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Khandwala Securities Ltd.

BSE: 531892 Sector: Financials
NSE: KHANDSE ISIN Code: INE060B01014
BSE 00:00 | 24 Jun 33.90 0.20
(0.59%)
OPEN

32.30

HIGH

34.50

LOW

32.10

NSE 00:00 | 24 Jun 33.40 0.15
(0.45%)
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33.95

HIGH

33.95

LOW

32.00

OPEN 32.30
PREVIOUS CLOSE 33.70
VOLUME 1688
52-Week high 41.25
52-Week low 14.50
P/E 339.00
Mkt Cap.(Rs cr) 40
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 32.30
CLOSE 33.70
VOLUME 1688
52-Week high 41.25
52-Week low 14.50
P/E 339.00
Mkt Cap.(Rs cr) 40
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Khandwala Securities Ltd. (KHANDSE) - Auditors Report

Company auditors report

TO THE MEMBERS OF KHANDWALA SECURITIES LIMITED

Report on the Standalone Indian Accounting Standards (Ind AS) Financial Statements

Qualified Opinion

We have audited the accompanying standalone financial statements of "KhandwalaSecurities Limited" which comprise the Balance Sheet as at March 31 2021 theStatement of Profit and Loss (including Other Comprehensive Income) the Statement ofChanges in Equity and the Statement of Cash Flows for the year ended on that date and asummary of the significant accounting policies and other explanatory information(hereinafter referred to as "the standalone financial statements"). In ouropinion and to the best of our information and according to the explanations given to usthe aforesaid standalone financial statements give the information required by theCompanies Act 2013 ("the Act") in the manner so required and give a true andfair view except for the effects of the matters described in the Basis for qualifiedopinion section of our report in conformity with the Indian Accounting Standardsprescribed under section 133 of the Act read with the Companies (Indian AccountingStandards) Rules 2015 as amended ("Ind AS") and other accounting principlesgenerally accepted in India of the state of affairs of the Company as at March 31 2021the profit/loss and total comprehensive income changes in equity and its cash flows forthe year ended on that date.

Basis for Qualified Opinion

We conducted our audit of the standalone financial statements in accordance with theStandards on Auditing specified under section 143(10) of the Act (SAs). Ourresponsibilities under those Standards are further described in the Auditor'sResponsibilities for the Audit of the Standalone Financial Statements section of ourreport. We are independent of the Company in accordance with the Code of Ethics issued bythe Institute of Chartered Accountants of India (ICAI) together with the independencerequirements that are relevant to our audit of the standalone financial statements underthe provisions of the Act and the Rules made thereunder and we have fulfilled our otherethical responsibilities in accordance with these requirements and the ICAI's Code ofEthics. We believe that the audit evidence we have obtained is sufficient and appropriateto provide a basis for our audit opinion on the standalone financial statements. Howeverwe draw your kind attention to the following qualifications to the audit opinion ofthe financial statements produced as under:-

1. The Company had advanced application money towards purchase of shares of Rs 216.69lakhs which is outstanding for a period of 228 months as at the end of the year. In theabsence of information regarding the

status of the allotment or the net worth of the entities in which the company madeapplications we are unable to ascertain the extent to which an amount of Rs 216.69 lakhsis recoverable and accordingly the effect thereof on the financial statements cannot beascertained. However it has been noted and confirmed after looking at relevant documentsthat at present the said matter is under litigation and pending for hearing before theHon'ble High Court of Mumbai.

2. Long-Term deposits to various companies of Rs 530.00 '• ..lakhs are subject tosubsequent adjustments. We are unable to ascertain the recoverability of these amounts asthe Company has not made any provisions for the same in the standalone financialstatements.

Key Audit Matters

Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the standalone financial statements of the current period.These matters were addressed in the context of our audit of the standalone financialstatements as a whole and in forming our opinion thereon and we do not provide aseparate opinion on these matters. In addition to the matter described in the Basis forQualified Opinion section we have determined the matters described below to be the keyaudit matters to be communicated in our report.

Sr. Key Audit Matter No. Auditor's Response
1. There has been an increase in brokerage Income as compared to the brokerage Income of last year. We have observed that in the last quarter of the Financial year the volume of transactions has increased at a decent rate thereby resulting in a good amount of brokerage Income. This is the consequence of strategic changes made by the management of the company. We have verified the trades happened from the summary generated from the company's software (SOHAM) and found the same to be in order.
2. The Company has made redemption of its Preference Share capital. We have noticed that the company has made the redemption of its preference share capital on 30.03.2021 and made the payment for an amount of Rs 15000000/- (Rupees One Crore Fifty Lakhs Only).

Information other than the Standalone Financial Statements and Auditor's ReportThereon.

The Company's Board of Directors is responsible for the preparation of the otherinformation. The other information comprises the information included in the ManagementDiscussion and Analysis Board's Report including Annexures to Board's Report BusinessResponsibility Report Corporate Governance and Shareholder's Information but does notinclude the standalone financial statements and our auditor's report thereon. Our opinionon the standalone financial statements does not cover the other information and we do notexpress any form of assurance conclusion thereon. In connection with our audit of thestandalone financial statements our responsibility is to read the other information andin doing so consider whether the other information is materially inconsistent with thestandalone financial statements or our knowledge obtained during the course of our auditor otherwise appears to be materially misstated. If based on the work we have performedwe conclude that there is a material misstatement of this other information; we arerequired to report that fact. We have nothing to report in this regard.

Management's Responsibility for the Standalone Financial Statements

The Company's Board of Directors is responsible for the matters stated in section134(5) of the Act with respect to the preparation of these standalone financial statementsthat give a true and fair view of the financial position financial performance totalcomprehensive income changes in equity and cash flows of the Company in accordance withthe Ind AS and other accounting principles generally accepted in India. Thisresponsibility also includes maintenance of adequate accounting records in accordance withthe provisions of the Act for safeguarding the assets of the Company and for preventingand detecting frauds and other irregularities; selection and application of appropriateaccounting policies; making judgments and estimates that are reasonable and prudent; anddesign implementation and maintenance of adequate internal financial controls that wereoperating effectively for ensuring the accuracy and completeness of the accountingrecords relevant to the preparation and presentation of the standalone financialstatements that give a true and fair view and are free from material misstatement whetherdue to fraud or error.

In preparing the standalone financial statements management is responsible forassessing the Company's ability to continue as a going concern disclosing as applicablematters related to going concern and using the going concern basis of accounting unlessmanagement either intends to liquidate the Company or to cease operations or has norealistic alternative but to do so.

The Board of Directors are responsible for overseeing the Company's financial reportingprocess.

Auditor's Responsibilities for the Audit of the Standalone Financial Statements

Our objectives are to obtain reasonable assurance about whether the standalonefinancial statements as a whole are free from material misstatement whether due to fraudor error and to issue an auditor's report that includes our opinion. Reasonable assuranceis a high level of assurance but is not a guarantee that an audit conducted in accordancewith SAs will always detect a material misstatement when it exists. Misstatements canarise from fraud or error and are considered material if individually or in theaggregate they could reasonably be expected to influence the economic decisions of userstaken on the basis of these standalone financial statements.

As part of an audit in accordance with SAs we exercise professional judgment andmaintain professional skepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of the standalonefinancial statements whether due to fraud or error design and perform audit proceduresresponsive to those risks and obtain audit evidence that is sufficient and appropriate toprovide a basis for our opinion. The risk of not detecting a material misstatementresulting from fraud is higher than for one resulting from error as fraud may involvecollusion forgery intentional omissions misrepresentations or the override of internalcontrol.

• Obtain an understanding of internal financial controls relevant to the audit inorder to design audit procedures that are appropriate in the circumstances. Under section143(3)(i) of the Act we are also responsible for expressing our opinion on whether theCompany has adequate internal financial controls system in place and the operatingeffectiveness of such controls.

• Evaluate the appropriateness of accounting policies used and the reasonablenessof accounting estimates and related disclosures made by management.

• Conclude on the appropriateness of management's use of the going concern basisof accounting and based on the audit evidence obtained whether a material uncertaintyexists related to events or conditions that may cast significant doubt on the Company'sability to continue as a going concern. If we conclude that a material uncertainty existswe are required to draw attention in our auditor's report to the related disclosures inthe standalone financial statements or if such disclosures are inadequate to modify ouropinion. Our conclusions are based on the audit evidence obtained up to the date of ourauditor's report. However future events or conditions may cause the Company to cease tocontinue as a going concern.

• Evaluate the overall presentation structure and content of the standalonefinancial statements including the disclosures and whether the standalone financialstatements represent the underlying transactions and events in a manner that achieves fairpresentation.

Materiality is the magnitude of misstatements in the standalone financial statementsthat individually or in aggregate makes it probable that the economic decisions of areasonably knowledgeable user of the financial statements may be influenced. We considerquantitative materiality and qualitative factors in (i) planning the scope of our auditwork and in evaluating the results of our work; and (ii) to evaluate the effect of anyidentified misstatements in the financial statements.

We communicate with those charged with governance regarding among other matters theplanned scope and timing of the audit and significant audit findings including anysignificant deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have compliedwith relevant ethical requirements regarding independence and to communicate with themall relationships and other matters that may reasonably be thought to bear on ourindependence and where applicable related safeguards.

From the matters communicated with those charged with governance we determine thosematters that were of most significance in the audit of the standalone financial statementsof the current period and are therefore the key audit matters. We describe these mattersin our auditor's report unless law or regulation precludes public disclosure about thematter or when in extremely rare circumstances we determine that a matter should not becommunicated in our report because the adverse consequences of doing so would reasonablybe expected to outweigh the public interest benefits of such communication.

Report on Other Legal and Regulatory Requirements

1. As required by Section 143(3) of the Act based on our

audit we report that:

a) We have sought and obtained all the information and explanations which to the bestof our knowledge and belief were necessary for the purposes of our audit.

b) In our opinion proper books of account as required by law have been kept by theCompany so far as it appears from our examination of those books.

c) The Balance Sheet the Statement of Profit and Loss including Other ComprehensiveIncome Statement of Changes in Equity and the Statement of Cash Flow dealt with by thisReport are in agreement with the relevant books of account.

d) In our opinion the aforesaid standalone financial statements comply with the Ind ASspecified under Section 133 of the Act read with Rule 7 of the Companies (Accounts)Rules 2014.

e) On the basis of the written representations received from the directors as on March31 2021 taken

on record by the Board of Directors none of the directors is disqualified as on March31 2021 from being appointed as a director in terms of Section 164 (2) of the Act.

f) With respect to the adequacy of the internal financial controls over financialreporting of the Company and the operating effectiveness of such controls refer to ourseparate Report in "Annexure A". Our report expresses an unmodified opinion onthe adequacy and operating effectiveness of the Company's internal financial controls overfinancial reporting.

g) With respect to the other matters to be included in the Auditor's Report inaccordance with the requirements of section 197(16) of the Act as amended: In our opinionand to the best of our information and according to the explanations given to us theremuneration paid by the Company to its directors during the year is in accordance withthe provisions of section 197 of the Act.

h) With respect to the other matters to be included in the Auditor's Report inaccordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 as amended inour opinion and to the best of our information and according to the explanations given tous:

i) The Company has disclosed the impact of pending litigations on its financialposition in its standalone financial statements.

ii. The Company has made provision as required under the applicable law or accountingstandards for material foreseeable losses if any on long-term contracts includingderivative contracts.

iii. There has been no delay in transferring amounts required to be transferred tothe Investor Education and Protection Fund by the Company

2 As required by the Companies (Auditor's Report) Order 2016 ("the Order")issued by the Central Government in terms of Section 143(11) of the Act we give in"Annexure B" a statement on the matters specified in paragraphs 3 and 4 of theOrder.

For Aniket Kulkarni & Associates
Chartered Accountants
Registration No. 130521W
Aniket Kulkarni
Proprietor
Membership No.127246
Place: Mumbai
Date: June 29 2021
UDIN: 21127246AAAAPV8558

"Annexure-A" to the Independent Auditors' Report - 31st March 2021

Report on the Internal Financial Control s under clause

(i) of sub - section 3 of Section 143 of the Companies Act 2013 ("the Act")

We have audited the Internal Financial Control over financial reporting of KhandwalaSecurities Limited("the Company") as of 31st March 2021 in conjunction withour audit of the financial statements of the Company for the year ended on that date.

Management's Responsibility for Internal Financial Controls

The Company's management is responsible for establishing and maintaining internalfinancial controls based on the internal control over financial reporting criteriaestablished by the Company considering the essential components of internal control statedin the Guidance Note on Audit of Internal Financial Control over Financial Reportingissued by the ICAI. These responsibilities include the design implementation andmaintenance of adequate internal financial control that were operating effectively forensuring the orderly and efficient conduct of its business including adherence tocompany's policies the safeguarding of assets the prevention and detection of fraud anderrors the accuracy and completeness of the accounting records and the timelypreparation of reliable financial information as required under the Companies Act 2013.

Auditor's Responsibility

Our responsibility is to express an opinion on the Company's internal financialcontrols over financial reporting based on our audit. We have conducted our audit inaccordance with the Guidance Note on Audit of Internal Financial Controls Over FinancialReporting (the "Guidance Note") and the standards on auditing issued by ICAIand deemed to be prescribed under section 143 (10) of the Companies Act 2013 to theextent applicable to an audit of Internal Financial Controls and both issued by theInstitute of Chartered Accountants of India. Those standards and the Guidance Note requirethat we comply with the ethical requirements and plan and perform the audit to obtainreasonable assurance about whether adequate internal financial controls over financialreporting was established and maintained and if such controls operated effectively in allmaterial respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls system over financial reporting and their operatingeffectiveness. Our audit of internal financial controls over financial reporting includesobtaining understanding of internal financial controls over financial reporting assessingthe risk that a material weakness exists and testing and evaluating the design andoperating effectiveness of internal control based on the assessed risk. The proceduresselected depend on the auditor's judgment including the assessment of the risk ofmaterial misstatement of the financial statements whether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the Company's internal financial controls systemover financial reporting.

Meaning of Internal Financial Controls over Financial Reporting

A Company's Internal Financial Control over Financial Reporting is a process designedto provide reasonable assurance regarding the reliability of financial reporting and thepreparation of financial statements for external purposes in accordance with generallyaccepted accounting principles. A company's internal financial control over financialreporting includes those policies and procedures that

(1) pertains to the maintenance of records that in reasonable detail accurately andfairly reflect the transaction and dispositions of the assets of the company;

(2) provide reasonable assurance that transactions are recorded as necessary to permitpreparation of financial statements in accordance with generally accepted accountingprinciples and that receipts and expenditures of the company are being made in accordancewith authorizations of management and directors of the company; and

(3) provide reasonable assurance regarding prevention or timely detection ofunauthorized acquisition use or disposition of the company's assets that could have amaterial effect on the financial statements.

Inherent Limitations of internal Financial Controls over Financial Reporting

Because of inherent limitations of internal controls over financial reportingincluding the possibility of collusion or improper management override of controlsmaterial misstatement due to error or fraud may occur and not to be detected. Alsoprojections of any evaluation of the internal financial controls over financial reportingto future periods are subject to the risk that the internal financial control overfinancial reporting may become inadequate because of changes in conditions or that thedegree of compliance with the policies or procedures may deteriorate.

Opinion

In our opinion the company has in all material respects an adequate internalfinancial controls system over financial reporting and such internal financial controlsover financial reporting were effectively as at 31st March2021 based on the internalcontrol over financial reporting criteria established by the company considering theessential components of internal control stated in the Guidance Note on Audit of InternalFinancial Controls Over Financial Reporting issued by Institute of Chartered Accounts ofIndia.

For Aniket Kulkarni & Associates
Chartered Accountants
Registration No. 130521W
Aniket Kulkarni
Proprietor
Membership No.127246
Place: Mumbai
Date: June 29 2021
UDIN: 21127246AAAAPV8558

ANNEXURE "B" TO THE INDEPENDENT AUDITORS' REPORT

Referred to in paragraph 2 under ‘Report on Other Legal and RegulatoryRequirements' section of our report to the Members of Khandwala Securities Limited of evendate

(i) In respect of Company's Fixed Assets:

(a) The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets.

(b) The Company has a regular programme of physical verification of its fixed assets bywhich fixed assets are verified in a phased manner. In accordance with this programmecertain fixed assets were verified during the year and no material discrepancies werenoticed on such verification. In our opinion this periodicity of physical verification isreasonable having regard to the size of the Company and the nature of its assets.

(c) According to the information and explanations given to us and on the basis of ourexamination of the records of the Company the title deeds of immovable properties areheld in the name of the Company.

(ii) The company does not have any inventory and hence reporting under clause (ii) ofthe CARO 2016 is not applicable.

(iii) In our opinion and according to the information and explanations given to us thecompany has not granted any loans secured or unsecured to companies firms or otherparties covered in the register maintained under section 189 of the Companies Act. Hencereporting under clause 3(iii) of the Order is not applicable to the company.

(iv) In our opinion and according to the information and explanations given to us thecompany has neither granted any loans to directors etc. nor made loan and investmentunder section 185 and 186 of the Companies Act respectively. Hence reporting under clause3(iv) of the Order is not applicable to the company.

(v) According to the information and explanations given to us during the FY 2020-21the Company has not accepted deposits from the public during the year. Therefore theprovisions of clause 3(v) of the Order are not applicable to the Company.

(vi) The Central Government has not prescribed the maintenance of cost records undersub-section (l) of section 148 of the Act for any of the goods manufactured or servicesrendered by the Company.

(vii) (a) According to the information and explanations given to us and on the basis ofour examination of the records of the Company amounts deducted/ accrued in the books ofaccount in respect of undisputed statutory dues including Income- tax service tax cessProvident Fund and other material statutory dues have been regularly deposited during theyear by the Company with the appropriate authorities. However there have been few cases ofdelays in payment of Income Tax.

According to the information and explanations given to us no undisputed amountspayable in respect of Income tax service tax goods and service tax cess and othermaterial statutory dues were in arrears as at 31 March 2021 for a period of morethan six months from the date they became payable except TDS Defaults showing on TDSTraces website amounting to Rs. 33196/- as on 31st March 2021.

(b) According to the information and explanation given to us there are no materialdues of income tax or service tax or GST which have not been deposited with appropriateauthorities on account of any dispute except reported as below.

Details of dues of statutory taxes which not been deposited as at March 31 2021 onaccount of disputes are given below:

Name of the Statute Nature of the Dues Amount (Rs. in lakhs) Period to which the amount relates Forum where Dispute is pending Under Section
Income Tax Act 1961 Income Tax 4.96 A.Y. 200708 Mumbai High Court 143(3)

(viii) According to the information and explanations given to us and based on theverification of records of company examined by us the company has not defaulted inrepayment of loan or borrowing's to financial institution & bank.

(ix) According to the information and explanations provided to us and as per therecords of the company examined by us company has not raised funds by way of publicissue/ follow-on offer (including debt instruments) and term loans. Therefore paragraph3(ix) of the Order is not applicable to the company.

(x) According to the information and explanations given to us no material fraud by theCompany or on the Company by its officers or employees has been noticed or reported duringthe course of our audit.

(xi) According to the information and explanations given to us and based on ourexamination of the records of the Company the Company has paid/provided managerialremuneration in accordance with the requisite approvals mandated by the provisions ofsection 197 read with schedule V to the Companies Act.

(xii) In our opinion and according to the information and explanations given to us theCompany is not a Nidhi company. Accordingly paragraph 3(xii) of the Order is notapplicable.

(xiii) According to the information and explanations given to us and based on ourexamination of the records of the Company transactions with the related parties are incompliance with sections 177 and 188 of the Act where applicable and details of suchtransactions have been disclosed in the financial statements as required by the applicableaccounting standards.

(xiv) According to the information and explanations given to us and based on ourexamination of the records of the Company the Company has not made preferential allotmentof Equity Share/ private placement of shares or fully or partly convertible debenture.Therefore paragraph 3(xiv) not applicable to the company.

(xv) According to the information and explanations given to us and based on ourexamination of the records of the Company the Company has not entered into non-cashtransactions with director or person connected with them.

(xvi) In our opinion and according to information and explanation provide to usCompany is not required to be registered under section 45-IA of Reserve Bank of India Act1934. Therefore paragraph 3(xvi) of the Order is not applicable to the company

For Aniket Kulkarni & Associates
Chartered Accountants
Registration No. 130521W
Aniket Kulkarni
Proprietor
" Membership No.127246
Place: Mumbai
Date: June 29 2021
UDIN: 21127246AAAAPV8558

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