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LKP Securities Ltd.

BSE: 540192 Sector: Financials
NSE: N.A. ISIN Code: INE341H01023
BSE 14:56 | 21 Jun 18.20 -0.10






NSE 05:30 | 01 Jan LKP Securities Ltd
OPEN 18.95
52-Week high 28.60
52-Week low 7.98
P/E 16.70
Mkt Cap.(Rs cr) 133
Buy Price 18.20
Buy Qty 124.00
Sell Price 18.35
Sell Qty 1.00
OPEN 18.95
CLOSE 18.30
52-Week high 28.60
52-Week low 7.98
P/E 16.70
Mkt Cap.(Rs cr) 133
Buy Price 18.20
Buy Qty 124.00
Sell Price 18.35
Sell Qty 1.00

LKP Securities Ltd. (LKPSECURITIES) - Director Report

Company director report

The Directors present the Twenty third Annual Report and Audited Accounts of theCompany for the year ended March 31 2017.

FINANCIAL RESULTS 2016 – 2017 2015 – 2016
(Rs. in lacs) (Rs. in lacs)
Profit before tax 248.18 -115.24
Less: Tax Expense for the Year 15.13 27.90
Profit after tax 233.05 -143.14
Profit brought forward from previous year -481 -337
Amount available for appropriation -247 -481


With a view to strengthen the financial position of the Company Directors did notrecommend any dividend for the shareholders for the financial year 2016-17.


During the year under review the company recoded the total revenue of Rs. 6340.5 lacsagainst previous year Rs. 5637.2 lacs; profit after tax stood at Rs.233.1 lacs for theyear under review as compared to previous year's Loss of Rs. 143.1 lacs.

During the year an amount of Rs 1712 lacs has been transferred to Preference ShareRedemption Reserve on cancellation of Preference Shares held by LKP Finance Ltd pursuantto the Scheme of Arrangement duly approved by Mumbai High Court.

Company's agenda for the growth is clearly defined by the management i.e. to understandthe financial need of the empowered customers and address those requirements withdiversified services with the help of best in class technology and never compromise oncore values namely fairness integrity and transparency. We believe that the financialindustry in India is moving towards rapid growth and with the aid of digitalisationsupported by economic prosperity and reforms performance of the company is certainlyexpected to reach heights.


The Company has no public deposits as of date and will not accept any deposits withoutprior approval of the Statutory Authorities concerned.


The Company has an Internal Control System commensurate with the size scale andcomplexity of its operations. The scope and authority of the Internal Auditors' functionis defined in their letter of engagement. To maintain its objectivity and independencethe Internal Audit function reports to the Chairman of the Audit Committee of the Board& to the Executive Chairman.

The Internal Audit Department monitors and evaluates the efficacy and adequacy ofinternal control system in the Company its compliance with operating systems accountingprocedures and policies of the Company. Based on the report of internal audit functionprocess owners undertake corrective action in their respective areas and therebystrengthen the controls. Significant audit observations and recommendations along withcorrective actions thereon are presented to the Audit Committee of the Board.


As per the Circular No. 51/12/2007-CL-III dated 8th February 2011 issued byGovernment of India Ministry of Corporate Affairs the required financial information inthe consolidated balance sheet is given in respect of Company's subsidiaries i.e. LKPWealth Advisory Private Limited in Form AOC 1 annexed as "Annexure A" inAnnual Report.

The annual accounts of the aforesaid subsidiary and the related detailed informationshall be made available to shareholders of the Company seeking such information at anypoint of time. The annual accounts of the subsidiary company shall also be kept open forinspection by any shareholder at the Registered office at 203 Embassy Centre NarimanPoint Mumbai 400 021.


Mr. S S Gulati retires by rotation and being eligible offers himself forre-appointment. Your Directors recommend his reappointment.

During the year under review Mr. Dinesh Waghela Mr. Behram Baldawala and Mr. MahendraV Doshi resigned from the Board with effect from 7th July 2016 7thJuly 2016 and 13th July 2016 respectively.

The Board of Directors record their appreciation of the services during their term asDirector of the Company. The Board of Directors appointed Mr. S S Gulati (DIN 02404230)Mrs. Sangeeta Jhaveri (DIN 03636133) and Mr. Ganesh Malhotra (DIN 07581670) as anAdditional Directors with effect from 8th July 2016 8th July 2016and 3rd August 2016 respectively.Pursuant to section 161 of the CompaniesAct 2013 as Additional Directors holding office only up to the date of the ensuing annualgeneral meeting. The company has received a notice under section 160(1) of the CompaniesAct 2013 proposing candidature of Mr. S S Gulati Mrs. Sangeeta Jhaveri and Mr. GaneshMalhotra to the office of Director alongwith the requisite deposit.

In accordance with the requirements of Section 149 and 152 of the Companies Act 2013appointment of Mr. Ganesh Malhotra and Mrs. Sangeeta Jhaveri as an Independent Director onthe Board of the Company requires approval of the Members of the Company.

The requisite resolutions for the appointment of Independent Directors are beingproposed in the Notice of the ensuing Annual General Meeting for the approval of theMembers.

The Company has received declarations from all the Independent Directors of the Companyconfirming that they meet the criteria of independence as prescribed in Section 149(6) ofthe Companies Act 2013.

The information on the particulars of the Directors proposed for appointment/re-appointment has been given in the Notice of the Annual General Meeting.

Board Evaluation

Pursuant to the provisions of the Companies Act 2013 and provisions of Regulations ofthe SEBI (Listing Obligations and Disclosure Requirements) Regulation 2015 the Board hascarried out an evaluation of its own performance the directors individually as well asthe evaluation of the working of its Audit Nomination & Remuneration Committees. Themanner in which the evaluation has been carried out has been explained in the CorporateGovernance Report.

Remuneration Policy

The Board has on the recommendation of the Nomination & Remuneration Committeeframed a policy for selection and appointment of Directors Senior Management and theirremuneration. The Remuneration Policy is stated in the Corporate Governance Report.


During the year nine Board Meetings and three Audit Committee Meetings were convenedand held. The details of which are given in the Corporate Governance Report. Theintervening gap between the Meetings was within the period prescribed under the CompaniesAct 2013.


The Board of Directors acknowledges the responsibility for ensuring compliance with theprovisions of section 134(3)(c) read with section 134(5) of the Companies Act 2013 in thepreparation of the annual accounts for the year ended on March 31 2017 and state that :

i. in the preparation of the annual accounts the applicable accounting standards havebeen followed along with proper explanation relating to material departures if any;

ii. the Directors have selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the Company at the end of the financial year and ofthe profit of the Company for that period;

iii. the Directors have taken proper and sufficient care for the maintenance ofadequate accounting records in accordance with the provisions of this Act for safeguardingthe assets of the Company and for preventing and detecting fraud and other irregularities;

iv. the Directors have prepared the annual accounts on a going concern basis;

v. the Directors have laid down internal financial controls to be followed by theCompany and that such internal financial controls are adequate and are operatingeffectively; and

vi. there is a proper system to ensure compliance with the provisions of all applicablelaws and that such systems are adequate and operating effectively.


The term of the existing Statutory Auditors M/s Ford Rhodes Parks & Co. LLP iscoming to end from. The Board of Directors have recommended appointment of M/s MGB &Co. LLP. (FRN 101169W/W-100035) to hold office from the conclusion of the ensuing AnnualGeneral Meeting till the conclusion of the next Annual General Meeting.

The Company has received a letter from them to the effect that their appointment ifmade would be within the provision prescribed under Section 139 of the Companies Act2013. Your Directors recommend their appointment.


Pursuant to provisions of section 204 of the Companies Act 2013 and The Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 the company hasappointed M/s V. R. Associates a firm of Company Secretaries in practice to undertake theSecretarial Audit of the Company. The Secretarial Audit report is annexed herewith as "AnnexureB".


The details forming part of the extract of the Annual Return in form MGT-9 is annexedherewith as "Annexure C".


Presently Corporate social responsibility provisions are not applicable to Company.


All related party transactions that were entered into during the financial year were onarm's length basis and were in the ordinary course of the business. There are nomaterially significant related party transactions made by the Company with Promoters KeyManagerial Personnel or other designated persons which may have potential conflict withinterest of the Company at large. The requisite details are given in Form AOC 2 is annexedherewith as "Annexure D".


The Board of Directors has approved a Code of Conduct which is applicable to theMembers of the Board and all employees in the course of day to day business operations ofthe company. The Code has been placed on the Company's website www.

The Code lays down the standard procedure of business conduct which is expected to befollowed by the Directors and the designated employees in their business dealings and inparticular on matters relating to integrity in the work place in business practices andin dealing with stakeholders.

All the Board Members and the Senior Management personnel have confirmed compliancewith the Code.


The Company is committed to the high standards of Corporate Governance and stakeholderresponsibility.

The Company has established a vigil mechanism to be known as the ‘Whistle BlowerPolicy' for its Directors and employees to report instances of unethical behavior actualor suspected fraud or violation of the Company's Code of Conduct. The aim of the policyis to provide adequate safeguards against victimization of whistle blower who avails ofthe mechanism and also provide direct access to the Chairman of the Audit Committee inappropriate or exceptional cases.

Accordingly ‘Whistle Blower Policy' has been formulated with a view to provide amechanism for the Directors and employees of the Company to approach the Ethics Counseloror the Chairman of the Audit Committee of the Company.

The purpose of this policy is to provide a framework to promote responsible and securewhistle blowing. It protects employees willing to raise a concern about seriousirregularities within the Company.


The Company has adopted a Code of Conduct for Prevention of Insider Trading with a viewto regulate trading in securities by the Directors and designated employees of theCompany. The Code requires pre-clearance for dealing in the Company's shares and prohibitsthe purchase or sale of Company shares by the Directors and the designated employees whilein possession of unpublished price sensitive information in relation to the Company andduring the period when the Trading Window is closed. The Board is responsible forimplementation of the Code.

All Board Directors and the designated employees have confirmed compliance with theCode.


The information required pursuant to rule 5 (1) of the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 forms a part of this report as AnnexureE. The information required pursuant to rule 5 (2) of the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 forms a part of this report However asper the first proviso to section 136(1) and second proviso of rule 5 (2) of the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 the report and thefinancial statements are being sent to the members of the Company excluding statement ofparticulars of employees under rule 5 (2) of the Companies (Appointment and Remunerationof Managerial Personnel) Rules 2014. If any member is interested in obtaining the copy ofthe said statement may write to the Company Secretary in advance.

The prescribed particulars of Conservation of Energy Technology Absorption do notapply to your Company. There are no foreign exchange earnings & outgo during the yearunder report.


The Consolidated Financial Statements are furnished herewith and form part of thisReport and Accounts. These statements have been prepared on the basis of audited financialstatements received from the Subsidiary Company as approved by their Board of Directors.


The Report on Corporate Governance along with a Certificate of compliance from thePractising Company Secretaries and Management Discussion and Analysis Report forms part ofthis Report.

BSE listing

Our company have been listed on The Bombay Stock Exchange Limited w.e.f. December 012016.

Restructure of Share capital pursuant to scheme of arrangement

The Hon'ble High Court of Judicature of Bombay at Mumbai vide order dated May 04 2016approved the Scheme of Arrangement.

Pursuant to the scheme of arrangement between LKP Finance Limited (LKPFL) and LKPSecurities Limited (LKPSL) the Investment of LKPFLin the form of equity share capital andpreference share capital of LKPSL stood cancelled. Accordingly the Equity Share Capitaland Preference Share Capital of LKPSL has been reduced to the extent of face value ofaforesaid shares held by LKPFLin LKPSL and further LKPSL has issued and allotted equityshares to each member of LKPFL whose name appears in the Register of Members of LKPFLonthe Record Date or his/her/its legal heirs executors or successors as the case may be inthe ratio of 6 (six) equity shares of the face value of Rs. 2/- (Rupees Two) each(credited as fully paid-up) of LKPSL for every 1(one) equity share of the face value ofRs. 10/- (Rupees Ten) each (credited as fully paid-up) held by such members.

Below is the detail of capital structure pre and post scheme of arrangement:

Share Capital of the Company Pre-Scheme of Arrangement is as set forth below:

Authorized Capital Aggregate Nominal Value
(Rs. in lacs)
30000000 Equity Shares of Rs. 2/- each 600.00
2900000 9% Redeemable Preference Shares of Rs. 100/- each 2900.00
Total 3500.00
Issued Subscribed and Paid-up Capital
26241000 Equity Shares of Rs. 2/- each 524.82
2900000 9% Redeemable Preference Shares of Rs. 100/- each 2900.00
Total 3424.82

The share capital of the Company Post- Scheme of Arrangement is as set forthbelow:

Authorized Capital Aggregate Nominal Value
(Rs. in lacs)
125000000 Equity Shares of Rs. 2/- each 2500
10000000 Unclassified of Rs. 10/- each 1000
Total 3500
Issued Subscribed and Paid-up Capital
73221296 Equity Shares of Rs. 2/- each 1464.43
Total 1464.43


During the year on July 08 2016 73183896 Equity Shares of Rs.2/- each fully paid-up were allotted to the Equity Shareholders of LKP Finance Limited in the ratio of 6:1i.e.; 6 (six) shares for every 1 (one) share held by them.


Your Directors would like to place on record their sincere appreciation toShareholders Bankers Institutions and Employees for their co-operation and support.

For and on behalf of the Board of Directors
Mumbai Pratik Doshi S S Gulati
Date: April 26 2017 Managing Director Director
DIN 00131122 DIN02404230