History of Jenson and Nicholson Financial Services Ltd.

BRIEF HISTORY and BUSINESS OF THE COMPANY

The Comp. was incorporated on February 20, 1986 as a Public Limited Comp. as J and N Leasing Co. Limited. The Comp. obtained the Certificate for Commencement of Business on May 2, 1986 & commenced its operations in June 1986. In 1992, symbolic of its synergistic activities in financial markets, the name of Comp. was changed to Jenson and Nicholson Financial Services Limited.[JNFSLs] The Company, a part of Jenson and Nicholson business group in India is primarily engaged in Lease & Hire Purchase financing of plant, machinery & equipments to its various clients. Over the past eight years, the Comp. made rapid strides in its business.

In addition to lease/hire purchase financing of all types of capital goods/consumer durables/office automation/vehicles etc., the activities of Comp. now includes bill discounting, inter corporate deposits, financial advisory services & allied activities. Today it is also a SEBI registered Category i Merchant Banker, providing all types of merchant banking activities.

The Comp. has its head quarters in Calcutta & representative offices at Bombay, New Delhi, Madras & Guwahati.

APPRAISAL SYSTEM The Company disbursement policy comprises on the one hand, stringent criteria in appraising credit risk & on the other hand, conservative norms for Company credit exposure as follows: 1. Prima Facie screening & in-principle acceptance. 2. Meetings with the client 3. Overall & individual exposure to each industry,company & activity 4. Security of transaction 5. Balancing between risk & return 6. The Comp. background & market perception of Promoters/Group Companies 7. Detailed financial analysis of Company 8. The Company specific competitive advantage in the market. 9. Market & Industry analysis.

MONITORING OF RECEIVABLES The Comp. closely monitors & reviews its outstanding commitments/transactions periodically. Timely payment of principal & interest is ensured through computerised operations. The Comp. obtains post-dated cheques in advance to ensure timely payments & in case of delayed payments if any, levies a penal interest on the same. Wherever required the Comp. takes additional collateral security & appropriate guarantees to ensure safety & liquidity of Company funds. The Comp. insists on a insurance cover for equipments as an additional safety measure.

MANPOWER and PERSONNEL The operations of Comp. are managed by Professionals well versed in their respective fields at various levels. The Comp. presently employs 20 persons in various categories & is in the process of immediately appointing atleast 12 more persons as General Manager/Managers & Assistant Managers to be located at different places.

Fund Based Activities Mr.S.Kumar, a qualified Chartered Accountant with around 5 years experience in industrial & financial services sector with specialisation in fund based activities like lease, hire purchase, bill discounting etc. looks after the marketing set up.

Mr.B.Ghosh, a qualified Chartered Accountant with years of experience in a few leading industrial houses & is well conversant with Financial analysis, Project Feasibility study, Project Counselling & co-ordination with banks & financial institutions.

Mrs.Balaka Sen, a qualified Cost Accountant has considerable experience in leasing & hire purchase financing in a few leading financial companies.

Non Fund Based Activities Mr.S.Seth, PGDBM, with over 4 years experience is well conversant with the Merchant Banking activities, issue management, preparation & appraisal of project report, & all other pre & post issue work.

MAIN OBJECTS OF THE COMPANY The main objects as set out in the Memorandum of Association are as under:

1. To carry on the business of an Investment Comp. or an Investment Trust Company. to undertake & transact trust & agency investment, financial business, financiers & for that purpose to lend or invest money & negotiate loans in any form or manner, to draw, accept endorse, discount, buy, sell & deal, in bills of exchange, hundies, promissory notes & other negotiable instruments & securities & also to issue on commission, to subscribe for, underwrite, take, acquire & hold, sell & exchange & deal in shares, stocks, bonds or debentures or securities of any Government or Public Authority or Comp. whether in India or elsewhere & to form, promote, subsidise & assist companies, syndicates & partnership, to promote & finance industrial enterprises & also to give any guarantees for payment of money or performance of any obligation or undertaking, to give advances, loans & subscribe to the capital of industrial undertakings. 2. To act as investors, guarantors, underwriters & financiers with the object of financing Industrial Enterprises, to lend or deal with the money either with or without interest or security, including current or deposit Acc. with any bank, other person or persons upon such terms, conditions & manner as may from time to time be determined & to receive money on deposit or loan upon such terms & conditions as the Comp. may approve. Provided that the Comp. shall not do any banking business as defined under the Banking Regulation Act, 1949. 3. To carry on and/or undertake the business of buying, selling, importing, exporting, dealing, trading, hire purchase, leasing, agency, licensing, subleasing, renting, chartering, servicing, repairing, assembling, packing, forwarding, stocking, distributing, erecting, reconditioning, transporting, Installing, assisting, subsidising, exchanging, granting of deferred payment facilities, providing collateral securities in respect of factories, plants, heavy & light machinery, equipments, articles, land, houses, flats, shops, buildings, structures, power plants, electricals, warehouses, fixtures, fittings, tools, implements, vehicles, furniture, carriers, rigs, appliances, utensils, apparatus, accessories & all kind of goods, raw materials, assets & all sorts of moveable & immovable properties which may concern or be required for agriculture, plantation, dairy, poultry, animal husbandry, atomic energy, aviation, cement, chemical, paint, electronics, fertiliser, computer, engineering industry, oil exploration, in commerce,transportation, communication, defence, education, electronics, entertainment, energy, housing, domestic and household needs, edible & food products, medical & health industry, irrigation, railways, science & technology, research & development, shipping and/or transport by air or land, space, steel industry, mining, hotel & tourism.

4. To carry on and/or undertake the business of traders & that of hire purchase & leasing of all types of movable & immovable properties & for that purpose to acquire by purchase or on lease, sub lease or rental property & to re-sell or give on lease or sub lease & on leave & licence or on rental basis allow any of properties belonging to the Comp. or acquire by it on lease, sub lease or rental basis. 5. To acquire & hold & otherwise deal with shares, stocks, debenture stocks, bonds, obligations & securities issued or guaranteed by any Comp. & debentures,debentures stocks, bonds, obligations & securities issued or guaranteed by any government, sovereign, ruler, commissioner, public body or authority, supreme, municipal, local, quasi body or otherwise whether in India or elsewhere & to invest & deal with the monies of Comp. in real & personal property of all kinds & in general to carry on business of investment Comp. and undertake all kinds of trust, investment agency & financial business.

PRESENT BUSINESS OF THE COMPANY The Comp. having established itself in the highly competitive market of Financial Services, has drawn up an ambitious growth plan for future. Thanks to the spurt in the industrial activities & business operations, in response to the liberalisation policies of Government, the Comp. is in an eminently suitable position to avail the opportunities of increasing demand for financial services - both fund based & non-fund based. The Comp. has taken steps to consolidate & expand its existing activities namely, i.e. Leasing, Hire Purchase, Bill Discounting, Consumer Finance etc. It has recently obtained the approval of SEBI as Category i Merchant Bankers which will substantially increase its business operation.

The Comp. provides a comprehensive package of financial services. The services are broadly classified into Fund Based & Non Fund Based Activities.

As] Fund Based Business is] Lease Financing/Hire Purchase Lease/Hire Purchase proposals are received either through financial brokers or through direct approach by Company Marketing Division.

For direct approach the Comp. identifies prospective clients through careful analysis of published financial results of such clients, scanning through articles on different companies that appear in business journals, Stock Exchange Year Books which detail financial performance figures as well as profiles of listed Companies. Besides, in response to Company advertisements, a large number of clients approach the Comp. directly for their financial requirements.

For consumer finance, the Comp. has direct tie-up with manufacturers of Automobiles, Consumer Durables, Audio-Visual and other type of Electronic items & manufacturers of other Domestic Appliances. The Comp. also has arrangement with reputed dealers of these items.

Major lessees include Lloyds Steel Industries, Khaitan Hostombe Spinels Ltd, Sitapur Plywood Industries Ltd, Goodearth Organic [Is] limited etc. East India Pharmaceuticals, Punj Lloyd Limited, Grapco Granites Limited etc. have availed of hire purchase financing from the Company. There has been no delays/defaults from the existing clients.

Total outstanding amount deployed in lease & hire purchase activities is Rs.10.33 crores & Rs.12.73 Crores respectively.

iis] Bill Discounting Marketing of Bill Discounting proposals are done in the same fashion as for Lease/Hire Purchase. Genuine trade bills, accepted by well known companies are discounted at a rate of around 25%. The bills are generally for a period of 90 days. As on 30/09/94 the outstanding value of Bills discounted was Rs.5.86 crores.

Bs] Non-fund based business is] Merchant Banking The Indian Capital Market has been significantly active in the recent years. Indian Corporate Sector including Public Sector Undertakings, Financial Institutions etc. has shown increased trend of reliance on the Capital Market for raising funds. Abolition of office of CCI, free pricing etc. have given wider access for corporate sector to the Capital Market.

In order to diversify its operations to non-funds based activities, the Comp. has obtained registration from SEBI as a Category Merchant Banker. It has already started its operation of Merchant Banking activities viz. Issue Management, Capital Restructuring, Underwriting, Project Appraisal and Consultancy etc. & is now poised for a substantial expansion in this area to play an active role in primary/secondary market operation.

Within a short span of time since the Comp. obtained Category i Merchant Banker registration from SEBI, it has 4 [fours] mandates of Lead Managership in hand. With a reputation already established in its existing lines of business, sound financial base, highly professional & reputed Board & Management team, intimate knowledge of Capital Market, network of branches & representative offices, the success in the Merchant Banking business.

iis] Underwriting The Comp. is actively involved in the business of Underwriting of Equity Shares, Convertible Debentures, Non-convertible Debentures, Bonds etc. This has been targeted as a high growth of business area. The Comp. is currently involved in underwriting of securities by Corporate Bodies & it plans to expand this activity by underwriting securities by Corporations, Financial Institutions, Mutual Funds, Banks etc.

iiis] Fixed Deposit The Comp. launched its Fixed Deposit Scheme for public in August 1993. The Comp. offers a multiple choice of fixed deposit schemes to its investors. The schemes offered by Comp. are Cumulative Deposit Scheme, Fixed Income Scheme, Cash Certificate Scheme & Recurring Deposit Scheme.

Credit Analysis and Research limited [CAREs] has assigned a Credit Rating of 'CARE 'A-[FDs]' to the fixed deposit scheme of Company. Instruments with this rating are considered upper medium grade & adequate.

The response to these schemes has been excellent & the Comp. has been able to mobilise substantial deposits from public. The Comp. has collected deposits aggregating Rs.2.89 crores for six monthly period ended 30.9.94 & has targeted to collect a total amount of Rs.6.69 crores for financial year 1994-98. This represents an increase of 500% over the previous year ended 1992-93.

SUBSIDIARY COMPANIES The Comp. doesn't have any subsidiaries.