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KUSHAL
LIMITED
Date: September 07, 2019
To.
Corporate Relation Department,'
BSE Limited,
P. J. Towers,Dalal Street, Fort,
Mumbai- 400001.
SCRIP CODE: 536170
Sub: Submission of Annual Report for FY 2018—19
Ref: Regulation 34(1) of the SEBI (Listing Obligation and Disclosure Requirements)
Regulations, 2015.
Dear Sir / Madam,
Pursuant to Regulation 34(1) of the SEBI (Listing Obligation and Disclosure Requirements)
Regulations, 2015, please find enclosed herewith Annual Report for the financial year 2018-
19 along with the Notice of the 19th Annual General Meeting to be held on Monday, 301“
September, 2019 at 10.00 AM. at Ahmedabad Management Association, ATIRA Campus, Dr.
V ikram Sarabhai Marg. University Area. Ahmedabad. Gujarat—3 80015, India which is sent/
dispatched to the members by the permitted modes.
The Annual Report for the financial year 2018-19 uploaded on the website of the company i.e.
www.kushallimit_e_d.com
Please take the same on your records.
Thanking you,
For hal Limited0”
C ivangi Shah.1“
Company Secretary & Compliance Officer
KUSHAL LIMITED
(Formerly known as Kushai Tradeiink Limited) Phone No ; +91-79-26408027CIN: L7411OGJ2000PLC037472
+91_79—26404027
_
.
Email id : [email protected] office.
Website : www.kushallimited.comKushal House, Plot no. 115, Off C.G Road,
Navrangpura,Ahmedabad- 380009, Gujarat, India.
ANNUAL REPORT 2018-19
OUR INSPIRATION
OUR STRENGTH
LATE SHRI TULSIRAMJI AGRAWAL 1941-2016
INDEX Corporate Overview 1 Corporate Information
2 Board Committee
3 Vision and Values
4 The Board of Director
5 Financial Highlights
Statutory Reports 6 Notice
20 Director’s Report
56 Management Discussion and Analysis Report
60 Corporate Governance Report
Financial Statement
Standalone Financial Statements 76 Independent Auditor’s Report
82 Balance Sheet
83 Statement of Profit and Loss
84 Statement of Change in Equity
85 Cash Flow Statement
86 Notes to Financial Statements
Consolidated Financial Statements 105 Independent Auditor’s Report
110 Balance Sheet
111 Statement of Profit and Loss
112 Statement of Change in Equity
113 Cash Flow Statement
114 Notes to Financial Statements
CORPORATE INFORMATION Kushal Limited (Formerly known as Kushal Tradelink Limited) CIN.: L74110GJ2000PLC037472
Registered Office
Kushal House, Plot No. 115 Off. C.G. Road, Navrangpura Ahmedabad-09, Gujarat, Tel.: +91-79-26408027 Web.: www.kushallimited.com
Board of Directors Mr. Sandeep Agrawal- Chairman and Managing Director Mr. Manoj Agrawal- Director Mr. Kushal Agrawal- Director Mr. Anil Soni- Independent Director Mr. Dharmendra Bhuchhada - Independent Director Mrs. Kavita Tejaskumar Shah- Independent Director
Company Secretary & Compliance Officer CS Shivangi Shah
Chief Financial Officer Mr. Jitendra Yadav
Statutory Auditor M/s S. V. Sojitra & Co. Chartered Accountants 407, Silver Square Complex, Opp Dipak School, Nikol, Ahmedabad-382350 Tel.: +91-9909928736
Secretarial Auditor M S Buchasia & Associates Company Secretaries 306, Gala Mart, Nr. Sobo Centre, Before Safal Parisar, S Bopal Main Road, South Bopal, Bopal, Ahmedabad-380058 Tel.: +91-9327916394
Registrar & Share Transfer Agent Bigshare Services Private Limited Mumbai Branch: 1st Floor, Bharat Tin Works Building, Opp. Vasant Oasis, Makwana Road, Marol, Andheri (East), Mumbai, Maharashtra, 400059 Tel No.: +91 – 22 – 40430200 / 62638200 Fax No.: +91 – 22 – 28475207 / 62638299 Web.: www.bigshareonline.com
Ahmedabad Branch: A/802, Samudra Complex, Near Klassic Gold, Girish Cold Drink, C.G Road, Ahmedabad, Gujarat-380009 Tel.: +91-79-40024135 Web.: www.bigshareonline.com
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BOARD COMMITTEES
AUDIT COMMITTEE
Mr. Anil Soni - Chairman Mrs. Kavita Shah - Member Mr. Dharmendra Bhuchhada – Member Mr. Kushal Agrawal - Member
NOMINATION AND REMUNERATION COMMITTEE
Mrs. Kavita Shah - Chairman Mr. Dharmendra Bhuchhada – Member Mr. Anil Soni - Member
STAKEHOLDER RELATIONSHIP COMMITTEE
Mr. Dharmendra Bhuchhada - Chairman Mr. Anil Soni - Member Mr. Manoj Agrawal – Member
CORPORATE SOCIAL RESPONSIBILITY COMMITTEE
Mr. Dharmendra Bhuchhada - Chairman Mr. Kushal Agrawal - Member Mr. Sandeep Agrawal – Member
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Corporate Governance Framework
“We are committed to enhancing long-term shareholder value by creating a sustainable enterprise that delivers consistent performance”
• To be a reputed global provider of competitive products and services within emerging markets. • To offer customer delight and employee growth with equal fairness towards all stakeholders. • To focus on innovation and creativity for promoting organisational participation and continuous learning.
• To continuously interact with customers to understand their needs. • To offer best-in-class customer service and provide them value for money to earn complete customer
loyalty and facilitate access to larger markets. • To continuously develop processes for delivering high quality, reliable and consistent products. • To be a debt-free company offering excellent shareholder returns, employee-friendly environment and
pay all fair dues to the Government and society
Integrity: We act with honesty at all times
Commitment: We give our best to meet the needs of our customers
Teamwork: We combine our talents and effort for superior outcomes. Together, each achieves more.
Value People: We respect and care for our people. Each one makes a significant contribution to our organisation.
Professionalism: We live by high standards of work and conduct. We live continuously to improve our knowledge and skills.
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THE BOARD OF DIRECTORS
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FINANCIAL HIGHLIGHTS (ON CONSOLIDATED BASIS)
₹ in LakhsPARTICULARS 2018-19 2017-18 2016-17 2015-16 2014-15
Revenue from Operations 89597.86 233541.14 235958.42 158990.28 43300.76
Other Income 364.52 251.91 97.37 87.17 65.76
Total Revenue 89962.39 233793.05 236055.79 159077.45 43366.52
Finance Cost 634.72 523.02 387.02 1043.64 1133.99
Depreciation & Amortisation 746.53 57.83 62.56 64.15 52.28
Earnings before Interest, Tax and Depreciation 6601.81 12355.83 16107.40 11688.83 2108.29
Profit Before Tax 5220.56 11774.98 15657.83 10581.04 922.02
Tax (104.87) (809.21) (1642.27) (791.92) (264.67)
Profit After Tax 5115.69 10965.77 14015.55 9789.12 657.35
Equity Share Capital 6732.81 4745.33 4745.33 2372.67 2372.67
Reserves & Surplus 153872.36 28902.10 20466.32 11082.66 3655.03
Total Equity 160605.18 33647.43 25211.65 13455.33 6027.70
Current Assets 54254.84 85242.64 90214.97 120192.31 23074.02
Current Liabilities 31824.65 54773.31 67177.54 108759.22 19245.97 Working capital/ Net Current Assets 22430.19 30469.33 23037.43 11433.09 3828.05
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PCIN: L74110GJ2000PLC037472 Reg. Office: Kushal House, Plot No. 115, Off. C.G. Road, Navrangpura, Ahmedabad- 380009, Gujarat.
Phone: 079-26408027 Email: [email protected] Website: www.kushallimited.com
NOTICE OF ANNUAL GENERAL MEETING
Notice is hereby given that the Nineteenth (19th) Annual General Meeting (AGM) of the Members of Kushal Limited will be held on Monday, September 30, 2019, at 10.00 A.M. at Ahmedabad Management Association, ATIRA Campus, Dr. Vikram Sarabhai Marg, University Area, Ahmedabad, Gujarat-380015, India to transact the following business: ORDINARY BUSINESS: 1. Adoption of Financial Statements
To consider and adopt the Audited Standalone and Consolidated Financial Statements of the Company for the financial year ended March 31, 2019 including the Audited Balance Sheet as on March 31, 2019, the statement of Profit & Loss and the Cash Flow Statement for the year ended on that date, along with the reports of the Board of Directors and Auditors thereon, by passing of following resolutions as: “RESOLVED THAT the Audited Standalone and Consolidated Financial Statement of the Company for the financial year ended March 31, 2019 including the Audited Balance Sheet as on March 31, 2019, the statement of Profit & Loss and the Cash Flow Statement for the year ended on that date and the reports of the Board of Directors and Auditors thereon, as laid before this meeting, be and are hereby received, considered and adopted.”
2. Appointment of Mr. Kushal Agrawal as a Director liable to retire by rotation To appoint Mr. Kushal Agrawal (DIN: 03043294) who retires by rotation, and being eligible, offers himself for reappointment. “RESOLVED THAT pursuant to provisions of Section 152 and other applicable provisions of the Companies Act, 2013, the approval of the shareholders of the Company be and is hereby accorded to the reappointment of Mr. Kushal Agrawal (DIN: 03043294) as a Director, who is liable to retire by rotation.”
SPECIAL BUSINESS: 3. To consider and if thought fit, to pass with or without modification(s), the following resolution as
Special Resolution:
“RESOLVED THAT pursuant to the provisions of Insolvency and Bankruptcy Code, 2016 (IBC) and Companies Act, 2013 and Rules made thereunder (including any statutory amendment(s) or modification(s) or re-enactment(s) thereof, for the time being in force) the provisions of the Memorandum and Articles of Association of the Company, the provisions of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (as amended from time to time) and subject to the necessary approvals, consents, permissions and/or sanctions from the appropriate authorities and consent of the Members of the Company be and is hereby accorded to ratify all the actions taken/ to be taken by the Company/Board including the issue of securities, warrants etc. for giving effect to and implementing the resolution plan submitted by Kushal Limited under IBC, 2016 which inter-alia including the scheme of amalgamation of Rainbow Papers Limited into Kushal Limited approved vide the order of Hon’ble NCLT Ahmedabad Bench, IA 273/2018 IN IA 224/2018 IN CP(IB) 88 OF 2017 dated February 27, 2019.”
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“RESOLVED FURTHER THAT the Board be and is hereby authorized to delegate all or any of the powers herein conferred to any Director(s) or Officer(s) of the Company and to generally do and perform all such acts, deeds, matters and things as mentioned in approved Resolution Plan, Addendum to Resolution Plan and Scheme of Amalgamation.”
4. To consider and if thought fit, to pass with or without modification(s), the following resolution as
Special Resolution:
“RESOLVED THAT pursuant to the provisions of Section 180(1)(a) and other applicable provisions, if any, of the Companies Act, 2013 and Rules made thereunder (including any statutory amendment(s) or modification(s) or re-enactment(s) thereof, for the time being in force), the provisions of the Memorandum and Articles of Association of the Company, the provisions of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (as amended from time to time) and subject to the necessary approvals, consents, permissions and/or sanctions from the appropriate authorities and consent of the Members of the Company be and is hereby accorded to Board of Directors of the Company (hereinafter referred to as the “Board” which term shall include any committee thereof) to sell or transfer or otherwise dispose-off its whole or part of investments/shareholding in Kushal Impex PTE LTD., Singapore, which is a wholly owned subsidiary Company of the Company, to the purchaser/third party investor, for a consideration as determined by independent valuer or such higher value, to be discharged in form of cash and/or kind, on such terms and conditions and with such modifications as the Board may deem fit and appropriate in the interest of the Company.” “RESOLVED FURTHER THAT the Board be and is hereby authorized to delegate all or any of the powers herein conferred to any Committee of the Board or any Director(s) or Officer(s) of the Company and to generally do and perform all such acts, deeds, matters and things as it may, in their absolute discretion, deem fit, necessary, proper or desirable, including finalizing, varying and settling the terms and conditions of such sale and to finalize, execute, deliver and perform the agreement, contracts, deeds, undertakings, and other documents in respect thereof and seek the requisite approvals, consents and permissions as may be applicable.”
5. To consider and if thought fit, to pass with or without modification(s), the following resolution as Special Resolution:
“RESOLVED THAT pursuant to the provisions of Section 180(1)(a) and other applicable provisions, if any, of the Companies Act, 2013 and Rules made thereunder (including any statutory amendment(s) or modification(s) or re-enactment(s) thereof, for the time being in force), the provisions of the Memorandum and Articles of Association of the Company, the provisions of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (as amended from time to time) and subject to the necessary approvals, consents, permissions and/or sanctions from the appropriate authorities and consent of the Members of the Company be and is hereby accorded to Board of Directors of the Company (hereinafter referred to as the “Board” which term shall include any committee thereof) to sell or transfer or otherwise dispose-off its whole or part of investments/shareholding in Kashish Worlwide FZE, U.A.E., which is a wholly owned subsidiary company of the Company, to the purchaser/third party investor, for a consideration as determined by independent valuer or such higher value, to be discharged in form of cash and/or kind, on such terms and conditions and with such modifications as the Board may deem fit and appropriate in the interest of the Company.” “RESOLVED FURTHER THAT the Board be and is hereby authorized to delegate all or any of the powers herein conferred to any Committee of the Board or any Director(s) or Officer(s) of the Company and to generally do and perform all such acts, deeds, matters and things as it may, in their absolute discretion, deem fit, necessary, proper or desirable, including finalizing, varying and settling the terms and conditions of such sale and to finalize, execute, deliver and perform the agreement, contracts, deeds, undertakings, and other documents in respect thereof and seek the requisite approvals, consents and permissions as may be applicable.”
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6. To consider and if thought fit, to pass with or without modification(s), the following resolution as Special Resolution: “RESOLVED THAT pursuant to the provisions of section 180(1)(a) and other applicable provisions, if any, of the Companies Act, 2013, and the relevant Rules framed thereunder (including any statutory amendment(s) or modification(s) or re-enactment(s) thereof, for the time being in force), and the enabling provisions in the Memorandum of Association and Article of Association of the Company, approval and consent of the members of the company be and is hereby accorded to the Board of Directors to sell and transfer the fixed asset including land, building and other assets of Corporate House of the Company situated at Kushal House, Plot No. 115, Off. C.G Road, Navrangpura, Ahmedabad-380009, Gujarat to the third party purchaser at a consideration as determined by independent valuer or such higher value, on such terms and conditions as may be deemed fit by the Board.” “RESOLVED FURTHER THAT the Board be and is hereby authorized to delegate all or any of the powers herein conferred to any Committee of the Board or any Director(s) or Officer(s) of the Company and to generally do and perform all such acts, deeds, matters and things as it may, in their absolute discretion, deem fit, necessary, proper or desirable, including finalizing, varying and settling the terms and conditions of such sale and to finalize, execute, deliver and perform the agreement, contracts, deeds, undertakings, and other documents in respect thereof and seek the requisite approvals, consents and permissions as may be applicable.”
By the order of Board For Kushal Limited SD/- Sandeep Agrawal Chairman and Managing Director DIN: 00239648 Date: September 02, 2019 Place: Ahmedabad
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NOTES: 1. A MEMBER ENTITLED TO ATTEND AND VOTE AT ANNUAL GENERAL MEETING IS ENTITLED TO
APPOINT A PROXY TO ATTEND AND VOTE ON HIS / HER BEHALF AND THE PROXY NEED NOT BE A MEMBER OF THE COMPANY.
2. Pursuant to Section 105 of the Companies Act, 2013, the instrument appointing the proxy, in order to be effective, must be deposited at the Company's Registered Office, duly completed and signed, not less than FORTY-EIGHT hours before the commencement of the AGM. Proxies submitted on behalf of limited companies, societies etc., must be supported by appropriate resolutions / authority letter, as applicable. A person can act as proxy on behalf of Members not exceeding fifty (50) and holding in the aggregate not more than 10% of the total share capital of the Company carrying voting rights. In case a proxy is proposed to be appointed by a Member holding more than 10% of the total share capital of the Company carrying voting rights, then such proxy shall not act as a proxy for any other person or shareholder. A proxy form is annexed at the end of this Annual Report.
3. Members, proxies and authorised representative are requested to bring Attendance Slip duly completed and signed, mentioning therein details of their DP ID and Client ID / Folio No. along with copies of Annual Report to the Meeting.
4. Only members of the Company whose names appear on the Register of Members/Proxy holders, in possession of valid Attendance Slips duly filled and signed will be permitted to attend the meeting. The Company reserves its right to take all steps as may be deemed necessary to restrict non-members from attending the meeting.
5. In case of joint holders attending the meeting, only such joint holder who is higher in the order of names
will be entitled to vote.
6. Members who wish to obtain information on the Company’s accounts may send their request at least 10 days before the Annual General Meeting to the Company at the Registered Office of the Company.
7. The Register of Members and Share Transfer book will remain closed from Tuesday, September 24, 2019 to Monday, September 30, 2019 (both days inclusive) for the purpose of the 19th Annual General Meeting.
8. Details as required in Regulation 36(3) of the SEBI (Listing Obligations and Disclosure Requirement) Regulations, 2015 (‘Listing Regulations’) in respect of the director seeking re-appointment at the AGM are annexed with this Notice. Requisite declarations have been received from the Director seeking re-appointment. The Independent Directors of the Company have been appointed for a term of 5 years in accordance with the relevant provisions of the Companies Act, 2013 and are not liable to retire by rotation.
9. Pursuant to Section 101 and Section 136 of the Companies Act, 2013 read with relevant Companies (Management and Administration Rules), 2014, companies can serve Annual Reports and other communications through electronic mode to those members who have registered their e-mail address either with the Company or with the Depository. Members are requested to register/update their e-mail address with their Depository Participant(s) directly. Members of the Company, who have registered their email-address, are entitled to receive such communication in physical form upon request.
10. The Notice of AGM, Attendance Slip and Annual Report are being sent in electronic mode to Members whose e-mail address is registered with the Company or the Depository Participant(s), unless the Members have registered their request for the hard copy of the same. Physical copy of the Notice of AGM and Attendance Slip along with Annual Report are being sent to those Members who have not registered their e-mail address with the Company or Depository Participant(s). Members who have received the Notice of AGM and Attendance Slip along with Annual Report in electronic mode are requested to print the Attendance Slip and submit a duly filled Attendance Slip at the Registration Counter at the AGM.
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11. Members who wish to claim unclaimed Dividends (Interim Dividends declared by the company till date), are requested either to correspond with the Secretarial Department at the Company's registered office or with the Company's Registrar and Share Transfer Agent (Bigshare Services Pvt. Ltd.).
12. All documents referred to in the accompanying Notice and the Explanatory Statement shall be open for
inspection at the registered office of the Company during business hours on all working days, except Sundays and public holidays, up to and including the date of the Annual General Meeting of the Company. The relevant documents referred to in the Notice and Explanatory Statement will also be available for inspection by the Members at the Meeting.
13. The Register of Directors and Key Managerial Personnel and their shareholding, maintained under Section 170 of the Act, and the Register of Contracts or Arrangements in which the Directors are interested, maintained under Section 189 of the Act, will be available for inspection by the Members at the Registered Office of the Company during business hours on all working days, except Sundays and public holidays prior to the date of Annual General Meeting and at the ensuing Annual General Meeting.
14. Pursuant to Section 108 of the Companies Act, 2013 read with the Companies (Management and
Administration) Rules, 2014, (as amended from time to time) and Regulation 44 of Listing Regulations, the Company is pleased to provide the facility to Members to exercise their right to vote on the resolutions proposed to be passed at AGM by electronic means. The Members, whose names appear in the Register of Members / list of Beneficial Owners as on Monday, September 23, 2019 i.e. the date prior to the commencement of book closure, being the cut-off date, are entitled to vote on the Resolutions set forth in this Notice. Members may cast their votes on electronic voting system from any place other than the venue of the meeting (remote e-voting). The remote e-voting period will commence at 9.00 A.M. (IST) on Friday, September 27, 2019 and will end at 5.00 P.M. (IST) on Sunday, September 29, 2019.
15. In addition, the facility for voting shall also be made available at the AGM and the Members attending the AGM who have not casted their vote by remote e-voting shall be eligible to vote at the AGM. The Company has appointed M/s. Yash Mehta & Associates, Practicing Company Secretaries, Ahmedabad (COP: 16535), to scrutinize the entire e-voting/ballot voting process in a fair and transparent manner. The members desiring to vote through remote e-voting are requested to refer to the detailed procedure given hereinafter. The scrutinizer shall forward the consolidated report of total votes cast in favour or against through e-voting and voting at the venue of the AGM. The Chairman shall within 48 hours of conclusion of AGM declare the result and such result along with the scrutinizer report shall be displayed on the website of the Company and on the website of the agencies.
16. The voting rights of the members shall be in proportion to the paid up equity share capital of the
Company held by them, as on the cut-off date i.e. Monday, September 23, 2019.
Further, a person who is not a member as on the cut-off date should treat this Notice for information purpose only. A person who has acquired the shares and has become a member of the Company after dispatch of the Notice of the AGM and prior to the cut-off date i.e. Monday, September 23, 2019, shall be entitled to exercise his / her vote either electronically i.e. remote e-voting or through the poll paper at the AGM by following the procedure mentioned in this part.
17. MEMBERS HOLDING EQUITY SHARES IN ELECTRONIC FORM AND PROXIES THEREOF, ARE REQUESTED TO BRING THEIR DP ID AND CLIENT ID FOR IDENTIFICATION.
The instructions for shareholders voting electronically are as under:
a) The voting period begins on Friday, September 27, 2019 at 9.00 A.M. (IST) and ends on Sunday, September 29, 2019 at 5.00 P.M. (IST). During this period shareholders of the Company, holding shares either in physical form or in dematerialized form, as on the cut-off date on Monday, September 23, 2019 may cast their vote electronically. The e-voting module shall be disabled by CDSL for voting thereafter.
b) The shareholders should log on to the e-voting website www.evotingindia.com.
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c) Click on Shareholders.
d) Now Enter your User ID • For CDSL: 16 digits beneficiary ID, • For NSDL: 8 Character DP ID followed by 8 Digits Client ID, • Members holding shares in Physical Form should enter Folio Number registered with the Company.
e) Next enter the Image Verification as displayed and Click on Login.
f) If you are holding shares in demat form and had logged on to www.evotingindia.com and voted on an
earlier voting of any company, then your existing password is to be used.
g) If you are a first time user follow the steps given below:
For Members holding shares in Demat Form and Physical Form
PAN
Enter your 10 digit alpha-numeric PAN issued by Income Tax Department (Applicable for both demat shareholders as well as physical shareholders)
• Members who have not updated their PAN with the Company/Depository Participant are requested to use the sequence number which is printed on Postal Ballot / Attendance Slip indicated in the PAN Field.
Dividend Bank Details OR Date of Birth (DOB)
Enter the Dividend Bank Details or Date of Birth (in dd/mm/yyyy format) as recorded in your demat account or in the company records in order to login.
• If both the details are not recorded with the depository or company please enter the member id / folio number in the Dividend Bank details field as mentioned in instruction (IV).
h) After entering these details appropriately, click on “SUBMIT” tab.
i) Members holding shares in physical form will then directly reach the Company selection screen.
However, members holding shares in demat form will now reach ‘Password Creation’ menu wherein they are required to mandatorily enter their login password in the new password field. Kindly note that this password is to be also used by the demat holders for voting for resolutions of any other company on which they are eligible to vote, provided that company opts for e-voting through CDSL platform. It is strongly recommended not to share your password with any other person and take utmost care to keep your password confidential.
j) For Members holding shares in physical form, the details can be used only for e-voting on the resolutions contained in this Notice.
k) Click on the EVSN for the relevant Kushal Limited on which you choose to vote.
l) On the voting page, you will see “RESOLUTION DESCRIPTION” and against the same the option “YES/NO” for voting. Select the option YES or NO as desired. The option YES implies that you assent to the Resolution and option NO implies that you dissent to the Resolution.
m) Click on the “RESOLUTIONS FILE LINK” if you wish to view the entire Resolution details.
n) After selecting the resolution you have decided to vote on, click on “SUBMIT”. A confirmation box will be displayed. If you wish to confirm your vote, click on “OK”, else to change your vote, click on “CANCEL” and accordingly modify your vote.
o) Once you “CONFIRM” your vote on the resolution, you will not be allowed to modify your vote.
p) You can also take a print of the votes cast by clicking on “Click here to print” option on the Voting page.
q) If a demat account holder has forgotten the login password then Enter the User ID and the image verification code and click on Forgot Password & enter the details as prompted by the system.
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r) Shareholders can also use Mobile app - “m - Voting” for e voting. m - Voting app is available on Apple, Android and Windows based Mobile. Shareholders may log in to m - Voting using their e voting credentials to vote for the company resolution(s).
s) Note for Non – Individual Shareholders and Custodians
i. Non-Individual shareholders (i.e. other than Individuals, HUF, and NRI etc.) and Custodian are required to log on to www.evotingindia.com and register themselves as Corporates.
ii. A scanned copy of the Registration Form bearing the stamp and sign of the entity should be emailed to [email protected].
iii. After receiving the login details, user would be able to link the account(s) for which they wish to vote on.
iv. The list of accounts linked in the login should be mailed to [email protected] and on approval of the accounts they would be able to cast their vote.
v. A scanned copy of the Board Resolution and Power of Attorney (POA) which they have issued in favour of the Custodian, if any, should be uploaded in PDF format in the system for the scrutinizer to verify the same.
t) In case you have any queries or issues regarding e-voting, you may refer the Frequently Asked
Questions (“FAQs”) and e-voting manual available at www.evotingindia.com, under help section or write an email to [email protected].
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EXPLANATORY STATEMENT IN RESPECT OF THE SPECIAL BUSINESS PURSUANT TO SECTION 102 OF THE COMPANIES ACT, 2013 (“THE ACT”)
Item No. 3 The Hon’ble NCLT, Ahmedabad Bench vide its order IA 273/2018 in IA 224/2018 in C.P. (1.8) No. 88/NCLT/AHM/2017 dated February 27, 2019 approved Resolution Plan (Which inter-alia includes scheme of Amalgamation of Rainbow Papers Limited into Kushal Limited) submitted by Kushal Limited under IBC, 2016. The approved resolution plan, addendum to resolution plan and scheme of amalgamation proposed issue of securities, warrants etc. The copy of the same is available on website of the Company i.e https://www.kushallimited.com/files/resolution-plan-scheme-of-amalgamation-in-the-matter-of-rainbow-papers-limited-sc5d6d028a8278d.pdf As per the order of Hon’ble NCLT, the Resolution Applicant shall obtain the necessary approvals required under any law for the time being in force within a period of one year from the date of approval of the resolution plan by adjudicating authority. As per order of Hon’ble NCLT, provisions of IBC, 2016 and Companies Act, 2013, the said business may be required the approval of the members of the Company by way of a Special Resolution. None of the Directors, Key Managerial Personnel and their relatives are, in any way, concerned or interested in the proposed resolution. The Board recommends the Special Resolution as set out at Item No. 3 of the Notice of the AGM for approval by the members. Item No. 4 The company proposes to sell or transfer or otherwise dispose-off its 100% investments/shareholding in Kushal Impex PTE LTD., Singapore, which is an overseas wholly owned subsidiary Company of the Kushal Limited to purchaser/third party investor, for a consideration as determined by independent valuer or such higher value, to be discharged in form of cash and/or kind. The Company has no substantial revenue generating business activities carried out in whole/part at present. The promoters of Kushal Limited want to focus on manufacturing activities carried out by 3 manufacturing units and recently acquired Rainbow Papers Limited. The Board keeping in view the hardship incurred as the subsidiary company has not received the expected growth, it feels that's its prudent to withdraw investment from the wholly owned Subsidiary and considers the proposed disinvestment in the best interest of the Company. Such disinvestment will amount to sale of substantial interest in undertaking by the Company, your Directors propose resolution under section 180(1)(a) of the Companies Act, 2013 for the approval of the shareholders. Members of the Company are further requested to note that Section 180(1)(a) of the Companies Act, 2013 mandates that the Board of Directors of the company shall exercise the power to sell, lease or otherwise dispose-off the whole or substantially the whole of any undertaking(s) of the company, only with the approval of the members of the Company by way of a special resolution. None of the Directors, Key Managerial Personnel and their relatives are, in any way, concerned or interested in the proposed resolution. The Board recommends the Special Resolution as set out at Item No. 4 of the Notice of the AGM for approval by the members. Item No. 5 The Company proposes to sell or transfer or otherwise dispose-off its 100% investments/shareholding in Kashish Worlwide FZE, U.A.E., which is an overseas wholly owned subsidiary Company of the Kushal Limited to purchaser/third party investor, for a consideration as determined by independent valuer or such higher value, to be discharged in form of cash and/or kind. The Company has no substantial
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revenue generating business activities carried out in whole/part at present. The promoters of Kushal Limited want to focus on manufacturing activities carried out by 3 manufacturing units and recently acquired Rainbow Papers Limited. The Board keeping in view the hardship incurred as the subsidiary company has not received the expected growth, it feels that's its prudent to withdraw investment from the wholly owned Subsidiary and considers the proposed disinvestment in the best interest of the Company. Such disinvestment will amount to sale of substantial interest in undertaking by the Company, your Directors propose resolution under section 180(1)(a) of the Companies Act, 2013 for the approval of the shareholders. Members of the Company are further requested to note that Section 180(1)(a) of the Companies Act, 2013 mandates that the Board of Directors of the company shall exercise the power to sell, lease or otherwise dispose-off the whole or substantially the whole of any undertaking(s) of the company, only with the approval of the members of the Company by way of a special resolution. None of the Directors, Key Managerial Personnel and their relatives are, in any way, concerned or interested in the proposed resolution. The Board recommends the Special Resolution as set out at Item No. 5 of the Notice of the AGM for approval by the members. Item No. 6 As the members are aware that the Registered Office of the Company is presently located at Kushal House, Plot No. 115, Off C.G Road, Navrangpura, Ahmedabad-380009, Gujarat. The said Corporate House at Ahmedabad is equipped with all the required furniture, Fixtures and various amenities. The above premise is not being fully utilized as it possesses more space than the actual requirement of the company due to which the cost of overhead and expenditure is increased. Hence the management is of opinion to sell/dispose off the said location which increases the net worth and the cash flows position of the Company, and reduces the overhead expenditure thereof. In this regard the management has been searching for suitable buyer who intends to acquire the said property at a consideration as determined by independent valuer or such higher value, on such terms and conditions as may be deemed fit by the Board. The sale of the said building would not have any adverse impact on the Company. As per explanation to Section 180(1)(a) of the Companies Act, 2013, the said building may be deemed to be an Undertaking of the Company and hence the Board of Directors of the Company shall exercise the power to sell, lease or otherwise dispose-off the whole or substantially the whole of any undertaking(s) of the company, only with the approval of the members of the Company by way of a special resolution. None of the Directors, Key Managerial Personnel and their relatives are, in any way, concerned or interested in the proposed resolution. The Board recommends the Special Resolution as set out at Item No. 6 of the Notice of the AGM for approval by the members.
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DETAILS OF DIRECTOR SEEKING APPOINTMENT / REAPPOINTMENT
Kushal Agrawal (DIN: 03043294) Nature: Re-appointment Date of Birth: 07-08-1991 Mr. Kushal Agrawal (aged 28) joined the Company on January 20, 2017 as an Additional (Executive) Director and subsequently regularized on September 30, 2017 by passing of resolution by shareholder At 17th Annual General Meeting. Mr. Agrawal holds a Bachelor's degree in Business Administration from Ahmedabad University and a Master of Science degree from University of Leeds, UK. After completing his education, he joined the family business and has played a key role in implementing international best practises & processes, financial management and optimizing business procedures, especially in construction. Directorship held in other public Companies: Not Applicable Membership/ Chairmanship of Committees in other Companies: - Not Applicable No of Shares held in the Company as on date: 2717420
ROUTE MAP FOR THE VENUE OF THE MEETING
Ahmedabad Management Association, ATIRA Campus, Dr Vikram Sarabhai Marg, University Area, Ahmedabad, Gujarat-380015, India
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CIN: L74110GJ2000PLC037472
Reg Office: Kushal House, Plot No. 115, Off. C.G. Road, Navrangpura, Ahmedabad- 380009, Gujarat.
Phone: 079-26408027 Email: [email protected] website: www.kushallimited.com
ATTENDANCE SLIP NINETEENTH ANNUAL GENERAL MEETING
AT AHMEDABAD MANAGEMENT ASSOCIATION, ATIRA CAMPUS, DR VIKRAM SARABHAI MARG,
UNIVERSITY AREA, AHMEDABAD, GUJARAT-380015, INDIA
I certify that I am a shareholder / proxy of the shareholder of the Company.
I hereby record my/our presence at the NINETEENTH ANNUAL GENERAL MEETING of the Company at the_____________________________________________ on____________________________________
Member’s Folio/DP ID- Client ID No. Member’s/ Proxy’s name in Block Letters Member’s/ Proxy’s Signature
Note: 1. Members are requested to bring their copies of Annual Report to the Meeting. 2. Bodies Corporate, whether a Company or not, who are members, may attend through their authorized
representative appointed under Section 113 of the Companies Act, 2013. A copy of authorization should be deposited with the Company.
3. Please fill in attendance slip and hand it over at the entrance of the hall.
DP ID
Client Id./Regd. Folio No.
Name and Address of the Sole/First Member
Joint Holder 1 Joint Holder 2 No. of shares held
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CIN: L74110GJ2000PLC037472
Reg Office: Kushal House, Plot No. 115, Off. C.G. Road, Navrangpura, Ahmedabad- 380009, Gujarat. Phone: 079-26408027 Email: [email protected] website: www.kushallimited.com
Form No. MGT-11
PROXY FORM
[Pursuant to Section 105(6) of the Companies Act, 2013 and Rule 19(3) of the Companies (Management and Administration) Rules, 2014]
Name of Member(s):______________________________________________________________________________________________ Registered Address: ______________________________________________________________________________________________ ______________________________________________________________________________________________________________________ ______________________________________________________________________________________________________________________ E-Mail ID___________________________________________________________________________________________________________ Folio No/DP ID and Client ID:____________________________________________________________________________________
I/We, being the Member(s) ___________________of shares of the Kushal Limited, hereby appoint 1. Name_____________________________________________________________E-Mail ID ______________________________________
Address___________________________________Signature_________________________________________or failing him/her
2. Name________________________________________________________ E-Mail ID __________________________________________ Address___________________________________Signature_________________________________________or failing him/her
3. Name____________________________________________________ E-Mail ID _____________________________________________ Address_____________________________________________Signature_____________________________or failing him/her
as my/our Proxy to attend and vote, in case of a poll, for me/us and on my/our behalf at the 19th Annual General Meeting of the Company, to be held on Monday, September 30, 2019 at 10.00 A.M. (IST) at “Ahmedabad Management Association, Atira Campus, Dr Vikram Sarabhai Marg, University Area, Ahmedabad, Gujarat-380015, India”, and at any adjournment thereof in respect of such resolutions and in such manner as are indicated below:
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Res. No. Description For* Against* Ordinary Businesses
1
Adoption of the Audited Standalone and Consolidated financial statements of the Company for the financial year ended March 31, 2019 including the statement of Profit & Loss of the Company for the year ended on that date, along with the reports of the Board of Directors and Auditors thereon.
2 Appointment of Mr. Kushal Agrawal (DIN - 03043294), as Director who retires by rotation and being eligible, offers himself for re-appointment.
Special Businesses
3 Special Resolution for ratification of NCLT order dated February 27, 2019.
4 Special Resolution for Sale/transfer or dispose-off investments or shareholding of the Company in Kushal Impex PTE LTD., Singapore, wholly owned subsidiary company.
5 Special Resolution for Sale/transfer or dispose-off investments or shareholding of the Company in Kashish Worlwide FZE, U.A.E., wholly owned subsidiary company.
6 Special Resolution for Sale/transfer or dispose-off Registered Office situated at Ahmedabad.
Signed this _________________ day of _________________ 2019 Signature of Member (s) ________________________ Signature of Proxy holder(s) _________________________ Notes: 1. Please put an ‘X’ in the Box in the appropriate column against the respective resolutions. If you leave the
‘For’ or ‘Against’ column blank against any or all the resolutions, your Proxy will be entitled to vote in the manner as he/she thinks appropriate.
2. A Proxy need not be a Member of the Company. Pursuant to the provisions of Section 105 of the Companies Act, 2013, a person can act as Proxy on behalf of not more than fifty Members and holding in aggregate not more than ten percent of the total Share Capital of the Company carrying voting rights. Members holding more than ten percent of the total Share Capital of the Company carrying voting rights may appoint a single person as Proxy, who shall not act as Proxy for any other Member.
3. This form of proxy in order to be effective should be duly completed and deposited at the Registered Office of the Company, not less than 48 hours before the commencement of the Meeting.
AFFIX Revenue
Stamp Of₹ 1
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CIN: L74110GJ2000PLC037472
Reg. Office: Kushal House, Plot No. 115, Off. C.G. Road, Navrangpura, Ahmedabad- 380009, Gujarat. Phone: 079-26408027 Email: [email protected] website: www.kushallimited.com
Form No. MGT-12
BALLOT FORM [Pursuant to Section 109(5) of the Companies Act, 2013 and rule 21(1) I of the Companies (Management
and Administration) Rules, 2014]
1.
Name(s) of Shareholder(s) (Including Joint holders, if any)
2. Registered address of the Sole / First named Shareholder
3. Registered Folio No. /DP ID & Client ID No. 4. No of Shares held
I hereby exercise my vote in respect of Ordinary Resolution enumerated below by recording my assent or dissent to the said resolution in the following manner:
Res. No. Description For* Against* Ordinary Businesses
1
Adoption of the Audited Standalone and Consolidated financial statements of the Company for the financial year ended March 31, 2019 including the statement of Profit & Loss of the Company for the year ended on that date, along with the reports of the Board of Directors and Auditors thereon.
2 Appointment of Mr. Kushal Agrawal (DIN – 03043294), as Director who retires by rotation and being eligible, offers himself for re-appointment.
Special Businesses
3 Special Resolution for ratification of NCLT order dated February 27, 2019.
4 Special Resolution for Sale/transfer or dispose-off investments or shareholding of the Company in Kushal Impex PTE LTD., Singapore, wholly owned subsidiary company.
5 Special Resolution for Sale/transfer or dispose-off investments or shareholding of the Company in Kashish Worlwide FZE, U.A.E., wholly owned subsidiary company.
6 Special Resolution for Sale/transfer or dispose-off Registered Office situated at Ahmedabad.
Date: Place: (Signature of Shareholder)
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DIRECTOR’S REPORT To The Members, The Board of Directors are pleased to present the Company’s 19th Annual Report along with the Audited Financial Statements, both standalone and consolidated, for the Financial Year ended March 31, 2019.
FINANCIAL RESULTS The Company’s financial performance for the year ended March 31, 2019 is summarized below:
1. FINANCIAL SUMMARY
(₹In Lakhs) STANDALONE CONSOLIDATED 2018-19 2017-18 2018-19 2017-18
Revenue from operations 35828.92 100660.50 89597.86 233541.14 Other income (net) 292.66 2436.03 364.52 251.91 Total Revenue (A) 36121.58 103096.53 89962.39 233793.05 Total Expenses (B) 34696.87 99589.18 84741.83 222018.07 Profit Before tax (PBT) (A-B) 1424.71 3507.35 5220.56 11774.98 Less Provision for Current Tax (including earlier year)
56.27 705.91 67.07 779.23
Less: Deferred Tax Provision 37.80 29.98 37.80 29.98 Profit After Tax (PAT) 1330.65 2771.46 5115.69 10965.77 Earnings per share (₹ 2/- each) a). Basic b). Diluted
0.54 0.40
1.17 1.17
2.07 1.52
4.62 4.62
*Figures for the Financial year 2018-19 are the merged figures of Kushal Limited (Transferee Company) and Kushal Wealth Creators Private Limited, Kushal Infrastructure Private Limited, Ashapura Paper Mills Private Limited and Riddhi Siddhi Recyclers Private Limited (Transferor Companies) and in addition, Rainbow Paper Limited (Acquired under Insolvency and bankruptcy Code, 2016 Procedure) Hence, not comparable with previous year figures. 2. MATERIAL CHANGES AND COMMITMENTS
AFFECTING THE FINANCIAL POSITION OF THE COMPANY OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR AND DATE OF THE REPORT
No material changes and commitments affecting the financial position of the Company occurred between the end of the financial year to which these Financial Statements relate and on the date of this report. Further, during the financial year under report, no significant or material orders have been passed by any of the regulators or courts or tribunals impacting the going concern status and operations of the company in future.
3. CHANGE IN THE NATURE OF BUSINESS
There was no change in the nature of business during the year under review.
4. PERFORMANCE OF THE COMPANY During this year your Company has achieved a turnover on Standalone Basis of ₹36121.58 Lakhs as against ₹103096.53 Lakhs in the previous year. Your Company posted a Profit of ₹1424.71 Lakhs (before Tax) as against profit of ₹ 3507.35 Lakhs (before Tax) in the previous year. While Profit after Tax (PAT) for the Financial Year 2018-19 was ₹ 1330.65 Lakhs as against Profit after Tax (PAT) of ₹ 2771.46Lakhs in the previous year.
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After merging the figures of Kushal Wealth Creators Private Limited, Kushal Infrastructure Private Limited, Ashapura Paper Mills Private Limited, Riddhi Siddhi Recyclers Private Limited and Rainbow Paper Limited, during this year your Company has achieved a turnover on Consolidated Basis of ₹89962.39 Lakhs as against ₹233793.05 Lakhs in the previous year. Your Company posted a Profit of ₹5220.56 Lakhs (before Tax) as against profit of ₹ 11774.98 Lakhs (before Tax) in the previous year. While Profit after Tax (PAT) for the Financial Year 2018-19 was ₹5115.69 Lakhs as against Profit after Tax (PAT) of ₹10965.77 Lakhs in the previous year.
5. MANAGEMENT DISCUSSION AND ANALYSIS
The Management Discussion and Analysis Report as stipulated under the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 forms part of this Annual Report. 6. DIVIDEND
4th Interim Dividend of Financial Year 2017-18 of ₹ 0.02 per Equity share i.e. 1% of face value of ₹ 2.00 per Equity share was declared and paid on April 11, 2018. The consent of the members of the Company was accorded for overall interim dividend of ₹ 0.82 per Equity share as final dividend for Financial Year 2017-18 in the 18th Annual General Meeting of the Company held on December 10, 2018. 7. APPROVAL OF SCHEME OF
AMALGAMATION I) The Hon’ble National Company Law Tribunal,
Ahmedabad Bench, Ahmedabad has approved Scheme of Amalgamation of Kushal Wealth Creators Private Limited, Kushal Infrastructure Private Limited, Ashapura Paper Mills Private Limited, and Riddhi Siddhi Recyclers Private Limited (Transferor Companies), group companies of Kushal Limited, with Kushal Limited (transferee company) vide its order dated February 05, 2019:
The restructuring plan in the form of amalgamation benefits the group as well as its stakeholders in the following manner:
a) The amalgamation has leads to backward
integration and synergies of operations and a stronger and wider capital and financial base for growth/expansion of Kushal Limited.
b) The Amalgamation increases the efficiency of business by means of reduction in administrative overheads, cascading effect of taxation and increase better utilization of resources. It promotes the diversification of products and simplification in compliance of various applicable laws and group structuring.
Further, taking note of appointed date March 31, 2017, the closing books of account of transferor companies i.e. books of accounts as on March 31, 2019 have been merged into the closing book of account of Kushal Limited.
Allotment of equity shares pursuant to the scheme of amalgamation: Pursuant to the aforesaid scheme of amalgamation, the board of directors of the company in its meeting held on February 21, 2019, allotted 10258850 equity shares to the shareholders of transferor companies of ₹2/- each of Kushal Limited. II) The Hon’ble National Company Law Tribunal,
Ahmedabad Bench, Ahmedabad has approved Resolution plan submitted under Insolvency and Bankruptcy Code, 2016 with Scheme of Amalgamation of Rainbow Papers Limited with Kushal Limited vide its order dated February 27, 2019. The Scheme of Amalgamation of Rainbow Papers Limited into Kushal Limited ensures continuity of business of Corporate Debtor i.e. Rainbow Papers Limited which preserves going concern valuation of Corporate Debtor and also to develop market and generate adequate cash flow as compared to an asset under liquidation.
8. DISCONTINUATION OF EDUCATION DIVISION Your Company had discontinued education division started in the name and style of “HUGS ‘n’ CUDDLES” and “joyjumprez” w.e.f
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August 06, 2019, as it was not sound viable to continue the said division.
9. LISTING ON STOCK EXCHANGES
As on March 31, 2019, the equity shares of the company were listed on BSE Limited. The company has paid the annual listing fees for the financial year ending on March 31, 2020 within time. 10. TRANSFER TO RESERVES
The Company proposes not to transfer any funds out of its total profit of for the financial year to the General Reserve. 11. PARTICULARS OF LOANS,
GUARANTEES AND INVESTMENTS As on March 31, 2019, there were no outstanding loans or guarantees covered under the provisions of Section 186 of the Act.
The details of changes in the Loans, Guarantees and Investments covered under the provisions of Section 186 of the Act are given in the notes to the Financial Statements. 12. DEPOSITS FROM PUBLIC
The Company has not accepted any deposits from public falling within the ambit of Section 73 of the Companies Act, 2013(hereinafter referred to as the ‘Act’), and the Companies (Acceptance of Deposits) Rules, 2014. 13. EQUITY SHARE CAPITAL During the financial year under report, the company has allotted equity shares to the shareholders of Kushal Wealth Creators Private Limited, Kushal Infrastructure Private Limited, Ashapura Paper Mills Private Limited and Riddhi Siddhi Recyclers Private Limited under the scheme of amalgamation. The detail of change in the capital structure of the company is tabulated as below:
Event Date
Particulars
Authorized Share Capital Issued, Subscribed and paid-up share capital
No. of Equity Shares
Amount in ₹
No. of Equity Shares
Amount in ₹
April 01, 2018
Share Capital at the beginning of the year
250000000 500000000 237266610 474533220
February 05, 2019
Merging of authorized share capital of Kushal Wealth Creators Private Limited, Kushal Infrastructure Private Limited, Ashapura Paper Mills Private Limited and Riddhi Siddhi Recyclers Private Limited into Kushal Limited pursuant to the scheme of amalgamation
41500000 83000000 0 0
February 21, 2019
Allotment of equity shares pursuant to the scheme of amalgamation
0 0 10258850 20517700
February 27, 2019
Merging of authorized share capital of Rainbow Papers Limited into Kushal Limited pursuant to approved Resolution plan including scheme of amalgamation under Insolvency and Bankruptcy Code, 2016.
200000000 400000000 0 0
March 31, 2019
Resultant share capital / capital at the end of the financial year
491500000 983000000 247525460 495050920
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14. DIRECTORS AND KEY MANAGERIAL PERSONNEL
Re-appointment/Regularisation:
• As per provision of Companies Act 2013, Mr. Manoj Agrawal who retires by rotation, and being eligible, offer himself for re-appointment is appointed as Non-Executive Director of the Company in the 18th Annual General Meeting held on December 10, 2018.
Appointment:
• Appointment of CS Shivangi Shah as a Company Secretary and Compliance Officer of the company effective from March 01, 2019 at the meeting of board of directors of the company held on February 21, 2019.
• Appointment of Jitendra Yadav as a Chief Financial Officer of the company effective from March 01, 2019 at the meeting of board of directors of the company held on February 21, 2019
Resignations:
• CS Khushboo Surana resigned as the Company Secretary and Compliance officer of the company with effect from February 28, 2019 due to personal reasons at the meeting of the Board of Directors of the Company held on February 21, 2019.
• CA Vimal Shah resigned as the Chief Financial Officer of the company with effect from February 28, 2019 due to personal reasons at the meeting of the Board of Directors of the Company held on February 21, 2019.
Declaration by Independent Directors All the Independent Directors have submitted their declarations that they meet the criteria of independence as laid down under Section 149(6) of the Companies Act, 2013 and Regulation 16(1)(b) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.
15. COMMITTEES OF THE BOARD
The details of various committees of Directors constituted under various provisions of Companies Act, 2013 and Rules made thereunder, their constitution, terms of reference and other details are provided in the Corporate Governance Report. Compositions of Board of Directors and various Committees of Directors are available on the Company’s website at www.kushallimited.com 16. NUMBER OF MEETINGS OF THE BOARD
AND COMMITTEES The number of meetings of the board and committees held during the year under review are as under:
• Thirteen Meetings of the Board of Directors were held during the year.
• Eight meetings of the Audit committee were held during the year.
• Three meetings of the Nomination and Remuneration committee were held during the year.
• Three meetings of the Stakeholder Relationship Committee were held during the year.
• One meetings of the Corporate Social Responsibility committee were held during the year.
For details of the meetings of the board and committees, please refer to the Corporate Governance report which forms part of this Annual Report. The intervening gap of the board meetings and audit committee meetings were within the period as prescribed under the Companies Act, 2013. 17. BOARD EVALUATION
Pursuant to the provisions of the Act and SEBI Listing Regulations, read with the Guidance Note on Board Evaluation, the Board has carried out the annual performance evaluation of the Board as a whole, the Directors individually as well as the working of the Board and its Committees. The performance of the Board was evaluated by the Board after seeking inputs from all the Directors on the basis of criteria such as board composition and structure, effectiveness of board processes,
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information and functioning etc. The Board and the Nomination and Remuneration Committee reviewed the performance of individual directors on the basis of criteria such as contribution of individual director to the board and committee meetings like preparedness on matters to be discussed, constructive contribution and inputs in meetings etc. Further, in a separate meeting of independent directors, performance of non-independent directors, the Board as a whole and its Chairman was evaluated as stipulated under the SEBI Listing Regulations. 18. CONTRACTS OR ARRANGEMENTS WITH
RELATED PARTIES During the financial year ended 31st March 2019, all the contracts or arrangements or transactions entered into by the Company with the Related Parties were in the ordinary course of business and on arm’s length basis and were in compliance with the applicable provisions of the Companies Act, 2013 and SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015.
Prior omnibus approval of the Audit Committee is obtained on a yearly basis for the transactions which are of a foreseen and repetitive nature. A statement giving details of all RPTs is placed before the Audit Committee for review on a quarterly basis. There are no materially significant related party transactions entered into by the Company with its promoters, directors, key managerial personnel or other designated persons which may have a potential conflict with the interest of the Company at large.
As provided under section 134[3][h] of the Act and Rules made there under disclosure of particulars of material transactions with related parties entered into by the Company with related parties in FORM AOC 2 is annexed to this report as Annexure B. Further, Transactions with related parties, as per the requirements of IND AS 24 are disclosed in the notes to financial statements. The Board of Directors has adopted a policy on Related Party Transactions which has been uploaded on website of the Company: (http://kushallimited.com/files/07-policy-of-related-party-transactions-sc5a4dd71befe33.pdf)
19. SUBSIDIARY AND ASSOCIATE COMPANIES
A separate section on the performance and financial position of each of the subsidiaries and associates companies in Form AOC-1 forms part of Board’s Report and same is appended as Annexure A. As per the SEBI Listing Regulations, a policy on material subsidiaries as approved by the Board of Directors may be accessed on the Company’s website:
(http://kushallimited.com/files/5-policy-for-determining-material-subsidiary-sc5a4dd68e8bca4.pdf) 20. CORPORATE SOCIAL RESPONSIBILITY Your Company recognizes the vital role played by society at large in its growth and development and strives to discharge its social responsibility as a corporate citizen. The key philosophy of all our Corporate Social Responsibility (CSR) initiatives is guided by our belief “Every Smile Counts ....” Our CSR projects focus on participatory and collaborative approach with the community. Over a period of last three years, your Company has emphasized CSR projects in the areas of Education, Healthcare, Women empowerment and Water and Sanitation. As per the provisions of Section 135 of the Companies Act, 2013 read with Companies (Corporate Social Responsibility Policy) Rules, 2014, a company, meeting the applicability threshold, needs to spend at least 2% of its average net profit for the immediately preceding three financial year on corporate social responsibility (CSR) activities. The areas for CSR activities are eradication of hunger and malnutrition, promoting education, art and culture, healthcare, destitute care and rehabilitation, environment sustainability, disaster relief and rural development projects. The details of CSR activities carried out by your Company during the year under review are set out in Annexure D forming part of this report. The Corporate Social Responsibility Policy as approved by the Board may be accessed on the Company’s website: (http://kushallimited.com/files/10-policy-on-corporate-social-responsibility-sc5a587988cc3ef.pdf)
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21. EXTRACT OF ANNUAL RETURN
In accordance with Section 134(3)(a) of the Companies Act, 2013, an extract of the annual return in the prescribe format is appended as Annexure F to the Board’s Report. 22. CORPORATE GOVERNANCE REPORT
A separate section on Corporate Governance practices followed by the Company, together with a certificate from the Company’s Auditors confirming compliance, forms a part of this Annual Report, as per SEBI (Listing Obligations & Disclosure Requirements), Regulations, 2015. The Corporate Governance report as stipulated under the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 forms part of this Annual Report 23. POLICY ON DIRECTORS’ APPOINTMENT
AND REMUNERATION Matching the needs of company and enhancing the competencies of the board are the basis for the Nomination and Remuneration Committee to select a candidate for the appointment to the board. The current policy is to have a balanced mix of executive and non-executive Directors to maintain the independence of the board, the Board of Directors comprise of 6 Directors out of which 3 are non-executive, including one women Director, which is one half of the total number of Directors. The policy of the company on directors’ appointment, including criteria for determining qualification, positive attributes, independence of a director and other matters, as required under sub-section (3) of section 178 of the Companies Act 2013, is governed by the Nomination and Remuneration policy and other details are available on the company’s website: (http://kushallimited.com/files/nomination-and-remuneration-policy-sc5ad72419584fc.pdf) We affirm that the remuneration paid to the Executive directors of the company is as per the Nomination, remuneration policy. 24. BOARD DIVERSITY The board has adopted a Policy on Board diversity which sets out the approach to diversity of the board
of directors. The Policy on Board diversity is available on the company’s website: (https://www.kushallimited.com/files/policy-on-board-diversity-sc5b727b86ca7bb.pdf) 25. CODE OF CONDUCT TO REGULATE,
MONITOR AND REPORT TRADING BY INSIDERS
The board has amended the policy of code of conduct to regulate, monitor and report trading by insiders which came into effect from April 01, 2019 as per SEBI (Prohibition of Insider Trading) (Amendment) Regulations, 2018 at the meeting of board of directors of the company held on May 30, 2019. The policy of code of conduct to regulate, monitor and report trading by insiders has been uploaded on the website of the company: (https://www.kushallimited.com/files/code-of-conduct-insider-trading-w-e-f-april-01-2019-sc5cefbb3fedc86.pdf) 26. CODE OF PRACTICE AND PROCEDURES
FOR FAIR DISCLOSURE OF UNPUBLISHED PRICE SENSITIVE INFORMATION FOR ADHERING TO THE PRINCIPLES OF FAIR DISCLOSURE
The board has amended the policy of Code of practice and procedures for fair disclosure of unpublished price sensitive information for adhering to the principles of fair disclosure which came into effect from April 01, 2019 as per SEBI (Prohibition of Insider Trading) (Amendment) Regulations, 2018 at the meeting of board of directors of the company held on May 30, 2019 The policy of code of conduct to regulate, monitor and report trading by insiders has been uploaded on the website of the company: (https://www.kushallimited.com/files/code-of-practices-and-procedures-for-fair-disclosure-w-e-f-april-01-2019-sc5cefc03dd6119.pdf)
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27. WHISTLEBLOWER/VIGIL MECHANISM
Your Company has an effective Vigil Mechanism system which is embedded in its Code of Conduct. The Code of Conduct of your Company serves as a guide for daily business interactions, reflecting your Company’s standard for appropriate behavior and living corporate values. The Whistle Blower Policy has been uploaded on the website of the Company (https://www.kushallimited.com/files/whistle-blower-policy-sc5b72817c54b63.pdf). The Company’s Whistle Blower Policy is the mechanism for directors and employees of the Company to report concerns about unethical behaviour, actual or suspected fraud or violation of the Company’s code of conduct, violations of legal or regulatory requirements, incorrect or misrepresentation in any financial statements and reports etc. The mechanism provides for adequate safeguards against victimization of those who avail the mechanism and also provides for direct access to the Chairman of Audit Committee in exceptional cases. 28. PREVENTION OF SEXUAL HARASSMENT
AT WORK PLACE The Company has zero tolerance towards sexual harassment at the workplace and has adopted a policy on prevention of sexual harassment policy in line with the requirements of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the Rules thereunder. An Internal Compliance Committee has been set up to redress complaints received regarding sexual harassment. All employees (permanent, contractual, temporary, trainees) are covered under this policy. During the year under review, no complaint relating to sexual harassment has been received. 29. DIRECTORS’ RESPONSIBILITY
STATEMENT
Pursuant to Section 134(5) of the Companies Act, 2013, the board of directors, to the best of their knowledge and ability, confirm:
(a) that in the preparation of the annual accounts, the applicable accounting
standards have been followed and no material departures have been made from the same;
(b) that appropriate accounting policies have been selected and applied consistently and have made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31, 2019 and of the profit and loss of the Company for the year ended March 31, 2019;
(c) that proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Act, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
(d) that the annual accounts has been prepared on a going concern basis;
(e) that proper internal financial controls were followed by the Company and that such internal financial controls are adequate and were operating effectively; and
(f) that proper systems have been devised to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.
30. AUDITORS
a). Statutory Auditors
M/s Shailesh & Co., Chartered Accountants, Ahmedabad (FRN: 114226W) were appointed as Statutory Auditors of the company by the shareholder through postal ballot until the conclusion of 18th Annual General Meeting of the company. However, M/s Shailesh & Co., Chartered Accountant, have expressed their unwillingness to continue as the Statutory Auditors of the Company ensuing Annual General Meeting as indicated in their letter dated November 05, 2018. Based on the recommendation of the Audit Committee, the Board of Director at their meeting held on November 12, 2018 appointed M/s. S. V. Sojitra & Co., Chartered Accountants, Ahmedabad (FRN:139013W) as a Statutory Auditor of the Company to fill up causal Vacancy.
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Their appointment was subsequently approved by the shareholder at 18th Annual general Meeting held on December 10, 2018 pursuant to Section 139 of Companies Act 2013 for a period of 5 consecutive years from the conclusion of 18th Annual General Meeting of the Company till the conclusion of 23rd
Annual General meeting of the Company. The Company has received the consent from the M/s. S. V. Sojitra & Co., Chartered Accountants, Ahmedabad (FRN:139013W) and confirmation to the effect that they are not disqualified to be appointed as the Auditors of the Company in terms of the provisions of the Companies Act, 2013 and rules made thereunder. b). Auditor’s Report The report of the Statutory Auditor along with Notes to Accounts are enclosed to this report. The observations made in the Auditors’ Report are self-explanatory and therefore do not call for any further comments. c). Secretarial Auditor: Pursuant to provisions of Section 204 of the Companies Act, 2013 read with rule 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, your Company engaged the services of M/S. M.S BUCHASIA & ASSOCIATES, Practising Company Secretaries, Ahmedabad (COP: 4156) to conduct the Secretarial Audit of the Company for the financial year ended March 31, 2019. The Secretarial Audit Report (in Form MR-3) is attached as Annexure E, to this Report. The Secretarial Auditor’s Report to the shareholders does not contain any qualification. 31. INTERNAL CONTROL SYSTEMS AND
THEIR ADEQUACY
Your Company has an effective Internal Control System to prevent fraud and misuse of Company’s resources and protect shareholders’ interest. These systems ensure that transactions are authorized, recorded and reported diligently, to safeguard the assets of the Company.
Your Company has also established and maintained the Internal Financial Control to ensure the orderly and efficiently conduct of its business inter alia adherence to Company’s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the
accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, 2013. 32. SIGNIFICANT AND MATERIAL ORDERS
There are no significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and Company’s operations in future.
33. PARTICULAR OF EMPLOYEES The information pertaining to Section 197(12) read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, as amended from time to time is annexed herewith as Annexure C. There is no employee drawing a salary exceeding the limit prescribed under Section 197(12) read with Rule 5 (2) of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014. 34. CONSERVATION OF ENERGY,
TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO:
The information on conservation of energy, technology absorption and foreign exchange earnings and outgo as stipulated under Section 134(3)(m) of the Companies Act, 2013 read with Rule, 8 of The Companies (Accounts) Rules, 2014 are as under: A). Conservation of Energy: The operations of your Company involve low energy consumption. Adequate measures have, however, been taken to conserve energy by way of optimizing usage of power. B). Technology Absorption: In the Financial Year 2018-19, no specific technology involved in the business model of the company. C). Import of Technology: The Company has not imported any technology during the year.
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D). Foreign Exchange Earning & Out Go:
Particular 2018-19 2017-18 Total Foreign
Exchange Outgo : Value of import on CIF basis-Traded
Goods
5003436.88 USD
NIL
Total Foreign Exchange Earned :
VALUE OF Export on
CIF basis-Traded Goods
1553753.71 USD
669279.75 USD
1). SBLC Commission NIL NIL 2). Dividend from
WOS NIL 12500000
AED
35. ACKNOWLEDGEMENT Your Directors take this opportunity to express their gratitude to the various stakeholders – customers, shareholders, banks, dealers, vendors and other business partners for the continued cooperation and support extended by them during the year under review. Your Directors would also like to acknowledge the exceptional contribution and commitment from all the employees of the Company during the year under review. For and on Behalf of the Board
Sandeep Agrawal (Chairman and Managing Director) (DIN: 00239648) Place: Ahmedabad Date: September 02, 2019
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ANNEXURE-A TO THE DIRECTOR’S REPORT FORM AOC 1
(Pursuant to first proviso to sub-section (3) of section 129 read with rule 5 of Companies (Accounts) Rules, 2014)
Statement containing salient features of the financial statement of subsidiaries/associate
companies/joint ventures
PART “A”: SUBSIDIARIES
(Information in respect of each subsidiary to be presented with amounts in ₹ In Lakh)
1. Sr. No. 1 2. Name of the subsidiary Kushal Impex Pte Ltd. 3. The date since when subsidiary was formed 16.01.2014 4. Reporting period for the subsidiary concerned,
if different from the holding company’s reporting period
The reporting period is same as of holding company. i.e. 01.04.2018 to 31.03.2019
5. Reporting currency and Exchange rate as on the last date of the relevant Financial year in the case of foreign subsidiaries.
Reporting Currency :US Dollars Exchange Rate : ₹ 69.28/ USD
6. Equity Share capital ₹ 65.93 7. Other Equity ₹ 1341.23 8. Total assets ₹ 2004.62 9. Total Liabilities ₹ 597.46 10. Investments Nil 11. Revenue from Operations ₹ 46171.33 12. Profit before taxation ₹ 63.54 13. Provision for taxation ₹ 10.80 14. Profit after taxation ₹ 52.74 15. Other Comprehensive Income Nil 16. Total Comprehensive Income ₹ 52.74 17. Proposed Dividend Nil 18. % of shareholding 100%
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1. Sr. No. 2 2. Name of the subsidiary Kashish Worldwide F.Z.E
3. The date since when subsidiary was formed 10.01.2016 4. Reporting period for the subsidiary concerned,
if different from the holding company’s reporting period
The reporting period is same as of holding company. i.e. 01.04.2018 to 31.03.2019
5. Reporting currency and Exchange rate as on the last date of the relevant Financial year in the case of foreign subsidiaries.
Reporting Currency :AED Exchange Rate : ₹ 18.86/ AED
6. Equity Share capital ₹ 34.63 7. Other Equity ₹ 27609.27 8. Total assets ₹ 27747.99 9. Total Liabilities ₹ 104.09 10. Investments Nil 11. Revenue from Operations ₹ 18.91 12. Profit before taxation ₹ 3732.30 13. Provision for taxation Nil 14. Profit after taxation ₹ 3732.30 15. Other Comprehensive Income Nil 16. Total Comprehensive Income ₹ 3732.30 17. Proposed Dividend Nil 18. % of shareholding 100%
Notes: The following information shall be furnished at the end of the statement: 1. Names of subsidiaries which are yet to commence operations:
i. Stallion Worldwide (Labuan) Private Limited and ii. Kushal Integrated Industrial Park LLP – Wholly Owned Subsidiary LLP
2. Names of subsidiaries which have been liquidated or sold during the year: NONE
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PART “B”: ASSOCIATES AND JOINT VENTURES
Statement pursuant to Section 129 (3) of the Companies Act, 2013 related to Associate Companies and Joint Ventures
Name of Associates/Joint Ventures
NOT APPLICABLE
Associate/Joint Venture 1. Latest audited Balance Sheet Date 2. Shares of Associate/Joint Ventures held by the company on
the year end i. No:
ii. Amount of Investment in Associates/Joint Venture iii. Extend of Holding %
3. Description of how there is significant influence 4. Reason why the associate/joint venture is not consolidated 5. Networth attributable to Shareholding as per latest audited
Balance Sheet 6. Profit / Loss for the year
i. Considered in Consolidation ii. Not Considered in Consolidation
1. Names of associates or joint ventures which are yet to commence operations: NONE 2. Names of associates or joint ventures which have been liquidated or sold during the year: NONE For, S. V. Sojitra & Co.
For and on behalf of the Board of KUSHAL LIMITED
Sanjay V. Sojitra Manoj Agrawal Kushal Agrawal Proprietor Membership No. 135239 FRN NO. 139013W
Director (DIN: 00225494)
Director (DIN:03043294)
Place: Ahmedabad Date: May 30, 2019
CS Shivangi Shah Company Secretary
Jitendra Yadav Chief Financial Officer
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ANNEXURE-B TO THE DIRECTOR’S REPORT AOC-2
(Pursuant to clause (h) of sub-section (3) of section 134 of the Act and Rule 8(2) of the Companies
(Accounts) Rules, 2014) Form for disclosure of particulars of contracts/arrangements entered into by the company with related parties referred to in sub-section (1) of section 188 of the Companies Act, 2013 including certain arm’s length transactions under third proviso thereto 1. Details of contracts or arrangements or transactions not at arm’s length basis: Kushal Limited has not entered into any contract or arrangement or transaction with its related parties which is not at arm’s length. 2. Details of material contracts or arrangement or transactions at arm’s length basis: Sr.no Particulars Details (a). Name(s) of the related party and nature of
relationship Ashapura Paper Mills Private Limited
(b). Nature of contracts/arrangements/transactions Purchase and Sale of Goods (c). Duration of the contracts / arrangements/
transactions April 1, 2016 - ongoing
(d). Salient terms of the contracts or arrangements or transactions including the value, if any
On Arm's length basis i). Purchase of goods- To the tune of ₹ 75 crore (in aggregate) in each Financial Year on such terms and conditions as may be mutually agreed upon between the Company, its Subsidiaries/Joint Ventures/ Associates. ii). Sale of Goods - To the tune of ₹ 75 crore (in aggregate) in each Financial Year on such terms and conditions as may be mutually agreed upon between the Company, its Subsidiaries/Joint Ventures/ Associates.
(e). Date(s) of approval by the Board (if any) 23th May, 2016 (f). Amount paid as advances, if any: - (g). Date on which the special resolution was passed in
general meeting (if any) 15th July, 2016
For and on Behalf of the Board
Sandeep Agrawal
Place: Ahmedabad (Chairman and Managing Director) Date: September 02, 2019 (DIN: 00239648)
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ANNEXURE-C TO THE DIRECTOR’S REPORT PARTICULARS OF EMPLOYEES
1. DISCLOSURE OF REMUNERATION AS REQUIRED UNDER SECTION 197(12) OF THE
COMPANIES ACT, 2013 READ WITH RULE 5(1) OF THE COMPANIES (APPOINTMENT AND REMUNERATION OF MANAGERIAL PERSONNEL) RULES, 2014
i). The ratio of the remuneration of each Director to the median remuneration of the employees of the Company for the Financial Year 2018-19 and the percentage increase in remuneration of each Director, Chief Financial Officer, Chief Executive Officer, Company Secretary or Manager, if any, in the Financial Year 2018-19: Sr. no.
Name of Director/KMP and Designation
Remuneration Of Director/KMP for financial year 2018-19 (₹ in Lakhs)
% increase in Remuneration in the Financial Year 2018-19
Ratio of remuneration of each Director to median remuneration of employees
1. Mr. Sandeep Agrawal Chairman and Managing Director (DIN: 00239648)
20.67 11.91% 7.91 times
2. Mr. Manoj Agrawal Executive Director (DIN: 00225494)
11.54 10.64% 4.42 times
3. Kushal Agrawal (Executive Director) (DIN: 03043294)
6.00 NIL 2.30 times
4. Kavita Tejaskumar Shah Independent Director (DIN: 05295442)
0.65 N.A. 0.25 times
5. Dharmendra Bhuchhada Independent Director (DIN: 06468613)
0.65 N.A. 0.25 times
6. Anil Soni Independent Director (DIN: 07579989)
0.65 N.A. 0.25 times
7. Vimal Shah Chief Financial Officer
6.82* NIL NA
8. Khushboo Surana Company Secretary
9.70*** 27.41% NA
9. Jitendra Yadav Chief Financial Officer
0.49** N.A. NA
10. Shivangi Shah Company Secretary
0.33**** N.A. NA
*CA Vimal Shah resigned as Chief Financial Officer of the Company w.e.f February 28, 2019. **Jitendra Yadav appointed as Chief Financial Officer of the Company w.e.f March 01, 2019. ***CS Khushboo Surana resigned as Company Secretary and Compliance Officer of the Company w.e.f February 28, 2019.
33
****CS Shivangi Shah appointed as Company Secretary and Compliance officer of the Company w.e.f March 01, 2019. ii). The percentage increase in the median remuneration of employees in the Financial Year: The median remuneration of employees in the Financial Year 2018-19 has increased by 12.20% as compared to the previous year. iii). The number of permanent employees on the rolls of Company: As on 31st March 2019, there were 38 permanent employees on the rolls of the company. vi). Average percentile increase already made in the salaries of employees other than the managerial personnel in the last Financial Year and its comparison with the percentile increase in the managerial remuneration and justification thereof and point out if there are any exceptional circumstances for increase in the managerial remuneration: Average increment in FY 2018-19 for Managerial Personnel: increment in salary of managerial Personnel is 16.65% (average). Average Increment in FY 2018-19 for Non Managerial Personnel: 9.64% (Average percent) increment in salary of employees. v). Affirmation that the remuneration is as per the remuneration policy of the Company: It is hereby affirmed that the remuneration paid is as per the as per the remuneration Policy for Directors, Key Managerial Personnel and other Employees.
2. Disclosure under Rule (5)(2)(iii) of the Companies (Appointment And Remuneration Of Managerial Personnel) Rules, 2014- Not Applicable
For and on behalf of the Board Sandeep Agrawal Place: Ahmedabad (Chairman and Managing Director) Date: September 02, 2019 (DIN: 00239648)
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ANNEXURE-D TO THE DIRECTOR’S REPORT ANNUAL REPORT ON CORPORATE
SOCIAL RESPONSIBILITY ACTIVITIES
1. A brief of the Company’s CSR Policy, including overview of projects or programmes proposed to be undertaken :
The Company believes to actively contribute to the social and economic development of the society in which the company operates.
The company undertakes corporate social responsibility activities enumerated in schedule VII of the Companies Act, 2013 from time to time. In doing so it plans to build a better and sustainable way of life for the weaker sections and to contribute to the social development of the society in which the company operates.
Our projects focus to remove the obstacles that are holding back people and the society, and giving the disadvantaged a fair opportunity at unlocking their true potential. All our CSR projects are selected and implemented in accordance with our CSR Policy. Our Vision is to advance the quality of life through our social commitments to help build healthy, sustainable, efficient and educated communities.
The Company’s CSR policy can be accessed on.: www.kushallimited.com
2. The Composition of the CSR Committee.
The Corporate Social Responsibility Committee was constituted with the following members:
Name of the Director Category
Mr. Dharmendra Bhuchhada Chairman
Mr. Sandeep Agrawal Member
Mr. Kushal Agrawal Member
3. Average net profit of the company for last three financial years: ₹ 1119.76 Lakhs
4. Prescribed CSR Expenditure (two per cent. of the amount as in item 3 above): ₹ 22.40 Lakhs 5. Details of CSR spent during the financial year 2018-19 (a) Total amount spent for the financial year₹ 22.63 Lakhs (b) Amount unspent , if any-Nil
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(c) Manner in which the amount spent during the financial year 2018-19 is as is detailed below (₹ in Lakhs)
Sr.no
CSR project or activity Identified.
Sector in which the Project is covered
Projects or programs (1) Local area or other (2) Specify the State and district where projects or programs was undertaken
Amount outlay (budget) project or programs wise
Amount spent on the projects or programs Sub-heads: (1) Direct expenditure on projects or programs (2)Overheads:
Cumulative expenditure Upto to the reporting period
Amount spent: Direct or through implementing agency
1 Contribution to Pushpa Tulsi Foundation
Various sectors covered by Schedule VII of the
Ahmedabad, Gujarat 22.17 22.40 22.40
Direct through Foundation
2 Mineral water Jug for Parab
Safe Drinking Water
Ahmedabad, Gujarat
0.23
0.23 0.23 Direct
22.40 22.63 22.63
6. In case the company has failed to spend the two per cent of the average net profit of the last three financial years or any part thereof, the company shall provide the reasons for not spending the amount in its Board report. - NA
7. A responsibility statement of the CSR Committee that the implementation and monitoring of CSR Policy, is in compliance with CSR objectives and Policy of the company.
We hereby declare that implementation and monitoring of the CSR policy are in compliance with CSR objectives and policy of the Company. FOR KUSHAL LIMITED Mr. Dharmendra Bhuchhada Mr. Sandeep Agrawal (Chairman, CSR Committee) (Member and Managing Director) Place: Ahmedabad Date: September 02, 2019
36
ANNEXURE-E TO THE DIRECTOR’S REPORT FORM NO. MR-3
SECRETARIAL AUDIT REPORT FOR THE FINANCIAL YEAR ENDED 31.03.2019
[Pursuant to section 204(1) of the Companies Act, 2013 and Rule No.9 of the Companies (Appointment and Remuneration Personnel) Rules, 2014]
To, The Members, KUSHAL LIMITED CIN: L74110GJ2000PLC037472 (Formerly known as Kushal Tradelink Limited), Kushal House, Plot No. 115, Off C.G. Road, Navrangpura, Ahmedabad-380009, Gujarat I have conducted the Secretarial Audit of the compliance of applicable statutory provisions and the adherence to good corporate practices by Kushal Limited (Formerly Known as Kushal Tradelink Limited), (herein after called the company). Secretarial Audit was conducted in a manner that provided me a reasonable basis for evaluating the corporate conducts/statutory compliances and expressing my opinion thereon.
Based on my verification of the Company’s books, papers, minute books, forms and returns filed and other records maintained by the company and also the information provided by the Company, its officers, agents and authorized representatives during the conduct of secretarial audit, I hereby report that in my opinion, the company has, during the audit period covering the financial year ended on 31st March, 2019, complied with the statutory provisions listed hereunder and also that the Company has proper Board-processes and compliance-mechanism in place to the extent, in the manner and subject to the reporting made hereinafter: I have examined the books, papers, minute books, forms and returns filed and other records maintained by the Company for the financial year ended on 31st March, 2019 according to the provisions of:
i. The Companies Act, 2013 (‘the Act’) and the rules made there under;
ii. The Securities Contracts (Regulation) Act, 1956 (‘SCRA’) and the rules made there under;
iii. The Depositories Act, 1996 and the Regulations and Bye-laws framed there under;
iv. Foreign Exchange Management Act, 1999 and the rules and regulations made there under to the extent of Foreign Direct Investment and Overseas Direct Investment and External commercial borrowing;
v. The following Regulations and Guidelines prescribed under the Securities and Exchange Board of India Act, 1992 (‘SEBI Act’):-
a) The Securities and Exchange Board of India (Substantial Acquisition of Shares and
Takeovers) Regulations, 2011; b) The Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations,
2015; c) The Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements)
Regulations, 2009; (till November 9, 2018) d) The Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements)
Regulations, 2018 (w.e.f. November 10, 2018);
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e) The Securities and Exchange Board of India (Share Based Employee Benefits) Regulations,
2014; - Not Applicable on company during the Audit Period f) The Securities and Exchange Board of India (Issue and Listing of Debt Securities)
Regulations, 2008; - Not Applicable to company during the Audit Period g) The Securities and Exchange Board of India (Registrars to an Issue and Share Transfer
Agents) Regulations, 1993 regarding the Companies Act and dealing with client; h) The Securities and Exchange Board of India (Delisting of Equity Shares) Regulations, 2009; -
Not Applicable to company during the Audit Period i) The Securities and Exchange Board of India (Buyback of Securities) Regulations, 2018;
-Not Applicable to company during the Audit Period
vi. The management has identified and confirmed the following laws as specifically applicable to the Company:-
a) The Employee’s Provident Fund & Miscellaneous Provisions Act, 1952 b) The Employees’ State Insurance Act, 1948 c) The Maternity Benefit Act, 1961 d) The Payment of Gratuity Act, 1972 e) The Workmen’s Compensation Act, 1923 f) Payment of Bonus Act,1965
I have also examined compliance with the applicable clauses of the following:
a) Secretarial Standards issued by The Institute of Company Secretaries of India; b) SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and the Listing
Agreements entered into by the Company with BSE Limited.
During the period under review, the Company has complied with the provisions of the Act, Rules, Regulations, Guidelines, Standards, etc. as mentioned above except following:- 1. Company got delayed in filing Consolidated Audit report of the company as required under Regulation
33 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 by 7 days; however that was just a clerical error which was corrected in meantime.
2. There was delayed in filing material Events of Search which was carried out by Income tax departments on 05.02.2019 by promoters of the company by 2 days, as required to be intimate to stock exchange as per regulation 30 SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, and it I observed that it was only due to non access of system of company which was clarified on 07.02.2019 once it was allowed.
I further report that
The Board of Directors of the Company is duly constituted with proper balance of Executive Directors, Non-Executive Directors and Independent Directors. During the year under review, there were no changes in the composition of the Board of Directors of Company.
Adequate notice is given to all directors to schedule the Board Meetings, agenda and detailed notes on agenda were sent at least seven days in advance, and a system exists for seeking and obtaining further information and clarifications on the agenda items before the meeting and for meaningful participation at the meeting.
Majority decision is carried through while the dissenting members’ views are captured and recorded as part of the minutes.
I further report that there are adequate systems and processes in the company commensurate with the size and operations of the company to monitor and ensure compliance with applicable laws, rules, regulations and guidelines.
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I further report that during the audit period:
1. The Scheme of Amalgamation of Kushal Infrastructure private limited, Ashapura Papers Mills Private Limited, Kushal Wealth Creators Private Limited and Riddhi Siddhi Recyclers Private Limited into Kushal Limited (Formerly known as Kushal Tradelink Limited) is approved through NCLT order dated 05/02/2019.
2. Passed a Board resolution to issue New 10,258,850 Equity shares of Rs. 10/- each allotted to new shares holders due to scheme of amalgamation result of which declared on 21.02.2019.
3. Passed Board Resolution for Appointment of Statutory Auditor to fill Casual Vacancy. Result of same has been declared on November 12, 2018.
4. Passed Ordinary Resolution for Appointment of Statutory Auditor to fill Casual Vacancy, Result of shareholder meeting has been declared on December 11, 2018.
5. Passed Board resolution for appointment of new Company secretary to fill vacancy of company secretary result of which was declared on 21/02/2019.
6. Passed Board resolution for resignation of CFO (KMP) Vimal Shah and appointment of new CFO (KMP) Jitendra Yadav and result of which was declared on 21/02/2019.
7. The Resolution Plan has been approved by Honorable National company law tribunal, Ahmedabad wide its order dated 27/02/2019 In The Matter Of Rainbow Papers Limited (In CIRP) Which Interalia Includes Scheme of Amalgamation between Rainbow Papers Limited and Kushal Limited and Respective Shareholders.
For M. S. Buchasia & Associates Practicing Company Secretaries Manish Buchasia Proprietor COP: 4156, FCS: 5843 Date: September 02, 2019 Place: Ahmedabad Note: This Report is to be read with Our Letter of event date which is annexed as Annexure “A” and forms an integral part of this report.
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ANNEXURE TO THE SECRETARIAL AUDIT REPORT
To, The Members, KUSHAL LIMITED CIN: L74110GJ2000PLC037472 (Formerly known as Kushal Tradelink Limited), Kushal House, Plot No. 115, Off C.G. Road, Navrangpura, Ahmedabad-380009, Gujarat Secretarial Audit Report of even date, for the Financial Year 2018-19 is to be read along with this Letter. 1. Maintenance of Secretarial Record is the responsibility of the management of the company. My
responsibility is to express an opinion on Secretarial Records based on my Audit.
2. I have followed the audit practices and processes as were appropriate to obtain reasonable assurance about the correctness of the contents of the Secretarial Records. The verification was done on test basis to ensure that correct facts are reflected in Secretarial records. I believe that the processes and practices I followed provide a reasonable basis for my opinion.
3. I have not verified the correctness and appropriateness of financial records and books of accounts of the company.
4. Wherever required, I have obtained the Management Representation about the compliance of laws, rules and regulations and happening of events etc.
5. The compliance of the provisions of Corporate and other applicable laws, rules, regulations, standards is the responsibility of the management. My examination was limited to the verification of the procedures on test basis.
6. The Secretarial Audit report is neither an assurance as to the future viability of the company nor of the efficacy or effectiveness with which the management has conducted the affairs of the company.
For M. S. Buchasia & Associates Practicing Company Secretaries Manish Buchasia Proprietor COP: 4156, FCS: 5843 Date: September 02, 2019 Place: Ahmedabad
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ANNEXURE-F TO THE DIRECTOR’S REPORT FORM MGT- 9
EXTRACT OF ANNUAL RETURN As on the Financial Year ended 31st March, 2019
[Pursuant to Section 92(3) of the Companies Act, 2013, and Rule 12(1) of the Companies (Management and Administration) Rules, 2014]
I. REGISTRATION AND OTHER DETAILS
Details Particular CIN: L74110GJ2000PLC037472 Registration Date 03/03/2000 Name of the Company KUSHAL LIMITED Category / Sub-Category of the Company
Company Limited by shares/Indian Non- Government Company.
Address of the Registered Office and contact details
“Kushal House” Plot No. 115, Off C.G. Road, Navrangpura Ahmedabad Gujarat- 380009, Tel: 079-26408027; Email: [email protected], Website:www.kushallimited.com
Whether listed company Yes Name, address and contact details of Registrar and Transfer Agent, if any
Bigshare Services Private Limited, A-802, Samudra Complex, Off C G Road, Navrangpura ,Near Girish Cold Drinks Ahmedabad -380009 Tel No.: +91 – 079-40392570 Contact Person: Mr. Prem Kumar Email: [email protected] Website: www.bigshareonline.com
II. PRINCIPAL BUSINESS ACTIVITIES OF THE COMPANY All the business activities contributing 10 % or more of the total turnover of the company shall be stated:
S. No. Name and Description of Main Products / Service
NIC Code of the Product/ Service
% to Total Turnover of the Company
1 Manufacture of paper and paper products 17014 77% 2 Merchandise trade 46696 18%
*As per National Industrial Classification 2008
III. PARTICULARS OF HOLDING, SUBSIDIARY AND ASSOCIATE COMPANIES
S. No Name and Address of the Company
Registration No
Holding/ Subsidiary / Associate
% of Holdin
g Section
1 Kushal Impex Pte Ltd (Singapore) 201401663K Subsidiary 100 2(87)
2. Kashish Worldwide F.Z.E (Ajman, UAE) 16816 Subsidiary 100 2(87)
3. Stallion Worldwide (Labuan) Private Limited LL13595 Subsidiary 100 2(87)
4. Kushal Integrated Park, LLP AAJ-6346 Subsidiary 100 2(87)
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IV. SHARE HOLDING PATTERN (Equity Share Capital Breakup as Percentage of Total Equity)
i) Category-wise Share Holding
Category Code
Category of Shareholder
No. of Shares held at the beginning of the year (01/04/2018)
No. of Shares held at the end of the year (31/03/2019)
Demat Physical Total % of Total
Shares Demat Physical Total
% of Total
Shares
% Change during
the year (I) (II) (III) (IV) (V) (VI) (VII) (VIII) (IX) (X) (XI)
A. Promoter and Promoter Group (1) Indian
a) Individual/ HUF
156475610 - 156475610 65.95 162603060 - 162603060 65.69 (0.26)
b) Central Govt - - - - - - - - -
c) State Govt (s) - - - - - - - - -
d) Bodies Corporate
- - - - - - - - -
e) Banks / FI - - - - - - - - - f) Any Other - - - - - - - - - Sub-Total (A)
(1):- 156475610 - 156475610 65.95 162603060 - 162603060 65.69 (0.26)
(2) Foreign
a) NRIs - Individuals
- - - - - - - - -
b) Other – Individuals
- - - - - - - - -
c) Bodies Corporate
- - - - - - - - -
d) Banks / FI - - - - - - - - -
e) Any Other - - - - - - - - - Sub-Total (A)
(2):- - - - - - - - - -
Total Shareholding Of Promoter and Promoter Group (A) =(A)(1)+(A)(2)
156475610 - 156475610 65.95 162603060 - 162603060 65.69 (0.26)
B. Public Shareholding
1. Institutions a) Mutual Funds - - - - - - - - -
b) Banks / FI - - - - - - - - - c) Central Govt - - - - - - - - - d) State Govt(s) - - - - - - - - -
e) Venture Capital Funds
- - - - - - - - -
f) Insurance Companies
- - - - - - - - -
g) FIIs 619303 - 619303 0.26 6 - 6 0.00 (0.26) h) Foreign
Venture Capital Funds
- - - - - - - - -
i) Others - - - - - - - - - i). Foreign Portfolio Investor
117515 - 117515 0.05 57572 - 57572 0.02 (0.03)
SUB-TOTAL (B)(1):
736818 - 736818 0.31 57578 - 57578 0.02 (0.29)
42
2. NON-INSTITUTIONS
a) Bodies Corporates
5023880 - 5023880 2.12 7071019 - 7071019 2.86 0.74
b) Individuals (i) Individuals
holding nominal share capital Upto ₹ 1 Lakh
35136680 2 35136682 14.81 33415985 2 33415987 13.50 (1.31)
(ii) Individuals holding nominal share capital in excess of ₹ 1 Lakh
35853827 35853827 15.11 40860179 - 40860179 16.51 1.40
c) Others (i) Trusts 2 - 2 0.00 2 - 2 0.00 0.00 (ii) Clearing Members
1771112 - 1771112 0.75 1435593 1435593 0.58 (0.17)
(iii) Non- Resident Indians (NRI)
1401 - 1401 0.00 2340 - 2340 0.00 0.00
(iv) Non- Resident Indians (Repatriation)
1951122 - 1951122 0.82 1754035 - 1754035 0.71 (0.11)
(v) Non- Resident Indians (Non- Repatriation)
316156 - 316156 0.13 325667 - 325667 0.13 0.00
d) Qualified Foreign Investor
- - - - - - - - -
Sub-total (B)(2):
80054180 2 80054182 33.74 84864820 2 84864822 34.29 0.55
Total Public Shareholding (B)=(B)(1)+ (B)(2)
80790998 2 80791000 34.05 84922398 2 84922400 34.31 0.26
C. Shares held by Custodians and against which Depository Receipts have been issued
- - - - - - - - -
a) Shares held By Custodians
- - - - - - - - -
(i) Promoter and Promoter Group
- - - - - - - - -
(ii) Public - - - - - - - - -
Sub Total (C)(1): (C)= (C)(1)
- - - - - - - - -
Grand Total (A+B+C)
237266608 2 237266610 100.00 247525458 2 247525460 100.00 -
Note: The shareholding for the financial year ended on March 31, 2019 includes 10258850 equity shares allotted on February 21, 2019 under the scheme of amalgamation. However, the allotted shares were pending to be credited to the demat account(s) of respective shareholders and the company had not received listing approval for the same as on March 31, 2019.
43
ii) Shareholding of Promoters
Sr.No
Shareholder’s Name
Shareholding at the beginning of the year (01/04/2018)
Shareholding at the end of the year (31/03/2019)
Number of Shares
% of total
Shares of the
company
%of Shares Pledged
/encumbered to
total shares
Number of Shares
% of total
Shares of the
company
%of Shares Pledged
/Encumbered to
total shares
% Change in shareholding
during the year
1 Namrata Sandeep Agrawal 44059650 18.57 - 45549650 18.40 - (0.17)
2 Mahendra Tulsiram Agrawal 22701600 9.57 - 22701600 9.17 - (0.40)
3 Pushpadevi Tulsiram Agrawal 21700220 9.15 - 21834385 8.82 - (0.33)
4 Manoj Tulsiram Agrawal 20541600 8.66 - 21374510 8.64 - (0.02)
5 Sandeep Tulsiram Agrawal 13682400 5.77 - 13682400 5.53 - (0.24)
6 Sangita Manoj Agrawal 8553600 3.61 - 10043600 4.06 - 0.45
7 Sudha Mahendra Agrawal 7236540 3.05 - 7661070 3.10 - 0.05
8 Manoj Tulsiram Agrawal (HUF) 2000000 0.84 - 2106375 0.85 - 0.01
9 Sandeep Tulsiram Agrawal (HUF) 2000000 0.84 - 2063825 0.83 - (0.01)
10 Mahendra Tulsiram Agrawal (HUF) 2000000 0.84 - 2106375 0.85 - 0.01
11 Kushal Manoj Agrawal 2000000 0.84 - 2717420 1.10 - 0.26
12 Komal Sandeep Agrawal 2000000 0.84 - 2158000 0.87 - 0.03
13 Karan Mahendra Agrawal 2000000 0.84 - 2487300 1.00 - 0.16
14 Kajal Manoj Agrawal
2000000 0.84 - 2000000 0.81 - (0.03)
15 Kashish Sandeep Agrawal 2000000 0.84 - 2000000 0.81 - (0.03)
16 Khushi Mahendra Agrawal 2000000 0.84 - 2000000 0.81 - (0.03)
17 Tulsiram Chiranjilal Agrawal (Huf) 0 0 - 116550 0.05 - 0.05
Total 156475610 65.95 - 162603060 65.69 - (0.26)
Note: Percentage of Shareholding at the beginning of the financial year is based on total paid up equity share capital as on April 01, 2018 (23,72,66,610 equity shares) and percentage of shareholding at the end of the financial year is based on total paid up equity share capital on March 31, 2019 (24,75,25,460 equity shares). The shareholding for the financial year ended on March 31, 2019 includes 1,02,58,850 equity shares allotted on February 21, 2019 under the scheme of amalgamation. However, the allotted shares were pending to be credited to the demat account(s) of respective shareholders and the company had not received listing approval for the same as on March 31, 2019.
44
iii) Change in Promoters’ Shareholding
Sr. No.
Name of the shareholder Shareholding at beginning of the financial year – April
01, 2018
Cumulative shareholding during the financial year
No. of shares
% of total no. of shares of the company
No. of shares
% of total no. of shares of the company
1 Namrata Sandeep Agrawal At the beginning of the year 44059650 18.57 44059650 18.57 Allotted on February 21, 2019 under
scheme of amalgamation 1490000
0.60 45549650 18.40
At the end of the year 45549650 18.40
2 Mahendra Tulsiram Agrawal At the beginning of the year 22701600 9.57 22701600 9.57 At the end of the year 22701600 9.17
3 Pushpadevi Tulsiram Agrawal At the beginning of the year 21700220 9.15 21700220 9.15 Allotted on February 21, 2019 under
scheme of amalgamation 134165
0.05 21834385 8.82
At the end of the year 21834385 8.82
4 Manoj Tulsiram Agrawal At the beginning of the year 20541600 8.66 20541600 8.66 Allotted on February 21, 2019 under
scheme of amalgamation 832910
0.34 21374510 8.64
At the end of the year 21374510 8.64
5 Sandeep Tulsiram Agrawal At the beginning of the year 13682400 5.77 13682400 5.77 At the end of the year 13682400 5.53
6 Sangita Manoj Agrawal At the beginning of the year 8553600 3.61 8553600 3.61 Allotted on February 21, 2019 under
scheme of amalgamation 1490000
0.60 10043600 4.06
At the end of the year 10043600 4.06 7 Sudha Mahendra Agrawal At the beginning of the year 7236540 3.05 7236540 3.05 Allotted on February 21, 2019 under
scheme of amalgamation 424530
0.17 7661070 3.10
At the end of the year 7661070 3.10 8 Manoj Tulsiram Agrawal (HUF) At the beginning of the year 2000000 0.84 2000000 0.84 Allotted on February 21, 2019 under
scheme of amalgamation 106375
0.04 2106375 0.85
At the end of the year 2106375 0.85 9 Sandeep Tulsiram Agrawal (HUF)
45
At the beginning of the year 2000000 0.84 2000000 0.84
Allotted on February 21, 2019 under scheme of amalgamation
63825
0.03 2063825 0.83
At the end of the year 2063825 0.83 10 Mahendra Tulsiram Agrawal (HUF) At the beginning of the year 2000000 0.84 2000000 0.84 Allotted on February 21, 2019 under
scheme of amalgamation 106375
0.04 2106375 0.85
At the end of the year 2106375 0.85 11 Kushal Manoj Agrawal At the beginning of the year 2000000 0.84 2000000 0.84 Allotted on February 21, 2019 under
scheme of amalgamation 717420
0.29 2717420 1.10
At the end of the year 2717420 1.10 12 Komal Sandeep Agrawal At the beginning of the year 2000000 0.84 2000000 0.84 Allotted on February 21, 2019 under
scheme of amalgamation 158000 0.06 2158000 0.87
At the end of the year 2158000 0.87 13 Karan Mahendra Agrawal At the beginning of the year 2000000 0.84 2000000 0.84 Allotted on February 21, 2019 under
scheme of amalgamation 487300 0.20 2487300 1.00
At the end of the year 2487300 1.00 14 Kajal Manoj Agrawal At the beginning of the year 2000000 0.84 2000000 0.84 At the end of the year 2000000 0.81 15 Kashish Sandeep Agrawal At the beginning of the year 2000000 0.84 2000000 0.84 At the end of the year 2000000 0.81 16 Khushi Mahendra Agrawal At the beginning of the year 2000000 0.84 2000000 0.84 At the end of the year 2000000 0.81 17 Tulsiram Chiranjilal Agrawal (Huf) At the beginning of the year 0 0 0 0 Allotted on February 21, 2019 under
scheme of amalgamation 116550 0.05 116550 0.05
At the end of the year 116550 0.05 Note: Percentage of shareholding is based on the paid up equity share capital post the transaction.
46
iv) Shareholding Pattern of Top Ten Shareholders (other than Directors, Promoters and Holders of GDRs and ADRs):
Sr. No.
Name of the shareholder Shareholding at beginning of the financial year – April 01,
2018
Cumulative shareholding during the financial year
No. of shares % of total no. of shares of the company
No. of shares % of total no. of shares of the company
1 Ileshkumar Purshottamdas Shah At the beginning of the year 962942 0.41 962942 0.41 Purchased on April 20, 2018 370000 0.16 1332942 0.56 Purchased on April 21, 2018 180000 0.08 1512942 0.64 Purchased on April 27, 2018 95000 0.04 1607942 0.68 Purchased on May 04, 2018 100000 0.04 1707942 0.72 Purchased on May 11, 2018 99008 0.04 1806950 0.76 Purchased on May 18, 2018 150992 0.06 1957942 0.83 Purchased on May 25, 2018 200000 0.08 2157942 0.91 Sold on September 24, 2018 (2157942) (0.91) 0 0.00 Purchased on September 28, 2018 1195000 0.50 1195000 0.50 Purchased on October 05, 2018 962942 0.41 2157942 0.91 At the end of the year 2157942 0.91
2 Shah Ileshbhai Puroshattamdas At the beginning of the year 813058 0.34 813058 0.34 Purchased on April 20, 2018 465000 0.20 1278058 0.54 Purchased on April 21, 2018 90442 0.04 1368500 0.58 Purchased on April 27, 2018 95000 0.04 1463500 0.62 Purchased on May 11, 2018 50000 0.02 1513500 0.64 Purchased on May 25, 2018 10000 0.00 1523500 0.64 Sold on September 24, 2018 (1523500) (0.64) 0 0.00 Purchased on September 28, 2018 1523500 0.64 1523500 0.64 At the end of the year 1523500 0.64 3 Shah Parth Ileshkumar At the beginning of the year 0 0.00 0 0.00 Purchased on January 11, 2019 2036398 0.86 2036398 0.86 Sold on January 18, 2019 (142404) (0.06) 1893994 0.80 Sold on February 22, 2019 (382705) (0.15) 1511289 0.61 At the end of the year 1511289 0.61 4 Diptiben Ileshkumar Shah At the beginning of the year 182000 0.08 182000 0.08 Purchased on April 20, 2018 375000 0.16 557000 0.23 Purchased on April 21, 2018 90000 0.04 647000 0.27 Purchased on May 25, 2018 205000 0.09 852000 0.36 Purchased on June 30, 2018 25000 0.01 877000 0.37 Purchased on August 17, 2018 20000 0.00 897000 0.38 Purchased on August 24, 2018 4180 0.00 901180 0.38 Purchased on August 31, 2018 285820 0.12 1187000 0.50 Purchased on September 07, 2018 42500 0.02 1229500 0.52 Sold on September 24, 2018 (1229500) (0.52) 0 0.00 Purchased on September 28, 2018 1229500 0.52 1229500 0.52 Purchased on February 22, 2019 15255 0.00 1244755 0.50
47
Purchased on March 01, 2019 184688 0.07 1429443 0.58 At the end of the year 1429443 0.58 5 Kiritkumar Raghuram Thakker At the beginning of the year 1463348 0.62 1463348 0.62 Purchased on June 29, 2018 103000 0.04 1566348 0.66 Purchased on July 13, 2018 60000 0.03 1626348 0.69 Purchased on July 20, 2018 210000 0.09 1836348 0.77 Purchased on August 03, 2018 27225 0.01 1863573 0.79 Purchased on August 17, 2018 110000 0.05 1973573 0.83 Sold on September 24, 2018 (1973573) (0.83) 0 0.00 Purchased on September 28, 2018 1973573 0.83 1973573 0.83 Sold on October 26, 2018 (66715) (0.03) 1906858 0.80 Sold on November 02, 2018 (2285) 0.00 1904573 0.80 Sold on November 09, 2018 (18026) 0.00 1886547 0.80 Sold on November 16, 2018 (158720) (0.07) 1727827 0.73 Purchased on November 16, 2018 104275 0.04 1832102 0.77 Sold on December 21, 2018 (26000) (0.01) 1806102 0.76 Sold on December 31, 2018 (56580) (0.02) 1749522 0.74 Purchased on January 04, 2019 183480 0.08 1933002 0.81 Sold on January 25, 2019 (167500) (0.07) 1765502 0.74 Sold on February 08, 2019 (500000) (0.21) 1265502 0.53 Sold on February 22, 2019 (20000) 0.00 1245502 0.50 Sold on March 01, 2019 (2745) 0.00 1242757 0.50 Sold on March 08, 2019 (5000) 0.00 1237757 0.50 Sold on March 15, 2019 (4500) 0.00 1233257 0.50 Sold on March 22, 2019 (8500) 0.00 1224757 0.49 Sold on March 29, 2019 (7500) 0.00 1217257 0.49 At the end of the year 1217257 0.49 6 MI Lifestyle Marketing Private Limited At the beginning of the year 815301 0.34 815301 0.34 Sold on September 24, 2018 (815301) (0.34) 0 0.00 Purchased on September 28, 2018 815301 0.34 815301 0.34 At the end of the year 815301 0.34 7 Asnani Stock Broker Private Limited At the beginning of the year 459422 0.19 459422 0.19 Purchased on April 06, 2018 689767 0.29 1149189 0.48 Sold on April 13, 2018 (317023) (0.13) 832166 0.35 Sold on April 20, 2018 (103568) (0.04) 728598 0.31 Purchased on April 27, 2018 278036 0.12 1006634 0.42 Purchased on May 04, 2018 103404 0.04 1110038 0.47 Sold on May 11, 2018 (349580) (0.15) 760458 0.32 Purchased on May 18, 2018 328203 0.14 1088661 0.46 Sold on May 25, 2018 (125590) (0.05) 963071 0.41 Purchased on June 01, 2018 190611 0.08 1153682 0.49 Purchased on June 08, 2018 444399 0.19 1598081 0.67 Purchased on June 15, 2018 10285 0.00 1608366 0.68 Sold on June 22, 2018 (355103) (0.15) 1253263 0.53 Purchased on June 29, 2018 28264 0.01 1281527 0.54 Purchased on July 06, 2018 11334 0.00 1292861 0.54 Sold on July 13, 2018 (254018) (0.11) 1038843 0.44 Sold on July 20, 2018 (125660) (0.05) 913183 0.38 Sold on July 27, 2018 (363323) (0.15) 549860 0.23 Purchased on August 03, 2018 77763 0.03 627623 0.26 Purchased on August 10, 2018 228360 0.10 855983 0.36 Sold on August 17, 2018 (116378) (0.05) 739605 0.31
48
Purchased on August 24, 2018 38592 0.02 778197 0.33 Sold on August 31, 2018 (12593) (0.01) 765604 0.32 Sold on September 07, 2018 (322174) (0.14) 443430 0.19 Purchased on September 14, 2018 549094 0.23 992524 0.42 Sold on September 21, 2018 (418211) (0.18) 574313 0.24 Sold on September 24, 2018 (574313) (0.24) 0 0.00 Purchased on September 28, 2018 924942 0.39 924942 0.39 Purchased on October 05, 2018 147539 0.06 1072481 0.45 Sold on October 12, 2018 (24230) (0.01) 1048251 0.44 Sold on October 19, 2018 (20119) 0.00 1028132 0.43 Sold on October 26, 2018 (59106) (0.02) 969026 0.41 Purchased on November 02, 2018 11897 0.00 980923 0.41 Purchased on November 09, 2018 385 0.00 981308 0.41 Sold on November 16, 2018 (497290) (0.21) 484018 0.20 Purchased on November 23, 2018 9370 0.00 493388 0.21 Purchased on November 30, 2018 17409 0.01 510797 0.22 Purchased on December 14, 2018 4763 0.00 515560 0.22 Purchased on December 21, 2018 46005 0.02 561565 0.24 Sold on December 28, 2018 (46499) (0.02) 515066 0.22 Purchased on December 31, 2018 71204 0.03 586270 0.25 Sold on January 04, 2019 (59114) (0.02) 527156 0.22 Purchased on January 11, 2019 249716 0.11 776872 0.33 Sold on January 18, 2019 (7449) 0.00 769423 0.32 Purchased on January 25, 2019 48665 0.02 818088 0.34 Sold on February 01, 2019 (13282) (0.01) 804806 0.34 Sold on February 08, 2019 (26887) (0.01) 777919 0.33 Sold on February 15, 2019 (270508) (0.11) 507411 0.21 Purchased on February 22, 2019 304223 0.12 811634 0.33 Sold on March 01, 2019 (182423) (0.07) 629211 0.25 Purchased on March 15, 2019 22202 0.01 651413 0.26 Sold on March 22, 2019 (3368) 0.00 648045 0.26 Purchased on March 29, 2019 24041 0.01 672086 0.27 At the end of the year 672086 0.27 8 Adeshwara Cement Co. Pvt. Ltd. At the beginning of the year 208288 0.09 208288 0.09 Sold on April 06, 2018 (31798) (0.01) 176490 0.07 Purchased on May 04, 2018 3569 0.00 180059 0.08 Sold on May 11, 2018 (10443) 0.00 169616 0.07 Sold on May 18, 2018 (100000) (0.04) 69616 0.03 Purchased on September 21, 2018 749839 0.32 819455 0.35 Sold on September 24, 2018 (819455) (0.35) 0 0.00 Purchased on September 28, 2018 819455 0.35 819455 0.35 Sold on October 05, 2018 (11950) (0.01) 807505 0.34 Purchased on October 19, 2018 300 0.00 807805 0.34 Sold on October 26, 2018 (36960) (0.02) 770845 0.32 Sold on November 16, 2018 (5400) 0.00 765445 0.32 Purchased on February 08, 2019 100 0.00 765545 0.32 Purchased on February 15, 2019 100 0.00 765645 0.32 Sold on February 22, 2019 (100000) (0.04) 665645 0.27 At the end of the year 665645 0.27 9 Pranavbhai M Patel At the beginning of the year 640000 0.27 640000 0.27 Sold on September 24, 2018 (640000) (0.27) 0 0.00 Purchased on September 28, 2018 640000 0.27 640000 0.27 At the end of the year 640000 0.27
49
10 Pawan Kumar Sharma At the beginning of the year 0 0.00 0 0.00 Purchased on April 06, 2018 50000 0.02 50000 0.02 Purchased on April 13, 2018 40000 0.02 90000 0.04 Purchased on May 11, 2018 30000 0.01 120000 0.05 Purchased on June 29, 2018 145000 0.06 265000 0.11 Purchased on July 20, 2018 5000 0.00 270000 0.11 Purchased on July 27, 2018 200000 0.08 470000 0.20 Purchased on August 03, 2018 51000 0.02 521000 0.22 Sold on September 24, 2018 (521000) (0.22) 0 0.00 Purchased on September 28, 2018 521000 0.22 521000 0.22 Purchased on March 08, 2019 30000 0.01 551000 0.22 Purchased on March 22, 2019 82500 0.03 633500 0.26 At the end of the year 633500 0.26 11 MV SCIF Mauritius At the beginning of the year 619297 0.26 619297 0.26 Sold on April 06, 2018 (5718) 0.00 613579 0.26 Sold on April 27, 2018 (91457) (0.04) 522122 0.22 Sold on June 15, 2018 (11334) 0.00 510788 0.22 Sold on June 22, 2018 (5341) 0.00 505447 0.21 Sold on June 29, 2018 (22576) (0.01) 482871 0.20 Purchased on July 27, 2018 5635 0.00 488506 0.21 Sold on September 21, 2018 (78983) (0.03) 409523 0.17 Sold on September 24, 2018 (409523) (0.17) 0 0.00 At the end of the year 0 0.00 12 Mamtarani Maheshkumar Agrawal At the beginning of the year 599599 0.25 599599 0.25 Purchased on April 13, 2018 30000 0.01 629599 0.27 Purchased on April 20, 2018 10000 0.00 639599 0.27 Sold on June 22, 2018 (325000) (0.14) 314599 0.13 Sold on June 29, 2018 (4000) 0.00 310599 0.13 Purchased on July 06, 2018 350000 0.15 660599 0.28 Sold on July 27, 2018 (18000) (0.01) 642599 0.27 Sold on August 03, 2018 (5000) 0.00 637599 0.27 Purchased on August 10, 2018 20000 0.01 657599 0.28 Sold on August 17, 2018 (10000) 0.00 647599 0.27 Sold on August 24, 2018 (135639) (0.06) 511960 0.22 Purchased on August 31, 2018 51321 0.02 563281 0.24 Sold on September 07, 2018 (20023) (0.01) 543258 0.23 Sold on September 14, 2018 (26745) (0.01) 516513 0.22 Sold on September 21, 2018 (168500) (0.07) 348013 0.15 Sold on September 24, 2018 (348013) (0.15) 0 0.00 Purchased on September 28, 2018 348013 0.15 348013 0.15 Purchased on October 19, 2018 2842 0.00 350855 0.15 Purchased on November 16, 2018 41257 0.02 392112 0.17 Sold on November 23, 2018 (24370) (0.01) 367742 0.16 Purchased on December 14, 2018 171731 0.07 539473 0.23 Purchased on February 15, 2019 9570 0.00 549043 0.23 Sold on February 22, 2019 (159713) (0.06) 389330 0.16 Sold on March 01, 2019 (27121) (0.01) 362209 0.15 At the end of the year 362209 0.15 13 Geetaben Kiritkumar Thakker At the beginning of the year 699535 0.29 699535 0.29 Sold on September 24, 2018 (699535) (0.29) 0 0.00 Purchased on September 28, 2018 699535 0.29 699535 0.29
50
Sold on November 02, 2018 (20000) (0.01) 679535 0.29 At the end of the year 679535 0.29 14 Susheel Kumar Saraff At the beginning of the year 539085 0.23 539085 0.23 Sold on September 24, 2018 (539085) (0.23) 0 0.00 Purchased on September 28, 2018 539085 0.23 539085 0.23 Sold on December 28, 2018 (10000) 0.00 529085 0.22 Sold on January 11, 2019 (10000) 0.00 519085 0.22 At the end of the year 519085 0.22 15 Fakirsons Papchem Pvt. Ltd. At the beginning of the year 531590 0.22 531590 0.22 Sold on July 13, 2018 (20000) (0.01) 511590 0.22 Sold on July 20, 2018 (60000) (0.03) 451590 0.19 Sold on September 24, 2018 (451590) (0.19) 0 0.00 Purchased on September 28, 2018 451590 0.19 451590 0.19 Sold on January 11, 2019 (40000) (0.02) 411590 0.17 At the end of the year 411590 0.17
Note: Percentage of shareholding is based on the paid up equity share capital post the transaction.
v) Shareholding of Directors and Key Managerial Personnel: Sr. No.
Name of the shareholder Shareholding at beginning of the financial year – April
01, 2018
Cumulative shareholding during the financial year
No. of shares
% of total no. of
shares of the company
No. of shares
% of total no. of
shares of the company
A. Directors 1 Sandeep Tulsiram Agrawal
(Chairman and Managing Director)
At the beginning of the year 13682400 5.77 13682400 5.77 At the end of the year 13682400 5.53 2 Manoj Tulsiram Agrawal
(Director)
At the beginning of the year 20541600 8.66 20541600 8.66 Allotted on February 21, 2019 under
scheme of amalgamation 832910
0.34 21374510 8.64
At the end of the year 21374510 8.64 3 Kushal Manoj Agrawal
(Director)
At the beginning of the year 2000000 0.84 2000000 0.84 Allotted on February 21, 2019 under
scheme of amalgamation 717420
0.29 2717420 1.10
At the end of the year 2717420 1.10 4 Kavita Shah
(Independent Director)
At the beginning of the year 0 0.00 0 0.00 At the end of the year 0 0.00 5 Dharmendra Bhuchhada
(Independent Director)
At the beginning of the year 0 0.00 0 0.00 At the end of the year 0 0.00
51
6 Anil Soni (Independent Director)
At the beginning of the year 0 0.00 0 0.00 At the end of the year 0 0.00 B. Key Managerial Personnel 1. Vimal Shah*
(Chief Financial Officer)
At the beginning of the year 1500 0.00 1500 0.00 At the end of the year 1500 0.00 2. Khushboo Surana**
(Company Secretary)
At the beginning of the year 11600 0.01 11600 0.01 At the end of the year 11600 0.01 3. Jitendra Yadav***
(Chief Financial Officer)
At the beginning of the year 0 0.00 0 0.00 At the end of the year 0 0.00 4. Shivangi Shah****
(Company Secretary)
At the beginning of the year 0 0.00 0 0.00 At the end of the year 0 0.00 Note: *Resignation of CA Vimal Shah with effect from 28.02.2019 **Resignation of CS Khushboo Surana with effect from 28.02.2019
***Appointment of Jitendra Yadav with effect from 01.03.2019 ****Appointment of CS Shivangi Shah with effect from 01.03.2019
vi) Indebtedness
Indebtedness of the Company including interest outstanding/accrued but not due for payment. (₹ in Lakh)
Particulars Secured Loans
excluding deposits
Unsecured Loans
Deposits Total Indebtedness
Indebtedness at the beginning of the financial year i.e. April 1, 2018
1300.43 - - 1300.43
i) Principal Amount - - - ii) Interest due but not paid - - - - iii) Interest accrued but not due - - - - Total (i+ii+iii) - - - - Change in Indebtedness during the financial year 2018-19
71.21 503.08 - 574.29
Addition (+) Reduction (-) - - - - Net Change - - - - Indebtedness at the end of the financial year i.e. March 31st, 2019
1371.64 503.08 - 1874.72
i)Principal Amount - - - - ii) Interest due but not paid - - - - iii) Interest accrued but not dues - - - - Total (i+ii+iii) 1371.64 503.08 - 1874.72
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vii) Remuneration of Directors and Key Managerial Personnel
a. Remuneration to Managing Director, Whole-Time Directors and / or Manager: (₹ In Lakh)
Sl. No. Particulars of Remuneration
Sandeep Agrawal
(Chairman &Managing
Director)
Manoj Agrawal
(Director)
Kushal Agrawal
(Director) Total
Amount
1. Gross salary (a) Salary as per provisions contained in section 17(1) of the Income-tax Act, 1961
18.00
9.00
6.00
33.00
(b) Value of perquisites u/s 17(2) Income-tax Act, 1961
2.67
2.54
0.00
5.21
(c) Profits in lieu of salary under section 17(3) Income-tax Act, 1961
- - - -
2. Stock Option - - - - 3. Sweat Equity - - - - 4. Commission
- as % of profit - Others, specify…
- - - -
5. Others, please specify - - - - Total (A) 20.67 11.54 6.00 38.21 Ceiling as per the Act(being 5% of the Net profit calculated as per Section 198 of the Companies Act,2013)
b. Remuneration to Other Directors:
(₹ in Lakh)
S.No. Particulars Kavita Tejaskumar Shah
Dharmendra Bhuchhada Anil Soni Total
1
Independent Directors
Fees for attending board /committee meetings
0.65
0.65
0.65
1.95 Commission - - - - Others, please specify - - - -
Total (1) 0.65 0.65 0.65 1.95
2.
Other Non-Executive Directors Fee for attending board / committee meetings
-
-
-
-
Commission - - - - Others, please specify - - - -
Total (2) - - - - Total (1+2)= 0.65 0.65 0.65 1.95 Total 1.95 Overall Ceiling as per the Act(being 11% of the Net profit calculated as per Section 198 of the Companies Act,2013)
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c. Remuneration to Key Managerial Personnel Other Than Managing Director / Manager / WTD (₹ In Lakh)
Sl. no.
Particulars of Remuneration
Key Managerial Personnel
CA Vimal Shah (Chief
Financial officer)*
CS Khushboo Surana
(Company Secretary)**
Jitendra Yadav (Chief
Financial Officer)***
CS Shivangi Shah
(Company Secretary)****
Total
1. Gross salary (a) Salary as per Provisions contained in section 17(1) of the Income-tax Act, 1961
6.82
9.70
0.49
0.33
17.34
(b) Value of perquisites u/s 17(2) Income-tax Act, 1961
- - -
(c) Profits in lieu of salary under section 17(3) Income-tax Act, 1961
- - -
2. Stock Option - - - 3. Sweat Equity - - - 4. Commission
- as % of Profit - Others, specify…
- - -
5. Others, please specify
- - -
Total 6.82 9.70 0.49 0.33 17.34 Note: *Resignation of CA Vimal Shah with effect from 28.02.2019 **Resignation of CS Khushboo Surana with effect from 28.02.2019
***Appointment of Jitendra Yadav with effect from 01.03.2019 ****Appointment of CS Shivangi Shah with effect from 01.03.2019
54
viii) Penalties / Punishment/ Compounding of Offences:
Type Section of
the Companies
Act
Brief Description
Details of Penalty /
Punishment/ Compounding fees imposed
Authority [RD / NCLT / COURT]
Appeal made, if any (give
Details) A. Company Penalty
NIL Punishment Compounding B. Directors Penalty
NIL Punishment Compounding C. Other officers in Default Penalty
NIL Punishment Compounding
For and on behalf of the Board Sandeep Agrawal (Chairman and Managing Director) (DIN: 00239648) Date: September 02, 2019 Place: Ahmedabad
55
MANAGEMENT DISCUSSION AND ANALYSIS REPORT FOR THE FINANCIAL YEAR ENDED 2018-19
(a) Indian Economy
The Indian economy continued to be one of the fastest growing large economies expected to register a growth of ~7% for the year under review.
The principal developments during the year under review comprised stabilization of GST, sustained increase in per capita income, decline in inflation, steadying interest rates, and good growth in GDP for the first 3 quarters. However, consumer sentiment started weakening from the 4th quarter on account of a large non-banking financial company announcing its inability to address liabilities. This affected credit expansion, financial markets and consumer sentiment, which resulted in a slower than expected GDP growth in the 4th quarter.
The reduction in interest rates by the Reserve Bank of India is aimed at boosting the economy. IMD has also forecasted a near-normal monsoon. One can therefore look forward to a revival in India’s growth momentum riding on continued investment in education sector and infrastructure building. Assuming no major global and domestic political shocks, India is expected to grow at 7.1% in FY19-20.
Industry structure and developments:
The Indian paper industry accounts for about 3.7% of the world’s production of paper. The estimated turnover of the industry is INR 60,000 crores (USD 8.5 billion approximately) and its contribution to the exchequer is around INR 4,500 crores. The industry provides employment to more than 0.5 million people directly and 1.5 million people indirectly.
Paper Industry in India is moving up with a strong demand push and in expansion mode to meet the projected demand of 20 million tonnes by 2020. Thus paper industry in India is on the growth trajectory and is expected to touch 8.5% GDP in the
coming years. Therefore, the growth of industry will exceed the present rate of 6.5%.
Inspite of the sustained growth witnessed by the industry, the per capita paper consumption in India stands at a little over 13 kg which is well below the global average of 57 kg.
The demand drivers include 1) rising income levels, 2) growing per capita expenditure, 3) a likely pick-up from the education sector, 4) requirement of better quality packaging of FMCG products marketed through organised retail, and 5) increasing preference for ready-to-eat foods.
On the other hand, challenges include 1) access to quality and cost competitive raw material whose prices have started increasing recently, 2) competition from imports and 3) technology obsolescence.
(b) Opportunities and Threats
The company has now adequate infrastructure facilities such as huge spare land and uninterrupted supply of water and power which is critical for the paper industry by acquiring M/s Rainbow Papers Limited under Insolvency and Bankruptcy Code, 2016 and amalgamating four sister concern companies. The company has the flexibility to manufacture various grades of paper, which gives the company, a distinct quality edge. With the current Global scenario, Export potential has opened up significantly and your company has been scaling up its marketing network to tap this potential.
The company continues to face challenges on account of increasing competition. Devaluation of rupee leading to increase in cost of imports. Your company is committed to meet these challenges by improving productivity and innovating processes to achieve reduction in production cost. The capital investment being made for increasing production capacities would also help your company in maintaining its cost leadership.
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(c) Segment–wise performance :
As on 31st March, 2019, the company had Three Wholly Owned Subsidiaries operating from Singapore, Ajman and Malaysia. The Segment wise performance of the Company along with its subsidiaries is as follows:
Particulars India Ajman, U.A.E. Singapore Segment revenue a) Segment revenue from sales to external
customers and b) Segment revenue from transactions with other
segments;
36121.59
0.00
7597.62
0.00
46243.18
0.00
Segment result 2059.44 3732.30 63.54 Total carrying amount of segment assets 188410.72 27747.99 1939.79 Total amount of segment liabilities 59792.44 103.51 597.38 Total cost incurred during the period to acquire segment assets that are expected to be used during more than one period (tangible and intangible fixed assets)
NIL NIL NIL
Total amount of expense included in the segment result for depreciation and amortisation in respect of segment assets for the period
NIL NIL NIL
Total amount of significant non-cash expenses, other than depreciation and amortisation in respect of segment assets that were included in segment expense and, therefore, deducted in measuring segment result.
NIL NIL NIL
(d) Outlook:
The Indian economy is slated to grow at a healthy 7.3% in the fiscal year 2018-19. As per a report by World Bank, the slow but steady improvement in size of the Indian economy is likely to continue in 2019-20. Your Company will continue to move on its path of sustained growth through differentiated product offerings and providing great service to its customers.
(e) Risk and concerns:
Risk is associated with every kind of business. There are risks and concerns such as less-favoured environmental policies, market risks, increasing input cost, competition from imports, foreign exchange fluctuations etc. State government degraded forest land should be made available to the Industry for raising plantations. Import duty on waste paper should be reduced, duty free imports of new and second hand machinery, equipment should
be allowed for technology up gradation. Your company regularly identifies the risks and undertakes appropriate measures to mitigate risk through risk identification and management.
(f) Internal control systems and their adequacy:
The company views internal control as a tool for improving operational performance and ensuring reliability of reporting mechanism. The company is equipped with adequate internal control systems for its business operations which determine the efficiency of its operational strengths in financial reporting and ensure compliance with applicable laws and regulations. The company continuously monitors the effectiveness of the internal controls with an objective to provide to the audit committee and the board of directors, an independent, objective and reasonable assurance on the adequacy and effectiveness of the organization's risk management, control and governance
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processes. The company also assesses opportunities for improvement in business processes, systems and controls to add value to the organization and follows up on the implementation of corrective actions and improvements in business processes after review by the audit committee and the senior management. The internal control systems are supplemented by extensive audits conducted by the internal auditors. These have been designed to provide reasonable assurance with regard to recording and providing reliable financial and operational information, complying with applicable statutes, safeguarding assets from unauthorized use or losses, executing transactions with proper authorization and ensuring compliance of corporate policies.
(g) Discussion on financial performance with respect to operational performance.
Financial Performance of the Company and group companies is not satisfactory, however Company is continuously focusing to diversify it’s business to maximize portability which result into maximize shareholder’s wealth.
Financial Overview
The analysis of the consolidated financial statements for the year is as follows:
Income
Total Income for the year ended March 31, 2019 was 89962.39 Lakhs as compared to 233793.05 in the previous year.
Employee Benefit Expenses
The employee benefit expenses increased from ₹ 246.46 Lakhs in FY 2017-18 to ₹ 933.38 Lakhs in FY 2018-19
Depreciation & Amortisation Expenses
Depreciation charge for the year increased to 746.53 Lakhs as compared to 57.83 in the previous year.
Exceptional Items
There were no exceptional items for the year
Other Expenses
Other Expenses include Insurance premium, Audit Fees, Electricity fees, Municipal expenses, rent and other administrative expenses which stood at ₹ 9865.71 Lakhs in FY 2018-19 as compared to ₹ 912.57 Lakhs in FY 2017-18
(b). Balance sheet
Shareholder’s funds increased from ₹ 33647.43 Lakhs in FY 2017-18 to ₹ 160605.18 Lakhs in FY 2018-19. There is Change in Equity Share Capital pursuant to scheme of Amalgamation of Kushal Wealth Creators Private Limited, Kushal Infrastructure Private Limited, Ashapura Paper Mills Private Limited and Riddhi Siddhi Recyclers Private Limited with Kushal Limited. Non-Current Liabilities
The balance under this head increased from ₹ 2009.26 Lakhs in FY 2017-18 to ₹ 25668.68 Lakhs in FY 2018-19. Current Liabilities
The balance under this head declined from ₹ 54773.31 Lakhs in FY 2017-18 to ₹ 31824.65 Lakhs in FY 2018-19. Fixed Assets
Fixed assets increased to ₹ 150608.11 Lakhs in FY 2018-19 as compared to ₹ 1417.33 Lakhs in FY 2017-18. Current Assets
The Balance under this head declined from ₹ 85242.64 Lakhs in FY 2017-18 to ₹ 54254.84 Lakhs in FY 2018-19. (h) Other Material Disclosures
The promoters and registered office of the Company had been searched by Income Tax Department on 5th February, 2019. The IT Department investigated accounting records to identify the extent of financial irregularities. Pursuant to this investigation conducted by the officers of Income Tax Department, various documents relating to period affected were seized.
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CGST office pursuant to investigation, visited the registered office of the company on April 01, 2019. Pursuant to part of investigation, Chairman and Managing Director of the Company Mr. Sandeep Agrawal was detained on 1st April, 2019 under section 132 of CGST Act alleging the wrong GST input credit. Mr. Sandeep Agrawal was released on bail on June 01, 2019 due to non-filling of charge sheet by the officers of CGST Department.
Both the proceedings are pending for disposal.
As per Resolution Plan approved by Hon’ble NCLT, Ahmedabad Bench, the company has to pay 350 Crores in cash component. The Company also requires huge amount of fund for overhauling of machineries of Rainbow papers Limited, capital expenditure and additional working capital. Therefore, the company is exploring various avenues presently. If it is not tied up, that will have adverse impact on the operations/performance of the Company.
(i) Material developments in Human Resources / Industrial Relations front, including number of people employed.
Employees are vital and valuable assets for any organization. They have always been part of success stories experienced by the organizations. The company recognizes people as the primary source of its competitiveness and continues to focus on people development by leveraging technology and developing a continuously learning human resource base to unleash their potential and fulfil
their aspirations. It believes in creating a favourable work environment which can lead to innovative ideas. The company has an optimum process of recruitment and awarding its human resource which leads to attraction and retention of productive individuals in the organization. The Company believes in offering full opportunity for growth to employees demonstrating positive attitude and initiative to accept challenge and responsibility. The total number of employees in the company stands at 38 as at March 31, 2019.
(j) Cautionary Statement
Statements in this Report, particularly those which relate to Management Discussion and Analysis, describing the Company’s objectives, projections, estimates and expectations may constitute “forward looking statements” within the meaning of applicable laws and regulations. The Company’s actual results, achievement might differ materially from those projected in any such forward looking statement.
For and on Behalf of the Board Sandeep Agrawal (Chairman and Managing Director) (DIN: 00239648) Place: Ahmedabad Date: September 02, 2019
59
CORPORATE GOVERNANCE REPORT FOR THE FINANCIAL YEAR ENDED 2018-19
COMPANY’S PHILOSOPHY ON CORPORATE GOVERNANCE:
At Kushal, we view corporate governance in its widest sense, almost like trusteeship, integrity, transparency, accountability and compliance with laws which are the columns of good governance & are involved in the company's business practices to ensure ethical and responsible leadership both at the board and at the management level. The company's philosophy on corporate governance is to enhance the long-term economic value of the company and to give sustainable return to its stakeholders i.e. the society at large by adopting best corporate practices in fair and transparent manner by aligning interest of the company with that of its shareholders & other key stakeholders.
Corporate governance is not merely compliance or simply creating checks and balances but it is an ongoing measure of superior delivery of company's objects with a view to translate opportunities into reality. This, together with sustainable development policies followed by the company, has enabled your company to earn trust and goodwill of its investors, business partners, employees and the communities in which it operates.
We are in compliance of all mandatory requirements of corporate governance laid down under new listing Regulations.
BOARD OF DIRECTORS
As on date, the Company has Six Directors headed by Mr. Sandeep Agrawal as the Chairman and Managing Director of the Board, there are two Executive Directors and three are Non- Executive Independent Directors in the board.
Each Director brings to the Board, domain knowledge on different aspects/functions in accordance with the Company’s policy on Board diversity. The Board provides strategic guidance to the company management and ensures effective monitoring of the management and corporate governance practices.
During the year there is no change in composition of Board of Directors and none of the Independent Directors of the Company serve as an Independent Director in more than seven listed Companies. The composition of the Board is in line with Regulation 17 of Listing Regulations. None of the Directors on the Board is a Member on more than 10 Committees, and Chairperson of more than 5 Committees across all listed companies in which he is a Director.
Meeting of the Board
The Board of Directors met 13 (thirteen) times during the financial year 2018-19 ended on March 31, 2019. Necessary quorum was present for all the meetings.
The Board meets at regular intervals to discuss and decide on Company/ Business policy and strategy apart from other Board business. The Board / Committee Meetings are pre-scheduled and a tentative notice of the Board and Committee Meetings is circulated to the Directors well in advance to facilitate them to plan their schedule and to ensure meaningful participation in the Meetings. However, in case of a special and urgent business matters, shorter notice of atleast two working days had given, as permitted by law, which is noted and confirmed in the subsequent Board meeting. The agenda and agenda notes are circulated to all the Directors well in advance. All the agenda items are backed by agenda notes and relevant supporting papers to ensure adequate flow of information from the
60
management, and to enable Directors to have focused discussions at the meeting and take informed decisions. The details of Board Meetings are provided as follows:
Sr. No. Date of Board Meeting Total Strength of the Board No. of Directors Present 1. 11.04.2018 6 6 2. 30.05.2018 6 6 3. 26.07.2018 6 4 4. 14.08.2018 6 6 5. 04.09.2018 6 4 6. 25.09.2018 6 6 7. 04.10.2018 6 5 8. 12.11.2018 6 5 9. 14.11.2018 6 6 10. 03.01.2019 6 4 11. 14.02.2019 6 6 12. 21.02.2019 6 4 13. 07.03.2019 6 6
Attendance of Directors during Fiscal Year 2018-19
Sr.no
Directors Category Board Meetings
during the FY 2018-19
Whether attended
last AGM
(Yes/No)
(______)
Directorships held in other companies
Committee Memberships held
in other companies.*
Shareholding as
on 31.03.201
9
Held Attended Director Chairman Member Chairman Equity Shares of face value of ₹ 2/- each
1. Sandeep Agrawal
(DIN: 00239648)
Promoter/ Chairman and Managing Director
13 13 Yes - - - - 136,82,400
2. Manoj Agrawal
(DIN: 00225494)
Promoter Group member/ Director
13 12 Yes - - - - 205,41,600
3. Kushal Agrawal
(DIN: 03043294 )
Promoter Group member/ Director
13 10 Yes - - - - 20,00,000
4. Dharmendra Bhuchhada
Non- Executive /Independ
13 11 Yes - - - - -
61
(DIN: 06468613)
ent Director
5. Kavita Tejaskumar Shah
(DIN: 05295442)
Non- Executive /Independent Director
13 11 Yes - - - - -
6. Anil Soni
(DIN: 07579989)
Non- Executive /Independent Director
13 11 Yes - - - - -
Notes:* 1. Includes Audit Committee, Nomination and Remuneration Committee and Shareholder and Investor Grievance Committee of Public limited. Separate Meetings of Independent Director
In accordance with the provisions of Schedule IV of the Companies Act, 2013 and Regulation 25 of the Listing Regulations, a separate meeting of the Independent Directors of the Company was held on 21st February 2019. Mr. Anil Soni was unanimously elected as Chairman of the meeting and all the three Independent Directors of the Company were present at the said Meeting. Details of familiarisation programmes imparted to Independent Directors At the time of appointing Independent Director, a formal letter of appointment is given to him/her, which inter alia explains the role, functions, duties and responsibilities expected of him/her as a Director of the Company. The Company’s management makes business presentations periodically to familiarise Independent Directors with the strategy, operations and functions of the Company. Such presentations help them understand Kushal’s strategy, competitive landscape, business model, operations, service and product offerings, markets, organisation structure, finance, human resources, technology, quality, facilities and risk management, and such other areas as may be relevant for their familiarisation from time to time. These interactions provide them with a holistic perspective of the Company’s business and regulatory framework.
https://www.kushallimited.com/files/familiarisation-programme-for-independent-directors-sc5b72835a69fcc.pdf Committees of the Board In Compliance with the various provision of the Companies Act, 2013 read with Rules framed there under, the SEBI (LODR) Regulation, 2015, your company has four committees: (A) Audit committee (B) Nomination and Remuneration Committee (C) Stakeholders Relationship Committee D) Corporate Social Responsibility Committee (A) AUDIT COMMITTEE
Composition: Constitution of Audit Committee is in alignment with provisions of Section 177 of the Companies Act, 2013 read with rules framed there under and Regulation 18 of the SEBI (LODR) Regulations, 2015. The committee comprise of four Directors which include three Non-Executive Independent directors and one Executive Director. The Chairman of the Committee is Mr. Anil Soni, a Non-Executive Director. The Company Secretary is the Secretary to the Audit Committee. The present composition of Audit Committee is as under:
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Name of Director Category No. of meetings Attended
Mr. Anil Soni Chairperson/ Independent
director 8
Ms. Kavita Tejaskumar Shah
Member/ Independent
Director 8
Mr. Dharmendra Bhuchhada
Member/ Independent
Director 7
Mr. Kushal Agrawal
Member/ Executive Director
7
Meeting and Attendance: The Audit Committee met 8 (eight) times during the Financial Year 2018-19 and the time gap between two meetings is not more than 120 days. The numbers of meetings of the Audit Committee held and attended by the members during the year are as under: Sr.No. Date Of
Audit Committee
Meeting
Total strength
of committee
Attendance
1 11.04.2018 4 4 2 30.05.2018 4 4 3 14.08.2018 4 4 4 25.09.2018 4 4 5 12.11.2018 4 3 6 14.11.2018 4 4 7 14.02.2019 4 4 8 21.02.2019 4 3
Role of the Committee: The role of the audit committee includes the following: (1) Oversight of the listed entity’s financial reporting
process and the disclosure of its financial information to ensure that the financial statement is correct, sufficient and credible;
(2) Recommendation for appointment, remuneration and terms of appointment of auditors of the listed entity;
(3) Approval of payment to statutory auditors for any other services rendered by the statutory auditors;
(4) Reviewing, with the management, the annual financial statements and auditor's report thereon before submission to the board for approval, with particular reference to:
(a) Matters required to be included in the
director’s responsibility statement to be included in the board’s report in terms of clause (c) of sub-section (3) of Section 134 of the Companies Act, 2013;
(b) Changes, if any, in accounting policies and practices and reasons for the same;
(c) Major accounting entries involving estimates based on the exercise of judgment by management;
(d) Significant adjustments made in the financial statements arising out of audit findings;
(e) Compliance with listing and other legal requirements relating to financial statements;
(f) Disclosure of any related party transactions;
(g) Modified opinion(s) in the draft audit report;
(5) Reviewing, with the management, the quarterly financial statements before submission to the board for approval;
(6) Reviewing, with the management, the statement of uses / application of funds raised through an issue (public issue, rights issue, preferential issue, etc.), the statement of funds utilized for purposes other than those stated in the offer document / prospectus / notice and the report submitted by the monitoring agency monitoring the utilisation of proceeds of a public or rights issue, and making appropriate recommendations to the board to take up steps in this matter;
(7) Reviewing and monitoring the auditor’s independence and performance, and effectiveness of audit process;
(8) Approval or any subsequent modification of transactions of the listed entity with related parties;
(9) Scrutiny of inter-corporate loans and investments;
(10) Valuation of undertakings or assets of the listed entity, wherever it is necessary;
(11) Evaluation of internal financial controls and risk management systems;
(12) Reviewing, with the management, performance of statutory and internal auditors, and adequacy of the internal control systems;
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(13) Reviewing the adequacy of internal audit function, if any, including the structure of the internal audit department, staffing and seniority of the official heading the department, reporting structure coverage and frequency of internal audit;
(14) Discussion with internal auditors of any significant findings and follow up there on;
(15) Reviewing the findings of any internal investigations by the internal auditors into matters where there is suspected fraud or irregularity or a failure of internal control systems of a material nature and reporting the matter to the board;
(16) Discussion with statutory auditors before the audit commences, about the nature and scope of audit as well as post-audit discussion to ascertain any area of concern;
(17) To look into the reasons for substantial defaults in the payment to the depositors, debenture holders, shareholders (in case of non-payment of declared dividends) and creditors;
(18) To review the functioning of the whistle blower mechanism;
(19) Approval of appointment of chief financial officer after assessing the qualifications, experience and background, etc. of the candidate;
(20) Carrying out any other function as is mentioned in the terms of reference of the audit committee.
Powers of Committee:
The Audit Committee have the following powers:
• To investigate any activity within its terms of reference.
• To seek information from any employee. • To obtain outside legal or other professional
advice whenever necessary. • To secure attendance of outsiders with relevant
expertise, if it considers necessary.
The audit committee shall mandatorily review the following information:
(1) Management discussion and analysis of financial condition and results of operations;
(2) Statement of significant related party transactions (as defined by the audit committee), submitted by management;
(3) Management letters / letters of internal control weaknesses issued by the statutory auditors;
(4) Internal audit reports relating to internal control weaknesses; and
(5) The appointment, removal and terms of remuneration of the chief internal auditor shall be subject to review by the audit committee.
(6) Statement of deviations:
(a) Quarterly statement of deviation(s) including report of monitoring agency, if applicable, submitted to stock exchange(s) in terms of Regulation 32(1).
(b) Annual statement of funds utilized for
purposes other than those stated in the offer document/prospectus/notice in terms of Regulation 32(7).
(B) NOMINATION AND REMUNERATION COMMITTEE
Composition: The company has framed qualified Nomination and Remuneration Committee as per the requirements of Section 178 of the Companies Act, 2013 read with Rules framed there under and Regulation 19 of the SEBI (LODR) Regulations 2015. The composition, names of members, chairperson, and particulars of the meetings and attendance of the members during the year ended on 31st March, 2019 are as follows:
Name of Director
Category No. of meetings Attended
Ms. Kavita Tejaskumar Shah
Chairperson /Independent
director 3
Mr. Anil Soni Member/
Independent Director
3
Mr. Dharmendra Bhuchhada
Member/ Independent
Director 3
Meeting and Attendance: The Nomination and Remuneration met 3 (three) times during the Financial Year 2018-19. The Meetings were held on 11th April 2018, 14th August 2018 and 21st February 2019.
64
The numbers of meetings of the Nomination and Remuneration Committee held and attended by the members during the year are as under:
Sr.No
Date of Meeting
Total strength of committee
Attendance
1 11.04.2018 3 3 2 14.08.2018 3 3 3 21.02.2019 3 3
Terms of Reference: The scope and function of the Nomination and Remuneration Committee is in accordance with Section 178 of the Companies Act, 2013 and the Listing Regulations and the terms of reference. The terms of reference of the Nomination and Remuneration Committee inter alia, includes the following: 1. Formulation of the criteria for determining
qualifications, positive attributes and independence of a director and recommend to the board of directors a policy relating to, the remuneration of the directors. Key managerial personnel and other employees;
2. Formulation of criteria for evaluation of performance of independent directors and the board of directors;
3. Devising a policy on diversity of board of directors;
4. Identifying persons who are qualified to become directors and who may be appointed in senior management in accordance with the criteria laid down, and recommend to the board of directors their appointment and removal;
5. Whether to extend or continue the term of appointment of the independent director, on the basis of the report of performance evaluation of independent directors.
6. Recommend to the Board a policy, relating to the remuneration for the directors, key managerial personnel and other employees.
The Nomination and Remuneration Committee, while formulating the above policy, should ensure that — a) the level and composition of remuneration be
reasonable and sufficient to attract, retain and
motivate directors of the quality required to run our Company successfully;
b) Relationship of remuneration to performance is clear and meets appropriate performance benchmarks;
c) Remuneration to directors, key managerial personnel and senior management involves a balance between fixed and incentive pay reflecting short and long term performance objectives appropriate to the working of the Company and its goals; and
d) Perform such other activities as may be delegated by the Board or specified/ provided under the Companies Act, 2013 or by the Listing Regulations or by any other applicable law or regulatory authority.
Performance Evaluation Criteria
The Nomination and Remuneration Committee has laid down the evaluation criteria for performance evaluation of every director including Independent director and the Board and its committees pursuant to the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The Individual Directors were evaluated on various performance indicators including the following:
• Attendance and Participation at the Board and Committee Meetings.
• Integrity and Maintaining Confidentiality • Effective deployment of Knowledge and
Expertise • Interpersonal Relationships with other
Directors and Management • Acting in good faith and interest of Company
as a Whole. • Assist the Company in implementing the
good corporate governance practices. • Contributes to strategy and relevant aspects
impacting company’s performance and such other factors as deemed appropriate.
• Protect the interests of all stakeholders and balance the conflicting interest of the stakeholders.
The board and committee were evaluated on the various parameters including:
a) Size, structure and expertise of the Board. b) Frequency of Meetings
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c) Effective discharge of functions and duties by Board and Committee prescribed under the law and as per terms of reference.
d) Ensuring the integrity of the company’s accounting and financial reporting systems, independent audit, internal audit and risk management systems (for Board and Audit Committee)
e) Working in the interests of all the stakeholders of the company and such other factors.
Remuneration to Directors:
a) Remuneration to Executive Directors:
The details of remuneration paid to the Executive Directors of the Company for the year 2018-19 are as follows:
Name Salary Paid (₹ In Lakhs) Sandeep Agrawal 20.67 Manoj Agrawal 11.54 Kushal Agrawal 6.00
b) Remuneration to Non-Executive Directors During the financial year the Non-Executive Directors do not have any pecuniary relationship or transactions with the Company. The terms and conditions for appointment of Independent Directors is available on the website of the Company: www.kushallimited.com . The Company has paid sitting fees of Rs. 6500/- per meeting to all Non-executive Independent Directors for attending the meetings of the Board and/or Committees of Directors (including sitting fee for a separate Meeting of Independent Directors), during the Financial year 2018-19. No commission is paid to the Independent Directors. .
Name Sitting Fees Paid (₹ In Lakhs)
Dharmendra Bhuchhada
0.65
Kavita Shah 0.65 Anil Soni 0.65
(C) Stakeholder relationship committee
Composition:
The company has framed qualified Stakeholder Relationship Committee as per the requirements of Section 178 of the Companies Act, 2013 read with
Rules framed there under and Regulation 20 of the SEBI (LODR) Regulations 2015. The composition, names of members, chairperson, and particulars of the meetings and attendance of the members during the year ended on March 31, 2019 are as follows:
Name of Director
Category No. of meetings Attended
Mr. Dharmendra Bhuchhada
Chairperson Independent
director 3
Mr. Anil Soni Member/
Independent Director
3
Mr. Manoj Agrawal
Member/ Executive Director
2
Meeting and Attendance: The Stakeholder Relationship Committee met 3 (three) times during the Financial Year 2018-19. The Meetings were held on 11th April 2018, 14th August 2018, and 21st February 2019. The numbers of meetings of the Stakeholder Relationship Committee held and attended by the members during the year are as under:
Sr.No Date of Meeting
Total strength of committee
Attendance
1 11.04.2018 3 3 2 14.08.2018 3 3 3 21.02.2019 3 2
Role of the committee:
The Committee shall consider and resolve the grievances of the security holders of the listed entity including complaints related to transfer of shares, non-receipt of annual report and non-receipt of declared dividends. Information on Investor Complaints of Financial year 2018-19: Number of Complaints received and resolved to the satisfaction of Shareholders / Investors during the year under review and their break- up is as under:
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Brought Forward
Received during the Year
Settled/ Redressed during the
Year
Carried Forward
0 3 3 0
(D) CORPORATE SOCIAL RESPONSIBILITY COMMITTEE:
Composition:
Company has constituted Corporate Social Responsibility (CSR) Committee, in compliance with the provision of section 135 of the Companies Act, 2013 read with Rules framed there under. The composition, names of members, chairperson, and particulars of the meetings and attendance of the members during the year ended on 31st March, 2019 are as follows:
Name of Director
Category No. of meetings Attended
Mr. Dharmendra Bhuchhada
Chairperson/ Independent
director 1
Mr. Kushal Agrawal
Member/ Executive Director 1
Mr. Sandeep Agrawal
Member/ Executive Director
(Chairman and Managing Director)
1
Meeting and Attendance: The Corporate Social Responsibility Committee met 1 (one) time during the Financial Year 2018-19. The Meeting was held on 11th April, 2018. The numbers of meetings of the Stakeholder Relationship Committee held and attended by the members during the year are as under:
Date of Meeting
Total strength of committee
Attendance
11.04.2018 3 3 Role of the committee: 1. Formulate and recommend to the Board, a
Corporate Social Responsibility Policy which shall indicate the activities to be undertaken by our Company in accordance with the provisions of the Companies Act, 2013;
2. Review and recommend the amount of expenditure to be incurred on activities to be undertaken by our Company;
3. Monitor the CSR policy of our Company and its
implementation from time to time; and 4. Any other matter as the Corporate Social
Responsibility Committee may deem appropriate after approval of the Board or as may be directed by the Board from time to time.
(A) GENERAL BODY MEETINGS
i) Location and time for last three Annual General Meetings and special resolutions passed were: Year Day, date and
time Venue No. of Special Resolution(s) passed
2015-16 Friday July 15 2016 11:00 AM
Kushal House, Plot No. 115, Off C.G Road, Navrangpura, Ahmedabad-380009
Nil
2016-17 Saturday September 30,2017 10:00 AM
Seminar Hall, Ahmedabad Management Association, AMA Complex, ATIRA, Dr. Vikram Sarabhai Marg, Ahmedabad- 380 015
Nil
2017-18 Monday December 10, 2018 10:30 AM
Ahmedabad Management Association, ATIRA Campus, Dr. Vikram Sarabhai Marg, University Area, Ahmedabad, Gujarat-380015
Nil
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ii) Extraordinary General Meeting During the period under review, no Extra Ordinary Meeting was held.
None of the business proposed to be transacted at the forthcoming Annual General Meeting is proposed to be conducted through Postal Ballot.
(B) Postal Ballot
During the period under review, No Resolutions through postal ballot were passed.
COMPLIANCE WITH MANDATORY REQUIREMENTS The Company has complied with the mandatory requirements to the extent applicable to the Company. Means of Communications I. Quarterly Results The quarterly and yearly financial results of the Company are submitted to the Stock Exchange immediately after they are approved by the Board. The results are published in ‘Financial Express’ both in English and the vernacular. II. Website Detailed information on the Company’s business; quarterly and annual financial results, shareholding patterns and other information are displayed on the Company’s website www.kushallimited.com. III. Intimation to Stock Exchange The Company intimates stock exchanges all information which in its opinion are material & of relevance to the shareholders. The Company also submits electronically various compliance reports /statements periodically in accordance with the provisions of the Listing Regulations on BSE’s Electronic Filing Systems.
General Shareholder information i)
Sr. no.
Salient Items of Interest
Particulars
a). Annual General Meeting Date and Day: September 30, 2019, Monday Time 10:00 A.M Venue At ‘Ahmedabad management Association”, ATIRA Campus, Dr.
Vikram Sarabhai Marg, University Area, Ahmedabad, Gujarat 380015
b). Financial year April 1st 2018 to March 31st March 2019 c). Final Dividend Payment Nil d). Listing on stock Exchange The Company’s equity shares are listed on:
BSE Limited P. J. Towers, Dalal Street, Fort, Mumbai – 400 001. The listing fee for the year 2018-19 has been paid.
e). Stock code/Symbol 536170/KUSHAL f). Registrar and Share Transfer
Agent BIGSHARE SERVICES PRIVATE LIMITED Mumbai Branch: 1st Floor, Bharat Tin Works Building, Opp. Vasant Oasis, Makwana Road, Marol, Andheri East, Mumbai, Maharashtra 400059 Tel No.: +91 – 22 – 6263 8200
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Fax No.: +91 – 22 – 6263 8299 Email: [email protected] Website: www.bigshareonline.com Ahmedabad Branch: A/802, Samudra Complex ,Near Klassic Gold, Hotel Girish Cold Drink ,Off C.G. Road, Navrangpura, Ahmedabad-380009 Tel: 91-079-40024135 Website:www.bigshareonline.com email: [email protected]
g). Dematerialization of shares and liquidity
As on March 31, 2019, all the Equity shares i.e. 99.99% of the total issued, subscribed and paid-up equity share capital of the Company were held in dematerialized form. The Equity Shares of the Company are regularly traded on the BSE Limited.
h). Share Transfer System The Board has authorised Registrar and Share Transfer Agents for processing of share transfers, which has been approved by the Stakeholders Relationship Committee.
i). Payment of Depository Fees Annual Custody/Issuer fee for the year 2018-19 has been paid by the Company to NSDL and CDSL
j). Outstanding GDRs/ADRs/warrants or any convertible instruments, conversion date and likely impact on equity
Nil
k). Address for correspondence
“Kushal House”, Plot No.115, Off. C.G Road, Navrangpura, Ahmedabad-380009, Gujarat, India. E-Mail:[email protected] Website: www.kushallimited.com
ii) MARKET PRICE DATA- HIGH, LOW DURING EACH MONTH IN FINANCIAL YEAR 2018-19
Month High Price Low price No. of Shares Traded/Volume
Apr 18 117.75 90.20 96,52,503 May 18 85.70 77.40 74,45,937 Jun 18 85.40 72.85 37,32,153 Jul 18 69.25 46.10 61,02,502 Aug 18 52.50 48.50 59,24,915 Sep 18 53.75 51.90 40,02,469 Oct 18 53.90 27.30 21,76,462 Nov 18 27.30 22.10 11,96,287 Dec 18 58.30 27.75 22,91,194 Jan 19 59.45 43.00 18,89,087 Feb 19 42.15 25.60 23,72,982 Mar 19 35.95 28.50 30,44,482
Note: High and low are in rupees per traded share Source: Websites of the respective stock exchanges, i.e. BSE
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iii) Kushal Limited 's Share Performance vs. BSE Sensex [April 2018 to March 2019]
SHAREHOLDING PATTERN AS ON MARCH 31, 2019
a) Distribution of shareholding by size class as on March 31, 2019:
Number of shares Number of shareholders
Shareholders %
Number of shares held Shareholding %
1-5000 21029 87.92 7022508 2.96
5001-10000 1016 4.25 3724348 1.57
10001-20000 721 3.01 5398147 2.28
20001-30000 316 1.32 3936914 1.66
30001-40000 156 0.65 2779881 1.17
40001-50000 96 0.40 2185587 0.92
50001-100000 276 1.15 9968958 4.20
100001- 9999999999 310 1.30 202250267 85.24
Total 23920 100.00 237266610 100.00
b) Distribution of shareholding by ownership as on March 31, 2019:
Category Shares held (No.) % of holding
Promoter’s holding
Promoters 156475610 65.95
Total (A) 156475610 65.95
-60.00%
-40.00%
-20.00%
0.00%
20.00%
40.00%
60.00%
80.00%
100.00%
120.00%
140.00%
Apr-18 May-18 Jun-18 Jul-18 Aug-18 Sep-18 Oct-18 Nov-18 Dec-18 Jan-19 Feb-19 Mar-19
closing price on last trading day of the month
Stock Performance in comparison: to BSE Sensex
Relative Movement of Kushal Limited Relative Movement of BSE Sensex
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Public
Corporate Bodies 7071019 2.98
Foreign Institutional Investor 6 0.00
Foreign Portfolio Investor 57572 0.02
Non-Resident Indians 2082042 0.88
Clearing Members 1435593 0.61
Nationalised Banks 0 0.00
Trusts 2 0.00
Individual Shareholders 70144766 29.56
Total (B) 80791000 34.05
Total (A+B) 237266610 100
c) Shares held in Physical and Dematerialised Form
Breakup of physical and dematerialised shares as on March 31, 2019:
Category No. of shares held % of Shareholding
Physical 2 0.00
Demat 237266608 99.99
Total 237266610 100
SUBSIDIARY COMPANIES:
Name of Subsidiary
Date of Incorporation Country Business % of
Shareholding
Kushal Impex Pte Ltd. January 16, 2014 Singapore
General Wholesale Trade (Including General
Importers And Exporters)
100
Kashish Worldwide -F.Z.E January 10, 2016 UAE General Trading Import &
Export 100
Stallion Worldwide(Labuan) Private Limited
April 13 ,2017 Malaysia General Wholesale Trade
(Including General Importers And Exporters)
100
Kushal Integrated Park,LLP June 17,2017 India Development of all types of
Industrial park 100
The Company has formulated a policy for determining material Subsidiaries. The said policy has been also put up on the website of the Company at:
http://kushallimited.com/files/5-policy-for-determining-material-subsidiary-sc5a4dd68e8bca4.pdf
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OTHER DISCLOSURES
a) Reconciliation of Share Capital Audit
As stipulated by SEBI, qualified chartered accountants carries out Reconciliation of Share Capital Audit to reconcile the total admitted capital with NSDL and CDSL and the total issued and listed capital. This audit is carried out every quarter and the report thereon is submitted to the Stock Exchanges. The Audit confirms that the total listed and paid-up capital is in agreement with the aggregate of the total number of shares in dematerialised form and in physical form.
b) Disclosures of Accounting Treatment
In the financial statements for the year ended March 31, 2019, the Company has followed the treatment as prescribed in the applicable Indian Accounting Standards.
c) Related Party Transactions
During the year there was no materially significant related party transaction which may have potential conflict with the interest of the Company. The Company has formulated a Related Party Transaction policy which has been uploaded on its website at:
https://www.kushallimited.com/files/policy-on-related-party-transactions-sc5b727c1d9299d.pdf
The transactions with the companies, where the Directors of the Company were interested, were in the ordinary course of business and were at arm’s length basis. Details of related party information and transactions are being placed before the Audit Committee from time to time. The details of the related party transactions during the year have been provided in Note to the financial statements.
d) Details of compliance with mandatory requirements and adoption of non-mandatory requirements
The board periodically reviewed the compliance of all the applicable laws and steps were taken by the company to rectify instances of non-compliance, if any. During the year, the company has complied with all the mandatory requirements of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. Further, the company has also complied with the non-mandatory requirements relating to having regime of financial statements with audit report with unmodified opinion, appointment of separate persons to the post of chairman and managing director and reporting by internal auditor directly to the audit committee
e) Details of Non-Compliance by the Company, Penalties, Stricture Imposed on the Company by
the Stock Exchanges, SEBI or any Statutory Authorities or any Matter Related to Capital Markets
The Company has complied with all the requirements of the Stock Exchanges/the Regulations and guidelines of SEBI and other Statutory Authorities on all matters relating to capital markets. No penalties or strictures have been imposed by SEBI, Stock Exchanges or any statutory authorities on matters relating to capital markets.
f) Whistle Blower Policy and Affirmation that no Personnel has been Denied Access to the
Audit Committee
The Company has established a vigil mechanism through a Whistle Blower Policy for directors and employees to report concerns about unethical behaviour, actual or suspected fraud or violation of the company’s code of conduct or ethics policy. The mechanism provides for adequate safeguards against victimisation of director(s)/ employee(s) who express their concerns and also provides for direct access
72
to the Chairman of the Audit Committee in exceptional cases. During the year under review, no personnel were denied access to the Audit Committee. The Company has formulated Whistle Blower policy which has been uploaded on its website at: https://www.kushallimited.com/files/whistle-blower-policy-sc5b72817c54b63.pdf
g) Code for Prevention of Insider Trading
The Company has instituted code on prevention of insider trading in compliance with the SEBI (Prohibition of Insider Trading) Regulations. The Code lays down the guidelines which advise on procedures to be followed and disclosures to be made, while dealing in shares of the Company and the consequences of the non-compliances and such code on prevention of insider trading has been uploaded on its website at:
https://www.kushallimited.com/files/code-of-conduct-insider-trading-w-e-f-april-01-2019-sc5cefbb3fedc86.pdf
h) Code of Conduct for Directors and Senior Executives
The Company has laid down a Code of Conduct for all Board members and the Senior Management Personnel of the Company. The Code of conduct is available on the Company’s website www.kushallimited.com.
The code of conduct was circulated to all the members of the Board and senior management personnel and they have affirmed their compliance with the said code of conduct for the financial year ended March 31, 2019. A declaration to this effect signed by the Chairman & Managing Director is given below:
“I, Sandeep Agrawal, Chairman and Managing Director of the company, do hereby confirm that the Company has obtained affirmation from all the members of the Board and Senior Management Personnel and they have complied with the Code of Conduct of the company for the Financial Year 2018-19.”
i) Disclosures of Requirements of Corporate Governance specified in Regulation 17 to 27 and Clause (b) to (i) of Sub-Regulation (2) of Regulation 46
The company is in compliance with the corporate governance requirements specified in regulations 17 to 27 and clauses (b) to (i) of sub-regulation (2) of regulation 46 of the SEBI (Listing Obligations and Disclosures Requirements) Regulations, 2015 (listing regulations) for the financial year ended on March 31, 2019, to the extent applicable.
j) Compliance certificate from the Statutory Auditors regarding compliance of conditions of Corporate Governance
A certificate from statutory auditors of the company regarding compliance of conditions of corporate governance is annexed herewith to the Report on Corporate Governance in the Annual Report.
k) Disclosures with respect to demat suspense account/ unclaimed suspense account – Not Applicable
For and on Behalf of the Board Mr. Sandeep Agrawal (Chairman and Managing Director) (DIN: 00239648)
Place: Ahmedabad Date: September 02, 2019
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AUDITORS’ CERTIFICATE ON CORPORATE GOVERNANCE To The Members, Kushal Limited We have examined the compliance of conditions of Corporate Governance by Kushal Limited, for the year ended on 31st March 2019, as stipulated in Regulations 17 to 27, clause (b) to (i) of Regulation 46 (2) and paragraphs C, D and E of Schedule V of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (‘Listing Regulations’). The compliance of conditions of Corporate Governance is the responsibility of the Management. Our examination has been limited to a review of the procedures and implementation thereof adopted by the Company for ensuring compliance with the conditions of the Corporate Governance as stipulated in the said regulation. 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 based on the representations made by the Directors and the Management, we certify that the Company has complied with the conditions of Corporate Governance as stipulated in Regulations 17-27, clause (b) to (i) of Regulation 46 (2) and paragraphs C, D and E of Schedule V of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (‘Listing Regulations’), as applicable. We state that such compliance is neither an assurance as to future viability of the Company nor of the efficiency or effectiveness with which the management has conducted the affairs of the Company. This Certificate is issued solely for the purpose of complying with the aforesaid Regulations and may not be suitable for any other purpose. For S.V.Sojitra & Co. Chartered Accountants CA Sanjay Sojitra Proprietor Membership No. 135239 FRN No. 139013W Date: September 02, 2019 Place: Ahmedabad
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MANGING DIRECTOR AND CFO COMPLIANCE CERTIFICATE
(Pursuant to regulation 17(8) of the SEBI(Listing Obligations and Disclosure Requirements) Regulations, 2015
We, Sandeep Agrawal as Managing Director and Jitendra Yadav being as Chief Financial Officer, hereby certify that: A) We have reviewed Financial Statements and the Cash Flow Statement for the year and that to the best of
our knowledge and belief: (i) These statements do not contain any materially untrue statement or omit any material fact or contain
statements that might be misleading; (ii) These statements together present a true and fair view of the listed entity’s affairs and are in
compliance with existing Accounting Standards, applicable laws and regulations.
B) There are, to the best of our knowledge and belief, no transactions entered into by the listed entity during the year which are fraudulent, illegal or violate of the listed entity’s code of conduct.
C) We accept responsibility for establishing and maintaining internal controls for financial reporting and that
we have evaluated the effectiveness of internal control systems of the listed entity pertaining to financial reporting and we have disclosed to the Auditors and the Audit Committee, deficiencies in the design or operation of such internal controls, if any, of which we are aware and the steps we have taken or propose to take to rectify these deficiencies.
D) We have indicated to the Auditors and the Audit committee:
1. Significant changes in internal control over financial reporting during the year; 2. Significant changes in Accounting Policies during the year and that the same have been disclosed in
the notes to the Financial Statements; and
3. Instances of significant fraud of which they have become aware and the involvement therein, if any, of the management or an employee having a significant role in the listed entity’s internal control system over Financial Reporting.
FOR KUSHAL LIMITED Sandeep Agrawal Jitendra Yadav Chairman and Managing Director Chief Financial Officer (DIN: 00239648) Date: September 02, 2019 Place: Ahmedabad
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INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF, KUSHAL LIMITED, AHMEDABAD
Report on the Standalone Ind AS Financial Statements
We have audited the accompanying Standalone Ind AS financial statements of KUSHAL LIMITED (‘the Company”) which comprise the Balance Sheet as at March 31, 2019, the Statement of Profit and Loss (including Other Comprehensive Income, if any), the Cash flow statement and the Statement of Changes in Equity for the year then ended and a summary of significant accounting policies and other explanatory information (herein after referred to as “Standalone Ind AS financial statements”)
Management’s Responsibility for the Standalone Ind AS Financial Statements
The Company’s Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 (“the Act”) with respect to the preparation and presentation of these Standalone Ind AS financial statements that give a true and fair view of the financial position, financial performance including Other comprehensive income, cash flows and changes in equity of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards (IND AS) specified under Section 133 of the Act, read with relevant rules issued thereunder.
This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the Standalone Ind AS financial statements that give true and fair view and are free from material misstatement, whether due to fraud or error.
Auditor’s Responsibility
Our responsibility is to express an opinion on these Standalone Ind AS financial statements based on our audit.
We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made there under.
We conducted our audit of the Standalone Ind AS financial statements in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the Standalone Ind AS financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the Standalone Ind AS financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the Standalone Ind AS financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Company’s preparation of the Standalone Ind AS financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Company’s Directors, as well as evaluating the overall presentation of the Standalone Ind AS financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Standalone Ind AS financial statements.
Opinion
In our opinion and to the best of our information and according to the explanations given to us, the 76
aforesaid Standalone Ind AS financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at 31st March, 2019, and its profit including other comprehensive income, its cash flows and the changes in equity for the year ended on that date.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor’s Report) Order, 2016 (“the Order”) issued by the Central Government of India, in terms of Section 143(11) of the Act, we give in the “Annexure A”, a statement on the matters specified in paragraphs 3 and 4 of the Order.
2. As required by Section 143(3) of the Act, we report that:
(a) We have sought and 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 it appears from our examination of those books.
(c) The Balance Sheet, the Statement of Profit and Loss including other comprehensive income, the Cash Flow Statement and Statement of Changes in Equity dealt with by this Report are in agreement with the books of account.
(d) In our opinion, the aforesaid Standalone Ind AS financial statements comply with the Indian Accounting Standards prescribed under Section 133 of the Act, read with relevant rules issued thereunder.
(e) On the basis of the written representations received from the directors as on 31st March, 2019 and taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2019 from being appointed as a director in terms of Section 164 (2) of the Act.
(f) With respect to the adequacy of the internal financial controls over financial reporting of the
Company and the operating effectiveness of such controls, refer to our separate report in “Annexure B” to this report;
(g) With respect to the other matters to be included in the Auditor’s Report in accordance with Rule
11 of the Companies (Audit and Auditors) Rules, 2014, as amended, in our opinion and to the best of our information and according to the explanations given to us:
i. The Company has disclosed the impact of pending litigation on its financial position in its Standalone Ind AS financial statements.
ii. The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses.
iii. During the year, there has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company.
For S. V. Sojitra & Co. Chartered Accountant (Sanjay V. Sojitra) Proprietor Membership No. 135239 FRN NO. 139013W Place : Ahmedabad Date : May 30, 2019
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ANNEXURE A
TO THE INDEPENDENT AUDITOR’S REPORT ON THE STANDALONE IND AS FINANCIAL STATEMENTS OF KUSHAL LIMITED
(Referred in paragraph 1, under “Report on Other Legal and Regulatory Requirements” 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) The fixed assets have been physically verified by the management at reasonable intervals and no
material discrepancies were noticed on such verification. (c) The title deeds of immovable properties are held in the name of the company.
(ii) As explained to us, management has conducted physical verification of inventory at reasonable intervals during the year and no material discrepancies were noticed on such physical verification.
(iii) The company has not granted any loans, secured or unsecured to companies, firms, Limited Liability
Partnerships or other parties covered in the register maintained under section 189 of the Companies Act, 2013.
As the company has not granted any loans, secured or unsecured to companies, firms, Limited Liability Partnerships or other parties covered in the register maintained under section 189 of the Companies Act, 2013, following points are not applicable incidental to that.
(a) Whether the terms and conditions of the grant of such loans are not prejudicial to the company’s
interest; (b) Whether the schedule of repayment of principal and payment of interest has been stipulated and
whether the repayments or receipts are regular; (c) if the amount is overdue, state the total amount overdue for more than ninety days, and whether
reasonable steps have been taken by the company for recovery of the principal and interest;
(iv) In our opinion and according to the information and explanations given to us, the company has complied with the provisions of section 185 and 186 of the Companies Act, 2013 in respect of grant of loans, making investments and providing securities and guarantees.
(v) The Company has not accepted any deposits within the meaning of Sections 73 to 76 of the Act and
the Companies (Acceptance of Deposits) Rules, 2014 (as amended). Accordingly, the provisions of clause 3(v) of the Order are not applicable to the Company.
(vi) Maintenance of cost records specified by the central government under section 148(1) of the
Companies Act, 2013 is not applicable to the company. (vii)
(a) According to the records of the company, undisputed statutory dues including Provident Fund, Employees’ State Insurance, Income Tax, Sales tax, Goods and Services Tax, Service Tax, Customs Duty, Excise Duty, Value Added Tax, Cess and other material statutory dues have been regularly deposited with the appropriate authorities. No undisputed amounts payable in respect of the aforesaid dues were outstanding as at March 31, 2019 for a period of more than six months from the date of becoming payable.
(b) According to information and explanation given to us, there are no undisputed amounts payable
in respect of provident fund, sales tax, Goods and Services Tax or service tax or duty of customs or duty of excise or value added tax and other statutory dues were outstanding, at the year end ,for the period of more than six months from the date they become payable.
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(c) Details of dues of income tax which have not been deposited on March 31, 2019 on account of disputes as follows:
Name of the statue Nature Of Dues Amount
(in Lakh)
Period to which the amount
relates(AY)
Forum where dispute is pending
Income Tax Act,1961
Income Tax 135.65 2007-08 Commissioner of Income Tax (Appeals)
Income Tax Act,1961
Income Tax 1.31 2008-09 Commissioner of Income Tax (Appeals)
Income Tax Act,1961
Income Tax 9.48 2009-10 Commissioner of Income Tax (Appeals)
Income Tax Act,1961
Income Tax 192.36 2010-11 Commissioner of Income Tax (Appeals)
Income Tax Act,1961
Income Tax 120.64 2016-17 Commissioner of Income Tax (Appeals)
Income Tax Department and Goods and Service Tax Departments carried out search at Registered Office of the company. Investigation Proceedings for both the departments are not yet concluded.
(viii) In our opinion and according to the information and explanation given to us, the company has not defaulted in repayment of loans or borrowing to a financial institution, bank, Government or dues to debenture holders.
(ix) According to information and explanation given to us, the company has not raised money by way of
initial public offer or further public offer (including debt instruments). Moreover the company has not taken term loans during the year.
(x) There is no fraud by the company or any fraud on the Company by its officers or employees has
been noticed or reported during the year. (xi) According to information and explanation given to us, the managerial remuneration has been paid/
provided in accordance with the requisite approvals mandated by the provisions of section 197 read with Schedule V to the Companies Act, 2013.
(xii) The Company is not a Nidhi Company and hence reporting under clause (xii) of paragraph 3 of the
Order is not applicable. (xiii) All transactions with the related parties are in compliance with sections 177 and 188 of Companies
Act, 2013 and the details have been disclosed in the Standalone Ind AS Financial Statements, as required by the applicable Indian Accounting Standards.
(xiv) The company has not made any preferential allotment or private placement of shares or fully or
partly convertible debentures during the year under review hence, reporting requirements under clause (xiv) of paragraph 3 of the Order is not applicable to the Company.
(xv) According to information and explanation given to us, the company has not entered into any non-
cash transactions with directors or persons connected with him as referred to in section 192 of Companies Act, 2013 and hence reporting under clause (xv) of paragraph 3 of the Order is not applicable to the company.
(xvi) According to the information and explanations provided to us, the provisions of section 45-IA of the
Reserve Bank of India Act, 1934 is not applicable to the Company.
79
ANNEXURE B
TO THE INDEPENDENT AUDITOR’S REPORT ON THE STANDALONE IND AS FINANCIAL STATEMENTS OF KUSHAL LIMITED
(Referred in paragraph 2(f) under “Report on Other Legal and Regulatory Requirements” of our report of even date) Report on the Internal Financial Controls over Financial Reporting under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 (“the Act”) We have audited the internal financial controls over financial reporting of KUSHAL LIMITED (“the Company”) as of 31st March 2019 in conjunction with our audit of the Standalone Ind AS financial statements of the Company for the year ended on that date. Management’s Responsibility for Internal Financial Controls The Company’s management is responsible for establishing and maintaining internal financial controls based on the internal financial controls over financial reporting criteria established by the Company considering the essential components of internal financial controls stated in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting (“the Guidance Note”) issued by the Institute of Chartered Accountants of India (‘ICAI’)”. These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to company’s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, 2013. Auditors’ Responsibility Our responsibility is to express an opinion on the Company's internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls over Financial Reporting (the “Guidance Note”) and the Standards on Auditing as specified under section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls, both applicable to an audit of Internal Financial Controls and, both issued by the Institute of Chartered Accountants of India. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects. Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal financial controls based on the assessed risk. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the Standalone Ind AS financial statements, whether due to fraud or error. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Company’s internal financial controls over financial reporting. Meaning of Internal Financial Controls over Financial Reporting A company's internal financial controls over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company's internal financial controls over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are
80
being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorised acquisition, use, or disposition of the company's assets that could have a material effect on the financial statements. Inherent Limitations of Internal Financial Controls over Financial Reporting Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial controls over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. Opinion In our opinion, to the best of our information and according to the explanations given to us, the Company has, in all material respects, an adequate internal financial controls over financial reporting and such internal financial controls over financial reporting were operating effectively as at 31st March 2019, based on the internal financial controls over financial reporting criteria established by the Company considering the essential components of internal financial controls stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India. For S. V. Sojitra & Co. Chartered Accountant (Sanjay V. Sojitra) Proprietor Membership No. 135239 FRN NO. 139013W Place : Ahmedabad Date : May 30, 2019
81
(₹ In Lakh)
Notes As at March 31, 2019 As at March 31, 2018
A ASSETS
1 Non-Current Assets
(a) Property, Plant & Equipment 3 1,50,605.65 1,414.93
(b) Goodwill 12,563.07 0.00
(c) Financial Assets
(i) Investments 4 176.57 352.52
(ii) Loans & Advances 5 524.28 3,416.18
(d) Other Non-Current Assets 6 61.91 74.14
Total Non-Current Assets (1) 1,63,931.48 5,257.77
2 Current Assets
(a) Inventories 7 11,714.95 571.08
(b) Financial Assets
(i) Trade Receivables 8 8,883.31 34,311.56
(ii) Cash and Cash Equivalents 9 490.69 56.95
(iii) Loans & Advances 10 3,481.67 8,823.64
(c) Other Current Assets 11 2.08 220.37
Total Current Assets (2) 24,572.71 43,983.60
TOTAL ASSETS (1+2) 1,88,504.19 49,241.37
B EQUITY AND LIABILITIES
3 Equity
(a) Equity Share Capital 12 6,732.81 4,745.33
(b) Other Equity 13 1,24,914.11 5,186.31
Total Equity (3) 1,31,646.93 9,931.64
4 Liabilities
Non-Current Liabilities
(a) Provisions 14 26.20 22.47
(b) Deferred Tax Liabilities (Net) 15 847.13 122.01
(c) Borrowings 16 9,374.72 1,300.43
(d) Other Long Term Liabilities 15,420.64 0.00
Total Non-Current Liabilities (4) 25,668.68 1,444.91
5 Current Liabilities
(a) Financial Liabilities
(i) Borrowings 17 1,866.91 0.00
(ii) Trade Payable 18 12,574.70 36,179.01
(b) 19 16,307.29 881.30
(c) 20 439.69 804.51
Total Current Liabilities (5) 31,188.58 37,864.82
TOTAL EQUITY AND LIABILITIES (3+4+5) 1,88,504.19 49,241.37
1 to 33
Chartered Accountants
MANOJ AGRAWAL KUSHAL AGRAWAL
Membership No.: 135239 DIRECTOR DIRECTOR
(DIN:00225494) (DIN: 03043294)
Place: Ahmedabad CS SHIVANGI SHAH JITENDRA YADAVDate: May 30, 2019 Company Secretary Chief Financial Officer
Significant Accounting Policies & Notes to the Financials Statements
Particulars
Other Current Liabilities
Current Tax Liabilities
STANDALONE BALANCE SHEET AS AT MARCH 31, 2019
FRN No.: 139013W
For and on behalf of the board ofKUSHAL LIMITED
Sanjay V. SojitraProprietor
For, S. V. Sojitra & Co.
82
(₹ In Lakh except per share data)
1 Revenue from Operations 21 35,828.92 1,00,660.50
2 Other Income 22 292.66 2,436.03
3 Total Revenue (1+2) 36,121.58 1,03,096.53
4 Expenses
(a) Purchases of Merchandise 23 11,461.24 98,284.82
(b) Changes in Inventories 24 (5,989.46) (114.33)
(c) Cost of Material Consumed 25 20,918.92 0.00
(d) Film Production Expenses 26 172.12 141.33
(e) Employee Benefit Expenses 27 897.23 170.86
(f) Finance Costs 28 608.37 505.57
(g) Depreciation and Amortisation Expenses 3 745.09 56.40
(h) Other Expenses 29 5,883.37 544.53
Total Expenses 34,696.87 99,589.18
5 Profit / (Loss) Before Tax (3 - 4) 1,424.71 3,507.35
6 Tax Expense:
(a) Current Tax Expense for Current Year (Provisions) 439.69 804.51
(b) Less: MAT Credit (where applicable) 0.11 0.00
(c) Current tax Expense relating to Prior Years (383.32) (98.60)
(d) Net Current Tax Expense 56.27 705.91
(e) Deferred Tax Provision 37.80 29.98
Total Tax Expenses 94.07 735.89
7 Net Profit / (Loss) for the period (5-6) 1,330.65 2,771.46
8 Other Comprehensive Income (OCI)
(i) Items that will not be reclassified to profit or loss 0.00 0.00
(iI) Income Tax relating to items that will not be reclassified to profit or loss 0.00 0.00
(iii) Items that will be reclassified to profit or loss 0.00 0.00
(iv) Income Tax relating to items that will be reclassified to profit or loss 0.00 0.00
Other Comprehensive Income 0.00 0.00
9 Total Comprehensive Income (7+8) 1,330.65 2,771.46
10 Earnings Per Share (Face Value of Rs.2/- each) (Not Annualised)
(a) Basic 0.54 1.17
(b) Diluted 0.40 1.17
11 Paid Up Equity Share Capital 4,950.51 4,745.33
12 Other Equity excluding Revaluation Reserves 45,911.26 5,186.31
Significant Accounting Policies & Notes to the Financials Statements 1 to 33
For, S. V. Sojitra & Co.
Chartered Accountants
Proprietor MANOJ AGRAWAL KUSHAL AGRAWAL
Membership No.: 135239 DIRECTOR DIRECTOR
FRN No.: 139013W (DIN:00225494) (DIN: 03043294)
Place: Ahmedabad CS SHIVANGI SHAH JITENDRA YADAVDate: May 30, 2019 Company Secretary Chief Financial Officer
STATEMENT OF STANDALONE PROFIT AND LOSS FOR THE YEAR ENDED MARCH 31, 2019
KUSHAL LIMITED
Sanjay V. Sojitra
NotesParticulars
For and on behalf of the board of
For the year ended
March 31, 2019
For the year ended
March 31, 2018
83
A Equity Share Capital
(₹ in Lakh)
Balance as on 1st April, 2017
Changes in
Equity Share
Capital
during FY
2017-18
Balance as on
31st March,
2018
Changes in
Equity Share
Capital during
FY 2018-19*
Balance as on
31st March,
2019
4,745.33 - 4,745.33 205.18 4,950.51
*Due to Amalgamation, Number of Equity shares are issued to transferor Company's Shareholders.
B Other Equity
(₹ in Lakh)
ParticularsSecurities
Premium
Retained
Earnings
General
ReserveTotal
As on 31st March, 2018
Balance as on 1st April, 2017 NIL 5,023.70 1.08 5,024.79
Total Comprehensive Income for the year NIL 2,771.46 NIL 6,378.23
Less: Utilised during the Year ( Isuue Of Bonus
Share - Capitalisation of Reserves ) NIL NIL NIL (2,372.67)
Less: Interim Dividend during the Year NIL (2,609.93) NIL (2,135.40)
Balance As on 31st March, 2018 NIL 5,185.23 1.08 5,186.31
(₹ in Lakh)
ParticularsSecurities
Premium
Retained
Earnings
General
ReserveCapital Reserve Total
As on 31st March, 2019
Balance as on 1st April, 2018 43,675.26 5,185.23 1.08 NIL 48,861.57
Total Comprehensive Income for the year NIL (2,902.85) NIL NIL (2,902.85)
Add:Addition during the year NIL NIL NIL 79,002.85 79,002.85
Less: Interim Dividend During The Year NIL (47.45) NIL NIL (47.45)
Balance As on 31st March, 2019 43,675.26 2,234.93 1.08 79,002.85 1,24,914.11
For S. V. Sojitra & Co
Chartered Accountant
(Sanjay V. Sojitra) Kushal Agrawal Manoj Agrawal
Proprietor Director Director
Membership No.135239 (DIN: 03043294) (DIN:00225494)
FRN No. 139013W
Place: Ahmedabad CS Shivangi Shah Jitendra Yadav
Date: May 30, 2019 Company Secretary Chief Financial Officer
For and on behalf of the Board of
KUSHAL LIMITED
Standalone Statement of Change in Equity for The Year Ended March 31, 2019
84
A . Cash Flow from Operating Activities
Net profit Before Tax as per Statement of Profit and Loss 1424.71 3507.35
Adjusted for:
Depreciation and Amortisation Expenses 745.09 56.40
Interest Expenses 608.37 505.57
Profit / Loss on sale of Fixed Assets (114.27) (27.27)
Gratuity 3.73 2.48
Foreign Exchange Fluctuations (123.32) 5.75
Rent Income - (6.91)
Interest Income (21.76) (6.25)
Dividend Income - (2192.25)
Preliminery Expense 12.23 -
Operating Profit Before Working Capital Changes 2534.77 1844.88
Adjusted For:
Trade & Other Receivables (9988.43) (26975.48)
Inventories (11143.87) (114.33)
Trade & Other Payables (8696.29) 28182.49
Cash Generated From Operations (27293.82) 2937.56
Direct Tax (paid)/ Refund (56.27) (705.91)
Net Cash from/ (Used in) Operating Activities A (27350.09) 2231.64
B. Cash Flow from Investing Activities
Purchase of Fixed Assets (67.01) (13.02)
Sale of Fixed Assets 55.21 134.00
Investment 175.95
Change in Other Non-current Assets 2891.90 (3270.83)
Dividend Income from Subsidiary - 2192.25
Rent Income - 6.91
Interest Income 21.76 6.25
Net Cash Flow from/ (Used in) Investing Activities B 3077.81 (944.45)
C. Cash Flow from Financing Activities
Borowings 25361.84 1300.43
Dividend Paid (47.45) (2609.93)
Interest Expenses (608.37) (505.57)
Net Cash Flow from/ (Used in) Financing Activities C 24706.02 (1815.07)
Net Increase/ (Decrease) in Cash & Cash Equivalents D (A+B+C) 433.74 (527.88)
Cash & Cash Equivalents at the beginning of the Year E 56.95 584.82
Cash & Cash Equivalents as at the end of the Year F (D+E) 490.69 56.95
For, S. V. Sojitra & Co.
Sanjay V. Sojitra
Proprietor MANOJ AGRAWAL KUSHAL AGRAWAL
Membership No.: 135239 DIRECTOR DIRECTOR
FRN No.: 139013W (DIN:00225494) (DIN: 03043294)
Place: Ahmedabad CS SHIVANGI SHAH JITENDRA YADAVDate: May 30, 2019 Company Secretary Chief Financial Officer
For and on behalf of the board of
KUSHAL LIMITED
Standalone Cash Flow Statement for the year ended March 31, 2019
ParticularsFor the year ended 31st
March, 2019
For the year ended 31st
March, 2018
85
NOTES FORMING PART OF THE STANDALONE IND AS FINANCIAL STATEMENTS FOR THE YEAR ENDED 31ST MARCH, 2019
1. Corporate Information Kushal Limited (KL) is a Public Company listed on BSE platform, domiciled in India, incorporated under Companies Act, 1956.The registered office of the company is located at 105, Kushal House,Off C.G.Road,Ahmedabad-380007,Gujarat,India. The company is engaged in the business of Manufacturing of Paper and Paper Products, Trading and selling of various kinds of Merchandise. The Hon'ble National Company Law Tribunal, Ahmedabad Bench {"NCLT") vide its order dated Tuesday, February 5, 2019 has approved the Scheme of Amalgamation of Ashapura Paper Mills Private Limited, Kushal Wealth Creators Private Limited, Riddhi Siddhi Recyclers Private Limited, Kushal Infra Structure Private Limited with Kushal Limited ("the Company") and their respective shareholders and creditors with Appointed date for the scheme as Friday, March 31 , 2017. The Hon'ble National Company Law Tribunal, Ahmedabad Bench {"NCLT") vide its order dated Wednesday February 27, 2019 has approved Resolution plan (which inter alia includes Scheme of Amalgamation between Rainbow Papers limited and Kushal Limited and their respective Shareholders) submitted by Kushal Limited under Section 30 of the Insolvency and Bankruptcy Code, 2016 (as amended from time to time) in the matter of Rainbow papers Limited (in CIRP). Accordingly books of the above Companies have been merged for preparing financial statements for the financial year 2018-19 but the same are strictly not comparable with those of previous year Figures. The company has acquired Rainbow Papers Limited under IBC, 2016. The consideration (pending to be passed on) as well as acquired assets have been measured at fair market value as per IND AS 103 Business Combinations. 2. Summary of Significant Accounting Policies A. Basis of Preparation and Presentation The financial statements have been prepared on the Historical Cost basis. The financial statements of the Company have been prepared to comply with the Indian Accounting Standards (‘Ind AS’), including the rules notified under the relevant provisions of the Companies Act, 2013. These financial statements have been prepared in accordance with the Indian Accounting Standards (hereinafter referred to as the ‘Ind AS’) as notified by the Ministry of Corporate Affairs pursuant to Section 133 of the Companies Act, 2013 (‘Act’) read with the Companies (Indian Accounting Standards) Rules, 2015 as amended and other relevant provisions of the Act. The accounting policies are applied consistently to all the periods presented in the financial statements. Company’s financial statements are presented in Indian Rupees (₹), which is also its functional currency. B. Inventories Inventories are measured at lower of cost and net realizable value after providing for obsolescence, if any. Cost of inventories comprises of cost of purchase, cost of conversion and other costs net of recoverable taxes incurred in bringing them to their respective present location and condition. C. Property, Plant and Equipment Property, Plant and Equipment are stated at cost, net of recoverable taxes, trade discount and rebates less accumulated depreciation and impairment losses, if any. Such cost includes purchase price, borrowing cost and any
86
cost directly attributable to bringing the assets to its working condition for its intended use and adjustments arising from exchange rate variations attributable to the assets. Subsequent costs are included in the asset’s carrying amount or recognized as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the entity and the cost can be measured reliably. Expenses incurred on asset, net of income earned during the development stage prior to its intended use, are considered as pre - operative expenses and disclosed under Capital Work - in - Progress. Depreciation on property, plant and equipment is provided using straight line method. The residual values, useful lives and method of depreciation of property, plant and equipment are reviewed at each financial year end and adjusted prospectively, if appropriate. Gains or losses arising from derecognition of Property, Plant and Equipment are measured as the difference between the net disposal proceeds and the carrying amount of the asset and are recognized in the Statement of Profit and Loss when the asset is derecognized. D. Leases Leases are classified as finance leases whenever the terms of the lease, transfers substantially all the risks and rewards of ownership to the lessee. All other leases are classified as operating leases. Whether a lease is a finance lease or an operation lease depends upon the substance of transaction rather than the form. E. Intangible Assets Intangible Assets are stated at cost of acquisition net of recoverable taxes, trade discount and rebates less accumulated amortization/depletion and impairment loss, if any. Such cost includes purchase price, borrowing costs, and any cost directly attributable to bringing the asset to its working condition for the intended use, net off charges on foreign exchange contracts and adjustments arising from exchange rate variations attributable to the intangible assets. Subsequent costs are included in the asset’s carrying amount or recognized as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the entity and the cost can be measured reliably. Gains or losses arising from derecognition of an intangible asset are measured as the difference between the net disposal proceeds and the carrying amount of the asset and are recognized in the Statement of Profit and Loss when the asset is derecognized. F. Borrowing Costs Borrowing costs include exchange differences arising from foreign currency borrowings to the extent they are regarded as an adjustment to the interest cost. Borrowing costs that are directly attributable to the acquisition or construction of qualifying assets are capitalized as part of the cost of such assets. A qualifying asset is one that necessarily takes substantial period of time to get ready for its intended use. Interest income earned on the temporary investment of specific borrowings pending their expenditure on qualifying assets is deducted from the borrowing costs eligible for capitalization. All other borrowing costs are charged to the Statement of Profit and Loss for the period for which they are incurred. G. Impairment of Assets The Company assesses at each reporting date as to whether there is any indication that any property, plant and equipment and intangible assets or group of assets, called cash generating units (CGU) may be impaired. If any such indication exists, the recoverable amount of an asset or CGU is estimated to determine the extent of impairment, if any. When it is not possible to estimate the recoverable amount of an individual asset, the Company estimates the recoverable amount of the CGU to which the asset belongs.
87
An impairment loss is recognized in the Statement of Profit and Loss to the extent, asset’s carrying amount exceeds its recoverable amount. The recoverable amount is higher of an asset’s fair value less cost of disposal and value in use. Value in use is based on the estimated future cash flows, discounted to their present value using pre-tax discount rate that reflects current market assessments of the time value of money and risk specific to the assets. The impairment loss recognized in prior accounting period is reversed if there has been a change in the estimate of recoverable amount. H. Provisions, Contingent Liabilities and Contingent Assets Provisions are recognized when the Company has a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. Provisions are reviewed at each balance sheet date. If the outflow is no longer probable, provision is reversed to Income. If the effect of the time value of money is material, provisions are discounted using a current pre-tax rate that reflects, when appropriate, the risks specific to the liability. When discounting is used, the increase in the provision due to the passage of time is recognized as a finance cost. Contingent Liability is not recognized but is disclosed, unless the possibility of outflow of economic resources is remote. Contingent Assets are not recognized but disclosed where an inflow of benefits is probable. I. Employee Benefits Short Term Employee Benefits The undiscounted amount of short term employee benefits expected to be paid in exchange for the services rendered by employees are recognized as an expense during the period when the employees render the services. Post-Employment Benefits
• Defined Contribution Plans
A defined contribution plan is a post-employment benefit plan under which the Company pays specified contributions to a separate entity. The Company makes specified monthly contributions towards Provident Fund and ESIC. The Company’s contribution is recognized as an expense in the Statement of Profit and Loss during the period in which the employee renders the related service.
• Defined Benefit Plans The Company pays gratuity to the employees whoever has completed five years of service with the Company at the time of resignation/superannuation. Provision for Gratuity is made @15 days salary for every completed year of service as per the Payment of Gratuity Act 1972. Provision for gratuity is made without the actuarial valuation. J. Income Taxes The tax expense for the period comprises current and deferred tax. Tax is recognized in Statement of Profit and Loss, except to the extent that it relates to items recognized in the comprehensive income or in equity. In which case, the tax is also recognized in other comprehensive income or equity. - Current tax Current tax assets and liabilities are measured at the amount expected to be recovered from or paid to the taxation authorities, based on tax rates and laws that are enacted or substantively enacted at the Balance sheet date. - Deferred tax Deferred tax is recognized on temporary differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit.
88
Deferred tax liabilities and assets are measured at the tax rates that are expected to apply in the period in which the liability is settled or the asset realized, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period. The carrying amount of deferred tax liabilities and assets are reviewed at the end of each reporting period. K. Foreign Currencies Transactions and Translation Transactions in foreign currencies are recorded at the exchange rate prevailing on the date of transaction (average rate is used when they are a reasonable approximate of actual). Monetary assets and liabilities denominated in foreign currencies are translated at the functional currency closing rates of exchange at the reporting date. Exchange differences arising on settlement or translation of monetary items are recognized in Statement of Profit and Loss except to the extent of exchange differences which are regarded as an adjustment to interest costs on foreign currency borrowings that are directly attributable to the acquisition or construction of qualifying assets, are capitalized as cost of assets. Non-monetary items that are measured in terms of historical cost in a foreign currency are recorded using the exchange rates at the date of the transaction. Non-monetary items carried at fair value in a foreign currency are translated using the exchange rates at the date when the fair value was measured. L. Revenue Recognition Sale of Goods Revenue from sale of goods is recognized when - the significant risks and rewards of ownership have been transferred to the buyer, - it is probable that the economic benefits associated with the transaction will flow. - the cost incurred or to be incurred in respect of the transaction can be measured reliably, - there is no continuing effective control or managerial involvement with the goods, and the amount of revenue
can be measured reliably. Rendering of Services Revenue from rendering of services is recognized when the outcome of a transaction can be measured reliably, revenue associated with the transaction shall be recognized with reference to the stage of completion of the transaction at the end of reporting period. When the outcome of the transaction involving rendering of services cannot be estimated reliably, revenue shall be recognized only to the extent of the expenses recognized that are recoverable. Revenue from sale of goods is measured at the fair value of the consideration received or receivable, taking into account contractually defined terms of payment and excluding taxes or duties collected on behalf of the government. Interest income Interest income from a financial asset is recognized using effective interest rate method. Dividend Income Revenue is recognized when the Company’s right to receive the dividend has been established. M. Financial Instruments
89
Financial Assets All financial assets and liabilities are initially recognized at fair value. Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities, which are not at fair value through profit or loss, are adjusted to the fair value on initial recognition. Purchase and sale of financial assets are recognized using trade date accounting. Investment in Subsidiaries The Company has accounted for its investments in subsidiaries at cost. Financial Liabilities All financial liabilities are recognized at fair value and in case of loans, net of directly attributable cost. Fees of recurring nature are directly recognized in the Statement of Profit and Loss as finance cost. N. Long Term Borrowings Term and conditions Long term loan taken from IVL Finance Limited under ILAP of ₹ 11.77 Cr. @ 11% P.a. The Loan is Repayable on monthly 84 installments and the interest payable on monthly basis.
The Loan Matures in February 2025. The loan is secured by exclusive charge on Plot No.115 A,B,Tps- No.20,Kushal House, Opp. Regenta Hotel, Off. C.G Road, Navrangpura, Ahmedabad, Gujarat-380009 O. Earnings Per Share Basic EPS is calculated by dividing profit or loss attributable to ordinary equity shareholders by the weighted average number of ordinary shares outstanding during the reporting period. Dilutive EPS is calculated by adjusting the earnings and number of shares for the effects of dilutive options and other dilutive potential ordinary shares. As per Indian AS 33-Earning Per Share, Company has calculated Basic Earning Per Share on the basis of number of equity shares (incl. equity shares issued pursuant to amalgamation referred to above) and Diluted Earning Per Share on the basis of Shares and Share Warrants to be issued pursuant to the Resolution Plan approved by NCLT, Ahmedabad referred to above. P. Operating Segments As per Ind AS 108- “Operating Segment”, segment information has been provided under the Notes to Consolidated Financial Statements. Q. Disclosure of Interest in Other Entities i) Kushal Impex Pte Ltd, Singapore Kushal Impex Pte. Ltd. was incorporated in the year 2014 in Singapore. It is Wholly Owned Subsidiary of Kushal Limited. ii) Kashish Worldwide F.Z.E., Ajman, U.A.E. Kashish Worldwide F.Z.E. was incorporated in the year 2016 in Ajman, U.A.E. It is Wholly Owned Subsidiary of Kushal Limited.
90
iii) Stallion Worldwide (Labuan) Private Limited, Malaysia Stallion Worldwide (Labuan) Private Limited was incorporated in April, 2017 in Labuan, Malaysia. It is Wholly Owned Subsidiary of Kushal Limited. It is yet to commence its business operations. iv) Kushal Integrated Industrial Park LLP, India A Wholly Owned LLP in the name and style of Kushal Integrated Industrial Park LLP was incorporated on 7th June, 2017 in Ahmedabad, Gujarat with main object of development of Industrial and other park. It is yet to commence its business operations. R. Cash Flows Cash and cash equivalent comprise cash on hand and demand deposits, together with short-term, highly liquid investments that are readily convertible to a known amount of cash, and that are subject to an insignificant risk of changes. Investment having maturity of three months or less is classified as cash equivalents. Cash flows are analyzed using indirect method into following three activities:
a. Operating activities b. Investing activities c. Financing activities
S. Events after the reporting period Events after the reporting period are those events, favorable and unfavorable, that occur between the end of the reporting period and the date when the financial statements are approved by the board of directors. Events that provide evidence of conditions that existed at the end of the reporting period are classified as adjusting events after the reporting period. Events that are indicative of conditions that arose after the reporting period are classified as non-adjusting events. T. Previous year’s figure have been recast, regrouped and rearranged, wherever necessary to confirm to
this year’s classification.
91
Note 3 Property, Plant & Equipment
(Rs. In Lakh)
Balance as at 1
April, 2018
*Assets Acquired
under
amalgamation
scheme
*Assets Acquired
under IBC scheme
Additions
during the
Year
Disposals
during the
Year
Balance
as at
31 March, 2019
Balance
as at
1 April, 2018
Depreciation on
Assets Acquired
under
amalgamation
scheme
Depreciation
expense for
the year
Depriciation on
Assets Acquired
under scheme
Depreciation
Eliminated on
disposal of
assets during
the Year
Balance
as at
31 March, 2019
Balance
as at
31 March, 2019
Balance
as at
31 March, 2018
Tangible Assets:Owned Assets(a) Land
Freehold Land 28.50 1,405.81 23,300.00 - - 24,734.31 - - - - - 24,734.31 28.50
(b) Buildings
Owned Factory Building 1,395.72 1,672.77 44,700.00 3.19 - 47,771.68 79.81 245.76 21.93 30.68 - 378.18 47,393.50 1,315.91
Owned Office Building - 121.85 - - - 121.85 - 10.84 - 1.69 12.53 109.31 -
(c) Plant and Equipment
Owned Plant & Machinery 49.35 7,294.50 72,900.00 38.68 - 80,282.52 18.88 2,011.78 3.82 580.47 - 2,614.95 77,667.57 30.47
(d) Electrification -
Owned - 878.17 - 878.17 - 238.01 - 54.03 - 292.04 586.13
(e) Furniture and Fixtures
Owned 23.89 15.84 - 9.10 - 48.83 12.28 7.29 1.74 1.50 - 22.81 26.01 11.61
(f) Office Vehicles
Owned 113.45 55.47 - 55.21 113.71 88.65 14.61 5.95 5.47 57.08 57.59 56.13 24.80
(g ) Commercial Vehicles
Owned 34.11 - - - - 34.11 32.41 - - - 32.41 1.70 1.70
(h) Office equipment
Owned 0.68 28.34 - 7.02 - 36.03 0.64 3.67 0.02 20.22 - 24.55 11.49 0.04
(i ) Computers
Owned 31.99 44.75 - 7.40 - 84.14 30.09 25.94 4.01 4.59 - 64.63 19.51 1.90
Total 1,677.69 11,517.50 1,40,900.00 65.37 55.21 1,54,105.36 262.76 2,557.90 37.47 698.65 57.08 3,499.70 1,50,605.65 1,414.93
*Refer Note:33
Tangible assets
Gross block Accumulated depreciation and impairment Net block
92
Note 4 Non-current Investments
(₹ In Lakh)
ParticularsAs at March 31,
2019
As at March
31, 2018
Investment in Quoted Shares 36.16 15.13
Investment in Properties 42.58 244.55
Investment in Subsidiaries 97.83 92.84
Total 176.57 352.52
(₹ In Lakh)
ParticularsAs at March 31,
2019
As at March
31, 2018
(a) Security Deposits (Unsecured, Considered Good) 58.66 0.56
(b) Other Advances
Investment Properties 133.36 133.36
Rainbow Papers Limited 0.00 3,271.23
Other Advances 332.26 11.03
Total 524.28 3,416.18
(₹ In Lakh)
ParticularsAs at March 31,
2019
As at March
31, 2018
Unamortised Preliminary Expenses 61.91 74.14
Total 61.91 74.14
(₹ In Lakh)
ParticularsAs at March 31,
2019
As at March
31, 2018
Stock in Trade 4,392.65 429.75
Cost of Under Production film 0.00 141.33
Raw Material 4,055.93 0.00
Finished Goods 191.89 0.00
Land 0.00 0.00
Work in Process 3,074.48 0.00
Total 11,714.95 571.08
Note 5 Long Term Loans and Advances
Note 6 Other Non-current Assets
Note 7 Inventories
93
(₹ In Lakh)
ParticularsAs at March 31,
2019
As at March
31, 2018
Unsecured, Considered Good 8,883.31 34,311.56
Total 8,883.31 34,311.56
(₹ In Lakh)
ParticularsAs at March 31,
2019
As at March
31, 2018
Cash and Cash Equivalents
Cash on hand 37.55 0.05
Balances with banks in Current Accounts 130.28 48.97
Balance earnmarked for Unclaimed Dividend 7.39 7.93
In Deposit Accounts 315.47 0.00
Total 490.69 56.95
(₹ In Lakh)
ParticularsAs at March 31,
2019
As at March
31, 2018
Prepaid Expenses 42.36 6.71
Balance with Government Authorities 2,084.24 893.50
Advance to Suppliers
To Related Parties 0.00 5,936.68
To Others 639.71 1,431.55
Other Advances 712.66 549.93
Advance to Employee 2.71 5.27
Total 3,481.67 8,823.64
(₹ In Lakh)
ParticularsAs at March 31,
2019
As at March
31, 2018
Amounts due from Subsidiaries 0.63 0.63
Commission charged to Wholly Owned Subsidiary for SBLC 0.00 0.00
Interest Accrued but not Due 0.00 0.00
Other Current Assets 0.00 131.04
Dividend Receivable from WOS 0.00 88.70
Interest Receivable 1.45 0.00
Total 2.08 220.37
Note 9 Cash and Cash Equivalents
Note 10 Short Term Loans and Advances
Note 8 Trade Receivables
Note 11 Other Current Assets
94
Note 12 Equity Share Capital
(₹ In Lakh)
Number of
sharesAmount
Number of
sharesAmount
(a) Authorised
Equity Shares of Rs. 2 each with Voting Rights 2500,00,000 5,000.00 2500,00,000 5,000.00
(b) Issued , Subscribed and Paid Up
Equity Shares of Rs. 2 each with Voting Rights 2475,25,460 4,950.51 2372,66,610 4,745.33
Total 2475,25,460.00 4,950.51 2372,66,610 4,745.33
Note:12 (i)
(₹ In Lakh)
ParticularsAs at March 31,
2019
As at March
31, 2018
Share Capital Suspense Account-* 1,782.31 Nil
Total 1,782.31 0.00
* Refer Note:33
(a)
ParticularsOpening
BalanceBuy back
*Issued During
the Year on
account of
Amalgamation
Closing
Balance
Equity shares with voting rights
Year ended 31 March, 2019
- Number of shares 2372,66,610 NIL 102,58,850 2475,25,460
- Amount 4,745.33 NIL NIL 4,950.51
Year ended 31 March, 2018
- Number of shares 2372,66,610 NIL NIL 2372,66,610
- Amount 4,745.33 NIL NIL 4,745.33
*National Company Law Tribunal has approved the Scheme of Amalgamation of Ashapura Paper Mills Private Limited,
Kushal Wealth Creators Private Limited, Riddhi Siddhi Recyclers Private Limited, Kushal Infra Structure Private Limited
Each holder of Equity share is entitled to One Vote per Share
(b) The Company has only One Class of Shares referred to as Equity Shares Having a Face Value of Rs.2/- per share
As at March 31, 2018As at March 31, 2019
Particulars
95
( c)
Number of
shares held
(Face Vaue
Rs.2)
% holding in
that class of
shares
Number of
shares held
(Face Vaue Rs.2)
% holding in
that class of
shares
Equity shares with voting rights
Sandeep T. Agrawal 136,82,400.00 0.06 136,82,400.00 0.06
Manoj T. Agrawal 213,74,510.00 0.09 205,41,600.00 0.09
Mahendra T. Agrawal 227,01,600.00 0.09 227,01,600.00 0.10
Namrata S. Agrawal 455,49,650.00 0.18 440,59,650.00 0.19
Pushpa T. Agrawal 218,34,385.00 0.09 217,00,220.00 0.09
Tulsiram C. Agrawal NIL 0.00 NIL 0.00
Note 13 Other Equity
(₹ In Lakh)
ParticularsAs at March 31,
2019
As at March
31, 2018
(a) Securities Premium
Opening Balance 0.00 0.00
Add : Premium on Shares issued during the Year* 43,675.26 0.00
Less : Utilised during the Year ( Isuue Of Bonus Share - Capitalisation of Reserves ) 0.00 0.00
Closing Balance 43,675.26 0.00
(b) Retained Earnings
Opening Balance 5,185.23 5,023.70
Add: Profit / (Loss) for the Year -2,902.85 2,771.46
Less: Interim Dividend During The Year 47.45 2,609.93
Less: Issue of Bonus shares- Capitalised for the issue of bonus shares 0.00 0.00
Less: Dividend Distribution Tax 0.00 0.00
Closing Balance 2,234.93 5,185.23
(c) General Reserve
Opening Balance 1.08 1.08
Add: Addition during the Year 0.00 0.00
Less : Utilised during the Year 0.00 0.00
Closing Balance 1.08 1.08
(c) Capital Reserve 0.00 0.00
Opening Balance 0.00 0.00
Add: Addition during the Year* 79,002.85 0.00
Less : Utilised during the Year 0.00 0.00
Closing Balance 79,002.85 0.00
Total 1,24,914.11 5,186.31
* Refer Note:33
As at March 31, 2018
Details of Shareholders holding more than 5% Shares in the Company
Class of shares / Name of shareholder
As at March 31, 2019
96
Note 14 Long Term Provisions (₹ In Lakh)
ParticularsAs at March 31,
2019
As at March
31, 2018
Provision for Gratuity 26.20 22.47
Total 26.20 22.47
Note 15 Deferred Tax Liabilities (Net) (₹ In Lakh)
ParticularsAs at March 31,
2019
As at March
31, 2018
Deferred Tax Liabilities 847.13 122.01
Total 847.13 122.01
Note 16 Long-term Borrowings (₹ In Lakh)
ParticularsAs at March 31,
2019
As at March
31, 2018
Mortgage Loan 1,371.64 1,300.43
Term Loans from banks 3.08 0.00
Loans and advances 500.00 0.00
Debenture Suspense Account* 7,500.00 0.00
Total 9,374.72 1,300.43
* Refer Note:33
Note 17 Short-term Borrowings (₹ In Lakh)
ParticularsAs at March 31,
2019
As at March
31, 2018
From Banks
Working Capital Facilities 1,866.91 0.00
Total 1,866.91 0.00
Note 18 Trade Payables (₹ In Lakh)
ParticularsAs at March 31,
2019
As at March
31, 2018
Acceptances NIL NIL
Other than Acceptances 12,574.70 36,179.01
Total 12,574.70 36,179.01
97
Note 19 Other Current Liabilities (₹ In Lakh)
ParticularsAs at March 31,
2019
As at March
31, 2018
Statutory Dues 212.11 9.70
Payable for Expenses 402.81 47.21
Advance from Customers 2,527.18 816.45
Deposit 238.80 0.00
Unclaimed Dividend 7.39 7.94
Amounts due to Subsidiaries 0.00 0.00
Current maturities of Long Term debts 349.58 0.00
Other Current Liabilities 5.56 0.00
Liabilities due within 12 months (RPL-IBC) 12,563.85 0.00
Total 16,307.29 881.30
Note 20 Current Tax Liabilities (₹ In Lakh)
ParticularsAs at March 31,
2019
As at March
31, 2018
Provision for Income Tax 439.69 425.16
Provision for Tax on Dividend received from WOS 0.00 379.35
Total 439.69 804.51
98
Note 21 Revenue from Operations(₹ In Lakh)
For the year ended
March 31, 2019
For the year ended
March 31, 2018
(a) Sale of various Merchandise 34637.97 100633.28
(b) Other Operating Income (Refer Note 21(i) below) 1190.95 27.22
35828.92 100660.50
Note 21(i)
(₹ In Lakh)
For the year ended
March 31, 2019
For the year ended
March 31, 2018
-39.68 -11.72
13.50 0.00
14.35 23.99
3.22 11.39
-0.01 0.06
102.09 2.47
419.18 1.03
MEIS License Sale (Duty Credit Script) 31.30 0.00
Business Development Services 600.58 0.00
12.68 0.00
Transit Insurance 33.74 0.00
1190.95 27.22
Note 22 Other Income
(₹ In Lakh)
For the year ended
March 31, 2019
For the year ended
March 31, 2018
21.76 6.25
0.00 2192.25
114.27 27.27
Rent Income 0.00 6.91
Foregin Exchnage Gain/(Loss) 123.32 0.00
Other Income 33.31 203.35
292.66 2436.03
Note 23 Purchase of Merchandise
(₹ In Lakh)
For the year ended
March 31, 2019
For the year ended
March 31, 2018
11461.24 98284.82
11461.24 98284.82
Particulars
Purchase of various Merchandise
Total
Other Operating income comprises:
Other Income
Other Sevices
Total
Claim from/to Suppliers/Customers (Net)
Rate Differences/Discount/Interest on Delay Payment
Recovery from Customers towards various Charges
Round off
Duty Drawback Income
Franchise Fees
Particulars
Total
Particulars
Particulars
Interest on FDRs
Net Gain/(Loss) on Sale of Fixed Assets & Investments
Total
Dividend from WOS
99
Note 24 Purchase of MerchandiseCost of Material Consumed
(₹ In Lakh)
For the year ended
March 31, 2019
For the year ended
March 31, 2018
20918.92 0.00
20918.92 0.00
(₹ In Lakh)
For the year ended
March 31, 2019
For the year ended
March 31, 2018
Stock in Trade/ Finished Goods 4584.54 429.75
Cost of under production film 2178.63 141.33
6763.17 571.08
773.71 456.75
Cost of under production film 0.00 0.00
773.71 456.75
-5989.46 -114.33
Note 26 Film Production Expenses
(₹ In Lakh)
For the year ended
March 31, 2019
For the year ended
March 31, 2018
172.12 141.33
172.12 141.33
Note 27 Employee Benefit Expenses
. (₹ In Lakh)
For the year ended
March 31, 2019
For the year ended
March 31, 2018
812.99 122.73
38.21 34.89
26.56 7.01
1.60 1.55
3.73 2.48
14.14 2.20
897.23 170.86
Particulars
Cost incurred during the year
Total
Inventories at the beginning of the year:
Net (Increase) / Decrease
Particulars
Salaries and Bonus
Managerial Remuneration
Contributions to Provident Fund
ESIC Expenses
Gratuity
Staff Welfare Expenses
Total
Particulars
Inventories at the end of the year:
Total
Total
Stock-in-Trade
Note 25 Changes in Inventories
Particulars
Cost of material consumed
Total
100
Note 28 Finance Costs
(₹ In Lakh)
For the year ended
March 31, 2019
For the year ended
March 31, 2018
550.46 450.80
4.07 11.23
53.83 43.54
608.37 505.57
Note 28(i) Other Borrowing Cost
(₹ In Lakh)
For the year ended
March 31, 2019
For the year ended
March 31, 2018
41.03 0.46
Loan Processing Fees 0.62 17.74
1.49 9.38
10.69 15.96
Foreign Exchange Loss 0.00 0.00
53.83 43.54
Note 29 Other Expenses
(₹ In Lakh)
For the year ended
March 31, 2019
For the year ended
March 31, 2018
Factory, Godown and Other Direct Expenses 1855.28 0.00
Export Expenses 576.26 0.00
Bad Debts 489.40 0.00
20.21 3.26
5.80 5.00
2324.86 14.90
0.00 5.75
3.69 4.28
27.08 3.10
95.76 37.13
0.00 3.15
Professional & Consultancy Fees 43.53 153.34
Advertisement Expenses 73.75 62.82
Travelling Expenses 9.41 39.35
Other Expenses 358.34 212.45
5883.37 544.53
Total
PARTICULARS
Particulars
(a) Interest Expense on:
(i) Borrowings
(ii) Other Interest
(b) Other Borrowing Costs (Refer note 27(i) below)
Repairs & Maintenance
Rent Expenses
Total
Municipal Expenses
Loan franking Expense
Other Finance Charges
Total
Particulars
Insurance Expenses
Audit Fees (Statutory Audit & Tax Audit)
Electricity Expenses
Foreign Exchange Losses (To the extent not considered as Finance Cost)
Vehicle Repair & Fuel Expenses
Bank Charges
101
Note 30 Related Party Disclosures
(i) As per Ind AS 24, the disclosures of transactions with the related parties are given below:
List of related parties where control exists and relationships:
Sr. no.
Name of Related Party Relationship
1 Kushal Impex Pte. Ltd., Singapore Wholly Owned Subsidiary 2 Kashish Worldwide F.Z.E., U.A.E. Wholly Owned Subsidiary 3 Stallion Worldwide (Labuan) Private Limited, Malaysia Wholly Owned Subsidiary 4 Kushal Integrated Industrial Park LLP, India Wholly Owned LLP 5 Sandeep Agrawal Director 6 Manoj Agrawal Director 7 Kushal Agrawal Director 8 Komal Agrawal Relative of Director 9 CA Vimal Shah Key Managerial Personnel (KMP) 10 CS Khushboo Surana Key Managerial Personnel (KMP) 11 CS Shivangi shah Key Managerial Personnel (KMP) 12 Jitendra yadav Key Managerial Personnel (KMP)
Transactions during the year with related parties:
(Amount in Lakh) Sr. No.
Name of Related Party Nature of Transaction 2018-19 2017-18
1 Ashapura Paper Mills Private Limited-* Purchase of Goods Sale of Goods
NIL 1,241.98 919.89
2 Riddhi Siddhi Recyclers Private Limited-* Purchase of Goods Sale of Goods
NIL 538.22 1,793.73
3 Kushal Wealth Creators Private Limited-* Purchase of Goods Sale of Goods
NIL 1,244.11 1,221.98
4 Kushal Impex Pte. Ltd., Singapore Investments 59.11 59.11 5 Kashish Worldwide F.Z.E., U.A.E. Investments 33.72 33.72 6 Kushal Integrated Industrial Park LLP, India Investments 5.00 5.00 7 Kashish Worldwide F.Z.E., U.A.E. Dividend Received NIL 2,192.25 8 Kushal Impex Pte. Ltd., Singapore Corporate Guarantee NIL 564.35 9 Kushal Impex Pte. Ltd., Singapore Expenses recoverable on
reimbursement basis 0.08 0.49
10 Kashish Worldwide F.Z.E., U.A.E. Expenses recoverable on reimbursement basis
0.55 NIL
11 Sandeep Agrawal- Managing Director Managerial Remuneration 20.67 18.47 12 Manoj Agrawal- Executive Director Managerial Remuneration 11.54 10.43 13 Kushal Agrawal- Executive Director Managerial Remuneration 6.00 6.00 14 Komal Agrawal- Relative of director Salary 4.80 NIL 15 CA Vimal Shah-** Salary 6.82 7.44 16 Jitendra Yadav-*** Salary 0.49 NIL 17 CS Khushboo Surana-**** Salary 9.70 3.46 18 CS Mittali Christachary Salary NIL 4.47 19 CS Shivangi Shah-***** Salary 0.33 NIL
* The Hon'ble National Company Law Tribunal, Ahmedabad Bench {"NCLT") vide its order dated Tuesday, February5, 2019 has approved the Scheme of Amalgamation of Ashapura Paper Mills Private Limited, Kushal Wealth
102
Creators Private Limited, Riddhi Siddhi Recyclers Private Limited, Kushal Infra Structure Private Limited with Kushal Limited ("the Company") and their respective shareholders and creditors with Appointed date for the scheme as Friday, March 31, 2017. ** CA Vimal Shah resigned as Chief Financial Officer of the Company w.e.f February 28, 2019. *** Jitendra Yadav appointed as Chief Financial Officer of the Company w.e.f March 01, 2019 **** CS Khushboo Surana resigned as Company Secretary and Compliance Officer of the Company w.e.f February 28, 2019. ***** CS Shivangi Shah appointed as Company Secretary and Compliance officer of the Company w.e.f March 01, 2019.
Note 31 Corporate Social Responsibility (CSR)
(a) CSR amount required to be spent as per Section 135 of the Companies Act, 2013 read with Schedule VII thereofby the Company during the year is 22.40 Lakh.
(b) Expenditure incurred and spent related to Corporate Social Responsibility is Rs. 22.63 Lakh.
Note: 32
Income Tax Department and Goods and Service Tax Department carried out search at Registered Office of the company. Investigation Proceedings for the both the departments are not yet concluded.
Note 33 Amalgamation/Acquisition with Kushal Limited The amalgamation would inter-alia achieve the following objectives as stated in the Scheme of Amalgamation:
(a) The amalgamation will consolidate the business activity and will lead to greater efficiency in the overallbusiness and achieve integration of the business operations as well as synergy benefits through combinedoperations of both the entities.
(b) As the products of both the Companies are similar in nature, the contemplated amalgamation will lead toeconomies of scale which in turn will promote cost efficiency by means of reduction in administrativeoverheads, reduction in multiplicity of legal and regulatory compliances, and will help running the businessmore effectively and economically resulting better utilization of resources.
(c) This amalgamation will create enhanced value for shareholders and allow a focused strategy in operations,which would be in the best interest of all its shareholders, creditors and all persons connected with theCompanies.
Pursuant to the scheme of amalgamation under section 230 to 232 of the Companies Act, 2013, approved by Hon'ble National Company Law Tribunal, Ahmedabad Bench (NCLT) on February 5, 2019 between Kushal Limited (the Transferee Company) and Ashapura Paper Mills Private Limited, Kushal Wealth Creators Private Limited, Riddhi Siddhi Recyclers Private Limited, Kushal Infra Structure Private Limited (the Transferor Company).These four companies were merged with Kushal Limited from the appointed date i.e. March 31, 2017.
Pursuant to the above, Transferor Company stands amalgamated with Kushal Limited of accounting as per the Indian Accounting Standard 103 "Business Combination”, issued by the Institute of Chartered Accountants of India, on the basis of the scheme approved by the Hon'ble National Company Law Tribunal, Ahmedabad Bench.
The company has acquired Rainbow Papers Limited under IBC, 2016. The consideration (pending to be passed on) as well as acquired assets have been measured at fair market value as per IND AS 103 Business Combinations.
PURCHASE CONSIDERATION
Pursuant to the approved scheme, in consideration for the transfer and vesting of the entire undertaking of the Transferor Company with the Transferee Company, the Transferee Company has issued fully paid up equity shares to the shareholders of the Transferor Company as under:
103
‘’149 Equity shares of Kushal Limited of Rs.2/- each for every 100 Equity Shares of Face Value Rs. 10/- each held by members of Ashapura Paper Mills Private Limited; 185 Equity Shares of Kushal Limited of Rs.2/- each for every 100 Equity Shares of Face Value Rs 10/- each held by members of Kushal Wealth Creators Private Limited; 130 Equity Shares of Kushal Limited of Rs.2/- each for every 100 Equity shares of Face Value Rs. 10/- each held by members of Riddhi Siddhi Recyclers Private Limited; 395 Equity shares of Kushal Limited of Rs.2/- each for every 100 Equity shares of Face Value Rs. 10/- each held by members of Kushal Infrastructure Private Limited.’’
In consideration of amalgamation, the Transferee Company has issued 1,02,58,850 Equity Shares of Face Value of 2/- each as fully paid up to the shareholders of the Transferor Company.
‘’Pursuant to Acquisition Of Rainbow Papers Limited under Section 30 of the Insolvency and Bankruptcy Code, 2016 (as amended from time to time), as per approved resolution plan by Hon'ble National Company Law Tribunal, Ahmedabad Bench {"NCLT"), Company has to issue Equity Shares (incl. Securities Premium) to the tune of Rs. 20000 Lakhs; Non-Convertible Debentures of Rs. 7500 Lakhs to the secured lenders of Rainbow Papers Ltd as a part of consideration. Pending the issuance of the said shares and debentures the same has been reported under Share Capital/Securities Premium Suspense Account and Debenture Suspense Account. ‘’
Pursuant to amalgamation, Transferor company transfer all assets and liabilities to Transferee company and Purchase consideration are excess over Net Assets and in result goodwill arose which has been reported in the Financial Statement on Assets side under ‘’ Intangible Assets’’. In consideration of Acquisitions of Rainbow paper Limited under (IBC), Where Net Assets are excess over Purchase Consideration and in result Capital Reserve arised which has been reported in the financials statement on Liabilities side under ‘’Reserves & Surplus ‘’sub head Capital reserves as per IND AS 103 ‘’Business Combination’
For S. V. Sojitra & Co. For and on behalf of the Board of Chartered Accountant KUSHAL LIMITED
Sanjay V. Sojitra KUSHAL AGRAWAL Manoj Agrawal Proprietor Director Director Membership No. 135239 (DIN: 03043294) (DIN:00225494) FRN NO. 139013W
Place : Ahmedabad CS Shivangi Shah Jitendra Yadav Date : May 30, 2019 Company Secretary Chief Financial Officer
104
INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF, KUSHAL LIMITED, AHMEDABAD
Report on the Consolidated Ind AS Financial Statements
We have audited the accompanying Consolidated Ind AS financial statements of KUSHAL LIMITED (‘hereinafter referred to as the Holding Company”) and its subsidiaries (the Holding Company and its subsidiaries together referred to as “the Group”) which comprise the Consolidated Balance Sheet as at March 31, 2019, the Consolidated Statement of Profit and Loss (including Other Comprehensive Income, if any), the Consolidated Cash flow statement and the Consolidated Statement of Changes in Equity for the year then ended and a summary of significant accounting policies and other explanatory information (herein after referred to as “Consolidated Ind AS financial statements”)
Management’s Responsibility for the Consolidated Ind AS Financial Statements
The Holding Company’s Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 (“the Act”) with respect to the preparation and presentation of these Consolidated Ind AS financial statements that give a true and fair view of the consolidated financial position, consolidated financial performance including Other comprehensive income, consolidated cash flows and changes in equity of the Group in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards (IND AS) specified under Section 133 of the Act, read with relevant rules issues thereunder.
The respective Board of Directors of the companies included in the Group are responsible for maintenance of adequate accounting records in accordance with the provisions of the Act of the concerned jurisdiction for safeguarding the assets of the Group and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the Consolidated Ind AS financial statements that give true and fair view and are free from material misstatement, whether due to fraud or error.
Auditor’s Responsibility
Our responsibility is to express an opinion on these Consolidated Ind AS financial statements based on our audit.
We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made there under.
We conducted our audit of the Consolidated Ind AS financial statements in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the Consolidated Ind AS financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the Consolidated Ind AS financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the Consolidated Ind AS financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Holding Company’s preparation of the Consolidated Ind AS financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Holding Company’s Directors, as well as evaluating the overall presentation of the Consolidated Ind AS financial statements.
We believe that the audit evidence obtained by us and by the other auditors in terms of their reports, is sufficient and appropriate to provide a basis for our audit opinion on the Consolidated Ind AS financial
105
statements. Opinion In our opinion and to the best of our information and according to the explanations given to us, and based on the consideration of reports of other auditors, the aforesaid Consolidated Ind AS financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India including Ind AS, of the consolidated state of affairs of the Group as at 31st March, 2019, and its consolidated profit , its consolidated cash flows and the consolidated changes in equity for the year ended on that date. Other Matters We did not audit the financial statements and other financial information, in respect of 3 Wholly Owned Subsidiaries and 1 Wholly Owned Limited Liability Partnership whose financial statements reflect total assets of 29692.78 Lakh as at 31st March, 2019 and total revenue of 53840.80 Lakh for the year ended 31st March, 2019, included in the Consolidated Ind AS financial statements. The Financial statements in respect of 2 Wholly Owned Subsidiaries (Kushal Impex Pte. Ltd, Singapore and Kashish Worldwide F.Z.E., U.A.E.) have been audited by other eligible auditors of the respective geographical jurisdiction and our opinion on the Consolidated Ind AS financial statements, to the extent relates to Wholly Owned Subsidiaries, based solely on the basis of reports of such other eligible auditors of the respective jurisdiction. Stallion Worldwide (Labuan) Private Limited, Wholly Owned Subsidiary incorporated in Malaysia is yet to commence its business. Kushal Integrated Industrial Park LLP, Wholly Owned LLP incorporated in India, which is not required to get it books of accounts audited as per the relevant statute, our opinion depends on the management certified financials. Report on Other Legal and Regulatory Requirements
1. As required by Section 143(3) of the Act, we report that:
(a) We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit of the aforesaid consolidated Ind AS financial statements.
(b) In our opinion, proper books of account as required by law relating to the preparation of aforesaid consolidated Ind AS financial statements have been kept so far as it appears from our examination of those books and the reports of the other auditors.
(c) The Consolidated Balance Sheet, the Consolidated Statement of Profit and Loss including Other Comprehensive Income, the Consolidated Cash Flow Statement and Consolidated Statement of Changes in Equity dealt with by this Report are in agreement with the books of account maintained for the purpose of preparation of the consolidated Ind AS financial statements.
(d) In our opinion, the aforesaid Consolidated Ind AS financial statements comply with the Indian Accounting Standards prescribed under Section 133 of the Act, read with relevant rules issued thereunder.
(e) On the basis of the written representations received from the directors of the Holding Company as on 31st March, 2019 taken on record by the Board of Directors of the Holding Company, none of the directors is disqualified as on March 31, 2019 from being appointed as a director in terms of Section 164 (2) of the Act.
(f) With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate report in “Annexure A” to this report;
(g) With respect to the other matters to be included in the Auditor’s Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, as amended, in our opinion and to the best of our information and according to the explanations given to us:
106
i. The Company has disclosed the impact of pending litigation on its financial position in its Consolidated Ind AS financial statements.
ii. The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses.
iii. During the year, there has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company.
For S. V. Sojitra & Co. Chartered Accountant (Sanjay V. Sojitra) Proprietor Membership No. 135239 FRN NO. 139013W Place : Ahmedabad Date : May 30, 2019
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ANNEXURE A
TO THE INDEPENDENT AUDITOR’S REPORT ON THE CONSOLIDATED IND AS FINANCIAL STATEMENTS OF KUSHAL LIMITED
(Referred to paragraph 1(f) under “Report on Other Legal and Regulatory Requirements’ of our report of even date) Report on the Internal Financial Controls over Financial Reporting under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 (“the Act”) We have audited the internal financial controls over financial reporting of KUSHAL LIMITED (“hereafter referred to as the Holding Company”) and its subsidiaries (the Holding Company and subsidiaries together referred to as “the Group”) as of 31st March 2019 in conjunction with our audit of the Consolidated Ind AS financial statements of the Company for the year ended on that date. Management’s Responsibility for Internal Financial Controls The respective Board of Directors of the Group is responsible for establishing and maintaining internal financial controls based on the internal financial controls over financial reporting criteria established by these entities considering the essential components of internal financial controls stated in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting (“the Guidance Note”) issued by the Institute of Chartered Accountants of India (‘ICAI’)”. These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to company’s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, 2013. Auditors’ Responsibility Our responsibility is to express an opinion on the Company's internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls over Financial Reporting (the “Guidance Note”) and the Standards on Auditing as specified under section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls, both applicable to an audit of Internal Financial Controls and, both issued by the Institute of Chartered Accountants of India. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects. Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal financial controls based on the assessed risk. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the Consolidated Ind AS financial statements, whether due to fraud or error. We believe that the audit evidence obtained by us and by the other auditors in terms of their reports, is sufficient and appropriate to provide a basis for our audit opinion on the Holding Company and its subsidiaries, internal financial controls over financial reporting. Meaning of Internal Financial Controls over Financial Reporting A company's internal financial controls over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company's internal financial controls over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with
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generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorised acquisition, use, or disposition of the company's assets that could have a material effect on the financial statements.
Inherent Limitations of Internal Financial Controls over Financial Reporting
Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial controls over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Opinion
In our opinion, to the best of our information and according to the explanations given to us and based on the consideration of the reports of the other auditors, the Group has, in all material respects, an adequate internal financial controls over financial reporting and such internal financial controls over financial reporting were operating effectively as at 31st March 2019, based on the internal financial controls over financial reporting criteria established by the respective companies considering the essential components of internal financial controls stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India and as per the laws of the country where the concerned company is incorporated.
For S. V. Sojitra & Co. Chartered Accountant
(Sanjay V. Sojitra) Proprietor Membership No. 135239 FRN NO. 139013W
Place : Ahmedabad Date : May 30, 2019
109
(₹ In Lakh)
Notes As at March 31, 2019 As at March 31, 2018
A ASSETS
1 Non-Current Assets
(a) Property, Plant & Equipment 3 1,50,608.11 1,417.33
(b) Goodwill 12,563.07 0.00
(c) Financial Assets
(i) Investments 4 78.73 259.68
(ii) Loans & Advances 5 524.51 3,428.75
(d) Other Non-Current Assets 6 69.24 81.60
Total Non-Current Assets (1) 1,63,843.65 5,187.36
2 Current Assets
(a) Inventories 7 11,714.95 588.82
(b) Financial Assets
(i) Trade Receivables 8 38,169.13 74,757.82
(ii) Cash and Cash Equivalents 9 506.72 132.85
(iii) Loans & Advances 10 3,862.60 8,830.74
(c) Other Current Assets 11 1.45 932.41
Total Current Assets (2) 54,254.84 85,242.64
TOTAL ASSETS (1+2) 2,18,098.50 90,430.00
B EQUITY AND LIABILITIES
3 Equity
(a) Equity Share Capital 12 6,732.81 4,745.33
(b) Other Equity 13 1,53,872.36 28,902.10
Total Equity (3) 1,60,605.18 33,647.43
4 Liabilities
Non-Current Liabilities
(a) Provisions 14 26.20 22.47
(b) Deferred Tax Liabilities (Net) 15 847.13 122.01
(c ) Borrowings 16 9,374.72 1,864.78
(d) Other Long Term Liabilities 15,420.64 0.00
Total Non-Current Liabilities (4) 25,668.68 2,009.26
5 Current Liabilities
(a) Financial Liabilities
(i) Borrowings 17 1,866.91 -
(ii) Trade Payable 18 13,091.38 52,986.23
(b) 19 16,415.86 908.67
(c) 20 450.49 878.41
Total Current Liabilities (5) 31,824.65 54,773.31
TOTAL EQUITY AND LIABILITIES (3+4+5) 2,18,098.50 90,430.00
1 to 33
For, S. V. Sojitra & Co.Chartered Accountants
MANOJ AGRAWAL KUSHAL AGRAWAL
Membership No.: 135239 DIRECTOR DIRECTOR
(DIN:00225494) (DIN: 03043294)
Place: Ahmedabad CS SHIVANGI SHAH JITENDRA YADAVDate: May 30, 2019 Company Secretary Chief Financial Officer
Sanjay V. SojitraProprietor
FRN No.: 139013W
KUSHAL LIMITED
CONSOLIDATED BALANCE SHEET AS AT MARCH 31, 2019
Particulars
Other Current Liabilities
Current Tax Liabilities
For and on behalf of the board of
Significant Accounting Policies & Notes to the Financials Statements
110
(₹ In Lakh except per share data)
1 Revenue from Operations 21 89,597.86 2,33,541.14
2 Other Income 22 364.52 251.91
3 Total Revenue (1+2) 89,962.39 2,33,793.05
4 Expenses
(a) Purchases of Merchandise 23 57,459.93 2,20,268.93
(b) Changes in Inventories 24 -5,989.46 (132.07)
(c) Cost of Material Consumed 25 20,918.92 0.00
(d) Film Production Expenses 26 172.12 141.33
(e) Employee Benefit Expenses 27 933.38 246.46
(f) Finance Costs 28 634.72 523.02
(g) Depreciation and Amortisation Expenses 3 746.53 57.83
(h) Other Expenses 29 9,865.71 912.57
Total Expenses 84,741.83 2,22,018.07
5 Profit / (Loss) Before Tax (3 - 4) 5,220.56 11,774.98
6 Tax Expense:
(a) Current Tax Expense for Current Year (Provisions) 450.49 878.22
(b) Less: MAT Credit (where applicable) 0.11 -
(c) Current tax Expense relating to Prior Years -383.32 -98.99
(d) Net Current Tax Expense 67.07 779.23
(e) Deferred Tax Provision 37.80 29.98
Total Tax Expenses 104.87 809.21
7 Net Profit / (Loss) for the period (5-6) 5,115.69 10,965.77
8 Other Comprehensive Income (OCI)
(i) Items that will not be reclassified to profit or loss 0.00 0.00
(iI) Income Tax relating to items that will not be reclassified to profit or loss 0.00 0.00
(iii) Items that will be reclassified to profit or loss 0.00 0.00
(iv) Income Tax relating to items that will be reclassified to profit or loss 0.00 0.00
Other Comprehensive Income 0.00 0.00
9 Total Comprehensive Income (7+8) 5,115.69 10,965.77
10 Earnings Per Share (Face Value of Rs.2/- each) (Not Annualised)
(a) Basic 2.07 4.62
(b) Diluted 1.52 4.62
11 Paid Up Equity Share Capital 6,732.81 4,745.33
12 Other Equity excluding Revaluation Reserves 1,53,872.36 28,902.10
Significant Accounting Policies & Notes to the Financials Statements 1 to 33
For. S. V. Sojitra & Co.
Chartered Accountants
MANOJ AGRAWAL KUSHAL AGRAWAL
Membership No.: 135239 DIRECTOR DIRECTOR
(DIN:00225494) (DIN: 03043294)
Place: Ahmedabad CS SHIVANGI SHAH JITENDRA YADAVDate: May 30, 2019 Company Secretary Chief Financial Officer
FRN No.: 139013W
For the year ended
March 31, 2019
For the year ended
March 31, 2018
Statement of Consolidated Profit and Loss for the Year ended March 31, 2019
Particulars Notes
For and on behalf of the board of
KUSHAL LIMITED
Sanjay V. Sojitra
Proprietor
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A Equity Share Capital(₹ in Lakh)
Balance as on 1st April, 2017
Changes in
Equity Share
Capital during
FY 2017-18
Balance as on
31st March,
2018
Changes in
Equity Share
Capital during
FY 2018-19*
Balance as on
31st March,
2019
4745.33 NIL 4745.33 205.18 4950.51
*Due to Amalgamation, Number of Equity shares are issued to transferor Company's Shareholders.
B Other Equity(₹ in Lakh)
ParticularsSecurities
Premium
Retained
Earnings
General
Reserve
Foreign
Currency
Translation
Reserve
Total
As on 31st March, 2018
Balance as on 1st April, 2017 - 20,581.91 1.08 (116.67) 20,466.32
Total Comprehensive Income for the year NIL 10,965.77 NIL NIL 10,965.77
Less: Utilised during the Year ( Isuue Of Bonus
Share - Capitalisation of Reserves ) NIL NIL NIL NIL NIL
Less: Interim Dividend During the Year NIL (2,609.93) NIL NIL (2,609.93)
Addition/ (reduction) during the Year NIL NIL NIL 79.94 79.94
Balance As on 31st March, 2018 NIL 28,937.75 1.08 (36.73) 28,902.10
(₹ in Lakh)
ParticularsSecurities
Premium
Retained
Earnings
General
Reserve
Foreign
Currency
Translation
Reserve
Capital
ReserveTotal
As on 31st March, 2019
Balance as on 1st April, 2018 NIL 28,937.75 1.08 (36.73) NIL 28,902.10
Total Comprehensive Income for the year NIL 882.19 NIL NIL NIL 882.19
Less: Interim Dividend During the Year NIL (47.45) NIL NIL NIL (47.45)
Addition/ (reduction) during the Year 43,675.26 NIL NIL 1,457.42 79,002.85 1,24,135.53
Balance As on 31st March, 2019 43,675.26 29,772.49 1.08 1,420.69 79,002.85 1,53,872.36
For S. V. Sojitra & Co
Chartered Accountant
(Sanjay V. Sojitra) Kushal Agrawal Manoj AgrawalProprietor Director Director
Membership No.135239 (DIN: 03043294) (DIN:00225494)
FRN No. 139013W
Place: Ahmedabad CS Shivangi Shah Jitendra YadavDate: May 30, 2019 Company Secretary Chief Financial Officer
Consolidated Statement of Change in Equity for the Year Ended March 31, 2019
For and on behalf of the Board of KUSHAL LIMITED
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A . Cash Flow from Operating ActivitiesNet Profit Before Tax as per Statement of Profit and Loss 5,220.56 11,774.98 Adjusted for:Depreciation and Amortisation Expenses 746.53 57.83
Profit/ Loss on sale of Fixed Assets (148.46) (27.27)
Gratuity 3.73 2.48
Foreign Exchange Fluctuations (128.63) 17.10
Interest Expenses 634.72 523.02
Interest Income (21.76) (6.25)
Preliminery Expense 12.36 -
Rent Income - (6.91)
Other Non Cash Income/Expense - 73.37
Operating Profit before Working Capital Changes 6,319.04 12,408.34 Adjusted For:Trade & Other Receivables 2,570.19 4,230.30
Inventories (11,126.13) 946.99
Trade & Other Payables (24,537.48) (12,426.85)
Cash Generated From Operations (26,774.39) 5,158.79 Direct Tax (paid)/ Refund (67.07) (779.23)
Net Cash Flow from/ (Used in) Operating Activities A (26,841.46) 4,379.56
B. Cash Flow from Investing ActivitiesPurchase of Fixed Assets (67.01) (13.70)
Sale of Fixed Assets 55.21 134.00
Investment 180.95 NIL
Rent Income - 6.91
Interest Income 21.76 6.25
Other Non Current Assets 2,904.20 (3,283.41)
Net Cash Flow from/ (Used in) Investing Activities B 3,095.11 (3,149.95)
C. Cash Flow from Financing ActivitiesProceeds From Borrowings/ (Repayment of Borrowings) 24,802.39 1,301.42
Dividend Paid (47.45) (2,609.93)
Interest Expenses (634.72) (523.02)
Net Cash Flow from/ (Used in) Financing Activities C 24,120.22 (1,831.52) Net Increase/ (Decrease) in Cash & Cash Equivalents D (A+B+C) 373.87 (601.91) Cash & Cash Equivalents at the beginning of the Year E 132.85 734.76 Cash & Cash Equivalents as at the end of the Year F (D+E) 506.72 132.85
For, S. V. Sojitra & Co.
Sanjay V. Sojitra
Proprietor MANOJ AGRAWAL KUSHAL AGRAWALMembership No.: 135239 DIRECTOR DIRECTORFRN No.: 139013W (DIN:00225494) (DIN: 03043294)
Place: Ahmedabad CS SHIVANGI SHAH JITENDRA YADAVDate: May 30, 2019 Company Secretary Chief Financial Officer
For and on behalf of the board ofKUSHAL LIMITED
Consolidated Cash Flow Statement for the year ended March 31, 2019
ParticularsFor the year ended 31st
March, 2019
For the year ended 31st
March, 2018
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NOTES FORMING PART OF THE CONSOLIDATED IND AS FINANCIAL STATEMENTS FOR THE YEAR ENDED 31ST MARCH, 2019
1. Corporate Information
Kushal Limited (KL) is a Public Company listed on BSE platform, domiciled in India incorporated under Companies Act, 1956. The company along with its WOSs (Kushal Group) is engaged in the business of of Manufacturing of Paper and Paper Products, Trading and selling of various kinds of Merchandise.
The Hon'ble National Company Law Tribunal, Ahmedabad Bench {"NCLT") vide its order dated Tuesday, February 5, 2019 has approved the Scheme of Amalgamation of Ashapura Paper Mills Private Limited, Kushal Wealth Creators Private Limited, Riddhi Siddhi Recyclers Private Limited, Kushal Infra Structure Private Limited with Kushal Limited ("the Company") and their respective shareholders and creditors with Appointed date for the scheme as Friday, March 31, 2017.
The Hon'ble National Company Law Tribunal, Ahmedabad Bench {"NCLT") vide its order dated Wednesday, February 27, 2019 has approved Resolution plan (which inter alia includes Scheme of Amalgamation between Rainbow Papers limited and Kushal Limited and their respective Shareholders) submitted by Kushal Limited under Section 30 of the Insolvency and Bankruptcy Code, 2016 (as amended from time to time) in the matter of Rainbow papers Limited (in CIRP).
Accordingly books of the above Companies have been merged for preparing financial statements for the financial year 2018-19 but the same are strictly not comparable with those of previous year Figures.
The company has acquired Rainbow Papers Limited under IBC, 2016. The consideration (pending to be passed on) as well as acquired assets have been measured at fair market value as per IND AS 103 Business Combinations.
2. Summary of Significant Accounting Policies
A. Basis Of Preparation and Presentation
The financial statements have been prepared on the Historical Cost basis.
The financial statements of the Company have been prepared to comply with the Indian Accounting Standards (‘Ind AS’), including the rules notified under the relevant provisions of the Companies Act, 2013.
These financial statements have been prepared in accordance with the Indian Accounting Standards (hereinafter referred to as the ‘Ind AS’) as notified by the Ministry of Corporate Affairs pursuant to Section 133 of the Companies Act, 2013 (‘Act’) read with the Companies (Indian Accounting Standards) Rules, 2015 as amended and other relevant provisions of the Act.
The accounting policies are applied consistently to all the periods presented in the financial statements.
Company’s financial statements are presented in Indian Rupees (₹), which is also its functional currency.
Principles of Consolidation
The consolidated Ind AS financial statements relate to Kushal Limited (‘the Company’) and its subsidiary companies and Wholly Owned LLP. The Consolidated Ind AS financial statements have been prepared on the following basis:
(a) The financial statements of the Company and its subsidiaries and LLP are combined on a line by line basisby adding together like items of assets, liabilities, incomes, expenses and cash flows.
(b) Revenue items are consolidated at the average rate prevailing during the year. All assets and liabilities areconverted at rates prevailing at the end of the year. Any exchange difference arising on consolidation isrecognized in the Foreign Currency Translation Reserve.
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(c) Offset (eliminate) the carrying amount of the parent’s investment in each subsidiary/ LLP and the parent’sportion of equity/capital of each subsidiary/ LLP.
(d) In case of disposal of investment in subsidiary/LLP, if any, the difference between the proceeds from disposalof investment in subsidiaries/LLP and the carrying amount of its assets less liabilities as on the date of disposalis recognized in the Consolidated Statement of Profit and Loss being the profit or loss on disposal ofinvestment in subsidiary/ LLP.
B. Inventories
Inventories are measured at lower of cost and net realizable value after providing for obsolescence, if any. Cost of inventories comprises of cost of purchase, cost of conversion and other costs net of recoverable taxes incurred in bringing them to their respective present location and condition.
C. Property, Plant and Equipment
Property, plant and equipment are stated at cost, net of recoverable taxes, trade discount and rebates less accumulated depreciation and impairment losses, if any. Such cost includes purchase price, borrowing cost and any cost directly attributable to bringing the assets to its working condition for its intended use and adjustments arising from exchange rate variations attributable to the assets.
Subsequent costs are included in the asset’s carrying amount or recognized as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the entity and the cost can be measured reliably. Expenses incurred on asset, net of income earned during the development stage prior to its intended use, are considered as pre - operative expenses and disclosed under Capital Work - in - Progress.
Depreciation on property, plant and equipment is provided using straight line method.
The residual values, useful lives and method of depreciation of property, plant and equipment are reviewed at each financial year end and adjusted prospectively, if appropriate.
Gains or losses arising from derecognition of a property, plant and equipment are measured as the difference between the net disposal proceeds and the carrying amount of the asset and are recognized in the Statement of Profit and Loss when the asset is derecognized.
D. Leases
Leases are classified as finance leases whenever the terms of the lease, transfers substantially all the risks and rewards of ownership to the lessee. All other leases are classified as operating leases. Whether a lease is a finance lease or an operation lease depends upon the substance of transaction rather than the form.
E. Intangible assets
Intangible Assets are stated at cost of acquisition net of recoverable taxes, trade discount and rebates less accumulated amortization/depletion and impairment loss, if any. Such cost includes purchase price, borrowing costs, and any cost directly attributable to bringing the asset to its working condition for the intended use, net off charges on foreign exchange contracts and adjustments arising from exchange rate variations attributable to the intangible assets.
Subsequent costs are included in the asset’s carrying amount or recognized as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the entity and the cost can be measured reliably.
Gains or losses arising from derecognition of an intangible asset are measured as the difference between the net disposal proceeds and the carrying amount of the asset and are recognised in the Statement of Profit and Loss when the asset is derecognised.
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F. Borrowing Costs
Borrowing costs include exchange differences arising from foreign currency borrowings to the extent they are regarded as an adjustment to the interest cost.
Borrowing costs that are directly attributable to the acquisition or construction of qualifying assets are capitalized as part of the cost of such assets. A qualifying asset is one that necessarily takes substantial period of time to get ready for its intended use.
Interest income earned on the temporary investment of specific borrowings pending their expenditure on qualifying assets is deducted from the borrowing costs eligible for capitalization.
All other borrowing costs are charged to the Statement of Profit and Loss for the period for which they are incurred.
G. Impairment of Assets
The Company assesses at each reporting date as to whether there is any indication that any property, plant and equipment and intangible assets or group of assets, called cash generating units (CGU) may be impaired. If any such indication exists the recoverable amount of an asset or CGU is estimated to determine the extent of impairment, if any. When it is not possible to estimate the recoverable amount of an individual asset, the Company estimates the recoverable amount of the CGU to which the asset belongs.
An impairment loss is recognized in the Statement of Profit and Loss to the extent, asset’s carrying amount exceeds its recoverable amount. The recoverable amount is higher of an asset’s fair value less cost of disposal and value in use. Value in use is based on the estimated future cash flows, discounted to their present value using pre-tax discount rate that reflects current market assessments of the time value of money and risk specific to the assets.
The impairment loss recognized in prior accounting period is reversed if there has been a change in the estimate of recoverable amount.
H. Provisions, Contingent Liabilities and Contingent Assets
Provisions are recognized when the Company has a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. Provisions are reviewed at each balance sheet date. If the outflow is no longer probable, provision is reversed to Income.
If the effect of the time value of money is material, provisions are discounted using a current pre-tax rate that reflects, when appropriate, the risks specific to the liability. When discounting is used, the increase in the provision due to the passage of time is recognised as a finance cost.
Contingent Liability is not recognized but is disclosed, unless the possibility of outflow of economic resources is remote.
Contingent Assets are not recognized but disclosed where an inflow of benefits is probable.
I. Employee Benefits
Short Term Employee Benefits
The undiscounted amount of short term employee benefits expected to be paid in exchange for the services rendered by employees are recognised as an expense during the period when the employees render the services.
Post-Employment Benefits
• Defined Contribution Plans
A defined contribution plan is a post-employment benefit plan under which the Company pays specified contributions to a separate entity. The Company makes specified monthly contributions towards Provident Fund and ESIC. The
116
Company’s contribution is recognized as an expense in the Statement of Profit and Loss during the period in which the employee renders the related service.
• Defined Benefit Plans
The Company pays gratuity to the employees whoever has completed five years of service with the Company at the time of resignation/superannuation. Provision for Gratuity is made @15 days salary for every completed year of service as per the Payment of Gratuity Act 1972. Provision for gratuity is made without the actuarial valuation.
J. Income Taxes
The tax expense for the period comprises current and deferred tax. Tax is recognized in Statement of Profit and Loss, except to the extent that it relates to items recognized in the comprehensive income or in equity. In which case, the tax is also recognized in other comprehensive income or equity.
- Current tax
Current tax assets and liabilities are measured at the amount expected to be recovered from or paid to the taxation authorities, based on tax rates and laws that are enacted or substantively enacted at the Balance sheet date.
- Deferred tax
Deferred tax is recognized on temporary differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit.
Deferred tax liabilities and assets are measured at the tax rates that are expected to apply in the period in which the liability is settled or the asset realized, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period. The carrying amount of deferred tax liabilities and assets are reviewed at the end of each reporting period.
K. Foreign currencies transactions and translation
Transactions in foreign currencies are recorded at the exchange rate prevailing on the date of transaction (average rate is used when they are a reasonable approximate of actual).
Monetary assets and liabilities denominated in foreign currencies are translated at the functional currency closing rates of exchange at the reporting date.
Exchange differences arising on settlement or translation of monetary items are recognized in Statement of Profit and Loss except to the extent of exchange differences which are regarded as an adjustment to interest costs on foreign currency borrowings that are directly attributable to the acquisition or construction of qualifying assets, are capitalized as cost of assets.
Non-monetary items that are measured in terms of historical cost in a foreign currency are recorded using the exchange rates at the date of the transaction.
Non-monetary items carried at fair value in a foreign currency are translated using the exchange rates at the date when the fair value was measured.
L. Revenue Recognition
Sale of Goods
Revenue from sale of goods is recognised when
- the significant risks and rewards of ownership have been transferred to the buyer,- it is probable that the economic benefits associated with the transaction will flow.- the cost incurred or to be incurred in respect of the transaction can be measured reliably,
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- there is no continuing effective control or managerial involvement with the goods, and the amount of revenuecan be measured reliably.
Rendering of Services
Revenue from rendering of services is recognized when the outcome of a transaction can be measured reliably, revenue associated with the transaction shall be recognized with reference to the stage of completion of the transaction at the end of reporting period. When the outcome of the transaction involving rendering of services cannot be estimated reliably, revenue shall be recognized only to the extent of the expenses recognized that are recoverable.
Revenue from sale of goods is measured at the fair value of the consideration received or receivable, taking into account contractually defined terms of payment and excluding taxes or duties collected on behalf of the government.
Interest income
Interest income from a financial asset is recognized using effective interest rate method.
Dividend Income
Revenue is recognized when the Company’s right to receive the dividend has been established.
M. Financial Instruments
Financial Assets
All financial assets and liabilities are initially recognized at fair value. Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities, which are not at fair value through profit or loss, are adjusted to the fair value on initial recognition. Purchase and sale of financial assets are recognized using trade date accounting.
Investment in subsidiaries
The Company has accounted for its investments in subsidiaries at cost.
Financial liabilities
All financial liabilities are recognized at fair value and in case of loans, net of directly attributable cost. Fees of recurring nature are directly recognized in the Statement of Profit and Loss as finance cost.
N. Long Term Borrowings
Term and conditions
Long term loan taken from IVL Finance Limited under ILAP of ₹ 11.77 Cr. @ 11% P.a.
The Loan is Repayable on monthly 84 installments and the interest payable on monthly basis.
The Loan Matures in February 2025. The loan is secured by exclusive charge on Plot No.115 A,B,Tps- No.20, Kushal House, Opp. Regenta Hotel, Off. C.G Road, Navrangpura, Ahmedabad, Gujarat-380009.
O. Earnings Per Share
Basic EPS is calculated by dividing profit or loss attributable to ordinary equity shareholders by the weighted average number of ordinary shares outstanding during the reporting period.
Dilutive EPS is calculated by adjusting the earnings and number of shares for the effects of dilutive options and other dilutive potential ordinary shares.
118
As per Indian AS 33-Earning Per Share, Company has calculated Basic Earnings Per Share on the basis of number of equity shares (incl. equity shares issued pursuant to amalgamation referred to above) and Diluted Earnings Per Share on the basis of Shares and Share Warrants to be issued pursuant to the Resolution Plan approved by NCLT, Ahmedabad referred to above.
P. Cash Flows
Cash and cash equivalent comprise cash on hand and demand deposits, together with short-term, highly liquid investments that are readily convertible to a known amount of cash, and that are subject to an insignificant risk of changes. Investment having maturity of three months or less is classified as cash equivalents.
Cash flows are analysed using Indirect method into following three activities: a. Operating activitiesb. Investing activitiesc. Financing activities
Q. Events after the reporting period
Events after the reporting period are those events, favorable and unfavorable, that occur between the end of the reporting period and the date when the financial statements are approved by the board of directors.
Events that provide evidence of conditions that existed at the end of the reporting period are classified as adjusting events after the reporting period.
Events that are indicative of conditions that arose after the reporting period are classified as non-adjusting events.
R. Operating Segments
Operating Segment is a component of an entity:
- That engages in business activities from which it may earn revenue and incur expenses- Whose operating results are reviewed regularly to make decisions about resources to be allocated to the
segment and assess its performance and- For which discrete financial information is available.
119
Segment-Wise Revenue Results And Capital Employed (₹ In Lakh)
Particulars Year Ended
31.03.2019 31.03.2018 Audited Audited
1 Segment Revenue a)Kushal Limited, India 36,121.59 1,00,904.28
b) Kushal Impex Pte Ltd., Singapore 46,243.18 68,096.99 c) Kashish Worldwide FZE, U.A.E. 7,597.62 64,796.64 Gross Revenue 89,962.39 2,33,797.92
Less: Inter Segment Transfer NIL NIL
Net Revenue 89,962.39 233,797.92 2 Segment Results
Profit/Loss Before Interest and Tax
a)Kushal Limited, Indiab) Kushal Impex Pte Ltd., Singaporec) Kashish Worldwide FZE, U.A.E.
2,059.44 63.54
3,732.30
1,820.37 554.23
9,923.99 Profit/Loss Before Interest and Tax 5,855.28 12,298.58 Less: Finance Expenses 634.72 523.21 Total Profit Before Tax 5,220.56 11,775.38 Less i) Current Tax 67.07 779.63 ii)Deferred Tax 37.80 29.98 Total Profit Before Tax 5,115.69 10,965.77
3 Segment Assets a)Kushal Limited, India 1,88,410.72 49,076.95
b) Kushal Impex Pte Ltd., Singapore 1,939.79 10,161.77
c) Kashish Worldwide FZE, U.A.E. 27,747.99 31,191.29 Total Segment Assets 2,18,098.50 90,430.00
4 Segment Liablities
a) Kushal Limited,India 56,792.44 39,309.72
b) Kushal Impex Pte Ltd., Singapore 597.38 8,860.20 c) Kashish Worldwide FZE, U.A.E. 103.51 8,612.64 Total Segment Liabilities 57,493.33 56,782.56
T. Previous year’s figure have been recast, regrouped and rearranged, wherever necessary to confirm tothis year’s classification.
120
Note 3 Property, Plant & Equipment(₹ In Lakh)
Balance as at 1
April, 2018
*Assets Acquired
under
amalgamation
scheme
*Assets
Acquired
under IBC
scheme
Additions
during the
Year
Disposals
during the
Year
Balance
as at
31 March, 2019
Balance
as at
1 April, 2018
Depreciation
on Assets
Acquired
under
amalgamation
scheme
Depreciation /
amortisation
expense for
the year
Depriciation
on Assets
Acquired
under scheme
Depreciation
Eliminated on
disposal of
assets during
the Year
Balance
as at
31 March, 2019
Balance
as at
31 March, 2019
Balance
as at
31 March, 2018
Tangible Assets:Owned Assets
(a) Land
Freehold Land 28.50 1,405.81 23,300.00 0.00 0.00 24,734.31 0.00 0.00 0.00 0.00 0.00 0.00 24,734.31 28.50
(b) Buildings
Owned Factory Building 1,395.72 1,672.77 44,700.00 3.19 0.00 47,771.68 79.81 245.76 21.93 30.68 0.00 378.18 47,393.49 1,315.91
Owned Office Building 0.00 121.85 0.00 0.00 0.00 121.85 0.00 10.84 - 1.69 0.00 12.53 109.31 0.00
(c) Plant and Equipment
Owned Plant & Machinery 49.35 7,294.50 72,900.00 38.68 0.00 80,282.52 18.88 2,011.78 3.82 580.47 0.00 2,614.95 77,667.57 30.47
(d) Electrification
Owned 0.00 878.17 0.00 0.00 0.00 878.17 0.00 238.01 - 54.03 0.00 292.04 586.13 0.00
(e) Furniture and Fixtures
Owned 25.81 15.84 0.00 9.10 0.00 50.75 12.45 7.29 1.93 1.50 0.00 23.17 27.57 13.36
(f) Office Vehicles
Owned 113.45 55.47 0.00 NIL 55.21 113.71 88.65 14.61 5.95 5.47 57.08 57.59 56.13 24.80
(g) Commercial Vehicles
Owned 34.11 0.00 0.00 NIL 0.00 34.11 32.41 - - - 0.00 32.41 1.70 1.70
(h) Office equipment
Owned 0.68 28.34 0.00 7.02 0.00 36.03 0.64 3.67 0.02 20.22 0.00 24.55 11.48 0.04
(i) Computers
Owned 32.98 45.25 0.00 7.40 0.00 85.63 30.43 25.94 4.27 4.59 0.00 65.23 20.40 2.55
Total 1,680.60 11,518.00 1,40,900.00 65.37 55.21 1,54,108.77 263.27 2,557.90 37.92 698.65 57.08 3,500.66 1,50,608.11 1,417.33
*Refer Note:33
Tangible assets
Gross block Accumulated depreciation and impairment Net block
121
Note 4 Non-current Investments
(₹ In Lakh)
ParticularsAs at March 31,
2019
As at March
31, 2018
Investment in Quoted Shares 36.16 15.13
Investment Properties 42.58 244.55
Total 78.73 259.68
(₹ In Lakh)
ParticularsAs at March 31,
2019
As at March
31, 2018
(a) Security Deposits (Unsecured, Considered Good) 58.89 13.13
0.00 0.00
(b) Other Advances 0.00 0.00
Investment Properties 133.36 133.36
Rainbow Papers Limited 0.00 3271.23
Other Advances 332.26 11.03
Total 524.51 3,428.75
(₹ In Lakh)
ParticularsAs at March 31,
2019
As at March
31, 2018
Unamortised Preliminary Expenses 69.24 81.60
Total 69.24 81.60
(₹ In Lakh)
ParticularsAs at March 31,
2019
As at March
31, 2018
Stock in Trade 4392.65 447.49
Cost of Under Production film 0.00 141.33
Raw Material 4055.93 0.00
Finished Goods 191.89 0.00
Work in Process 3074.48 0.00
Total 11714.95 588.82
Note 5 Long Term Loans and Advances
Note 6 Other Non-current Assets
Note 7 Inventories
122
(₹ In Lakh)
ParticularsAs at March 31,
2019
As at March
31, 2018
Unsecured, Considered Good 38169.13 74757.82
Total 38,169.13 74,757.82
(₹ In Lakh)
ParticularsAs at March 31,
2019
As at March
31, 2018
Cash and Cash Equivalents
Cash on hand 41.99 12.13
Balances with banks in Current Accounts 141.87 112.79
Balance earnmarked for Unclaimed Dividend 7.39 7.93
In Deposit Accounts 315.47
Total 506.72 132.85
(₹ In Lakh)
ParticularsAs at March 31,
2019
As at March
31, 2018
Prepaid Expenses 44.92 12.82
Balance with Government Authorities 2102.81 894.49
Advance to Suppliers 639.71 0.00
To Related Parties 0.00 5936.68
To Others 0.00 1431.55
Other Advances 1072.45 549.93
Advance to Employee 2.71 5.27
Total 3862.60 8830.74
(₹ In Lakh)
ParticularsAs at March 31,
2019
As at March
31, 2018
Amounts due from Subsidiaries 0.00 0.00
Commission charged to Wholly Owned Subsidiary for SBLC 0.00 0.00
Interest Accrued but not Due 0.00 0.00
Other Current Assets 0.00 131.04
Dividend Receivable from WOS 0.00 0.00
Property held for sale 0.00 801.37
Interest Receivable 1.45 0.00
Total 1.45 932.41
Note 8 Trade Receivables
Note 11 Other Current Assets
Note 9 Cash and Cash Equivalents
Note 10 Short Term Loans and Advances
123
Note 12 Equity Share Capital
(₹ In Lakh)
Number of
sharesAmount
Number of
sharesAmount
(a) Authorised
Equity Shares of Rs. 2 each with Voting Rights 2500,00,000 5,000.00 2500,00,000 5,000.00
(b) Issued , Subscribed and Paid Up
Equity Shares of Rs. 2 each with Voting Rights 2475,25,460 4,950.51 2372,66,610 4,745.33
Total 2475,25,460.00 4,950.51 2372,66,610.00 4,745.33
Note:12 (i)
ParticularsAs at March 31,
2019
As at March
31, 2018
Share Capital Suspense Account-* 1782.31 NIL
Total 1782.31 0
* Refer Note:33
(a)
Particulars Opening Balance Buy back
* Issued During
the Year on
account of
Amalgamation
Closing
Balance
Equity shares with voting rights
Year ended 31 March, 2019
- Number of shares 2372,66,610 NIL 102,58,850.00 2475,25,460
- Amount 4,745.33 NIL NIL 4,950.51
Year ended 31 March, 2018
- Number of shares 2372,66,610 NIL NIL 2372,66,610
- Amount 4,745.33 NIL NIL 4,745.33
*National Company Law Tribunal has approved the Scheme of Amalgamation of Ashapura Paper Mills Private Limited,
Kushal Wealth Creators Private Limited, Riddhi Siddhi Recyclers Private Limited, Kushal Infra Structure Private Limited
(b) The Company has only One Class of Shares referred to as Equity Shares Having a Face Value of Rs.2/- per share
Each holder of Equity share is entitled to One Vote per Share
As at March 31, 2019
Particulars
As at March 31, 2018
124
( c)
Number of
shares held (Face
Vaue Rs.2)
% holding in
that class of
shares
Number of
shares held
(Face Vaue Rs.2)
% holding in
that class of
shares
Equity shares with voting rights
Sandeep T. Agrawal 136,82,400 5.53% 136,82,400 5.77%
Manoj T. Agrawal 213,74,510 8.64% 205,41,600 8.66%
Mahendra T. Agrawal 227,01,600 9.17% 227,01,600 9.57%
Namrata S. Agrawal 455,49,650 18.40% 440,59,650 18.57%
Pushpa T. Agrawal 218,34,385 8.82% 217,00,220 9.15%
Tulsiram C. Agrawal NIL 0.00% NIL 0.00%
Note 13 Other Equity
(₹ In Lakh)
ParticularsAs at March 31,
2019
As at March
31, 2018
(a) Securities Premium
Opening Balance 0.00 0.00
Add : Premium on Shares issued during the Year-* 43675.26 0.00
Less : Utilised during the Year ( Isuue Of Bonus Share - Capitalisation of Reserves ) 0.00 0.00
Closing Balance 43675.26 0.00
(b) Retained Earnings
Opening Balance 28937.75 20581.91
Add: Profit / (Loss) for the Year 882.19 10965.77
Less: Interim Dividend During The Year 47.45 2609.93
Less: Issue of Bonus shares- Capitalised for the issue of bonus shares 0.00 0.00
Less: Dividend Distribution Tax 0.00 0.00
Closing Balance 29772.49 28937.75
(c) General Reserve
Opening Balance 1.08 1.08
Add: Addition during the Year 0.00 0.00
Less : Utilised during the Year 0.00 0.00
Closing Balance 1.08 1.08
(c) Foreign Currency Translation Reserve
Opening Balance -36.73 -116.67
Add: Addition during the Year 1457.42 79.94
Less : Utilised during the Year 0.00 0.00
Closing Balance 1420.69 -36.73
(c) Capital Reserve Reserve
Opening Balance 0.00 0.00
Add: Addition during the Year-* 79002.85 0.00
Less : Utilised during the Year 0.00 0.00
Closing Balance 79002.85 0.00
Total 153872.36 28902.10
* Refer Note:33
Details of Shareholders holding more than 5% Shares in the Company
Class of shares / Name of shareholder
As at March 31, 2019 As at March 31, 2018
125
Note 14 Long Term Provisions
(₹ In Lakh)
ParticularsAs at March 31,
2019
As at March
31, 2018
Provision for Gratuity 26.20 22.47
Total 26.20 22.47
Note 15 Deferred Tax Liabilities (Net)
(₹ In Lakh)
ParticularsAs at March 31,
2019
As at March
31, 2018
Deferred Tax Liabilities 847.13 122.01
Total 847.13 122.01
Note 16 Long-term Borrowings
(₹ In Lakh)
ParticularsAs at March 31,
2019
As at March
31, 2018
Mortgage Loan 1371.64 1300.43
Term Loans from banks 3.08 564.35
Other Loans and advances 500.00 0.00
Debenture Suspense Account-* 7500.00 0.00
Total 9374.72 1864.78
* Refer Note:33
Note 17 Short-term Borrowings
(₹ In Lakh)
ParticularsAs at March 31,
2019
As at March
31, 2018
From Banks
Working Capital Facilities 1866.91 0.00
Total 1866.91 0.00
Note 18 Trade Payables
(₹ In Lakh)
ParticularsAs at March 31,
2019
As at March
31, 2018
Acceptances 0.00 0.00
Other than Acceptances 13091.38 52986.23
Total 13091.38 52986.23
126
(₹ In Lakh)
ParticularsAs at March 31,
2019
As at March
31, 2018
Statutory Dues 212.11 9.70
Payable for Expenses 407.44 65.80
Advance from Customers 2527.18 816.45
Deposit 238.80 0.00
Unclaimed Dividend 7.39 7.93
Advance against option to purchase 0.00 8.79
Amounts due to Parent Co 0.00 0.00
Current maturities of Long Term debts 349.58 0.00
Other Current Liabilities 109.51 0.00
Liabilities due within 12 months (RPL-IBC) 12563.85 0.00
Total 16415.86 908.67
(₹ In Lakh)
ParticularsAs at March 31,
2019
As at March
31, 2018
Provision for Income Tax 450.49 499.06
Provision for Tax on Dividend received from WOS 0.00 379.35
Total 450.49 878.41
Note 19 Other Current Liabilities
Note 20 Current Tax Liabilities
127
Note 21 Revenue from Operations(₹ In Lakh)
For the year
ended
March 31, 2019
For the year
ended
March 31, 2018
(a) Sale of various Merchandise 80,828.20 2,26,438.05
(b) Other Operating Income (Refer Note 21(i) below) 8,769.66 7,103.09
89,597.86 2,33,541.14
Note 21(i)
(₹ In Lakh)
For the year
ended
March 31, 2019
For the year
ended
March 31, 2018
-39.68 -17.82
13.50 0.00
14.35 227.98
3.22 11.39
-0.01 0.96
102.09 2.47
0.00 6,861.23
7,997.89 16.88
MEIS License Sale (Duty Credit Script) 31.30 0.00
Business Development Services 600.58 0.00
12.68 0.00
Transit Insurance 33.74 0.00
8,769.66 7,103.09
Note 22 Other Income
(₹ In Lakh)
For the year
ended
March 31, 2019
For the year
ended
March 31, 2018
21.76 6.25
0.00 0.00
148.46 27.27
Rent Income 0.00 6.91
Foregin Exchnage Gain/(Loss) 128.63 0.00
Other Income 33.64 206.68
Income Tax refund 32.03 4.80
364.52 251.91
Note 23 Purchase of Merchandise
(₹ In Lakh)
For the year
ended
March 31, 2019
For the year
ended
March 31, 2018
*
57,459.93 2,20,268.93
57,459.93 2,20,268.93
*Including opening stock in trasnit
Particulars
Interest on FDRs
Net Gain/(Loss) on Sale of Fixed Assets & Investments
Total
Dividend from WOS
Particulars
Total
Particulars
Other Operating income comprises:
Other Income
Other Sevices
Total
Claim from/to Suppliers/Customers (Net)
Rate Differences/Discount/Interest on Delay Payment
Recovery from Customers towards various Charges
Round off
Duty Drawback Income
Franchise Fees
Commission Income
Particulars
Purchase of various Merchandise
Total
128
(₹ In Lakh)
For the year
ended
March 31, 2019
For the year
ended
March 31, 2018
Stock in Trade/ Finished Goods 6,763.17 447.49
Cost of under production film 0.00 141.33
6,763.17 588.82
773.71 456.75
Cost of under production film 0.00 0.00
773.71 456.75
-5,989.46 -132.07
Note 25 Purchase of MerchandiseCost of Material Consumed
(₹ In Lakh)
For the year
ended
March 31, 2019
For the year
ended
March 31, 2018
20,918.92 0.00
20,918.92 0.00
Note 26 Film Production Expenses
(₹ In Lakh)
For the year
ended
March 31, 2019
For the year
ended
March 31, 2018
172.12 141.33
172.12 141.33
Note 27 Employee Benefit Expenses
. (₹ In Lakh)
For the year
ended
March 31, 2019
For the year
ended
March 31, 2018
812.99 137.38
74.35 95.84
26.56 7.01
1.60 1.55
3.73 2.48
14.14 2.20
933.38 246.46
Note 24 Changes in Inventories
Particulars
Inventories at the end of the year:
Total
Total
Stock-in-Trade
Total
Particulars
Salaries and Bonus
Managerial Remuneration
Contributions to Provident Fund
ESIC Expenses
Gratuity
Staff Welfare Expenses
Particulars
Cost incurred during the year
Total
Inventories at the beginning of the year:
Net (Increase) / Decrease
Particulars
Cost of Material Consumed
Total
129
Note 28 Finance Costs
(₹ In Lakh)
For the year
ended
March 31, 2019
For the year
ended
March 31, 2018
576.11 450.80
4.11 11.23
54.50 60.99
634.72 523.02
Note 28(i) Other Borrowing Cost
(₹ In Lakh)
For the year
ended
March 31, 2019
For the year
ended
March 31, 2018
42.77 17.86
Loan Processing Fees 0.62 17.74
1.49 9.38
10.69 16.01
Foreign Exchange Loss 0.00 0.00
55.57 60.99
Note 29 Other Expenses
(₹ In Lakh)
For the year
ended
March 31, 2019
For the year
ended
March 31, 2018
Factory, Godown and Other Direct Expenses 1,855.28 0.00
Export Expenses 576.26 0.00
Bad Debts 4,360.62 0.00
20.21 3.26
16.53 18.50
2,324.86 14.90
0.00 17.10
4.07 9.37
27.08 3.10
95.76 37.13
0.00 3.15
Professional & Consultancy Fees 46.43 163.15
Advertisement Expenses 73.75 62.82
Travelling Expenses 10.62 43.94
Other Expenses 454.24 536.15
9,865.71 912.57
Repairs & Maintenance
Rent Expenses
Total
Municipal Expenses
Loan franking Expense
Other Finance Charges
Total
Particulars
Insurance Expenses
Audit Fees (Statutory Audit & Tax Audit)
Electricity Expenses
Foreign Exchange Losses (To the extent not considered as Finance Cost)
Vehicle Repair & Fuel Expenses
Bank Charges
Total
Particulars
Particulars
(a) Interest Expense on:
(i) Borrowings
(ii) Other Interest
(b) Other Borrowing Costs (Refer note 28(i) below)
130
Note 30 Related Party Disclosures As per Ind AS 24, the disclosures of transactions with the related parties are given below: List of related parties where control exists and relationships: Sr. no.
Name of Related Party Relationship
1 Sandeep Agrawal Director 2 Manoj Agrawal Director 3 Kushal Agrawal Director 4 Komal Agrawal Relative of Director 5 CA Vimal Shah Key Managerial Personnel (KMP) 6 CS Khushboo Surana Key Managerial Personnel (KMP) 7 CS Shivangi Shah Key Managerial Personnel (KMP) 8 Jitendra Yadav Key Managerial Personnel (KMP)
Transactions during the year with related parties:
(Amount in Lakh) Sr. No.
Name of Related Party Nature of Transaction 2018-19 2017-18
1 Ashapura Paper Mills Private Limited-* Purchase of Goods Sale of Goods
NIL 1,241.98 1,179.28
2 Riddhi Siddhi Recyclers Private Limited-* Purchase of Goods Sale of Goods
NIL 538.22 2,304.94
3 Kushal Wealth Creators Private Limited-* Purchase of Goods Sale of Goods
NIL 1,244.11 1,229.69
4 Sandeep Agrawal- Managing Director Managerial Remuneration 20.67 18.47 5 Manoj Agrawal- Executive Director Managerial Remuneration 11.54 10.43 6 Kushal Agrawal- Executive Director Managerial Remuneration 6.00 6.00 7 Komal Agrawal- Relative of director Salary 4.80 NIL 8 CA Vimal Shah** Salary 6.82 7.44 9 Jitendra Yadav*** Salary 0.49 NIL 10 CS Khushboo Surana**** Salary 9.70 3.46 11 CS Mittali Christachary Salary NIL 4.47 12 CS Shivangi Shah***** Salary 0.33 NIL
* The Hon'ble National Company Law Tribunal, Ahmedabad Bench {"NCLT") vide its order dated Tuesday, February 5, 2019 has approved the Scheme of Amalgamation of Ashapura Paper Mills Private Limited, Kushal Wealth Creators Private Limited, Riddhi Siddhi Recyclers Private Limited, Kushal Infra Structure Private Limited with Kushal Limited ("the Company") and their respective shareholders and creditors with Appointed date for the scheme as Friday, March 31 , 2017. ** CA Vimal Shah resigned as Chief Financial Officer of the Company w.e.f February 28, 2019. *** Jitendra Yadav appointed as Chief Financial Officer of the Company w.e.f March 01, 2019 **** CS Khushboo Surana resigned as Company Secretary and Compliance Officer of the Company w.e.f February 28, 2019. ***** CS Shivangi Shah appointed as Company Secretary and Compliance officer of the Company w.e.f March 01, 2019. Note 31 Corporate Social Responsibility (CSR) (a) CSR amount required to be spent as per Section 135 of the Companies Act, 2013 read with Schedule VII thereof by the Company during the year is 22.40 Lakh. (b) Expenditure incurred and spent related to Corporate Social Responsibility is Rs. 22.63 Lakh.
131
Note: 32 Income Tax Department and Goods and Service Tax Department carried out search at Registered Office of the company. Investigation Proceedings for the both the departments are not yet concluded. Note 33 Amalgamation/Acquisition with Kushal Limited Pursuant to the scheme of amalgamation under section 230 to 232 of the Companies Act, 2013, approved by Hon'ble National Company Law Tribunal, Ahmedabad Bench (NCLT) on February 5, 2019 between Kushal Limited (the Transferee Company) and Ashapura Paper Mills Private Limited, Kushal Wealth Creators Private Limited, Riddhi Siddhi Recyclers Private Limited, Kushal Infra Structure Private Limited (the Transferor Company).These four companies were merged with Kushal Limited from the appointed date i.e. March 31, 2017. Pursuant to the above, Transferor Company stands amalgamated with Kushal Limited of accounting as per the Indian Accounting Standard 103 "Business Combination”, issued by the Institute of Chartered Accountants of India, on the basis of the scheme approved by the Hon'ble National Company Law Tribunal, Ahmedabad Bench. The company has acquired Rainbow Papers Limited under IBC, 2016. The consideration (pending to be passed on) as well as acquired assets have been measured at fair market value as per IND AS 103 Business Combinations. PURCHASE CONSIDERATION The amalgamation would inter-alia achieve the following objectives as stated in the Scheme of Amalgamation: (a) The amalgamation will consolidate the business activity and will lead to greater efficiency in the overall business and achieve integration of the business operations as well as synergy benefits through combined operations of both the entities. (b) As the products of both the Companies are similar in nature, the contemplated amalgamation will lead to economies of scale which in turn will promote cost efficiency by means of reduction in administrative overheads, reduction in multiplicity of legal and regulatory compliances, and will help running the business more effectively and economically resulting better utilization of resources. (c) This amalgamation will create enhanced value for shareholders and allow a focused strategy in operations, which would be in the best interest of all its shareholders, creditors and all persons connected with the Companies. Pursuant to the scheme of amalgamation under section 230 to 232 of the Companies Act, 2013, approved by Hon'ble National Company Law Tribunal, Ahmedabad Bench (NCLT) on February 5, 2019 between Kushal Limited (the Transferee Company) and Ashapura Paper Mills Private Limited, Kushal Wealth Creators Private Limited, Riddhi Siddhi Recyclers Private Limited, Kushal Infra Structure Private Limited (the Transferor Company).These four companies were merged with Kushal Limited from the appointed date i.e. March 31, 2017. Pursuant to the above, Transferor Company stands amalgamated with Kushal Limited of accounting as per the Indian Accounting Standard 103 "Business Combination”, issued by the Institute of Chartered Accountants of India, on the basis of the scheme approved by the Hon'ble National Company Law Tribunal, Ahmedabad Bench. The company has acquired Rainbow Papers Limited under IBC, 2016. The consideration (pending to be passed on) as well as acquired assets have been measured at fair market value as per IND AS 103 Business Combinations. PURCHASE CONSIDERATION Pursuant to the approved scheme, In consideration for the transfer and vesting of the entire undertaking of the Transferor Company with the Transferee Company, the Transferee Company has issued fully paid up equity shares to the shareholders of the Transferor Company as under:
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‘’149 Equity shares of Kushal Limited of Rs.2/- each for every 100 Equity Shares of Face Value Rs. 10/- each held by members of Ashapura Paper Mills Private Limited; 185 Equity Shares of Kushal Limited of Rs.2/- each for every 100 Equity Shares of Face Value Rs 10/- each held by members of Kushal Wealth Creators Private Limited; 130 Equity Shares of Kushal Limited of Rs.2/- each for every 100 Equity shares of Face Value Rs. 10/- each held by members of Riddhi Siddhi Recyclers Private Limited; 395 Equity shares of Kushal Limited of Rs.2/- each for every 100 Equity shares of Face Value Rs. 10/- each held by members of Kushal Infrastructure Private Limited.’’ In consideration of amalgamation, the Transferee Company has issued 1,02,58,850 Equity Shares of Face Value of 2/- each as fully paid up to the shareholders of the Transferor Company. ‘’Pursuant to Acquisition Of Rainbow Papers Limited under Section 30 of the Insolvency and Bankruptcy Code, 2016 (as amended from time to time), as per approved resolution plan by Hon'ble National Company Law Tribunal, Ahmedabad Bench {"NCLT"), Company has to issue Equity Shares (incl. Securities Premium) to the tune of Rs. 20000 Lakhs; Non-Convertible Debentures of Rs. 7500 Lakhs to the secured lenders of Rainbow Papers Ltd as a part of consideration. Pending the issuance of the said shares and debentures the same has been reported under Share Capital/Securities Premium Suspense Account and Debenture Suspense Account. ‘’ Pursuant to amalgamation, Transferor company transfer all assets and liabilities to Transferee company and Purchase consideration are excess over Net Assets and in result goodwill arose which has been reported in the Financial Statement on Assets side under ‘’ Intangible Assets’’. In consideration of Acquisitions of Rainbow paper Limited under (IBC), Where Net Assets are excess over Purchase Consideration and in result Capital Reserve arised which has been reported in the financials statement on Liabilities side under ‘’Reserves & Surplus ‘’sub head Capital reserves as per IND AS 103 ‘’Business Combination’’. For S. V. Sojitra & Co. For and on behalf of the Board of
Chartered Accountant KUSHAL LIMITED
Sanjay V. Sojitra Kushal Agrawal Manoj Agrawal
Proprietor Director Director
Membership No. 135239 (DIN: 03043294) (DIN:00225494)
FRN NO. 139013W
Place : Ahmedabad CS Shivangi Shah Jitendra yadav
Date : May 30, 2019 Company Secretary Chief Financial Officer
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