1.11 Provisions, Contingent Liability and Contingent Assets
Disputed liabilities and claims against the company including claims raised by fiscal authorities pending in
appeal for which no reliable estimate can be made and or involves uncertainty of the outcome of the
amount of the obligation or which have remote chance for crystallisation are not provided for in accounts
but disclosed by way of notes to the accounts.
However, present obligation as a result of past event with possibility of outflow of resources, when reliable
estimation can be made of the amount of obligation, is recognized in accounts in terms of discounted
value, if the time value of money is material using a current pre-tax rate that reflects the risk specific to the
liability.
Contingent assets, if any, are not recognised in the accounts but are disclosed by way of notes to the
accounts.
1.12 Foreign currency
Functional currency and presentation currency
The functional currency of the company is the Indian rupee. The financial statements are presented in
Indian rupees (rounded off to lakhs).
Transactions and translations
Foreign currency denominated monetary assets and liabilities are translated into the relevant functional
currency at exchange rates in effect at the balance sheet date. The gains or losses resulting from such
translations are included in the Statement of Profit and Loss. Non-monetary assets and non-monetary
liabilities denominated in a foreign currency and measured at fair value are translated at the exchange rate
prevalent at the date when the fair value was determined. Non-monetary assets and non-monetary
liabilities denominated in a foreign currency and measured at historical cost are translated at the exchange
rate prevalent at the date of the transaction.
Transaction gains or losses realised upon settlement of foreign currency transactions are included in
determining net profit for the period in which the transaction is settled. Revenue, expense and cashflow
items denominated in foreign currencies are translated into the functional currency using the exchange
rate prevailing on the date of the transaction.
1.13 Earnings per equity share
Basic earnings per equity share is computed by dividing the profit for the year attributable to the equity
holders of the company by the weighted average number of equity shares outstanding during the period.
Diluted earnings per equity share is computed by dividing the net profit attributable to the equity holders of
the company by the weighted average number of equity shares considered for deriving basic earnings per
equity share and also the weighted average number of equity shares that could have been issued upon
conversion of all dilutive potential equity shares. The dilutive potential equity shares are adjusted for the
proceeds receivable had the equity shares been actually issued at fair value (i.e. the average market value
of the outstanding equity shares). Dilutive potential equity shares are deemed converted as of the
beginning of the period, unless issued at a later date. Dilutive potential equity shares are determined
independently for each period presented.
The number of equity shares and potentially dilutive equity shares are adjusted retrospectively for all
periods presented for any share splits and bonus shares issues including for changes effected prior to the
approval of the financial statements by the Board of Directors.
1.14 Income tax and Deferred Tax
Income tax expense comprises current and deferred income tax. Income tax expense is recognized in the
statement of profit and loss except to the extent that it relates to items recognised directly in equity, in
which case it is recognized in other comprehensive income. Income tax for current and prior periods is
recognised at the amount using the tax rates as per the tax laws that have been enacted. Deferred income
tax assets and liabilities are recognised for all temporary differences arising between the tax bases of
assets and liabilities and their carrying amounts in the financial statements. Deferred tax assets are
reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related
tax benefit will be realised.
Deferred income tax assets and liabilities are measured using tax rates and tax laws that have been
enacted or substantively enacted by the balance sheet date and are expected to apply to taxable income
in the years in which those temporary differences are expected to be recovered or settled. The effect of
changes in tax rates on deferred income tax assets and liabilities is recognised as income or expense in the
period that includes the enactment or the substantive enactment date. A deferred income tax asset is
recognized to the extent that it is probable test future taxable profit will be available against which the
deductible temporary differences and tax losses can be utilized.
The companyoffsets current tax assets and current tax liabilinies, where it has a legally enforceabls rigSt to
set off the recognized amounts and where it intends either to settle on a net besis, or to realize the asset
aed settle the liability simultaneef el y. Tine income tax provisiee for the interim period is made based on the
best estimate of the annual average tax rate expected to be applicable for the full financial year.
1.15 Employee benefits
A. Short-term employee benefits
tell employee benefits paynble wholly within twelve months of rendering the service are classified as “short
term employee benefits and they are recogsised in the period in which the employee renders the related
service. The Company recognizes the undiscounted amount of edort termemployee benefits expected to
be paid ia exchange for services rendered as a liability (accrued expense) after deducting any amount
already paid.
B. Post-employment benefits
(a) Defined contribution plans
Defined contributien nlans are Provident Fund Scheme and Employees' State iusurance Scheme
administered by the Goyennment for all eligible employees. Tan Company's contributions to defined
cont ribation plans are recognised in the Statement of Profit and Loss in the financial year to which
they relate.
(b) Defined benefit gratuity plan
A Group Graluity Truss under the name "KSE Empl oyee's Group Gratuity Fund Trust" has been
formedi which manages the funds transfnrred to the Tnust by the Company for meeting its gratuity
lia bility eotimated by ectuarial valuation and the paymen t of gratuity on re tirement ofthe employees
or the Company. The Trust hes taSen Policies under the Employee's Group Grat way-eum-Life
Assurance Sc heme of ten Life Inserance Cor poration of Indiai The net present value of the
obligatio s for gratuity benefits as determined o a indepe ndent actuarial valuation, son docted
annually using the projested unit credit method, as sdjusted for unrecognioed past sereices cost, if
any, and as reduced by the fair value of plan assets, is recognised in the accounts of the Company.
All exeenses represeuted by aurrent semce cost, past se rvice cost, if any, and eet int erest on the
defired benefit liabiliny/ (asset) are recognized in the Statement oi Pfofit ane Loss.
Remeas ureme nts of the net refined benefit li ability / (asset) comp risin g actuarial gain s an d losses
and tine return an the plan assens (excluding amoue^e included in net intersst on the net defined
benefit liability/asset), are recogmzed in Oteer Comprehensive Income. Sueh remeasurements are
not reclassified to the Statement of Profit and Loss in the subsequent periods.
Gratuity m respect of wholo-time directors, if any, is provided for on gross undiscounted basis and
charged to Statement of Profit and Loss.
C. Other long term employee benefits
The company has a scheme for compensated absences for eligible employees. The company makes
contributions to the Scheme of the Life Insurance Corporation of India. The net present value of the
obligation for compensated absences as determined on independent actuarial valuation, conducted
annually using the projected unit credit method and as reduced by the fair value of plan assets, is
recognised in the accounts. Actuarial gains and losses are recognised in full in the Statement of Profit and
Loss for the period in which they occur.
1.16 Cash Flow Statement
Cash flows are reported using the indirect method, whereby profit for the period is adjusted for the effects
of transactions of a non-cash nature, any deferrals or accruals of past or future operating cash receipts or
payments and item of income or expenses associated with investing or financing cash flows. The cash
flows of the Company are segregated into operating, investing and financing activities.
1.17 Dividends
Final dividends on shares are recorded as a liability on the date of approval by the shareholders and interim
dividends are recorded as a liability on the date of declaration by the Company's Board of Directors.
1.18 Leases
Leases under which the company assumes substantially all the risks and rewards of ownership are
classified as finance leases. When acquired, such assets are capitalized at fair value or present value of the
minimum lease payments at the inception of the lease, whichever is lower. Lease payments under
operating leases are recognized as an expense on a straight-line basis in the Statement of Profit and Loss
over the lease term.
1.19 Borrowing Cost
Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets,
which are assets that necessarily take a substantial period of time to get ready for their intended use or
sale, are added to the cost of those assets, until such time as the assets are substantially ready for their
intended use or sale.
All other borrowing costs are recognised in the statement of profit and loss in the period in which they are
incurred.
1.20 Inventories
Inventories as at the close of the year are valued at lower of cost or net realisable value. However, materials
and other items held for use in production of inventories are not written down below cost if the finished
goods in which they will be incorporated are expected to be sold at or above cost. The comparison of cost
and net realizable value is made on an item-by item basis. Cost of inventory comprises all costs of
purchase, duties, taxes (other than those subsequently recoverable from tax authorities) and all other
costs incurred in bringing the inventory to their present location and condition, determined on the
following methods:
(a) Raw materials - First In First Out (FIFO)
(b) Packing materials - First In First Out (FIFO)
(c) Stores & spares and consumables:
i. Furnace Oil, Diesel and Boiler Fuel - First In First Out (FIFO)
ii. Others - At weighted average cost
Cost of finished goods includes the cost of raw materials, packing materials, an appropriate share of fixed
and variable production overheads, ineligible tax credits as applicable and other costs incurred in bringing
the inventories to their present location and condition. Fixed production overheads are allocated on the
basis of normal capacity of production facilities.
1.21 Operating Segments
The Company's reportable segments (business segments) have been identified as (a) Animal Feed
Division (b) Oil Cake Processing Division, which includes vegetable oil refining also and (c) Dairy Division
comprising milk and milk products including ice cream. There are no reportable geographical segments.
Segment revenue, segment results, segment assets and segment liabilities include the respective
amounts identifiable to each of the segments as also amounts allocated on a reasonable estimate. The
Operating segments have been identified on the basis of the nature of products/services.
Segment revenue includes sales and other income directly identifiable with the segment including inter¬
segment revenue. Expenses that are directly identifiable with the segments are considered for
determining the segment results. Expenses which relate to the Company as a whole and not allocable to
segments are included under unallocable expenditure. Income which relates to the Company as a whole
and not allocable to segments is included in unallocable income. Segment result includes margins on inter¬
segment sales which are reduced in arriving at the profit before tax of the Company. Segment assets and
liabilities include those directly identifiable with the respective segments. Unallocable assets and liabilities
represent the assets and liabilities that relate to the Company as a whole and not allocable to any segment.
1.22 Government Subsidy/ Grant
Government Grant is recognized only when there is a reasonable assurance that the entity will comply with
the conditions attaching to them and the grants will be received.
a) Subsidy related to assets is recognized as deferred income which is recognized in the statement
of profit & loss on systematic basis over the useful life of the assets.
Purchase of assets and receipts of related grants are separately disclosed in statement of cash
flow.
b) Grants related to income are treated as other income in statement of profit and loss subject to
due disclosure about the nature of grant.
1B. DISCLOSURE OF SIGNIFICANT JUDGEMENT UNDER IND AS 1
Classification of Long-Term Leasehold Land
The Company has entered into lease arrangements for land with lease terms extending up to 99 years with
upfront premium paid and nominal annual lease rent. Based on the evaluation of the terms of the lease
The Company has a well-managed risk management framework, anchored to policies and procedures and
internal financial controls aimed at ensuring early identification, evaluation and management of key financial
risks (such as liquidity risk, market risk, credit risk and foreign currency risk) that may arise as a consequence
of its business operations as well as its investing and financing activities.
Accordingly, the Company's risk management framework has the objective of ensuring that such risks are
managed within acceptable risk parameters in a disciplined and consistent manner and in compliance with
applicable regulation.
1) Liquidity Risk
Liquidity risk is the risk that the Company will encounter due to difficulty in raising funds to meet commitments
associated with financial instruments that are settled by delivering cash or another financial asset. Liquidity
risk may result from an inability to sell a financial asset quickly at close to its fair value.
The company has sound financial strength represented by its aggregate current assets including current
investments as against aggregate current liabilities and its strong equity base. In such circumstances, liquidity
risk is insignificant.
2) Market Risk
As the Company's overall debt is less compared to its equity, the exposure to interest rate risk from the
perspective of Financial Liabilities is negligible. Further, treasury activities, focused on managing investments
in debt instruments, are administered under a set of approved policies and procedures guided by the tenets of
liquidity, safety and returns. This ensures that investments are only made within acceptable risk parameters
after due evaluation. The Company's investments are predominantly held in fixed deposits and debt mutual
funds. Fixed deposits are held with highly rated banks and have a short tenure and are not subject to interest
rate volatility. The Company also invests in mutual fund under schemes of leading fund houses. Such
investments are susceptible to market price risk that arise mainly from changes in interest rate which may
impact the return and value of such investments. However, given the relatively short tenure of underlying
portfolio of most of the mutual fund schemes in which the Company has invested, such price risk is not
significant.
3) Credit Risk
Credit risk refers to risk that a counterparty will default on its contractual obligations resulting in financial loss
to the Company. Credit risk arises primarily from financial assets such as trade receivables, investment in
mutual funds, derivative financial instruments, other balances with banks and other receivables.
The Company has adopted a policy of only dealing with counterparties that have sufficiently high credit
rating. The Company's exposure and credit ratings of its counterparties are continuously monitored and the
aggregate value of transactions is reasonably spread amongst the counterparties. Credit risk arising from
investment in mutual funds, derivative financial instruments and other balances with banks is limited because
the counterparties are banks and recognized financial institutions with high credit ratings.
For trade receivables, as a practical expedient, the company is accepting advance from customers against
sale of goods. Hence credit risk is negligible.
4) Foreign Currency Risk
The Company undertakes transactions denominated in foreign currency (mainly US Dollar) which are subject
to the risk of exchange rate fluctuations. Financial assets and liabilities denominated in foreign currency, are
also subject to reinstatement risks.
The Company has established risk management policies to hedge the volatility arising from exchange rate
fluctuations in respect of firm commitments and highly probable forecast transactions, through foreign
exchange forward contracts. The proportion of forecast transactions that are to be hedged is decided based
on the size of the forecast transaction and market conditions. As the counterparty for such transactions are
highly rated banks, the risk of their non-performance is considered to be insignificant.
For the purpose of the Company's capital management, capital includes issued capital and all other equity reserves
attributable to the equity shareholders of the Company. The primary objective of the Company when managing capital is to
safeguard its ability to continue as a going concern and to maintain an optimal capital structure so as to maximize
shareholder value.
The Company's financial strategy aims to support its strategic priorities and provide adequate capital to its businesses for
growth and creation of sustainable stakeholder value. The Company funds its operations through internal accruals. The
Company aims at maintaining a strong capital base largely towards supporting the future growth of its businesses as a
going concern.
As at 31st March, 2025, the Company has only one class of equity shares. The company is not subject to any externally
imposed capital requirements.
0.347 Lakhs SGST) vide order dated 22.11.2023. Interest to the tune of Rs 0.75 Lakhs and penalty of Rs 0.69 Lakhs
was also demanded in the order. The company has filed appeal against the order on 14.02.2024 and remitted Rs
6,936 as pre deposit. Since there is no fault on the part of the company, company is confident of receiving
favourable order in this regard.
(ii) Assistant Commissioner (Assessment), Department of Commercial taxes, Thrissur had issued order demanding f
25.40 lakhs (including interest f 12.64 lakhs) for the financial year 2000-01 against sales tax exemption claimed on
sale of refined vegetable oil. On appeal, The Deputy Commissioner (Appeals), Ernakulam had issued an order
directing the assessing authority to reconsider the matter. The final order from the Assistant Commissioner
(Assessment) is not yet received.
(iii) Southern Railway had raised two demands aggregating to f 57.11 lakhs on grounds of undercharge due to
incorrect classification of deoiled rice bran. The claim has been challenged by the Company before the Hon. High
Court of Kerala and the writ petition is still pending before the Court.
(iv) (a) Some of the employees of the company had challenged the enhancement of wage limit for coverage of ESI,
before the Hon. High Court of Kerala and the Court had granted stay. The cases were disposed off by the Court
in favour of ESI Corporation and Company had remitted contributions of employer and employees.
Subsequently, ESI Corporation demanded interest amounting to f 1.57 lakhs for delay in payment of
contributions relating to the period when the above stay was in operation and f 0.19 lakh towards employees'
contribution in respect of retired/resigned employees during the said period. Company had preferred appeal
before the ESI Court, Palakkad which was decided in favour of the Company. Aggrieved by the order, ESI
Corporation had filed appeal before the Hon. High Court of Kerala challenging the orders of ESI Court, Palakkad,
and the said appeal is still pending.
ESI Corporation had also demanded damages of f 1.14 lakhs for the delay in remittance of contribution
mentioned above and the Company had filed an appeal before the ESI Court, Palakkad which is still pending.
(b) ESI Corporation has issued order demanding f 1.63 lakhs as interest and f 0.60 lakh as damages for delay in
remittance of contribution on omitted wages for the period from 01.04.1996 to 31.03.2002. ESI Court, Thrissur
finally heard the case and set aside the demand and waived the damage demanded and remanded the matter
back to the Corporation for reconsideration. As per the direction of ESI Court, ESI Corporation issued order
dated 10.10.2022 with a revised demand of f 1.54 lakhs and the same was remitted. In the meantime, ESI
Corporation has filed an appeal before the High Court of Kerala against the order of the ESI Court, which is still
pending and hence no contingent liability is shown in this regard.
(v) (a) The BSE Limited, wherein the shares of the Company are listed, had issued a demand vide their letter dated
03.02.2020, for a fine of f 2.48 lakhs for non-compliance with Regulations 17 (1) and 19 (1) /19 (2) of SEBI (LODR)
Regulations, 2015 dealing with requirements as the composition of the Board including failure to appoint woman
director and for non-compliance with the constitution of the Nomination and Remuneration Committee. It has
been represented to the BSE Limited in writing that the Company is fully compliant with these regulations and
the Company has requested to recall the demand of fine. BSE Limited has not communicated on the said
representations till date.
In all the above cases company is legally advised that there is a good chance for full relief and hence no provision is
considered necessary at this stage.
34.4 The exceptional income of Rs 250.75 Lakhs for the year ended 31.03.2025 is net of insurance claim of Rs 251.80 Lakhs
received for flood-related damages of raw materials in Tamil Nadu during FY 2023-24 and additional expense of Rs 1.05
Lakh incurred by the company during the year on account of the materials damaged. The exceptional item of R.s 409.54
Lakhs for the year ended 31.03.2024 is net of the exceptional loss of Rs. 413.80 Lakhs, pertaining to the damage of raw
materials due to combustion and floods in Tamil Nadu during December 2023 (Rs.409.70 Lakhs based on provisional
assessment) and transit damage (Rs. 4.10 Lakhs) and the exceptional income of Rs. 4.26 Lakhs on account of receipt of
insurance claim received in part against the claim lodged during the financial year 2021- 22.
34.5 Balance with Government Authorities under Note 16 includes Goods and Service Tax (GST) which in the opinion of the
management is either refundable or eligible for set off against future GST liabilities.
34.6 Certain items of income and expenses have been netted off while reporting and expenses are stated net of recoveries; sale
of freezer and contribution received from dealers towards calendar and diaries are netted against Advertisement and Sales
promotion, Lay time incentive received in foreign currency is netted against respective purchase account. Cost of tea
supplied collected from employees is netted against Staff welfare expenses, bank charges recovered is netted against bank
charges paid.
34.7 Stores and spares consumed include cost of materials used for repairs and maintenance.
34.8 In the opinion of the Board, current assets and long-term loans & advances have the value at which they are stated in the
Balance Sheet, if realised in the ordinary course of business.
34.9 The company has a system of periodically obtaining and reconciling confirmations of balances with banks, suppliers and
customers.
34.10 Acid buff imported by the Company under CTH 23099020 at NIL rate was assessed by the Customs Department at 5%
IGST. Accordingly, the company has paid Rs 71.29 Lakhs under protest and filed writ petition before the Hon. High Court of
Kerala. The matter is disposed in favour of the company. Steps are being taken to secure refund of the amounts paid under
protest.
(a) Actuarial Risk - the risks that benefits costs more than expected. All assumptions used to project the
liability cash-flows are source of risk, if actual experience turns out to be worse than expected
experience - there could be a risk of being unable to meet the liabilities as and when they fall due. E.g. If
assumed salary growth rates turns out to be lesser than reality - this could cause a risk that the
provisions are inadequate in comparison to the actual benefits required to be paid.
(b) Investment Risk - There is a minimum investment return guaranteed to the Sponsor (called the
minimum floor rate) which is a non-zero positive percentage. Hence there is no market risk - risk due to
reductions in the market value of the underlying investments backing the insurance policy of the
Sponsor. Also there is a Guaranteed Surrender Value to the extent of 90% of contributions made net of
withdrawals and charges.
(c) Liquidity Risk - The investments are made in an insurance policy which is also very liquid - withdrawals
can happen at any time. There is no Market Value adjustment imposed for withdrawals done by the
Sponsor at an unfoward time except when the amount withdrawn exceeds 25% of the opening balance
at the beginning of the financial year. This can be easily mranaged by tnaking multiple withdrawals fo
ensure that the amiount withdrawn per transaction does not breach the limit above. Also nore that there
are no surrendet charges afrer three yeats. During the fitst three yeats also the surrender charges are
minimal.
rd) Legislative Risk -There could be changes to Regulation/legislation governing this Plan that could affect
the Company advetsely (e.g. introduction of a minimum benefit). The changes in regulation could
porentially increase the plan liabilities.
Notes:
1. The above disclosures are based on information certified by the independent actuary and relied upon by the
Company.
2. The plan assets of the Company are mranaged by the L-fe Insurance Corporation of India in rents of
insurance policies taken to tund the obligations of the Company with respect fo its Gratuity and
Compensared Absences Plan. Information on caregories of plan assets is not available with the Company.
34.26 Capital advance under Other Non-current Assets of previous year included ? 359.26 lakhs paid for purchase
of an existing ice cream manufacturing facility in KINFRA park in Malappuram District to cater the northern
districts of Kerala. During the current year, the legal title of the facility has been transferred to the company
and the facility is capitalized in the books at Rs 395.06 Lakhs.
34.27 Other information
(a) The Company has not traded or invested in crypto currency or virtual currency during the year.
(b) The Company has not been declared wilful defaulter by any bank or financial institution or other lender or
government
or any government authority.
(c) The Company does not have any benami property held in its name. No proceedings have been initiated on
or are pending against the Company for holding benami property under the Benami Transactions
(Prohibition) Act, 1988 (45 of 1988) and Rules made thereunder.
(d) The Company does not have any holding or subsidiary company.
(e) The Company does not have any transactions with companies struck off.
(f) The Company does not have any charges or satisfaction which is yet to be registered with ROC (Registrar of
Companies) beyond the statutory period.
(g) The Company has not received any fund from any person(s) or entity(ies), including foreign entities
(Funding Party) with the understanding (whether recorded in writing or otherwise) that the Company shall
directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on
behalf of the Funding Party (Ultimate Beneficiaries) or provide any guarantee, security or the like on behalf
of the Ultimate Beneficiaries.
(h) The Company has not advanced or loaned or invested funds to any other person(s) or entity(ies), including
foreign entities (Intermediaries) with the understanding that the Intermediary shall directly or indirectly
lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the
company (Ultimate Beneficiaries) or provide any guarantee, security or the like to or on behalf of the
Ultimate Beneficiaries.
(i) The Company has not surrendered or disclosed any transaction, previously unrecorded in the books of
account, in the tax assessments under the Income Tax Act, 1961 as income during the year.
34.28 Figures of the previous year have been regrouped and recast wherever necessary to suit the current year's
layout.
The accompanying notes are integral part of the financial statements
For and on Behalf of Board of Directors of KSE Limited
(CIN No.L15331KL1963PLC002028)
Sd/- Sd/- As per our report of
Tom Jose (DIN : 01971467) M.P. Jackson (DIN : 01889504) even date attached
Chairman Managing Director
For SRIDHAR & CO.
Sd/- Sd/- Chartered Accountants, Thiruvananthapuram
Senthil Kumar Nallamuthu Paul Francis (DIN : 00382797) (Firm No. 003978S)
Chief Financial Officer Executive Director
Sd/-
Sd/- Sd/- CA. R. Srinivasan,, F.C.A.
Srividya Damodaran Dony A.G. (DIN : 09211623) (M. No. 200969)
Company Secretary Director Partner
UDIN: 25200969BMJOAM4447
Place: Irinjalakuda
Date: May 27, 2025
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