JM Financial Director Discussions


Dear Members,

The Board of Directors (the “Board”) is pleased to present the 38th Annual Report of the Company along with the audited standalone and consolidated financial statements for the financial year ended March 31,2023.

Financial Performance

The Companys standalone and consolidated financial performance for the year ended March 31,2023 is summarised below.

( in Crore)

Particulars

Consolidated

Standalone

FY 2022-23

FY 2021-22

FY 2022-23

FY 2021-22

Gross income

3,343.07

3,763.28

488.56

619.63

Profit before depreciation, amortisation expense, finance costs and tax expenses (EBITDA)

2,172.99

2,467.55

329.45

433.35

Less: Depreciation and amortisation expense

41.87

37.78

10.03

10.69

Finance costs

1,178.51

1,081.73

6.13

6.76

Profit before tax

952.61

1,348.04

313.29

415.90

Current tax

243.54

415.46

40.15

77.50

Deferred tax

0.61

(60.24)

1.29

10.62

Tax adjustments of earlier years (net)

(0.30)

0.45

(1.22)

-

Net Profit after tax but before share in profit of associate

708.76

992.37

273.07

327.78

Add: Share in profit of associate

0.23

0.02

-

-

Net Profit after tax and share in profit of associate

708.99

992.39

273.07

327.78

Other Comprehensive Income

10.58

4.27

(0.13)

0.08

Total Comprehensive Income

719.57

996.66

272.94

327.86

Net Profit Attributable to

Owners of the Company

597.29

773.16

-

-

Non-Controlling Interests

111.70

219.23

-

-

Total Comprehensive Income Attributable to

Owners of the Company

607.91

777.50

-

-

Non-Controlling Interests

111.66

219.16

-

-

For the detailed analysis on financial and business performance of the Company, please refer to the Management Discussion and Analysis Report forming part of this Report.

Appropriations

The following appropriations have been made from the available profits of the Company for the financial year ended March 31,2023.

( in Crore)

Particulars

Consolidated

Standalone

FY 2022-23

FY2021-22

FY 2022-23

FY 2021-22

Net Profit

597.29

773.16

273.07

327.78

Add/(less): Other Comprehensive Income

(0.37)

0.68

(0.13)

0.08

Add: Balance profit brought forward from previous year

3,897.87

3,400.28

1,316.81

1,084.29

Profit available for appropriations

4,494.79

4,174.12

1,589.75

1,412.15

Less: Appropriations

Final Dividend pertaining to the previous year paid during the year

109.75

47.64

109.75

47.64

Interim Dividend paid during the year

85.93

47.70

85.93

47.70

Transfer to Statutory reserve - I

136.15

86.37

-

-

Transfer to Statutory reserve - II

5.85

0.87

-

-

Transfer to Impairment reserve

19.09

93.67

-

-

Surplus carried to balance sheet

4,138.02

3,897.87

1,394.07

1,316.81

The standalone and consolidated financial statements for the financial year ended March 31, 2023 have been prepared in accordance with Section 133 of the Companies Act, 2013 (the “Act”) read with the rules made thereunder and in accordance with the Indian Accounting Standards (“Ind AS”).

Key highlights of Consolidated Financial Performance

> Gross income decreased by 11.2% to 3,343.07 Crore as compared to 3,763.28 Crore in the financial year 2021-22;

> Profit before tax for the year decreased by 29.3% to 952.61 Crore as compared to 1,348.04 Crore in the financial year 2021-22;

> Profit after tax (post non-controlling interest) for the year decreased by 22.7% to 597.29 Crore as compared to 773.16 Crore in the financial year 2021-22; and

> The lower income and corresponding decrease in the profit after tax (post non-controlling interest) for the year is primarily attributable to significant decline in the performance of Alternative and Distressed Credit Business and Asset Management, Wealth Management & Securities Business (Platform AWS) segment during the year.

The consolidated financials reflect the cumulative performance of the Company together with its various subsidiaries, associate company, partnership firm and association of persons.

Key highlights of Standalone Financial Performance

> Gross income reported by the Company was 488.56 Crore for the year ended March 31, 2023 as against 619.63 Crore in the previous year, registering a decrease of 21.2%;

> Net profit of the Company was 273.07 Crore for the year ended March 31, 2023 as compared to the net profit of 327.78 Crore in the previous year, registering a decrease of 16.7%; and

> The lower income and corresponding decrease in the net profit is attributable to decrease in the fee income from 349.01 Crore in the previous year to 193.99 Crore

in the year under review due to lower deal closures in investment banking business. The said decrease was partially off-set by increase in dividend income from subsidiaries which stood at 140.22 Crore in the year under review as compared to 46.14 Crore in the previous year.

The standalone and consolidated financial statements, together with the relevant documents and audited financial statements for each of its subsidiaries, pursuant to Section 136 of the Act, are available on the website of the Company at https://imfi.com/investor-relation/financial-results.html.

General Reserve

During the financial year, there was no amount proposed to be transferred to the general reserve on a standalone basis.

Scheme of Arrangement

During the year, a Scheme of Arrangement was filed with the National Company Law Tribunal (“NCLT”) for demerger of the undertaking (the “Scheme”) comprising Private Wealth and Portfolio Management Services (the “PMS”) along with the investment in JM Financial Institutional Securities Limited (which houses the institutional equities business) from its wholly owned subsidiary, JM Financial Services Limited to the Company. The Scheme also comprises merger of JM Financial Capital Limited, which is a wholly owned subsidiary of JM Financial Services Limited, into JM Financial Services Limited. The Company has received the NCLT order approving the Scheme on April 20, 2023 with the appointed date April 1, 2023. The Scheme shall become effective upon filing of certified copy of the NCLT order with Registrar of Companies (the “ROC”).

Once the Scheme becomes effective, the following changes shall take place:

- JM Financial Capital Limited will cease to be a step- down subsidiary of the Company consequent upon its merger with JM Financial Services Limited;

- JM Financial Institutional Securities Limited will become a direct wholly owned subsidiary of the Company; and

- the Private Wealth and PMS divisions shall become part of the Company and be classified under the Investment Bank segment from the Platform AWS segment.

Dividend

The Board at its meeting held on May 9, 2023, recommended payment of the final dividend of 0.90 per equity share of the face value of 1/- each (90% of face value) for the financial year 2022-23. The payment of the final dividend is subiect to the approval of the members at the ensuing Annual General Meeting (the “AGM”) of the Company.

The Board at its meeting held on November 14, 2022, had also declared an interim dividend of 0.90 per equity share of the face value of 1/- each (90% of face value).

The total dividend for the financial year 2022-23, including the proposed final dividend, amounts to 1.80 per equity share of the face value of 1/- each (180% of face value). The final dividend (if approved by the members) along with the interim dividend would involve a total outflow of 171.86 Crore as compared to outflow of 157.45 Crore in the previous financial year. The dividend payout ratio works out to 28.77% of the consolidated net profit for the year which is in accordance with the Dividend Distribution Policy of the Company.

The amount of final dividend, on its declaration, will be paid to those members:

a. whose names appear in the statement of beneficial ownership furnished by National Securities Depository Limited and Central Depository Services (India) Limited at the close of the business hours on Friday, May 19, 2023 in respect of shares held by them in dematerialised form; and

b. whose names appear in the register of members at the close of business hours on Friday, May 19, 2023 in respect of shares held by them in physical form.

In view of the changes made under the Income Tax Act, 1961, by the Finance Act, 2020, dividends paid or distributed by the Company shall be taxable in the hands of the recipients. The Company shall, accordingly, make the payment of the final dividend after deduction of tax at source, as applicable.

The Dividend Distribution Policy of the Company, in terms of Regulation 43A of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (the “SEBI Listing Regulations”) is available on the website of the Company at https://jmfi.com/ investor-relations/Policv for Dividend Distribution.pdf.

Share Capital

During the year under review, the Company issued and allotted 7,48,270 equity shares to its eligible employees under the Companys Employees Stock Option Scheme - Series 8 to Series 13. As a result, the issued, subscribed and paid-up equity share capital of the Company increased from 95,40,55,533 (comprising 95,40,55,533 equity shares of the face value of 1/- each) to 95,48,03,803 (comprising 95,48,03,803 equity shares of the face value of 1/- each). The equity shares issued under the Employees Stock Option Scheme rank pari-passu with the existing equity shares of the Company.

Employees Stock Option Scheme

During the year under review, the Company granted 11,90,779 stock options to the eligible employees of the Company and its subsidiaries under the Companys Employees Stock Option Scheme (the “ESOP Scheme”) under Series 14, 15 and 16.

The ESOP Scheme is in compliance with the Securities and Exchange Board of India (Share Based Employee Benefits and Sweat Equity) Regulations, 2021 (the “SEBI SBEB Regulations”) and SEBI Circulars, issued from time to time, in this regard. A certificate from the Secretarial Auditors of the Company, confirming that the Scheme has been implemented in accordance with the SEBI SBEB Regulations, would be placed at the ensuing AGM for inspection by the members through electronic means.

The disclosure of the ESOP Scheme, in compliance with the SEBI SBEB Regulations, is set out in Annexure A and also uploaded on the Companys website at https://imfi.com/ annual-report. Additionally, the relevant disclosures in terms of Ind AS 102 relating to share based payment, forms part of note 31 of the notes to the standalone financial statements and note 44 of the notes to the consolidated financial statements of the Company.

The Nomination and Remuneration committee (the “NRC”) of the Board, at its meeting held on April 25, 2023, has granted an aggregate of 99,999 stock options to the eligible employees of Companys subsidiary as per the ESOP Scheme under Series 17.

Subsidiaries, Associate, Partnership Firm and Awards and Recognition Association of Persons

The Company has following subsidiaries (including step down subsidiaries), associate company, partnership firm and association of persons.

Subsidiary Companies (including step down 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. Ltd. (Singapore)

7. JM Financial Securities, Inc. (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

Partnership Firm

Astute Investments

Association of Persons

ARB Maestro

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

The Companys policy for determining material subsidiary is available on its website at https://imfi.com/investor-relations/ Policy on Material Subsidiaries.pdf.

The Asset Triple A Country Awards for Sustainable Finance 2022

- JM Financial Limited awarded for the Best Corporate and Institutional Adviser, India.

(February 2023)

- JM Financial Limited awarded for the Best Equity Adviser, India.

BSE Awards, 2022 (October 2022)

The Bondskart platform has been recognised by BSE Limited as the Best Performer in Retail Trading in Corporate Bonds - Fintech Platforms.

JM Financial Services Limited has been recognised by BSE Limited amongst:

- Top 5 Performers in Primary Market Segment (Equity - Members);

- Top 5 Performers in Primary Market Segment (UPI Bids - Members);

- Top 5 Performers in Primary Market Segment (Debt - Members); and

- Best Performers in Institutional Segment - Domestic.

The Great Place to Work Institute. Indias Great MidSizes Workplaces (June 2022)

JM Financial Home Loans Limited recognised third time in a row among ‘Indias Top 50 Great Mid-Sized Workplaces 2022.

Certifications

Great Place to Work- Certified™

(February 2023 - February 2024)

JM Financial Group has been accredited as Great Place to Work- CertifiedTM by the Great Place to Work Institute for the below five participating entities for the period February 2023 - February 2024.

- JM Financial Limited (Institutional Securities Businesses);

- JM Financial Services Limited;

- JM Financial Products Limited (Dwello);

- JM Financial Home Loans Limited; and

- JM Financial Asset Management Limited.

Directors and Key Managerial Personnel

As on March 31,2023, the Board of the Company comprises ten (10) Directors viz., two (2) executive directors, two (2) nonexecutive directors and six (6) independent directors including two (2) women independent directors.

Appointment of Non-Executive Independent Director

During the year under review, the members of the Company at its meeting held on August 2, 2022, had approved the appointment of Mr. Sumit Bose (DIN: 03340616) as an independent director for a period of five (5) years with effect from May 24, 2022 to May 23, 2027, basis the recommendation made by the NRC and the Board.

Retirement by Rotation

In accordance with the applicable provisions of Section 152 of the Act, Mr. Vishal Kampani (DIN: 00009079), a non-executive director of the Company, being longest in office since his last appointment, retires by rotation at the forthcoming AGM of the Company. Being eligible, Mr. Kampani has offered himself for re-appointment as a director.

A resolution seeking his re-appointment along with the brief particulars as required under the Secretarial Standard on General Meetings issued by the Institute of Company Secretaries of India and Regulation 36 of the SEBI Listing Regulations forms part of the Notice convening the 38th AGM of the Company.

None of the Directors is disqualified from being appointed as ‘Director, pursuant to Section 164 of the Act or under any other applicable laws. The Company has obtained a certificate from Makarand M Joshi & Co., Company Secretaries, that none of the directors on the Board of the Company has been debarred or disqualified from being appointed or continuing as director of companies by the Securities and Exchange Board of India (the “SEBI”)/Ministry of Corporate Affairs (the “MCA”) or any such statutory authorities as on March 31, 2023. A copy of the said certificate is forming part of Corporate Governance Report, which forms part of this Report.

Cessation of Independent Directors

During the year under review, Mr. E A Kshirsagar (DIN: 00121824), Dr. Vijay Kelkar (DIN: 00011991),

Mr. Paul Zuckerman (DIN: 00112255) and Mr. Keki Dadiseth (DIN: 00052165) ceased to be the independent directors of the Company with effect from close of business hours on July 2, 2022 upon completion of their second term pursuant

to Section 149(11) of the Act. With this, they also ceased to be chairmen/members of the respective committees of the Board on which they were serving as such.

The Board acknowledges the immense benefit derived by the Company from the expertise and valuable guidance of the above directors and places on record its deep appreciation for the thoroughness, dedication and commitment shown by them during their stint as independent directors of the Company.

Change in Key Managerial Personnel

Ms. Dimple Mehta (Membership No. F12560) has been appointed as the Company Secretary & Compliance Officer (for SEBI Listing Regulations) of the Company with effect from April 1, 2023 and the Key Managerial Personnel (the “KMP”) within the meaning of Section 203 of the Act. Mr. Prashant Choksi ceased to be the KMP upon he relinquishing his executive role on surpassing his superannuation age with effect from the close of business hours on March 31, 2023. The Board places on record its appreciation for flawless work/ role played by Mr. Choksi during his association with the Company as such, including his swiftness in responding to the queries/requirements of the Board Members, past and present.

Other than above, there are no changes in the KMP of the Company. Mr. Atul Mehra, Mr. Adi Patel, Joint Managing Directors and Mr. Manish Sheth, Chief Financial Officer continue to be the KMPs within the meaning of Section 2(51) read with Section 203(1) of the Act.

Declaration by Independent Directors

The independent directors of the Company, pursuant to the provisions of Section 149 of the Act and SEBI Listing Regulations, have submitted their declaration confirming that each of them meets the criteria of independence as prescribed under the Act read with rules made thereunder and the SEBI Listing Regulations and that they continue to comply with the Code of Conduct laid down under Schedule IV to the Act. They have also confirmed that they are not aware of any circumstance or situation which exists or may be reasonably anticipated that could impair or impact their ability to discharge their duties independently. Further, in terms of Section 150 of the Act read with Rule 6 of the Companies (Appointment and Qualification of Directors) Rules, 2014, the independent directors of the Company have confirmed that they have registered themselves with the databank maintained by the Indian Institute of Corporate Affairs.

Accordingly, based on the said declarations and after reviewing and verifying its veracity, the Board is of the opinion that the independent directors are persons of integrity, possess relevant expertise, experience, proficiency, fulfil the conditions of independence specified in the Act and SEBI Listing Regulations and are independent of the management of the Company.

There has been no change in the circumstances affecting their status as independent directors of the Company. During the financial year 2022-23, the independent directors had no pecuniary relationships or transactions with the Company, except as disclosed in the Corporate Governance Report which forms part of this Report.

The Company has adopted the Code of Conduct for its directors and senior management personnel (the “Code of Conduct”) in accordance with applicable provisions of the Act and the SEBI Listing Regulations. On an annual basis, all the Board Members and senior management personnel have affirmed compliance with the Code of Conduct.

Board Meetings

During the year under review, seven (7) meetings of the Board were held. The maximum interval between any two meetings did not exceed 120 days, as prescribed under the Act and the SEBI Listing Regulations. Detailed update on the Board, its composition, governance of committees, number of meetings held during the financial year 2022-23 and attendance of the Directors thereat, is provided in the Corporate Governance Report, which forms part of this Report.

Policies on Appointment of Directors and their Remuneration

The Board values the significance of diversity and firmly believes that diversity of gender, thought, experience and knowledge leads to sharper and balanced decision-making. The Company has an eminent, high-performing and diverse board comprising 20% Women Directors. In terms of the applicable provisions of Section 178(3) of the Act and Regulation 19(4) of the SEBI Listing Regulations, the Company has adopted the policies on ‘Selection and Appointment of Directors and ‘Performance Evaluation and Remuneration of the Directors. Both these policies are available on the website of the Company at https://imfi.com/investor-relations/ Policy on Selection and Appointment of Directors.pdf and https://imfi.com/investor-relations/Policy on Performance Evaluation and Remuneration of the Directors.pdf.

The salient features of the policy on Performance Evaluation and Remuneration of the Directors along with the details of

remuneration and other matters have been disclosed at length in the Corporate Governance Report which forms part of this Report.

Evaluation of Board of Directors

Pursuant to the applicable provisions of the Act and the SEBI Listing Regulations, the Board has carried out an annual evaluation of its own performance, the Board committees and individual directors. The evaluation was based on the criteria and questionnaire framed by the Company in accordance with its Policy on performance evaluation and remuneration of the Directors, which is available on the website of the Company and the Guidance Note on Board Evaluation issued by the SEBI vide its Circular dated January 5, 2017. The questionnaires were circulated online through the secured application and feedback received from the directors was discussed and reviewed by the NRC and the Board at their respective meetings.

The independent directors of the Company met separately at their meeting held on March 24, 2023, without the attendance of non-independent directors and members of the management. Based on the feedback received through performance evaluation questionnaires, the independent directors reviewed the following.

a) Performance of non-independent directors i.e., ioint managing directors, non-executive vice chairman of the Company and the Board as a whole;

b) Performance of the various committees of the Board;

c) Performance of the chairman of the Board/Company; and

d) Assessed the quality, quantity and timeliness of flow of information between the Companys management and the Board.

The independent directors expressed their satisfaction on the performance of the non-independent directors of the Company and the Board as a whole, for the financial year 2022-23 on the overall functioning of the Board committees.

The evaluation process endorsed the Board Members confidence in the ethical standards of the Company, the cohesiveness that exists amongst them, the two-way candid communication between the Board and the management and the openness of the management in sharing strategic information to enable the Board Members to discharge their responsibilities effectively.

As an outcome of this exercise, the Board was of the view that it has optimum mix of executive, non-executive and independent directors and that the Board and its Committees work to its optimum levels and functions with independence, integrity and professionalism for the long-term benefits of all the stakeholders. The Board noted that Joint Managing Directors were discharging their duties admirably and the Chairman has demonstrated exemplary leadership qualities in handling the board matters and has been regarded as the sagacious leader who commanded well deserved respect.

There have been no material observations or suggestions, consequent to such evaluation/review.

Board Committees

In compliance with the statutory requirements, the Board has following Committees:

1. Audit Committee;

2. Nomination and Remuneration Committee;

3. Corporate Social Responsibility Committee;

4. Stakeholders Relationship Committee;

5. Risk Management Committee; and

6. Allotment Committee

Detailed note on the composition of the Board and its committees, including its terms of reference and meetings held are provided in the Corporate Governance Report. The composition and terms of reference of the Committees of the Board of the Company is in line with the provisions of the Act and the SEBI Listing Regulations.

Directors Responsibility Statement

Pursuant to Section 134(3)(c) read with Section 134(5) of the Act with respect to Directors Responsibility Statement, the directors hereby confirm that:

a) in the preparation of the annual accounts, the applicable accounting standards have been followed and that no material departure has been made in following the same;

b) appropriate accounting policies have been selected and applied consistently and iudgements and estimates made 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 of the Company for that period;

c) proper and sufficient care for maintenance of adequate accounting records in accordance with the provisions of

the Act have been taken for safeguarding the assets 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 been laid down and such internal financial controls are adequate and operating effectively; and

f) proper systems have been devised to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.

Statutory Auditors

During the year under review, the members of the Company had approved the appointment of B S R & Co. LLP, Chartered Accountants (Firm registration no. 101248W/W-100022), Mumbai as the Statutory Auditors of the Company, for a period of five (5) consecutive years from the conclusion of the 37th AGM until the conclusion of the 42nd AGM to be held in the financial year 2027-28.

Auditors Report

The Statutory Auditors have issued their unmodified opinion, both on standalone and consolidated financial statements, for the financial year ended March 31, 2023. They have not highlighted any qualifications, reservations, adverse remarks or disclaimers. The Statutory Auditors have not reported any incidents of fraud to the Audit Committee of the Board during the financial year 2022-23. The notes to the accounts referred to in the auditors report are self-explanatory and therefore do not call for any further explanation and comments.

Secretarial Audit

The Board of the Company, on the recommendation made by the Audit committee, had appointed Makarand M. Joshi & Co., Company Secretaries, as the Secretarial Auditors (the “MMJC”) to conduct an audit of the secretarial records for the financial year 2022-23.

The secretarial audit report as issued by MMJC for the financial year ended March 31, 2023, is appended to this Report as Annexure B, which is self-explanatory.

The Secretarial Auditors have not reported any fraud under Section 143(12) of the Act.

Further, in compliance with Regulation 24A of the SEBI Listing Regulations, the Annual Secretarial Compliance Report issued by MMJB & Associates LLP, was submitted to the stock exchanges within the statutory timelines.

Secretarial audit report of material unlisted Indian subsidiary

A copy of the secretarial audit report for the financial year 2022-23 issued to JM Financial Services Limited, a material unlisted subsidiary of the Company is appended to this Report marked as Annexure B1.

Secretarial Standards

The Company has complied with the applicable provisions of Secretarial Standards issued by the Institute of Company Secretaries of India and notified by the MCA.

Internal Auditors

During the year under review, CNK & Associates LLP., Chartered Accountants, were appointed as the Internal Auditors of the Company in accordance with the applicable provisions of the Act.

Corporate Social Responsibility

The Corporate Social Responsibility Committee (the “CSR committee”) has been established by the Board in accordance with Section 135 of the Act and details of its composition, terms of reference and particulars of meetings held during the year are stated in the Corporate Governance Report which forms part of this Report.

As earmarked for the financial year under review, the Company has spent 0.99 Crore as the CSR expenditure towards the CSR Project viz., Shri Vardhman Nidaan Seva.

The aforesaid CSR Project of the Company was in accordance with the activities specified under Schedule VII to the Act and a brief overview on the same is available on the website of the Company at https://imfi.com/giving-csr/proiects.

The CSR policy outlines the activities that can be undertaken or supported by the Company within the applicable provisions of the Act and alignment of such activities as per the sustainable development goals principles. Apart from the composition requirements of the CSR committee, the CSR policy, inter alia, lays down the criteria for selection of projects & areas, annual allocation, modalities of execution/implementation of activities, monitoring mechanism of CSR activities/projects including the formulation of annual action plan. The CSR policy of the Company is available on the website of the Company at https://imfi.com/investor-relations/CSR Policy.pdf.

Pursuant to the amendment to the Companies (Corporate Social Responsibility Policy) Rules, 2014 (the “CSR Rules”), the Chief Financial Officer of the Company has certified that the funds disbursed basis the annual action plan for the

financial year 2022-23 have been utilised for the purpose and in the manner as approved by the Board.

The details of CSR activities as required under Rule 8 of the CSR Rules in the prescribed format is appended to this Report as Annexure C.

Risk Management

Risk management is an integral part of the Companys strategy for achieving the long-term goals. The Company and its subsidiaries are exposed to various risks which include liquidity risk, interest rate risk, market risk, credit risk, technology risk, operational risk, regulatory and compliance risk, reputational risk, business continuity risk, risk emanating from cyber security, legal risk, competition risk, among others. A comprehensive risk management policy has been formulated by the Company apart from the processes which are in place to identify, assess, evaluate, manage and mitigate the risks that are encountered during the conduct of business activities, which may pose significant loss or threat to the Company.

The Risk Management committee of the Company as established by the Board has been entrusted with the responsibility of reviewing the risk management process in the Company. The committee also reviews the cyber security function, assess various risks and ensures that the risks are brought within acceptable limits. The Audit committee has an additional oversight in the area of financial risks and controls.

Details about development and implementation of risk management policy have been covered at length in the Management Discussion and Analysis Report which forms part of this Report.

Internal financial control system and its adequacy

The Company has adequate internal financial control system over financial reporting which ensures that all transactions are authorised, recorded, and reported correctly in a timely manner. The Board has adopted accounting policies which are in accordance with Section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015.

The internal financial control system of the Company is supplemented with internal audits, regular reviews by the management and checks by external auditors. It provides reasonable assurance in respect of financial and operational information, compliance with applicable statutes, safeguarding of assets of the Company, prevention and detection of frauds, accuracy and completeness of accounting records and also ensuring compliance with the Companys policies.

The Statutory Auditors and the Internal Auditors of the Company also provide their confirmation that the internal financial control framework is operating effectively.

The Company on a regular basis tracks all amendments to Accounting Standards and makes changes to the underlying systems, processes and financial controls to ensure adherence to the same. During the year, no material or serious observations have been highlighted for inefficiency or inadequacy of such controls. The details of adequacy of internal controls are given at length in the Management Discussion and Analysis Report which forms part of this Report.

Deposits

There were no outstanding deposits within the meaning of Sections 73 and 74 of the Act read with the Companies (Acceptance of Deposits) Rules, 2014, as amended, at the end of financial year 2022-23 or the previous financial year. The Company did not accept any deposits during the financial year 2022-23.

Material changes and commitments affecting the financial position of the Company

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

Change in nature of business

During the financial year 2022-23, there has been no change in the nature of the Companys business except that as mentioned earlier, upon receipt of all approvals from the concerned authorities and pursuant to the Scheme of Arrangement, the Private Wealth and PMS divisions of JM Financial Services Limited, a wholly owned subsidiary of the Company, shall be classified under the Investment Bank segment of the Company.

Significant and material orders

During the financial year under review, there were no significant/ material orders passed by the regulators or courts or tribunals impacting the going concern status of the Company and its operations.

Report on Corporate Governance

Pursuant to Regulation 34 read with Schedule V to the SEBI Listing Regulations, a report on Corporate Governance for the financial year 2022-23 along with the certificate from the Secretarial Auditors of the Company confirming the

compliance with the regulations of Corporate Governance under the SEBI Listing Regulations is annexed and forms part of this Report.

Management Discussion and Analysis Report

Management Discussion and Analysis Report as stipulated under Regulation 34 of the SEBI Listing Regulations is presented in a separate section forming part of this Report, which gives an update, inter-alia on the following matters.

• Industry structure and developments;

• Segment-wise overview of business performance;

• Financial Overview;

• Risk management;

• Internal control systems and their adequacy;

• Corporate Social Responsibility and Philanthropy; and

• Human Resources.

Business Responsibility and Sustainability Report (BRSR)

Pursuant to Regulation 34 of the SEBI Listing Regulations, detailed BRSR report, in the format as prescribed by SEBI, describing various initiatives taken by the Company towards the Environmental, Social and Governance aspects forms part of this Report.

Particulars of employees and related information

The ratio of remuneration of each Director to the median employees remuneration as per Section 197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, (the “Rules”) as amended, is disclosed in Annexure D, appended to this Report.

In terms of Section 136(1) of the Act, the Annual Report is being sent to the members, excluding the information regarding employee remuneration as required pursuant to Rule 5(2) and Rule 5(3) of the said Rules. Any member desirous of obtaining such information may write to the Company Secretary at ecommunicationQjmfi.com and the same will be furnished on such request.

Particulars of loans, guarantees or investments

The details, if any, of loans, guarantees and investments falling under the provisions of Section 186 of the Act read with the Companies (Meetings of Board and its Powers) Rules, 2014 are given in note 37 of notes to the standalone financial statements of the Company.

Credit rating

Details of all the credit ratings obtained by the Company is mentioned in the General Shareholders Information which forms a part of the Corporate Governance Report.

Investor Education and Protection Fund (IEPF)

Details of unclaimed dividends and equity shares which are transferred to the Investor Education and Protection Fund and Investor Education and Protection Fund authority are mentioned in the General Shareholders Information which forms a part of the Corporate Governance Report.

Particulars of contracts or arrangements with related parties

In line with the requirements of the Act and the SEBI Listing Regulations, the Company has formulated a ‘Policy on dealing with Related Party Transactions and the said policy is uploaded on the website of the Company at https://jmfl.com/ investor-relation/Disclosures-of-related-party-transactions. html.

All the related party transactions were placed before the Audit committee for its review on a quarterly basis. An omnibus approval of the Audit committee had been obtained for the related party transactions which were repetitive in nature. Further, as per the applicable provisions of the SEBI Listing Regulations, necessary approvals of the members of the Company were also sought for the material related party transactions proposed to be entered with the related parties.

Pursuant to Section 134(3)(h) of the Act read with Rule 8(2) of the Companies (Accounts) Rules, 2014, there are no related party transactions that are required to be reported under Section 188(1) of the Act, as prescribed in Form AOC-2.

The related party transactions as required under Ind AS - 24 are reported in note 37 of notes to the standalone financial statements and note 41 of notes to the consolidated financial statements of the Company.

The Company in terms of Regulation 23 of the SEBI Listing Regulations, submits the disclosures of related party transactions on a consolidated basis to the stock exchanges within the stipulated time. The said disclosures are available on the website of the Company at https://jmfl.com/investor- relation/overview.html.

Annual Return

Pursuant to Sections 92(3) and 134(3)(a) of the Act, the Annual Return for the financial year 2022-23, is available on the website of the Company at https://imfl.com/investor-relation/ agm-egm.html.

Conservation of energy, technology absorption, foreign exchange earnings and outgo

The operations of the Company are not energy intensive nor does they require adoption of specific technology and 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. The Company has, however, implemented various energy conservation measures across all its functions which are highlighted in the BRSR forming part of this Report.

During the financial year 2022-23, the total foreign exchange earned by the Company was 12.05 Crore and the total foreign exchange outgo was 0.79 Crore.

The details of the transactions in foreign exchange are provided in notes 40 and 41 of notes to the standalone financial statements.

Vigil Mechanism/Whistle Blower Policy

The Company encourages an open and transparent system of working and dealing amongst its stakeholders and accordingly, has framed a robust vigil mechanism in the form of Whistle Blower policy. This policy enables its directors and employees of the Company or any other person who avails the mechanism framed under this policy to report concerns about unethical or improper practices or alleged wrongful conduct, actual or suspected fraud etc., without any fear of discrimination or victimisation of any kind. This policy protects such directors and employees from unfair or preiudicial treatment by anyone within the Company. It also provides direct access to the chairman of the Audit committee. Details of vigil mechanism/whistle blower policy are included in the Corporate Governance Report, forming part of this Report. The policy is available on the website of the Company at https://imfl.com/investor-relations/Whistle Blower Policy. pdf.

In order to enhance the knowledge amongst the employees about the Whistle Blower policy, an awareness programme was undertaken by the Company and an annual affirmation in this regard was obtained from the employees.

During the financial year 2022-23, no complaints under this mechanism have been reported.

Maintenance of cost records

The maintenance of cost records as specified under Section 148 of the Act is not applicable to the Company.

Policy for prevention, prohibition and redressal of sexual harassment of women at workplace

In compliance with the requirement of the Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal) Act, 2013 and rules made thereunder, the Company has a policy in place and has constituted Internal Complaints Committee (the “ICC”) to deal with complaints relating to sexual harassment at workplace. All employees, permanent, contractual, temporary and trainees are covered under this policy. A quarterly report on the complaints, if any, is placed before the Board for its review.

During the financial year 2022-23, no complaints were received from any of the employees, under this policy.

Certificate from the Joint Managing Directors and Chief Financial Officer

The certificate received from Mr. Atul Mehra, Mr. Adi Patel, the Joint Managing Directors and Mr. Manish Sheth, the Chief Financial Officer with respect to the financial statements and other matters as required under Part B of Schedule II to the SEBI Listing Regulations forms part of Corporate Governance Report, which forms part of this Report.

Other Disclosures

The Company has not issued equity shares with differential rights as to dividend, voting or otherwise.

The Company has not issued any sweat equity shares during the year.

No proceedings are made or pending under the Insolvency and Bankruptcy Code, 2016 and there is no instance of onetime settlement with any Bank or Financial Institution.

Acknowledgements

The Board of Directors take this opportunity to place on record its sincere thanks to SEBI, RBI, MCA, National Housing Bank, Real Estate Regulatory Authority, Stock Exchanges including Commodity Exchanges, customers, vendors, investors, banks, financial institutions, business associates, shareholders and all other stakeholders for their continued co-operation and support. The Directors also recognise the support and co-operation extended by the Government of India, State Governments, Overseas Regulatory Authorities and their agencies.

The Board of Directors wish to place on record their appreciation to employees at all levels for their dedication and commitment.

For and on behalf of the Board of Directors

Nimesh Kampani

Place: Mumbai

Chairman

Date: May 9, 2023

DIN: 00009071