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J J Finance Corporation

BSE: 523062|ISIN: INE584C01011|SECTOR: Finance - Leasing & Hire Purchase
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Directors Report Year End : Mar '15    Mar 14
 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
 
 
 
 
Source : Dion Global Solutions Limited
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