KLG Capital Services Ltd Directors Report.

Dear Members,

Your Directors are pleased to present the 25th Annual Report of KLG Capital Securities Limited (‘Company) together with the Audited Financial Statements for the year ended March 31, 2019.

Financial Highlights (Standalone)

The financial performance of the Company for the financial year ended March 31, 2019 is summarized below:

(Rupees In Lacs)
Particulars 2018-19 2017-18
Total Income 98.42 90.39
Less: Expenditure 86.97 21.11
Profit/(Loss) before Depreciation & Tax 11.45 69.27
Less: Depreciation 0.00 0.00
Profit before Tax 11.45 69.27
Less: Taxes 4.5 16.03
Profit after Tax 6.95 53.24
Less: Transfer to Statutory Reserve Account as per Section 45-IC of the 1.39 10.64
Reserve Bank of India Act, 1934
Balance carried forward to Balance Sheet 5.56 42.60

Note: Previous years figures are regrouped/rearranged, wherever necessary.

Review of Companys Affairs

Your Company is a Non-deposit taking Non-Banking Financial Company. During the year under review, the Company has earned total income of Rs. 98.42 Lacs as compared to the income of Rs. 90.39 Lacs during the previous financial year. The profit after tax as on March 31, 2019 amounted to Rs.6.95 Lacs as against profit of Rs. 53.24 Lacs during the previous financial year.

Dividend

With a view to conserve resources, your Directors do not recommend dividend for the year under review.

Reserves

During the year under review, Rs. 1.39 Lacs (Previous year Rs.10.64 Lacs) are transferred to Statutory Reserve Account as prescribed by section 45-IC of the Reserve Bank of India Act, 1934, being 20% of the profits after taxes for the year.

Extract of Annual Return

The extract of Annual Return in the Form MGT- 9 as required under Section 92(3) of the Act as prescribed in Rule 12 of the Companies (Management and Administration) Rules, 2014, is enclosed as Annexure I to this Report. The Annual Return in Form MGT-7 as required under Section 92 (3) of the Act is available on the website of the Company viz. www.klgcapital.com./investor-desk-annual-report.php

Material Changes and Commitments:

No material changes and commitments have occurred between the end of financial year of the Company and the date of this report affecting the financial position of the Company as at March 31, 2019.

Particulars of Loan, Guarantees and Investments

Details of Loans, Guarantees and Investment covered under the provisions of Section 186 of the Companies Act, 2013 (‘Act) are given in the notes to the Financial Statements. Also, pursuant to Schedule V of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (‘SEBI Regulations), the particulars of Loans/Advances given to Subsidiaries have been disclosed in the notes to the Financial Statements.

Particulars of Contracts or Arrangements with Related Parties

None of the transactions with related parties falls under the scope of section 188(1) of the Act. Hence, the Company has nothing to report in Form AOC-2 and the same is not annexed. The details of other related party transactions are given in the Notes to the Financial Statement.

Deposits

During the year under review, the Company had not accepted any deposits within the meaning of Section 73 of the Act and rules made thereunder.

Details of Subsidiaries Company

During the year under review, Company has one Wholly Owned Subsidiary Company namely KLG Stock Brokers Private Limited ("KSBPL"). KSBPL is a Deposit Based Trading Member of Cash and Equity Derivatives Segments of BSE Limited. However, it is yet to commence Business. There are no associate companies within the meaning of 2(6) of the Companies Act, 2013.

The performance and financial position of the Subsidiary Company included in the consolidated financial statement is provided in accordance with the provisions of Section 129 read with Rule 5 of the Companies (Accounts) Rules, 2014 as a separate statement annexed to the Notes to Financial Statements in Form AOC-1 and hence not repeated here for sake of brevity.

The contribution of Subsidiary toreflectedthrough the Consolidated Financial overall performance of the Company is Statements.

Details of Directors and Key Managerial Personnel

Pursuant to the provisions of Section 152 of the Act, Mr. Nilesh Mehta (DIN: 02101502) retires by rotation at ensuing AGM and being eligible, offers himself for re-appointment. Mr. J. Alexander (DIN: 00485766), Ms. Gayathri Ramachandran (DIN: 02872723) and Mr. V. Ramanan (DIN: 02754562) has been re-appointed as an Additional (Independent) Directors, with effect from May 28, 2019, May 30, 2019 and September 30, 2019 respectively and hold the office upto the date of ensuing AGM. Appropriate Resolution are being proposed at the ensuing AGM to re-appoint them for a second term of five consecutive years as contemplated under Section 149 of the Act, and they shall not be liable retire by rotation.

Brief profiles of the Directors proposed to be re-appointed is provided in Exhibit to the Notice of ensuing AGM. The Board of Directors recommends reappointment of the aforesaid Directors at the ensuing AGM. In terms of provisions of Act, Mr. Chakradhar Das, Manager and Mr. Ankit Pratap Singh, Chief Financial Officer are the KMPs of the Company.

Ms. Avni Garnara ceased to be Whole-time Key Managerial Personnel of the Company under the category of Company Secretary with effect from May 07, 2019.

Declaration by the Independent Directors

The Company has received necessary declarations from each Independent Directors under Section 149(7) of the Act, that he/ she meets the criteria of independence laid down in Section 149(6) of the Act, and SEBI Regulations.

Independent Directors Meetings

The Independent Directors Mr. J. Alexander, Mr. V. Ramanan and Ms. Gayathri Ramachandran, met without the attendance of Non- Independent Directors and the members of the Management. The Independent Directors, inter alia, reviewed the performance of Non- Independent Directors and the Board as a whole; the performance of the Chairman of the Company and assessed the quality, quantity and timeliness of flow of information between the Company Management and the Board that is necessary for the Board to effectively and reasonably perform their duties.

Performance Evaluation

The Act stipulates the performance Evaluation of the Directors, Board and its Committees. The Company has devised the criteria for performance evaluation after approval by the Nomination & Remuneration Committee/Board of Directors on the basis of which the annual performance evaluation of the Directors, Board and Board Committees has been carried out.

The criteria for performance evaluation of Independent Directors are mainly devised based upon the parameter for professional conduct, role, functions and duties laid under Schedule IV to the Act. The Evaluation process focused on various aspects of the functioning of the Board and its Committees such as composition of the Board and Committees, participation in discussions, etc. Performance evaluation of individual Directors was on parameters such as attendance, contribution, constructive and active participation etc.

The Independent Directors, at their separate Meeting, evaluated the performance of Non- Independent Directors including Chairperson of the Company and the Board as a whole; the performance of the Chairman of the Company and assessed the quality, quantity and timeliness of flowof information between the Company Management and the Board, that is necessary for the Board to effectively and reasonably perform their duties. The performance of all directors was also evaluated by the Nomination and Remuneration Committee.

The Board of Directors considered the performance evaluation of the Directors, Board and Board Committees. The performance evaluation of the Independent Directors was carried out by the entire Board excluding the concerned Director being evaluated.

Directors Responsibility Statement

In accordance with the provisions of Section 134(3) (c) and Section 134(5) of the Act, your Directors confirm that:

(a) In the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;

(b) The Directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31, 2019 and of the profit and loss of the Company for that period;

(c) The Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; (d) The Directors had prepared the annual accounts on a going concern basis; and

(e) The Directors had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and are operating effectively;

(f) The Directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

Number of Board Meetings

During the Financial Year 2018-19, four meetings of the Board of Directors of the company were held on May 28, 2018, August 14, 2018, November 13, 2018 and February 11, 2019. The maximum time gap between any two consecutive meetings did not exceed one hundred and twenty days.

Additionally, committee meetings were held during the financial year including Audit Committee, which met four times during the year.

The attendance of each Director at the said Board Meetings is given below:

Name of the Directors No. of Board Meetings Held No. of Board Meetings attended
Ms. Gayathri Ramachandran 4 4
Ms. Priyanka Gandhi 4 1
Mr. V. Ramanan 4 4
Mr. J. Alexander 4 4
Mr. Nilesh Mehta 4 4

Audit Committee

The Audit Committee comprises of Mr. V. Ramanan (Chairman), Mr. J. Alexander, Ms. Gayathri Ramachandran, and Mr. Nilesh Mehta as Members. All the recommendations made by the Audit Committee were accepted by the Board.

The Audit Committee met four times during the financial year under review. The meetings of the Committee were held on May 28, 2018, August 14, 2018, November 13, 2018 and February 11, 2019.

The attendance of each Director at the said Committee Meetings is given below:

Name of the Directors No. of Committee Meetings held No. of Committee Meetings Attended
Mr. V. Ramanan 4 4
Mr. J. Alexander 4 4
Ms. Gayathri Ramachandran 4 4
Mr. Nilesh Mehta 4 4

Nomination and Remuneration Committee:

The Nomination and Remuneration Committee comprises of Ms. Gayathri Ramachandran (Chairperson), Mr. J. Alexander and Mr. V. Ramanan as Members.

The Nomination and Remuneration Committee met once during the financial year under review. The meeting of the Committee was held on February 11, 2019.

The attendance of each director at the said Committee meetings is given below:

Name of the Directors No. of Committee Meetings held No. of Committee Meetings Attended
Ms. Gayathri Ramachandran 1 1
Mr. J. Alexander 1 1
Mr. V. Ramanan 1 1

Stakeholders Relationship Committee:

During the Financial year 2018-19, no meeting of the Stakeholders Relationship Committee was held.

Statutory Auditors:

As per the provision of Section 139 of the Act, the term of office of M/s. NBS & co., Chartered Accountants (Firm Registration No.110100W), the Statutory Auditors of the Company will conclude from the close of forthcoming AGM of the Company.

The Board of Director places on record its appreciation for the services rendered by M/s. NBS & Co., Chartered Accountants, as the Statutory Auditors of the Company.

As required under the provisions of Section 139(1) of the Act, the Company has received written consent from M/s. Batra Sapra & Co., Chartered Accountants bearing Firm Registration No.000103N informing that their appointment, if made would be in accordance of the provision of the Act, read with Rule 4 (2) of the Companies (Audit and Auditor) Rules, 2014 and that they satisfy the criteria provided in Section 141 of the Act.

Member attention is drawn to a resolution proposing the appointment of the M/s. Batra Sapra & Co., Chartered Accountants bearing Firm Registration No. 000103N as Statutory Auditor of the Company which is included in the item no. 3 of the Notice convening AGM.

Auditors Report

The Auditors Report to the Members on the Accounts of the Company for the financial year ended March 31, 2019, does not contain any qualification. The observation in the Auditors Report by M/s. NBS & Co., Chartered Accountants have been dealt with in the relevant Notes to Accounts, which are self - explanatory.

Internal auditors:

M/s. Sanjay Vijay & Associates, Chartered Accountants, Mumbai, have been appointed as Internal Auditors for conducting internal audit of the Company. The Internal Auditors independently evaluate the internal controls systems, monitor implementation of the accounting systems & procedures and statutory compliances. The Audit Committee periodically reviews the reports of the Internal Auditors.

Secretarial Auditor:

Pursuant to Section 204 of the Companies Act, 2013, the Board has appointed M/s. Jaisal Mohatta & Associates, Practicing Company Secretary, Mumbai, as its Secretarial Auditors to conduct the Secretarial Audit of the Company for the financial year 2018-19. The Secretarial Audit Report for the financial year ended March 31, 2019, is as annexed to this report as Annexure II. There are no qualifications made by the Secretarial Auditor in the Report. The observation in Secretarial Auditor Report is self explanatory.

Management Discussion and Analysis

The Management Discussion and Analysis (‘MDA) Report for the year under review as stipulated under Regulation 34 of SEBI Regulations, read with Schedule V of the said Regulations forms part of this Annual Report.

Adequacy of Internal Financial Control with reference to the Financial Statements

The Company has internal control systems, commensurate with the size, scale and complexity of its operations. The Audit Committee monitors and evaluates the efficacy and adequacy of internal control systems in the Company.

The Company has in place adequate internal financial controls with reference to Financial Statements. The report of the Statutory Auditors states about the existence of adequate internal financial control systems and its operating effectiveness. During the year, no reportable material weakness in the design or operation was observed in the internal financial controls.

Managerial Remuneration

Disclosures of the ratios of the remuneration of each director to the median employees remuneration details as required pursuant to Section 197(2) of the Act, read with Rule 5 (1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is annexed to this Report as Annexure III.

None of the Directors of the Company are in receipt of any commission from the Company or from any Subsidiary of the Company. The details of remuneration paid to the Directors of the Company are given in Extract of Annual Return.

Risk Management Policy

Pursuant to the requirement of Section 134 of the Act and Listing Regulations, the Company has already in place a Risk Management Policy. The Company has a robust Risk Management framework to safeguard the organization from various risks through adequate and timely actions. It is designed to anticipate, evaluate and mitigate risks in order to minimize its impact on the business. The elements of risk as identified for the Company are set out in the MDA Report forming part of the Boards Report.

Significant & Material Orders Passed By the Regulators or Courts Or Tribunal

There are no significant material orders passed by the regulators or courts or tribunals which would impact the going concern status and companys operations in future except as otherwise disclosed in this report.

Nomination & Remuneration Policy

The Nomination and Remuneration Committee comprises of Ms. Gayathri Ramachandran (Chairperson), Mr. J. Alexander and Mr. V. Ramanan as Members. The terms of reference of the Committee are given in the Report on Corporate Governance of the Company.

The Nomination and Remuneration Policy recommended by the Nomination and Remuneration Committee is duly approved by the Board of Directors of the Company and is annexed to this Report as Annexure IV.

Vigil Mechanism/Whistle Blower Policy

The Company has implemented Vigil Mechanism/Whistle Blower Policy which encourages the Whistle Blower to report genuine concerns about unethical behavior, actual or suspected fraud or violation of the Companys code of conduct or ethics policy. The mechanism provides for adequate safeguards against victimization of Whistle Blower who avail of such mechanism and also provides for direct access to the Chairman of the Audit Committee, in exceptional cases.

Sexual Harassment

During the year under review, there were no cases filed pursuant to the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

Particulars of Employees

In terms of Section 136 of the Act, the Annual Report and Financial Statements are being sent to the Members of the Company and others entitled thereto excluding the information pursuant to Rules 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014. Particulars in this regard, if any, will be made available for inspection by the Members at the Registered Office of the Companybetween 1100 hours to 1300 hours on all working days, expect Saturday, up to the date of the ensuing AGM. If any Member is interested in obtaining a copy thereof, such Member may write to the Company Secretary in this regard. Upon such request, the information will be made available.

Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo

Considering the nature of business of the Company, there are no particulars to be disclosed relating to the Conservation of Energy, Research and Development and Technology Absorption as required under the Companies (Accounts) Rules, 2014, for the year under review. Further, the Foreign Exchange Earnings during the year under review and the Foreign Exchange Outgo is Nil.

Corporate Social Responsibility (CSR) Policy

The provisions of Section 135 of the Act, relating to Corporate Social Responsibility are not applicable to the Company.

Appreciations and Acknowledgment

The Board of Directors wishes to express its sincere appreciation and thanks to all customers, suppliers, banks, financial institutions, solicitors, advisors, Government of India and other regulatory authorities for their consistent support and co-operation. Your Directors appreciate the contribution made by the employees of the Company and acknowledge their hard work and dedication. Your Directors are also deeply grateful to the Members for the confidence and faith that they have always placed in the Company.

Registered Office By Order of the Board of Directors
SKIL House, 209, Bank Street Cross Lane, For KLG Capital Services Limited
Fort, Mumbai - 400 023
Tel: +91-22-66199000, Fax: +91-22-22696023 Gayathri Ramachandran
CIN: L67120MH1994PLC218169 Chairperson
Website: www.klgcapital.com DIN:02872723
E-mail: company.secretary@klgcapital.com
Place: Mumbai
Date: September 03, 2019