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Notes to Accounts of Kesar Enterprises Ltd.

Dec 31, 2014

1. Contingent Liabilities Nature of claim/Demands As at As at 31st 30th June, December, 2013 2014

Claims / demands against the Company under litigation:

Central Sales Tax 122.56 122.56

Entry Tax (U.P.) 745.07 730.30

Trade Tax (U.P.) 113.36 193.07

Excise Duty 2,376.34 408.02

Arrears of Dividend on Cumulative Preference Shares 0 2.21

Others 35.55 35.55

Total 3,392.88 1,491.71

2. Alcohol and Molasses Storage Reserves and Effluent Disposal Reserves amounting to Rs. 58.78 Lac (P.Y. Rs. 62.06 Lac) are not deposited with a Scheduled Bank, as required under Uttar Pradesh Sheera Niyantran (Sansodhan) Adesh, 1974.

3. Segmental Reporting Disclosures under Accounting Standard 17 Business Segments:

Based on the guiding principles given in Accounting Standard 17 "Segmental Reporting" issued by the Institute of Chartered Accountants of India, the Company''s primary business segments are

a. Sugar

b. Power

c. Spirits

d. Seed

e. Agricultural Products

4. Disclosure in respect of Operating Lease in accordance with AS 19 on ''Leases''

a) The total of future minimum lease payments under non-cancellable operating leases for each of the following periods:

i) Not later than one year Rs. 68.84 Lac (P.Y. Rs. 58.83 Lac).

ii) Later than one year and not later than five years is Nil (P.Y. Rs. 9.20 Lac).

b) Lease payments recognised in the statement of profit and loss during the Period of Eighteen Months is Rs. 41.48 Lac (P.Y. Rs. 50.02 Lac).

5. The Company follows Accounting standard 22 (AS22) "Accounting for taxes on Income", Deferred Tax Asset arising on account of Unabsorbed depreciation and brought forward losses has been recognised only to the extent of Deferred Tax Liability. The management has assessed the position and on the basis of reasonable/ virtual certainty of realising it in future, has recognised Deferred Tax Asset as on 31st December, 2014, amounting to Rs. 1,631.92 Lac (P.Y. Rs. 1,569.74 Lac).

6. The Company has incurred significant operational losses in Sugar Division during the current period due to a steep decline in sugar prices and uneconomically high Sugarcane prices. Considering the various representations made by the Industry, the State Government of Uttar Pradesh has decided to form a high level committee to determine a fair sugarcane pricing policy and to restore the viability of the Sugar Industry and the Company is hopeful that pursuant to the same the Company would turnaround in near future. Accordingly, the financial statements have been prepared on the assumption of going concern, despite accumulated losses resulting in erosion of its networth.

7. Sugar cane purchase price for the season 2014-2015 is accounted at State Advisory Price (SAP) Rs. 280/- per quintal for general, Rs. 275/- per quintal for rejected and Rs. 290/- per quintal for early varieties. The Government of Uttar Pradesh has announced various rebates in sugar cane purchase price for the Season Year 2014-2015 vide press note dated 12/11/2014, linked to average market price of sugar & by-products during the period 1st October, 2014 to 31st May, 2015. The above rebates shall be accounted if and when crystalised to the Company or declared by the State Government of Uttar Pradesh.

8. The Previous Year figures have been regrouped and re-casted wherever necessary. The current financial statements are prepared for the Period of Eighteen Months and hence not comparable with the Previous Year figures.


Jun 30, 2013

1. Related party disclosures as per Accounting Standard 18

Names of related parties and nature of related party relationships:

a) Key Management Personnel and their relatives:

Mr. H R Kilachand Chairman & Managing Director

Mrs. M H Kilachand Director

Relatives of Key Management Personnel Mr. Rohan H Kilachand Son

Ms. Rohita H Kilachand Daughter

b) Enterprises over which Key Management Personnel and their relatives are able to exercise signifcant infuence: Kesar Terminals & Infrastructure Limited

Kesar Multimodal Logistics Limited

Kesar Corporation Pvt. Ltd.

Kilachand Devchand & Co. Pvt. Ltd.

Indian Commercial Co. Pvt. Ltd.

India Carat Pvt. Ltd.

Kilachand Devchand Commercial Pvt. Ltd.

Duracell Investments & Finance Pvt. Ltd.

Seel Investments Pvt. Ltd.

Skyline Chem-Trade Pvt. Ltd.

Disclosure of transactions between the Company and related parties and the status of outstanding balance as on 30th June, 2013 indicated in bold. Previous year fgures indicated in the row there below:

2. Disclosure in respect of Operating Lease in accordance with AS 19 on ''Leases''

a) The total of future minimum lease payments under non-cancellable operating leases for each of the following periods:

i) Not later than one year Rs. 58.83 Lac (P.Y. Rs. 47.94 Lac).

ii) Later than one year and not later than fve years Rs. 9.20 Lac (P.Y. Rs. 29.05 Lac).

b) Lease payments recognised in the statement of proft and loss during the year is Rs. 50.02 Lac (P.Y. Rs. 23.91 Lac).

3. The Company follows Accounting Standard 22 (AS 22) "Accounting for taxes on Income”, Deferred Tax Asset arising on account of Unabsorbed depreciation and brought forward losses has been recognised during the year only to the extent of Deferred Tax Liability. The management has assessed the position and on the basis of reasonable/virtual certainty of realising it in future, has recognised Deferred Tax Asset as on 30th June 2013 amounting to Rs. 1,569.74 Lac (P.Y. Rs. 1,296.43 Lac) and carried it as at the end of the year.

4. The previous year fgures have been regrouped and re-casted wherever necessary.


Jun 30, 2012

1. Alcohol and Molasses Storage Reserves and Effluent Disposal Reserves amounting to Rs. 130.83 Lac (P.Y. Rs. 123.51 Lac) are not deposited with a Scheduled Bank, as required under Uttar Pradesh Sheera Niyantran (Sansodhan) Adesh, 1974.

2. Segmental Reporting Disclosures under Accounting Standard 17

Business Segments:

Based on the guiding principles given in Accounting Standard 1 7 "Segmental Reporting"issued by the Institute of Chartered Accountants of India, the Company's primary business segments are

a. Sugar

b. Spirits

c. Seed

d. Power

e. Agricultural Products

Geographical Segments:

Since the Company's activities/operations are primarily within the country and considering the nature of products it deals in, the risk and returns are same and as such there are no geographical segments.

Financial Information about the primary business segment:

3. Related party disclosures as per Accounting Standard 18

Names of related parties and nature of related party relationships:

a. Key Management Personnel and relatives of such personnel:

Mr. H R Kilachand Chairman & Managing Director

Mrs. M.H. Kilachand Director

Relatives of Key Management Personnel

Mr. Rohan H. Kilachand Son

Ms. Rohita H. Kilachand Daughter

b. Enterprises over which Key Management Personnel and their relatives are able to exercise significant influence:

Kesar Terminals & Infrastructure Limited

Kesar Corporation Pvt. Ltd.

Kilachand Devchand & Co. Pvt. Ltd.

Indian Commercial Co. Pvt. Ltd.

India Carat Pvt. Ltd.

Kilachand Devchand Commercial Pvt. Ltd.

Duracell Investments & Finance Pvt. Ltd.

Seel Investments Pvt. Ltd.

Skyline Chem-Trade Pvt. Ltd.

4. Disclosure in respect of Operating Lease in accordance with AS 19 on 'Leases'

a) The total of future minimum lease payments under non-cancellable operating leases for each of the following periods:

i) Not later than one year Rs. 47.94 Lac (P.Y. Rs. 23. 91 Lac).

ii) Later than one year and not later than five years Rs 29.05 Lac (P.Y. Rs. Nil).

b) Lease payments recognised in the statement of profit and loss during the year is Rs. 23.91 Lac (P.Y. Rs. 40.90 Lac).

5. Jointly controlled entity:

In compliance with the Accounting Standard 27 on 'Financial Reporting of Interest in Joint Ventures' as notified by the (Companies Accounting Standard) Rules, 2006, the Company has interest in the following jointly controlled entity:

Kesar Multimodal Logistics Ltd (KMLL) has entered in to a Concession Agreement with the Madhya Pradesh Agricultural Marketing Board (Mandi Board) for setting up a "Composite Logistics Hub" at Pawarkheda in the

6. Exceptional itm represent differential cane price for sugar season 2007-2008 accounted for pursuant to the Hon'ble Supreme Court Order dated 17th January, 2012

7. As notified by Ministry of Corporate Affairs, Revised Schedule VI under the Companies Act, 1956 is applicable to the Financial Statements for the financial year commencing on or after 1" April, 2011. Accordingly, the financial statements for the year ended on 30th June, 2012 are prepared in accordance with the Revised Schedule VI. The amounts and disclosures included in the financial statements of the previous year have been reclassified to conform to the requirements of Revised Schedule VI.


Jun 30, 2010

1. Demerger of Storage Undertaking /Division of the Company into Kesar Terminals and Infrastructure Limited (KTIL).

a) The Board of Directors of Kesar Enterprises Limited (KEL) at their meeting held on 21-01-2009 approved the Scheme of demerger of Storage Undertaking/Division known as Distillers Trading Corporation (DTC) Division of KEL [Transferor Company] into Kesar Terminals and Infrastructure Limited (KTIL) [Resulting Company] and their respective Shareholders and Creditors U/S 391-394 of the Companies Act which was sanctioned by the Honble High Court, Bombay on 12th March 2010 and as per the Order, the Scheme of Demerger of Storage Undertaking /Division known as DTC Division of KEL into KTIL is effective from the "Appointed Date" i.e. 1st January, 2009. Accordingly, all the Assets and Liabilities of Storage Division of the Transferor Company(KEL) stands transferred to and vested in KTIL with Effect from the appointed date at Book Value.

b) Pursuant to the Scheme of Demerger, in consideration of the transfer of the Storage Undertaking into KTIL, 47,53,113 Equity Shares of Rs. 10/- each fully paid up are issued and allotted by KTIL on 1-6-2010 to the shareholders of the Company in the ratio of 10:7 i.e. for every 10 shares in the Company, 7 shares of KTIL.

c) As per the sanctioned Scheme, against the Net Assets of the Storage Division as on 1st January, 2009 amounting to Rs.1500.52 Lacs (i.e. gross assets of Rs. 3140.71 Lacs as reduced by liabilities amounting to Rs.1640.19 Lacs) Rs.971.55 Lacs is debited to Securities Premium Account, Rs. 49.42 Lacs is debited to Capital Reserve Account and the balance amount of Rs.479.55 Lacs is Debited to General Reserve Account of the Company.

d) In view of the above, figures in respect of the current financial year are not comparable with those of the previous year, since the previous year figures include the operations of the Storage Division for 12 months i.e from July 2008 to June, 2009.

2. Contingent Liabilities on account of Demands/Claims against the Company not acknowledged as debts and not provided for Rs. 711.22 Lacs (Previous Year Rs. 719.64 Lacs)

3. For Sugar season 2008-2009, the company has accounted for Sugarcane purchase @ Rs. 140/- per quintal as per the State Advised Price declared by the U.P. Government. For Sugar season 2009-2010, the company has paid @ Rs. 165/- per quintal for Sugarcane purchase as per the State Advised Price (SAP) as declared by the U.P. Government plus substantial incentives which led to a net total Sugarcane cost of about Rs. 248/- per Qtl, keeping in view the higher Sugar prices at that point of time & the shortage of Sugarcane.

4. The estimated amount of contracts remaining to be executed on Capital Account (net of advances) Rs. 83.29 Lacs (Previous Year Rs 83.29 Lacs).

5. Alcohol and Molasses Storage Funds and Effluent Disposal Fund amounting to Rs.115.62 Lacs (Previous Year Rs 112.00 Lacs) are not deposited with a Scheduled Bank as required by the said Orders, under legal advice.

7. Term Loans from UP Co-operative Bank and Allahabad Bank under SEFA 2007 (Scheme for Extending Financial Assistance to Sugar Undertakings, 2007), are secured by way of residual charge on the Fixed Assets of the Sugar Division situated at Baheri on pari passu basis.

Term Loans from Sugar Development Fund are secured by way of charge on the Fixed Assets of the Sugar, Spirit and Power Division situated at Baheri on First pari passu basis.

Cash Credit facility from U.P.Co-operative Bank Limited, is secured by way of Pledge of sugar stock. Cash Credit facility from Allahabad Bank is secured by way of Pledge of sugar stock and joint first hypothecation charge on pari passu basis over Current Assets of Sugar Division and Spirits (Distillery) Division at Baheri, State of Uttar Pradesh (U.P.). Cash Credit facility from U.P.Co-operative Bank Limited and Allahabad Bank is further secured by second hypothecation/mortgage charge on pari passu basis over the fixed assets of the Sugar Division and Spirits (DistWery) Division of the Company situafec/ at Sarieri, U.P. Cash Credit facility from Axis Bank Limited, is secured by way of Pledge of warehouse receipts / storage receipts with lien noted in favour of Bank for stock of Seed Division.

8. In the absence of confirmations, the balances in respect of Loans and Advances, Sundry Debtors, Sundry Creditors, Acceptances, Deposits and National Savings Certificates deposited with the Government Authorities are taken as shown by the books of account and are subject to adjustments and reconciliations, if any.

9. The Company has entered into arrangements with third Parties for Manufacture of its Indian Made Foreign liquor (IMFL) products for which the Company provides them necessary technical know-how, working capital and marketing services.

The Company has tied up with third parties for manufacture of their IMFL brands in its plant at Baheri for which necessary technical know-how, working capital and marketing services are provided by them.

10. The Companys Accounting Year for the purpose of compliance with the provisions of the Companies Act, 1956 ended on 30th June 2010 and the previous year for tax purpose ended on 31s1 March 2010. The income if any for the period from 1/4/2010 to 30/6/2010 forming part of the annexed accounts will be assessed as a part of the composite income relevant to previous year ending 31s March, 2011 i.e. Assessment Year 2011-2012.

The Company has made provision for Current Income Tax of Rs. 16.87 Lacs and Deferred Tax Expenses of Rs. (16.30) Lacs for the financial year 2009-2010 pertaining to Assessment Year 2010-2011.

11. Sundry Creditors include Rs.50.88 Lacs (Previous year Rs. 37.11 Lacs) due to The Micro, Small and Medium Enterprises.

The Micro, Small and Medium Enterprises to whom an amount of Rs.1.00 lac or more was payable and outstanding for more than 45 days (as per the terms & conditions of the orders) are as under:-

1 M/s. Rajukesh Industries Rs. 4.73 Lacs

2 M/s G.R.Polypet Industries Rs. 26.33 Lacs

3 M/s. Anil Kumar Singhal Rs. 8.15 Lacs

4 M/s. Deepak Chemical Lime Works Rs. 1.76 Lacs

5 M/s. Dehra mineral Corporation Rs. 4.57 Lacs

6 M/s Lux Flavours Chennai Rs. 5.34 Lacs

This disclosure is on the basis of information available with the Company regarding the status of Suppliers as defined under the "Interest on delayed payments to The Micro, Small & Medium Enterprises Act, 2006."

12. Advances includes Rs 9.67 Lacs, outstanding since a long time. In the opinion of the management, the same are considered good and recoverable.

13. The Company had given Bank Guarantees to Government of India in respect of Levy Price realization. Subsequently the Government has adjusted the amounts from the Buffer Stock Subsidy receivable by the Company and has also encashed the Bank Guarantees, which has resulted in excess payment of Rs. 16.80 Lacs to the Government of India. The Company has lodged its claim with Government Authorities for refund.

14. Segmental Reporting Disclosures under Accounting Standard 17

Business Segments:

Based on the guiding principles given in Accounting Standard 17 "Segmental Reporting" issued by the Institute of Chartered Accountants of India, the Companys primary business segments are

a. Sugar

b. Spirits

c. Seed

Geographical Segments:

Since the Companys activities/operations are primarily within the country and considering the nature of products it deals in, the risk and returns are same and as such there are no geographical segments.

15. Related party disclosures under Accounting Standard 18

Names of related parties and nature of related party relationships:

a. Subsidiary Companies:

As on date of Balance Sheet NIL.

During the year, on 1-6-2010 KTIL ceased to be Subsidiary of the Company. [Refer Note 1 (b)].

b. Associates: N.A.

c. Key Management Personnel and relatives of such personnel:

Mr. H R Kilachand Chairman & Managing Director

Mrs. M.H. Kilachand Director

Relatives of Key Management Personnel

Mr. Rohan H. Kilachand Son

Ms. Rohita H. Kilachand Daughter

d. Enterprises over which Key Management Personnel and their relatives are able to exercise significant influence:

Kesar Corporation Pvt. Ltd.

Kilachand Devchand & Co. Pvt. Ltd.

Indian Commercial Co. Pvt. Ltd.

India Carat Pvt. Ltd.

Kilachand Devchand Commercial Pvt. Ltd.

Duracell Investments & Finance Pvt. Ltd.

Seel Investments Pvt. Ltd.

Skyline Chem-Trade Pvt. Ltd.

Kesar Terminals & Infrastructure Limited

18. Share warrant application money account amounting to Rs. 67.90 lacs has been forfeited and transferred to Capital Reserve Account.

19. Quantitative information of Manufacturing and Trading activities is given in Annexure I.

20. The following tables summarise the components of net benefit expenses recognised in the Profit and Loss account and the funded status and amounts recognised in the balance sheet for Gratuity for financial year.

21. Previous year figures have been regrouped and recasted wherever necessary.

 
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