The Delhi Stock Exchange Association Ltd (DSE) recorded a sharp erosion in its income stream and decline in profit (excess of income over expenditure) for the year ended March 31, 2001.
Income for the year declined by Rs 4.47 crore or 21 per cent to Rs 17.35 crore during the year ended March 2001 from Rs 22.09 crore last year. The income declined mainly due to drop in listing and renewal fees at Rs 7.39 crore (Rs 8..27 crore). While total expenditure was Rs 14.54 crore compared to Rs 17.09 crore last year. The excess of income over expenditure after extraordinary item (profit in DSE parlance) was flat at Rs 2.78 crore compared with Rs 2.94 crore last year.
The extraordinary item of voluntary retirement scheme accounted for Rs 0.03 crore compared with Rs 2.05 crore last year. Since DSE is a Section 11 company under Income-Tax Act and is exempted from income-tax, it classifies profit as excess income over expenditure.
Meanwhile, the auditors in their report to shareholders, have noted that the "funds, reserves and surplus" are overstated by Rs 6.02 crore.
In the annual report, the auditors have noted: "The amount does not belong to the exchange as the same is not a fund but is in the nature of a liability and as such the reserves and surplus at the balance sheet date are stated higher and liabilities stated lower by Rs 6.02 crore."
Also, the auditors have noted, that the company (DSE) has not maintained proper records to show full particulars including quantitative details and location of its fixed assets.
"The variance between physical balances and book records worked out by them (DSE) was not given effect to as the information contained in records prepared was found wanting in many respects.''
DSE has explained that it had entrusted to an outside agency the task of preparing proper records disclosing information, carry out physical verification of all fixed assets wherever situated and report variances between book balances and assets actually verified.
"Suitable adjustments would be carried out in the books if necessary after the records are fully compiled," DSE has explained to auditors' notes.
The exchange has convened its annual general meeting on October 27 to consider the audited accounts.
