indbank merchant banking services ltd share price Directors report


To the Members,

Your Directors have pleasure in presenting before you the Thirty Fourth Annual Report together with the Audited Statements of Accounts for the year ended 31st March, 2023.

Operations

During the year your company has earned a gross income of Rs.2135.08 lakhs as against Rs.2445.96 lakhs in the previous year. Under Stock Broking your company has a mix of institutional and individual clients and has achieved a turnover of Rs.10720.50 crores during the year as against Rs.13541.03 crores in the previous financial year. Your company also provides Depository services to institutions and retail customers and has 81898 accounts under DP operations and 37872 accounts under broking operations.

Your company reported a net profit of Rs.337.30 lakhs during the year 2022-23 as against a net profit of Rs. 685.14 lakhs in the previous year as under:

Sl.No. FY 2022-23 FY 2021-22
1 Income from Fee based operations 1589.32 1763.08
Of which income from Stock Broking 1244.14 1388.48
DP 232.87 251.63
Merchant Banking/ Mutual Funds 112.31 122.97
2 Other income 545.76 682.88
3 Total income (1+2) 2135.08 2445.96
4 Employee Expenses 758.74 692.54
5 Other expenses 415.72 323.61
6 Interest Expenses 88.90 150.68
7 Depreciation 37.13 19.91
8 Provisions for NPAs/Write off 326.07 403.91
9 Total expenses (4+5+6+7+8) 1626.56 1590.65
10 Profit before exceptional items (3-9) 508.52 855.31
11 Prior period income/Exp 0.00 0.00
12 Profit before tax (10-11) 508.52 855.31
13 Current Tax 91.22 143.40
14 MAT Tax 0.00 0.00
15 Deferred tax 67.08 15.55
16 Prior Year tax 0.00 0.00
17 Items reclassified as per IND-AS re-measurement of the defined benefit plans (12.92) (11.22)
18 Net profit / Loss after tax (12-13-14-15-16+17) 337.30 685.14
19 EPS 0.79 1.57

Dividend :

As your Companys profits are not adequate and for the reserves to be ploughed back to improve the net worth, your Directors do not recommend any dividend for the year 2022-23.

Board Meetings :

The Board of Directors met 5 times during the year on 20.04.2022, 22.07.2022, 18.10.2022, 21.01.2023 and 28.03.2023.

Directors and Key Managerial Personnel :

Shri. Arun Kumar Bansal, Nominee Director of the Company submitted his resignation from the Directorship of the Company with effect from 07.06.2022 consequent to his voluntary retirement from Indian Bank. The same was taken on record by the Board of Directors in their meeting held on 22.07.2022. The Board also recorded the valuable services rendered by him during his tenure as director of the Company. Shri Sunil Jain has been appointed as a Nominee Director in his place by the Board of Directors in their meeting held on 22.07.2022.

Shri Sunil Jain is having more than 15 years of banking experience. Currently he is working as the Chief Financial Officer (CFO) of Indian Bank. He joined Indian Bank on 06.11.2006. He has also worked with credit verticals and lead corporate branches of Indian Bank. He is a Chartered Accountant and holds a Post- Graduation in Commerce and CAIIB.

Shri V Haribabu, resigned from the position of CFO as on 21.07.2022 and Shri Tausif Inamdar was appointed as CFO with effect from 22.07.2022.

Retirement of Directors by rotation :

Shri Imran Amin Siddiqui, Non-executive Nominee Director of the Company, who has been longest in the office since last appointment, is subject to retire by rotation and being eligible, offers himself for re-appointment.

Declaration from Independent Directors on Annual Basis :

The Company has received necessary declaration from each Independent Director of the Company under Section 149(7) of the Companies Act, 2013 that the Independent Directors of the 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 31, 2023.

Vigil Mechanism:

The Company has established a vigil mechanism called Whistle-blower Policy for its directors and employees to report genuine concerns pursuant to the provisions of section 177(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 Corporate Governance Report and also posted on the website of the Company.

Directors Responsibility Statement:

In pursuance of section 134 (5) of the Companies Act, 2013, the Directors hereby 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; and

e) the Directors had laid down internal financial controls to be followed by the company and that such internal financial controls and were operating effectively;

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.

Particulars of loans & investments by company

Details of Loans, Guarantees and Investments covered under the provisions of Section 186 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 the Companies (Management and Administration) Rules, 2014, an extract of annual return in Form No. MGT 9 is annexed herewith. Annual report of the Company is placed in the website of the Company i.e., www.indbankonline.com under Investors > Financials > Annual Report

Auditors:

M/s. Brahmayya &Co, Chartered Accountants, Chennai was appointed by the Office of the Comptroller and Auditor General of India in exercise of the powers conferred on them by section 139 of the Companies Act, 2013 as statutory auditors of the company for the financial year 2022-23.

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, Practising Company Secretaries, who were appointed as Secretarial Auditors for the year 2022-23 by the Board of Directors at their meeting held on 21.01.2023, is annexed to this Report and there were no adverse remarks in the said 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 technology absorption.

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

Material Changes and commitments, if any:

There were no material changes and commitments, affecting the financial position of the Company which have occurred between the end of the financial year of the Company to which this financial statements relate and the date of this report.

Significant & Material orders passed by the Regulators:

There is no significant and material order passed by the regulators or Courts or Tribunals impacting the going concern status and the companys operations in future.

Details of adequacy of Internal Financial Controls:

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

Risk Management Policy:

The company has put in place the Risk Management Policy compatible with the type and size of operations and risk perception. The said policy is drawn up based on the guidelines 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 of Section 135 of the Companies Act, 2013. The said policy is drawn up in terms of the section 135 and other relevant section/ rules of Companies Act 2013. The Annual Report on CSR activities is annexed to the Board Report. CSR Policy of the Company is placed in the website of the Company i.e., www.indbankonline.com under About us- policies and procedures Corporate Social Responsibility Policy.

Policy on criteria for determining qualifications, positive attributes and independence of a director, relating to the remuneration for the directors, key managerial personnel and other employees:

The Nomination and Remuneration Committee of the Company pursuant to section 178 of the Companies Act, 2013, has formulated the Nomination and Remuneration Policy which includes the criteria for determining qualifications, positive attributes and independence of a director, relating to the remuneration for the directors, key managerial personnel and other employees. The said Policy of the Company is placed in the website of the Company i.e., www.indbankonline.com under About us- policies and procedures Nomination and Remuneration Policy.

Related Party Transactions :

During the year under review, the transactions with related party is reported in Form AOC 2 under section 188 of the Companies Act, 2013 read with the Companies (Meeting of Board and its Powers) Rules 2014 is annexed herewith.

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

An Internal Complaints Committee (ICC) is set up to redress complaints received regarding sexual harassment and discrimination at work place. During the year ended March 31, 2023, the ICC has received no complaints pertaining to sexual harassment / discrimination at work place.

a. Number of complaints filed during the financial year : Nil

b. Number of complaints disposed off during the financial year : Nil

c. Number of Complaints pending as on end of the financial year :Nil

Management discussion and analysis report

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

Formal Annual Evaluation:

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

Ratio of Remuneration to each Director:

Details/Disclosures of Ratio of Remuneration of each Director to the median employees remuneration as Annexure 1.

Listing with Stock Exchanges:

The Company confirms that it has paid the Annual Listing Fees for the year 2022-23 to NSE and BSE where the Companys Shares are listed.

Corporate Governance

Your Company has taken adequate steps to adhere to all the stipulations laid down for Corporate Governance as per SEBI (Listing Obligations and Disclosure Requirements), Regulations 2015. A report on Corporate Governance is included as a part of this Annual Report. Certificate from the Statutory Auditors of the company confirming the compliance with the conditions of Corporate Governance as stipulated in SEBI (Listing Obligations and Disclosure Requirements), Regulations 2015 is attached also to this report.

Disclosures as per 134(3) read with Rule 8 of Companies (Accounts) Rules, 2014

I. Maintenance of cost records as specified by the Central Government under sub-section (1) of section 148 of the Companies Act, 2013, is not applicable to the Company.

ii. No proceedings are pending under the Insolvency and Bankruptcy Code, 2016 (31 of 2016) during the year under review.

iii. There was no onetime settlement made by the Company and therefore the disclosure regarding the details of difference between amount of the valuation done at the time of one time settlement and the valuation done while taking loan from the Banks or Financial Institutions did not arise for the year 2022-23.

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 limits prescribed Under Rule 5 (2) of The Companies (Appointment and Remuneration of Managerial Personnel) Rules of the Companies Act, 2013.

Outlook:

Your company will continue to focus its efforts to increase its activities under fee-based business in addition to concentrating on recovery of over dues and reduction of Non-Performing Assets, disinvestment of quoted and unquoted investments. Your companys involved management network, satisfied clientele, quality manpower and diligent internal control and cost control measures will enable your company to continue to report better performance in the coming years.

Acknowledgements:

Your Directors wish to place on record their gratitude to the Ministry of Finance, Government of India, SEBI and Comptroller and Auditor General of India for their valuable guidance.

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

Your Directors express their appreciation for the contribution made by the Companys dedicated Employees.

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

for and on behalf of Board of Directors
V. Haribabu Imran Amin Siddiqui
Place: Chennai President and Whole Time Director Nominee Director
Date: 19.07.2023 DIN : 09523733 DIN : 09153707