KJMC Financial Services Ltd.
|BSE: 530235||Sector: Financials|
|NSE: KJMCFIN||ISIN Code: INE533C01018|
|BSE 00:00 | 04 Mar||KJMC Financial Services Ltd|
|NSE 05:30 | 01 Jan||KJMC Financial Services Ltd|
|BSE: 530235||Sector: Financials|
|NSE: KJMCFIN||ISIN Code: INE533C01018|
|BSE 00:00 | 04 Mar||KJMC Financial Services Ltd|
|NSE 05:30 | 01 Jan||KJMC Financial Services Ltd|
Your Directors have pleasure in presenting the 29th Annual Report together with theaudited financial statement of the Company for the financial year ended March 31 2017.The consolidated performance of the Company and its subsidiaries has been referred towherever required.
The performance of the Company for the financial year ended March 31 2017 issummarized below:
(Rs in "000")
OVERVIEW OF COMPANY'S FINANCIAL PERFORMANCE
On standalone basis your Company earned the gross income of Rs 282.88 Lakhs as againstRs 224.76 Lakhs in the previous year. The total expenditure during the year under reviewwas Rs 252.49 Lakhs as against Rs 163.09 Lakhs in the previous year. The Net Profit aftertax was Rs 42.25 Lakhs as against Rs 63.12 Lakhs in the previous year.
On consolidated basis your Company earned the gross income of Rs 299.38 Lakhs asagainst Rs 236.96 Lakhs in the previous year. The total expenditure during the year underreview was Rs 264.72 Lakhs as against Rs 175.24 Lakhs in the previous year. The Net Profitafter tax was Rs 47.22 Lakhs as against Rs 63.19 Lakhs in the previous year.
PERFORMANCE AND FINANCIAL POSITION OF THE SUBSIDIARIES AND ASSOCIATES
(i) KJMC Asset Management Company Limited: It earned gross income of Rs 17.34 Lakhs asagainst Rs 15.66 Lakhs in the previous year. The total expenditure during the year underreview was Rs 17.02 Lakhs as against Rs 15.88 Lakhs in the previous year. The Net Profitafter tax was Rs 0.23 Lakhs as against loss of Rs 0.32 Lakhs in the previous year.
(ii) KJMC Investment Trust Company Limited: It earned gross income of Rs 1.07 Lakhs asagainst Rs 1.34 Lakhs in the previous year. The total expenditure during the year underreview was Rs 0.73 Lakhs as against Rs 0.99 Lakhs in the previous year. The Net Profitafter tax was Rs 0.17 Lakhs as against Rs 0.34 Lakhs in the previous year.
(iii) KJMC Trading & Agency Limited: It earned gross income of Rs 4.7 Lakhs asagainst Rs 0.42 Lakhs in the previous year. The total expenditure during the year underreview was Rs 1.09 Lakhs as against Rs 0.49 Lakhs in the previous year. The Net Profitafter tax was Rs 3.54 Lakhs as against loss of Rs 0.07 Lakhs in the previous year.
(i) KJMC Platinum Builders Private Limited: It earned gross income of Rs 10.49 Lakhs asagainst Rs 5.70 Lakhs in the previous year. The total expenditure during the year underreview was Rs 6.81 Lakhs as against Rs 5.20 Lakhs in the previous year. The Net Profitafter tax was Rs 2.52 Lakhs as against Rs 0.51 Lakhs in the previous year.
(ii) KJMC Realty Private Limited: No income was earned during the current and previousyear. The total expenditure during the year under review was Rs 0.16 Lakhs as against Rs0.38 Lakhs in the previous year. The loss incurred during the year under review was Rs0.16 Lakhs as against loss of Rs 0.38 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 transfer Rs 1.06 Lakhs to the general reserve and Rs 8.45 Lakhsto Special Reserves out of the amount available for appropriation and an amount of Rs281.16 Lakhs is proposed to be retained in the profit and loss account.
RBI PRUDENTIAL NORMS
Since the Company does not accept and hold any public deposits the Non- BankingFinancial (Non Deposit Accepting or Holding) Companies Prudential Norms (Reserve Bank)Directions 2007 are not applicable to the Company as regard to capital adequacyrequirement.
EXTRACT OF ANNUAL RETURN
The extract of the Annual Return as provided under sub-section (3) of Section 92 in theForm MGT 9 for the 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 wereconvened and held. The details pertaining to composition of Nomination and RemunerationCommittee and the attendance of the Nomination and Remuneration Committee members areprovided in the Corporate Governance Report which forms part of the annual report.
d. Share Transfer and Stakeholders Relationship Committee
During the year Three (3) 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 the annual report.
e. Credit and Investment Committee
During the year Eight (8) Credit and Investment Committee Meetings were convenedand held. 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 the annual 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 madejudgment and estimates that are reasonable and prudent so as to give a true and fair viewof the state of affairs of the Company as at the end of the financial year and of theprofit of the Company for that period;
c. they have taken proper and sufficient care to the best of their knowledge andability for the maintenance of adequate accounting records in accordance with theprovisions of the Companies Act 2013 for safeguarding the assets of the Company and forpreventing and detecting fraud and other irregularities;
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 have devised proper systems to ensure compliance with the provisions of allapplicable laws and that such systems were adequate and operating effectively.
POLICY ON DIRECTORS' APPOINTMENT REMUNERATION AND OTHER DETAILS
The Company's policy on Directors' appointment remuneration and other matters providedin Section 178(3) of the Companies Act 2013 has been disclosed in the CorporateGovernance report which forms part of the annual report.
STATUTORY AND SECRETARIAL AUDITORS' REPORT
The statutory and secretarial auditors' report do not contain any qualificationsreservations or adverse remarks. Report of the secretarial auditor is given as anannexure 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 related parties pursuant to Section 134(3)(h) of theAct read with rule 8(2) of the Companies (Accounts) Rules 2014 in Form AOC-2 is annexedand forms part of this report.
MATERIAL CHANGES AND COMMITMENT IF ANY AFFECTING THE
FINANCIAL POSITION OF THE COMPANY OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR TOWHICH THE FINANCIAL STATEMENTS RELATE AND 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 a Financial Services Company the details required under Section134 of the Companies Act 2013 are not applicable. However Company believes in conservingthe natural resources and uses CFL and LED Lighting in the office premises which has lowenergy consumption.
During the reporting period there was no foreign exchange earning but incurred anexpenditure of Rs 3.63 lakhs as against Rs 6.93 Lakhs in the previous year.
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 the Corporate Governance requirements as prescribed by Securities and ExchangeBoard of 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 Board composition and structureeffectiveness of board processes information 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 AND KEY MANAGERIAL PERSONNEL
Mr. Rajnesh Jain's tenure as whole time Director of the Company ends on August 102017 The Nomination and Remuneration Committee considered the re-appointment of Mr.Rajnesh Jain (DIN: 00151988) as a Whole Time Director and also reviewed the terms andconditions for the extended period of three years from August 11 2017 to August 10 2020at their meeting held on May 18 2017 and recommended the same to the Board. The Board attheir meeting held on May 27 2017 considered the recommendation of the Nomination andRemuneration Committee and approved the re-appointment of Mr. Rajnesh Jain (DIN: 00151988)as Whole-time Director of the Company for a further period of three years with effect fromAugust 11 2017 to August 10 2020 in accordance with the provisions of Sections 196 197198 and 203 read with Schedule "V" and all other applicable provisions of theCompanies Act 2013 and the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 and subject to approval of members in the ensuing Annual GeneralMeeting of the Company.
Necessary resolution is being proposed in the notice of the ensuing Annual GeneralMeeting for the approval of the members for reappointment of Mr. Rajnesh Jain (DIN:00151988) as Whole-time Director of the Company for a further period of three years witheffect from August 11 2017 to August 10 2020.
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 composition of the Board of Directors Mr. Inderchand JainDirector of the Company is liable to retire by rotation at the ensuing Annual GeneralMeeting and being eligible offer himself for reappointment.
Pursuant to the provisions of Section 149 of the Companies Act 2013 Mr. NitinKulkarni and Mr. Sureshchandra Aythora were appointed as independent directors at theannual general meeting of the Company held on September 27 2014. They have submitted adeclaration that each of them meets the criteria of independence as provided in Section149(6) of the Companies Act 2013 and there has been no change in the circumstances whichmay affect their status as an independent director during the year.
The Company being a Non-Deposit Accepting Non-Banking Finance Company has not acceptedany deposits from the public during the year under review and shall not accept anydeposits from the public without obtaining prior approval of the Reserve Bank of India(RBI).
SUBSIDIARIES AND ASSOCIATE COMPANIES
During the reporting period the Company has three wholly owned subsidiaries namelyKJMC Asset Management Company Limited KJMC Investment Trust Company Limited and KJMCTrading & Agency Limited within the meaning of Section 2(87) of the Companies Act2013 ("Act") and two associate companies namely KJMC Realty Private Limited andKJMC Platinum Builders Private Limited within the meaning of Section 2(6) of the Act.There has been no material change in the nature of the business of the subsidiaries andassociates.
Pursuant to provisions of Section 129(3) of the Act read with rule 5 of the Companies(Accounts) Rules 2014 a statement containing salient features of the financialstatements of the Company's subsidiaries and an associates Companies in Form AOC-1 isannexed and forms part of the 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.
THE DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS ORTRIBUNALS IMPACTING THE GOING CONCERN STATUS AND COMPANY'S OPERATIONS IN FUTURE
There are no significant or material orders which were passed by the Regulators orCourts or Tribunals which impact the going concern status and the Company's operations infuture.
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 the annual 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 2014are given below:
i. The ratio of the remuneration of each Director to the median remuneration of theemployees of the company for the financial year 2016-17;
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;
iii. The percentage increase in the median remuneration of employees in the financialyear: Nil
iv. The number of permanent employees on the rolls of Company as on March 31 2017: 8
v. Average percentile increase already made in the salaries of employees other than themanagerial 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 2016-17 was around 9%. However during the financial year2016-17 there has been an increase in the payment of perquisite and allowances to WholeTime Director not exceeding the limit laid down in section II of part II of Schedule V ofthe Companies Act 2013 and as per the special resolution passed at the AGM held onSeptember 10 2016 due to which the managerial remuneration was increased by 196%. 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 the Company:
The Company affirms remuneration is as per the remuneration policy of the Company.
vii. 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. Chartered Accountants Mumbai the Statutory Auditorsof your Company has been appointed as the Statutory Auditors of the Company in the AnnualGeneral Meeting held on September 27 2014 for a consecutive term of five years (subjectto ratification of their appointment at every AGM). Their continuance of appointment is tobe ratified in the ensuing Annual General Meeting.
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.
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 Sanjay Raja Jain &Co. 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.K. Jain & Associates a firm of Company Secretaries in Practiceto undertake the Secretarial Audit of the Company. The Secretarial Audit Report is annexedand forms part of 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 Company's Code of Conduct or Ethics Policy. The policyprovides for adequate safeguards against victimization of employees who avail of themechanism and also provides for direct access to the Chairman of the Audit Committee. Itis 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 your Company has allotted 300000 equity shares of Rs10/- each at a price of Rs 25/- per share pursuant to Conversion of 30000 0% CompulsoryConvertible Preference Shares allotted on March 25 2015.
Pursuant to Regulation 15(2) of SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 compliance with the corporate governance provisions are not applicableto your Company as the Company's paid up Equity Share Capital does not exceed of Rs 10Crores and net worth does not exceed of Rs 25 Crores as on March 31 2017.
To maintain highest standards of Corporate Governance a separate section on CorporateGovernance is annexed and forms part of the annual 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
Equity Shares of the Company are listed with BSE Limited. During the reporting periodyour Company has allotted 300000 equity shares of
Rs 10/- each issued on conversion of 30000 0%CCPS and the same got listed in BSELimited. The Annual listing fee for the financial year 2017-18 has been paid to the BSELimited (BSE).
The Company's assets have been adequately insured.
WHOLE TIME DIRECTOR & CHIEF FINANCIAL OFFICER CERTIFICATION
Certificate from Mr. Rajnesh Jain Whole Time Director and Mr. Kartik Konar 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 Board of Directors takes the opportunity to express its sincere appreciation forthe support and co operation from its members Reserve Bank of India banks and Statutoryand Regulatory Authorities.
The Board also wishes to place on record their sincere appreciation of the contributionmade by the executives and employees at all levels for their dedication and commitment tothe Company throughout the year.
(Pursuant to first proviso to sub-section (3) of section 129 read with rule 5 ofCompanies (Accounts) Rules 2014) Statement containing salient features of the financialstatement of subsidiaries & associate companies.
Part "A": SUBSIDIARIES
(Rs in '000")
PART "B": ASSOCIATES
Statement pursuant to Section 129 (3) of the Companies Act 2013 related to AssociateCompanies.
(Rs in '000")
Networth:- Revaluation reserve is not considered while calculating the Networth.
Form No. AOC-2
(Pursuant to clause (h) of sub-section (3)of section 134 of the Act and Rule 8(2) ofthe Companies (Accounts) Rules 2014)
Form for disclosure of particulars of contracts/arrangements entered into by thecompany with related parties referred to in sub-section (1) of section 188 of theCompanies Act 2013 including certain arms length transactions under third proviso thereto
1. Details of contracts or arrangements or transactions not at arm's length basis: Nil
2. Details of material contracts or arrangement or transactions at arm's length basis:
For and on behalf of the Board of Directors Sd/-
(Inderchand Jain) Place: Mumbai Chairman
Date : August 09 2017