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Khandwala Securities Ltd.

BSE: 531892 Sector: Financials
NSE: KHANDSE ISIN Code: INE060B01014
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OPEN 13.30
PREVIOUS CLOSE 12.90
VOLUME 8200
52-Week high 18.00
52-Week low 12.52
P/E
Mkt Cap.(Rs cr) 16
Buy Price 12.82
Buy Qty 200.00
Sell Price 13.00
Sell Qty 4800.00
OPEN 13.30
CLOSE 12.90
VOLUME 8200
52-Week high 18.00
52-Week low 12.52
P/E
Mkt Cap.(Rs cr) 16
Buy Price 12.82
Buy Qty 200.00
Sell Price 13.00
Sell Qty 4800.00

Khandwala Securities Ltd. (KHANDSE) - Director Report

Company director report

To

The Members

Your Directors hereby presenting their Twenty Fourth Annual Report together with theaudited financial statements of your Company for the financial year ended 31st March 2017.

FINANCIAL HIGHLIGHTS

The summary of the Company’s financial performance for the Financial Year 2016-17as compared to the previous Financial Year 2015-16 is given below:

(Rs. in Lakhs)

Particulars Year ended March 31 2017 Year ended March 31 2016
Total Income 495.36 348.72
Financial Cost 34.57 32.10
Depreciation and Amortization 29.67 29.00
Expenses
Profit / (Loss) before (59.94) (71.53)
Exceptional Items & Tax
Exceptional Items - -
Profit / (Loss) before Tax (59.94) (71.53)
Provision for Tax 1.01 (1.42)
Profit / (Loss) after Tax (60.95) (70.11)
Appropriations
Dividend on Preference Shares - -
Provision for Corporate Tax on Dividend - -
Surplus / (Deficit) carried forward 568.21 629.17
Reserves and Surplus 1452.62 1513.58

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 2016-17.

INFORMATION ON THE RESULTS OF OPERATIONS / STATE OF AFFAIRS

During the year under review the standalone income for the financial year was Rs.495.36 lacs as compared to Rs. 348.72 lacs for the previous year. The total expensesduring the financial year was Rs. 555.30 lacs as compared to Rs. 420.25 lacs in theprevious year. The Net loss after tax was Rs. 60.95 lacs in the financial year as comparedto net loss of Rs. 70.11 lacs in the previous year. The detailed information onoperational and financial performance of the Company are given in the ManagementDiscussion & Analysis Report forming part of this Annual Report.

SHARE CAPITAL

The paid up equity share capital as on March 31 2017 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 2017 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 also availableon the website of the Company. The Company will also make available copy of auditedaccounts of the associate Company upon request by any member of the Company interested inobtaining the 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 Report forming part of this 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 Mrs. BhagyashreeKhandwala retires by rotation at the ensuing Annual General Meeting and being eligibleoffers herself for reappointment. The Board of Directors recommends her re-appointment.

b) Changes in Directors and Key Managerial Personnel

During the year under review Mr. Pranav Khandwala was appointed as Whole-time Directorof the Company w.e.fSeptember12016.ButlaterheinformedtheBoard that for exploring someother business opportunities he will not be able to look into the day to day affairs ofthe Company. Hence he resigned from the designation of Whole-time Director and ChiefFinancial Officer (CFO) of the Company w.e.f. December 4 2016. However he expressed hiswillingness to continue to act as a Non-Executive Director of the Company. Accordinglythe Board appointed him as Non-Executive Director of the Company. Further Mr. ShreedharM. Parande resigned from the Chairman of the Board and Independent Director of the Companyeffective from the close of business hours on November 12 2016. The Board places onrecord its appreciation for the services rendered by Mr. Shreedhar M. Parande during histenure as a member of the Board and its Committees. Further Mrs. Bhagyashree Khandwalawas appointed as Chief Financial Officer (CFO) of the Company with effect from February14 2017. Subsequently the Board also appointed Mrs. Bhagyashree Khandwala as anExecutive Director of the Company for a period of three years with effect from February14 2017 subject to the approval by members at the ensuing Annual General Meeting of theCompany.

DECLARATION OF INDEPENDENCE

The Company has received declarations from all the Independent Directors confirmingthat they meet the criteria of independence as prescribed under the provisions of theCompanies Act 2013 read with schedules and rules issued there under as well as SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015.

MEETINGS OF THE BOARD OF DIRECTORS

During the financial year the Board met 5 (five) times i.e. on May 20 2016 August10 2016 November 12 2016 December 12 2016 and February 14 2017. 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 and meeting held during the year are provided in the Corporate GovernanceReport forming part of this Annual Report. The Board of Directors has accepted all therecommendations made by the Audit 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 Board of Directors evaluated the performance of theBoard after seeking inputs from all the directors on the basis of board composition andstructures understanding of their roles and responsibilities effectiveness of boardprocesses etc. In a separate meeting of the Independent Directors of the Company theperformance of non-independent directors performance of the board as a whole wasevaluated after taking into accounts the view of executive directors and non-executivedirectors. The Board and the Nomination and Remuneration Committee has reviewed theperformance of the individual directors of the Company on the basis of their criteria suchas effectiveness performance transparency strategic thinking quality of discussions atthe meetings etc. The performance evaluation of independent directors was done by theentire board. The Directors 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 personnel and their remuneration including the criteria for determiningqualifications independence of directors positive attributes etc. The said policy isannexed to 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 accountsfor the financial year ended 31st March 2017 the applicable accounting standards havebeen followed along with proper explanations relating to material departures if any; (ii)that such accounting policies as mentioned in the notes to accounts have been selected andapplied consistently and judgments and estimates have been made that are reasonable andprudent so as to give a true and fair view of the state of affairs of the Company at theend of the financial year and of the loss of the Company for the year ended 31st March2017; (iii) proper and sufficient care for the maintenance of adequate accounting recordsin accordance with the provisions of the Companies Act 2013 for safeguarding the assetsof the Company and for preventing and detecting fraud and other irregularities; (iv) thatthe Annual accounts are prepared on a going concern basis. (v) that proper internalfinancial controls were in place and that the internal financial controls were adequateand were operating effectively ; and (vi) that systems to ensure compliance with theprovisions of all applicable laws were in place and were adequate and were operatingeffectively.

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 identified 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 the Related Party Transactions that were entered during the financial year 2016-17were on arm’s length basis and in the ordinary course of business of the Company.Thus disclosure 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 uploaded on the website of the Company.

DEPOSITS

During the year under review the Company has neither accepted nor renewed any depositsfrom the public under the provision of Section 73 and other applicable provisions if anyCompanies Act 2013 read with the rules made thereunder.

PARTICULARS OF LOAN GUARANTEES AND INVESTMENTS BY COMPANY

The particulars of loans guarantees and investments made by the Company under Section186 of the Companies Act 2013 during the financial year have been disclosed in thenotes of the financial statements.

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 2017 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 staffed 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 efforts put in by all the employees. Employee-Management relations continuedto remain cordial throughout the year under review.

PARTICULARS OF EMPLOYEES

Pursuant to the provisions of Section 197(12) of Companies Act 2013 the ratio of theremuneration of each Director to the median employee’s remuneration and other detailsin term of sub-section 12 of Section 197 of the Companies Act 2013 read with Rule 5(1) ofthe Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 areforming part of this report as "Annexure - 4".

During the year under review there was no employee was in receipt of remunerationexceeding the limits as prescribed under the provision of Section 197 of the CompaniesAct 2013 read with Rule 5(2) and 5(3) of the Companies (Appointment and Remuneration ofManagerial 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.

The objective of this policy is to provide protection against sexual harassment ofwomen at workplace and for redressal of complaints of any such harassment. During the yearunder review no complaints of sexual harassment were received by the Company.

VIGIL MECHANISM / WHISTLE BLOWER POLICY

The Company has adopted a Vigil Mechanism/Whistle Blower Policy for the employees forreporting genuine concerns/grievances and reporting any unethical behavior or wrongpractices such as fraud violation of code of conduct inappropriate behavior etc. in theorganization. This Policy provides the adequate safeguards against the victimization ofthe employees who use the vigil mechanism. The Vigil Mechanism/Whistle Blower Policy hasbeen uploaded on the website of the Company at http://www.kslindia.com/Admin/Fileuploads/Code_of_Corporate_Disclosure_for_ prevention_of_Insider_Trading.pdf. Thefunctioning of the vigil mechanism is reviewed by the Audit Committee from time to time.

PREVENTION OF INSIDER TRADING

The Company has adopted a Code of Practices and Procedure for Fair Disclosure ofUnpublished Price Sensitive Information for prevention of Insider Trading. The said codeis in line with the provisions of the SEBI (Prohibition of

Insider Trading) Regulations 2015 and the same has been uploaded on the website of theCompany at http: //www. kslindia.com/Static/Code_of_Conduct%20_Revised_KSL. pdf. All theDirectors and the designated employees have complied with the Code.

STATUTORY AUDITORS

Pursuant to the provisions of Sec. 139 of the Companies Act 2013 ("the Act")read with the Companies (Audit and Auditors) Rules 2014 an audit firm can hold office asstatutory auditor for two terms of five consecutive years i.e. for a maximum period of tenyears. Further as per the provisions of the Act the Company is required to comply withthese provisions within three years from the commencement of the Act. M/s. Udyen Jain& Associates Chartered Accountants the existing Statutory Auditor of the Company hascompleted their terms in accordance with Sec. 139 of the Act and they will hold the officeof Statutory Auditors upto the conclusion of the ensuing Twenty Fourth Annual GeneralMeeting of the Company. The Board on the recommendation of the Audit Committee at itsmeeting held on June 23 2017 proposed the appointment of M/s. Aniket Kulkarni &Associates Chartered Accountants (Firm Registration No. 130521W) as Statutory Auditor ofthe Company for a period of three years to hold office from the conclusion of the ensuingTwenty Fourth Annual General Meeting till the conclusion of the Twenty Seventh AnnualGeneral Meeting of the Company to be held in the year 2020 for the approval of themembers of the Company. M/s. Aniket Kulkarni & Associates Chartered Accountants haveconsented to the said appointment as Statutory Auditors of the Company and confirmed thatthe appointed if made would be in accordance with the Section 139 and 141 of the Act.

SECRETARIAL AUDITORS

In accordance with the provision of Section 204 of the Companies Act 2013 and theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 the Companyhas appointed M/s. Bhuwnesh Bansal & Associates Practicing Company Secretary toconduct the Secretarial Audit of the Company for the financial year ended March 31 2017.The Secretarial Audit Report for the financial year ended March 31 2017 is annexed as"Annexure-5" to this report.

There were no qualifications reservations and adverse remarks in the Secretarial AuditReport of 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 Certificate 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 is presently not applicableto the Company.

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURT

There has been an order passed by the Securities Appellate Tribunal (SAT) on March 82017 in respect of the appeal filed by the Company against SEBI order dated May 13 2015.The details of the same has been explained in point no. 9(b) of Corporate GovernanceReport forming part of this Annual Report.

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. 0.60 Lacs (Previous Year Rs. 1.01 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
Khandwala Securities Limited
Date : May 29 2017 Kalpen Shukla
Place : Mumbai Chairman