OTCEI

Your Directors have pleasure in presenting the Eight Annual Report of your Company together with the audited Statement of Accounts for the financial year ended 31 March, 2007.

Financial Highlights

The Directors have not recommended any dividend for the financial year ended March 31, 2007 due to the accumulated losses sustained by the Company. The Company has not accepted any deposits during the year.

Performance

The Directors are pleased to state that your Company has generated the highest ever net profit of Rs 17.41 lacs (previous year Rs 7.08 lacs). A consistent financial discipline and active fund management has helped the Company to achieve this. Your Company has been making all out efforts continuously to reduce its operating costs on one hand and to enhance its income on the other. Consequently, the Company has been able to increase its income by Rs 2.65 lacs from Rs 44.34 lacs to Rs 46.99 lacs in spite of reduction in turnover and reduce the total expenditure by Rs 7.62 lacs in comparison to previous financial year.

Your Company shall continually endeavor to achieve its principal objective of providing greater business opportunities to the Members and Dealers of OTC Exchange of India through trading on the Capital Market Segment of National Stock Exchange of India limited at considerably low cost.

Your company uses the Order Routing System (ORS) software provided and managed by NSE.IT. The software and hardware are continuously monitored to assess the need for up-gradations / modifications / replacements etc. based on capacity required and regulatory changes.

Your Company has observed the high standards of corporate governance. The Chief Executive Officer is in charge of day-to-day management of the affairs of the Company, subject to the superintendence, control and directions of the Board of Directors. At present there are 6 Directors on the Board; the Chairman of the Board is a non-executive Director.

During the financial year 2006-2007, the Board met four times. The names of members of the Company’s Board of Directors, their attendance at the Board meetings and the number of their directorships are set out below:

Sr. No.	Name of the Member	Board Meetings attended during the year	Number of other Directorships (Public/ other companies)	Remarks
1	Shri S. C. Bhargava	4	13
2	Shri B. R. Gupta	3	5	-
3	Shri Om Porwal	4	3
4	Prof. G. Sethu	1	2	Resigned on March 10,2007
5	Shri R B L Vaish	n.a.	1	Appointed on August14, 2007
6	Shri A. Manickavelu	4	1
7	Shri Munesh Goel	4	Nil

The paid-up capital of your Company being less than Rs. 5 crores, the provisions of Section 292A of the Companies Act, 1956 related to Audit Committee are not applicable.

In accordance with the provisions of the Companies Act, 1956, and pursuant to the Articles of Association of the Company, Shri Subhash Chandra Bhargava, Director of the Company, retires at the Eighth Annual General Meeting and is eligible for re-appointment.

As per SEBI’s directive, Shri B R Gupta, Shri R B L Vaish and Shri Om Porwal, Directors, were appointed as Public Representative Directors for one year or next Annual General Meeting whichever is earlier. The Board of Directors has recommended re-appointment of Shri B. R. Gupta, Shri R B L Vaish and Shri Om Porwal subject to approval of SEBI.

a. That in the preparation of the annual accounts, the applicable Accounting Standards have been followed and that no material departures have been made from the same;

b. That they have selected such Accounting Standards and policies and applied them consistently and made fair judgement and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the Profit & loss of the Company for that period;

c. That they have taken proper and sufficient care for maintenance of adequate accounting records in accordance with the applicable provisions of the Companies Act, 1956, for safeguarding of assets and for preventing and detecting fraud and irregularities; and

The Statutory Auditors, M/s. Mittal & Associates, Chartered Accountants, Mumbai, will retire at the conclusion of the ensuing Annual General Meeting and are eligible for re-appointment. The Board has recommended the re-appointment of M/s. Mittal & Associates. as Auditors to audit the accounts of the Company for the financial year ending on March 31,2008. M/s. Mittal & Associates has confirmed their eligibility and willingness to accept the office of Statutory Auditors, if reappointed.

There are no employees within the purview of Section 217(2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975. Your Company has recorded no Foreign Exchange earnings or outgo during the year 2006-2007.

The requirements of disclosure in terms of Section 217(1)(e) of the Companies Act, 1956, of steps taken with regard to conservation of energy and technology absorption do not apply to your Company. Since the Company does not own any manufacturing facility, the other particulars in the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988 are not applicable and hence have not been given. The Company has, however, used information technology extensively in its operations.

The Board of Directors would like to express their gratitude for the support, advice and financial backing from OTC Exchange of India as also from promoter institutions of OTC Exchange of India.

The Board place on record their sincere appreciation and thanks for the valuable support, co-operation and guidance received from Securities and Exchange Board of India, National Stock Exchange of India Limited, NSE.IT, BSNL, Stock Holding Corporation of India Limited, HDFC Bank Limited, UTI Bank Limited, other Banks and all its constituents.

Your Company takes this opportunity to thank the Members and Dealers of OTC Exchange of India for providing their unstinting support and assistance. The Board of Directors also wishes to thank the employees at all levels for their support and contribution made by them towards achieving this results despite severe constraints.

Directors’ Report

Financial Highlights

Performance