ASE CAPITAL MARKETS LIMITED
ANNUAL REPORT 2008-2009
DIRECTOR'S REPORT
Dear Staleholders,
Your directors have pleasure in presenting the Nineth Annual Report along
with audited accounts for the financial year ended on 31st March 2009.
Financial Highlights:
Particulars Year ended Previous Year
on 31.3.2009 ended on
31.3.2008
(Rs. In Lacs) (Rs. In Lacs)
Income from Operations 312.21 377.93
Add: Interest & Other Income
(including selling of BSE shares) 326.96 804.89
Total Income 639.17 1182.82
Profit Before Tax 167.76 630.52
Provision for taxation 52.74 148.94
Profit After Tax 115.02 481.58
Balance brought forward from
previous year/s 619.60 156.95
Sum available for appropriation 734.62 638.53
Appropriations:
Proposed Dividend on Equity Shares
for the year and Dividend Tax 43.11 17.24
Balance carried forward to balance sheet 691.51 619.60
Dividend:
Your directors are pleased to recommend 5% dividend on the Equity Shares (5
paisa per equity share) of Rs. 1/- each for the year ended on 31.3.2009.
Appropriations:
In view of the adequacy of profit for the financial year 200809, the Board
has recommended 5% dividend on equity shares and has transferred total
amount of Rs. 36.85 lacs towards proposed dividend payment to the
shareholders of the company.
Stock Markets-2008-2009-Global Scenario:
The global financial crisis of 2008-2009 began in July 2007 when a loss of
confidence by investors in the value of securitized mortgages in the United
States and other developed western countries resulted in a liquidity crisis
that prompted a substantial injection of capital into financial markets by
the United States Federal Reserve, Bank of England and the European Central
Bank. The indicator of perceived credit risk in the general economy, spiked
up in July 2007, remained volatile for a year, then spiked even higher in
September 2008, as stock markets worldwide crashed and entered a period of
high volatility, and a considerable number of banks, mortgage lenders and
insurance companies failed in the following weeks.
What many are now calling the 'Great Recession', the financial crisis of
2007-2009 has been noted as the most serious and global financial crisis
since the Great Depression of 1929-1930,by leading economists, with its
global effects characterized by the failure of key businesses, declines in
consumer wealth estimated in the trillions of U.S. dollars, substantial
financial commitments incurred by governments, and a significant decline in
economic activity. Many causes have been proposed, with varying weight
assigned by experts. Both market-based and regulatory solutions have been
implemented or are under consideration, while significant risks remain for
the world economy.
The following table gives a picture of how global markets have crashed
during the financial year 2008-09:
Index March March Fall
2009 2008 in points In %
Dow jones 7608 12262 4654 38
Industrial
Average
NASDAQ 1528 2279 751 33
Composite
FTSE 100 3926 5702 1776 31
Nifty 3020 4734 1714 36
Sensex 9708 15644 5936 38
In spite of the Recessionary Global Trend that prevailed during the year
2008-09, your company could achieve positive results in terms of turnover,
profit etc.
Overview of the operations:
During the year under review, the Company has earned an operational income
of Rs. 312.21 lacs as compared to Rs. 377.93 lacs in the previous year,
with a 17.39% decrease. The Profit after tax, has decreased to Rs. 115.02
lacs compared to Rs. 481.58 lacs, a decrease of Rs. 341.31 lacs over the
previous year and the Earning per Share of the Company decreased from
Rs.0.81 to Rs. 0.16 for the last fiscal. The previous year profit included
the extra ordinary profit on sale of investment held in BSE shares and the
same is not comparable with current year profit.
In view of the global recession that prevailed during the year, the trading
volume on BSE (Cash Segment) has decreased to Rs. 20493.97 Crore, against
Rs. 24495 Crore in the previous year. The trading volume on NSE (Cash
Segment) has decreased to Rs. 438.89 Crore as compared to Rs. 717.22 Crore
in the previous year. The number of Members registered as sub- brokers of
the Company for BSE and NSE operations, are 188 and 97 respectively
(Previous year- 180-BSE & 91-NSE). Your company, being DP of NSDL continued
to provide Demat related facility to its members, their clients, members of
Ahmedabad Stock Exchange Ltd. and general public and the total number of
active Demat accounts as on 31st March 2009 were 15083 (Previous year-
14920).
In order to further strengthen the internal control, the company has
appointed concurrent auditor M/s. M.R. Pandhi & Associates, Chartered
Accountants, to verify 100% all demat related activities, w.e.f.
01/04/2008.
Future Outlook:
In the last year members were informed that the management is putting its
best efforts to get clearance of SEBI for NSE Futures & Options (F&O). Your
directors are pleased to inform you that SEBI has given the permission to
your company to deal in the NSE Derivative Segment vide their registration
no. INF231107435 dated 19/02/2009.
During the year the number of trading clients increased to 88,328 (BSE-
77385 & NSE-10943) as on 31st March 2009, (72,200 on 31.3.2008). Your
company hopes to surpass the previous year turnover through increasing the
investors' satisfaction level and by gaining the trust of investors.
Further, your Company has also obtained the membership of Currency
Derivatives Segment, in MCX-SX as well as in NSE vide SEBI Registration No.
INE261107435 dated 06/02/2009 and INF231107435 dated 19/02/2009
respectively. Your company is thinking of introducing new products such as
Interest Rate Futures, Portfolio Investment Scheme (PIS) for NRI clients,
etc. Also, your company is exploring the ways and means of expanding DP
Client base by opening new DP branches.
Deposits:
During the year under review, the company has not accepted deposits from
the public within the meaning of The Companies (Acceptance of Deposits)
Rules, 1975 and rules made there under.
Share Capital:
During the year (2008-09), there is no change in the paid up share capital
of the company and the shareholding pattern of the company has remained as
under:
Shareholding By Equity Equity
Share Share
Capital (%) Capital in (Rs.)
Ahmedabad Stock Exchange Ltd. 54.27 4 00 00 000
ASE Capital Market 22.94 1 69 04 800
Development Board
Members of Ahmedabad 22.79 1 67 95 700
Stock Exchange Ltd. including
Subscribers to Memorandum
of Association
Total 100 7 37 00 500
Directors Responsibility Statement:
As required under provisions of sub section 217(2AA) of the Companies Act,
1956, the Directors confirm that,
a) in the preparations of Annual Accounts, the applicable Accounting
standards had been followed and no material departures have been made from
the same;
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 that period;
c) the directors have taken proper and sufficient care for the maintenance
of adequate accounting records in accordance with 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 Annual Accounts on a going concern basis.
Committees:
Audit Committee:
Your company has constituted an Audit Committee of Directors as mandated by
Section 292(A) of the Companies Act, 1956. Mr. Hasmukh H. Khetani, Mr.
Piyushchandra R. Vyas, Mr. Keyoor Bakshi, Mr. K K Mishra and Mr. A
Manickavelu Directors are the members of the Committee. During the year,
four meetings of the Audit Committee were held and the discussions were
held with auditors periodically on quarterly accounts and internal control
systems. Further annual financial statements were also reviewed by the
Audit Committee.
Other Committees:
In addition to the audit committee, your company has formed Share Allotment
and Transfer committee, Investment committee, Computerization committee and
Business Development committee, consisting of Member Directors, Public
Representative Directors and CEO.
Conservation of Energy, Technology Absorption and Foreign Exchange Earning
and Outgo:
Since the Company is not engaged in the manufacturing activities, the
particulars regarding Conservation of Energy, Technology Absorption and
Foreign Exchange Earning and outgo pursuant to Section 217(1) (e) of the
Companies Act, 1956 are Nil.
Particulars of Employees:
There was no employee who was in receipt of remuneration exceeding the
limits as prescribed under section 217 (2A) of the Companies Act, 1956.
Directors:
Mr. Hasmukh H. Khetani and Mr. Snehal I. Patel were appointed as additional
directors in the Board meeting held on 1st November 2007 and were elected
in AGM held on 26th September 2008. Mr. Vicky R. Jhaveri, Mr. Jignesh R.
Shah, Mr. Shilpesh M. Shah and Mr. Rajendra A. Shah were also elected in
AGM held on 26th September 2008. Mr. Rajendra A. Shah resigned from the
Board w.e.f.13th January 2009.
Mr. M. C. Gupta Public Representative Director resigned w.e.f. 26th
December 2008. During the year, SEBI vide letter no. MRD/
DSA/ASE/DA/112948/2008 dated 07/01/2008, communicated no objection to the
re-nomination of Mr. Piyushchandra R. Vyas and Mr. Keyoor Bakshi and
appointment of Mr. Shailesh Gandhi, Mr. Vinod Kumar Sharma, Mr. Vinod Mehta
and Dr. (Ms) Sarla Achuthan as Public Representative Directors of the
company. Accordingly, they have become the Public representative directors
of the company w.e.f. 22nd May 2009.. In view of the fresh nominations by
ASEL, Mr. S. Manikutty, Mr. Navin Pahwa and Mr. Sandipan Kar vacated their
office as Public Representative Directors.
The Board places on record, its appreciation and thanks for their valuable
guidance and services rendered by all the outgoing Directors.
During the year, Mr. A Manickavelu joined as CEO of the company w.e.f. 31st
December 2008. He is a B.B.A.(Bachelor of Business Administration), a
C.A.I.I.B.(Certified Associate of the Indian Institute of Bankers) and an
M.F.M.(Master of Financial Management) from Jamnalal Bajaj Institute of
Management Studies, Mumbai. Before joining our company, he was the Managing
Director of OTC Exchange of India, Mumbai. He has served in SEBI - I.E.S
(Investigation, Enforcement and Surveillance) Department as Officer on
Special Duty. In view of his joining as CEO, Mr. Bhadren Darji vacated the
charge of CEO (O).
Auditors:
M/s. G.K. Choksi & Co., Chartered Accountants, Ahmedabad, the Statutory
Auditors of the Company retires at the ensuing Annual General Meeting and
are eligible for re-appointment.
Acknowledgement:
The Board wishes to place on record its sincere appreciation for the co-
operation received from SEBI, ROC, NSEIL, BSEL, ASEL, MCX-SX, NSDL and
Other Government Agencies, Bankers, Auditors, Sub brokers and clients of
the company. The Board also expresses its appreciation for the support
extended by the shareholders and employees of the organisation.
For and on behalf of the Board of Directors of
ASE CAPITAL MARKETS LIMITED.
Hasmukh H. Khetani
Chairman
Place: Ahmedabad
Date : 24th August 2009.
|