KJMC GLOBAL MARKET (INDIA) LIMITED
ANNUAL REPORT 2004-2005
I have great pleasure in presenting before you the Annual Report of your
Company for the year ended 31st March, 2005.
The Indian economy is riding on the crest of a high wave of optimism. As
per the advanced estimates of the Central Statistical Organisation (CSO),
the real, GDP growth during 2004-05 is likely to be around 6.9 percent
which is more robust than what was expected in the fight of deficient
monsoon and rising oil prices. This has brightened the Country's macro-
economic prospects in the medium term.
The economy proved its resilience with the Industrial Sector and Services
segment presenting a robust performance and posting a growth of 8.3 percent
and 8.6 percent, respectively.
The year 2004-05 witnessed the upturn in the industrial sector which was
supplemented by the buoyancy in the exports, encouraging domestic
investment and an enhanced level of consumer confidence. The Industrial
Sector's contribution in the growth of the economy escalated from 17
percent in 2003-04, to 26 percent in 2004-05.
A positive result of the accelerated industrial activity is the growth in
the capital goods sector which continued to show a double-digit growth
since the last 3 years. This exhibits signs of capacity expansion in the
Indian industry aided by growing consumer demand.
Though agriculture recorded much lower growth of 1.1 percent in 2004-05,
this did not have any perceptible adverse impact on the economic
environment. This is a possible pointer to the gradual insulation of the
industrial sector from the uncertainties of monsoon.
The Services Sector continued to project its increasing predominance in the
Indian economy and occupy the status as the main propeller of the economy
with a growth of 8.6 percent in 2004-05.
The growth in invisible receipts (from travel earnings, software exports
and remittances) increased by 37.5 percent which, coupled with the growth
of 35 percent in software and services exports, have helped finance a
significant part of the trade deficit of our Country.
Gross domestic savings increased to 28.1 percent of the GDP at current.
prices and the household sector continued to be the significant
The introduction of the Fiscal Responsibility and Budget Management (FRBM)
exercise introduced by the Government met partial success, although both
fiscal deficit and revenue deficit exceeded revised budget estimates. The
positive side of this new measure is the in, principle acceptance of the
need to exercise conscious control over both fiscal and revenue deficit.
Market borrowing of the Government is estimated to be Rs.1,03,791 crore in
2005-06, compared to Rs.45,943 crore in the previous financial year.
Despite the mandatory level of Statutory Liquidity Ratio (SLR) being 25
percent of the commercial banks' Net Demand & Time Liabilities (NDTL),
commercial banks still hold government securities at a level of 38.5
percent of NDTL in March 2005. Commercial banks may have to explore ways of
reducing the excessive portfolio of government securities to partially
fulfill the demand for credit.
For the present, however, sufficient liquidity estimated to the tune of
Rs.83,000 crores as at the end of March 2005 is available in the system.
Despite the excessive liquidity, interest rates have moved up marginally,
possibly apprehending further uncertainties on the oil-price front, coupled
with an increased appetite for domestic credit demand.
The mild inflationary environment in the beginning of the year with an
inflation rate of 4.5 percent accelerated to the peak of 8.7 percent at the
end of August 2004. However, due to the timely monetary measures taken, the
inflation rate declined to 5 percent by March 2005.
Oil prices continue to be a came of concern for both, developed and
developing economies. The US Federal Reserve raised its federal funds rate
in stages from 1 percent to 2.75 percent in 2004-05. However, it is
expected that the overall inflationary outlook in the medium terra is
unlikely to give rise to any alarming developments on the price front.
Reflecting improved fundamentals, capital inflows have been buoyant. The
equity markets turned upbeat and witnessed a sustained and broad-based
rally with increasing Foreign Institutional Investor (FII) inflows. The
sensex touched a historic high of 6915.05 on 08.03.2005.
Foreign Institutional Investors (FIIs) have continued to pump in
significant amounts into the domestic markets. Al investments in the equity
markets during 2004-05 stand at a level of US$.7.11 billion.
The world output is estimated to have risen by 5.1 percent in 2004,
assisted mainly by the robust growth in developed countries and emerging
economies such as China and India. The International Monetary Fund (IMF)
has projected a growth of 4.3 percent in world output which is well below
the level of 5.1 percent in 2004.
The re-emergence of current account deficit in our Balance of Payments is a
welcome sign for the growth of the Indian economy, as import of capital
goods is taking place to improve capacity and modernize the Indian
The economy faced considerable net outflows under Non-Resident Indian (NRI)
deposits due to the then existing uncertainties on taxing of the interest
on these deposits. However, with the annual budget for 2005-06 laying such
tears to rest, it is likely that the outflow may not only be stemmed but
also reversed during the year 2005-06.
The Foreign Direct Investment inflows have continued to favour India, as a
result of which such investments increased to US$ 4.1 billion during April-
December 2004, from US$.3.4 billion in the same period of the previous
About Your Company
As part of your Company's philosophy - to be the one stop mart for all the
financial needs of all the segments of the corporates, we are continuously
expanding the range of services on offer. The continuous quest for
increasing the profits is leading us to find newer revenue streams.
We being in service industry, our human capital is the most valuable asset.
Our human resources practices emanate from the premise that the
satisfaction of the 'external customer' is solely dependent on the
'internal customer'. The management of human resources thus converges on to
provide a 'satisfying work environment, matching the staff profile with the
job profile and development of skills through training. Motivation plays an
important role in employee functioning and thus a comprehensive employee
motivation scheme has been put in place to propel our employees to excel.
Keeping its 'Mission' and 'Vision' as the guiding principles, your Company
is focusing on its core competencies. In the years to come the 'Mantra' for
your Company would be to spot and exploit all opportunities, to harness
investments in technology and human capital to achieve higher level of
efficiencies and customer satisfaction.
This year, we rededicate ourselves in increasing the stakeholders' value
with enshrined principles of Corporate Governance. We have done the
groundwork for creating a robust and enduring structure which will support
the business model and take on every challenge in the ever-changing
business environment. The results will be visible in the years to come. We
solicit your support in our journey towards excellence.
With warm regards,