KJMC Corporate Advisors (India) Limited
The Directors submit Annual Report of KJMC Corporate Advisors (India) Limited (the"Company" or "KCAL") along with the Audited Financial Statements forthe Financial Year (FY) ended March 31 2016. Consolidated performance of the Company andits subsidiaries has been referred to wherever required.
The summarised Financial Results of the Company for the Financial Year ended March 312016 are presented below:
(Rs in "000")
|Particulars ||Year Ended March 31 2016 ||Year Ended March 31 2015 ||Year Ended March 31 2016 ||Year Ended March 31 2015 |
| ||Standalone ||Consolidated |
|Total Revenue ||22862 ||27293 ||54285 ||58108 |
|Total Expenditure ||22455 ||24958 ||53064 ||54196 |
|Profit/(Loss) Before Tax ||407 ||2335 ||1221 ||3912 |
|Provision for Tax || || || || |
|- Current Tax ||Nil ||Nil ||7 ||131 |
|- Deferred Tax ||4 ||(1472) ||(449) ||(4593) |
|- MAT Credit ||Nil ||Nil ||(7) ||(89) |
|- Prior Period || || || || |
|Taxes ||Nil ||1302 ||(9) ||1264 |
|Profit for the Year before Share in Associates' profit / Loss ||403 ||2505 ||1679 ||7199 |
|Share in Associates' Profit/ (Loss) ||NA ||NA ||1409 ||NA |
|Profit/(Loss) for the Year ||403 ||2505 ||3088 ||7199 |
|Add : Surplus b/f ||32136 ||29915 ||58326 ||51410 |
|Fixed Assets not having remaining useful life as on 1st April 2014 ||Nil ||(284) ||Nil ||(284) |
|Disposable Profits ||32539 ||32136 ||61414 ||58326 |
|Appropriations ||Nil ||Nil ||Nil ||Nil |
|Balance carried forward ||32539 ||32136 ||61414 ||58326 |
|Earnings Per Equity Share: || || || || |
|(1) Basic ||0.13 ||0.80 ||0.98 ||2.30 |
|(2) Diluted ||0.13 ||0.80 ||0.98 ||2.30 |
PERFORMANCE REVIEW STANDALONE
The Company achieved total revenue during the year under review was Rs 228.62 Lakhs ascompared to Rs 272.93 Lakhs in the previous year. The Profit after tax for the year was Rs4.03 Lakhs as compared to Rs 25.05 Lakhs in the previous year.
The Company achieved total revenue of Rs 542.85 Lakhs as compared to Rs 581.08 Lakhs inthe previous year. The Profit after tax was Rs 30.88 Lakhs as compared to Rs 71.99 Lakhsin the previous year.
In order to conserve the resources for operations your Directors regret theirinability to recommend any dividend for the year under review.
The Paid-up Equity Share Capital as on March31 2016 was Rs 313.64 Lakhs comprising of3136440 Equity Shares of Rs 10 each. There was no change in the Company's Share Capitalduring the year under review.
DIRECTORS & KEY MANEGERIAL PERSONNEL
Mr. Girish Jains tenure as Whole Time Director ended on completion of the threeyear term on March 31 2016. The Nomination and Remuneration Committee considered there-appointment of Mr. Girish Jain (DIN: 00151673) as a Whole Time Director and revisedremuneration payable to him upon renewal for a further period of three years from April01 2016 to March 31 2019 at their meeting held on March 19 2016 and May 06 2016 andrecommended the same to the Board. The Board at their meeting held on March 29 2016 andMay 19 2016 accepted the recommendation of the Nomination and Remuneration Committee andapproved the re-appointment for a period of three years from 1st April 2016 to 31st March2019 and the revised remuneration payable to Mr. Girish Jain as Whole-time Director inaccordance with the provisions of Sections 196 197 198 and 203 read with Schedule"V" and all other applicable provisions of the Companies Act 2013 and theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 and subjectto approval of members in the ensuing Annual General Meeting of the Company.
Necessary resolution is being proposed for the re-appointment and remuneration payableto Mr. Girish Jain on re-appointment for a term of three years in the notice of theensuing Annual General Meeting for the approval of the members.
According to the Companies Act 2013 at least twothirds 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. Inderchand JainDirector of the Company is liable to retire by rotation at this Annual General Meeting andbeing eligible offer himself for reappointment.
The Independent Directors of the Company have submitted the Declaration ofIndependence as required pursuant to section 149(7) of the Companies Act 2013 statingthat they meet with the criteria of Independence as provided in sub-section (6) of section149 of the Companies Act 2013.
During the year under review Mr. Vinit Kedia Chartered Accountant has been appointedas a Chief Financial Officer (CFO) of the Company with effect from June 30th 2015 inplace of Mr. Lokesh Ranawat who resigned from the post of Chief Financial Officer witheffect from June 30 2015
NUMBER OF MEETINGS
a. Board Meeting
The Board of Directors met Six (6) 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 this 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 this report.
c. Nomination and Remuneration Committee
During the year Two (2) Nomination and Remuneration Committee Meeting 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 this report.
d. Share Transfer and Stakeholders Relationship Committee
During the year Five (5) 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 Four (4) 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.
The Board of Directors has carried out an annual evaluation of its own performancepursuant to the provisions of the Companies Act 2013 and the corporate governancerequirements as prescribed by Securities and Exchange Board of India (Listing Obligationsand Disclosure Requirements) Regulations 2015. At the meeting of the Board all therelevant factors that are material for evaluating the performance of the individualDirectors as well as the Board Committees were discussed in detail.
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 Independent judgementsafeguarding the interest of the Company and that of its minority shareholders. Inaddition the Chairman was also evaluated on the key aspects of his role including settingthe strategic agenda of the Board encouraging active engagement by all Board members.
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.
POLICY ON DIRECTORS' APPOINTMENT AND REMUNERATION
The Company's policy on Directors' appointment Boards composition and remuneration andother matters provided in Section 178(3) of the Act has been disclosed in detail in thecorporate governance report which forms part of the directors' report.
ADEQUACY OF INTERNAL CONTROL
The details in respect of internal financial control internal audit process and theiradequacy are included in the Management Discussion & Analysis which forms part ofthis report.
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 2016.
Pursuant to the provisions of Section 139 of the Act and the rules framed thereunderM/s. K. S. Aiyar & Co. Mumbai Chartered Accountants were appointed as statutoryauditors of the Company from the conclusion of the Sixteenth Annual General Meeting (AGM)of the Company held on September 27 2014 till the conclusion of the Twenty First AGM tobe held in the year 2019 subject to ratification of their appointment at every AGM.
They have confirmed their eligibility under Section 141 of the Companies Act 2013 andthe rules framed there under for appointment as Auditors of the Company for the ensuingfinancial year.
AUDITORS' REPORT AND SECRETARIAL AUDITORS' REPORT
The Statutory Auditors' Report from M/s K. S. Aiyar & Co. Chartered Accountantsand Secretarial Auditors' Report from M/s S. S. Rauthan & Co a firm of CompanySecretaries in practice (CP No. 3233) have undertaken the Statutory and Secretarial Auditrespectively of the Company for the financial year ended March 31 2016 The auditors'report and secretarial auditors' report does not contain any qualifications reservationsor adverse remarks. Report of the Secretarial Auditor is given as an annexure which formspart of this report.
SUBSIDIARY AND ASSOCIATE COMPANIES
As on March 31 2016 your Company has Four (4) wholly owned subsidiaries viz. (1)KJMC Capital Market Services Limited (2) KJMC Credit Marketing Limited (3) KJMC Shares& Securities Limited (4) KJMC Commodities Market India Limited. There has been nochange in the number of subsidiaries or in the nature of business of the subsidiariesduring the year under review.
During the year M/s. KJMC Financial Services Limited has become an Associate Company ofM/s. KJMC Corporate Advisors (India) Limited.
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 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.
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 31 2016 the applicable accounting standards have been followed along withproper explanation relating 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 on a going concern basis;
e. they have laid down internal financial controls to be followed by the
Company and such internal financial controls are adequate and operating effectively;
f. they have devised proper systems to ensure compliance with the provisions of allapplicable laws and that such systems were adequate and operating effectively.
Based on the framework of internal financial controls and compliance systemsestablished and maintained by the Company work performed by the internal statutory andsecretarial auditors including audit of internal financial controls over financialreporting by the statutory auditors and the reviews performed by management and therelevant board committees including the audit committee the board is of the opinion thatthe Company's internal financial controls were adequate and effective during FY 2015-16.
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 2016.However to maintain highest standards of Corporate Governance a separate section onCorporate Governance is annexed and forms part of this report.
UPDATE ON LEGAL MATTER
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 givenfollowing 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/- |
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.
Jammu and Kashmir State Power Development Corporation (Respondent) had filed appeal andchallenged the Arbitral Tribunal award dated July 03 2012 by filing of petition beforethe Hon'ble Delhi High Court under section 34 of the Arbitration and Conciliation Act1999. The Delhi High Court has passed the judgment on May 09 2016 and dismissed theappeal filed by respondent against the Arbitral Tribunal award dated July 03 2012. TheCompany will take further steps as are necessary for execution of the Award and the orderpassed by the Honble High court of Delhi.
EXTRACT OF ANNUAL RETURN
The extract of the Annual Return of your Company as on March 31 2016 as provided undersub-section 3 of Section 92 of the Companies Act 2013 in the Form MGT 9 is enclosed andforms part of the Directors' Report.
RELATED PARTY TRANSACTIONS
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 before the Audit Committee and also beforethe Board for its approval.
Information on transactions with related parties pursuant to Section 134(3)(h) of theCompanies Act 2013 read with rule 8(2) of the Companies (Accounts) Rules 2014 in FormAOC-2 is annexed and forms part of the report.
PARTICULARS OF LOANS GUARANTEES AND INVESTMENTS
The particulars of loans guarantees and investments have been disclosed in thefinancial statements.
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 Listing feesupto the financial year 2016-17 has been paid to BSE Limited (BSE).
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 ||0.03 |
|Mr. S.C. Aythora ||0.03 |
|Mr. Nitin Kulkarni ||0.03 |
|Mrs. Shraddha Jain ||0.02 |
|Mr. Rajnesh Jain ||0.02 |
|Executive Directors || |
|Mr. Girish Jain ||2.27 |
(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. 2015-16 |
|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 ||- |
|Mrs. Shraddha Jain ||Non Executive Director ||- |
|Mr. Hemant Soni ||Company Secretary ||21.53 |
|Mr. Vinit Kedia ||Chief Financial Officer ||10.00 |
(iii) The percentage increase in the median remuneration of employees in thefinancial year: Nil
(iv) The number of permanent employees on the rolls of Company as on March 31 2016:7
(v) Average percentile increase already made in the salaries of employees other thanthe managerial personnel in the last financial year and its comparison with the percentileincrease in the managerial remuneration and justification thereof and point out if thereare any exceptional circumstances for increase in the managerial remuneration:
The average percentage increase in the salaries of employees other than managerialpersonnel in the financial year 2015-2016 was around 9%. However there was no increase inthe salary of Whole Time Director (Managerial Personnel) during the year.
The increments given to employees are based on their potential performance andcontribution which 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.
PARTICULARS OF CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION
Since the Company does not own any manufacturing facility the other particularsrelating to conservation of energy and technology absorption stipulated in the Companies(Accounts) Rules 2014 are not applicable. However Company believes in conserving thenatural resources and uses CFL and LED Lighting in the office premises which has lowenergy consumption.
FOREIGN EXCHANGE EARNINGS AND OUTGO
The Company earned Rs 44.48 Lakhs in foreign currency in the current financial year ascompared to Rs 37 Lakhs in the previous financial year and incurred expenditure of Rs12.56 Lakhs in the current year as compared to Rs 12.51 Lakhs in the previous year.
The Company's assets have been adequately insured.
The Board has formulated a risk management policy to be implemented and monitored therisk management plan for the Company. The board is responsible for reviewing the riskmanagement plan and ensuring its effectiveness. The audit committee of the Board hasadditional oversight in the area of financial risks and controls. Major risks identifiedby the businesses and functions are systematically addressed through an ongoing mitigatingactions on a continuing basis.
The development and implementation of risk management policy has been covered in themanagement discussion and analysis Report which forms part of this report
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 312016 was placed before the Board of Directors of the Company at its meeting held on May19 2016.
The Directors wish to place on record their appreciation of the contribution made bythe executives and employees at all levels for their dedication and commitment to theCompany throughout the year.
Your Directors also appreciate with gratitude the continuous support of the BankersClients and the Company's Shareholders.
| ||For and on behalf of the Board of Directors |
| ||INDERCHAND JAIN |
| ||Chairman |
|Place: Mumbai || |
|Date: August 10 2016 || |