JM Financial

1 A Contingent Liability
 
 a) Contingent liability in respect of income tax disputed in appeal
 including departmental appeals in respect of cases won by the Company
 but excluding interest thereon, is Rs. 33,890,935/- (previous year
 Rs.33,171,144/-).
 
 b) Security of Rs. 425,000,000/- is given on behalf of a subsidiary
 company against fixed deposits placed with banks.
 
 B Capital Commitments
 
 a) Estimated amount of contracts remaining to be executed on capital
 account and not provided for (net of advances) is Rs. 8,838,940/-
 (previous year Rs.4,829,000/-).
 
 b) Uncalled amount on investments in JM Financial Property Fund, Class
 C units is Rs. Nil (previous year Rs. 150,000,000/-).
 
 2 Employee stock option scheme
 
 The 2008 Employee Stock Option Scheme (the Scheme) provides for grant
 of stock options on equity shares of the Company to the employees and
 Directors of the Company and/or its subsidiaries. The Scheme is in
 accordance with the Securities and Exchange Board of India (SEBI)
 (Employees Stock Option Scheme and Employee Stock Purchase Scheme)
 Guidelines, 1999. Options are granted at an exercise price,which is
 equal to the fair market price of the underlying equity shares.
 
 The scheme provides for grant of options to employees to acquire the
 equity shares of the Company that vest in a graded manner that are to
 be exercised within a specified period. During the year, the Company
 has granted 445,500 options (adjusted option -11,137,500 post
 sub-division and issue of bonus shares) at an exercise price of Rs.
 1,370/- per option (adjusted price Rs. 54.80/- per option)
 
 3 Share Capital
 
 a.  i) During the year, 1 equity share of the face value of Rs. 10/-
 each of the Company was sub- divided into lOequity shares oftheface
 value of Re.1 each.
 
 ii) During the year,449,869,500 fully paid-up bonus shares were issued
 in the ratio of 3 equity shares for every 2 equity shares held by the
 then existing shareholders.
 
 iii) During the year, the Company forfeited 8,700 equity shares (pre
 sub-division & bonus) for non-payment of allotment moneys by 53
 allottees in accordance with the provisions of its Articles of
 Association.
 
 b.  The issued, subscribed and paid-up capital, inter alia, includes an
 amount in respect of I 15,000 (post sub-division of shares), (previous
 year I 1,500 shares) held in abeyance under Section 206A of the Act.
 During the year the Company allotted the bonus shares in ratio of 3:2
 on the above I 15,000 shares resulting in addition of 172,500
 shares.With this, the total number of shares held under abeyance is
 287,500.
 
 c.  An amount of Rs. 43,500/- is transferred to capital reserve on
 account of forfeiture of shares during the year.
 
 4 There are no Micro, Small and Medium Enterprises, to whom the Company
 owes dues, which are outstanding for more than 45 days as at March 3 1,
 2009. This information as required to be disclosed under the Micro,
 Small and Medium Enterprises Development Act, 2006 has been determined
 to the extent such parties have been identified on the basis of
 information available with the Company.
 
 5 Retirement benefits
 
 Valuation assumptions
 
 - The estimates of future salary increases, considered in actuarial
 valuation, taking account of inflation, seniority, promotion and other
 relevant factors in the employment market.
 
 - The above information is certified by the actuary.
 
 b) Leave encashment
 
 As per Companys policy, provision of Rs.2,028,140/- has been made
 towards compensated absences, calculated on the basis of unutilised
 leave.
 
 B.  Defined contribution plans
 
 - Amount recognised as an expense and included in the Schedule I -
 Contribution to provident fund & other funds Rs. 2,560,496/-
 (previous year Rs.808,143/-).
 
 15 During the year, the Company changed the method of provision for
 depreciation on fixed assets other than office premises and asset taken
 on lease from written down value method to straight line method.  As a
 result, excess depreciation provided has been written back and adjusted
 with current years depreciation in the Profit and Loss Account.
 Consequently, depreciation for the year is lower by Rs. 537,030/-, net
 block of Fixed Assets is higher by Rs. 537,030/- and profit after tax
 is higher by Rs. 354,494/-
 
 6 a) As the Company is mainly holding the investments in its
 subsidiaries, joint venture and associate companies, there are no
 reportable segments.
 
 b) Geographical segment is also not applicable to the Company.
 
 7 Disclosure in respect of related parties is attached as per annexure
 I
 
 8 Statement of cash flow is attached as per annexure II
 
 9 In the context of global financial crisis and its severe impact on
 the Indian Capital Markets including the stock markets, the Company has
 decided to provide Rs. 18,255,000/- towards the diminution in the value
 of individual shares of listed companies in their long term investment
 portfolio, where the market value is lower than the cost considering
 the same to be other than temporary.
 
 10 Interest expense includes Rs. 363,844/- (previous year Rs.
 207,817/-) towards interest on fixed loan and Rs. 18,748/- (previous
 year Rs. 298,503/-) towards interest on loan other than fixed loan.
 
 11 Previous year figures have been re-grouped and re-arranged wherever
 necessary.
 
 12 Other additional disclosures require under paras 3,4C and 4D of Part
 II of Schedule VI to the Act are not applicable to the Company.
 
 Disclosure in respect of related parties pursuant to AS 18 on Related
 Party Disclosure
 
 A.  List of related parties
 
 I) Parties where control exists:
 
 Subsidiaries
 
 JM Financial Consultants Private Limited (IBD)
 
 JM Financial Services Private Limited (Financial Services)
 
 JM Financial Investment Managers Limited (Investment Managers)
 
 JM Financial Commtrade Limited (Commtrade)
 
 JM Financial Ventures Limited (SSF)
 
 JM Financial Products Private Limited (NBFC)
 
 JM Financial Securities Private Limited (FID)
 
 JM Financial Institutional Securities Private Limited (IED)
 
 JM Financial Asset Management Private Limited (AMC)
 
 JM Financial Holdings (Mauritius) Ltd (JMFM)
 
 JMF-BR Investments Holdings (Mauritius) Ltd (JMFBR)
 
 Oracle Enterprises Private Limited (Oracle)
 
 JM Financial Overseas Holdings Private Limited (Overseas)
 
 JM Financial Insurance Broking Private Limited (Insurance Broking)
 
 II) Other parties with whom the Company has entered into transactions
 during the year:
 
 a) Joint venture
 
 Infinite India Investment Management Private Limited (Infinite)
 
 b) Associates
 
 JM FinancialAsset Reconstruction Company Private Limited (ARC)
 Financial Engineering Solutions Private Limited (FES) JM
 FinancialTrustee Company Private Limited (Trustee)
 
 c) Partnership Firm Stellar Investments (Stellar)
 
 d) Key management person Mr. Nimesh N Kampani (NNK)
 
 e) Relative of key management person Mr. Ashith N Kampani (ASNK)
 
 f) Enterprise over which Key management person is able to exercise
 significant influence
 
 J.M. Financial & Investment Consultancy Services Private Limited
 (JMFICS)
 
 B.  I) No amounts in respect of related parties have been written
 off/back during the year.
 
 II) Amount provided for diminution in the value of investments in
 respect of related parties is Rs. 15,000,000/- (previous year Rs.
 15,000,000/-).
 
 III) Related party relationships have been identified by the management
 and relied upon by the auditors.