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Directors Report of KJMC Financial Services Ltd.

Mar 31, 2015

Dear Members,

The Directors have pleasure in presenting the 27th Annual Report, together with the audited financial statement of the Company for the financial year ended 31st March, 2015.

FINANCIAL RESULTS

The performance of the Company for the financial year ended 31st March, 2015 is summarized below:

(Rs. in "000")

Standalone

Year Year Particulars Ended Ended 31st March, 31st March, 2015 2014

Total Income 13,379 7,188

Total Expenses 12,289 6,517

Profit before Tax 1,090 671

Less: Provision for Tax

*Current Tax - -

* Deferred Tax (1,193) (366)

* MAT Credit - -

* Prior period taxes 472 -

Profit for the Year before Share in 1,811 1,037 Associates'' profit / Loss

Share in Associates'' Loss NA NA

Profit / (Loss) After Tax 1,811 1,037

Add : Surplus b/f 18,756 17,952

Fixed Assets not having remaining useful life as on 1st April, 2014 (208) -

Disposable Profits 20,358 18,989

Appropriations towards :

Special Reserve 362 207

General Reserve 45 26

Balance carried forward 19,951 18,756

EPS

*Basic 0.48 0.31

*Diluted 0.39 0.25

Consolidated

Year Year Particulars Ended Ended 31st March, 31st March, 2015 2014

Total Income 14,799 7,655

Total Expenses 13,287 7,225

Profit before Tax 1,512 430

Less: Provision for Tax

*Current Tax 41 10

* Deferred Tax (1,193) (366)

* MAT Credit (40) (10)

* Prior period taxes 456 -

Profit for the Year before Share in 2,248 796 Associates'' profit / Loss

Share in Associates'' Loss (56) (42)

Profit / (Loss) After Tax 2,192 754

Add : Surplus b/f 16,739 16,218

Fixed Assets not having remaining useful life as on 1st April, 2014 (208) -

Disposable Profits 18,723 16,972

Appropriations towards :

Special Reserve 362 207

General Reserve 45 26

Balance carried forward 18,316 16,739

EPS

*Basic 0.58 0.23

*Diluted 047 0.18

PERFORMANCE REVIEW

On standalone basis, your Company earned the gross income of Rs. 133.79 Lakhs as against Rs. 71.88 Lakhs in the previous year. The total expenditure during the year under review was Rs. 122.89 Lakhs as against Rs. 65.17 Lakhs in the previous year. The Net Profit after tax was Rs. 18.11 Lakhs as against Rs. 10.37 Lakhs in the previous year.

On consolidated basis, your Company earned the gross income of Rs. 147.99 Lakhs as against Rs. 76.55 Lakhs in the previous year. The total expenditure during the year under review was Rs. 132.87 Lakhs as against Rs. 72.25 Lakhs in the previous year. The Net Profit after tax was Rs. 21.92 Lakhs as against Rs. 7.54 Lakhs in the previous year.

TRANSFER TO RESERVES

The Company proposes to transfer Rs. 0.45 Lakhs to the general reserve and Rs. 3.62 Lakhs to Special Reserves out of the amount available for appropriation and an amount of Rs. 199.51 Lakhs is proposed to be retained in the profit and loss account.

SHARE CAPITAL

During the reporting period, your Company has allotted 45000, 0% Compulsory Convertible Preference Shares of Rs. 100/- each (CCPS) at a price of Rs. 250/- per share to Promoter and Part of the Promoters Group of the Company on Preferential basis in accordance with the SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2009 pursuant to approval of members on special resolution passed through postal ballot on 19th March, 2015. As a result of this, the issued, subscribed and paid up capital of the Company has increased from Rs. 433.57 lacs to Rs. 478.57 lacs.

The 45,000 CCPS are convertible into 450,000 equity shares within 18 months from the date of allotment of CCPS i.e. 25th March, 2015 at an offer price Rs. 25/- per share.

DIVIDEND

In order to conserve the resources for operations, your Directors regret their inability to recommend any dividend for the year under review.

RBI PRUDENTIAL NORMS

Since the Company does not accept and hold any public deposits, the Non- Banking Financial (Non Deposit Accepting or Holding) Companies Prudential Norms (Reserve Bank) Directions, 2007 are not applicable to the Company as regard to capital adequacy requirement.

DIRECTORS AND KEY MANAGERIAL PERSONNEL

Mr. Raghunath Mohanlal Kumar (Din: 00261227), Independent Director of the Company, stepped down from the Board of the Company on 10th November, 2014 due to his ill health. He was associated with the Company since 5th October, 1994.

Mr. Sanjeev Singh Sengar, Company Secretary and Compliance Officer of the Company resigned w.e.f. 15th November, 2014.

The Board places on record their appreciation for the valuable services rendered by Mr. Raghunath Mohanlal Kumar and Mr. Sanjeev Singh Sengar.

Pursuant to the requirement of Section 149 of the Companies Act, 2013 and Clause 49 of the Listing Agreement, the Board has also inducted Mrs. Aditi Jain (Din: 00152373), as an Additional Director of the Company with effect from 25th March, 2015. She is B.E (Computers) & PGDBM (Finance) and has experience in corporate finance, capital market and general administration besides technology related issues.

Necessary resolutions are being proposed in the notice of the ensuing annual general meeting for the approval of the members for appointment of Mrs. Aditi Jain, as a Director of the Company. The Company has received a notice from a member pursuant to Section 160 of the Companies Act 2013 proposing her appointment as a Director.

According to the Companies Act, 2013, at least two-thirds of the total number of Directors (excluding Independent Directors) shall be liable to retire by rotation. For this purpose, considering the composition of the Board of Directors, Mr. Girish Jain, Director of the Company is liable to retire by rotation at the ensuing Annual General Meeting and being eligible, offer himself for reappointment. Necessary resolution for this purpose is being proposed in the notice of the ensuing annual general meeting for the approval of the members.

The Independent Directors have submitted the Declaration of Independence, as required pursuant to section 149(7) of the Companies Act, 2013, stating that they meet the criteria of Independence as provided in sub-section (6).

The Board has appointed Mr. Kartik Konar as Chief Financial Officer of the Company with effect from 11 th August, 2014.

The Board has appointed Ms. Sankari Muthuraj as Company Secretary of the company with effect from 25th March, 2015 within a meaning of Section 203 read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014. She has been designated as Compliance Officer of the Company pursuant to Clause 47 of the Listing Agreement.

NUMBER OF BOARD MEETING

The Board of Directors met six (6) times in the financial year. The details of the Board Meetings and the attendance of the Directors are provided in the Corporate Governance Report.

BOARD EVALUATION

The Board of Directors has carried out an annual evaluation of its own performance, Board committees and Individual Directors pursuant to the provisions of the Act and the Corporate Governance requirements as prescribed by Securities and Exchange Board of India ("SEBI") under Clause 49 of the Listing Agreements ("Clause 49").

The performance of the Board was evaluated by the Board after seeking inputs from all the Directors on the basis of the criteria such as the Board composition and structure, effectiveness of board processes, information and functioning, etc.

The performance of the committees was evaluated by the board after seeking inputs from the committee members on the basis of the criteria such as the composition of committees, effectiveness of committee meetings, etc.

The Board and the Nomination and Remuneration Committee reviewed the performance of the individual Directors on the basis of the criteria such as the contribution of the individual Director to the Board and committee meetings. In addition, the Chairman was also evaluated on the key aspects of his role.

In a separate meeting of Independent Directors, performance of non- Independent Directors, performance of the board as a whole and performance of the Chairman was evaluated, taking into account the views of executive directors and non-executive Directors.

POLICY ON DIRECTORS'' APPOINTMENT AND REMUNERATION

The Company''s policy on Directors'' appointment and remuneration and other matters provided in Section 178(3) of the Companies Act, 2013 has been disclosed in the Corporate Governance report, which forms part of the Directors'' report.

ADEQUACY OF INTERNAL CONTROL

The details in respect of internal financial control and their adequacy are included in the Management Discussion & Analysis, which forms part of this report.

PUBLIC DEPOSITS

The Company being a Non-Deposit Accepting Non-Banking Finance Company has not accepted any deposits from the public during the year under review and shall not accept any deposits from the public without obtaining prior approval of the Reserve Bank of India (RBI).

AUDITORS

In accordance with Section 139 of the Companies Act, 2013 and the rules made there under, M/s. K. S. Aiyar & Co., Mumbai, the Statutory Auditors of your Company has been appointed as the Statutory Auditors of the Company in the 26th Annual General Meeting of the Company, for a period of five years (subject to ratification of their appointment at every AGM).

They have confirmed their eligibility under Section 141 of the Companies Act, 2013 and the Rules framed there under for appointment as Auditors of the Company.

The Auditors Report for the year under review does not contain any qualification.

AUDIT COMMITTEE

The details pertaining to composition of audit committee are included in the Corporate Governance Report, which forms part of this report.

SECRETARIAL AUDIT

Pursuant to the provisions of Section 204 of the Companies Act, 2013 read with Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed M/s. S. S. Rauthan & Associates, a firm of Company Secretaries in Practice to undertake the Secretarial Audit of the Company. The Secretarial Audit Report is annexed and forms part of this report.

SUBSIDIARY COMPANIES

The Company has two wholly owned subsidiaries namely KJMC Asset Management Company Limited and KJMC Investment Trust Company Limited and two associate companies namely KJMC Realty Private Limited and KJMC Platinum Builders Private Limited within the meaning of Section 2(6) of the Companies Act, 2013 ("Act"). There has been no material change in the nature of the business of the subsidiaries and associates.

Pursuant to provisions of Section 129(3) of the Act, a statement containing salient features of the financial statements of the Company''s subsidiaries in Form AOC-1 is annexed and forms part of this report.

In accordance with third proviso of Section 136(1) of the Companies Act, 2013, the Annual Report of the Company, containing therein its standalone and the consolidated financial statements has been placed on the website of the Company, www.kjmc.com. Further, as per fourth proviso of the said section, audited annual accounts of each of the subsidiary companies have also been placed on the website of the Company, www.kjmc.com. Shareholders interested in obtaining a copy of the audited annual accounts of the subsidiary companies may write to the Company Secretary at the Company''s registered office.

DIRECTORS'' RESPONSIBILITY STATEMENT UNDER SECTION 134 OF THE COMPANIES ACT, 2013

Pursuant to Section 134 (5) of the Companies Act, 2013, your Directors hereby confirm that:

a. that in the preparation of the annual financial statements for the year ended 31st March, 2015, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any;

b. that such accounting policies have been selected and applied them consistently and made judgement 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. that proper and sufficient care has been taken 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. that the annual accounts have been prepared on a going concern basis;

e. that proper internal financial controls were in place and that the financial controls were adequate and were operating effectively; and

f. that systems to ensure compliance with the provisions of all applicable laws were in place and were adequate and operating effectively.

CORPORATE GOVERNANCE

In terms of SEBI Circular No: CIR/CFD/POLICY CELL/7/2014 dated 15th September, 2014, compliance of Clause no. 49 of the Equity Listing Agreement is not applicable to your Company as the Company''s paid up Equity Share Capital does not exceed of Rs. 10 Crores and net worth does not exceed of Rs. 25 Crores as on 31st March, 2015.

To maintain highest standards of Corporate Governance, a separate section on Corporate Governance, is annexed and forms part of this report.

EXTRACT OF ANNUAL RETURN

The extract of the Annual Return as provided under sub-section (3) of Section 92 in the Form MGT 9 for the financial year under review is annexed and forms part of this report.

RELATED PARTY TRANSACTIONS

All related party transactions that were entered into during the financial year were on an arm''s length basis and were in the ordinary course of business. There are no materially significant related party transactions made by the Company with Promoters, Directors, Key Managerial Personnel or other designated persons which may have a potential conflict with the interest of the Company at large.

All Related Party Transactions are placed on a quarterly basis before the Audit Committee and also before the Board for approval.

Information on transactions with related parties pursuant to Section 134(3)(h) of the Act read with rule 8(2) of the Companies (Accounts) Rules, 2014 in Form AOC-2 is annexed and forms part of this report.

PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS

The particulars of loans, guarantees and investments have been disclosed in the financial statements.

MANAGEMENT DISCUSSION AND ANALYSIS

A report on the Management Discussion and Analysis for the financial year under review is annexed and forms part of this report.

LISTING OF SHARES

Equity Shares of the Company are listed with BSE Limited. The Annual listing fee for the financial year 2015-16 has been paid to the BSE Limited (BSE). The Company has complied with the delisting formalities with the Bhubaneshwar Stock Exchange Association Limited and the Calcutta Stock Exchange Association Limited. Delisting approval from these exchanges are awaited.

FUTURE BUSINESS PLAN

The Board of Directors of your Company are looking continuously to increase and grow the business of the Company and also considering the new business proposal to start a Housing finance business through its subsidiary company as a special purpose vehicle (SPV).

PARTICULARS OF EMPLOYEES

The information required under Section 197 of the Companies Act, 2013 read with rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are given below:

i. The ratio of the remuneration of each Director to the median remuneration of the employees of the company for the financial year;

Non-executive Directors Ratio to median remuneration

Mr. Inderchand Jain -

Mr. S.C. Aythora 0.12

Mr. R.R. Kumar ( up to 10.11.2015) * -

Mr. Nitin Kulkarni 0.12

Mr. Girish Jain -

Mrs. Aditi Jain (Appointed w.e.f.

25th March, 2015) * -

Executive Directors

Mr. Rajnesh Jain* -

*Since this information is for part of the year, the same is not comparable.

ii. The percentage increase in remuneration of each Director, Chief Financial Officer, Company Secretary, if any, in the financial year; Whole Time Director, Chief Financial Officer & Company Secretary : Nil

iii. The percentage increase in the median remuneration of employees in the financial year: Nil

iv. The number of permanent employees on the rolls of Company as on 31st March, 2015: 8

v. The explanation on the relationship between average increase in remuneration and Company performance:

On an average, employees received an annual increase of 6%. The individual increments varied from 5% to 8% based on individual performance.

vi. Comparison of the remuneration of the key managerial personnel against the performance of the Company:

(Rs. in''000")

Aggregate remuneration of key managerial personnel (KMP) in FY15 2,517

Revenue 13,379

Remuneration of KMPs (as % of revenue) 18.81

Profit before Tax (PBT) 1,090

Remuneration of KMP (as % of PBT) 230.92

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:

Particulars 31st,March 31st,March % Change 2015 2014

No. of Equity Share 39,10,740 34,85,740 12.19

Market price per share Rs. 12.55 16.35 (23.24)

Market Capitalisation Rs. 4,90,79,787 5,69,91,849 (13.88)

Earning per share Rs. 0.48 0.31 54.84

Price Earnings Ratio 26.15 52.74 (50.42)

viii. 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:

Particulars 31st March, 2015 March, 1995 - IPO % Change

Market Price 12.55 60 & 70* (79.08)

* Equity Shares of Rs. 10/- each were offered at a premium of Rs. 50/-per share to the Financial Institutions and Indian Public and at a premium of Rs. 60/- per share to Mutual Funds.

ix. 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:

The average annual increase of employees was around 6%. However, during the course of the year, managerial remuneration was not increased.

x. Comparison of each remuneration of the key managerial personnel against the performance of the Company:

(Rs. in''000")

Mr. Rajnesh Mr. Kartik Mr.Sanjeev Jain (Whole Konar (Chiel Sengar time Director Financial (Company appointed Officer Secretary w.e.f. appointed resigned w.e.f, 11.08.2014) w.e.f. 15.11.2014) 11.08.2014)

Remuneration in Fy15 (Rs. ''000) 1,474 202 831

Revenue 13,379

Remuneration as % of revenue 11.02 1.51 6.21

Profit before Tax (PBT) 1,090

Remuneration (as % of PBT) 135.23 18.53 76.24

Sankari Muthuraj (Company Secretary appointed w.e.f. 25.03.2015)

Remuneration in Fy15 (Rs. ''000) 11

Revenue

Remuneration as % of revenue 0.08

Profit before Tax (PBT)

Remuneration (as % of PBT) 1.01

xi. The key parameters for any variable component of remuneration availed by the Directors: None

xii. 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: None

xiii. Affirmation that the remuneration is as per the remuneration policy of the Company:

The Company affirms remuneration is as per the remuneration policy of the Company.

xiv. There are no employees falling within the purview of Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, no such details, are required to be given.

PARTICULARS OF CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION

Since the Company is a Financial Services Company, the details required under Section 134 of the Companies Act, 2013 are not applicable.

FOREIGN EXCHANGE EARNINGS AND OUTGO

There were no earnings and outgo in foreign exchange during the year under review.

INSURANCE

The Company''s fixed assets as well as current assets have been adequately insured.

RISK MANAGEMENT

The details in respect of risks and concerns are included in the Management Discussion & Analysis, which forms part of this report.

ACKNOWLEDGMENT

The Board of Directors takes the opportunity to express its sincere appreciation for the support and co-operation from its members, Reserve Bank of India, banks and Statutory and Regulatory Authorities.

The Board also wishes to place on record their sincere appreciation of the contribution made by the executives and employees at all levels for their dedication and commitment to the Company throughout the year.

For and on behalf of the Board of Directors

(I. C. Jain) Chairman

Place: Mumbai Date: 27th May, 2015


Mar 31, 2014

The Members of

KJMC Financial Services Limited

The Directors have pleasure in presenting the 26th Annual Report, together with the audited financial statement of the Company for the financial year ended 31st March, 2014.

FINANCIAL RESULTS

The performance of the Company for the financial year ended 31st March, 2014 is summarized below:

(Rs.in "000") Standalone Consolidated Year Year Year Year Particulars Ended Ended Ended Ended

31 st March, 31st March, 31st March, 31st March, 2014 2013 2014 2013

Total Income 6921 4716 7388 5026

Total Expenses 6250 3892 7000 4635

Profit before Tax 671 824 388 391

Less: Provision for Tax

- Current Tax - 112 10 125

- Deferred Tax (366) (214) (366) (214)

- MAT Credit - (111) (10) (124)

- Prior period taxes - (409) - (409)

Profit / (Loss) After Tax 1037 1446 754 1013

Add : Surplus B/F 17952 18016 16218 16715

Disposable Profits 18989 19462 16972 17728

Appropriations towards :

Special Reserve 207 289 207 289

General Reserve 26 36 26 36

Dividend on 12% Non Cumulative Redeemable Preference Shares - 1020 - 1020

Tax on Preference Dividend - 165 - 165

Balance carried forward 18756 17952 16739 16218

EPS

-Basic 0.31 0.08 0.23 (0.05)

Diluted 0.25 0.08 0.18 (0.05)



PERFORMANCE REVIEW

During the year under review, your Company earned the gross income of Rs. 69.21Lakhs as against Rs. 47.16 Lakhs in the previous year. The total expenditure during the year under review was Rs. 62.50 Lakhs as against Rs. 38.92 Lakhs in the previous year. The Net Profit after tax was f 10.37 Lakhs as against f 14.46 Lakhs in the previous year.

SHARE CAPITAL

During the reporting period, your Company has allotted:-

(i) 3,50,000 (Three Lacs Fifty Thousand) Equity Shares of Rs. 10/- each at a price of Rs. 20/- per share aggregate amounting to Rs. 70,00,000/- (Rupees Seventy Lacs only) to the Promoters of the Company pursuant to approval of members by special resolution passed in previous Annual General Meeting of the Company held on 28th September, 2013, and

(ii) 85000, 0% Compulsory Convertible Preference Shares of Rs.

100/- each (CCPS) at a price of Rs. 200/- per share to one of the Promoters Group Company on Preferential basis in accordance with the SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2009 pursuant to approval of members on special resolution passed through postal ballot on 20th February, 2014. The CCPS are convertible into 850,000 equity shares within 18 months from the date of allotment of CCPS i.e. 28th February, 2014 at an offer price Rs. 20/- per share.

Therefore, the listed capital of your company get increases accordingly on account of said preferential allotments of shares.

DIVIDEND

In view of the inadequate profits, your Directors do not recommend any dividend on Equity Shares of the Company for the year under review.

RBI PRUDENTIAL NORMS

Since the Company does not accept and hold any public deposits, the Non-Banking Financial (Non Deposit Accepting or Holding) Companies Prudential Norms (Reserve Bank) Directions, 2007 are not applicable to the Company as regard to capital adequacy requirement.

DIRECTORS

Mr. S. C. Aythora, Mr. Nitin Kulkarni and Mr. R. R. Kumar are the existing Independent Directors of the Company. It is proposed to appoint Mr. S. C. Aythora, Mr. Nitin Kulkarni and Mr. R. R. Kumar as Independent Directors under Section 149 of the Companies Act, 2013 and Clause 49 of the Listing Agreement to hold office for a terms of 5 (Five) consecutive years.

In respect of proposed appointment of Mr. S. C. Aythora, Mr. Nitin Kulkarni and Mr. R. R. Kumar, the Company has, as required by section 160 of the Companies Act, 2013, received notices in writing regarding their candidature for the office of the independent director at the ensuing annual general meeting. Mr. S. C. Aythora, Mr. Nitin Kulkarni and Mr. R. R. Kumar, has submitted the declaration of independence, as required pursuant to section 149(7) of the Companies Act, 2013 stating that they meet the criteria of independence as provided in sub-section (6) and also consent to act as Director of the Company. Mr. S. C. Aythora, Mr. Nitin Kulkarni and Mr. R. R. Kumar, are not disqualified from being appointed as a director in terms of section 164 of the Companies Act, 2013.

Necessary resolutions are being proposed in the notice of the ensuing annual general meeting for the approval of the members for appointment of Mr. S. C. Aythora, Mr. Nitin Kulkarni and Mr. R. R. Kumar as an independent director of the Company for a term of 5 consecutive years w.e.f. 27th September, 2014 upto 26th September, 2019 pursuant to section 149 of the Companies Act, 2013 and Clause 49 of the Listing Agreement.

The Board of Directors of the Company has appointed Mr. Rajnesh Jain (DIN: 00151988) as Whole-time Director (WTD) of the Company, for a period of 3 (three) years with effect from 11th August, 2014 in accordance with the provisions of Sections 196, 197 and 203 read with Schedule V and all other applicable provisions of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014. Necessary resolution is being proposed in the notice of the ensuing annual general meeting for the approval of the members for his appointment as Whole-time Director (WTD) of the Company.

According to the Companies Act, 2013, at least two–thirds of the total number of directors (excluding independent directors) shall be liable to retire by rotation. For this purpose, considering the composition of the Board of Directors, Mr. I. C. Jain, Director of the Company is liable to retire by rotation at the ensuing Annual General Meeting and being eligible, offer himself for reappointment. Necessary resolution for this purpose is being proposed in the notice of the ensuing annual general meeting for the approval of the members.

CHIEF FINANCIAL OFFICER (CFO)

Mr. Kartik Konar has appointed as Chief Financial Officer (CFO) of the Company with effect from 11th August, 2014 within a meaning of Section 203 read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014

PUBLIC DEPOSITS

The Company being a Non-Deposit Accepting Non-Banking Finance Company has not accepted any deposits from the public during the year under review and shall not accept any deposits from the public without obtaining prior approval of the Reserve Bank of India (RBI).

AUDITORS

M/s. K. S. Aiyar & Co., Mumbai, the Statutory Auditors of your Company retire at the ensuing Annual General Meeting and offer themselves for re- appointment. In accordance with Section 139 of the Companies Act, 2013 (''the Act'') read with the Rules made thereunder, M/s. K. S. Aiyar & Co., Mumbai, may be appointed as the Statutory Auditors of the Company for a period of five years. They have also confirmed that their appointment, if made, shall be in accordance with the provisions of Section 139(1) of the Act read with Companies (Audit and Auditors) Rules, 2014 and that they satisfy the criteria given under Section 141 of the Act.

Members are requested to consider their appointment for a period of five years. The Audit committee and Board of Directors have recommended the appointment of M/s. K. S. Aiyar & Co., Chartered Accountants as the Statutory Auditors of your Company.

SUBSIDIARY COMPANIES

KJMC Asset Management Company Limited and KJMC Investment Trust Company Limited are wholly owned subsidiaries of the Company.

In accordance with the general circular No. 2/2011 issued by the Ministry of Corporate Affairs, Government of India, the balance-sheet, Profit and Loss Account and other documents of the Subsidiary Companies are not attached to the Balance Sheet of the Company. However the financial information of the Subsidiary companies are disclosed in the Annual Report under the Consolidated Financial Statement in compliance with the said circular. The Company will make available the Annual Accounts of the Subsidiary companies and the related details information to any member of the company and that of the subsidiary companies who may be interested in obtaining the same. The annual accounts of the Company shall also be kept open for inspection at the Registered Office of the Company and that of respective subsidiary companies on any working day, except Saturdays, between 11.00 a.m. and 3.00 p.m. However, as required under the aforesaid circular and pursuant to Clause 32 of the Listing Agreement, the Consolidated Financial Statements of the Company include the financial results of the subsidiary companies.

DIRECTORS'' RESPONSIBILITY STATEMENT UNDER SECTION 217(2AA) OF THE COMPANIES ACT, 1956

Pursuant to Section 217(2AA) of the Companies Act, 1956, the Directors confirm that:

1. In the preparation of annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any;

2. The Directors have 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 31st March, 2013 and of the profit of the Company for that period;

3. The Directors have taken proper and sufficient care for 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;

4. The Directors have prepared the annual accounts on a going concern basis.

The Board of Directors has taken sufficient care to maintain adequate accounting records in accordance with the provisions of the Companies Act, 1956 (to the extent applicable) and the Companies Act, 2013 (to the extent notified), to safeguard the assets of the Company and to prevent and detect fraud and other irregularities.

CORPORATE GOVERNANCE

The Company has complied with the conditions of Corporate Governance as stipulated under Clause 49 of the Listing Agreement with the Stock Exchange. A separate section on Corporate Governance, along with a certificate from the Auditors for the compliance is annexed and forms part of this report.

MANAGEMENT DISCUSSION AND ANALYSIS

A report on the Management Discussion and Analysis for the financial year under review is annexed and forms part of the report.

LISTING OF SHARES

Equity Shares of the Company are listed with BSE Limited. The Annual listing fee for the financial year 2014-15 has been paid to the Bombay Stock Exchange Limited (BSE). The Company has complied with the delisting formalities with the Bhubaneshwar Stock Exchange Association Limited and The Calcutta Stock Exchange Association Limited. Delisting approval from these exchanges are awaited.

FUTURE BUSINESS PLAN

The Board of Directors of your Company are looking continuously to increase and grow the business of the Company and also considering the new business proposal to start a Housing finance business through its subsidiary company as a special purpose vehicle (SPV).

PARTICULARS OF EMPLOYEES

Since there are no employees falling within the purview of the provisions of Section 217(2A) of the Companies Act, 1956, read with the Companies (Particulars of Employee) Rules, 1975 as amended, no such details are required to be given.

PARTICULARS OF CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION

Since the Company is a Financial Services Company, the details required under Section 217(1)(e) of the Companies Act, 1956 are not applicable.

FOREIGN EXCHANGE EARNINGS AND OUTGO

There were no earnings and outgo in foreign exchange during the year under review.

INSURANCE

The Company''s fixed assets as well as current assets have been adequately insured.

ACKNOWLEDGMENT

The Board of Directors takes the opportunity to express its sincere appreciation for the support and co–operation from its members, Reserve Bank of India, banks, and Statutory and Regulatory Authorities.

The Board also wishes to place on record their sincere appreciation of the contribution made by the executives and employees for their dedication and commitment to the Company throughout the year.

For and on behalf of the Board of Directors

I. C. JAIN Place: Mumbai CHAIRMAN Date: 11th August, 2014


Mar 31, 2012

To, The Members of KJMC Financial Services Limited

The Directors herewith present the 24th Annual Report, together with the audited statement of accounts of the Company for the year ended 31st March, 2012.

FINANCIAL RESULTS

The performance of the Company for the financial year ended 31st March, 2012 is summarized below:

(in lakhs)

Particulars Year ended Year ended 31st March, 2012 31st March, 2011

Total Income 64 78 106.81

Total Expenditure 30 69 52.37

Profit before Depreciation and Tax 34.09 64.44

Less : Depreciation 4.53 5.57

Profit before Tax 29.66 48.87 Less. Provision for Tax

- Current Tax 5 50 8.50

- Deferred Tax 0.79 (127.09)

- MAT Credit (5.50) (6.86)

- Prior year taxes 1 76 22.46

Profit / (Loss) After Tax 27.01 161.86 Add : Prior period Income / (Expenses) - -

Add : Surplus as per last account 173 10 78.66

Disposable Profits 200.11 230 51 Appropriations towards :

Special Reserve 5 40 30.37

General Reserve 2.70 15 19 Dividend on 12% Non Cumulative

Redeemable Preference Shares 10.20 10.20

Tax on Preference Dividend 1 65 1.65

Surplus Balance carried to Balance Sheet 180 16 173.10

PERFORMANCE REVIEW

During the year under review, your Company earned the gross income of Rs. 64.78 Lakhs as against Rs. 106.81 Lakhs in the previous year. The total expenditure during the year under review was Rs. 30.69 Lakhs as against Rs. 52.37 Lakhs in the previous year. The Net Profit after tax was Rs. 27.01 Lakhs as against Rs. 151.85 Lakhs in the previous year .

DIVIDEND

In view of the inadequate profits, your Directors do not recommend any dividend on Equity Shares for the year under review. Your Directors recommend Dividend ofRs. 12/- per share on 12% Non Cumulative Redeemable Preference Shares of Rs. 100/- each.

DIRECTORS

In accordance with the provisions of the Companies Act, 1956 and the Articles of Association of the Company, Shri Rajnesh Jain and Shri Girish Jain, Directors of the Company are liable to retire by rotation at the ensuing Annual General Meeting and being eligible, offer themselves for reappointment.

AUDITORS

M/s. K. S. Aiyar & Co., Chartered Accountants, Mumbai, Statutory Auditors of the Company will retire at the ensuing Annual General Meeting and are eligible for reappointment. The Company has received letter from the Auditors to the effect that their re-appointment, if made, shall be in accordance with section 224(1 B) of the Companies Act, 1956 and that they are not disqualified for such re-appointment within the meaning of section 226 of the Companies Act, 1956.

FIXED DEPOSITS

The Company has neither invited, nor accepted, nor renewed any fixed deposit from the public during the year and there was no outstanding deposit payable during the financial year ended 31st March, 2012.

RBI PRUDENTIAL NORMS

Since the Company does not accept and hold any public deposits, Non-Banking Financial Companies Prudential Norms (Reserve Bank of India) Directions, 1998 are not applicable to the Company in regard to capital adequacy.

RBI GUIDELINES

The Company has made necessary changes in its Fair Practice Code in line with Circular dated March 26, 2012 of Reserve Bank of India. The Company continues to comply with all the requirements prescribed by the Reserve Bank of India, from time to time as applicable to it.

SUBSIDIARY COMPANIES

KJMC Asset Management Company Limited and KJMC Investment Trust Company Limited are subsidiaries of the Company.

In accordance with the general circular no. 2/2011 issued by the Ministry of Corporate Affairs, Government of India, the Balance Sheet, Profit and Loss Account and other documents of the subsidiary companies are not being attached with the Balance Sheet of the Company. However the financial information of the subsidiary companies is disclosed in the Annual Report in compliance with the said circular. The Company will make available the Annual Accounts of the subsidiary companies and the related detailed information to any member of the Company who may be interested in obtaining the same. The annual accounts of the subsidiary companies will also be kept open for inspection at the Registered Office of the Company and that of the respective subsidiary companies on any working day, except Saturdays, between 11 00 a.m. and 3.00 p.m. However, as required under the aforesaid circular and pursuant to Clause 32 of the Listing Agreement, the Consolidated Financial Statements presented by the Company include the financial results of its subsidiary companies.

CONSOLIDATED FINANCIAL STATEMENTS

Pursuant to Clause 32 of the Listing Agreement entered into with the Stock Exchange, your Directors have pleasure in attaching the Consolidated Financial Statements for the financial year ended 31st March, 2012, prepared in accordance with the Accounting Standards 21 (AS 21) prescribed by the Institute of Chartered Accountants of India, in this regard.

DIRECTORS' RESPONSIBILITY STATEMENT UNDER SECTION 217(2AA) OF THE COMPANIES ACT, 1956

Pursuant to Section 217(2AA) of the Companies Act, 1956, the Directors confirm that:

1. In the preparation of annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures;

2. The Directors have 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 31st March, 2012 and of the profit of the Company for that period;

3. The Directors have taken proper and sufficient care for 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;

4. The Directors have prepared the annual accounts on a going concern basis.

CORPORATE GOVERNANCE

The Company is committed to maintain the highest standards of

Corporate Governance and adhere to the Corporate Governance requirements set out by SEBI. The Company has also implemented several best Corporate Governance practices as prevalent globally.

The Report on Corporate Governance as stipulated under Clause 49 of the Listing Agreement forms part of the Annual Report.

The requisite Certificate from the Auditors of the Company confirming compliance with the conditions of Corporate Governance as stipulated under the aforesaid Clause 49, is attached to this Report. MANAGEMENT DISCUSSION AND ANALYSIS A report on the Management Discussion and Analysis for the financial year under review is annexed and forms part of the report.

LISTING OF SHARES

Equity Shares of the Company are listed on BSE Limited. Annual listing fees upto the year 2012-13 has been paid to the BSE Limited. The Company complied with the delisting formalities in respect of the other stock exchanges and consequently the Equity Shares of the Company were delisted from Jaipur Stock Exchange Limited, The Stock Exchange, Ahmadabad and Delhi Stock Exchange Association Limited. The delisting approval from Bhubaneswar and Calcutta Stock exchanges is awaited.

PARTICULARS OF EMPLOYEES

Since there are no employees falling within the purview of the provisions of Section 217(2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975 as amended, no such details are required to be given.

PARTICULARS OF CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION

Since the Company is a Financial Services Company, the details required under Section 217(1)(e) of the Companies Act, 1956 are not applicable.

FOREIGN EXCHANGE EARNINGS AND OUTGO

There were no earnings in foreign exchange nor was there any outflow during the year under review

INSURANCE

The Company's fixed assets as well as current assets have been adequately insured.

ACKNOWLEDGMENTS

The Directors wish to place on record their appreciation of the contribution made by the executives and employees at all levels for their dedication and commitment to the Company throughout the year.

Your Directors also appreciate with gratitude the continuous support of the Bankers, Clients and the Company's Shareholders.

For and on behalf of the Board of Directors

Place : Mumbai (I. C. Jain)

Date : 2nd August, 2012 Chairman


Mar 31, 2010

The Directors herewith present the 22nd Annual Report, together with the audited statement of accounts of the Company for the year ended 31st March, 2010.

FINANCIAL RESULTS

The performance of the Company for the financial year ended 31st March, 2010 is summarised below:

(Rs. in lakhs)

Year ended Year ended

31st March, 2010 31st March, 2009

Total Income 75.15 94.81

Total Expenditure 42.43 70.00

Profit before Depreciation and Tax 32.72 24.81

Less : Depreciation 6.37 7.29

Provision for Ta x

- (Current & Deferred) 4.88 (8.69)

Profit / (Loss) After Tax 21.47 26.21

Add : Prior period item (net) (0.04) (0.03)

Add : Surplus as per last account 75.56 69.18

Disposable Profits 96.99 95.36 Appropriations towards :

Special Reserve 4.29 5.24

General Reserve 2.15 2.62

Dividend on 12% Redeemable Preference Shares 10.20 10.20

Tax on Preference Dividend 1.69 1.73

Surplus Balance carried to Balance Sheet 78.66 75.57

PERFORMANCE REVIEW

During the year under review, your Company earned the gross income of Rs. 75.15 Lakhs as against Rs. 94.81 Lakhs in the previous year. The total expenditure during the year under review was Rs. 42.43 Lakhs as against Rs. 70.00 Lakhs in the previous year. The Net Profit after tax was Rs. 21.47 Lakhs as against Rs. 26.21 Lakhs in the previous year. Considering expectations of Countrys gradual improvement in effective demand and GDP growth rate coupled with upward movements in capital market, your directors expect better performance of the Company in the coming years.

DIVIDEND

In view of the inadequate profits, your Directors do not recommend any dividend on Equity Shares for the year under review. Your Directors recommend Dividend of Rs. 12/- per share on 12% Non Cumulative Redeemable Preference Shares of Rs.100/- each.

RBI GUIDELINES

The Company has complied with all the applicable regulations of the Reserve Bank of India as on 31st March, 2010.

RBI PRUDENTIAL NORMS

Since the Company does not accept and hold any public deposits, Non-Banking Financial Companies Prudential Norms (Reserve Bank of India) Directions, 1998 are not applicable to the Company in regard to capital adequacy.

DIRECTORS

In accordance with the provisions of the Companies Act, 1956 and the Articles of Association of the Company, Mr. R. R. Kumar and Mr. Nitin Kulkarni, the Directors of the Company are liable to retire by rotation at the ensuing Annual General Meeting and being eligible, offer themselves for re-appointment.

AUDITORS

M/s. Batliboi & Purohit, Chartered Accountants, the Auditors of the Company holds office until the conclusion of the ensuing Annual General Meeting. Your Company has received certificate from the Auditors u/s. 224(1B) of the Companies Act, 1956 to the effect that their reappointment, if made, will be within the limit prescribed. Members are requested to appoint Auditors and authorize the Board to fix their remuneration.

FIXED DEPOSITS

The Company has neither invited, nor accepted, nor renewed any fixed deposit from the public during the year and there was no outstanding deposit payable during the financial year ended 31st March, 2010.

SUBSIDIARY COMPANIES

The accounts of the subsidiary Companies viz. M/s. KJMC Asset Management Company Limited and KJMC Investment Trust Company Limited for the financial year ended 31st March, 2010 are attached to the accounts of the Company in terms of section 212 of the Companies Act, 1956.

CONSOLIDATED FINANCIAL STATEMENTS

Pursuant to Clause 32 of the Listing Agreement entered into with the Stock Exchange, your Directors have pleasure in attaching the Consolidated Financial Statements for the financial year ended 31st March, 2010, prepared in accordance with the Accounting Standards 21 (AS 21) prescribed by the Institute of Chartered Accountants of India, in this regard.

DIRECTORS RESPONSIBILITY STATEMENT UNDER SECTION 217(2AA) OF THE COMPANIES ACT, 1956

Pursuant to Section 217(2AA) of the Companies Act, 1956, the Directors confirm that:

1. In the preparation of annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures;

2. The Directors have 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 31st March, 2010 and of the profit of the Company for that period;

3. The Directors have taken proper and sufficient care for 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;

4. The Directors have prepared the annual accounts on a going concern basis.

CORPORATE GOVERNANCE

The Company has complied with the conditions of Corporate Governance as stipulated under Clause 49 of the Listing Agreement with the Stock Exchange. A separate section on Corporate Governance, along with a certificate from the Auditors for the compliance is annexed and forms part of this report.

MANAGEMENT DISCUSSION AND ANALYSIS

A report on the Management Discussion and Analysis for the financial year under review is annexed and forms part of the report.

LISTING OF SHARES

Equity Shares of the Company are listed on Bombay Stock Exchange Limited (BSE). Annual listing fees upto the year 2010-11 has been paid to the Bombay Stock Exchange Limited (BSE). The Company complied with the delisting formalities in respect of the other stock exchanges and consequently the Equity Shares of the Company were delisted from Jaipur Stock Exchange Limited, The Stock Exchange, Ahmedabad and Delhi Stock Exchange Association Limited. The delisting approval from Bhubaneswar and Calcutta Stock exchanges is awaited.

PREFERENTIAL ALLOTMENT OF CONVERTIBLE WARRANTS

During the year under review, the Company allotted 76,300 Equity Shares of Rs. 10/- each to ‘I.C. Jain HUF’, the person belonging to Promoter Group, consequent upon conversion of 2nd tranche of convertible warrants at a price of Rs. 23.19 (including premium of Rs. 13.19 per share) being the price determined in accordance with SEBI (Disclosure & Investor Protection) Guidelines, 2000 on Preferential Issues and Listing Agreement. The proceeds of the Equity Shares issued by Company are being used for the purpose for which they were raised.

PARTICULARS OF EMPLOYEES

Since there are no employees falling within the purview of the provisions of Section 217(2A) of the Companies Act, 1956, no such details are required to be given.

PARTICULARS OF CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION

Since the Company is a Financial Services Company, the details required under Section 217(1)(e) of the Companies Act, 1956 are not applicable.

FOREIGN EXCHANGE EARNINGS AND OUTGO

There was no earnings in foreign exchange nor was there any outflow during the year under review.

INSURANCE

The Company’s fixed assets as well as current assets have been adequately insured.

ACKNOWLEDGMENTS

The Directors wish to place on record their appreciation of the contribution made by the executives and employees at all levels for their dedication and commitment to the Company throughout the year.

Your Directors also appreciate with gratitude the continuous support of the Bankers, Clients and the Company’s Shareholders.

FOR AND ON BEHALF OF BOARD OF DIRECTORS

Place:Mumbai (I.C.JAIN)

Date :27th May, 2010 CHAIRMAN

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