chemox securities ltd Directors report

1996 CHEMOX SECURITIES LIMITED DIRECTORS REPORT The Directors are pleased to present their Tenth Annual Report together with the Audited Accounts of the Company for the year ended 31st March, 1996. 1) OPERATIONS: The financial services industry has passed through a very critical and bad phase because of supressed and subdued capital market conditions, but despite these adverse conditions your company could perform reasonably well and have earned a profit of Rs. 500.71 lacs during the year. The total income earned by the company for the year was Rs. 1486.13 lacs as against Rs. 1478.77 lacs in the previous year, which include income from Leasing, Hire Purchase, Investment Banking, Corporate Finance and Syndication of various corporate services t the fag end of the year, the company also received registration as Category-l Merchant Bankers from SEBI. Your Company will be able to expand this activity fully in the coming years. The Company has also launched Public Deposit Scheme and is hopeful of getting good response. 2) DIVIDEND: Your Directors recommend Dividend of Rs. 2/- per equity share of Rs. 10/- (previous year Rs. 2/- per share) and Rs. 15.00 per Preference Share of Rs. 100/- on pro-rata basis, subject to deduction of tax at source and approval by the Shareholders. This will result in a payout of Rs. 87.82 lacs. 3) FUTURE PROSPECTS: The Company proposes to concentrate mainly on fund based activities like Leasing & Hire Purchase, discounting of Bills etc. and non-fund based activities like Merchant Banking, Stock Broking Syndication of various credit facilities, money changing etc. a) Leasing & Hire Purchase: As money market situation is very tight and most of the Banks have got resources constraint, Non-Banking Finance Companies can play a vital role in bridging the gap of fund scarcity and can earn high rate of return by extending the credits to corporates by way of leasing, hire purchase etc. Still the Company has kept a very modest target of leasing and hire purchase to the extent of Rs. 25 Crores. The Company also proposes to do syndication for leasing business for cash surplus corporates, who are doing leasing for tax shelter purposes. b) Corporate Finance: The Company proposes to deal in Bill Discounting, Inter Corporate Deposits and Credit against shares. This activity has got good scope and the Company is expected to earn substantial income in this segment. c) Investment Banking: The Company has got strong portfolio of around Rs. 1300 lacs in the shares of various companies. Because of its prudent and timely decisions, the company is able to earn Rs. 260 lacs even in such an adverse capital market conditions. The Company expects improvement in the Capital Market conditions and would like to enter into the areas of Portfolio Management Services. d) Merchant Banking: The Company has received its registration as a Category - I Merchant Bankers from SEBI in February this year The Company wants to concentrate fully in the activities of Merchant Banking like issue management, amalgamation and take over, underwriting, placement of shares and debentures, syndication of loan and other corporate advisory services. As the Company expects that the conditions of capital market would improve, it would further help the business prospects of the company. e) Stock Broking: As per the rules and regulations of SEBI, fund based activities can not be carried out along with broking business. Hence, the company has formed, a subsidiary company named CHEMOX STOCK BROKING LIMITED to do primary and secondary market operations including marketing of initial pubic offerings and underwriting of the issues. The Company is offering full fledged broking services. The Company has already purchased BSE Membership Card and applied for its transfer. The Companys application for membership of NSE is also pending. During the year the company will be able to start broking operations in full swing. 4) DIRECTORS: Mr. S.N. Agarwal, Mr. Nana Chudasama and Mr. Pramod Jain retire by rotation at the forthcoming Annual General Meeting and being eligible offer themselves for reappointment. 5) DEPOSITS: The Company had, during the year, invited and accepted Public Deposit to the tune of Rs. 5.33 lacs as on 31st March, 1996. There were no overdue deposits. 6) AUDITORS REPORT: The Notes referred to by the Auditors in their Report are self-explanatory and do not require any further explanation. 7) AUDITORS: M/s. M.G. Bhandari & Company, Chartered Accountants, the Auditors of the Company, retire at the end of the forthcoming Annual General Meeting and being eligible offer themselves for reappointment. 8) CONSERVATION OF ENERGY AND TECHNOLOGY ABSORPTION: The particulars under the Companies (disclosure of particulars in the Report of Board of Directors) Rules, 1988, on conservation of energy and technology absorption are not applicable to the Company. 9) FOREIGN EXCHANGE: During the year under review there has been no foreign exchange income or outflow. 10) PARTICULARS OF EMPLOYEES: The particulars of employees as per the requirements under Section 217(2A) of the Companies Act, 1956, read with the Companies (particulars of employees) Rules 1975 are given in Annexure I, which will be sent to members at their request. 11) ACKNOWLEDGEMENTS: The Company gratefully acknowledge the co-operation and support extended by bankers, shareholders and customers of the Company and place on record its appreciation for the active support and assistance of the employees for the performance. For and on behalf of the Board S.N. AGARWAL CHAIRMAN Place : Mumbai Date : 29th June, 1996.