Notes to Accounts of Indbank Merchant Banking Services Ltd.

Mar 31, 2025

(f) Provisions and contingent liabilities and Contingent Assets:

Provisions are recognized, when there is a present legal or constructive obligation as a result of a past event, it is probable that
an outflow of resources will be required to settle the obligation, and when a reliable estimate of the amount of the obligation can
be made. If the effect of the time value of money is material, the provision is discounted using a pre-tax rate that reflects current
market assessments of the time value of money and the risks specific to the obligation and the unwinding of the discount is
recognised as interest expense.

Contingent liabilities are recognized only when there is a possible obligation arising from past events, due to occurrence or
non-occurrence of one or more uncertain future events, not wholly within the control of the Company, or where any present
obligation cannot be measured in terms of future outflow of resources, or where a reliable estimate of the obligation cannot be
made. Obligations are assessed on an ongoing basis and only those having a largely probable outflow of resources are provided
for.

Contingent assets are not recognized in the financial statements.

(g) Revenue recognition:

Revenue from contracts with customers

Revenue from contracts with customers is recognised when control of the goods or services are transferred to the customer at
an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods or services.
Revenue is measured based on the transaction price, which is the consideration, adjusted for discounts and other credits, if any,
as specified in the contract with the customer. The Company presents revenue from contracts with customers net of indirect
taxes in its statement of profit and loss.

The Company considers whether there are other promises in the contract that are separate performance obligations to which a
portion of the transaction price needs to be allocated. In determining the transaction price, the Company considers the effects
of variable consideration, the existence of significant financing components, noncash consideration and consideration payable
to the customer, if any.

The following specific recognition criteria must also be met before revenue is recognized:

(i) Revenue from Stock broking services is recognised on trade date basis.

(ii) Depository Fees , is recognised on accrual basis and as per terms agreed with the customers. Other charges recovered
from secondary broking customers are recognised upon completion of services.

(iii) I ssue management fees and placement fees, underwriting commission and financial advisory fees are accounted on
completion of milestones specified in the contract.

(iv) Income on account of distribution from funds are recognised on the receipt of the distribution letter or when right to
receive is established.

(v) Interest income, including income arising from other financial instruments measured at amortized cost, is recognized
using the effective interest rate method.

(vi) Dividend income is recognized in the Statement of profit and loss on the date that the Company’s right to receive payment
is established, it is probable that the economic benefits associated with the dividend will flow to the entity and the amount
of dividend

Contract balances

Contract asset is the right to consideration in exchange for goods or services transferred to the customer. If the Company
performs by transferring goods or services to a customer before the customer pays consideration or before payment is due, a
contract asset is recognised for the earned consideration that is conditional.

Trade receivable represents the Company’s right to an amount of consideration that is unconditional (i.e., only the passage of
time is required before payment of the consideration is due).

Contract liability is the obligation to transfer goods or services to a customer for which the Company has received consideration
(or an amount of consideration is due) from the customer. If a customer pays consideration before the Company transfers
goods or services to the customer, a contract liability is recognised when the payment is made, or the payment is due
(whichever is earlier). Contract liabilities are recognised as revenue when the Company performs under the contract.

(h) Employee Benefits:

Retirement benefits in the form of state governed Employee Provident Fund, Employee State Insurance and Employee Pension
Fund Schemes are defined contribution schemes (collectively the ‘Schemes’). The Company has no obligation, other than the
contribution payable to the Schemes. The Company recognizes contribution payable to the Schemes as expenditure, when
an employee renders the related service. The contribution paid in excess of amount due is recognized as an asset and the
contribution due in excess of amount paid is recognized as a liability.

Gratuity, which is a defined benefit plan, is accrued based on an independent actuarial valuation, which is done based on
project unit credit method as at the balance sheet date. The Company recognizes the net obligation of a defined benefit plan in
its balance sheet as an asset or liability. Gains and losses through re-measurements of the net defined benefit liability/ (asset)
are recognized in other comprehensive income. In accordance with Ind AS, re-measurement gains and losses on defined
benefit plans recognized in OCI are not to be subsequently reclassified to statement of profit and loss. As required under Ind
AS compliant Schedule III, the Company recognizes re-measurement gains and losses on defined benefit plans (net of tax) to
retained earnings.

Accumulated leave, which is expected to be utilized within the next twelve months, is treated as short-term employee benefit.
The Company measures the expected cost of such absences as the additional amount that it expects to pay as a result of the
unused entitlement that has accumulated at the reporting date.

The Company treats accumulated leave expected to be carried forward beyond twelve months, as long-term employee benefit
for measurement purposes. Such long-term compensated absences are provided for based on the actuarial valuation using
the projected unit credit method, made at the end of each financial year. Actuarial gains/losses are immediately taken to the
statement of profit and loss. The Company presents the accumulated leave liability as a current liability in the balance sheet,
since it does not have an unconditional right to defer its settlement for twelve months after the reporting date.

(i) Borrowing Costs:

Borrowing costs consist of interest and other costs that an entity incurs in connection with the borrowing of funds.

Borrowing costs directly attributable to the acquisition, construction or production of an asset that necessarily takes a substantial
period of time to get ready for its intended use or sale are capitalized/inventorised as part of the cost of the respective asset. All
other borrowing costs are charged to statement of profit and loss.

(j) Income Taxes:

Income tax expense comprises current tax expense and the net change in the deferred tax asset or liability during the year.
Current and deferred tax are recognized in the statement of profit and loss, except when they relate to items that are recognized
in other comprehensive income or directly in equity, in which case, the current and deferred tax are also recognized in other
comprehensive income or directly in equity, respectively.
i. Current income tax

Current income tax for the current and prior periods are measured at the amount expected to be recovered from or paid to the
taxation authorities based on the taxable income for that period. The tax rates and tax laws used to compute the amount are
those that are enacted or substantively enacted by the balance sheet date.
ii Deferred income tax

Deferred income tax is recognized on temporary differences at the balance sheet date between the tax bases of assets and
liabilities and their carrying amounts for financial reporting purposes, except when the deferred income tax arises from the initial
recognition of goodwill or an asset or liability in a transaction that is not a business combination and affects neither accounting
nor taxable profit or loss at the time of the transaction.

Deferred income tax assets are recognized for all deductible temporary differences, carry forward of unused tax credits and
unused tax losses, to the extent that it is probable that taxable profit will be available against which the deductible temporary
differences, and the carry forward of unused tax credits and unused tax losses can be utilized.

The carrying amount of deferred income tax assets is reviewed at each balance sheet date and reduced to the extent that it is no
longer probable that sufficient taxable profit will be available to allow all or part of the deferred income tax asset to be utilized.
Deferred tax relating to items recognized outside profit or loss is recognized in correlation to the underlying transaction either
in OCI or directly in equity.

Deferred income tax assets and liabilities are measured at the tax rates that are expected to apply in the period when the asset is
realized or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the balance
sheet date.

(k) Earnings Per Share:

Basic earnings per share is computed by dividing the profit / (loss) after tax (including the post-tax effect of extraordinary
items, if any) by the weighted average number of equity shares outstanding during the year including potential equity shares,
if any, on compulsory convertible debentures. Diluted earnings per share is computed by dividing the profit / (loss) after tax
(including the post-tax effect of extraordinary items, if any) as adjusted for dividend, interest and other charges to expense or
income (net of any attributable taxes) relating to the dilutive potential equity shares, by the weighted average number of equity
shares considered for deriving basic earnings per share and the weighted average number of equity shares which could have
been issued on the conversion of all dilutive potential equity shares.

Note 3 : Standards issued but not yet effective:

Ministry of Corporate Affairs (“MCA”) notifies new standards or amendments to the existing standards under Companies
(Indian Accounting Standards) Rules as issued from time to time. For the year ended March 31, 2025, MCA has notified
Ind AS - 117 Insurance Contracts and amendments to Ind AS 116 - Leases, relating to sale and leaseback transactions,
applicable to the Company w.e.f. April 1, 2024. The Company has reviewed the new pronouncements and based on its
evaluation has determined that it does not have any significant impact in its financial statements.

Note. 35

Employee benefit plans
Defined contribution plans

The eligible employees of the Company are entitled to receive benefits under Provident Fund, a defined contribution plan in which
both employees and the company makes monthly contributions at a specified percentage of the covered employees’ salary, the
contributions as specified under the Law are paid to the Provident Fund and Pension Fund to the provident fund authorities.

The total expense recognised in profit or loss of Rs.71.18 lakhs (for the year ended March 31, 2024 Rs.66.47 lakhs) represents
contributions payable to these plans by the Company at rates specified in the rules of the plans.

Leave Encashment - The eligible Leave encashment liability to the employees other than those deputed by Indian Bank has been
provided for on the basis of actuarial valuation based on number of days unutilised leave at each reporting date. The actuarial gain or
loss is recognised in the Statement of Profit and Loss as per Ind AS 19.

Defined benefit plans

Gratuity

Payments to defined benefit retirement benefit plans are recognised as an expense when employees have rendered service entitling
them to the benefits.

The plan provides for a lump sum payment to vested employees at retirement or death while in employment or on termination
of employment of an amount equivalent to 15 days’ salary payable for each completed year of service. Vesting occurs upon the
completion of five years of service. The Company makes an annual contribution to gratuity fund established as a Trust through a
Group Gratuity Policy with LIC of India. The Company’s liability towards Gratuity is actuarially determined at the reporting date using
the Project Unit Credit (PUC) method. Actuarial gains and losses on gratuity are recognised in Other Comprehensive Income as per
Ind AS 19.

These plans typically expose the Company to actuarial risks such as: investment risk, interest rate risk, longevity risk and salary risk
The principal assumptions used for the purposes of the actuarial valuations were as follows.

(A) i) Salary escalation by taking into account inflation, seniority, promotion, and other factors mentioned in para 90 of Ind AS 19

ii) Expected rate of return plan assets

iii) Attrition rate by reference to past experience and expected future experience and includes all types of withdrawals other than
death but including those due to disability.

(B) It is assumed that the active members of the scheme will experience in service mortality in accordance with the Indian Assured
Lives Mortality (2012-14) Ultimate Table.

(C) Discount Rate has been determined by reference to market yields on 28-02-2025 on Government bonds of term consistent with
estimated term of the obligations as per para 83 of Ind AS19. The source for determining the market yields is the Zero Coupon
Sovereign Rupee Yield Curve estimated by the Clearing Corporation of India Limited (CCIL) as on 28-02-2025

(D) As per the Company’s accounting policy actuarial gains and losses are recognized as per paras 127,128 and 129 of Ind AS19.

Gratuity is payable as per Payment of Gratuity Act, 1972. In terms of the same Gratuity is computed by multiplying last drawn salary
[Basic salary including Dearness Allowance if any] by completed years of continuous service with part thereof in excess of six months
and again by 15/26. Act provides for a vesting period of 5 years for withdrawal and retirement and a monetary ceiling on gratuity
payable to an employee on separation, as may be prescribed under the Payment of Gratuity Act, 1972, from time to time. However,
in cases where an enterprise has more favourable terms in this regard the same has been adopted.

(1) In respect of the disputed tax demand for Assessment Year 1992-93,on the deduction in respect of dividend income under
section 80M read with section 80AA, the Income Tax Appellate Tribunal, vide its order dated January 25, 2022, has accepted the
Company’s submissions and granted the relief sought. Consequently, the Assessing Officer is required to pass an order giving
effect to the Tribunal’s decision, which is expected to result in a substantial reduction in the tax demand. As of March 31, 2025,
the order giving effect has not yet been passed by the Assessing Officer. The Company is monitoring the matter and expects the
demand to be appropriately revised upon issuance of the said order.

(2) During the financial year 2022-23, the Company received a giving effect order for Assessment Year 1998-99, raising a demand
of Rs. 380.09 lakhs, without considering the benefit of brought forward losses. The Company has filed a rectification application
with the Income Tax Department on August 9, 2024, requesting adjustment of the brought forward losses against the assessed
income. Upon such adjustment, the revised demand is expected to reduce to rs. 7.63 lakhs. Accordingly, no provision has been
made in the financial statements for the disputed amount.

(3) The disputed income tax demands aggregating to Rs. 1,842.78 lakhs for the Assessment Years 2007-08 to 2009-10. The
dispute relates to the Company’s claim for exemption under Section 10(38) of the Income-tax Act, 1961 (exemption on long¬
term capital gains arising from the sale of equity shares on which Securities Transaction Tax has been paid). The Assessing
Officer has treated the income as business income instead of capital gains. The Company has filed an appeal before the Hon’ble
High Court of Madras against the said treatment. Based on legal advice, the management believes that the ultimate outcome of
the matter is likely to be favorable and, accordingly, no provision has been made in the financial statements. For Assessment
Year 2007-08, the Company has paid Rs. 18 lakhs and for Assessment Year 2008-09, Rs.132 lakhs, in accordance with the stay
orders passed by the Hon’ble High Court of Madras.

(4) The Company received an assessment order dated November 25, 2016, for Assessment Year 2014-15, raising a demand of INR
24.80 lakhs. The demand was raised without considering the benefit of brought forward losses, credit for taxes already paid,
and certain other allowable adjustments. The Company has filed a rectification application with the Income Tax Department on
December 26, 2016, seeking correction of the aforementioned errors in the order.

ii) Sales Tax demand disputed in appeal - Rs.26.04 lakhs (Previous year Rs.26.04 lakhs).

iii) GST Excess Input tax demand disputed in Appeal - For FY 2018-19 - Rs.6.35 lakhs and For FY 2019-20 -Rs.10.91 lakhs

B) Guarantees - Counter guarantee issued to bank for guarantees - Nil (Previous Year- Nil).

C) Estimated amount of contracts remaining to be executed on capital account and not provided for - Nil (Previous Year - Nil).

Note 40.

Financial Risk Management Objectives and Policies

A. Capital management

The Company’s objective for capital management is to maximise shareholder value, safeguard business continuity and support the
growth of the Company. The Company determines the capital requirement based on annual operating plans and long-term and other
strategic investment plans. The funding requirements are met through equity, operating cash flows generated and short term debt.
The Company is not subject to any externally imposed capital requirements.

B. Financial risk management

The Company is exposed to market risk, credit risk and liquidity risk. All these risks are managed by the company in accordance with
its Integrated Risk Management Policy approved by its Board.

B.1 Market Risk

Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market
prices. Market risk comprises following types of risk: interest rate risk and market price risk. Financial instruments affected by market
risk inter-alia includes borrowings.

B.1.1 Interest Rate Risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market
interest rates. The company does not carry any floating rate financial instruments that exposes it to risk arising out of change in
interest rates.

B.1.2 Market Price Risk

The Company is exposed to market price risk, which arises from FVTPL investment in listed securities. The management monitors
the proportion of listed securities investments in its investment portfolio based on market indices. Material investments within the
portfolio are managed on an individual basis and all buy and sell decisions are approved by the appropriate authority.

B.2 Credit Risk

Credit risk is the risk that the Company will incur a loss because its customers or counterparties fail to discharge their contractual
obligation. The Company manages and controls credit risk by setting limits on the amount of risk it is willing to accept for individual
counterparties, and by monitoring exposures in relations to such limits.

The maximum exposure to credit risk for each class of financial instruments is the carrying amount of that class of financial
instruments presented in the financial statements. The Company’s major classes of financial assets are cash and cash equivalents,
term deposits, trade receivables and security deposits.

Cash and cash equivalents and term deposits with banks are considered to have negligible risk or nil risk, as they are maintained with
high rated banks financial institutions as approved by the Board of directors. Security deposits are kept with stock exchanges for
meeting minimum base capital requirements. These deposits do not have any credit risk.

The Company holds collateral of securities against its credit exposures. The management has established accounts receivable policy
under which customer accounts are regularly monitored. The Company has a dedicated risk management team, which monitors the
positions, exposures and margins on a continuous basis.

B.3 Liquidity Risk

Liquidity represents the ability of the Company to generate sufficient cash flow to meet its financial obligations on time, both in
normal and in stressed conditions, without having to liquidate assets or raise funds at unfavorable terms thus compromising its
earnings and capital.

Prudent liquidity risk management requires sufficient cash and marketable securities and availability of funds through adequate
committed credit facilities to meet obligations when due and to close out market positions.

The Company aims to maintain the level of its cash and cash equivalents in the form of bank deposits at an amount in excess of
expected cash outflow on financial liabilities. Funds required for short period is taken care by utilising overdraft facility availded from
scheduled commercial bank.

NOTE: 43 ADDITIONAL REGULATORY INFORMATION

(i) No loans or advances in the nature of loans are granted to Promoters, Directors, KMPs and the related parties (as defined
under the Companies Act, 2013), either severally or jointly with any other person that are repayable on demand or without
specifying any terms or period of repayment.

(ii) The company does not hold any benami property and no proceedings have been initiated or pending against the company for
holding any benami property under the Benami Transactions (Prohibition) Act, 1988 (45 of 1988) and rules made thereunder.

(iii) The Company has not availed any borrowings from banks or financial institutions on the basis of security of current assets.

(iv) The Company is not declared a wilful defaulter by any bank or financial institution or other lender (as defined under the
Companies Act 2013) or consortium thereof, in accordance with the guidelines on wilful defaulters issued by the Reserve Bank
of India.

(v) The Company is in the process of compiling the required information for the purpose of verification as to whether there are
any relationship with companies struck off under section 248 of the Companies Act, 2013 or section 560 of the Companies
Act, 1956. Pending such exercise, based on the information available with the company, there are no amounts or transactions
to disclose as required under (WB)(xi) of Part I of Division III of Schedule III to the Companies Act, 2013.

(vi) There are no charges or satisfaction yet to be registered with Registrar of companies (ROC).

(vii) The company has complied with the number of layers prescribed under clause (87) of section 2 of the Act read with Companies
(Restriction on number of Layers) Rules, 2017.

(viii) There are no Scheme of Arrangements placed before the Competent Authority in terms of sections 230 to 237 of the Companies
Act, 2013 for approval.

(ix) Utilisation of Borrowed funds and share premium

(a) No funds (which are material either individually or in the aggregate) have been advanced or loaned or invested (either
from borrowed funds or share premium or any other sources or kind of funds) by the Company to or in any other
person(s) or entity(ies), including foreign entities (“Intermediaries”), with the understanding, whether recorded in writing
or otherwise, that the Intermediary shall, directly or indirectly lend or invest in party identified in any manner by or on
behalf of the Company (Ultimate Beneficiaries) or provide any guarantee, security or the like on behalf of the Ultimate
Beneficiaries.

(b) The Company has not received any fund (which are material either individually or in the aggregate) from any party(s)
(Funding Party(ies)) with the understanding, whether recorded in writing or otherwise, that the Company shall, whether,
directly or indirectly lend or invest in other persons or entities identified in any manner by or on behalf of the Funding
Party (“Ultimate Beneficiaries”) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

(x) The Company has not traded or invested in Crypto currency or Virtual currency during the year ended 31st March, 2025.

(xi) The Company did not have any transactions which had not been recorded in the books of accounts that had been surrendered
or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961 (such as, search or survey or
any other relevant provisions of the Income Tax Act, 1961).

(xii) Additional regulatory information required under (WB) (xvi) of Division III of amended Schedule III of the Companies Act, 2013
i.e., the disclosure of ratios, is not applicable to the Company as it is in stock broking business and also the Company has not
conducted any Non-Banking Financial activities or any Housing Finance activities and it is not required to obtain Certificate of
Registration (CoR) from the Reserve Bank of India (RBI) as per section 45-IA of Reserve Bank of India Act, 1934.

ASHUTOSH CHOUDHURY (DIN 09245804) SUNIL JAIN (DIN 09665264) V HARIBABU (DIN 09523733)

DIRECTOR DIRECTOR PRESIDENT AND WHOLE TIME

DIRECTOR

TAUSIF INAMDAR CS. CHITRA M A

VICE PRESIDENT & CFO COMPANY SECRETARY

(A33512)

As per our report of even date attached
For BRAHMAYYA & CO

CHARTERED ACCOUNTANTS
(FRN 000511S)

CA. K JITENDRA KUMAR

PARTNER
(M.No: 201825)

Date : 24/04/2025
Place : Chennai

---

Mar 31, 2024

A. Measurement of fair values

i. Fair value hierarchy

The fair value of the above investment property has been determined by an external independent valuer.

The fair value measurement for the above investment property is assessed by the management using level 3 inputs of fair value hierarchy as outlined in Ind AS 113, Fair Value Measurement and has been categorised as a level 3 fair value based on the inputs to the valuation technique.

The Company has no restrictions on the realisability of its investment property.

ii. Valuation technique

For the purpose of valuation, the primary valuation methodology used is Sales Comparison method in which the sales instances of the similar properties or properties with similar attributes in the same region are traced and the Market Rates are derived based on the Present Marker Value of the premises.

C. Investment property given on operating lease:

The Company has given investment property on operating lease. The lease arrangement is for a period of 12 months and is a cancellable lease. The lease is renewable for further periods on mutually agreeable terms.

Terms/rights attached to equity shares

The Company has only one class of equity shares having par value of Rs.10 each per share. Each holder of equity shares is entitled to one vote per share. The Company declares and pay dividends in indian Rupees. The dividend if any proposed by the Board of Directors is subject to the approval of share holders in the ensuing Annual General Meeting.

In the event of liquidation of the Company, holders of equity shares will be entitled to receive remaining assets of the Company. The distribution will be in the proportion to equity shareholding.

Of the above, no shares are issued for consideration other than cash.

Note. 35

Employee benefit plans Defined contribution plans

The eligible employees of the Company are entitled to receive benefits under Provident Fund, a defined contribution plan in which both employees and the company makes monthly contributions at a specified percentage of the covered employees’ salary, the contributions as specified under the Law are paid to the Provident Fund and Pension Fund to the provident fund authorities.

The total expense recognised in profit or loss of Rs. 66.47 lakhs (for the year ended March 31, 2023 Rs.62.80 lakhs) represents contributions payable to these plans by the Company at rates specified in the rules of the plans.

Leave Encashment - The eligible Leave encashment liability to the employees other than those deputed by Indian Bank has been provided for on the basis of actuarial valuation based on number of days unutilised leave at each reporting date. The actuarial gain or loss is recognised in the Statement of Profit and Loss as per Ind AS 19.

Defined benefit plans

Gratuity

Payments to defined benefit retirement benefit plans are recognised as an expense when employees have rendered service entitling them to the benefits.

The plan provides for a lump sum payment to vested employees at retirement or death while in employment or on termination of employment of an amount equivalent to 15 days’ salary payable for each completed year of service. Vesting occurs upon the completion of five years of service. The Company makes an annual contribution to gratuity fund established as a Trust through a Group Gratuity Policy with LIC of India. The Company’s liability towards Gratuity is actuarially determined at the reporting date using the Project Unit Credit (PUC) method. Actuarial gains and losses on gratuity are recognised in Other Comprehensive Income as per Ind AS 19.

These plans typically expose the Company to actuarial risks such as: investment risk, interest rate risk, longevity risk and salary risk The principal assumptions used for the purposes of the actuarial valuations were as follows.

(A) i) Salary escalation by taking into account inflation, seniority, promotion, and other factors mentioned in para 90 of Ind AS

19

ii) Expected rate of return plan assets

iii) Attrition rate by reference to past experience and expected future experience and includes all types of withdrawals other than death but including those due to disability.

(B) It is assumed that the active members of the scheme will experience in service mortality in accordance with the Indian Assured Lives Mortality (2012-14) Ultimate Table.

(C) Discount Rate has been determined by reference to market yields on 29-02-2024 on Government bonds of term consistent with estimated term of the obligations as per para 83 of Ind AS19. The source for determining the market yields is the Zero Coupon Sovereign Rupee Yield Curve estimated by the Clearing Corporation of India Limited (CCIL) as on 29-02-2024

(D) As per the Company’s accounting policy actuarial gains and losses are recognized as per paras 127,128 and 129 of Ind AS19.

Gratuity is payable as per Payment of Gratuity Act, 1972. In terms of the same Gratuity is computed by multiplying last drawn salary [Basic salary including Dearness Allowance if any] by completed years of continuous service with part thereof in excess of six months and again by 15/26. Act provides for a vesting period of 5 years for withdrawal and retirement and a monetary ceiling on gratuity payable to an employee on separation, as may be prescribed under the Payment of Gratuity Act, 1972, from time to time. However, in cases where an enterprise has more favourable terms in this regard the same has been adopted.

* Relating to disputed tax pertaining to AY 1992-93, the Tribunal at the hearing held on 25.01.22 has accepted our written submissions and arguments and has passed order giving the relief requested by us. Consequent to the Tribunal, the Assessing Officer will now pass an order giving effect to the same substantially reducing the demand and the giving effect order by the AO is not passed till 31/03/2024.

** During the FY 2022-23, a giving effect order pertaining to AY 1998-99 was served on the Company imposing a demand of INR 380.09 Lakhs without giving benefit of brought forward losses. The Company is in the process of filing a rectification request with the Income Tax Department to allow the adjustment of brought forward loss with the income assessed, as a result of which, the demand payable would be INR 32.13 lakhs. Since the time limit to file the rectification request has not elapsed, no provision has been made for the same.

*** The company has paid Rs. 18 lakhs for this Assessment Year in terms of the orders passed by the CIT on the stay petition filed by the company.

**** The company has paid Rs.132 lakhs for this Assessment Year in terms of the orders passed by the CIT and High Court, Madras on the stay petition filed by the company.

ii) Sales Tax demand disputed in appeal - Rs.26.04 lakhs (Previous year Rs.26.04 lakhs).

B) Guarantees - Counter guarantee issued to bank for guarantees - Nil (Previous Year- Nil).

C) Estimated amount of contracts remaining to be executed on capital account and not provided for - Nil (Previous Year - Nil).

The above transactions with the government related entities cover transactions that are significant individually and collectively. The company has also entered into other transactions that are insignificant individually & collectively and hence not disclosed.

All transactions are carried out on market terms.

Note 38

Note 38. Segment information

Information reported to the Chief Operating Decision Maker (CODM - Board of Directors) for the purposes of resource allocation and assessment of segment performance focusses on the Company as a whole. Hence, the management has concluded that the Company has only one segment.

The effective income tax rate for the year ended March 31, 2024 is 25.168% (For the previous year it is 25.168%)

During the year, the Company has not surrendered or disclosed any income in the tax assessments under the Income Tax Act, 1961 (such as, search or survey or any other relevant provisions of the Income Tax Act, 1961). Accordingly, there are no transaction which are not recorded in the books of accounts.

Financial Risk Management Objectives and Policies Note 40

a. Capital management

The Company’s objective for capital management is to maximise shareholder value, safeguard business continuity and support the growth of the Company. The Company determines the capital requirement based on annual operating plans and long-term and other strategic investment plans. The funding requirements are met through equity, operating cash flows generated and short term debt. The Company is not subject to any externally imposed capital requirements.

B. Financial risk management

The Company is exposed to market risk, credit risk and liquidity risk. All these risks are managed by the company in accordance with its Integrated Risk Management Policy approved by its Board.

B.1 Market Risk

Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises following types of risk: interest rate risk and market price risk. Financial instruments affected by market risk inter-alia includes borrowings.

B.1.1 Interest Rate Risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The company does not carry any floating rate financial instruments that exposes it to risk arising out of change in interest rates.

B.1.2 Market Price Risk

The Company is exposed to market price risk, which arises from FVTPL investment in listed securities. The management monitors the proportion of listed securities investments in its investment portfolio based on market indices. Material investments within the portfolio are managed on an individual basis and all buy and sell decisions are approved by the appropriate authority.

B.2 Credit Risk

Credit risk is the risk that the Company will incur a loss because its customers or counterparties fail to discharge their contractual obligation. The Company manages and controls credit risk by setting limits on the amount of risk it is willing to accept for individual counterparties, and by monitoring exposures in relations to such limits.

The maximum exposure to credit risk for each class of financial instruments is the carrying amount of that class of financial instruments presented in the financial statements. The Company’s major classes of financial assets are cash and cash equivalents, term deposits, trade receivables and security deposits.

Cash and cash equivalents and term deposits with banks are considered to have negligible risk or nil risk, as they are maintained with high rated banks financial institutions as approved by the Board of directors. Security deposits are kept with stock exchanges for meeting minimum base capital requirements. These deposits do not have any credit risk.

The Company holds collateral of securities against its credit exposures. The management has established accounts receivable policy under which customer accounts are regularly monitored. The Company has a dedicated risk management team, which monitors the positions, exposures and margins on a continuous basis.

B.3 Liquidity Risk

Liquidity represents the ability of the Company to generate sufficient cash flow to meet its financial obligations on time, both in normal and in stressed conditions, without having to liquidate assets or raise funds at unfavorable terms thus compromising its earnings and capital.

Prudent liquidity risk management requires sufficient cash and marketable securities and availability of funds through adequate committed credit facilities to meet obligations when due and to close out market positions.

The Company aims to maintain the level of its cash and cash equivalents in the form of bank deposits at an amount in excess of expected cash outflow on financial liabilities. Funds required for short period is taken care by utilising overdraft facility availded from scheduled commercial bank.

The carrying amount reflected above represents the Company’s maximum exposure to credit risk for such Financial assets.

Fair value measurements

This note provides information about how the Company determines fair values of various financial assets and financial liabilities.

Some of the Company’s financial assets and financial liabilities are measured at fair value at the end of each reporting period.

The following table gives information about how the fair values of these financial assets and financial liabilities are determined (in particular, the valuation technique(s) and inputs used).

Fair value of financial assets and financial liabilities that are not measured at fair value (but fair value disclosures are required)

Except as detailed in the following table, the directors consider that the carrying amounts of financial assets and financial liabilities recognised in the financial statements approximate their fair values.

NOTE: 43 ADDITIONAL REGULATORY INFORMATION

(i) No loans or advances in the nature of loans are granted to Promoters, Directors, KMPs and the related parties (as defined under the Companies Act, 2013), either severally or jointly with any other person that are repayable on demand or without specifying any terms or period of repayment.

(ii) The company does not hold any benami property and no proceedings have been initiated or pending against the company for holding any benami property under the Benami Transactions (Prohibition) Act, 1988 (45 of 1988) and rules made thereunder.

(iii) The Company has not availed any borrowings from banks or financial institutions on the basis of security of current assets.

(iv) The Company is not declared a wilful defaulter by any bank or financial institution or other lender (as defined under the Companies Act 2013) or consortium thereof, in accordance with the guidelines on wilful defaulters issued by the Reserve Bank of India.

(v) The Company is in the process of compiling the required information for the purpose of verification as to whether there are any relationship with companies struck off under section 248 of the Companies Act, 2013 or section 560 of the Companies Act, 1956. Pending such exercise, based on the information available with the company, there are no amounts or transactions to disclose as required under (WB)(xi) of Part I of Division III of Schedule III to the Companies Act, 2013.

(vi) There are no charges or satisfaction yet to be registered with Registrar of companies (ROC).

(vii) The company has complied with the number of layers prescribed under clause (87) of section 2 of the Act read with Companies (Restriction on number of Layers) Rules, 2017.

(viii) There are no Scheme of Arrangements placed before the Competent Authority in terms of sections 230 to 237 of the Companies Act, 2013 for approval.

(ix) Utilisation of Borrowed funds and share premium

(a) No funds (which are material either individually or in the aggregate) have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) by the Company to or in any other person(s) or entity(ies), including foreign entities (“Intermediaries”), with the understanding, whether recorded in writing or otherwise, that the Intermediary shall, directly or indirectly lend or invest in party identified in any manner by or on behalf of the Company (Ultimate Beneficiaries) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

(b) The Company has not received any fund (which are material either individually or in the aggregate) from any party(s) (Funding Party(ies)) with the understanding, whether recorded in writing or otherwise, that the Company shall, whether, directly or indirectly lend or invest in other persons or entities identified in any manner by or on behalf of the Funding Party (“Ultimate Beneficiaries”) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

(x) The Company has not traded or invested in Crypto currency or Virtual currency during the year ended 31st March, 2024.

(xi) The Company did not have any transactions which had not been recorded in the books of accounts that had been surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961 (such as, search or survey or any other relevant provisions of the Income Tax Act, 1961).

(xii) Additional regulatory information required under (WB) (xvi) of Division III of amended Schedule III of the Companies Act, 2013 i.e., the disclosure of ratios, is not applicable to the Company as it is in stock broking business and also the Company has not conducted any Non-Banking Financial activities or any Housing Finance activities and it is not required to obtain Certificate of Registration (CoR) from the Reserve Bank of India (RBI) as per section 45-IA of Reserve Bank of India Act, 1934.

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Mar 31, 2018

Note 27: Employee benefit plans Defined contribution plans

The eligible employees of the Company are entitled to receive benefits under Provident Fund, a defined contribution plan in which both employees and the company makes monthly contributions at a specified percentage of the covered employees'' salary, the contributions as specified under the Law are paid to the Provident Fund and Pension Fund to the provident fund authorities.

Leave Encashment - The eligible Leave encashment liability to the employees other than those deputed by Indian Bank has been provided for on the basis of actuarial valuation based on number of days unutilized leave at each reporting date. The actuarial gain or loss is recognized in the Statement of Profit and Loss as per Ind AS 19.

The total expense recognized in profit or loss of Rs. 29,39,999 (for the year ended March 31, 2017 Rs.31,06,303) represents contributions payable to these plans by the Company at rates specified in the rules of the plans.

Defined benefit plans

Payments to defined contribution retirement benefit plans are recognized as an expense when employees have rendered service entitling them to the contributions.

The plan provides for a lump sum payment to vested employees at retirement, death while in employment or on termination of employment of an amount equivalent to 15 days'' salary payable for each completed year of service. Vesting occurs upon the completion of five years of service. The Company makes an annual contribution to gratuity fund established as a Trust through a Group Gratuity Policy with Life Insurance Corporation of India. The Company''s liability towards Gratuity is actuarially determined at the reporting date using the Project Unit Credit (PUC) method. Actuarial gains and losses on gratuity are recognized in Other Comprehensive Income as per Ind AS 19.

These plans typically expose the Company to actuarial risks such as: investment risk, interest rate risk, longevity risk and salary risk Since the company contributes to an approved Gratutiy Fund, it is not exposed to any risk.

- The company has paid Rs. 18 lakhs for this Assessment Year in terms of the orders passed by the CIT on the stay petition filed by the company.

-- The company has paid Rs. 132 lakhs for this Assessment Year in terms of the orders passed by the CIT and High Court, Madras on the stay petition filed by the company.

ii) Sales Tax demand disputed in appeal - Rs.42.78 lakhs (Previous year Rs.42.78 lakhs).

B. Guarantees - Counter guarantee issued to bank for guarantees - Nil (Previous Year - Nil)

C. Estimated amount of contracts remaining to be executed on capital account and not provided for - Nil (Previous Year - Nil).

Note 29: Disclosure in respect of Related Parties pursuant to Ind AS 24

The Company has identified all related parties and transactions with the related parties as per details given below:

Name Relationship

Indian Bank Holding Company

Ind Bank Housing Limited Fellow Subsidiary

Key Management Personnel Mr. A K Bajpai, President & Whole Time Director

Key Management Personnel Mr. K S Sujay, Vice President & CFO

Key Management Personnel Ms. S S Deepthi, Company Secretary & Compliance Officer

Vice President & CFO of the Company is on deputation from Indian Bank and the remuneration is in accordance with the service rules of the said Bank.

Company Secretary & Compliance Officer has been recruited directly by the company and the remuneration is in accordance with the terms of offer of employment given by the company.

Note 30. Segment information

Information reported to the Chief Operating Decision Maker (CODM - Board of Directors) for the purposes of resource allocation and assessment of segment performance focuses on the Company as a whole. Hence, the management has concluded that the Company has only one segment.

Note 32: Financial instruments Capital management

The Company manages its Capital to ensure that it continues as a Going Concern while maximizing the return to its stakeholders through the optimization of equity balance.

The capital structure of the Company does not consist of any debt. The business activities are carried out using internal accruals and the equity balance of the Company.

Financial risk management objectives

The Company has fixed prudential limits for giving exposure to its clients and also has a elaborate collection process for mitigating the risks. The exposure norms prescribed by various statutory authorities (SEBI, NSDL and RBI) are being adhered to. The risk management policy shall be reviewed every two years.

The risks include market risk, credit risk and liquidity risk.

Market Risk

The Company is not exposed to market risks due to foreign currency exchange rates and interest rates as there are no borrowings and no transactions in foreign currency.

Credit risk management

The credit risk associated with broking comprises failure of the client, intermediary, clearing agents and the exchanges in meeting their respective payment obligations. The Company has a power of attorney to sell the underlying securities when there is delay in receipts from the customers at its discretion. The Company also has fixed margin requirements which have to be adhered to by the customers in order to transact with the Company. Hence, the Company''s exposure to credit risk is minimal.

Interest Rate Risk Management

The Company has not obtained any borrowings. Hence, it has no exposure due to interest rate fluctuations.

Liquidity risk management

Ultimate responsibility for liquidity risk management rests with the board of directors, which has established an appropriate liquidity risk

Note 33: First-time adoption of Ind AS

These financial statements, for the year ended 31 March 2018, are the first the Company has prepared in accordance with Ind AS. For periods up to and including the year ended 31 March 2017, the Company prepared its financial statements in accordance with accounting standards notified under section 133 of the Companies Act 2013, read together with paragraph 7 of the Companies (Accounts) Rules, 2014 (Indian GAAP).

Accordingly, the Company has prepared financial statements which comply with Ind AS applicable for periods ending on 31 March 2018, together with the comparative period data as at end for the year ended 31 March 2017, as described in the summary of significant accounting policies. In preparing these financial statements, the Company''s opening balance sheet was prepared as at 1 April 2016, the Company''s date of transition to Ind AS. This note explains the principal adjustments made by the Company in restating its Indian GAAP financial statements, including the balance sheet as at 1 April 2016 and the financial statements as at and for the year ended 31 March 2017.

Ind AS 101 allows first-time adopters certain exemptions from the retrospective application of certain requirements under Ind AS. The Company has applied the following exemptions:

1 Since there is no change in the functional currency, the Company has elected to continue with the carrying value as at 1st April, 2016 for all of its investment property and property plant & equipment as recognized in its Previous GAAP financial as deemed cost at the transition date.

2 Under previous GAAP, long term investments were measured at cost less diminution in value which is other than temporary. Under Ind AS, the investments in Bought Out Deals have been classified as at FVTOCI and that in equity instruments have been classified as at FVTPL.

3 Under previous GAAP, current investments were measured at lower of cost or fair value. Under Ind AS, the investments in equity instruments have been classified as FVTPL on the date of transition. The fair value changes are recognized in profit or loss.

4 Under previous GAAP, there was no concept of other comprehensive income. Under Ind AS, specified items of income, expense, gains, or losses are required to be presented in other comprehensive income.

5 Under previous GAAP, actuarial gains and losses were recognized in profit or loss. Under Ind AS, the actuarial gains and losses form part of remeasurernent of the net defined benefit liability / asset which is recognized in other comprehensive income. The actuarial gains for the year ended March 31, 2018 were Rs.6.98 lakhs and for March 31, 2017 were Rs.2.72 lakhs.

Effect of the Transition to Ind AS

Reconciliations of the Company''s balance sheets prepared under Indian GAAP and Ind AS as of April 1, 2016 and March 31, 2017 are also presented in Note 34 & 35. Reconciliations of the Company''s income statements for the year ended March 31, 2017 prepared in accordance with Indian GAAP and Ind AS in Note 36.

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Mar 31, 2016

1. AS-24 - Discontinuing operations and Segment reporting

The Company had discontinuing fund-based activities consequent to SEBI regulations coming into force with effect from December 1997 and had decided to undertake only fee-based activities. The existing fund based exposures as on December 1997 are continued to run down to their contracted period. The Company had obtained cancellation of registration as NBFC from RBI consequent to repayment of fixed deposits and transfer of unclaimed fixed deposits to an escrow account with a nationalized bank for repayment as and when claimed. The Company is now governed only by SEBI regulations.

The business segments have been identified as the Primary Segment considering the nature of service, organizational structure and internal financial reporting system. The services of the reported domestic business segments are classified as "Discontinuing operations" (Fund Based) and "Continuing Operations" (Fee Based). Discontinuing operations consists of Leasing, Hire purchase, Inter corporate deposits and Investments. Continuing operations include Merchant Banking, Stock Broking, Depository Participant services, Distribution of Financial Products and allied activities. There is no Secondary Reportable Segment.

2. Interest on Income tax refund / excess interest reversed

Based on the orders under section 154 of the Income Tax Act, received during the year, the interest allowed by the department on the refunds due under the Income Tax Act has been reckoned in the accounts for various assessment years as under:

3. A sum of Rs.7.19 lakhs deducted by Indian Bank as TDS on interest accrued on Fixed Deposit of Rs.93.15 lakhs placed with them in terms of Court Order passed on 10.02.2010 for the recovery of Client dues from M/s Shreeji Investments is considered as an asset and corresponding liability is also provided for in the books of accounts.

4. Indian Bank, the parent Bank, has approved a moratorium period of 3 years from September 2013 to September 2016 for repayment of the amount of Rs. 897.48 lakhs payable to them under the Right of Recompense clause with repayment of Rs. 75 lakhs per half year to commence from the half year ending 31.03.2017 without any interest charge for the period of moratorium/repayment. Hence no liability has been provided in the books for the current financial year.

5. Sales Tax demand disputed in appeal - Rs.42.78 lakhs (Previous year Rs.42.78 lakhs).

6. Guarantees - Counter guarantee issued to bank for guarantees - Rs.200.00 lakhs (Previous Year- Rs.200.00 lakhs)

7. Estimated amount of contracts remaining to be executed on capital account and not provided for - Nil (Previous Year - Nil).

President and Whole Time Director of the Company is on deputation from Indian Bank and the remuneration is in accordance with the service rules of the said Bank and also in terms of appointment as ''Whole Time Director'' by the shareholders of the Company.

8. As at March 31, 2016, the Company has no outstanding dues to medium and small enterprises. There is no liability towards interest on delayed payments under the Micro, Small and Medium Enterprises Development Act, 2006 during the year.

9. In the opinion of the Management all Fixed Assets, Current Assets, Loans & Advances will have value on realization in the ordinary course of business at least equal to the amounts at which they are stated in the accounts.

10. The previous year''s figures in the Balance Sheet, Profit and Loss Account and Cash Flow Statement have been regrouped and reclassified, wherever necessary, to conform to the current year''s classification.

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Mar 31, 2015

1. Prior period adjustments

During the year 2014-15 there was no prior period expenses (previous year Rs. 83633/-)

2. Tax expenses

a. In view of losses (as per Income tax) as well as book losses (as per MAT computation) no provision for tax is required for the year.

b. No provision is made for the disputed demands of income tax keeping in view the judicial pronouncements and/or legal opinion on the issues.

c. The provision for deferred tax (net) for the year is Rs.98.47 lakhs (Previous year Rs.1.37 lakhs) which has been charged to profit & loss account.

3. AS-24 - Discontinuing operations and Segment reporting

The Company had discontinuing fund-based activities consequent to SEBI regulations coming into force with effect from December 1997 and had decided to undertake only fee-based activities. The existing fund based exposures as on December 1997 are continued to run down to their contracted period. The Company had obtained cancellation of registration as NBFC from RBI consequent to repayment of fixed deposits and transfer of unclaimed fixed deposits to an escrow account with a nationalized bank for repayment as and when claimed. The Company is now governed only by SEBI regulations.

The business segments have been identified as the Primary Segment considering the nature of service, organizational structure and internal financial reporting system. The services of the reported domestic business segments are classified as "Discontinuing operations" (Fund Based) and "Continuing Operations" (Fee Based). Discontinuing operations consists of Leasing, Hire purchase, Inter corporate deposits and Investments. Continuing operations include Merchant Banking, Stock Broking, Depository Participant services, Distribution of Financial Products and allied activities. There is no Secondary Reportable Segment.

4. Indian Bank, the parent Bank, has approved a moratorium period of 3 years from September 2013 to September 2016 for repayment of the amount of Rs. 897.48 lakhs payable to them under the Right of Recompense clause with repayment of Rs. 75 lakhs per half year to commence from the half year ending 31.03.2017 without any interest charge for the period of moratorium/repayment. Hence no liability has been provided in the books for the current financial year.

5. AS-29 - Contingent Liability

A. Disputed demand on taxes

i) Income Tax Rs.Lakhs 2014-15 Asst Year Tax Demand Interest Total

1997- 98 0.00 0.00 0.00

1998- 99 32.13 0.00 32.13

2007- 08* 462.02 155.45 617.47

2008- 09** 832.56 296.49 1129.05

2009- 10 72.23 0.00 72.33

Total 1398.94 451.94 1850.98

2013-14

Asst year Tax Demand Interest Total

1997-98 20.13 0.00 20.13

1998-99 45.31 0.00 45.31

2007-08 462.02 155.45 617.47

2008-09 832.56 296.49 1129.05

2009-10 72.23 0.00 72.23

1432.25 451.94 1884.19

*The company has paid Rs. 18 lakhs for this Assessment Year in terms of the orders passed by the CIT on the stay petition filed by the company.

**The company has paid Rs. 132 lakhs for this Assessment Year in terms of the orders passed by the CIT and High Court, Madras on the stay petition filed by the company.

Sales Tax demand disputed in appeal - Rs.42.78 lakhs (Previous year Rs.57.37 lakhs).

B. Guarantees - Counter guarantee issued to bank for guarantees - Rs.200.00 lakhs (Previous Year- Rs.200.00 lakhs)

C. Estimated amount of contracts remaining to be executed on capital account and not provided for - Nil (Previous Year - Nil).

President and Whole Time Director of the Company is on deputation from Indian Bank and the remuneration is in accordance with the service

rules of the said Bank and also in terms of appointment as 'Whole Time Director' by the shareholders of the Company.

6. As at March 31,2015, the Company has no outstanding dues to medium and small enterprises. There is no liability towards interest on delayed payments under the Micro, Small and Medium Enterprises Development Act, 2006 during the year.

7. In the opinion of the Management all Fixed Assets, Current Assets, Loans & Advances will have value on realization in the ordinary course of business at least equal to the amounts at which they are stated in the accounts.

8. The previous year's figures in the Balance Sheet, Profit and Loss Account and Cash Flow Statement have been regrouped and reclassified, wherever necessary, to conform to the current year's classification.

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Mar 31, 2014

1. Prior period adjustments

During the year 2013-14 a sum of Rs. 83633 pertaining to expenses of previous year has been shown under prior period expenses.

2. Tax expenses

a) In view of losses (as per Income tax) as well as book losses (as per MAT computation) no provision for tax is required for the year.

b) No provision is made for the disputed demands of income tax keeping in view the judicial pronouncements and/or legal opinion on the issues.

c) The provision for deferred tax (net) for the year is Rs. 1.37 lakhs (Previous year Rs. 29.35 lakhs) which has been charged to profit & loss account.

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Mar 31, 2013

1. Interest onIncome tax / interest tax refund due

Based on the orders received during the year, the interest allowed by the department on the refunds due under Income Tax/Interest Tax has been reckoned inthe accounts for various assessment yearsasunder:

2. Prior period adjustments

During the year 2011-12, based on the orders of the Income tax department for interest on income tax/interest tax refunds due an amount of Rs. 455.81 lakhs was reckoned in the accounts. Howeverthe said orders were revised by the department on 29.06.2012 as there was an error in the interest calculations and the excess interest of Rs. 204.62 lakhs was reversed. Consequent to the above, the interest provision of Rs. 247.48 lakhs made in the accounts in the year 2011 -12 towards the interest payable to Indian Bank under the right of recompense was reversed during the year and the net resultant amount of Rs. 42.86 lakhs is shown under prior period adjustment. Consequent to the above, the balance interest payable to Indian Bank under the right of recompense is Rs. 897.48 lakhs. The bank has permitted the company to pay the balance on or before 30.9.2013.

3. Tax expenses

a) In view of losses (as per Income tax) as well as book losses (as per MAT computation) no provision for tax is required forthe year.

b) No provision is made forthe disputed demands of income tax keeping in view the judicial pronouncements and/or legal opinion on the issues.

c) The provision for deferred tax (net) forthe year is Rs.29.35 lakhs (Previous year Rs.11.62 lakhs) which has been charged to profit & loss account.

4. AS-24 - Discontinuing operations and Segment reporting

The Company had discontinued fund-based activities consequent to SEBI regulations coming into force with effect from December 1997 and had decided to undertake only fee-based activities. The existing fund based exposures as on December 1997 are continued to run down to their contracted period. The Company had obtained cancellation of registration as NBFC from RBI consequent to repayment of fixed deposits and transfer of unclaimed fixed deposits to an escrow account with a nationalized bank for repayment as and when claimed. The Company isnow governed only bySEBI regulations.

The business segments have been identified as the Primary Segment considering the nature of service, organizational structure and internal financial reporting system. The services of the reported domestic business segments are classified as "Discontinuing operations" (Fund Based) and "Continuing Operations" (Fee Based). Discontinuing operations consists of Leasing, Hire purchase, Intercorporate deposits and Investments. Continuing operations include Merchant Banking, Stock Broking, Depository Participant services, Distribution of Financial Products and allied activities. There is no Secondary Reportable Segment.

ii) Sales Tax demand disputed in appeal - Rs. 108.87 lakhs (Previous year Rs. 110.72 lakhs). (Rs. 51.50 lakhs at Bangalore, Rs. 42.78 lakhs at Chennai and Rs. 14.59 lakhs at Rajasthan)

B. Guarantees - Counter guarantee issued to bank for guarantees - Rs.200.00 lakhs (Previous Year- Rs. 200.00 lakhs)

C. Estimated amount of contracts remaining to be executed on capital account and not provided for - Rs. 20.72 lakhs (Previous Year Rs. 109.40 lakhs).

President and Whole Time Director of the Company is on deputation from Indian Bank and the remuneration is in accordance with the service rules of the said Bank and also in terms of appointment as ''Whole Time Director'' by the shareholdersofthe Company.

5. As at March 31, 2013, the Company has no outstanding dues to medium and small enterprises. There is no liability towards interest on delayed payments under the Micro, Small and Medium Enterprises Development Act, 2006 during the year.

6. In the opinion of the Management all Fixed Assets, Current Assets, Loans & Advances will have value on realization in the ordinarycourse of businessat least equal to the amountsat which they are statedin the accounts.

7. The previous year''s figures in the Balance Sheet, Profit and Loss Account and Cash Flow Statement have been regrouped and reclassified, wherever necessary,toconformtothe current year''sclassification.

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Mar 31, 2011

1. AS-15 - Employee Benefits

The estimates of rate of escalation in salary considered in actuarial valuation, take into account inflation, seniority, promotion and other relevant factors including supply and demand in the employment market. The expected rate of return is determined considering several applicable factors, mainly the composition of plan assets held, assessed risks, historical results of return on plan assets and the company's policy for plan assets management. The retirement benefit liability in respect of staff on deputation from Indian Bank is borne by Indian Bank.

The company has contributed Rs.7.92 lakhs towards Gratuity liability in the year 2010-11.

2. AS-17-Segment Reporting

The business segments have been identified as the Primary Segment considering the nature of service, organisational structure and internal financial reporting system. The services of the reported domestic business segments are classified as "Fund Based” and "Fee Based” activities. Fund Based activities consists of Leasing, Hire purchase, Intercorporate deposits and Investments. Fee Based activities include Merchant Banking, Stock Broking, Depository Participant services, distribution of Financial Products and allied activities. There is no Secondary Reportable Segment

3. AS-18 - Related Party Transactions

The Company has identified all related parties and transactions with the related parties as per details given below:

Name Relationship Indian Bank Holding Company

Ind Bank Housing Limited Fellow Subsidiary

Indfund Management Limited Fellow Subsidiary

Key Management Personnel Mr. G. Rangarajan, President & Wholetime Director

The transactions with Holding company and fellow subsidiaries has not been disclosed in view of exemption for State- controlled enterprises from making any disclosure pertaining to their transactions with other related parties which are also state-controlled enterprises.

The related party transactions with key management personnel have been disclosed in Managerial Remuneration - Note 15 of Notes on Accounts.

4. AS-19- Leases

In case of assets taken on lease

The lease agreements provide for option to the company to renew the lease period after the non-cancellable period. There are no exceptional/restrictive covenants in the lease agreements.

5. AS-22 - Provision for Taxation

a) In view of losses (as per Income tax) as well as book losses (as per MAT computation) no provision for tax is required for the year.

b) No provision is made for the disputed demands of income tax keeping in view the judicial pronouncements and/or legal opinion on the issues.

6. AS-24 - Discontinued operations

The Company had discontinued fund-based activities consequent to SEBI regulations coming into force with effect from December 1997 and had decided to undertake only fee-based activities. The existing fund based exposures as on December 1997 are continued to run down to their contracted period. The Company had obtained cancellation of registration as NBFC from RBI consequent to repayment of fixed deposits and transfer of unclaimed fixed deposits to an escrow account with a nationalised bank for repayment as and when claimed. The Company is now governed only by SEBI regulations.

7. AS-29-Contingent Liablities

A. Disputed demand on taxes

i) Income Tax Rs.Lakhs

2010-11 Asst Year Tax Demand Interest Total

1996-97 0.00 0.00 4.79

1997-98 55.35 0.37 55.72

1998-99 52.42 5.42 57.84

2000-01 100.14 94.20 194.34

2001-02 311.31 139.07 450.38

2003-04 11.33 10.48 21.81

2004-05 232.58 160.90 393.48

2005-06 181.56 58.60 240.16

2006-07 237.51 78.38 315.89

2007-08 778.39 254.95 1033.34

2008-09 881.37 272.39 1153.76

Total 2841.96 1074.76 3916.72



2009-10 Asst Year Tax Demand Interest Total 1996-97 4.79 0.00 4.79

1997-98 55.36 0.37 55.73

1998-99 194.78 259.12 453.90

2000-01 242.95 345.16 588.11

2001-02 311.30 136.07 450.37

2003-04 11.33 10.48 21.81

2004-05 232.58 160.90 393.48

2005-06 181.56 58.60 240.16

2006-07 237.51 78.38 315.89

2007-08 881.37 272.39 1153.76

2008-09 0.00 0.00 0.00

Total 2250.55 1307.03 3557.58

ii) Interest Tax Rs.Lakhs 2010-11 Asst Year Tax Demand Interest Total

1996-97 17.21 18.45 35.66

1997-98 5.01 11.24 16.25

2000-01 3.36 2.45 5.81

Total 25.58 32.14 57.72

Asst Year Tax Demand Interest Total

1996-97 17.21 18.45 35.66

1997-98 5.01 11.24 16.25

2000-01 3.36 2.45 5.81

Total 25.58 32.14 57.72

iii) Sales Tax demand disputed in appeal - Rs. 110.72 lakhs (Previous year Rs. 110.72 lakhs).

B Guarantees - Counter guarantee issued to bank for guarantees - Rs.200.00 lakhs (Previous Year- Rs.200.00 lakhs)

C Estimated amount of contracts remaining to be executed on capital account and not provided for - Rs. 124 Lakhs (Previous Year - Nil ).

8. Loans from lndian Bank is Secured by first charge on Assets given on Lease, Stock on Hire & other Current Assets and has been fully repaid during the year 2007-08. During the previous year the company had received a claim from Indian Bank for payment of interest of Rs.2397.48 lakhs (involving a waiver of Rs. 1808.84 lakhs) under the right of recompense clause, out of the interest waived by them in the past aggregating to Rs.4206.32 lakhs. The company has represented to the Bank for payment of the same over a period of time based on the profits generated. The bank has permitted the company to pay the balance Rs 1147.48 lakhs in instalments on or before 30.9.2013. Out of this, the company has paid Rs.250 lakhs (previous year Rs.1250 lakhs) during the year which has been considered in the accounts. The balance interest payable to IndianBank is Rs 897.48 lakh.

9. As at March 31, 2011, the Company has no outstanding dues to medium and small enterprises. There is no liability towards interest on delayed payments under the Micro, Small and Medium Enterprises Development Act, 2006 during the year.

10. Managerial Remuneration:

President and Whole Time Director of the Company is on deputation from Indian Bank and the remuneration is in accordance with the service rules of the said Bank and also in terms of appointment as Whole Time Director' by the shareholders of the Company.

11. Profit on sale of investments (Net) under investment income includes loss on sale of investments of Rs. 108.79 lakhs (Previous year - Profit of Rs.332.15 lakhs). Loss incurred under Proprietary Trading of Rs.189.80 lakhs (Previous year - Profit of Rs.29.44 lakhs) and income from reversal of provisions made for investments no longer required of Rs.207.52 lakhs (Previous year Rs.289.21 lakhs).

12. In the opinion of the Management all Fixed Assets, Current Assets, Loans & Advances will have value on realisation in the ordinary course of business atleast equal to the amounts at which they are stated in the accounts.

13. The previous year's figures in the Balance Sheet, Profit and Loss Account and Cash Flow Statement have been regrouped and reclassified, wherever necessary, to conform to the current year's classification.