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Kushal

BSE: 536170|ISIN: INE647N01021|SECTOR: Diversified
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Oct 23, 16:00
9.81
0.46 (4.92%)
VOLUME 9,970
Kushal is not listed on NSE
Mar 17
Accounting Policy Year : Mar '18

1. 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.

Up to the year ended March 31, 2017, the Company has prepared its financial statements in accordance with the requirement of Indian Generally Accepted Accounting Principles (Indian GAAP), which includes Standards notified under the Companies (Accounting Standards) Rules, 2006 and considered as “Previous GAAP”. These financial statements are the Company''s first Ind AS Standalone financial statements.

Company’s financial statements are presented in Indian Rupees (Rs. ), which is also its functional currency.

B. Inventories

Inventories are measured at lower of cost and net realisable 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 recognised 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 methods 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 recognised in the Statement of Profit and Loss when the asset is derecognised.

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 amortisation/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 recognised 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.

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 capitalised 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 capitalisation.

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 recognised 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 recognised 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 recognised 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 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 Company’s contribution is recognised 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. The gratuity is paid @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 recognised in Statement of Profit and Loss, except to the extent that it relates to items recognised in the comprehensive income or in equity. In which case, the tax is also recognised 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 recognised 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 realised, 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 recognised 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,

- 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 recognised 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 recognised using effective interest rate method.

Dividend Income

Revenue is recognised 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 recognised 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 recognised in the Statement of Profit and Loss as finance cost.

N. Long Term Borrowings

Long term loan taken from IVL Finance Limited under ILAP of Rs. 11.77 Cr. @ 11% P.a.

The Loan is Repayable on monthly 84 instalments 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,TpsNo.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.

P. Operating Segments

As per Ind AS 108- “Operating Segment”, segment information has been provided under the Notes to Consolidated Ind AS Financial Statements.

Q. Disclosure of Interest in Other Entities

i) Kushal Impex Pte Ltd, Singaopre

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

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’s 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 analysed 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.

Events that are indicative of conditions that arose after the reporting period are classified as non-adjusting events.

(i) The Board of Directors, in its meeting held on May 1, 2017, approved a Scheme of Amalgamation of Kushal Infrastructure Private Limited, Ashapura Paper Mills Private Limited, Kushal Wealth Creators Private Limited and Riddhi Siddhi Recyclers Private Limited with Kushal Limited (Formerly known as Kushal Tradelink Limited) and their respective shareholders and creditors. The company has applied for In-principle approval from the Stock exchange/SEBI in May, 2017 and are awaiting the no objection letter from the Stock exchange/SEBI. As the final approval from SEBI as well as requisite approvals, sanctions, consents, observations, clearances from the National Company Law Tribunal (NCLT) and other concerned authorities, are pending, the accompanying Standalone Ind AS financial statements for the year ended March 31, 2018 have been prepared without giving any effect of the proposed scheme.

(ii) The Board of Directors in its meeting held on September 14, 2017 approved a Composite Scheme of Compromise and Arrangement between Rainbow Papers Limited and its Secured and Unsecured Creditors and Amalgamation of Rainbow Papers Limited with Kushal Limited (formerly known as Kushal Tradelink Limited) and their respective shareholders and creditors under Section 230-232 of the Companies Act, 2013.

T. First Time Adoption of Ind AS

The Company has adopted Ind AS with effect from 1st April, 2017 with comparatives being restated. The figures for the previous period have been restated, regrouped and reclassified wherever required to comply with the requirement of Ind AS and Schedule.

Exemptions from retrospective application

(i) Fair value as deemed cost exemption

The Company has elected to measure items of property, plant and equipment and intangible assets at its carrying amount.

(ii) Investments in Subsidiaries and Wholly Owned LLP

The Company has elected to measure investment in subsidiaries and wholly owned LLP at cost.

U. Previous year’s figures have been recast, regrouped and rearranged, wherever necessary to confirm to this year’s classification.

Source : Dion Global Solutions Limited
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