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Khandwala Securities Ltd.

BSE: 531892 Sector: Financials
NSE: KHANDSE ISIN Code: INE060B01014
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VOLUME 8
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Khandwala Securities Ltd. (KHANDSE) - Director Report

Company director report

To

The Members

The Directors of the Company take pleasure in presenting their 23rd Annual Report withthe annual audited financial statements for the financial year ended on March 31 2016.

FINANCIAL HIGHLIGHTS

The summary of the Company’s financial performance for the Financial Year 2015-16as compared to the previous Financial Year 2014-15 is given below:

(Rs. in Lakhs)

Particulars Year ended March 31 2016 Year ended March 31 2015
Total Income 348.72 506.85
Interest & other Financial
Charges 32.10 52.56
Depreciation 29.00 60.92
Profit / (Loss) before Tax and prior period item (71.53) 17.64
Less: Prior Period item - -
Provision for Tax (including 1.42 (7.46)
Deferred Tax & Fringe
Benefi t Tax)
Profit / (Loss) after Tax (70.11) 25.10
Appropriations
Dividend on Preference - -
Shares
Provision for Corporate - -
Tax on Dividend
Surplus / (Defi cit) carried forward 629.17 699.27
Reserves and Surplus 1513.58 1583.68

DIVIDEND

In view of the losses incurred by your company during the year under review nodividend has been proposed to be declared in the financial year 2015-16.

INFORMATION ON THE RESULTS OF OPERATIONS / STATE OF AFFAIRS

The consolidated income of Khandwala Securities Limited stood at Rs. 348.72 lacs forthe financial year ended March 31 2016 as against Rs. 506.85 lacs for the previous year.The Company made a net loss of Rs. 70.11 lacs for the financial year ended March 31 2016as compared to a net profit of Rs. 25.10 lacs in the previous year. The detailedinformation on operational and financial performance etc is also given in the ManagementDiscussion and Analysis which is annexed to this Annual

Report and has been prepared in compliance with the SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015.

SHARE CAPITAL

The paid up Equity Share Capital as on March 31 2016 was Rs. 119390000/-. During thefinancial year under review the Company has neither issued any shares with differentialvoting rights nor had granted any stock options or sweat equity.

LISTING WITH STOCK EXCHANGES

The equity shares of the Company are listed on National Stock Exchange of India Limited(NSE) and BSE Limited (BSE).

SUBSIDIARIES AND JOINT VENTURES

Your company does not have any subsidiary company or joint venture.

ASSOCIATE COMPANIES

During the year ended March 31 2016 your Company had one associate Company i.e.Trumonee Financial Limited within the meaning of Section 2(6) of the Companies Act 2013.

CONSOLIDATED FINANCIAL STATEMENTS

The Consolidated Financial Statements of the Company has been prepared in accordancewith the applicable Accounting Standards. The audited consolidated financial statementstogether with auditor’s report forms part of this Annual Report. A statementcontaining the salient features of the financial statement of associate Company asrequired under Sec. 129(3) of the Companies Act 2013 in the prescribed form i.e."Form AOC-1" is annexed as "Annexure - 1" to this report.

Further pursuant to the provision of Section 136 of the Companies Act 2013 thefinancial statement of the Company consolidated financial statements along with relevantdocuments and separate audited accounts in respect of associate company are available onthe website of the company. The Company will also make available copy of audited accountsof the associate Company upon request by any member of the Company interested in obtainingthe same.

EXTRACT OF ANNUAL RETURN

As provided under section 92(3) of the Companies Act 2013 and the rules framedthereunder the extract of annual return in the prescribed form MGT-9 is provided as"Annexure - 2’’ to this report.

MANAGEMENT DISCUSSION AND ANALYSIS

A detailed analysis of the Company’s performance is explained in the ManagementDiscussion & Analysis forming part of the Annual Report.

DIRECTORS AND KEY MANAGERIAL PERSONNEL a) Retirement by Rotation of the Directors

Pursuant to the provisions of Section 152 of the Companies Act 2013 Mr. PranavKhandwala retires by rotation at the ensuing Annual General Meeting and being eligibleoff ers himself for re-appointment. Your directors recommend his re-appointment.

b) Changes in Director and Key Managerial Personnel

During the year under review Mr. Pranav Khandwala was appointed as Chief Financial O3cer of the Company w.e.f May 26 2015 in accordance with the provision of section 203 ofthe Companies Act 2013. Further Mr. Abhishek Joshi was appointed as Company Secretaryand Compliance O3 cer of the Company w.e.f September 3 2015 in accordance with theprovision of section 203 of the Companies Act 2013.

DECLARATION OF INDEPENDENCE

The Company has received declarations from all the Independence Directors confi rmingthat they meet the criteria of independence as prescribed under SEBI (Listing Obligationsand Disclosure Requirements) Regulations 2015 and section 149(6) of the Companies Act2013.

MEETINGS OF THE BOARD OF DIRECTORS

During the financial year the Board met 5 (fi ve) times i.e. on May 26 2015 August1 2015 September 3 2015 November 7 2015 and February 12 2016. The intervening gapbetween the Meetings was within the period prescribed under the Companies Act 2013. Theattendance details of directors at the Board Meetings are provided in the CorporateGovernance Report.

COMMITTEES OF THE BOARD

The details of all the Committees of the Board along with their composition terms ofreference etc. are provided in the Corporate Governance Report which forms part of thisAnnual Report. The Board of Directors has accepted all the recommendations made by theAudit Committee during the financial year.

BOARD EVALUATION

Pursuant to the provisions of the Companies Act 2013 and the SEBI (Listing Obligationsand Disclosure Requirements) Regulations 2015 the Board of Directors has carried out anannual evaluation of its own performance the directors individually as well as theworking of its various committees. The Independent Directors at their separate meetingheld during the financial year has reviewed the performance of non-independent directorsperformance of the board as a whole and performance of the Chairman of the Company aftertaking into accounts the view of executive directors and non-executive directors. Theperformance evaluation of independent directors was done by the entire board. The

Board of Directors has expressed their satisfaction with the evaluation process.

NOMINATION AND REMUNERATION POLICY

The Board has on recommendation of Nomination and Remuneration Committee framed aNomination and Remuneration policy on appointment of Directors key managerial personnelsenior management and their remuneration including the criteria for determining qualifications independence of directors positive attributes etc. The said policy is annexedto this report as "Annexure - 3’’.

DIRECTOR’S RESPONSIBILITY STATEMENT

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

(i) in the preparation of the Annual Accounts for the year ended March 31 2016 theapplicable Accounting Standards have been followed along with proper explanations relatingto material departures if any;

(ii) that such accounting policies as mentioned in the notes to accounts have beenselected and applied consistently and judgments and estimates have been made that arereasonable and prudent so as to give a true and fair view of the state of affairs of theCompany at the end of the financial year and of the loss of the Company for the year endedMarch 31 2016;

(iii) proper and sufficient care for the maintenance of adequate accounting records inaccordance with the provisions of the Companies Act 2013 for safeguarding the assets ofthe Company and for preventing and detecting fraud and other irregularities;

(iv) that the Annual accounts are prepared on a going concern basis.

(v) that proper internal financial controls were in place and that the internalfinancial controls were adequate and were operating effectively ; and

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

INTERNAL FINANCIAL CONTROLS

The Company has in place adequate internal financial controls with reference tofinancial statements. The internal financial control procedure adopted by the Company areadequate for safeguarding its assets the prevention and detection of frauds and errorsthe accuracy and completeness of the accounting records and the timely preparation ofreliable financial information. The details of internal financial controls and itsadequacy are provided in the Management’s Discussion and Analysis which forms partof this annual report.

RISK MANAGEMENT

The Company has an elaborated risk management framework which is designed to enablerisks to be identifi ed assessed and mitigated appropriately. Details of risk managementincluding identification of elements of risk and their mitigation are also provided inManagement’s Discussion and Analysis which forms part of this annual report.

RELATED PARTY TRANSACTIONS

All Related Party Transactions that were entered during the financial year 2015-16 wereon arm’s length basis and in the ordinary course of business of the Company. Thusdisclosure in form AOC-2 is not required. Further there were no materiallysignificant related party transactions entered by the Company during the year with thePromoters Directors and Key Managerial Personnel which may have a potential conflict withthe interest of the Company. The disclosure with related parties is set out in the notesto accounts forming part of the Annual Report. The Company has also adopted a relatedparty transactions policy which is available on the website of the Company.

DEPOSITS

During the year under review the Company has not accepted any deposits from the publicunder Chapter V of the Companies Act 2013.

PARTICULARS OF LOAN GUARANTEES AND INVESTMENTS BY COMPANY

During the year under review the Company has not given any loans or guarantees orprovided any security or made any investments covered under Section 186 of the CompaniesAct 2013.

EMPLOYEES

Your Company is consciously aware that its well being largely depends upon the qualityand strength of human resource. Your Company recognizes that human capital is its mostvaluable asset and thus endeavors to attract and retain the best available talent. Towardsthe end of FY 2016 your Company undertook an exercise to shrink the payroll head count tomake it lean and more competitive. The Company through constant monitoring of itsmilestones and goals ensures that its operations are adequately sta3 ed and in sync withrequirements. Your Company’s human resource policies are designed and implemented toachieve these objectives. The Board wishes to place on record its appreciation for sincereand dedicated e3 orts put in by all the employees. Employee-Management relations continuedto remain cordial throughout the year under review.

PARTICULARS OF EMPLOYEES

Pursuant to Section 197 of the Companies Act 2013 read with Rule 5(1) of the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 details of the ratioof remuneration of each director to the median employee’s remuneration are annexed tothis report as "Annexure-4".

During the year under review no employee was in receipt of remuneration exceeding thelimits as prescribed under provision of Section 197 of the Companies Act 2013 and Rule5(2) and Rule 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel)Rules 2014.

POLICY FOR PREVENTION OF SEXUAL HARASSMENT OF WOMEN AT WORKPLACE

The Company has adopted a policy on prevention of sexual harassment of women atworkplace under the provisions of the Sexual Harassment of Women at Workplace (PreventionProhibition and Redressal) Act 2013 ("Act"). The objective of this policy is toprovide protection against sexual harassment of women at workplace and for redressal ofcomplaints of any such harassment. During the year under review no complaints of sexualharassment were received by the Company.

VIGIL MECHANISM/ WHISTER BLOWER POLICY

The Company has adopted a Vigil Mechanism/Whistle Blower Policy for the employees toreport instances of unethical behaviour actual or suspected fraud or violation of theCompany’s Code of Conduct. The detail of the said Policy is explained in theCorporate Governance Report and has been uploaded in the website of the Company.

PREVENTION OF INSIDER TRADING

The Company has adopted the code of practices and procedure for fair disclosure ofUnpublished Price Sensitive Information for prevention of Insider trading which is in linewith the provision of the SEBI (Prohibition of Insider Trading) Regulations 2015 and hasbeen uploaded in the website of the Company.

STATUTORY AUDITORS

M/s. Udyen Jain & Associates Chartered Accountants (Firm Registration No.116336W) the Statutory Auditor of the Company hold off ce till the conclusion of theensuing Annual General Meeting of the Company and are eligible for re-appointment. TheCompany has received the consent letter from them to the effect that their re-appointmentif made would be within the prescribed limits under section 139 of the Companies Act2013 and that they are not disqualifi ed for re-appointment. Observations made by theAuditors in their Report have been appropriately dealt with in the notes forming part ofthe accounts for the year which are self-explanatory and therefore do not call for anyfurther comments.

SECRETARIAL AUDITORS

PursuanttotheprovisionofSection204oftheCompaniesAct 2013 and the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 the Company hasappointed M/s. Bhuwnesh Bansal & Associates Company Secretary in Practice to conductthe Secretarial Audit of the Company for the financial year 2015-2016. The SecretarialAudit Report for the financial year ended March 31 2016 is annexed as"Annexure-5" to this report.

In respect of the Secretarial Auditors remark in their Report for the financial year2015-2016 the Company would like to state as under:

a) aspertheprovisionsoftheSection203oftheCompanies Act 2013 read with Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 the Company has failedto fi ll the vacancy of Company Secretary from 5th December 2014 to 2nd September 2015which is more than six months from the date of such vacancy; The Company was in theprocess of appointing a whole-time Company Secretary but didn't fi nd the suitablecandidate within six months from the date of vacancy of Company Secretary.

b) as per the provisions of the Section 134 of the Companies Act 2013 read withCompanies (Accounts) Rules 2014 the annual Financial Statements for the Financial Yearended March 31 2015 were not signed by the Company Secretary of the Company.

At the time of the signing the financial statements there was no person designated asCompany Secretary in the Company.

INTERNAL AUDITORS

Pursuant to Section 138 of the Companies Act 2013 and the rules made thereunder M/s.Shah & Ramaiya Chartered Accountants was appointed as Internal Auditors of theCompany. They have conducted the internal audit periodically and submitted their reportsto the Audit Committee.

CORPORATE GOVERNANCE

A report on Corporate Governance along with a Certifi cate from the Auditors of theCompany regarding compliance of conditions of Corporate Governance as prescribed underSEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 has been providedin this Annual Report.

CORPORATE SOCIAL RESPONSIBILITY

Pursuant to the provisions of Sec. 135 of the Companies Act 2013 read with Companies(Corporate Social Responsibility) Rules 2014 the requirements of mandatoryimplementation of Corporate Social Responsibility activities are not applicable to theCompany as on date.

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURT

There are no significant and material orders passed by the regulators or Courts thatwould impact the going concern status of the Company and its future operations.

CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

In view of the nature of activities which are being carried on by the Company Rule8(3) of the Company (Accounts) Rules 2014 concerning conservation of energy andtechnology absorption respectively are not applicable to the Company.

Foreign Exchange Earnings and Outgo:

During the year under review the foreign exchange earnings was nil. The foreignexchange outgo was Rs. 1.01 Lacs (Previous Year Rs. 1.49 Lacs).

ACKNOWLEDGMENTS

The Board expresses its sincere gratitude for the continued support and guidancereceived by the Company from the Securities and Exchange Board of India the StockExchanges and other government and regulatory agencies. The Board would like toacknowledge the continued support of its bankers registrars vendors clients andinvestors. The Directors also wish to place on record their gratitude and appreciation ofthe employees’ hard work dedication teamwork and professionalism which has made thephenomenal growth possible year after year.

For and on behalf of the Board of Directors of

Khandwala Securities Limited

Shreedhar M. Parande

Chairman

Date: May 20 2016

Place: Mumbai

Form AOC-1

(Pursuant to first proviso to sub-section (3) of section 129 read with rule 5 ofCompanies (Accounts) Rules 2014)

Statement containing salient features of the Financial Statement ofSubsidiaries/Associate Companies/Joint Ventures Part A: Subsidiaries Not Applicable

Part B: Associates and Joint Ventures

Statement pursuant to Section 129(3) of the Companies Act 2013 related to AssociateCompanies and Joint Ventures

(Amount in Rupees)
Name of the Associate Company Trumonee Financial Limited
Latest Audited Balance Sheet Date March 31 2016
No. of Shares of Associate held by the company on the year end 3375000
Amount of Investment in Associates 33750000/-
Extend of Holding % 43.41%
Description of how there is significant infl uence Signifi cant influence due to percentage of share capital
Reason why the associate/joint venture is not consolidated -
Net worth attributable to shareholding as per latest audited Balance Sheet 1699119/-
Profit/Loss for the year Considered in Consolidation (15818)/-
Profit/Loss for the year not Considered in Consolidation -

 

For Udyen Jain & Associates For and on behalf of the Board of Directors
Chartered Accountants Khandwala Securities Limited
Udyen Jain Shreedhar M. Parande Paresh J. Khandwala
Partner Chairman Managing Director
Mem. No: F – 101201 DIN: 00542525 DIN: 00112678
ICAI Registration No. 116336W
Place: Mumbai Pranav Khandwala Abhishek Joshi
Date: May 20 2016 Chief Financial O3 cer Company Secretary

Annexure - 3

NOMINATION AND REMUNERATION POLICY

1. Preamble

This Nomination and Remuneration Policy is being formulated in compliance with Section178 of the Companies Act 2013 (herein after called as ‘the Act’) read alongwith the applicable rules thereto and clause 49 of the Listing Agreement as amended fromtime to time. This policy on Nomination and Remuneration of Directors Key ManagerialPersonnel and Senior Management has been formulated by the Nomination and RemunerationCommittee and has been approved by the Board of Directors.

2. Defi nitions

"Company" means Khandwala Securities Limited.

"Board of Directors" or "Board" means theBoard of Directors of Khandwala Securities Limited as constituted/reconstituted from timeto time.

• "Nomination and Remuneration Committee" or Committee"means the Committee of the Board constituted/reconstituted under the provisions of Clause49 of the Listing Agreement read with Section 178 of the Companies Act 2013 as in forcefrom time to time.

"Remuneration" means any money or its equivalent given orpassed to any person for services rendered by him and includes perquisites as definedunder the Income-tax Act 1961;

"Key Managerial Personnel" means:

• Managing Director or Chief Executive O3 cer or Manager and in their absence aWhole-time Director;

• Chief Financial O3 cer;

• Company Secretary; and

• Such other off cer as may be prescribed.

"Senior Managerial Personnel" mean the personnel of the companywho are members of its core management team excluding Board of Directors. Normally thiswould comprise all members of management of rank equivalent to General Manager and aboveincluding all functional heads.

3. Objective

The objective of the policy is to ensure that:

• the level and composition of remuneration is reasonable and sufficient toattract retain and motivate directors to run the company successfully;

• relationship of remuneration to performance is clear and meets appropriateperformance benchmarks; and

• remuneration to directors key managerial personnel and senior managementinvolves a balance between fixed and incentive pay refl ecting short and long-termperformance objectives appropriate to the working of the company and its goals.

4. Role of the Committee

The role of the Committee will be the following:

• To formulate criteria for determining qualifi cations positive attributes andindependence of a Director.

• To formulate criteria for evaluation of Independent Directors and the Board.

• To carry out evaluation of Director’s performance.

• To identify persons who are qualified to become Directors and who may beappointed in Senior Management in accordance with the criteria laid down in this policy.

• To recommend to the Board the appointment and removal of Directors and SeniorManagement.

• To recommend to the Board policy relating to remuneration for Directors KeyManagerial Personnel and Senior Management.

• To devise a policy on Board diversity composition size.

• Succession planning for replacing Key Executives and overseeing.

• To carry out any other function as is mandated by the Board from time to timeand/ or enforced by any statutory notifi cation amendment or modifi cation as may beapplicable.

• To perform such other functions as may be necessary or appropriate for theperformance of its duties.

5. Appointment and Removal of Director Key Managerial Personnel and Senior ManagementAppointment criteria and qualifications

a) The Committee shall identify and ascertain the integrity qualifi cation expertiseand experience of the person for appointment as Director KMP or at Senior Managementlevel and recommend his/ her appointment as per Company’s Policy.

b) A person should possess adequate qualifi cation expertise and experience for theposition he/she is considered for appointment. The Committee has authority to decidewhether qualifi cation expertise and experience possessed by a person are sufficient/satisfactory for the position.

c) The Company shall not appoint or continue the employment of any person as ManagingDirector/Whole-time Director/ Manager who has attained the age of seventy years. Providedthat the term of the person holding this position may be extended beyond the age ofseventy years with the approval of shareholders by passing a special resolution.

6. Term / Tenure

a) Managing Director/Whole-time Director:

The Company shall appoint or re-appoint any person as its Managing Director orWhole-time Director or Manager for a term not exceeding five years at a time. Nore-appointment shall be made earlier than one year before the expiry of term.

b) Independent Director:

An Independent Director shall hold off ce for a term up to the term fixed by the Boardof Directors as prescribed under the Act and shall be eligible for re-appointment onpassing of a special resolution by the Company and disclosure of such appointment in theBoard's report. No Independent Director shall hold off ce for more than two consecutiveterms maximum of 5 years each but such Independent Director shall be eligible forappointment after expiration of three years of ceasing to become an Independent Director.Provided that an Independent Director shall not during the said period of three years beappointed in or be associated with the Company in any other capacity either directly orindirectly.

7. Evaluation

The Committee shall carry out evaluation of performance of Director KMP and SeniorManagement Personnel yearly or at such intervals as may be considered necessary.

8. Removal

The Committee may recommend with reasons recorded in writing removal of a DirectorKMP or Senior Management Personnel subject to the provisions and compliance of theCompanies Act 2013 rules and regulations and the policy of the Company.

9. Retirement

The Director KMP and Senior Management Personnel shall retire as per the applicableprovisions of the Act and the prevailing policy of the Company. The Board will have thediscretion to retain the Director KMP Senior Management Personnel in the sameposition/remuneration or otherwise even after attaining the retirement age for thebenefit of the Company.

10. Provision relating to Remuneration of Directors/KMP/ Senior Management Personnel

1. Remuneration to Managing Director / Whole-time Directors:

i. The Remuneration/Commission etc. to be paid to Managing Director/Whole-timeDirectors etc. shall be governed as per provisions of the Companies Act 2013 and rulesmade there under or any other enactment for the time being in force and the approvalsobtained from the Members of the Company.

ii. The Nomination and Remuneration Committee shall make such recommendations to theBoard of Directors as it may consider appropriate with regard to remuneration to ManagingDirector / Whole-time Directors.

2. Remuneration to Non- Executive / Independent Directors:

iii. The Non-Executive/ Independent Directors may receive sitting fees and such otherremuneration as permissible under the provisions of Companies Act 2013. The amount ofsitting fees shall be such as may be recommended by the Nomination and RemunerationCommittee and approved by the Board of Directors.

iv. All the remuneration of the Non-Executive / Independent Directors (excludingremuneration for attending meetings as prescribed under Section 197(5) of the CompaniesAct 2013) shall be subject to ceiling/ limits as provided under Companies Act 2013 andrules made thereunder or any other enactment for the time being in force. The amount ofsuch remuneration shall be such as may be recommended by the Nomination and RemunerationCommittee and approved by the Board of Directors or shareholders as the case maybe. AnIndependent Director shall not be eligible to get Stock Options and also shall not beeligible to participate in any remuneration paid to Non-Executive/ Independent Directorsfor services rendered which are of professional in nature shall not be considered as partof the remuneration for the purposes of clause (III) above if the following conditions aresatisfi ed:

• The Services are rendered by such Director in his capacity as the professional;and

• In the opinion of the Committee the director possesses the requisitequalification for the practice of that profession.

3. Remuneration to Key Managerial Personnel and Senior Management:

v. The remuneration to Key Managerial Personnel and Senior Management shall consist offixed pay and incentive pay in compliance with the provisions of the Companies Act 2013and in accordance with the Company’s Policy.

vi. The Committee shall determine the stock options and other share based payments tobe made to Key Managerial Personnel and Senior Management.

vii. The Fixed pay may include monthly remuneration employer’s contribution toProvident Fund contribution to pension fund pension schemes etc. as decided from totime.

viii. The Incentive pay shall be decided based on the balance between performance ofthe Company and performance of the Key Managerial Personnel and Senior Management to bedecided annually or at such intervals as may be considered appropriate.

11. Amendments:

The Board of Directors on its own and/or as per the recommendations of Nomination andRemuneration Committee can amend this Policy as and when deemed fi t. In case of anyamendment(s) clarifi cation(s) circular(s) etc. issued by the relevant authorities notbeing consistent with the provisions laid down under this Policy then such amendment(s)clarifi cation(s) circular(s) etc. shall prevail upon the provisions hereunder and thisPolicy shall stand amended accordingly from the effective date as laid down under suchamendment(s) clarifi cation(s) circular(s) etc.

Annexure – 4

Details pertaining to remuneration as required under Section 197(12) of the CompaniesAct 2013 read with and Rule 5(1) of the Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014

Requirements Disclosure
1 The ratio of the remuneration of each Director to the median remuneration of the employees of the Company for the Financial Year and the percentage increase in remuneration of each Director Chief Financial O3 cer & Company Secretary in the Financial Year Name of Director / KMP Ratio of the remuneration & Designation of each Director to the median remuneration of the employees % increase In remuneration
Mr. Paresh Khandwala 21.79:1 (Managing Director) Nil
Mr. Pranav Khandwala N.A (Chief Financial O3 cer)* N.A
* appointed w.e.f May 26 2015
** appointed w.e.f September 3 2015
2 The percentage decrease in the median remuneration of employees in the financial year 22.68%.

 

3 The number of employees as on 31st March 2016 on the rolls of Company 33 employees as on 31st March 2016
4 The explanation on the relationship between average increase in remuneration and company performance The average increase in remuneration of all employees was 21.83%. The increase in remuneration was in line with the Company’s market competitiveness.
5 Comparison of the remuneration of the Key Managerial Personnel against the performance of the Company. No increase in remuneration of Key Managerial Personnel during the year. The detail of the performance of the company is given in the Directors Report and Management Discussion and Ananlysis.
6 Variations in the market capitalization of the company price earnings ratio as at the closing date of the current fi nancial year and previous financial year and percentage increase over decrease in the market quotations of the shares of the company in comparison to the rate at which the company came out with the last public off er in case of listed companies. The Market capitalization of the Company as on March 31 2016 was Rs. 20.42 crores as compared to Rs. 17.91 crores as on March 31 2015. The price earning ratio of the Company as on March 31 2016 was (28.98) as compared to 71.36 as on March 31 2015.
7 Average percentile increase made in the salaries of employees other than the managerial personnel in the last financial year and its comparison with the percentile increase in the managerial remuneration and justifi cation thereof and point out if there any exceptional circumstances for increase in the managerial remuneration. The average increase in salaries of employees other than the managerial personnel was 21.83%. The increase in remuneration of non-managerial personnel was in line with the Company’s market competitiveness. There was no increase in the remuneration of key managerial personnel during the year.
8 The key parameters for any variable component of remuneration availed by the Directors. None of the Directors have availed any variable components of remuneration during the year.
9 The ratio of the remuneration of the highest paid director to that of the employees who are not Directors but receive remuneration in excess of the highest paid Director during the year. There was no employee who received remuneration in excess of the highest paid director during the year.
10 Affrmation that the remuneration is as per the remuneration policy of the Company It is affrmed that the remuneration is as per the Nomination and Remuneration Policy of the Company.

 

For and on behalf of the Board of Directors of
Khandwala Securities Limited
Date: May 20 2016 Paresh Khandwala
Place: Mumbai Managing Director

Annexure-5

SECRETARIAL AUDIT REPORT

FORM NO. MR – 3

FOR THE FINANCIAL YEAR ENDED March 31 2016

[Pursuant to section 204(1) of the Companies Act 2013 and rule No.9 of the Companies(Appointment and Remuneration personnel Rule 2014]

To

The Members

Khandwala Securities Limited

Vikas Building Ground Floor Green Street Fort Mumbai – 400 023

I have conducted the secretarial audit of the Compliance of applicable statutoryprovisions and the adherence to good corporate practices by Khandwala Securities Limited(hereinafter called the Company). Secretarial Audit was conducted in a manner thatprovided me a reasonable basis for evaluating the corporate conduct/Statutory compliancesand expressing my opinion thereon.

Based on my verifi cation of Khandwala Securities Limited’s books papers minutebooks form and returns fi led and other records maintained by the Company and also theinformation provided by the Company its off cers agents and authorized representativesduring the conduct of Secretarial audit I hereby report that in my opinion the Companyhas during the audit period covering the Financial year ended March 31 2016 compliedwith the statutory provisions listed hereunder and also that the Company has properBoard-processes and compliance mechanism in place to the extent in the manner and subjectto the reporting made hereinafter.

I have examined the books papers minute books form and returns fi led and otherrecords maintained by the Company for the financial year ended on March 31 2016 accordingto the provisions of

(1) The Companies Act 2013 (the Act) and the rules made thereunder;

(2) The Securities Contracts (Regulation) Act 1956 (SCRA) and the rules madethereunder;

(3) The Depository Act 1996 and the Regulations and bye-laws framed thereunder;

(4) Foreign Exchange Management Act 1999 and the rules and regulations made thereunderto the extent of Foreign Direct Investment Overseas Direct Investment and ExternalCommercial Borrowings; (5) The following Regulation and Guidelines prescribed under theSecurities and Exchange Board of India Act 1992 (‘SEBI Act’):-

a. The Securities and Exchange Board of India (Substantial Acquisition of Shares andTakeovers) Regulations 2011;

b. The Securities and Exchange Board of India (Prohibition of Insider Trading)Regulations 2015;

c. The Securities and Exchange Board of India (Issue of Capital and DisclosureRequirements) Regulations 2009;

(Not applicable to the Company during the Audit period)

d. The Securities and Exchange Board of India (Employee Stock Option Scheme andEmployee Stock Purchase Scheme) Guidelines 1999; (Not applicable to the Company duringthe Audit period)

e. The Securities and Exchange Board of India (Issue and Listing of Debt Securities)Regulations 2008; (Not applicable to the Company during the Audit period)

f. The Securities and Exchange Board of India (Registration to an Issue and ShareTransfer Agents) Regulation 1993 regarding the Companies Act and dealing with client;

g. The Securities and Exchange Board of India (Delisting of Equity Shares) Regulations2009; (Not applicable to the Company during the Audit period) h. The Securities andExchange Board of India (Buyback of Securities) Regulations 1998; (Not applicable tothe Company during the Audit period)

i. The Securities and Exchange Board of India (Merchant Bankers) Regulation 1992;

j. The Securities and Exchange Board of India (Portfolio Managers) Regulation 1993

(6) Employees Provident Fund and Miscellaneous provision Act 1952

; (7) Employees State Insurance Act 1948;

(8) Payment of Gratuity Act 1972;

(9) Act as prescribed under Shop and Establishment Act of various local authorities

. I have also examined Compliance with the applicable clauses of the following:

(i) Secretarial Standards issued by The Institute of Company Secretaries of India.

(ii) The SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015entered into by the Company with Bombay Stock Exchange Limited (BSE) and National StockExchange of India Limited (NSE).

During the period under review the Company has complied with the provision of the ActRules Regulations Guidelines Standards etc. mentioned above. I further report that theBoard of Directors of the Company is duly constituted with Proper balance of ExecutiveDirectors Non Executive Directors and Independent Directors. The changes in thecomposition of the Board of Directors that took place during the period under review werecarried out in compliance with the provisions of the Act.

Adequate notice is given to all Directors to schedule the Board Meetings agenda anddetailed notes on agenda were sent at least seven days in advance and a system exists forseeking and obtaining further information and clarification on the agenda items before themeeting and for meaningful participation at the meeting.

Majority decision is carried through while the dissenting members’ views arecaptured and recorded as part of the minutes.

I further report that as per the provisions of the Section 203 of the CompaniesAct 2013 read with Companies (Appointment and Remuneration of Managerial Personnel)Rules 2014 the Company has failed to fi ll the vacancy of Company Secretaryfrom 5th December 2014 to 02nd September 2015 which is more than six months from thedate of such vacancy.

I further report that per the provisions of the Section 134 of the CompaniesAct 2013 read with Companies (Accounts) Rules 2014 the annual Financial Statements forthe Financial Year ended March 31 2015 were not signed by the Company Secretary of theCompany.

I further report that there are adequate systems and processes in the Companycommensurate with size and operations of the Company to monitor and ensure compliance withapplicable laws rules regulations and guidelines.

I further report that during the audit period the Company has passed followingspecial Resolution which is having major bearing on the company’s affairs inpursuance of the above referred laws rules regulations guidelines. I further reportthat during the audit period there were no instances of: (i) Public/Right/preferential issue of shares/ debentures/ sweat equity.

(ii) Redemption/ buy-back of securities. (iii) Merger/ amalgamation/ reconstructionetc. (iv) Foreign technical collaborations.

For Bhuwnesh Bansal & Associates
Bhuwnesh Bansal
Proprietor
Place: Mumbai FCS No. – 6526
Date: May 20 2016 CP No. - 9089

This Report is to be read with my letter of even date which is annexed as Annexure Aand forms an integral part of this report.

‘Annexure A’ To The Members Khandwala Securities Limited

Vikas Building Ground Floor Green Street Fort Mumbai – 400 023

My report of even date is to be read along with this letter.

1. Maintenance of Secretarial record is responsibility of the Management of theCompany. My responsibility is to express an opinion on these secretarial records based onmy audit.

2. I have followed the audit practices and process as were appropriate to obtainreasonable assurance about the correctness of the contents of the Secretarial records. Theverifi cation was done on test basis to ensure that correct facts are reflected inSecretarial records. I believe that the process and practices I followed provide areasonable basis for my opinion.

3. I have not verified the correctness and appropriateness of financial records andBooks of Accounts of the Company.

4. Where ever required I have obtained the Management representation about theCompliance of laws rules and regulations and happening of events etc.

5. The Compliance of the provisions of Corporate and other applicable laws rulesregulations standards is the responsibility of management. My examination was limited tothe verifi cation of procedure on test basis.

6. The Secretarial Audit report is neither an assurance as to the future viability ofthe Company nor of the e3 cacy or efectiveness with which the management has conducted theaffairs of the Company.

For Bhuwnesh Bansal & Associates
Bhuwnesh Bansal
Proprietor
Place: Mumbai FCS No. – 6526
Date: May 20 2016 CP No. - 9089