In my letter addressed to you in the last Annual Report for 2009-10, I
shared with you our Group''s Vision of transforming emerging economies
by nurturing new technology centric financial exchanges in them. During
the year under review, developing such exchanges has enabled the Group
to expand its reach to all classes of society, and offer a transparent
price discovery mechanism.
Launch of New Global Exchanges
I am happy to inform you that the second decade of this millennium saw
the Group going verily global, with a well-spread international
presence. The main highlight of the year 2010-11 has been the launch of
three international exchanges by your Company and its subsidiaries for
facilitating trading in several asset classes in the regions, in which
they operate. The launch of these exchanges Singapore Mercantile
Exchange (SMX) in Singapore, Global Board of Trade (GBOT) in Mauritius
and Bahrain Financial Exchange (BFX) in Bahrain has made your Company
a truly global financial institution.
What''s more remarkable is that these three international exchanges have
been established in three different and widely separated economic
regions of the world South-East Asia, Africa and Middle-East. As a
consequence, your Company is now poised to tap the immense financial
derivative business potential in these regional economies, so as to
serve not only the respective regional market players, but also the
global market functionaries trading in and with those regions. Having
established now as many as nine financial exchanges in India and
abroad, your Company is racing to compete with large global exchanges.
This is in accordance with the Group''s overall strategy of building a
unique and unparalleled international financial ecosystem, aimed at
promoting financial inclusion, thereby bringing about equitable growth.
Your Group has thus successfully created an ideal business sculpt to
establish deeper and new-age financial markets across diverse
geographical boundaries. At this juncture, we now keenly look forward
to the launch of Bourse Africa at Botswana. This exchange will operate
on the ''Hub and Spoke Model'', with Botswana as the hub and its spokes
reaching out to numerous African nations. Bourse Africa is aimed at
establishing an effective price discovery mechanism for resources
originating in Africa, and providing those who produce and trade in
such resources with an efficient risk management tool. Not only will
this Bourse fortify Africa''s financial markets, but, more importantly,
also unlock the untapped growth potential of this rather
New Product Line
As for your Company''s primary business of providing technology
solutions, its tryst with triumph continued for its flagship product
ODINTM a multi-exchange trading technology and risk management
system. This one-stop window for technology solutions with a strong
presence in three key verticals Exchange Solutions, Brokerage
Solutions and Technology Solutions commemorated 12 years of its
phenomenal success this year. As you are aware, ODINTM is well accepted
by its customers and financial markets alike, and is a leading
end-to-end technology solutions provider in India''s financial markets,
having over 80% market share in the country.
Your Company constantly seeks to enhance its existing product line to
deliver innovative and higher value-added solutions to meet the
challenges arising from the ever-changing business environment. The
newly developed ODINTM 64-bit version has delivered an increase in
performance, scalability and compatibility of our flagship product.
In addition to its flagship products driving growth, your Company
expects its new products ODINTM Greek Neutralizer, ODINTM ATS,
Advanced Charting, ODINTM Xplaza, FTNET and DMA LIVE! introduced
during 2010-11 to contribute significantly to its future growth. Your
Company continues to offer other product offerings which include CnS,
STP-GateTM, iNet.net, iWin, MATCHTM, e-HastaksharTM and Protector.
During the year, your Company successfully deployed a new version of
its exchange technology product suite (multi-asset and multi-currency)
with advanced functionalities in its flagship products DOME
(Distributed Order Matching Machine), CnS (Clearing & Settlement) and
Risk Management. These have been deployed at Multi-Commodity Exchange
of India (MCX), MCX Stock Exchange (MCX-SX), National Spot Exchange
(NSEL), SMX and GBOT.
Yet another major achievement during the year was the inauguration of
the landmark nine-storey FT (Financial Technologies) Tower, spread over
a sprawling 1.56 lakh square feet of area and accommodating over 1,600
work stations, in Andheri the commercial hub of Mumbai.
This state-of-the-art development centre has created a unique
architectural ensemble, resulting in emplacement of the Group Companies
into a centralized function area. The structural and spatial design of
FT Tower crafts a captivating working environment, facilitating easy
communication and promoting teamwork and interaction at every level.
Moving to a new company-owned premise, with facilities such as a
cafeteria and a gymnasium, has inculcated a distinctive sense of
belonging and elevated job satisfaction among the employees. FT Tower
aims to not only create a single base for its operational activities
and functional requirements, but also stands as a visible symbol of
Business Financials During the year 2010-11,
- Income from Operations increased by 7.8% to Rs 3,308.89 million, as
against Rs 3,069.87 million through the previous year.
- EBIDTA* at Rs 2,428.52 million was up 12.3%, compared to Rs 2,162.53
million the year before.
- Net Profit* was up 9.7% to reach Rs 2,062.90 million from Rs 1,880.36
million for the year ended March 31, 2010.
*Numbers mentioned are Standalone results, excluding capital gains on
sale of shares, diminution in long term investments and exceptional
Your Company continues to maintain its track record of rewarding its
shareholders. It has paid 3 interim dividends aggregating Rs 6 per
share (300%) and recommended a final dividend of Rs 2 per share (100%)
on a face value of Rs 2 per share for the year ending March 31, 2011.
As your Company moves ahead focused on fulfilling its vision and goals,
I share with you some key business highlights for the year under
- ODIN is a leading end-to-end technology solutions provider, powering
over 10 exchanges (Indian and international), deploying over 640,000
licenses. It is poised to serve more than 1,000 institutions and
brokerage clients, including the top 30 public and private sector banks
- MCX maintained its leadership position with 82% market share in the
Indian commodity market space by having recorded the highest daily
turnover of Rs 71,876.33 crore on March 15. It recorded an average
daily turnover of Rs 32,057.01 crore, representing a rise of 53%
year-on-year. MCX clocked a total trading turnover of Rs 98.42 lakh
crore for the entire year under review. During the year, it launched
mini futures contracts in zinc, lead and aluminum, as also micro
futures contracts in iron ore and silver.
- MCX joined hands with Shanghai and Taiwan Futures Exchanges for
developing commodity derivative markets.
- Indian Energy Exchange (IEX) has maintained a lead over other
exchanges with 87% market share and has been the No. 1 energy exchange
of the country since its inception. During the year under review, the
exchange has witnessed substantial increase in volumes in the Day Ahead
Market as well as Term Ahead Market. Average daily volumes for Day
Ahead Market have nearly doubled to 32,330 MWh from last year. The
exchange also added a new market segment for trading of Renewable
Energy Certificate and also a new version of Day Ahead Market Trader
- National Spot Exchange (NSEL) is India''s No. 1 commodity spot
exchange with over 99% market share in the electronic spot market
segment. During the year, the exchange launched a unique product in the
form of e-series, which enables millions of retail investors to invest
in commodities in small denominations, thereby driving financial
inclusion. e-gold, e-silver and e-copper have also received
- Singapore Mercantile Exchange (SMX), which went live on August 31,
2010, now offers facilities for trading in a diversified basket of
commodities including futures and options contracts on precious metals,
base metals, agricultural commodities, energy and indices and futures
trading in various currency pairs (EUR-USD, USD-JPY and AUD-USD).
Renowned financial companies, such as ICICI Bank, Morgan Stanley,
NewEdge and Philip Futures have become its General Clearing Members,
while NextVIEW is the financial and real-time data provider for SMX.
- Bahrain Financial Exchange (BFX), the first multi-asset exchange in
Middle East and North Africa region, launched on February 1, 2011, is
offering for trading financial instruments across a wide range of asset
classes, comprising three main categories: cash instruments, derivative
contracts and Shariah-compliant Islamic products. The exchange launched
its Islamic Finance division, with the establishment of ''Bait Al
Bursa'', thus marking the creation of the region''s first
exchange-operated platform dedicated to Islamic Finance products.
- Daily trade volumes on Global Board of Trade (GBOT) crossed US$ 50
million mark on April 18, thus multiplying five times within six months
of having commenced trading on October 15, 2010. GBOT is the first
exchange in the world to earn the distinction of offering two African
currencies USD/MUR and ZAR/USD on its exchange platform from the first
day of commencement of trading and also offers trading in EUR/USD,
GBP/USD and JPY/USD. Besides this, it also offers trading in gold and
silver commodity futures contracts. The exchange has collaborated with
Thomson Reuters, a leading source of intelligent information for
business and professionals, to provide real-time prices and exchange
- National Bulk Handling Corporation (NBHC) is a national level ISO
22000:2005 certified warehousing company and a leading integrated
services enterprise for commodity and collateral management. It
continues to outpace its peers in terms of growth and create value
within the ecosystem, with assets under management at Rs 26,000 crore.
Conducive policy initiatives give it a further impetus to undertake
long-term investments and commitments, thus enabling it to address
crucial ecosystem issues, while simultaneously enhancing an
unparalleled value for its stakeholders.
- atom Technologies provides secure and convenient payment solutions
involving either IVR or mobile applications. During the year, it has
tied up with over 190 merchants and processed more than 6 million
transactions valuing over Rs 1,600 crore on its platform.
- TickerPlant, the Group''s foray into real-time global financial market
information dissemination, continued to make inroads into the target
segments. Its unique strategy of designing user-friendly, ultra low
latency, high performance and cost-effective technology products,
coupled with customer centric offerings, has resulted in MarketView
TerminalTM, its flagship product, being adopted rapidly by market
participants across various asset classes.
Corporate Social Opportunity (CSO)
This year, too, your Company made a significant impact on the society
and community at large. Being strongly committed towards Corporate
Social Opportunity (CSO), your Company''s Management has supported
various community initiatives, touching many lives by supporting social
and healthcare facilities. During the year, the FT Group:
- Participated in Standard Chartered Marathon 2011''s Yuva Parivartan,
which works to empower deprived dropouts and youth to earn a livelihood
and become useful citizens.
- Launched School=Lunch Drive and ranked second among the companies,
having donated Rs 2.62 lakh to ISKCON Food Relief and Foundation.
- Launched 4th All India Blood Donation Drive, with 356 blood units
- Observed HIV-AIDS Day, held workshops for female employees and
community, and participated in Awareness on HIV Prevention.
- Launched Joy of Giving Week with participation in Mobile Creches,
workshop on toy making, and cloth donation drive.
- Launched Savings Campaign for Postal Recurring Deposit Scheme, in
association with India Post.
Empowering Lives, Transforming Economies.
In its recent report, The International Monetary Fund (IMF) observed
that, The fastest growth in recent years has come from the emerging
markets, which helped offset the deep downturns in the United States
and other rich nations faced due to the recession in 2008.
The emerging market economies are at a point of inflection as they gain
traction more quickly than their advanced counterparts, and become
central engines for economic growth across the globe. The rapidly
growing markets of these economies support global expansion, thus
underlying their importance in reshaping the international financial
landscape. Emerging nations are destined to give rise to major
financial, commercial and technological players on the world stage.
As financial markets in these fast growing economies move ahead with
much vigour, their future rests on the four supporting pillars
products, market structure, technology and regulation. It is by
building a vigourous financial ecosystem on these four pillars that
your Company aims to transform the emerging economies of Asia and
Africa, empower the masses there, and change their lives for the
FOFMTM Leadership Summit
Your Group''s vehicle to drive its vision of redesigning the financial
market infrastructure aimed at empowering lives and transforming
economies is the Future of Financial Markets (FOFMTM) Leadership
Summit, its annual leadership event. This platform continues to foster
ahead year-after-year with a strong endeavor to engage thought-leaders
of the financial markets at a strategic level. Held in January this
year at Hotel Renaissance Mumbai, the Summit was attended by over 500
Senior Management Leaders from the financial world, including nearly
100 speakers from 10 countries, who participated in as many as 15
Tracks and Keynote Addresses. FOFM Summit was supported by 22
partners. In summary, the Summit was nothing short of the ''Davos of
Indian Financial Markets''.
The Next Decade
The present year 2011-12 will be a defining one for your Company, as
the new international exchanges set up by the Group will scale up their
operations. During this decade also, the Group sees value being
generated from the new exchanges, as also from the ever-widening market
participatory base in them, bringing markets to the masses for the
benefit of all stakeholders.
Your Company''s focus will continue to be on execution and enlargement
of its technology business, taking its exchanges and ecosystems to the
next level of growth and making them more profitable. Its domain
expertise in establishing and operating next-generation financial
exchanges, coupled with the Group''s global partnerships and strategic
alliances, will take it to a new high in its march across continents.
As we complete another year, I am happy to whole-heartedly acknowledge
your unrelenting support towards the activities and achievements of the
Group as a whole, and the flagship company in particular. I am also
thankful to our Board of Directors, Advisory Board, Regulatory
authorities, my colleagues and all the stakeholders for their unstinted
support and guidance.
Chairman & Group CEO