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Directors Report of KIFS Financial Services Ltd.
Mar 31, 2025
Your directors have pleasure in presenting the 30th annual report on the business and operations of the company
together with the audited financial statement for the financial year ended on March 31, 2025.
1. Financial summary
|
Particulars |
2024-25 |
2023-24 |
|
Revenue from operations |
2,911.86 |
4,663.87 |
|
Other income |
404.06 |
1.23 |
|
Total income |
3,315.92 |
4,665.09 |
|
Total expenditure |
2,232.16 |
3,691.27 |
|
Profit / (loss) before exceptional items & provision for tax |
1,083.76 |
973.82 |
|
Exceptional items |
- |
- |
|
Profit / (loss) before tax |
1,083.76 |
973.82 |
|
Tax expenses |
277.24 |
262.21 |
|
Net profit |
806.52 |
711.62 |
|
EPS - basic & diluted (?) |
7.46 |
6.58 |
2. Operational performance of the company
During the financial year under report, total income of the company includes ? 2,911.86 lakhs as revenue from
operations and ? 404.06 lakhs as other income as compared to ? 4,663.87 lakhs as revenue from operations and ?
1.23 lakhs as other income during the previous financial year. The revenue from operations has been declined
37.57% in compare to previous financial year. Profit before interest, depreciation and tax also stands at ? 3,252.51
lakhs as compared to ? 4,543.12 lakhs in the financial year ended on March 31, 2024 which has been declined by
28.41%.
However, net profit after tax has represented positive growth of 13.34% when compared to that of previous
financial year. Earnings per share stands at ? 7.46 compared to ? 6.58 for the previous financial year ended on
March 31, 2024.
The detailed analysis as to review of company''s operational and financial performance is given in the management
discussion and analysis report.
3. Dividend
Your directors propose to recommend final dividend for the financial year 2024-25 at a rate of ? 1.50 (one rupee
and fifty paise only) (15.00 %) per equity share of ? 10/- (rupees ten only) each in compare to ? 1.40 (14.00%) per
equity share of ? 10/- (rupees ten only) each declared for the previous financial year.
Further, the payment of dividend is subject to the approval of shareholders in the ensuing annual general meeting
of the company. The dividend, if declared at the ensuing annual general meeting, will be paid to those
shareholders whose names appear in the register of members as on the record date. The amount of final dividend
will be ? 162.27 lakhs.
4. T ransfer to reserves
The company proposes to transfer ? 161.30 lakhs to the special reserve out of amount available for appropriations
and an amount of ? 2,882.26 lakhs is proposed to be retained in the statement of profit and loss.
5. Deposits
During the financial year ended on March 31, 2025, the company has not accepted any deposits from the public
within the meaning of the provisions of applicable directions and notifications issued by the Reserve Bank of India
in this respect.
The company being a non-deposit taking non-banking financial company, the disclosures with respect to deposits,
required as per rule 8(5)(v) & (vi) of the Companies (Accounts) Rules, 2014 read with the Companies (Acceptance
of Deposits) Rules, 2014 and section 73 of the Companies Act, 2013 are not applicable to it. Further, the company
continues to be a non-deposit taking non-banking financial company in conformity with the guidelines of the RBI.
6. Annual return
Pursuant to the provisions of section 92(3) read with section I34(3)(a) of the Companies Act, 2013, the annual
return as on March 31, 2025 is available under the investors tab on the company''s website www.kifsfinance.com.
7. Share capital
The authorized share capital of the company as on March 31, 2025, stood at ? 11,00,00,000 (Rupees Eleven Crore
Only) consisting of 1,10,00,000 (One Crore and Ten Lakh only) equity shares of ? 10 (Rupees Ten only) each.
The issued, subscribed and paid up share capital of the company as on March 31, 2025, stood at ? 10,81,80,000/-
(Rupees Ten Crore Eighty One Lakhs and Eighty Thousand Only) consisting of 1,08,18,000 (One Crore Eight Lakhs
and Eighteen Thousand Only) equity shares of ? 10/- (Rupees Ten Only) each fully paid-up.
During the financial year under report, the company has neither made any issue of equity shares with differential
voting rights, sweat equity shares or under employee stock options scheme nor it has made any provision of
money for purchase of its own shares by employees or by trustees for the benefit of employees.
8. Directors and key managerial personnel (KMP)
Director retiring by rotation
Pursuant to the provisions of section 152 of the Companies Act, 2013 and in accordance with the articles of
association of the company, Mrs. Sonal Rajesh Khandwala (DIN: 01788620) non executive director of the company
retired by rotation at the previous annual general meeting of the company held on Friday, September 27, 2024 i.e.
during the financial year 2024-25 and Mr. Rajesh Parmanand Khandwala (DIN: 00477673) managing director of the
company retires by rotation at the ensuing annual general meeting and being eligible offers himself for re¬
appointment. The board of directors of the company recommends his re-appointment.
Independent directors
In terms of the definition of the independent director as prescribed under regulation 16(1)(b) of the SEBI (Listing
Obligations and Disclosure Requirements) Regulations, 2015 and section 149(6) of the Companies Act, 2013, Mr.
Sharvil Bharat Kumar Suthar (DIN: 08785030), Mr. Rajesh Gopaldas Parekh (DIN: 09362221) and Mr. Dixit
Dipakkumar Shah (DIN: 07826994) remained independent directors of the company throughout the financial year
under report. Appointments of Mr. Rajesh Gopaldas Parekh (DIN: 09362221) and Mr. Dixit Dipakkumar Shah (DIN:
07826994) approved by the shareholders of the company by passing ordinary resolutions at their annual general
meeting held on September 29, 2023, were ratified by passing special resolutions at the previous annual general
meeting held on September 27, 2024.
Further the second consecutive term of five years each of two of the independent directors namely Mr. Devang M.
Shah (DIN: 01788760) and Mr. Dharmendra N. Soni (DIN: 01659489) expired on May 26, 2024 and accordingly they
ceased to be directors of the company and members of the various committees. The board admires their
invaluable contribution made towards growth of the company during their tenure.
The continuing independent directors have submitted the declaration, confirming that they meet the criteria of
independence as prescribed under the provisions of the relevant laws. Further, the independent directors have
complied with the code for independent directors prescribed in schedule IV of the Companies Act, 2013 and code
of conduct prescribed for the directors, management and senior managerial personnel.
Further, a separate meeting of independent directors of the company was held on Monday, February 10, 2025 in
accordance with the provisions of clause VII of the schedule IV of the Companies Act, 2013 and provisions of the
SEBI LODR regulations.
All the independent directors of the company have completed their registration on the independent directors''
data bank within the timeline stipulated by the law. Also the requisite independent director(s) have cleared the
proficiency self-assessment test or are not required to do so based on the relaxation provided therein.
Also the board of directors of the company opines that during the year the integrity, expertise and experience
(including proficiency) of the independent directors are satisfactory to the company''s requirements. The
independent directors are proficient in the field as specified in point II(h) of the corporate governance report
attached herewith.
Woman director
Pursuant to the provisions of section 149 of the Companies Act, 2013 and regulation 17 of the SEBI (Listing
Obligations and Disclosure Requirements) Regulations, 2015, the board of directors of the company is required to
be constituted with at least one women director and accordingly, the company has appointed Mrs. Sonal Rajesh
Khandwala (DIN: 01788620) as a non executive non independent woman director on the board of director of the
company.
All of the directors of the company have confirmed that they are not disqualified under provisions of section 164
of the Companies Act, 2013 from being appointed / continue to hold position of directors of the company.
Key managerial personnel
Pursuant to the provisions of section 203 of the Companies Act, 2013, Mr. Rajesh Parmanand Khandwala holds
position of managing director and Mr. Bhavik Jayantibhai Shah holds the position of chief financial officer of the
company. Mr. Durgesh Dulichand Soni, an associated member of the Institute of Company Secretaries of India,
who resigned w.e.f. July 12, 2024 from the position of company secretary and compliance officer had rejoined
w.e.f. February 13, 2025 as company secretary, compliance officer and key managerial personnel of the company
to perform the functions of a company secretary as prescribed under provisions of section 205 of the Companies
Act, 2013 and rules made there under and other duties as assigned by the board of directors of the company to
him, at such remuneration and at such other terms and conditions as may be mutually decided from time to time.
Meanwhile Mr. Utsav Sumantkumar Bhavsar was appointed as company secretary and compliance officer w.e.f.
October 8, 2024 and he further resigned and ceased to be company secretary and compliance officer of the
company w.e.f. December 30, 2024.
Remuneration policy
The company follows a policy on remuneration of directors and senior management employees. The policy has
been approved both by the nomination & remuneration committee and the board of directors. The company''s
remuneration policy is framed in line with the requirement of section 178 of the Act, regulation 19 read with part D
of schedule II to the listing regulations. More details on the same have been given in the corporate governance
report.
The policy on remuneration of directors, key managerial personnel and senior employees can be accessed on
website of the company at following web link:
https://www.kifsfinance.com/assets/pdf/Nomination-Remuneration-policy-KIFS.pdf
9. Number of meetings of the board of directors
During the financial year 2024-25, the board of directors met five times and the details of which have been given in
the corporate governance report. The intervening gap between every two consecutive meetings was within the
period prescribed under the applicable provisions of the law.
10. Committees of the board
The company has formed various committees namely audit committee, nomination and remuneration committee,
stakeholders'' relationship committee, corporate social responsibility committee and risk management committee
in compliance with the requirements of the relevant provisions of the applicable laws and statutes. The risk
management committee has been established voluntarily as a part of the better corporate governance practices.
Apart from the above statutory committees, the company also has a managing committee of the board of
directors to look after the routine day to day affairs of the company.
The details with respect to the compositions, terms of reference, scope and powers, roles, meetings etc. of the
relevant committees are given in detail in the corporate governance report forming part of this annual report.
11. Corporate social responsibility
The company was required to comply with the provisions related to corporate social responsibility considering its
applicability for the financial year 2024-25. Accordingly it has adhered the provisions of section 135(1) of the
Companies Act, 2013 read with the Companies (Corporate Social Responsibility Policy) Rules, 2014 and has also
implemented a policy and has formed a committee named corporate social responsibility committee, more details
on which along with details of spending w.r.t. CSR are provided in the report on corporate social responsibility
enclosed along with this directors'' report as Annexure - 1. It is also stated by the board and CSR committee that
implementation and monitoring of CSR policy has been carried out responsibly and to the best extent possible.
12. Performance evaluation of the board
In accordance with the provisions of regulation 17(10) of the SEBI (Listing Obligations and Disclosure
Requirements) Regulations, 2015 and schedule IV of the Companies Act, 2013, evaluation of performance of
independent directors by the non independent directors and review of performance of non independent directors
and the board as a whole by the independent directors was made during the financial year under report. The
board also evaluated performance of all the committee and their members. The directors were satisfied with the
evaluation results, which reflected an overall engagement of the board and its committees with the company. This
may be considered as a statement under provisions of section 134(3)(p) of the Companies Act, 2013 and rule 8(4)
of the Companies (Accounts) Rules, 2014.
More details on the evaluation mechanism are given in the corporate governance report.
13. Vigil mechanism / whistle blower policy
The company promotes ethical behavior in all its business activities and has put in place a mechanism wherein the
employees are free to report illegal or unethical behavior, actual or suspected fraud or violation of the company''s
codes of conduct or corporate governance policies, raise concerns against management and business practices,
incorrect or misrepresentation of any financial statements and reports or any improper activity being negative in
nature to the chairman of the audit committee of the company or chairman of the board. The whistle blower
policy has been appropriately communicated within the company. The policy provides adequate safeguards
against victimization of director(s) / employee(s) who avail of the mechanism. The company has not received any
instance under the said policy during the year.
Under the whistle blower policy, the confidentiality of those reporting violation(s) is protected and they are not
subject to any discriminatory practices. No personnel have been denied access to the audit committee. The
functioning of the vigil mechanism is reviewed by the audit committee from time to time. The vigil mechanism /
whistle blower policy has been uploaded on website of the company and can be accessed at following web link:
https://www.kifsfinance.com/assets/pdf/kifs_whistle_blower_policy.pdf
14. Statement of development & implementation of risk management policy
The company has developed and implemented a risk management policy to meet the risks associated with the
business of the company. Business risk evaluation and management is an ongoing process within the company.
The assessment is periodically examined by the risk management committee of the board. The company, while
giving loan to its customers, follows the criteria and procedure laid down in policy and the credibility of the clients.
15. Loans / guarantees or investment in securities
Being a non banking financial company pursuing loan business in its ordinary course of business, the disclosures
relating to the details of loans made, guarantees given, securities provided or subscription / acquisition of
securities, pursuant to the provisions of section 186(11) of the Companies Act, 2013 and rule 11 of the Companies
(Meetings of Board and its Powers) Rules, 2014 are not required to be given. Details of loans as financial assets are
given in note no. 6 of the notes to the financial statements of the company.
16. Contracts or arrangements with related parties
All related party transactions that were entered during the financial year under report were in the ordinary course
of business of the company and were on arm''s length basis. There were no materially significant related party
transactions entered by the company with its promoters, directors, key managerial personnel or other persons,
which may have a potential conflict with the interest of the company. All such related party transactions are being
quarterly placed before the audit committee for its review. Omnibus approval has been obtained from the audit
committee, board of directors and shareholders of the company, as and when required, for all the related party
transactions (including transactions which are foreseen and repetitive in nature).
Since no material related party transactions were entered by the company which may have a potential conflict
with the interest of the company and all the transactions entered into by the company with its related parties
were in the ordinary course of business and on arm''s length basis, disclosure in the form AOC-2 is not being given.
In terms of amendment made vide the SEBI (Listing Obligations and Disclosure Requirements) (Sixth Amendment)
Regulations, 2021 replacing threshold determining material related party transactions and related clarifications
issued in this respect, the board had proposed and the shareholders accorded their consent in the annual general
meeting held on Friday, September 29, 2023 for the related party transactions / material related party transactions
made and proposed to be made with the related parties identified in terms of definition provided in the
Companies Act, 2013.
The policy on related party transactions as approved by the board has been uploaded on the company''s website
at the web link:
https://www.kifsfinance.com/category/assets/pdf/RPT-Policy-KIFS.pdf
17. Internal financial control systems and their adequacy
As per section 134(5)(e) of the Companies Act, 2013, the directors have an overall responsibility for ensuring that
the company has implemented a robust system and framework of internal financial controls. The company has
internal control systems, commensurate with the size, scale and complexity of its operations. Your company has
laid down set of standards, processes and structure which enable it to implement internal financial control
systems across the organization and ensure that the same are adequate and operating effectively. Internal
financial control systems of the company provide a reasonable assurance with regard to maintaining of proper
accounting controls, monitoring of operations, protecting assets from unauthorized use or losses, compliance
with regulations and for ensuring reliability of financial reporting.
18. Disclosure as per the rule 5 of the Companies (Appointment and Remuneration of Managerial
Personnel) Rules, 2014
In terms of the provisions of section 197(12) of the Act read with rule 5 of the Companies (Appointment
Remuneration of Managerial Personnel) Rules, 2014, including any statutory modification(s) thereof for the time
being in force, the details of remuneration etc. of directors, key managerial personnel and employees covered
under the said rules are enclosed herewith as Annexure - 2.
19. Auditors
Statutory auditors
Pursuant to the provisions of section 139 and 141 of the Companies Act, 2013 read with rule 4 of the Companies
(Audit and Auditors) Rules, 2014, the shareholders of the company at their 27th annual general meeting held on
Tuesday, September 27, 2022, re-appointed M/s. Bimal Shah Associates, chartered accountants, Ahmedabad as
statutory auditors of the company for a period of 5 years i.e. upto conclusion of 32nd annual general meeting of the
company and the same firm of auditors continues to be statutory auditors of your company during the financial
year under report.
The said appointment of statutory auditors has been made in accordance with the provisions of rule 6 of the
Companies (Audit and Auditors) Rules, 2014 i.e. manner of rotation of auditors by the companies on expiry of their
term.
Further, the company, being engaged in the financial service activities, is not required to maintain cost records
under the provisions of section 148 of the Companies Act, 2013.
Secretarial auditors
Pursuant to the provisions of section 204 of the Companies Act, 2013 and rules framed thereunder, M/s. Prachi
Bansal & Associates, secretarial auditors of the company appointed by the board of directors has issued secretarial
audit report for the financial year under report and the board of directors of the company further recommends
approval of shareholders to appoint said firm of auditors for a further period of 5 (five) consecutive years, to hold
office from the conclusion of this 30th annual general meeting till the conclusion of 35th annual general meeting of
the company, to conduct the secretarial audit and other such other related things.
Secretarial audit report issued by the secretarial auditor of the company for the financial year ended on March 31,
2025 in form MR-3 is enclosed to this directors'' report as Annexure - 3. Further, the company has complied with
the secretarial standards to the extent applicable to the company. Annual secretarial compliance report issued in
terms of provisions of regulation 24A of the SEBI LODR is attached as Annexure - 4.
Explanations or comments by the board on qualification / reservation / adverse remark or disclaimer
made by the statutory auditors in their audit report and by the secretarial auditor in their secretarial
audit report
The audit report issued by the statutory auditors of the company is self-explanatory and no comment from the
board of directors of the company is required as no qualification, reservation or adverse remark or disclaimer is
given by any of the auditors of the company.
The secretarial auditor has not reported any observation in the secretarial audit report and annual secretarial
compliance report issued for the financial year ended on March 31, 2025.
Internal auditors
In accordance with the provisions of section 138 of the Companies Act, 2013 and rules framed thereunder, your
company has appointed M/s. Parikh Shah & Associates, Ahmedabad, as the internal auditors of the company in the
board meeting held on May 21, 2025 to conduct the internal audit of the functions and activities of the company
for the financial year ending on March 31, 2026.
20. Investor education and protection fund (IEPF)
In compliance with the provision of section 124 and 125 of the Companies Act, 2013 and rules framed thereunder,
the equity shares in respect of which dividend remains unclaimed / unpaid for seven consecutive years or more,
are required to be transferred to the investors education and protection fund. During the financial year under
report i.e. financial year 2024-25, the company has transferred ? 1,73,903/- (rupees one lakh seventy three
thousand nine hundred and three only) from the unclaimed and unpaid dividend amount for the financial year
2016-17 to the investor education and protection fund. Moreover, 1,680 number of equity shares were also
transferred to the IEPF during the financial year under report, corresponding to the unpaid dividend remained
unclaimed and unpaid for seven consecutive years. The shares outstanding with the IEPF authority stands at
1,74,600 equity shares of ? 10/- each as on March 31, 2025.
Further, the details as on March 31, 2025 for unclaimed / unpaid dividend lying in the unpaid account, which are
liable to be transferred to the IFPF are as follows:
|
Sr. |
Financial |
Type of |
Unclaimed / unpaid dividend (?) |
Due date of transfer |
|
1 |
2017-18 |
Final dividend |
? 38,431.8 |
October 27, 2025 |
|
2 |
2018-19 |
Final dividend |
? 21,433.00 |
November 2, 2026 |
|
3 |
2019-20 |
Final dividend |
? 19,584.75 |
November 4, 2027 |
|
4 |
2020-21 |
Final dividend |
? 21,516.25 |
November 3, 2028 |
|
5 |
2021-22 |
Final dividend |
? 18,633.05 |
November 2, 2029 |
|
6 |
2022-23 |
Final dividend |
? 46,954.15 |
November 4, 2030 |
|
7 |
2023-24 |
Final dividend |
? 63,077.00 |
November 2, 2031 |
21. Material changes and commitments affecting financial position of the company
There are no material changes and commitments, affecting the financial position of the company which have been
occurred between the end of the financial year i.e. March 31, 2025 and the date of signing of the directors'' report.
Further, no significant or material orders have been passed by the regulators or courts or tribunals impacting the
going concern status of the company and / or the company''s operations in future.
22. Remuneration given to the managing director
The managing director of the company, Mr. Rajesh Parmanand Khandwala also occupies the office of the
managing director in KIFS Housing Finance Limited, a group company to the Khandwala group. Mr. Khandwala
was paid remuneration to the tune of ? 9,00,000/- (rupees nine lakhs only) from your company during and for the
financial year ended on March 31, 2025. The company does not have any subsidiary company.
23. Disclosure under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and
Redressal) Act, 2013
The Company has in place a robust policy on prevention, prohibition and redressal of sexual harassment at the
workplace, in accordance with the provisions of the Sexual Harassment of Women at Workplace (Prevention,
Prohibition and Redressal) Act, 2013 and the Rules framed thereunder has been laid down and circulated to every
employee of the company so as to inform them about the redressal mechanism available to them against any kind
of harassment. Your directors state that during the financial year under report, there were no cases filed or
compliant received from any employee pertaining to the sexual harassment. More details on the same have been
given in the corporate governance report.
An Internal Complaints Committee (ICC) has been constituted at all applicable locations to redress complaints
received regarding sexual harassment. The ICC is duly constituted and comprises members in accordance with the
statutory requirements, including an external member with experience in social work and legal knowledge.
A policy framed and adopted by the board of directors of the company on prevention of sexual harassment is
uploaded on the company website at below web link:
https://www.kifsfinance.com/assets/pdf/SEXUAL-HARASSMENT-POLICY.pdf
24. Listing
Presently, the equity shares of your company are listed at the Bombay Stock Exchange Limited (BSE) (scrip code:
535566). The company''s equity shares are available for trading in demat form by all the investors on BSE which is
having nation-wide trading terminals in various cities affording to the investors convenient access to trade and
deal in the company''s equity shares across the country.
The company is regular in complying with the requirements of the listing agreement / regulations and has duly
paid the requisite listing fees to the BSE.
25. Code of conduct
The board has laid down a code of conduct (âcodeâ) for board members, managerial personnel and for senior
management employees of the company. This code has been posted on the company''s website at
https://www.kifsfinance.com/category/code-of-conduct-policies.php. All the board members and senior
management personnel have affirmed compliance with this code. A declaration by the managing director to this
effect forms part of the corporate governance report.
The board has also laid down a code of conduct for independent directors pursuant to section 149(8) and schedule
IV to the Companies Act, 2013 via terms and conditions for appointment of independent directors, which is a guide
to professional conduct for independent directors and has been uploaded on the website of the company at
following web link:
http://www.kifsfinance.com/assets/pdf/Terms-of-appointment-of-Independent-Directors.pdf
26. Corporate governance
Your company practices a culture that is built on core values and ethical governance practices and is committed to
transparency in all its dealings. A report on corporate governance along with a certificate from statutory auditors
of the company regarding compliance of conditions of corporate governance, as stipulated under provisions of
regulation 34(3) and schedule V of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 is
annexed to this report.
27. Details of subsidiary / joint venture / associate companies
The company doesn''t have any subsidiary, joint venture or associate company.
28. Management discussion and analysis report
A detailed analysis of the company''s performance is made in the management discussion and analysis report,
which forms part of this annual report.
29. Compliance with the Reserve Bank of India guidelines
The company is registered with the Reserve Bank of India as a non banking financial company (NBFC) within the
provisions of the NBFC (Reserve Bank of India) Directions, 1998. The company categorized as a loan company
continues to comply with the requirements prescribed by the Reserve Bank of India as applicable to it, from time
to time.
30. Particulars regarding conservation of energy, technology absorption and foreign exchange
earnings and outgo
The disclosures required to be made under section 134(3)(m) of the Companies Act, 2013 read with rule (8)(3) of
the Companies (Accounts) Rules, 2014 pertaining to the conservation of energy, technology absorption and
foreign exchange earnings and outgo are not applicable to the company as the company being a non banking
financial company, is neither involved in any manufacturing, processing activities nor any of its transactions
involves foreign exchange earnings and outgo.
31. Directors'' responsibility statement
Pursuant to the provisions of section I34(3)(c) of the Companies Act, 2013, your directors state and 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 for the financial year ended on March 31, 2025 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 Companies Act, 2013 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;
e) the directors had laid down internal financial controls to be followed by the company and that such internal
financial controls are adequate and were operating effectively; and
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.
32. Capital adequacy ratio
The company usually makes lending to limited known entities and IPO funding it makes against secured margin
amount thus it assumes minimum to no risk for its lending.
33. Details of application made or proceedings pending under the Insolvency and Bankruptcy Code,
2016
During the financial year under report, no application was made or proceeding was pending for the company
under the Insolvency and Bankruptcy Code, 2016.
34. Details of difference between valuation amount on one time settlement and valuation while
availing loan from bank and financial institutions
During the financial year under report, there has been no instance of one time settlement of loans taken from
banks and financial institutions.
35. Disclosure under the Maternity Benefit Act, 1961
In accordance with the provisions of the Maternity Benefit Act, 1961, as amended, the Company affirms that it has
complied with all applicable requirements relating to maternity benefits for women employees during the financial
year 2024-25.
Eligible women employees were granted paid maternity leave and other statutory entitlements, including benefits
such as paid maternity leave, medical bonuses, nursing breaks and where applicable creche facilities were
provided in line with the prescribed norms. This measure aims to reinforce the company''s commitment to
fostering a safe, equitable, and supportive workplace for women during and after pregnancy.
The Company remains committed to fostering a safe, equitable, and supportive work environment for all
employees and ensures full compliance with all statutory provisions under the Act.
36. Acknowledgement
Your directors take this opportunity to express their deep and sincere gratitude to the clients, customers,
employees, shareholders and other stakeholders of the company for their trust and patronage, as well as to the
various bankers, Reserve Bank of India, Securities and Exchange Board of India, Bombay Stock Exchange,
Government of India and other regulatory authorities for their continued co-operation, support and guidance. The
Company look forward to their continued co-operation in realisation of the corporate goals in the years ahead.
For and on behalf of the board of directors
KIFS Financial Services Limited
Rajesh P. Khandwala
(Chairman & managing director)
(DIN:00477673)
Ahmedabad, June 20, 2025
Mar 31, 2023
The directors have pleasure in presenting the 28th annual report on the business and operations of the company together with the audited financial statement for the financial year ended on March 31, 2023.
|
1. Financial summary |
(Rs. in Lakhs except EPS) |
|
|
Particulars |
2022-23 |
2021-22 |
|
Revenue from operations |
3,072.01 |
3,271.30 |
|
Other income |
2.94 |
- |
|
Total income |
3,074.95 |
3,271.30 |
|
Total expenditure |
2,215.84 |
2,449.10 |
|
Profit / (loss) before exceptional items & provision for tax |
859.11 |
822.20 |
|
Exceptional items |
- |
- |
|
Profit / (loss) before tax |
859.11 |
822.20 |
|
Tax expenses |
219.49 |
209.57 |
|
Net profit |
639.62 |
612.62 |
|
EPS - basic & diluted (?) |
5.91 |
5.66 |
2. State of company''s affairs / performance of the company
During the financial year under report, total income of the company stands to '' 3,072.01 lakhs as revenue from operations and '' 2.94 lakhs as other income as compared to '' 3,271.30 lakhs as revenue from operations during the previous financial year. The revenue from operations has been declined 6.09% in compare to previous financial year. Profit before interest, depreciation and tax also stands at '' 2,984.98 lakhs as compared to '' 3,174.19 lakhs in the financial year ended on March 31, 2022.
Net profit after tax has also represented growth of 4.41% when compared to that of previous financial year. Earnings per share stands at '' 5.91 compared to '' 5.66 for the previous financial year ended on March 31, 2022.
The detailed analysis as to review of company''s operational and financial performance is given in the management discussion and analysis report.
Your directors propose to recommend final dividend for the financial year 2022-23 at a rate of '' 1.35 (one rupee and thirty five paise only) (13.50%) per equity share of '' 10/- (rupees ten only) each which is same as declared for the previous financial year ended on March 31, 2022.
Further, the payment of dividend is subject to the approval of shareholders in the ensuing annual general meeting of the company. The dividend, if declared at the ensuing annual general meeting, will be paid to those shareholders whose names appear in the register of members as on the record date. The amount of final dividend will be '' 146.04 lakhs.
The company proposes to transfer '' 127.92 lakhs to the special reserve out of amount available for appropriations and an amount of '' 1,965.25 lakhs is proposed to be retained in the statement of profit and loss.
During the financial year ended on March 31, 2023, the company has not accepted any deposits from the public within the meaning of the provisions of applicable directions and notifications issued by the Reserve Bank of India in this respect.
Further, being a non-deposit taking non-banking financial company, the disclosures with respect to deposits, required as per rule 8(5)(v) & (vi) of the Companies (Accounts) Rules, 2014 read with the Companies (Acceptance of Deposits) Rules, 2014 and section 73 of the Companies Act, 2013 are not applicable to it.
During the financial year under report, the company has neither made any issue of equity shares with differential voting rights, sweat equity shares or under employee stock options scheme nor it has made any provision of money for purchase of its own shares by employees or by trustees for the benefit of employees.
As on March 31, 2023, the authorized share capital of the company stands at '' 11,00,00,000/- consisting of 1,10,00,000 no. of equity shares of '' 10/- each and issued, subscribed and paid up share capital of the company stands at '' 10,81,80,000/- consisting of 1,08,18,000 no. of equity shares of '' 10/- each fully paid-up.
7. Details of subsidiary / joint venture / associate companies
The company doesn''t have any subsidiary, joint venture or associate company.
8. Directors and key managerial personnel (KMP)Director retiring by rotation
Pursuant to the provisions of section 152 of the Companies Act, 2013 and in accordance with the articles of association of the company, Mr. Vimal P. Khandwala, director of the company, retires by rotation at the ensuing annual general meeting and being eligible offers himself for re-appointment. The board of directors of the company recommends his re-appointment.
Regularization of appointment of directors during the financial year
The board of directors of the company at its meeting held on August 14, 2023 appointed Mr. Rajesh Gopaldas Parekh and Mr. Dixit Dipakkumar Shah as additional non-executive independent directors of the company and the board of directors of the company recommend to the shareholders for their regularization at the ensuing annual general meeting to be held on September 29, 2023.
Re-appointment of managing director
Mr. Rajesh P. Khandwala was re-appointed as an executive chairman and managing director of the company vide approval of shareholders granted at their annual general meeting held on September 27, 2022 for a term of five consecutive commencing from February 4, 2023.
At the board meeting held on August 14, 2023, the board appointed Mr. Rajesh Gopaldas Parekh and Mr. Dixit Dipakkumar Shah as independent directors of the company to hold the office for a period of 5 years and their appointment will be subject to shareholders'' approval to be obtained in the ensuing annual general meeting.
In terms of the definition of the independent director as prescribed under regulation 16(1)(b) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and section 149(6) of the Companies Act, 2013, Mr. Devang M. Shah, Mr. Dharmendra N. Soni, Mr. Sharvil B. Suthar, Mr. Rajesh G. Parekh and Mr. Dixit D. Shah have been appointed as non executive independent directors on the board of the company. Existing tenure of Mr. Devang M. Shah and Mr. Dharmendra N. Soni as independent directors of the company expires on May 26, 2024 and that their office shall be vacant accordingly w.e.f. May 26, 2024 i.e. after closure of financial year 2023-24.
The independent directors have submitted the declaration, confirming that they meet the criteria of independence as prescribed under both the provisions of the relevant laws. Further, the independent directors have complied with the code for independent directors prescribed in schedule IV of the Companies Act, 2013 and code of conduct prescribed for the directors, management and senior managerial personnel.
Further, a separate meeting of independent directors of the company was held on Friday, February 10, 2023 in accordance with the provisions of clause VII of the schedule IV of the Companies Act, 2013.
All the independent directors of the company have completed their registration on the independent directors'' data bank within the timeline stipulated by the law. Also the requisite independent director(s) have cleared the proficiency self-assessment test or are not required to do so based on the relaxation provided therein.
Also the board of directors of the company opines that during the year the integrity, expertise and experience (including proficiency) of the independent directors are satisfactory to the company''s requirements. The independent directors are proficient in the field as specified in point II(h) of the corporate governance report attached herewith.
Pursuant to the provisions of section 149 of the Companies Act, 2013 and regulation 17 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, Mrs. Sonal R. Khandwala holds position of a non executive woman director of the company.
All of the directors of the company have confirmed that they are not disqualified under provisions of section 164 of the Companies Act, 2013 from being appointed / continue to hold position of directors of the company.
Pursuant to the provisions of section 203 of the Companies Act, 2013, Mr. Rajesh P. Khandwala holds position of managing director, Mr. Durgesh D. Soni holds position of company secretary and Mr. Bhavik J. Shah holds the position of chief financial officer of the company.
The company follows a policy on remuneration of directors and senior management employees. The policy has been approved both by the nomination & remuneration committee and the board of directors. More details on the same have been given in the corporate governance report.
The policy on remuneration of directors, key managerial personnel and senior employees can be accessed on website of the company at following web link:
https://www.kifsfinance.com/wp-content/uploads/all/Nomination-Remuneration-policy-KIFS.pdf
9. Number of meetings of the board of directors
The board of directors met five times during the financial year under report, the details of which have been given in the corporate governance report. The intervening gap between any two board meetings did not exceed 120 days, as prescribed under the provisions of the law(s), except where relaxation provided by the appropriate authorities.
The company has formed various committees namely audit committee, nomination and remuneration committee, stakeholders'' relationship committee, corporate social responsibility committee and risk management committee in compliance with the requirements of the relevant provisions of the applicable laws and statutes. The risk management committee has been established voluntarily as a part of the better corporate governance practices.
Apart from the above statutory committees, the company also has a managing committee of the board of directors to look after the routine day to day affairs of the company.
The details with respect to the compositions, terms of reference, scope and powers, roles, meetings etc. of the relevant committees are given in detail in the corporate governance report forming part of this annual report.
11. Corporate social responsibility
The company was required to comply with the provisions related to corporate social responsibility considering its applicability for the financial year 2022-23. Accordingly it has adhered the provisions of section 135(1) of the Companies Act, 2013 read with the Companies (Corporate Social Responsibility Policy) Rules, 2014 and has also implemented a policy and has formed a committee named corporate social responsibility committee, more details on which along with details of spending w.r.t. CSR are provided in the report on corporate social responsibility enclosed along with this directors'' report as Annexure - 1.
12. Performance evaluation of the board
In accordance with the provisions of regulation 17(10) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and schedule IV of the Companies Act, 2013, evaluation of performance of independent directors by the non independent directors and review of performance of non independent directors and the board as a whole by the independent directors was made during the financial year under report. The directors were satisfied with the evaluation results, which reflected an overall engagement of the board and its committees with the company. This may be considered as a statement under provisions of section 134(3)(p) of the Companies Act, 2013 and rule 8(4) of the Companies (Accounts) Rules, 2014.
More details on the evaluation mechanism are given in the corporate governance report.
13. Vigil mechanism / whistle blower policy
The company promotes ethical behavior in all its business activities and has put in place a mechanism wherein the employees are free to report illegal or unethical behavior, actual or suspected fraud or violation of the company''s codes of conduct or corporate governance policies, raise concerns against management and business practices, incorrect or misrepresentation of any financial statements and reports or any improper activity being negative in nature to the chairman of the audit committee of the company or chairman of the board. The whistle blower policy has been appropriately communicated within the company.
Under the whistle blower policy, the confidentiality of those reporting violation(s) is protected and they are not subject to any discriminatory practices. No personnel have been denied access to the audit committee. The functioning of the vigil mechanism is reviewed by the audit committee from time to time. The vigil mechanism / whistle blower policy has been uploaded on website of the company and can be accessed at following web link:
https://www.kifsfinance.com/kifs_whistle_blower_policy.pdf
14. Statement of development & implementation of risk management policy
The company has developed and implemented a risk management policy to meet the risks associated with the business of the company. Business risk evaluation and management is an ongoing process within the company. The assessment is periodically examined by the risk management committee of the board. The company, while giving loan to its customers, follows the criteria and procedure laid down in policy and the credibility of the clients.
15. Loans / guarantees or investment in securities
Being a non banking financial company pursuing loan business in its ordinary course of business, the disclosures relating to the details of loans made, guarantees given, securities provided or subscription / acquisition of securities, pursuant to the provisions of section 186(11) of the Companies Act, 2013 and rule 11 of the Companies (Meetings of Board and its Powers) Rules, 2014 are not required to be given. Details of loans as financial assets are given in note no. 6 of the notes to the financial statements of the company.
16. Contracts or arrangements with related parties
All related party transactions that were entered during the financial year under report were in the ordinary course of business of the company and were on arm''s length basis. There were no materially significant related party transactions entered by the company with its promoters, directors, key managerial personnel or other persons, which may have a potential conflict with the interest of the company. All such related party transactions are being quarterly placed before the audit committee for its review. Omnibus approval has been obtained from the audit committee, board of directors and shareholders of the company for all the related party transactions (including transactions which are foreseen and repetitive in nature).
Since no material related party transactions were entered by the company and all the transactions entered into by the company with its related parties were in the ordinary course of business and on arm''s length basis, disclosure in the form AOC-2 is not being given.
In terms of amendment made vide the SEBI (Listing Obligations and Disclosure Requirements) (Sixth Amendment) Regulations, 2021 replacing threshold determining material related party transactions and related clarifications issued in this respect, the board has recommended to the shareholders to accord their consent for the related party transactions / material related party transactions being made and proposed to be made with the related parties identified in terms of definition provided in the Companies Act, 2013. The directors recommend the shareholders to pass the respective resolution.
The policy on related party transactions as approved by the board has been uploaded on the company''s website at the web link:
https://www.kifsfinance.com/wp-content/uploads/all/RPT-Policy-KIFS.pdf
17. Internal financial control systems and their adequacy
The company has internal control systems, commensurate with the size, scale and complexity of its operations. Your company has laid down set of standards, processes and structure which enable it to implement internal financial control systems across the organization and ensure that the same are adequate and operating effectively. Internal financial control systems of the company provide a reasonable assurance with regard to maintaining of proper accounting controls, monitoring of operations, protecting assets from unauthorized use or losses, compliance with regulations and for ensuring reliability of financial reporting.
Pursuant to the provisions of section 92(3) read with section I34(3)(a) of the Companies Act, 2013, the annual return as on March 31, 2023 is available under the investors tab on the company''s website www.kifsfinance.com.
19. Disclosure as per the rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014
The details as per rule 5(1) and 5(2) of the aforesaid rules are enclosed herewith as Annexure - 2.
20. Auditors Statutory auditors
The shareholders of the company at their 27th annual general meeting held on Tuesday, September 27, 2022, reappointed M/s. Bimal Shah Associates, chartered accountants, Ahmedabad as statutory auditors of the company for a period of 5 years i.e. upto conclusion of 32nd annual general meeting of the company.
The said appointment of statutory auditors has been made in accordance with the provisions of rule 6 of the Companies (Audit and Auditors) Rules, 2014 i.e. manner of rotation of auditors by the companies on expiry of their term.
Further, the company, being engaged in the financial service activities, is not required to maintain cost records under the provisions of section 148 of the Companies Act, 2013.
Pursuant to the provisions of section 204 of the Companies Act, 2013 and rules framed thereunder, the board has re-appointed the existing secretarial auditors of the company, M/s. Anamika Jajoo & Co., practicing company secretary, Ahmedabad for conducting the secretarial audit for the financial year ending on March 31, 2024.
Secretarial audit report issued by the secretarial auditor of the company for the financial year ended on March 31, 2023 is attached to the directors'' report as Annexure - 3. Further, the company has complied with the secretarial standards to the extent applicable to the company. Annual secretarial compliance report issued in terms of provisions of regulation 24A of the SEBI LODR is attached as Annexure - 4.
Explanations or comments by the board on qualification / reservation / adverse remark or disclaimer made by the statutory auditors in their audit report and by the secretarial auditor in her secretarial audit report
The audit report issued by the statutory auditors of the company is self-explanatory and no comment from the board of directors of the company is required as no qualification, reservation or adverse remark or disclaimer is given by any of the auditors of the company.
The secretarial auditor has not reported any observation in the secretarial audit report and annual secretarial compliance report issued for the financial year ended on March 31, 2023.
In accordance with the provisions of section 138 of the Companies Act, 2013 and rules framed thereunder, your company has appointed M/s. Mihir D. Shah & Associates, Ahmedabad, as the internal auditors of the company in the board meeting held on May 30, 2023 to conduct the internal audit of the functions and activities of the company for the financial year ending on March 31, 2024.
21. Investor education and protection fund (IEPF)
During the financial year under report i.e. 2022-23, the company has transferred '' 1,27,058/- from the unclaimed and unpaid dividend amount for the financial year 2014-15 to the investor education and protection fund. Moreover, 1,080 number of equity shares were also transferred to the IEPF corresponding to the unpaid dividend remained unclaimed and unpaid for seven consecutive years. The cumulative shares transferred to the IEPF stands at 1,73,540 equity shares of '' 10/- each as on March 31, 2023.
Further the details as on March 31, 2023 for unclaimed / unpaid dividend lying in the unpaid account, which are liable to be transferred to the IEPF are as follows:
|
Sr. no. |
Financial year |
Type of dividend |
Unclaimed / unpaid dividend (?) |
Due date of transfer to IEPF |
|
1 |
2015-16 |
Final dividend |
1,52,140.50 |
September 24, 2023 |
|
2 |
2016-17 |
Final dividend |
1,76,350.50 |
October 28, 2024 |
|
3 |
2017-18 |
Final dividend |
39,907.80 |
October 27, 2025 |
|
4 |
2018-19 |
Final dividend |
21,633.00 |
November 2, 2026 |
|
5 |
2019-20 |
Final dividend |
44,952.75 |
November 4, 2027 |
|
6 |
2020-21 |
Final dividend |
21,766.25 |
November 3, 2028 |
|
7 |
2021-22 |
Final dividend |
18,903.05 |
November 2, 2029 |
22. Material changes and commitments affecting financial position of the company
There are no material changes and commitments, affecting the financial position of the company which have been occurred between the end of the financial year i.e. March 31, 2023 and the date of signing of the directors'' report. Further, no significant or material orders have been passed by the regulators or courts or tribunals impacting the going concern status of the company and / or the company''s operations in future.
23. Remuneration given to the managing director
The managing director of the company, Mr. Rajesh P. Khandwala also occupies the office of the managing director in KIFS Housing Finance Limited, a group company to the Khandwala group. Mr. Khandwala was paid remuneration to the tune of '' 9,00,000/- (rupees nine lakhs only) from your company during and for the financial year ended on March 31, 2023. The company does not have any subsidiary company.
24. Disclosure under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013
A policy under the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 has been laid down and circulated to every employee of the company so as to inform them about the redressal mechanism available to them against any kind of harassment. Your directors state that during the financial year under report, there were no cases filed or compliant received from any employee pertaining to the sexual harassment.
A policy framed and adopted by the board of directors of the company on prevention of sexual harassment is uploaded on the company website at below web link:
https://www.kifsfinance.com/wp-content/uploads/all/SEXUAL-HARASSMENT-POLICY.pdf
Presently, the equity shares of your company are listed at the Bombay Stock Exchange Limited (BSE) (scrip code: 535566). The company''s equity shares are available for trading in demat form by all the investors on BSE which is having nation-wide trading terminals in various cities affording to the investors convenient access to trade and deal in the company''s equity shares across the country.
The company is regular in complying with the requirements of the listing agreement / regulations and has duly paid the requisite listing fees to the BSE.
The board has laid down a code of conduct (âcodeâ) for board members, managerial personnel and for senior management employees of the company. This code has been posted on the company''s website at http://kifsfinance.com/code-of-conduct-policy/. All the board members and senior management personnel have affirmed compliance with this code. A declaration by the managing director to this effect forms part of the corporate governance report.
The board has also laid down a code of conduct for independent directors pursuant to section 149(8) and schedule IV to the Companies Act, 2013 via terms and conditions for appointment of independent directors, which is a guide to professional conduct for independent directors and has been uploaded on the website of the company at following web link:
Your company practices a culture that is built on core values and ethical governance practices and is committed to transparency in all its dealings. A report on corporate governance along with a certificate from statutory auditors of the company regarding compliance of conditions of corporate governance, as stipulated under provisions of regulation 34(3) and schedule V of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 is annexed to this report.
28. Management discussion and analysis report
A detailed analysis of the company''s performance is made in the management discussion and analysis report, which forms part of this annual report.
29. Compliance with the Reserve Bank of India guidelines
The company being a non banking financial company categorized as a loan company continues to comply with all the applicable regulations, directions and guidelines issued by the Reserve Bank of India from time to time.
30. Particulars regarding conservation of energy, technology absorption and foreign exchange earnings and outgo
The disclosures required to be made under section 134(3)(m) of the Companies Act, 2013 read with rule (8)(3) of the Companies (Accounts) Rules, 2014 pertaining to the conservation of energy, technology absorption and foreign exchange earnings and outgo are not applicable to the company as the company being a non banking financial company, is neither involved in any manufacturing, processing activities nor any of its transactions involves foreign exchange earnings and outgo.
31. Directors'' responsibility statement
Pursuant to the provisions of section 134(3)(c) of the Companies Act, 2013, 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 for the financial year ended on March 31, 2023 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 Companies Act, 2013 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;
e) the directors had laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively; and
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.
32. Details of application made or proceedings pending under the Insolvency and Bankruptcy Code, 2016
During the financial year under report, no application was made or proceeding was pending for the company under the Insolvency and Bankruptcy Code, 2016.
33. Details of difference between valuation amount on one time settlement and valuation while availing loan from bank and financial institutions
During the financial year under report, there has been no instance of one time settlement of loans taken from banks and financial institutions.
34. Shifting of registered office
The company has vide approval of its board of directors obtained at their meeting held on March 17, 2023, shifted situation / address of its registered office from B-81, Pariseema Complex, C. G. Road, Ellisbridge, Ahmedabad -380006, Gujarat, India to 4th Floor, KIFS Corporate House (Khandwala House), Nr. Land Mark Hotel, Nr. Neptune House, Iskon-Ambli Road, Bodakdev, Ahmedabad - 380054, Gujarat, India i.e. within the local limits of city, town or village and has also updated its contact details accordingly.
Your directors take this opportunity to express their deep and sincere gratitude to the clients, customers, employees, shareholders and other stakeholders of the company for their trust and patronage, as well as to the various bankers, Reserve Bank of India, Securities and Exchange Board of India, Bombay Stock Exchange, Government of India and other regulatory authorities for their continued co-operation, support and guidance.
Mar 31, 2018
Dear members,
The directors have pleasure in presenting the 23rd annual report on the business and operations of the company together with the audited financial statement for the financial year ended on March 31, 2018.
1. Financial summary
(Rs. in lacs except EPS)
|
Particulars |
2017-18 |
2016-17 |
|
Revenue from operations |
604.97 |
848.25 |
|
Other income |
0.40 |
0.55 |
|
Total income |
605.37 |
848.80 |
|
Total expenditure |
190.52 |
354.82 |
|
Profit / (loss) before exceptional items & provision for tax |
414.85 |
493.97 |
|
Exceptional items |
0.00 |
0.00 |
|
Profit / (loss) before tax |
414.85 |
493.97 |
|
Tax expenses |
114.73 |
158.64 |
|
Net profit |
300.11 |
335.34 |
|
EPS - basic & diluted (Rs.) |
2.77 |
3.10 |
2. State of companyâs affairs
During the financial year under report, total income of the company stands to Rs. 605.37 lacs comprised of Rs.604.97 lacs as revenue from operations and Rs.0.40 lacs as other income as compared to Rs.848.80 lacs comprised of Rs.848.25 lacs as revenue from operations and Rs.0.55 lacs as other income generated during the previous financial year. Profit before interest, depreciation and tax also stands at Rs.530.80 lacs as compare to Rs.789.68 lacs in the financial year ended on March 31, 2017. Net profit after tax has also been reduced to Rs.300.11 lacs as compared to Rs.335.34 lacs for the financial year 2016-17 showing year on year decrease of 10.50%. However, the net profit margin has been increased by 25.48% i.e. from 39.51% for the financial year 2016-17 to 49.58% for the financial year 2017-18. The total expenditure has also reported a significant decrease of 46.30% year on year basis. Total expenditure for the financial year 2017-18 stands at Rs.190.52 lacs as compared to Rs.354.82 lacs for the financial year 2016-17. The directors of your company are optimistic to achieve newer heights in the upcoming years.
The detailed analysis as to review of company''s operational and financial performance is given in the management discussion and analysis report.
3. Dividend
Your directors propose to reward the shareholders by sharing the profits at a consistent rate of dividend with that of previous financial year i.e. final dividend of Rs.0.90 (ninety paisa only) (9.00%) per equity share of Rs.10/- (rupees ten only) each for the financial year ended on March 31, 2018.
Further, the payment of dividend is subject to the approval of shareholders in the ensuing annual general meeting of the company. The dividend, if declared at the ensuing annual general meeting, will be paid to those shareholders whose names appear in the register of members as on the record date. The amount of final dividend will be Rs.97.362 lacs and the dividend distribution tax will be Rs.19.82 lacs.
4. Transfer to reserves
The company proposes to transfer Rs.60.02 lacs to the special reserve out of amount available for appropriations and an amount of Rs.666.34 lacs is proposed to be retained in the statement of profit and loss.
5. Deposits
During the financial year ended on March 31, 2018, the company has not accepted any deposits from the public within the meaning of the provisions of applicable directions and notifications issued by the Reserve Bank of India in this respect.
Further, being a non-deposit taking non-banking financial company, the disclosures with respect to deposits, required as per rule 8(5)(v) & (vi) of the Companies (Accounts) Rules, 2014 read with the Companies (Acceptance of Deposits) Rules, 2014 and section 73 of the Companies Act, 2013 are not applicable to it.
6. Share capital
During the financial year under report, the company has neither made any issue of equity shares with differential voting rights, sweat equity shares or under employee stock options scheme nor it has made any provision of money for purchase of its own shares by employees or by trustees for the benefit of employees.
7. Details of subsidiary / joint venture / associate companies
The company doesn''t have any subsidiary, joint venture or associate company.
8. Directors and key managerial personnel (KMP) Director retiring by rotation
Pursuant to the provisions of section 152 of the Companies Act, 2013 and in accordance with the articles of association of the company, Mr. Rajesh P. Khandwala, managing director of the company, retires by rotation at the ensuing annual general meeting and being eligible offers himself for re-appointment. The board of directors recommends his re-appointment.
Independent directors
In terms of the definition of the independent director as prescribed under regulation 16(1)(b) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and section 149(6) of the Companies Act, 2013, Mr. Devang M. Shah and Mr. Dharmendra N. Soni have been appointed as non executive independent directors on the board of the company.
The independent directors have submitted the declaration, confirming that they meet the criteria of independence as prescribed under both the provisions of the relevant laws.
Further, a separate meeting of independent directors of the company was held on February 26, 2018 in accordance with the provisions of clause VII of the schedule IV of the Companies Act, 2013.
Woman director
Pursuant to the provisions of section 149 of the Companies Act, 2013 and regulation 17 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, Mrs. Sonal R. Khandwala holds position of a non executive woman director of the company.
All of the directors of the company have confirmed that they are not disqualified under provisions of section 164 of the Companies Act, 2013 from being appointed / continue to hold position of directors of the company.
Key managerial personnel
Pursuant to provisions of section 203 of the Companies Act, 2013, Mr. Rajesh P. Khandwala holds position of managing director, Mr. Durgesh D. Soni holds position of company secretary and Mr. Bhavik J. Shah holds the position of chief financial officer of the company.
During the financial year under report, at the 22nd annual general meeting of the shareholders of the company held on September 22, 2017, Mr. Rajesh P. Khandwala was re-appointed as a managing director of the company for a period of five years effective from February 4, 2018.
Remuneration policy
The company follows a policy on remuneration of directors and senior management employees. The policy has been approved both by the nomination & remuneration committee and the board of directors. More details on the same have been given in the corporate governance report.
The policy on remuneration of directors, key managerial personnel and senior employees can be accessed on website of the company at following web link:
http://kifsfinance.com/wp-content/uploads/2015/02/Nomination-Remuneration-policy-KIFS.pdf
9. Number of meetings of the board of directors
The board of directors met four times during the financial year under report, the details of which have been given in the corporate governance report. The intervening gap between any two board meetings did not exceed 120 days, as prescribed under the provisions of the law(s).
10. Committees of the board
At present, the company has four committees viz. audit committee, nomination and remuneration committee, stakeholders relationship committee and risk management committee which have been established as a part of the better corporate governance practices and are in compliance with the requirements of the relevant provisions of the applicable laws and statutes.
Apart from the above statutory committees, the company also has a managing committee of the board of directors to look after the routine day to day affairs of the company.
The details with respect to the compositions, terms of reference, scope and powers, roles, meetings etc. of the relevant committees are given in detail in the corporate governance report forming part of this annual report.
11. Corporate social responsibility
During the financial year under report, your company did not meet the criteria laid down under the provisions of section 135(1) of the Companies Act, 2013 read with the Companies (Corporate Social Responsibility Policy) Rules, 2014 and accordingly the provisions including but not limited upto constitution of corporate social responsibility committee and formulation / implementation of a policy on corporate social responsibility are not applicable to the company.
12. Performance evaluation of the board
In accordance with the provisions of regulation 17(10) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and schedule IV of the Companies Act, 2013, evaluation of performance of independent directors by the non independent directors and review of performance of non independent directors and the board as a whole by the independent directors was made during the financial year under report. The directors were satisfied with the evaluation results, which reflected the overall engagement of the board and its committees with the company. This may be considered as a statement under provisions of section 134(3)(p) of the Companies Act, 2013 and rule 8(4) of the Companies (Accounts) Rules, 2014.
More details on the evaluation mechanism are given in the corporate governance report.
13. Vigil mechanism / whistle blower policy
The company promotes ethical behavior in all its business activities and has put in place a mechanism wherein the employees are free to report illegal or unethical behavior, actual or suspected fraud or violation of the company''s codes of conduct or corporate governance policies, raise concerns against management and business practices, incorrect or misrepresentation of any financial statements and reports or any improper activity being negative in nature to the chairman of the audit committee of the company or chairman of the board. The whistle blower policy has been appropriately communicated within the company.
Under the whistle blower policy, the confidentiality of those reporting violation(s) is protected and they are not subject to any discriminatory practices. No personnel have been denied access to the audit committee. The functioning of the vigil mechanism is reviewed by the audit committee from time to time. The vigil mechanism / whistle blower policy has been uploaded on website of the company and can be accessed at following web link:
http://kifsfinance.com/wp-content/uploads/2016/06/KIFS-FINANCIAL-Whistle-blower-policy-2016.pdf
14. Statement of development & implementation of risk management policy
The company has developed and implemented a risk management policy to meet the risks associated with the business of the company. Business risk evaluation and management is an ongoing process within the company. The assessment is periodically examined by the risk management committee of the board. The company, while giving loan to its customers, follows the criteria and procedure laid down in policy and the credibility of the clients.
15. Loans / guarantees or investment in securities
Being a non banking financial company pursuing loan business in its ordinary course of business, the disclosures relating to the details of loans made, guarantees given, securities provided or subscription / acquisition of securities, pursuant to the provisions of section 186(11) of the Companies Act, 2013 and rule 11 of the Companies (Meetings of Board and its Powers) Rules, 2014 are not required to be given. Long term and short term loans and advances made are enumerated in note 8 and 11 respectively of the notes to the financial statements of the company.
16. Contracts or arrangements with related parties
All related party transactions that were entered during the financial year under report were in the ordinary course of business of the company and were on arm''s length basis. There were no materially significant related party transactions entered by the company with its promoters, directors, key managerial personnel or other persons, which may have a potential conflict with the interest of the company. All such related party transactions are being quarterly placed before the audit committee for its review. Omnibus approval has been obtained from the audit committee, board of directors and shareholders of the company for all the related party transactions (including transactions which are foreseen and repetitive in nature).
Since no material related party transactions were entered by the company and all the transactions entered into by the company with its related parties were in the ordinary course of business and on arm''s length basis, disclosure in the form AOC-2 is not being given.
The policy on related party transactions as approved by the board has been uploaded on the company''s website at the web link:
http://kifsfinance.com/wp-content/uploads/2015/02/RPT-Policy-KIFS.pdf
17. Internal financial control systems and their adequacy
The company has internal control systems, commensurate with the size, scale and complexity of its operations. Your company has laid down set of standards, processes and structure which enable it to implement internal financial control systems across the organization and ensure that the same are adequate and operating effectively. Internal financial control systems of the company provide a reasonable assurance with regard to maintaining of proper accounting controls, monitoring of operations, protecting assets from unauthorized use or losses, compliance with regulations and for ensuring reliability of financial reporting.
18. Extract of annual return
Pursuant to the provisions of section 134(3)(a) and section 92(3) of the Companies Act, 2013 read with rule 12 of the Companies (Management and Administration) Rules, 2014, the extract of the annual return as at March 31, 2018, in the form MGT - 9 is enclosed herewith as Annexure - 1.
19. Disclosure as per the rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014
The details as per rule 5(1) and 5(2) of the aforesaid rules are enclosed herewith as Annexure - 2.
20. Auditors
Statutory auditors
Pursuant to expiration of term of M/s. Shailesh C. Parikh & Co., chartered accountants, Ahmedabad, shareholders at their 22nd annual general meeting appointed M/s. Bimal Shah Associates, chartered accountants, Ahmedabad as statutory auditors of the company for a period of 5 years i.e. upto conclusion of 27th annual general meeting of the company.
The said appointment of statutory auditors has been made in accordance with the provisions of rule 6 of the Companies (Audit and Auditors) Rules, 2014 i.e. manner of rotation of auditors by the companies on expiry of their term.
In accordance with the provisions of the Companies (Amendment) Act, 2017, requirement of placing the matter of ratification of appointment of statutory auditors at every annual general meeting has been omitted.
Secretarial auditors
Pursuant to the provisions of section 204 of the Companies Act, 2013 and rules framed thereunder, the board has re-appointed the existing secretarial auditors of the company, M/s. Anamika Jajoo & Co., practicing company secretary, Ahmedabad for conducting the secretarial audit for the financial year ending on March 31, 2019.
Secretarial audit report issued by the secretarial auditor of the company for the financial year ended on March 31, 2018 is attached to the directors'' report as Annexure - 3.
Explanations or comments by the board on qualification / reservation / adverse remark or disclaimer made by the statutory auditors in their audit report and by the secretarial auditor in her secretarial audit report
Both the statutory auditors'' report and secretarial audit report are self explanatory and no comment from the board of directors of the company is required as no qualification, reservation or adverse remark or disclaimer is given by any of the auditors of the company.
Internal auditors
In accordance with the provisions of section 138 of the Companies Act, 2013 and rules framed thereunder, your company has appointed M/s. SMPK & Associates LLP, Ahmedabad, as the internal auditors of the company in the board meeting held on May 22, 2018 to conduct the internal audit of the functions and activities of the company for the financial year ending on March 31, 2019.
21. Investment advisory business
With a view to having expansion of company''s present scope of operations, your company has also got itself registered as an investment advisor under the SEBI (Investment Advisers) Regulations, 2013 vide registration no. INA000001852 during the financial year ended on March 31, 2015.
22. Material changes and commitments affecting financial position of the company
There are no material changes and commitments, affecting the financial position of the company which have been occurred between the end of the financial year i.e. March 31, 2018 and the date of signing of the directors'' report i.e. May 22, 2018. Further, no significant or material orders have been passed by the regulators or courts or tribunals impacting the going concern status of the company and / or the company''s operations in future.
23. Remuneration given to the managing director
The managing director of the company, Mr. Rajesh P. Khandwala also occupies the office of the managing director in KIFS Housing Finance Private Limited, a group company to the Khandwala group. Mr. Khandwala was paid remuneration to the tune of Rs.6,00,000/- (rupees six lacs only) from your company during and for the financial year ended on March 31, 2018. The company does not have any subsidiary company.
The material terms and conditions of re-appointment and remuneration of Mr. Khandwala are enumerated in the explanatory statement to the notice of 22nd annual general meeting of the company.
24. Disclosure under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013
A policy under the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 has been laid down and circulated to every employee of the company so as to inform them about the redressal mechanism available to them against any kind of harassment. Your directors state that during the financial year under report, there were no cases filed or compliant received from any employee pertaining to the sexual harassment.
A policy framed and adopted by the board of directors of the company on prevention of sexual harassment is uploaded on the company website at below web link:
http://kifsfinance.com/wp-content/uploads/2016/09/SEXUAL-HARASSMENT-POLICY.pdf
25. Listing
Presently, the equity shares capital of your company are listed at the Bombay Stock Exchange Limited (BSE) (scrip code: 535566). The company''s equity shares are available for trading in demat form by all the investors on BSE which is having trading terminals in various cities affording to the investors convenient access to trade and deal in the company''s equity shares across the country.
The company is regular in complying with the requirements of the listing agreement / regulations and has duly paid the requisite listing fees to the BSE.
26. Code of conduct
The board has laid down a code of conduct (âcodeâ) for board members, managerial personnel and for senior management employees of the company. This code has been posted on the company''s website at http://kifsfinance.com/code-of-conduct-policy/. All the board members and senior management personnel have affirmed compliance with this code. A declaration by the managing director to this effect forms part of the corporate governance report.
The board has also laid down a code of conduct for independent directors pursuant to section 149(8) and schedule IV to the Companies Act, 2013 via terms and conditions for appointment of Independent directors, which is a guide to professional conduct for independent directors and has been uploaded on the website of the company at following web link:
http://kifsfinance.com/wp-content/uploads/2013/03/Terms-of-appointment-of-Independent-Directors.pdf
27. Corporate governance
Your company practices a culture that is built on core values and ethical governance practices and is committed to transparency in all its dealings. A report on corporate governance along with a certificate from statutory auditors of the company regarding compliance of conditions of corporate governance, as stipulated under provisions of regulation 34(3) and schedule V of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 is annexed to this report.
28. Management discussion and analysis report
A detailed analysis of the company''s performance is made in the management discussion and analysis report, which forms part of this annual report.
29. Compliance with the Reserve Bank of India guidelines
The company being a non banking financial company categorized as a loan company continues to comply with all the applicable regulations, directions and guidelines issued by the Reserve Bank of India from time to time.
30. Particulars regarding conservation of energy, technology absorption and foreign exchange earnings and outgo
The disclosures required to be made under section 134(3)(m) of the Companies Act, 2013 read with rule (8)(3) of the Companies (Accounts) Rules, 2014 pertaining to the conservation of energy, technology absorption and foreign exchange earnings and outgo are not applicable to the company as the company being a non banking financial company, is neither involved in any manufacturing, processing activities nor any of its transactions involves foreign exchange earnings and outgo.
31. Directorsâ responsibility statement
Pursuant to the provisions of section 134(3)(c) of the Companies Act, 2013, 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 for the financial year ended on March 31, 2018 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 Companies Act, 2013 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;
e) the directors had laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively; and
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.
32. Acknowledgement
Your directors take this opportunity to express their deep and sincere gratitude to the clients, customers, employees, shareholders and other stakeholders of the company for their trust and patronage, as well as to the various bankers, Reserve Bank of India, Securities and Exchange Board of India, Bombay Stock Exchange, Government of India and other regulatory authorities for their continued co-operation, support and guidance.
For and on behalf of the board of directors
KIFS Financial Services Limited
Rajesh P. Khandwala
(Chairman & managing director)
(DIN:00477673)
Ahmedabad, May 22, 2018
Mar 31, 2016
Directors'' Report
Dear members,
The Directors have pleasure in presenting their 21st Annual Report on the business and operations of the Company together with the Audited Financial Statement for the financial year ended on March 31, 2016.
1. Financial Summary
(Rs. in Lacs except EPS)
|
Particulars |
2015-16 |
2014-15 |
|
Revenue from operations |
714.47 |
380.78 |
|
Other income |
0.13 |
0.01 |
|
Total income |
714.60 |
380.79 |
|
Total expenditure |
289.85 |
100.47 |
|
Profit / (Loss) before exceptional items & provision for tax |
424.75 |
280.32 |
|
Exceptional items |
0.00 |
0.00 |
|
Profit / (Loss) before tax |
424.75 |
280.32 |
|
Provision for taxation |
142.07 |
92.03 |
|
Net profit |
282.68 |
188.29 |
|
EPS - Basic & Diluted (Rs.) |
2.61 |
1.74 |
2. State of Company''s Affairs
During the financial year under report, total income of the Company has increased to Rs. 714.60 Lacs as compared to Rs. 380.79 Lacs earned during the previous financial year showing an impressive growth of 87.66%. Profit before interest, depreciation and tax increased from Rs. 343.89 Lacs to Rs. 623.59 Lacs in the financial year ended on March 31, 2016. Net profit after tax increased by 50.13% attaining an amount of Rs. 282.67 Lacs. Net profit margin stands at 39.56% for the financial year under report. Overall your Company achieved a notable growth in both top and bottom lines of the financials for the financial year ended on March 31, 2016 and the Directors are optimistic to achieve newer heights in the upcoming years.
Considering the enhanced business during the financial year under report, the total expenditure has also reported an increase of 188.49% as compared to previous financial year. Further, the enhanced business resulted an increase of 181.94% in the short term borrowings and the same has impacted the financial cost by hiking the same by 207.28% as compared to the previous financial year ended on March 31, 2015.
The detailed analysis as to review of Company''s operational and financial performance is given in the Management Discussion and Analysis Report.
3. Dividend
Considering both the improved financial performance of the Company and conservation of resources for future purposes, your Directors are desirous of rewarding the shareholders by sharing the profit in the form of increased dividend as compared to the previous financial year. In continuance of the earlier trends of cash dividends, the Board of Directors are pleased to recommend a final dividend of Rs. 0.75 (Seventy Five Paisa Only) (i.e. 7.5%) per equity share of Rs. 10/- (Rupees Ten Only) each for the financial year ended on March 31, 2016. The final dividend recommended and declared for the financial year ended on March 31, 2015 was Rs. 0.50 (Fifty Paisa Only) (i.e. 5%) per equity share of Rs. 10/- (Rupees Ten Only) each.
Further, the payment of dividend is subject to the approval of shareholders of the Company in the ensuing Annual General Meeting of the Company. The dividend, if declared at the ensuing Annual General Meeting, will be paid to those shareholders whose names appear in the register of members as on the record date. The amount of final dividend shall be Rs. 81.135 Lacs and the dividend distribution tax shall be Rs. 16.52 Lacs.
4. Transfer to Reserves
The Company proposes to transfer Rs. 56.54 Lacs to the special reserve out of amount available for appropriations and an amount of Rs. 392.35 Lacs is proposed to be retained in the Statement of Profit and Loss.
5. Deposits
During the financial year ended on March 31, 2016, the Company has not accepted any deposits from the public within the meaning of the provisions of the Non-Banking Financial Companies (Reserve Bank) Directions, 1977 and RBI''s Notification No. DFC. 118DG(SPT)-98 dated January 31, 1998.
Further, being a Non-Deposit Taking Non-Banking Financial Company, the disclosures with respect to deposits, required as per Rule 8(5)(v) & (vi) of the Companies (Accounts) Rules, 2014 read with the Companies (Acceptance of Deposits) Rules, 2014 and Section 73 of the Companies Act, 2013 are not applicable to it.
6. Share Capital
During the financial year under report, the Company has neither made any issue of equity shares with differential voting rights, sweat equity shares or under employee stock options scheme nor it has made any provision of money for purchase of its own shares by employees or by trustees for the benefit of employees.
7. Details of Subsidiary / Joint Venture / Associate Companies
The Company has not any subsidiary, joint venture or associate company.
8. Directors and Key Managerial Personnel (KMP) Director retiring by rotation
Pursuant to the provisions of Section 152 of the Companies Act, 2013 and in accordance with the Articles of Association of the Company, Mr. Rajesh P. Khandwala, Managing Director of the Company, retires by rotation at the ensuing Annual General Meeting and being eligible offers himself for re-appointment. The Board of Directors recommends his re-appointment.
Independent Directors
In terms of the definition of the Independent Director as prescribed under Regulation 16(1)(b) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and Section 149(6) of the Companies Act, 2013, Mr. Devang M. Shah and Mr. Dharmendra N. Soni have been appointed as Non Executive Independent Directors on the Board of the Company.
The Independent Directors have submitted the declaration, confirming that they meet the criteria of independence as prescribed under both the provisions of the relevant laws.
Further, a separate meeting of Independent Directors of the Company was held on February 23, 2016 in accordance with the provisions of Clause VII of the Schedule IV of the Companies Act, 2013.
Woman Director
Pursuant to the provisions of Section 149 of the Companies Act, 2013 and Regulation 17 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, Mrs. Sonal R. Khandwala holds position of a Non Executive Woman Director of the Company.
All of the Directors of the Company have confirmed that they are not disqualified under provisions of Section 164 of the Companies Act, 2013 from being appointed / continue to hold position of Directors of the Company.
Key Managerial Personnel
Pursuant to provisions of Section 203 of the Companies Act, 2013, Mr. Bhavik J. Shah holds the position of Chief Financial Officer of the Company.
Subsequent to the closure of the financial year under report, Ms. Krupa N. Joshi resigned from the post of Company Secretary cum Compliance Officer of the Company w.e.f. May 4, 2016 and the Board at its meeting held on May 24, 2016 has appointed Mr. Durgesh D. Soni in her place as the Company Secretary and Compliance Officer of the Company.
The Board places on record its sincere appreciation for the valuable services rendered by Ms. Krupa N. Joshi during her tenure.
Remuneration Policy
The Company follows a policy on remuneration of Directors and Senior Management Employees. The policy has been approved by the Nomination & Remuneration Committee and the Board of Directors. More details on the same have been given in the Corporate Governance Report.
The policy on Remuneration of Directors, Key Managerial Personnel and Senior Employees can be accessed on website of the Company at following web link:
http://kifsfinance.com/wp-content/uploads/2015/02/Nomination-Remuneration-policy-KIFS.pdf
9. Number of meetings of the Board of Directors
The Board of Directors met four times during the financial year under report, the details of which have been given in the Corporate Governance Report. The intervening gap between any two Board meetings did not exceed 120 days, as prescribed under the provisions of the law(s).
10. Committees of the Board
Currently, the Company has four committees viz; Audit Committee, Nomination and Remuneration Committee, Stakeholders Relationship Committee and Risk Management Committee which have been established as a part of the better corporate governance practices and are in compliance with the requirements of the relevant provisions of applicable laws and statutes.
Apart from the above statutory committees, the Company also has a Managing Committee of the Board of Directors to look after the routine affairs of the Company.
The details with respect to the compositions, terms of reference, scope and powers, roles, meetings etc. of the relevant committees are given in detail in the Corporate Governance Report forming part of this Annual Report.
11. Corporate Social Responsibility
During the financial year under report, your Company has not met the criteria laid down under the provisions of Section 135(1) of the Companies Act, 2013 read with Companies (Corporate Social Responsibility Policy) Rules, 2014 and accordingly the provisions including but not limited up to constitution of Corporate Social Responsibility Committee and formulation / implementation of a policy on Corporate Social Responsibility are not applicable to the Company.
12. Performance evaluation of the Board
In accordance with the provisions of Regulation 17(10) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and Schedule IV of the Companies Act, 2013, evaluation of performance of Independent Directors by the Non Independent Directors and review of performance of Non Independent Directors and the Board as a whole by the Independent Directors was made during the financial year under report. The Directors were satisfied with the evaluation results, which reflected the overall engagement of the Board and its Committees with the Company. This may be considered as a statement under provisions of Section 134(3)(p) of the Companies Act, 2013 and Rule 8(4) of the Companies (Accounts) Rules, 2014.
More details on the evaluation mechanism are given in the Corporate Governance Report.
13. Vigil Mechanism / Whistle Blower Policy
The Company promotes ethical behavior in all its business activities and has put in place a mechanism wherein the employees are free to report illegal or unethical behavior, actual or suspected fraud or violation of the Company''s Codes of Conduct or Corporate Governance Policies, raise concerns against management and business practices, incorrect or misrepresentation of any financial statements and reports or any improper activity being negative in nature to the Chairman of the Audit Committee of the Company or Chairman of the Board. The Whistle Blower Policy has been appropriately communicated within the Company.
Under the Whistle Blower Policy, the confidentiality of those reporting violation(s) is protected and they are not subject to any discriminatory practices. No personnel have been denied access to the Audit Committee. The functioning of the Vigil mechanism is reviewed by the Audit Committee from time to time. The Vigil Mechanism / Whistle Blower Policy has been uploaded on website of the Company and can be accessed at following web link:
http://kifsfinance.com/wp-content/uploads/2016/06/KIFS-FINANCIAL-Whistle-blower-policy-
2016.pdf
14. Statement of Development & Implementation of Risk Management Policy
The Company has developed and implemented a Risk Management Policy to meet the risks associated with the business of the Company. Business risk evaluation and management is an ongoing process within the Company. The assessment is periodically examined by the Risk Management Committee of the Board. The Company, while giving loan to its customers, follows the criteria and procedure laid down in policy and the credibility of the clients.
15. Loans / Guarantees or Investment in Securities
Being a Non Banking Financial Company pursuing loan business in its ordinary course of business, the disclosures relating to the details of loans made, guarantees given, securities provided or subscription / acquisition of securities, pursuant to the provisions of Section 186(11) of the Companies Act, 2013 and Rule 11 of the Companies (Meetings of Board and its Powers) Rules, 2014 are not required to be given.
16. Contracts or Arrangements with Related Parties
All related party transactions that were entered during the financial year under report were in the ordinary course of business of the Company and were on arm''s length basis. There were no materially significant related party transactions entered by the Company with its Promoters, Directors, Key Managerial Personnel or other persons, which may have a potential conflict with the interest of the Company. All such related party transactions are being quarterly placed before the Audit Committee for its review. Omnibus approval has been obtained from the Audit Committee & Board of Directors for all the related party transactions (including transactions which are foreseen and repetitive in nature).
Since no material related party transactions were entered by the Company and all the transactions entered into by the Company with its related parties were in the ordinary course of business and on an arm''s length basis, disclosure in the Form AOC-2 is not required to be given.
The Policy on Related Party Transactions as approved by the Board has been uploaded on the Company''s website at the web link:
http://kifsfinance.com/wp-content/uploads/2015/02/RPT-Policy-KIFS.pdf
17. Internal Financial Control Systems and their adequacy
The Company has internal control systems, commensurate with the size, scale and complexity of its operations. Your Company has laid down set of standards, processes and structure which enable it to implement internal financial control systems across the organization and ensure that the same are adequate and operating effectively. Internal financial control systems of the Company provide a reasonable assurance with regard to maintaining of proper accounting controls, monitoring of operations, protecting assets from unauthorized use or losses, compliance with regulations and for ensuring reliability of financial reporting.
18. Extract of Annual Return
Pursuant to the provisions of Section 134(3)(a) and Section 92(3) of the Companies Act, 2013 read with Rule 12 of the Companies (Management and Administration) Rules, 2014, the Extract of the Annual Return as at March 31, 2016, in the Form MGT - 9 is enclosed herewith as Annexure 1.
19. Disclosure as per the Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014
The details as per Rule 5(1) of the aforesaid Rule are enclosed herewith as Annexure - 2.
20. Auditors Statutory Auditors
M/s. Shailesh C. Parikh & Co., Chartered Accountants, Ahmadabad, Statutory Auditors of the Company were appointed at the 19th Annual General Meeting of the Company for a period of three years (including transitional period).
In accordance with the provisions of Section 139 of the Companies Act, 2013 and Rules framed there under, the Board recommends the members to ratify their appointment up to the conclusion of next Annual General Meeting.
Secretarial Auditors
Pursuant to the provisions of Section 204 of the Companies Act, 2013 and Rules framed there under, the Board has re-appointed the existing Secretarial Auditors of the Company, M/s. Anamika Jajoo & Co., Practicing Company Secretary, Ahmadabad for conducting the Secretarial Audit for the financial year ending on March 31, 2017.
Secretarial Audit Report issued by the Secretarial Auditor of the Company for the financial year ended on March 31, 2016 is attached to the Directors'' Report as Annexure - 3.
Explanations or comments by the Board on qualification / reservation / adverse remark or disclaimer made by the Statutory Auditors in their Audit Report and by the Secretarial Auditor in her Secretarial Audit Report
Both the Statutory Auditors'' Report and Secretarial Audit Report are self explanatory and no comment from the Board of Directors of the Company is required as no qualification, reservation or adverse remark or disclaimer is given by any of both of the Auditors of the Company.
Internal Auditors
In accordance with the provisions of Section 138 of the Companies Act, 2013 and Rules framed there under, your Company has appointed M/s. SMPK & Associates LLP, Ahmadabad, as the Internal Auditors of the Company in the Board meeting held on May 24, 2016 to conduct the internal audit of the functions and activities of the Company for the financial year ending on March 31, 2017.
21. Investment Advisory Business
With a view to having expansion of Company''s present scope of operations, your Company has also got itself registered as an Investment Advisor under the SEBI (Investment Advisers) Regulations, 2013 vide Registration No. INA000001852 during the financial year ended on March 31, 2015. The said business is yet to be commenced by the Company.
22. Material changes and commitments affecting financial position of the Company
There are no material changes and commitments, affecting the financial position of the Company which have been occurred between the end of the financial year i.e. March 31, 2016 and the date of signing of the Directors'' Report i.e. May 24, 2016. Further, no significant or material orders have been passed by the Regulators or Courts or Tribunals impacting the going concern status of the Company and / or the Company''s operations in future.
23. Remuneration given to the Managing Director from Holding / Subsidiary Company
The Managing Director of the Company, Mr. Rajesh P. Khandwala also occupied the office of the Managing Director in the erstwhile Holding Company of the Company viz; M/s. KIFS Securities Private Limited (now amalgamated) and accordingly total managerial remuneration to the tune of Rs. 9,00,000/- (Rupees Nine Lacs Only) was paid to him from the aforesaid Holding Company. Apart from this, Mr. Rajesh P. Khandwala also received total Rs. 5,00,000/- (Rupees Five Lacs Only) towards managerial remuneration from your Company. The Company does not have any Subsidiary Company.
24. Disclosure under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013
A policy under the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 has been laid down and circulated to every employee of the Company so as to inform them about the redressal mechanism available to them against any kind of harassment. Your Directors state that during the financial year under report, there were no cases filed or compliant received from any employee pertaining to sexual harassment.
25. Listing
Presently, the equity share capital of your Company is listed at the Bombay Stock Exchange Limited (Scrip Code: 535566). The Company''s equity shares are available for trading in demat form by all the investors on BSE which is having trading terminals in various cities affording to the investors convenient access to trade and deal in the Company''s equity shares across the country.
The Company is regular in complying with the requirements of the Listing Agreement / Regulations and has duly paid the requisite Listing Fees to the Bombay Stock Exchange Limited.
26. Code of Conduct
The Board has laid down a Code of Conduct ("Code") for Board Members, Managerial Personnel and for Senior Management Employees of the Company. This Code has been posted on the Company''s website at http://kifsfinance.com/code-of-conduct-policy/. All the Board Members and Senior Management Personnel have affirmed compliance with this Code. A declaration by the Managing Director to this effect forms part of the Corporate Governance Report.
The Board has also laid down a Code of Conduct for Independent Directors pursuant to Section 149(8) and Schedule IV to the Companies Act, 2013 via terms and conditions for appointment of Independent Directors, which is a guide to professional conduct for Independent Directors and has been uploaded on the website of the Company at following web link:
http://kifsfinance.com/wp-content/uploads/2013/03/Terms-of-appointment-of-Independent-
Directors.pdf
27. Corporate Governance
Your Company practices a culture that is built on core values and ethical governance practices and is committed to transparency in all its dealings. A Report on Corporate Governance along with a Certificate from Statutory Auditors of the Company regarding compliance of conditions of Corporate Governance, as stipulated under provisions of Regulation 34(3) and Schedule V of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 is annexed to this Report.
28. Management Discussion and Analysis Report
A detailed analysis of the Company''s performance is made in the Management Discussion and Analysis Report, which forms part of this Annual Report.
29. Compliance with the Reserve Bank of India Guidelines
The Company being a Non Banking Financial Company categorized as a Loan Company continues to comply with all the applicable regulations and guidelines issued by the Reserve Bank of India from time to time.
30. Particulars regarding Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo
The disclosures required to be made under Section 134(3)(m) of the Companies Act, 2013 read with Rule (8)(3) of the Companies (Accounts) Rules, 2014 pertaining to the conservation of energy, technology absorption and foreign exchange earnings and outgo are not applicable to the Company as the Company being a Non Banking Financial Company, is neither involved in any manufacturing, processing activities nor any of its transactions involves foreign exchange earnings and outgo.
31. Directors'' Responsibility Statement
Pursuant to the provisions of Section 134(3)(c) of the Companies Act, 2013, your Directors, based on the representations received from the head of the various departments, and after due inquiry, 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 for the financial year ended on March 31, 2016 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 Companies Act, 2013 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;
e) the Directors had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively; and
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.
32. Acknowledgement
Your Directors take this opportunity to express their deep and sincere gratitude to the Clients, Customers and Shareholders of the Company for their trust and patronage, as well as to the various Bankers, Reserve Bank of India, Securities and Exchange Board of India, Bombay Stock Exchange, Government of India and other Regulatory Authorities for their continued co-operation, support and guidance.
For and on behalf of the Board of Directors
KIFS Financial Services Limited
Rajesh P. Khandwala
(Chairman & Managing Director)
(DIN: 00477673)
Ahmadabad, May 24, 2016
Mar 31, 2015
Dear Members,
The Directors have pleasure in presenting their 20th Annual Report of
the Company together with Audited Statement of Accounts for the FY
ended on 31st March, 2015.
1. FINANCIAL RESULTS
(Rs. in Lacs)
Particulars 2014-15 2013-14
Revenue from Operations 380.78 474.48
Other Income 0.01 2.57
Total Income 380.79 477.05
Total Expenditure 100.47 239.34
Profit/ Loss before Exceptional Items
& provision for Tax 280.32 237.71
Exceptional Items 0.00 0.00
Profit before Tax 280.32 237.71
Provision for Taxation 92.03 77.39
Net Profit 188.29 160.32
EARNINGS PER SHARE (Rs.)
Basic & Diluted 1.74 1.48
2. REVIEW OF OPERATIONS
During the year under review, total income of the Company has declined
to Rs. 380.79 Lacs as compared to Rs. 477.05 Lacs earned during the
previous year showing a fall of about 19.75%. The reason of fall in the
Company's income is the poor performance in the primary as well as
secondary markets in the FY 2014-15.
On the other side, the total expenditure of the Company, during the
current year has also showed a reduction of more than 50% as compared
to that of previous year. Current year's total expenditure is Rs.
100.47 Lacs and that during previous year it was Rs. 239.34 Lacs. The
reduction of expenditure is due to curtailing of borrowings by the
Company owing to the higher interest rates. Thus, the Company has
achieved an OPM of Rs. 90.34%.
The Net profit of the company after providing for all expenditure,
necessary provisions and prior period adjustments as well as current
tax stood at Rs. 188.29/- lacs compared to Rs. 160.32/- lacs of
previous year showing an increase of about 18%. Thus, the Company was
able to achieve NPM of 49.45% during the year under review.
The detailed results of operations of the Company are given in the
"Management Discussion & Analysis" forming part of this report.
3. DIVIDEND
Considering the consistent financial performance of the Company, your
Company is desirous of rewarding its shareholders by sharing its Profit
in the form of dividend. In continuance of the earlier trends of cash
dividends, the Board of Directors have recommended Dividend of Rs.
0.50/- (Fifty Paisa only, i.e. 5%) per Equity Share on the face value
of Rs. 10/- each on the total paid up capital as on 31st March, 2015
for approval by the shareholders at the 20th Annual General Meeting.
The dividend, if approved by the members at ensuing Annual General
Meeting, will be paid to those shareholders whose names appear in the
Register of Members as on the date of Book closure. The dividend and
dividend distribution tax will absorb a total sum of Rs. 6510272/-.
4. TRANSFER TO RESERVES
The Company proposes to transfer Rs. 3766000/- to the Special Reserve
out of amount available for appropriations and an amount of Rs.
26386654/- is proposed to be retained in the Profit and Loss Account.
5. DEPOSITS
During the year ended March 31, 2015, the Company has not accepted any
deposits from the public within the meaning of the provisions of the
Non-Banking Financial Companies (Reserve Bank) Directions, 1977 and
RBI's notification no. DFC. 118DG/ (SPT)-98 dated 31st January, 1998.
Further, being a non banking financial company, the disclosures
required as per Rule 8 (5)(v)&(vi) of the Companies (Accounts) Rules,
2014 read with Rule 3 (ii) of Companies (Acceptance of Deposits) Rules,
2014, and section 73 of the Companies Act, 2013, are not applicable to
the Company
6. EMPLOYEE STOCK OPTIONS SCHEME
Your Company has not issued any Employee Stock Options Plans. As such
no Employee Stock Option Schemes have been framed.
7. SUBSIDIARY COMPANIES
The Company has no Subsidiaries / Associates or Joint venture companies
during the period under review. As such the requirement for submission
of report on the performance and the financial position of the
Subsidiary/ Associate/ Joint venture companies is not applicable to the
Company.
8. DIRECTORS AND KEY MANAGERIAL PERSONNEL (KMP)
a.) Director Retiring by Rotation:
Pursuant to provisions of Section-152 of the Companies Act, 2013 and in
accordance with the Articles of Association of the Company, Mrs. Sonal
R. Khandwala, Director of the Company, retires by rotation at the
ensuing Annual General Meeting and being eligible offers herself for
re-appointment. The Board of Directors recommends her re-appointment.
b.) Independent Directors:
In terms of the definition of 'Independence' of Directors as prescribed
under Clause 49 of the Listing Agreement entered with Stock Exchanges
and Section 149(6) of the Companies Act, 2013 Mr. Devang Manubhai Shah
and Mr. Dharmendra Navnitlal Soni are the Non-executive Independent
Directors on the Board of the Company. They were appointed as
Independent Directors for a period of five years from the date of
previous Annual General Meeting i.e. 6th September, 2014. None of the
Independent Directors are due for re-appointment.
The Independent Directors have given declarations confirming that they
meet the criteria of independence as prescribed both under the
Companies Act, 2013 and Clause 49 of the Listing Agreement with the
Stock Exchange.
c. ) Woman Director:
In terms of the provisions of Section 149 of the Companies Act, 2013
and Clause 49 of the Listing Agreement, a company shall have at least
one Woman Director on the Board of the Company. In order to comply with
the said provisions of the Companies Act, 2013 and the Listing
Agreement, your Company had appointed Mrs. Sonal R. Khandwala as
Director on the Board of the Company in the previous Annual General
Meeting held on 6th September, 2014. She holds the position as such on
the date.
All the directors of the Company have confirmed that they are not
disqualified from being appointed as directors in terms of the
Companies Act, 2013.
d.) Resignation of Directors:
There were no resignations of Directors during the year.
e.) Key Managerial Personnel:
Pursuant to provisions of section 203 of the Companies Act, 2013, Mr.
Bhavik J. Shah was appointed as the Chief Financial Officer of the
Company w.e.f. 27th May, 2014.
The appointment of Mr. Rajesh P. Khandwala, Managing Director of the
Company and Ms. Krupa N. Joshi Company Secretary of the Company, who
were already in the respective offices before the commencement of the
Companies Act, 2013, were formalized as the Key Managerial Personnel of
the Company in terms of the said section.
None of the Key Managerial Personnel have resigned during the year
under review.
9. NUMBER OF MEETINGS OF THE BOARD
During the year four Board Meetings and four Audit Committee Meetings
were convened and held, the details of which are given in the
"Corporate Governance Report" that forms part of this Annual Report.
The intervening gap between any two Meetings was within the period
prescribed under the Companies Act, 2013.
Additionally, other committee meetings as well as separate meeting
exclusively of the Independent Directors were also held during the year
under review.
10. COMMITTEES OF THE BOARD
Currently, the Company has four committees viz; "Audit Committee",
"Nomination and Remuneration Committee", "Stakeholders Relationship
Committee" and "Risk Management Committee" which have been established
as a part of the better corporate governance practices and are in
compliance with the requirements of the relevant provisions of
applicable laws and statutes as well as listing agreement.
Apart from the above statutory committees, the Company also has a
Managing Committee of the Board of Directors to look after the routine
affairs of the Company.
The details with respect to the compositions, scope and powers, roles,
terms of reference, meetings, etc. of the relevant committees are given
in detail in the "Corporate Governance Report" section forming part of
this Annual Report.
11. CORPORATE SOCIAL RESPONSIBILLITY
During the year under, your Company does not meet the criteria laid
under section 135(1) of the Companies Act, 2013 read with Companies
(Corporate Social Responsibility Policy) Rules, 2014 pertaining to the
constitution of the Corporate Social Responsibility Committee and other
provisions covered there under regarding expenditure to be made on
certain specified activities as a part of the Corporate Social
Responsibility. Therefore the Company has not framed the Corporate
Social Responsibility Committee/ Policy and has not incurred any
expenditure thereon.
12. PERFORMANCE EVALUATION OF BOARD
In accordance with Clause - 49 of the Listing Agreement which mandates
the Board to monitor and review the Board evaluation framework as well
as the provisions of the Companies Act, 2013, which states that a
formal annual evaluation needs to be made by the Board of its own
performance and that of its committees and individual directors and
further in accordance with schedule IV of the Companies Act, 2013 which
also states that the performance evaluation of the independent
directors shall be done by the entire Board of Directors, excluding the
Director being evaluated, the evaluation of all the Directors and the
Board as a whole as well as all the committees of the Board, was
conducted on the basis of the criteria and framework adopted by the
Board.
The evaluation process has been mentioned in details in the "Corporate
Governance Report" section forming part of this Annual Report.
13. VIGIL MECHANISM/ WHISTLE BLOWER POLICY
The Company has implemented a Whistle Blower Policy pursuant to which
Whistle Blowers can raise concerns against unacceptable work behaviour,
management practices, business practices, physiologically adverse work
conditions, actual or suspected fraud or violation of the Codes of
conduct or violation of legal or regulatory requirements, incorrect or
misrepresentation of any financial statements and reports and such
other activities of reasonably negative nature which may be seen to
tarnish the image of the Company, its products, its social image,
employee morale and employee's safety at the workplace etc. and such
other Reportable Matters (as defined in the policy). Further, the
mechanism adopted by the Company encourages the Whistle Blower to
report genuine concerns or grievances and 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.
The functioning of the Vigil mechanism is reviewed by the Audit
Committee from time to time. None of the Whistle Blowers have been
denied access to the Audit Committee of the Board. The details of the
Vigil mechanism/ Whistle Blower Policy are explained in the "Corporate
Governance Report" and also available on the website of the Company
(www.kifsfinance.com).
14. STATEMENT OF DEVELOPMENT & IMPLEMENTATION OF RISK MANAGEMENT POLICY
The Company has framed and implemented a policy in the name of "Risk
Management Policy" for assuring to meet the risks associated with
business of the Company. Business risk evaluation and management is an
ongoing process within the Company. The assessment is periodically
examined by the Risk Management Committee of Board. The Company, while
giving loan to its customers, follows the criteria and procedure laid
in its Risk Management Policy and the credibility of the clients.
15. LOANS/ GUARANTEES OR INVESTMENT IN SECURITIES
Pursuant to Section 186(11) of the Companies Act, 2013, read with Rule
11(2) of Companies (Meetings of Board and its Powers) Rules, 2014, the
loans made, guarantees given or securities provided or acquisition of
securities by a Non Banking Financial Company in the ordinary course of
its business are exempted from disclosure in the Annual Report.
Since your Company is a Non Banking Financial Company registered with
the Reserve Bank of India in the Category of Loan Company, it is
exempted under the said section from giving disclosure regarding the
Loans or guarantees given or securities provided.
As regards investments made by the Company, the details of same are
provided in Balance Sheet and under the Notes forming part of the
Annual Accounts of the Company for the year ended March 31, 2015.
16. CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES
All related party transactions that were entered during the financial
year were in the ordinary course of the business of the Company and were
on arm's length basis. There were no materially significant related
party transactions entered by the Company with Promoters, Directors, Key
Managerial Personnel or other persons which may have a potential
conflict with the interest of the Company.
Considering the nature of the industry in which the Company operates,
transactions with related parties of the Company are in the ordinary
course of business specially w.r.t. IPO Funding and Loan against
securities which are also on arms' length basis. All such Related Party
Transactions are placed before the Audit Committee for approval,
wherever applicable.
The policy on materiality of Related Party Transactions and also on
dealing with Related Party Transactions as approved by the Audit
Committee and the Board of Directors is uploaded on the website of the
Company and the link for the same is
(http://kifsfinance.com/wp-content/uploads/2015/02/RPT-Policy-KIFS.pdf).
Since no material related party transactions were entered by the Company
and all the transactions entered into by the Company with related
parties were in the ordinary course of business and on an arm's length
basis, form AOC-2 is not applicable to the Company.
17. INTERNAL FINANCIAL CONTROL SYSTEMS AND THEIR ADEQUACY
Your Company has laid down set of standards, processes and structure
which enables to implement internal financial control across the
organization and ensure that the same are adequate and operating
effectively. Internal Financial Control system of the Company provides
a reasonable assurance with regard to maintaining of proper accounting
controls, monitoring of operations, protecting assets from unauthorized
use or losses, compliance with regulations and for ensuring reliability
of financial reporting.
The certification provided in the CEO / CFO certification section of
the Annual Report confirms the adequacy of our internal control system
and procedures.
18. EXTRACTS OF ANNUAL RETURN
Pursuant to section134 (3) (a) section 92 (3) of the Companies Act
2013, read with Rule 12 of the Companies (Management and
Administration) Rules, 2014 the extracts of the Annual Return as at
31st March, 2015, in the prescribed form MGT - 9 forms part of this
report as "Annexure 1".
19. AUDITORS
a.) STATUTORY AUDITORS:
As per the provisions of section 139 of the Companies Act, 2013 read
with Rules made there under, the members, in the 19th Annual General
Meeting of the Company held on 6th September, 2014, had appointed M/s.
Shailesh C. Parikh & Co., Chartered Accountants, Ahmedabad, ( FRN No:
109858W) as the statutory auditors of the Company for a period of 3
years i.e. till the conclusion of the Annual General Meeting of the
Company to be held for the Financial year 2016-17, subject to ratifying
the said appointment at every AGM till 2016-17.
The Company has received a certificate from M/s. Shailesh C. Parikh &
Co., Chartered Accountants, giving confirmation to the effect that
their appointment, if made, at the ensuing AGM would be in terms of
Sections 139 and 141 of the Companies Act, 2013 and rules made there
under. The board proposes to the members to ratify the said appointment
of M/s. Shailesh C. Parikh & Co., Chartered Accountants, Ahmedabad.
b.) INTERNAL AUDITORS:
In accordance with the provisions of section 138 of the Companies Act,
2013, read with Rules made thereunder, your Company has re-appointed
M/s. Nimita A. Desai & Co., Chartered Accountants, Ahmedabad as the
Internal Auditors of the Company in the Board meeting held on 28th May,
2015 to conduct the internal audit of the functions and activities of
the Company for the financial year - 2015-16.
c.) SECRETARIAL AUDITORS:
Pursuant to provisions of section 204 of the Companies Act, 2013 and
Rules framed thereunder, M/s. Jay Bhavsar & Associates, Practicing
Company Secretaries, Ahmedabad were appointed as the Secretarial
Auditors to conduct the secretarial Audit of the Company for the
Financial Year 2014-15 by the Board of Directors in their meeting held
on 27th May, 2014. However, M/s. Jay Bhavsar & Associates, Practicing
Company Secretaries showed their unwillingness to continue as the
Secretarial Auditor and resigned w.e.f. 12th February, 2015 from the
said office due to his pre-occupations.
As such M/s. AG Shah & Associates, Practicing Company Secretaries,
Ahmedabad were appointed as the Secretarial Auditor by the Board in
their meeting held on 12th February, 2015 to conduct the Secretarial
Audit for the FY 2014-15. The Report of the Secretarial Auditor, M/s.
AG Shah & Associates, Practicing Company Secretaries for the FY 2014-15
is annexed herewith as "Annexure - 2".
d.) Explanations or comments by the Board on every qualification/
reservation/ adverse remark or disclaimer made by the Statutory Auditor
in his Audit Report and by the Secretarial Auditor in his Secretarial
Audit Report
The Statutory Auditors have not given any qualification, reservation or
made any adverse remarks or disclaimer in their Audit Report. The
Secretarial Auditor has not made any adverse comments or given any
qualification, reservation or adverse remarks or disclaimer in their
Audit Report.
20. INVESTMENT ADVISORY BUSINESS
Your Company intends to expand its present scope of operations and is
proposing to venture into activities of "Investment Adviser" at
appropriate time considering the market scenario, whereby the Company
will advise its clients in placing their funds or other securities for
short, medium or long term periods in various financial instruments/
products in accordance with the requirements of the client. For
conducting the said activity, the Company has also obtained registration
with SEBI as "Investment Adviser" under SEBI (Investment Advisers)
Regulations, 2013 vide registration no. INA000001852 dated 13th June,
2014.
21. ALTERATION OF THE MEMORANDUM OF ASSOCIATION THROUGH POSTAL BALLOT
The Company is required to alter its Memorandum of Association, for the
inclusion of the activity of "Investment Adviser" in the Main Objects
Clause of the Memorandum of Association of the Company. The Board of
Directors have approved the alteration of the Memorandum of Association
and further for obtaining the approval of the members for the said
purpose, the Company is issuing the Postal Ballot Notice, since, in
terms of Section 110 of the Act and the Companies (Management and
Administration) Rules, 2014, the consent of the members for alteration
of the Memorandum of Association is required to be obtained through
postal ballot process.
22. MATERIAL CHANGES AND COMMITMENT AFFECTING FINANCIAL POSITION OF THE
COMPANY
There are no material changes and commitments, affecting the financial
position of the Company which has occurred between the end of the
financial year of the Company i.e. 31st March, 2015 and the date of the
Directors' Report i.e. 28th May, 2015.
The Company does not have any subsidiary. There has been no change in
the nature of business of the Company No significant or material Orders
have been passed by the regulators or Courts or Tribunals impacting the
going concern status of the Company and/ or the Company's operations in
future.
23. RATIO OF REMUNERATION OF EACH DIRECTOR
The ratio of the remuneration of each director to the median employee's
remuneration and other details in terms of sub-section 12 of Section
197 of the Companies Act, 2013 read with Rule 5(1) of the Companies
(Appointment and Remuneration of Managerial Personnel) Rules, 2014:
Sr. Requirements/ Particulars
No.
(i.) ratio of the remuneration of each director to the
median remuneration of the employees of the
company for the financial year;
(ii.) percentage increase in remuneration of director,
Chief Financial Officer, Chief Executive Officer,
Company Secretary or Manager, if any, in the financial
year;
(iii.) percentage increase in the median remuneration of
employees in the financial year;
(iv.) number of permanent employees on the rolls of company;
(v.) explanation on the relationship between average
increase in remuneration and company performance;
(vi.) comparison of the remuneration of the Key Managerial
Personnel against the performance of the company;
(vii.) variations in the market capitalisation of the company,
price earnings ratio as at the closing date of the
current financial year and previous financial year and
percentage increase over decrease in the market
quotations of the shares of the company in comparison
to the rate at which the company came out with the
last public offer in case of listed
companies, and in case of unlisted companies, the
variations in the net worth of the company as at the
close of the current financial year and previous
financial year;
(viii.) average percentile increase already made in the
salaries of employees other than the managerial
personnel in the last financial year and its comparison
with the percentile increase in the managerial
remuneration and justification thereof
and point out if there are any
exceptional circumstances for increase
in the managerial remuneration;
(ix.) comparison of the each remuneration of the Key
Managerial Personnel against the performance of the
company;
(x.) the key parameters for any variable
component of remuneration availed by the directors;
(xi.) the ratio of the remuneration of the
highest paid director to that of the employees who
are not directors but receive remuneration
in excess of the highest paid director during the year;
(xii.) affirmation that the remuneration is as
per the remuneration policy of the Company.
Sr. Disclosure
No.
(i.) Director's Name Ratio to median
remuneration.
Mr. Rajesh P. 3.7:1
Khandwala, MD
Mrs. Sonal R. Nil
Khandwala
Mr. Devang Shah Nil
Mr. Dharmendra Soni Nil
(ii.) Director/ CFO/ CS Ratio to median
remuneration.
MD Nil
Other Director Nil
CFO 7.5%
CS 7.5%
(iii.) 14%
(iv.) 8
(v.) Normal industry standards applied based on
turnover of the Company.
(vi.) During the year under review the total
remuneration to KMPs were Rs. 13.06 Lacs which
works out to 6.94% of the Net Profit of the
Company of Rs. 188.29 Lacs
(vii.) Details 31.03.2015 31.03.2014
Market Capitalization Rs. 28.13 Rs. 27.32
Crores Crores
Price Earnings Ratio 14.94 17.06
% increase/ The stock price of the
(decrease) of market Company has increased to Rs.
quotations 26/- as on 31.03.2015 which
shows increase of 36.84% to
the last preferential
allotment rate of Rs. 19/-.
(viii.) Average % increase in the salaries of employees
other than managerial personnel in the Financial
Year was 14% whereas increase in managerial
remuneration was NIL.
(ix.) Name & Rem. Of Performanc Rem. Of KMP
Designation KMP e of the Co. in
of KMP (Rs. In (Rs. In comparison
Lacs) Lacs) with
performance
of the Co.
Mr. Rajesh P. 6.00 188.29 3.19%
Khandwala -
MD
Mr. Bhavik J. 287 188.29 1.52%
Shah - CFO
Mr. Krupa N. 4.19 188.29 2.23%
Joshi - CS
(x.) Not applicable since no other payment or
commission based on net profit is being paid to
the Directors.
(xi.) None
(xii.) The Board of Directors of the Company affirms
that the remuneration is as per the
remuneration policy of the company
24. REMUNERATION GIVEN TO MANAGING DIRECTOR FROM HOLDING/ SUBSIDIARY
COMPANY
The Managing Director of the Company, Mr. Rajesh P. Khandwala also
occupies the office of the Managing Director in the Holding Company of
the Company viz; KIFS Securities Private Limited and is receiving by
way of salary, commission, perquisites and other allowances, the total
remuneration of Rs. 5,00,000/- p.m. (Rupees Five lacs p.m.) from the
holding company.
25. PARTICULARS OF EMPLOYEES
Pursuant to section 197(12) of the Companies Act, 2013 read with Rule
5(2) of The Companies (Appointment and Remuneration of Managerial
Personnel) Rules, 2014, there was no employee, who, if employed,
(i) throughout the financial year was in receipt of remuneration for
the year which, in the aggregate, was not less than sixty lakh rupees;
(ii) for a part of the financial year, was in receipt of remuneration
for any part of the year, at a rate which, in the aggregate, was not
less than five lakh rupees per month;
(iii) throughout the financial year or part thereof, was in receipt of
remuneration in that year which, in the aggregate, or as the case may
be, at a rate which, in the aggregate, is in excess of that drawn by
the managing director or whole-time director or manager and holds by
himself or along with his spouse and dependent children, not less than
two percent of the equity shares of the company.
As such, the Company is not required to submit the statement containing
details as required under Rule 5(2) of The Companies (Appointment and
Remuneration of Managerial Personnel) Rules, 2014.
26. DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE
(PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013
The Company has been employing women employees in various cadres. A
policy of the The Sexual Harassment of Women at Workplace (Prevention,
Prohibition and Redressal) Act, 2013 has also been laid and circulated
to every female employee of the Company so as to inform them about the
redressal mechanism available to them in the cases of such harassment.
Your Directors state that during the year under review, there were no
cases filed or compliant received from any employee pursuant to the
Sexual Harassment of Women at Workplace (Prevention, Prohibition and
Redressal) Act, 2013.
27. LISTING
Presently, the entire Equity Share Capital of your Company is listed at
Bombay Stock Exchange Ltd. (BSE) (Scrip Code - 535566). The company's
equity shares are available for compulsory trading in demat form by all
investors on BSE which is having trading terminals in various cities
affording to the investors convenient access to trade and deal in the
company's equity shares across the country.
The Company is regular in complying with the requirements of the
Listing Agreement and has duly paid the requisite Listing Fees at BSE,
where the Company is listed.
28. CORPORATE GOVERNANCE
The Company has been observing the best corporate governance practices
and benchmarking itself against each such practice on an ongoing basis.
A separate section on Corporate Governance as per the Listing Agreement
is annexed to the Directors Report and a Certificate from the Statutory
Auditors of the Company regarding compliance of the conditions of
Corporate Governance as stipulated under Clause 49 of the Listing
Agreements with the Stock Exchanges forms part of this Annual Report
(enclosed as "Annexure - 3").
29. MANAGEMENT DISCUSSION AND ANALYSIS
A detailed chapter on Management Discussion and Analysis as per Clause
- 49 of the Listing Agreement forming part of the Directors' Report is
included in this Annual Report.
30. COMPLIANCE WITH RESERVE BANK OF INDIA (RBI) GUIDELINES
The Company being a Non Banking Financial Company categorized as a Loan
Company continues to comply with all the applicable regulations and
Guidelines issued by RBI from time to time.
31. PARTICULARS REGARDING CONSERVATION OF ENERGY/ TECHNOLOGY
ABSORPTION/ FOREIGN EXCHANGE EARNINGS & OUTGO
The disclosures to be made under Section 134 (3) (m) of the Companies
Act, 2013 read with Rule (8)(3) of the Companies (Accounts) Rules, 2014
pertaining to conservation of energy and technology absorption and
foreign exchange earnings and outgo, are not applicable to the Company
as the Company being a non banking financial company, is neither
involved in any manufacturing, processing activities nor any of its
transactions involve foreign exchange earnings and outgo.
32. DIRECTORS' RESPONSIBILITY STATEMENT
Pursuant to the requirement under Section 134(5) of the Companies Act,
2013, it is hereby confirmed 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 at the end of the financial year and of the profit 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 Companies Act, 2013 for safeguarding the assets of
the Bank and for preventing and detecting fraud and other
irregularities;
d) the directors had prepared the annual accounts on a going concern
basis;
e) the directors had laid down internal financial controls to be
followed by the Company and that such internal financial controls are
adequate and were operating effectively; and
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.
33. ACKNOWLEDGEMENT
Your Directors take this opportunity to express their deep and sincere
gratitude to the clients, customers and shareholders of the Company for
their trust and patronage, as well as to the Reserve Bank of India,
Securities and Exchange Board of India, Government of India and other
Regulatory Authorities for their continued co-operation, support and
guidance. Your Directors also express a profound sense of appreciation
for the commitment shown by the employees in supporting the Company at
all levels and looks forward to their continued commitment to achieve
further growth and take up more challenges.
By Order of the Board
FOR KIFS FINANCIAL SERVICES LTD.
Sd/-
Place: Ahmedabad Rajesh P. Khandwala
Date: 28/05/2015 Chairman
Regd. Office:
B-81, Pariseema Complex,
C.G. Road, Ellisbridge, Ahmedabad-380006
CIN:L67990GJ1995PLC025234
Mar 31, 2014
Dear members,
The Directors have pleasure in presenting their 19th Annual Report of
the Company together with Audited Statement of Accounts for the FY
ended on 31st March, 2014.
FINANCIAL RESULTS (Rs. In Lacs)
Particulars 2013-14 2012-13
Revenue from Operations 474.48 182.30
Other Income 2.57 2.44
Total Income 477.05 184.74
Total Expenditure 239.34 36.76
Profit / Loss Before Exceptional Items and
Provision for Tax 237.71 147.98
Exceptional Items 0.00 0.00
Profit Before Tax 237.71 147.98
Provision for Taxation 77.39 41.50
Net Profit 160.32 106.48
EARNINGS PER SHARE (Rs.)
Basic & Diluted 1.48 1.57
REVIEW OF OPERATIONS
During the year under review, total income of the Company has increased
to Rs. 477.05 Lacs as compared to Rs. 184.74 Lacs earned during the
previous year showing a rise of about more than 150%. The rise in the
income of the Company is because of the interest earned on primary
market funding as new IPOs were initiated in the FY 2012-13 as well as
by interest earned on loans against shares.
On the other side, the total expenditure of the Company, during the
current year has also increased from Rs. 36.76 Lacs to Rs. 239.34 Lacs
due to increase in finance costs which consists mainly of interest on
borrowings.
The Net profit of the company after providing for all expenditure,
necessary provisions and prior period adjustments stood at Rs. 160.32/-
lacs compared to Rs. 106.48/- lacs of previous year showing a rise of
about 50.00%.
The detailed results of operations of the Company are given in the
"Management Discussion &Analysis" forming part of this report.
DIVIDEND
Keeping in view the overall performance during the year, your Directors
recommend a dividend of Rs. 0.50/- (Fifty Paisa only, i.e. 5%) per
Equity Share on the face value of Rs. 10/- each on the total paid up
capital as on 31st March, 2014. The dividend, if approved by the
members at ensuing Annual General Meeting, will be paid to those
shareholders whose names appear in the Register of Members as on the
date of Book closure. The dividend and dividend distribution tax will
absorb a sum of Rs. 6328260/-.
DIRECTORS
Pursuant to provisions of Section-152 of the Companies Act, 2013 and in
accordance with the Articles of Association of the Company, Mr. Rajesh
P. Khandwala, Director of the Company, retires by rotation at the
ensuing Annual General Meeting and being eligible offers himself for
re-appointment. Mr. Rajesh P. Khandwala is the Managing Director. As
such on his reappointment, he will resume to the office of the Managing
Director. The Board of Directors recommends his re-appointment.
The Directors viz; Mr. Dharmendra N. Soni and Mr. Devang M. Shah, have
been on the Board of Directors of the Company since 28th December,
2002. They were designated as the Independent Directors pursuant to
clause 49 of the Listing Agreement entered into with the Bombay Stock
Exchange Ltd. by the Company. But as per the new Companies Act, 2013,
Mr. Dharmendra N. Soni and Mr. Devang M. Shah are required to be
appointed as the Independent Directors in terms of section 149 of the
Companies Act, 2013. They shall hold office for a term upto five
consecutive years on the Board of a Company subject to approval by the
members in the ensuing Annual General Meeting.
Your Board is of the opinion that both the Directors i.e. Mr.
Dharmendra N. Soni and Mr. Devang M. Shah, fulfill the conditions
specified in the Companies Act, 2013 and the rules made thereunder for
being appointed as the Independent Directors of the Company. Both the
Directors are well versed with the capital market and have huge
experience in this field. The Board believes that their continued
association with the Company would be of immense benefit to the
Company.
Further, 149 of the Companies Act, 2013 also contain the provisions for
appointment of a Woman Director on the Board of the Company. As such,
Mrs. Sonal R. Khandwala was appointed as the Additional Director by the
Board with effect from 27/05/2014 in accordance with section 161 of the
Companies Act, 2013 read with the Articles of Association of the
Company. Mrs. Sonal R. Khandwala will hold office upto the date of the
ensuing Annual General Meeting. The Company has received notice in
writing under the provisions of section 160 of the Companies Act, 2013,
from a member along with a deposit of Rs. 1,00,000/- proposing the
candidature of Mrs. Sonal R. Khandwala for being appointed as the
Director liable to retire by rotation as contained in section 152 of
the Companies Act, 2013.
DE-LISTING
Presently, the Equity Shares of your Company are listed at Bombay Stock
Exchange Ltd. (BSE). Earlier the Equity Shares were also listed at
Ahmedabad Stock Exchange Ltd. (ASE) and Vadodara Stock Exchange Ltd.
(VSE). Since there was no liquidity/total absence of trading for a
considerable long period of time in ASE and VSE, your Company decided
to get its Equity Shares delisted from the said Stock Exchanges viz;
ASE and VSE. Therefore, based on Regulation 6(a) of SEBI Delisting
Regulations, which provides that a Company can voluntarily delist its
securities from regional stock exchanges, if the equity shares continue
to remain listed on the stock exchange(s) having nationwide trading
terminals like BSE, your Company made an application to ASE and VSE for
voluntary delisting of its entire 10818000 Equity Shares from the said
Exchanges viz; ASE and VSE.
The Equity Shares of the Company were delisted from VSE and ASE vide
their approval letters dated 30th October, 2013 and 20th January, 2014
respectively.
Thus, the company''s equity shares are now available for compulsory
trading in demat form by all investors on BSE which is having trading
terminals in various cities affording to the investors convenient
access to trade and deal in the company''s equity shares across the
country.
The Company is regular in complying with the requirements of the
Listing Agreement and has duly paid the requisite Listing Fees at BSE,
where the Company is listed.
PUBLIC DEPOSITS
During the year ended March 31, 2014, the Company has not accepted any
deposits from the public within the meaning of the provisions of the
Non-Banking Financial Companies (Reserve Bank) Directions, 1977 and
RBI''s notification no. DFC. 118DG/(SPT)-98 dated 31st January, 1998.
CORPORATE GOVERNANCE
The Company has been observing the best corporate governance practices
and benchmarking itself against each such practice on an ongoing basis.
A separate section on Corporate Governance and a Certificate from the
Statutory Auditors of the Company regarding compliance of the
conditions of Corporate Governance as stipulated under Clause 49 of the
Listing Agreements with the Stock Exchanges forms part of this Annual
Report (enclosed as "Annexure-1").
MANAGEMENT DISCUSSION AND ANALYSIS
A detailed chapter on Management Discussion and Analysis as per Clause
- 49 of the Listing Agreement forming part of the Directors'' Report is
included in this Annual Report.
COMPLIANCE WITH RESERVE BANK OF INDIA (RBI) GUIDELINES
The Company being a Non Banking Financial Company categorized as a Loan
Company continues to comply with all the applicable regulations and
Guidelines issued by RBI from time to time.
AUDITORS
a.) STATUTORY AUDITORS:
The Statutory Auditors of the Company M/s. Shailesh C. Parikh & Co.,
Chartered Accountants, Ahmedabad shall retire at the ensuing Annual
General Meeting and being eligible offer themselves for re-appointment.
The Auditors have furnished a certificate to the effect that if
re-appointed, their appointment shall be within the limits prescribed
under Section 224 (1-B) of the Companies Act, 1956.
As per provisions of section 139 of the Companies Act, 2013 read with
Rules thereunder, M/s. Shailesh C. Parikh & Co., Chartered Accountants,
Ahmedabad, can be reappointed for a period of three consecutive years
from the ensuing AGM subject to ratification of the reappointment by
the members at every Annual General Meeting held after this Annual
General Meeting. Therefore, the Board of Directors recommends their
re-appointment for a period of three years i.e. from the conclusion of
the ensuing AGM to the conclusion of the Annual General Meeting held
for the financial year 2016-17.
b.) INTERNAL AUDITORS:
In accordance with the provisions of section 138 of the Companies Act,
2013, read with Rules made thereunder, your Company has appointed M/s.
Nimita A. Desai & Co., Chartered Accountants, Ahmedabad as the Internal
Auditors of the Company in the Board meeting held on 27th May, 2014 to
conduct the internal audit of the functions and activities of the
Company.
c.) SECRETARIAL AUDITORS:
Pursuant to provisions of section 204 of the Companies Act, 2013 and
Rules framed thereunder, M/s. Jay Bhavsar & Associates, Practicing
Company Secretaries, Ahmedabad were appointed as the Secretarial
Auditors to conduct the secretarial Audit of the Company for the
Financial Year 2014-15.
PARTICULARS OF EMPLOYEES
No employee, employed throughout the financial year was in receipt of
remuneration equal to or exceeding Rs. 60,00,000/- p.a. or if employed
for a part of the financial year, was in receipt of remuneration equal
to or exceeding Rs. 5,00,000/- p.m., therefore the Company is not
required to submit the details as required under Section 217(2-A) of
the Companies Act, 1956 read with Companies (Particulars of Employees)
Rules, 1975.
CONSERVATION OF ENERGEY, TECHNOLOGY ABOSORPTION AND FOREIGN EXCHANGE
EARNINGS AND OUTGO
The Company is a non banking financial company. It is neither involved
in any manufacturing, processing activities nor any of its transactions
involve foreign exchange earnings and outgo. In view of the same, the
particulars in terms of section 217(1)(e) of the Companies Act, 1956
and the Companies (Disclosures of Particulars in the Report of the
Board of Directors) Rules, 1988, regarding conservation of energy and
technology absorption and foreign exchange earnings and outgo, are not
applicable to the Company.
DIRECTORS'' RESPONSIBILITY STATEMENT
Pursuant to the requirement of Section 217(2AA) of the Companies Act,
1956 with respect to Directors'' Responsibility Statement, it is hereby
confirmed:
I) That in the preparation of the Annual Accounts, all the applicable
Accounting Standards have been followed
ii) That the accounting policies are adopted and consistently followed
and the judgments and estimates made are reasonable and prudent so as
to give a true and fair view of the state of affairs of the Company at
the end of the Financial Year and of the Profit of the Company for the
Financial Year
iii) That the Directors have 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/detecting fraud and irregularities
iv) That the Directors have prepared the Annual Accounts on Going
Concern Basis.
ACKNOWLEDGEMENT
Your Company would like to take this opportunity to express its sincere
thanks to its clients and customers for their continued patronage. Your
Directors wish to place on record their deep sense of appreciation for
the co-operation and assistance extended to the company by its
Promoters, Bankers, Government Authorities, Shareholders and Employees
of the Company at all levels.
Place: Ahmedabad By Order of the Board
Date: 27/05/2014 For, KIFS FINANCIAL SERVICES LTD.
Regd. Office
B - 81, Pariseema Complex, S/d
C. G. Road, Ellisbridge, Rajesh P. Khandwala
Ahmedabad - 380006. Chairman
Mar 31, 2013
To, The Members of KIFS Financial Services Limited
Ahmedabad
The Directors have pleasure in presenting their 18th Annual Report of
the Company together with Audited Statement of Accounts for the FY
ended on 31st March, 2013.
FINANCIAL RESULTS (Rs. In Lacs)
Particulars 2012 -13 2011 -12
Revenue from Operations 182.30 238.75
Other Income 2.44 3.69
Total Income 184.74 242.44
Total Expenditure 36.76 80.58
Profit / Loss Before
Exceptional Items and
Provision for Tax 147.98 161.86
Exceptional Items (MAT Credit
entitlement net of 0.00 34.24
Current Year sutilization
Profit Before Tax 147.98 196.10
Provision for Taxation 41.50 33.67
Net Profit 106.48 162.43
REVIEW OF OPERATIONS
During the year under review, total income of the Company has reduced
to Rs. 184.74 Lacs as compared to Rs. 242.44 Lacs earned during the
previous year showing a fall of about 23.80%. The reason of fall in the
Company''s income is the poor performance in the securities market in
the FY 2012-13 more particularly, in the primary markets.
On the other side, the total expenditure of the Company, during the
current year has also showed a reduction of more than 50% as compared
to that of previous year. Current year''s total expenditure is Rs. 36.76
Lacs and that during previous year it was Rs. 80.58 Lacs. The reduction
of expenditure is duetocurtailingofborrowingsbythe Company owingto the
higherinterest rates.
The Net profit of the company after providing for all expenditure,
necessary provisions and prior period adjustments stood at Rs. 106.48/-
lacs compared to Rs. 162.43/- lacs of previous year showing a decline
of about 34.45%.
The detailed results of operations of the Company are given in the
"Management Discussion & Analysis" forming part of this report.
DIVIDEND
Keeping in view the overall performance during the year, your Directors
recommend a dividend of Rs. 0.50/- (Fifty Paisa only, i.e. 5%) per
Equity Share on the face value of Rs. 10/- each on the total paid up
capital as on 31st March, 2013. The dividend, if approved by the
members at ensuing Annual General Meeting, will be paid to those
shareholders whose names appear in the Register of Members as on the
Book closure date. The dividend and dividend distribution tax will
absorb a sum ofRs. 62.86 lacs.
DIRECTORS
Pursuant to provisions of Section-256 of the Companies Act, 1956 and in
accordance with the Articles of Association of the Company, Mr.
Dharmendra N. Soni, Director of the Company, retires by rotation at the
ensuing Annual General Meeting and being eligible offers himself for
re- appointment. The Board of Directors recommends his re-appointment.
During the year, Mr. Rajesh P. Khandwala, Director of the Company was
appointed as Managing Director for a period of Five years w.e.f. 4th
February, 2013.
Further, Mr. Atul N. Parikh, who held the office of Independent
Director on the Board of the Company, has resigned from the said
Directorship w.e.f. 14th May, 2013. The Board of Directors places their
appreciation for the valuable services and guidance provided by him
during his tenure as the Director of the Company as well as the
Chairman of the Audit Committee of the Company.
INCREASE IN AUTHORISED SHARE CAPITAL
During the year under review, the Authorised Share Capital of the
Company was increased from Rs. 3,30,00,000/- (Rupees Three Crores and
Thirty Lacs Only) divided into 33,00,000 (Thirty Three lacs) Equity
Shares of Rs.10/- each to Rs. 11,00,00,000/- (Rupees Eleven Crores
Only) divided into 1,10,00,000 (One Crore Ten Lacs) Equity Shares of
Rs. 10/- each vide special resolution passed by the members of the
Company in the Extra-ordinary General Meeting held on 4th December,
2012.
CAPITALIZATION OF RESERVES & BONUS ISSUE
In the Extraordinary General Meeting of the members of the Company held
on 4th December, 2012, the members gave their consent for the
capitalization of reserves to the extent of Rs. 2,40,40,000/- for the
purpose of Bonus issue of Equity Shares and thereafter on 14th
December, 2012, the Company made the Bonus issue of 24,04,000 Equity
Shares in the ratio of 4:5 i.e. FOUR new fully paid up Equity Shares of
Rs. 10/- each for every FIVE fully paid up Equity Shares of Rs. 10/-
each held in the Company by the Shareholders on the Record date fixed
by the Company.
PREFERENTIAL ISSUE / PRIVATE PLACEMENT OF EQUITY SHARES & UTILIZATION
OF ISSUE PROCEEDS
The Members of the Company at their Extraordinary General Meeting held
on 4th December, 2012 passed the special resolution for issue and
allotment of 54,09,000 Equity Shares of Rs. 10/- each at a premium of
Rs. 9/- each to the Promoter(s) and Non promoter(s) on preferential/
private placement basis. Subsequently, on 27th December, 2012, the said
allotment of 54,09,000 Equity Shares was made to the Promoter(s) and
Non-promoter(s), contained in the Notice convening the Extraordinary
General Meeting.
The Capital, including Premium raised through such preferential issue/
private placement amounting to Rs. 1027.71 Lacs has been fully utilized
as on 31st March, 2013 for the attainment of the objects specified in
the Explanatory Statement to the Notice convening Extra-ordinary
General Meeting and has also been disclosed to the Audit Committee. The
detailed break-up of the utilization of such issue proceeds has been
provided in the Notes to Accounts.
INCREASE IN PAID-UP EQUITY SHARE CAPITAL
During the year under review, the Paid Up Equity Share Capital of the
Company was increased from Rs. 3,00,50,000/- (Rupees Three Crores and
Fifty Thousand only) to Rs. 10,81,80,000/- (Rupees Ten Crores Eighty
One Lacs and Eighty thousand only) as the Company made the Bonus issue
of 2404000 Equity Shares of Rs. 10/- each fully paid up and 5409000
Equity Shares of Rs. 10/- each by way of Preferential Issue/ Private
placement.
LISTING
Your Company made the Listing application to the Bombay Stock Exchange
Limited (BSE) under "BSE''s Direct Listing Norms" for getting its entire
Equity Share Capital listed on BSE. The Company received Final Listing
and Trading approval of BSE on 8th May, 2013 and the trading of the
Equity Shares of the Company on the platform of BSE was permitted from
10th May, 2013 onwards.
Earlier the Equity Shares of the Company were listed on the Ahmedabad
Stock Exchange Limited (ASE) and Vadodara Stock Exchange Limited (VSE).
The Company is regular in complying with the requirements of the
Listing Agreement and has duly paid the requisite Listing Fees at all
the Exchanges where the Company is listed.
PUBLIC DEPOSITS
During the year ended March 31, 2013, the Company has not accepted any
deposits from the public within the meaning of the provisions of the
Non-Banking Financial Companies (Reserve Bank) Directions, 1977 and
RBI''s notification no. DFC .118DG/ (SPT)-98 dated 31st January, 1998.
CORPORATE GOVERNANCE
The Company continues to adhere to High standard of Corporate
Governance. The efforts of the Company in this direction are widely
recognized by the investors and other stake holders.
As required under clause 49 of the Listing Agreement entered into with
stock exchanges, a report on Corporate Governance forming part of this
report together with the Certificate from the Auditors of the Company
(enclosed as "Awiexure-1"), confirmingthe compliance of conditions of
Corporate Governance is annexed to this Report.
MANAGEMENT DISCUSSION AND ANALYSIS
As per Clause-49 of the Listing Agreement, the Management Discussion
and Analysis should form part of Directors'' Report. Hence a detailed
chapter on Management Discussion and Analysis forms part of this Annual
Report.
COMPLIANCE WITH RESERVE BANK OF INDIA (RBI) GUIDELINES
The Company being a Non Banking Financial Company categorized as a Loan
Company continues to comply with all the applicable regulations and
Guidelines issued by RBI from time to time.
AUDITORS
The Statutory Auditors of the Company M/s. Shailesh C. Parikh & Co.,
Chartered Accountants, Ahmedabad shall retire atthe ensuing Annual
General Meeting and being eligible offer themselves for re-appointment.
The Auditors have furnished a certificate to the effect that if
re-appointed, their appointment shall be within the limits prescribed
under Section 224 (1-B) of the Companies Act, 1956.
The Board of Directors recommends their re-appointment.
PARTICULARS OF EMPLOYEES
No employee, employed throughout the financial year was in receipt of
remuneration equal to or exceeding Rs. 60,00,000/- p.a. or if employed
for a part of the financial year, was in receipt of remuneration equal
to or exceeding Rs. 5,00,000/- p.m., therefore the Company is not
required to submit the details as required under Section 217(2-A) of
the Companies Act, 1956 read with Companies (Particulars of Employees)
Rules, 1975.
CONSERVATION OF ENERGEY, TECHNOLOGY ABOSORPTION AND FOREIGN EXCHANGE
EARNINGS AND OUTGO
The Company is a non banking financial company. It is neither involved
in any manufacturing, processing activities nor any of its transactions
involve foreign exchange earnings and outgo. In view of the same, the
particulars in terms of section 217(l)(e) of the Companies Act, 1956
and the Companies (Disclosures of Particulars in the Report of the
Board of Directors) Rules, 1988, regarding conservation of energy and
technology absorption and foreign exchange earnings and outgo, are not
applicable to the Company.
DIRECTORS''RESPONSIBILITY STATEMENT
Pursuant to the requirement of Section 217(2AA) of the Companies Act,
1956 with respect to Directors'' Responsibility Statement, it is hereby
confirmed:
i) That in the preparation of the Annual Accounts, all the applicable
Accounting Standards have been followed
ii) That the accounting policies are adopted and consistently followed
and the judgments and estimates made are reasonable and prudent so as
to give a true and fair view of the state of affairs of the Company at
the end of the Financial Year and of the Profit of the Company forthe
FinancialYear
iii) That the Directors have 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/detecting fraud and irregularities
iv) That the Directors have prepared the Annual Accounts on Going
Concern Basis.
ACKNOWLEDGEMENT
Your Company would like to take this opportunity to express its sincere
thanks to its clients and customers for their continued patronage. Your
Directors wish to place on record their deep sense of appreciation for
the co-operation and assistance extended to the company by its
Promoters, Bankers, Government Authorities, Shareholders and Employees
of the Company at all levels.
Place: Ahmedabad By Order of the Board
Date: 24/05/ 2013 For, KIFS FINANCIAL SERVICES LTD.
Regd. Office
B/81, Pariseema Complex, S/d
C.G. Road, Ellisbridge, Rajesh P. Khandwala
Ahmedabad - 380006. Chairman
Mar 31, 2012
The Directors have pleasure in presenting their 17th Annual Report of
the Company together with Audited Statement of Accounts for the
financial year ended on 31st March, 2012.
FINANCIAL RESULTS
(Rs. in Lacs)
Particulars 2011-12 2010-11
Business and Other Income 242.44 402.54
Total Expenditure 80.58 29.33
Profit/ Loss before Exceptional Items 161.86 373.21
and provision for Tax
Exceptional Items (Mat Credit entitlement 34.24 0.00
net of Current Year''s utilization)
Profit before Tax 196.10 373.21
Provision for Taxation 33.67 74.57
Net Profit 162.43 298.64
REVIEW OF OPERATIONS
During the year under review, total income of the Company has reduced
to Rs. 242.44 Lacs as compared to Rs. 402.54 Lacs earned during the
previous year because of exceptional income of Rs. 317.64 lacs towards
profit from sale of Investment in previous year. However, the
Company''s income from operations which mainly comprises of Interest
from Margin Funding, IPO Funding and Loans against Securities has shown
a significant rise of Rs. 238.75 lacs as compared to Rs. 82.98 lacs
during the previous financial year.
Amount of total expenditure has increased to Rs. 80.58 Lacs compared to
Rs. 29.33 Lacs in previous year due to higher interest charges on
borrowings. The other expenses largely remained flat during the year.
The Net profit of the company after providing for all expenditure,
necessary provisions and prior period adjustments was Rs. 162.43/- lacs
compared to Rs. 298.64/- lacs of previous year showing a decline of
about 46%.
The detailed results of operations of the Company are given in the
Management Discussion & Analysis forming part of this report.
DIVIDEND
Keeping in view the overall performance during the year, your Directors
recommend a dividend of Rs. 1.25/- (One Rupee and Twenty five paisa
only, i.e. 12.50 %) per Equity Share on the face value of Rs. 10/- each
on the total paid up capital as on 31st March, 2012. The dividend, if
approved by the members at ensuing Annual General Meeting, will be paid
to those shareholders whose names appear in the Register of Members as
on the Book closure date. The dividend and dividend distribution tax
will absorb a sum of Rs. 43.66 lacs.
DIRECTORS
Pursuant to provisions of Section-256 of the Companies Act, 1956 Mr.
Devang M. Shah, retires by rotation at the forthcoming Annual General
Meeting and being eligible offers himself for re-appointment.
The Ex-Chairman and Director, Mr. Parmanand G. Khandwala has resigned
from the Board of the Company w.e.f. 19th May, 2012. The Board of
Directors place their appreciation for the valuable services and
guidance provided by him during his tenure as the Chairman & Director
of the Company.
MANAGEMENT DISCUSSION AND ANALYSIS
As per Clause - 49 of the Listing Agreement, the Management Discussion
and Analysis should form part of Director''s Report. Hence a detailed
chapter on Management Discussion and Analysis forms part of this Annual
Report.
CORPORATE GOVERNANCE
A report on Corporate Governance along with a certificate from the
Auditors of the Company (enclosed with this Report as Annexure - 1)
regarding the compliance of conditions of Corporate Governance as
stipulated under Clause 49 of the Listing Agreement is annexed to this
Report.
PUBLIC DEPOSITS
During the year ended March 31, 2012, the Company has not accepted any
deposits from the public within the meaning of the provisions of the
Non- Banking Financial Companies (Reserve Bank) Directions, 1977 and
RBI''s notification no.DFC .118DG/(SPT)-98 dated 31st January, 1998.
AUDITORS
The statutory Auditors of the Company M/s. Shailesh C. Parikh & Co.,
Chartered Accountants, Ahmadabad retire at the ensuing Annual General
Meeting and being eligible offer themselves for re-appointment. The
Auditors have furnished a certificate to the effect that if
re-appointed, their appointment shall be within the limits prescribed
under Section 224 (1-B) of the Companies Act, 1956.
The Board of Directors recommends their re-appointment.
PARTICULARS OF EMPLOYEES
No employee, employed throughout the financial year was in receipt of
remuneration not less than Rs. 24,00,000/- p.a. or if employed for a
part of the financial year, was in receipt of remuneration not less
than Rs. 2,00,000/- p.m. therefore the Company is not required to
submit the details as required under Section 217(2-A) of the Companies
Act, 1956 read with Companies (Particulars of Employees) Rules, 1975.
CONSERVATION OF ENERGEY, TECHNOLOGY ABOSORPTION AND FOREIGN EXCHANGE
EARNINGS AND OUTGO
The Company is a non banking financial company. It is neither involved
in any manufacturing, processing activities nor any of its transactions
involve foreign exchange earnings and outgo. In view of the same, the
particulars in terms of section 217(1)(e) of the Companies Act, 1956
and the Companies (Disclosures of Particulars in the Report of the
Board of Directors) Rules, 1988, regarding conservation of energy and
technology absorption and foreign exchange earnings and outgo, are not
applicable to the Company.
DIRECTORS'' RESPONSIBILITY STATEMENT
Pursuant to the requirement of Section 217(2AA) of the Companies Act,
1956 with respect to Directors'' Responsibility Statement, it is
hereby confirmed:
i) That in the preparation of the Annual Accounts, all the applicable
Accounting Standards have been followed
ii) That the accounting policies are adopted and consistently followed
and the judgments and estimates made are reasonable and prudent so as
to give a true and fair view of the state of affairs of the Company at
the end of the Financial Year and of the Profit of the Company for the
Financial Year
iii) That the Directors have 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/detecting fraud and irregularities
iv) That the Directors have prepared the Annual Accounts on Going
Concern Basis.
ACKNOWLEDGEMENT
Your Company would like to take this opportunity to express its sincere
thanks to its clients and customers for their continued patronage. Your
Directors wish to place on record their deep sense of appreciation for
the co- operation and assistance extended to the company by its
Promoters, Bankers, Government Authorities, Shareholders and Employees
of the Company at all levels.
FOR AND ON BEHALF OF THE BOARD
Sd
Place: Ahmadabad Rajesh P. Khandwala
Date: 23/05/2012 Chairman
Regd. Office:
B-81, Pariseema Complex,
C.G. Road, Ellisbridge,
Ahmedabad-380006
Mar 31, 2011
The Company was incorporated on 29th March 1995 as a Public Limited
Company. It is listed on ASE & VSE and it is registered with the
Reserve Bank of India {RBI) as a Non Banking Finance Company (NBFC).
The Directors hereby present the Annual Report of your company
together with Audited Statement of Accounts for the year ended on 31rt
March, 2011.
FINANCIAL RESULTS:
(Rs. in Lacs)
Particulars 2010-11 2009-10
Business and Other Income 402.08 126.22
Total Expenditure 29.28 18.85
Profit/ Loss before provision for 372.80 107.37
Tax
Provision for Taxation 75.09 18.51
Profit after provision for Tax 298.23 88.88
REVIEW OF OPERATIONS:
During the year under review, total income of your Company has shown a
remarkable growth as compared to the previous year. Total income has
increased to Rs. 402.08 Lacs compared to Rs. 126,22 Lacs in the
previous year. Amount of total expenditure also increased to Rs.29.28
Lacs compared to Rs, 18.85 Lacs in previous year. The net profit of the
company after providing for all expenditure and necessary provisions
was Rs. 298.23 lacs compared to Rs.88.88 Lacs of previous year. Your
Directors are pleased to inform you that this significant rise income
level is due to increase in interest income and IPO distribution income
compared to previous year''s performance. During the year, there was
also one exceptional source of income i.e. profit from sale of
investment.
DIVIDEND:
Your Directors are pleased to recommend a special dividend of Re. 1
(Rupee One only, i.e. 10 %) on the paid up equity share capital of the
Company for the year ended on 31st March, 2011. The dividend, if
approved by the members at ensuing Annual General Meeting, will be paid
to those shareholders whose names appear in the Register of Members as
on the record date fixed for the purpose of determining eligibility for
receiving dividend.
CHANGE IN CONSTITUTION OF AUDIT COMMITTEE AND SHAREHOLDERS'' GRIEVANCE
COMMITTEE:
The Board of Directors at its meeting held on 14/02/2011 reconstituted
the Audit Committee. Mr. Devang Shah and Mr. Parmanand G. Khandwala
showed their unwillingness to continue as a member of Audit Committee,
and their resignation from the committee were accepted. At the same
time, it was proposed to appoint Mr. Atul N, Parikh (Non- Executive
Independent Director) and Mr. Rajesh P. Khandwala (Non- Executive
Non-Independent Director) of the Company to be appointed as a Member of
the Audit Committee which was agreed by both. Further, Mr. Atul N.
Parikh was also appointed as the Chairman of the Audit Committee
meeting.
There was also reconstitution of in Shareholders'' Grievance Committee
w.e.f. 14/02/2011. Mr. Rajesh P. Khandwala was inducted into the
Committee place of Mr. Parmanand G. Khandwala who resigned from the
post of Committee member / Chairman.
However, both Mr. Parmanand G. Khandwala and Mr. Devang Shah continue
to be the Director of the Company.
CONSTITUION OF SHARE TRANSFER, ISSUE AND ALLOTMENT COMMITTEE:
The Board of Directors in its meeting held on 14/02/2011 constituted
Share Transfer, Issue and Allotment Committee, which shall look after
the day to day transfer, transmission of shares, issue and allotment of
shares activities. Mr. Dharmendra Soni was appointed as a Chairman of
the Committee and Mr. Devang Shah and Mr, Rajesh P. Khandwala are
appointed as the Members of the said Committee.
MANAGEMENT DISCUSSION AND ANALYSIS ON OUTLOOK AND FUTURE PLANS;
Your directors are pleased to inform you that during the year under
review the company has enlarged margin trading and loans against shares
activities. The funding of primary market investment for retail
category initiated during the last financial year has also shown a
significant growth in the business performance of the Company.
INDUSTRY STRUCTURE AND DEVELOPMENT:
Indian economy is going through a period of rapid ''financial
liberalisation''. Today, the ''intermediation'' is being conducted by a
wide range of financial institutions through customer friendly
financial products. The segment consisting of NBFCs, such as equipment
leasing/hire purchase finance, loan and investment companies, etc. have
made great strides in recent years and are meeting the diverse
financial needs of the economy. These NBFCs provide a variety of
services including fund-based and fee-based activities and cater to
retail and non-retail markets and niche segments. They are being
recogni2ed as complementary to the banking sector due to their
customer-oriented services, simplified procedures, attractive rates of
return on deposits, flexibility and timeliness in meeting the credit
needs of specified sectors.
OUTLOOK & STRATEGY:
The year 2010-11 proved to be a year of global economic resurgence. The
global economy, after faltering due to recession during 2008-09,
witnessed an improvement mainly on account of infusion of stimulus
funds by various countries. China and India led the recovery from the
front, on account of huge domestic demand and continued thrust on
infrastructure creation, further propelling demand within the core
sectors.
India enjoys a strong domestic demand that bolsters a robust economic
outlook. India''s economy is estimated to grow in 2011-12 compared to
2010-11. Economic growth prospects are expected to improve
significantly in fiscal 2011-12 as the private sector demand - both
consumption as well as investment - begins to pick up.
FINANCIAL & BUSINESS REVIEW
The Company''s operations continue to be mainly focused in the areas of
NBFC activities and are predominantly engaged in following capital
market products at present;
- Margin Trading
- Loan against shares
- Funding Primary market investment for retail category
In-spite of limited resources, our Company has outperformed in almost
every facet for vibrant increase of interest income and profit in this
fiscal year,
KFSL has been able to bring in higher operating efficiencies within the
company based on the understanding and strength of our superior
knowledge of local markets and efficient, proactive and conservative
approach,
FUTURE OUTLOOK
The Company has plans to expand its business by offering a wide array
of financial products and services. Apart from existing funding
activities, the Company will also plan out to offer other financial
products and services like;
- Loan against Property
- Equipment Financing
- Debt Market operations
- Corporate advisory services - Loan syndication
The Company will also try to get a sustainable credit rating that will
help to provide source to access to a wide range of financial markets
and funding sources supported by a Capital Adequacy Ratio as per RBI
norms.
RISKS & CONCERNS
Being a Financial company, KFSL is exposed to specific risks that are
particular to its business and the environment within which it
operates, including interest rate volatility, economic cycle, credit
risk and market risk. The most important among them are credit risk,
market risk and operational risk. The measurement, monitaring
management of risk remains key focus areas for the company.
KFLS has laid down stringent credit norms through the Lending Policy
Framework approved by the Board. The company maintains a conservative
approach and manages the credit risk through prudent selection of
clients, delegation oi appropriate lending powers and by stipulating
various prudential limits.
In retail loan businesses like lives. overall portfolio diversification
and reviews also facilitate mitigation a ad management.
INTERNAL CONTROL SYSTEM:
The Company has adequate internal control systems appropriate for the
business process having efficiency of operations systems,
financial reporting and for compliance with applicable laws.
HUMAN RESOURCES:
One of the key pillars of our business is people. The company''s HR
policies and practices are on company''s core value of integrity,
passion, speed, commitment and seamlessness, while initially the
challenges were around integration. The company firmly believes that
intellectual capital and human resources is the backbone of the
company''s success. The company is committed to provide development
and training opportunities to employees to equip them with the best
skill which enable them to contemporary technological advancements.
Industrial related during the year continues to be harmonious.
CORPORATE GOVERNANCE:
The Corporate Governance report and Auditors'' Report thereon form
part of this record.
PUBLIC DEPOSITS:
During the year ended March 31st 2011, the Company has not accepted any
deposits from the public within the meaning of the provisions of the
Non-Banking Financial Companies . Reserve Bank] Directions, 1977 and
RBFs notification no.DFC dated 31st January, 1998.
DIRECTORS:
Pursuant to provisions of Section 256 of the Companies Act, 1956 Mr.
Dharnundra Soni and Mr. Parmanand G, Khandwasa, retire by rotation and
being eligible offers themselves for re-appointment.
AUDITORS:
The retiring Auditors Shailesh C. Parikh & Co.. Chartered Accountants,
Ahmadabad arc eligible for re-appointment and offer themselves for re-
appointment. The Auditors have furnished a certificate to the effect
that if re-appointed, their appointment shall be within the limits
prescribed under Section 224 (1-B) of the Companies Act, 1956,
PARTICULARS OF EMPLOYEES:
No employee 11 rows remuneration for which information is required to
be submitted under Section 217(2-A} of the Companies Act, 1956 read
with Companies (Particulars of Employees) Rules, 1975.
CONSERVATION OF ENERGEY, TECHNOLOGY ABOSORPTION AND FOREIGN EXCHANGE
EARNINGS AND OUTGO:
As the Company''s operations neither involve any manufacturing or
processing activities nor any transactions involving foreign exchange
earnings and outgo, the particulars in terms of section 217(1](e) of
the Companies Act, 1956 and the Companies (Disclosures of Particulars
in the Report of the Board of Directors) Rules, 1988, regarding
conservation of energy and technology absorption and foreign exchange
earnings and outgo, are not applicable.
DIRECTORS'' RESPONSIBILITY STATEMENT:
Pursuant to the requirement of Section 217(2AA) of the Companies Act,
1956 with respect to Directors'' Responsibility Statement, it is
hereby confirmed;
i) That in the principals of the Annual Accounts, all the applicable
Accounting Standards have been followed.
ii) That the accounting policies are adopted and consistently followed
and the judgments and estimates made are reasonable and prudent so as
to give a true and fair view of the state of affairs of the Company at
the end of the Financial Year and of the Profit of the Company for the
Financial Year
iii) That the Directors have 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 proven ting/ detecting fraud and irregularities iv) Thai the
Directors have prepared the Annual Accounts on Going Concern Basis.
ACKNOWLEDGEMENT:
Your Company would like to take this opportunity to express sincere
thanks to its clients and customers for their continued patronage. Your
Directors wish to place on record their deep sense of appreciation for
the co-operation and assistance extended to the company by its
Promoters, Bankers, Government Authorities, Shareholders and Employees
of the Company at all Jewels.
FOR AND ON BEHALF OF THE BOARD
Place: Ahmadabad
Date: 04/06/ 2011 P. G, Khandwala
Kegd. Office: Chairman
B/81, Pariseema Complex,
C.G. Road, Ellisbridge,
Ahmedabad-380006
Mar 31, 2010
The Directors hereby present the Annual Report of your company
together with Audited Statement of Accounts for the year ended on 31st
March, 2010.
FINANCIAL RESULTS :
(Rs. in Lacs)
Particulars 2009-10 2008-09
Business and Other Income 126.22 66.28
Total Expenditure 18.85 38.52
Profit/ Loss before provision for Tax 107.37 27.76
Provision for Taxation 18.51 8.71
Profit after provision for Tax 88.88 19.06
REVIEW OF OPERATIONS:
During the year under review your Company has achieved more than double
the growth in total income as compared to the previous year. Your
company has recorded a total income of Rs.126.22 Lacs compared to the
total income of Rs.66.28 Lacs in the previous year and incurred the
total expenditure of Rs.18.85 Lacs compared to Rs.38.52 Lacs in
previous year. The net profit of the company after providing for all
expenditure and necessary provisions was Rs. 88.88 lacs compared to
Rs.19.06 Lacs of previous year. During the year under review your
company has become a subsidiary company of M/s. KIFS Securities Pvt.
Ltd. by way of interse promoter transfer of shares.
DIVIDEND:
Your Directors are pleased to recommend for your consideration a
dividend of 1.50 (Rupees One and Fifty Paise Only) on the paid up
equity share capital of the Company for the year ended on 31st March,
2010. The dividend, if approved, will be paid to those shareholders
whose names appear in the Register of Members as on the record date
fixed for the purpose of determining eligibility for receiving
dividend.
MANAGEMENT DISCUSSION AND ANALYSIS ON OUTLOOK AND FUTURE YEAR PLANS:
Your directors are pleased to inform you that during the year under
review the company has enlarged margin trading and loans against shares
activities and has also contemplated to initiate funding of primary
market investment for retail category this ultimately reflected in the
business performance of the Company for the year under review.
INDUSTRY STRUCTURE AND DEVELOPMENT:
The NBFC Structure in India is represented by mix of few large
companies with nationwide presence and large number of small and medium
sized companies with regional focus. The Reserve Bank of India
regulates the operations of NBFCs. In recent years NBFCs are facing
strong competition from Banks and financial institutions as they are
providing funds at lower cost. Hence, NBFCs are under pressure to cut
cost and to develop focused marketing approach by offering more
personalized services. Entries of strong NBFCs in insurance and banking
sector have been some of the major development in this sector.
OUTLOOK & STRATEGY :
Considering the growth prospects of India in the long-term and various
opportunities that will emerge across different sectors from time to
time , we continue to remain enthused about the manifold growth of the
financial services sector in India. The Capital market in India have
performed well over the past few years barring F.Y.2008-09 and certain
level of moderation in growth is likely to take place in the near
future depending upon the depth of the global economic recession, the
pace of recovery and the Indian economic scenario. We continue to be
optimistic and believe that the Indian markets will see pull back and
continue their northward journey once the global markets stabilise and
to some extent even before that for the years to come.
With an eye on growth we keep expanding our portfolio of financial
services. Our strategic focus on diversified activities in the
financial services sector, will help stabilize base level for earning.
OPPORTUNITIES AND THREATS:
The pace of economic recovery in India is reflective of the transitory
impact of the global financial crisis on the Indian economy. India''s
strong domestic fundamentals are expected to remain operative over the
log term, with the twin drivers of assumption and investment supporting
sustained high growth for the economy. Over the next year, while
economic recovery is expected to strengthen and assume a broad - based
nature, the management of inflation expectations, , the pace of
withdrawal of stimulus measures and the management of systemic
liquidity in view of the large government borrowing programme and the
impact of volatile global markets on capital flows will be key factors
impacting the economy and financial markets.
Political stability always has a direct co-relation with the investment
environment of any economy. The stability of government has presented
an optimistic scenario for the Indian business, economy and capital
market. The continuous demands for experienced and skilled human
capital is one of the major challenges faced by any financial firm.
RISK MANAGEMENT:
Your Company follows well-established and detailed risk assessment and
minimisation procedures. The Company especially focuses on improving
sensitivity to assessment of risks and improving methods of computation
of risk weights and capital charges. The risk assessment and mitigation
procedures are reviewed by the Board periodically. The Company has a
comprehensive risk management framework. Additionally, the company has
a dedicated work force that monitors risk management in the Company.
The work force monitors different types of risks across the
organisation i.e. credit risk, market risk , liquidity risk ,
operational risk , competition risk, business continuity risk and
general risks arising out of various economic factors. Overall
framework for monitoring these risks is called enterprise Risk
Management System.
INTERNAL CONTROL SYSTEM:
The Company has adequate internal control systems appropriate for the
business process having regard to efficiency of operations systems,
financial reporting and for compliance with applicable laws.
HUMAN RESOURCES:
One of the key pillars of our business is people. The company''s HR
policies and practices are built on company''s core value of integrity
, passion , speed, commitment and seamlessness, while initially the
challenges were around integration. The company firmly believes that
intellectual capital and human resources is the backbone of the
company''s success. The company is committed to provide development
and training opportunities to employees to equip them with the best
skill which enable them to adapt to contemporary technological
advancements. Industrial relation during the year continues to be
harmonious.
CORPORATE GOVERNANCE:
The Corporate Governance Report and Auditors'' Report thereon form
part of this report.
PUBLIC DEPOSITS:
During the year under review, your company has not accepted any
deposits from the public.
DIRECTORS:
Pursuant to provisions of Section 256 of the Companies Act, 1956 Mr.
Devang Shah retires by rotation and being eligible offers himself for
re-appointment.
AUDITORS:
The retiring Auditors Shailesh C. Parikh & Co., Chartered Accountants,
Ahmadabad are eligible for re-appointment and offer themselves for
re-appointment. The Auditors have furnished a certificate to the effect
that if re-appointed, their appointment shall be within the limits
prescribed under Section 224 (1-B) of the Companies Act, 1956.
PARTICULARS OF EMPLOYEES:
No employee draws remuneration for which information is required to be
submitted under Section 217(2-A) of the Companies Act, 1956 read with
Companies (Particulars of Employees) Rules, 1975.
CONSERVATION OF ENERGEY, TECHNOLOGY ABOSORPTION AND FOREIGN EXCHANGE
EARNINGS AND OUTGO:
As the Company''s operations neither involve any manufacturing or
processing activities nor any transactions involving foreign exchange
earnings and outgo, the particulars in terms of section 217(1)(e) of
the Companies Act, 1956 and the Companies (Disclosures of Particulars
in the Report of the Board of Directors) Rules, 1988, regarding
conservation of energy and technology absorption and foreign exchange
earnings and outgo, are not applicable.
DIRECTORS'' RESPONSIBILITY STATEMENT:
Pursuant to the requirement of Section 217(2AA) of the Companies Act,
1956 with respect to Directors'' Responsibility Statement, it is
hereby confirmed:
i) That in the preparation of the Annual Accounts, all the applicable
Accounting Standards have been followed
ii) That the accounting policies are adopted and consistently followed
and the judgments and estimates made are reasonable and prudent so as
to give a true and fair view of the state of affairs of the Company at
the end of the Financial Year and of the Profit of the Company for the
Financial Year
iii) That the Directors have 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/detecting fraud and irregularities
iv) That the Directors have prepared the Annual Accounts on Going
Concern Basis.
ACKNOWLEDGEMENT:
Your Company would like to take this opportunity to express sincere
thanks to its clients and customers for their continued patronage. Your
Directors wish to place on record their deep sense of appreciation for
the co-operation and assistance extended to the company by its
Promoters, Bankers, Government Authorities, Shareholders and Employees
of the Company at all levels.
FOR AND ON BEHALF OF THE BOARD
Place: Ahmadabad S/d.
Date: 18 /05/ 2010 P.G.Khandwala
Regd. Office : Chairman
B/81, Pariseema Complex,
C.G. Road, Ellisbridge,
Ahmedabad-380006
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