:L15331KL1963PLC002028) (‘‘the Company'') which comprise the Balance Sheetas at 31st March 2019 the Statement of Profit and Loss (including Other ComprehensiveIncome) the Statement of Changes in Equity and the Statement of Cash Flows for the yearthen ended and a summary of the significant accounting policies along with the Notesforming part of the accounts and other explanatory information (hereinafter referred to as"financial statements") which we have signed under reference to this report.

2. In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid financial statements give the information required by theCompanies Act 2013 ("the Act") in the manner so required and give a true andfair view in conformity with the Indian Accounting Standards prescribed under section 133of the Act read with Companies (Indian Accounting Standards) Rules 2015 as amended("Ind AS") and other accounting principles generally accepted in India of thestate of affairs of the Company as at 31st March 2019 and its profit total comprehensiveincome the changes in equity and its cash flows for the year ended on that date.

Basis for Opinion

3. We conducted our audit of the financial statements on a test check basis inaccordance with the Standards on Auditing specified under Section 143(10) of the Act("SAs"). Our responsibility under those standards are further described in theAuditors' responsibility for the audit of the financial statements section of this report.We are independent of the Company in accordance with the Code of Ethics issued by theInstitute of Chartered Accountants of India ("ICAI") together with the ethicalrequirements that are relevant to our audit of the financial statements under theprovisions of the Act and the Rules made thereunder and we have fulfilled our ethicalresponsibilities in accordance with these requirements and the ICAI's Code of Ethics. Webelieve that the audit evidence obtained by us is sufficient and appropriate to provide abasis for our opinion on the financial statements.

Emphasis of Matter

4. We draw attention to the matters detailed below. Our opinion is not modified inrespect of these matters.

Sl. No. Note No. in the financial statements Brief description
a. 34.5 Developments since the defeat of the special resolution regarding appointment / re-appointment of Managing Director and fixing his remuneration in the previous AGM concluded on 31.08.2018 are narrated in this note.
b. 34.6 Developments since the defeat of the special resolution proposing payment of posthumous post- retirement benefits to the widow of former Managing Director in the previous AGM concluded on 31.08.2018 are narrated in this note.
c. 34.7 Description about discovery this year of a fraud that had been taking place for the past five years in one of the units of the company and the consequences are narrated in this note.
d. 34.29 On the basis of our test check and on the basis of the reports of the Internal Auditors pointing out certain internal control weaknesses policy overrides and statutory non-compliances and on the basis of facts coming out post discovery of fraud this year that had been taking place for the past 5 years in one of the units of the company we are of the opinion that the company's internal con- trol systems and statutory compliance mechanisms require improvement. Management's response thereto is given in this note.
e. 34.9 This note describes the financial effect where one of the products of the company had to be valued at net realisable value due to fall in prices.

 

Sl. No. Note No. in the financial statements Brief description
f. 34.25 The company has stated in this note that it has a system of obtaining confirmations of balances. However balances in the accounts except balances with banks and a few trade receivables are subject to confirmation.
g. 22 As stated in this note the classification of trade payables as covered under the Micro Small & Medium Enterprises Development (MSMED) Act 2006 and others is as done by the company.

Key Audit Matters

5. Key Audit Matters are those matters that in our professional judgement were of mostsignificance in our audit of the financial statements of the current period. These matterswere addressed in the context of our audit of the financial statements as a whole and informing our opinion thereon and we do not provide a separate opinion on these matters. Wehave determined the matters described below to be the key audit matters to be communicatedin our report :

Sl. No. Key Audit Matter Note No. in the financial statements How the matter was addressed in our audit
a. Impact of New Ind AS 115 - Revenue from Contracts with Customers 1.5 Our audit procedures with regard to revenue recognition included examining on a test check basis how the company has booked each item of its revenue. Based on the above we conclude that the method adopted by the company is generally fair.
b. Critical Accounting Estimates and judgements 1.4 Our audit procedures with regard to critical accounting estimates and judgements included examining on a test check basis the critical accounting estimates and judgements made by the management in the preparation of the financial statements. Based on the above we conclude that the estimates and judgements are generally fair in the reporting framework.
c. The company's internal audit is done by external firms of Chartered Accountants whose scope of work is very exhaustive and minutely covers almost all aspects concerning financial accounting statutory compliances and internal controls. We have laid down our audit programme and devised our audit procedures after due consideration of the scope of work of the internal auditors and their reports.

Other Information in ‘Annual Report' other than Financial Statements and Auditors'Report

6. The Company's Board of Directors is responsible for the other information. The otherinformation comprises the information included in the Company's annual report other thanthe financial statements our auditors' report thereon and our certificate on corporategovernance.

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

8. Other Information was not ready at the time of completion of our audit andtherefore we could not read the same and accordingly no opinion is expressed thereon.

Management's Responsibility for the Financial Statements

9. 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 financial statements that givea true and fair view of the state of affairs the profit total comprehensive income cashflows and changes in equity of the Company in accordance with Ind AS and other accountingprinciples generally accepted in India.

10. 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 financialstatements that give a true and fair view and are free from material misstatement whetherdue to fraud or error.

11. In preparing the financial statements management is responsible for assessing thecompany's ability to continue as a going concern disclosing as applicable mattersrelated 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.

12. Those Board of Directors are also responsible for overseeing the Company'sfinancial reporting process.

Auditors' Responsibility for the audit of Financial Statements

13. Our objectives are to obtain reasonable assurance about whether 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 mis-statement when it exists.

14. Misstatements can arise from fraud or error and are considered material ifindividually or in the aggregate they could reasonably be expected to influence theeconomic decisions of users taken on the basis of these financial statements.

15. As part of an audit in accordance with SAs we exercise professional judgement andmaintain professional scepticism throughout the audit. We also:

a) Identify and assess the risks of material misstatement of the financial statementswhether due to fraud or error design and perform audit procedures responsive to thoserisks and obtain audit evidence that is sufficient and appropriate to provide a basis forour opinion. The risk of not detecting a material misstatement resulting from fraud ishigher than for one resulting from error as fraud may involve collusion forgeryintentional omissions misrepresentations or the override of internal control.

b) Obtain an understanding of internal control relevant to the audit in order to designaudit procedures that are appropriate in the circumstances. Under section 143(3)(i) of theAct we are also responsible for expressing our opinion on whether the company hasadequate internal financial controls with reference to financial reporting in place andthe operating effectiveness of such controls.

c) Evaluate the appropriateness of accounting policies used and the reasonableness ofaccounting estimates and related disclosures made by management.

d) Conclude on the appropriateness of management's use of the going concern basis ofaccounting 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 financial statements or if such disclosures are inadequate to modify our opinion.Our conclusions are based on the audit evidence obtained up to the date of our auditor'sreport. However future events or conditions may cause the Company to cease to continue asa going concern.

e) Evaluate the overall presentation structure and content of the financialstatements including the disclosures and whether the financial statements represent theunderlying transactions and events in a manner that achieves fair presentation.

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

17. We also provide those charged with governance with a statement that we havecomplied with relevant ethical requirements regarding independence and to communicatewith them all relationships and other matters that may reasonably be thought to bear onour independence and where applicable related safeguards. From the matters communicatedwith those charged with governance we determine those matters that were of mostsignificance in the audit of the financial statements of the current period and aretherefore the key audit matters. We describe these matters in our auditors' report unlesslaw or regulation precludes public disclosure about the matter or when in extremely rarecircumstances we determine that a matter should not be communicated in our report becausethe adverse consequences of doing so would reasonably be expected to outweigh the publicinterest benefits of such communication.

Report on Other Legal and Regulatory Requirements

18. 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 on thebasis of such checks of the books and records of the Company as we considered appropriateand according to the information and explanations given to us we give in the"Annexure A" to this report a statement on the matters specified in theparagraph 3 and 4 of the order.

19. As required by Section 143(3) of the Act based on our audit 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 Flows dealt with by thisreport are in agreement with the books of account;

(d) in our opinion the aforesaid financial statements comply with the Ind AS specifiedunder Section 133 of the Act to the extent applicable;

(e) On the basis of the written representations received from the directors of thecompany as on 31st March 2019 and taken on record by the Board of Directors none of thedirectors of the company is disqualified as on 31st March 2019 from being appointed as adirector in terms of Section 164 (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 our report isgiven in "Annexure B" to this report; and

(g) With respect to the matter to be included in the Auditors' Report under section197(16) of the Act as amended in our opinion and according to the information andexplanations given to us the remuneration paid by the Company to its directors during thecurrent year is in accordance with the provisions of Section 197 of the Act. Attention isalso invited to paragraphs 4 (a) and (b) under ‘Emphasis of Matter' paragraph of thisreport.

(h) with respect to the other matters to be included in the Auditors' Report inaccordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 as amended inour opinion and to the best of our information and according to the explanations given tous:

i. the Company has disclosed the impact of pending litigations on its financialposition in its financial statements – Refer Note 34.3 to the financial statements;

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

iii. there has been no delay in transferring amounts required to be transferred tothe Investor Education and Protection Fund by the Company. However attention is invitedto Note 34.28 to the financial statements.

For S. S. AYYAR & CO.
Chartered Accountants Kottayam
(Firm No. 050012 S)
Sd/-
CA. S.S Ayyar F. C. A.
Irinjalakuda (M. No. 004846)
May 30 2019 Partner

Enclosures : Annexure A and Annexure B referred to above

ANNEXURE - "A" TO THE INDEPENDENT AUDITORS' REPORT

(Referred to in paragraph 18 under "Report on Other Legal and RegulatoryRequirements" section of our report to the members of KSE Limited of even date)

(i) In respect of fixed assets :-

(a) The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets. The software in respect of register offixed assets is under upgradation.

(b) We are informed that major items of the fixed assets of the Company have beenphysically verified by the management during the year which in our opinion is reasonablehaving regard to the size of the Company and the nature of its assets.

We are also informed that no material discrepancies have been noticed on suchverification.

(c) According to the information and explanations given to us the records of thecompany examined by us on a test check basis and the confirmation from financial lendersin respect of title deeds deposited with them and based on the details of land andbuildings furnished to us by the company the title deeds of immovable properties are heldin the name of the Company.

(ii) We are informed that the physical verification of inventory has been conducted atreasonable intervals by the management and that no material discrepancies were noticed onsuch verification.

(iii) To the best of our knowledge and according to information and explanations givento us the Company has not granted any loans secured or unsecured to companies firmslimited liability partnerships or other parties covered in the register maintained underSection 189 of the Companies Act 2013.

(iv) In our opinion and according to information and explanations given to us theCompany has not made any investment or granted any loans or given any security or givenany guarantee for which the provisions of Sections 185 and 186 of the Companies Act 2013are applicable.

(v) In respect of deposits accepted by the Company from the public the directivesissued by the Reserve Bank of India and the provisions of Sections 73 to 76 or any otherrelevant provisions of the Companies Act 2013 and the Rules framed there under whereverapplicable have been complied with.

(vi) We have broadly reviewed the cost records maintained by the Company pursuant tothe Companies (Cost Records and Audit) Rules 2014 prescribed by the Central Governmentunder Section 148 (1) of the Companies Act 2013 and are of the opinion that prima faciethe prescribed cost records have been maintained. We have however not made a detailedexamination of the cost records with a view to determine whether they are accurate orcomplete.

(vii) In respect of statutory dues:

(a) According to the information and explanations furnished to us and according to ourexamination of the records of the Company except for certain delays in remittance ofundisputed income tax deducted at source Service tax referred to in Note No. 34.31 GSTpayable र 2.28 lakhs and GST referred to in Note No. 34.24 (b) the Company has generallybeen regular in depositing undisputed statutory dues including Provident Fund Employees'State Insurance Income Tax Sales Tax Service Tax Goods and Service Tax Value AddedTax Customs Duty Excise Duty Cess and other material statutory dues applicable to itwith the appropriate authorities. There were no undisputed amounts except Service tax andGST referred to above payable in respect of Provident Fund Employees' State InsuranceIncome Tax Sales Tax Service Tax Value Added Tax Goods and Service Tax Customs DutyExcise Duty Cess and other material statutory dues in arrears as at 31st March 2019 fora period of more than six months from the date they became payable.

(b) According to the information and explanations given to us and as per the records ofthe Company examined by us details of dues of income tax and sales tax or service tax orduty of custom or duty of excise or value added tax that have not been deposited with therelevant authorities on account of dispute as at 31st March 2019 are as shown below:

Name of the statute Nature of the dues Amount (in lakhs) Period to which the amount relates Forum where dispute is pending
Kerala General Sales Tax Act 1963 Sales tax 25.40 Financial year Deputy Commissioner (Appeals) –
2000-01 remanded to Assistant Commissioner (Assessment)
Financial years
Central Excise Act 1948 Central Excise Duty 34.52 2014-15 2015-16 and 2016-17 The Company is in the process of filing appeal before CESTAT.
Customs Act 1962 Customs duty 66.31* Financial year The Company has filed appeals before the Honourable High Court of Kerala.
2008-09 and 2009-10

*interest amount as computed and provided for by the company

(viii) According to the information and explanations given to us and as per the recordsof the Company verified by us the Company has not defaulted in repayment of loans orborrowings to the banks and financial institutions. The company has neither taken anyloans or borrowings from government nor has any dues to debenture holders.

(ix) According to the information and explanations given to us and on an overallexamination of the records we report that the Company has not raised any money by way ofinitial public offer or further public offer (including debt instruments). The company hasnot availed any term loans during the year.

(x) While planning and performing audit procedures and evaluating and reporting theresults thereof we have considered the risk of material mis-statements in the financialstatements resulting from fraud or error. However due to the inherent limitations of anaudit there is an unavoidable risk that some material mis-statements of financialstatements on account of fraud or error may not be detected even though the audit isproperly planned and performed in accordance with the SAs generally accepted in India.Details of fraud committed by an employee of the company detected during the year arereported in Note No. 34.7 of the Notes forming part of the financial statements. Duringthe course of our examination of the books and records of the Company carried out inaccordance with generally accepted auditing practices in India and according to theinformation and explanations given to us we have neither come across any other instancesof material fraud by the Company or on the company by its officers or employees noticedor reported during the year nor have been informed of such case by the Management.

(xi) In our opinion and according to the information and explanations given to us theCompany has paid / provided managerial remuneration in accordance with the requisiteapprovals mandated by the provisions of Section 197 read with Schedule V to the Act.However attention is invited to Note Nos. 34.5 and 34.6 of the Notes forming part of thefinancial statements.

(xii) The company is not a Nidhi Company. Accordingly the reporting requirements underclause (xii) of paragraph 3 of the Order are not applicable.

(xiii) According to the information and explanations given to us and the records of theCompany examined by us all transactions with the related parties are in compliance withSections 177 and 188 of the Companies Act 2013 where applicable and the details asrequired by the applicable Ind AS have been disclosed by the management in Note No. 34.13of the Notes forming part the financial statements.

(xiv) According to the information and explanations given to us and based on ourexamination of the records of the Company the Company has not made any preferentialallotment or private placement of shares or fully or partly convertible debentures duringthe year.

(xv) According to the information and explanations given to us and records of theCompany examined by us the Company has not entered into any non-cash transactions withdirectors or persons connected with them. Accordingly paragraph 3 (xv) of the Order isnot applicable.

(xvi) According to the information and explanations given to us and the records of thecompany examined by us the company is not required to be registered under section 45 IAof the Reserve Bank of India Act 1934. Accordingly the reporting requirement underClause (xvi) of paragraph 3 of the Order is not applicable.

For S. S. AYYAR & CO.
Chartered Accountants Kottayam
(Firm No. 050012 S)
Sd/-
CA. S.S Ayyar F. C. A.
Irinjalakuda (M. No. 004846)
May 30 2019 Partner

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