HSE SECURITIES LIMITED
ANNUAL REPORT 2011-2012
DIRECTOR'S REPORT
To
The Members
HSE Securities Limited
The Board of Directors are pleased to present the 13th Annual Report of the
Company along with the Audited Statement of Accounts for the financial year
ended 31st March 2012.
FINANCIAL PERFORMANCE:
During the year under review, your Company has made a turnover of
Rs.5556.25 crores as against Rs. 8057.21 Crores total turnover in the
previous year. Your Company made a net profit of Rs. 28,78,537/- (previous
year Rs.1,49,05,124/-) after providing depreciation of Rs. 8,64,134/-
(Previous year Rs. 8,41,712/-). The profit aftertax is Rs. 24,21,841/-
(previous year Rs. 1,21,29,575/-) after considering deferred tax asset
charge/release of Rs. 36,244/- (Previous year Rs. 1,77,735/-).
DIVIDEND:
The Company has paid dividend @ 7% per annum upto the date of redemption on
5,00,000 redeemable non-convertible preference shares of Rs. 10/- each
(Series I), amounting to Rs. 1,40,000/- and 7,50,000 7% redeemable non-
convertible preference shares (Series II) @ 7% amounting to Rs. 2,02,808/-.
The total dividend distribution tax for the above dividends is Rs. 53,483/-
In the view of business growth plans no dividend is recommended by the
Governing Board on equity shares.
REDEMPTION OF PREFERENCE CAPITAL.
At the request of the preference shareholders, the Governing Board has
decided to redeem the preference capital as follows:
5,00,000 redeemable non-convertible preference shares of Rs. 10/- each
(Series I), amounting to Rs. 50.00 lacs and for 7,50,000 redeemable non-
convertible preference shares (Series II) @ 7% amounting to Rs. 75.00 lacs
and total amount of Rs. 1.25 crores.
DEVELOPMENT RIGHTS ISSUE EQUITY CAPITAL:
During the year, the Company has issued notice to the shareholders for
payment of allotment/call. Calls in arrears as on notice date is
Rs.6,77,861/- receivable from 17 shareholders.
REVIEW OF OPERATIONS AND BUSINESS ENVIRONMENT:
The total number of Sub-brokers registered on NSE Segment were 95 and in
BSE Segment 54 as on 31/03/2012. As on 31/03/2012 four (4) Authorised
Persons are registered in NSE Segment and six (6) Authorised Persons are
registered in BSE Segment.
CDSL OPERATIONS:
At present there are 13166 BO Accounts after closing the inoperative and
inactive BO Accounts.
NSDL OPERATIONS:
During the year under review, the DP Division of the Company (NSDL)
continued to make a good progress and at present it has 4668 Beneficiary
Accounts.
Due to the inadequate Networth, the Company is unable to open new accounts
in NSDL.
BANKING OPERATIONS:
The total banking/clearing operations are being held with a single Bank,
ie., HDFC Bank. Cash Management Services (CMS) facility is also introduced
and the same was well received by the clients and by the sub brokers. The
office is now issuing digitally signed cheques to the clients.
REDUCTION OF BROKERAGE
Due to the overall recession of the global markets, the turnovers of the
company have come down and in order to attract the clients/sub brokers, the
Management has considered the requests received from the sub brokers and
reduced the brokerage slabs in F&O Segment and square up transactions in
Cash Segment. Further the Company is also contemplating to introduce
incentive scheme of Rs. 10,000/- per shareholder to the shareholders on the
turnovers contributed by them.
UPGRADATION OF TECHNOLOGY - INTRODUCTION OF NOW AND FOW:
NOW is a trading software provided by NSE and FOW is provided by BSE. We
are prominently trading on NOW platform, having FOW as a Standby.
Advantages of NOW is since the software is provided by the Exchange, all
the compliance issues are addressed upfront. In addition to that, users do
not have any need to maintain the servers and other connected requirements.
This is also saving AMC cost and at present both the Exchanges are not
charging any AMC for their users. Your Company is also contemplating to
commence trading in BSE (FNO) and full-fledged membership of MCX-SX for
equity segment.
MESSAGES THROUGH SMS:
We have introduced the facility to our clients and sub brokers, where
trades and account balances are communicated through SMS on day-to-day
basis. This is in addition to sending contract notes and other daily
reports. Statement of accounts are also sent through email by discarding
the physical copies.
COMMITTEES
INVESTORS GRIEVANCE COMMITTEE
The Investors' Grievance Committee consists of the following:
1. Shri Ramswaroop Agrawal - Chairman
2. Shri Satish Kumar Kuna
3. Shri V. Venkateswarlu
The Committee successfully resolved all the complaints received and as on
date there are no pending grievances except one, which is pending before
the Judicial Authority.
MANAGEMENT COMMITTEE:
The Governing Board has constituted Management Committee. The current
members of the Committee are as under:
* Shri L.N. Kakani - Chairman
* Shri Kamal K. Modani
* Shri R.D. Lahoti
* Shri N. Gowrishankar
* Shri Pankaj Kumar Ramawat
* Shri Rama Subba Rao
During the year 17 committee meetings were held.
DIRECTORS:
In accordance with the provisions of the Companies Act, 1956, Dr. B.
Brahmaiah and Shri P.V. Ratnam will be retiring by rotation at the
forthcoming Annual General Meeting and are eligible for reappointment.
AUDITORS:
M/s Ramesh Athasniya and Company, Chartered Accountants, Statutory Auditors
of the company will retire at the forthcoming Annual General Meeting of the
Company and being eligible offer themselves to re-appoint.
AUDITORS REPORT.
The Auditor's observations are self-explanatory and hence do not call for
any further clarification under Section 217 of the Companies Act, 1956.
DEPOSITS:
The Company has not accepted any deposits within the meaning of Section 58A
of the Companies Act, 1956.
DIRECTORS' RESPONSIBILITY STATEMENT:
The Directors confirm:
1. that in the preparation of the Annual Accounts, the applicable
Accounting Standards have been followed, along with proper explanation
relating to material departures;
2. that the Directors had selected such Accounting policies and applied
consistently and made judgment 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 profit and loss account of
the Company to that period.
3. that the Directors had taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with the
provisions of this Act for safeguarding the assets of the Company and for
preventing and detecting fraud and other irregularities.
4. that the Directors had prepared the Annual Accounts on a going concern
basis.
PARTICULARS OF EMPLOYEES:
None of the employees is covered under Section 217(2A) of the Companies
Act, 1956 read with the companies (Particulars of Employees) Rules 1975.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS
AND OUTGO:
A. Conservation of Energy: The Company is not a manufacturing organisation
and therefore the operations are not power-intensive.
(a) The following energy conservation measures were taken:
i. Shutting down all electrical machineries, computers and other appliances
when not in use.
ii. Independent Control switches are provided for lighting to enable use of
only required lights.
(b) Additional investments and proposals, if any, being implemented for
reduction of consumption of energy: None
(c) Impact of measures at (a) and (b) above, for reduction of energy
consumption and consequent impact on the cost of production of goods.
The Company is not engaged in manufacturing of any goods. However with
implementation of the measures referred in (a) above, it is expected that
there would be a corresponding favourable impact on the energy
conservation.
B. Technology absorption:
a. Specific areas in which R&D carried out by the Company: Nil
b. Benefits derived as a result of the above R&D: Nil
c. Future plan of action relating to R&D: Nil
d. Expenditure on R&D: Nil
e. Technology imported during the last 6 years: Nil
ACKNOWLEDGEMENTS:
The Board thanks the SEBI, NSE, BSE, NSDL, CDSL,HS&EL, Government of Andhra
Pradesh, Registrar of Companies, Bankers and Software Vendors for their
continued help and support for the benefit and development of the Company.
The Board also acknowledges the contribution made by all employees, sub
brokers, clients and investors for the orderly growth and development of
the Company.
For and on behalf of the Board of Directors
Dr. B. BRAHMAIAH
CHAIRMAN
REGISTERED OFFICE:
3-6-275, Himayatnagar
HYDERABAD - 500 029
Place: Hyderabad.
Dated: 23/08/2012
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