FT Group :: Management Discussion | Revenue Analysis | Profit Analysis

Section I

Section II

SectionIII

Section IV

Section V

Section VI

Section VII

Letter from Chairman & Group CEO

Business & Financial Highlights

Messages from Group Senior Management

Directors Report

Management Discussion & Analysis

Corporate Governance Report

Financials

Section V - MANAGEMENT DISCUSSION & ANALYSIS

www.ftindia.com

ECOSYSTEM VENTURES

Ecosystem ventures are setup to aid and complement the exchange businesses by providing the required upstream and downstream integration which includes clearing, settlement, warehousing, collateral management, credit support, mobile based services and information broadcasting to give end-to-end solutions to intermediaries and market participants. Here below is an overview of the Group’s various ecosystem ventures:

www.nbhcindia.com

NATIONAL BULK HANDLING CORPORATION LTD.

National Bulk Handling Corporation Ltd. (NBHC) is an end-to-end solutions provider in warehousing and bulk handling of agri-commodities. In March 2007, it was certified to ISO 22000:2005, a quality standard for food safety management. The combination of ISO 22000:2005 certification with ISO 9001:2000 has made NBHC a preferred Indian partner of the global food chain participants for end-to-end commodity management solutions.

Today, NBHC has 437 warehouses and 25 quality assurance laboratories. Additionally, the Company has managed over 5,000 storage facilities with close to 6.5 million MT stock of agri-commodities (cumulative) under collateral management with 31 leading public and private sector banks in India. The Company has facilitated over 70,000 Warehouse receipts financing transactions to date worth over US$ 1.67 billion with an asset base of over US$ 2.4 billion.

www.atomtech.in

atom Technologies Ltd.

atom technologies Ltd. (atom) is a digital retail initiative of the Financial Technologies Group. atom has created multiple products and services for mobile payment, mobile banking, IVR based payments and mobile based service distribution network. It is a new age payment processing system enabling ‘any transaction on mobile’. The transactions are routed through banks’ payment gateways using phones. atom uses Interactive Voice Response (IVR) technology, which eliminates manual intervention and ensures foolproof transactions. As on 31st March 2009, FTIL had an 99.37% stake in atom.

In FY 08-09, the total number of transactions of atom touched Rs 5.5 billion. The Company expanded its clientele base to include companies such as Dell, Tata Sky, Dish TV, Sun Direct, ICICI Lombard, ICICI Prudential, Reliance General Insurance, India Today Group, Deccan Chronicle, Magna Mags, Fame Cinemas, Cinemax, Seventy mm, ebay, futurebazaar.com, among others.

New Mobile Payment Services

atom Paybuzz (IVR): A simple and secure payment solution based on IVR technology, which allows users to make payments without revealing their credit card data.
atom Cards: A simple, secure and single-touch payment solution.

Micro-banking platform and merchant acquiring business

atom SEWA: A mobile banking platform for banks and MFIs providing technology-enabled financial inclusion services.
Merchant acquiring business: Bank services and other services are provided on the same terminal, enabling mobile payments through points-of-sale (POS).
Field-force automation (Feet on Street): Availability of real-time data, leveraging on the technology for direct benefits, accountability and better supervision, new and secure payment options for customers, automation, exponential growth prospects, automatic reconciliation, and 24x7 support and security.

www.tickerplantindia.com

TICKERPLANT LTD.

TickerPlant Ltd. (TickerPlant) is India’s emerging global content provider which organises and delivers real-time market data that supports quality decision-making. TickerPlant also provides price performance services to address the middle-of-the-pyramid markets at competitive prices and is designed to deliver integrated solutions that are tailor made to meet one’s business information requirements. The solutions provide real-time market data—on two platforms, mobile and internet—with rich features and functionalities that meet customer requirements. TickerPlant caters to all segments of the financial markets including banks, corporates, broking houses, media, HNIs, etc. Using open technology standards, the TickerPlant framework offers high flexibility to its users while maintaining the highest level of security. As on 31st March 2009, FTIL had a 100% stake in TickerPlant.

www.riskraft.com

RISKRAFT CONSULTING LTD.

Riskraft Consulting Ltd. (Riskraft) is a knowledge initiative of the Financial Technologies Group, focused on providing high quality domain consulting services to the Banking and Financial Services Industry (BFSI) on financial risk management, risk analytics, quantitative techniques and data warehousing for risk management. Riskraft’s technology platform for Risk Based Supervision (RBS) has been successfully launched during the year by a regulator abroad. Riskraft has also been retained by an Indian regulator to develop quantitative models for its internal use. As of 31st March 2009, FTIL had 100% stake in Riskraft.

www.ftkmc.com

FT KNOWLEDGE MANAGEMENT COMPANY LTD.

FT Knowledge Management Company Ltd. (FTKMC) is the knowledge hub of the Financial Technologies Group. FTKMC traces its origins to the erstwhile MCX Centre of Academia Consultancy and Training, a department of MCX. It offers short-term and long-term training programmes and also provides consultancy services. These programmes aim to leverage on the knowledge and domain expertise possessed by the Financial Technologies Group with an aim to impart quality education on financial markets and create financial market specialists. As on 31st March 2009, FTIL had a 100% stake in FTKMC.

www.mcx-sxccl.com

MCX STOCK EXCHANGE CLEARING CORPORATION LTD.

MCX Stock Exchange Clearing Corporation Ltd. (MCX-SX CCL), the clearing arm of the MCX-SX, has been jointly promoted the MCX-SX, MCX and FTIL. MCX-SX CCL, approved by SEBI and RBI, commenced operations on 16th February 2009 and completed its first settlement on 17th February 2009. MCX-SX set up this clearing corporation within six months of commencing operations. MCX-SX CCL is India’s second clearing corporation. MCX-SX CCL has a state-of-the-art risk management system which uses SPAN based Value at Risk (VaR) margining model, apart from various other online and offline risk management tools. As on 31st March 2009, FTIL had a 23% stake in MCX-SX CCL.

RISK MANAGEMENT

FTIL has instituted a risk management policy to ensure that key operational risks are effectively mitigated. Transparency as well as the level of participation in the decision making process has improved through elaborate and effective reporting mechanisms leading to speedy execution. FTIL’s risk management committee (RMC) helps identify, evaluate and mitigate the risk exposure of your Company in a holistic manner.

INTERNAL AUDIT AND CONTROLS

Your Company has appointed V. Sankar Aiyar & Co. as its internal auditor. During the year, your Company continued to implement their recommendations to improve internal controls. Internal auditors’ findings are discussed with the respective process owners and suitable corrective actions are taken according to the directions of Audit Committee on an on going basis to improve efficiency in operations.

OUTLOOK

The financial year 2008-2009 was a year of great achievement for FTIL as it boldly undertook several new initiatives focused on achieving its stated goal of promoting a global exchange network to facilitate price discovery, efficient trade, risk hedging and access to structured finance for its clients.

FY 2009-10 promises to be a defining year in your Company’s history as these initiatives are expected to bring unprecedented rewards in terms of revenues and recognition.

COMPETITIVE STRENGTHS

Brand Equity and Market Leadership

Financial Technologies has established strong brand equity owing to its exceptional track record of unlocking value by offering innovative digital transaction solutions and creating new markets by spawning and incubating new exchanges, new products and investing in strategic geographies, with an aim to promote an interconnected and sophisticated marketplace. It is the market leader in terms of technological innovation, customer service and client satisfaction, and provides end-to-end product solution across the value chain, instead of restricting its domain knowledge to just being a service provider within the process chain.