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Directors Report of Kushal Tradelink Ltd.

Mar 31, 2015

The Members

KUSHAL TRADELINK LIMITED

The directors take pleasure in presenting the 15th Annual Report together with the Audited Financial Statements for the financial year ended on 31st March, 2015.

- HIGHLIGHTS OF PERFORMANCE

- Consolidated revenue from operations for the year 2015 increased by 43.20 % to Rs. 43366.52 Lacs as compared to Rs. 30283.73 Lacs in year 2014 and the Consolidated Profit after Tax increased by 46.48% to Rs. 657.35 Lacs as compared to Rs. 448.77 Lacs in year 2014. The EPS was recorded at 1.97(stand alone),which is lower compared to that of last year, while Consolidated EPS was recorded at 2.77, which is higher as compared to that of last year.

- FINANCIAL HIGHLIGHTS

(Amount in Lacs) PARTICULARS Consolidated Accounts Standalone Accounts 2014-15 2013-14 2014-15 2013-14

Revenue from Operations 43300.76 30251.85 26360.76 30050.28

Other Income 65.76 31.88 65.76 31.88

TOTAL REVENUE 43366.52 30283.73 26426.52 30082.16

Total Expenditure 42444.50 29614.69 25706.13 29392.07

Profit Before Tax 922.02 669.04 720.39 690.09

Less: Provision for Current Tax (Incl . 250.75 223.35 238.48 223.35 Earlier Year )

Less: Deferred tax liability 13.92 (3.08) 14.60 (3.08)

Profit after Tax 657.35 448.77 467.30 469.82

Earnings Per Share (in Rs) 2.77 2.20 1.97 2.30

- CHANGES IN NATURE OF BUSINESS

There is no significant changes had been made in the nature of the company during the financial year.

- MATERIAL CHANGES AND COMMITMENTS OCCURRED BETWEEN THE DATE OF BALANCE SHEET AND THE DATE OF AUDIT REPORT

No significant material changes and commitments have occurred between the date of the balance sheet and the date of the audit report.

- DIVIDEND

No Dividend is declared for the current financial year due to conservation of Profits to meet the long term working requirements.

- SHARE CAPITAL

The paid up Equity Share Capital as on March 31st, 2015 was Rs. 237266610. During the year under review, the Company has not issued any shares with differential voting rights nor granted stock options nor sweat equity. As on March 31st 2015, none of the Directors except Mr. Sandeep Agrawal, Managing Director and Mr. Mahendra Agrawal, Whole Time Director of the Company hold any shares of the Company.

- DIRECTORS

A). CHANGES IN DIRECTORS

During the period under review there was no change in the constitution of Board of Directors.

In accordance with the Section 152(6) of the Companies Act, 2013 and Articles of Association of the Company. Mr. Mahendra Agrawal, Whole Time Director (DIN: 00225551) and CA Arpan Shah, Professional Non- Executive Director (DIN: 06458101) of the Company liable to retires by rotation in the forthcoming Annual General Meeting and being eligible, they offer themselves for their re-appointment Pursuant to Clause 49 of the Listing Agreement, Details of Directors retiring by rotation is provided as part of the Notice of the ensuing Annual General Meeting.

All Independent Directors have given declarations that they meet the criteria of independence as laid down under Section 149(6) of the Companies Act, 2013 and Revised Clause 49 of the Listing Agreement

None of the Directors of the Company are disqualified under Section 164 of Companies Act 2013.

B). BOARD EVALUATION

Pursuant to the provisions of the Companies Act, 2013 and Revised Clause 49 of the Listing Agreement, the Board has carried out an annual performance evaluation of its own performance, the directors individually as well as the evaluation of the working of its Audit, Nomination & Remuneration and Shareholder and Investor Grievance Committee. The manner in which the evaluation has been carried out has been explained in the Corporate Governance Report

C). MEETINGS

During the year 11 Board Meetings, 6 Audit Committee Meetings, 1 Nomination and Remuneration Committee Meeting, 1 Shareholder and Investor Grievance Committee meeting and 1 meeting of the CSR Committee were convened and held.

An Independent Directors Meeting was held as on 31st March, 2015

The details of which are given in the Corporate Governance Report The intervening gap between the Meetings was within the period prescribed under the Companies Act, 2013.

D). COMMITTEES

During the period under review, Audit Committee and Nomination and Remuneration Committee were reconstituted and a CSR Committee was constituted as per Companies Act, 2013.

The composition of the board committees of the company are as under:

1). Audit Committee

Sr. Name Designation Position In No Committee

1 Ms. Kavita Jain Non Executive Independent Chairman Director

2 CS Sagar Sharma Non Executive Independent Member Director

3 Mr. Dharmendra Non Executive Independent Member Bhuchhada Director

4. CA Arpan Shah Non Executive Professional Member Director

2). Nomination and Remuneration Committee

Sr. Name Designation Position In No Committee

1 CS Sagar Sharma Non Executive Independent Chairman Director

2 Ms. Kavita Jain Non Executive Independent Member Director

3 Mr. Dharmendra Non Executive Independent Member Bhuchhada Director

4 CA Arpan Shah Non Executive Professional Member Director

3). Shareholder and Investor Grievance Committee

Sr. Name Designation Position In No Committee

1 CS Sagar Sharma Non Executive Independent Chairman Director

2 Ms. Kavita Jain Non Executive Independent Member Director

3 Mr. Dharmendra Non Executive Independent Member Bhuchhada Director

4. CA Arpan Shah Non Executive Professional Member Director

4). Corporate Social Responsibility Committee.

S.No Name Category Designation in committee

1 Mr. Dharmendra Buchhada Independent Director Chairperson

2 CA. Arpan Shah Non Executive Professional Member Director

3 Mr. Sandeep Agrawal Managing Director Member

E). REMUNERATION POLICY

The Board has, on the recommendation of the Nomination & Remuneration Committee framed a policy for selection and appointment of Directors, Senior Management and their remuneration.

The Remuneration Policy is posted on the website of the Company.

E). KEY MANGERIAL PERSONNEL

During the period under review, the appointment of CA Vimal Shah, Chief Financial Officer of the Company as the Key Managerial Personnel was confirmed in accordance with the Companies Act, 2013

Further, Ms. Khushboo Surana, Company Secretary and Compliance Officer of the Company resigned from her post with effect from 16th January, 2015 and in her place Ms. Mittali Christachary having ACS membership no. 37269 was appointed as the Company Secretary and Compliance Officer of the company with effect from 16th January, 2015.

F). REMUNERATION TO DIRECTORS

The Remuneration paid to the Executive Directors and the Sitting Fees paid to the Non-Executive and Independent Directors are disclosed in the Extract to the Annual Return i.e Annexure C to the Boards Report.

- FINANCE A). DEPOSITS

- The Company has not accepted deposit from the public falling within the ambit of Section 73 of the Companies Act, 2013 and The Companies (Acceptance of Deposits) Rules, 2014.

B). PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

- Details of Loans, Guarantees and Investments covered under the provisions of Section 186 of the Companies Act, 2013 are given in the notes to the Financial Statements.

- INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

- The Company has an Internal Control System, commensurate with the size, scale and complexity of its operations.

- The Company has appointed M/s. MJV & Co., Chartered Accountants, Ahmedabad having FRN: 131600W as the Internal Auditor of the Company to monitor and evaluate the efficacy and adequacy of internal control system in the Company, its compliance with operating systems, accounting procedures and policies of the Company and its subsidiary.

- Based on the report of internal audit function, process owners undertake corrective action in their respective areas and thereby strengthen the controls. Significant audit observations and corrective actions thereon are presented to the Audit Committee of the Board.

- WHISTLE BLOWER POLICY/ VIGIL MECHANISM

In accordance with Section 177 of the Companies Act, 2013 and revised Clause 49 of the Listing Agreement, the Company has constituted a Whistle Blower Policy/ Vigil Mechanism to establish a vigil mechanism for the directors and employees to report genuine concerns in such manner as may be prescribed and to report to the management instances of unethical behavior, actual or suspected fraud or violation of the Companys code of conduct

The detail of the Whistle Blower Policy has been posted on the website of the Company.

- CREDIT RATING

The Companys financial discipline is reflected in the following ratings assigned by Brickwork Ratings for the Bank Loan Facilities:

Facilities Limit (Rs. In Tenure Rating Outlook Cr)

Fund Based 63.00 Long Term BWR BBB Stable Cash Credit/ Overdraft

Non Fund Based 69.80 Short Term BWR A3 - Letter of Credit

Total 132.80 INR (One Hundred Thirty Two Crores and Eighty Lakh Only)

- SUBSIDIARY COMPANIES

Kushal Impex Pte Ltd, a Wholly Owned Subsidiary incorporated in Singapore in the January 2014 2014 the main object of General Wholesale Trade (Including General Importers and Exporters) generated revenue of Rs. 16332.28 Lacs.

- CONSERVATION OF ENERGY, TECHNOLOGY, ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO:

The information on conservation of energy, technology absorption and foreign exchange earnings and outgo stipulated under Section 134(3)(m) of the Companies Act, 2013 read with Rule, 8 of The Companies (Accounts) Rules, 2014, is annexed herewith as "Annexure A".

- PERFORMANCE AND FINANCIAL POSITION OF THE SUBSIDIARY, ASSOCIATES AND JOINT VENTURES (IF ANY) INCLUDED IN THE CONSOLIDATED FINANCIAL STATEMENT

The salient features of the financial statement and financial position of the Subsidiary, Associates included in the Consolidated Financial Statement of the Company is annexed alongwith the Financial Statements

- DIRECTORS'' RESPONSIBILITY STATEMENT

To the best of their knowledge and belief and according to the information and explanations obtained by them, your Directors make the following statements in terms of Section 134(3) (c) of the Companies Act, 2013:

a). that in the preparation of the annual financial statements for the year ended March 31, 2015, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any;

b). that such accounting policies as mentioned in Note 2 of the Notes to the Financial Statements have been selected and applied consistently and judgment and estimates have been made 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, 2015 and of the profit of the Company for the year ended on that date;

c). that proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

d). that the annual financial statements have been prepared on a going concern basis;

e.). that proper internal financial controls were in place and that the financial controls were adequate and were operating effectively.

f). that systems to ensure compliance with the provisions of all applicable laws were in place and were adequate and operating effectively.

- RELATED PARTY TRANSACTIONS

All related party transactions that were entered into during the financial year were on an arms length basis and were in the ordinary course of business. There are no materially significant related party transactions made by the Company with Promoters, Directors, Key Managerial Personnel or other designated persons which may have a potential conflict with the interest of the Company at large.

All Related Party Transactions are placed before the Audit Committee for approval. Further prior approval of the Shareholders of the company at the Annual General Meeting dated 22nd August, 2014 has been taken for the business related transactions entered into with the Associate Companies for 3 years.

Particulars of contract or arrangements with related parties is annexed herewith in Form AOC 2 as Annexure B

- CORPORATE SOCIAL RESPONSIBILITY

Kushal Tradelink Limited has constituted the Corporate Social Responsibility Committee consisting of 3 directors as members of the Committee. The Committee has formulated a CSR Policy which is annexed herewith as Annexure C

During the financial year, as the part of the Corporate Social Responsibility activity, our Company was planning to organise a health camp or a camp of any social cause of similar nature to help to raise awareness among the population. The approximate budget of the camp came to Rs. 15-20 lacs.

However, the amount to be spent on CSR activities at the end of this financial year i.e 2% of the average of the last three preceding years (FY 11-12, 12-13 and 13-14) amounted to Rs. 10.05 lacs. As the company fall short of the budget to organise the aforesaid activity, the board have postponed to organise the health camp till next year and have decided to make a provision for CSR for this financial year and spend the same altogether in the financial year 2015-16.

Hence, the company has not spent on the Corporate Social Responsibility in this financial year and instead made a provision for CSR.

- EXTRACT OF ANNUAL RETURN

The details forming part of the extract of the Annual Return in Form MGT 9 is annexed herewith as "Annexure D".

- AUDITORS

A). Statutory Auditors

The Companys Auditors, M/s. K.G Vakharia & Co., Chartered Accountants, Ahmedabad having FRN: 117022W who retire at the ensuing Annual General Meeting of the Company are eligible for reappointment They have confirmed their eligibility under Section 141 of the Companies Act, 2013 and the Rules framed there under for reappointment as Auditors of the Company. As required under Clause 49 of the Listing Agreement, the auditors have also confirmed that they hold a valid certificate issued by the Peer Review Board of the Institute of Chartered Accountants of India.

B). Auditors Report

Notes to the accounts, as referred in the Auditors Report, are self-explanatory and therefore do not call for any further comments and explanations.

C). Secretarial Audit

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed M/s. Kavita Khatri & Associates, a firm of Company Secretaries in Practice to undertake the Secretarial Audit of the Company.

The Report of the Secretarial Audit Report is annexed herewith as "Annexure E".

- CORPORATE GOVERNANCE

Your Company is committed to maintain high standards of Corporate Governance and adhere to the Corporate Governance requirements as set out in the Listing Agreement

A report on corporate governance as stipulated under Clause 52 of the SME Listing Agreement together with the statutory auditors certificate thereon forms part of the Annual Report and is annexed herewith as Annexure F.

- MANAGEMENT DISCUSSION AND ANALYSIS REPORT

Highlights / Extracts of Management Discussion and Analysis Report relating to the various aspects of the activities of your company is attached herewith as Annexure G as a part of compliance of clause 52 of the listing Agreement.

- PARTICULARS OF EMPLOYEES

There is no employee drawing a salary exceeding the limit prescribed under Section 197(12) read with Rule 5 (1) of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014

- ACKNOWLEDGEMENTS

Your Directors also extend their sincere thanks to the various Central and State Government Departments, Organizations and Agencies for the continued help and co-operation extended by them. Your Directors also gratefully acknowledge all stakeholders of the Company viz. customers, members, bankers, various Regulatory Bodies and various other Stakeholders for the excellent support received from them during the year. The Directors place on record their sincere appreciation to all employees of the Company for their unstinted commitment and continued contribution to the Company.

FOR AND ON BEHALF OF THE BOARD OF DIRECTORS

SANDEEP AGRAWAL (CHAIRMAN AND MANAGING DIRECTOR)

AHMEDABAD (DIN: 00239648) May 29, 2015

 
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