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KSE Ltd.

BSE: 519421 Sector: Agri and agri inputs
NSE: KSE ISIN Code: INE953E01014
BSE 00:00 | 07 Dec 2251.70 1.95
(0.09%)
OPEN

2250.00

HIGH

2278.00

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2240.15

NSE 05:30 | 01 Jan KSE Ltd
OPEN 2250.00
PREVIOUS CLOSE 2249.75
VOLUME 122
52-Week high 3065.10
52-Week low 1925.00
P/E 12.06
Mkt Cap.(Rs cr) 721
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 2250.00
CLOSE 2249.75
VOLUME 122
52-Week high 3065.10
52-Week low 1925.00
P/E 12.06
Mkt Cap.(Rs cr) 721
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

KSE Ltd. (KSE) - Auditors Report

Company auditors report

To the Members of M/S KSE Limited Irinjalakuda Kerala - 680121

Report on the Audit of the Standalone Financial Statements

OPINION

We have audited the accompanying Ind AS financial statements of KSELimited(CIN:L15331KL1963PLC002028) ("the Company") which comprise the BalanceSheet as at 31st March 2020 the Statement of Profit and Loss (including OtherComprehensive Income) the Statement of changes in Equity and the Statement of Cash Flowsfor the year then ended and notes to the Ind AS financial statements including a summaryof significant accounting policies and other explanatory information (hereinafter referredto as "Ind AS financial statements") which we have signed under reference tothis report.

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 Indian Accounting Standards prescribed under section133 of 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 31 March 2020 its profit total comprehensiveincome the changes in equity and its cash flows for the year ended on that 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 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 Ind AS financial statementsunder the provisions of the Act and the Rules there under and we have fulfilled our otherethical responsibilities in accordance with these requirements and the Code of Ethics. Webelieve that the audit evidence we have obtained is sufficient and appropriate to providea basis for our opinion on the Ind AS financial statements.

EMPHASIS OF MATTER

We draw attention to the matters detailed below. Our opinion is not modified in respectof these matters.

a. Note No 21.1 in the Ind AS financial statements : As stated in the note theclassification of trade payables as covered under the Micro Small& MediumEnterprises Development (MSMED) Act 2006 and others is as carried out by the companybased on the information available with it.

b. Note No 32.13 in the Ind AS financial statements : The company has stated in thisnote that it has a system of obtaining confirmations of balances However balances in theaccounts except balances with banks and a few trade receivables are subject toconfirmation.

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.

Key Information technology (IT) systems used in financial reporting process.

Key Audit Matter Description

The Company's key financial accounting and reporting processes are highly dependent oninformation systems including automated controls in systems such that there exists a riskthat gaps in the IT control environment could result in the financial accounting andreporting records being misstated. Also the company is using an ERP Solution developed inhouse and it has yet to be evolved into a full fledged end to end solution necessitatingmanual interventions at various levels while the system is handling large transactionvolumes at multiple locations. We have identified 'IT systems and controls' as key auditmatter because of the manual interventions and the untested environment of an evolvingERP.

How the Key Audit Matter Was Addressed in the Audit

We focused on user access management change management segregation of duties systemreconciliation controls and system application controls over key financial accounting andreporting systems.

We tested a sample of key controls operating over the information technology inrelation to financial accounting and reporting systems design and operating effectivenessof key controls over user access management and preventive controls designed to enforcesegregation of duties. For a selected group of key controls over financial and reportingsystems we independently performed procedures to determine that these control remainedunchanged during the year or were changed following the standard change managementprocess. Other areas that were assessed included security configurations system interfacecontrols controls over changes to applications and databases and controls to ensure thatdevelopers and production support did not have access to changing applications theoperating system or databases in the production environment.

We have identified the manual intervention areas and evaluated the designimplementation and effectiveness of the controls over the manual interventions. We havetested samples in key areas of manual interventions to ensure the effectiveness of thecontrol system in force.

INFORMATION OTHER THAN THE IND AS FINANCIAL STATEMENTS AND AUDITOR'S REPORT THEREON

The Company's Board of Directors is responsible for the other information. The otherinformation comprises the Directors Report including the annexures to Directors' ReportSecretarial audit Report Management Discussion & Analysis Report and CorporateGovernance Report included in the Annual report but does not include the Ind AS financialstatements and our auditor's report thereon. The Annual Report is expected to be madeavailable to us after the date of this auditor's report.

Our opinion on the Ind AS financial statements does not cover the other information andwe will not express any form of assurance conclusion thereon.

In connection with our audit of the Ind AS financial statements our responsibility isto read the other information and in doing so consider whether the other information ismaterially inconsistent with the Ind AS financial statements or our knowledge obtained inthe audit or otherwise appears to be materially misstated.

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 Management and Board of Directors are responsible for the matters statedin section 134(5) of the Act with respect to the preparation of these Ind AS financialstatements that give a true and fair view of the financial position financial performanceincluding other comprehensive income cash flows and change in equity of the Company inaccordance with the accounting principles generally accepted in India including theIndian Accounting Standards (Ind AS) specified under section 133 of the Act read with theCompanies (Indian Accounting Standards) Rules 2015 as amended. This responsibility alsoincludes maintenance of adequate accounting records in accordance with the provisions ofthe Act for safeguarding of the assets of the Company and for preventing and detectingfrauds and other irregularities; selection and application of appropriate accountingpolicies making judgments and estimates that are reasonable and prudent; and the designimplementation and maintenance of adequate internal financial control that were operatingeffectively for ensuring the accuracy and completeness of the accounting records relevantto the preparation and presentation of the Ind AS financial statements that give a trueand fair view and are free from material misstatement whether due to fraud 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.

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

AUDITOR'S RESPONSIBILITY 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 these 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 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 resulting fromfraud 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 the financial statement in placeand the operating effectiveness of such controls.

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

> 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 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 year ended 31st March 2020 and are therefore the key audit matters. We describe thesematters in our auditor's report unless law or regulation precludes public disclosure aboutthe matter or when in extremely rare circumstances we determine that a matter should notbe communicated in our report because the adverse consequences of doing so wouldreasonably be 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) Order2016("the Order")issued by the Central Government of India

in terms of sub-section (11) of section 143 of the Act we give in "Annexure1" a statement on the matters specified in paragraphs 3 and 4 of the Order.

2. Further as required by section 143(3) of the Act we further 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 purpose 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 the Statement of OtherComprehensive Income the Cash Flow Statement and Statement of Changes in Equity dealtwith by this Report are in agreement with the books of account;

d) In our opinion the aforesaid Ind AS financial statements comply with the AccountingStandards specified under Section 133 of the Act read with Companies (Indian AccountingStandards) Rules 2015 as amended by Companies (Indian Accounting Standards) AmendmentRules 2018.

e) On the basis of written representations received from the directors as on 31 March2020 taken on record by the Board of Directors none of the directors are disqualified ason 31 March 2020 from being appointed as a director in terms of Section 164(2) of theAct;

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 "Annexure2" to this report. Our report expresses anunmodified opinion 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 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 32.3 to the Ind AS financialstatements;

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

iii. There has been no delay in transferring amounts required to be transferred to theInvestor Education and Protection Fund by the Company.

For SRIDHAR & CO.
Chartered Accountants
Thiruvananthapuram
(Firm No. 003978S)
S d/-
Irinjalakuda CA. R. Sridhar F. C. A.
June 30 2020 (M. No. 026343)
Partner
UDIN: 20026343AAAAAD8108

Enclosures : Annexure 1 and Annexure 2 referred to above

ANNEXURE - "1" TO THE INDEPENDENT AUDITORS' REPORT

(Referred to in paragraph 1 under 'Report on Other Legal and Regulatory Requirements'section of our report of even date)

i. In respect of the Company's 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) The fixed assets of the company have been physically verified by the managementduring the year and no material discrepancies between the book records and the physicalinventory have been noticed. In our opinion the frequency of verification is reasonable.

c) In our opinion and according to the information and explanations given to us thetitle deeds of immovable properties are held in the name of the Company.

ii. We are informed that the physical verification of inventory has been conducted bythe management at reasonable intervals. In our opinion the procedures of physicalverification of inventory followed by management are reasonable and adequate in relationto size of the company and the nature of its business. The Company is maintaining properrecords of inventory. According to the information furnished to us no significantdiscrepancies were noticed on such verification between the physical stock and the bookrecords. The valuation of stock is fair and proper in accordance with the normallyaccepted accounting principles.

iii. The company has not granted loan or advances in the nature of loans to any companylisted in the register maintained U/S 189 except the loans to employees which arerecovered through payroll on a regular basis and interest free advance to employees whichare being repaid as stipulated no other loans have been given by the company.

iv. In our opinion and according to the information and explanations given to us inrespect of loans investments guarantees and security the provisions of section 185 and186 of the Companies Act 2013 have been complied with.

v. In respect of deposits accepted by the Company from public the directives issued bythe Reserve Bank of India and the provisions of Section 73 to 76 or any other relevantprovisions 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 to theCompanies (Cost Records and Audit) Rules 2014 prescribed by the Central Government underSection 148 (1) of the Companies Act 2013 and are of the opinion that primafacie theprescribed 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. According to the information and explanations furnished to us and according to ourexamination of the records of the Company in respect of the Statutory dues :

[a] The company is regular in depositing with appropriate authorities undisputedstatutory dues including provident fund Income Tax customs duty excise duty cess andother material statutory dues applicable to it. According to the information andexplanations given to us there are no undisputed amounts payable in respect of sales taxcustoms duty and cess in arrears as at 31.03.2020 for a period of more than six monthsfrom the date they become payable.

[b] Details of dues of sale tax income tax customs duty wealth tax excise duty andcess which have not been deposited on account of any dispute are as shown below :

Name of the statute Nature of the dues Period to which the amount relates Amount (Rs in lakhs) Forum where dispute is pending
Kerala General Sales Tax Act 1963 Sales tax Financial year 2000-01 25.40 Deputy Commissioner (Appeals) - remanded to Assistant Commissioner (Assessment)
Customs Act 1962 Customs duty Financial year 2008-09 and 2009-10 66.31* The Company has filed appeals before the Honourable High Court of Kerala.

"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 nor borrowings from government nor has any dues to debenture holders.

ix. According to the information and explanations given to us and our verification ofrecords the company has not raised any money by way of initial public offer or furtherpublic offer (including debt instruments).The Company has not availed any term loansduring the year.

x. Based upon the audit procedures performed for the purpose of reporting true and fairview of the financial statements and according to the information and explanations givenby the management we report that no fraud by the company or no fraud on the company bythe officers and employees of the Company has been noticed or reported during the year.

xi. In our opinion and according to information and explanations given to us theCompany has paid/provided managerial remuneration in accordance with the requisiteapprovals mandated by the provision of Section 197 read with Schedule V to the Act.

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

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. 32.18of the Notes forming part the Ind AS 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 based on ourexamination of the records of the Company the Company has not entered into non-cashtransactions with directors or persons connected with them. Accordingly paragraph (xv) ofthe Order is not applicable.

xvi. According to the information and explanations given to us and based on ourexamination of the records of the Company the Company is not required to be registeredunder section 45-IA of the Reserve Bank of India Act 1934

For SRIDHAR & CO.
Chartered Accountants
Thiruvananthapuram
(Firm No. 003978S)
S d/-
CA. R. Sridhar F. C. A.
Irinjalakuda (M. No. 026343)
June 30 2020 Partner
UDIN: 20026343AAAAAD8108

ANNEXURE "2" TO THE INDEPENDENT AUDITORS' REPORT

(Referred to in paragraph 2(f) under "Report on Other Legal and RegulatoryRequirements" section of our report of even date)

Report on the Internal Financial Controls over Financial Reporting under Clause (i) ofSub-section 3 of Section 143 of the Companies Act 2013 ("the Act")

We have audited the internal financial controls over financial reporting of M/s KSELimited (CIN:L15331KL1963PLC002028) ("the Company") as of 31st March 2020 inconjunction with our audit of the Ind AS financial statements of the Company for the yearended on that 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 over financial reporting criteriaestablished by the Company considering the essential components of internal control statedin the Guidance Note on Audit of Internal Financial Controls over Financial Reportingissued by the Institute of Chartered Accountants of India (the "Guidance Note").These responsibilities include the design implementation and maintenance of adequateinternal financial controls that were operating effectively for ensuring the orderly andefficient conduct of its business including adherence to the 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 Company's internal financialcontrols over financial reporting based on our audit. We have conducted our audit inaccordance with the Guidance Note and the Standards on Auditing as specified under section143(10)of the Companies Act 2013 to the extent applicable to an audit of internalfinancial controls both applicable to an audit of Internal Financial Controls and bothissued by the Institute of Chartered Accountants of India. Those Standards and theGuidance Note require that we comply with ethical requirements and plan and perform theaudit to obtain reasonable assurance about whether adequate internal financial controlsover financial reporting was established and maintained and if such controls operatedeffectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls system over financial reporting and their operatingeffectiveness. Our audit of internal financial controls over financial reporting includedobtaining an understanding of internal financial controls over financial reportingassessing the risk that a material weakness exists and testing and evaluating the designand operating effectiveness of internal control based on the assessed risk. The proceduresselected depend on the auditor's judgment including the assessment of the risks ofmaterial misstatement of the Ind AS financial statements whether due to 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 internal financial controls system overfinancial reporting.

Meaning of Internal Financial Controls over Financial Reporting With Reference to theseInd AS financial statements

A Company's internal financial control over financial reporting is a process designedto provide reasonable assurance regarding the reliability of financial reporting and thepreparation of Ind AS financial statements for external purposes in accordance withgenerally accepted accounting principles. A Company's internal financial control overfinancial reporting includes those policies and procedures that (1) pertain to themaintenance of records that in reasonable detail accurately and fairly reflect thetransactions and dispositions of the assets of the Company; (2) provide reasonableassurance that transactions are recorded as necessary to permit preparation of Ind ASfinancial statements in accordance with generally accepted accounting principles and thatreceipts and expenditures of the Company are being made only in accordance withauthorizations of management and directors of the Company; and (3) provide reasonableassurance regarding prevention or timely detection of unauthorized acquisition use ordisposition of the Company's assets that could have a material effect on the Ind ASfinancial statements.

Inherent Limitations of Internal Financial Controls over Financial Reporting

Because of the inherent limitations of internal financial controls over financialreporting including the possibility of collusion or improper management override ofcontrols material misstatements due to error or fraud may occur and not be detected.Also projections of any evaluation of the internal financial controls over financialreporting to future periods are subject to the risk that the internal financial controlover financial reporting may become inadequate because of changes in conditions or thatthe degree of compliance with the policies or procedures may deteriorate.

Opinion

In our opinion 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 31 March 2020 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 SRIDHAR & CO.
Chartered Accountants
Thiruvananthapuram
(Firm No. 003978S)
S d/-
CA. R. Sridhar F. C. A.
Irinjalakuda (M. No. 026343) Partner
June 30 2020 UDIN: 20026343AAAAAD8108

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