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Khandwala Securities Ltd.

BSE: 531892 Sector: Financials
NSE: KHANDSE ISIN Code: INE060B01014
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VOLUME 6152
52-Week high 23.45
52-Week low 7.10
P/E
Mkt Cap.(Rs cr) 22
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
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OPEN 18.45
CLOSE 17.85
VOLUME 6152
52-Week high 23.45
52-Week low 7.10
P/E
Mkt Cap.(Rs cr) 22
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Khandwala Securities Ltd. (KHANDSE) - Director Report

Company director report

To

The Members

Your Directors hereby present the Twenty Seventh Annual Report on the businessoperations and state of affairs of the Company together with the audited financialstatements for the year ended 31st March 2020.

FINANCIAL HIGHLIGHTS

The summary of the Company's financial performance for the financial year 2019-20 ascompared to the previous financial year 2018-19 is given below:

(I) Standalone Financial Performance :

(Rs. in Lakhs)
Particulars Year ended March 31 2020 Year ended March 31 2019
Total Income 362.00 609.83
Financial Cost 81.70 23.23
Depreciation and 27.97 27.78
Amortization Expenses
Profit / (Loss) before (362.52) 15.53
Exceptional Items & Tax
Exceptional Items - -
Profit / (Loss) before Tax (362.52) 15.53
Provision for Tax (3.82) (3.58)
Profit / (Loss) after Tax (358.70) 19.11
Other Comprehensive (0.60) (7.18)
Income
Total Comprehensive Income for the Year (359.30) 11.93

(II) Consolidated Financial Performance :

(Rs. in Lakhs)
Particulars Year ended March 31 2020 Year ended March 31 2019
Total Income 362.01 609.83
Financial Cost 81.73 23.23
Depreciation and 27.97 27.78
Amortization Expenses
Profit / (Loss) before (362.63) 15.40
Exceptional Items & Tax
Exceptional Items - -
Profit / (Loss) before Tax (362.63) 15.40
Provision for Tax (3.82) (3.58)
Profit / (Loss) after Tax (358.81) 18.98
Other Comprehensive (0.60) (7.18)
Income
Total Comprehensive (359.40) 11.80
Income for the Year

FINANCIAL PERFORMANCE

Standalone

During the year under review the standalone total income for the financial year wasRs. 362.00 lakhs as compared to Rs. 609.83 lakhs for the previous year. The total expensesincurred during the financial year was Rs. 724.52 lakhs as compared to Rs. 594.30 lakhs inthe previous year. The Net Loss after tax was Rs. 358.70 lakhs in the financial year ascompared to Net Profit after tax of Rs. 19.11 lakhs in the previous year.

Consolidated

During the year under review the consolidated total income for the financial year wasRs. 362.01 lakhs as compared to Rs. 609.83 lakhs for the previous year. The total expensesincurred during the financial year was Rs. 724.64 lakhs as compared to Rs. 594.43 lakhs inthe previous year. The Net Loss after tax was Rs. 358.81 lakhs in the financial year ascompared to Net Profit after tax of Rs. 18.98 lakhs in the previous year.

COVID-19

In the month of March 2020 the COVID-19 pandemic developed rapidly into a globalcrisis forcing governments to enforce lockdowns of all economic activity. For theCompany the focus immediately shifted to ensuring the health and well-being of allemployees and on minimizing disruption to services for all our customers globally. Theoffices were completely closed from March 25 2020. Later after passing of few days theoffices were in operation at 10% level of employees and gradually improved to around30-40% level. However employees attendance was very low due to restrictions on movements.Resulting part working of the office initially effected and the same is being improvedgradually. The office is operating with complete compliance of all directives related tomaintaining of social distancing and mandatory to wear face mask and have propersanitizations.

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 2019-20.

INFORMATION ON THE STATE OF AFFAIRS OF THE COMPANY

The nformation on operational and financial performance of the Company is givenin the Management Discussion & Analysis Report forming part of this Annual Report.

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 2020 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 Indian Accounting Standards. The audited consolidated financialstatements together 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 provisions 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. All these documents will also be available for inspection at theRegistered Office of the Company till the date of ensuing Annual General Meeting of theCompany.

EXTRACT OF ANNUAL RETURN

Pursuant to the provisions of Section 92(3) of the Companies Act 2013 and Rule 12(1)of the Companies (Management and Administration) Rules 2014 the extract of annual returnin the prescribed form i.e. 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 Chief FinancialOfficer (CFO) of the Company w.e.f February 11 2020. Subsequently the Board alsoappointed Mr. Pranav Khandwala (DIN: 00519113) as Whole-time Director of the Company for aterm of 5 years w.e.f February 11 2020 subject to the approval of the Members of theCompany at the ensuing Annual General Meeting. Mrs. Bhagyashree Khandwala (DIN: 02335473)resigned from the designation of CFO of the Company w.e.f February 11 2020. Further Mrs.Bhagyashree Khandwala informed the Board that she will not be able to hold the office asExecutive Director of the Company and expressed her willingness to continue to act asNon-Executive Director of the Company. Accordingly the Board approved the change indesignation of Mrs. Bhagyashree Khandwala from Executive Director to Non-ExecutiveDirector w.e.f February 11 2020 subject to the approval of the Members of the Company atthe ensuing Annual General Meeting. The Members have at the Twenty Second Annual GeneralMeeting held on September 19 2015 appointed Mr. Homiar N. Vakil (DIN: 05210178) as anIndependent Director of the Company to hold the office for a term of 5 (five) consecutiveyears with effect from September 19 2015. Accordingly the current term of Mr. Homiar N.Vakil expires on September 18 2020. In terms of Section 149 of the Companies Act 2013Mr. Homiar N. Vakil is eligible for being re-appointed as an Independent Director on theBoard for another term of upto five September 19 2020. The Board of Directors on therecommendation of the Nomination and Remuneration Committee at its meetings held on July27 2020 approved re-appointment of Mr. Homiar N. Vakil as an Independent Director forthe second term of five consecutive years commencing from September 19 2020 subject tothe approval of the members at the ensuing Annual General Meeting of the Company. Furtherafter the end of year and up to the date of the Report Mr. Pratik Khandwala (DIN:00519147) was appointed as Additional Director (Non-Executive) of the Company w.e.f August14 2020 and shall hold the office upto the date of ensuing Annual General Meeting. TheBoard recommends the appointment of Mr. Pratik Khandwala as Non-Executive Director in theensuing Annual General Meeting.

DECLARATION OF INDEPENDENCE

The Board has received declarations from all the Independent Directors confirming thatthey meet the criteria of independence as provided in Section 149(6) of the Companies Act2013 and Regulation 16(1)(b) of SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 andarenotdisqualifiedfrom continuing as Independent Directors of theCompany.

MEETINGS OF THE BOARD OF DIRECTORS

During the financial year the Board met 5 (five) times i.e. May 25 2019 August 52019 November 8 2019 December 13 2019 and February 11 2020. 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 Board of Directors of the Company has constituted various Committees in compliancewith the provisions of the Companies Act 2013 and SEBI Listing Regulations. The detailsof the Committees along with their composition terms of reference no. of meeting heldduring the year and attendance at these meetings are provided in the Corporate GovernanceReport forming part of this Annual Report.

BOARD EVALUATION

In compliance with the provisions of the Companies Act 2013 and SEBI (ListingObligations and Disclosure Requirements) Regulations 2015 the Board of Directors hascarried out an annual evaluation of its own performance board committees and individualdirectors. The performance of the board and its committees was evaluated after seekinginputs from all the directors on the basis of criteria such as board effectivenessquality of discussion contribution at the meeting corporate governance practicesstrategic thinking time commitment review of the terms of reference of the committeesetc. The above criteria are based on the guidance note on Board Evaluation issued by theSecurities and Exchange Board of India.

The Board and the Nomination and Remuneration Committee reviewed the performance of theindividual directors of the Company on the basis of their criteria such as effectivenessperformance transparency strategic thinking quality of discussions at the meetingsetc. Theperformance and no material or 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 that:

(i) in the preparation of the annual accounts for the financial year ended 31st March2020 the applicable accounting standards have been followed along with properexplanations relating to material departures if any; (ii) such accounting policies asmentioned in the notes to accounts have been selected and applied consistently andjudgments and estimates have been made that are reasonable and prudent so as to give atrue and fair view of the state of affairs of the Company at the end of the financial yearand of the loss of the Company for the year ended 31st March 2020;

(iii) proper and sufficient adequate accounting records in accordance with theprovisions of the Companies Act 2013 for safeguarding the assets of the Company and forpreventing and detecting fraud and other irregularities;

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

(v) proper internal financial controls have been laid down and the same are adequateand were operating effectively ; and

(vi) proper systems had been devised to ensure compliance with the provisions of allapplicable laws and that such systems were adequate and operating effectively.

INTERNAL FINANCIAL CONTROLS

The Company has in place adequate internal financial control with reference to thefinancial statements. The Company has policies and procedures in place for ensuring properand efficient conduct of its business the safeguarding of its assets the prevention anddetection of frauds and errors the accuracy and completeness of the accounting recordsand the timely preparation of reliable financial information. During the year underreview the Internal Financial Controls were operating effectively observation has beenreceived from the Auditors of the Company for inefficiency or inadequacy of such controls.

INTERNAL CONTROL SYSTEM AND THEIR ADEQUACY

The details in respect of internal control system and their adequacy are included inthe Management's Discussion and Analysis which forms part of this annual report.

RISK MANAGEMENT

The Company has a risk management framework which not only ensures timelyidentification of risks analysis of the reasons for such risk assessment of itsmateriality assessment of its impact but also adequate risk mitigation processes. TheRisk management framework encompasses all areas of the Company's business. The details ofrisk management including identification of elements of risk and their mitigation areprovided in Management's Discussion and Analysis which forms part of this annual report.The Audit Committee monitors the risk management plan and ensures its effectiveness.

RELATED PARTY TRANSACTIONS

All the Related Party Transactions that were entered during the financial year 2019-20were on 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 byno materially significantthe Company during the year with the Promoters Directors and Key Managerial Personnelwhich may have a potential conflict with the interest of the Company. The disclosure withrelated parties is set out in the notes to accounts forming part of the Annual Report. TheCompany has also adopted a related party transactions policy which is available on thewebsite 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 anyof the Companies Act 2013 read with the rules made thereunder.

LOAN GUARANTEES AND INVESTMENTS BY COMPANY

The details of loans guarantees and investments made by the Company under theprovision of Section 186 of the Companies Act 2013 during the financial year have beendisclosed in the notes 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 2020 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 details interm 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 reviewthere was no employee was in receipt of remuneration exceeding the limits as prescribedunder the provision of Section 197 of the Companies Act 2013 read with Rule 5(2) and 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 in place 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 provideprotection against sexual harassment of women at workplace and for redressal of complaintsof any such harassment.

During the year under review no complaints of sexual harassment was received by theCompany.

VIGIL MECHANISM/ WHISTER 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. The functioning ofthe 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) Regulations2015 and the same has been uploaded on the website of the Company at http://www.kslindia.com. All the Directors and the designated employees have complied with theCode.

SECRETARIAL STANDARDS

The Company has complied with all the applicable Secretarial Standards issued by theInstitute of Company Secretaries of India relating to meetings of the Board of Directorsand General Meetings.

SHARE CAPITAL

During the year under review there was no change in the equity share capital of theCompany. The paid up equity share capital of the Company as on March 31 2020 is Rs.119390000/-(11939000 equity shares of Rs.10/- each). However the Board of Directors at theirmeeting held on December 13 2019 approved variation in the rights of preferenceshareholder of the Company who is holding 150000 - 10.00% Cumulative RedeemablePreference Shares of Rs. 100/- each fully paid up of the Company by extending the duedate of redemption of aforesaid preference shares for a further period of one year.Pursuant to the provision of section 48 of the Companies Act 2013 read with the rulesmade thereunder the Company has received written consent from the preference shareholder.

STATUTORY AUDITORS

At the twenty fourth AGM of the Company held on September 21 2017 the Membersapproved the appointment of M/s. Aniket Kulkarni & Associates Chartered Accountants(Firm Registration No. 130521W) as Statutory Auditors of the Company to hold the officefor a period of three years from the conclusion of that AGM till the conclusion of twentyseventh AGM of the Company. Accordingly the current term of M/s. Aniket Kulkarni &Associates Chartered Accountants as Statutory Auditors of the Company will end at theconclusion of the ensuing AGM.

M/s. Aniket Kulkarni & Associates have consented to act as statutory auditors ofthe Company for a further term of 5 years from the conclusion of the forthcoming twentyseventh Annual General Meeting till the conclusion of the thirty second Annual GeneralMeeting of the Company to be accordanceheld in the year 2025 and given a certificate withSection 139 141 and other applicable provisions of the Companies Act 2013 to the effectthat their re-appointment if made shall be in accordance with the conditions prescribedand that they are eligible to hold office as Statutory Auditors of the Company.

Necessary resolution and explanation thereto have been provided in the AGM noticeseeking approval of members. The Statutory Auditor's has given the qualified opinion intheir audit reports and the Board has furnished required details/explanation in its NoteNos. 27 and 28 of Notes to the Standalone Financial Statements and Note Nos. 29 and 30 ofNotes to the Consolidated Financial Statements respectively.

SECRETARIAL AUDITORS

Pursuant to the provisions of section 204 of the Companies Act 2013 and the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 as amended from timeto time the Company had appointed M/s. Bhuwnesh Bansal & Associates PracticingCompany Secretary to conduct the Secretarial Audit of the Company for the financial yearended March 31 2020. The Secretarial Audit Report for the financial year ended March 312020 is annexed as "Annexure-5" to this report.

There is no adverse remark qualifications or reservations the Secretarial Audit Reportof the Company.

INTERNAL AUDITORS

Pursuant to the provisions of section 138 of the Companies Act 2013 and the rules madethereunder M/s. Shah & Ramaiya Chartered Accountants was appointed as InternalAuditors of the Company for the financial year 2020-2021. They have conducted the internalaudit periodically and submitted their reports to 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 section 135 of the Companies Act 2013 read withCompanies (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 are no material significant material orders passed by the Regulators or Court orTribunals which can have an impact on the going concern status 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 nil (Previous Year Rs. 1.83 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

Homiar N. Vakil

Chairman

Date : September 21 2020

Place : Mumbai

.