BOARD OF DIRECTORS Ramesh Chand Garg Govind Prasad …Vineet Garg Chief Executive (Operation) Vivek...

BOARD OF DIRECTORS

Ramesh Chand Garg Chairman

Govind Prasad Garg Managing Director

Sourabh Garg Whole Time Director

Pramod Kumar Mandloi

B. N. Singh

R. S. Sisodia

MANAGEMENT TEAM

Y. Sarup Chief Executive (Overseas)

Vineet Garg Chief Executive (Operation)

Vivek Garg Chief Executive (Finance)

Chandra Kamal Bhuyan Head - Marketing (North-East)

Ashok Kawade Head - Logistics

Nalinesh Jha Head - Overseas

Jayant Mitra Head - Human Resources & Admin.

Anil K. Kabra Head - Accounts and Audit

V. K. Mathur Head - Prod. Refined & Vanaspati

V. K. Bamal Head - Oil & Solvent

Ramniwas Gupta Head - Accounts

COMPANY SECRETARY

Vikas Tulsiani

BANKERS

Central Bank of India

Andhra Bank

AUDITORSCONTENTS PAGES Rathi & Co.

Chartered Accountants

Notice 2

Directors’ Report 5 INTERNAL AUDITORS

Management Discussion and Analysis 8 Sanjay Kalicharan Agarwal & Associates

Corporate Governance Report 9 Chartered Accountants

Auditors’ Report 17

Balance Sheet 20 REGISTERED OFFICEProfit & Loss Account 21 Jiwaji Ganj, Morena - 476 001 (M. P.)

Cash Flow Statement 22

Schedules A to O 23-27

Schedule P "Notes Forming 28 WORKSPart of the Accounts" Industrial Area, A.B. Road, Morena - 476 001 (M. P.)

REGISTRAR & SHARE TRANSFER AGENT

Ankit Consultancy Pvt. Ltd.

2nd Floor, Alankar Point, Gita Bhawan Square, Indore (M. P.)

visit us at www.ksoils.com

th20 Annual Report 2004-05

K. S. Oils LimitedSK

7. To consider and if thought fit, to pass the following Resolutions, with or without modification :-

(a) Increase in Authorised Capital - ORDINARY RESOLUTION

“RESOLVED that pursuant to the provisions of section 94 of the Companies Act, 1956, and other applicable provisions, if any, the authorised share capital of the Company be and is hereby increased from Rs. 10,00,00,000/- (Rupees Ten Crores Only) divided into 1,00,00,000 Equity Shares of Rs. 10/- each to Rs. 15,00,00,000/- (Rupees Fifteen Crores Only) divided into 1,50,00,000 Equity Shares of Rs. 10/- each.

(b) Amendment of Memorandum of Association - SPECIAL RESOLUTION

RESOLVED FURTHER that the existing clause V of the Memorandum of Association of the Company as to Share Capital be and is hereby deleted and in its place the following Clause V be substituted :

“The Authorised Share Capital of the Company is Rs. 15,00,00,000/- (Rupees Fifteen Crores Only) divided into 1,50,00,000 (One Crore Fifty Lakh) Equity Shares of Rs. 10/- (Rupees Ten) each subject to being increased as hereinafter provided and in accordance with the regulations of the Company for the time being whether original or increased or reduced may be divided into classes, with any preferential, deferred, qualified or other rights, privileges conditions or restriction attached thereto, whether in regard to dividend, voting, return of capital or otherwise.”

(c) Amendment of Articles of Association - SPECIAL RESOLUTION

RESOLVED that pursuant to the provisions of section 31 of the Companies Act, 1956, and other applicable provisions, if any, the existing Article 3 of the Articles of Association of the Company be and is hereby deleted and in its place the following article be substituted therefor :

“The Authorised Share Capital of the Company is Rs. 15,00,00,000/- (Rupees Fifteen Crores Only) divided into 1,50,00,000 (One Crore Fifty Lakh) Equity Shares of Rs. 10/- (Rupees Ten) each only with power to increase or reduce and to divide the same capital into several classes and to attach thereto preferential or other rights, privileges or condition and to vary, modify, abrogate, any right and consolidate or subdivide the shares and issue shares of higher or lower denomination.”

By Order of the Board of DirectorsFor K. S. Oils Limited

Morena, Vikas Tulsianird03 September, 2005 Company Secretary

Registered office Jiwaji Ganj, Morena - 476 001



NOTICEthNOTICE is hereby given that the 20 Annual General Meeting

of the Members of K. S. Oils Limited will be held on Friday, the th30 Day of September, 2005 at 4.00 p.m. at the Registered Office

of the Company at Jiwaji Ganj, Morena - 476 001 (M. P.) to transact the following business :-

ORDINARY BUSINESS

1. To consider and adopt the Audited Balance Sheet as at st31 March, 2005, the Profit and Loss Account of the

Company for the year ended on that date and the Reports of the Auditors and Directors thereon.

2. To Consider declaration of dividend on Equity Shares.

3. To appoint a Director in place of Mr. R. C. Garg who retires by rotation and being eligible, offers himself for re-appointment.

4. To appoint Auditors of the Company and to fix their remuneration, The retiring Auditors M/s Rathi & Co., Chartered Accountants, are e l ig ib le for re-appointment.

SPECIAL BUSINESS

5. To consider and if thought fit, to pass with or without modification, the following Resolution as an Ordinary Resolution :

“RESOLVED that Dr. R. S. Sisodia, retiring at this Annual General Meeting, having been appointed as an Additional Director, and being eligible and offering himself for the appointment and in respect of whom the Company having received notice in writing under Section 257 of the Companies Act, 1956 from a member proposing his candidature, be and is hereby appointed a Director of the Company liable to retirement by rotation.”

6. To consider and if thought fit, to pass the following Resolution, with or without modification, as an Ordinary Resolution :-

“RESOLVED that in supersession of the Ordinary thResolution passed at the 17 Annual General Meeting of

ththe Company held on Saturday the 28 day of September, 2002 and pursuant to section 293 (1) (d) and other applicable provisions, if any, of the Companies Act, 1956 and the Articles of Association of the Company, the consent of the Company be and is hereby accorded to the Board of Directors of the Company for borrowing form time to time any such sums of money which, together with the moneys already borrowed by the Company (apart from temporary loans obtained or to be obtained from the Company’s bankers in the ordinary course of business), may exceed the aggregate for the time being of the paid-up Capital of the Company and its Free Reserves, that is to say, Reserves not set apart for any specific purpose, provided that the maximum amount of moneys so borrowed by the Board shall not at any time exceed the limit of Rs. 200 Crores (Rupees Two Hundred Crores Only).”

NOTES :-

i A MEMBER ENTITLED TO ATTEND AND VOTE AT THE MEETING IS ENTITLED TO APPOINT A PROXY TO ATTEND AND VOTE (ON A POLL) INSTEAD OF HIMSELF AND THE PROXY NEED NOT BE A MEMBER OF THE COMPANY. A PROXY IN ORDER TO BE EFFECTIVE MUST BE RECEIVED BY THE COMPANY NOT LESS THAN 48 HOURS BEFORE THE MEETING. A PROXY SO APPOINTED SHALL NOT HAVE ANY RIGHT TO SPEAK AT THE MEETING.

ii Explanatory Statement under section 173 (2) of the Companies Act, 1956 relating to Special Business to be transacted at the Meeting is annexed hereto.

thiii The Register of Members and share transfer books of the Company will remain closed from 26 September, th2005 to 30 September, 2005 (both days inclusive) for determining the names of members eligible for

dividend, if approved, on equity shares.

iv Members are requested to notify immediately any changes in their address to the Company or its Shares ndTransfer Agents : Ankit Consultancy Pvt. Ltd, 2 Floor, Alankar Point, 4 A, Rajgarh Kothi, Gita Bhawan Square,

Indore - 452 001 (M. P.).

v The dividend on the equity shares, as recommended by the Board of Directors, if declared, at the Annual thGeneral Meeting, will be paid on or before 29 October, 2005.

vi All the amounts of unclaimed dividend up to the final dividend for 1996-97 have already transferred to the Investor Education and Protection Fund of the Central Government in terms of the provisions of Section 205C of the Companies Act, 1956. The amount of dividend for any subsequent dividend payment remaining unclaimed for a period of seven years from the date of payment shall be transferred to the “Investor Education & Protection Fund” of the Central Government under Section 205 C of the Companies Act, 1956.

vii Members who have not encashed their dividend warrant(s) for the year 1997-98 and 1998-99 so far for the said amounts are requested to make their claims to the Company. No claim shall lie against the Company or the said fund in respect of the amounts remaining unclaimed once the unclaimed dividend is transferred to the Central Government.

viii Members holding shares in the dematerialised mode are requested to intimate all changes with respect to their bank details, mandate etc., to their respective Depository Participant (DP). These changes will be automatically reflected in Company’s records, which will help the Company to provide efficient and better service to the members.

ix Members holding shares in physical form who have not yet provided the Bank Details are requested to provide their latest Bank Account Number, name of Bank and address of the Branch, quoting their folio number, to the company to enable the company to print the Bank Account Details on the Dividend Warrants. This would ensure safety in so far as the dividend warrants, if lost or misplaced, cannot be used for any other purpose except for depositing the same in the account specified on the dividend warrant.

x Details under Clause 49 of the Listing Agreement with the Stock Exchanges in respect of directors seeking appointment/reappointment at the Annual General Meeting, form part of the Corporate Governance Report.

xi A member desirous of getting any information on the accounts or operations of the Company is required to forward his/her queries to the Company at least seven days prior to the meeting so that the required information can be made available at the Meeting.

Explanatory Statement in respect of the Special Business pursuant to Section 173 (2) of the Companies Act, 1956.

ITEM NO. 5

rdThe Board of Directors of the Company had appointed Dr. R. S. Sisodia, at its meeting held on 03 September, 2005, as an Additional Director, liable to retire by rotation, under section 260 of the Companies Act, 1956 read with the Articles of Association of the Company, Dr. R. S. Sisodia, holds office only till the date of the forthcoming Annual General Meeting.

Notice has been received from a member as required under Section 257 of the Companies Act, 1956, proposing Dr. R. S. Sisodia as candidate for the office of Director.



Dr. R. S. Sisodia, holds a Ph. D and a Law graduate and held various senior positions in the department of Madhya Pradesh State Road Transport Corporation (MPSRTC) including that of the Additional Director in Agricultural Marketing Board, Bhopal and also worked as General Manager, Text Book Corporation. He has a rich and varied experience in the field of Marketing of Agriculture Commodities, Road Transportation, Legal Matters and Corporate Advisory. Your Directors of the view that the Company would be immensely benefited by the rich experience and expert guidance of Dr. R. S. Sisodia and therefore recommend for approval, the Resolution contained in Item No 5 of the Notice convening the Annual General Meeting.

None of the Directors except Dr. R. S. Sisodia is concerned or interested in the resolution concerning his appointment.

ITEM NO. 6

The Board of Directors of the Company cannot, except with the consent of the Company in General Meeting, borrow moneys, apart from temporary loans obtained from the Company’s bankers in the ordinary course of business, in excess of the aggregate of the paid-up Capital and Free Reserves of the Company, that is say, Reserves not set apart for any specific purpose.

The proposed limit for borrowing of Rs. 200 Crores would also enable the Company to mobilise the funds as and when required and also look for alternative resources in the interim to offset the high cost borrowing of the Company.

Taking in to consideration the above position, it is proposed to increase the borrowing limit of the Company with the sanction of the Shareholders up to an amount of Rs. 200 Crores. Any further borrowing will be made subject to obtaining the requisite approvals from the concerned authorities.

The directors recommends the Resolution at item No. 6 of the Notice for approval by the Members.

No Directors is interested or concerned in this Resolution.

ITEM NO. 7 (a), (b) & (c) :

The present authorised share capital of the Company is Rs. 10,00,00,000/- (Rupees Ten Crores Only) divided into 1,00,00,000 (One Crore) Equity Shares of Rs. 10/- each.

The growth of the Company’s operation require augmentation of resources. Accordingly, increase in authorised share capital of the Company by creation of 50,00,000 Equity Shares is recommended.

As per section 94 (2) of the Companies Act, 1956, the power to increase the authorised share capital has to be exercised by the Company in General Meeting. Accordingly, the resolution at Item No. 7(a) of the Notice seeks approval of the members for increasing the authorised capital. Resolutions at item Nos. 7(b) and 7(c) seeks members’ approval for making consequential changes in the Memorandum and Articles of Association of the Company.

Your directors recommend this resolution for approval of members.

None of the Directors of the Company is in any way concerned or interested in the proposed amendments to the Memorandum and Articles of Association of the Company.

By Order of the Board of DirectorsFor K. S. Oils Limited.

Vikas TulsianiCompany Secretary

Morena,rd03 September, 2005

Registered office Jiwaji Ganj, Morena - 476 001



procure the best seeds at very competitive rate.

4 The retail pack of vanaspati enjoys the prime position in M. P. region and develop brand image which resulted higher yield to the Company.

4 Company has adopted strict cost control measure, better working capital and cash management has yielded good results during the year.

4 Removal of excise duty on refined edible vegetable oil and vanaspati enhance the profit of the Company.

PERFORMANCE OF DIVISIONS

Oil Division

During the year Mustard seeds processed at 81,941 M.T. against that of 32,122 M.T. in previous year thus recorded a significant jump of 155% over the previous year. Your Company continued to be major player in the mustard oil segment.

Refinery Division

Production of Refined oil at 14,342 M.T. as against that of 17,250 M.T. in previous year accounted a marginal decrease of 16.85% as compared to the previous year.

Vanaspati Division

Production of Vanaspati at 13,595 M.T. as against that of 14,880 M.T. accounted a fall of 8.6% as compared to the previous year.

Solvent Division

During the year DOC (De-oiled Cake) produced at 93,157 M.T. as against that of 69,972 M.T. during the pervious year thus recorded a increase by 33.13% over the previous year.

Management Discussion and Analysis

A separate section on management discussion and analysis as stipulated in Clause 49 of the Listing Agreement with the Stock Exchanges, is given in the Annual Report.

Awards and Recognition

Your Company won a prestigious award for the "Highest Processor of Rapeseed Oilcake for the year 2004-05" from The Solvent Extractors' Association of India, A Premier Association of Vegetable Oil Industry & Trade.

Corporate Governance

The company confers significant consideration to good Corporate Governance as it contributes to enhance investors confidence, improve investors' protection and attain highest level of transparency.

Pursuant to Clause 49 of the Listing Agreement a Report on Corporate Governance together with the Auditor's Certificate on compliance with the



DIRECTOR'S REPORT FOR THE YEAR ENDEDST

31 MARCH, 2005Dear Shareholders,

thYour Directors take great pleasure in presenting the 20 Annual Report together with the audited statement of accounts for the year

stended 31 March, 2005.

Financial Results (Rs. in Lacs)

Particulars Year Ended Year Ended31.03.2005 31.03.2004

Sales 42,517 42,714

Export Sales 2,729 4,093

Profit before Interest, Depreciationand Tax (PBIDT) 1,436 1,241

Interest 771 795

Profit before Depreciation and Tax (PBDT) 665 446

Depreciation 253 195

Profit before Tax (PBT) 412 251

Provision for Taxation 76 25

Profit after Tax (PAT) 336 226

Add : Profit brought forward fromprevious year 615 439

Profits after tax available for Appropriation 951 665

Appropriations

General Reserve 50 50

Proposed Dividend on equity shares 49 -

Corporate Tax on Proposed Dividend 7 -

Total Appropriation 106 50

Surplus carried to Balance Sheet 845 615

Dividend

In view of the continuing good performance, your Directors recommend a dividend @ 10% (Rs. 1.00 per equity share) on equity capital of Rs. 489.29 Lacs for the financial year ended

st31 March, 2005.

Consequently, the total outgo on account of dividend and tax thereon for the financial year 2004-05 shall be Rs. 55.79 Lacs.

Review of Operations

Your Company's overall performance was excellent during the financial year 2004-05. Your Company registered a turnover of 453 crores as against Rs. 468 crores during the previous year the marginal fall in turnover is on account of less realisation in the value of product of the Company however the company recorded the higher sales in terms of quantity. During the year under review Company recorded a Profit before Depreciation, Interest and Tax of Rs. 14.36 crores as against 12.41 crores during the previous year thus registering an increase in the operating profit by 15.71%. The net profit after tax during the current year at Rs. 3.36 crores as against Rs. 2.26 crores in the previous year thus recorded a higher ever profit.

The major contributing factors for the improved performance are :

4 Increased production of Mustard oil due to good crop of Mustard/Rape seeds which facilitate the Company to

conditions of Corporate Governance is provided elsewhere in this Annual Report.

Share Capital

Pursuant to the Resolution passed by the Shareholders at the thExtraordinary General Meeting held on 29 January, 2005,

ththe Board of Directors had allotted on 11 February, 2005, 35,00,000 Equity Warrants of Rs. 25/- each which is convertible into one equity shares of Rs. 10/- each at premium of Rs. 15/-each at the option of warrant holder. The Company has received warrant application money @ Rs. 6.25 per warrant on 35,00,000 warrants.

The Share Capital of the Company will increase by a maximum of Rs. 3.5 Crores to Rs. 8.39 Crores in the event of exercise of option for conversion to equity shares of equity warrants

thallotted on 11 February, 2005.

The Company has utilised the warrant application money in repayment of long term liability.

Voluntary Delisting of Equity Shares from the stock exchange at Delhi and Jaipur.

The securities of the Company have been de-listed from the Delhi Stock Exchange Association Limited and Jaipur Stock Exchange Limited as there has been no trading recorded in the securities of the Company for quite some time.

Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and Outgo.

The particulars as prescribed under sub section (1) (e) of the Section 217 of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988, are given at Annexure 'A' to the Report.

Particulars of Employees

None of the employees of your Company received a remuneration in excess of reportable amount as laid down under section 217(2A) of the Companies Act, 1956.

Fixed Deposits

Your Company has not accepted/invited any Deposits within the meaning of Section 58 A of the Companies Act 1956. The Company has made the payments of all mature deposits during the year under review and there is no outstanding deposit, which is matured and not claimed.

Directors

Mr. R. C. Garg, Director, retire by rotation and being eligible, offer himself for reappointment.

Mr. M. L. Garg, Director resigned from the Board of Directors of the Company on September 3, 2005. Your Directors placed on record their sincere appreciation for the valuable advice and guidance received from Mr. M. L. Garg during his tenure as member of the Board.

Mr. R. S. Sisodia, joined the Board of Directors of the Company with effect from September 3, 2005, as additional director of the Company. The Company has received notice along with requisite fee from a member under Section 257 of the

Companies Act, 1956 proposing candidature of Mr. R. S. Sisodia, as Director of the Company.

The Resolutions for the reappointment of the aforesaid Directors are being moved at the ensuing Annual General Meeting, which the Board recommends for your approval.

Directors Responsibility Statement

Pursuant to the requirement under Section 217 (2AA) of the Companies Act, 1956 with respect to Directors ' Responsibility Statement, it is hereby confirmed that :

i In the preparation of annual accounts for the financial styear ended 31 March, 2005, the applicable accounting

standards have been followed along with proper explanation relating to material departures, if any;

ii The Directors have selected such accounting policies and have applied them consistently and made judgements and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the

stCompany as at 31 March, 2005 and of the Profit of the Company for the year ended on that date;

iii The Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; and

iv The Directors have prepared the annual accounts for the stfinancial year ended 31 March, 2005 on a going concern

basis.

Auditors

M/s Rathi & Co., Chartered Accountants, Auditors of the Company will retire at the ensuing Annual General Meeting, and being eligible, offer themselves for re-appointment. The Company has received a certificate from the Auditors to the effect that their re-appointment, if made, would be in accordance with Section 224 (IB) of the Companies Act, 1956.

The members are requested to consider their re-appointment for the current financial year 2005-06 and authorise the Board of Directors to fix their remuneration.

Acknowledgements

The Directors wish to place on record their appreciation for continued assistance and co-operation extended to the Company by its Customers, Investors, Bankers, Regulatory & Government Authorities, Service Providers and its own dedicated Employees. The Board of Directors express its gratitude for the Co-operation extended by the Consortium Bankers i.e. Central Bank of India and Andhra Bank.

On behalf of the Board of Directors

Ramesh Chand GargChairman

rdMorena 3 September, 2005



Annexure (A) to Directors' ReportInformation pursuant to Section 217 (1) (e) of the Companies

Act, 1956 read with Companies (Disclosure of Particulars in the Report of Board of Directors) Rules,1988.

A. Conservation of Energy :

(a) Energy conservation measures taken :

4 The Company has been monitoring its energy consumpt ion regular ly and making severa l modifications in the plants which have resulted reduction in the energy consumption.

4 Installation of electric control panels.

4 Installation of high voltage control stabiliser.

(b) Additional investments and proposals, if any, being implemented for reduction of consumption of energy :

The Company is planning for 2.5 M.W. power project (wind mill) the benefit would be derived in the form of credit in existing captive power by the Company.

Modernisation of Plants to achieve increased output and power savings.

(c) Impact of measures at (a) and (b) above for reduction of energy consumption and consequent impact on the cost of production of goods :

As a result of the above measures undertaken power consumption in plants has been reduced.

(d) Total energy consumption and energy consumption per unit of production :

Given in Form 'A' as below :

FORM - A

Form for Disclosure of Particulars with respect to Conservation of Energy

(A) POWER AND FUEL CONSUMPTION

PARTICULARS Year Ended Year Ended

31/03/2005 31/03/2004

1. Electricity

(a) Purchased

Units 5,297,220 3,883,680

Total Amount (Rs.) 25,164,838 19,743,694

Rate Unit (Rs.) 4.75 5.08

(b) Own Generation

(I) Through Diesel Generator

Units 8,105,586 7,236,094

Unit per liters

of Diesel Oil (Rs.) 4.20 3.50

Cost/Units (Rs.) 5.29 5.41

(ii) Through steam

turbine/generator N.A. N.A.

Through Kerosene Generator

Units - 475,498

Total Amount - 2,555,261

Rate Units (Rs.) - 5.37

2. Coal

Quality (MT) 13,087 12,862

Total Cost (Rs.) 34,488,792 28,113,920

Average Rate (Rs.) 2,635.35 2,185.81

3. Furnace Oil

Quality (MT) - -Total Cost (Rs.) - -Average Rate (Rs.) - -

4

4



4. Others

Quality (MT) - -Total Cost (Rs.) - -Average Rate (Rs.) - -

(B) Consumption per Unit of Production :

PARTICULARS Current Year Previous Year

(PMT) (PMT)

Production :

(with details) unit (1,59,342 Mt of Oil, DOC, Vanaspati Ghee)

Electricity 84.11 93.89

Furnace Oil - -

Coal 0.08 0.11

Others - -

B. TECHNOLOGY ABSORPTION

Form-B

(Form for Disclosures of Particulars with respect to Absorption)

RESEARCH & DEVELOPMENT (R & D) :

1 Specific areas in which R&D carried out by the Company :

The Company is putting effort with a specific objective of optimisation of process systems and adopting parameters ensuring Product improvement and cost reduction.

The Company has started the production of refined palm oil as per international standard as per technology provided by the council of Scientific and Industrial Research (CSIR) and Regional Research Laboratories (RRL), Trivanduram.

2 Benefits derived as a result of the above R & D :

The quality of Company's products has improved which are enjoying the significant position in the industry.

3 Future Plan of Action :

The Company will continue to pursue its R & D work for further reduction of cost of product and adding more value to the product.

4 Expenditure on Research and Development

Expenditures are Charged to the respective heads of accounts and not allocated separately.

Technology Absorption, Adaptation and Innovation :

1. Efforts made :

The Company is putting its effort for further optimisation of the manufacturing process, reduction of waste and cost efficiency.

2. Benefits derived as a result of the above efforts :

Improvement in quality of products and reduction of cost of product.

FOREIGN EXCHANGE EARNINGS AND OUTGO OF THE COMPANY :(Rs. in Lacs)

PARTICULARS Year Ended Year Ended

31.03.2005 31.03.2004

a) Foreign Exchangeearnings of the CompanyEarning on FOB basis 631 4,093

b) Foreign Exchange outgoCIF value of importsa) Raw Material (Oil) 11795 9,031b) Expenditure in foreign

currency - 1

MANAGEMENT DISCUSSION AND ANALYSISK. S. Oils Limited has been promoted by the Garg family and is one of India’s leading manufactures of Mustard/Rapeseed Oils and having strong position in Refined Oils and Vanaspati. The Company’s state of the art Manufacturing facility is located in Morena (M. P.) which is in close proximity to the state of Rajsthan, Uttarpradesh and Haryana which produces the 90% of the total Mustard/Rapeseed crop of the Countary which immensely benefit the Company to procure the best seeds at very competitive rate. The Company is one of the largest and regular supplier of edible oil to the defense department and also a regular exporter of Rapeseed and Soybean meal.

Business Overview

The production of major oil seeds during the oil year 2004-05 (November-October) is estimated at 294.1 Lacs M.T. as against that of the 294.4 Lacs M.T. in previous year. Despite of inconsistent monsoons in 2004-05 the edible oil seeds production has shown remarkable resilience. The demand for edible oils has been increasing several fold compared to almost stagnant oilseeds productions. Under the high GDP growth premise the demand could double by 2010. Demand supply management of edible oils is thus a complex task keeping in balance the interests of consumers, farmers and industry. India’s dependency on import of edible oil is almost 50% of our requirement.

Opportunities and Threats

Edible oils and fats are essential ingredients for a healthy food and balance diet. Demand for edible oils is rising owing to increase in population as also rise in the standard of living with higher per capita income. India is the world’s fourth largest vegetable oil economy and the third largest consumer of edible oils after China and European Union. World Health Organisation (WHO) recommends consumption of 20 to 25 kg per person per year. India ‘s per capita consumption of edible oils is 11.5 kg. per person per year as compared to the world average of 20.50 kg per person per year. Considering this the domestic demand of edible oil will substantially increase in future.

The domestic production of oil seeds is not sufficient to meet the demand. The gap between demand and supply is met through import of edible oils.

The Company will continue to focus on improving quality standards, competitive pricing of products, large customers base, reducing processing costs and more focus on product innovation to meet the new set of healthy cooking medium.

Future Outlook

The Company is planning an aggressive advertising and promotion campaign through print and television media to further promote its mustard oil brands. The Company’s focus on Retail Sales with the establishment of sales depots at fifteen new locations, which will cover new markets like Bihar, Rajsthan, WB, J&K, Orissa and Chattisgarh. The Company aims to raise the share of retail sales in total revenues.

The Company’s focus on to set up overseas offices on strategic locations to facilitate the handling of Company’s import and export business economically.

The Company is working on Backward integration by setting a 2.5 M.W. Power Plant (Wind Mill) which will reduce the power cost for the Company and enhance further margin for the Company.

Risk and Concerns

The Company’s key inputs are agriculture based obtained from domestic and international market. The prices of agriculture



commodities are dependant upon factors like good and timely monsoons, demand supply position, foreign exchange risk and Government Policies.

Besides commodity risk as stated above Company is also exposed to foreign exchange risk because of crude edible oil imported and rapeseed oil meal and soy oil meal exported.

The Company has adopted continues risk monitoring system and to systematically hedge its foreign exchange risk.

The commodity risks are not significant considering the normal co-relation in the price of raw materials and finished goods.

Internal Control Systems and their Adequacy

Internal Control Systems are implemented :

· to safeguard the Company’s assets from loss or damage.

· to keep constant check on cost structure and process loss.

· to provide adequate financial and accounting controls and implement in accounting standards.

· to maintain proper accounting records and statutory compliances.

· the appropriate use of Company’s funds.

The systematic implementation of internal control system and policies have resulted the use of funds in the most profitable and appropriate manner. All this has been implemented in every area commencing from raw materials to finished products.

The Internal Audit Program: the internal audit program, besides checking reliability of financial information also ensures the effectiveness and efficiency of internal control system and suggests the way to further strengthen our internal control system to meet the requirement of growing business.

Human Resources and Industrial Relations

Your Company is a professionally managed Company which employs the best talent in the industry and continued its efforts to improve the most important capital of the Company namely, the Human Resources. The Company is implementing better HR policies by making appreciable changes, which resulted in the form of improved efficiency. With the rapid changes in the business environment importance has, therefore been given for training and development of employees to augment the managerial and professional skills. The Company maintained cordial industrial relations with the employees which yielded the Company improved productivity, quality and efficiency.

Segment wise performance

The various segments identified by the Company are as under :

Oil and Refinery - Crude Mustard Oils and Refined Oils

Vanaspati - Vanaspati Ghee

Solvent Extraction - Seed Extraction

The detail performance segment wise is given in schedule 'P' to the audited accounts of the Company as provided in this Annual Report.

CAUTIONARY STATEMENT

Statement made in the Management Discussion and Analysis describing the Company’s objectives, projections, estimates, expectations may be “forward–looking statements” within the meaning of applicable securities laws and regulations. Actual result could differ from those expressed or implied. Important factors that could make a difference to the Company’s operations include economic conditions affecting demand supply and price conditions in the domestic and overseas markets in which the Company operates, changes in the Government Regulations, tax laws and other statutes and other incidental factors.

CORPORATE GOVERNANCE REPORT

1. COMPANY’S PHILOSOPHY ON CORPORATE GOVERNANCE

Corporate Governance is a vital part of K. S. Oils’s value system as it builds confidence and trust which leads to a more stable and sustained resource flows and long term relationship with its investors and other stakeholders. The driving forces of Corporate Governance at K. S. Oils are its core values – Excellence and Customer Satisfaction, Maximizing Long Term Value for Stakeholders, Good Corporate Conduct and Environment Friendly.

Your Company is fully committed to follow the procedures and practices in conformity with the clause 49 of the Listing Agreement of the Stock Exchanges, as applicable, your Directors present the Company’s Report on Corporate Governance as under:

2. BOARD OF DIRECTORS

COMPOSITION AND CATEGORY

The Board of Directors of the Company consists of an optimum combination of Executive, Non-Executive and Independent Directors, to ensure the independent functioning of the Board. The composition of the Board of Directors with reference to number of Executive and Non-Executive Directors, meets with the requirements of Clause 49 (I) (A) of the Listing Agreement.

None of the Directors on the Board is a Member on more than 10 Committees and Chairman of more than 5 Committees (as per Clause 49 (IV) (B)) across all the Companies in which he is a Director. All the Directors have made the requisite disclosures regarding Committee positions held by them in other Companies.

The Composition of the Board of Directors and also the No of other Board Committees in which he is a Chairman/Member are as under :

Name of Director Category of Designation Directorship in No. of BoardDirectorship other Companies Committees in which

Chairman/Member. @

Chairman Member

Mr. R. C. Garg Promoter - Chairman - - -Non Executive

Mr. G. P. Garg Promoter Executive Managing Director - - 1

Mr. Sourabh Garg Promoter Executive Whole Time Director - - 1

Mr. M. L. Garg Promoter - Director - 1 2(Resigned w.e.f. Non Executive

rd September 03 , 2005)

Mr. P. K. Mandloi Independent Director - 1 1Non-Executive

Mr. B. N. Singh Independent Director - 1 1Non-Executive

Mr. R. S. Sisodia Independent Director - 1 2(Additional Director Non-Executive

rdw. e. f. September 3 , 2005)

@ For this purpose only 3 committees namely Audit Committee, Remuneration Committee and Investors Grievances Committee have been considered across all the Companies in which the Director is a Member or Chairman

BOARD PROCEDURE

The Board meets atleast once a quarter to review the quarterly performance and the financial results. The Board Meetings are generally scheduled well in advance and the notice of each Board Meeting is given in writing to each Director. The information as required under Annexure I to clause 49 of the Listing Agreement is made available to the Board. The Agenda and Board notes for consideration of the Board are circulated well in advance with the notice of meeting so that all the Directors can actively participate in the lengthy and fruitful deliberations on various agenda items put before the Board for discussion. The Board is also free to recommend the inclusion of any matter for discussion in consultation with the Chairman. The Board is kept apprised of the overall performance of the Company by the Managing Director at the Board Meetings.





Mr. R. S. S isodia has extensive experience in the field of Corporate Legal Matters, Administration and Marketing of Agro Products. He had worked on various managerial positions in Madhya Pradesh State Road Transport (M.P.S.R.T.C.) Corporation and Mandi Board of M. P.

ATTENDANCE OF EACH DIRECTOR AT THE BOARD MEETINGS AND THE LAST ANNUAL GENERAL MEETING

During the financial year ended March 31, 2005, Nine Board Meetings were held on following dates and the maximum time gap between two meetings did not exceed four months:

April 1, 2004, May 24, 2004, June 28, 2004, July 31, 2004, August 16, 2004, October 28, 2004, January 04, 2005, January 28, 2005, February 11, 2005,

Name of the Director No. of Board Attendance at last AGMMeetings attended held on 25.09.04

Mr. Ramesh Chand Garg 9 Yes

Mr. Govind Prasad Garg 9 Yes

Mr. Sourabh Garg 9 Yes

Mr. Mohan Lal Garg 8 Yes

Mr. Pramod Kumar Mandloi 8 Yes

Brij Mahendra Nandan Singh 8 Yes

Details of the Directors seeking appointment/re-appointment at the forthcoming

Annual General Meeting (Pursuant to Clause 49 of the Listing Agreement)

Name of the Director Mr. R. C. Garg Mr. R. S. Sisodiast thDate of Birth : 01 May, 1959 06 April, 1946th rdDate of Appointment : 27 September, 2003 03 September, 2005

Qualification : Graduate M.A., LL.B., Ph D.

Expertise : Mr. R. C. Garg, is associated with the Company since incorporation and possess vast experience in business of Agriculture C o m m o d i t i e s , P r o j e c t E x p a n s i o n , Commodity Export, Mandi Purchase, Sales and Distribution and is driving force behind Company’s Business and Success.

Directorships held in otherCompanies : Nil Nil

Chairman/Member of theCommittee of the Board ofDirectors of the Company : Nil Audit Committee - Member

Remuneration Comm. - Member

Shareholder Griev. Comm. - Member

Chairman/Member of theCommittee of the Board ofDirectors of other Companies : Nil Nil

3. AUDIT COMMITTEE

TERMS OF REFERENCE

The Audit Committee has been constituted as per Section 292 A of the Companies Act, 1956 and the guidelines set out in the Listing Agreement with Stock Exchanges. The Audit Committee of the Company, inter-alia, provides assurance to the Board on the existence and adequacy of an effective internal control systems that ensures :-

4 Efficiency and effectiveness of Internal Control and Audit.

4 Safeguarding of Assets and adequacy of provisions for liabilities.

4 Reliability of all financial and other information and adequacy of disclosures.

4 Compliance with all relevant statutes.

The terms of Reference of the Audit Committee are in accordance with the requirements of clause 49 (II) of the Listing Agreement and as specified by the Board of Directors of the Company and inter-alia includes :

4 reviewing the company’s financial reporting process and disclosure of financial information.



4 reviewing the quarterly and annual financial statements with primary focus on accounting policies and practices, compliances with accounting standards and legal requirements concerning financial statements.

4 reviewing the adequacy of internal control system and internal audit function, ensuring compliance of internal control systems and reviewing the Company’s financial and risk management policies.

4 recommending the appointment and removal of statutory auditors, fixation of audit fees and also to approve payment of other services.

4 reviewing the reports furnished by the internal auditors and statutory auditors and ensures suitable follow-up thereon.

The Audit Committee while reviewing the Annual Financial Statements also reviewed the applicability of various Accounting Standards (AS) issued by The Institute of Chartered Accountants of India during the year. Compliance of the AS as applicable to the Company has been ensured in the Financial Statements for the year ended March 31, 2005.

COMPOSITION AND ATTENDANCE stThe Audit Committee as on 31 March’ 2005 comprises of three Non-executive Directors, namely :-

Mr. Brij Mahendra Nandan Singh - Chairman - Independent, Non-Executive

Mr. Mohan Lal Garg - Member- Promoter, Non-Executive

Mr. Pramod Kumar Mandloi - Member- Independent, Non-Executive

The Audit Committee is constituted in accordance with the provisions of Clause 49 (II) (A) of the Listing Agreement and the Companies Act, 1956. All the Members of Audit Committee possess knowledge of corporate finance, accounts and company law.

During the financial year 2004-05, Four Audit Committee Meetings were held as under :

· June 28, 2004

· July 31, 2004

· October 28, 2004

· January 28, 2005

Attendance at the Audit Committee Meeting:

Name of Director No. of meetings attended

Mr. Brij Mahendra Nandan Singh 4

Mr. Mohan Lal Garg 4

Mr. Pramod Kumar Mandloi 4

Mr. Vikas Tulsiani, Company Secretary acts as the Secretary to the Committee.

4. REMUNERATION COMMITTEE

Terms of Reference :

The broad terms of reference of the Committee are to appraise the performance of Managing/Executive Directors, determine and recommend to the Board, Compensation payable to Managing/Executive Directors.

The Remuneration Committee of the Company as on March 31, 2005 comprised of the following three Directors of the Company :

Mr. Pramod Kumar Mandloi Chairman - (Independent, Non-executive)

Mr. Mohan Lal Garg Member - (Promoter, Non-executive)

Mr. Brij Mahendra Nandan Singh Member - (Independent, Non-executive)

One meeting was held during the Financial year 2004 - 05 i.e., May 24, 2004 and all the members attended the same.

Remuneration Policy

Subject to the approval of the Board of Directors and the subsequent approval by the shareholders at the General Body Meeting and such authorities as the case may be, remuneration of the Managing/Whole–time Directors is fixed by the Remuneration Committee. The remuneration is fixed considering various factors such as qualification, experience, expertise, prevailing remuneration in the competitive industries, financial position of the Company, etc. The remuneration structure comprises basic salary, commission, perquisites and allowances, contribution to provident fund and other funds in accordance with various related provisions of the Companies Act, 1956. The remuneration policy for

Whole-time Director is directed towards rewarding performance, based on review of achievements. The non executive Directors have not drawn any remuneration from the Company except sitting fees for meetings of the Board and committees attended by them. The Board, on the recommendations of the Remuneration Committee approves the annual increments. The Board fixes a ceiling on perquisites and allowances as a percentage of salary. Within the prescribed ceiling, the perquisite package is recommended by the Remuneration Committee.

stDetails of remuneration paid to the Directors during the Financial Year ended 31 March, 2005.

Director Sitting Fees Salaries and other Perquisites

Mr. Ramesh Chand Garg 45,000 -

Mr. Govind Prasad Garg - 9,36,387

Mr. Sourabh Garg - 3,09,360

Mr. Mohan Lal Garg 60,000 -

Mr. Pramod Kumar Mandloi 60,000 -

Mr. Brij Mahendra Nandan Singh 60,000 -

5. SHAREHOLDERS'/INVESTORS GRIEVANCES COMMITTEE

The Company has a Shareholder’/Investors’ Grievance Committee, to look into redressal of Investors’ Complaints and requests such as delay in transfer of shares, non receipt of dividend, annual report, revalidation of dividend warrants etc.

The Committee meets atleast once a month and deals with various matters relating to :

4 Transfer/transmission/transposition of shares;

4 Issue of share certificates for lost, sub divided, consolidated, rematerialized, defaced, etc;

4 Consolidation/Splitting of folios;

4 Review of shares dematerialized and all other related matters;

4 Investors’ Grievances and redressal mechanism and recommend measures to improve the level of Investor services.

The Share Department of the Company and the Registrar and Share Transfer Agent’ Ankit Consultancy (P) Ltd., Indore, attend all grievances/correspondences expeditiously of the shareholders and investors received directly or through SEBI, Stock Exchanges, Department of Company Affairs, Registrar of Companies, etc., usually a reply is sent with in 15 days of receipt of letter, except in the cases that are constrained by dispute or legal impediment.

COMPOSITION

The Committee comprises of :

Mr. Mohan Lal Garg Chairman Promoter, Non-executive

Mr. Govind Prasad Garg Member Promoter Executive

Mr. Sourabh Garg Member Promoter, Executive

Mr. Vikas Tulsiani, Company Secretary acts as the Secretary to the Committee.

MEETINGS AND ATTENDANCE

The quorum for functioning of the Committee is any two directors present. Twenty Four meetings of the Committee were held during the year. The meetings were held on April 10, 2004, April 30, 2004, May 10, 2004, May 25, 2004, June 10, 2004, June 30, 2004, July 26, 2004, August 10, 2004, August 31, 2004, September 15, 2004, September 25, 2004, October 15, 2004, October 30, 2004, November 15, 2004, November 30, 2004, December 15, 2004, December 30, 2004, January 15, 2005, January 31, 2005 February 15, 2005, February 28, 2005, March 15, 2005, March 24, 2005 and March 31, 2005. The minutes of the Shareholders’/Investors’ Grievances Committee are noted by the Board of Directors at the Board Meetings.

The number of meetings attended by each of the member is as under :

Name of the Director No. of meetings attended

Mr. Mohan Lal Garg 16

Mr. Govind Prasad Garg 24

Mr. Sourabh Garg 12

DETAILS OF SHAREHOLDERS’ COMPLAINTS RECEIVED, NOT SOLVED AND PENDING SHARE TRANSFERS stThe total complaints received and replied to the shareholders during the year ended 31 March’ 2005 were 40. There is no

complaint that has not been resolved to the satisfaction of the shareholders nor is there any pending transfer.





COMPLIANCE OFFICER

The Board has designated Mr. Vikas Tulsiani, Company Secretary as the Compliance Officer.

6. GENERAL BODY MEETING

Location and time, where last three Annual General Meetings were held is given below :

Annual General Meeting

Financial Date Day Location of the Meeting Time No. ofYear Special Resolutions

2001-02 September 25, 2002 Wednesday T. R. Puram, A. B. Road, Morena 4.00 P.M. 4

2002-03 September 27, 2003 Saturday T. R. Puram, A. B. Road, Morena 4.00 P.M. 3

2003-04 September 25, 2004 Saturday T. R. Puram, A. B. Road, Morena 4.00 P.M. 2

Extraordinary General Meeting (EGM) :

Financial Date Day Location of the Meeting Time No. ofYear Special Resolutions

2004-05 January 29, 2005 Saturday Jiwaji Ganj, Morena – 476 001(Registered office of the Company) 11.00 A.M. 2

None of the resolutions was required to be put through postal ballot.

7. DISCLOSURES

Related Party Transactions

During the financial year 2004-05 there were no materially significant transactions of the Company, with its promoters, the directors or the Management, their subsidiaries or relatives, etc. that may have potential conflict with the interests of the Company at large.

Statutory Compliance, Penalties and Strictures

The Company has complied with all requirements of the Listing Agreements entered into with the Stock Exchanges as well as the regulations and guidelines of SEBI, Consequently, there were no strictures or penalties imposed by either SEBI or the Stock Exchanges or any statutory authority for non-compliance of any matter related to the capital markets during the last three years.

8. MEANS OF COMMUNICATION

· The quarterly financial results of the Company are published in leading English/Hindi National/Regional Newspapers.

· The Company’s financial results and official news releases are displayed on the Company’s website www.ksoils.com

· Management Discussion and Analysis forms a part of the Annual Report, which is posted to the Shareholders.

· As the Company’s quarterly financial results are published in press and also posted on its Website, the same are not mailed to the shareholders.

9. GENERAL SHAREHOLDERS INFORMATION

Registered Office : Jiwaji Ganj, Morena - 476 001 Madhya Pradesh

Phone : 07532 - 223496 – 99, 505051- 57

Fax : 07532 - 505060

Email : [email protected]

Website : www.ksoils.com

Annual General Meeting :

Date September 30, 2005

Time : 4.00 P.M.

Venue : Registered office of the Company at Jiwaji Ganj , Morena - 476 001



SHA

RE P

RIC

E O

N B

SE

50.00

45.00

40.00

35.00

30.00

25.00

20.00

15.00

10.00

5.00

0.00

8000

7000

6000

5000

4000

3000

2000

1000

0

Ap

ril-

04

May-0

4

Jun

e-0

4

July

-04

Au

g.-

04

Sep

.-04

Oct.

-04

No

v.-0

4

Dec.-

04

Jan

.-05

Feb

.-05

Marc

h-0

4

BSE

SEN

SEX

K. S. Oils (High) K. S. Oils (Low) BSE Sensex

Financial Calendar (tentative) :

Adoption of Quarterly : In the Month of

Results Ended :th rd th30 June, 2005* July, 2005 (3 /4 week)th rd th30 September, 2005 October, 2005 (3 /4 week)st rd th31 December, 2005 January, 2006 (3 /4 week)st rd th31 March, 2006 (Un-audited Annual Accounts) April, 2006 (3 /4 week)

th th* Un-audited results for the quarter ended 30 June, 2005 have been adopted by the Board on 20 Day of July, 2005. th thDate of Book Closure : From 26 September, 2005 to 30 September, 2005 (both days inclusive).

Dividend :

A dividend of Rs. 1.00 per share (10%) has been recommended by the Board of Directors for the Financial Year 2004-05 and is subject to approval of the shareholder at the ensuing Annual General Meeting. The Dividend, if approved, will be paid on

thor before 29 October, 2005.

Listing on Stock Exchanges

The Equity Shares of the Company are listed on the Stock Exchange, Mumbai and the Madhya Pradesh Stock Exchange, Indore. The Company has paid the Annual Listing fees for the financial year 2005-06 based on the Share Capital as at March 31, 2005, to the Stock Exchanges on which Equity Shares of the Company are presently listed.

The Equity Shares of the Company have been de-listed from the Delhi Stock Exchange Association Limited and Jaipur Stock Exchange Limited.

Stock Code : BSE, Mumbai – 526209

International Securities Identification Number for dematerialised shares (ISIN) - INE727DO1014

Market Price Data :

The Monthly high and low quotations on the Stock Exchange, Mumbai (BSE) during the year were as follows:

Month K.S. Oils K.S. Oils

(High) (Low)

Apr-04 9.50 8.05

May-04 9.25 7.09

Jun-04 8.25 6.04

Jul-04 8.50 6.50

Aug-04 9.00 7.31

Sep-04 14.80 8.11

Oct-04 13.60 9.91

Nov-04 17.47 11.53

Dec-04 35.79 13.00

Jan-05 44.25 23.25

Feb-05 34.45 27.20

Mar-05 45.85 25.40

Stock Performance vis–a–vis BSE Sensex

The performance of the Company’s Share related to BSE Sensex is given in the chart below :-



Registrar and Share Transfer Agent :

Ankit Consultancy Pvt. Ltd,nd2 Floor, Alankar Point, 4 A Rajgarh Kothi, Gita Bhawan Square, Indore - 452 001 (M. P.)

Tel : (0731) - 2491298, 2495226, 5076083

Fax : (0731) 5065798 Email: [email protected]

Time: 10.00 a.m. to 6.00 p.m.

Share Transfer System :

Share transfers in physical form are registered by the Registrars and returned to the respective transferee within a period from two to three weeks, provided the documents lodged with the Registrars/Company are clear in all respects. In case of shares in electronic form, the transfers are processed by National Securities Depository Limited (NSDL) and Central Depository Services (India) Limited (CDSL) through respective Depository Participants. In compliance with the Listing Agreement with the Stock Exchanges, a practicing Company Secretary audits the system of Transfer and a Certificate to that effect is issued.

Distribution of Shareholding as on March 31, 2005 :

No. of Shares held No. of Shareholders Percentage of No of Shares held PercentageShareholders of Shareholding

Up to 500 4871 94.26 629175 12.85501-1000 145 2.81 119967 2.451001-2000 51 0.99 73677 1.502001-3000 19 0.37 48501 0.993001-4000 7 0.14 24950 0.514001-5000 11 0.21 53318 1.095001-10000 13 0.25 103072 2.1110001 and above 50 0.97 3840240 78.50

Total 5167 100.00 4892900 100.00

Shareholding Pattern of the Company as on March 31, 2005 :

Category No. of Shares held % of Share Capital

A.PROMOTER’S HOLDING

1. Promoters

Indian Promoters 3091000 63.17

Foreign promoters - -

2. Person acting in concert 165200 3.38

Sub-Total 3256200 66.55

B NON-PROMOTER’S HOLDING

3. Institutional Investors

a. Mutual Funds and UTI - -

b. Banks, Financial Institutions, Insurance Companies

(Central/State Government Institutions/

Non Government Institutions) 600 0.01

c. FIIs - - -

Sub-Total 600 0.01

4. OTHERS - -

a. Private Corporate Bodies 372960 7.62

b. Indian Public 1263125 25.82

c. NRIs/OCBs 15 -

d. Any Other - -

Sub-Total 1636100 33.44

Grand Total 4892900 100.00



Dematerialisation of Shares:

The trading in Company’s shares is permitted only in dematerialised form. In order to enable the shareholders to hold their shares in D-mat form, the Company has enlisted its shares with National Securities Depositories Limited (NSDL) and Central Depository Services (India) Limited (CDSL).

Status of De-materialisation as on March 31, 2005 :

No. of Shares Dematerialised 40,66,180 83.10 % of the total share capital

No. of Shareholders in D’mat form 1,344 26.00 % of the total no. of shareholders

Outstanding Securities:

During the year, the Company has issued 35,00,000 warrants which are convertible into equity shares at the option of the holders thereof to subscribe for one equity share of the face value of Rs.10.00 at a price of Rs.25.00 (including a premium of Rs.15.00) for every warrant held.

thThe holders of warrants will be entitled to apply for conversion into equity shares within 18 months from 11 February, 2005, the date of allotment of warrants.

st35,00,000 warrants were outstanding as on 31 March, 2005. The Share Capital of the Company will increase by a maximum of Rs.3.5 Crores to Rs.8.39 Crores in the event of exercise of option for conversion to equity shares of equity warrants

thallotted on 11 February, 2005.

Plant Location of the Company :

The Company has its manufacturing facility at :

A.B. Road, Industrial Area, Morean – 476 001 (M. P.)

Tel. : (07532) 232881 to 84

Fax. : (07532) 232885

Address for Correspondence :

K. S. Oils LimitedJiwaji Ganj, Morena - 476 001 (M. P.)

AUDITOR’S CERTIFICATE ON CORPORATE GOVERNANCEToThe Members ofK. S. Oils Limited

We have reviewed the records concerning the Company’s compliance of conditions of Corporate Governance as stipulated stin Clause 49 of the Listing Agreement entered into, by the Company, with the Stock Exchanges, for the financial year ended 31

March, 2005.

The compliance of conditions of corporate governance is the responsibility of the management. Our examination was limited to procedures and implementation thereof, adopted by the Company for ensuring the compliance of the conditions of the Corporate Governance. It is neither an audit nor an expression of opinion on the financial statements of the Company.

In our opinion and to the best of our information and according to the explanations given to us and the representation made by the directors and the management, we certify that the Company has complied with in all material respects the Conditions of Corporate Governance as stipulated in the abovementioned Listing Agreement.

As required by the Guidance Note issued by The Institute of Chartered Accountants of India, we have to state that as per records maintained by the Company, there were no investor grievances remaining unattended/pending for more than 30 days.

We further state that such compliance is neither an assurance as to the future viability of the Company, nor as to the efficiency or effectiveness with which the management has conducted the affairs of the Company.

For and on behalf of Rathi & Co.


R. S. RathirdGwalior : 3 September, 2005 (Partner)

AUDITOR’S REPORTTo the Members of K. S. Oils Limited

stWe have audited the attached Balance Sheet of K. S. Oils Limited as at 31 March, 2005, the Profit and Loss Account and the Cash Flow Statement for the year ended on that date annexed thereto. These financial statements are the responsibility of the company’s management. Our responsibility is to express an opinion on these financial statements based on our audit.

We conducted our audit in accordance with the auditing standards generally accepted in India. Those Standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

We report as follows :

1. As required by the Companies (Auditor’s Report) Order, 2003 issued by the Central Government of India in terms of sub-section (4A) of Section 227 of the Companies Act, 1956, we enclose in the Annexure, a statement on the matters specified in paragraphs 4 and 5 of the said Order.

2. Further to our comments in the Annexure referred to in Paragraph 1above, we report that :

(a) We have obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the purposes of our audit;

(b) In our opinion, proper books of account as required by law have been kept by the company so far, as appears from our examination of those books;

(c) The Balance Sheet, Profit and Loss Account and Cash Flow Statements dealt with by this report are in agreement with the books of account;

(d) In our opinion, the Balance Sheet, Profit and Loss Account and Cash Flow statement dealt with by this report comply with the accounting standards referred to in of section 211(3C) of the Companies Act,1956;

st(e) On the basis of the written representations received from the directors, as on 31 March, 2005 and taken ston record by the Board of Directors, we report that none of the Directors is disqualified as on 31 March,

2005 from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956;

(f) In our opinion and to the best of our information and according to the explanations given to us, the said accounts read together with notes thereon give the information required by the Companies Act, 1956,in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India;

st(a) in the case of Balance Sheet, of the state of affairs of the Company as at 31 March, 2005;

(b) in the case of Profit and Loss Account, of the ‘Profit’ for the year ended on that date; and

(c) in the case of Cash Flow Statement, of the cash flows for the year ended on that date.

For Rathi & Co.


R. S. Rathi

Place : Gwalior (Partner)

Dated : 3rd September, 2005 M.No.12121



Annexure refer to in paragraph 3 of our report of even date(i) (a) The company has maintained proper records showing full particulars including quantitative details and

situation of fixed assets.

(b) As explained to us, most of the fixed assets have been physically verified by the management during the year in a phased periodical manner, which in our opinion is reasonable, having regard to the size of the company and nature of its assets. No material discrepancies were noticed on such physical verification.

substantial part of fixed assets during the year and the going concern status of the company is not affected.

(ii) (a) As explained to us, Inventories have been physically verified by the management at reasonable intervals during the year. In our opinion the frequency of such verification is reasonable.

(b) In our opinion, the procedures of physical verification of inventories followed by the management are reasonable and adequate in relation to the size of the company and the nature of its business.

(c) The company has maintained proper records of inventories. As explained to us, there were no material discrepancies noticed on physical verification of inventory as compared to the book records.

(iii) (a) The company had taken loan from the parties covered in the register maintained under section 301 of the Companies Act, 1956.The maximum amount involved during the year was Rs. 301.90 Lacs and the year end balance of loan taken from such parties was Nil. The company has not granted any loans, secured or unsecured to companies, firm or other parties covered in the register maintained under section 301 of the Companies Act, 1956.

(b) In our opinion, the rate of interest and other terms and conditions on which loans have been taken from companies, firm or other parties covered in the register maintained under section 301 of the Companies Act, 1956 are not, prima facie, prejudicial to the interest of the company.

(c) The company is regular in repaying the principal amounts as stipulated and has been regular in the payment of interest.

(iv) In our opinion and according to the information and explanations given to us, there are adequate internal control system commensurate with the size of the company and the nature of its business, for the purchase of inventory and fixed assets and for the sale of goods and services. To the best of our knowledge, no major weaknesses in internal control were either reported or noticed by us during the course of our audit.

(v) (a) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of contract or arrangements, that needed to be entered into the register maintained under section 301 of the Companies Act, 1956 have been so entered.

(b) In our opinion and according to the information and explanations given to us, the transaction of purchase of goods and material and sale of goods, material and services made in pursuance of contract or arrangement entered in the register maintained under section 301 and aggregating during the year to Rs 500,000 (Rs. Five Lacs) or more in respect of each party have been made at prices which are reasonable having regard to the prevailing market prices for such goods, material and services as the prices at which transactions for similar goods, material and services have been made with other parties.

(vi) In our opinion and according to the information and explanations given to us, the company has complied with the provisions of section 58-A and 58-AA or any other relevant provision and the rules made thereunder with regard to deposit accepted by it. We have been informed by the company that no order has been passed by the Company Law Board or National Company Law Tribunal or Reserve Bank of India or any court or any other tribunal.

(vii) The company has an ‘Internal Audit System’ carried through a firm of Chartered Accountants. In our opinion, the scope of audit is commensurate with the size and nature of its business.

(viii) The Central Government has prescribed maintenance of Cost records under section 209(1)(d) of the Companies Act, 1956 in respect of company’s ‘Vanaspati and refinery’ product. We have broadly reviewed the accounts and records of the company in this connection and are of the opinion, that prima facie, the prescribed accounts and records have been made and maintained. Though the contents of these accounts have not been examined by us.

(ix) (a) According to the records of the company, undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees State Insurance, Income Tax, Sales Tax, Wealth Tax, service tax Custom Duty, Excise Duty, Cess and other statutory dues have been generally regularly deposited with the

(c) In our opinion, the company has not disposed of





appropriate authorities. According to the information and explanations given to us, no undisputed stamounts payable in respect of the aforesaid dues were outstanding as at 31 March’05 for a period of

more than six months from the date of becoming payable.

(ix) (b) According to the information and explanation given to us and record of the company examined by us the disputed statutory dues aggregating to Rs. 203.75 Lacs, that have not been deposited on account of matters pending before appropriate authorities are as under : (Rs. In Lacs)

S.No. Name of the Statue Nature of the Dues Forum where dispute is pending Amount

1 Sales Tax Act Sales/Commercial/ Deputy/Additional, 181.13

Entry Tax Commissioner, Sales Tax

2 Central Excise and Excise Duty with Interest CESTAT, Delhi 2.42

Custom Act and Penalty

Excise Duty with Interest Assistant Commissioner, 3.62

and Penalty Central Excise, Gwalior

Excise Duty with Interest Joint Commissioner, 16.58

and Penalty Central Excise, Indore

st(x) The company has no accumulated losses as at 31 March 2005 and it has not incurred any cash losses in the financial year ended on that date or in immediately preceding financial year.

(xi) Based on our audit procedures and according to the information and explanations given to us, we are of the opinion that the company has not defaulted in repayment of dues to financial institutions or banks. The company has not issued any debentures.

(xii) According to the information and explanation given to us, the company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

(xiii) In our opinion, the company is not a Chit Fund or a Nidhi/Mutual Benefit Fund/Society. Therefore, clause 4(xiii) of the Companies (Auditor’s Report) Order, 2003 is not applicable to the company.

(xiv) In our opinion, the company is not dealing or trading in shares, securities, debentures and other investments. Accordingly the provisions of clause 4 (xiv) of the Companies (Auditor’s Report) Order, 2003 is not applicable to the company.

(xv) According to the information and explanations given to us, the company has not given any guarantee for loans taken by others from banks or financial institutions.

(xvi) In our opinion, and according to the information and explanation given to us, on an overall basis the Term loans have been applied for the purpose for which they were raised.

(xvii) According to the information and explanations given to us and on an overall examination of the Balance Sheet and Cash Flow Statement of the company, we report that funds amounting Rs.88.31 Lacs (Previous Year Rs.98.73 Lacs) raised on short-term basis have been used for long-term investment.

(xviii) The company has made preferential allotment of share warrants during the year to person covered in the register maintained under section 301 of the Companies Act ,1956. The share warrants issued have been priced in accordance with guidelines issued by the Securities and Exchange Board of India and accordingly , are not prejudicial to the interests of the company .

(xix) The company has no secured debentures outstanding and accordingly clause 4 (xix) is not applicable.

(xx) The company has not raised any money through public issue during the year.

(xxi) In our opinion and according to the information and explanations given to us, no fraud on or by the company has been noticed or reported during the year, that causes the financial statements to be materially misstated.

For Rathi & Co.Chartered Accountants

R. S. RathiPlace : Gwalior (Partner)Dated : 3rd September, 2005 M.No.12121



STBALANCE SHEET AS AT 31 MARCH, 2005

(Rs. in Lacs)

SCHEDULE CURRENT YEAR PREVIOUS YEAR

SOURCES OF FUNDS

Shareholders Funds

Share Capital A 495 495

Equity Share Entitlement Warrants 219 0

Reserves and Surplus B 1,799 1,519

Deffered Government Grant 111 19

Loan Funds

Secured Loans C 7,414 6,867

Unsecured Loans D 0 443

TOTAL 10,038 9,343

APPLICATION OF FUNDS

Fixed Assets

Gross Block E 4,474 4,043

Less : Depreciation 1,314 1,062

Net Block 3,160 2,981

Capital Work in Progress 0 19

Current Assets, Loans and Advances F

(A) Current Assets 13,910 12,420

(B) Loans & Advances 349 252

14,259 12,672

Less : Current Liabilities and Provisions G

Current Liabilities 7,211 6,280

Provisions 170 49

7,381 6,329

Net Current Assets (F-G) 6,878 6,343

Significant Accounting Policies,

Contingent Liabilities and Notes to the Accounts P

TOTAL 10,038 9,343

As per our separate report of even date attached.

For RATHI & CO.

Chartered Accountants G. P. GARG SOURABH GARG

(Managing Director) (Director)

R. S. RATHI

(Partner)

M. No. 12121

Place : Gwalior V. TULSIANIrdDated : 3 September, 2005 (Company Secretary)



STPROFIT & LOSS ACCOUNT FOR THE YEAR ENDED 31 MARCH, 2005

(Rs. in Lacs)

SCHEDULE CURRENT YEAR PREVIOUS YEAR

INCOMES

Sales H 45,246 46,807

Other Income I 55 35

TOTAL 45,301 46,842

EXPENDITURES

Raw-Material and Purchases J 42,295 42,474

Manufacturing Expenses K 1,679 1,556

Selling Expenses L 993 843

Administrative and Other Expenses M 793 770

45,760 45,643

Add : Opening Stock N 6,567 6,525

52,327 52,168

Less : Closing Stock O 8,462 6,567

43,865 45,601

Interest 771 795

Depreciation on Fixed Assets 253 195

44,889 46,591

Operating Profit 412 251

Less : Prior period Adjustment 0 1

Tax Paid on Assessment 1 1

Provision for Taxation 75 23

Profit after Tax 336 226

Balance brought forward from Previous Year 615 439

Amount available for appropriation 951 665

APPROPRIATIONS

Proposed Dividend 49 0

Tax on Proposed Dividend 7 0

Amount transferred to General Reserve 50 50

Balance Carried over to Balance Sheet 845 615

TOTAL 951 665

As per our separate report of even date attached.

For RATHI & CO.

Chartered Accountants G. P. GARG SOURABH GARG


R. S. RATHI

(Partner)

M. No. 12121

Place : Gwalior V. TULSIANIrdDated : 3 September, 2005 (Company Secretary)



CASH FLOW STATEMENT ANNEXED TO THE BALANCE SHEETSTFOR THE YEAR ENDED 31 MARCH, 2005

(Rs. in Lacs)

CURRENT YEAR PREVIOUS YEAR

A. Cash Flow from Operating Activities

Net Profit before Tax and Extraordinary item 412 250

Adjustment for :

Depreciation 253 195

Profit/Loss on Sale of Assets -3 1

Interest Received -20 -5

Interest Paid 771 794

Provision for Taxation -75 -23

Provision for taxation no longer required -1 -1

Operating Profit before Working Capital Changes 1,337 1,211

Adjustment for :

Trade and Other Receivables 792 -214

Inventories -2,061 -1,998

Trade payables and Provisions 1,656 2,642

Cash generated from operations 1,724 1,641

Interest Paid -771 -795

Cash Flow before extraordinary items 953 846

Net Cash from Operating Activities 953 846

B. Cash Flow from Investing Activities

Purchase of Fixed Assets -452 -425

Sale of Fixed Assets 23 9

Capital Work in Progress 19 -16

Interest Received 20 5

Subsidy Received 92 19

Sale of Investment 0 0

Net Cash Flow from Investing Activities -298 -408

C. Cash Flow from Financing Activities

Proceeds from issue of Share Capital/Premium 219 2

Proceeds from Long Term Borrowing -113 -124

Dividend Paid 0 0

Unsecured Loans -443 14

Net Cash used in Financing Activities -337 -108

Net increase in Cash and Cash Equivalents (A+B+C) 318 330

Opening Balance of Cash and Cash Equivalent 397 67

Closing Balance of Cash and Cash Equivalent 715 397

For RATHI & CO.Chartered Accountants G. P. GARG SOURABH GARG


R. S. RATHI(Partner)M. No. 12121Place : Gwalior V. TULSIANI

rdDated : 3 September, 2005 (Company Secretary)



STSCHEDULES FORMING PART OF THE BALANCE SHEET AS AT 31 MARCH, 2005

(Rs. in Lacs)


SCHEDULE - A

SHARE CAPITAL

AUTHORISED

10,000,000 Equity Shares of Rs. 10/- each

(Previous year 1,00,00,000 Equity Shares of Rs. 10/- each) 1,000 1,000

Issued, Subscribed and Paid up

4,892,900 Equity Shares of Rs. 10/- each 489 500

(Previous year 5,000,000 Equity Shares of Rs. 10/- each)

Add : Shares Forfeited 6 0

(Amount paid up on 107,100 shares)

Less : Calls in Arrears 0 5

TOTAL 495 495

SCHEDULE - B

RESERVES AND SURPLUS

Capital Reserve

Balance as per last year 11 11

Share Premium Account 285 285

Balance as per last year

General Reserve

Balance as per last year 608

Transferred from Profit and Loss Account 50 658 608

Profit and Loss Account 845 615

TOTAL 1,799 1,519

SCHEDULE - C

SECURED LOANS

From Banks

On Term Loan Account 741 854

Secured against Mortgage, Hypothecation of

Factory, Land, Building, Plant and Machinery &

First Charge on all Fixed Assets of the Company

On Working Capital Account 6,673 6,013

Secured against hypothecation of Stock of Raw-Material,

Stock in Process, Finished Goods, By-products and

Guaranteed by Directors & Second Pari-passu Charge

on Fixed Assets of the Company

TOTAL 7,414 6,867

SCHEDULE - D

UNSECURED LOANS

Other Loans and Advances

Term Deposit

From Directors, Shareholders and Relatives 0 303

From Others 0 140

TOTAL 0 443



ST

SC

HE

DU

LE

S F

OR

MIN

G P

AR

T O

F T

HE B

ALA

NC

E S

HE

ET A

S A

T 3

1

MA

RC

H,

20

05

SC

HE

DU

LE - E

(Rs.

in L

acs)

FIX

ED

AS

SE

TS

GR

OS

S B

LO

CK

DE

PR

EC

IAT

ION

NE

T B

LO

CK

DE

SC

RIP

TIO

NA

s O

nA

dd

itio

nSale

sTo

tal

As

On

Ad

dit

ion

Sale

sTo

tal

As

On

As

On

OF A

SS

ET

S0

1-0

4-0

4d

uri

ng

du

rin

gA

s O

n0

1-0

4-0

4d

uri

ng

du

rin

gA

s O

n3

1-0

3-0

53

1-0

3-0

4

the Y

ear

the Y

ear

31

-03

-05

the y

ear

the Y

ear

31

-03

-05

Lan

d (Le

ase

ho

ld)

43

00

43

00

00

43

43

Lan

d (F

ree

ho

ld)

51

01

93

20

00

03

25

1

Bu

ild

ing

86

65

08

71

15

23

30

18

56

86

71

4

Pla

nt

an

d M

ach

ine

ry

1,9

99

22

50

2,2

24

52

21

36

06

58

1,5

66

1,4

77

Ele

ctric

in

stall

atio

ns

33

31

13

04

46

83

26

01

09

33

72

50

Fu

rn

itu

re a

nd

Fix

tu

re

s5

26

60

11

83

35

03

88

01

9

Ve

hic

les

11

29

21

19

65

13

17

74

24

7

Off

ice E

qu

ipm

en

t1

01

34

01

35

67

13

08

05

53

4

Util

itie

s4

86

00

48

61

40

27

01

67

31

93

46

GR

AN

D T

OTA

L :

4,0

43

45

22

14

,47

41

,06

22

53

11

,31

43

,16

02

,98

1

PR

EV

IOU

S Y

EA

R :

3,6

76

42

55

84

,04

39

16

19

54

91

,06

22

,98

1

CA

PIT

AL W

OR

K IN

PR

OG

RE

SS :

As

At

As

At

31

-03

-20

05

31

-03

-20

04

Pla

nt

& M

ach

ine

ry

01

9

No

te :

Ad

dit

ion

of

Rs.

25

3 L

acs

inclu

de

s th

e d

ep

recia

tio

n o

f R

s. 5

1,5

63

/- a

s d

ep

recia

tio

n o

n m

ach

ine

ry f

ina

nce

d b

y g

ov

ern

me

nt

gra

nt.



STSCHEDULES FORMING PART OF THE BALANCE SHEET AS AT 31 MARCH, 2005(Rs. in Lacs)


SCHEDULE - FCURRENT ASSETS, LOANS AND ADVANCES(A) Current Assets

Interest Receivable 23 8Inventories (As taken, valued and certified by Management)Raw-Materials 2,480 2,556Finished Goods 7,626 6,254By-Products 660 197Packing materials 177 116Stores and Spares 501 260

11,444 9,383Sundry Debtors (Unsecured Considered Good)Outstanding for more than six months 72 16Other Debts 1,656 1,728 2,612Assets held for disposal 0 4Cash and Bank BalancesCash in hand 69 106Cash at BankOn Current Accounts 297 45On Fixed Deposit Accounts (Refer note no. 15 of Schedule -P) 349 246

715 397

TOTAL (A) 13,910 12,420(B) Loans and Advances

(Unsecured, Considered Good)(Advance recoverable in cash or kind or for value to be received)Advance to Suppliers and Others 164 52Advance to Suppliers for Capital Goods 0 7Security Deposits 49 46Prepaid Expenses 16 22Sales-tax Paid under Appeal 20 21Income-tax Advance and TDS 87 48Claims Receivable 13 56

TOTAL (B) 349 252

GRAND TOTAL (A) + (B) 14,259 12,672SCHEDULE - GCURRENT LIABILITIES AND PROVISIONS(A) Current Liabilities

Sundry Creditors for Goods and Expenses 3,758 3,205Security Deposit from Suppliers/Customers 3,224 2,905Tax deducted at source 16 15Advance from Customers 133 43Credit Balance in Bank current account (since adjusted) 11 60Other Liabilities 68 49Liability towards Investor Protection andEducation Fund under Sec. 205C of the Companies Act, 1956(Not Due as on 31.03.2005) 1 3Unclaimed Dividend

TOTAL (A) 7,211 6,280(B) Provisions

Proposed Dividend (Including tax on dividend) 56 0Provision for Taxation 114 49

TOTAL (B) 170 49

GRAND TOTAL (A) + (B) 7,381 6,329



SCHEDULES FORMING PART OF THE PROFIT AND LOSS ACCOUNTSTFOR THE YEAR ENDED 31 MARCH, 2005

Rs. in Lacs)


SCHEDULE - H

SALES

Domestic Sales 42,782

Less : Excise Duty 265 42,517 42,714

Export Sales 2,729 4,093

TOTAL 45,246 46,807

SCHEDULE - I

OTHER INCOME

Interest received 20 5

Miscellaneous Income 35 30

TOTAL 55 35

SCHEDULE - J

RAW-MATERIAL AND PURCHASES

Oil Seed 15,826 12,295

Oil 22,705 26,586

Oil Cake 1,980 1,231

Packing Material 1,618 1,382

Trading Goods/By-Product 166 980

TOTAL 42,295 42,474

SCHEDULE - K

MANUFACTURING EXPENSES

Coal Consumed 345 281

Chemical Consumed 171 182

Repairs and Maintenance 161 137

Hexane Consumed 103 84

Power and Fuel 678 614

Wages 201 173

Laboratory Expenses 4 5

Job Work Charges 6 12

Tin Manufacturing Expenses 10 68

TOTAL 1,679 1,556

SCHEDULE - L

SELLING EXPENSES

Advertisement 4 5

Loading and Unloading 133 141

Packing Material 45 148

Brokerage 73 116

Freight Outward 587 393

Sales Expenses 151 40

TOTAL 993 843



SCHEDULES FORMING PART OF THE PROFIT AND LOSS ACCOUNTSTFOR THE YEAR ENDED 31 MARCH, 2005

(Rs. in Lacs)


SCHEDULE - M

ADMINISTRATIVE AND OTHER EXPENSES

Salary to Directors 12 6

Employees Remuneration and Benefit 67 74

Directors Medical Expenses 0 0

Postage, Telegram and Telephone Expenses 24 21

Rent, Rates and Taxes 306 310

Bank Commission 185 144

Stationery and Printing Expenses 7 7

Travelling and Conveyance 39 36

Repairs and Maintenance 31 37

Insurance 68 83

Miscellaneous Expenses 22 20

Consultancy, Legal and Professional Charges 25 26

Loss on Sale of Fixed Assets 0 1

Financial Expenses 5 3

Auditor's Remuneration

As Auditors 2 2

For Certification 0 0

Out of Pocket Expenses 0 0

TOTAL 793 770

SCHEDULE - N

OPENING STOCK

Finished Goods 6,254 6,314

By-products 197 99

Packing Materials 116 112

TOTAL 6,567 6,525

SCHEDULE - O

CLOSING STOCK

(As taken, valued and certified by Management)

Finished Goods 7,626 6,254

By-products 660 197

Packing Materials 176 116

TOTAL 8,462 6,567



SCHEDULE- P

CONTINGENT LIABILITIES AND NOTES TO THE ACCOUNTSSTFORMING PART OF THE BALANCE SHEET AS AT 31 MARCH, 2005

(A) SIGNIFICANT ACCOUNTING POLICIES :

General :

(a) The company follows the Mercantile System of Accounting and recognizes Income and Expenditure on Accrual basis. The Accounts are prepared on historical cost basis as a going concern. Accounting policies not referred to otherwise are consistent with generally accepted accounting principles.

Fixed Assets :

(b) Fixed Assets are stated at cost less depreciation except Land which is stated ‘At Cost’.

Investments :

(c) Investments are stated ‘At cost’.

Inventories :

(d) Inventories are valued as under :

Raw Material : ‘At Cost’

Finished Goods & Trading Goods : ‘At cost or Net Realisable Value’ which ever is less

Packing Material : ‘At Cost’

Stores & Spares : ‘At Cost’

Sales :

(e) Sales are recognised on passing of property in goods i.e. delivery as per terms, consignment sales is recognised on receipt of Sale Report from Consignees, net of Consignment Expenses, Sales is booked excluding excise duty.

(f) Inter-unit transfers of goods are shown as contra items in the Profit and Loss Account to reflect the true economic vale of the production inter-se the unit which has no impact on the profits of the Company.

(g) Entitlement in terms of duty-free imports of Raw-materials, others benefits and duty draw back against export are being accounted for on realisation basis.

Depreciation :

(h) Depreciation on Fixed Assets is provided on ‘Written Down Value Method ‘except on assets of ‘Solvent and Vanaspati Division’ where it is provided on ‘Straight Line Method’ at the rates and in the manner specified in Schedule xiv of the Companies Act,1956.

Foreign Currency Transactions :

(i) Transactions in foreign currency are recorded at the rate prevailing on the date of transaction or the rate realised. Current Assets and Current Liabilities not covered by forward contracts are translated at the year end exchange rates. Net loss/gain on such transaction is recognised at the year end. Forward exchange contracts are accounted for by amortising the difference between the forward rate and the exchange rate on the date of the transaction over the life of the contract.

Retirement Benefits :

(j) Contribution to Provident Fund and Gratuity Fund are charged against revenue, Gratuity liability is paid to a Trust created for the purpose jointly with Life Insurance Corporation of India under Group Gratuity Scheme. The premium paid/payable is being charged to Profit and Loss Account on accrual basis.

Grants :

(k) Government Grant related to specific fixed assets which are depreciable, are treated as deferred income which is recognized in the Profit and Loss Statement on a systematic and rational basis over the useful life of the asset. Such allocation to income is usually made over the periods and in the proportions in which depreciation on related assets is charged.

Borrowing cost :

(l) Borrowing costs directly attributable to the acquisition or construction of fixed assets are capitalised as part of the cost of the assets up to the date the assets is put to use. Other borrowing cost are charged to the profit & loss account in the year in which they are incurred.

Taxes on Income :

(m) Current tax is amount of tax payable on the taxable income for the year determined in accordance with Provisions of Income-tax Act,1961.

(n) Deferred tax liability has been determined in accordance with Accounting Standard-22-Accounting for Taxes on Income issued by the Institute of Chartered Accountants of India, based on timing difference expected to arise in foreseeable future. Deferred taxation benefit are recognised where there is a virtual certainty of sufficient future taxable income.

Provisions & contingent liabilities :

(o) Provisions are recognised when this company has a legal and constructive obligation as a result of past event , for which it is probable that a cash out flow will be required and a reliable estimate can be made of the amount of the obligation

(p) Contingent liabilities are not provided for and are disclosed by way of notes to the accounts.

(q) Contingent assets are neither recognised nor disclosed.

(B) NOTES TO THE ACCOUNTS :

1. Claims against the Company not acknowledged as debts : ‘Nil’

2. Contingent Liabilities in respect of : Year ended Year ended31-03-2005 31-03-2004

(Rs. in Lacs) (Rs. in Lacs)

(i) Outstanding Bank Guarantee 99.79 797.70

(ii) Letter of Credits 131.33 321.21

(iii) Capital Commitments [Net] 10.92 10.63

(iv) Excise duty & Custom demands 22.62 7.31

3. In the opinion of ‘Board of Directors’, the Current Assets, Loans and Advances are approximately of the value as stated, if realised, in the ordinary course of business. Some of the Advances, Sundry Debtors, Sundry Creditors and Security deposit from customers are taken as per books awaiting their respective confirmation.

4. Previous year figures have been re-arranged or re-grouped wherever necessary.

5. A demand of Rs. 181.13 Lacs [Previous year Rs. 199.03 Lacs] has been raised on completion of Sales-Tax assessments up to the year 2001-02 against which the Company has paid Rs. 20.19 Lacs [Previous year Rs. 21.10 Lacs] as advance against appeal. No liability has been provided towards the above demand as the Company expects to get relief.

th6. Pursuant to Special Resolution passed at the Extra Ordinary General Meeting held on 29 January 2005 ,the company has issued and allotted 35,00,000 warrants of Rs. 25/- each on preferential basis. The said Equity Warrants are with an option to acquire per warrant, one new equity share of Rs. 10/- each of the company at a premium of Rs. 15 per share at any time at the option of warrant holders but not later than 18 months from the date of allotment of such equity warrants. As per terms, 25% of the subscription amounting Rs. 218.75 lacs have been received by the company.

7. Management has evaluated impairment of assets as required by AS-28, impairment of assets which was stmade mandatory for accounting period commencing on or after 1 April 2004. On the basis of evaluation,

stmanagement is of the opinion that there is no impairment of assets of the company as on 31 March 2005.

8. No borrowing cost has been capitalised during the year.

9. Advance includes due from officers of the company Rs. Nil (Previous Year Rs. Nil). Maximum amount due from the officers during the year Rs. 4.17 Lacs (Previous Year Rs. 2.36 Lacs).

10. Finished Goods Stock includes goods sent on consignment Rs. 69.13 Lacs [Previous year Rs. 177.58 Lacs] against which advance received Rs. 24.47 Lacs [Previous year Rs. 1.54 Lacs]. Raw Materials includes Goods at Port of Rs. 74.73 Lacs (Previous Year Rs. Nil).

11. Installments of Term Loan due within 12 months are Rs. 274.33 Lacs [Previous year 260.00 Lacs].



12. Interest paid includes : Year ended Year ended31-03-2005 31-03-2004


To Bank :

On loan for Fixed Period 90.70 108.05

On other Loans 588.26 559.34


Salary 12.00 06.00

Contribution to Provident Fund 0.19 0.19

Reimbursement of Medical expenses 0.27 0.25

14. Sale includes inter unit transfers of Rs. 698.25 Lacs [Previous year Rs. 2761.23 Lacs].

15. Fixed Deposit of Rs. 349.23 Lacs [Previous year 246.07 Lacs] is under lien with the Bank towards margin against Bank Guarantee & Letter of Credit facilities.

16. Insurance charges includes amount paid for Key Man Insurance premium amounting Rs. 3.92 Lacs (Previous year Rs. Nil) taken on the life of Shri Govind Prasad Garg, Managing Director and Shri Ramesh Chand Garg, Chairman of the Company.

17. Other Income include : Year ended Year ended31-03-2005 31-03-2004


Other Miscellaneous Income 34.19 29.95

Interest 20.27 5.07

18. (a) Deferred Tax Liability has been considered accordance with Accounting Standard-22-Accounting for Taxes on Income issued by the Institute of Chartered Accountants of India. The Company has past record of regular capital expenditure. On account of this, Tax Depreciation is regularly higher than Book Depreciation and same trend is to be continued in next years. Being a measure of prudential decision keeping in view of past record and future estimate it is expected that the Tax effect of timing difference shall not be reversed in a long period and same may be treated as permanent difference therefore, no deferred tax liability has been provided.

(b) The Deferred tax liability and Assets as on 31.03.2005 is Rs. Nil [Previous year Nil].

19. During the year, the company has received a Capital Grant of Rs. 92.02 Lacs (previous year Rs. 19.37) towards the cost of acquisition of Plant & Machinery. The said grant has been shown under the head “Deferred Government Grant”. Depreciation on assets against the grant amounting Rs. 0.52 Lacs has been charged to the respective grant account in accordance with norms laided in AS-12.

20. Related Party Disclosure [As identified by Management] :

(i) Related Party Relationships :

{a) Where control exists Nil

{b} Key Management personal Shri Ramesh Chand Garg [Chairman]

Shri Govind Prasad Garg [Managing Director]

Shri Sourabh Garg [whole time Director]

To others :

On loan for fixed Period 44.71 52.81

On others 47.62 74.26

13. Managerial remuneration under section 198 of the Companies Act,1956 :

Year ended Year ended31-03-2005 31-03-2004



{c} Relatives of Key Management Personal Vivek Garg [Son of Govind Garg]

Vineet Garg [Son of Govind Garg]

Smt. Sheela devi Garg [Wife of Ramesh Garg]

{d} Other Related Parties K. S. Food Products

K. S. Enterprises

K. S. Exim Limited

T. R. Agritechno Limited

(ii) Transaction with Related Parties {Previous year figure are shown in [ ]} [Rs. in Lacs]

Type of Related Description & Volume of Amount OutstandingParties Nature of the Transaction as on

Transaction during the Year 31.03.05

Recievable Payable

(i) Key Management Remuneration Paid 12.00 [6.00]

Personnel Fixed Deposit Repaid 11.00 [Nil]

(ii) Relatives of Key Salary Paid 2.28 [1.71]

Managerial Personnel Consultancy Paid Nil [1.08]

Sales of Fixed assets 22.69 [Nil]

Fixed Deposit Repaid 59.50 [Nil]

Issue of Share Warrants 25.00 [Nil]

(iii) Other Related Parties Purchase of Goods 10,436.55 [6,415.18] 79.36 863.53

[19.91] [1,026.44]

Sale of Goods 37.57 [85.64]

Job Charges Received 15.74 [07.16]

Job Charges Paid 6.00 [12.00]

Rent Paid 6.93 [5.00]

Rent Received 0.18 [0.18]

Interest Paid 23.05 [16.45]

Fixed Deposit Repaid 100.00 [Nil]

21. Earning per Share : 2004-05 2003-04

(a) Net Profit after Tax available for equity Shareholders [Rs./Lacs] 336.12 226.31

(b) Weighted average number of equity shares of Rs. 10/- each

outstanding during the year [Nos. of Shares] 4,892,900 4,946,500

(c) Basic/Diluted earning per Shares [Rs.] [a/b] 6.87 4.58

22. (a) No amount has been claimed from the Company under the interest on Delayed Payments to Small Scale and Ancillary Undertakings Act.1993.

(b) Sundry Creditors includes Rs. 54.12 Lacs [Previous year Rs. 44.50 Lacs] due to Small Scale Undertakings.

(c) Small Scale Industries undertakings to whom on amount of Rs. 1.00 Lacs or more was payable and outstanding for more than 30 days, which were within the agreed terms are.

Brijbasi Packaging

Gupta Packing Products

Parth Packaging Products

Ridam Polymers Packaging Products

Suman Corrugated



23. Statement of additional Information.

Class of Goods Manufactured:

(A) Capacity : [As certified by Management and Accepted by Auditors]

Unit Licensed Installed

Current year Previous year

Mustard Oil (Owned) M.T. N/A 32,920 25,920Mustard Oil (On Lease) M.T. N/A 24,000 24,000DOC M.T. N/A 133,200 133,200Solvent Extracted Oil M.T. N/A 43,200 43,200Refined Oil M.T. N/A 44,100 44,100Vanaspati Ghee M.T. N/A 45,000 45,000Tin Containers Nos. Nos. 3,600,000 3,600,000HDPE Jars Nos. Nos. 1,800,000 1,800,000

(B) Trading and Production Data : Year ended 31-03-2005 Year ended 31-03-2004Qty. in Value in Qty. in Value in

M.T. Rs. (Lacs) M.T. Rs. (Lacs)

OPENING STOCKOil 12,327 5,173.16 13,087 5,502.85DOC 10,483 901.33 9,877 731.66Vanaspati Ghee 697 323.14 204 74.08By-Product/Packing Material/Trading Goods 148.82 192.34Empty Tin (in Nos.) 59,174 20.29 69,119 24.39

PRODUCTIONOil 52,590 38,635DOC 93,157 69,972Vanaspati Ghee 13,595 14,880Empty Tin (in Nos.) 2,689,634 3,058,568

PURCHASESOil 29,544 11,660.99 322,79 13,602.59DOC 4,395 166.37 11,847 979.92Vanaspati Ghee 0 0.00 0 0.00By-Product/Packing Material/Trading Goods 490.60 263.22Empty Tin (in Nos.) 0 0.00 0 0.00

SALESOil 75,283 33,450.86 71,674 34,039.33DOC 88,770 5,104.43 81,213 5,999.36Vanaspati Ghee 13,874 6,364.06 14,387 6,330.93By-Product/Packing Material/Trading Goods 164.22 264.42Empty Tin (in Nos.) (Captive Consumption) 2,177,423 0.00 2,675,513 0.00Empty Tin (in Nos.) (Sales) 368,841 162.29 393,000 172.92

CLOSING STOCKOil 19,178 7,275.35 12,327 5,173.16DOC 19,265 826.37 10,483 901.33Vanaspati Ghee 418 173.92 697 323.14By-Product/Packing Material/Trading Goods 108.62 148.82Empty Tin (in Nos.) 202,544 77.84 59,174 20.29

RAW MATERIAL CONSUMEDMustard Seed 81,941 13,754.08 32,122 6,540.10Soyabean Seed 16,278 2,071.70 40,886 5,655.26Sunflower Seed 0 0.00 605 99.58Oil 14,832 6,182.66 18,114 7,249.20Palm/Other Oil 14,563 4,860.90 15,856 5,734.26Tin Plate 2,642 986.52 2,919 947.58Oil Cake 87,162 1,979.41 19,378 1,230.58HDPE 264 141.09 387 171.31



2. (a) Items of Expenses and Income, Assets and Liabilities (including borrowing, Provision for Taxation and Advance-tax) which are not directly attributable/identifiable/allocable to business segment are shown as unallocated.

(b) Inter segment transfers are done at actual transfer prices.

3. Secondary Segment information - Geographical Segments

Signature of Schedules ‘A’ to ‘P’

As per our separate report of even date attached.For RATHI & CO.Chartered Accountants G. P. GARG SOURABH GARG


R. S. RATHI(Partner)M. No. 12121Place : Gwalior V. TULSIANI

rdDated : 3 September, 2005 (Company Secretary)

The Sales of the Company are mainly in India the export turnover is not significant in the context of total turnover. There are no reportable Geographical Segments.



PART IV

INFORMATION PURSUANT TO THE PROVISIONS OF PART IV OF SCHEDULE-VI TO THE COMPANIES ACT, 1956BALANCE SHEET ABSTRACT AND COMPANY’S GENERAL BUSINESS PROFILE

I. REGISTRATION DETAILS :

Registration No. 1 0 - 3 1 7 1 State Code 1 0

Balance Sheet Date

3 1 0 3 2 0 0 5

Date Month Year

II. CAPITAL RAISED DURING THE YEAR (Amount in Rs. Lacs)

Public Issue Right Issue

N I L N I L

Bonus Issue Private Placement

N I L 2 1 9

III. POSITION OF MOBILISATION AND DEPLOYMENT OF FUNDS (Amount in Rs. Lacs)

Total Liabilities Total Assets

1 7 4 1 9 1 7 4 1 9

Sources of Funds :

Paid-up Capital Reserves & Surplus

7 1 4 1 9 1 0

Secured Loans Unsecured Loans

7 4 1 4 N I L

(Paid up Capital includes share warrants aggregating to Rs. In Lacs 219)

Application of Funds

Net Fixed Assets Investments

3 1 6 0 N I L

Net Current Assets Misc. Expenditure

6 8 7 8 N I L

Accumulated Losses

N I L

IV. PERFORMANCE OF THE COMPANY (Amount in Rs. Lacs)

Turnover (Incl. other income) Total Expenditure

4 5 3 0 1 4 4 8 8 9

Profit before Tax Profit after Tax

4 1 2 3 3 6

Earning per share (Rs.) Dividend Rate %

6 . 8 7 10

V. GENERIC NAMES OF THREE PRINCIPAL PRODUCTS/SERVICES OF THE COMPANY (As per Monetary Terms)

I) Item Code No. (ITC Code) 2 3 0 6 9 0 0 3

Product Description M U S T A R D S E E D O I L

C A K E & O I L M E A L

II) Item Code No. (ITC Code) 2 3 0 4 0 0 0 2

Product Description S O Y A B E A N O I L C A K E

S O L V E N T E X T R A C T E D

V A R I E T Y

III) Item Code No. (ITC Code) 2 1 0 0

Product Description H Y D R O G E N A T E D

V E G E T A B L E O I L

IV) Item Code No. (ITC Code) 1 5 1 4 4 0 0 2

Product Description S O L V E N T E X T R A C T E

D O I L



K. S. OILS LIMITEDRegd. Office : Jiwaji Ganj, MORENA-476 001 (M. P.)

ATTENDANCE SLIP

thI hereby record my presence at the Annual General Meeting held on Friday, the 30 September, 2005 at 4.00 P.M. at Jiwaji Ganj, Morena-476 001 (M. P.)

Full name of the Shareholder (in Block Letters) ______________________________________________________________

* Folio No./DP ID No. and Client ID No. __________________________________

No. of Shares held__________________________________________________

Name of Proxy if the proxy attends, instead of the Shareholder ___________________________________________________

Signature of Member/Proxy*Delete whichever is not applicableNote :Member/Proxy attending the Meeting must fill in this attendance slip and hand it over at the entrance of the meeting hall.

---------------------------------------------------------------------------------------&--------------------------------------------------------------------------------------

K. S. OILS LIMITEDRegd. Office : Jiwaji Ganj, MORENA-476 001 (M. P.)

PROXY FORM

Folio No. _______________ No. of Shares held____________________________

DP ID No. and Client ID No. ______________________________

I/We ____________________________________________________________________________________________________

of ______________________________________________ in the district of ___________________________________________

being a Member/members of the above-named Company hereby appoint Mr./Ms. ____________________________________

of __________________________________ in the district of _____________________________________________________ or failing

him/her Mr./Ms. ___________________________________________________________ of ___________________________________ in

ththe district of ___________________________ my/our proxy to vote for me/us on my/our behalf at the 20 Annual General

thMeeting of the Company to be held on Friday, the 30 September, 2005 at 4.00 P.M. and at any adjournment thereof.

Signed this _______________________ day of _________________________, 2005

Signature of ShareholderNote :This Proxy Form, in order to be effective should be duly stamped, completed and signed and must be deposited at the Registered Office of the Company not less than 48 hours before the Meeting.



AffixRe. 1/-

RevenueStamp

BOARD OF DIRECTORS Ramesh Chand Garg Govind Prasad …Vineet Garg Chief Executive (Operation) Vivek...

Documents

Transcript of BOARD OF DIRECTORS Ramesh Chand Garg Govind Prasad …Vineet Garg Chief Executive (Operation) Vivek...