final ppt on sept 19
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Presentation on “ Investors education Presentation on “ Investors education and redressal mechanism- A Study and redressal mechanism- A Study
on LSEon LSE
Presented ByPresented By
Lakhvir SinghLakhvir Singh
MBA 2AMBA 2A
Introduction of Stock ExchangeIntroduction of Stock Exchange
Stock Exchange, organized market for buying and selling financial instruments known as securities, which include bonds, shares, debenture, commercial paper, NSC etc.
Functions of stock ExchangeFunctions of stock Exchange
• To protect the interest of investor.• To encourage the people for invest their saving.• Mobilizing savings for investment• Raising capital for businesses• Barometer of the economy
Who gain from Stock ExchangeWho gain from Stock Exchange
• Investor• Broker• Company• Economy and Country
Stock Exchanges in IndiaStock Exchanges in India
Non-Regional Stock Exchanges – 2
BSE and NSE
Regional Stock Exchanges – 19
Out of 19 there are 8 stock exchanges have been granted permanent reorganization and rest of them have been valid for 5 years
Cont.Cont.
During the years 2008 to 2010 there are 4 stock Exchanges which are derecognized by SEBI;
• Magadh Stock Exchange• Hydrabad Stock Exchange• Manglore Stock Exchange• Saurasha Stock Exchange
Introduction of the LSEIntroduction of the LSE
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.
Cont.Cont.
Vision of LSE –
“To maximize the satisfaction level of its customers.”
Mission of LSE -
“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.”
Work Profile of LSEWork Profile of LSE
Board of Directors
6 Shareholding Director
6 Public interestDirector
3 Trading MemberDirector
1 Executive Director
Board of Director of LSEBoard of Director of LSESr. No. Name of the Director Designation
1 Sh. Padam Prakash Kansal Chairman and Shareholder Director
2 Sh. Joginder Kumar Vice-Chairman and Shareholder Director
3 Sh. Sanjay Anand Trading Member Director
4 Sh. T.S. Thapar Trading Member Director
5 Sh. Sunil Gupta Trading Member Director
6 Dr. Ravinder Nath Sethi Shareholder Director
7 Sh. Ashok Kumar Shareholder Director
8 Sh. Satish Nagpal Shareholder Director
9 Sh. Varun Chabra Shareholder Director
10 Sh. Ashwani Kumar Public Interest Director
11 Dr. Raj Singh Public Interest Director
12 Sh. Ved Prakash Gaur Public Interest Director
13 Ms. Pooja M. Kohli Executive Director (Officiating)
ORGANIZATIONAL CHART OF LUDHIANA STOCK EXCHANGEORGANIZATIONAL 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
Introduction of LSE Security Ltd.Introduction of LSE Security Ltd.
• LSE Securities Ltd., was incorporated in 07th January, 2000.
• 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”.
• LSESL is a Trading-cum-Clearing member in the capital market.
• Incorporation of LSE COMMODITIES TRADING SERVICES LTD., a subsidiary of LSE. Securities ltd
Objective of LSE Security LtdObjective of LSE Security Ltd..
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.
Features of LSE security Ltd.Features of LSE security Ltd.
• First 100% subsidiary of any Regional stock exchange.
• Provides D/P service of NSDL and CSDL.• Provides Platform for Trading in capital market.• More than 40000 clients
• The company has 295 sub-brokers
Work profile of the LSE Security Ltd.Work profile of the LSE Security Ltd.
Board of Directors
1 Chairman1 vice Chairman
3 From Broker Member
5 Public interestDirector
1 from LSE1 CEO cum
Director
Board of Director of LSE Security ltd.Board of Director of LSE Security ltd.
Sr. No. Name of the Director Designation
1 Sh. Anurag Arora Chairman
2 Sh. Vishal Goomber Vice-Chairman
3 Sh. Jatinder Garg Member Director
4 Sh. M.S. Sarna Member Director
5 Sh. Lalit Kishore Member Director
6 Sh. Susheel Bhakoo Public Representative Director
7 Sh. Vijay K. Bansal Public Representative Director
8 Dr. Prem Kumar Public Representative Director
9 Dr. Anil Angrish Public Representative Director
10 Sh. Pawan K. Garg Public Representative Director
11 Ms. Pooja M. Kohli LSE Representative Director
12 Mr. Rajesh K. Sharma CEO Cum Director
DEPARTMENT OF LUDHIANA STOCK EXCHANGEDEPARTMENT OF LUDHIANA STOCK EXCHANGE
Departments HOD
Depositary Department Mr. Viney Mahajan
KYC Department Ms. Sonia Makkar
Clearing Department Mr. Vipun Goyal
Margin Department Mr. Rajinder Pal Singh
Account 1 Department Mr. Ram Ji
Account 2 Department Mr. Ravinder Saini
Surveillance Department Ms. Paramjeet Kaur
IT Department Mr. Madhur Gupta
Personnel Department Ms. Pooja Sharma
Financial analysisFinancial analysis
Current Ratio = Current Assets/Current Liabilities
March 2009
March 2008
March 2007
March 2006
Current Asset 144212436 133627992
127256429 136653178
Current Liabilities
90056374 88057900 85510697 102615218
Current Ratio 1.60 1.52 1.49 1.33
Liquid Ratio=Liquid Assets/Current Liabilities
Liquid Assets= Current Assets – Inventory – Prepaid Expenses
March 2009
March 2008
March 2007 March 2006
Liquid Asset 143995929 133118958 127214660 136596413
Current Liabilities 90056374 88057900 85510697 102615218
Liquid Ratio 1.59 1.51 1.48 1.33
Absolute Liquid Ratio= Absolute Liquid Assets/Current LiabilitiesAbsolute Liquid Assets= Cash + Bank + Short Term Investments
March 2009 March 2008
March 2007 March 2006
Absolute Liquid Asset
113940009 106628810 110577976 108499165
Current Liabilities 90056374 88057900 85510697 102615218
1.26 1.21 1.18 1.05
Proprietary Ratio= (Shareholder Funds/Total Assets)*100
March 2009
March 2008
March 2007
March 2006
Shareholder Funds
175905155 171513006 169718351 169446708
Total Assets 265961529 259570906 255229047 272061926
Proprietary Ratio
66.14 66.07 66.50 62.28
Solvency Ratio= (Total Outside Liability/Total Assets)*100
March 2009
March 2009
March 2009
March 2009
Total Debt 90056374 88057900 85510696 102615218
Total Assets
265961529 259570906 255229047 272061926
Solvency Ratio
33.86 33.92 33.50 37.72
Fixed Assets to Net-worth Ratio= (Net Fixed Assets/Shareholder Funds)*100
March 09 March 08 March 07 March 06
Net Fixed Assets 89734809 92072811 92804243 94679869
Shareholder Funds
175905155 171513006 169718351 169446708
Ratio 51.01 53.68 54.68 55.87
ROSF= (Net Profit after tax/ Shareholder Funds)*100
March 2009 March 2008 March 2007 March 2006
EAT 6966926 3855982 7170142 4132544)
SH Fund 175905155 171513006 169718351 169446708
ROSF 3.96 2.25 4.22 (2.44)
Trend analysis of Net Profit
-150
-100
-50
0
50
100
150
200
250
300
2005-06 2006-07 2007-08 2008-09
Year
Per
cen
tag
e
percentage
Trend Analysis of Earning Per shareTrend Analysis of Earning Per share
6.8611.91
64.05
115.73
0
20
40
60
80
100
120
140
2005-06 2006-07 2007-08 2008-09
years
Per
cen
tag
e
E P S
Introduction of the ProjectIntroduction of the Project
Rights of the InvestorsRights of the Investors
• To receive the allotment /transfer of shares on time.
• To received the copy of annual report, balance sheet and the P & L A/c of company.
• To participate and vote in the general meeting.
• To received corporate benefit.
• To inspect the minute book of annual general meeting.
Responsibilities of InvestorsResponsibilities of Investors
• Verify the legitimacy of the investment.
• Assess the risk-return profile of the investment.
• To know the liquidity and safety aspects of the investment.
• Deal only through an authorized intermediate.
• Find out the cost and benefits associated with the investment.
Investors related services in LSEInvestors related services in LSE
• Investor grievance cell
• Investor Protection Fund
• Investor Service Centre
• Website www.lse.co.in
• Certification programme in capital market
Investor Grievance CommitteeInvestor Grievance Committee
• 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:
• Scrutinize
• Investigate and
• decide
• 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.
Cont.Cont.
• Mainly the investors having grievance regarding two aspects :
Investor grievance against listed companies.
Investor grievance against broker member.
Investor grievance against listed companiesInvestor grievance against listed companies
• The investors complains regarding dispute’s with the company like dividend, bonus shares, non-receipt of dividend, non-receipts of balance sheet, information etc.
• The complaint can be send three places;i. Stock exchangeii. SEBIiii. Court
Procedure of complaintsProcedure of complaints
• Filled the complaint in concerned exchange.• Forward to concerned listed company.• Advice to resolve in 45 days.• Reminder to resolve in 30 days• Advice to appear company’s official Investor Grievance
committee.• Trading suspended.• Matter forward to SEBI.• SEBI imposes penalties one lakh per day from the delay it
will maximum up to one cores whichever is less.• Appeal to SAT (Securities Appellate Tribunal): if one of
the above authorities is not able to resolve the matter.
SAT (Securities Appellate Tribunal)SAT (Securities Appellate Tribunal)
• 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.
• Qualification of the members: The judge will be the retired chief justice of supreme or high court.
• Functions of SAT: Mainly SAT do three functions these are given blow:
• Entertain appeals
• Conduct enquiry
• Investigation
Power of SATPower of SAT
• Can send summon to the parties.
• Discovery and production of documents related to the appeal.
• Receiving evidence of affidavits.
• Can Dismiss the appeal .
• Can give the order.
The CEO or MD of the company or Company secretary can represent before the SAT.
Investor grievance against broker memberInvestor grievance against broker member
Dispute against the broker members like:-
• Non receipt of share in time
• Non receipt of payment
• Non receipt of contract note
• Misuse of DIS
• Wrong trading
Procedure of complaintProcedure of complaint
• Filing the complaint in concerned exchange; • Exchange will forward the complaint to concerned member;• Request to give clarification wit in 7 days • Reminder & ex-party decision ( in case second party does not
present after two or three call.• Matter place before IGC.• Advice to appear before committee.• Both parties present their case.• Decision in merit (in the bases of available documents).• Appeal to board in 30 days.• Fail to implement decision will cause disciplinary action.
Title of the ProjectTitle of the Project
“Investors’ education and grievances redressal mechanism – A Study on LSE”
Objective of the ProjectObjective of the Project
• The research aims to study the level of awareness of investors of Ludhiana regarding their rights and responsibilities.
• To study different types of grievances faced by investor
• To determine the extent of information provided by the stock exchange for solving grievance of investor.
Research MethodologyResearch Methodology
Research Designs - The conceptual structure within the
research was descriptive in nature.data collection method -Primary and secondary source of data
was used for data collection.
Universe - all investors of Stock Exchanges.
Population - all investor of Ludhiana.
Sample Unit - included an investor of Ludhiana.
Sample Size - 100
• Sample Techniques - Convenience sampling techniques was used to get the questionnaire filled from investors of Ludhiana.
• Limitations of the study;
Time constraint
Biasness
DATA ANALYSIS AND INTERPRETATIONDATA ANALYSIS AND INTERPRETATION
Duration of activity of respondents in the stock exchange Duration of activity of respondents in the stock exchange
(N=100)(N=100)
Graph 4.1
1610
18
56
0
10
20
30
40
50
60
Lessthan 1year
1-3years
3-5years
Morethan 5years
Time
Per
cen
tag
e
Percentage
Instrument of investment (N=100)Instrument of investment (N=100)
GRAPH 4.2
Percentage
72
813
7
0
10
20
30
40
50
60
70
80
Equity Debenture Bond All
Instrument
Perc
enta
ge
Percentage
Awareness about their rights (N=100)Awareness about their rights (N=100)
Graph 4.3
Percentage
88
12
0102030405060708090
100
Yes No
Awareness
Per
cent
age
Percentage
Rights aware about (N=88)Rights aware about (N=88) Graph 4.4
0
5
10
15
20
25To
rece
ived
docu
men
tre
gard
ing
your
To d
eman
dce
rtific
ates
of
regi
stra
tion
of
To re
ceiv
ed th
ese
curit
ies
onal
lotm
ent/t
rans
fer
To re
ceiv
eco
rpor
ate
bene
fiti.e
. div
iden
d,
To p
artic
ipat
e an
dvo
te in
gen
eral
mee
ting
To re
ceiv
e an
nual
repo
rt
To a
pply
for
wind
ing
up o
f aco
mpa
ny
Knowledge About
Perc
enta
ge
Investors Education Programmes (N=100)Investors Education Programmes (N=100) Graph 4.5
Percentage
70
1812
0
10
20
30
40
50
60
70
80
Yes No Can’t say
Response
Per
cen
tag
e
Percentage
Mode of education regarding rights (N=100)Mode of education regarding rights (N=100) Graph 4.6
2326
13
38
0
5
10
15
20
25
30
35
40
T.V. Newspaper Magazine At stock exchange
mode
per
cen
tag
e
Problems faced by Investor (N=100)Problems faced by Investor (N=100)
Graph 4.7
44
56
0
10
20
30
40
50
60
Yes No
Response
Per
cen
tag
e
Types of Problem faced (N=44)Types of Problem faced (N=44)
Graph 4.8
Percenatege
16
26
20
33
5
0
5
10
15
20
25
30
35
Problem
Any action followed against the complaint (N=44)Any action followed against the complaint (N=44) Graph 4.9
82
18
0
10
20
30
40
50
60
70
80
90
Yes No
Response
Per
cen
tag
e
Filling of complaint with the departments (N=36)Filling of complaint with the departments (N=36)
Graph 4.10
0
10
20
30
40
50
60
Avenue
Per
cent
age
Support provided to the investor in their complaints (N=36)Support provided to the investor in their complaints (N=36)
Graph 4.11
39
61
0
10
20
30
40
50
60
70
Yes No
Response
Per
cen
tag
e
Satisfaction level of grievance settlement procedure (N=36)Satisfaction level of grievance settlement procedure (N=36)
Graph 4.12
Percentage
8%
22%
39%
25%
6%
Extremely Satisfied
Somewhat Satisfied
Neutral
Somewhat Dissatisfied
Extremely Dissatisfied
SUGGESTIONSUGGESTION
• Heavy penalties should be imposed against defaulter companies.
• At office of broker, address of investor grievance cell should be mentioned.
• Broker should educate their customer because they are one who actually influenced the decision of investors largely.
• Investor should form association and came together as group and not as invidual for enforcement of their right.
SUMMARY AND CONCLUSIONSUMMARY AND CONCLUSION
• Majority of the respondent have experienced in stock exchange is more than 5 years.
• Equity was the most favored instrument of investment. • Majority of respondent are aware of their rights.• Almost all the respondent are ready to attend educational
programmes, if organized.• Maximum number of respondent preferred T.V. as medium for
educating them regarding their rights.
Cont.Cont.
• Most of the respondents faced problem and most of them faced problem to delay in sending of dematerialization.
• Maximum number of respondent lodges their complaint with stock exchange.
• Majority of the respondents did not received support from various avenues.
• 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.