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Indbank Merchant Banking Services Ltd.

BSE: 511473 Sector: Financials
NSE: INDBANK ISIN Code: INE841B01017
BSE 13:21 | 01 Dec 21.30 0.25
(1.19%)
OPEN

21.30

HIGH

21.75

LOW

20.85

NSE 13:14 | 01 Dec 21.50 0.45
(2.14%)
OPEN

21.20

HIGH

21.75

LOW

20.90

OPEN 21.30
PREVIOUS CLOSE 21.05
VOLUME 676
52-Week high 37.25
52-Week low 9.24
P/E 19.02
Mkt Cap.(Rs cr) 95
Buy Price 21.30
Buy Qty 200.00
Sell Price 21.55
Sell Qty 137.00
OPEN 21.30
CLOSE 21.05
VOLUME 676
52-Week high 37.25
52-Week low 9.24
P/E 19.02
Mkt Cap.(Rs cr) 95
Buy Price 21.30
Buy Qty 200.00
Sell Price 21.55
Sell Qty 137.00

Indbank Merchant Banking Services Ltd. (INDBANK) - Director Report

Company director report

To the Members

Your Directors have pleasure in presenting before you the Thirty First Annual Reporttogether with the Audited Statements of Accounts for the year ended 31st March 2020.

Operations

During the year your company has earned a gross income of Rs.1723.83 lakhs as againstRs.1244.90 lakhs in the previous year. Under Stock Broking your company has a mix ofinstitutional and individual clients and has achieved a turnover of Rs.5907.62 croreduring the year as against Rs.561026 crore in the previous financial year. Your companyalso provides Depository services to institutions and retail customers and has 45546accounts under DP operations and 26085 accounts under broking operations.

Your company reported a net profit of Rs.197.28 lakhs during the year 2019-20 asagainst a net profit of Rs.172.75 lakhs in the previous year as under:

Sl.No. Rs. in Lakhs

Rs. in Lakhs

FY2019-20 FY2018-19
1 Income from Fee based operations 877.17 811.78
of which income from Stock Broking 780.74 698.03
DP 90.95 91.37
Merchant Banking/Mutual Funds 5.48 22.38
2 Other income 846.66 433.12
3 Total income (1+2) 1723.83 1244.90
4 Employee Expenses 496.10 438.33
5 Other expenses 598.02 374.26
6 Interest Expenses 152.18 153.08
7 Depreciation 30.21 23.29
8 Provisions for NPAs/Write off 153.32 82.13
9 Total expenses (4+5+6+7+8) 1429.83 1071.09
10 Profit before exceptional items (3-9) 294.00 173.81
11 Prior period income/Exp 0.00 7.22
12 Profit before tax (10-11) 294.00 181.03
13 Current Tax 50.95 59.87
14 MAT Tax 0.00 -51.35
15 Deferred tax 34.15 -4.02
16 Prior Year tax 0.00 0.00
17 Items reclassified as per IND-AS - re-measurement of the defined benefit plans -11.62 -3.78
18 Net profit / Loss after tax (12-13-14-15-16+17) 197.28 172.75
19 EPS 0.47 0.40

Dividend

As your Company's profits are not adequate and for the reserves to be ploughed back toimprove the networth your Directors do not recommend any dividend for the year 2019-20.

Board Meetings:

The Board of Directors met four times during the year on 18.05.2019 19.07.201907.11.2019 & 01.02.2020.

Directors and Key Managerial Personnel:

Shri. Shenoy Vishwanath Vittal was appointed as an Additional Director of the Companyby the Board of Directors of the Company in their meeting held on 11.02.2019 with effectfrom 11.02.2019 to hold office until the conclusion of the 30th Annual General Meetingand he was appointed as Non-Executive Nominee Director liable to retire by rotation bythe shareholders of the Company in their 30th Annual General Meeting held on 21.09.2019.

Shri. Vaijinath Gavarshetty was appointed as an Additional Director of the Company bythe Board of Directors of the Company in their meeting held on 19.07.2019 with effectfrom 19.07.2019 to hold office until the conclusion of the 30th Annual General Meetingand he was appointed as an Independent Director of the Company for the first term of fiveyears commencing from the

conclusion of the 30th Annual General Meeting till the conclusion of 35th Annualgeneral Meeting not liable to retire by rotation by the shareholders of the Company intheir 30th Annual General Meeting held on 21.09.2019.

Shri. T M Nagarajan and Shri. P M Venkatasubramanian Independent Directors who wereappointed as Non-executive Independent Directors of the Company to hold office for 5consecutive years from the conclusion of the 25th Annual General Meeting till theconclusion of the 30th Annual General Meeting did not seek re-appointment consequent totheir health conditions. Hence the Board did not propose them for re-appointment. As theirfirst term of office as Independent Directors were completed at the conclusion of the 30thAnnual General Meeting held on 21.09.2019 the said directors were deemed to have vacatedthe office. Your Directors place on record their appreciation for the valuablecontributions made by Shri. T M Nagarajan and Shri. P M Venkatasubramanian during theirtenure as Independent Directors of the Company.

Shri. G.R.Sundaravadivel and Smt. Chitra Murali who were appointed as Non-executiveIndependent Directors of the Company to hold office for 5 consecutive years from theconclusion of the 25th Annual General Meeting till the conclusion of the 30th AnnualGeneral Meeting and Nomination and Remuneration Committee Meeting held on 19.07.2019proposed their candidature for office of Non-executive Independent Director for a secondterm were appointed as Non-executive Independent Directors for a second term of fiveyears commencing from the conclusion of the 30th Annual General Meeting till theconclusion of 35th Annual General Meeting not liable to retire by rotation by theshareholders of the Company in their 30th Annual General Meeting held on 21.09.2019.

Shri. U.Rajkumar Vice-President (In-Charge) of the Company was appointed as ChiefFinancial Officer of the Company by the Board of Directors of the Company with effectfrom 07.11.2019 which was recommended by the Nomination and Remuneration Committee in itsmeeting held on 07.11.2019 in place of Shri. K.S.Sujay who resigned from the post ofChief Financial Officer of the company consequent to his repatriation to Indian Bank.

Shri. Shenoy Vishwanath Vittal Executive Director of Indian Bank and Non-executiveNominee Director of our Company has sent resignation letter dated 16.04.2020 to theCompany which was received by the Company on 04.05.2020 consequent to the nomination ofShri.K.Ramachandran Executive Director of Indian Bank in his place. The Board meetingheld on 11.06.2020 recorded the resignation of Shri. Shenoy Vishwanath VittalNon-executive Nominee Director of our Company with effective from 16.04.2020 and alsorecorded the valuable services rendered by him during his tenure as director of theCompany.

Indian Bank nominated Shri K.Ramachandran Executive Director Indian Bank forCo-option as a Director on the Board of the company in place of Shri Shenoy VishwanathVittal. Nomination & Remuneration Committee meeting held on 11.06.2020 recommended toBoard for co-option of Shri K.Ramachandran as an Additional Director with effect from11.06.2020 who shall hold office until the conclusion of the ensuing Annual GeneralMeeting and also recommended to Board to propose the candidature of Shri K.Ramachandranto appoint as Non-executive Director in the ensuing Annual General Meeting under section160 of the Companies Act 2013 and rules and regulations made thereunder. Board ofDirectors in their meeting held on 11.06.2020 co-opted Shri K.Ramachandran as anAdditional Director with effect from 11.06.2020 who shall hold office until theconclusion of the ensuing Annual General Meeting and given consent to propose thecandidature of Shri K.Ramachandran to appoint as Nonexecutive Director in the ensuingAnnual General Meeting.

Retirement of Directors by rotation:

The Company's Board consists of 3 Independent Directors who were appointed for a fixedterm of 5 years and are not liable to retire by rotation as per Section 149(13) of theCompanies Act 2013. The Whole-time Director who was appointed for fixed tenure cannotretire by rotation.

There are only Additional Directors who shall hold office until the conclusion of theensuing AGM apart from Independent Directors and Whole time Director who are not liableto retire by rotation. Hence none of the directors are liable to retire by rotation in theensuing Annual General Meeting.

Declaration from Independent Directors on Annual Basis:

The Company has received necessary declaration from each Independent Director of theCompany under Section 149(7) of the Companies Act 2013 that the Independent Directors ofthe Company meet with the criteria of their Independence laid down in Section 149(6).

Subsidiary companies

Your Company has no subsidiary Companies as on March 312020.

Vigil Mechanism:

The Company has established a vigil mechanism called Whistle-blower Policy for itsdirectors and employees to report genuine concerns pursuant to the provisions of section177(9) & (10) of the Companies Act 2013 and as per Regulation 22 of SEBI (LODR)Regulations 2015. The details of the Whistle-blower Policy is explained in the CorporateGovernance Report and also posted on the website of the Company.

Director's Responsibility Statement:

In pursuance of section 134 (5) of the Companies Act 2013 the Directors herebyconfirm that:

a) in the preparation of the annual accounts the applicable accounting standards hadbeen followed along with proper explanation relating to material departures;

b) the Directors had selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the company at the end of the financial year and ofthe profit and loss of the company for that period;

c) the Directors had taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of this Act for safeguarding theassets 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; and

e) the Directors had laid down internal financial controls to be followed by thecompany and that such internal financial controls are adequate and were operatingeffectively.

f) the Directors had devised proper systems to ensure compliance with the provisions ofall applicable laws and that such systems were adequate and operating effectively

Particulars of loans & investments by company

Details of Loans Guarantees and Investments covered under the provisions of Section186 of the Companies Act 2013 are given in the notes to the Financial Statements.

Extract of Annual Return:

As required pursuant to section 92(3) of the Companies Act 2013 and rule 12(1) of theCompanies (Management and Administration) Rules 2014 an extract of annual return in formMGT 9 is annexed herewith.

Auditors:

The Auditors M/s M. Srinivasan & Associates Chartered Accountants Chennai wasappointed by the Office of the Comptroller and Auditor General of India New Delhi inexercise of the powers conferred on them by section 139 of the Companies Act 2013 asstatutory auditors of the company for the financial year 2019-20.

Auditors Observations in the Audit Report:

There is nil observation from the Auditors.

Secretarial Audit:

Secretarial audit report in Form MR 3 as given by M/s. SPNP Associates PractisingCompany Secretaries who were appointed as Secretarial Auditors for the year 2019-2020 bythe Board of Directors in their meeting held on 01.02.2020 is annexed to this Report.Information as per Section 134 (3) (m) of the Companies Act 2013

a) The company has no activity relating to conservation of energy or technologyabsorption.

b) The company did not have any foreign exchange earnings as well as expenses.

Significant & Material orders passed by the Regulators:

There is no significant and material order passed by the regulators or Courts orTribunals impacting the going concern status and the company's operations in future.

Details of adequacy of Internal Financial Controls:

The Company has an Internal Control System commensurate with the size scale andcomplexity of its operations.

Risk Management Policy:

The company has put in place the Risk Management Policy compatible with the type andsize of operations and risk perception. The said policy is drawn up based on theguidelines of SEBI and stock exchanges issued in this regard.

Corporate Social Responsibility Policy:

The company has put in place The Corporate Social Responsibility Policy in terms ofSection 135 of the Companies Act 2013. The said policy is drawn up in terms of thesection 135 and other relevant section/ rules of Companies Act 2013. The Annual Report onCSR activities pursuant to clause (o) of sub-section (3) of section 134 of the Act andRule 9 of the Companies (Corporate Social Responsibility) Rules 2014 which is to beincluded in the Board's Report is annexed herewith.

Related Party Transactions:

During the year under review there was no transaction with related party that needs tobe reported in Form AOC 2 under section 188 of the Companies Act 2013 read with theCompanies (Meeting of Board and its Powers) Rules 2014.

Disclosure under the sexual harassment of women at workplace (prevention prohibitionand redressal) Act 2013:

An Internal Complaints Committee (ICC) is set up to redress complaints receivedregarding sexual harassment and discrimination at work place.

During the year ended March 312020 the ICC has received no complaints pertaining tosexual harassment / discrimination at work place.

Management discussion and analysis report

Management Discussion and Analysis Report of the Company for year under review is givenas a separate Statement in the Annual Report

Formal Annual Evaluation:

Pursuant to the provisions of the Companies Act 2013 of SEBI (LODR) Regulations 2015the Board has carried out an annual performance evaluation of its own performance thedirectors individually as well as the evaluation of the working of its Audit Nomination& Remuneration and Stakeholders Relationship Committees. The performance evaluation ofthe Independent Directors was carried out by the entire Board. The performance evaluationof the President & Whole Time Director and the Non Independent Directors was carriedout by the Independent Directors. The Directors expressed their satisfaction with theevaluation process and the performance of the Board Ratio of Remuneration to eachDirector:

Details / Disclosures of Ratio of Remuneration of each Director to the medianemployee's remuneration as Annexure 1.

Listing with Stock Exchanges:

The Company confirms that it has paid the Annual Listing Fees for the year 2020-21 toNSE and BSE where the Company's Shares are listed.

Corporate Governance

Your Company has taken adequate steps to adhere to all the stipulations laid down forCorporate Governance as per SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015. A report on Corporate Governance is included as a part of this AnnualReport

Certificate from the Statutory Auditors of the company confirming the compliance withthe conditions of Corporate Governance as stipulated in SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 is attached to this report.

Particulars of Employees:

The information required pursuant to Section 197 read with Rule 5 (1) of The Companies(Appointment and Remuneration of Managerial Personnel) Rules attached with this report.None of the employees of the company received remuneration in excess of the limitsprescribed Under Rule 5 (2) of The Companies (Appointment and Remuneration of ManagerialPersonnel) Rules of the Companies Act 2013.

Outlook:

Your company will continue to focus its efforts to increase its activities underfee-based business in addition to concentrating on recovery of overdues and reduction ofNon Performing Assets disinvestment of quoted and unquoted investments. Your company'sinvolved management network satisfied clientele quality manpower and diligent internalcontrol and cost control measures will enable your company to continue to report betterperformance in the coming years.

Acknowledgements:

Your Directors wish to place on record their gratitude to the Ministry of FinanceGovernment of India SEBI and Comptroller and Auditor General of India for their valuableguidance.

Your Directors also wish to place on record their thanks to the Bankers of the Companyand their appreciation for the assistance support and guidance received from Indian Bankand its Employees.

Your Directors express their appreciation for the contribution made by the Company'sdedicated Employees.

In conclusion your Directors thank you the members of the company for your supportand seek your continued patronage for achieving better results.

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