maximus securities ltd Management discussions

MAFATLAL SECURITIES LIMITED ANNUAL REPORT 2005-2006 MANAGEMENT DISCUSSION AND ANALYSIS OPERATION: The Company had earned brokerage income of Rs.247.55 lacs as compared to Rs.286.85 lacs during the previous year. The income front depository segment was Rs.56.44 lacs as compared to Rs.66.29 lass during the previous year. After writing off the bad debts to the extent of Rs.3.08 Rocs and after providing for doubtful debts of Rs.1.07 lacs, the Company ended the financial year with a pretax profit of Rs.83.48 lacs as compared to Rs.200.33 lacs [includes Profit on Sale of Long Term Investments (net) of Rs.120.52 lacs] of the previous year. HOLDING COMPANY: The entire share capital of the Company is held by Mafatlal Finance Company Ltd. the holding company of the Company. COMMENTS ON AUDITORS QUALIFICATIONS AND MANAGEMENTS RESPONSES: Note No.7 regarding holding of clients securities in Companys beneficiary accounts for reasons stated therein. As mentioned in the notes, the Company has already identified the clients and sent intimations to them for their confirmations. The Company will take necessary actions based on the Clients Confirmations. Note No.8 regarding non-confirmation of balances of Sundry Debtors pertaining to Depository business of Rs.22,81,214/- Accordingly these accounts are subject to adjustments as and when reconciled. Due to large clientle, we could send letters requesting for confirmation of balance only to selected few parties with huge debit balances. The balance of Rs.22,81,214/- mostly comprises of ponies with small devil balances and as mentioned due to enormous number of clients, we could not sent confirmation letters to all the parties. However bills are being sent to all clients every month informing the debit or credit balance held by them. Note No. 11 regarding non appointment of Company Secretary. We are in the process of recruiting Company Secretary and are waiting for a suitable candidate. PUBLIC FIXED DEPOSITS: The Company has not accepted any deposits from the public as on 31st March, 2006 and therefore particulars stipulated in respect thereof are nil. OUTLOOK: The Stock Marker is showing an upswing and is expected to strengthen further. In view of this the business is expected to grow further in the equity market segments. In view of the regulatory changes the business in the Wholesale Debt market is affected adversely. The Company has received approval from SEBI for commencing. Futures & Options Segment in last year. The company anticipates good growth in volume in the current year.