AHMEDABAD, (GNI): The board of Kushal Tradelink Limited (BSE Scrip Code: 536170), an Ahmedabad-based paper trading major, in its meeting held on Monday, 1 May 2017, approved the scheme of amalgamation of Kushal Infrastructure Private Limited (KIPL), Ashapura Paper Mills Private Limited (APMPL), Kushal Wealth Creators Private Limited (KWCPL) and Riddhi Siddhi Recyclers Private Limited (RSRPL) into Kushal Tradelink Limited (KTL), with effect from the appointed date (31 March 2017), thus paving way for the backward integration of its operations.
Following is the brief description of the entities merging with KTL.
- Kushal Infrastructure Private Limited (KIPL), originally incorporated as Riddhi Siddhi Paper Mills, is engaged in Construction and Real Estate for development. Its project KUSHAL AWAAS is providing affordable housing in outskirts of Ahmedabad and the first phase of 451 units has been sold out. Kushal Infrastructure is exploring to commence work on high-end housing projects in and around city of Ahmedabad. For the period ended 31 December 2016, the company’s turnover was nil, while its net worth was Rs 128.77 lakh.
- Ashapura Paper Mills Private Limited (APMPL), is engaged in the business of manufacturing Paper and Paper Products. It manufactures high-quality Kraft Paper and has a production capacity of 150 tons per day or 45000 tons of paper p.a. at its plant in Bhuj. The paper at APMPL plant is made from 100% waste paper. For the period ended 31 December 2016, APML posted a turnover of Rs 4088.71 lakhs and had a net worth of Rs 1269.09 lakh.
- Kushal Wealth Creators Private Limited (KWCPL), which manufactures high-GSM Kraft Paper ranging from 200-550 GSM. The unit’s production capacity is 50 tons paper per day or 18000 tons p.a. There are very few companies in world that can make high-GSM Kraft Paper from 100% waste paper. Being eco-friendly, these scraps do not cause any harm to the environment. For the period ended 31 December 2016, KWCPL posted a turnover of Rs 37.68 lakh and had a net worth of Rs 628.05 lakh.
- Riddhi Siddhi Recyclers Private Limited (RSRPL), which is engaged in manufacturing of Paper and Paper Products with a capacity of 180 ton per day. RSRPL is a specialist in manufacturing best-quality Kraft Paper from 100% recycled fiber. Having mastered the art of making Kraft Paper from 100% recycled fiber, RSRPL has emerged as a strong player in the Asian and Middle Eastern markets. For the period ended 31 December 2016, the RSRPL had posted a turnover of Rs 10379.43 lakh and its net worth stood at Rs 1650.51 lakh.
According to the press release, 0n the board’s approval to the scheme of amalgamation of the above four companies with Kushal Tradelink, Sandeep Agrawal, Chairman and Managing Director said, “We are happy to announce the merger of four companies, which integrate KTL’s operations backward. While KTL has been a trading company, the merger adds manufacturing capacities to its operations. As the merger will be effective from the appointed date of 31 March 2017, the merged entities will contribute to KTL’s performance for the just-concluded financial year”.
Explaining the rationale behind the merger, Agrawal said, “KTL is presently engaged in the business of general trading with future plans to indulge in diversified business ventures. The merger with four companies would be beneficial to all parties involved including KTL shareholders. This merger will:
- lead to better, efficient and economical management, control and running of the business, and further development and growth of the business of KTL
- provide significant impetus to the growth of KTL
- lead to the backward integration and synergies of operations and a stronger and wider capital and financial base for the future growth/expansion of KTL along with diversification
- economize on administrative and other expenses
- increase the efficiency of the combined business by pooling of resources and their optimum utilization, thereby availing synergies from combined resources
- give impetus and increase in the area of sales, network of KTL
- create a combined managerial and technical expertise, which would enable KTL to develop a business model that would be competitive and cogent
- simplify the compliance of various applicable laws and group restructuring
- avoid cascading effects of multiple taxes in the proposed GST
- give KTL the benefit of multi-locational operations with diversified product range under one banner
- help use the common resources for development of business of all individual entities, which will reduce overheads and thereby improve the overall financial performance”
The BSE-listed KTL is presently engaged in the business of general trading with an existing client base of over 600 customers and future plans to indulge in diversified business ventures. The company has done a remarkable turnaround and has been paying dividend since last two years with a sterling performance for the quarter ended September 2016. KTL is conscious in addressing environmental and safety concerns and the stocking / processing facilities are ISO 9001:2008 compliant. KTL is an important intermediary in the paper product supply chain whereby it purchases materials such as Kraft Paper, Duplex Board, etc. from individual paper mills and supplies the same to customers in the packaging products business.ends