Final ppt on sept 19


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Final ppt on sept 19

  1. 1. Presentation on “ Investors education and redressal mechanism- A Study on LSE Presented By Lakhvir Singh MBA 2A
  2. 2. Introduction of Stock Exchange <ul><li>Stock Exchange, organized market for buying and selling financial instruments known as securities, which include bonds, shares, debenture, commercial paper, NSC etc . </li></ul>
  3. 3. Functions of stock Exchange <ul><li>To protect the interest of investor. </li></ul><ul><li>To encourage the people for invest their saving. </li></ul><ul><li>Mobilizing savings for investment </li></ul><ul><li>Raising capital for businesses </li></ul><ul><li>Barometer of the economy </li></ul>
  4. 4. Who gain from Stock Exchange <ul><li>Investor </li></ul><ul><li>Broker </li></ul><ul><li>Company </li></ul><ul><li>Economy and Country </li></ul>
  5. 5. Stock Exchanges in India <ul><li>Non-Regional Stock Exchanges – 2 </li></ul><ul><li>BSE and NSE </li></ul><ul><li>Regional Stock Exchanges – 19 </li></ul><ul><li>Out of 19 there are 8 stock exchanges have been granted permanent reorganization and rest of them have been valid for 5 years </li></ul>
  6. 6. Cont. <ul><li>During the years 2008 to 2010 there are 4 stock Exchanges which are derecognized by SEBI; </li></ul><ul><li>Magadh Stock Exchange </li></ul><ul><li>Hydrabad Stock Exchange </li></ul><ul><li>Manglore Stock Exchange </li></ul><ul><li>Saurasha Stock Exchange </li></ul>
  7. 7. Introduction of the LSE <ul><li>The Ludhiana Stock Exchange Limited was established by Sh. S.P. Oswal of Vardhman Group and Sh. B.M. Munjal of Hero Group, leading industrial luminaries, to fulfill a vital need of having a Stock Exchange in the region of Punjab, Himachal Pradesh, Jammu & Kashmir and Union Territory of Chandigarh. LSE was actually introduced in 17 April 1981 but it was fully established in 1983. </li></ul>
  8. 8. Cont. <ul><li>Vision of LSE – </li></ul><ul><li>“ To maximize the satisfaction level of its customers.” </li></ul><ul><li>Mission of LSE - </li></ul><ul><li>“ To provide DP services to its clients and facilitate its broker i.e. LSE SECURITIES LTD. & sub –brokers at LSE (These are like broker for LSE securities), for trading purposes.” </li></ul>
  9. 9. Work Profile of LSE Board of Directors 6 Shareholding Director 6 Public interest Director 3 Trading Member Director 1 Executive Director
  10. 10. Board of Director of LSE Executive Director (Officiating) Ms. Pooja M. Kohli 13 Public Interest Director Sh. Ved Prakash Gaur 12 Public Interest Director Dr. Raj Singh 11 Public Interest Director Sh. Ashwani Kumar 10 Shareholder Director Sh. Varun Chabra 9 Shareholder Director Sh. Satish Nagpal 8 Shareholder Director Sh. Ashok Kumar 7 Shareholder Director Dr. Ravinder Nath Sethi 6 Trading Member Director Sh. Sunil Gupta 5 Trading Member Director Sh. T.S. Thapar 4 Trading Member Director Sh. Sanjay Anand 3 Vice-Chairman and Shareholder Director Sh. Joginder Kumar 2 Chairman and Shareholder Director Sh. Padam Prakash Kansal 1 Designation Name of the Director Sr. No.
  11. 11. ORGANIZATIONAL CHART OF LUDHIANA STOCK EXCHANGE Board of Director Chairman CEO Department Legal Department Secretarial Department Tech & Maintaince Department Listing Department Membership Department Account Department Training & Education Department
  12. 12. Introduction of LSE Security Ltd. <ul><li>LSE Securities Ltd., was incorporated in 07th January, 2000. </li></ul><ul><li>LSE SECURITIES LIMITED (LSESL) is a subsidiary of the Ludhiana Stock Exchange Limited under the policy formulated by the Securities and Exchange Board of India (SEBI) for “Revival of Small Stock Exchanges”. </li></ul><ul><li>LSESL is a Trading-cum-Clearing member in the capital market. </li></ul><ul><li>Incorporation of LSE COMMODITIES TRADING SERVICES LTD., a subsidiary of LSE. Securities ltd </li></ul>
  13. 13. Objective of LSE Security Ltd . <ul><li>The objective of the LSESL is to enhance business and investment opportunities for the investors and members of Ludhiana Stock Exchange at large, through innovative products by encompassing a variety of activities related to the capital market. </li></ul>
  14. 14. Features of LSE security Ltd. <ul><li>First 100% subsidiary of any Regional stock exchange. </li></ul><ul><li>Provides D/P service of NSDL and CSDL. </li></ul><ul><li>Provides Platform for Trading in capital market. </li></ul><ul><li>More than 40000 clients </li></ul><ul><li>The company has 295 sub-brokers </li></ul>
  15. 15. Work profile of the LSE Security Ltd. Board of Directors 1 Chairman 1 vice Chairman 3 From Broker Member 5 Public interest Director 1 from LSE 1 CEO cum Director
  16. 16. Board of Director of LSE Security ltd. CEO Cum Director Mr. Rajesh K. Sharma 12 LSE Representative Director Ms. Pooja M. Kohli 11 Public Representative Director Sh. Pawan K. Garg 10 Public Representative Director Dr. Anil Angrish 9 Public Representative Director Dr. Prem Kumar 8 Public Representative Director Sh. Vijay K. Bansal 7 Public Representative Director Sh. Susheel Bhakoo 6 Member Director Sh. Lalit Kishore 5 Member Director Sh. M.S. Sarna 4 Member Director Sh. Jatinder Garg 3 Vice-Chairman Sh. Vishal Goomber 2 Chairman Sh. Anurag Arora 1 Designation Name of the Director Sr. No.
  17. 17. DEPARTMENT OF LUDHIANA STOCK EXCHANGE Ms. Pooja Sharma Personnel Department Mr. Madhur Gupta IT Department Ms. Paramjeet Kaur Surveillance Department Mr. Ravinder Saini Account 2 Department Mr. Ram Ji Account 1 Department Mr. Rajinder Pal Singh Margin Department Mr. Vipun Goyal Clearing Department Ms. Sonia Makkar KYC Department Mr. Viney Mahajan Depositary Department HOD Departments
  18. 18. Financial analysis Current Ratio = Current Assets/Current Liabilities 1.33 1.49 1.52 1.60 Current Ratio 102615218 85510697 88057900 90056374 Current Liabilities 136653178 127256429 133627992 144212436 Current Asset March 2006 March 2007 March 2008 March 2009
  19. 19. Liquid Ratio=Liquid Assets/Current Liabilities Liquid Assets= Current Assets – Inventory – Prepaid Expenses 1.33 1.48 1.51 1.59 Liquid Ratio 102615218 85510697 88057900 90056374 Current Liabilities 136596413 127214660 133118958 143995929 Liquid Asset March 2006 March 2007 March 2008 March 2009
  20. 20. Absolute Liquid Ratio= Absolute Liquid Assets/Current Liabilities Absolute Liquid Assets= Cash + Bank + Short Term Investments 1.05 1.18 1.21 1.26 102615218 85510697 88057900 90056374 Current Liabilities 108499165 110577976 106628810 113940009 Absolute Liquid Asset March 2006 March 2007 March 2008 March 2009
  21. 21. Proprietary Ratio= (Shareholder Funds/Total Assets)*100 Solvency Ratio= (Total Outside Liability/Total Assets)*100 62.28 66.50 66.07 66.14 Proprietary Ratio 272061926 255229047 259570906 265961529 Total Assets 169446708 169718351 171513006 175905155 Shareholder Funds March 2006 March 2007 March 2008 March 2009 37.72 33.50 33.92 33.86 Solvency Ratio 272061926 255229047 259570906 265961529 Total Assets 102615218 85510696 88057900 90056374 Total Debt March 2009 March 2009 March 2009 March 2009
  22. 22. Fixed Assets to Net-worth Ratio= (Net Fixed Assets/Shareholder Funds)*100 ROSF= (Net Profit after tax/ Shareholder Funds)*100 55.87 54.68 53.68 51.01 Ratio 169446708 169718351 171513006 175905155 Shareholder Funds 94679869 92804243 92072811 89734809 Net Fixed Assets March 06 March 07 March 08 March 09 (2.44) 4.22 2.25 3.96 ROSF 169446708 169718351 171513006 175905155 SH Fund  4132544) 7170142 3855982 6966926 EAT March 2006 March 2007 March 2008 March 2009
  23. 23. Trend analysis of Net Profit
  24. 24. Trend Analysis of Earning Per share
  25. 25. Introduction of the Project Investors Education
  26. 26. Rights of the Investors <ul><li>To receive the allotment /transfer of shares on time. </li></ul><ul><li>To received the copy of annual report, balance sheet and the P & L A/c of company. </li></ul><ul><li>To participate and vote in the general meeting. </li></ul><ul><li>To received corporate benefit. </li></ul><ul><li>To inspect the minute book of annual general meeting. </li></ul>
  27. 27. Responsibilities of Investors <ul><li>Verify the legitimacy of the investment. </li></ul><ul><li>Assess the risk-return profile of the investment. </li></ul><ul><li>To know the liquidity and safety aspects of the investment. </li></ul><ul><li>Deal only through an authorized intermediate. </li></ul><ul><li>Find out the cost and benefits associated with the investment. </li></ul>
  28. 28. Investors related services in LSE <ul><li>Investor grievance cell </li></ul><ul><li>Investor Protection Fund </li></ul><ul><li>Investor Service Centre </li></ul><ul><li>Website </li></ul><ul><li>Certification programme in capital market </li></ul>
  29. 29. Investor Grievance Committee <ul><li>The board of director of LSE constitutes the investor grievance committee as the power conferred on its article of association and as recommended by SEBI to: </li></ul><ul><ul><ul><ul><ul><li>Scrutinize </li></ul></ul></ul></ul></ul><ul><ul><ul><ul><ul><li>Investigate and </li></ul></ul></ul></ul></ul><ul><ul><ul><ul><ul><li>decide </li></ul></ul></ul></ul></ul><ul><li>It consist of body of member nominated by the board of directors every year after the annual general meeting and the committee is required to have atleast two public representative. </li></ul>
  30. 30. Cont. <ul><li>Mainly the investors having grievance regarding two aspects : </li></ul><ul><li>Investor grievance against listed companies. </li></ul><ul><li>Investor grievance against broker member . </li></ul>
  31. 31. Investor grievance against listed companies <ul><li>The investors complains regarding dispute’s with the company like dividend, bonus shares, non-receipt of dividend, non-receipts of balance sheet, information etc. </li></ul><ul><li>The complaint can be send three places; </li></ul><ul><ul><ul><ul><ul><li>Stock exchange </li></ul></ul></ul></ul></ul><ul><ul><ul><ul><ul><li>SEBI </li></ul></ul></ul></ul></ul><ul><ul><ul><ul><ul><li>Court </li></ul></ul></ul></ul></ul>
  32. 32. Procedure of complaints <ul><li>Filled the complaint in concerned exchange. </li></ul><ul><li>Forward to concerned listed company. </li></ul><ul><li>Advice to resolve in 45 days. </li></ul><ul><li>Reminder to resolve in 30 days </li></ul><ul><li>Advice to appear company’s official Investor Grievance committee. </li></ul><ul><li>Trading suspended. </li></ul><ul><li>Matter forward to SEBI. </li></ul><ul><li>SEBI imposes penalties one lakh per day from the delay it will maximum up to one cores whichever is less. </li></ul><ul><li>Appeal to SAT (Securities Appellate Tribunal): if one of the above authorities is not able to resolve the matter. </li></ul>
  33. 33. SAT (Securities Appellate Tribunal) <ul><li>Securities appellate tribunal is made for resolving the every case related to securities. The board consists of 3 members, which includes 1 preceding officer and 2 will be member from central Govt. </li></ul><ul><li>Qualification of the members: The judge will be the retired chief justice of supreme or high court. </li></ul><ul><li>Functions of SAT: Mainly SAT do three functions these are given blow: </li></ul><ul><ul><ul><ul><ul><li>Entertain appeals </li></ul></ul></ul></ul></ul><ul><ul><ul><ul><ul><li>Conduct enquiry </li></ul></ul></ul></ul></ul><ul><ul><ul><ul><ul><li>Investigation </li></ul></ul></ul></ul></ul>
  34. 34. Power of SAT <ul><li>Can send summon to the parties. </li></ul><ul><li>Discovery and production of documents related to the appeal. </li></ul><ul><li>Receiving evidence of affidavits. </li></ul><ul><li>Can Dismiss the appeal . </li></ul><ul><li>Can give the order. </li></ul><ul><li>The CEO or MD of the company or Company secretary can represent before the SAT. </li></ul>
  35. 35. Investor grievance against broker member <ul><li>Dispute against the broker members like:- </li></ul><ul><li>Non receipt of share in time </li></ul><ul><li>Non receipt of payment </li></ul><ul><li>Non receipt of contract note </li></ul><ul><li>Misuse of DIS </li></ul><ul><li>Wrong trading </li></ul>
  36. 36. Procedure of complaint <ul><li>Filing the complaint in concerned exchange; </li></ul><ul><li>Exchange will forward the complaint to concerned member; </li></ul><ul><li>Request to give clarification wit in 7 days </li></ul><ul><li>Reminder & ex-party decision ( in case second party does not present after two or three call. </li></ul><ul><li>Matter place before IGC. </li></ul><ul><li>Advice to appear before committee. </li></ul><ul><li>Both parties present their case. </li></ul><ul><li>Decision in merit (in the bases of available documents). </li></ul><ul><li>Appeal to board in 30 days. </li></ul><ul><li>Fail to implement decision will cause disciplinary action . </li></ul>
  37. 37. Title of the Project <ul><li>“Investors’ education and grievances redressal mechanism – A Study on LSE” </li></ul>
  38. 38. Objective of the Project <ul><li>The research aims to study the level of awareness of investors of Ludhiana regarding their rights and responsibilities. </li></ul><ul><li>To study different types of grievances faced by investor </li></ul><ul><li>To determine the extent of information provided by the stock exchange for solving grievance of investor. </li></ul>
  39. 39. Research Methodology <ul><li>Research Designs - The conceptual structure within the research was descriptive in nature . </li></ul><ul><li>data collection method -Primary and secondary source of data was used for data collection. </li></ul><ul><li>Universe - all investors of Stock Exchanges. </li></ul><ul><li>Population - all investor of Ludhiana. </li></ul><ul><li>Sample Unit - included an investor of Ludhiana. </li></ul><ul><li>Sample Size - 100 </li></ul>
  40. 40. <ul><li>Sample Techniques - Convenience sampling techniques was used to get the questionnaire filled from investors of Ludhiana. </li></ul><ul><li>Limitations of the study; </li></ul><ul><li>Time constraint </li></ul><ul><li>Biasness </li></ul>
  42. 42. Duration of activity of respondents in the stock exchange (N=100) Graph 4.1
  43. 43. Instrument of investment (N=100) GRAPH 4.2
  44. 44. Awareness about their rights (N=100) Graph 4.3
  45. 45. Rights aware about (N=88) Graph 4.4
  46. 46. Investors Education Programmes (N=100) Graph 4.5
  47. 47. Mode of education regarding rights (N=100) Graph 4.6
  48. 48. Problems faced by Investor (N=100) Graph 4.7
  49. 49. Types of Problem faced (N=44) Graph 4.8
  50. 50. Any action followed against the complaint (N=44) Graph 4.9
  51. 51. Filling of complaint with the departments (N=36) Graph 4.10
  52. 52. Support provided to the investor in their complaints (N=36) Graph 4.11
  53. 53. Satisfaction level of grievance settlement procedure (N=36) Graph 4.12
  54. 54. SUGGESTION <ul><li>Heavy penalties should be imposed against defaulter companies. </li></ul><ul><li>At office of broker, address of investor grievance cell should be mentioned. </li></ul><ul><li>Broker should educate their customer because they are one who actually influenced the decision of investors largely. </li></ul><ul><li>Investor should form association and came together as group and not as invidual for enforcement of their right. </li></ul>
  55. 55. SUMMARY AND CONCLUSION <ul><li>Majority of the respondent have experienced in stock exchange is more than 5 years. </li></ul><ul><li>Equity was the most favored instrument of investment. </li></ul><ul><li>Majority of respondent are aware of their rights. </li></ul><ul><li>Almost all the respondent are ready to attend educational programmes, if organized. </li></ul><ul><li>Maximum number of respondent preferred T.V. as medium for educating them regarding their rights. </li></ul>
  56. 56. Cont. <ul><li>Most of the respondents faced problem and most of them faced problem to delay in sending of dematerialization. </li></ul><ul><li>Maximum number of respondent lodges their complaint with stock exchange. </li></ul><ul><li>Majority of the respondents did not received support from various avenues. </li></ul><ul><li>Most of the respondent’s satisfaction level from the grievance redressal procedure is neutral and it shows that the investors are not satisfied with redressal mechanism. </li></ul>
  57. 57. Querry
  58. 58. Thanx