INDUSTRY PROFILE AND

COMPANY PROFILE

Chapter 2
Industry Profile And Company Profile
2.1. Industry Profile:
Financial services industry is term used to describe organizations that deal with the management
of money. Financial Services industry is also the term used to refer to the industry which
provides services to the financial market.

The financial service industry is highly fragmented. This industry is sub divided into few
different sectors, in recent scenario there is high growth in these sectors.

2.2. Industry Composition:

The financial services is mainly involved the businesses providing services mainly related to
investment, banking, insurance, risk analysis, accounting, brokerage, real estate, and asset
management.
Insurance firm offer insurance to the other investors in order to cover their risk.
Banks their primary activity is to accept deposit and to lend loans, they can be
commercial, private, national or regional or community level banks.
Brokerage firms act as mediators between consumers and sellers for a variety of
financial assets or products such as debt, equity and other investment services.
Real Estate firms deliver services such as developing, operating, purchasing, selling,
and handling real estate.
The project falls to the stock market sector in finance Service industry.

2.3. History of Indian Stock Exchange The origin Pre Independence.

Indian stock market is one of the oldest stock market in Asia. It started merely in 18 th century
when the East India Company was trading loan securities. In the 1830s, dealing on corporate
stocks and shares in Bank and Cotton presses took place in Bombay. There are only half dozen
during 1840 and 1850 though the trading was broad. In mid-1850the informal group of 22
brokers began trading in Town Hall of Bombay. This still exist in Mumbai. Later in1860 the
brokers were increased to 60. At that point of time Share Mania was started in India then later
250brokers increased further. These informal stock brokers systematized themselves as The
Native Share and Stockbrokers Association which was formally organized as the Bombay
Stock Exchange in 1875.
BSE was moved to the other building near the Town Hall in 1928, the area of land on which the
BSE building now stands (at the intersection of Dalal Street, Bombay Samachar and Hammam
Street in downtown Mumbai) was purchased, and a office block was built and occupied in 1930.
The following is the list of some of the initial members of the exchange and who are still running
their respective business.
Brijmohan Laxminarayan.
Jamnadas Morarjee
D.S.Probhudas & Company
Champaklal Devidas (called Cifco Finance)
2.4. Post-independence to Present:
The Government of India recognized the Bombay Stock Exchange as the first stock exchange in
the country under the securities contracts (Regulation) Act, in the year 1956.

Later in 1992 the most conclusive period took place in the history of the BSE. The scandal by
BSE member named Harshad Mehta manipulated the market by using the loop holes in the
market for this BSE calls for the intransigence. This was resulted in the formation of the National
stock Exchange (NSE), which twisted an electronic marketplace. On November 4 1994 NSE
started trading. By less than a year, NSE gross revenue exceeded the BSE. BSE quickly
automated, but it never caught up with NSE spot market gross revenue. In the next 2 years the
second strategic failure at BSE came. NSE boarded on the launch of equity derivatives trading.
BSE reacted by political effort, with a welcoming SEBI chairman (D.R.Mehta) aimed at delaying
equity derivatives trading. By roughly 5 years the BSE and D.R.Mehta flourished in delaying the
onset of equity derivatives trading.

But then again this trading, and the supplementary shift of the spot market to rolling settlement,
did come along in 2000 and 2001 assisted by another major scandal at BSE involving the
President Mr.Anand Rathi. NSE scored nearly 100% market share in the runaway success of
equity derivatives trading, thus entrusting BSE into clearly second place. Today, NSE has
roughly 66% of equity spot turnover and roughly 100% of equity derivatives turnover.

2.5. Stock Market:

Stock market is a market where both unlisted and listed companies trading take place. It is
different from the stock exchange as stock markets include the stock exchanges of the relevant
country.

The stock market can be or the capital market can be divided into two segments.
Primary market
Secondary market
Primary market:
It is a market that issues new securities in the market. This new issues are done by the
companies to raise the capital in the form of debt or equity. These markets are facilitated by
underwriting groups, which consist of investment banks. This process is called as Initial Public
Offering. The securities issued in this market are trade in secondary market.

Secondary market:
The secondary market is the place which provides liquidity to the investors in the primary
market. If there was no medium to liquidate our position, today They would not invest in any
instrument. The secondary market provides an efficient trading of those securities which are
initially offered in the primary market.

Through the stock exchange trading is done in the secondary market; the stock exchange is the
place where the shares are traded in an organized manner by the buyers and sellers.

Current Scenario:
Beside with India, the other who are participating in the race of investment between the
developing economies are china, Singapore, Malaysia, Russia and Brazil. Most of them
are competing for contracts from USA and Europe. Capital market is the Centre of
arrangement that provides facilities for buying and selling of long term financial
assertions. It is the market where transactions are made in long term securities such as
stock and bonds. The participants of this market includes various financial institutions,
mutual funds, agents, brokers and other leaders of long term debt and equity capital.
Stock market is evaluated BSEIT, BSEFMCG, BSEHC, TCH, BANKEX, BSECG,
AUTO, METAL and OILGAS. After liberalization, BSE has become the indicator for
economy growth its trend and its variations.
In 2011, it has been propounded that efficient market theory is really effective in real
situation. Its the form hypothesis has been the issues of research for all the researchers.
 In 2013, the listings of corporate on various stock exchanges have emotional impact on
the liquidity in the market. Risk in the stock market cannot be eliminated but that can be
measured with the help of volatility and variability of preceding trends.
In 2015, the studies that stock marketplace is not that much strong that it can affect the
real GDP growth of the country. Because only 2% of population in India is intricate with
the stock market investment.

COMPANY PROFILE

Company Profile:
Introduction of Alpha Commodities:
It was started in 1948, they have admirably proven their capability in sock market by providing
expert services across various asset classes for investors with varied investment needs. In the
field of equity and related products (Retail and Institution), Currencies, Commodities, Debt
instruments, corporate finance, investment banking, wealth management, SLB and Third Party
Product Distribution they have marked it has strong presence.

They provide valuable services to more than 80,000 satisfied customers with its extensive
network having indelible presence across more than 150 cities India, through 30 branches and
over 850 Business Associates, with head office at Nariman Point, Mumbai.
The customized research and advisory services are given to is customers and business associates
through its strong and advisory team providing both fundamental and technical research.
From past decade its research team has proven an excellent performance track record.

They have done excellence in the IT industry systems and network trades requiring very high
speed. Alpha commodities trading platforms (offline and online) are extremely user friendly and
time tested with advance charting system to meet every individual customers needs integrating
24x7 systems support. Its cutting edge robust risk management system across all segments of the
market enables us to provide its customers and business associates with required leverages to
facilitate trades in a systematic and organized manner on a real time basis. Its 24x7 customer
service platform with then defined turnaround time is dedicated and monitored to provide
customer delight. Its energetic, talented, professional and experienced team of over 400 members
in India continuously renders to provide better services to its customers and business associates
through innovative processes across all functions to its customers and Business associates
through innovative processes across all functions of its business. All these and more makes
Alpha commodities the most preferred business and brokerage house.
Multi-dimensional financial services of Alpha Commodity group work in the field or equities
markets, debt markets, corporate finance, investment banking, merchant banking, Theyalth
management and commodities..
Alpha securities limited and its associates enjoy the following registration and membership.
Member of MCX SX and NSE currency.
Member of commodity exchange MCX, NCDX and DGCX.
Membership of BSE and NSE.
Category I merchant bankers with SEBI.
AMFI registered all India Mutual distributors.
Member of NSE for interest rate futures.

Objectives of the Organization:

All the parties intricate will be defined and assign the responsibilities
Create a clear understanding for all involved parties of the investment goals.
Provide basis for assessing investment results.
The long term portfolio.
 Establish the relevant investment horizon for which the assets will be managed.
Furnish ongoing over sign of investment by the finance committee.

Values:
The companys dense foundation and strong balance sheet adds degree of security and
firmness to the clients.
ALPHA looks at long run customer relationship.
ALPHA understands their clients financial scheduling, requirements and needs
according to their assets and liability.
ALPHA put forward their suggestions clients where to invest and where not to.

Networks:
The Company has a network of 414 outlets in 147 cities in India with 67,500 customers
registered in retail. It has tied up Bajaj Alianz, one of the leading insurance companies in
India for distribution of their insurance products. In a 200 crores deal, Alpha forex and
Thomas Cook India merged for the foreign exchange space in India.
Largest client base of 80,000 registered customers in broking.
ALPHA Finance (NBFC) is registered with RBI and listed on BSE.
Established in 1948. The company went public in 1986.
Over-all broking turnover of Rs. 604 billion in FY15.
Key businesses include equity broking and distribution, secure income, merchant banking
and treasury.

Vision of the Company:

Our vision is to be a leading investment company, providing investment products and services
for the local and International Market.

Mission of the company:

To achieve good investment returns for both our shareholders and clients and to increase the
productivity by diversifying our investments. Providing Complete financial care driven by the
core values of diligence and transparency.
 Management or Board of Directors:
Mahendra Doshi Chairman
Sayanta Basu Director
Pratik Doshi Director
Milan Bhise Director
Vineet Suchnati Director
Hariharan Padmanabhan Director

Area of Operations and Business

Center: Chhattisgarh, Madyapradesh, Bihar, Jharkhand
South: Kerala, Karnataka, Tamil Nadu
Theyst: Gujarat, Rajasthan, Maharashtra, Goa.
East: Assam, Meghalaya, Tripura, Arunachal Pradesh, Manipur, Nagaland, Sikkim
North: Delhi, Haryana, Himachal Pradesh, Punjab, Uttaranchal

Achievements:
Strong network of 1350 sub brokers and 40 divisions.
Graded an No.2 agreed by prime league tables the replacement of short-term debts,
commercial papers and ranked No 11 for placement of long term debts.
ALPHA stands on the panel of almost 200 PF/pension trust across India.
Network of 1180 outlets in tier II and tier III cities (more than 150 cities and
towns)across India
Organisation Structure:
 Product and service profile:
Equities
Commodities
Depository services
IPO
Derivatives
Currency
Mutual Funds
Wholesale Debt Market

Commodities:
As commodity turn out to be an increasingly attractive investment option, they proposed a wide-
ranging bouquet of client-friendly services in the growing commodities market. Commodities
have continuously been the basis of world trade and, they look to guide and contribution to them
in all probable ways to help to them in endeavors in this market. Besides offering regular
spectrum of services, expected from a high standing company, Alpha Commodities also offers
delivery based commodity trading. They have multiple sale Tax/Vat registration numbers in
different states of India, enabling us to execute systematic delivery based transaction on behalf of
our clients thereby making us one of the leading commodity brokers in the country.

Wholesale Debt Market:

Alpha commodities is a fellow of NSE and BSE for wholesale Debt Market and its category I
Merchant Banker registered with SEBI. It is also member of NSE for interest rate futures. Alpha
commodities was adjudged amongst Indias top 3 brokers for the corporate bonds in the year
2010-2011.
It is dynamically engaged in Primary, Secondary and advisory services like NCDs Bonds, CDs,
Securitized papers & loan syndication, G-sec, T-Bills, state loans, corporate Bonds, CPs, CDs,
PTCs & special GOI fertilizer / oil / food foods, Advising & deal execution for provident funds,
pension & gratuity trusts.

Insurance Products:
Insurance is the equitable transfer of the risk of a loss, from one entity to another in exchange for
payment. It is a form of risk management mainly used to hedge against the risk of a contingent,
uncertain loss.

Government securities:
Government securities promise repayments of principal upon maturity as Theyll as coupon or
interest payments periodically. Examples of government securities include savings bonds,
treasury bills and notes. Government securities are usually used to raise funds that pay for the
governments various expenses, including those related to infrastructure development projects.
Because they are low risk, the return on the securities is generally low.

Corporate bonds:
A corporate bond is a bond distributed by a corporation. It is a bond that a corporation issues to
raise money effectively in order to enlarge its business. The period is usually applied to longer
term debt instruments, usually with a maturity date falling at least a year after their issue date.

Depository Services:
Alpha Commodities Depository Services offers Demat facilities to individuals and business
investors as a Depository Participant with the Central Depository Services(India)limited(CDSL).
With greater experienced team of specialists, backed with sophisticated technical support, and a
national network of Business Associate & Regional Offices pan India, They ensure quality and
convenience at all times. Alpha Commodities online depository service offers to them paperless
and budget effective ways to hold the investments.

Portfolio Management services:

The Indian mutual fund industry, yet still small in evaluation to the scope of the Indian economy,
Indian economy offers domestic and global investors, both big and small, an opportunity to
invest carefully and securely, at a compact cost, in a divergence series of securities, spread across
a varied range of industries and sectors.

Mutual Funds
The Indian mutual fund industry, although still small in evaluation to the size of the Indian
economy, Indian economy offers domestic and global investors, both big and small, an
opportunity to invest carefully and securely, at a compact cost, in a divergence series of
securities, spread across a varied range of industries and sectors. Investments through Mutual
funds are one of the safest, stress-free and appropriate ways of making successful investments.
Dedicated Mutual fund desk provides professional advice assisted services thus giving the edge.
Mutual funds also propose ideal platform to participate in the equity and Debt market indirectly
through professional administration of the Mutual fund. Alpha Commodities provides features
designed to help make mutual fund investing convenient. They offer systematic investment
strategy through our tailor made portfolio advice, servicing to the needs better and help to them
make educated about the investment conclusions.

Currencies
Alpha Commodities offers Currency Future Contracts on both the exchange in USD/INR,
EUR/INR, GBP/INR and JYP/NR pairs. Currencies Options in the USD/INR pair are also
offered on the NSE and have recently been introduced on MCX-SX with a reasonable bid ask
spread. Currency derivate is a great option for hedgers Arbitrageurs, Speculators and Investors to
protect their interest against Exchange Rate Fluctuations. Arbitrageurs get the opportunity of
trading in Currency Futures by taking advantages of price different in the markets.

Equities:
Backed by strong research and advisory team, most preferred trading platform and seamless
connectivity, Alpha commodities provides equities investment and trading facilities which is
They will appreciated by all our business Associates and customers . They have very strong
presence in retail as they as institutional equity business. Alpha commodities They are-equipped
regional and centralized teams with dedicated relationship managers and customer service
executive provide maximum customer satisfaction. To them can access a multitude of recourse
like live quotes, charts, alerts, advice, instant fund transfer facility etc.

Derivatives:
Successful investment strategy is simple let to themr profits run, and cut to themr losses
quickly. Successful our Derivatives advisory, to them have the advantage of high leverage and
thereby can participate in making higher returns from the respective stocks. Also, using our
various strategies, clients can mitigate their risks to a large extent. Our focus in derivatives
ranges from plain vanilla option strategies to complex option strategies. Our core team of Alpha
commodities advisory can customize option strategies based on to themr portfolio queries.
Derivatives repots also keep to them updated information and in depth analysis of the F&O
segment. Our product ranges from daily derivatives view, special reports such as rollover reports,
position building an much more.

SWOT ANALYSIS:

Strengths:
Original research: According to the analysis based on facts, theories, ideas which have
not yet been subject to peer review by experts which are reliable publication.
The company has an integrated technology: It is a converged solution with the problem
relating to system and technology, the technology as a lot tool to enhance the learning are
in a multidisciplinary and effective integration to achieve the information in timely
manner analyze and present professionally.
One stop shop for all the clients: It is the company which have umbrella of services to its
customers where they can get all they need in just one shop.
 Pan Indian distribution network: It is an Act where the government provides the benefits
to the employees who are physically handicapped or lost their lives for working with the
company.
Company had dedicated research team who looks at the throughout the day where to
invest and where to sell.
Company has positive cash flow for last three years i.e, the total assets in 2011 is 3220
million, in 2012 it is 3580 million, and in 2013 is 2598 million.
A good reputation and a strong brand name in financial sector.
It has a strong balance sheet with total assets rounding to 1300 million for last three
years.
Company has a growing turnover and profitability as per balance sheet analysis.
Sound financial condition gives the advantage over the competitors as they have high
profits and turnover as compared to other firms.

Weakness:
Insignificant Presence in institutional segment
Turnover of employees: At ALPHA is it the process of replacing one worker to other
when it comes to performance or any other reason within a given time period. This leads
to the higher rates of employees.
High cost structure in IT department: Investment on costly softwares and programming
devices increases the cost for the company.
Lack of usage and insufficient telephone devices to communicate with the customer and
clients.
Poor presence in the worlds; largest markets.
Lack of investment in R and D
department below the industry
average.
Opportunities:
Future changes in the personal taxation rules can impact on insurance sales.
Market growth for the firms main product and services.
Falling interest rates with the companies favorable percentage.
Changing of customer habits.
Economy is expected to increase by 4% next year.
The new introduction of financial bankers who are keen to fund expansion.

Threats:
New or increase competition is one of the major threat to the company because of free
government policies and regulations make other firms to enter into the market.
Insurance plans change according to time as per the IRDA interests of the policy holders
to regulate and promote the growth of the insurance.
Adverse government policies: The change in economic and political policies or laws
affects the business adversely which results the negative outcome of financial condition.
Economic showdown: The state where the GDP growth slowdowns but does not decline
where analysts do not consider a slowdown but recession of unemployment.
Litigation: It is also known as legal funding and a third party funding, which enables the
party to litigate or arbitrate without having any pay for it.
Lenders reducing credit lines or increasing charges.
Many online competitors who are teaming up and expanding the distribution channels
and customer base.
 Future Growth and Prospects:
The future prospects and profitability of the company in various fields is:

Leasing and hire purchase.

The leasing and hire purchase business of the company has been consistently growing
and it intends to tie up major lease/hire purchase business.

Capital Market:
The company has made an application to over the counter exchange of India (OTCEI) for
sponsorship which is still under consideration. The company is also involved in
secondary capital markets by the way of portfolio management.
Trade Finance:
In view of the scarce bank finance there will be greater reliance on funding from non-
banking sector to meet the working capital and project finance requirement. Bill
discounting will be increase by the infusion of additional Rs.4 Cr.
Fully Fledged money changer (FFMC)
The company has applied for license for operating fully fledged money changing centers.
Due to changing economic environment will lead to an accelerated flow of tourists and
increase in business for the company.
Financial advisory Service:
The company for sees scope in project counseling and advisory services in areas like
acquisitions and mergers and introduction of new financial instruments.
Portfolio management:
 The company has recruited professionals as this activity is expected to increase.

Financial Statements:

Meaning of financial statement:

Financial statement analysis is a process of evaluating relationship between component parts of
financial statement is to obtain a better understanding of firms positions and performances.
According to Myer, Financial statement analysis is largely a study of the trend of these factors
as known as show in a serious o statement.

Objectives of financial statement analysis:

To analysis the financial status of the business concern.
To analysis the long term liquidity of its fund.
To know the real meaning and significance of financial data.

Techniques for the financial statement analysis:

Ratios:
Meaning of Ration analysis
Analysis of financial statement with the help of Ratio is termed as Ratio analysis. Ration
analysis is a widely used tool of financial analysis. It can be used to compare the risk and return
relationship of firms of different sizes. It is defined as the systematic use of ratio to interpret the
financial statement so that the strength and weakness of a firm as well as its historical
performance and current financial condition can be determined.
Current Ratio:
This ratio is also called Working Capital Ratio. It is used to assess the short term financial
position of the business concern. In other words, it is a measure of the companys short term
solvency; it indicates the rupee of current asset available for each rupee of current liability.
Apparently, higher the current ratio, the more protected are the short term creditors and voce-
versa. Conventionally, a current ratio of 2:1 (current asset twice of current liabilities) is
satisfactory. The formula for computation of current ratio is given below:

Current Ratio: Current asset

Current liability

Current Ratio Of Alpha Commodity Private Limited

Table 2.21 Showing current ratio of ACPL during past 5 years: (Rs.in cr)

YEAR CURRENT ASSET CURRENT LIABILITIES CURRENT RATIO

2009-10 123.55 42.25 2.92426

2010-11 216.90 31.51 6.883529

2011-12 207.34 9.47 21.8944

2012-13 280.81 26.17 10.73022

2013-14 207.52 7.70 26.9506

Chart 2.22 showing current ratio of ACPL during past 5 years.

INTERPRETATION
The above graph represents the consistency of the current ratio from 2009-2014. In the year 2009
10 it has 2.92 and 2010-11 it has slightly increase 6.88 and again increases in 2011-12 it
increase to 21.89 butit will decrease in the next year for 10.73 in 2012-13 and in 2014 it has
again highest increases to 26.95 this variation shows that current assets and current liabilities in
alpha commodities slight variable in year by year.

Net profit ratio:

It established relationship between net profit after tax and sales. And it indicates the efficiency of
the management. In manufacturing, administrative, selling and other activity of the firm. This
ratio tells the overall measure of firm profitability.
The Net profit ratio is calculated as:
Net profit ratio = Net profitability / sales X 100.
Net profit ratio of acpl:

Table 2.23 Showing net profit ratio of ACPL during past 5 years: (Rs.in cr)

YEAR NET PROFITABILITY SALES NET PROFIT RATIO

2009-10 19.22 31.77 60.49

2010-11 26.12 52.24 50

2011-12 4.86 21.01 23.1318

2012-13 6.75 34.55 19.5369

2013-14 7.48 35.25 21.219

Chart 2.24 Showing Net profit ratio of ACPL during past 5 years.

INTERPRETATION:
The above graph represents the net profit ratio of the ACPL from the 2010 to 2014. In the year
2009 10 it has 60.49 and 2010-11 it is 50 it decreased compared to previous year. After that it
again decrease very negatively like 23.132, 19.5369 and in the year 2013-14 slightly increases
for the years 2012 2013 and 2014 respectively. This shows that manufacturing expenses and
sales of the organization has then to well relation with bad position.

Gross profit ratio:

Gross profitability ratio is a profitability ratio that shown the gross profit as a percentage of total
net sales revenue. It is popular tool to evaluate the operational performance of the business. It is
computed by diving the gross profit figure by net sales and is expressed in percentage.

Gross profit ratio = Gross profit / Net sales X 100.

The basic components of the formula of gross profit ration are gross profit and net sales. Gross
profit is equal to net sales minus cost of goods sold. Net sales are equal to total gross sales
returns inward and discount allowed. The information about gross profit and net sales is normally
available from income statement of the company.

Gross Profit Ratio Of ACPL:

Table 2.25 showing gross profit ratio of ACPL during past 5 years: (Rs.in Cr)

YEAR GROSS PROFIT NET SALES GROSS PROFIT RATIO

2009-10 23.27 31.77 73.24519

2010-11 36.21 52.24 69.3147

YEAR GROSS PROFIT NET SALES GROSS PROFIT RATIO

2011-12 14.75 21.01 70.20466

2012-13 27.08 34.55 78.37916

2013-14 26.36 35.25 74.78014

Chart 2.26 showing gross profit ratio of ACPL during past 5 years.

INTERPRETATION
The above graph shows the gross profit ratio of the ACPL and it has 73.24519 in the year 2009-
10 and remaining years 69.3147, 70.20466, 78.379, 74.78014 for the years 2009-10 and
remaining years 2010-11 it decreased compare to the previous year. This shows that organization
net sale and direct expenses of the organization.
Return on Net worth ratio:
The net worth ratio, first compile the net profit generated by the company. The profit figure used
should have all financing cost and taxes deducted from it, so that it accurately reflected the profit
available to shareholders. This is the numerator in the formula. Next, and together the capital
contribution made by shareholders, as well as all retained earnings, this is the denominator in the
formula the final formula is,

Net after interest and tax X100

Shareholders fund

Return On Net Worth Ratio Of ACPL

Table 2.27 showing return on net worth ration of ACPL during past 5 years: (Rs.in.Cr)

YEAR NET PROFIT AFTER SHAREHOLDER RETURN ON

INTEREST AND TAX FUND NETWORTH RATIO

2009-10 19.22 13.08 146.942

2010-11 26.12 13.08 199.69

2011-12 4.86 13.08 37.156

2012-13 6.75 12.34 54.70016

2013-14 7.48 12.20 61.31147

Chart 2.28 showing gross profit ratio of ACPL during past 5 years.

INTERPRETATION
This graph shows the return on net worth ration of ACPL and in the year 2011-12 it decreased to
37.156. Remaining years it increased by consistently by 54.700, 61.31147 for the years 2012-13,
and 2013-14 respectively and 2010-11 shows highest net worth ratio. This ratio shows that the
relationship between shareholders fund and net profit after tax so in ACPL net worth ratio has
moderate position.