Kushal Ltd Directors Report.

To

The Members,

The Board of Directors are pleased to present the Companys 19th Annual Report along with the Audited Financial Statements, both standalone and consolidated, for the Financial Year ended March 31, 2019. FINANCIAL RESULTS The Companys 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 0.54 1.17 2.07 4.62
b). Diluted 0.40 1.17 1.52 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.

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 Honble 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 Honble 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

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

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 reappointment 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 Companys 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, 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 arms 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 Boards 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 Companys 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 Companys website:

(http://kushallimited.com/files/10-policy-on-corporate-social-responsibility-sc5a587988cc3ef.pdf)

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 Boards Report.

22. CORPORATE GOVERNANCE REPORT

A separate section on Corporate Governance practices followed by the Company, together with a certificate from the Companys 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 subsection (3) of section 178 of the Companies Act 2013, is governed by the Nomination and Remuneration policy and other details are available on the companys 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 companys website: (https://www.kushallimited.com/files/policy-onboard-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)

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 Companys 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 Companys 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 Companys 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 (f) effectively; and 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.

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). Auditors 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 Auditors 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 Companys 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 Companys 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 Companys 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.

D). Foreign Exchange Earning & Out Go:

Particular

2018-19

2017-18

Total Foreign
Exchange Outgo :
Value of import on
5003436.88 NIL
CIF basis-Traded
USD
Goods
Total Foreign
Exchange Earned :
VALUE OF Export on
CIF basis-Traded 1553753.71 669279.75
Goods USD USD
1). SBLC Commission NIL NIL
2). Dividend from NIL 12500000
WOS 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