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Kushal

BSE: 536170|ISIN: INE647N01021|SECTOR: Diversified
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Directors Report Year End : Mar '18    Mar 17

To,

The Members,

The Board of Directors are pleased to present the Company’s 18th Annual Report along with the Audited Financial Statements, both standalone and consolidated, for the Financial Year ended March 31, 2018.

I. FINANCIAL RESULTS

The Company’s financial performance for the year ended March 31, 2018 is summarized below:

(Rs. In Lakh)

STANDALONE

CONSOLIDATED

2017-18

2016-17

2017-18

2016-17

Revenue from Operations

100660.50

38421.84

233541.14

235958.42

Other Income (net)

2436.03

6973.91

251.91

97.37

Total Revenue (A)

103096.53

45395.75

233793.05

236055.79

Total Expenses (B)

99589.18

37437.96

222018.07

220397.97

Profit Before Tax (PBT) (A-B)

3507.35

7957.79

11774.98

15657.82

Tax

(735.89)

(1579.56)

(809.21)

(1642.27)

Profit After T ax (PAT)

2771.46

6378.23

10965.77

14015.55

Earnings per Share (face value of Rs. 2/each)

1.17

2.69

4.62

5.91

a). Basic

1.17

2.69

4.62

5.91

b). Diluted

II. MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR AND DATE OF THE REPORT

- Declared and paid 4th Interim Dividend of Rs. 0.02 per Equity share i.e. 1% of face value of Rs. 2.00 per Equity shares for the financial year 2017-18 in April, 2018.

- Your Company is in process of revival and rehabilitation of Rainbow Papers Limited (in CIRP) and subsequently amalgamation of Rainbow Papers Limited into Kushal Limited as a part of Resolution Plan, which is approved by Committee of Creditors in their Meeting held in June 2018. Details of the same is available on the public domain: https://www.bseindia.com/xml-data/corpfi l ing/CorpAttachment//2018/6/43b6f aeb-4e06-4bd7-ab3d-9dce74d21122. pdf

- Education Divisions in the names and style of “Hugs n Cuddles” and “Joy Jumperz” have been started by your company with the main object to promote education in April, 2018.

III. CHANGE IN THE NATURE OF BUSINESS

The company have changed its main object caluse by passing of special resolution through Postal Ballot, the results of which were declared on January 2, 2018. The Amended Memorandum of Association and Articles of Association are available at the company’s website at: http://www.kushallimited.com

IV. PERFORMANCE OF THE COMPANY

Your Company has always aspired to enhance its participation in the socio- economic development of the nation and will continue to dream bigger with continuously working towards building a nation of our dreams.

During this year your company has achieved a total Revenue on Standalone Basis of Rs. 103096.53 Lakh as against Rs. 45395.75 Lakh in the previous year. Your company posted a Profit Before Tax of Rs. 3507.35 Lakh as against Profit of Rs. 7957.79 Lakh in the previous year. While Total Comprehensive Income for the Financial Year 2017-18 was Rs. 2771.46 Lakh as against Profit After Tax (PAT) of Rs. 6378.23 Lakh in the previous year.

During this year your Company has achieved a Total Revenue on Consolidated Basis of Rs. 233793.05 Lakh as against Rs. 236055.79 Lakh in the previous year. Your Company posted a Profit Before Tax of Rs. 11774.98 Lakh as against profit of Rs. 15657.83 Lakh in the previous year. While Total Comprehensive Income for the Financial Year 2017-18 was Rs. 10965.77 Lakh as against Profit After Tax (PAT) of Rs. 14015.55 Lakh in the previous year.

The reason for reduction in top line on consolidated basis is due to shift of some business from trading model to agency commission model.

Reduction in profits on consolidated basis is mainly due to volatility in prices of products and contribution of business by geographical base i.e. Indian arm contributing more than UAE and Singapore as compared to previous year which relatively resulted lesser profits.

V. 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.

VI. DIVIDEND

Your Company has declared and paid an overall interim dividend of Rs. 0.82 per Equity Share out of profits of the Company i.e. 41 % dividend on the face value of Rs. 2.00 each, in the Financial year 2017-18.

Details Interim Dividends declared by board in the Financial Year 2017-18 are as under:

1st Interim Dividend of Rs. 0.20 per Equity Share i.e. 10% of face value of Rs. 2.00 per Equity Share was declared on November 13, 2017.

2nd Interim Dividend of Rs. 0.50 per Equity Share i.e. 25% of face value of Rs. 2.00 per Equity Share was declared on December 14, 2017.

3rd Interim Dividend of Rs. 0.10 per Equity Share i.e. 5% of face value of Rs. 2.00 per Equity Share was declared on February 14, 2018.

4th Interim Dividend of Rs. 0.02 per Equity Share i.e. 1% of face value of Rs. 2.00 per Equity Share was declared on April 11, 2018.

VII. PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS

As on March 31, 2018, 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.

VIII. DEPOSITS FROM PUBLIC

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.

IX. EQUITY SHARE CAPITAL

The Company has only one class of share viz. Equity Share with a face value of Rs. 2 each. During the year under review, there is no change in the issued and subscribed and paid up capital of your Company. The outstanding capital as on March 31, 2018 is Rs. 474533220.00 comprising 237266610 Equity Shares of Rs. . 2/- each. Share Capital Audit as per the directives of the Securities and Exchange Board of India (SEBI) is being conducted on a quarterly basis by statutory auditors of the Company and the Share Audit Reports being forwarded to the stock exchanges where the Equity Shares of Company are listed and same placed on the table of the Board for their record.

X. DIRECTORS AND KEY MANAGERIAL PERSONNEL Appointment/Re-appointment/Regularisation:

- As per provision of Companies Act, 2013 Mr. Manoj Agrawal who retired by rotation and being eligible offered himself, was appointed as Director of the Company in 17th Annual General Meeting held on September 30, 2017.

- Mr. Kushal Agrawal Regularised as Director after receiving approval from the Shareholder of the Company at the 17th Annual General Meeting held on September 30, 2017.

- CS Khushboo Surana appointed as Company Secretary and Compliance Officer on November 13, 2017 due to vacancy caused by resignation of CS Mittali Christachary. CS Mittali was associated with company from January 2015 and continued till February 28, 2018.

XI. 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.

XII. COMMITTEES OF THE BOARD

The Board have reconstituted various Committees, such reconstitution occurred due to resignation made by CS Sagar Sharma (Independent Director of the Company) effective from March 31, 2017.

The following Committees was reconstituted by the Board in their meeting held April 13, 2017.

- Audit Committee

- Stakeholder Relationship Committee

- Nomination and Remuneration Committee

- Corporate Social Responsibility Committee

A detailed note on the board and its committees is provided in the Corporate Governance Report forming part of this Annual Report.

Note: - Merger Committee which was constituted by the Board for the execution of the Amalgamation of its four group companies into Kushal Limited have been dissolved by the Board in their meeting held April 13, 2017.

XIII. 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.

- Seven meetings of the Audit committee were held during the year.

- Three meetings of the Nomination and Remuneration committee were held during the year.

- Four meetings of the Stakeholder Relationship Committee were held during the year.

- Four 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 and SEBI (LODR) Regulation 2015.

XIV. BOARD EVALUATION

Pursuant to the provisions of the Companies Act, 2013, 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, 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.

XV. SUBSIDIARY AND ASSOCIATE COMPANIES

A separate section on the performance and financial position of each of the subsidiaries and associated 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: www.kushallimited.com

In accordance with the provisions of the Companies Act, 2013 and Ind AS-110-Consolidated Financial statement, the audited consolidated financial statement is provided in the Annual Report.

XVI. CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES

During the year under review, 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 timely 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 of interest with the Company.

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: www.kushallimited.com

XVII. 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 and forms part of Annual Report 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.

XVIII. 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 two 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: www.kushallimited.com

XIX. AUDITORS

a). Statutory Auditors

M/s. Devadiya & Associates, Chartered Accountants, Ahmedabad (FRN: 123045W) the Company''s Auditors were re-appointed to hold office till the conclusion of 21st Annual General Meeting at the 17th Annual General Meeting of the Company.

However, M/s. Devadiya & Associates, Chartered Accountant, have expressed their unwillingness to continue as the Statutory Auditors of the Company as indicated in their letter dated November 10, 2017.

Based on the recommendation of the Audit Committee, the Board of Director at their meeting held on November 13, 2017 appointed M/s. Shailesh & Co, Chartered Accountants, Ahmedabad (FRN:114226W) as the Statutory Auditors of the Company to fill the causal vacancy.

Their appointment was subsequently approved by the shareholder by passing of ordinary resolution through postal ballot pursuant to Section 139(8) of Companies Act 2013, result of which was declared on January 02, 2018. Further company has received resignation letter from M/s. Shailesh and Co., Chartered Accountant, Ahmedabad (FRN: 114226W) stating their inability to continue as the Statuary Auditors of the Company due to their preoccupancy with effect from November 05, 2018.

Based on the recommendation of the Audit Committee, the Board of Director at their meeting held on November 12, 2018 has appointed M/s. S. V. Sojitra & Co, Chartered Accountants, Ahmedabad (FRN No 139013W) as the statutory Auditors of the Company to fill the causal vacancy.

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.

M/s. S. V. Sojitra & Co. Chartered Accountants, Ahmedabad (FrN:139013W) hold office as the Statutory Auditors of the company till the conclusion of the ensuing 18th Annual General meeting.

Your Directors recommend the re-appointment of M/s. S. V. Sojitra & Co. Chartered Accountants, Ahmedabad (FRN:139013W) as Statutory Auditors of the Company for a term of five consecutive years.

b). Auditor’s Report

The report of the Statutory Auditor is enclosed to this report. The observations made in the Auditors’ Report are self-explanatory and therefore do not call for any further comments.

The Auditors have reported that there is no fraud by the company noticed or reported during the year.

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 31st, 2018. 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.

XX. 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.

XXI. CORPORATE GOVERNANCE REPORT

A separate section on Corporate Governance as per 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

XXII. 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.

Company have the policy to have an optimum combination of executive and non-executive directors with at least one woman director and not less than fifty percent of the board of directors shall comprise of non-executive directors as per SEBI (LODR) Regulation 2015.

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 subsection (3) of section 178 of the Companies Act 2013, is governed by the Nomination and Remuneration committee and same is available on the company’s website: http://www.kushallimited.com

We affirm that the remuneration paid to the Executive Directors of the company are as per the Nomination and remuneration policy.

XXIII. BOARD DIVERSITY

The board has adopted a Policy which sets out the approach to diversity of the board of directors. The Policy on Board diversity is available on the company’s website: www.kushallimited.com

XXIV. WHISTLE BLOWER/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 behaviour and living corporate values.

The Whistle Blower Policy is available on the website of the Company, i.e. www.kushallimited.com. 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.

XXV. 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.

XXVI. 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, 2018 and of the profit and loss of the Company for the year ended March 31, 2018;

(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.

XXVII. 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.

XXVIII. 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.

XXIX. 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 2017-18, 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.

D). Foreign Exchange Earning & Out Go:

XXX. RISK MANAGEMENT POLICY

The details of Risk Management policy adopted by the Board of Directors is available on the website of the company: www.kushallimited.com

XXXI. MAINTENANCE OF COST RECORDS

Maintenance of cost records are not applicable to company as currently we are in merchandise trade.

XXXII. 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: November 14, 2018

Source : Dion Global Solutions Limited
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