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J J Finance Corporation Ltd.

BSE: 523062 | NSE: | Series: NA | ISIN: INE584C01011 | SECTOR: Finance - Leasing & Hire Purchase

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Annual Report

For Year :
2015 2014 2013 2010 2009 2008 2006

Director’s Report

Dear members, The Directors have pleasure in presenting the Thirty Second (32nd) Annual Report and the Audited Financial Statements on the business and operations of your Company for the year ended 31st March, 2015. FINANCIAL RESULTS Rs. in thousand''s particulars For the ended 31st year 2015 March 2014 Profit before Depreciation 2691 2121 Less: Depreciation 143 1241 Profit before Tax : 2548 880 Current Tax 410 175 Deferred Tax (26) (347) Income Tax for earlier year (31) - Profit after Tax 2195 1052 Add: Balance brought forward from 12187 11385 last year Less: Transferred to Reserve U/s 45-IC 450 250 of RBI Act, 1934 Provision towards Standard Assets 18 - Balance carried forward 13914 12187 SUMMARY OF OPERATIONS During the year, the net revenue from operations of your Company increased by 19.12 %, from Rs. 37.84 Lakhs to Rs. 45.07 Lakhs. For FY 2014 - 15, your Company''s profit after tax stood at Rs. 21.95 Lakhs vis-a-vis Rs. 10.52 Lakhs in the previous year, registering a growth of 108.65 %. INDUSTRY SCENARIO NBFCs play a vital role in the financial sector of our economy along with other financial institutions. Over the years, due to their strategic management practices and refined operational techniques coupled with lower costs of delivery, lower restrictions on customers etc., have led to it being an alternate choice and at times the first choice for several customers, who need financing. While the RBI has made regulations stringent for the NBFCs, it has also recognized the utility of the NBFCs and thereby made them eligible to set up Banks and also act as an extension of Banks, where the Banks cannot reach. Due to the increase in finance space by NBFCs, the RBI''s surveillance has increased. Through its various regulatory measures NBFCs are brought under stricter supervisory regime of RBI. While several steps are being taken to increase the role that the NBFCs play, norms are being strengthened to ensure that there is a strong, transparent and robust non banking financial sector. SHARE CAPITAL The paid up Equity Share Capital as at March 31, 2015 stood at Rs. 2.82 crore. During the year, the Company did not allot any shares nor did grant any stock options or sweat equity. As on March 31, 2015, none of the Directors of the Company hold instruments convertible into equity shares of the Company. As on 31st March, 2015, the issued, subscribed and paid up share capital of your Company stood at Rs. 2.82 crore, comprising 28.2 lakh Equity shares of Rs. 10/- each. DIVIDEND AND RESERVES In order to consolidate the position of the company, Directors do not recommend any Dividend for the year ended 31st March, 2015. During the year, your Company transferred a sum of Rs. 4.5 lakh to Special Reserve as per Section 45-IC of RBI Act, 1934. PUBLIC DEPOSITS The Company did not hold any public deposits at the beginning of the year nor has it accepted any public deposits during the year under review. MATERIAL CHANGES AND COMMITMENTS, IF ANY, AFFECTING THE FINANCIAL POSITION OF THE COMPANY WHICH HAVE OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR OF THE COMPANY TO WHICH THE FINANCIAL STATEMENTS RELATE AND THE DATE OF THE REPORT Your Company had no significant and material changes affecting the financial position of the company which have occurred between the end of the financial year of the company to which the financial statements relate and the date of the report. EXTRACT OF ANNUAL RETURN Pursuant to section 92(3) of the Companies Act, 2013 (''the Act'') and rule 12(1) of the Companies (Management and Administration) Rules, 2014, extract of annual return is enclosed as Annexure 1. BOARD MEETINGS The Board meets at regular intervals to discuss and decide on business strategies/policies and review the financial performance of the Company. The notice of each Board Meeting along with the agenda is given in writing to each Director separately and in exceptional cases tabled at the meeting. This ensures timely and informed decisions by the Board. In the financial year 2014-15, the Board met six times. The meetings were held on 13th May, 2014, 2nd July, 2014, 11th August, 2014, 22nd September, 2014, 13th November, 2014 and 12th February, 2015. The interval between two meetings was well within the maximum period mentioned under Section 173 of the Companies Act, 2013 and the Listing Agreement. COMMITTEES OF BOARD The details of composition of the Committees of the Board of Directors are as under : a. Audit Committee Sl. Name Category of Directors/ Chairman/ No. Members Members 1 Mr. Vijay Burman Independent Director Chairman 2 Mr. Anil Jhunjhunwala Non- Executive Director Member 3 Mr. Brajesh Kumar Independent Director Member Dhandhania During the year, the Committee had met on 12.02.2015 and 30.03.2015. * Vigil Mechanism Pursuant to the requirement of the Act, the Company has established a vigil mechanism policy to report genuine concerns or grievances. The Vigil Mechanism Policy has been posted on the website of the Company (www.jjfc.co.in) b. Nomination & Remuneration Committee Sl. Name Category of Directors/ Chairman/ No. Members Members 1 Mr. Vijay Burman Independent Director Chairman 2. Mr. Rajesh Poddar Non- Executive Director Member 3. Mr. Brajesh Kumar Independent Director Member Dhandhania During the year, the Committee had met on 12.02.2015. c. Stakeholders Relationship Committee Sl. Name Category of Directors/ Chairman/ No. Members Members 1 Mr. Anil Jhunjhunwala Non-Executive Director Chairman 2. Ms. Ankita Nigam Company Secretary Member *Ms. Ankita Nigam replaced Mr. Anuj Jalan from the Committee on 12.02.2015 after the latter''s resignation from the Company. During the year, the Committee had met on 25.03.2015. Types of Meetings Date of Names of Directors''/ Meetings Members Present 13.05.2014 Mr. Anil Jhunjhunwala, Mr. S. P. Mukherjee, Mr. Rajesh Poddar, Mr. Shyam Bagaria & Mr. Amit Bhalotia. 02.07.2014 Mr. Anil Jhunjhunwala, Mr. S. P. Mukherjee, Mr. Rajesh Poddar, Mr. Shyam Bagaria & Mr. Amit Bhalotia. 11.08.2014 Mr. Anil Jhunjhunwala, Mr. S. P. Mukherjee, Mr. Rajesh Poddar & Mr. Shyam Bagaria Board Meetings 22.09.2014 Mr. Anil Jhunjhunwala, Mr. Shyam Bagaria, Mr. Brajesh Kumar Dhandhania, Mr. Vijay Burman, Mrs. Hilla Bhathena & Mr. Rajesh Poddar. 13.11.2014 Mr. Anil Jhunjhunwala, Mr. Shyam Bagaria, Mr. Brajesh Kumar Dhandhania, Mr. Vijay Burman, Mrs. Hilla Bhathena & Mr. Rajesh Poddar. 12.02.2015 Mr. Anil Jhunjhunwala, Mr. Shyam Bagaria, Mr. Brajesh Kumar Dhandhania, Mr. Vijay Burman, Mrs. Hilla Bhathena & Mr. Rajesh Poddar. Audit Committee Meetings 12.02.2015 Mr. Vijay Burman, Mr. Anil Jhunjhunwala & Mr. Brajesh Kumar Dhandhania 30.03.2015 Mr. Vijay Burman, Mr. Anil Jhunjhunwala & Mr. Brajesh Kumar Dhandhania Annual General Meeting 26.08.2014 Mr. Anil Jhunjhunwala, Mr. S.P. Mukherjee & Mr. Shyam Bagaria Nomination & Remuneration 12.02.2015 Mr. Vijay Burman, Committee Meeting Mr. Rajesh Poddar & Mr. Brajesh Kumar Dhandhania Stakeholder Relationship 25.03.2015 Mr. Anil Jhunjhunwala & Committee Meeting Ms. Ankita Nigam. DIRECTORS AND KEY MANAGERIAL PERSONNEL Mr. Rajesh Poddar, Director retires by rotation at the forthcoming Annual General Meeting and being eligible, offers himself for reappointment. During the year, Mr. Brajesh Dhandhania, Mr. Vijay Burman and Mrs. Hilla Bhathena have been appointed as an Independent Directors for term of five years. Further, Mr. S. P. Mukherjee and Mr. Amit Bhalotia have resigned as Directors of the Company with effect from 26.08.2014. Also, Mr. Rabi Kumar Almal, Mr. Hriday Mondal and Ms. Ankita Nigam have been appointed as Chief Executive Officer, Chief Financial Officer and Company Secretary with effect from 01.12.2014, 10.03.2015 and 12.02.2015 respectively. Further Mr. Anuj Jalan resigned as the Company Secretary cum Chief Financial Officer of the Company with effect from 31.01.2015. Mr. Anil Jhunjhunwala became the Managing Director of the Company on 01.09.2014 and later changed his designation to Non-Executive Director with effect from 01.10.2014. DIRECTORS'' RESPONSIBILITY STATEMENT Pursuant to the requirement clause (c) of sub-section (3) of Section 134 of the Companies Act, 2013, your Directors confirm that : (a) in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures; (b) the directors had selected such accounting policies and applied them consistently and made judgments 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 and loss of the company for that period; (c) the directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities; (d) the directors had prepared the annual accounts on a going concern basis; (e) the directors, had laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively; and (f) the directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively. DECLARATION BY INDEPENDENT DIRECTORS Mr. Brajesh Kumar Dhandhania, Mr. Vijay Burman and Mrs. Hilla Bhathena are Independent Directors on the Board of your Company. These Non-Executive Independent Directors fulfill the conditions of Independence specified in Section 149(6) of the Companies Act, 2013 and Rules made thereunder and meet with the requirement of Clause 49 of the Listing Agreement entered into with the Stock Exchanges. A format letter of appointment to Independent Director as provided in Companies Act, 2013 and the Listing Agreement has been issued and disclosed on the website of the Company viz. www.jjfc.co.in. PERFORMANCE EVALUATION Pursuant to the provisions of the Companies Act, 2013 and Clause 49 of the Listing Agreement, the Board has carried out the annual performance evaluation of its own performance, the Directors individually as well as the evaluation of the working of its Board Committees. A structured questionnaire was prepared after circulating the draft forms, covering various aspects of the Board''s functioning such as adequacy of the composition of the Board and its Committees, Board culture, execution and performance of specific duties, obligations and governance. The performance evaluation of the Non- Independent Directors was carried out by the Independent Directors. The Directors expressed their satisfaction with the evaluation process. COMPANY''S POLICY ON APPOINTMENT AND REMUNERATION In accordance with Section 178 of the Companies Act, 2015, the Board of Directors have adopted a Policy on Board Diversity, Director Attributes and the Remuneration. The Policy of Nomination and Remuneration Committee has been framed to encourage diversity of thought, experience, knowledge, perspective, age and gender in the Board. The Remuneration Policy for Directors, Key Managerial Personnel and all other employees is aligned to the philosophy on the commitment of fostering a culture of leadership with trust. The Remuneration Policy aims to ensure that the level and composition of the remuneration of the Directors, Key Managerial Personnel and all other employees is reasonably sufficient to attract, retain and motivate them to successfully run the Company. The Details of Remuneration paid by the Company is given in MGT- 9 of the Annual Report. INTERNAL FINANCIAL CONTROLS Effective Internal Controls are necessary for building up an efficient organization. Our Company has adequate Internal Control systems in place to ensure accuracy, transparency and accountability in its operations. A dedicated concurrent audit team functioning within the Company confirms that the activities are in compliance with its policies and occurrences of deviations are reported to the Management. The concurrent audit report is reviewed by the internal auditors - M/s Guha & Matilal, a firm of practicing Chartered Accountants. Internal auditors review operations of the Company and ensure that the Company is functioning within the limits of all applicable statutes. Any Internal Control weaknesses, non compliance with statutes and suggestions on improvements in existing practices forms part of internal audit report. Audit Committee reviews the internal audit report and ensures that observations pointed out in the report are addressed in a timely and structured manner by the Management. The Internal Audit Report is reviewed by Statutory Auditors while performing audit functions to confirm that there are no transactions conflicting with interests of the Company. The Internal Financial Controls with reference to the Financial Statements are commensurate with the size and nature of business of the Company. STATUTORY AUDITORS, THEIR REPORT AND NOTES TO FINANCIAL STATEMENTS In the last AGM held on August 26, 2014, M/s. Chaturvedi & Partners, Chartered Accountants have been appointed Statutory Auditors of the Company for a period of three years. Ratification of appointment of Statutory Auditors is being sought from the members of the Company at the ensuing AGM. Further, the report of the Statutory Auditors along with notes to Schedules is enclosed to this report. The Auditors'' Report is self-explanatory and therefore does not call for any further comments. SECRETARIAL AUDIT In terms of Section 204 of the Act and Rules made there under, M/s. Corporate Advisors Law Professionals LLP, represented by Ms. Disha Dugar, Practicing Company Secretary, had been appointed Secretarial Auditor of the Company. The Secretarial Audit Report, enclosed as Annexure 2 is self-explanatory and does not call for any further comments. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS The provisions of Section 186 of the Act pertaining to investment and lending activities are not applicable to the Company since the Company is an NBFC. Details of guarantees and/or security in connection with loans to other body corporates or persons are given in notes to the Financial Statements. RELATED PARTY TRANSACTIONS The provisions of Section 188(1) do not attract as the transactions entered into with Related Parties are in ordinary course of business on arms length basis. Thus disclosure in AOC-2 is not required. The Company has developed a Related Party Transaction framework through standard operating procedures for the purpose of identification and monitoring of such transactions. PARTICULARS OF EMPLOYEES Your Company treats its Human Resources as one of its most important assets. The information required pursuant to Section 197 read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 in respect of employees of the Company will be provided upon request. In terms of section 136 of the Act, the Reports and Accounts are being sent to the Members and others entitled thereto, excluding the information on employees'' particulars which is available for inspection by the Members at the Registered Office of the Company during business hours on working days of the Company up to the date of the ensuing Annual general Meeting. If any Member is interested in obtaining a copy thereof,such Member may write to the Company Secretary in this regard. None of the employees were drawing in excess of the limits as specified by the Companies Act, 2013 and the rules made thereunder that needs disclosing in the Directors Report. RISK MANAGEMENT POLICY In terms of the requirement of the Act, the Company has developed and implemented the Risk Management Policy and the Audit Committee of the Board reviews the same periodically. The Risk Management policy inter alia provides for review of the risk assessment and minimization procedure, laying down procedure to inform the Board in the matter and for periodical review of the procedure to ensure that management controls the risks through properly defined framework. CORPORATE GOVERNANCE Since the paid up share capital of your Company and its net-worth was below the prescribed limit as notified by SEBI vide circular no. CIR/CFD/POLICY CELL/7/2014 dated 15th September 2014; the compliance of clause 49 of the listing agreement is not mandatory on the Company in the financial year 2014-2015. CORPORATE SOCIAL RESPONSIBILTY Since your Company does not fall under the threshold laid down in section 135 of the Companies Act, 2013, the provision of section 134(3)(o) of the Companies Act, 2013 is not applicable and no disclosure is required by the Board. DISCLOSURE PURSUANT TO LISTING AGREEMENT Necessary disclosures pursuant to listing agreement are made hereunder: The shares of the company are listed on the following Stock Exchanges in the period under review. Name and Address of the Stock Exchange Security Listed 1. The Calcutta Stock Exchange Ltd. Equity Shares 7, Lyons Range, Kolkata - 700 001 2. The Bombay Stock Exchange Ltd Equity Shares 25th Floor, P. J. Towers, Dalal Street, Fort,Mumbai - 400 001 3. The Delhi Stock Exchange Ltd Equity Shares DSE House, 3/1, Asaf Ali Road, New Delhi - 110 002 The Listing fees to The Calcutta Stock Exchange Ltd. and The Bombay Stock Exchange Ltd. for the Financial Year 2015 - 16 have been paid. Securities and Exchange Board of India has derecognised Delhi Stock Exchange Ltd., hence no invoice was raised. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS There are no significant and material orders passed by the Regulators/Courts that would impact the going concern status of the Company and its future operations DETAILS OF CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO The Company, being a Non-Banking Finance Company (NBFC), does not have any manufacturing activity neither does it have any foreign exchange earnings or any foreign exchange outgo. The Directors, therefore, have nothing to report on conservation of energy and technology absorption. ACKNOWLEDGEMENT Your Directors place on record their appreciation for employees at all levels, who have contributed to the growth and performance of your Company. Your Directors also thank the clients, vendors, bankers, shareholders and advisers of the Company for their perennial support during the year. We also express our gratitude towards the Central and State Governments, and other statutory authorities for their continued support. For and on behalf of the Board Place : Kolkata Anil Jhunjhunwala Shyam Bagaria Dated : 9th July, 2015 Director Director DIN : 00128717 DIN : 00121949

Director’s Report