Notes to Accounts of KJMC Financial Services Ltd.

Mar 31, 2015

1.Company Overview:

KJMC Financial Services Limited is a flagship company of the KJMC Group domiciled in India and incorporated under the provisions of the Companies Act, 1956. The Company is engaged in non banking financial operations without accepting public deposits and is regulated by the provisions of Reserve Bank of India Act, 1934.

2. Terms and Rights attached to Equity Shares:

The Company has only one class of equity shares having par value of Rs. 10 per share. Each shareholder of equity share is entitled to one vote per share.

In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the Company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.

3. Terms and Rights attached to Preference Shares:

The Company has issued only one class of Preference Shares, namely 0% Compulsorily Convertible Preference Shares having par value of Rs. 100 each per share. No voting rights are attached to Preference Shares. On conversion of these Preference Shares into Equity Shares, the shareholder shall be entitled to one vote per share.One Preference Share is convertible into Ten Equity Shares.

42,500 0% Compulsorily Convertible Preference Shares issued in the Financial Year 2013-14 are convertible into Equity Shares within eighteen months from the date of allotment i.e. 28th February, 2014.

45,000 0% Compulsorily Convertible Preference Shares issued in the Financial Year 2014-15 are convertible into Equity Shares within eighteen months from the date of allotment i.e. 25th March, 2015.

4. Contingent Liabilities:

Claims against the Company not acknowledged as debt

There is income tax demand of Rs. 400 (in ''000'') in respect of income tax for assessment year 2012-13 against which appeal has been filed with CIT (A). The management expects matter to be decided in favor of the Company in the appellate process. The management accordingly believes that the ultimate outcome of these proceedings will not have any material adverse effect on the Company''s financial position and results of operations.

5. Estimated amount of contracts remaining to be executed on Capital Account and not provided for (net of advances) Rs. NIL (Previous Year Rs. NIL)

6. Earnings in Foreign Currency - Rs. Nil ( Rs. Nil).

Expenditure in Foreign Currency - Rs. Nil Rs. Nil).

7. Related party disclosures under Accounting Standard 18:

List of related parties

I) Parties where control exists Wholly owned subsidiary Companies : KJMC Asset Management Company Limited

KJMC Investment Trust Company Limited

II) Other parties (a) Key Management Personnel

Rajnesh Jain - Whole Time Director (w.e.f 11th August, 2014)

Kartik Konar - Chief Financial Officer (w.e.f. 11th August, 2014)

Sankari Muthuraj - Company Secretary (w.e.f. 25th March, 2015)

Sanjeev Singh Sengar- Company Secretary (resigned on 15th November ,2014)

(b) Relatives of Key Management Personnel

Inderchand Jain - Father

Chanddevi Jain - Mother

Girish Jain - Brother

Shraddha Rajnesh Jain - Wife

(c) Enterprises over which key management personnel and relatives are able to exercise significant influence .

KJMC Corporate Advisors (India) Limited KJMC Credit Marketing Limited

KJMC Shares and Securities Limited KJMC Capital Market Services Limited

KJMC Commodities Market India Limited Puja Impex Private Limited

Prathamesh Enterprises Private Limited

(d) Associates

KJMC Platinum Builders Private Limited KJMC Realty Private Limited

8. The management has identified the Company''s operations with a single business segment of non banking financial operations in India. All the assets of the Company are located in India.

9. The Company has charged depreciation based on the remaining useful life of the assets as per the requirement of Note 7 (b) of Schedule II of the Companies Act, 2013. As a result, the depreciation charge for the current year is higher by Rs. 10.38 Lacs as compared to the depreciation required to be charged under Companies Act, 1956. The carrying value of assets amounting to Rs. 2.08 Lacs ( Net of Deferred Tax of Rs. 0.93 Lacs ) of which the remaining useful life was NIL as on 1st April, 2014 is adjusted to the opening balance of retained earnings.

10. Previous year figures have been regrouped or reclassified wherever necessary in order to make them comparable and shown in brackets.

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Mar 31, 2014

Company Overview:

KJMC Financial Services Limited is a flagship company of the KJMC Group domiciled in India and incorporated under the provisions of the Companies Act, 1956. The Company is engaged in non banking financial operations without accepting public deposits and is regulated by the provisions of Reserve Bank of India Act, 1934.

2. Contingent Liabilities not provided for: NIL

3. Provision for Income Tax has been made in accordance with section 115JB of Income Tax Act, 1961. However, Management expects that it would be in a position to pay normal tax within the period specified under the Income Tax Act 1961 and hence MAT Credit has been recognized.

4. Earnings in Foreign Currency - Rs. Nil ( Rs. Nil). Expenditure in Foreign Currency – Rs. Nil (Rs. Nil).

5. Managerial remuneration included in the Statement of Profit & Loss Nil ( Rs. Nil)

6. Related party disclosures under Accounting Standard 18:

List of related parties 1) Parties where control exists

a) Wholly owned subsidiary Companies

KJMC Asset Management Company Limited KJMC Investment Trust Company Limited

2) Other parties

a) Key Management Personnel

Girish Jain

b) Relatives of Key Management Personnel.

Inderchand Jain - Father

Chanddevi Jain - Mother

Rajnesh Jain - Brother

Aditi Jain - Wife

c) Enterprises over which key management personnel/relatives are able to exercise significant influence:

KJMC Corporate Advisors (India) Limited KJMC Shares and Securities Limited KJMC Capital Market Services Limited KJMC Credit Marketing Limited KJMC Commodities Market India Limited KJMC Silver Properties Private Limited Puja Impex Private Limited Prathamesh Enterprises Private Limited

d) Associates

KJMC Platinum Builders Private Limited (w.e.f 13.03.2013) KJMC Realty Private Limited (w.e.f 22.03.2013)

7. Equitable mortgage is created on Office Premises of M/s.Puja Impex Pvt. Ltd., a Company over which the Key Management Personnel /relatives have significant influence, in favor of Union Bank of India on behalf of the company to avail overdraft facility.(As on 31-03-2014 Rs. 29,962 (''000))

8. The management has identified the Company''s operations with a single business segment of non banking financial operations in India. All the assets of the Company are located in India.

9. Previous year figures have been regrouped or reclassified wherever necessary in order to make them comparable and shown in brackets. As per our report of even date attached

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Mar 31, 2013

Company Overview:

KJMC Financial Services Limited is a flagship company of the KJMC Group domiciled in India and incorporated under the provisions of the Companies Act, 1956. The Company is engaged in non banking financial operations without accepting public deposits and is regulated by the provisions of Reserve Bank of India Act, 1934. Note No. : 1

1. Contingent Liabilities not provided for: NIL

2. Disclosure required by Micro, Small and Medium Enterprises (Development) Act, 2006.

As per requirement of Section 22 of Micro, Small & Medium Enterprises Development Act, 2006 following information is disclosed:

The above information regarding Micro, Small and Medium Enterprises has been determined to the extent such parties have been identified on the basis of information available with the Company. This has been relied upon by the auditors.

3. Provision for Income Tax has been made in accordance with section 115JB of Income Tax Act, 1961. However, Management expects that it would be in a position to pay normal tax within the period specified under the Income Tax Act 1961 and hence MAT Credit has been recognized.

4. Earnings in Foreign Currency - 7 Nil (7 Nil).

Expenditure in Foreign Currency - 7 Nil (7 Nil).

5. Managerial remuneration included in the Statement of Profit & Loss -7 Nil (7 Nil)

6. Related party disclosures under Accounting Standard 18 List of related parties

1) Parties where control exists

a) Wholly owned subsidiary Companies

KJMC Asset Management Company Limited KJMC Investment Trust Company Limited

2) Other parties

a) Key Management Personnel

Girish Jain

b) Relatives of Key Management Personnel.

Inderchand Jain - Father

Chanddevi Jain - Mother

Rajnesh Jain - Brother

Aditi Jain - Wife

c) Enterprises over which key management personnel/relatives are able to exercise significant influence:

KJMC Corporate Advisors (India) Limited KJMC Shares and Securities Limited KJMC Capital Market Services Limited KJMC Credit Marketing Limited KJMC Commodities Market India Limited Puja Impex Private Limited Prathamesh Enterprises Private Limited KJMC Silver Properties Private Limited

d) Associates

KJMC Platinum Builders Private Limited (w.e.f 13.03.2013)

KJMC Realty Private Limited (w.e.f 22.03.2013)

7. The management has identified the Company''s operations with a single business segment of non banking financial operations in India. All the assets of the Company are located in India.

8. Previous year figures have been regrouped or reclassified wherever necessary in order to make them comparable and shown in brackets.

The provisions of Section 212 (5) of the Companies Act 1956 are not applicable as the financial year of the subsidiary company coincides with that of the Company

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Mar 31, 2012

Note:- The Cash Flow Statement has been prepared under the "Indirect Method "as set out in Accounting Standard - 3 on Cash Flow Statements specified in the Companies (Accounting Standards) Rules, 2006.

1. Contingent Liabilities not provided for in respect of:

Corporate Guarantees given to:

(Rs. in '000)

i) HDFC Bank Rs. Nil (Rs.30,000 )

ii) Corporation Bank Rs. Nil (Rs.20,000 )

In respect of KJMC Capital Market Services Limited.

The above information regarding Micro, Small and Medium Enterprises has been determined to the extent such parties have been identified on the basis of information available with the Company. This has been relied upon by the auditors.

2 Provision for Income Tax has been made in accordance with section 115JB of Income Tax Act, 1961. However, Management expects that it would be in a position to pay normal tax within the period specified under the Income Tax Act, 1961 and hence MAT Credit has been recognized.

3 Earnings in Foreign Currency - Rs.Nil ( Rs.Nil).

Expenditure in Foreign Currency - Rs.Nil Nil).

4. Managerial remuneration included in the Profit & Loss Account - Rs.Nil ( Rs. Nil)

5 Related party disclosures under Accounting Standard 18 List of related parties 1) Parties where control exists

a) Wholly owned subsidiary Companies

KJMC Asset Management Company Limited KJMC Investment Trust Company Limited

c) Enterprises over which key management personnel/relatives are able to exercise significant influence :

KJMC Global Market (India) Limited KJMC Shares and Securities Limited KJMC Capital Market Services Limited KJMC Credit Marketing Limited KJMC Commodities Market India Limited KJMC Technologies & Systems Limited Puja Impex Private Limited Prathamesh Enterprises Private Limited KJMC Platinum Builders Private Limited KJMC Silver Properties Private Limited

KJMC Capital Market Services Limited and KJMC Commodities Market India Limited are classified as "Associates" for the year 2010-2011 in respect of related party transactions

6. Schedule to the Balance Sheet of a non-deposit taking non-banking financial company [as required in terms of paragraph 13 of Non- Banking Financial (Non-Deposit Accepting or Holding) Companies Prudential Norms (Reserve Bank) Directions, 2007]

7. The management has identified the Company's operations with a single business segment of non banking financial operations in India. All the assets of the Company are located in India.

8. Previous year figures have been regrouped or reclassified wherever necessary in order to make them comparable and shown in brackets.

The provisions of Section 212(5) of the Companies Act, 1956 are not applicable as the financial year of the subsidiary company coincides with that of the Company.

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Mar 31, 2010

1. Contingent Liabilities not provided for in respect of: Corporate Guarantees given to:

i) HDFC Bank for Rs. 300 Lacs

ii) Corporation Bank for Rs.200 Lacs

in respect of KJMC Capital Market Services Limited.

2. The Company has not received any information from its vendor regarding their status under the Micro, Small and Medium Enterprises Development Act, 2006 and hence disclosures, if any, required under the said Act have not been made.

3. Auditors Remuneration include payments in respect of: Rs.

Particulars 31st March, 2010 31st March, 2009

a) Audit Fees 35,848 35,848

b) Tax Audit Fees 11,030 11,030



4. Earnings in Foreign Currency - Rs. Nil (Rs. Nil). Expenditure in Foreign Currency – Rs. Nil (Rs. Nil).

5 Managerial remuneration included in the Profit & Loss Account Rs. NIL (Rs. NIL)

6) Other parties with whom the company has entered into transactions during the year

a) Associates

KJMC Global Market (India) Limited

KJMC Shares and Securities Limited

KJMC Capital Market Services Limited

KJMC Credit Marketing Limited KJMC

Commodities Market India Limited

b) Key Management Personnel

Mr. Rajnesh Jain Mr. Girish Jain

c) Enterprises over which key management personnel is able to exercise significant influence :

Inderchand Jain (HUF) Puja Private Limited

7. The management has identified the Companys operations with a single business segment of non banking financial operations in India. All the assets of the Company are located in India.

8. Previous year figures have been regrouped or reclassified wherever necessary in order to make them comparable and shown in brackets.