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Directors Report of Indbank Merchant Banking Services Ltd.

Mar 31, 2015

To the Members,

The Directors have pleasure in presenting before you the Twenty Sixth Annual Report together with the Audited Statements of Accounts for the year ended 31st March, 2015.

Operations

During the year your company has earned a gross income of Rs. 1047.78 lakhs as against Rs. 744.62 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. 6082.73 crore during the year. Your company also provides Depository services to institutions and retail customers and has 43928 accounts under DP operations and 21293 accounts under broking operations.

Your company reported a net profit of Rs.498.80 lakhs during the year 2014-15 as against a net profit of Rs.30.02 lakhs in the previous year as under:

Rs. In lakhs Particulars 2014-15 2013-14

I Revenue from Operations 859.89 608.26

II Other Income 186.73 136.36

Interest on Income tax refund due 1.16 0.00

III Total Revenue 1047.78 744.62

IV EXPENSES " "

Employee Benefit expenses 352.59 321.18

Depreciation & Amortization expenses 69.29 67.11

Finance Cost 3.27 4.39

Interest on Income tax refund - Excess i nt reversed 0.00 9.42

Interest on excess IT refund 25.76 0.00

Other Expenses 216.94 221.83

Bad debts written off 14.93 3.89

Total expenses 682.78 627.82

Profit Before Provisions , prior period adjustments and Tax 365.00 116.80

Provisions made 56.50 12.66

Reversal of Provisions (55.30) (6.82)

V Profit Before prior period adjustments and Tax 363.80 110.96

VI Prior Period adjustments 0.00 0.83

VII Profit Before Tax 363.80 110.13

VIII Tax Expenses - Current 0.00 0.00

- Deferred 98.47 1.37

- Prior years (6.84) 0.00

IX PROFIT/(LOSS) for the period from continuing operations 272.17 108.76

X PROFIT/(LOSS) for the period from discontinuing operations 226.63 (78.74)

XI Tax expenses of discontinuing operations 0.00 0.00

XU PROFIT/(LOSS) from discontinuing operations after tax 226.63 (78.74)

XUI PROFIT/(LOSS) for the period 498.80 30.02

XIV Add: Balance brought forward from Previous Year (268.49) (298.51)

Addl. Depreciation to comply with Companies Act, 2013 (39.02) 0.00

XV Balance carried to Balance Sheet 191.29 (268.49)

XVI Earnings Per Share - Basic & Diluted 1.12 0.07

Dividend

After adjusting the profits of the year against the brought forward loss and additional depreciation to comply with the requirements of the Companies Act, 2013, your company is left with Rs.191.29 lakhs which need to be ploughed back to improve the net worth. Hence your Directors do not recommend any dividend for the year 2014-15.

Board Meetings

The Board of Directors met five times during the year on 23.04.2014, 09.08.2014, 20.10.2014, 07.02.2015 & 28.03.2015.

Directors and Key Managerial Personnel:

Shri G. Rajeevan Pillai has resigned from the Board on his retirement from the services of Indian Bank consequent to his attaining superannuation on 31.05.2014. His resignation was taken on record by the Board at the meeting held on 09.08.2014. In his place Indian Bank has nominated Shri K Udaya Baskara Reddy, General Manager, Indian Bank and he was co-opted as additional Director at the meeting held on 09.08.2014 and appointed as Director at the annual general meeting held on 27.09. 2014 as Director liable to retire by rotation. Shri. K Udaya Bhaskara Reddy has resigned from the Board, consequent to his transfer to Kolkata as Zonal Manager, on 23.05.2015. Shri.B Raj Kumar has resigned from the Board consequent to completion of his term of appointment in Indian Bank as Executive Director on 31.05.2015. Indian Bank has nominated Shri. S Krishnan, General Manager, Indian Bank and Shri. V Gopal, General Manager Indian Bank. They were inducted on the Board as Additional Directors at its meeting held on 13.08.2015.

At the annual general meeting held on 27.09.2014 the existing Independent Directors i.e. Shri T M Nagarajan, Shri P M Venkatasubramanian, Shri G R Sundaravadivel & Mrs. Chitra Murali were appointed as Independent Directors under the provisions of the Companies Act, 2013 for a fixed term of five years and they will hold the office till the conclusion of 30th Annual General Meeting. They are not liable to retire by rotation. In the opinion of the Board the Independent Directors fulfill the conditions specified in the Companies Act, 2013 and the rules made there under and are independent of the management.

Your Directors place on record their appreciation for the valuable contributions made by Shri.B Raj Kumar, Executive Director, Shri. K Udaya Bhaskara Reddy, General Manager, Shri G. Rajeevan Pillai, General Manager during their tenure as Directors of the Company.

To comply with the requirements of the Companies Act, 2013, Shri K S Sujay, Officer on deputation from Indian Bank to the company was appointed as Chief Financial Officer.

Retirement of Directors by rotation:

The Company's Board consists of 4 Independent Directors who were appointed for a fixed term of 5 years, are not liable to retire by rotation as per Section 149(13) of the Companies Act, 2013. The Whole-time Director who was appointed for fixed tenure cannot retire by rotation. The other two Directors who are nominees of Indian Bank are appointed as Additional Directors at the Board Meeting held on 13.08.2015. They will hold office of Directorship until the ensuing Annual General Meeting and their appointment as Directors is placed before the ensuing Annual General Meeting. None of the Directors are retiring by rotation.

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).

Composition of Audit Committee:

The Audit Committee of the Board consists of the following Directors as its members:

Name of the Director Category Position

Shri T M Nagarajan Independent Director Chairman of the committee

Shri P M Venkatasubramanian Independent Director Member

Shri G R Sundaravadivel Independent Director Member

Smt Chitra Murali Independent Director Member

Shri K Udaya Bhaskara Reddy* Nominee of Indian Bank Member

Shri V Gopal # Nominee of Indian Bank Member

* upto 23.05.2015

# from 13.08.2015

The Board has accepted all the recommendations of the Audit Committee.

The Board has, on the recommendation of the Nomination & Remuneration Committee framed a policy for selection and appointment of Directors, Senior Management and their remuneration. The Remuneration Policy is stated in the Corporate Governance Report.

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 Clause 49 of the Listing Agreement. The details of the Whistle-blower Policy is explained in the Corporate Governance Report and also posted on the website of the Company

Director's Responsibility Statement:

In pursuance of section 134 (5) of the Companies Act, 2013, the Directors 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 are adequate 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

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 MGT 9 is annexed herewith.

Auditors:

The Auditors, M/s A V Deven & Co., Chartered Accountants, Chennai were appointed by the Office of the Comptroller and Auditor General of India, New Delhi 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 2014-15.

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. P Sriram & Associates, Practising Company Secretary is annexed to this Report.

Information as per Section 134 (3) (m) of the Companies Act, 2013

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

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

Significant & Material orders passed by the Regulators:

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

Details of adequacy of Internal Financial Controls:

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

Risk Management Policy:

The company has put in place 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 does not fall into the criteria stipulated for the applicability of Section 135 of the Companies Act, 2013. Hence the provisions of section 135 of the Companies Act 2013 are not applicable.

Related Party Transactions:

During the year under review, there was no transaction with related party that needs to be 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.

Formal Annual Evaluation:

Pursuant to the provisions of the Companies Act, 2013 and Clause 49 of the Listing Agreement, 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 employee's remuneration are enclosed as Annexure 1.

Listing with Stock Exchanges:

The Company confirms that it has paid the Annual Listing Fees for the year 2015-2016 to NSE and BSE where the Company's Shares are listed. Corporate Governance and Shareholders Information:

Your Company has taken adequate steps to adhere to all the stipulations laid down in Clause 49 of the Listing Agreement. 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 under Clause 49 of the Listing Agreement is attached to this report.

Particulars of Employees:

The information required pursuant to Section 197 read with Rule 5 (1) of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, is 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:

The cost control and monitoring measures initiated in the previous years coupled with improved performance in the broking areas due to the revival of capital market and recovery in some NPA accounts have resulted in substantial jump in net profit. Your company will continue to focus its efforts to increase its activities under fee-based business in addition to concentrating on recovery of overdues and reduction of Non Performing Assets, disinvestment of quoted and unquoted investments. Your company's 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. General:

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 Company's 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 the Board of Directors

Place: Chennai V Gopal Banabihari Panda Date: 13-08-2015 Director President & Whole Time Director








Mar 31, 2014

Dear Members,

The Directors have pleasure in presenting the Twenty Fifth Annual Report together with the Audited Statement of Accounts of the Company for the Year ended March 31,2014.

Business of the Company Operations

During the year your company has earned a gross income of Rs. 744.62 lakhs as against Rs. 703.36 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. 3894.14 crore during the year. Your company also provides Depository services to Institutions and retail customers and has 42972 accounts under DP operations and 19343 under broking operations.

Your company has reported a net profit of Rs.30.02 lakhs during the year 2013-14 as against a net profit of Rs. 72.94 lakhs in the previous year as under.

Financial Results Rs. in lakhs

Particulars 2013-14 2012-13

I Revenue from Operations 608.26 524.53

II Other Income 136.36 128.74

Interest on Income tax/interest tax refund due 0.00 50.08

III Total Revenue 744.62 703.35

IV EXPENSES

Employee Benefit expenses 321.18 335.55

Depreciation & Amortization expenses 67.11 70.85

Finance Cost 4.39 0.63

Interest on Income tax refund - Excess int reversed 9.42 0.00

Other Expenses 221.83 307.43

Bad debts written off 3.89 8.44

Provisions made 12.66 11.60

Reversal of Provisions (6.82) (19.58)

Total expenses 633.66 714.92

V Profit Before Exceptional and Extraordinary items and Tax 110.96 (11.57)

VI Exceptional Items 0.00 0.00

VII Prior Period adjustments 0.83 42.86

VIII Profit Before Extraordinary Items and Tax 110.13 31.29

IX Extraordinary Items 0.00 0.00

X PROFIT/(LOSS) BEFORE TAX 110.13 31.29

XI Tax Expenses - Current 0.00 0.00

- Deferred 1.37 29.35

XII PROFIT/(LOSS) for the period from continuing operations 108.76 1.94

XIII PROFIT/(LOSS) for the period from discontinuing operations (78.74) 71.00

XIV Tax expenses of discontinuing operations 0.00 0.00

XV PROFIT/(LOSS) from discontinuing operations after tax (78.74) 71.00

XVI PROFIT/(LOSS) for the period 30.02 72.94

XVII Add: Balance brought forward from Previous Year (298.51) (371.45)

XVIII Less: Transferred from General Reserves 0.00 0.00

XIX Balance carried to Balance Sheet (268.49) (298.51)

XX Earnings Per Share - Basic & Diluted 0.07 0.16

Dividend

After adjusting the profits for the year against the carried forward loss there is no profit. Hence, your Directors do not recommend any dividend for the year.

Board of Directors

Shri Rajeev Rishi, Director, nominee of Indian Bank resigned from the Board with effect from 29.06.2013 consequent to his appointment as Chairman & Managing Director of Central Bank of India.

Shri B Rajkumar, Executive Director, Indian Bank was Co-opted as a Director (nominee of Indian Bank) on the Board with effect from 29.06.2013.

Shri N Eswaran, Director, nominee of Indian Bank resigned from the Board with effect from 29.06.2013 consequent to his retirement from the services of Indian Bank on attaining superannuation on 31.05.2013.

Shri G Rajeevan Pillai, General Manager, Indian Bank was Co-opted as a Director (nominee of Indian Bank) on the Board with effect from 29.06.2013 and resigned from the Board consequent to his retirement from the services of Indian Bank on his attaining superannuation on 31.05.2014. His resignation was taken on record by the Board on 09.08.2014. In his place, Indian Bank has nominated Shri K Udaya Bhaskara Reddy, General Manager, Indian Bank and he was co-opted as an additional Director at the meeting held on 09.08.2014. He will be appointed as Director at the ensuring Annual General Meeting as Director liable to retire by rotation.

Your Directors also wish to place on record the quality contribution and valuable guidance of Shri Rajeev Rishi, Shri N Eswaran and Shri G Rajeevan Pillai during their tenure as Directors of the company.

Shri G R Sundaravadivel and Mrs. Chitra Murali were Co-opted as Independent Directors on the Board with effect from 20.11.2013 and they hold office up to the date of the ensuing Annual General Meeting.

All the four Independent Directors ie., Shri T M Nagarajan, Shri P M Venkatasubramanian, Shri G R Sundaravadivel and Mrs. Chitra Murali will be appointed at the ensuing annual general meeting for a fixed term of 5 years and they are not liable to retire by rotation. In the opinion of the Board, the Independent Directors fulfill the conditions specified in the Companies Act, 2013 and the rules made thereunder and are independent of the management.

Directors Responsibility Statement

Pursuant to the requirement under Section 217 (2AA) of the Companies Act, 1956 with respect to Directors Responsibility Statement, it is hereby confirmed that:

a) In the preparation of the annual accounts for the financial year ended 31st March 2014, the applicable accounting standard has been followed along with proper explanation relating to departures.

b) The Directors have 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 or loss of the Company for the year under review.

c) The Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

d) The Directors have prepared the accounts for the financial year ended 31st March 2014 on a going concern basis.

Auditors

The provisions of Section 619 (2) of the Companies Act, 1956 being applicable to the Company, the Comptroller and Auditor General of India has appointed M/s A V Deven & Co., Chartered Accountants, Chennai as the auditors of the Company for the year 2013-14.

Auditors'' observations in the Audit report

With reference to the observations of the Auditors in the Audit report in respect to note No. 27 of Notes on Accounts regarding non consideration of liability towards interest claim of Rs. 897.48 lakhs under right of recompense on settled borrowings availed earlier from Indian Bank, the holding company, the note is self explanatory.

Information as per Section 217 (1-E) of the Companies Act, 1956

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.

Particulars of Employees

Details required under Section 217 (2A) of The Companies Act, 1956 read with Companies (Particulars of Employees) Rules 1975 regarding particulars of employees drawing remuneration of more than Rs. 2,00,000/- per month: Nil.

Report on Corporate governance

A report on Corporate Governance as stipulated under Clause 49 of the Listing Agreement is attached to this report.

Outlook

With the relocation of stock broking terminals within Indian Bank branches, your Company will have savings in administrative cost, in addition to the potential business opportunities available to your Company. Your company will continue to focus its efforts to increase its activities under fee-based business in addition to concentrating on recovery of overdues and reduction of Non Performing Assets, disinvestment of quoted and unquoted investments. Your company''s 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.

General

Your Directors wish to place on record their gratitude to the Ministry of Finance, Government of India, SEBI, Comptroller and Auditor General of India and the Reserve Bank 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 Company''s 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 the Board of Directors

Place: Chennai B Raj Kumar Date: 09.08.2014 Director


Mar 31, 2011

Dear Members,

The Directors have pleasure in presenting the Twenty Second Annual Report together with the Audited Statement of Accounts of the Company for the Year ended March 31, 2011.

Business of the Company

Geographical Expansion

Your company during the current year has opened new branch offices at Tenkasi and Vijayawada, increasing the number of branch offices to 24. In additions to branches your company has 33 CTCL terminals in various places. With this your company has presence in 57 locations across the country as part of its efforts to increase its reach and distribution network.

Operations

During the year your company has earned a gross income of Rs.658.02 lakhs from operations as against Rs.2357.43 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.4209.15 crore during the year. Your company also provides Depository services to Institutions and retail customers and has 24530 accounts under DP operations and 15524 under broking operations.

Your company has reported a net loss before tax of Rs.859.77 lakhs during the year 2010-11 as against a net profit before tax of Rs.230.25 lakhs in the previous year.

Financial Results

Year Ended Previous Year Ended

31.03.2011 31.03.2010

Income from Operations 658.01 1914.11

Reversal of Provisions (Net) 0.00 443.32

Total Income 658.01 2357.43

Administrative/Operating Expenses 818.43 767.57

Depreciation 91.79 109.61

Finance Charges 250.00 1250.00

Provisions made/reversals (Net) 357.56 0.00

Total Expenses 1517.78 2127.18

Profit/(Loss) Before Tax (859.77) 230.25

Provision for Tax - Deferred (Net) 132.88 395.53

Profit/(Loss) AfterTax (992.65) (165.28)

Balance brought forward from previous year 110.03 275.31

Less: Transferred from General Reserve 500.00 0.00

Balance carried forward to Balance Sheet (382.61) 110.03

Earnings per share (in Rs) (2.24) (0.37)

Dividend

In view of the loss recorded during the year after tax, your Directors do not recommend any dividend for the year.

Board of Directors

Shri Anup Sankar Bhattacharya, Director, nominee of Indian Bank resigned from the Board with effect from 09.10.2010 consequent to his appointment as Chairman & Managing Director of Bank of Maharashtra.

Shri V Rama Gopal, Executive Director, Indian Bank was Co-opted as a Director (nominee of Indian Bank) on the Board with effect from 09.10.2010 and he holds office upto the date of the Annual General Meeting. Notice has been received from a member of the company for the appointment of Shri V Rama Gopal as Director U/s 257 of the Companies Act, 1956, who being eligible has offered himself for appointment.

Shri Sri Ramanan, Director, nominee of Indian Bank resigned from the Board with effect from 28.01.2011 consequent to his retirement from the services of Indian Bank.

Shri R Ravi, General Manager, Indian Bank was Co-opted as a Director (nominee of Indian Bank) on the Board with effect from 28.1.2011 and he holds office upto the date of the Annual General Meeting. Notice has been received from a member of the company for the appointment of Shri R Ravi as Director U/s 257 of the Companies Act, 1956, who being eligible has offered himself for appointment.

At the Annual General Meeting, Shri T M Nagarajan, and Shri P V Rajaraman, Directors retire by rotation and being eligible offers themselves for reappointment.

At the Annual General Meeting,

Directors Responsibility Statement

Pursuant to the requirement under Section 217 (2AA) of the Companies Act, 1956 with respect to Directors Responsibility Statement, it is hereby confirmed that:

a) In the preparation of the annual accounts for the financial year ended 31st March 2011, the applicable accounting standards had been followed along with proper explanation relating to 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 or loss of the Company for the year under review.

c) The Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

d) The Directors had prepared the accounts for the financial year ended 31 st March 2011 on a going concern basis.

Auditors

The provisions of Section 619 (2) of the Companies Act, 1956 being applicable to the Company, the Comptroller and Auditor General of India has appointed M/s Raman Associate, Chartered Accountants, Chennai as the auditors of the Company for the year 2010-11.

Auditors' observations in the Audit report

With reference to the observations of the Auditors in the Audit report in respect of note no: 10 of notes on accounts regarding non consideration of liability towards interest claim of Rs.897.48 lakhs under right of recompense on settled borrowings availed earlier from Indian Bank, holding company, note is self explanatory.

Particulars of Employees

Details required under Section 217 (2A) of The Companies Act, 1956 read with Companies (Particulars of Employees) Rules 1975 regarding particulars of employees drawing remuneration of more than Rs.2,00,000/- per month: Nil.

Report on Corporate governance

A report on Corporate Governance as stipulated under Clause 49 of the Listing Agreement is attached to this report

Outlook

Indian Bank has accorded approval for merger of Indian Bank DP with your company's DP in accordance with the NSDL Regulations. NSDL has accorded their approval for the same subject to following the procedures laid down under their regulations. Accordingly, in coordination with Indian Bank, DP Controlling office, your company has taken steps to complete all the procedures and expect the DP accounts of Indian Bank to be merged with your company's DP by end of the first quarter of 2011 -12. This would enable your company to increase business further and render value added service to all the DP account holders of Indian Bank.

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

General

Your Directors wish to place on record their gratitude to the Ministry of Finance, Government of India, SEBI, Comptroller and Auditor General of India and the Reserve Bank 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 Company's Employees.

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

For and on behalf of the Board of Directors

V Rama Gopal Chairman

Place : Chennai Date : 18.04.2011




Mar 31, 2010

The company has reported a net profit before tax of R.s.230.25 iakhs during the year 2009-10 as against a net loss before tax of Rs.33.23 lakhs in the previous year.

Financial Results Year Ended Previous Year Ended 31.03.2010 31.03.2009 Rs.Lakhs Income from Operations 1914.11 980.91 Interest on refund from Income tax 0.00 111.63 Reversal of Provisions (Net) 443.32 0.00 Total Income 2357.43 1092.54 Administrative/Operating Expenses 767.57 582.56 Depreciation 109.61 126.63 Finance Charges 1250.00 0.00 Provisions made/reversals (Net) 0.00 416.58 Total Expenses 2127.18 1125.77 Profit/(Loss) Before Tax 230.25 (33.23) Provision for Tax - Fringe Benefit Tax 0.00 3.69 Provision for Tax - Deferred (Net) 395.53 633.73 Provision for Tax - Pertaining to earlier years 0.00 51.95 Profit/(Loss) After Tax (165.28) (722.60) Balance brought forward from previous year 275.31 1387.31 Proposed dividend (Re.0.75 per share) 0.00 332.84 Corporate dividend tax 0.00 56.56 Balance carried forward to Balance Sheet 110.03 275.31 Earnings per share (in Rs) (0.37) (1.63)

Dividend

In view of the loss recorded during the year after tax, your Directors do not recommend any dividend for the year.

Board of Directors

Shri A Subramanian, Director, a nominee of Indian Bank resigned from the Board on 15.07.2009 consequent to his retirement from the services of Indian Bank.

Shri Anup Sankar Bhattacharya, Executive Director, Indian Bank was Co-opted as a Director on the Board with effect from 15.07.2009.

Shri P V Rajaraman,(lAS) Retd., was co-opted as a Director on the Board with effect from 15.07.2009.

Shri M K Narayanan, Director resigned from the Board on28.01.2010 consequent to his appointment as Honourable Governor of West Bengal.

Shri. P M Venkatasubramanian (former Managing Director GIC) was co opted as a director on the Board with effect from 16.04.2010.

Shri P N Patel, President & Wholetime Director vacated office on 28.4.2010 consequent to his retirement from the services of Indian Bank on 30.04.2010

Shri G Rangaraian, Deputy General Manager, Indian Bank was appointed as President & Wholetime Director of the

company from 28.04.2010 to 31.05.2014.

At the Annual General Meeting, Shri Anup Sankar Bhattacharya and Shri Sri Ramanan, Directors retire by rotation and being eligible offers themselves for reappointment. Directors Responsibility Statement

Pursuant to the requirement under Section 217 (2AA) of the Companies Act, 1956 with respect to Directors Responsibility Statement, it is hereby confirmed that:

a) in the preparation of the annual accounts for the financial year ended 31st March 2010, the applicable accounting standards had been followed along with proper explanation relating to 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 or loss of the Company for the year under review.

c) The Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

d) The Directors had prepared the accounts for the financial year ended 31st March 2010 on a going concern basis.

Auditors

The provisions of Section 619(2) of the Companies Act, 1956 being applicable to the Company, the Comptroller and Auditor General of India has appointed M/s Raman Associate, Chartered Accountants, Chennai as the auditors of the Company for the year 2009-10.

Auditors observations in the Audit report

With reference to the observations of the Auditors in the Audit report in respect of note no. 10 of notes on accounts regarding non consideration of liability towards interest claim of Rs. 1147.48 lakhs under right of recompense on settled borrowings availed earlier from Indian Bank, holding company, note is self explanatory.

Particulars of Employees

Details required under Section 217 (2A) of The Companies Act. 1955 read with Companies (Particulars of Employees) Rules 1975 regarding particulars of employees drawing remuneration of more than Rs.2.00.000/- per month: Nil.

Report on Corporate governance

A report on Corporate Governance as stipulated under Clause 49 of the Listing Agreement is attached to this report

Outlook

Your company is engaged in Merchant Banking, Stock Broking, Depository Participant and allied activities. Your company is a member of NSE. BSE, MSE and OTCEI and registered with NSDL as a Depository Participant. Your company is also registered with Association of Mutual Funds of India (AMFI) for distribution of Mutual Fund products. The outlook of players in the Securities Market are always linked to the growth of the economy primarily growth in capital market conditions. The Capital markets have been conducive in the year 2009 -10 for the market intermediaries and the trend indicates favourable market conditions in the current year also.

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

General

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

Your Directors also wish to place on record their thanks to the Bankers to 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 Employees.

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

For and on behalf of the Board of Directors Place: Chennai Anup Sankar Bhattacharya Date: 28.04.2010 Chairman

 
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