To the Members
We have pleasure in presenting the 19th Annual Report of the KJMC Corporate Advisors(India) Limited (The Company or KCAL) along with the audited financial statements for thefinancial year ended March 31 2017. The consolidated performance of the Company and itssubsidiaries have been referred to wherever required.
The Summarised Financial Results of the Company for the Financial Year ended March 312017:
| ||Standalone ||Consolidated |
|Particulars ||Year Ended March 31 2017 ||Year Ended March 31 2016 ||Year Ended March 31 2017 ||Year Ended March 31 2016 |
|FINANCIAL RESULTS || || || || |
|Revenue from operation ||27305 ||21101 ||62812 ||49450 |
|Other Income ||1109 ||1761 ||4732 ||4835 |
|Total Revenue ||28414 ||22862 ||67544 ||54285 |
|Total Expenses ||27976 ||22455 ||65368 ||53064 |
|Profit before Tax ||438 ||407 ||2176 ||1221 |
|Less: || || || || |
|Provision for Tax || || || || |
|- Current Tax ||18 ||Nil ||192 ||7 |
|- Deferred Tax ||(87) ||4 ||(47) ||(449) |
|- MAT Credit ||(18) ||Nil ||(192) ||(7) |
|- Prior period taxes ||Nil ||Nil ||Nil ||(9) |
|Profit/(loss) after tax ||525 ||403 ||2223 ||1679 |
|Share in Associates' profit/(Loss) ||NA ||NA ||1179 ||1409 |
|Profit/(loss) for the year ||525 ||403 ||3402 ||3088 |
|APPROPRIATIONS || || || || |
|Profit/(loss) for the year ||525 ||403 ||3402 ||3088 |
|Add: Balance brought forward from previous year ||32539 ||32136 ||61414 ||58326 |
|Amount available for appropriations ||33064 ||32539 ||64816 ||61414 |
|Less:Appropriations ||Nil ||Nil ||Nil ||Nil |
|Special Reserve ||Nil ||Nil ||Nil ||Nil |
|General Reserve ||Nil ||Nil ||Nil ||Nil |
|Balance carried to || || || || |
|Balance Sheet ||33064 ||32539 ||64816 ||61414 |
|EPS || || || || |
|-Basic ||0.17 ||0.13 ||1.08 ||0.98 |
|-Diluted ||0.17 ||0.13 ||1.08 ||0.98 |
On Standalone Basis the Company has earned the total revenue of Rs 284.14 Lakhs asagainst Rs 228.62 Lakhs in the previous year. The total expenditure during the year is Rs279.76 Lakhs as against Rs 224.55 Lakhs in the previous year. The net profit for the yearunder review is Rs 5.25 Lakhs as against Rs 4.03 Lakhs in the previous year.
On Consolidated Basis the Company has earned the total revenue of Rs 675.44 Lakhs asagainst Rs 542.85 Lakhs in the previous year. The total expenditure during the year is Rs653.68 Lakhs as against Rs 530.64 Lakhs in the previous year. The net profit for the yearunder review is Rs 34.02 Lakhs as against Rs 30.88 Lakhs in the previous year.
Financial Performance of the subsidiary companies and associate company
The Financial performance of the subsidiary companies and associate company are asunder:
(i) KJMC Capital Market Services Limited: It earned gross income of Rs 349.24 Lakhs asagainst Rs 292.84 Lakhs in the previous year. The total expenditure during the year underreview was Rs 342.85 Lakhs as against Rs 284.88 Lakhs in the previous year. The net profitafter tax was Rs 6.12 Lakhs as against Rs 8.67 Lakhs in the previous year.
(ii) KJMC Credit Marketing Limited: It earned gross income of Rs 8.79 Lakhs as againstRs 11.64 Lakhs in the previous year. The total expenditure during the year under reviewwas Rs 14.70 Lakhs as against Rs 11.54 Lakhs in the previous year. The net loss for theyear under review was Rs 6.03 Lakhs as against the net profit of Rs 3.92 Lakhs in theprevious year.
(iii) KJMC Commodities Market India Limited: It earned gross income of Rs 4.98 Lakhs asagainst Rs 4.53 Lakhs in the previous year. The total expenditure during the year underreview was Rs 3.95 Lakhs as against Rs 3.83 Lakhs in the previous year. The net profitafter tax was Rs 1.03 Lakhs as against Rs 0.70 Lakhs in the previous year.
(iv) KJMC Shares and Securities Limited: It earned gross income of Rs 44.90 Lakhs asagainst Rs 24.41 Lakhs in the previous year. The total expenditure during the year underreview was Rs 29.01 Lakhs as against Rs 25.03 Lakhs in the previous year. The net profitafter tax was Rs 15.89 Lakhs as against net loss of Rs 0.62 Lakhs in the previous year.
(i) KJMC Financial Services Limited: It earned gross income of Rs 282.88 Lakhs asagainst Rs 224.76 Lakhs in the previous year. The total expenditure during the year underreview was Rs 252.49 Lakhs as against Rs 163.09 Lakhs in the previous year. The net profitafter tax was Rs 42.25 Lakhs as against Rs 63.12 Lakhs in the previous year.
In order to conserve the resources for operations your Directors regret theirinability to recommend any dividend for the year under review.
TRANSFER TO RESERVES
The Company proposes to retain the entire amount of Rs 330.64 Lakhs in the profit andloss account.
EXTRACT OF ANNUAL RETURN
The extracts of Annual Return pursuant to section 92(3) of the Companies Act 2013 andrule 12(1) of the Companies (Management and Administration) Rules 2014 in form MGT -9 forthe financial year under review is annexed and forms part of this report.
NUMBER OF MEETINGS a. Board Meeting
The Board of Directors met Four (4) times in the financial year. The details of theBoard Meetings and the attendance of the Directors are provided in the CorporateGovernance Report which forms part of the annual report.
b. Audit Committee
During the year Four (4) Audit Committee Meetings were convened and held. The detailspertaining to composition of Audit Committee and the attendance of the Audit Committeemembers are provided in the Corporate Governance Report which forms part of the annualreport.
c. Nomination and Remuneration Committee
During the year Two (2) Nomination and Remuneration Committee Meetings were convenedand held. The details pertaining to composition of Nomination and Remuneration Committeeand the attendance of the Nomination and Remuneration Committee members are provided inthe Corporate Governance Report which forms part of the annual report.
d. Share Transfer and Stakeholders Relationship Committee
During the year Two (2) Share Transfer and Stakeholders Relationship CommitteeMeetings were convened and held. The details pertaining to composition of Share Transferand Stakeholders Relationship Committee and the attendance of the Share Transfer andStakeholders Relationship Committee members are provided in the Corporate GovernanceReport which forms part of this report.
e. Credit and Investment Committee
During the year Two (2) Credit and Investment Committee Meetings were convened andheld. The details pertaining to composition of Credit and Investment Committee and theattendance of the Credit and Investment Committee members are provided in the CorporateGovernance Report which forms part of this report.
DIRECTORS' RESPONSIBILITY STATEMENT UNDER SECTION 134 OF THE COMPANIES ACT 2013
Pursuant to Section 134 (5) of the Companies Act 2013 the Board of Directors to thebest of their knowledge and ability confirm that:
a. In the preparation of the annual financial statements for the year ended March 312017 the applicable accounting standards have been followed along with proper explanationrelating to material departures if any;
b. they have selected such accounting policies and applied them consistently and madejudgement and estimates that are reasonable and prudent so as to give a true and fair viewof the state of affairs of the Company at the end of the financial year and of the profitof the Company for that period;
c. they have taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of the Companies Act 2013 forsafeguarding the assets of the Company and for preventing and detecting fraud and otherirregularities;
d. they have prepared the annual accounts for the financial year ended March 31 2017on a going concern basis;
e. they have laid down internal financial controls to be followed by the Company andsuch internal financial controls are adequate and operating effectively; f. they havedevised proper systems to ensure compliance with the provisions of all applicable laws andthat such systems were adequate and operating effectively.
POLICY ON DIRECTORS' APPOINTMENT AND REMUNERATION AND OTHER DETAILS
The Company's policy on Directors' appointment and remuneration and other mattersprovided in Section 178(3) of the Companies Act 2013 has been disclosed in the CorporateGovernance report which forms part of the annual report.
AUDITORS' REPORT AND SECRETARIAL AUDITORS' REPORT
The auditors' report and secretarial auditors' report do not contain anyqualifications reservations or adverse remarks. Report of the secretarial auditor isgiven as an annexure to this report.
PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS MADE UNDER SECTION 186 OF THE COMPANIESACT 2013
The particulars of loans guarantees and investments have been disclosed in thefinancial statements which forms part of the annual report.
PARTICULARS OF CONTRACTS OR ARRANGEMENTS MADE WITH RELATED PARTIES
All related party transactions that were entered into during the financial year were onan arm's length basis and were in the ordinary course of business. There are no materiallysignificant related party transactions made by the Company with Promoters Directors KeyManagerial Personnel or other designated persons which may have a potential conflict withthe interest of the Company at large.
All Related Party Transactions are placed on a quarterly basis before the AuditCommittee and also before the Board for approval. Information on transactions with relatedparties 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.
MATERIAL CHANGES AND COMMITMENT IF ANY AFFECTING THE FINANCIAL POSITION OF THE COMPANYOCCURRED BETWEEN THE END OF THE FINANCIAL YEAR TO WHICH THIS FINANCIAL STATEMENTS RELATEAND THE DATE OF THE REPORT
No material changes and commitments affecting the financial position of the Companyoccurred between the end of the financial year to which this financial statement relateand on the date of this report.
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNINGS AND OUTGO
Since the Company is engaged in the business of Merchant Banking Services the detailsrequired under Section 134 of the Companies Act 2013 are not applicable. However Companybelieves in conserving the natural resources and uses CFL and LED Lighting in the officepremises which has low energy consumption.
The total Foreign Exchange Inflow was Rs 8.50 Lakhs and Outflow was Rs 3.08 Lakhsduring the year under review.
The details in respect of risks and concerns are included in the Management Discussion& Analysis which forms part of this report.
The Board of Directors has carried out an annual evaluation of its own performanceBoard Committees and Individual Directors pursuant to the provisions of the Companies Act2013 and corporate governance requirements as prescribed by Securities and Exchange Boardof India ("SEBI") under the SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015.
The performance of the Board was evaluated by the Board after seeking inputs from allthe directors on the basis of the criteria such as the degree of fulfillment of keyresponsibilities Board composition and structure effectiveness of board processesinformation and functioning etc.
The performance of the committees was evaluated by the board after seeking inputs fromthe committee members on the basis of the criteria such as the composition of committeeseffectiveness of committee meetings etc.
The Board and the Nomination and Remuneration Committee reviewed the performance of theindividual directors on the basis of the criteria such as the contribution of theindividual director to the Board and committee meetings. In addition the Chairman wasalso evaluated on the key aspects of his role.
In a separate meeting of Independent Directors performance of non independentdirectors performance of the board as a whole and performance of the Chairman wasevaluated taking into account the views of executive directors and non-executivedirectors. The directors expressed satisfaction with the evaluation process.
DIRECTORS & KEY MANAGERIAL PERSONNEL
According to the Companies Act 2013 at least two thirds of the total number ofDirectors (excluding independent directors) shall be liable to retire by rotation. Forthis purpose considering the present composition of the Board Mr. Rajnesh Jain Directorof the Company is liable to retire by rotation at this Annual General Meeting and beingeligible offer himself for reappointment.
Pursuant to the provisions of Section 149 of the Act Mr. Nitin Kulkarni and Mr.Sureshchandra Aythora were appointed as independent directors at the annual generalmeeting of the Company held on September 27 2014. They have submitted a declaration thateach of them meet the criteria of independence as provided in Section 149(6) of the Actand there has been no change in the circumstances which may affect their status as anindependent director during the year.
The Company has neither invited nor accepted any fixed deposit from the public duringthe year and there was no outstanding deposit due and payable during the financial yearended on March 31 2017.
SUBSIDIARIES AND ASSOCIATE COMPANIES
During the reporting period the Company has Four (4) wholly owned subsidiaries viz.(1) KJMC Capital Market Services Limited (2) KJMC Credit Marketing Limited (3) KJMCShares & Securities Limited (4) KJMC Commodities Market India Limited within themeaning of Section 2(87) of the Companies Act 2013 ("Act") and One (1)Associate Company namely KJMC Financial Services Limited within the meaning of Section2(6) of the Act and AS-23. There has been no change in the number of subsidiaries andAssociate Company or in the nature of business during the year under review.
Pursuant to provisions of Section 129(3) of the Companies Act 2013 read with rule 5 ofthe Companies (Accounts) Rules 2014 a statement containing salient features of thefinancial statements of the Company's subsidiaries and an Associate Company in Form AOC-1is attached & forms part of this Annual report.
In accordance with third proviso of Section 136(1) of the Companies Act 2013 theAnnual Report of the Company containing therein its standalone and the consolidatedfinancial statements has been placed on the website of the Company www.kjmc.com. Furtheras per fourth proviso of the said section audited annual accounts of each of thesubsidiary 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 thesubsidiary companies may write to the Company Secretary at the Company's registeredoffice.
In the matter of professional services rendered to Jammu and Kashmir State PowerDevelopment Corporation (Respondent) for syndicating a loan facility from consortium ofBanks and Financial Institutions raised a dispute before the Arbitral Tribunal and made aclaim for payment of its outstanding fees by Respondent of Rs 71000000/- on account ofits fees for the assignment plus interest and costs.
The Arbitral Tribunal had given following award in favour of Company.
A) Due fees and pre award interest
|(a) Principal sum (after deducting The advance of Rs 1 Crore already received) ||Rs 20250000/- |
|(b) Pendente-lite interest: Simple interest @ 12% Per annum for the period || |
|From 01.02.2005 upto 30.06.2012. (7 years 5 months ) ||Rs 18022500/- |
|(c) Total ( a + b ) ||Rs 38272500/- |
B) Costs Rs 6265279/-
The total sum of money to be paid by the Respondent inclusive of costs as above shallcarry simple interest at the rate of 12% per annum from the date of the award to the dateof realization. Respondent had filed appeal and challenged the Arbitral Tribunal awarddated July 03 2012 by filing of petition before the Hon'ble Delhi High Court undersection 34 of the Arbitration and Conciliation Act 1999. The Hon'ble Delhi High Court haspassed the judgment on May 09 2016 and dismissed the appeal filed by respondent againstthe Arbitral Tribunal award dated July 03 2012. Respondent had filed Petition underSection 37 of the Arbitration & Conciliation Act 1996 before the Hon'ble DivisionBench of Delhi High Court challenging the decision given by the Hon'ble Single Bench ofDelhi High Court. The Hon'ble Division Bench has dismissed the Petition filed byrespondent under Section 37 of the Arbitration & Conciliation Act 1996 due to delayin filing the Petition by 86 days.
The Respondent has filed Special Leave Petition (SLP) before the Hon'ble Supreme Courtto set aside the said order with the direction to the Hon'ble Division Bench of Delhi Highcourt to hear the matter on merit. Your Company had filed an application under section 36of Arbitration and Conciliation Act 1999 for execution of Arbitral Award before theHon'ble Delhi High Court and the said application was admitted by the Hon'ble Delhi HighCourt and respondent was directed to deposit Rs. 65915913/- in court and also givenliberty to the Company to withdraw the said amount by depositing Bank Guarantee ofequivalent amount. Hence the Company has given the bank guarantee and has withdrawn thesaid amount from the Court.
ADEQUACY OF INTERNAL CONTROL
The details in respect of internal financial control and their adequacy are included inthe Management Discussion & Analysis which forms part of this report.
PARTICULARS OF EMPLOYEES
The information required under Section 197 of the Companies Act 2013 read with rule5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014is given below.
(i) the ratio of the remuneration of each director to the median remuneration of theemployees of the company for the financial year;
|Non-executive directors ||Ratio to median remuneration |
|Mr. Inderchand Jain ||0.02 |
|Mr. S.C. Aythora ||0.02 |
|Mr. Nitin Kulkarni ||0.02 |
|Mrs. Shraddha Jain ||0.01 |
|Mr. Rajnesh Jain ||0.01 |
|Executive Directors || |
|Mr. Girish Jain ||2.82 |
The median remuneration is calculated based on the salary paid during the financialyear to employees on payroll as on March 31 2017.
(ii) The percentage increase in remuneration of each Director Chief Financial OfficerCompany Secretary if any in the financial year;
|Name ||Designation ||% increase in remuneration in the financial year i.e. 2016-17 |
|Mr. Inderchand Jain ||Non Executive Director ||- |
|Mr. S.C. Aythora ||Independent Director ||- |
|Mr. Nitin Kulkarni ||Independent Director ||- |
|Mr. Rajnesh Jain ||Non Executive Director ||- |
|Mr. Girish Jain ||Whole Time Director ||65% |
|Mrs. Shraddha Jain ||Non Executive Director ||- |
|Mr. Hemant Soni ||Company Secretary ||10% |
|Mr. Vinit Kedia ||Chief Financial Officer ||10% |
(iii) The percentage increase in the median remuneration of employees in thefinancial year: 76% (iv) The number of permanent employees on the rolls of Companyas on March 31 2017: 6 (Six) (v) Average percentile increase already made in thesalaries of employees other than the managerial personnel in the last financial year andits comparison with the percentile increase in the managerial remuneration andjustification thereof and point out if there are any exceptional circumstances forincrease in the managerial remuneration:
The average percentage increase in the salaries of employees other than managerialpersonnel in the financial year 2016-2017 was around 12%. However during the financialyear 2016-17 there has been an increase in the payment of perquisite and allowances toWhole Time Director not exceeding the limit laid down in section II of part II of ScheduleV of the Companies Act 2013 and as per the special resolution passed at the AGM held onSeptember 10 2016 due to which managerial remuneration was increase by 65%. Theincrements given to employees are based on their potential performance and contributionwhich is also benchmarked against applicable industry norms.
(vi) Affirmation that the remuneration is as per the remuneration policy of theCompany:
The Company affirms remuneration is as per the remuneration policy of the Company.
(viii) 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 arerequired to be given.
a. Statutory Auditor
In accordance with Section 139 of the Companies Act 2013 and the rules made thereunder M/s. K. S. Aiyar & Co. Charted Accountants Mumbai the has been appointed asthe Statutory Auditors of the Company in the Annual General Meeting held on September 272014 for a consecutive term of five years (subject to ratification of their appointment atevery AGM). Their continuance of appointment is to be ratified in the ensuing AnnualGeneral Meeting of the Company. They have confirmed their eligibility under Section 141 ofthe Companies Act 2013 and the Rules framed there under for appointment as Auditors ofthe Company.
b. Internal Auditor
Pursuant to the provisions of Section 138 of the Companies Act 2013 read withCompanies (Accounts) Rules 2014 the Company has appointed M/s. Batliboi & PurohitChartered Accountants as an internal auditor of the Company.
c. Secretarial Auditor
Pursuant to the provisions of Section 204 of the Companies Act 2013 read withCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 the Companyhas appointed M/s. S S
Rauthan & Associates a firm of Practicing Company Secretaries to undertake theSecretarial Audit of the Company. The Secretarial Audit Report is annexed and forms partof this report.
WHISTLE BLOWER/VIGIL MECHANISM:
The Company has adopted a Whistle Blower Policy to provide a formal mechanism to theDirectors and Employees to report their concerns about unethical behaviour actual orsuspected fraud or violation of the Companys Code of Conduct or Ethics Policy. Thepolicy provides for adequate safeguards against victimization of employees who avail ofthe mechanism and also provides for direct access to the Chairman of the Audit Committee.It is affirmed that no personnel of the Company has been denied access to the AuditCommittee. The Whistle Blower Policy has been posted on the website of the Company.
During the reporting period the Company has not issued any shares. However the Paid-upEquity Share Capital as on March 31 2017 was Rs 31364400/- comprising of 3136440Equity Shares of Rs 10/- each.
Pursuant to regulation 15(2) of SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 the compliance with the corporate governance provisions are notapplicable to your Company as the Company's paid up Equity Share Capital does not exceedof Rs 10/- Crores and Net Worth does not exceed of Rs 25 Crores as on March 31 2017.However to maintain highest standards of Corporate Governance a separate section onCorporate Governance 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 reviewis annexed and forms part of this report.
LISTING OF SHARES
The 3136440 Equity Shares of the Company are listed on BSE Limited. The annuallisting fee for the financial year 2017-18 has been paid to BSE Limited (BSE).
The Company's assets have been adequately insured.
WHOLE TIME DIRECTOR & CHIEF FINANCIAL OFFICER CERTIFICATION
Certificate from Mr. Girish Jain Whole Time Director and Mr. Vinit Kedia ChiefFinancial Officer as specified in Part B of Schedule II of the SEBI (Listing Obligationsand Disclosure Requirements) Regulations 2015 for the financial year ended March 312017 was placed before the Board of Directors of the Company at its meeting held on May27 2017.
The Directors wish to place on record their appreciation for their sincere support fromits members banks and other Statutory and Regulatory Authorities. The Board of Directorsalso appreciates for the continuous with gratitude the contribution made by the executivesand employees at all levels for their dedication and commitment to the Company throughoutthe year.
| ||For and on behalf of the Board of Directors |
| ||Sd/- |
| ||Inderchand Jain |
|Place: Mumbai ||Chairman |
|Date: August 09 2017 || |