BOARD'S REPORT

TO

THE MEMBERS,

Your Directors are pleased to present 22 Annual Report and the company's audited financial statement for the financial year ended March 31, 2016.

Dividend

In order to conserve the resources, your Directors do not recommend any dividend on equity shares of the Company.

Brief description of the Company's working during the year/State of Company's affairs: Standalone Results

During the year, the company reported an increase in total revenue by 2.67% to Rs.46.07 Lacs as compared to Rs.44.87 Lacs during the last year. The company recorded an increase in Net profit after tax of Rs.14.13 Lacs as compared to Rs.7.18 Lacs during the last year.

Your Company is Non-Banking Finance Company registered with Reserve Bank of India. The Company proposes to transfer an amount of Rs.3.75 Lacs which is 20% of net profit to Special Reserve Fund and after adjustment the balance is proposed to be retained in the Statement of Profit & Loss.

Consolidated Results:

The company has consolidated its accounts with its associate Company viz. Palco Metals Limited. During the year, the company reported consolidated total revenue of Rs.58.44 Lacs as compared to Rs.64.90 Lacs  during the last year. The company recorded an increase in Net profit after tax of Rs.60.62 Lacs as  compared to Rs.18.52 Lacs during the last year. Cubing the expenses help the company to increase in its  net profit.

There is no change in the nature of business of the Company during the year.

Subsidiaries/ Joint Venture/ Associate Companies :

Company does not have Subsidiary or Joint Venture Companies. Company has one associate company namely M/s. Palco Metals Limited. M/s. Krishna Share broking Services Pvt. Ltd has ceased to be an associate Company during the year.

The performance and financial position of associate company is given as per annexure B to the report.

Material Changes and Commitments :

There are no material changes and commitments affecting the financial position of the Company which have occurred between the end of the financial year of the company to which the financial statements relate and the date of this report.

There are no significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and company's operations in future.

Directors' Responsibility Statement :

Your Directors Statement and confirm that :

i) in the preparation of the annual accounts, the applicable accounting standards had been  followed and there are no material departures from the same;

ii) 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 financial year and of the profit and loss of the company for the year ended on that date.

iii) the directors had taken proper and sufficient care of the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities;

iv) The directors had prepared the annual accounts on a going concern basis.

v) The directors had laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and are operating effectively.

vi) The directors had devised proper systems to ensure compliance with the provisions of all

applicable laws and that such systems are adequate and operating effectively.

Contracts and Arrangement with Related Parties :

During the year the Company has not entered into any material contracts or arrangement with related parties which attracted the provisions of Section 188 of the Companies Act, 2013. Notes to the financial statement sets out the disclosure of related party transactions during the year.

Corporate Governance :

The amended Clause 49 of listing requirements on Corporate Governance is not applicable to the Company and hence nothing to report thereon.

Corporate Social Responsibilities :

As the Company's net worth, turnover or net profits are below the limit prescribed under section 135 of the Companies Act 2013 and hence CSR is not applicable to your Company.

Risk Management

Your company has Risk Management Framework as approved by the Board of Directors which provides mechanism to identify, evaluate business risk and opportunities. The risk associated with the business of  the Company, its root causes are reviewed and steps are taken to mitigate the same. The Audit

Committee and Board of Directors also reviews the key risk associated with the business of the Company, the procedure adopted to assess the risk, efficacy and mitigation measures.

Internal Financial Control :

Your directors state that there are adequate internal financial controls with reference to the financial  statements i.e. Balance Sheet, Statement of Profit and loss, Cash Flow Statements and other relevant records and are operating effectively.

Directors and Key Managerial Personnel :

In accordance with the provisions of the Act and the Articles of Association of the Company, Mr. Vinodkumar Agrawal will retire by rotation at the ensuing Annual General Meeting and being eligible has  offered himself for re-appointment.

Mr. Ashokkumar Agrawal has been re-appointed as Chairman & Mg. Director of the Company for a period of 5 years from April 1, 2016.

The Company has received declarations from all the Independent Directors of the Company confirming that they meet with the criteria of independence as prescribed both under sub-section (6) of Section 149 of the Companies Act, 2013 and under the Listing Agreement with the Stock Exchanges.

COMPOSITION OF BOARD OF DIRECTORS AND ITS COMMITTEES: Composition of Board

The Board of Directors has an optimum combination of Executive and Non-Executive Directors and  Independent directors in accordance with the provisions of the Act. The composition of the Board of Directors of the company as on 31st March, 2016 is as under:

Audit Committee :

The composition of committee inter alia meets with the requirement of Section 177 of the Companies Act, 2013

Functions and Powers of Audit Committee :

The Committee shall have discussions with the auditors periodically about internal control systems, the  scope of audit including observation of the auditors and review of financial statement before their submission to the Board and discuss any related issue with internal and statutory auditors and the  management of the company.

In discharging the function of the Audit Committee, the committee shall have the authority to investigate into any matter in relating to any terms specified in Section 177 or referred to it by the Board.

Responsibility of the Committee :

The Committee may assign any matter of importance nature relating to the accounts, finance, taxation, inspection and investigation from time to tome and may require submitting a report to the Board on such matters within the stipulated time.

The committee on any matter relating to financial management including audit report shall submit a  report to the Board from time to time.

The Board has accepted all the recommendation made by the Audit Committee.

Nomination and Remuneration Committee :

During the year the Company has renamed and reconstituted it Shareholders Grievance Committee as the Nomination and Remuneration Committee:

The Committee has been reconstituted in terms of Section 178 of the Companies Act, 2013. The Committee shall have at least the following basic responsibilities:

• To identify persons who are qualified to become directors and who may be appointed in senior management in accordance with the criteria laid down, recommend to the Board their appointment and removal and shall carry out evaluation of every director's performance.

• To formulate and review criteria that must be followed for determining qualification for determining qualifications, positive attributes and independence of director.

• To recommend the Board a policy relating to the remuneration for the directors, key managerial personnel and other employees and to ensure compliance with the remuneration policy set forth by the Company.

• To propose to the Board the members that must form part of the Committee.

• To report on the systems and on the amount of the annual remuneration of directors and senior management.

The Remuneration Policy has been posted on the website of the Company.

Stakeholders Relationship Committee

The Committee has reconstituted and renamed Shareholders Grievance Committee as Stakeholders Relationship Committee. The composition of the Committee is in accordance with the Companies Act, 2013. The Composition of the Committee is as under :

Basic Responsibilities of the Committee :

• Considering and resolving the grievance of shareholders of the Company with respect to transfer of shares, non-receipt of annual report etc.

• Ensuring expeditious share transfer process in line with the proceedings of the Share Transfer Committee.

• Evaluating performance and service standards of the Registrar & Share Transfer Agent of the Company.

• Providing guidance and making recommendation to improve service levels for investors.

Separate Meeting of Independent Directors :

The Independent directors held meeting on 30/03/2016 without the attendance of Non independent directors and the members of Management. All independent directors were present at the meeting. The following issues were discussed in detail;

i. Reviewed the performance of non-independent directors and the Board as a whole.

ii. Reviewed the performance of the Chairperson of the Company taking into account the views of executive directors and non-executive directors.

BOARD EVALUATION :

Pursuant to the provisions of the Companies Act, 2013, the Board has carried out an annual performance evaluation of its own performance, the directors individually as well as the evaluation of the working of its Audit, Nomination & Remuneration and Stakeholders Relationship Committee.

Various aspects of the Board's functioning were evaluated such as adequacy of the composition of the Board and its Committees, Board culture, execution and performance of specific duties, obligations and governance.

A separate exercise was carried out to evaluate the performance of individual Directors including the Chairman of the Board, who were evaluated on parameters such as level of engagement and contribution, independence of judgment, safeguarding the interest of the Company and its minority shareholders etc. The performance evaluation of the Independent Directors was carried out by the entire Board. The performance evaluation of the Chairman and the Non Independent Directors was carried out by the Independent Directors. The Directors expressed their satisfaction with the evaluation process.

Vigil Mechanism

Company has vigil mechanism in force to deal with instances of fraud and mismanagement if any. The mechanism ensures that strict confidentiality is maintained whilst dealing with the concern and also that no discrimination will be meted to any person for a genuinely raised concern. The Chairman of the Audit Committee may also be contacted by employees to report any suspected or concerned incident of fraud / misconduct.

The detail of the Policy has been posted on the website of the Company.

Employee Stock Option etc. :

During the year there are no issue of equity shares with differential rights, no issue of sweat equity shares, no issue of employee stock options and no provision of money by company for purchase of its own shares by employees or by trustees for the benefit of the employees, the details required to be given under various rules issued under the Companies Act 2013 is NIL.

Secretarial Auditor :

The Board has appointed Mr. Bipin L. Makwana, Practicing Company Secretary to conduct Secretarial Audit for the financial year 2015-2016. The secretarial Audit Report for the financial year March 31, 2016 is annexed as Annexure C to the Report. The Secretarial Audit Report does not contain any qualification, reservation or adverse remark.

Auditors and Auditors Report :

M/s. K. G. Vakharia & Co., Chartered Accounts (FRN:117022W) are the statutory auditors of the Company and there are no changes in the same and they are being eligible offers themselves for reappointment and Board recommend their reappointment.

There are no qualifications, reservation or adverse remark or disclaimer made by the statutory auditors in their auditor's report.

Further notes to accounts are Self explanatory.

Particulars of Loans given, Investment made, Guarantee given and Securities provided :

The disclosure regarding particulars of loan given, guarantee given and security provided in Schedulesto financial statement.

Conservation of energy, technology absorptions and foreign exchange earnings and outgo are as follows :

Though the operations of the company are not energy intensive, the company has taken adequate measures to conserve energy and optimize its use by using energy efficient computers and equipment. The Company has not brought any technology. There is no a foreign exchange earnings or outgo during the year.

Extract of Annual Return :

Extract of the Annual Return of the Company is enclosed herewith as an annexure A tothis Report.

Particulars of Employees and Other Related disclosures :

The Company has no employee drawing the remuneration of Rs.5 Lacs per Month or Rs.60 Lacs per Annum.

The Company has few employees on its payroll. Details of remuneration paid to Directors, Non-Executive Directors and Independent Directors are disclosed in the Form MGT 9 annexed as Annexure A to the Board Report. Whereas the disclosure as required under Rule 5 (1)of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is provided in Annexure D to the Report.

Deposits :

Your Company has not accepted any deposits which fall under Chapter V and Section 73 to Section 76 of the Companies Act, 2013.

Listing of Shares :

The Company had applied for listing of securities at Bombay Stock Exchange Ltd and in response to that equity shares of the Company were listed and trading permission was granted with effect from October 14, 2015. Thereby the securities of the Company are listed at BSE and Ahmedabad Stock Exchange. ISIN of the Company is INE897B01019.

Registrar and Share Transfer Agents : (R & T)

The company has appointed MCS Share Transfer Agents Ltd., 101, Shatdal Complex, Opp. Bata

Showroom, Ashram Road, Ahmedabad:380009 as Registrar and Transfer Agents for electronics shares.

The average time taken in transfer of shares is 15 days. The depositories directly transfer the dematerialized shares to the beneficiaries.

Share Transfer System

Share transfers are registered and returned within a period of 15 days from the date of receipt, provided documents are correct and valid in all respect.

Acknowledgment :

Your Directors wish to place on record their deep sense of gratitude to Banks for their continued support and cooperation. Our sincere thanks are also due to our esteemed customers, suppliers and finally to employees of the Company for their untiring efforts and commitment to their duties.

By Order of the Board

For, Krishna Capital & Securities Ltd.

sd/- Ashokkumar Agrawal

Chairman & Managing Director DIN 00944735

Registered Office :

403, Mauryansh Elanza, B/h. Parekh Hospital, Shyamal Cross Road Satellite, Ahmedabad : 380 015

Place: Ahmadabad

Date: 30/05/2016