To

The Shareholders,

Kesar Enterprises Ltd.

Dear Members,

The Directors present to you the 82nd Annual Report and audited Statement of Accounts for the year ended 31st March, 2017.

Alignment of Financial Year

As per Section 2(41) of the Companies Act, 2013, to follow a homogeneous Financial Year starting from 1st April to 31st March of the following year, the previous Financial Year of the Company was made for 15 months i.e. from 1.1.2015 to 31.3.2016. Hence, the Financial Year under review is for 12 months.

FINANCIAL RESULTS:

(Rs. in Lakh)

For the Financial Year 2016-17, there is a profit of Rs.821.37 lakh as against a loss of Rs.5,322.22 lakh in the previous year [15 months].

During the year under review, the Company has made a profit and the cash flow is positive. However, over the last few years, the Sugar Industry was facing severe difficulties on account of high sugar cane prices set by the State Government, lower sugar prices and consequential inadequate recovery of cost of production. These factors have adversely affected the Company's operations and financial performance. Hence, the entire net worth of the Company is eroded and its current liabilities are in excess of current assets.

In view of the above, your Directors have not recommended any dividend for the year 2016-17.

WORKING OF THE DIVISIONS Sugar Division

The crushing for the Season 2016-17 started on 13.11.2016 i.e. 14 days earlier as compared to 27.1 1.2015 in the previous season and ended on 10.03.2017 as against 24.2.2016 i.e. 24 days later than the previous season.

During the season, the plant crushed 65.08 lakh quintals of sugarcane in 118 days as against 44.47 lakh quintals in 89 days in the previous season. Crushing was higher by 20.61 lakh quintals during this season due to better cane yield and more supply of sugarcane by the farmers due to timely cane price payment to the farmers. The sugar recovery overall was higher at 10.81% as against 10.19% in the previous season. This was due to our cane development programme of changing the varieties into early maturing high sugar canes. The production of sugar was higher at 7.04 lakh quintals as against 4.58 lakh quintals in the previous season.

For the Season 2016-17, the Central Government had announced a Fair & Remunerative Price [FRP] of sugarcane at Rs.230/- a quintal at a base recovery of 9.50%. The UP Government had announced a State Advised Price (SAP) of sugarcane of Rs.305/-(normal variety) a quintal as against Rs.280/- a quintal in the previous season. The said price was to be paid to the farmers within 14 days. The UP State Government has not extended any relief to the Sugar industry during the crushing season 201617 in view of better sugar realisations. Besides this, the Hon'ble High Court, in two different matters, has quashed the Orders of the Cane Commissioner / Government, through which the Society Commission was reduced / refunded and interest on late payment of cane price waived for the previous year. The industry has decided to take up these issues with the High Court and also through a SLP in the Supreme Court.

During the last few years, the cost of production in UP was the highest in the country, which rendered the UP Sugar Industry unviable, cash-starved and uncompetitive. There is an urgent need to rationalize the cane pricing policy in UP and adopt a 'linkage formula' as recommended by the Rangarajan Committee linking sugar cane price to sugar prices. The two major sugar producing States i.e. Maharashtra and Karnataka, who together contribute for almost 50% of the country's sugar production, have adopted and implemented the 'linkage formula' for determining cane price. It is understood that a team of senior officials from UP had visited Maharashtra and Karnataka to study their cane pricing system and have submitted their report to the State Government but no decision is taken till date in the matter. The U P Government had announced the formation of a high level Committee to determine a fair Sugarcane Pricing Policy. This is the only long term solution for stability & viability of the Sugar industry.

During the Season 2016-17, Molasses produced was 2.74 lakh quintals as against 2.10 lakh quintals the previous season 2015-16.

The UP Government had announced the Molasses Policy for 2016-17 (November-October), wherein the molasses reservation rate for the country liquor manufacturers had been retained at 25%. The Policy had been specifically formulated to help country liquor manufacturers, reserving a part of their total molasses production for the country liquor manufacturers at a rate, much lower than the market specified prices.

During the year under review, there has been an increase in sugar prices from the levels prevailing in December 2015. This has resulted in the Company generating operational profits for the quarter ended March 31, 2017. The industry outlook is also positive in the short term and long term with sugar prices expected to hold.

Power Division

During the Sugar Season 2016-17, the Plant started on 11.11.2016 as against 2 7.1 1.2015 and operated for 152 days as against 93 days, higher by 59 days than in the previous Season, due to higher crushing of sugarcane and purchase of additional alternate fuel. The Plant consumed 2.37 lakh MT of bagasse/alternate fuel to generate 1.21 lakh MW power as against 1.48 lakh MT of bagasse/alternate fuel to generate 0.69 lakh MW power in the previous Season. The total power exported to the grid was 0.91 lakh MW amounting to Rs.51.44 crore as against 0.49 lakh MW amounting to Rs.2 7.05 crore in the previous Season.

Spirits Division

During the year under review, the production of Rectified Spirit (RS) was nil as against 23.16 lakh bulk litres in 15 months period of the previous year. The production of Extra Neutral Alcohol (ENA) was nil as against 17.07 lakh bulk litres in 15 months period of the previous year. The quantity of Country Liquor supplied was nil as against 5.50 lakh cases in 15 months period of the previous year.

The Spirits Division was put out of operations as the Company is required to install multiple effect evaporation system to reduce the effluent volume as well as to do modifications in the Reverse Osmosis Plant & Bio-composting, which would enable the Distillery to become zero discharge compliant. As the Company does not have such capability, the Company has voluntarily taken a shut down for Distillery operations since October 2015. Hence, the Molasses was sold directly in the market.

SUBSEQUENT FINANCIAL YEAR 2017-18

Sugar Division

The crushing for the Season 2017-18 is expected to start in November 2017.

During the Financial Year 2017-18, there may be a steady increase in sugar prices. This may result into the Company generating operational profits gradually. The industry outlook is also positive in the short term and long term with sugar prices expected to be stable.

Power Division

The Cogen Power Plant is also planned to start in November 2017.

SHARE CAPITAL

The Paid up Share Capital as on 31.3.2017 was Rs.10.08 crore. During the year under review, the Company has not issued any shares.

BOARD MEETINGS

During the year 6 Board Meetings and 4 Audit Committee Meetings were heId. The details of which are given in the Corporate Governance Report. The intervening gap between the Meetings was within the period prescribed under the Companies Act, 2013.

DIRECTORS & KEY MANAGERIAL PERSONNEL

During the year under review, Shri A S Ruia resigned as Director of the Company with effect from 29.4.2016 due to personal reasons. The Board of Directors placed on record its sincere appreciation for the valuable support and guidance given by Shri A S Ruia to the Company during his tenure as Director of the Company.

On 18.8.2016, Shri Mahesh A Kuvadia was appointed as Independent Director of the Company by the Shareholders of the Company, for the 1st term of 5 years, and Shri H R Kilachand was reappointed as Managing Director of the Company designated as "Chairman & Managing Director", subject to approval of the Central Government, by the Shareholders of the Company for a further period of 3 years with effect from 14.8.2016 on a remuneration within the limits prescribed under the Companies Act, 2013 and Schedule V thereof. Accordingly, the application was made to the Central Government by the Company, the approval for which is awaited.

Pursuant to Section 152 of the Companies Act, 2013, Shri D J Shah, Director & Company Secretary retires by rotation at the ensuing Annual General Meeting and being eligible, offers himself for reappointment. As per the SEBI (LODR) Regulations 2015, a brief profile of Shri D J Shah, retiring by rotation, forms part of the Corporate Governance Report.

All the Independent Directors have given declarations that they meet the criteria of Independence as laid down under Section 149(6) of the Companies Act, 2013 and the SEBI (LODR) Regulations 2015.

Pursuant to the provisions of Regulation 25 of the SEBI (LODR) Regulations 2015, the Company has formulated a programme for familiarising the Independent Directors with the Company, their roles, rights, responsibilities in the Company, nature of the industry in which the Company operates, business model of the Company etc through various initiatives. The details of the aforementioned programme are available at the Company's website www.kesarindia.com/ Investor's Corner/ Corporate Governance/ Policies.

BOARD EVALUATION / APPOINTMENT AND REMUNERATION POLICY FOR DIRECTORS AND SENIOR MANAGEMENT

Pursuant to the provisions of the Companies Act, 2013, the Board carried out an Annual Performance Evaluation of its own performance, the Directors individually as well as the evaluation of the working of its Audit Committee and Nomination & Remuneration Committee.

The Board has, on the recommendation of the Nomination & Remuneration Committee framed a policy for selection and appointment of Directors, Senior Management and their remuneration. The Remuneration Policy is stated in the Corporate Governance Report. The details of the Nomination & Remuneration Policy are available on the website of the Company www. kesarindia.com/ Investor's Corner/ Corporate Governance/ Policies.

MATERIAL CHANGES & COMMITMENTS AFFECTING FINANCIAL POSITION BETWEEN END OF THE FINANCIAL YEAR & DATE OF THIS REPORT:

There are no material changes & commitments affecting financial position.

DIRECTORS' RESPONSIBILITY STATEMENT

Pursuant to the requirement of Section 134(3)(c) of the Companies Act, 2013, the Board of Directors to the best of their knowledge hereby state that :

i) in preparation of the annual accounts for the financial year ended on 31st March, 2017, the applicable accounting standards had been followed along with proper explanation relating to material departures;

ii) the Directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent, so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit for that period;

iii) the Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

iv) the Directors had prepared the Annual Accounts for the financial year ended on 31^st March, 2017 on a going concern basis.

v) the Directors had laid down proper internal financial controls in place and that such internal financial controls are adequate and were operating effectively.

vi) the Directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

RELATED PARTY TRANSACTIONS

There are no contracts or arrangements with related parties referred to in Section 188(1) of the Companies Act, 2013 and hence Form AOC-2 is not annexed. The Members may refer Note 33 to the Notes to Accounts for further details of routine transactions entered into with the Related Parties.

A policy of Related Party Transactions as approved by the Audit Committee and the Board of Directors is uploaded on the website of the Company www.kesarindia.com / Investor's Corner/ Policies.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

Details of Loans, Guarantees and Investments covered under the provisions of Section 186 of the Companies Act, 2013 are given in the Notes to Accounts. Some of the credit facilities have been classified as Non-Performing Assets (NPA) by Banks.

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS

The Company had filed a reference with BIFR, under Section 15 of SICA, on 15.5.2015. Thereafter, BIFR intimated the Company by a letter dated 21.9.2015 that the said reference was registered.

As the Sick Industrial Companies Act (SICA) was repealed with effect from 1.12.2016, the Reference filed by the Company under Section 22 of SICA stood abated. However, the Company has been allowed 180 days time to file fresh reference with the National Company Law Tribunal (NCLT) under the recently notified the Insolvency and Bankruptcy Code, 2016 & Regulations (IBC) issued there under.

MANAGEMENT DISCUSSION & ANALYSIS REPORT AND CORPORATE GOVERNANCE REPORT

The Management Discussion & Analysis Report is annexed and forms part of this Annual Report. The Company has complied with the Corporate Governance requirements as stipulated under Regulation 34 of the SEBI (LODR) Regulations, 2015. A separate section on Corporate Governance, along with a Certificate from the Secretarial Auditors confirming the compliance, is also annexed and forms part of the Annual Report.

INSIDER TRADING

In compliance with the SEBI regulation on prevention of Insider Trading, your Company has framed a comprehensive code which lays down guidelines and advises the Directors and employees of the Company on procedures to be followed and disclosures to be made, while dealing in securities of the Company. During the year under review, the Company adopted Code of Practices and Procedures for Fair Disclosure of Unpublished Price Sensitive Information and the Code of Conduct for Prohibition of Insider Trading in accordance with SEBI (Prohibition of Insider Trading) Regulations, 2015.

SEXUAL HARASSMENT POLICY

The Company has constituted an Internal Complaint Committee (ICC) for prevention and redressal of complaints / grievances on the sexual harassment of women at work places. As part of this policy, during the year under review the Company had arranged a session on Women's Safety by Madhukar Katragadda, Major (Retd). During the year under review no incident had taken place.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

Particulars with respect to conservation of energy, technology absorption and foreign exchange earnings and outgo pursuant to Section 134(3)(m) of the Companies Act, 2013 are given in the Annexure "A" forming part of this Report. During the year under review, there were no foreign Exchange Earnings (Previous year Nil) and Foreign Exchange Outgo was Nil (Previous Year Nil).

INSURANCE

The Company has taken adequate insurance for all its properties.

FIXED DEPOSITS

As per the Companies Act, 2013, the Company is not eligible to raise Fixed Deposits in terms of Section 73 of the Act. Hence, the Company has not accepted / renewed any Fixed Deposits. Further, as per Section 74(1) of the Companies Act, 2013, the Company has repaid the entire Fixed Deposit.

AUDITORS

In terms of the provisions of the Section 139(1) of the Company's Act 2013, the appointment made of Haribhakti & Co. LLP, Chartered Accountants is placed before the Shareholders for their ratification.

AUDITORS' REPORT

There is no qualification in the Auditors' Report. With respect to para 40 of the notes forming Financial Statement, the explanation thereto is given in the above para Significant & Material Orders Passed by the Regulators or Courts.

INTERNAL CONTROL SYSTEM & INTERNAL AUDITORS

The Company has an adequate Internal Control System. All transactions are properly authorized, recorded and reported to the Management. The Company has Independent Auditors M/s. Ashok Jayesh & Co., Chartered Accountants to review critical areas of operations. The Audit Reports are reviewed periodically by the Management and the Audit Committee of the Board and appropriate measures are taken to improve the process.

COST AUDITOR

Pursuant to Sections 148 read with Rule 14 of the Companies (Audit and Auditors) Rules, 2014 and all other applicable provisions of the Companies Act, 2013, the Board had appointed Rishi Mohan Bansal, Cost Accountant as Cost Auditor of the Company to conduct Cost Audit for the products 'Sugar & Alcohol' and 'Electricity Generation' for the year ended 31.3.2017. The Cost Audit Report for the same will be submitted to the Central Government before 30.09.2017.

Similarly, as recommended by the Audit Committee and approved by the Board of Directors of the Company, the appointment and payment of remuneration to Rishi Mohan Bansal, Cost Accountant, Kanpur, as Cost Auditor will be placed before the Shareholders at the ensuing Annual General Meeting for their ratification, to conduct the audit of the Cost records of the Company relating to Sugar & Industrial Alcohol and Generation of Power for the year ending 31st March, 2018.

EXTRACT OF ANNUAL RETURN

The details forming part of the extract of the Annual Return in form MGT 9 is annexed herewith as Annexure "B". SECRETARIAL AUDITOR

Pursuant to Section 204 of the Companies Act, 2013 read with Rule 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Board had appointed Ragini Chokshi & Co., Practicing Company Secretary, as Secretarial Auditor of the Company to undertake the Secretarial Audit and provide Secretarial Audit Report in Form MR3. The Report of the Secretarial Audit Report is annexed herewith as Annexure- "C". There are no qualifications, reservations or remarks in the Secretarial Audit Report.

CORPORATE SOCIAL RESPONSIBILITY

As required under Section 135 of the Companies Act, 2013, the Company has constituted a Corporate Social Responsibility Committee as the Company had a Net Profit of more than Rs.5 crore for the financial year 2016-17. However, the Company is not required to spend any amount during the subsequent financial year as per the applicable provisions of the Act. The Company has continued to play its role as a responsible corporate citizen, adding value to society and addressing the contemporary societal needs and challenges. The Corporate Social Responsibility philosophy ensures that while business objectives are met and shareholder value is enhanced, the Company equally focuses on engaging with the wider community and sustainably addressing environmental concerns in its sphere of operations.

EMPLOYEES

Relation with the employees remained cordial throughout the year. Your Directors place on record their sincere appreciation for the devoted services of the employees of the Company.

The information required pursuant to Section 197(12) of the Companies Act, 2013, read with Rule 5(1) of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, in respect of employees on the payroll of the Company in India, is provided as Annexure-"D" which forms part of this report.

The information required pursuant to Section 197 read with Rule 5(2)&(3) of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 in respect of employees of the Company, will be provided upon request. In terms of Section 136 of the Act, the Report and Accounts are being sent to the Members and others entitled thereto, excluding the information on employees' particulars which is available for inspection by the Members at the Registered Office of the Company during business hours on working days of the Company up to the date of the ensuing Annual General Meeting. Any member interested in obtaining such particulars may write to the Company Secretary at the registered office of the Company.

ACKNOWLEDGEMENT

Your Directors would like to place on record their grateful appreciation for the assistance and cooperation extended by the Banks, Financial Institutions and the wholehearted support extended by the Shareholders during the year under review.

By Order of the Board of Directors

H R KILACHAND

19th May, 2017 Chairman & Managing Director

DIN: 00294835