| 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
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