ANNUAL REPORT 2008-2009
DIRECTORS’ REPORT
TO THE SHAREHOLDERS OF THE EXCHANGE
Your Directors have pleasure in presenting herewith 28th Annual Report and the Audited Statement of Accounts of the Exchange for the year ended 31st March, 2009
FINANCIALPERFORMANCE
(Rs. in lakhs) |
||
2008-2009 |
2007-2008 |
|
Gross Income |
519.55 |
438.43 |
Income before contribution, depreciation, tax & other appropriations (after adjustment of prior period expenses) |
218.89 |
173.16 |
Depreciation |
(-) 16.98 |
(-) 14.68 |
Contribution to UPSE Investors’ Protection Fund |
(-) 13.30 |
(-) 9.69 |
Provision for Taxation: Current year Deferred tax Fringe benefit tax |
(-) 19.81 (-) 1.79 (-) 1.06 |
(-) 23.28 (+) 5.57 (-) 1.02 |
Profit after tax |
165.95 |
130.06 |
Transfer to Investors Service Fund |
(-) 11.59 |
(-) 4.94 |
Transfer to Broker Welfare Endowment Fund |
(-) 2.43 |
(-) 1.09 |
Transfer to Settlement Guarantee Fund |
(-) 38.84 |
(-) 33.63 |
Transfer to General Reserve and Staff Welfare Fund |
(-) 17.16 |
(-) 13.28 |
Dividend and Tax on Dividend |
(-) 23.40 |
(-) 11.70 |
Profit after appropriations |
72.53 |
65.42 |
Profit/(Loss) of Previous Year |
78.31 |
12.89 |
Profit/(Loss) carried to Balance Sheet |
150.84 |
78.31 |
DIVIDEND
Considering the performance during the year under review, the Board of Directors of the Company recommended a dividend of Rs.2,000/- per Equity Share of Rs.2,000/- each (100%), for the year ended March 31, 2009 and the same will be paid subject to the approval of the Shareholders at the ensuing Annual General Meeting. The total outgo on account of dividend payment for the year 2008-09 (inclusive of Dividend distribution tax of Rs.3.40 lakhs) will be Rs.23.40 lakhs.
TRADE OPERATIONS
Securities worth Rs.199 Crores (double sided) were traded on the Exchange during the year 2008-09 (Previous year Rs.953 Crores). The average daily turnover was Rs.0.82 Crores (Previous year Rs.3.80 Crores).
SUBSIDIARY COMPANY
UPSE Securities Limited, a Wholly-owned Subsidiary of the Exchange continued trading on BSE through its sub-brokers (members of UPSE). The total value of shares traded through the Company was Rs.2,241.91 Crores (Previous year Rs. 3,127.45 Crores) and the total number of Sub-Brokers active on BOLT during this period was 66 (previous year 66), including 3 sub–brokers at Lucknow and 1 at Allahabad. The Sub-brokers of the subsidiary Company are availing Internet Trading facility (Multi Users) through IML on Neat XS of NSE IT.
During the year UPSE Securities Ltd. also got membership of MCX Stock Exchange Ltd. for Currency Derivatives Trading. However, the trading in this segment is yet to commence.
UPSE Securities Ltd. applied for the Membership of the National Stock Exchange of India Ltd. for Cash, F & O and Currency Derivative Segments. The application is at advance stage at NSE and is likely to be forwarded to SEBI shortly for registration. After registration with SEBI, Members of our Exchange will have to get themselves separately registered as Sub-brokers of UPSE Securities Ltd..
UPSE Securities Ltd. has recorded a Net Profit of Rs.2.86 lakhs as against a Net Loss of Rs. 0.22 lakhs in the previous year.
The Audited Statement of Accounts for the year ended March 31, 2009 of UPSE Securities Ltd. together with the reports of Directors and Auditors and the Statement under Section 212 of the Companies Act, 1956 are attached.
SETTLEMENT GUARANTEE FUND
The Settlement Guarantee Fund of the Exchange with a corpus of Rs.11.38 Crores [which consisted of Rs.3.38 Crores cash corpus under General Access Fund (To be used in case of default by any Member) and Rs.8.00 Crores BMC of 200 Members under Specific Access Fund (to be used upto Rs.4 lakhs on default of a member concerned)] was operationalised w.e.f. 03.02.2003, as per the Scheme approved by SEBI. The corpus of the SGF as on 31.08.2009 is Rs.12.86 Crores (Cash Corpus Rs.6.28 Crores + Specific Access Fund Rs.6.58 Crores of 171 Members).
INTER-CONNECTED STOCK EXCHANGE
OF INDIA LTD. (ISE)
The Inter-Connected Stock Exchange of India Ltd., through its Subsidiary ISE Securities and Services Ltd. has provided trading facility on NSE segment (Cash and F & O) to the Members of participating Exchanges including your Exchange.
DEPOSITORY PARTICIPANT (DP) SERVICES
The Exchange commenced its Depository Participant Services, after due clearance from CDSL/SEBI and the same was formally inaugurated by Shri Shriprakash Jaiswal, Hon’ble Minister of Coal, Statistics and Programme Implementation, Government of India on 24.07.2009.
LISTING
The abolition of concept of Regional listing and the introduction of De-listing Guidelines, 2003, have adversely affected the listing and the listing fee receipts of Regional Stock Exchanges, including your Exchange. Details of listing of companies at the Exchange are as follows :-
2008-2009 2007-2008
New Listing |
0 |
1 |
Further Listing of Existing Companies |
7 |
10 |
No. of Companies deleted from the list of Listed Companies (due to amalgamation/arrangement Schemes) |
4 |
6 |
No. of Companies de-listed |
0 |
1 |
Total No. of Companies Listed at year end |
681 |
685 |
Paid up Capital of listed companies (Rs. in Crores) |
3571 |
3254 |
Market Capitalisation of listed securities (Rs.in Crores) |
3164 |
4008 |
TRADING MEMBERSHIP
Trading Membership details of the Exchange are as follows :-
2008-2009 2007-2008
Transfer of Trading Membership |
01 |
00 |
New Membership |
01 |
00 |
Membership Restored |
02 |
00 |
Resigned from Trading Memebrship and SEBI Registration Certificate Surrender Accepted by the Exchange |
07 |
13 |
Deceased |
02 |
00 |
Total No. of Trading Members as on 31.03.2009 : 237
GRIEVANCES & COMPLAINTS DEPARTMENT
The Grievances & Complaints Department of the Exchange has gained confidence of the Investors for expeditious and effective redressal of their grievances.
It is promptly attending the complaints lodged by the investors on various issues against the Companies as well as against the Members of the Exchange and, through diligent pursuance of the complaints, it makes all possible efforts to get settled/redressed the grievances/complaints of the Investors.
Moreover, pending complaints of earlier years have also been dealt with suitably.
During the year, no Arbitration case was filed with the Exchange.
CLAIMS AGAINST DEFAULTER MEMBERS
During the year, no payment was made from Investors Protection Fund towards claims of investors against Defaulter Members.
During the year, Rs.5,98,982.57 were disbursed towards 52 Members’ claims and Rs.2,70,971.25 were disbursed towards 02 investors’ claims against a defaulter, out of his balance available with the Exchange..
U.P.STOCK EXCHANGE INVESTORS PROTECTION FUND
Uttar Pradesh Stock Exchange Investors Protection Fund is functioning as per SEBI norms.
PUBLIC DEPOSITS
The Exchange has not accepted any deposit from the public or from employees during the year under review.
OTHER DEVELOPMENTAL ACTIVITIES
PRACTICAL TRAINING
During the period under review, your Stock Exchange has provided Practical Training to students undergoing Technical/Professional Courses at various institutes including The Institute of Company Secretaries of India, New Delhi.
INVESTORS AWARENESS PROGRAMME
During the year under review, your Exchange conducted an Educational Seminar on Indian Financial and Derivates Market for benefit of the investors.
FELICITATION PROGRAMMES
Your Stock Exchange Officials also felicitated Shri Shriprkash Jaiswal in a programme organized at Merchants’ Chamber of U.P. on 20.06.2009 on his victory in the Lok Sabha Election and becoming Minister of Coal, Statistics and Programme Implementation (I/C).
Your Stock Exchange also separately organized felicitation programme of Shri Shriprkash Jaiswal, Hon’ble Minister of Coal, Statistics and Programme Implementation (I/C) in the Exchange Auditorium on 24.07.2009 after inauguration of D.P. Services by him.
Shri K D Gupta, Chairman of your Exchange, was appointed Chairman of the Quality Review Board of the Institute of Chartered Accountants of India by Ministry of Corporate Affairs, Government of India, on 12.03.2009. Your Stock Exchange organized a felicitation programme of Shri K D Gupta on 21.04.2009 for his aforesaid achievement.
DIRECTORS
During the period (22.11.2008 to 24.09.2009) Shri Sanjiv Kapoor was inducted as a Shareholder Director in place of Shri V K Mehrotra, Shareholder Director, who retired by rotation. The Board places on record its appreciation for the contribution rendered by the outgoing director during his tenure as Director of the Exchange.
Shri T.K. Das, Public Interest Director, is retiring from the Board by rotation and being eligible for re-appointment, has been selected by the Board for another term.
Shri Sushil Kumar Kanodia, Trading Member Director and Shri Raj Kumar Agarwal and Shri Sudhindra Kumar Jain, Shareholder Directors are retiring from the Board by rotation and are eligible for re-appointment.
COMMITTEE OPERATIONS
Various Statutory and non Statutory Committees constituted by the Exchange such as Arbitration Committee, Defaults Committee, Disciplinary Committee, Investor Services Committee, Audit Committee, Ethics Committee, Listing and Delisting Committee, Computer Break Down Committee, Committee for Monitoring Compliance of SEBI Inspection Report etc. played an important role in the efficient performance of functions of the Exchange.
AUDITORS
The Auditors of the Exchange M/s V.P.Aditya & Company, Chartered Accountants, Kanpur retire at the conclusion of the ensuing Annual General Meeting and being eligible, offer themselves for re-appointment. They have furnished a Certificate to the effect that the proposed re-appointment, if made, will be in accordance with sub-section (1B) of Section 224 of the Companies Act, 1956.
Although, the Auditors’ Observations in their report read with Notes to Accounts are self-explanatory, the Management’s specific explanation in respect of Auditors’ comments on Note No.10(c) to the Accounts is as under :-
Sundry Debtors Adjustment [Note No.10(c)]
The Exchange is examining all available options in this regard and measures taken are adequate.
CORPORATE GOVERNANCE
The Company follows Corporate Governance practices. The Chairman and the Other Directors and the staff working for the company are committed to serving the cause of the intermediaries, investors and the general public with the highest level of efficiency.
PERSONNEL
Management places on record its heartiest appreciation for the sincere, devoted and dedicated services rendered by staff for the smooth functioning of the Exchange. None of the employees of the Exchange is in receipt of remuneration requiring disclosure under Section 217(2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975 as amended upto date.
PARTICULARS OF CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUT-GO
The Exchange being a Service Company and not engaged in any manufacturing activities, details relating to Conservation of Energy and Technology Absorption being inapplicable, are not provided, although efforts were made to optimize the use of power in all operational areas. There have been no earnings and expenditure in Foreign currency during the year under review.
DIRECTORS RESPONSIBILITY STATEMENT:
In terms of Section 217(2AA) of the Companies Act, 1956, the Directors of the Company state in respect of the year ended 31st March, 2009 :-
i) that in preparation of Annual Accounts, the applicable Accounting Standards have been followed;
ii) that the Directors have selected such Accounting policies and applied them consistently and made judgements 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 of the Company for that year ;
iii) that 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 ; and
iv) that the Directors have prepared the Annual Accounts on a going concern basis.
COMPLIANCE CERTIFICATE
In terms of the provisions of Section 383A of the Companies Act, 1956, Compliance Certificate issued by M/s S.K. Gupta & Co., Company Secretaries, for the financial year ended 31st March, 2009, is annexed hereto and forms part of this report.
ACKNOWLEDGEMENTS
Management also places on record its gratitude to the Officials of the Ministry of Finance, Securities and Exchange Board of India, all other Stock Exchanges and in particular BSE, CDSL and ISE, State Government, Local Administration and Banks, (specially the Clearing Banker of the Exchange, viz. Standard Chartered Bank) and Depository Participants, viz. Stock Holding Corporation of India Ltd. and Karvy Consultants Ltd., all the members of the various Committees and also the Press/Media for their continued co-operation in furtherance of our avowed objectives of complete transparency, investors’ protection and rule-of- law bound growth of the Company.
Further, the Management also records its deep appreciation towards the Members for their valued and active co-operation and looks forward to its renewed continuation for the resolution of the transitional challenges, including the development of future business growth, driven by transparent and integrity empowered Capital Markets.
For and on behalf of the Board of Directors
Place : Kanpur
(K.D. GUPTA)
CHAIRMAN
Date : 24th September, 2009
STATEMENT REGARDING SUBSIDIARY COMPANY
Pursuant to Section 212 of the Companies Act, 1956
01. Name of the subsidiary : UPSE Securities Ltd.
02. The Financial Year of the subsidiary : From 01.04.2008 to 31.03.2009
03. U.P.Stock Exchange Association Ltd.’s : shareholding in subsidiary as on 31.03.2009
Number of equity shares of Rs.10/- each : 19,50,000 (70 equity shares of the subsidiary company are held in the names of nominees of U.P.Stock Exchange Association Ltd.) Percentage of holding : 100%
04. The net aggregate profit/(loss) of subsidiary company so far as it concerns the holding company.
i) Not dealt with the accounts of U.P.Stock Exchange Association Ltd:
(a) For the subsidiary financial Year ended on March 31, 2009 ; Rs.2,85,529.95
(b) For the previous financial years of UPSE Securities Ltd. since it became a subsidiary of U.P.
Stock Exchange Assn.Ltd. : Rs.39,61,395.91
ii) Dealt with in the holding company Accounts by way of dividends on Shares held in the subsidiary.
(a) For the financial Year ended March 31, 2009. : Nil
(b) For the previous financial Years of UPSE Securities Ltd Since it became a subsidiary of U.P.Stock Exchange Assn.Ltd. : Nil
(K.D. GUPTA)
CHAIRMAN