1 › Analyst Meet › 126881_20090630.pdf · DECLARES FINAL DIVIDEND OF 100DECLARES FINAL DIVIDEND...

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1 www.ftindia.com

Transcript of 1 › Analyst Meet › 126881_20090630.pdf · DECLARES FINAL DIVIDEND OF 100DECLARES FINAL DIVIDEND...

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1www.ftindia.com

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Certain statements in this presentation contain forward-looking information about Financial Technologies

(India) Ltd. and its group companies, including their business operations, strategy and expected financial

performance and condition. Forward-looking statements include statements that are predictive in nature,

depend upon or refer to future events or conditions, or concern future financial performance (including

revenues, earnings or growth rates), possible future plans and action of the company. Forward-looking

statements are based on current expectations and understanding about future events.

They are inherently subject to, risks, uncertainties, and assumptions, etc about the Company, economic

factors and the industry in general. The Company’s actual performance and events could materially differ from

those expressed or implied by forward-looking statements made by the company due to, but not limited to,

important factors such as general economic, political and market factors in India and internationally,

competition, technological change, and changes in the government regulations.

SAFE HARBOR STATEMENT

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PAT 205 77 166%

INCOME STATEMENT

FINANCIAL HIGHLIGHTS (Standalone)

Q1 FY 09 Y-o-Y %Q1 FY 10(in Rs. mn)

Note: Above stated financials are standalone figures excluding long term capital gain on shares

OPERATING REVENUES 585 440 33%

TOTAL INCOME 650 473 37%

PROFIT FROM OPERATIONS 174 76 130%

EBITDA 253 124 104%

PBT 239 108 121%

DECLARES FINAL DIVIDEND OF 100% ON THE FACE VALUE OF RS. 2/- PER SHAREDECLARES FINAL DIVIDEND OF 100% ON THE FACE VALUE OF RS. 2/- PER SHARE

Financial Technologies' operating revenue increased by 33% to Rs. 585 million (Y-o-Y) for the quarter ended June 30, 2009

Profit from operations has increased by 130% to Rs. 174 million (Y-o-Y) for the quarter ended June 30, 2009

Net profit excluding long term capital gain on shares increased by 166% to Rs. 205 million (Y-o-Y) for the quarter ended June 30,2009

FTIL has signed an agreement on July 18, 2009 and has sold (secondary sale) 5% stake in the then equity share capital of MCX Stock Exchange Limited to IFCI Ltd at Rs.35 per share. The sale has been done to comply with the regulatory requirements

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Dewang Neralla, Whole Time Director, Financial Technologies said:

“Financial Technologies has witnessed yet another strong quarter. Operating revenues has increased by 33% to Rs. 585 million (Y-o-Y). Net profit excluding long term capital gain on shares has grown by 166% to Rs. 205 million (Y-o-Y). These results underscore the resilience of our robust business model and the potential of our technology solutions.

Continuing our leadership in the trading technology, National Multi Commodities Exchange (NMCE) signed up FTIL's ODIN for its Front-end Trading technology.

This quarter we have brought posse of strategic investors in MCX-SX; bringing business synergies and broad experience. IEX completed 1 year of successful operations maintaining dominant market share of 92%. Within 6 months of operations, NSEL has emerged as a coveted and leading spot exchange in the country with more than 95% market share.

On the ecosystem front, NBHC has seen steady growth with increased storage facilities and increase in funding facilitated. Continuing to broaden the product portfolio ‘atom’ has launched Merchant Acquiring Business (MAB) through PoS (Point of Sale) terminal, along with its existing streams of voice based (IVR) and mobile based payments.

The group continued to forge strategic relationships with leading players in various business segments; the corporate milestonesin Q1 FY10 included partnership with Invest In Denmark under the Global Alliance program.”

COMMENTING ON FINANCIAL TECHNOLOGIES’ FY 2008-09 PERFORMANCE

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The Company, as part of its core business strategy promotes and invests in new ‘Exchange’, ‘Technology’ and ‘Ecosystem’ventures that utilize its technological capabilities and domain expertise towards creating world class enterprises. The investment in each such venture is assessed for its risks and is limited to a pre-determined level and will generate returns after the ventures start ramping-up operations in 2 to 4 years time frame. The company, as part of its non-linear business model, will continue to unlock value by broadening the investor base of its ventures. At this moment, the broad framework for investment in ventures is as follows:

- Domestic ventures upto US$ 10 million

- International ventures upto US$ 25 million

- Exceptional ventures upto US$ 50 million

Despite continuing investments in these ventures, our cash surplus including investment in mutual funds (standalone) is at Rs. 11,137.2 million as on June 30, 2009

BROAD INVESTMENT PHILOSOPHY

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STRONG BALANCE SHEET

Net worth of Rs. 17,546 million as on Jun 30, 2009

Company has cash and bank balances of Rs.4,029.2 million and mutual funds of Rs.7,108 million (aggregated to Rs. 11,137.2million) as on June 30, 2009

Zero Coupon Convertible Bonds (ZCCB) of Rs. 4,332 million as on Jun 30, 2009

SUMMARIZED BALANCE SHEET (Standalone)

SOURCES OF FUNDS

Shareholders’ Funds

Share Capital

Reserves & Surplus

Loan Funds

Unsecured Loan

Zero Coupon Convertible Bonds

Deferred tax liability (Net)

TOTAL

APPLICATION OF FUNDS

Fixed Assets

Investments

Deferred Tax Asset

FCMITDA*

Current Assets, Loans & Advances

Less: Current Liabilities & Provisions

Net Current Assets

TOTAL

(in Rs. mn)

*Foreign Currency Monetary Item Translation Difference Account

AS ON JUNE 30, 09

AS ON MARCH 31, 09

4,332

120

21,998

17,454

92

4,611

167

22,275

17,405

92

AS ON JUNE 30, 09

AS ON MARCH 31, 09

2,645

14,471

-

137

6,755

2,010

4,745

21,998

2,841

14,445

-

353

6,438

1,802

4,636

22,275

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CASH AND CASH EQUIVALENTS (Standalone)

PARTICULARS

(in Rs. mn)

MUTUAL FUNDS

FIXED DEPOSITS

CURRENT / EEFC ACCOUNT

TOTAL

AS ON JUNE 30, 09

AS ON MARCH 31, 09

7,209

3,850

558

11,617

7,108

3,885

144

11,137

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BUSINESS OVERVIEW:Self Fueling Model for GrowthExchange Business OverviewEcosystem Business Overview

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BROKERAGE SOLUTIONSEXCHANGE SOLUTIONS

EXCHANGEBUSINESS

ECOSYSTEMBUSINESS

TECHNOLOGYBUSINESS

INTE

RN

ATI

ON

AL

COMMODITY

EQUITY & FX

ENERGY

COMMODITY & FX

MULTI-ASSET

DEPOSITORY

TRANSACTION PROCESSING

KNOWLEDGE SERVICES

INFORMATION RETAIL

CLEARING CORP.

* Holding in the companies are direct or through subsidiaries

DO

MES

TIC

BUSINESS OVERVIEW

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Technology Revenue Exchange Revenue Ecosystem Revenue Income / Dividend from investments Long Term Capital Gains

SELF FUELING MODEL FOR GROWTH

Revenue DriversTransaction FeesMembership FeesContent DistributionInterest on float

CustomersExchanges MembersBanks

EXCHANGE BUSINESSRevenue Drivers

Licensing FeesAMC FeesMessaging (STP) FeesConsultancy FeesLong Term Capital GainsInterest and dividend income from investments

CustomersExchangesBrokerage housesDPs, funds, AMCs

TECHNOLOGY BUSINESS

Revenue DriversWarehouse Receipt Financing revenueStorage and allied serviceProcurement revenue

CustomersBanksFarmers / TradersCentral GovernmentInstitutions

ECOSYSTEM BUSINESS

GROUP REVENUE DRIVERS

SELF-FUELINGVIRTUOUS

GROWTH CYCLE

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MCX - LEADERSHIP (www.mcxindia.com)

MCX market share for the Q1 FY10 has increased to 86% as compared to 85% in Q1 FY09

Average Daily turnover of Rs. 17,833 cr has been recorded for the period of Apr-Jun, 2009, an increase of 46% over Q1 FY09

Highest turnover of Rs.28,747 cr was recorded on April 2, 2009

Ranked 4th among Asia-Pacific Commodity Derivatives Exchanges(Source: Exchange websites)

HIGHLIGHTS

DOMESTIC MARKET SHARE (Q1 FY 09-10)*

*Source: FMC

DOMESTIC MARKET SHARE (Q1 FY 08-09)*

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MCX - OPERATIONAL GROWTH

**The figures are derived from the FMC website (www.fmc.gov.in) and have been aggregated by the company

QUARTERLY AVERAGE DAILY TURNOVER (Rs. bn.)** TOTAL VALUE TRADED** (CAGR: 68%) (Rs. bn)

TOTAL VALUE TRADED (Rs. cr)

AVERAGE DAILY TURNOVER (Rs. cr)

MARKET SHARE %

Y-o-Y%Q1-FY 10 Q1 FY 09

1,337,487

17,833

86%

41%

46%

949,897

12,178

85%

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MCX witnessed a record turnover of Rs. 33.19 crores in wheat contracts

MCX launched futures trading in Almond for the first time in the World

MCX crude oil volume crossed 25 million barrels mark for the first time ever

Aries Agro Ltd signed pact with MCX

MCX - KEY DEVELOPMENTS

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MCX-SX - OPERATIONAL GROWTH (www.mcx-sx.com)

*As on June 30, 2009 since inception**On May 19, 2009

WEEKLY VOLUME MOVEMENT MARKET SHARE AS OF JUNE 2009

AS OF JUNE 2009 AS OF MARCH 2009 Q- o-Q GROWTH

APPROVED NO. OF MEMBERS

CITIES PARTICIPATED ACROSS INDIA

AVERAGE DAILY TURNOVER * (Rs. cr)

HIGHEST TURNOVER (Rs. cr)

AVERAGE DAILY VOLUMES* (Contracts)

HIGHEST NO. OF CONTRACTS TRADED (Lots)

11%

5%

40%

41%

532

441

1,305.39

3,912.08

261,821

775,953

592

464

1,820.57

4,754.79**

370,036

997,608**

Note: BSE share negligible

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The RBI-SEBI Technical Committee Report on Interest Rate Futures released on 17th June 2009, the product is expected to be launched shortly

MCX Stock Exchange applied for approval to the regulators to launch Interest Rate Futures, coming under the Currency Derivatives segment

MCX Stock Exchange started the educative seminars on Interest Rate Futures in the four metros viz. Mumbai, Delhi, Chennai & Kolkata.

MCX Stock Exchange published a book titled ‘A Guide to Interest Rate Futures’ in line with our philosophy of Information, Innovation, Education & Research.

MCX-SX - KEY DEVELOPMENTS

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RICH PARENTAGE MCX-SX CCL is promoted by MCX-SX (51%), MCX & Financial Technologies (49%)

CORE STRENGTHS An independent and vertically integrated approved Clearing House, MCX-SX CCL in place to undertake clearing & settlement activities for its members Settlement guarantee fund transferred from MCX-SX –Rs. 25 Mn

Simplification of risk management through substitution of many counterparties by a central counterparty

Ensures ‘certainty’ and augments market confidence through mutualization of losses under extreme but plausible market scenarios

Standardization of transaction processing across markets or geographies

Highest credit quality rating LAAA(SO) assigned by ICRA

2nd approved clearing house by SEBI and RBI

Margins fixed as per CME (Chicago Mercantile Exchange) SPAN (Standardized Portfolio Analysis of Risk) margin system +1% ELM (Excess Loss Margin)

Automatic square off if MTM losses exceed 75% of margin limit

KEY HIGHLIGHTS

MCX-SX CCL

Establish as a leading provider of post-trade, pre-settlement trade management solutions for market participants

Enhance operational efficiency and mitigate risk through collaboration with all stakeholders via straight-through processing (STP) solution

In line with global developments, gear up to handle settlement and associated risk of OTC derivative products

STRATEGIC FOCUS

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IEX - OPERATIONAL GROWTH (www.iexindia.com)

DOMESTIC MARKET SHARE** HIGHLIGHTS

India’s No. 1 power exchange with 92% market share**

Number of Members - 62*

Total Turnover - Rs. 3,172 cr*

Total number of contracts traded – 3,795,750 MWh*

Highest number of contracts traded - 27,671 MWh on Jun 27, 2009

Average Daily Volume - 12,960 MWh (for Apr-Jun, 2009)

Average Daily Turnover - Rs. 13 cr (for Jan-Mar 2009)

IEX completed 1 year of successful operations with 37,35,000 WH of electricity traded in 1st year

Members added during Quarter:

- BSEB, Welspun Gujrat Stahl Rohren Ltd., Kerala State Electtricity Board, VARRSANA ISPAT LIMITED, JAIPRAKASH ASSOCIATES LTD., Madhucon Sugar and Power Industries Ltd. & Narayanpur Power Co. Pvt Ltd.

Strategies adopted in market

- More penetration into physical market

- Wide participation of smaller players like CPPs, generators (less than 10 MW), Distribution Licensees

Keeping existing members intact through better services

CERC gave in-principle approval to IEX to enter into Term Ahead Market. Plans to launch new products like

- Intra Day Contract

- Daily Contract

- Day Ahead Contingency

- Weekly Contract

- Monthly Contract

- Intra-State Contract

*As on June 30, 2009 since inception**For the Apr-June, 2009 in terms of volume Source : www.powerexindia.com for PXI turnover

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NSEL- OPERATIONAL GROWTH (www.nationalspotexchange.com)

*As on June 30, 2009

NSEL commenced its live operation on October 15, 2008 and since then, it has seen continuous surge in its volume

Number of members: 273*

National Spot Exchange, India's 1st electronic spot exchange, isaiming a daily turnover of up to Rs. 15,000 cr by 2011

NSEL has undertaken various meets like pulses meet, Gold meet atvarious places across the country to create awareness

Products in pipeline – RBD Palmolive, Jeera and Soyabean

Indian Bullion Market Association Limited which is a subsidiary of NSEL has been launched on 30th May, 2009 to create a National level forum for India’s bullion trade and to organize the Indian Bullion trade as unified, structures, credible and transparent market discovering bench mark Indian spot price.

Tied up with 9 banks for clearing operations

COMMODITIES AVAILABLE FOR TRADING AS ON JUNE 30, 2009

Bullion

Gold 1 Kg bar

Gold 100g bar

Silver 30 Kg bar

Intraday Gold 1 kg bar

Intraday Gold 100g bar

Intraday Silver 30 kg bar

Silver Granules 25 kg

Intraday Silver Granules 25 kg

Gold mini

Silver mini

NAFED Cotton ContractGuar SeedLemon TurImported UradRed Areca nut RashiYellow Peas

Castor SeedMaizeChanaSugarPepperCotton Bales

AVERAGE DAILY TURNOVER (Rs. mn) HIGHLIGHTS

Agri-Commodities

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First Pan-Asian Global Commodity derivatives Exchange based out of Singapore- Singapore is among the top 5 International Financial Centre

SMX will act as a proxy to the Asian economies like- China, India (closed economies)- Japan, Australia, Malaysia, Thailand, Indonesia, Vietnam (mostly inward)

KEY HIGHLIGHTS

Appointment of Standard Chartered Bank and RBS Bank as Clearing and Settlement Bank of SMX.Regulatory Framework update : Trading Rules approved by MAS.

OTHER RECENT DEVELOPMENTS

SINGAPORE MERCANTILE EXCHANGE (www.smx.com.sg)

KEY HIGHLIGHTS Offering access to a diverse range of multi asset products within a unique customer centric environment.

Direct access to one of the world’s fastest growing and largest areas of financial liquidity.

Via a multi access trading model, BFX will offer multi-asset class trading of conventional products whilst also pioneering Sharia compliant products within the regulatory framework of the Central Bank of Bahrain (CBB).

BAHRAIN FINANCIAL EXCHANGE (www.bfx.bh)

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NBHC - OPERATIONAL GROWTH (www.nbhcindia.com)

Presence 18 States

Sales & admin offices 73

Number of corporate clients 30

WarehousingStorage capacity 1.4 mn MT

Storage facilities 569

Collateral Management (CM)Commodity under CM (Cumulative) 7 mn MT

Geographical spread 800+ locations

CM Cumulative Funding facilitated Rs. 8750+ cr

Number of farmers under CM 45,000+

No. of Banks associated with 33

Number of commodities funded 115

Quality Assurance & Pest ManagementFunctional QA Laboratories 26

Number of Commodities tested 125

Number of Certificates Issued 80,000+

NBHC is the first and the only company in private sector having granted membership of NAWC (National Association of Warehousing Corporations). NAWC is affiliated to International Federation of Warehousing Logistics Association (IFWLA)

Collateral Management Arrangements during the quarter with Bank of Baroda and Akola Urban Co-op Bank

OPERATIONAL HIGHLIGHTS AS ON JUNE 30, 2009 OTHER DEVELOPMENTS

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atom - OPERATIONAL GROWTH (www.atomtech.in)

Agreement signed with Readers Digest, Paulo Holiday Makers, IHO, Ybrant Digital, Net core, One Touch Solutions, Country Club, Next Gen, Future GeneraliIndia, Iskon Food Relief Foundation, Redbus, Vodaphone, Net Assets, Shift thoughts, Gift 360

Atom has Launched Merchant Acquiring Business (MAB) through PoS (Point of Sale) terminal, for Union Bank of India.

Atom has tied up with Sahayata a leading Micro finance Institute in country for mobile application enabling their field officers to browse information related to disbursement, collections & pre payments using a normal Java–enabled handset. Sahayata has won EDGE Award “Enterprise application” developed by atom technologies.

SMS services enabled for brokers, agreement signed with 9 brokers

Business correspondent project initiated with SBI and PNB

atom IVR TRANSACTION VALUES (Cumulative in Rs. cr) HIGHLIGHTS

atom IVR TRANSACTION VOLUMES (Cumulative)

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SHAREHOLDING HIGHLIGHTS AS ON JUNE 30, 2009

PROMOTERS HAVE NOT PLEDGED ANY OF THEIR SHARESPROMOTERS HAVE NOT PLEDGED ANY OF THEIR SHARES

SHAREHOLDING STRUCTURE* STOCK INFORMATION

FINANTECHFINTECH

FTECH:IN / FITE.BO

45.88

1307.30 (BSE)

1.25**

1900.05 / 404.00 (BSE)

1895 / 382.35 (NSE)

Code : NSEBSE

Bloomberg / Reuters

No. of Shares Outstanding (In mn)

Closing Price***(In Rs. / share)

Market Capitalization***(US$ bn)

52 week high / low (In Rs. / share)

52 week high / low(In Rs. / share)

*As on June 30,2009 **Exchange Rate as on June 30, 09, US$1: 47.87 Rs. (Source: RBI reference rates)***As on June 30, 09

MAJOR INSTITUTIONAL SHAREHOLDERS*

Passport Capital LLC A/C

Reliance Mutual Fund

Acacia Partners, LP

FID Funds Mauritius Limited

Deutsche Securities Mauritius Limited

Morgan Stanley Mauritius Company Limited

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OTHER DEVELOPMENTSHUMAN RESOUCE ANALYSISCORPORATE GOVERNANCECSO INITIATIVES

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OTHER DEVELOPMENTS

Financial Technologies Selects Aegisoft for Client Simulator to Test and Support its FIX-Based Trading Gateway

Client Simulator acts as a fully-featured simulation of buy-side clients for the purpose of testing inbound FIX order flow. Client

Simulator reduces development and QA cycles so that customers can release their trading system faster and deliver the

highest quality software..

Invest In Denmark and Financial Technologies Group sign an MoU under Global Alliance Program

Invest in Denmark will introduce FT Group to financial associations, trade & investment associations, banks, market makers,

clearing companies, finance & economy teams, fund houses, traders, educational institutes, universities and government

representatives. The alliance will also look at promoting FT Group’s ventures in the Danish Markets.

NMCE Signs Up FTIL’s ODINTM for its Front-end Trading Technology

NMCE segment would be integrated in the Financial Technologies’ flagship product ODINTM, which enjoys more than 80%

market share in front-end exchange trading solutions used by brokers, banks and institutions.

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HUMAN RESOURCE ANALYSIS

Employee strength of the Group is 3,024 as on June 30, 2009

HR has implemented automated Core HR system, OGC Software & PMS Software to build a competent HR system

HR has conducted various employee connect events like Republic Day Celebration, Diabetes Reveal Program, Online Contests etc. to maintain a positive work life balance

Skill based Functional training programs and Enrichment programs are regular feature at FT

HIGHLIGHTS

FINANCIAL TECHNOLOGIES EMPLOYEESAS ON JUNE 30, 2009

QUALIFICATION WISE BREAK-UP

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CORPORATE GOVERNANCE

BOARD OF DIRECTORS

Highly accomplished and acclaimed industry leaders with rich and diverse wealth of experience from managing MNC to exchange regulators, bureaucrats, advising GOI

Advisory board members includes:

Mr. Narayanan Vaghul, Chairman

Dr. S. Narayan, Ph. D.

Mr. G. N. Bajpai

Mr. Kiran Karnik

Globally recognized leaders from technology and financial market space

Directors on the board includes:Mr. Jignesh Shah, Chairman

Mr. Dewang Neralla

Mr. P. G. Kakodkar

Mr. C. Subramaniam

Mr. Ravi K. Sheth

Mr. Chandrakant Kamdar

Mr. R. Devarajan

ADVISORY BOARD

Committees consisting of world-class professionals representing an appropriate and diverse mix of skills and experience committees

Audit Committee

Shareholders’/Investor Grievance & Share Transfer Committee

Remuneration and Compensation Committee

COMMITTEES

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CORPORATE GOVERNANCE

CG Policy-Encompasses - transparency, accountability, trusteeship, ethical corporate citizenship and management responsibilities and Insider Trading Dealing Code to comply with the Insider Trading Regulations issued by SEBI.

Audit Committee - Provides assurance on the adequacy of the internal control systems and financial disclosure & has a formal Risk Management Framework

Adherence & compliance with Clause 49 of Listing Agreement

CORPORATE GOVERNANCE STANDARDS

Financial Downloads - 5 year overview of both standalone and consolidated business, Quarterly financials and annual report

Detailed section in the website on Corporate Governance section

My FT - Facility to customize the dashboard and subscribe to SMS & e-mail alerts

Participation in all financial market related investor events and conferences

1800 229666 - 24 hrs toll free phone for Indian Investors and fax facility for uninterrupted investor interaction

INFORMATION SHARING & DISCLOSURE

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Gramin Suvidha Kendra (GSK)More than 4000 farmers are registered on the GSK platform. First all India GSK coordinators meet held at Jalgaon. The meet was sponsored by Aries Agro, Ion Exchange, and WRMS.

Khushi ki KiranMaking difference in the lives of the under privileged by volunteering for community service

Environmental AwarenessOn the occasion of World Environment Day 2009, FT Group along with Attero Recycling launched the first ever E-waste drive for employees on June 5th and 6th 2009, at Mumbai and other locations.

JagrutIn house peer education movement for HIV/AIDS awareness

EDUCATION

CSO INITIATIVES

HEALTH AND SAFETY COMMUNITY INVESTMENT

Blood Donation DriveFT Group of Companies in association with Rotary Blood Bank organized all India Blood Donation Drive on May 23, 2008. The drive conducted at various other locations across cities saw more than 500 units of blood being collected.

Mouth and Foot Painting Artists (MPFA)To provide exposure and publicity to MPFA through various mediums such as corporate gifts, calendars and events

Mumbai Marathon 200930 FT Group employees participated in the marathon, supporting the cause of the NGO -Save the Children India

Reach OutFT Group ‘Give As You Earn’ scheme was launched in the month of May 2009. This initiative lets an employee donate a sum of money from his/her monthly salary to the charity of his/her choice. Employees can also track how your money has been utilized - that too from their desk.

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FINANCIALS FOR QUARTER ENDED JUNE 30, 2009

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FINANCIALS FOR QUARTER ENDED JUNE 30, 2009

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Shreekant JavalgekarDirector - FinanceT: +91-2267152000M: +91 98211 [email protected]

Vaishali KariyaSr. Vice President - Investor RelationsT: +91-22-67152000M: +91 99302 [email protected]

INVESTOR RELATIONS CONTACTS: