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JM Financial Ltd.

BSE: 523405 Sector: Financials
NSE: JMFINANCIL ISIN Code: INE780C01023
BSE 00:00 | 22 Oct 89.85 -1.25
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NSE 00:00 | 22 Oct 89.85 -1.20
(-1.32%)
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OPEN 90.75
PREVIOUS CLOSE 91.10
VOLUME 116250
52-Week high 117.55
52-Week low 74.35
P/E 35.65
Mkt Cap.(Rs cr) 8,569
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 90.75
CLOSE 91.10
VOLUME 116250
52-Week high 117.55
52-Week low 74.35
P/E 35.65
Mkt Cap.(Rs cr) 8,569
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

JM Financial Ltd. (JMFINANCIL) - Director Report

Company director report

Dear Members

The Board of Directors (the "board") is pleased to presentthe Company's thirty sixth annual report together with the audited standalone andconsolidated financial statements for the financial year ended March 31 2021.

Financial Performance

The key highlights of the consolidated and standalone financial resultsof the Company are summarised below:

Rs. in Crore
Particulars Consolidated Standalone
2020-21 2019-20 2020-21 2019-20
Gross income 3226.63 3453.55 374.41 303.07
Profit before depreciation and amortisation expense finance costs and tax expenses 2217.47 2520.42 235.99 176.44
Less: Depreciation and amortisation expense 39.75 41.04 11.92 12.18
Less: Finance cost 1110.87 1385.86 7.24 7.81
Profit before tax 1066.85 1093.52 216.83 156.45
Current tax 313.59 328.52 42.40 32.16
Deferred tax (52.73) (15.92) (0.90) (3.11)
Tax adjustments of earlier years (net) (0.07) 3.38 0.10 0.09
Net Profit after tax but before share in profit of associate 806.06 777.54 175.23 127.31
Add: Share in profit of associate 2.11 0.41 - -
Net Profit after tax and share in profit of associate 808.17 777.95 175.23 127.31
Other Comprehensive Income (0.69) 8.68 0.16 (0.29)
Total Comprehensive Income 807.48 786.63 175.39 127.02
Net Profit Attributable to:
Owners of the Company 590.14 544.98 - -
Non-Controlling Interests 218.03 232.97 - -
Total Comprehensive Income Attributable to:
Owners of the Company 589.33 553.76 - -
Non-Controlling Interests 218.15 232.87 - -

Appropriations

The following appropriations have been made from the available profitsof the Company for the financial year ended March 31 2021:

Rs. in Crore
Particulars Consolidated Standalone
2020-21 2019-20 2020-21 2019-20
Net Profit 590.14 544.98 175.23 127.31
Add/(less): Other Comprehensive Income 1.93 (1.09) 0.16 (0.29)
Add: Balance profit brought forward from previous year 2943.00 2524.91 925.72 842.07
Add: Transfer from Debenture redemption reserve - 33.76 - -
Profit available for appropriation 3535.07 3102.56 1101.11 969.09
Less: Appropriations
Final Dividend pertaining to the previous year paid during the year 16.82 42.00 16.82 42.00
Dividend distribution tax - 3.61 - 1.37
Transfer to Statutory reserve - I 102.90 112.47 - -
Transfer to Statutory reserve - II 0.64 1.48 - -
Transfer to Impairment reserve 14.43 - - -
Surplus carried to balance sheet 3400.28 2943.00 1084.29 925.72

Consolidated Financial Performance

The consolidated gross income of the Company for the financial yearended March 31 2021 is Rs. 3226.63 crore as against Rs. 3453.55 crore in the previousyear. Consolidated net profit during the said year is Rs. 590.14 crore as compared to Rs.544.98 crore in the previous year. The outbreak of Covid-19 pandemic across the globe andin India is continuing to adversely impact the global and Indian financial markets and theresultant slowdown in the economic activities. The statement of profit and loss for thefinancial year 2020-21 therefore includes an incremental gross impairment provision of Rs.207.55 crore on account of the pandemic. The said provision is in addition to theimpairment provision and fair value loss aggregating Rs. 175.21 crore for the financialyear 2019-20 which significantly included potential impact on account of the pandemic.

Consolidated financial statements for the financial year ended March31 2021 have been prepared in accordance with section 133 of the Companies Act 2013 (the"Act") read with the rules made thereunder and Indian Accounting Standards (the"Ind AS") 110. The consolidated financials reflect the cumulative performance ofthe Company together with its various subsidiaries and associate company.

Standalone Financial Performance

The gross income of the Company was higher at Rs. 374.41 crore for theyear ended March 31 2021 as against Rs.303.07 crore in the previous year registering anincrease of 23.54%. The Company reported a net profit of Rs. 175.23 crore for the yearended March 312021 as compared to the net profit of Rs.127.31 crore in the previous yearregistering an increase of 37.64%. The higher income and corresponding increase in the netprofit is primarily on account of increase in net gain on fair value changes from ?21.15crore in the previous year to Rs.65.27 crore in the year under review primarily due totreasury activities and proceeds from QIP issue temporarily deployed in liquid mutualfunds. Fee income also increased from Rs. 219.45 crore in the previous year to Rs.229.10crore in the year under review due to increase in deal closures in investment bankingbusiness. The said increase is partially off-set by decrease in dividend income fromsubsidiaries of Rs. 16.43 crore during the year under review as against Rs.35.53 crore inthe previous year.

Pursuant to the provisions of section 136 of the Act the annual reportof the Company containing inter alia its standalone and the consolidated financialstatements along with the relevant documents and separate audited financial statementsfor each of the subsidiaries are available on the website of the Company viz.https://imfl.com/investor- relation/ financial-results.html

Covid-19

As we move through the phases of Covid-19 pandemic and itsconsequential changes in the macro-economic factors the Indian corporates have witnessedmajor changes in their operations use of technology and other business activities.

The Company and its subsidiaries are operating in the financialservices sector and hence has also witnessed decline in financial and operatingperformance reduced disbursements collection and increased provisioning due to theimpact of Covid-19. In addition the Reserve Bank of India (the "RBI") hadissued guidelines giving regulatory packages in response to the Covid-19 pandemic. Inaccordance with these guidelines the non-banking finance and affordable housing financesubsidiaries have provided a moratorium of six months on the payment of all principalamounts and/or interest as applicable falling due between March 1 2020 and August 312020 to all eligible borrowers classified as standard even if the said amounts wereoverdue on February 29 2020.

With the unprecedented challenges and risks expected from thispandemic during the year the Company along with its subsidiaries have ensured smoothfunctioning of operations which amongst other things included effective implementation ofthe business continuity plan. The Company has also issued multiple advisories to employeesand the Company's crisis management team is active for health and non-health relatedassistance required during this period. In addition several precautionary measures havebeen implemented for essential staff working in the offices including fumigationtemperature checks supplying and wearing of masks and use of sanitizers among others.The Company and its subsidiaries are also promoting ‘learning from home' toensure self-development for its employees.

The Company aims to resume operations in a calibrated manner whilecontinuing to exercise all necessary precautions and measures at work in the post Covid-19scenario. This will be done in accordance with various directives of the State and CentralGovernments regarding the resumption of operations in accordance with theguidelines/precautionary measures framed by the Company.

Dividend

The board has recommended a payment of dividend of Rs.0.50 per share ofthe face value of Rs.1.00 each for the financial year 2020-21 compared to Rs.0.20 pershare paid for the previous financial year. The dividend if declared by the membersshall result in total cash outflow of Rs.47.64 crore during the financial year as comparedto outflow of Rs.16.82 crore in the previous financial year.

The dividend amount as above once declared at the thirty sixth annualgeneral meeting will be paid to those members whose names appear in the Register ofMembers/List of Beneficial Owners on Monday May 31 2021. The details of theunclaimed/unpaid dividend lying in the unpaid account and liable to be transferred to theInvestor Education Protection Fund is mentioned at length in general shareholdersinformation forming part of corporate governance report which forms part of this report.

The dividend distribution policy as adopted by the board is availableon the website of the Company viz. https://imfl. com/investor-relations/DividendDistribution Policv.pdf

Share Capital

As the members are aware the Company made an issue of equity sharesunder the Qualified Institutional Placement (the "QIP") route on a privateplacement basis in June 2020. Through the QIP issue the Company raised an aggregate of?770 crore by allotting 110000000 equity shares of the face value Rs.1 each toQualified Institutional Buyers at an issue price of ?70/- per equity share (includingpremium of Rs.69/- per share). The said equity shares are listed on BSE Limited (the"BSE") and National Stock Exchange of India Limited (the "NSE").

Additionally the Company has allotted an aggregate of 1498064 equityshares to the eligible employees consequent upon the exercise of stock options by themunder the Company's Employees' Stock Option Scheme - Series 6 Series 7 andSeries 9 to Series 12.

As on March 31 2021 the issued subscribed and paid-up equity sharecapital of the Company stood at Rs.952722711 (comprising 952722711 equity shares ofthe face value of Rs. 1/- each) as against?841224647 (comprising 841224647 equityshares of the face value of Rs. 1/- each) at the end of the previous financial year.

Employees' Stock Option Scheme

The Company's Employees' Stock Option Scheme is in compliancewith applicable Securities and Exchange Board of India (the "SEBI") regulationsand SEBI circulars issued from time to time concerning the said regulations.

Up to March 31 2021 an aggregate of 29436627 stock options hadbeen exercised by the eligible employees. The aggregate number of stock options grantedand outstanding as at March 31 2021 is 3498444.

The statutory auditors' of the Company had certified that theCompany's Employees' Stock Option Scheme has been implemented in accordance withthe applicable SEBI regulations.

Disclosure required under the applicable SEBI regulations read withSEBI Circular CIR/CFD/POLICY CELL/2/2015 dated June 16 2015 is appended to this report asAnnexure A and also uploaded on the Company's website viz.https://imfl.com/annual-report. Further the relevant disclosures in terms of the Ind AS102 relating to share based payment forms part of note 31 of the notes to the standalonefinancial statements and note 42 of the notes to the consolidated financial statements ofthe Company.

Deposits

The Company has neither invited nor accepted any deposits from publicand as such no amount on account of principal or interest on deposits in terms of section73 of the Act read with the Companies (Acceptance of Deposits) Rules 2014 wasoutstanding as on March 31 2021.

Subsidiaries and Associate

The Company has following subsidiaries (including step downsubsidiaries) and associate company:

Subsidiaries

1. JM Financial Institutional Securities Limited

2. JM Financial Services Limited

3. JM Financial Capital Limited

4. JM Financial Commtrade Limited

5. JM Financial Overseas Holdings Private Limited (Mauritius)

6. JM Financial Singapore Pte Limited (Singapore)

7. JM Financial Securities Inc.

(Delaware - United States of America)

8. Infinite India Investment Management Limited

9. JM Financial Properties and Holdings Limited

10. CR Retail Malls (India) Limited

11. JM Financial Products Limited

12. JM Financial Credit Solutions Limited

13. JM Financial Home Loans Limited

14. JM Financial Asset Reconstruction Company Limited

15. JM Financial Asset Management Limited

Associate

JM Financial Trustee Company Private Limited There has been no materialchange in the nature of the business of subsidiaries. The segment wise business activitiesof the subsidiaries their performance and financial position are described in detail inthe management discussion and analysis report which forms part of this report.

A report on the performance and financial position of each of thesubsidiaries and associate company is included in the consolidated financial statementsand their contribution to the overall performance of the Company is provided in Form AOC-1which forms part of this report.

Additionally Astute Investments a partnership firm within the grouphas two partners viz. JM Financial Services Limited and JM Financial Properties andHoldings Limited which are the wholly owned subsidiaries of the Company.

Awards and Recognition

The Asset Triple A Sustainable Capital Markets Country & Regional Awards 2020 (March 2021) JM Financial Limited has been awarded :
• ‘Best IPO' under the Best Deal category (Mindspace Business Parks REITRs.45 billion IPO);
• ‘Best rights issue' under the Best Deal category (Reliance Industries Limited US $7.1 billion rights offering);
• ‘Best block trade' under the Best Deal category (Bandhan Bank US $1.4 billion block trade).
BSE Awards 2020 (November 2020) JM Financial Services Limited has been recognised by BSE Limited amongst the top performers in Primary Market Segment (Equity - IPO/FPO Bids - Members).
18th Federation of Indian Chambers of Commerce & Industry (FICCI) CSR Award (July 2020) JM Financial Limited has been awarded for the CSR Healthcare Project implemented by JM Financial Foundation in the Dumri Block- Giridih district Jharkhand.
The Great Place to Work Institute India's Best Companies To Work For 2020 (June 2020) JM Financial Asset Management Limited JM Financial Limited (Institutional Businesses) JM Financial Products Limited (Dwello) JM Financial Home Loans Limited and JM Financial Services Limited have been accredited as a ‘Great Place to Work-Certified™' by the Great Place to Work Institute.
JM Financial Home Loans Limited has been recognised as India's Best Workplaces in BFSI 2020 and ranked 21st among India's Top 50 Great Mid- Size Workplaces 2020.
JM Financial Services Limited has been recognised as ‘India's Best Workplaces in Investment Industry 2020'.
14th Institute of Chartered Accountants of India (ICAI) Awards (January 2021) Mr. Nimesh Kampani Chairman - JM Financial Group inducted into the ‘CA Hall of Fame' award by ICAI.

Board of directors and key managerial personnel

Non-Executive Director

Pursuant to the applicable provisions of section 152 of the Act Mr.Nimesh Kampani (DIN 00009071) a non-executive director of the Company retires byrotation at the forthcoming annual general meeting of the Company. Being eligible Mr.Kampani has offered himself for re-appointment as a director.

Additionally Mr. Kampani shall be attaining the age of seventy-five(75) years on September 30 2021. As required under regulation 17(A) of the SEBI (ListingObligations and Disclosure Requirements) Regulations 2015 (the "ListingRegulations") the board on the recommendation of the nomination and remunerationcommittee has unanimously decided to commend to the members of the Company passing ofthe special resolution approving the continuation of the directorship of Mr. Kampani as anon-executive director of the Company notwithstanding he attaining the age of seventy five(75) years.

Brief details of Mr. Kampani along with justification for the aboverecommendation is provided in the Notice convening the thirty sixth annual generalmeeting.

Independent Directors

During the financial year 2020-21 the board pursuant to section 161of the Act appointed Mr. P S Jayakumar (DIN: 01173236) as an additional (independent)director of the Company with effect from July 30 2020 subject to the approval of themembers of the Company. The required resolution commending the appointment of Mr.Jayakumar is included in the Notice convening the thirty sixth annual general meeting. Theinitial term of Mr. P S Jayakumar as an independent director shall be five (5) yearseffective from July 30 2020 and ending on July 29 2025.

The board is of opinion that Mr. P S Jayakumar is a person of integritywith high level of ethical standards and having worked in senior positions possessesrelevant expertise experience and proficiency for appointment as an independent directorof the Company.

The Company is in receipt of a notice from a member signifying hisintention to propose the candidature of Mr. Jayakumar for the office of a Director.

Brief profile of Mr. Jayakumar is given in the Notice convening thethirty sixth general meeting.

Key Managerial Personnel

During the year under review there was no change in the key managerialpersonnel of the Company.

Mr. Vishal Kampani Managing Director Mr. Prashant Choksi CompanySecretary and Mr. Manish Sheth Chief Financial Officer are the Key Managerial Personnelwithin the meaning of section 2(51) read with section 203(1) of the Act.

Declaration by Independent Directors

All the independent directors of the Company have submitted theirdeclarations that each of them meets the criteria of independence as provided undersection 149(6) of the Act along with the rules framed thereunder and regulation 16(1)(b)of the Listing Regulations. There has been no change in the circumstances affecting theirstatus as independent directors of the Company. During the year under review theindependent directors of the Company had no pecuniary relationship or transactions withthe Company except as disclosed in the corporate governance report.

In terms of section 150 of the Act read with rule 6 of the Companies(Appointment and Qualification of Directors) Rules 2014 as amended the names of all theindependent directors of the Company have been included in the data bank maintained by theIndian Institute of Corporate Affairs.

Board Meetings

In view of the Covid-19 outbreak the Ministry of Corporate Affairs(the "MCA") and the SEBI vide their respective circulars had relaxed therequirement of having intervening gap of one hundred and twenty (120) days between any two(2) meetings of the board. Notwithstanding this the gap between the two (2) boardmeetings was not more than 120 days.

During the year six (6) meetings of the board were held. Details aboutthe board and committees meetings are given at length in the corporate governance reportwhich forms part of this report.

Policies on appointment of directors and their remuneration

The Company has adopted policies on selection and appointment ofdirectors and also on performance evaluation and remuneration of directors pursuant tosection 178(3) of the Act and regulation 19(4) of the Listing Regulations. The details ofremuneration and other matters have been disclosed at length in the corporate governancereport which forms part of this report.

In accordance with the applicable provisions of the Act and the ListingRegulations these policies are uploaded on the website of the Company viz.https://imfl.com/investor-relations/ Policy on Selection and Appointment of Directors.pdfand https://imfl.com/investor-relations/Policv on Performance Evaluation and Remunerationof the Directors.pdf

Evaluation of board of directors

The board has carried out an annual evaluation of its own performanceboard committees individual directors pursuant to the Act and the Listing Regulations.Through a digital structured questionnaire feedback from directors was obtained as a partof performance evaluation. This questionnaire and criteria of performance was broadlybased on the Company's policy on performance evaluation and guidance note on theboard evaluation issued by SEBI on January 5 2017.

The board and the nomination and remuneration committee of the boardreviewed the performance of the individual directors the chairman the managing directorand various committees established by the board.

The performance evaluation of individual directors including thechairman and the managing director inter alia was done based on the criteria such asprofessional conduct roles and functions discharge of duties their contribution toboard/ committees/senior management preparedness on the issues to be discussedcontribution to the decision making etc.

The performance evaluation of the board as a whole and its committeeswas made after seeking inputs from the directors/ committee members on various criteriasuch as structure and composition effectiveness of the board process information rolesand responsibilities professional development functioning of the board and itscommittees establishment and determination of responsibilities of committees and thequality of relationship between the board and the management.

The performance evaluation of the non-independent directors viz. thechairman the managing director and the board as a whole was also carried out by theIndependent Directors at their separate meeting held on March 24 2021 considering theviews of the executive director and the nonexecutive directors.

Board Committees

The board has formulated the following Committees:

1. Audit Committee

2. Nomination and Remuneration Committee

3. Corporate Social Responsibility Committee

4. Stakeholders' Relationship Committee

5. Risk Management Committee

6. Allotment Committee

Details of all the committees along with their composition terms ofreference and meetings held during the year are provided in the corporate governancereport which forms part of this report.

Directors' Responsibility Statement

Pursuant to section 134(3)(c) read with section 134(5) of the Act withrespect to directors' responsibility statement the directors hereby confirm that:

(a) in the preparation of the annual accounts the applicableaccounting standards have been followed and that no material departure has been made infollowing the same;

(b) appropriate accounting policies have been selected and appliedconsistently and judgements and estimates made are reasonable and prudent so as to give atrue and fair view of the state of affairs of the Company at the end of the financial yearand of the profit of the Company for that period;

(c) proper and sufficient care for maintenance of adequate accountingrecords in accordance with the provisions of Act have been taken for safeguarding theassets of the Company and for preventing and detecting frauds and other irregularities;

(d) the annual accounts have been prepared on a going concern basis;

(e) internal financial controls to be followed by the Company had beenlaid down and such internal financial controls are adequate and are operating effectively;and

(f) proper systems have been devised to ensure compliance with theprovisions of all applicable laws and that such systems are adequate and operatingeffectively.

Statutory Auditors'

Deloitte Haskins & Sells LLP Chartered Accountants are thestatutory auditors' of the Company. The members of the Company at their meeting heldon July 24 2017 had appointed them as the statutory auditors' for a period of five(5) years from the conclusion of the thirty second annual general meeting of the Companyheld on July 24 2017 until the conclusion of the thirty seventh annual general meetingpursuant to the applicable provisions of the Act.

Auditors' Report

The statutory auditors' have issued their unmodified opinion bothon standalone and consolidated financial statements for the year ended March 31 2021 andthat they have not highlighted any qualifications reservations adverse remarks ordisclaimers. The statutory auditors' have not reported any incident of fraud to theaudit committee of the Company during the financial year 2020-21. The notes to theAccounts referred to in the auditors' report are self-explanatory and therefore donot call for any further explanation and comments.

Secretarial Audit

M/s. Makarand M. Joshi & Co. practicing company secretaries wereappointed as the secretarial auditors for conducting the secretarial audit of the Companyfor the financial year 2020-21.

The secretarial audit report as issued by the aforesaid secretarialauditors for the financial year ended March 31 2021 is appended to this report asAnnexure B.

There are no qualifications reservations adverse remarks ordisclaimers in the above secretarial audit report.

Secretarial audit of material unlisted indian subsidiaries

All the material subsidiaries of the Company had undertaken SecretarialAudit for financial year 2020-21 pursuant to section 204 of the Act. The secretarial auditreport issued by the secretarial auditors of the material unlisted subsidiaries viz. JMFinancial Products Limited JM Financial Credit Solutions Limited JM Financial AssetReconstruction Company Limited and JM Financial Services Limited are appended to thisreport as Annexure B1 to Annexure B4.

Secretarial Standards

The Company has complied with the applicable Secretarial Standardsissued by the Institute of Company Secretaries of India.

Corporate Social Responsibility

The corporate social responsibility committee (the "CSRcommittee") is established by the board in accordance with section 135 of the Act.

In compliance with the amendments made by the MCA vide notificationdated January 22 2021 in the provisions of section 135 of the Act and in the existingrules vide Companies (Corporate Social Responsibility Policy) Amendment Rules 2021 (the"CSR rules") the Corporate Social Responsibility policy (the "CSRpolicy") has been suitably amended and approved by the CSR committee and the board ofthe Company.

The CSR policy of the Company lists out the activities that can beundertaken or supported by the Company within the applicable provisions of the Act. Apartfrom the composition requirements of the CSR committee the CSR policy inter alia laysdown the criteria for selection of projects and areas annual allocation modalities ofexecution/implementation of activities monitoring mechanism of CSR activities/projects aswell as the formulation of annual action plan.

The details of CSR activities as required under rule 8 of CSR rules inthe format as applicable to the Company are appended to this report as Annexure C.

Risk Management

Risk management forms an integral part of the Company's businessoperations and monitoring activities. The Company and its subsidiaries are exposed to avariety of risks including liquidity risk interest rate risk market risk credit risktechnology risk operational risk regulatory and compliance risk reputational riskbusiness continuity risk legal risk competition risk and risks pertaining to Covid-19pandemic. The Company has formulated comprehensive risk management policies and processesto identify evaluate manage and mitigate the risks that are encountered during conductof business activities in an effective manner.

The risk management committee as established by the board framesimplements and monitors the risk management plan including functions relating to cybersecurity assessment of various risks formulation of measures to mitigate the risks. Theboard reviews the effectiveness of risk management systems in place and ensures that therisks are effectively managed. The audit committee has additional oversight in the area offinancial risks and controls.

Details about development and implementation of risk management policyhave been covered at length in the management discussion and analysis report forming partof this report.

Internal financial control systems and its adequacy

The board has adopted accounting policies which are in accordance withsection 133 of the Act read with the Companies (Indian Accounting Standards) Rules 2015.

The internal financial control system of the Company is supplementedwith internal audits regular reviews by the management and checks by external auditors.It provides reasonable assurance in respect of financial and operational informationcompliance with applicable statues safeguarding of assets of the Company prevention anddetection of frauds accuracy and completeness of accounting records and also ensuringcompliance with the Company's policies. The audit committee monitors this system andensures adequacy of the same. The statutory auditors and the internal auditors of theCompany also provide their opinion on the internal financial control framework of theCompany.

During the year no material or serious observations have beenhighlighted for inefficiency or inadequacy of such controls. The details of adequacy ofinternal financial controls are given at length in the management discussion and analysisreport forming part of this report.

Material changes and commitments affecting the financial position ofthe company

There have been no material changes and commitments affecting thefinancial position of the Company which have occurred between the end of the financialyear to which the financial statements relate and the date of this annual report.

Change in nature of business

During the financial year 2020-21 there has been no change in thenature of the Company's business.

Significant and material orders

During the financial year 2020-21 there were no significant andmaterial orders passed by the regulators or courts or tribunals impacting the goingconcern status of the Company and its operations.

Report on Corporate Governance

Report on corporate governance for the financial year 2020- 21 alongwith the certificate from the statutory auditors' of the Company confirming thecompliance with regulations of corporate governance under the Listing Regulations formspart of this report.

Management discussion and analysis report

In terms of the provisions of regulation 34 of the Listing Regulationsmanagement discussion and analysis report forms part of this report.

Business Responsibility Report

Pursuant to regulation 34(2) of the Listing Regulations read with SEBICircular No. CIR/CFD/CMD/10/2015 dated November 4 2015 the business responsibilityreport describing the initiatives taken by the Company from an environmental social andgovernance perspective forms part of this report.

Particulars of employees and related information

The requisite disclosures in terms of the provisions of section 197 ofthe Act read with rule 5 of the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 (the "said Rules") is appended to this report as AnnexureD.

As per the provisions of section 136(1) of the Act the reports andaccounts are being sent to the members of the Company excluding the information regardingemployee remuneration as required pursuant to rule 5(2) and rule 5(3) of the said rules.Any member interested in obtaining such information may write to the company secretary atecommunication@imfl.com and the same will be furnished on such request.

Particulars of loans guarantees or investments

Particulars if any of investments made loans and guarantees givenand securities provided are given in the note 37 of notes to the standalone financialstatements.

Particulars of contracts or arrangements with related parties

The board of the Company has formulated a policy on dealing withrelated party transactions pursuant to the applicable provisions of the Act the ListingRegulations. The said policy is displayed on the website of the Company viz.https://imfl. com/investor-relations/Policv on Dealing with Related Party Transactions.pdf

During the financial year 2020-21 the related party transactionsentered in to by the Company were in the ordinary course of business and on arms'length basis. The majority of such related party transactions were with wholly ownedsubsidiaries and subsidiaries of the Company. All the related party transactions areplaced before the audit committee for its review and approved on a quarterly basis. Anomnibus approval of the audit committee is obtained for the related party transactionswhich are repetitive in nature. All related party transactions as required under Ind AS -24 are reported in note 37 of notes to the standalone financial statements and note 39 ofnotes to the consolidated financial statements of the Company.

None of the transactions with related parties fall under the scope ofsection 188(1) of the Act. Accordingly the disclosure of related party transactions asrequired under section 134(3) (h) of the Act in Form AOC-2 is not applicable to theCompany for the financial year 2020-21 and hence does not form part of this report.

Annual Return

In accordance with the requirements under section 92(3) and section134(3)(a) of the Act and the applicable rules the annual return as on March 31 2021 isavailable on the website of the Company viz. https://imfl.com/annual-report

Conservation of energy technology absorption foreign exchangeearnings and outgo

As the Company is engaged in the financial services activities itsoperations are not energy intensive nor does it require adoption of specific technologyand hence information in terms of section 134(3)(m) of the Act read with the Companies(Accounts) Rules 2014 is not applicable to the Company. Nevertheless the Company isvigilant on the need for conservation of energy as stated in business responsibilityreport.

During the financial year 2020-21 the Company's foreign exchangeearnings was Rs.37.18 crore and expenditure was Rs.0.51 crore.

The details of the transaction in foreign exchange are provided innotes 40 and 41 of notes to the standalone financial statements forming part of thisannual report.

Vigil Mechanism/Whistle Blower Policy

The vigil mechanism as envisaged in the Act the rules prescribedthereunder and the Listing Regulations is implemented through the Company's WhistleBlower Policy to enable the directors and employees of the Company to report genuineconcerns to provide for adequate safeguards against victimisation who use such mechanismand make provision for direct access to the chairman of the audit committee. Details ofvigil mechanism/whistle blower are included in the report on corporate governance.

During the financial year 2020-21 no cases under this mechanism werereported.

Maintenance of cost records

The cost records as specified by the Central Government under section148(1) of the Act are not required to be maintained by the Company.

Policy for prevention prohibition and redressal of sexual harassmentof women at workplace

The Company has a detailed policy in place in line with therequirements of The Sexual Harassment of Women at Workplace (Prevention Prohibition andRedressal) Act 2013 (the "POSH"). Internal Complaints Committees (the"ICC") has been set up to redress complaints received regarding sexualharassment and the Company has complied with provisions relating to the constitution ofICC under the POSH. All employees permanent contractual temporary trainees are coveredunder this policy. The provisions related to prevention of sexual harassment are alsoimbibed in the Company's Code of Conduct as applicable to the employees.

During the year under review no complaints were received from any ofthe employees.

Managing director and chief financial officer certificate

The certificate received from Mr. Vishal Kampani the Managing Directorand Mr. Manish Sheth Group Chief Financial Officer with respect to the financialstatements and other matters as required under part B of schedule II to the ListingRegulations forms part of corporate governance.

Acknowledgements

The Board of Directors of the Company takes this opportunity to placeon record its gratitude for the guidance and support extended from time to time by SEBIRBI BSE NSE National Housing Bank Ministry of Corporate Affairs Registrar ofCompanies (Mumbai) Maharashtra Metropolitan Stock Exchange of India Limited MultiCommodity Exchange of India Limited National Commodity & Derivatives ExchangeLimited National Securities Depository Limited and Central Depository Services (India)Limited and all such other governmental and regulatory authorities.

Your directors also place on record their sincere appreciation for thecontinued support extended by the bankers financial institutions lenders andstakeholders and the trust reposed by them in the Company.

Recognising the challenging work environment in general andparticularly during the unprecedented time of Covid-19 pandemic the directors sincerelyacknowledge all-round efforts and commitment displayed by all the employees who have beenreporting to work at the office during the lockdown and also the employees working fromtheir respective homes. The directors further express their grief for the loss of lives ofsome of the employees and/or their family members due to Covid-19 pandemic and haveimmense respect for the employees risking their lives to fight this pandemic.

.