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Khandwala Securities Ltd

BSE: 531892 | NSE: KHANDSE ISIN: INE060B01014
Market Cap: [Rs.Cr.] 20.30 Face Value: [Rs.] 10
Industry: Finance & Investments

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Auditor's Report
INDEPENDENT AUDITOR

To,

The Members of

Khandwala Securities Limited

1. Report on the Financial Statements

We have audited the accompanying financial statements of Khandwala SecuritiesLimited (‘the Company’) which comprise the Balance Sheet as at 31stMarch2014, the Statement of Profit and Loss for the year ended and a summary of significantaccounting policies and other explanatory information.

2. Management’s Responsibility for the Financial Statements

Management is responsible for the preparation of these financial statements that give atrue and fair view of the financial position, financial performance of the Company inaccordance with the Accounting Standards referred to in sub-section (3C) of section 211 ofthe Companies Act, 1956 ("the Act"). This responsibility includes the design,implementation and maintenance of internal control relevant to the preparation andpresentation of the financial statements that give a true and fair view and are free frommaterial misstatement, whether due to fraud or error.

3. Auditor’s Responsibility

Our responsibility is to express an opinion on these financial statements based on ouraudit. We conducted our audit in accordance with the Standards on Auditing issued by theInstitute of Chartered Accountants of India. Those Standards require that we comply withethical requirements and plan and perform the audit to obtain reasonable assurance aboutwhether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts anddisclosures in the financial statements. The procedures selected depend on theauditor’s judgment, including the assessment of the risks of material misstatement ofthe financial statements, whether due to fraud or error. In making those risk assessments,the auditor considers internal control relevant to the Company’s preparation and fairpresentation of the financial statements in order to design audit procedures that areappropriate in the circumstances, but not for the purpose of expressing an opinion on theeffectiveness of the entity’s internal control. An audit also includes evaluating theappropriateness of accounting policies used and the reasonableness of the accountingestimates made by management, as well as evaluating the overall presentation of thefinancial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion.

4. Opinion

In our opinion and to the best of our information and according to the explanationsgiven to us subject to matters referred in the notes to accounts, the financial statementsgive the information required by the Act in the manner so required and give a true andfair view in conformity with the accounting principles generally accepted in India:

(i) In the case of the Balance Sheet, of the state of affairs of the Company as at 31stMarch, 2014; (ii) In the case of the Statement of Profit and Loss, of the Loss for theyear ended on that date.

(iii) In the case of the Cash Flow Statement, of the Cash flow for the year ended onthat date.

5. Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor’s Report) Order, 2003 ("theOrder"), as amended, issued by the Central Government of India in terms ofsub-section (4A) of section 227 of the Act, we give in the Annexure a statement on thematters specified in paragraphs 4 and 5 of the Order.

2. Further to our comments in our opinion referred to above, we report that:

a. The Company had advanced application money towards purchase of shares of Rs. 216.69lacs, which is outstanding for a period of 144 months as at the end of the year. In theabsence of information regarding the status of the allotment or the net worth of theentities in which the Company made applications, we are unable to ascertain the extent towhich an amount of Rs. 216.69 lacs is recoverable and accordingly, the effect thereof onthe financial statements cannot be ascertained. Please refer Note No. 21 forming part offinancial statements.

b. Long-term deposits to companies of Rs. 530.00 lacs are subject to confirmation andsubsequent adjustments, if any. Please refer Note No 23 forming part of financialstatements.

3. As required by section 227(3) of the Act, we report that:

a. We have obtained all the information and explanations which to the best of ourknowledge and belief were necessary for the purpose of our audit;

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

c. The Balance Sheet and Statement of Profit and Loss dealt with by this Report are inagreement with the books of account;

d. Except for our comments above, in our opinion and to the best of our information andaccording to the explanations given to us, the financial statements read together with thenotes thereon, give the information required by the Companies Act, 1956, in the manner sorequired and give a true and fair view in conformity with the accounting principlesgenerally accepted in India

For Udyen Jain and Associates

Chartered Accountants

Mr. Udyen Jain

Partner

Mem. No: F- 101201

Firm Reg. No. : 116336W

Place: Mumbai

Date: 30th May, 2014

ANNEXURE TO THE AUDITOR’S REPORT

ANNEXURE TO THE AUDITOR’S REPORT

(Referred to in paragraph 4 of our report of even date to the members of KhandwalaSecurities Limited on the financial statements for the period from April 1, 2013 to March31, 2014)

1. The company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets. Discrepancies have been identified andadjusted/rectified in the records relating to fixed assets.

2. According to the information & explanations given to us and having regards tothe size of the company and the nature of its business, in our opinion the frequency ofphysical verification of fixed assets need to be strengthened.

3. None of the fixed assets have been revalued during the year.

4. No substantial part of the fixed assets was disposed off during the year.

5. The Company is a service company primarily engaged in the business of renderingmerchant banking services. Accordingly, it does not hold any physical inventories. Thus,paragraph 4(ii) of the Order is not applicable.

6. The company has not granted any loans, secured or unsecured during the period.

7. The rate of interest and the other terms and conditions are prima facie notprejudicial to the interest of the company

8. As the company has not taken any loans, secured or unsecured, from companies coveredu/s 301 of the Companies Act 1956, during the period, the clause no. 4(iii)(b) and4(iii)(c) of the Companies (Auditor’s Report) Order, 2003 are not applicable to thecompany.

9. In our opinion and according to the information and explanations given to us, thereare adequate internal control procedures commensurate with the size of the Company and thenature of its business with regard to purchase of fixed assets and with regards to sale ofservice. The activities of the Company do not involve any purchase of inventory and saleof goods. In our opinion and according to the information and explanations given to us,there is no continuing failure to correct major weaknesses in internal control system.

10. To the best of knowledge and belief, and according to the information andexplanations given to us, we are of the opinion that transactions that need to be enteredinto the register maintained under Section 301 of the Companies Act, 1956 have been soentered.

11. No transactions have been entered during the period in the register maintained inpursuance of section 301 of the Companies Act, 1956 and based on the audit proceduresapplied by us and according to the information and explanations given and therepresentations made to us, we have not come across any transaction that need to beentered into the register maintained in pursuance of section 301 of the Companies Act,1956. Accordingly, sub-clause (b) is not applicable.

12. In our opinion and according to information and explanations given to us, theCompany has not accepted any deposits from the public to which the provisions of Section58A or Section 58AA of the Companies Act, 1956 apply.

13. According to the information and explanations given to us, the Company has aninternal audit system. In our opinion, the internal audit system is adequate with regardsto the size of the company and the nature of its business.

14. According to the information and explanations given to us, the Central Governmenthas not prescribed maintenance of cost records under Section 209(1) (d) of the CompaniesAct, 1956 for any of the activities of the Company.

15. According to the information and explanations given to us, during the period thecompany was generally regular in depositing with appropriate authority undisputedstatutory dues, though there have been few cases of delays in payments of statutoryliabilities.

16. 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 Provident Fund, Income-tax,Sales-tax, Service tax and other material statutory dues have not been deposited in timeduring the year.

17. According to the records of the company, the dues outstanding of Income Tax andcess on account of any dispute are as follows:

Name of the Statute Nature of the Dues Amount (Rs.) Period to which the amount relates Forum where Dispute is pending Under Section
Income Tax Act 1961 Income Tax 31.88 A.Y. 2006-07 CIT(A) 271(1)(C)
7.80 A.Y. 2007-08 CIT(A) 271(1)(C)
2.5 A.Y. 2008-09 CIT(A) 271(1)(C)
19.49 A.Y. 2009-10 CIT(A) 271(1)(C)
4.96 A.Y. 2007-08 ITAT 143(3)
58.89 A.Y. 2008-09 ITAT 143(3)
82.65 A.Y. 2009-10 ITAT 143(3)

18. TDS defaults showing on TDS traces website for the various Financial Years as on 31stMarch 2014 and Company is under process of rectifying the defaults by revising the TDSreturns.

19. The Company has granted loans and advances on the basis of security by way ofpledge of shares from Bank during the year.

20. According to the information and explanations given to us, no personal expenseshave been charged to revenue account.

21. As at the balance sheet date, the Company does not have accumulated losses. TheCompany has incurred cash losses in the current year.

22. According to the information and explanations given to us, though the company hasnot defaulted in the repayment of dues to financial institutions and banks however amountof Rs. 1.20 Cr is pending towards preferential shareholder for preference dividend.

23. In our opinion, and according to the information and explanations given to us, theCompany is not a chit fund or a Nidhi / mutual benefit fund / society. Therefore theprovisions of paragraph 4(xiii) of the Companies (Auditor’s Report) Order, 2003 arenot applicable to the Company.

24. In respect of the Company’s dealings or trading in shares, securities,debentures and other investments, proper records have been maintained on a timely basis inrespect of the transactions and contracts during the period under report. According to theinformation and explanations given to us, shares and other securities held as investmentsare in the Company’s name, except in cases where the same are in the process of beingtransferred in its name.

25. According to the information and explanations given to us, the company has notgiven guarantees for loans taken by others from banks which are prima facie prejudicial tothe interest of the company.

26. According to the information and explanations given to us, the Company had appliedterm loans availed for the purpose for which they were obtained.

27. In our opinion and according to the information and explanations given to us, andon an overall examination of the balance sheet of the Company, prima facie, no fundsraised on short-term basis have been applied for long-term investments and vice versa.

28. According to the information and explanations given to us, during the period underreport, the Company has not made preferential allotments of equity shares to personslisted in the register maintained under Section 301 of the Companies Act, 1956.

29. As the company did not have any debentures outstanding during the year, the clauseno. 4(xix) of Companies (Auditor’s Report) Order, 2003 is not applicable to thecompany.

30. The Company has not made any public issue of shares or debentures during theperiod; accordingly, the question of disclosure of end use of proceeds of public issuesdoes not arise.

31. The company is not a sick industrial company within the meaning of clause (o) ofsub-section (1) of Section 3 of the Sick Industrial Companies (Special Provisions) Act,1985 (1 of 1986).

32. During the course of our examination of the books and records of the Company,carried out in accordance with the generally accepted auditing practices in India andaccording to the information and explanations given to us, we have neither come across anyinstance of material fraud on or by the Company, noticed or reported during the period,nor have we been informed of such case by the management.

For Udyen Jain and Associates

Chartered Accountants

Mr. Udyen Jain

Partner

Mem. No: F- 101201

Firm Reg. No. : 116336W

Place: Mumbai

Date: 30th May, 2014

   
Futures & Options Quote
Future Data Not present
Key Information

Key Executives:

Shreedhar Parande , Chairman

Paresh J Khandwala , Managing Director & CEO

Rohit Chand , Director

Kalpen Shukla , Director


Company Head Office / Quarters:

Ground Floor Vikas Building,
Green Street Fort,
Mumbai,
Maharashtra-400023
Phone : Maharashtra-91-22-22642300/40767373 / Maharashtra-
Fax : Maharashtra-91-22-22615172/40767377 / Maharashtra-
E-mail : investorgrievances@kslindia.com
Web : http://www.kslindia.com

Registrars:

Karvy Computershare Pvt Ltd
Karvy House 46,Road No 4 Street No1,Banjara Hills,Hyderabad - 500034

 
Fund Holding
Scheme Name No. of Shares
 
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