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NATIONAL STOCK EXCHANGE OF INDIA LIMITED
Nineteenth Annual Report
BOARD OF DIRECTORS
Dr. Vijay L. Kelkar : Chairman
Mr. C. Achuthan
Mr. Anjan Barua
Mrs. Ranjana Kumar
Mr. A.P. Kurian
Dr. Rajiv B. Lall
Mr. S. B. Mainak
Mr. Y.H. Malegam
Mr. S. B. Mathur
Dr. K.R.S. Murthy
Dr. R.H. Patil
Mrs. Bhagyam Ramani
Dr. V.A. Sastry
Mr. Deepak Satwalekar
Mr. Ravi Narain : Managing Director
Ms. Chitra Ramkrishna : Joint Managing Director
MANAGEMENT TEAM*
Mr. J. Ravichandran : Director (F&L) & Company Secretary
Mr. R. Sundararaman # : Senior Vice President
Mr. Yatrik R. Vin : Senior Vice President
Mr. R. Nanda Kumar : Senior Vice President
Mr. Ravi Varanasi : Senior Vice President
Mr. Vidhu Shekhar : Vice President
Ms. K. Kamala : Vice President
Mr. Nirmal Mohanty : Vice President
Mr. Hari K : Vice President
Mr. Suresh Narayan : Vice President
Mr. T. Venkat Rao : Vice President & Head-Northern Region
Mr. Chandrashekhar Mukherjee : Vice President
Mr. Suprabhat Lala : Vice President
Mr. Mahesh Haldipur : Asst. Vice President
Mr. C.N. Upadhyay : Asst. Vice President
Mr. Arup Mukherjee : Asst. Vice President
Mr. R. Jayakumar # : Asst. Vice President
Mr. Ravindra Mohan Bathula : Asst. Vice President
Ms. Nisha Subhash : Asst. Vice President
Mr. Nilesh Tinaikar : Asst. Vice President
Ms. Rana Usman # : Asst. Vice President
Mr. Mayur Sindhwad : Asst. Vice President
Mr. Nagendra Kumar # : Asst. Vice President
Mr. Vitthal More : Asst. Vice President
Mr. Sandip Mehta : Asst. Vice President
Mr. Sumit Tyagi : Head- Sales & Marketing
Mr. Amol Mahajan : Asst. Vice President
Ms. Divya Malik Lahiri : Asst. Vice President
Mr. Rehena D’sauza : Asst. Vice President
Mr. Sunitha Anand : Asst. Vice President & Head Southern Region
AUDITORS : M/s. Khandelwal Jain & Co.
Chartered Accountants
12-B, Baldota Bhavan, 5th Floor
Maharshi Karve Road
Churchgate, Mumbai-400 020
REGISTERED OFFICE : “Exchange Plaza”
Plot C-1, Block ‘G’
Bandra Kurla Complex,
Bandra (East), Mumbai- 400 051
REGISTRAR & TRANSFER AGENTS : Link Intime India Pvt. Ltd.
C-13, Pannalal Silk Mills Compound
L B S Marg, Bhandup (West)
Mumbai-400 078
# on deputation to NSCCL
NATIONAL STOCK EXCHANGE OF INDIA LIMITED
Nineteenth Annual Report
DIRECTORS’ REPORT
To,
The Members,
Your Directors have pleasure in presenting the Nineteenth Annual Report and Audited Accounts of the Company
for the year ended March 31, 2011.
Table 1
Sr. No. Exchange Contracts traded
during 2010
(in millions)
1 NYSE Liffe Europe 291.27
2 National Stock Exchange of India 175.67
3 Eurex 150.75
4 JSE 78.76
5 Korea Exchange 44.71
Source: WFE.
1.1.2 Index Options
NSE continues to be ranked as the 2nd largest exchange in the world in index options. The details of top 5
exchanges in index options are given in Table 2 below:
Table 2
Sr. No. Exchange Contracts traded
during 2010
(in millions)
1 Korea Exchange 3,525.90
2 National Stock Exchange of India 529.77
3 Eurex 342.92
4 Chicago Board Options Exchange 270.01
5 Taifex 88.91
Source: WFE
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The turnover on WDM segment decreased in the financial year 2010-11. The turnover decreased from
Rs 5,63,815.93 crores in 2009-10 to Rs 5,59,446.75 crores in 2010-11 registering a decline of 0.77%. The average
daily turnover decreased to Rs 2,255.83 crores in 2010-11 from Rs 2,359.06 crores in 2009-10.
The business growth on the WDM segment of the Exchange is presented in Figure 1.
Figure 1
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The changes in turnover statistics over the preceding year are presented in Table No. 11
Table 11: Turnover Statistics on CM segment
Sr. Details 2010-11 2009-10 %Rise/(Fall)
No. in 2010-11
1 Total Number of trades (in lakhs) 15,507 16,816 (7.78)
2 Total no. of shares traded (in lakhs) 18,24,515 22,15,530 (17.65)
3 Total Turnover (Rs. Cr.) 35,77,410 41,38024 (13.55)
4 Market Capitalisation at the end of year (Rs. Cr.) 67,02,616 60,09,173 11.54
5 Turnover of S&P CNX Nifty Securities (Rs. Cr.) 16,89,977.59 21,46,022.84 (21.25)
6 Total number of listed companies. 1,574 1,470 7.07
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1.6.1 Comparison of the close prices of the NIFTY Near Month Futures Contract (F&O segment)
with the underlying movement of the NIFTY Index (Cash segment) along with the Daily
Traded value of the F&O segment (Figure 10):
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Nineteenth Annual Report
1.6.3 (b) A graphical presentation of monthly product- wise contribution is given below (Figure 11):
It may be observed that contribution of Index Option to Total Turnover has increased from 54.17% in April 2010
to 71.18% in March 2011.
1.6.4 Institutional Retail & Proprietary Investors - Turnover Analysis (Table 14):
No. Year Institutional investors Retail Proprietary
Average Percentage Average Percentage Average Percentage
Gross Contribution Gross Contribution Gross Contribution
Traded Traded Traded
Value Value Value
(Rs. in Crs.) (Rs. in Crs.) (Rs. in Crs.)
1 2009-10 3,97,743 13.53 14,93,247 54.81 9,31,287 31.66
2 2010-11 6,18,641 12.69 23,96,870 49.17 18,59,193 38.14
It may be observed that average contribution of proprietary category has increased in the year 2010-11 as compared
to the year 2009-10.
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1.6.5 Comparative analysis of the Traded Value in the F&O segment with the Cash segment (Figure 12):
The ratio of F&O segment turnover to cash segment turnover was 8.18 for the year 2010-11 as compared to 4.27
for 2009-10.
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The share of Index options among all other product types in equity derivatives segment on NSE rose to 59% on
a daily average in 2010 from less than 50% in 2009. The Exchange took some initiatives in building up the
options volume and making it a preferred product choice for traders. After rationalising the daily price range of
options based on options delta value, the Exchange further optimised the price range by increasing the minimum
price range from Re. 1 to Rs. 3. Considering the market demand in popular Nifty options, the Exchange also
revised the strike scheme of Index Options and increased its minimum index coverage percentage from 10% to
20% for all short term options and from 20% to 40% for all Nifty long term options.
The equity stock options volume in the Exchange has also witnessed a steady and substantial rise in 2010 as
compared to 2009. Approximately 28 million contracts were traded in 2010 over 14 million contracts in 2009
showing a strong 50% increase in volumes.
January 2011 Development in Stock Options:
The Exchange introduced Stock options with European style of exercise from January 2011 expiry onwards.
With this, all Index and Stock options now follow European exercise method only.
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Figure 16
AVERAGE VOLUME AND OPEN INTEREST IN CURRENCY DERIVATIVES
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matter to the Regulator. The Exchange has implemented series of pattern recognition models which unearth
manipulative activity such as Front running, insider trading, circular trading, etc.
2. SERVICES TO INVESTORS
The Exchange attaches high importance to investor safety and investor empowerment. Towards this direction, in
order to spread awareness about market, products, operational aspects of market, etc., the Exchange regularly
conducts investor awareness programs in various cities of the country. During the year, the Exchange conducted
1,382 programs. During the year, the Exchange also issued 371 investor alerts in 37 newspapers and in 8 languages.
Important Investor Awareness message showcasing various do's and don'ts were broadcasted over electronic
media in form of animation films in popular TV shows and through investor friendly messages on FM Radio
channels.
In addition, to enhance general safety levels, the Exchange has started a new service to disseminate trade information
directly to investors through emails and sms on their registered email ids and mobile numbers. The Exchange has
also has a user friendly trade verification facility on its website wherein common investor can check the trades
that have taken place in their account.
In order to reach out to a mass, the Exchange has initiated the idea of investor education and financial information
on wheels wherein Rajdhani Express is being used to disseminate information on markets, products, flagship
index, etc., to help investors understand how to use product & protect themselves. This train is currently running
on Delhi - Sealdah (Kolkata) route and in Delhi - Chennai/Bangalore/ Trivandrum routes. The Exchange constantly
endeavors to resolve disputes between investor and the trading members through its intervention.
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NSE comprises of theory subjects as well as practical. This program has been launched in the year 2010-11
in around 200 schools and is mandatory for class VIII & class XI. The program would be extended to more
schools from the academic year 2011-12.
• NSE-Manipal Education Training Programs on Stock Markets
National Stock Exchange has joined hands with Manipal Education, one of India's premier educational
institutions, to impart training with the aim of improving the participants' understanding of how the stock
markets function. These programs are designed to cater to people interested in a career in stock markets
and other related financial services and also to those who wish to learn about the functioning of the securities
markets. It provides relevant tools and techniques that give an in-depth understanding of the various facets
of the stock market. So far more than 1600 candidates have undergone this training program.
• Visit to NSE Program
It has been the endeavor of National Stock Exchange to spread knowledge about financial markets as
widely as possible. As part of this endeavor, NSE has been organising the ‘Visit to NSE' Program, under
which groups of students visit NSE to attend a 2-hour session. The session includes lecture on ‘Overview
of the Exchange', ‘Capital Markets', ‘Derivative Markets' and NSE's NCFM certification which not only
expands their knowledge base, but also improves their career prospects. In this session, the students learn
about stock exchange structure, its operations, products traded on it and so on. More than 150 colleges
have visited the Mumbai office as well as the regional offices located at Delhi, Kolkata and Chennai during
the year 2010-11.
• NSE's Research Initiative
Knowledge management is very important in today's competitive world. It acts as a tool which helps to
acquire the cutting edge in a globalised financial market. The regulators and SROs have been actively
promoting academicians and market participants to carry out research on the various segments of securities
markets. The completed papers are available on the NSE website www.nseindia.com.
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6. DIVIDEND
In view of the above results, your Directors recommend payment of dividend of Rs. 21/- per share for the year
2010-11.
7. SUBSIDIARY COMPANIES
7.1 National Securities Clearing Corporation Limited (NSCCL)
CM segment: NSCCL successfully continued its track record of completing all settlements in a timely manner.
During the period under review, 255 rolling settlements were handled in de-materialised mode. The per settlement
figures in value terms in the current year are higher than the previous year as given below:
The average value of securities handled per settlement was Rs. 3,840 crores in 2010-11 compared to
Rs. 3,761 crores in 2009-10. The average funds pay-in per settlement during the above periods was Rs 1,150 crores
and Rs. 1,141 crores respectively. The average number of shares processed per settlement was about Rs. 1,954
lakhs in 2010-11 compared to Rs. 1,946 lakhs in 2009-10. Short deliveries per settlement averaged around 0.13%
in 2010-11 as compared to 0.18% in 2009-10.
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The highest deliverable value of Rs.8,450.65 crores was observed on November 9, 2010. Percentage of number
of shares deliverable to number of shares traded increased to 27.51% in 2010-11 from 21.52% in 2009-10.
Percentage of value of shares deliverable to value of shares traded increased to 27.47% in 2010-11 from 22.22%
in 2009-10. The Settlement Guarantee Fund stood at Rs. 5,100.35 crores as on 31st March 2011.
F&O segment: The period April 2010 - March 2011 witnessed an increase in the total amount settled. The total
value of settlement increased from around Rs. 4,034.47 crores in March 2010 to Rs. 5,374.22 crores in
March 2011. The highest monthly settlement was Rs.11,597.10 crores in the month of November 2010. The
highest trading volumes on NSE during this period were Rs. 2,77,277.49 crores, witnessed on February 24, 2011
with total of 1,04,97,798 contracts being traded.
Currency Derivatives segment: Currency Derivatives trading commenced from August 29, 2008 with the
introduction of futures on USD-INR as the currency pair. Futures on multiple currency pairs namely Euro-INR,
Pound Sterling- INR and Japanese Yen-INR were introduced in February 2010. In October 2010, option contracts
were introduced on the USD-INR pair.
Based on the guidelines issued by SEBI, NSE introduced trading in IRF contracts on 10 year notional 7% coupon
bearing GOI security on August 31, 2009.
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tenders and requirements. The Company was successful in adding new clients etc to its customer list.
During the year the Company embarked on quality journey to certify its online examination centers for ISO
9001:2008 certification. NSE.IT through all the steps of ISO such as gap analysis, documentation, implementation
of documented processes, internal auditing, training and awareness. After extensive rounds of internal and external
quality implementation efforts in past six months and audits conducted across country by Bureau Veritas
Certification India (BVCI) auditors till first week of March, NSE.IT has been certified for ISO 9001:2008 by
BVCI for its Online Examination Services.
During the year, Company has added to its product portfolio with the introduction of an Algorithmic Trading
solution, called AlgoStudio. The product provides various standard algorithmic trading strategies (viz. Cash-
Futures arbitrage, Futures-Futures arbitrage, Cash-Cash arbitrage, Conversion/Reversal, Box Spread) as well as
custom strategies, taken up as be-spoke development.
The most important achievement for the Tea Board e-Auction project this year, was winning the coveted Bronze
medal in the National e-Governance Awards 2011, under the category - Specific Sectoral Award (Focus Sector
for 2010-11 - Agriculture).
The e-Auction program went 100% live in Siliguri this year. This marked 100% sale of tea through e-Auction
route across all the six auction centres. Around 370 million kg of tea was sold this year, totaling the sales figure
to 610 million kg since inception with a monetary worth of around Rs. 6100 crore
During the financial year 2010-11, NSE.IT earned a net profit after tax of Rs. 13.64 crores as compared to Rs.
9.53 crores in the previous year. The Board of Directors of NSE.IT has recommended a dividend of Rs. 4/- per
equity share to its shareholders in respect of the financial year 2010-11.
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During the year the DotEx started providing the following additional facilities through NOW platform viz.,
access to NSE IPO segment, access to Ace Commodity Exchange (ACE) markets, provision of Direct Market
Access (DMA) facility and provision of news from Newswire 18. With the objective of improving the reach and
providing stable connectivity to members, the following new initiatives were taken:-
• Mobile platform to provide live streaming data and trading capability. Market Data is made available as an
open application for any investor or potential investor who registers on NSE website. For investors desirous
of trading, they can avail the facility from any NOW enabled trading member.
• Tied up with private VSAT service providers to make NOW available through private VSAT Network.
This facility has been proved to be a boon to users in northeast regions where even basic internet connectivity
is an issue.
The above initiatives have resulted in an increase in trading turnover through NOW platform during the financial
year 2010-11.
During the year 2010-11, DotEx earned a profit of Rs. 1,416.68 lakhs as compared to a profit of
Rs. 1,304.32 lakhs during 2009-10. The financial position of DotEx has improved in the current financial year by
virtue of income generated through increase in the number of vendors and the end user clients. The Board of
DotEx has recommended a dividend of Rs. 1.50/- per equity share to its shareholders in respect of the financial
year 2010-11.
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The risk management engine in CM and F&O segments were optimised after multiple benchmarks with pre-set
parameters (portfolio, trade rate, number of suspensions, intra-day changes). This optimisation has reduced the
average turnaround time within the risk management considerably.
Cyber Security drill was conducted by CERT-in (Computer Emergency Response Team), Department of
Information Technology, Government of India. The performance was evaluated on four categories namely
(i) Pro-active actions to secure the drill setup; (ii) Attack defense & detection; (iii) Incident reporting & response;
and (iv) Mitigation & Recovery actions. NSE was rated excellent among 18 critical organisations in the financial
sector, for its capability in handling and responding to cyber security incidents, across all areas.
Awards / Recognitions
‘NOW (NSE on Web)' & ‘Inspection' applications won the InformationWeek EDGE award in Sep'2010.
During the financial year 2010-11, NSETECH earned net profit after tax of Rs. 94.61 lakhs as compared to the
net profit after tax of Rs.99.81 lakhs during 2009-10. As the profit is required to augment operational needs of
the Company, the Board of NSETECH did not recommend any dividend to its shareholders.
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b) Learning and Development: In line with the Business Strategy, company has continued to focus on the
functional and behavioral training based on the individual and the organisational need. In the past year
NSE has focused more on the Regional offices to meet their strategic learning and development needs.
4) Employee Relations: The employee relations scenario has been harmonious throughout the period under
consideration.
The Employee Strength as on March 31, 2011 is 504.
9. CORPORATE GOVERNANCE
The Company is committed to maintain the highest standards of corporate governance and adhere to the corporate
governance requirements.
The Company being an unlisted Company has voluntarily adopted compliance of corporate governance norms
provided in Clause 49 of the Listing Agreement applicable to the Companies which are listed with the Stock
Exchanges. A report on corporate governance for the financial year 2010-11 is accordingly furnished as part of
the Annual Report for the information of all its stakeholders. The certificate from a Practicing Company Secretary
confirming compliance with the conditions of Corporate Governance as stipulated under clause 49 of Listing
Agreement, is also attached with the above report.
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• Setting up of a voluntary group of employees called ‘‘Green Warriors’’ supported by NSEIL whose mission
is based on the principles of the 3Rs (Reuse, Reduce &Recycle) and whose objective is to identify and
work towards finding ways to help protect and sustain our environment in a manner that is least resource
intensive. Some of the activities conducted by the Green Warriors during the year include monthly awareness
programmes ‘‘Green Evening’’ for all employees with screening of movie/ messages on global warming
and environmental conservation, tree plantation drive in the BKC area, sapling distribution to staff, monthly
bulletin to the employees with simple effective environment tips for use homes /offices, targeted annual
paper reduction drive, etc
12. DIRECTORS
Dr. Vijay Kelkar, Chairman of your Company was awarded ‘Padma Vibhushan', which is the second highest
civilian award in the Republic of India, as recognition towards his exceptional and distinguished service to the
nation in the field of ‘public affairs'.
Mr. Anjan Barua, Mrs. Bhagyam Ramani, Mr. S.B. Mainak and Mr. S.B. Mathur retire by rotation at the ensuing
Annual General Meeting and are eligible for reappointment.
Mr. Anand G. Mahindra and Mr. B.N. Srikrishna ceased to be the Directors of the Company consequent upon
their resignation from the Board with effect from December 28, 2010 and January 14, 2011 respectively. The
Board wishes to place on record its sincere appreciation and gratitude for their valuable contribution made during
their tenure as Directors.
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Table 17
15. AUDITORS
M/s. Khandelwal Jain & Co., Chartered Accountants, Auditors of the Company, retire at the forthcoming Annual
General Meeting of the Company and are eligible for re-appointment. The Company has received a certificate
from the Auditors to the effect that their re-appointment, if made, would be within the limits prescribed under
Section 224 (1B) of the Companies Act, 1956. Their re-appointment is required to be made by a Special Resolution
pursuant to Section 224A of the Companies Act, 1956.
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3) Sewerage Treatment Plant - This plant has been installed at the inception stage itself to enable the
Company to reuse building's domestic and flushing water (i.e. after treatment) for its Cooling Towers
associated with HVAC System and for Gardening purposes every day.
4) Vermiculture Plant - In this system, the compostable material like food waste collected from canteen,
garden organics and paper & cardboard gets collected at one place. Post shredding, the organic
material gets loaded into vermiculture unit for the decomposing process. Post 7 days on-going process,
vermicompost / manure get generated and used for Gardening purposes.
b) Foreign Exchange earnings/ outgo during the year under review:
The foreign exchange earnings during the year were Rs. 11.01 crores whereas the foreign exchange outgo
during the year was Rs. 9.11 crores.
17. Statement of Particulars of Employees covered under the provisions of Section 217(2A) of the Companies
Act, 1956 read with Companies (Particulars of Employees) Rules, 1975 is annexed.
18. Your Directors are grateful for the support and co-operation extended by the Government of India, Securities
and Exchange Board of India and Reserve Bank of India. Your Directors would like to place on record their
sincere appreciation of support provided by the shareholders and also their deep appreciation of the contribution
made by employees at all levels to the continued growth of the Company.
Vijay Kelkar
Chairman
Place: Mumbai
Date: April 29, 2011
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Sr. Name & Age Designation/ Remuneration Experience Date of Last Employment
No. Qualifications in Nature Received (Rs.) (No. of commencement
Years of duties years) of
Employment
Gross Net
1 Mr. Ravi Narain 55 Managing 73490470 38571970 32 April 15, 1994 Dy. General Manager,
M.A. (Eco.), MBA Director Industrial Development
Bank of India
2 Ms. Chitra Ramkrishna 48 Joint 48958995 25519544 26 October 15, 1994 Dy. Manager,
B. Com., FCA Managing Industrial Development
Director Bank of India
3 Mr. J. Ravichandran 50 Director (F&L) 23784062 13110387 25 August 12, 1994 Dy. Secretary & Manager
B. Com., B.L.,FCS & Company (Legal), Raymond
Secretary Synthetics Limited
4 Mr. Yatrik Vin 44 Senior Vice 11230074 6300589 24 February 21, 2000 Manager
M. Com., AICWA President (Finance & Accounts),
Godrej & Boyce
Mfg. Co. Ltd.
5 Mr. Ravi Varanasi 48 Senior Vice 11050722 7460547 24 July 3, 1995 Sr. Dy. Manager,
B. Sc., ACA President Vysya Bank
6 Mr. R Nandakumar* 45 Senior Vice 11559001 7789177 24 March 15, 1995 Staff Officer (Finance),
B. Com., Grad. CWA, MBA, President Unit Trust of India
CAIIB, FIII
7 Ms. Kamala K 45 Vice President 11094930 6432207 20 March 16, 2006 Vice President (Risk
B.Com, ACA Mgmt. & Ops.), IL&FS
Investsmart Limited
8 Mr. Vidhu Shekhar 46 Vice President 8509560 4862937 24 October 3, 2005 Sr. Vice President,
PGDBM, CFA IDBI Capital Market
Services Ltd.
9 Mr. Hari K. 44 Vice President 8971408 5083224 20 May 29, 1995 Cost Accountant,
AICWA, ACS KCP Ltd.
10 Mr. T Venkat Rao 53 Vice President 7918696 5035958 29 December 21, 2000 Manager, Global Trust
B.Com., LL. B. Bank Limited
11 Mr. Suresh Narayan # 41 Vice President 7027630 4845901 21 January 24, 2005 Manager , National
B.Com, Grad. CWA Securities Depository
Limited
12 Mr. Suprabhat Lala 44 Vice President 6361827 4392656 21 October 1, 2001 Sr. Vice President,
B. Sc. Geojit Securities Ltd.
13 Mr. Mahesh Haldipur 51 Asst. Vice 6493540 3719734 28 April 25, 1995 Project Engineer,
B.E. (Civil), AMIE President Tata Electric Company
Limited
Notes :
1 Gross Remuneration includes Salary and other benefits, Company's contribution to Provident Fund,
Superannuation Fund, taxable value of perquisites, etc. Net remuneration represents gross remuneration
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less Company's contribution to provident and superannuation funds, taxable value of perquisites, profession
tax and income tax. Where applicable, the amounts also include certain allowances accrued during previous
year(s) but claimed in the current year.
2 Mr. Ravi Narain was re-appointed as Managing Director for a period of three years with effect from
April 1, 2010.
3 Ms. Chitra Ramkrishna was re-appointed as Dy. Manging Director for a period of five years with effect
from April 1, 2008. She was re-designated as Joint Managing Director with effect from September 1, 2009.
4 Other employees are in permanent employment of the Company on contractual basis governed by the
employment terms & conditions and service rules.
5 None of the employees mentioned above is a relative of any Director.
6 Employees, in respect of whom Section 217 (2A) applies but are on deputation to subsidiary company
and in respect of whom the remuneration is recovered are shown under statement prepared under
Section 217 (2A) of that subsidiary company to avoid duplication. Employee whose name has been marked
with # is on deputation to two subsidiary companies and his remuneration has been shared amongst the two
subsidiary companies. Employee whose name has been marked with * is also on deputation to subsidiary
company and in respect of whom the proportionate remuneration recovered from the subsidiary company
is shown in the statement prepared under Section 217 (2A) of that subsidiary company.
7 None of the employees is holding equity share(s) in the Company within the meaning of sub-clause (iii) of
clause (a) of sub-section (2A) of Section 217 of the Companies Act, 1956.
8 The Company does not have any Employees Stock Option Plan(ESOP) Scheme for its employees.
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I. Board of Directors
(A) Composition of the Board
The Board consists of 16 Directors of which 5 Directors represent Shareholders, 9 are independent Directors
(which includes 3 Public Interest Directors) who are chosen from among eminent persons or experts in the field
of Law, Finance, Accounting, Taxation, Information Technology, Economics, Commerce, etc. and 2 are working
Directors (1 Managing Director and 1 Joint Managing Director). None of the Directors of the Company are
related with each other.
(1) Details of Directors along with the Directorship(s) and Chairmanship(s)/Membership(s) of Committees in
other companies as on March 31, 2011:
Name of the Director Category No. of Directorships / Chairmanships and
committees chairmanships/Memberships
Other Other Other
Directorships/ Committee Committee
Chairmanship Memberships ** Chairmanships **
Dr. Vijay L. Kelkar,
Chairman Independent 7 1 –
Mr. C. Achuthan Public Interest Director 4 2 1
Mr. Anjan Barua Shareholder 3 – –
Mrs. Ranjana Kumar Independent 3 1 –
Mr. A.P.Kurian Independent 4 3 –
Dr. Rajiv B. Lall Shareholder 12 3 –
Mr.Y.H.Malegam Independent 8 1 4
Mr. S.B. Mainak Shareholder 1 1 –
Mr. S. B. Mathur Shareholder 13 5 4
Dr. K. R. S. Murthy Public Interest Director 3 1 2
Dr. R. H. Patil Independent 13 6 3
Mrs. Bhagyam Ramani Shareholder 5 – –
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NSEIL, the Nomination Committee follows following guidelines before recommending any individual as a Director
on the Board :-
(i) Public Interest Directors (PIDs) shall constitute one-fourth of the total strength of the Board.
(ii) Trading Member Directors shall constitute a maximum of one-fourth of the total strength of the Board.
(iii) Shareholder Directors shall constitute the balance of the Board.
The Nomination Committee comprises of Dr. Vijay Kelkar, Mr. S.B.Mathur, Mr. Y.H. Malegam, Mr. Anjan
Barua and Mr. Ravi Narain. Dr. Vijay Kelkar is the Chairman of the Nomination Committee.
(4) Share Transfer and Shareholders Grievances Committee
The Committee was initially discharging the function of approving share transfers and deciding on any matter
incidental to or connected with the transfer. The Company, in continuation of its pursuit to establish good corporate
governance practice, felt the need to have a Committee under the chairmanship of a non-executive director to
specifically look into the redressal of shareholder complaints like transfer of shares, non-receipt of balance
sheet, non-receipt of declared dividends, etc. Accordingly, during the year this Committee was vested with the
additional role of looking into the redressal of shareholder, grievances like transfer of shares, non-receipt of
balance sheet, non-receipt of declared dividends, etc.
The Committee comprises Dr. Vijay Kelkar, Mr. Y. H. Malegam, Mr. S. B. Mathur, Mr. A.P. Kurian and Mr. Ravi
Narain. Dr. Vijay Kelkar is the Chairman of the Committee. The Committee met three times during the year i.e.,
on April 6, 2010, December 13, 2010 and March 28, 2011. The details of the attendance of members of the Share
Transfer and Shareholders Grievances Committee at the meetings held on the above dates are given hereunder:-
Name No. of meetings held during No. of meetings attended
the tenure of the member
Dr. Vijay Kelkar* 1 –
Mr. A. P.Kurian 3 3
Mr. Y. H. Malegam 3 3
Mr. S.B.Mathur 3 3
Mr. Ravi Narain 3 3
*Dr. Kelkar was inducted on this Committee only on February 4, 2011.
(5) Risk Assessment and Review Committee
The Audit Committee inter-alia periodically reviews the risk impacting the company's business and suggests
measures for risk mitigation. In order to carry out the identification and assessment of existing risk and also
recommend risk minimisation procedures & reporting system thereof on an ongoing basis, a Risk Assessment
and Review Committee comprising Dr. R. H. Patil, Mr. Y. H. Malegam, Mr. A. P. Kurian and Dr. V. A. Sastry
(who are also members of Audit Committee) was separately constituted during the year.
(6) In addition to Committees covered specifically in detail, the Company also has following Committees,
namely:
(i) Standing Committees under the Rules, Byelaws and Regulations
1. Arbitration Panel
2. Defaulters Committee
3. Disciplinary Action Committee (Board Committee)
4. Ethics Committee (Board Committee)
(ii) SEBI mandated Committees
1. Executive Committee ( F& O segment)
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NATIONAL STOCK EXCHANGE OF INDIA LIMITED
Nineteenth Annual Report
37
NATIONAL STOCK EXCHANGE OF INDIA LIMITED
Nineteenth Annual Report
The sitting fees paid to the Non-executive Directors for attending the meetings of the Board and its Committees
are as follows:
Name Board meetings Board Committees' meetings Total
No. of Amount No. of Amount
meetings (Rs.) meetings (Rs.)
attended attended
Dr. Vijay Kelkar 4 80,000 6 1,20,000 2,00,000
Mr. C. Achuthan 3 60,000 8 1,60,000 2,20,000
SBI (Mr. Anjan Barua) 2 40,000 – – 40,000
Mrs. Ranjana Kumar 2 40,000 4 80,000 1,20,000
Mr. A.P.Kurian 4 80,000 16 3,20,000 4,00,000
Dr. Rajiv Lall 1 20,000 – – 20,000
Mr. Y.H.Malegam 3 60,000 8 1,60,000 2,20,000
LIC (Mr. S.B.Mainak) 4 80,000 5 1,00,000 1,80,000
Mr. S.B.Mathur 4 80,000 11 2,20,000 3,00,000
Dr. K.R.S.Murthy 4 80,000 12 2,40,000 3,20,000
Dr. R.H.Patil 1 20,000 4 80,000 1,00,000
GIC (Mrs. Bhagyam Ramani) 3 60,000 5 1,00,000 1,60,000
Dr. V.A.Sastry 4 80,000 7 1,40,000 2,20,000
Mr. Deepak Satwalekar 4 80,000 5 1,00,000 1,80,000
II. Auditors
The Audit Committee considers the profile of the audit firms, qualifications and experience of partners auditing
books and accounts of the Company, strengths and weaknesses, if any, of the audit firm and other related aspects
and then recommends appointment of Auditor and the remuneration payable to them to the Board/shareholders.
The Audit Committee also periodically discusses with the Auditor the annual work programme and the depth and
detailing of the audit plan to be undertaken by him.
The Board appointed an external firm of Chartered Accountants as its internal auditor in order to ensure the
independence and credibility of the internal audit process.
III. Secretarial Review
The Company has engaged the services of Mr. S.N. Ananthasubramanian, Practicing Company Secretary and
also the member of the Central Council of The Institute of Company Secretaries of India, to conduct review of
compliances under the Companies Act, 1956 and the rules laid down thereunder for the financial year ended
31st March, 2011. The report of the Practicing Company Secretary is placed before the Audit Committee.
IV. Shareholders
(A) Disclosures regarding the appointment/re-appointment of directors
Mr. Anjan Barua, Mrs. Bhagyam Ramani, Mr. S.B.Mainak and Mr. S.B. Mathur retire by rotation at the ensuing
Annual General Meeting and are eligible for re-appoinment. The profiles of all these directors are provided in
the Notice convening the Annual General Meeting.
(B) Communication with Shareholders
The Exchange disseminates all material information to its shareholders through periodical communications.
38
NATIONAL STOCK EXCHANGE OF INDIA LIMITED
Nineteenth Annual Report
Annual Report: Annual report containing inter alia, Audited Accounts, Directors' Report, Report on Corporate
Governance, other material and related matters/information is circulated to the shareholders and others entitled
thereto.
(C) Redressal of shareholders complaints
NSEIL has ‘Share Transfer and Shareholders Grievances Committee' under the chairmanship of Dr. Vijay Kelkar,
Non Executive Director, to look into the redressal of shareholder complaints.
(D) General Body Meetings
Location, date and time of the general meetings held in the last three years till March 31, 2011:-
Type of meeting Date Time Venue Special Resolution
passed
18th Annual General September 27, 4.00 p.m. Exchange Plaza, • Re-appointment
Meeting 2010 Bandra-Kurla of Auditors
Complex under
Bandra (East) Section 224A
Mumbai- 400 051
16th Annual General July 18, 2008 10.30 a.m. -do- • Re-appointment of
Meeting Auditors under
Section 224A
• Alteration of
Articles of
Association of the
Company.
39
NATIONAL STOCK EXCHANGE OF INDIA LIMITED
Nineteenth Annual Report
(E) Shareholding pattern of the Exchange and Top 10 Shareholders as on 31st March, 2011.
Distribution of Shareholding as on 31st March, 2011:
40
NATIONAL STOCK EXCHANGE OF INDIA LIMITED
Nineteenth Annual Report
41
NATIONAL STOCK EXCHANGE OF INDIA LIMITED
Nineteenth Annual Report
To,
The Members,
National Stock Exchange of India Limited
Exchange Plaza, C-1, Block G
Bandra Kurla Complex
Bandra (East), Mumbai 400051
We have examined all relevant records of National Stock Exchange of India Limited (the Company) for the
purpose of certifying compliance of the conditions of Corporate Governance as stipulated under Clause 49 of the
Listing Agreement for the financial year ended 31st March 2011. The Company being an unlisted Company has
voluntarily adopted compliance of Clause 49 of the Listing Agreement applicable to the Companies which are
listed with the Stock Exchanges. We have obtained all the information and explanations to the best of our knowledge
and belief which were necessary for the purpose of this certification.
The compliance of the conditions of Corporate Governance is the responsibility of the Management. Our
examination was limited to the procedures and implementation thereof, adopted by the Company for ensuring the
compliance of the conditions of the Corporate Governance. This certificate is neither an assurance as to the future
viability of the Company nor of the efficacy or effectiveness with which the management has conducted the
affairs of the Company.
On the basis of our examination of the records produced, explanations and information furnished, we certify that
the Company has complied with the conditions of Corporate Governance as stipulated in the above mentioned
Listing Agreement.
S. N. Ananthasubramanian
Proprietor
C.P.No.: 1774
Date: April 29, 2011
Place: Thane
42
NATIONAL STOCK EXCHANGE OF INDIA LIMITED
Nineteenth Annual Report
Outlook
The Indian economy is expected to operate close to its trend growth rate, powered mainly by domestic factors.
The investment rate has exceeded 36 per cent of GDP. Even with an incremental capital-output ratio of 4, this
should enable the Indian economy to grow at 9 per cent. Thus, the broad macroeconomic parameters relating to
savings and investment are conducive for achieving a high growth rate. Aligned with this, as a natural fall out, it
is expected that the investment momentum within the economy would continue at an accelerated pace. This
would have a significantly positive impact on the capital markets. Similarly, the existing products and asset
classes which would continue to evince interest, it is expected that there would be attraction towards new asset
classes as well. New products and services, technological innovation and strong risk management framework
would continue to be the key drivers for the securities market.
Risks and concerns
While the fundamentals of Indian economy remain strong, the domestic capital market and especially the inflow
of foreign funds are to a large extent susceptible to the developments in the global economy. Any adverse
development could have a negative impact on the domestic markets. Also post global financial crisis, much of the
recovery in the developed economies was driven by temporary measures such as fiscal stimulus and the like.
Some of these countries are considering withdrawal of these fiscal stimuli which could affect the growth levels in
those economies it could have adverse impact on the Indian capital market. However, with vibrant growth
expectations within the country these risks would be largely mitigated.
43
NATIONAL STOCK EXCHANGE OF INDIA LIMITED
Nineteenth Annual Report
Revenue
Transaction charges
During the year, there was a modest increase of around 4% in the income from Transaction charges from
Rs. 768.43 crores for the year 2009-10 to Rs. 799.27 crores for the year 2010-11. The average daily turnover on
the Exchange during the year 2010-11 was Rs. 14,090 crores in Cash Market (CM segment) as against Rs. 16,964
crores for the year 2009-10 indicating a decline of 17%. In F&O segment the average daily turnover (billable)
for the year 2010-11 was Rs. 39,628 crores as against Rs. 37,990 crores for the year 2009-10 indicating a growth
of 4%.
Listing Fees
Revenue under this head of income increased by around 20% from Rs. 19.30 crores for the year 2009-10 to
Rs. 23.24 crores for the year 2010-11.The Exchange as of March 31, 2011 had 1,542 listed companies. The total
market capitalisation of these companies as of March 31, 2011 stood at Rs.65 lakhs crores.
Book Building Fees
The total book building fees during the year 2010-11 decreased by around 6% from Rs. 12.33 crores for the year
2009-10 to Rs. 11.67 crores for the year 2010-11.
Treasury income (Interest & Other Investment income)
In line with the overall increase in the interest rates in the economy and change in the investment strategy, during
44
NATIONAL STOCK EXCHANGE OF INDIA LIMITED
Nineteenth Annual Report
the year 2010-11, the total income from treasury operations increased from Rs. 292.23 crores for the
year 2009-10 to Rs. 336.09 crores for the year 2010-11.
NSE's Certification in Financial Markets (NCFM)
Based on the feedback received and catering to the growing needs of the capital market, the Exchange continued
its focus on educational initiatives by introducing new NCFM modules during the year 2010-11. The income
from NCFM activity stood at Rs. 23.35 crores for the year 2010-11. Also, the total number of candidates taking
examination during the year 2010-11 was around 1, 69,000.
Other Income
During the year 2010-11, the other income increased by 39% from Rs. 106.19 crores for the year 2009-10 to
Rs. 147.81 crores for the year 2010-11.
Expenditure
Operating, Administration and Other expenses
The total Operating, Administration and Other expenses for the year 2010-11 increased by 29% from Rs. 78.59
crores for the year 2009-10 to Rs. 101.06 crores for the year 2010-11.
IT & Telecom expenses
Technology is the backbone of our business and also the key differentiator. The Exchange continued to invest in
the state of the art technology in different areas of its business keeping clear focus on its cost efficiency. Accordingly,
during the year, the total IT & Telecom expenses for the year 2010-11 decreased by 6% from Rs. 150.57 crores
for the year 2009-10 to Rs. 141.69 crores for the year 2010-11.
Clearing & Settlement charges
National Securities and Clearing Corporation Limited (NSCCL), a wholly owned subsidiary of the Exchange,
carries out the clearing and settlement of the trades executed in the CM and F&O segments. Consequent to the
increase in income from transaction charges and change in the charging structure, the clearing & Settlement
charges for the year 2010-11 paid to NSCCL increased by 25% from Rs. 95.91 crores for the year 2009-10 to
Rs. 119.89 crores for the year 2010-11.
Payment and Provision for employees
The Exchange recognises the value of its human capital deployed at all levels. To continue to provide best in class
services to its members and other market participants it is essential for the Company to attract and retain the best
talent available. In this direction, the Company continues to take various initiatives to follow HR best practices
and also keeps benchmarking it with other forward looking organisations. During the year 2010-11, the Company
has taken number of HR initiatives in the areas of employee developments and training, harnessing knowledge
and skill levels as well as various staff welfare measures etc. During the year 2010-11, the total employee strength
increased by around 6% and the employee related expenses stood at Rs. 64.43 crores which was Rs. 52.73 crores
for the year 2009-10. For the year 2010-11, the total employee cost as a percentage to total income was 4.7% and
as a percentage of expenditure was 12.4% which is comparable to the industry standards.
Depreciation
Exchange continued to invest in technology in different areas of its business. Accordingly, the total depreciation
increased by 19% from Rs.76.75 crores for the year 2009-10 to Rs. 91.35 crores for the year 2010-11.
45
NATIONAL STOCK EXCHANGE OF INDIA LIMITED
Nineteenth Annual Report
46
NATIONAL STOCK EXCHANGE OF INDIA LIMITED
Nineteenth Annual Report
To,
The Board of Directors
National Stock Exchange of India Limited
We, Ravi Narain, Managing Director & CEO and J. Ravichandran, Director (F&L) of the National Stock Exchange
of India Limited hereby certify to the Board that:
a. We have reviewed financial statements and the cash flow statement for the year ended on March 31, 2011
and that to the best of our knowledge and belief :
i. these statements do not contain any materially untrue statement or omit any material fact or contain
statements that might be misleading;
ii. these statements together present a true and fair view of the Company's affairs and are in compliance
with existing accounting standards, applicable laws and regulations.
b. There are, to the best of our knowledge and belief, no transactions entered into by the Company during the
year which are fraudulent, illegal or violative of the Company's code of conduct.
c. We accept responsibility for establishing and maintaining internal controls for financial reporting and that
we have evaluated the effectiveness of internal control systems of the Company pertaining to financial
reporting and we have disclosed to the auditors and the Audit Committee, deficiencies in the design or
operation of such internal controls, if any, of which we are aware and the steps we have taken or propose to
take to rectify these deficiencies.
d. We have indicated to the Auditors and the Audit Committee
i. significant changes, if any, in internal control over financial reporting during the year;
ii. significant changes, if any, in accounting policies during the year and that the same have been disclosed
in the notes to the financial statements; and
iii. instances of significant fraud of which we have become aware and the involvement therein, if any, of
the management or an employee having a significant role in the Company's internal control system
over financial reporting.
47
NATIONAL STOCK EXCHANGE OF INDIA LIMITED
Nineteenth Annual Report
AUDITORS’ REPORT
To,
The Members,
NATIONAL STOCK EXCHANGE OF INDIA LIMITED
1. We have audited the attached Balance Sheet of NATIONAL STOCK EXCHANGE OF INDIA
LIMITED, as at 31st March, 2011 and also the Profit & Loss Account and the Cash Flow Statement
for the year ended on that date annexed thereto. These financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these financial statements
based on our audit.
2. We conducted our audit in accordance with auditing standards generally accepted in India. Those
Standards require that we plan and perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our audit provides a reasonable
basis for our opinion.
3. As required by the Companies (Auditor's Report) Order, 2003, and read with the amendments made by
the Companies (Auditors' Report) (Amendment) Order 2004, issued by the Central Government of
India in terms of sub-section (4A) of Section 227 of the Companies Act, 1956, and on the basis of such
checks of the books and records as we considered appropriate and according to the information and
explanations given to us during the course of audit, we enclose in the Annexure a statement on the
matters specified in paragraphs 4 and 5 of the said Order to the extent they are applicable to the
Company.
a) We have obtained all the information and explanations, which to the best of our knowledge and
belief, were necessary for the purposes of our audit;
b) In our opinion, proper books of account as required by law have been kept by the Company so far
as appears from our examination of those books;
c) The Balance Sheet, Profit & Loss Account and Cash Flow Statement dealt with by this report are
in agreement with the books of account;
d) In our opinion, the Balance Sheet, Profit & Loss Account and Cash Flow Statement dealt with by
this report comply with the accounting standards referred to in sub-section (3C) of section 211 of
the Companies Act, 1956;
48
NATIONAL STOCK EXCHANGE OF INDIA LIMITED
Nineteenth Annual Report
e) On the basis of the representations received from the Directors as on 31st March, 2011 and taken
on record by the Board of Directors, none of the Directors is disqualified as on 31st March, 2011
from being appointed as a Director in terms of Clause (g) of sub-section (1) of Section 274 of the
Companies Act, 1956;
f) In our opinion and to the best of information and according to the explanations given to us, the
said accounts read together with the notes thereon, give the information required by the Companies
Act, 1956, in the manner so required and give a true and fair view in conformity with the accounting
principles generally accepted in India;
i) in the case of the Balance Sheet, of the state of affairs of the Company as at 31st March,
2011;
ii) in the case of the Profit & Loss Account, of the Profit of the Company for the year ended on
that date; and
iii) in the case of cash flow statement, of the cash flows for the year ended on that date.
(NARENDRA JAIN)
PARTNER
Membership No.: 48725
Place : Mumbai
Date : April 29, 2011
49
NATIONAL STOCK EXCHANGE OF INDIA LIMITED
Nineteenth Annual Report
i) a) The Company has maintained proper records showing full particulars including quantitative
details and situation of Fixed Assets.
b) The Company has physically verified the fixed assets in accordance with a programme of
verification which in our opinion provides for physical verification of all fixed assets at reasonable
intervals except for VSAT equipments lying with third parties for which confirmations are
generally obtained or electronically confirmed. We have been informed that no material
discrepancies were noticed on such verification.
c) No substantial part of fixed assets of the Company has been disposed off during the year.
ii) a) The Company has not granted any loans, secured or unsecured, to companies, firms or other
parties covered in the register maintained under Section 301 of the Act.
b) The Company has not taken any loans, secured or unsecured, from companies, firms or other
parties covered in the register maintained under Section 301 of the Act.
iii) In our opinion, there is an adequate internal control procedure commensurate with the size of the
Company and the nature of its business, for purchase of fixed assets and for rendering of services.
During the course of our audit, we have not observed any major weakness in the internal control
systems.
iv) Based on the audit procedures applied by us and according to the information and explanations provided
by the management, we are of the opinion that the Company has not entered into any contracts or
arrangements that need to be entered in the register maintained under Section 301 of the Companies
Act, 1956.
v) The Company has not accepted any deposits during the year from the public within the meaning of
the provisions of Section 58A, 58AA or any other relevant provisions of the Companies Act, 1956
and the rules made thereunder.
vi) In our opinion, the Company has an internal audit system which is commensurate with the size of the
Company and the nature of its business.
vii) We are informed that no cost records are required to be maintained by the Company under Section
209(1)(d) of the Companies Act, 1956.
50
NATIONAL STOCK EXCHANGE OF INDIA LIMITED
Nineteenth Annual Report
viii) a) According to the information and explanations given to us and the records examined by us, the
Company is regular in depositing with appropriate authorities undisputed statutory dues including
provident fund, investor education and protection fund, employees' state insurance, income-
tax, sales-tax, wealth-tax, service-tax, custom duty, excise duty, cess and any other statutory
dues wherever applicable.
b) According to the records of the Company, the dues of sales-tax, income-tax, customs, wealth-
tax, service tax, securities transaction tax, excise duty, cess which have not been deposited on
account of disputes and the forum where the dispute is pending are as under:
ix) The Company did not have any accumulated losses at the end of the financial year, nor had it incurred
any cash loss during the financial year or in the immediately preceding financial year.
x) The Company has not taken any loan from banks or financial institutions and the Company has not
issued any debentures.
xi) The Company has not granted loans and advances on the basis of security by way of pledge of shares,
debentures and other securities.
xii) According to the information and explanations given to us, the company has not given any guarantee
for loans taken by others from bank or financial institutions.
51
NATIONAL STOCK EXCHANGE OF INDIA LIMITED
Nineteenth Annual Report
xiii) The Company has not taken any term loans during the year.
xiv) According to the information and explanations given to us and on an examination of the Balance
Sheet of the Company, we report that, on an overall basis, funds raised on short term basis have prima
facie, not been used during the year for long term investment.
xv) The Company has not made any preferential allotment of shares to the parties and companies covered
in the register maintained under Section 301 of the Companies Act, 1956.
xvi) The Company has not issued any Debentures during the year and there were no debenture outstanding
at the year-end.
xvii) The Company has not raised any money by public issue during the year.
xviii) Based upon the audit procedures performed and information and explanations given by the
management, we report that no fraud on the Company or by the Company has been noticed or reported
during the course of our audit.
xix) The other clauses 4(ii), 4(xiii) and 4(xiv) of para 4 of the Companies (Auditor's Report) Order, 2003,
as amended by the Companies (Auditors' Report) (Amendment) Order 2004, are not applicable to
company.
(NARENDRA JAIN)
PARTNER
Membership No.: 48725
Place : Mumbai
Date : April 29, 2011
52
NATIONAL STOCK EXCHANGE OF INDIA LIMITED
Nineteenth Annual Report
I SOURCES OF FUNDS
1. Shareholders' Funds
a Share Capital 1 45.00 45.00
b Reserves & Surplus 2 2,923.40 2,381.26
2. Deposits (Unsecured)
a Deposits from trading
members 1,063.98 983.99
b Deposits from applicants
for membership 4.54 11.14
c Deposits towards equipments 46.68 48.45
II APPLICATION OF FUNDS
1. Fixed Assets 3
a Gross Block 915.23 825.78
Less: Depreciation till date 484.23 406.31
53
NATIONAL STOCK EXCHANGE OF INDIA LIMITED
Nineteenth Annual Report
As per our report of even date attached For and on behalf of the Board of Directors
For KHANDELWAL JAIN & CO.,
Chartered Accountants
NARENDRA JAIN
Partner
Membership No.:48725 CHITRA RAMKRISHNA DR. R. H. PATIL
Jt. Managing Director Director
Y. H. MALEGAM J. RAVICHANDRAN
Place : Mumbai Director Director (F&L) &
Date : April 29, 2011 Company Secretary
54
NATIONAL STOCK EXCHANGE OF INDIA LIMITED
Nineteenth Annual Report
PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED MARCH 31,2011
INCOME
Transaction charges 799.27 768.43
Annual subscription 11.39 10.71
Book building Fees 11.67 12.33
Listing fees 23.24 19.30
Operational Expenses Recovery 7 25.65 28.36
Interest income 8 129.43 37.21
Other Investment Income 9 206.66 255.02
Other income 10 171.16 135.02
TOTAL 1,378.47 1,266.38
EXPENDITURE
Operating,Administration & other expenses 11 242.75 229.16
Clearing & Settlement charges 119.89 95.91
Payments to and provision for employees 12 64.43 52.73
Depreciation 91.35 76.75
TOTAL 518.42 454.55
55
NATIONAL STOCK EXCHANGE OF INDIA LIMITED
Nineteenth Annual Report
Appropriations :
- General reserve 530.00 475.00
- Investor Compensation Reserve 0.14 0.11
- Proposed dividend 94.50 90.00
- Corporate dividend tax 15.33 14.95
- Staff welfare reserve 0.35 0.30
- Balance carried to balance sheet 117.40 105.26
757.72 685.62
Basic/Diluted Earnings per share (Rs.) (Refer Note No.17) 141.67 136.39
As per our report of even date attached For and on behalf of the Board of Directors
For KHANDELWAL JAIN & CO.,
Chartered Accountants
NARENDRA JAIN
Partner
Membership No.:48725 CHITRA RAMKRISHNA DR. R. H. PATIL
Jt. Managing Director Director
Y. H. MALEGAM J. RAVICHANDRAN
Place : Mumbai Director Director (F&L) &
Date : April 29, 2011 Company Secretary
56
NATIONAL STOCK EXCHANGE OF INDIA LIMITED
Nineteenth Annual Report
Authorised
5,00,00,000 (Previous Year 5,00,00,000) Equity Shares
of Rs 10 Each. 50.00 50.00
General Reserve
As per last balance sheet 2,125.00 1,650.00
Add : Transferred from profit & loss account 530.00 475.00
Add : Transferred from Technology Upgradation Reserve 100.00 2,755.00 - 2,125.00
57
SCHEDULES FORMING PART OF THE BALANCE SHEET
SCHEDULE 3: FIXED ASSETS (Note No. 1c, 1d, 1e & 13) (Rs. in Crores)
Tangible Assets
1 Land 3.31 – – 3.31 – – – – 3.31 3.31
2 Leasehold Land 107.61 – – 107.61 18.63 1.30 – 19.93 87.68 88.98
3 Building 125.57 46.01 – 171.58 18.25 2.39 – 20.64 150.94 107.32
NATIONAL STOCK EXCHANGE OF INDIA LIMITED
4 Trading Systems 176.05 11.74 3.96 183.83 112.94 31.18 3.77 140.35 43.48 63.11
5 Computer Systems
Office Automation 11.18 3.09 1.50 12.77 9.79 1.13 1.49 9.43 3.34 1.39
6 Computer Systems
Others 46.60 8.11 1.05 53.66 21.26 10.96 1.05 31.17 22.49 25.34
7 Telecommunication
Systems 183.13 9.30 4.91 187.52 121.63 26.98 4.90 143.71 43.81 61.50
8 Office Equipments 33.54 3.46 0.28 36.72 19.36 2.80 0.28 21.88 14.84 14.18
9 Electrical Equipment
& Installations 31.51 7.35 2.04 36.82 11.45 1.87 1.90 11.42 25.40 20.06
10 Furniture & Fixtures 25.31 1.52 0.03 26.80 13.97 2.30 0.03 16.24 10.56 11.34
Intangible Assets
11 Computer Software 81.97 12.69 0.05 94.61 59.03 10.44 0.01 69.46 25.15 22.94
TOTAL 825.78 103.27 13.82 915.23 406.31 91.35 13.43 484.23 431.00 419.47
Previous Year 817.27 90.10 81.59 825.78 411.09 76.75 81.53 406.31 419.47 –
58
Nineteenth Annual Report
SCHEDULES FORMING PART OF THE BALANCE SHEET
SCHEDULE 4 : INVESTMENTS (Note No.1f)
LONG TERM INVESTMENTS (AT COST)
Maturity Number of Face Value Face As at Number As at
Date Units Per Unit Value 31.03.2011 of 31.03.2010
(Rs.) (Rs.) (Rs. in Crores) Units (Rs. in Crores)
A) QUOTED
BONDS
Taxfree
5.30% Nuclear Power Corporation of India Ltd. 31-Dec-12 – 100,000.00 30,000,000 – 300 3.00
5.50% Nuclear Power Corporation of India Ltd. 14-Aug-13 200 100,000.00 20,000,000 2.00 200 2.00
9.00% Indian Railway Finance Corporation Ltd. 28-Feb-15 100 1,000,000.00 100,000,000 10.52 50 5.00
5.25% Nuclear Power Corporation of India Ltd. 23-Mar-14 100 1,000,000.00 100,000,000 10.00 100 10.00
7.75% Indian Railway Finance Corporation Ltd. 30-Mar-11 – 1,000,000.00 82,000,000 – 82 8.29
6.85% India Infrastructure Finance Company Ltd. 22-Jan-14 6,390 100,000.00 639,000,000 64.39 4,750 47.83
6.85% India Infrastructure Finance Company Ltd. 20-Mar-14 3,175 100,000.00 317,500,000 31.95 2,000 20.00
NATIONAL STOCK EXCHANGE OF INDIA LIMITED
6.05% Indian Railway Finance Corporation Ltd. 20-Dec-15 500 100,000.00 50,000,000 5.00 – –
6.00% Indian Railway Finance Corporation Ltd. 8-Mar-15 1,000 100,000.00 100,000,000 10.00 1,000 10.00
Taxable
7.00% Power Finance Corporation 24-Dec-11 50 1,000,000.00 50,000,000 4.96 50 4.89
7.10% Power Finance Corporation 15-Jul-12 20 1,000,000.00 20,000,000 2.00 – –
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SCHEDULES FORMING PART OF THE BALANCE SHEET
SCHEDULE 4 : INVESTMENTS (Note No.1f)
LONG TERM INVESTMENTS (AT COST)
Maturity Number of Face Value Face As at Number As at
Date Units Per Unit Value 31.03.2011 of 31.03.2010
(Rs.) (Rs.) (Rs. in Crores) Units (Rs. in Crores)
DWS Fixed Term Fund - Series 71- Growth Plan 14-Jun-11 5,000,600.84 10.00 50,006,008 5.00 – –
DWS Fixed Term Fund - Series 75 - Growth Plan 28-Sep-11 5,000,632.08 10.00 50,006,321 5.00 – –
DWS Fixed Term Fund - Series 76 - Growth Plan 1-Nov-11 5,000,000.00 10.00 50,000,000 5.00 – –
DWS Fixed Term Fund Series 67- Growth Plan 24-Apr-11 5,000,412.93 10.00 50,004,129 5.00 5,000,412.93 5.00
DWS Fixed Term Fund- Series 72- Growth Plan 28-Jun-11 5,000,000.00 10.00 50,000,000 5.00 – –
HDFC FMP 13M October 2009 - Growth - Series XI 20-Nov-10 – 10.00 50,005,171 – 5,000,517.09 5.00
HDFC FMP 370D March 2011 (2) - Growth - Series XVI 13-Mar-12 5,000,000.00 10.00 50,000,000 5.00 – –
HDFC FMP 370D September 2010 (1) - Growth - XV 19-Sep-11 5,000,000.00 10.00 50,000,000 5.00 – –
ICICI Prudential Fixed Maturity Plan - Series 53 -
1 Year Plan B Cumulative 21-Nov-11 5,000,730.00 10.00 50,007,300 5.00 – –
ICICI Prudential FMP Series 56-1 Year Plan B Cumulative 26-Mar-12 5,000,000.00 10.00 50,000,000 5.00 – –
NATIONAL STOCK EXCHANGE OF INDIA LIMITED
IDBI FMP - 367 Days Series - I(March 2011) - C - Growth 8-Mar-12 5,000,843.50 10.00 50,008,435 5.00 – –
IDBI FMP - 367 Days Series-I(March 2011) - D - Growth 26-Mar-12 3,000,544.50 10.00 30,005,445 3.00 – –
IDFC Fixed Maturity - Yearly Series 32 - Growth 19-Aug-11 5,000,000.00 10.00 50,000,000 5.00 – –
IDFC Fixed Maturity - Yearly Series 33 - Growth 20-Sep-11 5,000,000.00 10.00 50,000,000 5.00 – –
IDFC Fixed Maturity Yearly Series 38 Growth 25-Feb-12 5,000,000.00 10.00 50,000,000 5.00 – –
IDFC FMP - Yearly Series 42-Growth 25-Mar-12 5,000,000.00 10.00 50,000,000 5.00 – –
JM Fixed Maturity Fund Series XIX Plan C -
Growth Plan 29-Mar-12 5,000,000.00 10.00 50,000,000 5.00 – –
JP Morgan India Fixed Maturity Plan 367 D Series 1 -
Growth Plan 28-Mar-12 3,000,492.00 10.00 30,004,918 3.00 – –
Kotak FMP 15M Series 7 - Growth 23-Feb-12 5,000,000.00 10.00 50,000,000 5.00 – –
Kotak FMP 370 Days Series 10 - Growth 3-Nov-11 5,000,000.00 10.00 50,000,000 5.00 – –
Kotak FMP 370 Days Series 9 - Growth 25-Oct-11 5,000,000.00 10.00 50,000,000 5.00 – –
Kotak FMP Series 39 - Growth 13-Mar-12 5,000,000.00 10.00 50,000,000 5.00 – –
Reliance Fixed Horizon Fund - XIX - Series 9-
Growth Plan 22-Mar-12 2,000,000.00 10.00 20,000,000 2.00 – –
Religare Fixed Maturity Plan - Series III - Plan D
(370 Days) - Growth 5-Sep-11 5,000,000.00 10.00 50,000,000 5.00 – –
Religare Fixed Maturity Plan Series III - Plan A
(12 Months) - Growth 20-Jun-11 5,000,000.00 10.00 50,000,000 5.00 – –
Religare Fixed Maturity Plan Series VI - Plan D
(370 Days) - Growth Plan 26-Mar-12 2,200,000.00 10.00 22,000,000 2.20 – –
Religare Fixed Maturity Plan-Series - II Plan A - Growth 11-Apr-11 5,000,376.95 10.00 50,003,770 5.00 5,000,376.95 5.00
SBI Debt Fund Series - 15 Months - 5 - Growth 8-Jun-11 5,000,343.28 10.00 50,003,433 5.00 5,000,343.28 5.00
SBI Debt Fund Series - 370 Days - 5 - Growth 30-Aug-11 5,000,558.00 10.00 50,005,580 5.00 – –
Sundaram Fixed Term Plan AN 367 Days Growth 12-Sep-11 5,000,000.00 10.00 50,000,000 5.00 – –
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SCHEDULES FORMING PART OF THE BALANCE SHEET
SCHEDULE 4 : INVESTMENTS (Note No.1f)
LONG TERM INVESTMENTS (AT COST)
Maturity Number of Face Value Face As at Number As at
Date Units Per Unit Value 31.03.2011 of 31.03.2010
(Rs.) (Rs.) (Rs. in Crores) Units (Rs. in Crores)
Sundaram Fixed Term Plan AO 367 Days Growth 30-Sep-11 5,000,000.00 10.00 50,000,000 5.00 – –
Sundaram Fixed Term Plan AP 367 Days Growth 4-Nov-11 5,000,000.00 10.00 50,000,000 5.00 – –
Tata Fixed Maturity Plan Series 26 Scheme C - Growth 5-Sep-11 5,000,000.00 10.00 50,000,000 5.00 – –
TATA Fixed Maturity Plan Series 26 Sheme A - Growth 25-Apr-11 6,725,002.00 10.00 67,250,020 6.73 6,725,002.00 6.73
Tata Fixed Maturity Plan Series 27 Scheme A - Growth 7-Sep-11 5,000,579.00 10.00 50,005,790 5.00 – –
Tata Fixed Maturity Plan Series 29 Scheme A - Growth 7-Nov-11 5,000,000.00 10.00 50,000,000 5.00 – –
Tata Fixed Maturity Plan Series 31 Scheme B - Growth 12-Mar-12 5,000,000.00 10.00 50,000,000 5.00 – –
UTI Fixed Maturity Plan-Yearly FMP Series:YFMP
(08-10)-Institutional Growth Plan 23-Sep-11 5,000,576.99 10.00 50,005,770 5.00 – –
Sub-Total (iii) 231.93 36.73
NATIONAL STOCK EXCHANGE OF INDIA LIMITED
Income Funds
HDFC Income Fund - Growth – 20.50 100,017,863 – 4,878,884.06 10.00
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SCHEDULES FORMING PART OF THE BALANCE SHEET
SCHEDULE 4 : INVESTMENTS (Note No.1f)
LONG TERM INVESTMENTS (AT COST)
Maturity Number of Face Value Face As at Number As at
Date Units Per Unit Value 31.03.2011 of 31.03.2010
(Rs.) (Rs.) (Rs. in Crores) Units (Rs. in Crores)
EQUITY SHARES
In Subsidiary Companies
National Securities Clearing Corporation Ltd. 45,000,000 10.00 450,000,000 5.63 45,000,000 5.63
NSE.IT LTD. 10,000,010 10.00 100,000,100 10.00 10,000,010 10.00
DotEx International Ltd. 12,000,000 10.00 120,000,000 0.69 12,000,000 0.69
NSE Infotech Services Ltd 50,000 10.00 500,000 0.05 50,000 0.05
National Commodity Clearing Ltd. 3,087,500 10.00 30,875,000 3.09 3,087,500 3.09
India Index Services & Products Ltd. 663,000 10.00 6,630,000 0.67 663,000 0.67
20.13 20.13
In Associate Company
NATIONAL STOCK EXCHANGE OF INDIA LIMITED
National Securities Depository Ltd. 20,036,001 10.00 200,360,010 96.90 20,036,001 96.90
96.90 96.90
In Joint Venture
Power Exchange India Ltd 13,000,030 10.00 130,000,300 13.00 12,500,030 12.50
13.00 12.50
In Other Companies
National Commodity & Derivative Exchange Ltd. 5,625,013 10.00 56,250,130 16.87 5,361,860 13.97
MCX Limited 1,250,000 10.00 10,000,000 1.00 2,000,000 1.00
17.87 14.97
As at 31.3.2011 As at 31.3.2010
Notes : Rs. in Crores Rs. in Crores
1 (a) Aggregate Book Value - Quoted Investments 372.75 147.74
(b) Aggregate Book Value - Unquoted Investments 175.49 169.59
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As at As at
31.03.2011 31.03.2010
(Rs. in Crores) (Rs. in Crores)
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(iv) Other Long term benefits: Liability on account of other long term benefits such as Leave
encashment, medical reimbursement and Leave Travel Allowance is made on the basis of
actuarial valuation at the end of the year.
(v) Short term employee benefits are charged to revenue in the year in which the related service
is rendered.
i) Taxation : Tax expense for the year, comprising current tax and deferred tax is included in determining
the net profit for the year.
A provision is made for the current tax based on tax liability computed in accordance with relevant
tax rates and tax laws. A provision is made for deferred tax for all timing differences arising between
taxable income and accounting income at currently enacted tax rates.
Deferred tax assets are recognised only if there is a reasonable certainty that they will be realised
and are reviewed for the appropriateness of their respective carrying values at each balance sheet date.
2. Contingent liability:
(i) Estimated amount of contracts remaining to be executed on capital account (net of advances) and
not provided for Rs.14.10 Crores (Previous year : Rs. 23.22 Crores).
(ii) On account of bank guarantees: Rs.5.00 Crores (Previous year : Rs. 5.27 Crores).
(iii) Claims against the company not acknowledged as debts: Rs. 5.80 Crores (Previous Year : Rs. 6.53 Crores)
(iv) A suit has been filed against the Company for damages / compensation along with interest thereon
and the same has been disputed by the Company. As per the legal opinion received, the possibility
of the claim being awarded against the Company is remote.
(v) On account of disputed demand of Employees State Insurance Corporation: Rs. Nil (Previous
Year: Rs. 0.10 Crore)
(vi) On account of disputed demand of Income Tax: Rs. 58.52 Crores (Previous Year: Rs. 46.62 Crores),
disputed demand of Fringe Benefit Tax: Rs.2.21 Crores (Previous Year: Rs. 1.81 Crores) and disputed
demand of Wealth Tax: Rs.1.94 Crores (Previous Year: 1.94 Crores). Wealth Tax liability includes
Rs.1.86 Crores (Previous Year: Rs.1.86 Crores) on account of Tax Department appeals pending
disposal before the Bombay High Court. On account of disputed demand of Service Tax: Rs. 28.10
crores (Previous Year: Rs. Nil) alongwith interest and penalty, for the period from April, 2004 to
March, 2009.
(vii) On account of disputed demand of Securities Transaction Tax : Rs.14.69 Crores (Previous Year :
Rs. 13.15 Crores)
3. In the opinion of the Board, current assets, loans and advances are approximately of the value stated, if
realised in the ordinary course of business.
4. Managerial Remuneration :
Particulars (Rs. in Crores)
Current year Previous year
Salary and allowances 9.68 8.84
Compensation to Chairman 0.25 0.04
Contribution to Provident Fund
and other Funds 0.79 0.65
Perquisites in cash or in kind 1.78 1.52
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5. Loans to employees includes housing loan to Directors amounting to Rs. 0.02 Crore (Previous Year:Rs.0.03
Crore), maximum amount outstanding at any time during the year Rs. 0.03 Crore (Previous Year : Rs.0.04
Crore).
6. a. Expenditure in foreign currency:
(i) Travelling expenses Rs. 0.38 Crore (Previous Year : Rs. 0.38 Crore)
(ii) Professional and technical fees Rs. 2.79 Crores (Previous Year : Rs. 2.17 Crores)
(iii) Others Rs. 5.94 Crores (Previous Year : Rs. 3.51 Crores)
b. Earnings in foreign exchange : Rs. 11.01 Crores (Previous Year : Rs. 3.86 Crores)
7. C.I.F. value of imports in respect of:
Capital goods Rs. 11.45 Crores (Previous year : Rs. 19.98 Crores)
8. Deposits from trading members include Rs. 5.92 Crores (Previous year : Rs. 4.89 Crores) from trading
members who have applied for surrender of their trading membership which have been conditionally
accepted by the company. Such deposits are refundable to them on fulfilment of conditions of surrender.
9. Statement of Short Term Investment at the end of the year is given below.
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10. Statement of investments purchased and sold/redeemed during the year at cost is given below :
Sr. Particulars No. of units Cost
No. Rs. in Crores
Commercial Paper
1 Raymond Limited 300 14.73
2 Tata Capital Limited 200 9.64
3 L&T Infrastructure Finance Company Limited 200 9.63
4 HCL Infosystems Limited 200 9.81
5 Hindustan Construction Company Limited 200 9.81
6 Aditya Birla Finance Limited 200 9.62
7 Aditya Birla Finance Limited 200 9.66
8 HCL Infosystems Limited 200 9.98
9 Aditya Birla Finance Limited 200 9.80
10 Blue Star Limited 200 9.79
11 Tata Capital Limited 200 9.80
12 Tata Capital Limited 200 9.85
13 HCL Infosystems Limited 200 9.77
Total Commercial Paper 131.89
Mutual Funds :
1 Axis Liquid Fund - Institutional - Daily Dividend 1647446.8133 164.75
2 Axis Treasury Advantage Fund - Institutional Daily Dividend 122612.2121 12.26
3 Baroda Pioneer Liquid Fund - Institutional Daily Dividend Plan 200993022.6607 201.12
4 Baroda Pioneer Treasury Advantage Fund - Institutional Daily Dividend Plan 202208230.2300 202.39
5 Birla Sun Life Cash Manager - IP - Daily Dividend - Reinvestment 113425926.7252 113.46
6 Birla Sun Life Cash Plus - Instl. Prem Plan - Daily Dividend - Reinvestment 569236596.8816 570.35
7 Birla Sun Life Interval Income Fund - Instl - Quarterly - Series 1 - Dividend 5135151.6710 5.14
8 Birla Sun Life Quarterly Interval - Series 4 - Dividend - Reinvestment 5073817.8780 5.07
9 Birla Sun Life Savings Fund - Instl. - Daily Dividend - Reinvestment 154112475.1693 154.22
10 Birla Sun Life Short Term Fmp - Series 1 - Dividend 5117800.0000 5.12
11 Birla Sun Life Short Term Fmp Series 3 - Dividend 5088542.5000 5.09
12 BNP Paribas Overnight Fund - Institutional - Daily Dividend 55016336.4524 55.03
13 Canara Robeco Interval Series 2 - Quarterly Plan 2 - Inst Dividend Fund 62676.7650 0.06
14 Canara Robeco Liquid Super Inst Daily Div Reinvest Fund 101285400.2229 101.84
15 Canara Robeco Treasury Advantage Super Instt Daily Div Reinv Fund 117120891.0839 145.31
16 DSP Black Rock FMP - 3M - Series 21 - Dividend 5073765.0000 5.07
17 DSP Black Rock FMP - 3M - Series 24 - Dividend 5081665.0000 5.08
18 DSP Black Rock FMP - 3M - Series 19 - Dividend 5072209.5000 5.07
19 DSP Black Rock FMP - 3M - Series 20 - Dividend 5072209.5000 5.07
20 DSP Blackrock Liquidity Fund-Institutional Plan-Daily Dividend-Reinvestment 1123680.3014 112.40
21 DSP BLACKROCK Money Manager Fund - Institutional Plan - Daily Dividend 825496.9222 82.62
22 DWS Cash Opportunities Fund - Institutional Plan Weekly Dividend 87073447.2267 87.79
23 DWS Insta Cash Plus Fund-Super Institutional-Daily Dividend-Reinvest 258864771.8537 259.65
24 DWS Ultra Short Term Fund - Institutional Daily Dividend 173480766.0952 173.79
25 Fidelity Cash Fund - Super IP - Daily Dividend 20257284.8478 20.71
26 Fidelity FMP Series 2 - Plan A - Dividend 5059318.2900 5.06
27 Fidelity FMP Series 3 - Plan B - Dividend 5073210.8720 5.07
28 Fidelity FMP Series 3 - Plan C - Dividend 5792079.1562 5.79
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11. Sundry creditors includes Rs. 0.19 Crore (Previous Year: Rs. 0.32 Crore) due to Micro, Small & Medium
Enterprises. Total outstanding dues to Micro, Small & Medium Enterprises have been determined to the
extent such parties have been identified on the basis of information available with the Company.
12. Disclosure under Revised Accounting Standard 15 on Employee Benefits:
(i) Defined Contribution Plan: Company's contribution towards superannuation amounting to Rs. 1.16
Crore (Previous Year : Rs.0.88 Crore) has been charged to Profit & Loss account.
(ii) Defined Benefit Plan:
(a) Provident Fund: Company's contribution towards Provident Fund amounting to Rs. 1.65
Crores (Previous Year: Rs. 1.28 Crores) has been charged to Profit & Loss account. As per
Implementation Guidance on AS 15 (Revised 2005) Employee Benefits issued by the
Accounting Standard Board (ASB) of the Institute of Chartered Accountants of India, benefit
involving employer established provident funds which require interest short fall to be
recompensed are to be considered as defined benefit plans. Pending issuance of the guidance
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note from the Actuarial Society of India, the Company is unable to reliably measure provident
fund liabilities and exhibit the related information.
(b) Gratuity: Company has charged the Gratuity expense to Profit & Loss account based on the
actuarial valuation of gratuity liability at the end of the year. The projected unit credit method
used to show the position as at March 31, 2011 is as under.
i) Assumptions:
Current Previous
Year Year
Discount Rate 8.25% 8.00%
Rate of Return on Plan Assets 8.00% 8.00%
Salary Escalation 5.00% 5.00%
Attrition Rate 2.00% 2.00%
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13. During the year, the company has reviewed its fixed assets for impairment loss as required by Accounting
Standards 28 - "Impairment of Assets". In the opinion of management no provision for impairment loss is
considered necessary. Certain assets having gross book value of Rs.4.12 Crores (Previous Year: Rs. 80.12
Crores) and net book value of Rs. Nil (Previous Year : Rs.0.03 Crores) have become obsolete and therefore
have been earmarked for disposal or scrap. The net realisable value of the obsolete assets cannot be
estimated and therefore taken as Rs. Nil.
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14. In the opinion of the management, as the Company's operations comprise of only facilitating trading in
securities and the activities incidental thereto within India, the disclosures required in terms of Accounting
Standard 17 - "Segment Reporting" issued by the Institute of Chartered Accountants of India are not
applicable.
15. In compliance with Accounting Standard 18 - "Related Party Disclosures" issued by the Institute of Chartered
Accountants of India, the required disclosures are given in the table below:
B) Details of transactions (including service tax wherever levied) with related parties are as follows:
(Rs. in Crores)
Name of the Year ended Year ended
Nature of Transactions
Related Party 31.03.2011 31.03.2010
National Securities • Usage charges received 6.34 5.24
Clearing • Space and Infrastructure usage charges received 6.08 2.42
Corporation Ltd. • Reimbursement received for expenses on staff on deputation 13.68 10.31
• Reimbursement received for other expenses incurred 20.41 18.30
• Dividend received 85.50 51.75
• Clearing and Settlement charges paid 132.24 105.79
• Closing balance (Credit)/Debit 9.45 (14.92)
• Investment in Equity Share Capital 5.63 5.63
NSE.IT Ltd. • Reimbursement received for other expenses incurred 0.01 0.01
• Software license procured 0.51 0.02
• Software Development Charges paid 0.70 0.33
• Repairs and maintenance - Computer trading,
Telecommunication systems 17.56 18.06
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16. In accordance with Accounting Standard 19 - "Leases" issued by the Institute of Chartered Accountants of
India, the details of obligation on long term non - cancellable operating lease in respect of certain vehicles
and office premises taken by the Company are as follows.
(Rs. in Crores)
Lease obligations Year ended Year ended
31.03.2011 31.03.2010
Total of future minimum lease payments
- Lease rentals paid during the year 3.09 2.99
- Not later than one year 3.23 3.00
- Later than one year and not later than five years 14.77 14.19
- Later than five years 3.43 7.20
The terms of the Leases range from 3 years to 10 years.
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17. In accordance with Accounting Standard 20 - "Earning per Share" issued by the Institute of Chartered
Accountants of India, the required disclosure is given below.
Earning per share
Year ended Year ended
31.03.2011 31.03.2010
Net Profit attributable to Shareholders (Rs. In Crores) 637.51 613.77
Weighted Average number of equity shares issued (No. in Crores) 4.50 4.50
Basic earnings per share of Rs. 10/- each (in Rs.) 141.67 136.39
The Company does not have any outstanding dilutive potential equity shares. Consequently, the basic and
diluted earning per share of the Company remain the same.
18. In accordance with the Accounting Standard 22 - "Accounting for Taxes on Income", the break up of
deferred tax assets / liabilities is as follows:
(Rs. in Crores)
As at As at
31st March 2011 31st March 2010
Deferred Tax Liabilities
Related to depreciation and other capital expenditure 16.67 17.71
Related to other items 0.11 0.11
Total (A) 16.78 17.82
Less: Deferred Tax Assets
Related to disallowance u/s 43B 4.02 3.66
Related to other items – –
Total (B) 4.02 3.66
Net Deferred Tax Liability (A-B) 12.76 14.16
19. i) The Company has a Joint Venture interest in India Index Services & Products Ltd.(IISPL) which is
a jointly controlled entity and is incorporated in India. The company has a 51% ownership interest
in the joint venture. As per Accounting Standard 27 - "Financial Reporting of Interests in the Joint
Ventures", the aggregate amounts related to Company's interest in the joint venture are as follows.
(Rs. in Crores)
Particulars As at As at
31-March-2011 31-March-2010
Assets 19.33 14.29
Reserve & Surplus 17.95 11.91
Liabilities 0.72 1.71
Income 10.70 7.74
Expenses 4.66 3.18
Dividend received 0.46 0.33
Contingent Liability 0.99 0.29
The Company has no capital commitments in relation to its interest in Joint Ventures.
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ii) The Company has a Joint Venture interest in Power Exchange India Ltd.(PXIL) which is a jointly
controlled entity and is incorporated in India. The company has a 32.50% (Previous Year 36.40%)
ownership interest in the joint venture. As per Accounting Standard 27 - "Financial Reporting of
Interests in the Joint Ventures", the aggregate amounts related to Company's interest in the joint
venture based on un-audited accounts are as follows.
(Rs. in Crores)
Particulars As at As at
31-March-2011 31-March-2010
Assets 11.71 14.05
Reserve & Surplus (10.13) (6.56)
Liabilities 8.84 8.11
Income 3.03 1.44
Expenses 7.30 6.24
Dividend received – –
Contingent Liability – 0.19
The Company has no capital commitments in relation to its interest in Joint Ventures.
20. Previous years' figures are regrouped, reclassified and rearranged wherever necessary.
21. Information with regard to other matters specified in clauses 3, 4C and 4D of the Part II of Schedule VI to
the Companies Act, 1956 are either Nil or not applicable to the Company.
As per our report of even date attached For and on behalf of the Board of Directors
For KHANDELWAL JAIN & CO.
Chartered Accountants
NARENDRA JAIN
Partner
Membership No.:48725 CHITRA RAMKRISHNA DR. R. H. PATIL
Jt. Managing Director Director
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2010-2011 2009-2010
(Rs. in Crores) (Rs. in Crores)
NET CASH FROM (USED IN) INVESTING ACTIVITIES - Total (B) 2,365.68 (46.86)
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2010-2011 2009-2010
(Rs. in Crores) (Rs. in Crores)
As per our report of even date attached For and on behalf of the Board of Directors
For KHANDELWAL JAIN & CO.
Chartered Accountants
NARENDRA JAIN
Partner
Membership No.:48725 CHITRA RAMKRISHNA DR. R. H. PATIL
Jt. Managing Director Director
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I Registration Details
Registration No. * 6 9 7 6 9 State Code 1 1
Sources of Funds
Paid-up Capital Reserves & Surplus
* * * 4 5 0 0 0 0 * 2 9 2 3 3 8 1 8
Application of Funds
Net Fixed Assets Investments
* * 4 5 7 9 9 5 6 * * 5 4 8 2 4 1 6
Accumulated Losses
* * * N I L * * *
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V Generic Names of Three Principal Products / Services of Company (as per monetary terms)
Product F A C I L I T A T I N G T R A D I N G
Description
I N S E C U R I T I E S
As per our report of even date attached For and on behalf of the Board of Directors
For KHANDELWAL JAIN & CO.
Chartered Accountants
NARENDRA JAIN
Partner
Membership No.:48725 CHITRA RAMKRISHNA DR. R. H. PATIL
Jt. Managing Director Director
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Statement pursuant to Section 212 of the Companies Act,1956, relating to subsidiary company
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Statement pursuant to Section 212 of the Companies Act, 1956, relating to subsidiary company
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Nineteenth Annual Report
Statement pursuant to Section 212 of the Companies Act,1956, relating to subsidiary company
91
NATIONAL STOCK EXCHANGE OF INDIA LIMITED
Nineteenth Annual Report
Statement pursuant to Section 212 of the Companies Act,1956, relating to subsidiary company
92
NATIONAL STOCK EXCHANGE OF INDIA LIMITED
Nineteenth Annual Report
Statement pursuant to Section 212 of the Companies Act, 1956, relating to subsidiary company
93
NATIONAL STOCK EXCHANGE OF INDIA LIMITED
Nineteenth Annual Report
Statement pursuant to Section 212 of the Companies Act, 1956, relating to subsidiary company
94
NATIONAL STOCK EXCHANGE OF INDIA LIMITED
Nineteenth Annual Report
Statement pursuant to Section 212 of the Companies Act,1956, relating to subsidiary company
95
NATIONAL STOCK EXCHANGE OF INDIA LIMITED
Nineteenth Annual Report
Statement pursuant to Section 212 of the Companies Act,1956, relating to subsidiary company
96
A A
NATIONAL SECURITIES CLEARING
CORPORATION LIMITED
A A
National Securities Clearing Corporation Limited Sixteenth Annual Report
BOARD OF DIRECTORS
SECRETARY
DIRECTORS' REPORT
To,
The Members,
Your Directors have pleasure in presenting the Sixteenth Annual Report and Audited Accounts of the Company
for the year ended March 31, 2011.
I. OPERATIONS
Your Company, a wholly-owned subsidiary of National Stock Exchange of India Limited (NSEIL), carries
out the clearing and settlement of the trades executed on the Capital Market (CM), Futures & Options
(F&O), Currency Derivatives (CD), Securities Lending and Borrowing (SLBS), Mutual Funds (MFSS)
segments and OTC trades in Corporate Bonds. National Securities Clearing Corporation Limited (NSCCL)
guarantees settlement of trades executed on the Capital Market, Futures and Options, Securities Lending
& Borrowing and Currency Derivatives segments.
NSCCL successfully continued its track record of completing all settlements in a timely manner.
During the period under review, 255 rolling settlements were handled in de-materialised mode. The
Per settlement figures in value terms in the current year are higher than the previous year as given
below:
The average value of securities handled per settlement was Rs. 3,840 crores in 2010-11 compared to
Rs. 3,761 crores in 2009-10. The average funds pay-in per settlement during the above periods were
Rs 1,150 crores and Rs. 1,141 crores respectively. The average number of shares processed per
settlement was about 1,954 lakhs in 2010-11 compared to 1,946 lakhs in 2009-10. Short deliveries
per settlement averaged around 0.13% in 2010-11 as compared to 0.18% in 2009-10.
The highest trading volume of Rs. 29,832.54 crores was observed on November 4, 2010 and highest
deliverable value of Rs. 8,450.65 crores was observed on November 9, 2010. Percentage of number
of shares deliverable to number of shares traded increased to 27.51% in 2010-11 from 21.52% in
2009-10. Percentage of value of shares deliverable to value of shares traded increased to 27.47% in
2010-11 from 22.22% in 2009-10. The Settlement Guarantee Fund stood at Rs. 5,100.35 crores as on
March 31, 2011. The details of settlements carried out by NSCCL are presented in Table 1.
1
National Securities Clearing Corporation Limited Sixteenth Annual Report
Particulars Quantity Quantity % of Shares Value of Value of % of % of Short Funds Settlement No. of
of Shares of Shares Deliverable Shares Shares Delivery Delivery Pay-in Guarantee settlements
Traded Deliverable to Total Traded Deliverable to Value to (Rs. Cr) Fund
(lakhs) (lakhs) Shares (Rs. Cr) (Rs. Cr) of Shares Delivery closing
Traded Traded balances
(Rs. Cr)
Apr-10 1,40,723.02 38,962.50 27.69% 2,73,343.78 74,744.36 27.34% 0.14% 19,310.45 5,426.87 20
May-10 1,41,599.36 37,327.92 26.36% 2,87,930.81 76,122.28 26.44% 0.11% 23,541.46 5,233.37 22
Jun-10 1,41,008.48 34,607.39 24.54% 2,82,747.78 70,801.02 25.04% 0.13% 22,292.03 5,209.64 22
Jul-10 1,40,128.49 38,714.06 27.63% 2,76,734.07 76,753.46 27.74% 0.12% 20,145.40 5,226.01 22
Aug-10 1,53,693.71 44,391.11 28.88% 3,16,431.26 87,520.91 27.66% 0.19% 21,675.19 5,201.10 22
Sep-10 1,56,909.02 44,985.90 28.67% 3,02,984.19 87,471.36 28.87% 0.14% 27,316.18 5,448.95 20
Oct-10 1,98,534.25 55,683.10 28.05% 3,68,748.17 1,05,673.77 28.66% 0.13% 28,479.30 5,349.99 22
Nov-10 1,88,745.45 53,979.70 28.60% 3,70,156.59 1,04,995.86 28.37% 0.15% 35,467.42 5,357.53 21
Dec-10 1,54,480.09 41,289.30 26.73% 3,02,625.93 82,171.18 27.15% 0.11% 24,744.22 5,261.18 22
Jan-11 1,29,068.15 36,358.11 28.17% 2,64,548.11 74,104.69 28.01% 0.10% 25,839.25 4,998.62 20
Feb-11 1,40,066.86 38,134.33 27.23% 2,65,416.46 71,190.56 26.82% 0.11% 22,217.24 4,967.33 20
Mar-11 1,25,953.33 33,836.84 26.86% 2,53,527.71 67,719.93 26.71% 0.10% 22,329.28 5,100.35 22
2010-11 18,10,910.21 4,98,270.26 27.51% 35,65,194.86 9,79,269.38 27.47% 0.13% 2,93,357.42 5,100.35* 255
2
National Securities Clearing Corporation Limited Sixteenth Annual Report
The details of turnover and month-wise settlement values during the year April 01, 2010 to
March 31, 2011 are tabulated below:
Date No. of Turnover MTM Final Premium Exercise Total
Contracts Traded (in Rs. cr) Settlement Settlement Settlement Settlement Settlement
( in lakhs) (in Rs. cr) (in Rs. cr) (in Rs. cr) (in Rs. cr) (in Rs. cr)
As of March 31, 2011, the Settlement Guarantee Fund in F&O segment stood at
Rs. 29,759.29 Crores.
3
National Securities Clearing Corporation Limited Sixteenth Annual Report
Based on the guidelines issued by SEBI, NSE introduced trading in IRF contracts on 10 year notional
7% coupon bearing GOI security on August 31, 2009. The details of turnover and month-wise
settlement values during the period April 1, 2010 to March 31, 2011 are tabulated below:
4
National Securities Clearing Corporation Limited Sixteenth Annual Report
5. Risk Management
(i) Capital Market & Securities Lending & Borrowing segments
NSCCL has laid requisite focus towards risk management by putting in place an On-line Position
monitoring system which has successfully and efficaciously addressed the market risks. Margins
are computed on an on-line real time basis at client level. The Value at Risk (VAR) Margins are
applied which is statistically arrived at covering 99% value at risk.
With effect from April 21, 2008, margins in Capital market are being levied on institutional
trades also. These margins are levied on T+1 day in the Capital Market segment.
5
National Securities Clearing Corporation Limited Sixteenth Annual Report
requirements, its overriding objective is to determine the largest loss that a portfolio might
reasonably be expected to suffer from one day to the next day. The parameters used in the
computation of margins are revised six times a day.
There have been no defaults during the financial year.
RBI had permitted the repo transactions in corporate bond vide directions issued on January 8, 2010.
There have been four repo trades valuing Rs. 91.04 crores.
6
National Securities Clearing Corporation Limited Sixteenth Annual Report
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National Securities Clearing Corporation Limited Sixteenth Annual Report
8
National Securities Clearing Corporation Limited Sixteenth Annual Report
Ltd., Hongkong & Shanghai Banking Corporation Ltd., ICICI Bank Ltd., IDBI Bank Ltd., IndusInd
Bank Ltd., Kotak Mahindra Bank Ltd., Standard Chartered Bank, State Bank of India and Union
Bank of India for funds settlement.
III. DIVIDEND
In view of the above results, the Directors recommend payment of dividend of Rs. 20/- per share for the
year 2010-11.
V. DIRECTORS
Mr. Y. H. Malegam and Dr. Ajay Shah retire by rotation at the ensuing Annual General Meeting and being
eligible offer themselves for reappointment.
9
National Securities Clearing Corporation Limited Sixteenth Annual Report
VIII. AUDITORS
The Auditors, M/s. Haribhakti & Co., Chartered Accountants, will retire at the forthcoming Annual General
Meeting of NSCCL and are eligible for re-appointment. NSCCL has received a certificate from the Auditors
to the effect that their re-appointment, if made, would be within the limits prescribed under Section
224 (1B) of the Companies Act, 1956.
10
National Securities Clearing Corporation Limited Sixteenth Annual Report
Section 217(1)(e) of the Companies Act, 1956, read with the aforesaid Rules are not applicable to
the Company.
2. Foreign Exchange earnings/outgo during the year under review
There was no foreign exchange earning during the year. However, the foreign exchange outgo
during the year was Rs.0.02 crores.
X. PARTICULARS OF EMPLOYEES
All the persons who are working with NSCCL are on deputation from National Stock Exchange of India
Limited (NSEIL) and accordingly the remuneration paid in respect of them has been reimbursed to NSEIL
by NSCCL. A statement under Section 217(2A) of the Companies Act, 1956 read with Companies
(Particulars of Employees) Rules, 1975 is enclosed.
XI. ACKNOWLEDGMENT
Your Directors wish to place on record their gratitude for the co-operation and support extended by the
Government of India, Securities and Exchange Board of India and Reserve Bank of India. The Board also
wishes to place on record their sincere appreciation for the unstinted efforts of the employees at all levels
towards the continued growth of NSCCL.
Ravi Narain
Chairman
Place : Mumbai
Date : April 28, 2011
11
National Securities Clearing Corporation Limited Sixteenth Annual Report
1 Mr. R. Sundararaman 48 Senior Vice 15950826 8617432 28 March 13, 1995 Grade ‘B’
B. Sc., CAIIB, AICWA President Officer,
Industrial
Development
Bank of India
Notes :
1 Gross Remuneration includes Salary and other benefits, Company's contribution to Provident Fund,
Superannuation Fund, taxable value of perquisites, etc. Net remuneration represents gross remuneration less
Company's contribution to provident and superannuation funds, taxable value of perquisites, profession tax
and income tax. Where applicable, the amounts also include certain allowances accrued during previous
year(s) but claimed in the current year.
2 The above mentioned employee is not a relative of any Director.
3 The above employee is on deputation basis from the Company's holding company i.e. National Stock Exchange
of India Limited (NSEIL) and the remuneration mentioned above in respect of him has been reimbursed to
NSEIL by the Company
4 The abovementioned employee is not holding equity shares in the company within the meaning of sub-clause
(iii) of clause (a) of sub-section (2A) of Section 217 of the Companies Act, 1956.
5 The Company does not have any Employees Stock Option Plan (ESOP) Scheme for its employees.
12
National Securities Clearing Corporation Limited Sixteenth Annual Report
1. We have audited the attached Balance Sheet of National Securities Clearing Corporation Limited
(‘the Company') as at March 31, 2011 and also the Profit and Loss account and the cash flow statement
for the year ended on that date annexed thereto. These financial statements are the responsibility of
the Company's management. Our responsibility is to express an opinion on these financial statements
based on our audit.
2. We conducted our audit in accordance with auditing standards generally accepted in India. Those
Standards require that we plan and perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the financial statements. An audit also
includes assessing the accounting principles used and significant estimates made by management, as
well as evaluating the overall financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.
3. As required by the Companies (Auditor's Report) Order, 2003, (as amended) issued by the Central
Government of India in terms of sub-section (4A) of Section 227 of ‘The Companies Act, 1956' of
India (the ‘Act') and on the basis of such checks of the books and records of the company as we
considered appropriate and according to the information and explanations given to us, we give in the
Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order.
13
National Securities Clearing Corporation Limited Sixteenth Annual Report
vi. In our opinion and to the best of our information and according to the explanations given to us,
the said accounts give the information required by the Companies Act, 1956, in the manner so
required and give a true and fair view in conformity with the accounting principles generally
accepted in India;
a) in the case of the balance sheet, of the state of affairs of the Company as at March 31,
2011;
b) in the case of the profit and loss account, of the profit for the year ended on that date;
and
c) in the case of cash flow statement, of the cash flows for the year ended on that date.
PRASAD V. PARANJAPE
PARTNER
Membership No. 47296
Place : Mumbai
Date : April 28, 2011
14
National Securities Clearing Corporation Limited Sixteenth Annual Report
(i) (a) The Company has maintained proper records showing full particulars, including quantitative details
and situation of fixed assets.
(b) The fixed assets of the company have been physically verified by the management during the year
and no material discrepancies between the book records and the physical inventory have been noticed.
In our opinion, the frequency of verification is reasonable.
(c) There was no substantial disposal of fixed assets during the year.
(ii) The Company does not hold any Inventory. Therefore, the provisions of clauses 4(ii)(a),(b) & (c) of
the Companies (Auditor's Report) Order, 2003 (as amended) are not applicable to the Company.
(iii) As informed, the Company has not granted or taken any loans, secured or unsecured to companies,
firms or other parties covered in the register maintained under section 301 of the Companies Act,
1956 and hence clauses 4(iii)(b), 4(iii)(c), 4(iii)(d), 4(iii)(f) and 4(iii)(g) of the Companies (Auditor's
Report) Order, 2003 (as amended) are not applicable to the company.
(iv) In our opinion and according to the information and explanations given to us, there is an adequate
internal control system commensurate with the size of the Company and the nature of its business
with regard to purchase of fixed assets and sale of services. During the course of our audit, no major
weakness has been noticed in the internal control system in respect of these areas. During the course
of our audit, we have not observed any continuing failure to correct weakness in internal control
system of the company.
(v) According to the information and explanations given to us, there were no contracts or arrangement
during the year that need to be entered in the register maintained under section 301 of the Companies
Act, 1956.
(vi) The company has not accepted any deposits from the public within the meaning of Sections 58A and
58AA of the Act and the rules framed there under.
(vii) In our opinion, the Company has an internal audit system commensurate with the size and nature of
its business.
(viii) To the best of our knowledge and as explained, the Central Government of India has not prescribed
the maintenance of cost records under clause (d) of sub-section (1) of Section 209 of the Act for any
of the services of the company.
15
National Securities Clearing Corporation Limited Sixteenth Annual Report
(ix) (a) The Company is regular in depositing with appropriate authorities undisputed statutory dues including
investor education and protection fund, income-tax, service tax, customs duty, cess and other material
statutory dues applicable to it. We are informed that the provisions of Provident Fund Act and Employee
State Insurance Act are not applicable to the Company.
Further, since the Central Government has till date not prescribed the amount of cess payable under
section 441A of the Companies Act,1956, we are not in a position to comment upon the regularity or
otherwise of the company in depositing the same.
(b) According to the information and explanations given to us, no undisputed amounts payable in respect
of investor education and protection fund, income-tax, service tax, customs duty, cess and other
undisputed statutory dues were outstanding, at the year end, for a period of more than six months
from the date they became payable.
(c) According to the records of the Company, the dues outstanding in respect of income-tax, service tax,
customs duty, and cess as at March 31, 2011, which have been not been deposited with respective
authorities on account of disputes are as follows:
Name of the Statute Nature of the Amount (Rs.) Period to which Forum where
Dues the amount relates dispute is pending
Income Tax Act 1961 Income Tax 1,82,988 AY 2003-04 CIT (Appeals)
Income Tax Act 1961 Income Tax 36,26,169 AY 2005-06 ITAT
Income Tax Act 1961 Income Tax 41,70,131 AY 2008-09 CIT (Appeals)
Income Tax Act 1961 Income Tax 6,95,33,692 AY 2009-10 ACIT (Appeals)
(x) The Company has no accumulated losses at the end of the financial year and has not incurred cash
losses during the financial year covered by our audit and the immediately preceding financial year.
(xi) The Company does not have any dues payable to financial institution, bank or debenture holders.
(xii) According to the information and explanations given to us, the Company has not granted loans and
advances on the basis of security by way of pledge of shares, debentures and other securities.
(xiii) In our opinion, the Company is not a chit fund or a nidhi / mutual benefit fund / society. Therefore, the
provisions of clause 4(xiii) of the Companies (Auditor's Report) Order, 2003 (as amended) are not
applicable to the Company.
(xiv) In our opinion, the Company is not dealing in or trading in shares, securities, debentures and other
investments. Accordingly, the provisions of clause 4(xiv) of the Companies (Auditor's Report) Order,
2003 (as amended) are not applicable to the Company.
(xv) In our opinion and according to the information and explanations given to us, the company has not
given any guarantee for loans taken by others from banks or financial institutions during the year.
16
National Securities Clearing Corporation Limited Sixteenth Annual Report
(xvii) According to the information and explanations given to us and on an overall examination of the
balance sheet of the Company, we report that no funds raised on short-term basis have been used for
long-term investment.
(xviii) According to the information and explanations given to us, the company has not made preferential
allotment of shares to parties and companies covered in the register maintained under section 301 of
the Act.
(xix) The Company did not have any outstanding debentures during the year.
(xx) The Company has not raised any money by public issue during the year.
(xxi) During the course of our examination of the books and records of the company, carried out in accordance
with the generally accepted auditing practices in India, and according to the information and
explanations given to us, we have neither come across any instance of fraud on or by the company,
noticed or reported during the year, nor have we been informed of such case by the management.
PRASAD V. PARANJAPE
PARTNER
Membership No. 47296
Place : Mumbai
Date : April 28, 2011
17
National Securities Clearing Corporation Limited Sixteenth Annual Report
2. Deposits (Unsecured)
a Deposit from Members 3 38,449.83 36,855.24
b Deposits from Applicants 427.00 552.00
c Deposits from Clearing Banks 12,450.00 51,326.83 11,900.00 49,307.24
II APPLICATION OF FUNDS
1. Fixed Assets 4
a. Gross Block 2,714.29 2,544.97
Less : Accumulated Depreciation 2,171.33 2,041.47
Net Block 542.96 503.50
18
National Securities Clearing Corporation Limited Sixteenth Annual Report
PROFIT & LOSS ACCOUNT FOR THE YEAR ENDED MARCH 31, 2011
EXPENDITURE
Administration & Other Expenses 11 4,121.05 3,615.90
Bad Debts (Refer Note No.1c (ii) ) – 8.20
Payments to and provision for employees 12 1,295.48 968.91
Depreciation 249.76 234.78
Appropriations :
- General Reserve 13,000.00 8,500.00
- Proposed Dividend 9,000.00 8,550.00
- Corporate Dividend Tax 1,460.02 1,420.05
- Balance carried to Balance Sheet 10,532.97 10,180.34
33,992.99 28,650.39
Basic Earning per share (Rs) (FV Rs.10) (Refer Note No.2 (l)) 52.92 50.23
19
National Securities Clearing Corporation Limited Sixteenth Annual Report
20
SCHEDULE 4 : FIXED ASSETS {Refer Note No. 1 d (ii) to (v)}
(Rs. In Lacs)
SR. GROSS BLOCK DEPRECIATION NET BLOCK
NO. DESCRIPTION As on Additions Deductions As on Upto For the Deductions Total upto As on As on
01.04.10 during the during the 31.03.11 31.03.10 year during the 31.03.11 31.03.11 31.03.10
year year year
Tangible Assets
1 Clearing And Settlement Systems 2,110.16 231.61 98.77 2,243.00 1,659.25 220.91 97.09 1,783.07 459.93 450.91
2 Computer Systems 126.50 – 22.55 103.95 121.82 2.84 22.55 102.11 1.84 4.68
3 Dial Based Telecom Network * 0.31 – – 0.31 0.31 – – 0.31 – –
4 Furniture and Fixtures 8.68 – – 8.68 6.44 0.29 – 6.73 1.95 2.24
5 Office Equipments 1.84 – 0.26 1.58 1.84 – 0.26 1.58 – –
6 Telecommunications Systems 9.34 – – 9.34 7.33 1.40 – 8.73 0.61 2.01
National Securities Clearing Corporation Limited
Intangible Assets
7 Computer Software 288.14 59.29 – 347.43 244.48 24.32 – 268.80 78.63 43.66
TOTAL: 2,544.97 290.90 121.58 2,714.29 2,041.47 249.76 119.90 2,171.33 542.96 503.50
Previous Year 2,170.85 410.72 36.60 2,544.97 1,842.45 234.78 35.76 2,041.47 503.50 328.40
21
Sixteenth Annual Report
SCHEDULE 5: INVESTMENTS (LONG TERM) (Refer Note No. 1e)
QUOTED
GOI SECURITIES
Taxable
11.50% GOVERNMENT OF INDIA SECURITY 21-May-2015 300 100 30,000.00 0.35 300 0.37
Sub-total(i) 0.35 0.37
BONDS
Taxfree
9% INDIAN RAILWAY FINANCE CORPORATION LTD. 2015 28-Feb-2015 90 1,000,000 90,000,000.00 941.36 50 500.00
5.30% NUCLEAR POWER CORPORATION OF INDIA LTD. 2012 31-Dec-2012 – 100,000 50,000,000.00 – 500 499.49
5.50% NUCLEAR POWER CORPORATION OF INDIA LTD.2013 14-Aug-2013 200 100,000 20,000,000.00 200.00 200 200.00
5.25% NUCLEAR POWER CORPORATION OF INDIA LIMITED 2014 23-Mar-2014 100 1,000,000 100,000,000.00 1,000.00 100 1,000.00
National Securities Clearing Corporation Limited
22
Sixteenth Annual Report
SCHEDULE 5: INVESTMENTS (LONG TERM) (Refer Note No. 1e)
As at 31.3.2011 As at 31.3.2010
Notes: Rs. in lacs Rs. in lacs
1. (a) Aggregate Book Value - Quoted Investments 15,470.36 9,636.50
(b) Aggregate Book Value - Unquoted Investments 905.04 597.83
(c) Total (a + b) 16,375.40 10,234.34
2. Aggregrate Market value of quoted investments Rs. 15,481.67 lacs (Previous year Rs. 9,852.25lacs)
23
Sixteenth Annual Report
National Securities Clearing Corporation Limited Sixteenth Annual Report
As at 31.3.2011 As at 31.3.2010
(Rs. In Lacs) (Rs. In Lacs)
3 Bank Balances
Balances with Scheduled Banks
in Current Accounts 2,301.50 20,108.36
in Deposit Accounts * 355,991.12 262,623.71
in Certificate of Deposits 18,964.92 –
377,257.54 282,732.07
4 Other Current Assets
Mutual Funds 52,479.79 131,350.57
Commercial Papers 6,539.10 –
Taxable Bonds 499.56 –
59,518.45 131,350.57
442,990.76 421,032.27
B. LOANS & ADVANCES
(Unsecured, considered good)
* Includes deposits of Rs.1029.53 lacs ( Previous Year: Rs.964.78 lacs) made on behalf of members out of withheld
payouts/collateral deposits.
24
National Securities Clearing Corporation Limited Sixteenth Annual Report
As at 31.3.2011 As at 31.3.2010
(Rs. In Lacs) (Rs. In Lacs)
PROVISIONS
Proposed Dividend 9,000.00 8,550.00
Corporate Dividend Tax 1,460.02 10,460.02 1,420.05 9,970.05
25
National Securities Clearing Corporation Limited Sixteenth Annual Report
SCHEDULE 12 : PAYMENTS TO & PROVISION FOR EMPLOYEES (Refer Note No. 2(h))
Salaries & Allowances 1,192.21 895.08
Contribution to Provident Fund and other Funds 39.32 34.83
Employees' Welfare expenses 63.95 39.00
TOTAL 1,295.48 968.91
26
National Securities Clearing Corporation Limited Sixteenth Annual Report
27
National Securities Clearing Corporation Limited Sixteenth Annual Report
(ii) Fixed assets are stated at cost (or revalued amounts, as the case may be), less accumulated
depreciation and impairment losses if any. Cost comprises the purchase price and any
attributable cost of bringing the asset to its working condition for its intended use.
(iii) Depreciation is provided on the "Straight line method" based on estimated useful life of
assets at the following rates which are higher than those prescribed in Schedule XIV (Inserted
by the Companies (Amendment) Act, 1988 and Notification GSR No. 756E dated 16th
December, 1993) to the Companies Act, 1956.Depreciation on additions /deletions is
provided on pro-rata basis from the date of acquisition/ up to the date of deletion.
Assets Depreciation Rate
Office Equipment 25.00%
Furniture & Fixtures
- Movable Furniture 20.00%
- Non movable Furniture 6.33%/10.00%
Computer Systems 33.33 %
Clearing and Settlement Systems 25.00 %
Telecommunications Systems 25.00 %
Dial Based Telecom Network 25.00 %
(iv) Intangibles :-
Intangibles comprising of software are recorded at acquisition cost and are amortized over
the estimated useful life on straight line basis. Depreciation on additions/deletions is provided
on pro-rata basis from the date of acquisition/ upto the date of deletion.
Assets Depreciation Rate
Computer Software 25.00 %
(v) Impairment of Assets :-
The carrying amounts of assets are reviewed at each balance sheet date if there is any
indication of impairment based on internal/external factors. An impairment loss is recognized
wherever the carrying amount of an asset exceeds its recoverable amount. The recoverable
amount is the greater of the asset's net selling price and value in use. In assessing value in
use, the estimated future cash flows are discounted to their present value at the weighted
average cost of capital. After impairment, depreciation is provided on the revised carrying
amount of the asset over its remaining useful life.
e) Investments :
(i) Long term investments are considered as held till maturity and are valued at cost. Provision
is made for diminution in the value of investment, if any, other than temporary in nature.
(ii) Short term investments are valued at cost or fair value whichever is lower.
(iii) Premium/ Discount at the time of acquisition of Government / Debt securities is amortised
/recognised over the residual period of its maturity.
(iv) The cost of investment includes acquisition charges such as brokerage, etc. Front-end
discount / incentive earned in respect of direct subscription are adjusted towards the cost of
investment.
28
National Securities Clearing Corporation Limited Sixteenth Annual Report
f) Income Tax :
Income tax expense for the year, comprising current tax and deferred tax is included in
determining the net profit for the year.
A provision is made for the current tax based on tax liability computed in accordance with
relevant tax rates and tax laws. Deferred tax assets are recognised only to the extent that there is
reasonable certainty that sufficient future taxable income will be available against which such
deferred tax assets can be realised. In situations where the company has unabsorbed depreciation
or carry forward tax losses, all deferred tax assets are recognised only if there is virtual certainty
supported by convincing evidence that they can be realised against future taxable profits. At
each balance sheet date the Company re-assesses unrecognized deferred tax assets. It recognises
unrecognised deferred tax assets to the extent that it has become reasonably certain or virtually
certain, as the case may be that sufficient future taxable income will be available against which
such deferred tax assets can be realised.
The carrying amount of deferred tax assets are reviewed at each balance sheet date. The company
writes-down the carrying amount of a deferred tax asset to the extent that it is no longer reasonably
certain or virtually certain, as the case may be, that sufficient future taxable income will be
available against which deferred tax asset can be realised. Any such write-down is reversed to
the extent that it becomes reasonably certain or virtually certain, as the case may be, that sufficient
future taxable income will be available.
g) Provisions, contingent liabilities & contingent assets :
Provisions involving substantial degree of estimations in measurement are recognized when
there is present obligation as result of past events and it is probable that there will be outflow of
economic resources. Provisions are not discounted to its present value and are determined based
on best estimate required to settle the obligation at the balance sheet date. These are reviewed at
each balance sheet date and adjusted to reflect the current best estimates.
Contingent liabilities are not recognised but are disclosed while, contingent assets neither are
recognized nor disclosed in financial statements.
h) Earning Per Share:
Basic and diluted earning per share is computed by dividing the net profit attributable to equity
shareholders for the year, by weighted average number of equity shares outstanding during the
year.
2. Notes to Accounts :
a) Contingent Liabilities:
(i) Estimated amount of contracts remaining to be executed on capital account (net of advances)
and not provided for Rs.75.00 Lacs (Previous Year : Rs. 7.60 Lacs)
(ii) Claims against company not acknowledged as debts: Rs. 669.07 Lacs (Previous Year :
Rs. 669.07 Lacs)
(iii) On account of disputed demand of Income tax Rs. 1479.41 Lacs (Previous Year :
Rs. 446.70 Lacs)
b) In the opinion of the Board, current assets, loans and advances are approximately of the value
stated, if realised in the ordinary course of business.
c) During the year, certain assets have been retired from active use and held for disposal/scrap.
The same have been valued at the lower of net book value and net realisable value. The net
realisable value thereof has been considered as Nil in view of the technological obsolescence
thereof.
29
National Securities Clearing Corporation Limited Sixteenth Annual Report
d) Statement of Short investments grouped under ‘Other Current Assets' at the end of the year is
given below :
Particulars No. of As at 31/03/2011 As at
units (Rs. In Lacs) 31/03/2010
Figures in brackets (Rs. In Lacs)
indicates amount No. of Rs. In
earmarked towards SGF units lacs
(I) Commercial Papers
Aditya Birla Finance Limited - CP - 13
Sep 2011 - 8.40% 200.00 922.71 – – –
Nabard - CP - 22 Sep 2011 - 8.00% 200.00 926.11 (926) – –
Reliance Capital Limited - CP - 01 Jul 2011 -
8.05% 200.00 943.80 – –
L&T Finance Company Limited - CP - 27
May 2011 - 8.10% 200.00 951.06 – –
Tata Capital Limited - CP - 05 Oct 2011 - 8.29% 200.00 924.03 – –
Blue Star Limited - CP - 22 Apr 2011 - 8.25% 200.00 961.11 – –
Aditya Birla Finance Limited - CP - 06
Jan 2012 - 10.02% 200.00 910.29 (910) – –
Sub-total (I) 6,539.10 (1,836) – –
(II) Taxable Bonds
7.75% Infrastructure Development Finance
Company Limited 50.00 499.56 – – –
Sub-total (II) 499.56 – – –
(III) Mutual Funds – –
Axis Liquid Fund - IP - Dly Dividend 3,01,435.56 3,014.41 (2,200) – –
Baroda Pioneer Treasury Advantage Fund - IP -
Dly Dividend 2,61,890.17 2,621.28 (2,541) 12565532.4817 1,257.70
Birla Sun Life Cash Plus - I P - Growth – – 85799.9130 15.64
Birla Sun Life Cash Plus - Institutional Premium
Plan - Daily Div 7,80,418.00 78.19 – – –
Birla Sun Life Cash Plus - Institutional Premium
Plan - Growth – – – 1715769.0170 225.29
Birla Sun Life Interval Income Fund Quarterly
Plan - Series 1 - IP - Dividend – – – 5000414.6900 500.04
Birla Sun Life Interval Income Fund Quarterly
Plan - Series II - IP - Dividend – – – 3110000.0000 311.00
Birla Sun Life Savings Fund - IP - Dly Dividend
Reinvestment – – – 2715629.3976 271.75
BNP Paribas Money Plus IP Fund - Daily
Dividend 44,49,668.12 445.10 (93) 119932668.4246 11,996.70
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National Securities Clearing Corporation Limited Sixteenth Annual Report
31
National Securities Clearing Corporation Limited Sixteenth Annual Report
32
National Securities Clearing Corporation Limited Sixteenth Annual Report
e) Statement of Investments Purchased and Sold/Redeemed during the year at cost is given below:
Particulars No. of Units Cost (Rs. in Lacs)
Certificate of Deposits :
PUNJAB NATIONAL BANK - CD - 24 DEC 2010 - 7.50% 2500 2,468.07
AXIS BANK LIMITED - CD - 21 JAN 2011 - 8.50% 500 494.72
Commercial Papers :
TATA CAPITAL LIMITED - CP - 09 FEB 2011 - 7.60% 200 964.84
TATA MOTORS FINANCE LIMITED - CP - 10 DEC 2010 - 7.30% 200 978.09
RAYMOND LIMITED - CP - 15 NOV 2010 - 7.42% 200 982.62
L&T INFRASTRUCTURE FINANCE COMPANY LIMITED - CP -
25 JAN 2011 - 7.90% 200 974.69
HCL INFOSYSTEMS LIMITED - CP - 17 JAN 2011 - 8.00% 200 980.66
ADITYA BIRLA FINANCE LIMITED - CP - 25 JAN 2011 - 8.40% 200 979.71
SUNDARAM FINANCE LIMITED - CP - 10 MAR 2011 - 8.27% 200 970.96
MAHINDRA & MAHINDRA FINANCIAL SERVICES LIMITED - CP
- 11 FEB 2011 - 8.40% 200 979.49
HCL INFOSYSTEMS LIMITED - CP - 17 FEB 2011 - 8.75% 200 978.88
Mutual Funds:
Axis Liquid Fund - Institutional - Daily Dividend 15,49,927.78 15,499.78
33
National Securities Clearing Corporation Limited Sixteenth Annual Report
Baroda Pioneer Liquid Fund - Institutional Daily Dividend Plan 57,98,13,146.25 58,027.53
Baroda Pioneer Treasury Advantage Fund - Institutional Daily
Dividend Plan 26,59,33,942.12 26,617.59
Birla Sun Life Cash Plus - Instl Prem - Daily Dividend - Reinvestment 11,21,88,345.32 11,240.71
Birla Sun Life Interval Income Fund - Instl - Quarterly - Series 1 -
Dividend 61,394.09 6.14
Birla Sun Life Interval Income Fund - Instl - Quarterly - Series 2 -
Dividend 36,531.30 3.65
Birla Sun Life Savings Fund - Instl - Daily Dividend - Reinvestment 7,14,55,914.62 7,150.45
BNP Paribas Money Plus Institutional Plan - Daily Dividend 18,42,526.14 184.32
Canara Robeco Liquid Super Instt Daily Div Reinvest Fund 22,28,22,368.31 22,404.79
DSP Blackrock Fmp - 3 Months - Series 22 - Dividend 50,79,454.50 507.95
DSP Blackrock Liquidity Fund - Institutional Plan - Daily Dividend 34,52,602.30 34,536.94
DSP Blackrock Money Manager Fund - Institutional Plan - Daily
Dividend 23,079.65 230.98
DWS Insta Cash Plus Fund - Super Institutional - Daily Dividend -
Reinvest 26,20,24,811.18 26,282.14
DWS Ultra Short Term Fund - Institutional Daily Dividend 16,19,41,604.19 16,223.15
Fidelity Cash Fund - Super IP - Daily Dividend 2,93,96,980.31 3,005.49
Fidelity FMP Series 2 - Plan A - Daily Dividend 50,59,318.29 505.93
Fidelity Ultra Short Term Debt Fund Super Institutional -
Daily Dividend 3,69,031.74 36.92
HDFC Cash Management Fund -Treasury Advantage Plan - Wholesale
- Daily Dividend 31,17,150.65 312.70
HDFC Liquid Fund Premium Plan - Dividend - Daily Reinvest 53,037.84 6.50
HSBC Cash Fund Institutional Plus-Daily Dividend-Reinvestment 1,49,93,009.03 1,500.14
HSBC Floating Rate - Long Term Plan - Institutional Option - Weekly
Dividend 1,33,78,644.77 1,503.38
ICICI Prudential Flexible Income Plan Premium - Daily Dividend 1,16,691.70 123.38
ICICI Prudential Inst Liquid Plan - Super Institutional Daily Dividend
- Reinv 5,70,21,672.32 57,034.33
ICICI Prudential Interval Fund III - Quarterly Interval Plan -
Inst Dividend 50,77,061.53 507.71
ICICI Prudential Ultra Short Term Plan Super Premium Weekly
Dividend 21,51,69,907.75 21,616.37
34
National Securities Clearing Corporation Limited Sixteenth Annual Report
35
National Securities Clearing Corporation Limited Sixteenth Annual Report
Sundaram Money Fund - Super Institutional - Dividend - Daily Reinvset 4,33,106.49 43.72
Sundaram Ultra Short Term Fund Super Inst Daily Dividend Reinv 3,72,469.97 37.38
Tata Fixed Income Portfolio Fund - Scheme B2 - Institutional Dividend 49,93,458.57 500.00
Tata Floater Fund - Daily Dividend 19,09,880.09 191.67
Tata Liquid Super High Investment Fund - Daily Dividend 13,98,974.38 15,591.85
Templeton Floating Rate Income Fund Super Inst Option -
Daily Dividend Reinvest 16,48,04,518.80 16,497.06
Templeton India Treasury Mgmt Account Super Institutional Plan -
Daily Dividend 49,18,045.42 49,213.55
Templeton India Ultra Short Bond Fund Super Inst Plan - Daily
Dividend Reinvest 14,56,43,690.26 14,581.26
UTI Fixed Income Interval Fund - Quarterly Interval Plan Sr III -
Inst Div Rein 7,26,223.39 72.62
UTI Fixed Income Interval Fund - Quartly Interval Plan Sr I -
Dividend Plan - PO 2,03,013.33 20.30
UTI Liquid Cash Plan-Institutional Plan-Income-Daily Reinvestment 8,383.20 85.46
UTI Money Market Fund - Institutional Plan - Daily Dividend 9,65,232.30 9,685.00
f) Sundry creditors include overdue amounts of Rs. 0.02 Lacs (Previous Year: Rs. 0.15 Lacs)
(including interest of Rs. Nil, (Previous Year Rs. Nil) payable to Micro, Small & Medium
Enterprises. Total outstanding dues to Micro, Small & Medium Enterprises have been determined
to the extent such parties have been identified on the basis of information available with the
Company.
g) Expenditure in foreign currency :
Travelling Expenses: Rs. 0.23 Lacs (Previous Year: Rs. 1.45 Lacs)
Others: Rs. 2.10 Lacs (Previous Year: Rs. 11.75 Lacs)
h) Payments to and provision for employees represents the amount reimbursed by the company to
The National Stock Exchange of India Limited (NSEIL) in respect of employees made available
to the company. It includes all charges relating to all retirement benefits and other long term
employee benefits as per the requirements of Accounting Standard 15-"Employee Benefits"
issued by the Institute of Chartered Accountants of India .The necessary provisions are carried
by NSEIL.
i) The Company has constituted separate Settlement Guarantee Funds (SGF) in respect of the
Capital Market, Futures & Options Market, Retail Debt Market segments and Currency
Derivatives Market.
The Clearing members are required to contribute to the respective fund in the form of interest
free security deposit and also make additional deposits in the form of cash, securities, fixed
36
National Securities Clearing Corporation Limited Sixteenth Annual Report
deposit receipts or bank guarantees. Besides the same, the Clearing members are also required
to deposit margin money which, subject to hair cut, forms part of the SGF. While the interest
free security deposit is not refundable during the tenure of a clearing membership, the margin
money is refundable, subject to adjustments, if any.
Of this, the interest free security deposit and security deposit in the form of cash collected from
members amounting to Rs.357.43 Crores are grouped under the head "Unsecured Deposits"
whereas the cash margin amounting to Rs.1061.32 Crores collected from members (Rs. 1050.09
Crores after applying hair cut) has been grouped under the head "Current Liabilities & Provisions".
The non cash portion of the SGF comprising of collaterals such as bank guarantees, securities
and fixed deposit receipts received from the members amounting to Rs.42,718.45 Crores
(Rs. 34,309.39 Crores after applying hair cut) does not form part of the Balance Sheet.
(Rs. in crores)
Sr. Segment Total Cash Non Cash Component
No. SGF Component Bank Securities Fixed Deposit
Guarantees Receipts
1 Capital market 5,100.35 362.94 1413.67 567.84 2,755.90
2 Futures & Options 29,759.79 956.73 4,998.98 4,685.98 19,118.10
3 Retail Debt Market 3.15 1.70 0.40 1.05
4 Currency Derivatives 853.57 86.10 150.68 290.34 326.45
Total 35,716.86 1,407.47 6,563.73 5,544.16 22,201.50
March 2011
Sr. Segment Interest Free Security Margins Total
No. Security Deposit
Deposit
1 Capital market 147.16 19.32 196.51 362.99
Less : Net Shortages 0.05
Net Amount 62.94
2 Futures & options 120.50 30.93 805.30 956.73
3 Retail Debt Market – 1.70 – 1.70
4 Currency Derivatives 30.00 7.82 48.28 86.10
Total 297.66 59.77 1,050.09 1,407.47
5 Amount not forming part of SGF 24.69 2.37 11.23 38.35
TOTAL 322.35 62.14 1,061.32 1,445.82
(Balance Sheet ref. no) (ref no. I/2(a)) (ref no. I/2(a)) (Schedule7)
*after adjusting net shortages amounting to Rs. 0.05 Crore
37
National Securities Clearing Corporation Limited Sixteenth Annual Report
38
National Securities Clearing Corporation Limited Sixteenth Annual Report
II Cash component in form of Security Deposit of Rs. 19.32 Crores is earmarked as under:
Particulars Amount
(Rs. in Crores)
Flexi Fixed Deposits
Flexi Fixed Deposits with HDFC Bank 19.32
Total Flexi Fixed Deposits 19.32
III Cash component in form of Margins of Rs. 196.51 Crores is earmarked as under:
Particulars Amount
(Rs. in Crores)
Mutual Funds
Axis Liquid Fund-Institutional- Daily Dividend 22.00
BARODA PIONEER TREASURY ADVANTAGE FUND - IP - DLY DIVIDEND 0.03
JM HIGH LIQ FUND - SUPER INST DAILY REINVEST 14.74
KOTAK FLOATER LONG TERM - DAILY DIVIDEND 0.32
SBI-MAGNUM INSTA CASH FUND-DAILY DIVIDEND OPTION 5.00
UTI TREASURY ADVANTAGE FUND - IP - DAILY DIVIDEND 0.47
Total Mutual Funds 42.56
Flexi Fixed Deposits
FLEXI FIXED DEPOSITS WITH HDFC BANK 59.78
FLEXI FIXED DEPOSITS WITH AXIS BANK 5.86
FLEXI FIXED DEPOSITS WITH CANARA BANK 0.03
FLEXI FIXED DEPOSITS WITH ICICI BANK 7.88
FLEXI FIXED DEPOSITS WITH CITIBANK 7.31
FLEXI FIXED DEPOSITS WITH HSBC BANK 7.09
FLEXI FIXED DEPOSITS WITH STANDARD CHARTERED BANK 25.41
Total Flexi Fixed Deposits 113.36
Fixed Deposits
7.50% STATE BANK OF TRAVANCORE 13.00
7.10% STATE BANK OF BIKANER & JAIPUR 1.64
8.85% YES BANK LIMITED - CM MARGIN 17.00
8.65% CENTRAL BANK OF INDIA - CM MARGIN 8.00
7.50% IDBI BANK - CM MARGIN 0.95
Total Fixed Deposits 40.59
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National Securities Clearing Corporation Limited Sixteenth Annual Report
40
National Securities Clearing Corporation Limited Sixteenth Annual Report
III Cash Component in form of Margins of Rs. 805.30 Crores is earmarked as under
Particulars Amount
(Rs. in Crores)
Mutual Funds
BARODA PIONEER TREASURY ADVANTAGE FUND - IP - DLY
DIVIDEND 0.38
DSP BLACKROCK LIQUIDITY FUND - INSTITUTIONAL PLAN - DAILY
DIVIDEND 35.00
DWS ULTRA SHORT TERM FUND - INSTITUTIONAL DAILY DIVIDEND 0.24
TEMPLETON INDIA TREASURY MGMT ACCOUNT SUPER
INSTITUTIONAL PLAN - DAILY DIVIDEND 63.01
TEMPLETON INDIA ULTRA SHORT BOND FUND SUPER INST PLAN -
DAILY DIVIDEND REINVEST 1.82
TEMPLETON FLOATING RATE INCOME FUND LONG TERM SUPER INST
- DAILY DIVIDEND REINV 0.13
BNP PARIBAS MONEY PLUS IP FUND - DAILY DIVIDEND 0.93
HDFC CASH MANAGEMENT FUND -TREASURY ADVANTAGE PLAN -
WHOLESALE - DAILY DIVIDEND 0.01
IDBI LIQUID FUND - DAILY DIVIDEND - REINVESTMENT 90.00
JM MONEY MANAGER SUPER PLUS PLAN - DAILY DIVIDEND 0.40
JPMORGAN INDIA TREASURY FUND - SUPER INST. DAILY DIV PLAN -
REINVEST 1.00
KOTAK FLOATER - SHORT TERM - DAILY DIVIDEND 110.00
ICICI PRUDENTIAL FLEXIBLE INCOME PLAN PREMIUM -
DAILY DIVIDEND 3.91
RELIANCE LIQUIDITY FUND -DAILY DIVIDEND REINVESTMENT 80.00
RELIGARE ULTRA SHORT TERM FUND - INSTITUTIONAL DAILY
DIVIDEND 1.67
SUNDARAM MONEY FUND - SUPER INSTITUTIONAL - DIVIDEND -
DAILY REINVEST 10.00
UTI TREASURY ADVANTAGE FUND - INSTITUTIONAL PLAN - DAILY
DIVIDEND - RE-INVEST 1.71
Total Mutual Funds 400.21
Fixed Deposits
7.50% STATE BANK OF TRAVANCORE - 0.60
7.50% IDBI BANK - F&O MARGIN - AUGUST '10 1.25
10.30% IDBI BANK - F&O MARGIN 10.05
9.78% STATE BANK OF PATIALA - F&O MARGIN 25.00
8.05% AXIS BANK LIMITED - F&O MARGIN 10.72
8.00% AXIS BANK LIMITED - F&O MARGIN 15.00
8.08% YES BANK LIMITED - F&O MARGIN 20.00
8.08% AXIS BANK LIMITED - F&O MARGIN 50.00
8.15% AXIS BANK LIMITED - F&O MARGIN 30.00
Total Fixed Deposits 162.62
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National Securities Clearing Corporation Limited Sixteenth Annual Report
Particulars Amount
(Rs. in Crores)
Flexi Fixed Deposits
FLEXI FIXED DEPOSIT BANK OF INDIA 10.20
FLEXI FIXED DEPOSIT AXIS BANK 12.34
FLEXI FIXED DEPOSIT CANARA BANK 6.13
FLEXI FIXED DEPOSIT HDFC BANK 68.41
FLEXI FIXED DEPOSIT ICICI BANK 3.27
FLEXI FIXED DEPOSIT INDUSIND BANK 6.45
FLEXI FIXED DEPOSIT HSBC BANK 4.35
FLEXI FIXED DEPOSIT KOTAK MAHINDRA BANK LTD. 13.32
FLEXI FIXED DEPOSIT IDBI BANK 3.15
FLEXI FIXED DEPOSIT CITI BANK LTD. 94.71
FLEXI FIXED DEPOSIT STANDARD CHARTERED BANK 5.83
FLEXI FIXED DEPOSIT UNION BANK 14.31
Total Flexi Fixed Deposits 242.47
Particulars Amount
(Rs. in Crores)
Particulars Amount
(Rs. in Crores)
Mutual Funds
BARODA PIONEER TREASURY ADVANTAGE FUND - IP - DLY DIVIDEND 10.00
ICICI PRUDENTIAL FMP SERIES 56 - 1 YEAR PLAN D CUMMULATIVE 5.00
ICICI PRUDENTIAL ULTRA SHORT TERM PLAN SUPER PREMIUM
WEEKLY DIVIDEND 10.00
Total Mutual Funds 25.00
Bank Balances
BANK OF INDIA 0.06
CITI BANK 0.11
Total Bank Balances 0.17
Flexi Fixed Deposits
CITI BANK 0.85
BANK OF INDIA 1.72
STANDARD CHARTERED BANK 0.41
KOTAK MAHINDRA BANK LTD 0.51
42
National Securities Clearing Corporation Limited Sixteenth Annual Report
II Cash component in form of CDS Security Deposit of Rs. 7.82 Crores is earmarked as under:
Particulars Amount
(Rs. in Crores)
Flexi Fixed Deposits
HDFC BANK LTD 3.01
AXIS BANK 0.74
Total Flexi Fixed Deposits 3.75
Bank Balances
ICICI 4.07
Total Bank Balances 4.07
III Cash component in form of CDS Margins of Rs. 48.28 Crores is earmarked as under:
Particulars Amount
(Rs. in Crores)
j) In the opinion of the management, as the Company's operations comprise of only facilitating
Clearing & Settlement in securities and the activities incidental thereto within India, the
disclosures required in terms of Accounting Standard 17 - "Segment Reporting" issued by the
Institute of Chartered Accountants of India are not applicable.
k) In compliance with Accounting Standard 18 "Related Party Disclosures" issued by the Institute
of Chartered Accountants of India, the required disclosures are given in the table below:
43
National Securities Clearing Corporation Limited Sixteenth Annual Report
B) Details of transactions (including service tax wherever levied) with related parties are as follows:
(Rs in Lacs)
Name of the Nature of Transactions Year ended Year ended
Related Party 31/03/2011 31/03/2010
National Stock • Clearing and Settlement charges received 13223.86 10579.01
Exchange of
India Ltd. • Usage charges paid 634.23 523.93
• Reimbursement paid for expenses on staff on
deputation 1367.99 1030.01
• Reimbursement paid for other expenses incurred 2040.97 1830.80
• Space & Infrastructure Usage Charges paid 608.44 242.13
• Dividend paid 8550.00 5175.00
• Reimbursement received for services Rendered – –
• Outstanding balance - (Credit) / Debit 945.00 1492.84
NSE.IT Ltd. • SGL - Related charges received – –
• Repairs & Maintenance - Clearing & Computer
systems 114.61 74.48
• Outstanding balance - (Credit) / Debit (13.70) (9.64)
National • Amount received for sale of assets – –
Commodity
Clearing Ltd. • Software usage charges paid 55.15 55.15
• Outstanding Balance (Credit)/Debit – –
NSE Infotech • SGL- Related charges received – 0.01
Services
Limited • Repairs & Maintenance - Clearing & Computer
systems 600.85 604.79
• Outstanding balance - (Credit) / Debit (173.80) (131.21)
Power Exchange • Clearing and Settlement charges received – 49.19
of India Ltd
• Interest on late payment of Clearing & Settlement
charges – 2.48
• Outstanding balance - (Credit) / Debit – –
44
National Securities Clearing Corporation Limited Sixteenth Annual Report
l) In accordance with Accounting Standard - 20 "Earning per Share" issued by the Institute of Chartered
Accountants of India, the required disclosure is given below.
Particulars Year ended Year ended
31/03/2011 31/03/2010
Net Profit attributable to Shareholders (Rs. in Lacs) 23,812.65 22,602.03
Weighted Average number of equity shares issued
(No. in Lacs ) 450 450
Basic earnings per share of Rs. 10/- each (in Rs.) 52.92 50.23
The Company does not have any outstanding dilutive potential equity shares. Consequently, the basic
and diluted earning per share of the Company remain the same.
m) In accordance with the provisions of Accounting Standard-22 relating to "Accounting for taxes on
income", the breakup of deferred tax liabilities/ (Asset) is shown below:-
(Rs. in Lacs)
Particulars As at As at
31st March 2011 31st March 2010
Deferred Tax Liabilities
Related to Depreciation 41.20 15.83
Total Deferred Tax Liabilities 41.20 15.83
n) During the year, the company has reviewed its fixed assets for impairment loss as required by
Accounting Standards - 28 'Impairment of Assets'. In the opinion of management no provision for
impairment loss is considered necessary.
o) Previous year's figures are regrouped, reclassified and rearranged wherever necessary.
p) Information with regard to other matters specified in Clauses 3, 4C & 4D of Part II to Schedule VI of
the Companies Act,1956 are either nil or not applicable to the company.
As per our report of even date attached For and on behalf of the Board of Directors
For HARIBHAKTI & CO.
Chartered Accountants
45
National Securities Clearing Corporation Limited Sixteenth Annual Report
CASH FLOW STATEMENT FOR THE YEAR ENDED 31ST MARCH, 2011
2010-11 2009-10
(Rs. In Lacs) (Rs. In Lacs)
Adjustments for :
Sundry Debtors 1,416.11 (1,538.93)
Loans & Advances (35.80) (181.62)
Current Liabilities & Provisions 12,290.86 21,638.89
Cash Generated from Operations 22,983.30 26,824.56
Direct taxes paid (Net of Refunds) (8,092.10) (7,114.88)
Net Cash from (used in) Operating Activities - Total (A) 14,891.20 19,709.68
Net cash from (used in) Investing activities - Total (B) 87,584.71 9,233.82
46
National Securities Clearing Corporation Limited Sixteenth Annual Report
As per our report of even date attached For and on behalf of the Board of Directors
For HARIBHAKTI & CO.
Chartered Accountants
47
National Securities Clearing Corporation Limited Sixteenth Annual Report
I Registration Details
Registration No. * 9 2 2 8 3 State Code 1 1
Sources of Funds
Paid-up Capital Reserves & Surplus
* * * 4 5 0 0 0 0 * * 9 3 6 2 7 9 7
Application of Funds
Net Fixed Assets Investments
* * * * 6 5 7 7 5 * * 1 6 3 7 5 4 0
Accumulated Losses
* * * * * * N I L
48
National Securities Clearing Corporation Limited Sixteenth Annual Report
V Generic Names of Three Principal Products / Services of Company (as per monetary terms)
Product C L E A R I N G A N D
Description S E T T L E M E N T O F
S E C U R I T I E S
Y. H. MALEGAM R. H . PATIL
Director Director
49
Y Y
NSE.IT LIMITED
Y Y
NSE.IT Limited Twelfth Annual Report
BOARD OF DIRECTORS
MANAGEMENT TEAM
EXECUTIVE SUMMARY
Dear Shareholders,
The economy evidenced signs of recovery in the previous year after having witnessed a global downturn in the recent
past. The Company formulated a strategy based on its existing customers and its strength, a large part of which was
successful and the Company was able to achieve a turnover of 10,304 lakhs which was 28% higher than the previous
corresponding year.
Continuing with its foray in online examinations, the IRDA project for achieving 100% online examination status by
year end was undertaken by the Company across the country and implemented in record time of
9 months. This also included achieving important milestones of 100 new centers within 6 months and
200+ centers going live by end of December 2010 within six months of starting the project. The assessments are
conducted pan India for the insurance companies and the Company executes the end-to-end process from registration
to examination certificates. During the year the Company worked on adding new customers and bid for various tenders
and requirements. The Company was successful in adding new clients such as NCFM, ITB, CCIL, IBPS etc to its
customer list.
The assessments are conducted pan India for the insurance companies and the Company executes the end-to-end
process from registration to examination certificates. The high end technology framework along with the robust monitoring
system provided by the Company facilitates the conduct of the examinations in a transparent and efficient manner. The
Company intends to leverage the same along with state-of-the-art facility by engaging with similar other organizations/
institutions in the current year. The Company's total centers touched a figure of 220.
During the year the Company embarked on quality journey to certify its online examination centers for ISO 9001:2008
certification. NSE.IT through all the steps of ISO such as gap analysis, documentation, implementation of documented
processes, internal auditing, training and awareness. After extensive rounds of internal and external quality implementation
efforts in past six months and audits conducted across country by Bureau Veritas Certification India (BVCI) auditors till
first week of March, NSE.IT has been certified for ISO 9001:2008 by BVCI for its Online Examination Services.
During the year, Company has added to its product portfolio with the introduction of an Algorithmic Trading solution,
called AlgoStudio. The product provides various standard algorithmic trading strategies (viz.
Cash-Futures arbitrage, Futures-Futures arbitrage, Cash-Cash arbitrage, Conversion/Reversal, Box Spread) as well as
custom strategies, taken up as be-spoke development
The most important achievement for the Tea Board e-Auction project this year, was winning the coveted Bronze medal
in the National e-Governance Awards 2011, under the category - Specific Sectoral Award (Focus Sector for 2010-11 -
Agriculture).
The e-Auction program went 100% live in Siliguri this year. This marked 100% sale of tea through e-Auction route
across all the six auction centres. Around 370 million kg of tea was sold this year, totaling the sales figure to 610 million
kg since inception with a monetary worth of around 6100 crore rupees.
In the Product space, the Company has partnered with a niche technology provider for developing high end algorithmic
trading solutions for the Indian capital market that will replace the traditional methods of trading and provide brokers
and financial intermediaries to trade in real time without human intervention. The Company will launch various
algorithmic trading products for the capital market in the ensuing year to cater to the needs of the financial intermediaries.
On the talent front, the Company evidenced handsome growth by adding 186 new employees to its pool of resources
thereby taking up the number to 714. The Company took various initiatives towards grooming of the employees by
rolling out various training programs in the previous year. The Company continues to focus on building a pool of
talented resources who can deliver world class solutions to the customers
With a strong existing clientele and new customers with high potential, the Company plans to take innovative steps in
the products and services arena to cater to the technology requirements of its customers and take the Company to
greater heights.
Sd/-
Ramesh Padmanabhan
MD & CEO
1
NSE.IT Limited Twelfth Annual Report
DIRECTORS' REPORT
Dear Members,
Your Directors have great pleasure in presenting the twelfth Annual Report and the Audited Accounts of NSE.IT
Limited for the Financial Year ended March 31, 2011.
I. FINANCIAL RESULTS
The working of the Company during the period has resulted in a profit after tax of Rs. 1,363.62 lacs as per
particulars given below:
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NSE.IT Limited Twelfth Annual Report
Major Milestones
The following milestones were achieved during the year:
• Initiation of two major verticals for providing solutions to Insurance and Banking industry
• Launch of Algorithmic Trading solution in the market, key technology implementation for latency
improvement
• Kick-start of US operations, and won an initial contract from US client through the US subsidiary
of the Company.
• Engagement with Regional Stock Exchange to provide exchange solution for Cash Market
• Enhancing of our testing engagement with NSDL for multiple systems
• Stabilization and performance improvement of IRDA Agency licensing portal with helpdesk
for nationwide users
• Benchmarking and Performance Testing of Stratus V-series server for Trading application
• Completion of 100% online examination Project for IRDA.
• Achieved ISO 9001:2008 certification for Online Examination Services business Added new
clients in Online Examination Services business.
• Government of India honoured Tea Board with the e-Governance award at the 14th National
Conference on e-Governance on February 10, 2011.
• Implementation of normal and instant e-Auction, launch of web-based tea waste e-auction.
• Delivery of Spot Exchange Solution for a prestigious industry house in India
• Delivery and going live with a challenging re-engineering project at NSE for Membership
• Delivery and going live with the REC Trading for Power Exchange India Limited, and added
solutions for various trading segments in power trading
• Providing Co location services to NSE members.
• Number of employees increased to 714.
• ISO 27001 re-certification for system compliance.
• Implementation of Low latency technology using Ultra Low latency messaging system for the
Simulator product
• The Company was awarded a pilot project by NSDL to support their SEZ application software
at 8 remote SEZ locations. The project was rolled out in 15 days.
==> SERVICES
1. Algorithmic Trading
During the year, Company has added to its product portfolio with the introduction of an
Algorithmic Trading solution, called AlgoStudio. The product provides various standard
algorithmic trading strategies (viz. Cash-Futures arbitrage, Futures-Futures arbitrage,
Cash-Cash arbitrage, Conversion/Reversal, Box Spread) as well as custom strategies, taken up
as be-spoke development. This solution utilizes a customized NeatXS product line for
Algorithmic trading. The Company has added 18 clients to its clientele list for this product line,
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NSE.IT Limited Twelfth Annual Report
with a mix of standard and custom strategies. Of these, 9 have already gone live with AlgoStudio.
During the year, the Company has also undertaken a technical enhancement project to further
improve the latency and throughput. The upgraded solution utilizes an in-memory database for
computation of all Risk Management.
The Company expects to implement more custom strategies, and upgrade the product with
technical enhancements.
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NSE.IT Limited Twelfth Annual Report
5. Citi group
Citigroup is a Trading Member cum Clearing Member on the National Stock Exchange of India's
(NSE), Futures and Options segment. Cititgroup does trading and clearing on behalf of their
clients(participants). Currently 3 Ensettle instances running at Citigroup - CCSIL, Treasury
and CGM for different exchange and segments.
• EnSettleTM has been configured as a comprehensive modular application platform for
Exchange Intermediaries (Brokers, Clearing Members and Custodians)
• Support for different market segments - Equity, Equity Derivatives, Forex and SLBS
Benefits seen by Citi
High ROI.
Comprehensive Risk Management. Risk simulation: Allows "What-if" analysis on
portfolio.
Increased focus on the core business instead of spending time on the repetitive data
collection / processing tasks.
Regulatory Compliance.
In the previous year the following was achieved:
- Citi Treasury and CCSIL EnSettle went live
- Support for extensive client reporting, MIS and regulatory reporting.
- Seamless Integration with various existing legacy systems at client's end.
- Support for audit trail for all the activities.
6. Angel Broking
NSE.IT has developed and implemented a solution - Advisory Dashboard window and web
application, which is helpful for Angel broking's business users. This application is based on
research call by research team to generate market list and pre market list which improves the
dealers business.
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8. Tea Board
The most important achievement for the Tea Board e-Auction project this year, was winning
the coveted Bronze medal in the National e-Governance Awards 2011, under the category -
Specific Sectoral Award (Focus Sector for 2010-11 - Agriculture).
The e-Auction program went 100% live in Siliguri this year. This marked 100% sale of tea
through e-Auction route across all the six auction centres. Around 370 million kg of tea was
sold this year, totaling the sales figure to 610 million kg since inception with a monetary worth
of around 6100 crore rupees.
The following were also achieved during the last fiscal year:
1. We conducted "The Golden Leaf India Awards - Southern Tea Competition". This specialty
auction saw the best quality teas from South India competing for the Golden Leaf Award
with participation of buyers from all the six auction centers.
2. Implementation of Normal plus Instant Auctions.
3. Implementation of web-based Tea Waste Auction.
4. Implementation of post-auction activities related to Contract Notes and Delivery Orders.
5. Periodical inclusion of enhancements in existing e-Auction system.
Future Roadmap
- Sale of Packaged Tea
- Sale of Bulk Tea
- e-Settlement
- Warehouse Inventory Management System
- Statistical Reports for Tea Board and other auction stakeholders
- Potential domestic opportunity with UPASI (United Planters' Association of Southern India)
Potential international opportunity in Kenya with EATTA (East African Tea Traders Association)
They had continued to demand more improvements and features in the system and the company
had rolled out many changes with enhanced features. The first All India Tea e-auction where
buyers across India participated was successfully conducted by The United Planters' Association
of South India for their premium teas.
Government of India honoured Tea Board with the e- Governance award at the 14th National
Conference on e-Governance on February 10, 2011.
Future Roadmap
- Sales of Packaged tea through non-auction route
- Sales of tea in bulk packages through non-auction route
- e-Settlement for sales of tea and tea waste through e-platform
- Warehouse Inventory Management
- Potential international opportunities - Kenya, Vietnam, Sri Lanka
9. NSE
I Development Projects
During the year, NSE.IT partnered with NSE to deliver new projects / re-engineer existing
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NSE.IT Limited Twelfth Annual Report
solutions to suit NSE's growing business needs. Given below are the projects executed
during the year.
Project Membership: NSE.IT has delivered a re-engineered solution of Membership
application. Besides providing the solution for problem areas like PDCs, database
normalization, bulk upload, company is also involved in process improvement so that 150
internal users of membership application can get benefit of a stable system and faster data
access. Membership application is integrated with 12 other departments like NFA, Listing,
FOCASS, Inspection etc. data import/export to these departments will be automated. Also
continuous maintenance, support and enhancement activity is handled.
Project Arbitration: Currently NSE.IT is engaged in re-engineering of Arbitration
application. Apart from providing the solution for problem areas like PDCs, database
normalization, company is also involved in providing a complete solution to users of
arbitration application with stable system and faster data access. Arbitration application is
integrated with other systems like NFA and NICE, data import/export to these systems
will be automated. Functionality of the system also includes reports, letters generation,
alert generation, arbitration tracker and DMS.
Project SCORES: NSE.IT has delivered web service based solution for IGC department.
The web service module, SCORES would enable the stock exchanges and depositories to
‘consume' the complaints forwarded to them and to send reply through this web service.NSE
as an exchange, consumes the complaint and send ATR for the same. SCORES application
is integrated with NICE, data import/export to NICE is automated.
NSE WEBSITE: NSE website is the most important and visible project of NSE. The
Website shows its members and all the others the live traded Stock, Derivatives, Currency,
Bonds, Securities and Various Other Traded securities on the Stock Exchange. End of the
day historic information, graphs and quotes are also displayed. NSEIT's Team has developed
Corporate Home Page. Resources from NSEIT are working on the website revamp which
involves some of the architectural revamp as well as the revamp of the display of the website.
Focus is given on the scalability as well as performance improvement of the website.
Project CRM: Privilege Card is a value added service provided by NSE to all its members.
Privilege Card will provide hassle free access to Exchange Plaza and its utilities. NSEiT
has automated the process of receiving Members details and generating reports. A user
Friendly Interface for Trading Members for privilege card request generation has been
developed by NSEiT.
Project CSE Surveillance: NSEiT Team along with NSEIL Team has developed CSE
Capital Market surveillance which is an Offline and Online monitoring tool for securities
traded in the Capital Market. Based on set parameter(s), alerts get generated by the system
for the security hitting the set limits. The system is designed to alert the surveillance users
of any unusual activity in the market. Provide tools and functions to carry out further
investigations into causes and effects of such an unusual activity.
NSE.IT was also involved with several key initiatives like India Venture Board Portal
specification and testing, Specification and UI for Listing project, etc.
NSE.IT's testing team has been consistent in providing testing support to NSE's business
and has worked on various key projects during the year:
- Pre-open in Cash market
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NSE.IT Limited Twelfth Annual Report
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NSE.IT Limited Twelfth Annual Report
Major Activities
1. Benchmarking and Performance Testing of V-series server for Trading application
2. Drafted Policy and guidelines on Automated Trading Software
NCDEX SPOT
Major Highlights
• Gives the best output for an web based trading system which needs spontaneous
communication with the server to get latest data
• First in NSE.IT to implement Fix protocol (Fix 4.2) in trading system
• This team has developed India's first SMS Based Trading system for Continuous Market
and Auction Market in SPOT Exchange.
• Implemented in memory data base in .net, Implemented Single sign on between cross
platform.
• Implemented India's first Real Time settlement for Spot Exchange
Implemented template based clearing and settlement system which is configurable.
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NSE.IT Limited Twelfth Annual Report
I. SEZ Online
NSE.IT is responsible for end to end Functionality Testing and UAT of this application
that handles Import/Export related transactions inside SEZs. Additionally, NSE.IT provides
help to support team, users, training, requirements and presentation/demos.
II. PAN
NSE.IT is responsible for Functionality Testing on Web based PAN Application. Currently,
the application is live and change/requests keep coming which have to be pushed into
Production after doing UAT
III. TIN
NSE.IT is majorly responsible for System/Database Testing of various modules of this
Tax Information Network, apart from front-end related Testing to a limited level. Here, we
are involved with the Systems/Technical side team of NSDL.
IV. Speed-e
NSE.IT is responsible for Functionality Testing of this DP interface provided to carry out
DP transactions electronically. Fair amount of DB level Testing has also been carried out.
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NSE.IT Limited Twelfth Annual Report
New customers
During the year the team worked on adding new customers and bid for various tenders and
requirements. The Company was successful in adding new clients such as NCFM, ITB, CCIL,
IBPS etc to its esteemed customer list.
• NCFM - 38210 exams were conducted in 65 locations - Since July 2010
• ITB - 2788 exams were conducted in 19 locations - Since September 2010
• CCIL - 21 exams conducted - since September 2010
• IBPS - 777 exams were conducted in 13 locations - Since February 2010
• IRDA internal promotion exams - 155 exams conducted during the year
Some of the opportunities explored by the Company during the year was as under-
• FPSB
• GTU
• IACT
• IBPS
• ICAI
• NISM
• NTPC
• UIDAI
• BIFM
• Nasscom
• ASRB
Quality Initiative
During the year the Company embarked on quality journey to certify its online examination centers
for ISO 9001:2008 certification. NSE.IT through all the steps of ISO such as gap analysis,
documentation, implementation of documented processes, internal auditing, training and awareness.
After extensive rounds of internal and external quality implementation efforts in past six months
and audits conducted across country by Bureau Veritas Certification India (BVCI) auditors till
first week of March, NSE.IT has been certified for ISO 9001:2008 by BVCI for its Online
Examination Services.
This certification covers Head Office together with 106 centres, 4 Regional Offices and 10
Territory offices as per following scope:
Online Examination Services Management across India, including:
at head office: registration, scheduling, customer helpdesk, physical & electronic vigilance and
IT support at regional and territory offices : customer relationship management, resource
management, monitoring centre operations performance in the region
at test centres: conducting online examination and facilities management
It is even more noteworthy that NSE.IT achieved the ISO 9001:2008 compliance certification
for the above mentioned scope with ZERO NCs (Non-conformities) while the Phase II expansion
is ongoing.
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NSE.IT Limited Twelfth Annual Report
IT initiatives
IT Infrastructure
• Release of offline/demo exams on Touch screen Devices.(Hyderabad center Kiosk)
• DR site for IRDA @ NSEIT Mumbai
• New Infrastructure setup and hosted to manage new clients
• Advent net (Manage Engine Service Desk) Rollout for central helpdesk at HO for all
220 locations
• AIMS deployed on public network and made accessible to entire national team.
• Procurement of UTM devices which can work with Data Cards and distribute internet
for exams.
• Procurement of dedicated internet connections for internet connectivity at remote
locations [TULIP, SIFY, AIRCELL]
• 16 Mbps link for vigilance and 4mbps data link between HO and DC
• Enabled new clients like NSE, CCIL, NISM
• IRDA 100% online - Phase II, 2x, Capacity Enhancements - Procurement, deployment
• Small but important releases like Mikogo and ‘Sabse Bolo' to deliver good quality but
zero cost products
• New Chat server Commissioned, again an addition to production at Zero cost of
procurement.
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NSE.IT Limited Twelfth Annual Report
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NSE.IT Limited Twelfth Annual Report
sec and is scalable. This has been achieved adopting a distributed architecture using 29West
UME bus with multiple matching engines. The system is under user testing and will be
rolled out during the first quarter of 2011-12
2. Back office - Ensettle
Ensettle is a product for post trade settlement for Trading and Clearing Member back
office operations. The product has capabilities to address F&O, Cash and currency
derivatives market.
During the year, company has completed several key installations like Citi Treasury, SBI,
Kotak, and IDBI.
3. XpressSTP
It is a messaging Hub, facilitating brokerage firms, investors, & custodians, to exchange
post trade transactions based messages. This is used for Institutional Trades. XpressSTP
eases the work of user by combining all the process of conversion, signing and uploading
of ISO file in one process. This saves time of the user. It also includes several audit reports
that can give an overview of the activities performed by the user.
During the year continuous support was provided to approx. 150 clients.
4. Plans
During the year, company has developed a product PLANS for insurance industry to manage
its pre-licensing process for the agents. The product has been demonstrated with several
insurance clients and is in an advanced stage for live implementation.
IV. DIRECTORS
Retirement by rotation
In accordance with the provisions of the Companies Act, 1956 and the Company's Articles of
Association, Mr. Ravi Narain and Dr. R H Patil retire by rotation and are eligible for re-appointment.
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NSE.IT Limited Twelfth Annual Report
V. DIVIDEND
Based on the Company's performance, the Directors are pleased to recommend, for approval of
the Members a Final Dividend of Rs.4/- per share on Equity Shares of Re.10/- each of the
Company for the financial year 2010 -11. The Final Dividend on the Equity Shares, if declared
as above, would involve an outflow of Rs.4,00,00,040/- towards dividend.
Transfer to Reserves
The Company proposes to transfer Rs. 8,00,00,000/- to the General Reserve out of the amount
available for appropriations.
IX AUDITORS
M/s Gokhale & Sathe, Chartered Accountants, Auditors of the Company, retire at the forthcoming
Annual General Meeting of the Company and are eligible for re-appointment. The Company
has received a certificate from the Auditors to the effect that their re-appointment, if made,
would be within the limits prescribed under Section 224(1B) of the Companies Act, 1956.
X DEPOSITS
During the period the Company has not accepted any deposits from the public.
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NSE.IT Limited Twelfth Annual Report
XV APPRECIATION
Your Directors would like to place on record their sincere appreciation for the confidence support
and co-operation received from the holding company, its employees, Banks, Reserve Bank of
India, Registrar of Companies (ROC), Government Authorities, suppliers, customers,
shareholders and all other stakeholders
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NSE.IT Limited Twelfth Annual Report
Notes:
Gross remuneration includes Salary and other allowances, Company's contribution to Provident Fund,
Superannuation Fund, Gratuity Fund and taxable value of perquisites etc. Net remuneration has been
arrived at by deducting from gross remuneration, Company's contribution to provident fund,
superannuation fund, taxable value of perquisite, amount deducted as profession tax and income tax.
The nature of employment is contractual in all above cases.
None of the employees mentioned above is a relative of any Director.
None of the employees owns more than 2% of the outstanding shares of the Company as on 31st
March 2011.
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NSE.IT Limited Twelfth Annual Report
AUDITOR'S REPORT
TO THE MEMBERS OF NSE.IT LIMITED
We have audited the attached Balance Sheet of NSE.IT LIMITED as at 31st March 2011, Profit & Loss Account
and cash flow statement for the year ended on that date annexed thereto. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an opinion on these financial
statements based on our audit.
We conducted our audit in accordance with auditing standards generally accepted in India. Those Standards
require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
1. As required by the Companies (Auditor's Report) Order, 2003 issued by the Central Government of India in
terms of sub-section (4A) of section 227 of the Companies Act, 1956, we enclose in the Annexure a statement
on the matters specified in paragraphs 4 and 5 of the said Order to the extent applicable to the Company.
2. Further to our comments in the Annexure referred to above, we report that:
(i) We have obtained all the information and explanations, which to the best of our knowledge and belief
were necessary for the purposes of our audit;
(ii) In our opinion, proper books of account as required by law have been kept by the Company so far as
appears from our examination of those books;
(iii) The Balance Sheet, Profit & Loss Account and Cash Flow Statement dealt with by this report are in
agreement with the books of account;
(iv) In our opinion, the Balance Sheet, Profit & Loss Account and Cash Flow Statement dealt with by this
report comply with the accounting standards referred to in sub-section (3C) of section 211 of the
Companies Act, 1956.
(v) On the basis of written representations received by the Company from the directors which is taken on
record by the Board of Directors on 26th April 2011, we report that none of the Director is disqualified
as on 31st March 2011 from being appointed as a director in terms of clause (g) of sub-section (1) of
section 274 of the Companies Act, 1956.
(vi) In our opinion and to the best of our information and according to the explanations given to us, the
Balance Sheet and Profit and Loss Account read with the Significant Accounting Policies and notes
on accounts, give the information required by the Companies Act 1956 in the manner so required and
give a true and fair view in conformity with the accounting principles generally accepted in India:
(a) in the case of the Balance Sheet, of the state of affairs of the Company as at 31st March 2011 ;
(b) in the case of the Profit & Loss Account, of the Profit for the year ended on that date; and
(c) in the case of the Cash Flow Statement, of the cash flows for the year ended on that date;
For Gokhale & Sathe
Chartered Accountants
Firm's Reg. No. 103264W
Kedar Mehendale
Place: Mumbai. Partner
Date : 26th April 2011 Membership No.: 116065
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NSE.IT Limited Twelfth Annual Report
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NSE.IT Limited Twelfth Annual Report
Wealth Tax, Service Tax, Custom Duty, Excise Duty, cess and any other statutory dues which have
remained outstanding as at 31st March 2011 for a period exceeding six months from the date they
became payable.
b) According to the information and explanation given to us, there are no disputed dues of Income
Tax, Sales Tax, Wealth Tax, Service Tax, Custom Duty, Excise Duty, Cess which have not been
deposited on account of any dispute, except for following
(x) There are no accumulated losses. The Company has not incurred cash losses during the financial year
covered by our audit and the immediately preceding financial year.
(xi) In our opinion and according to the information and explanations given to us, the Company has not taken
any loan and no amounts were due towards principal or interest to any financial institution, bank, or
debenture holders during the year.
F.Y. Dispute Pertaining Sales Tax Liability Forum where dispute is pending
(Amt. in Rs.)
2000-01 Bombay Sales Tax 1,79,169/- Appeal filed with ACST
u/s 33 (3) (A) on 08/05/2006
(xii) As per information given to us, the Company has not granted loans and advances on the basis of security
by way of pledge of shares, debentures and other securities.
(xiii) In our opinion the Company is not a chit fund or a nidhi/ mutual benefit fund/ society. Therefore, the
provisions of clause 4
(xiii) are not applicable to the Company.
(xiv) In our opinion, the Company is not dealing in or trading in shares, securities, debentures, and other
investments.
(xv) According to the information and explanations given to us the Company has not given any guarantee for
loans taken by others from bank or financial institutions.
(xvi) According to the information and explanations given to us, the company has not taken any term loan.
(xvii) According to the information and explanations given to us, the company has not raised any funds.
(xviii) According to the information and explanations given to us, the Company has not made any preferential
allotment of shares.
(xix) According to the information and explanation given to us, the company has not issued any debentures up
to 31st March 2011.
(xx) During the period covered by our audit report, there was no public issue of the Company's shares.
(xxi) According to the information and explanations given to us no fraud on or by the Company has been
noticed or reported during the year.
For Gokhale & Sathe
Chartered Accountants
Firm's Reg. No. 103264W
Kedar Mehendale
Place : Mumbai. Partner
Date : 26th April 2011 Membership No.: 116065
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NSE.IT Limited Twelfth Annual Report
BALANCE SHEET
Particulars Schedule As at 31-Mar-11 As at 31-Mar-10
No. Rs. Rs.
I. SOURCES OF FUNDS
1. Shareholders' Funds
Share Capital 1 100,000,100.00 100,000,100.00
Reserves & Surplus 2 291,982,849.93 202,110,034.31
2. Deferred Tax Liability 3,521,995.00 436,543.00
TOTAL 395,504,944.93 302,546,677.31
As per our report of even date attached For and on behalf of the Board of Directors
For Gokhale & Sathe
Chartered Accountants ( Reg. No.103264W )
RAVI NARAIN RAMESH PADMANABHAN
Chairman Managing Director & CEO
KEDAR MEHENDALE
Partner DILEEP CHOKSI J. RAVICHANDRAN
Membership No.116065 Director Director
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NSE.IT Limited Twelfth Annual Report
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NSE.IT Limited Twelfth Annual Report
Authorised
10,000,010 (10,000,010) Equity shares of Rs. 10/- each fully paid up 100,000,100.00 100,000,100.00
(1,00,00,010 Equity shares of Rs. 10/- each fully paid is held by
National Stock Exchange of India Limited, the Holding Company)
General Reserve
As per last Balance Sheet 158,506,069.00 58,506,069.00
Add : Transferred from Profit & Loss Account 80,000,000.00 100,000,000.00
238,506,069.00 158,506,069.00
24
SCHEDULE 3 : FIXED ASSETS
Tangible Assets
1 Computer Hardware & Server 80,043,047.99 33,809,646.15 – 113,852,694.14 48,921,762.70 10,478,985.02 – 59,400,747.72 54,451,946.42 31,121,285.29
2 Office Equipment 32,791,982.38 16,342,297.14 – 49,134,279.52 5,445,124.59 2,774,583.10 – 8,219,707.69 40,914,571.83 27,346,857.79
3 Furniture & Fixtures 17,103,046.59 9,253,943.75 – 26,356,990.34 3,415,345.05 2,535,954.17 – 5,951,299.22 20,405,691.12 13,687,701.54
4 Building – Civil Work 2,680,056.00 3,287,566.00 – 5,967,622.00 371,507.20 387,676.52 – 759,183.72 5,208,438.28 2,308,548.80
Intangible Assets
5 Computer Software 36,401,003.01 7,314,516.23 – 43,715,519.24 23,656,146.64 6,237,616.65 – 29,893,763.29 13,821,755.95 12,744,856.37
6 Software copyrights 25,906,099.00 – – 25,906,099.00 25,906,098.00 – – 25,906,098.00 1.00 1.00
GRAND TOTAL 194,925,234.97 70,007,969.27 – 264,933,204.24 107,715,984.18 22,414,815.46 – 130,130,799.64 134,802,404.60 87,209,250.79
PREVIOUS YEAR 160,401,059.27 50,216,071.41 15,691,895.71 194,925,234.97 96,580,195.59 20,146,320.50 9,010,531.91 107,715,984.18 87,209,250.79 63,820,863.68
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Twelfth Annual Report
NSE.IT Limited Twelfth Annual Report
No. of Units As at As at
In Quoted Mutual Funds (as on 31-Mar-11 31-Mar-10
31.03.2011)
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NSE.IT Limited Twelfth Annual Report
As at 31-Mar-11 As at 31-Mar-10
PARTICULARS
Rs. Rs.
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NSE.IT Limited Twelfth Annual Report
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NSE.IT Limited Twelfth Annual Report
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NSE.IT Limited Twelfth Annual Report
NSE.IT LIMITED
Schedule 12: NOTES TO ACCOUNTS
1. Significant Accounting Policies:
a. Basis of Accounting
The financial statements have been prepared under the historical cost convention on accrual system and in
accordance with the generally accepted accounting principles.
b. Revenue recognition
Revenue from sale of software product licenses and sale of digital certificates is recognised on dispatch.
Revenue from resale of hardware and software is recognised on dispatch.
Revenue from fixed price contracts is recognised on the basis of the deliverables provided.
Revenues from maintenance contracts and technical support agreements are recognised on a pro-rata basis
over the period in which such services are rendered under the terms of the contracts and agreements.
Revenues from software development and maintenance on time and material basis and consultancy charges
are recognised based on the terms agreed with the customers.
Revenue from e-learning activity is recognised on the basis of enrollment.
Revenue from online examination services are recognized on the basis of exams conducted.
Interest on deployment of funds is recognised using the time proportion method, based on interest rates
implicit in the transaction.
Income excludes applicable taxes and other levies.
c. Expenditure
Expenses are accounted on accrual basis and provisions are made for all known losses and liabilities.
Since the company does not visualise any major expenditure on account of warranty given for maintaining
the software product licenses sold, no provisions are made on this account. Any expenditure that may have
to be incurred towards honouring the warranty shall be accounted for in the year in which it is incurred.
d. Fixed Assets
Fixed Assets are stated at cost of acquisition less accumulated depreciation and impairments, if any. Cost of
acquisition is inclusive of freight, duties, taxes and other incidental expenses.
Individual low cost assets (acquired for less than Rs.5000/-) are depreciated at the rate of 100% in the year of
acquisition.
Fixed Furniture and fixtures, electrical installation and office equipment including civil improvements at
lease hold premises are depreciated over the lease period.
Expenditure incurred during the year for acquiring software copyright, source code and other deliverables
along with the in-house development cost is capitalised and depreciated @ 33 1/3 % on Straight Line Method,
which is higher than the rates prescribed in the aforesaid schedule.
Software products/ licenses purchased/ acquired for internal use of the Company which have expected longer
life are capitalised and depreciated @ 33 1/3 % on Straight Line Method, which is higher than the rates
prescribed in the aforesaid schedule.
Depreciation on fixed assets other than above is provided using straight line method at the rates specified in
schedule XIV to Companies Act, 1956.
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NSE.IT Limited Twelfth Annual Report
e. Inventory
The Inventory is valued at cost or net realizable value whichever is lower.
f. Foreign currency transactions
Transactions in foreign exchange are accounted at the exchange rates prevailing on the date on which
transactions have taken place. Outstanding if any, at the end of the year are converted at the year end rates.
g. Employee Retirement Benefits
Gratuity
The Company has maintained a Group Gratuity Assurance Scheme with the Life Insurance Corporation of
India towards which it annually contributes a sum determined by Life Insurance Corporation of India. The
Company has made provision for gratuity liability estimated as per actuarial report as on the balance sheet
date to comply with the Accounting Standard 15 for employee benefits.
Superannuation
Superannuation benefit for employees designated as managers and above is covered by Group Superannuation
Scheme with the Life Insurance Corporation of India towards which it annually contributes a sum based on
a specified percentage of each covered employees' salary. The contribution paid for the year on the Group
Superannuation Scheme is charged to revenue.
Provident Fund
Company had established the NSE.IT Limited Employees' Provident Fund Trust to which both the employee
and the employer, respectively made monthly contributions equal to 12% of the employee's basic salary.
Upto 31st July 2010 the company had an obligation to make good the short fall, if any, between the return
from its investments and the administered interest rate.
From 1st August 2010, contribution to Provident Fund is charged to revenue as per applicable Rules /
Statute.
Leave Encashment
Leave encashment paid to the employees while in service is charged to revenue as the same is considered as
a short term benefit. Provision for leave encashment on retirement is made on the basis of actuarial valuation
at the end of the year.
h. Investments
Long-term investments are carried at cost. Provision for diminution is made to recognize a decline, other
than temporary, in their value.
i. Income Tax
Provision for Income Tax is made on the basis of the prevailing rates under the Income Tax Act, 1961.
Company has accounted deferred tax liability/asset in accordance with the Accounting Standard
22 - Accounting for Taxes on Income.
2. Contingent Liabilities:
(i) Estimated amount of contracts remaining to be executed on capital account and not provided for is
1,41,00,311/- (Previous Year: 18,60,832).
31
NSE.IT Limited Twelfth Annual Report
3. Capital Work in Progress includes following assets purchased during the Year but not installed:
Asset/Expenses Head As on 31-Mar-11 As on 31-Mar-2010
Adrenalin Shift Management Module 22,863.00 Nil
CCTV Cameras Nil 1,36,762.64
Total 22,863.00 1,36,762.64
4. Managerial remuneration
Particulars For the year ended Previous Year ended
31-Mar-2011 31-Mar-2010
Mr. Ramesh Padmanabhan, MD & CEO
Salary, Bonus & Allowances 11,395,851 8,180,430
Company's contribution to Provident Fund 603,793 417,600
Company's contribution to Superannuation Fund 754,742 522,000
Gratuity (@ one month's Basic Salary) 419,301 290,000
Other Perquisites Nil Nil
Total 13,173,687 94,10,030
The aforesaid remuneration paid to Mr. Ramesh Padmanabhan is within the limits of the total remuneration
approved by Central Government under Section 269,198(4)/309(3) and 637AA of the Companies Act, 1956
vide letter dated 5th August 2010, which is valid up to 12th April 2012.
32
NSE.IT Limited Twelfth Annual Report
8. C.I. F. value of imports in respect of Capital goods: Nil (Previous Year : Rs. Nil/-)
9. As on the Balance Sheet date, the amounts due to Small-Scale Industrial undertaking are not outstanding for
more than 30 days. There is no micro, small and medium enterprises to whom Company owes dues which
are outstanding for more than 45 days at balance sheet date computed on unit wise basis.
10. The company is primarily engaged in the business of development and maintenance of computer software.
The production, acquisition and sale of such software cannot be expressed in any generic unit. Hence, it is
not possible to give the quantitative details of sales and certain information as required under paragraphs 3,
4C and 4D of part II of Schedule VI of the Companies Act, 1956 for such product. During the year the
company has not undertaken any trading activity in respect of software or hardware.
The details of Stock of Digital certificates as on 31st March 2011 is as follows:
Digital Certificates
33
NSE.IT Limited Twelfth Annual Report
34
NSE.IT Limited Twelfth Annual Report
12. In compliance with Accounting Standard 18 "Related Party Disclosures", the required disclosures are given
in the table below:
A) Names of the related parties and relationship:
Sr.
Related Party Nature of Relationship
No.
1 National Stock Exchange of India Limited Holding Company
2 National Securities Clearing Corporation Limited Fellow Subsidiary
3 DotEx International Limited Fellow Subsidiary
4 NSE Infotech Services Limited Fellow Subsidiary
5 NSE.IT (UK) Limited Wholly owned Subsidiary Company
6 NSE.IT (US) Inc. Wholly owned Subsidiary Company
7 India Index Services & Products Limited Joint Venture of Holding Company
8 Power Exchange India Limited Joint Venture of Holding Company
9 NSE.IT Limited Employees' Provident Fund Trust
(Dissolved w.e.f. 1st August'2010) Entity over which control exists
10 NSE.IT Limited Employees' Group Superannuation
Scheme Entity over which control exists
11 NSE.IT Limited Employees' Gratuity Fund Trust Entity over which control exists
12 National Stock Exchange of India Limited Employees' Entity over which Holding
Provident Fund Trust company's control exists
13 National Stock Exchange of India Limited Employees' Entity over which Holding
Group Superannuation Fund Trust company's control exists
14 National Stock Exchange of India Limited Employees' Entity over which Holding
Group Gratuity-cum-Life Assurance Scheme. company's control exists
15 National Stock Exchange Investor Protection Fund Trust Entity over which Holding
company's control exists
16 Mr. Ramesh Padmanabhan - Managing Director & CEO Key Management Personnel
35
NSE.IT Limited Twelfth Annual Report
36
NSE.IT Limited Twelfth Annual Report
13. The Company has taken following assets on non-cancelable renewable operating lease basis:
Office Premises : Leave & License Agreement for maximum of 108 months
The maximum future rent obligations as per the respective agreements are as follows:-
Future Lease Rent obligations For the Year ended
31-Mar-2011 (Rs.) 31-Mar-2010 (Rs.)
Office & Residential Premises
not later than 1 year 103,919,632 75,798,724
later than 1 year not later than 5 years 251,920,960 134,454,237
later than 5 years 134,859,745 66,151,292
Total 490,700,337 276,404,253
14. In accordance with Accounting Standard - 20 "Earning per Share", the required disclosure is given below:
Particulars Year ended Year ended
31-Mar-2011 31-Mar-2010
Net Profit attributable to Shareholders (Rs.) 136,361,863 95,273,446
Weighted Average number of equity shares issues (in Nos). 10,000,010 10,000,010
Basic earnings per share of Rs. 10/- each (in Rs.) 13.64 9.53
The dilutive impact of ESOPs granted as mentioned in Note 18 on the EPS mentioned below is considered
nominal and not material and therefore, no separate diluted EPS has been computed.
15. Components of deferred tax Asset / (Liability) are as under:
Particulars Year ended Year ended
31-Mar-2011 31-Mar-2010
On account of depreciation (8,965,487) (4,445,541)
On account of impairment of intangible asset 2,855,611 4,008,998
On account of disallowance u/s 40 (a)(ia) 25,87,881 Nil
Deferred Tax Asset / (Liability) (3,521,995) (436,543)
37
NSE.IT Limited Twelfth Annual Report
16. In accordance with Accounting Standard 29 "Provisions, Contingent Liabilities and Contingent Assets",
the company has made provision for "Performance Pay" payable to the employees and "Leave Encashment".
The particulars of these provisions are as under:
In case of provision for performance pay, it is expected that these obligation will be met in the next financial
year.
17. In terms of the authority granted by the General Meeting held on September 25th, 2006, the Company has
formulated an Employee Stock Option Plan 2006 (ESOP). Under the said ESOP, 3,47,350 Options for
equivalent number of Equity Shares of the company have been granted as an incentive scheme to the
employees covered under the scheme. The Scheme provides that the Options shall vest in a graded manner
over a period of 4 years in the ratio of 25%, 30%, 35% and 10% respectively. The exercise period shall be
three years from the vesting of each tranche of the aforesaid options. Each option entitles the holder of the
option to 1 Equity Share of the Company at an exercise price of Rs.53/- per share, which is also the Fair
Market Value (FMV) of the share on the date of the grant as determined by a valuation report obtained from
an independent valuer.
The Guidance Note issued by the Institute of Chartered Accountants of India on Accounting for Employee
Share Based Payments requires accounting of the expense in regard to the ESOPs. The Company has adopted
the Intrinsic Value Method as given in the said Guidance for accounting for the same. The Company has
obtained expert opinion that since the Exercise Price is equal to the FMV of the shares on the grant date; it
would not be required to recognize any compensation expense since the "intrinsic value" of the options is NIL.
Particulars F.Y. 2010-11 F.Y. 2009-10
Quantity (Nos.) Quantity (Nos.)
Options at the beginning of the year 145,780 164,340
Options granted during the year Nil Nil
Options lapsed during the year 940 18,560
Options Exercised during the year Nil Nil
Options expired during the year Nil Nil
Balance Options in force 144,840 145,780
38
NSE.IT Limited Twelfth Annual Report
19. Effective April 1, 2007 the company adopted the Accounting Standard 15 "Employee Benefits". Company
has charged the gratuity expenses to revenue based on gratuity liability estimated as per actuarial report
furnished by independent actuarial valuer. The report which uses projected unit credit method shows the
position as at March 31, 2011 as under.
Particulars FY 2010-11 FY 2009-10
Obligation at period beginning 60,93,592 5,291,846
Service Cost 16,01,906 2,427,952
Interest Cost 502,721 587,824
Actuarial (gain)/loss (5,61,445) (1,470,030)
(Benefits paid) (145,000) (744,000)
Obligation at period end 7,491,774 6,093,592
Change in plan assets
Plan assets at period beginning, at fair value 7,027,937 3,336,520
Expected return on plan assets 562,235 544,523
Acturial gain / (Loss) 229,642 48,879
Contributions 1,771,451 3,842,015
(Benefits paid) (145,000) (744,000)
Plan assets at period end, at fair value 9,446,265 7,027,937
39
NSE.IT Limited Twelfth Annual Report
The estimate of future salary increases, considered in actuarial valuation, take account of inflation, promotion
and other relevant factors such as supply and demand factors in the employment market.
20. Company had established the NSE.IT Limited Employees' Provident Fund Trust to which both the employee
and the employer, respectively made monthly contributions equal to 12% of the employee's basic salary.
Upto 31st July 2010 the company had an obligation to make good the short fall, if any, between the return
from its investments and the administered interest rate. W.e.f. 1st August 2010, the company has transferred
the corpus balance of the NSE.IT Ltd. Employees Provident Fund Trust to the Regional Provident Fund
Office, Kandivali, Mumbai and started contributing to Provident Fund as per applicable Rules / Statute.
21. The previous year figures are regrouped, reclassified and rearranged, wherever necessary.
40
NSE.IT Limited Twelfth Annual Report
CASH FLOW STATEMENT FOR THE YEAR ENDED MARCH 31, 2011
2010-2011 2009-2010
(Rs.) (Rs.)
41
NSE.IT Limited Twelfth Annual Report
2010-2011 2009-2010
(Rs.) (Rs.)
(34,982,660.00) (13,839,285.00)
As per our report of even date attached For and on behalf of the Board of Directors
KEDAR MEHENDALE
Partner DILEEP CHOKSI J. RAVICHANDRAN
Membership No.116065 Director Director
42
NSE.IT Limited Twelfth Annual Report
I Registration Details
Registration No. 122456
State Code 11
Balance Sheet Date 31-Mar-11
Sources of Funds
Paid-up Capital 100,000
Reserves & Surplus 291,983
Secured Loans NIL
Unsecured Loans NIL
Deferred Tax Liability 3,522
Application of Funds
Net Fixed Assets 134,825
Investments 22,793
Net Current Assets 237,887
Misc. Expenditure NIL
Accumulated Losses NIL
43
NSE.IT Limited Twelfth Annual Report
44
NSE.IT Limited Twelfth Annual Report
NSE.IT LIMITED
Statement pursuant to Section 212 of the Companies Act, 1956, relating to Subsidiary Companies
45
Y Y
NSE.IT (UK) LIMITED
REPORT OF THE DIRECTORS AND FINANCIAL STATEMENTS REPORT OF THE DIRECTORS AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31ST MARCH 2011 FOR THE YEAR ENDED 31ST MARCH 2011
FOR NSE.IT (UK) LIMITED FOR NSE.IT (UK) LIMITED
Page Page
1 1
NSE.IT (UK) Limited Fourth Annual Report
COMPANY INFORMATION
FOR THE YEAR ENDED 31ST MARCH 2011
DIRECTORS
J Ravichandran
R Padmanabhan
SECRETARY
R Padmanabhan
2
NSE.IT (UK) Limited Fourth Annual Report
The directors present their report with the financial statements of the company for the year ended 31st March
2011.
PRINCIPAL ACTIVITY
The principal activity of the company in the year under review was that of software consultancy.
REVIEW OF BUSINESS
The results for the period and financial position of the company are as shown in the annexed financial statements.
DIVIDENDS
No dividends will be distributed for the year ended 31st March 2011.
DIRECTORS
The directors shown below have held office during the whole of the period from 1st April 2010 to the date of this
report.
J Ravichandran
R Padmanabhan
3
NSE.IT (UK) Limited Fourth Annual Report
AUDITORS
The auditors, Butler & Co, will be proposed for re-appointment at the forthcoming Annual General Meeting.
R Padmanabhan
Secretary
4
NSE.IT (UK) Limited Fourth Annual Report
We have audited the financial statements of NSE.IT (UK) Limited for the year ended 31st March 2011 on pages
seven to eleven. The financial reporting framework that has been applied in their preparation is applicable law
and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice).
This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 16 of the
Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members
those matters we are required to state to them in a Report of the Auditors and for no other purpose. To the fullest
extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the
company's members as a body, for our audit work, for this report, or for the opinions we have formed.
5
NSE.IT (UK) Limited Fourth Annual Report
6
NSE.IT (UK) Limited Fourth Annual Report
PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 31ST MARCH 2011
TURNOVER – –
Administrative expenses 2,171 693
OPERATING LOSS
ON ORDINARY ACTIVITIES
BEFORE TAXATION 3 (2,171) (693)
CONTINUING OPERATIONS
None of the company's activities were acquired or discontinued during the current year or previous year.
7
NSE.IT (UK) Limited Fourth Annual Report
CREDITORS
Amounts falling due within one year 5 6,841 4,670
The financial statements were approved by the Board of Directors on 7th April 2011 and were signed on its behalf by:
J RAVICHANDRAN R PADMANABHAN
Director Director
8
NSE.IT (UK) Limited Fourth Annual Report
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31ST MARCH 2011
1. ACCOUNTING POLICIES
Accounting convention
The financial statements have been prepared under the historical cost convention.
Going Concern
As at 31st March 2011, the company's current liabilities exceed current assets by £6,841
(2010 - £4,670). However, the directors of the company consider that the going concern basis is
appropriate in view of the assurance of continuing financial support which the company has
received from its shareholders.
Deferred tax
Deferred tax is recognised in respect of all timing differences that have originated but not reversed at
the balance sheet date.
2. STAFF COSTS
There were no staff costs for the year ended 31st March 2011 nor for the year ended 31st March 2010.
The average monthly number of employees during the year was as follows:
2011 2010
Management 2 2
3. OPERATING LOSS
The operating loss is stated after charging:
2011 2010
£ £
Directors' remuneration – –
4. TAXATION
Analysis of the tax charge
No liability to UK corporation tax arose on ordinary activities for the year ended 31st March 2011 nor
for the year ended 31st March 2010.
9
NSE.IT (UK) Limited Fourth Annual Report
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31ST MARCH 2011
Authorised:
Number: Class: Nominal 2011 2010
value: £ £
1 Ordinary 1 1 1
7. RESERVES
Profit
and loss
account
£
At 1st April 2010 (4,671)
Deficit for the year (2,171)
At 31st March 2011 (6,842)
10
NSE.IT (UK) Limited Fourth Annual Report
2011 2010
£ £ £ £
Income – –
Expenditure
Professional fees 1,528 24
Auditors' remuneration 630 630
2,158 654
(2,158) (654)
Finance costs
Bank charges 13 39
This page does not form part of the statutory financial statements
11
Y Y
NSE.IT (US) INC.
1
NSE.IT (US) Limited Fourth Annual Report
Fixed Assets:
Computer Equipment 1,345 –
(Accumulated Depreciation) (1,345) –
Total Net Fixed Assets – –
Current Assets:
Cash and cash equivalents 196,728 225,381
Accounts receivable 13,429 13,429
Rental deposit 2,400 2,400
Total Current Assets 212,557 241,210
TOTAL ASSETS 212,557 241,210
Shareholders' Equity
Equity shares, $ 1 par value, Authorized shares
Issued, Subscribed & Paid up 1 1
Additional paid-in-capital – –
Retained earnings (48,697) 9,245
Total Shareholders' Equity (48,696) 9,246
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY 212,557 241,210
Ramesh Padmanabhan
Date : 24th March 2011 Director
2
NSE.IT (US) Limited Fourth Annual Report
Total Revenues – –
COST OF REVENUE
Personnel Expenses (Salaries) 43,333 –
Total Cost of Goods Sold 43,333 –
OPERATING EXPENSES
General and administrative expenses
Rental Expenses 79 –
Telephone Expenses 590 –
Conveyance & Travelling 2,975 –
Bank Charges – 146
Professional Fees 3,812 6,348
Depreciation and amortisation 1,345 –
Entertainment Expenses 476 –
Miscellaneous Expenses 651 –
Office Supplies 822 –
Payroll Taxes 2,960 –
Total General and Administrative Expenses 13,710 6,494
3
A A
DotEx International Limited
(A Wholly owned Subsidiary of National Stock Exchange of India Limited)
DotEx
DotEx
First with the next
A A
DotEx International Limited Eleventh Annual Report
BOARD OF DIRECTORS
Mr. J. Ravichandran
SECRETARY
DIRECTORS' REPORT
To,
The Members,
Your Directors have pleasure in presenting the Eleventh Annual Report and the Audited Accounts of DotEx
International Limited for the financial year ended March 31, 2011.
1
DotEx International Limited Eleventh Annual Report
• Mobile platform to provide live streaming data and trading capability. Market Data is made available
as an open application for any investor or potential investor who registers on NSE website. For
investors desirous of trading, they can avail the facility from any NOW enabled trading member.
• Tied up with Pvt. VSAT service providers to make NOW available through Pvt. VSAT Network. This
facility has been proved to be a boon to users in northeast regions where even basic internet connectivity
is an issue.
The above initiatives have resulted in an increase in trading turnover through NOW platform during the
financial year 2010-11.
During the year 2010-11, DotEx earned a profit after tax of Rs. 1,416.68 lakhs as compared to a profit of
Rs. 1,304.32 lakhs during 2009-10. The financial position of DotEx has improved significantly in the current
financial year by virtue of income generated through revision in tariff, increase in the number of clients and
increase in the number of vendors reporting end user clients. The financial results for the financial years
2010-11 and 2009-10 are summarised hereunder:-
III. DIVIDEND
In view of the above results, your Directors recommended payment of dividend of Rs. 1.50 per share for the
year 2010 -11.
2
DotEx International Limited Eleventh Annual Report
V. DIRECTORS
In accordance with the provisions of the Companies Act, 1956 and the Company's Articles of Association,
Mr. Ravi Narain retires by rotation at the ensuing Annual General Meeting and being eligible offers himself for
re-appointment.
3
DotEx International Limited Eleventh Annual Report
VIII. AUDITORS
M/s. K. S. Aiyar and Co., Chartered Accountants, Auditors of the Company, retire at the forthcoming Annual
General Meeting of the Company and are eligible for re-appointment. The Company has received a certificate
from the Auditors to the effect that their re-appointment, if made, would be within the limits prescribed
under Section 224(1B) of the Companies Act, 1956.
X. PARTICULARS OF EMPLOYEES
A statement prepared pursuant to requirements of Section 217(2A) of the Companies Act, 1956 read with
the Companies (Particulars of Employees) Rules, 1975 is attached herewith.
XI. APPRECIATION
Your Directors are grateful for the support and co-operation extended by NSEIL and NSE Infotech Services
Limited and the valued clients and looks forward to their continued support and co-operation. Your Directors
would like to place on record their deep appreciation of the contribution made by the employees at all levels
to the continued growth of the Company.
Ravi Narain
Chairman
Place : Mumbai
Date : April 26, 2011
4
DotEx International Limited Eleventh Annual Report
1 Mr. Suresh Narayan 41 Director 2108290 1453771 21 January 24, 2005 Manager ,
B.Com, Grad. CWA In-charge National Securities
Depository
Limited
Notes :
1 Gross Remuneration includes Salary and other benefits, Company's contribution to Provident Fund, Superannuation
Fund, taxable value of perquisites, etc. Net remuneration represents gross remuneration less Company's contribution to
provident and superannuation funds, taxable value of perquisites, profession tax and income tax.
3 The above employee is on deputation basis from the Company's holding Company i.e. National Stock Exchange of India
Limited (NSEIL) and the proportionate remuneration mentioned above in respect of him has been reimbursed to NSEIL
by the Company.
4 None of the employees is holding equity shares in the Company within the meaning of sub-clause (iii) of clause (a) of
sub-section (2A) of Section 217 of the Companies Act, 1956.
5 The Company does not have any Employees Stock Option Plan (ESOP) Scheme for its employees.
5
DotEx International Limited Eleventh Annual Report
AUDITORS' REPORT
To the Members of
1. We have audited the attached Balance Sheet of DOTEX INTERNATIONAL LIMITED, as at March
31, 2011, the Profit and Loss Account and Cash Flow for the year ended on that date annexed thereto.
These financial statements are the responsibility of the Company's management. Our responsibility is
to express an opinion on these financial statements based on our audit.
2. We conducted our audit in accordance with the auditing standards generally accepted in India. Those
Standards require that we plan and perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our audit provides a reasonable
basis for our opinion.
3. As required by the Companies (Auditor's Report) Order, 2003 as amended by the Companies (Auditor's
Report) Amendment Order, 2004 issued by the Central Government of India in terms of sub-section
(4A) of section 227 of the Companies Act, 1956, we enclose in the Annexure a statement on the
matters specified in paragraphs 4 and 5 of the said Order.
4. Further to our comments in the Annexure referred to in paragraph (3) above, we report that:
(i) We have obtained all the information and explanations, which to the best of our knowledge and
belief were necessary for the purposes of our audit;
(ii) In our opinion, proper books of account as required by law have been kept by the Company so far
as appears from our examination of those books;
(iii) The Balance sheet, Profit and Loss Account and Cash Flow Statement dealt with by this report
are in agreement with the books of account ;
(iv) In our opinion, the Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with
by this report comply with the Accounting Standards referred to in sub-section (3C) of section
211 of the Companies Act, 1956;
(v) On the basis of written representations received from the directors, as on March 31, 2011 and
taken on record by the Board of Directors, we report that none of the directors of the Company
6
DotEx International Limited Eleventh Annual Report
are disqualified as on March 31, 2011 from being appointed as a director, in terms of clause (g) of
sub-section (1) of section 274 of the Companies Act, 1956;
(vi) In our opinion and to the best of our information and according to the explanations given to us,
the said accounts give the information required by the Companies Act, 1956, in the manner so
required and give a true and fair view in conformity with the accounting principles generally
accepted in India:
(a) in the case of the Balance Sheet, of the state of affairs of the Company as at March 31, 2011;
(b) in the case of the Profit and Loss Account, of the profit for the year ended on that date; and
(c) in the case of the Cash Flow Statement, of the cash flows for the year ended on that date.
Raghuvir M. Aiyar
Place : Mumbai Partner
Date : April 26, 2011 (M No. 38128)
7
DotEx International Limited Eleventh Annual Report
(Referred to in paragraph 3 of our report of even date on the Accounts for the year ended March 31, 2011 of
DOTEX INTERNATIONAL LIMITED.)
In our opinion, and on the basis of such checks of the books and records as we considered appropriate and
according to the information and explanations given to us during the normal course of audit, which were necessary
to the best of our knowledge and belief, we report that:
1. The Company has maintained proper records showing full particulars including quantitative details and
situation of fixed assets.
2. A substantial portion of the fixed assets have been physically verified by the management during the year. In
our opinion, the frequency of verification is reasonable having regard to the size of the Company and the
nature of its assets. No material discrepancies were noticed on such verification.
3. The fixed assets disposed off during the year were not substantial, According to the information and
explanations given to us; we are of the opinion that the disposal of the fixed assets has not affected the going
concern status of the Company.
4. The Company is a service Company and therefore does not maintain any inventory; the direction in this
regard is therefore not applicable.
5. The Company has not granted any loans, secured or unsecured, to the companies, firms and other parties
covered in the Register maintained under Section 301 of the Companies Act, 1956. Accordingly sub clause
(b), (c) and (d) are not applicable.
6. The Company has not taken any loans, secured or unsecured, from the companies, firms and other parties
covered in the Register maintained under Section 301 of the Companies Act, 1956. Accordingly sub clause
(f), and (g) are not applicable.
7. In our opinion and according to the information and explanations given to us, there are adequate internal
control procedures commensurate with the size of the Company and the nature of its business with regard to
purchases of fixed assets and with regard to the sale of services. During the course of our audit, we have not
observed any continuing failure to correct major weakness in the internal controls.
8. In our opinion and according to the information and explanations given to us, there are no transactions or
arrangements as referred to in section 301 of the Companies Act, 1956 that have to be required to be maintained
under that section. Sub clause (b) is not applicable.
9. The Company has not accepted any deposit from the public and consequently the directives issued by the
Reserve Bank of India, provisions of section 58A and 58AA of the Companies Act, 1956, and the Companies
(Acceptance of Deposits) Rules, 1975 with regard to the deposits accepted from the public are not applicable
to the Company. No order has been passed by the Company Law Board, National Law Tribunal or Reserve
Bank of India or any other court or any other tribunal.
10. In our opinion, the Company has an internal audit system commensurate with the size and nature of its
business.
11. According to the information and explanations given to us, the Central Government has not prescribed
maintenance of cost records under section 209(1) (d) of the Companies Act, 1956 in respect of services
carried out by the Company.
8
DotEx International Limited Eleventh Annual Report
12. During the year there were no employees in the employment of the Company. Accordingly the directions
relating to Provident Fund and Employee's State Insurance are not applicable to the Company. Further,
based on our examination of the records maintained during the year, the Company is not liable to make any
payments towards Investor Education Protection Fund, Sales tax, Wealth tax, Customs duty, Excise duty,
and Cess. The Company has been generally regular in depositing Income Tax and Service Tax dues along
with Cess thereon with the appropriate authority.
13. According to the records of the Company, Sales tax, Income-tax, Customs duty, Wealth tax, Service tax,
Excise duty and Cess which have not been deposited on account of any dispute, are as follows:
Name of Statute Year to which the Forum where the Amount (Rs.)
(Nature of dues) amount relates dispute is pending
Income Tax (Tax/ Interest) 2008-09 Assessing Officer 22,13,540
14. The Company does not have any accumulated losses at the end of the financial year and has not incurred any
cash losses during the financial year covered by our audit and in the immediately preceding financial year.
15. The Company has neither taken any loans from any bank or financial institution nor issued any debentures.
16. The Company has not granted loans and advances on the basis of security by way of pledge of shares,
debentures and other securities.
17. The Company is not a chit fund or a nidhi / mutual benefit fund / society.
18. In our opinion and according to the information and explanations given to us, the Company is not dealing in
or trading in shares, securities, debentures and other investments.
19. According to the information and explanations given to us, the Company has not given any guarantee for
loans taken by others from bank or financial institutions.
20. The Company has not raised any term loans.
21. According to the information and explanations given to us and on an overall examination of the balance
sheet of the Company, we report that no funds raised on short-term basis have been used for long-term
investment.
22. The Company has not made any preferential allotment of shares to parties and companies covered in the
register maintained under section 301 of the Companies Act, 1956.
23. The Company has not issued any debentures during the year.
24. The Company has not raised money by public issues during the year.
25. According to the information and explanations given to us, no fraud on or by the Company has been noticed
or reported during the course of our audit.
For K. S. AIYAR & CO.
Chartered Accountants
Registration No: 100186W
9
DotEx International Limited Eleventh Annual Report
I. SOURCES OF FUNDS
1. Shareholder's Funds
a Share Capital 1 120,000,000.00 120,000,000.00
b Reserves & Surplus 2 348,325,068.76 227,507,738.19
10
DotEx International Limited Eleventh Annual Report
PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED MARCH 31,2011
(II) EXPENDITURE
Employee Cost 9 21,283,730.00 11,267,871.21
Operating, Administration and
Other Expenses 10 204,506,693.60 145,028,979.98
Revenue sharing (Refer Note.11 ) 71,997,820.00 62,563,908.00
Depreciation 35,654,901.82 25,202,652.23
333,443,145.42 244,063,411.42
Profit before Prior Period Adjustments 211,079,957.57 191,623,835.33
(Less) : Prior Period Adjustments – –
Profit before Tax 211,079,957.57 191,623,835.33
Less : Provision for Tax
- Current 72,000,000.00 60,900,000.00
- Deferred Tax Expense (2,844,210.00) (638,778.00)
- Short Provision of Tax 256,307.00 930,037.00
Profit after Tax 141,667,860.57 130,432,576.33
Surplus brought forward from previous year 22,507,738.19 18,134,261.86
Excess Corporate Dividend Tax for last year transferred back 69,520.00 -
Profit Available for appropriations 164,245,118.76 148,566,838.19
Appropriations :
- General Reserve 120,000,000.00 105,000,000.00
- Proposed Dividend 18,000,000.00 18,000,000.00
- Corporate Dividend Tax 2,920,050.00 3,059,100.00
- Balance Carried to Balance Sheet 23,325,068.76 22,507,738.19
164,245,118.76 148,566,838.19
Basic Earning per share (Rs) (Refer Note no.8 ) 11.81 10.87
Notes forming part of the accounts 11
As per our report of even date attached For and on behalf of the Board of Directors
For K. S. AIYAR & CO.
Chartered Accountants
RAVI NARAIN CHITRA RAMKRISHNA
Chairman Director
11
DotEx International Limited Eleventh Annual Report
As At 31.03.11 As At 31.03.10
Amount (Rs.) Amount (Rs.)
Authorised
1,30,00,000 (Prev. year 1,30,00,000) 130,000,000.00 130,000,000.00
Equity shares of Rs 10 each
12
SCHEDULES FORMING PART OF THE BALANCE SHEET
SCHEDULE 3 : FIXED ASSETS (Note No. 1(D))
Description Gross Block Depreciation Net Block
As on Additions Deduction As on As on For the Deletion Total upto As on As on
01/04/2010 during the during the 31/03/2011 01/04/2010 year 31/03/2011 31/03/2011 31/03/2010
Year Year
Computer Hardware 5,423,244.07 – 1,382,535.00 4,040,709.07 4,591,560.86 240,406.39 1,382,535.00 3,449,432.25 591,276.82 831,683.21
Computer Software 8,574,312.00 253,155.00 – 8,827,467.00 8,574,312.00 55,658.33 – 8,629,970.33 197,496.67 –
Computer Sys-Others 49,754,749.71 10,503,769.26 – 60,258,518.97 14,075,270.75 13,428,618.70 – 27,503,889.45 32,754,629.52 35,679,478.96
DotEx International Limited
Office Equipments 194,198.00 25,515.00 – 219,713.00 116,791.08 20,495.50 – 137,286.58 82,426.42 77,406.92
Telecom Installations 86,466,568.78 7,571,489.96 542,922.87 93,495,135.87 25,163,160.15 21,909,722.90 542,922.87 46,529,960.18 46,965,175.69 61,303,408.63
Total 150,413,072.56 18,353,929.22 1,925,457.87 166,841,543.91 52,521,094.84 35,654,901.82 1,925,457.87 86,250,538.79 80,591,005.12 97,891,977.72
Previous Year 88,182,732.57 62,797,738.95 567,398.96 150,413,072.56 27,878,622.44 25,202,652.23 560,179.83 52,521,094.84 97,891,977.72 60,304,110.13
UNQUOTED –
BONDS
TAXABLE
5.5% Rural Electrification Corporation Limited. 31/Mar/11 29.00 10,000.00 290,000.00 – 290,000.00
6.25% Rural Electrification Corporation Limited. 31/Mar/12 193.00 10,000.00 1,930,000.00 1,930,000.00 1,930,000.00
QUOTED
BONDS
Taxfree
6.85% India Infrastructure Finance Company Limited - 2014 22/Jan/14 100.00 100,000.00 10,000,000.00 10,174,437.00 10,236,433.00
MUTUAL FUNDS –
Sundaram Fixed Term Plan AP-367 Days Growth 4/Nov/11 1,000,000.00 10.00 10,000,000.00 10,000,000.00 –
EQUITY SHARES –
Omnesys Technologies Pvt. Ltd. 833,990.00 10.00 8,339,900.00 46,800,000.00 46,800,000.00
INXS Technologies Limited 2,160,920.00 10.00 21,609,200.00 47,000,000.00 –
TOTAL 3,995,232.00 52,169,100.00 115,904,437.00 59,256,433.00
Note : Aggregate Market Value of the quoted investments is Rs.1,00,00,000.00 (Previous Year :1,01,78,000.00)
13
Eleventh Annual Report
DotEx International Limited Eleventh Annual Report
As At 31.03.11 As At 31.03.10
Amount (Rs.) Amount (Rs.)
A: CURRENT ASSETS
Interest Accrued
On Investments 218,498.29 230,515.41
On Bank Deposits 5,850,056.10 327,542.00
On Inter-corporate Deposits – 6,068,554.39 264,079.66 822,137.07
Sundry Debtors
Outstanding for a period of
more than six months
Considered good 594,057.00 6,529,904.26
Considered doubtful 2,033,766.00 1,370,792.00
2,627,823.00 7,900,696.26
Less: Provision for Doubtful Debts. 2,033,766.00 1,370,792.00
594,057.00 6,529,904.26
Other debts
Considered good (Unsecured) 173,728,578.85 174,322,635.85 81,677,296.56 88,207,200.82
(includes dues from Holding Company
Rs.15,99,92,091.85 (net)
Previous Year : Rs. 8,03,91,603.56 (net) )
Cash & Bank Balances
Cash in Hand 4,826.00 1,883.00
Balances with Scheduled Banks
In Current accounts (with Auto
Fixed Deposit facility) 4,946,908.16 1,925,591.67
In Deposit accounts- Fixed Deposits 110,500,000.00 115,451,734.16 – 1,927,474.67
14
DotEx International Limited Eleventh Annual Report
As At 31.03.11 As At 31.03.10
Amount (Rs.) Amount (Rs.)
15
DotEx International Limited Eleventh Annual Report
As At 31.03.11 As At 31.03.10
Amount (Rs.) Amount (Rs.)
16
DotEx International Limited Eleventh Annual Report
17
DotEx International Limited Eleventh Annual Report
Deferred tax assets are recognized only if there is a reasonable certainty that they will be realized and
are reviewed for the appropriateness of their respective carrying values at each balance sheet date.
2. Contingent Liabilities:
A. Estimated amount of contracts remaining to be executed on capital account (net of advances) and not
provided for Rs.55,15,975/- (Previous Year: Rs. 48,87,846/-)
B. Capital commitment towards investment Rs. 5,09,87,556.25 (Previous Year: Rs. Nil/-)
C. On account of disputed matters of Income Tax Rs.33,83,206/- (Previous Year: Rs. 11,03,323/-)
3. Managerial Remuneration :
18
DotEx International Limited Eleventh Annual Report
5. The statement of Short Term Investments at the end of year is given below :
19
DotEx International Limited Eleventh Annual Report
6. Statement of investments purchased and sold/redeemed during the year at cost is given below :
20
DotEx International Limited Eleventh Annual Report
21
DotEx International Limited Eleventh Annual Report
7. In compliance with Accounting Standard - 18 "Related Party Disclosures" issued by the Institute of Chartered
Accountants of India, the required disclosures are given in the table below:
22
DotEx International Limited Eleventh Annual Report
23
DotEx International Limited Eleventh Annual Report
10 There are no Micro, Small and Medium Enterprises, as defined in the Micro, Small, and Medium Enterprises
Development Act, 2006 to whom the company owes dues on account of principal amount together with
interest and accordingly no additional disclosures have been made.
The above information regarding Micro, Small and Medium Enterprises has been determined to the extent
such parties have been identified on the basis of information available with the company. This has been
relied upon by the auditors.
11 The Company is in the business of dissemination of data and has a Revenue sharing agreement with National
Stock Exchange of India Limited (NSEIL).
14 Information with regard to other matters specified in Clause 3, 4C and 4D of the part II of Schedule VI to
Companies Act, 1956 are either Nil or not applicable to the Company.
15 Figures for the previous accounting year have been re-grouped, rearranged and reclassified wherever necessary.
As per our report of even date attached For and on behalf of the Board of Directors
24
DotEx International Limited Eleventh Annual Report
2010-2011 2009-2010
(Rs.) (Rs.)
Adjustments for :
Sundry Debtors (86,942,346.39) (59,862,180.34)
Loans & Advances 37,906,208.80 (29,917,270.00)
Current Liabilities & Provisions (17,423,300.40) 28,384,322.60
(Cash Genrated From Operations) 169,857,616.25 140,100,935.11
Direct Taxes paid (Net of Refunds) (70,292,353.66) (61,648,599.10)
NET CASH FROM OPERATING ACTIVITIES - Total (A) 99,565,262.59 78,452,336.01
25
DotEx International Limited Eleventh Annual Report
2010-2011 2009-2010
(Rs.) (Rs.)
C) CASHFLOW FROM FINANCING ACTIVITIES
Dividend Paid (18,000,000.00) (12,000,000.00)
Dividend Distribution Tax (2,989,580.00) (2,039,400.00)
NET CASH FROM (USED IN) FINANCING (20,989,580.00) (14,039,400.00)
ACTIVITIES - Total (C)
NET INCREASE/(DECREASE) IN CASH AND 113,524,259.49 (3,831,654.82)
CASH EQUIVALENTS (A+B+C)
As per our report of even date attached For and on behalf of the Board of Directors
26
DotEx International Limited Eleventh Annual Report
I Registration Details
Registration No. 1 2 6 9 5 2 State Code 1 1
Sources of Funds
Paid-up Capital Reserves & Surplus
* * * 1 2 0 0 0 0 * * * 3 4 8 3 2 5
Application of Funds
Net Fixed Assets Investments
* * * * 8 0 5 9 1 * * * 1 1 5 9 0 4
27
DotEx International Limited Eleventh Annual Report
V Generic Names of Three Principal Products / Services of Company (as per monetary terms)
Product D I S S E M I N A T I O N O F
Description D A T A ( D A T A F E E D )
VED MALLA
Asst. Company Secretary
Place : Mumbai
Date : April 26, 2011
28
E E
India Index Services & Products Limited
(Subsidiary of National Stock Exchange of India Limited)
IISL
E E
INDIA INDEX SERVICES & PRODUCTS LIMITED
Thirteenth Annual Report
BOARD OF DIRECTORS*
DIRECTORS’ REPORT
To,
The Members,
Your Directors have pleasure in presenting the Thirteenth Annual Report and the Audited Accounts of
India Index Services & Products Limited (IISL) for the year ended March 31, 2011.
The total number of index-linked funds linked to your Company's indices are as follows:
1. Nineteen funds and four ETFs on S&P CNX Nifty Index available in India.
2. Five ETFs on S&P CNX Nifty Index listed outside India.
3. One ETF on CNX Nifty Junior Index listed in India.
4. Two ETFs on CNX Bank Index listed in India.
5. One ETF on CNX Midcap Index listed in India.
6. One ETF on CNX Infrastructure Index listed in India.
7. Two ETFs on CNX PSU Bank Index listed in India.
8. One ETF on S&P CNX Shariah Nifty listed in India.
9. One Index fund on S&P CNX Shariah 500 available in India.
10. One Index fund on S&P CNX 500 Index available in India.
The corpus of index linked funds in India based on S&P CNX Nifty Index, CNX Nifty Junior Index,
CNX Bank Index, CNX PSU Bank Index and S&P CNX 500 Index stood at Rs. 2,648.45 Crores,
Rs. 170.53 Crores, Rs.284.16 Crores, Rs. 75.20 Crores and Rs. 90.40 Crores respectively as on
March 31, 2011.
Your Company provides index and index related services to various stock exchanges, asset management
companies, investment banks and other organisations across the globe for business purposes. Apart from
the indices being used for Index Funds and trading of index based derivative contracts, the indices of your
1
INDIA INDEX SERVICES & PRODUCTS LIMITED
Thirteenth Annual Report
Company are being used by the mutual funds for benchmarking the performance of their funds. The
demand for index related data has increased in past year in line with the improved condition of the equity
market. During the year, your Company provided licenses to various Clients for using your Company's
indices as underlyings for their products. These clients issue products such as index linked notes /
certificates, index linked bonds, index linked certificates of deposit, Exchange Traded Funds (ETFs),
etc., using IISL Indices as the underlying for their products. Your Company also provides annual licenses
to its clients who issue many structured products with IISL indices as underlying for such products.
In continuation of its efforts to develop indices that meet the requirements of market participants, your
Company launched two new indices during the year viz. CNX Dividend Opportunities Index and CNX
Smallcap Index.
Products:
The financial products based on IISL indices currently available are:
2
INDIA INDEX SERVICES & PRODUCTS LIMITED
Thirteenth Annual Report
Operations
During the year under review, the Company has widened the client base that uses IISL Indices and index
data. Your Company has the following major sources of income viz. income from licensing indices to
stock exchanges for trading in derivative contracts linked to such indices, income from licensing indices
to Index Funds/Exchange Traded Funds, income from licensing indices to finance and insurance companies
for debentures/ insurance products, income from licensing indices to investment banks for structured
products and income from data subscription. The income received from these for the year 2010-11 was
Rs. 1,925.93 lakhs. The revenues of your Company have increased from Rs. 1,516.89 lakhs in 2009-10 to
Rs.2,097.53 lakhs in 2010-11. The total outflow of the Company was Rs. 349.55 lakhs in 2010-11 as
compared to Rs. 189.36 lakhs in 2009-10.
Future Prospects
During the last financial year, your Company had received inquiries from Indian entities for developing
customised indices to suit the needs of these entities. Your Company is also receiving enquiries from
various insurance companies and pension fund managers for launching products based on the premier
index viz. S&P CNX Nifty Index.
Your Company has also been receiving enquiries for index related data from various domestic entities
viz., asset management companies, which are launching new funds and finance companies that are issuing
debentures based on various indices of the Company. Further, enquiries have also been received from
various fund houses based outside India for licensing the S&P CNX Nifty for index related data & issuance
of structured products that include Index-linked Certificates of Deposit, Index linked Notes, etc.
The Company has earned a net profit after tax of Rs. 1,183.74 lakhs as per particulars given below:-
3
INDIA INDEX SERVICES & PRODUCTS LIMITED
Thirteenth Annual Report
III. DIVIDEND
In view of the above results, your Directors recommend payment of dividend of Rs.9/- per share for the
year 2010-11 as against a dividend of Rs.7/- per share for the previous year.
In continuation of its pursuit to establish good corporate governance practice, your Company, while
already complying by and large with a major part of the Corporate Governance Voluntary Guidelines
2009 issued by the Ministry of Corporate Affairs, is in the process of complying with/ examining the
possibility of implementing, the remaining part of the said Guidelines.
V. DIRECTORS
Ms. Roopa Kudva and Ms. Chitra Ramkrishna retire by rotation at the ensuing Annual General Meeting
and are eligible for re-appointment.
Since the paid up capital of the Company is Rs. 1.30 crores only, it is not mandatory for the Company to
constitute an Audit Committee as per the provisions of Section 292A of the Companies Act, 1956.
VIII. AUDITORS
M/s. K.S.Aiyar & Co., Chartered Accountants, Mumbai, will retire at the conclusion of the forthcoming
Annual General Meeting and are eligible for re-appointment. The Company has received a certificate
from the Auditors to the effect that their re-appointment, if made, would be within the limits prescribed
under Section 224 (1B) of the Companies Act, 1956.
4
INDIA INDEX SERVICES & PRODUCTS LIMITED
Thirteenth Annual Report
X. PARTICULARS OF EMPLOYEES
A statement prepared pursuant to requirements of Section 217 (2A) of the Companies Act, 1956 read
with the Companies (Particulars of Employees) Rules, 1975 is attached herewith.
A certificate of compliance for the financial year 2010-11, as required by the provisions of the Companies
Act, 1956, obtained from M/s. S.N. Ananthasubramanian & Co., Practicing Company Secretaries, is
attached herewith.
XII. APPRECIATION
The Board of Directors wishes to place on record their appreciation of the support and co-operation
received from NSEIL, CRISIL, Standard & Poor's, members of the Index Policy Committee and Index
Maintenance Sub-committee, Bankers of the Company, business associates and the valued clients and
looks forward to their continued support and co-operation. The Board of Directors also wishes to thank
the staff at all levels for their exemplary dedication, support and co-operation to the continued growth of
the Company.
Ravi Narain
Chairman
Place : Mumbai
Date : April 25, 2011
5
INDIA INDEX SERVICES & PRODUCTS LIMITED
Thirteenth Annual Report
1 Mr. Suresh Narayan 41 Director & CEO 4919340 3392130 21 January 24, 2005 Manager,
B.Com, Grad. CWA National
Securities
Depository
Limited
Notes :
1 Gross Remuneration includes Salary and other benefits, Company's contribution to Provident Fund,
Superannuation Fund, taxable value of perquisites etc. Net remuneration represents gross remuneration
less company's contribution to provident and superannuation funds, taxable value of perquisites, profession
tax and income tax.
3 The above employee is on deputation basis from the Company's holding company i.e. National Stock
Exchange of India Limited (NSEIL) and the proportionate remuneration mentioned above in respect of
him has been reimbursed to NSEIL by the Company
4 None of the employees of the Company is holding equity shares in the company within the meaning of
sub-clause (iii) of clause (a) of sub-section (2A) of Section 217 of the Companies Act, 1956.
5 The Company has not offered any shares to any of its employees under any Stock Option Scheme.
6
INDIA INDEX SERVICES & PRODUCTS LIMITED
Thirteenth Annual Report
COMPLIANCE CERTIFICATE
COMPLIANCE CERTIFICATE FOR THE FINANCIAL YEAR ENDED 31ST MARCH 2011
To,
The Members,
INDIA INDEX SERVICES AND PRODUCTS LIMITED
Exchange Plaza, C-l, Block-G, Bandra Kurla Complex,
Bandra (East), Mumbai 400051
CIN: U73100MH1998PLC114976
Nominal Capital: Rs. 1,50,00,000
Paid-up Capital: Rs. 1,30,00,000
We have examined the registers, records, books and papers of INDIA INDEX SERVICES AND PRODUCTS
LIMITED (the Company) as required to be maintained under the Companies Act, 1956, (the Act) and the rules
made thereunder and also the provisions contained in the Memorandum and Articles of Association of the Company
for the financial year ended on 31st March 2011. In our opinion and to the best of our information and according
to the examinations, carried out by us and explanations furnished to us by the Company, its officers, we certify
that in respect of the aforesaid financial year:
1. The Company has kept and maintained all registers as stated in, Annexure ‘A' to this Certificate, as per
the provisions of the Act and the rules made thereunder and all entries therein have been duly recorded.
2. The Company has duly filed the forms and returns as stated in Annexure ‘B' to this Certificate, with the
Registrar of Companies, Regional Director, Central Government, Company Law Board or other authorities
within the time prescribed under the Act and the rules made thereunder.
3. The Company, being a public limited Company, following comments under this paragraph viz., the
Company has a minimum prescribed paid-up capital and its maximum number of members during the
said financial year were upto fifty and the Company during the year under review:
(i) has not invited public to subscribe for its shares or debentures; and
(ii) has not invited or accepted any deposits from persons other than its members, Directors or their
relatives.
(iii) is prohibited from making any invitation or acceptance of any deposits from persons other than its
members, Directors or their relatives"
are not required.
4. The Board of Directors of the Company duly met four times respectively on 27 thApril 2010,
11th August 2010, 29th November 2010 and 7th February 2011. In respect of these meetings, proper notices
were given and the proceedings were properly recorded and signed (including circular resolutions passed)
in the Minutes Book maintained for the purpose.
5. The Company has not closed its Register of Members as it was not required to close.
6. The Annual General Meeting for the financial year ended on 31 st March 2010 was held on
11th August 2010 after giving due notice to the members of the Company and the resolutions passed
thereat were duly recorded in the Minutes Book maintained for the purpose.
7
INDIA INDEX SERVICES & PRODUCTS LIMITED
Thirteenth Annual Report
7. No Extraordinary General Meeting was held during the financial year under review.
8. The Company has not advanced any loans to its Directors or persons or firms or companies referred to
under Section 295 of the Act.
9. The Company has not entered into any contracts falling within the purview of Section 297 of the Act.
10. The Company has made necessary entries in the Register maintained under Section 301 of the Act.
11. As there were no instances falling within the purview of Section 314 of the Act, no approvals were
required, pursuant to said section, from the Board of Directors, Members or Central Government, as the
case may be.
12. The Company has not issued any duplicate share certificate(s) during the financial year.
13. The Company
(i) was not required to deliver any share certificates as there were no allotment / transfer / transmission
of securities or any other purpose during the financial year.
(ii) has deposited the amount of dividend declared at the Annual General Meeting in a separate bank
Account within five days from the date of declaration of dividend.
(iii) has paid dividend to all members within a period of 30 (thirty) days from the date of declaration
and that there was no unclaimed / unpaid dividend which was required to be transferred to unpaid
dividend account of the company during the year.
(iv) does not have amounts in the unpaid dividend account, application money due for refund, matured
deposits, matured debentures and the interest accrued thereon which have remained unclaimed or
unpaid for a period of seven years and hence transferring of the same to the Investor Protection
Fund does not arise.
(v) has duly complied with the requirements of Section 217 of the Act.
14. The Board of Directors of the Company is duly constituted and the appointment and re-appointment of
Directors, additional directors were duly made.
15. The appointment of Mr. Suresh Narayan as Whole-time Director of the Company on 27th April 2010 for
a period of five years from 27th April 2010 to 26th April 2015 has been made in compliance with the
provisions of Section 269 read with Schedule XIII of the Act.
16. The Company has not appointed any sole selling agents during the financial year.
17. The Company was not required to obtain any approvals of the Central Government, Company Law
Board, Regional Director, Registrar of Companies and / or such other authorities prescribed under the
various provisions of the Act during the financial year.
18. The Directors have disclosed their interest in other firms / companies to the Board of Directors and
complied with the provisions of the Act and the rules made thereunder.
19. The Company has not issued any shares, debentures or other securities during the financial year.
20. The Company has not bought back any shares during the financial year.
21. The Company has not issued any Preference Shares or Debentures and hence redemption, if any, of
Preference Shares or Debentures does not arise.
8
INDIA INDEX SERVICES & PRODUCTS LIMITED
Thirteenth Annual Report
22. There were no transactions necessitating the Company to keep in abeyance the rights to dividend, rights
shares and bonus shares pending registration of transfer of shares in compliance with the provisions of
the Act.
23. The Company has not invited / accepted any deposits including any unsecured loans within the purview
of Section 58A during the financial year under review.
24. The Company has not made any borrowings during the financial year ended 31st March 2011 and therefore
provisions of Section 293(1)(d) of the Act are not applicable.
25. The Company has not made any loans or advances or given guarantees or provided securities to other
bodies corporate and consequently no entries were required to be made in the register kept for the purpose.
26. The Company has not altered the provisions of the Memorandum of Association of the Company with
respect to situation of the Company's registered office from one state to another during the year under
review.
27. The Company has not altered the provisions of the Memorandum of Association of the Company with
respect to the objects of the Company during the financial year under review.
28. The Company has not altered the provisions of the Memorandum of Association of the Company with
respect to name of the Company during the financial year under review.
29. The Company has not altered the provisions of the Memorandum of Association of the Company with
respect to share capital during the financial year under review.
30. The Company has not altered the Articles of Association of the Company during the financial year under
review.
31. There was no prosecution initiated against or show cause notice received by the Company and no fines or
penalties or any other punishment was imposed on the Company during the financial year, for alleged
offences under the Act.
32. The Company has not received any money as security from its employees during the financial year under
review and thus the provisions of Section 417(1) of the Companies Act, 1956 are not applicable.
33. The Company is not required to comply with the provisions of Section 418 of the Act with regard to
employee's and employer's contribution to provident fund.
9
INDIA INDEX SERVICES & PRODUCTS LIMITED
Thirteenth Annual Report
Annexure A
Registers as maintained by the Company
Sr. No. Registers Under Section
1. Register of Members and Index of Members 150 and 151
2. Register of Share Transfers –
3. Register of Directors, Managing Directors 303
4. Register of Director's Share and Debenture Holdings 307
5. Register of Charges 143
6. Register of Contracts 301
7. Register of Directors' Attendance –
8. Register of Shareholders' Attendance –
9. Register of Proxies –
10. Register of Documents Sealed –
11 Minutes Book 193
12. Books of Accounts 209
Annexure B
Forms and Returns as filed by the Company with Registrar of Companies / Regional Director /
Central Government or other authorities during the financial year ended on 31st March 2011.
Sr. Form No. Date of Filing For
1. Form 32 21st May 2010 Appointment of Mr. Suresh Narayan and Mr. Mukesh
Shambhu Agarwal as Additional Directors of the Company
w.e.f. 27th April 2010
2. Form 32 5th July 2010 Appointment of Mr. Suresh Narayan as Whole-time Director
w.e.f. 27th April 2010
3. Form 25 C 20th July 2010 Appointment of Mr. Suresh Narayan, Whole-time Director
& CEO for a period of five years commencing from 27th
April 2010 to 26th April 2015.
4. Form 23 AC 8th September 2010 Balance Sheet and Profit & Loss Account for the year ended
& ACA 31st March 2010 adopted in the Annual General Meeting
held on 11th August 2010.
5. Form 32 8th September 2010 Appointment of Mr. Arun Panicker, Mr. Mukesh Agarwal
and Mr Suresh Narayan at the Annual General Meeting held
on 11th August 2010.
6. Form 66 8th September 2010 Filing of Compliance Certificate for 31st March 2010.
7. Form 20B 30th September 2010 Annual Return made up to the date of the Annual General
Meeting held on 11th August 2010.
Sd./-
Place: Thane Name of Company Secretary: S.N. Ananthasubramanian
Date: 9th April, 2011 C.P. No : 1774
10
INDIA INDEX SERVICES & PRODUCTS LIMITED
Thirteenth Annual Report
AUDITORS’ REPORT
To,
The Members,
INDIA INDEX SERVICES & PRODUCTS LIMITED
1. We have audited the attached Balance Sheet of INDIA INDEX SERVICES & PRODUCTS LIMITED,
as at March 31, 2011, the Profit and Loss Account and Cash Flow for the year ended on that date
annexed thereto. These financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on our audit.
2. We conducted our audit in accordance with the auditing standards generally accepted in India. Those
Standards require that we plan and perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our audit provides a reasonable
basis for our opinion.
3. As required by the Companies (Auditor's Report)(Amendment) Order, 2004, issued by the Central
Government of India in terms of sub-section (4A) of section 227 of the Companies Act, 1956, we
enclose in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order.
4. Further to our comments in the Annexure referred to in paragraph 3 above, we report that:
(i) We have obtained all the information and explanations, which to the best of our knowledge and
belief were necessary for the purposes of our audit;
(ii) In our opinion, proper books of account as required by law have been kept by the Company so far
as appears from our examination of those books
(iii) The Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this report
are in agreement with the books of account
(iv) In our opinion, the Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with
by this report comply with the accounting standards referred to in sub-section (3C) of section 211
of the Companies Act, 1956.
(v) On the basis of written representations received from the directors, as on March 31, 2011 and
taken on record by the Board of Directors, we report that none of the directors of the Company are
disqualified as on March 31, 2011 from being appointed as a director, in terms of clause (g) of
sub-section (1) of section 274 of the Companies Act, 1956;
11
INDIA INDEX SERVICES & PRODUCTS LIMITED
Thirteenth Annual Report
(vi) In our opinion and to the best of our information and according to the explanations given to us,
the said accounts give the information required by the Companies Act, 1956, in the manner so
required and give a true and fair view in conformity with the accounting principles generally
accepted in India:
(a) in the case of the Balance Sheet, of the state of affairs of the Company as at March 31, 2011;
(b) in the case of the Profit and Loss Account, of the profit for the year ended on that date; and
(c) in the case of Cash Flow Statement, of the cash flows for the year ended on that date.
RAGHUVIR M AIYAR
PARTNER
Membership No.: 38128
Place : Mumbai
Date : April 25, 2011
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INDIA INDEX SERVICES & PRODUCTS LIMITED
Thirteenth Annual Report
Referred to in paragraph 3 of our report of even date on the Accounts for the
year ended March 31, 2011 of INDIA INDEX SERVICES & PRODUCTS LIMITED.
In our opinion, and on the basis of such checks of the books and records as we considered appropriate and
according to the information and explanations given to us during the normal course of audit, which were
necessary to the best of our knowledge and belief, we report that:
1. The Company has maintained proper records showing full particulars including quantitative details
and situation of fixed assets.
2. A substantial portion of the fixed assets have been physically verified by the management during the
year and in our opinion the frequency of verification is reasonable having regard to the size of the
Company and the nature of its assets. No material discrepancies were noticed on such verification.
3. The Company has not disposed off substantial part of the fixed assets during the year.
4. The Company is a service Company and therefore does not maintain any inventory, the direction in
this regard are therefore not applicable.
5. The Company has not granted any loans, secured or unsecured, to the companies, firms and other
parties covered in the Register maintained under Section 301 of the Companies Act, 1956. Accordingly
sub clause (b), (c) and (d) of clause (iii) are not applicable.
6. The Company has not taken any loans, secured or unsecured from the companies, firms and other
parties covered in the Register maintained under Section 301 of the Companies Act, 1956. Accordingly
sub clause (f) and (g) of clause (iii) are not applicable.
7. In our opinion and according to the information and explanations given to us, there are adequate
internal control procedures commensurate with the size of the Company and the nature of its business
with regard to purchases of fixed assets and with regard to the sale of goods and services. During the
course of our audit, no major weakness has been noticed in the internal controls.
8. In our opinion and according to the information and explanations given to us, there are no transactions
or arrangements as referred to in section 301 of the Companies Act, 1956 that have to be required to
be maintained under that section. Sub clause (b) of clause (v) is not applicable.
9. The Company has not accepted any deposit from the public and consequently the directives issued by
the Reserve Bank of India, provisions of section 58A and 58AA of the Companies Act, 1956, and the
Companies (Acceptance of Deposits) Rules, 1975 with regard to the deposits accepted from the public
are not applicable to the Company. No order has been passed by the Company Law Board, National
Law Tribunal or Reserve Bank of India or any other court or any other tribunal.
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INDIA INDEX SERVICES & PRODUCTS LIMITED
Thirteenth Annual Report
10. In our opinion, the Company has an internal audit system commensurate with the size and nature of
its business.
11. According to the information and explanations given to us, the Central Government has not prescribed
maintenance of cost records under section 209(1) (d) of the Companies Act, 1956 in respect of services
carried out by the Company.
12. During the year there were no employees in the employment of the Company. Accordingly the
directions relating to Provident Fund and Employee's State Insurance are not applicable to the
Company. Further, based on our examination of the records maintained during the year, the Company
is not liable to make any payments towards Investor Education Protection Fund, Sales Tax, Wealth
Tax, Customs Duty, Excise Duty and Cess. The Company has been regular in depositing Income Tax
and Service Tax dues along with cess thereon with the appropriate authority.
13. According to the records of the Company, Sales tax, Income-tax, Customs duty, Wealth tax, Service
tax, Excise duty and Cess which have not been deposited on account of any dispute, are as follows:
Name of Statute Year to which the Forum where the dispute Amount (Rs.)
(Nature of dues) amount relates is pending
Income Tax 2003-04 Assessing Officer 145
(Tax/ Interest) 2008-09 12,79,090
2006-07 Commissioner of 54,99,092
2007-08 Income Tax (Appeals) 1,25,00,348
14. According to the records of the Company, there are no dues of sales tax, income-tax, customs tax /
wealth-tax, service tax, excise duty / cess which have not been deposited on account disputes.
15. The Company does not have any accumulated losses at the end of the financial year and has not
incurred any cash losses during the financial year covered by our audit and in the immediately preceding
financial year.
16. The Company has neither taken any loans from any bank or financial institution nor issued any
debentures.
17. The Company has not granted loans and advances on the basis of security by way of pledge of shares,
debentures and other securities.
18. The Company is not a chit fund or a nidhi/ mutual benefit fund/society.
19. In our opinion and according to the information and explanations given to us, the Company is not
dealing in or trading in shares, securities, debentures and other investments.
20. The Company has not given any guarantee for loans taken by others from bank or financial institutions.
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INDIA INDEX SERVICES & PRODUCTS LIMITED
Thirteenth Annual Report
22. According to the information and explanations given to us and on an overall examination of the
balance sheet of the Company, we report that the no funds raised on short-term basis have been used
for long-term investment.
23. The Company has not made any preferential allotment of shares to parties and companies covered in
the register maintained under section 301 of the Companies Act 1956.
24. The Company has not issued any debentures during the year.
25. The Company has not raised money by public issues during the year.
26. According to the information and explanations given to us, no fraud on or by the Company has been
noticed or reported during the course of our audit
RAGHUVIR M AIYAR
PARTNER
Membership No.: 38128
Place : Mumbai
Date : April 25, 2011
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INDIA INDEX SERVICES & PRODUCTS LIMITED
Thirteenth Annual Report
II APPLICATION OF FUNDS
1. Fixed Assets 3
Gross Block 5,950,878.53 5,966,168.53
Less: Depreciation 5,626,508.78 5,296,523.07
3. Current Assets,
Loans and Advances 5
(a) Current Assets 278,719,970.93 242,263,519.38
(b) Loans & Advances 21,168,168.00 16,988,245.00
299,888,138.93 259,251,764.38
Less: Current Liabilities
& Provisions 6 27,682,526.16 33,368,010.06
272,205,612.77
Net Current Assets 225,883,754.32
TOTAL 351,466,182.63 246,772,659.98
Notes forming part of the accounts 10
Schedules referred to above form an integral part of the Balance Sheet
As per our report of even date attached
For K. S. AIYAR & CO. For and on behalf of the Board of Directors
Chartered Accountants
RAGHUVIR M. AIYAR RAVI NARAIN CHITRA RAMKRISHNA
Partner Chairman Director
Membership No. 38128
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INDIA INDEX SERVICES & PRODUCTS LIMITED
Thirteenth Annual Report
PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED MARCH 31, 2011
For the year ended For the year ended
Schedule 31.03.2011 31.03.2010
(Rs.) (Rs.)
INCOME
Income From Operation 7 192,593,393.00 142,286,042.00
Other Income 8 17,159,251.74 9,403,185.02
Total 209,752,644.74 151,689,227.02
EXPENDITURE
Administration & Other Expenses 9 34,954,541.38 18,936,463.72
Depreciation 537,067.71 1,252,071.50
Total 35,491,609.09 20,188,535.22
Net Profit before tax 174,261,035.65 131,500,691.80
Schedules referred to above form an integral part of the Profit and Loss Account
As per our report of even date attached
For K. S. AIYAR & CO. For and on behalf of the Board of Directors
Chartered Accountants
RAGHUVIR M. AIYAR RAVI NARAIN CHITRA RAMKRISHNA
Partner Chairman Director
Membership No. 38128
ROOPA KUDVA J RAVICHANDRAN
Director Director
ARUN PANICKER MUKESH AGARWAL
Director Director
Place : Mumbai SURESH NARAYAN
Date : April 25, 2011 Director & CEO
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INDIA INDEX SERVICES & PRODUCTS LIMITED
Thirteenth Annual Report
As at 31.03.2011 As at 31.03.2010
(Rs.) (Rs.)
Authorised
15,00,000 Equity Shares of Rs. 10/- each 15,000,000.00 15,000,000.00
General Reserve
As per last Balance Sheet 222,000,000.00 147,000,000.00
Add: Transfered from Profit & Loss account 100,000,000.00 322,000,000.00 75,000,000.00 222,000,000.00
Profit & Loss Account 16,436,454.30 11,625,390.65
18
SCHEDULES FORMING PART OF THE BALANCE SHEET
SCHEDULE 3 : Fixed Assets Schedule (Refer Note No. 2 (b))
SR. DESCRIPTION GROSS BLOCK DEPRECIATION NET BLOCK
NO. As on Additions Deletions As on As on For the Deletions/ As on As on As on
01/Apr/10 31/Mar/11 01/Apr/10 Year Adjust- 31/Mar/11 31/Mar/11 31/Mar/10
2010-2011 ments
1 COMPUTER SYSTEMS 4,450,448.53 166,277.00 207,082.00 4,409,643.53 4,035,329.40 349,535.76 207,082.00 4,177,783.16 231,860.37 415,119.13
2 FURNITURE & FIXTURES 13,945.00 – – 13,945.00 10,773.10 759.66 – 11,532.76 2,412.24 3,171.90
3 OFFICE EQUIPMENTS 49,215.00 25,515.00 – 74,730.00 49,215.00 3,372.89 – 52,587.89 22,142.11 –
4 TELECOMMUNICATION
SYSTEMS 9,500.00 – – 9,500.00 9,500.00 – – 9,500.00 – –
5 COMPUTER SOFTWARE 1,443,060.00 – – 1,443,060.00 1,191,705.57 183,399.40 – 1,375,104.97 67,955.03 251,354.43
TOTAL 5,966,168.53 191,792.00 207,082.00 5,950,878.53 5,296,523.07 537,067.71 207,082.00 5,626,508.78 324,369.75 669,645.46
Previous Year 5,966,168.53 – – 5,966,168.53 4,044,451.57 1,252,071.50 – 5,296,523.07 669,645.46 1,921,716.96
SCHEDULES FORMING PART OF THE BALANCE SHEET
INDIA INDEX SERVICES & PRODUCTS LIMITED
19
Note : Aggregate Market Value of the quoted investments is Rs 3,14,71,000/- (Previous Year : Rs. 1,01,78,000.00)
Thirteenth Annual Report
INDIA INDEX SERVICES & PRODUCTS LIMITED
Thirteenth Annual Report
As at 31.03.2011 As at 31.03.2010
(Rs.) (Rs.)
Short Term Investments (Refer note No. 2(e) & 6) 175,820,265.83 209,040,002.04
TOTAL 278,719,970.93 242,263,519.38
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INDIA INDEX SERVICES & PRODUCTS LIMITED
Thirteenth Annual Report
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Thirteenth Annual Report
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Thirteenth Annual Report
f) Taxation :
Tax expense for the year, comprising of current tax and deferred tax is included in determining the
net profit / (loss) for the year.
A provision is made for the current tax based on tax liability computed in accordance with prevailing
tax rates and tax laws. A provision / accrual is made for deferred tax for all timing differences
arising between taxable income and accounting income at the Balance Sheet Date based on prevailing
enacted or substantively enacted tax rates.
Deferred tax assets are recognized only if there is a reasonable certainty that they will be realized and
are reviewed for the appropriateness of their respective carrying values at each balance sheet date.
3. Contingent Liability:
On account of disputed matters of Income Tax Rs. 1,93,62,213/- (Previous Year Rs. 55,82,171/-) of
Fringe Benefit Tax Rs. 100/- (Previous Year Rs. Nil /-)
4. In the opinion of the Board, current assets, loans and advances are approximately of the value
stated, if realised in the ordinary course of business.
5. Managerial Remuneration
Particulars Current Year Previous Year
Salary and Allowances 44,00,000.00 30,00,000.00
Contribution to Provident Fund and other Funds 3,00,000.00 2,00,000.00
Perquisites in Cash or in kind 2,00,000.00 1,00,000.00
6. The Company is paying space and infrastructure charges and other reimbursement of expenses to
National Stock Exchange of India Limited (NSEIL) and deputation expenses in respect of the
employees of both the promoter companies (NSEIL and CRISIL Limited.) who are on deputation.
7. The statement of Short Term Investments at the end of year is given below.
Sr. Particulars Number of As at 31.03.2011 As at 31.03.2010
No. Units (Rs.) (Rs.)
Mutual Funds
1. Axis Treasury Advantage Fund -
Institutional Daily Dividend 10,096.69 10,097,486.13 –
2 Birla Sun Life Cash Plus - Institutional
Premium Plan - Daily Div 545,485.19 5,465,488.84 –
3 Birla Sun Life Savings Fund - IP -
Dly Dividend 1,739,200.68 17,403,833.38 14,500,636.27
4 Canara Robeco Treasury Advantage Fund -
Retail - Daily Dividend 435,112.89 5,398,489.15 5,138,330.92
5 DWS Ultra Short -Term Fund - Daily
Dividend – – 1,813,622.58
6 DWS Cash Opportunities Fund - Reg -
Weekly Dividend 457,619.15 4,624,859.42 4,422,870.03
7 HDFC Cash Mgmt Fund - Savings Plan -
Daily Dividend 63.91 679.78 –
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INDIA INDEX SERVICES & PRODUCTS LIMITED
Thirteenth Annual Report
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INDIA INDEX SERVICES & PRODUCTS LIMITED
Thirteenth Annual Report
8. Statement of investments purchased and sold/redeemed during the year at cost is given below:
Sr. Particulars No. of Units Investment Cost
No. (Rs.)
1 Birla Sun Life Cash Plus - Instl. Prem Plan -
Daily Dividend - Reinvestment 1,397,295.78 14,000,205.01
2 DWS ULTRA SHORT TERM FUND - REGULAR
DAILY DIVIDEND PLAN 475.50 4,765.23
3 HDFC CASH MANAGEMENT FUND SAVINGS PLAN
-DAILY DIVIDEND-REINVESTMENT 376,067.09 4,000,000.00
4 ICICI Prudential Institutional Liquid Plan - Super Institutional
Daily Div 102,990.22 10,301,349.14
5 IDFC CASH FUND - PLAN A - DAILY DIVIDEND -
REINVESTMENT 472,504.94 5,000,000.00
6 IDFC MONEY MANAGER FUND - TREASURY PLAN -
DAILY DIV 667.99 6,726.61
7 JPMorgan India Liquid Fund - Super Inst.Daily
Dividend Plan - Reinvest 99,921.06 1,000,000.00
8 JPMORGAN INDIA TREASURY FUND - SUPER INST.
DAILY DIV PLAN - REINVEST 1,743.22 17,447.75
9 KOTAK FLOATER LONG TERM - DAILY DIVIDEND 1,344.68 13,554.10
10 KOTAK LIQUID INSTITUTIONAL PLAN -
DIVIDEND - DAILY 515,272.25 6,300,800.63
11 KOTAK QUARTERLY INTERVAL PLAN
SERIES 3 - DIVIDEND 7,562.01 75,629.18
12 PRINCIPAL FLOATING RATE FUND-SHORT MATURITY
PLAN-INSTL-DAILY DIV-REINVESTMENT 11,433.46 114,342.58
13 RELIANCE LIQUID FUND-TREASURY PLAN-
INSTITUTIONAL OPTION-DAILY DIVIDEND 922,494.45 14,102,541.61
14 RELIGARE LIQUID FUND - INSTITUTIONAL
DAILY DIVIDEND 89,991.44 10,800,112.91
15 Religare Ultra Short Term Fund - Institutional Daily
Dividend 158,032.66 1,583,028.97
16 TEMPLETON INDIA TREASURY MANAGEMENT
ACCOUNT REGULAR PLAN - DAILY DIV REINVEST 1,454.80 2,200,153.50
17 Templeton Floating Rate INCOME FUND Retail Option -
DIVIDEND Reinvestment 206,800.63 2,218,621.05
Grand Total 4,366,052.18 71,739,278.27
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INDIA INDEX SERVICES & PRODUCTS LIMITED
Thirteenth Annual Report
9 In compliance with Accounting Standard - 18 "Related Party Disclosures" issued by the Institute of Chartered
Accountants of India, the required disclosures are given in the table below:
26
INDIA INDEX SERVICES & PRODUCTS LIMITED
Thirteenth Annual Report
10. In accordance with Accounting Standard 20 "Earning per Share" issued by the Institute of Chartered
Accountants of India, the required disclosure is given below
Year ended Year ended
31/03/2011 31/03/2010
Net Profit Attributable to Shareholders (Rs.) 11,83,73,953.65 8,93,38,753.47
Weighted Average number of equity shares issued 13,00,000 13,00,000
Basic earnings per shares of Rs. 10/- each (Rs.) 91.06 68.72
The Company does not have any outstanding dilutive potential equity shares. Consequently, the basic and
diluted earnings per share of the Company remain the same.
11. In accordance with Accounting Standard 22 "Accounting for Taxes on Income" issued by the Institute of
Chartered Accountants of India, deferred tax liability as at 31st March 2011 and 31st March 2010 have
been detailed below:
Particulars As at As at
31st March 2011 31st March 2010
(Rs.) (Rs.)
Deferred Tax Liability :
Depreciation Difference 29,728.33 1,47,269.33
27
INDIA INDEX SERVICES & PRODUCTS LIMITED
Thirteenth Annual Report
14. Information with regard to other matters specified in Clauses 3, 4C and 4D of Part II of Schedule VI of the
Companies Act, 1956 are not applicable to the Company.
15. The previous year's figures have been regrouped, reclassified and rearranged wherever necessary.
28
INDIA INDEX SERVICES & PRODUCTS LIMITED
Thirteenth Annual Report
2010-2011 2009-2010
(Rs.) (Rs.)
29
INDIA INDEX SERVICES & PRODUCTS LIMITED
Thirteenth Annual Report
2010-2011 2009-2010
(Rs.) (Rs.)
C) CASHFLOW FROM FINANCING ACTIVITIES
Dividend Paid (9,100,000.00) (6,500,000.00)
Dividend Distribution Tax (1,511,400.00) (1,104,680.00)
NET CASH FROM (USED IN) FINANCING ACTIVITIES - Total (C) (10,611,400.00) (7,604,680.00)
30
INDIA INDEX SERVICES & PRODUCTS LIMITED
Thirteenth Annual Report
I Registration Details
Registration No. 1 1 4 9 7 6 State Code 1 1
Sources of Funds
Paid-up Capital Reserves & Surplus
* * * * 1 3 0 0 0 * * * 3 3 8 4 3 6
Application of Funds
Net Fixed Assets Investments
* * * * * * 3 2 4 * * * * 7 8 9 3 6
Accumulated Losses
N I L
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INDIA INDEX SERVICES & PRODUCTS LIMITED
Thirteenth Annual Report
V Generic Names of Three Principal Products / Services of Company (as per monetary terms)
Product I N D I C E S
Description
SURESH NARAYAN
Director & CEO
Place : Mumbai
Date : April 25, 2011
32
A A
NSE INFOTECH SERVICES LIMITED
(A wholly owned subsidiary of National Stock Exchange of India Limited)
A A
Sys8 E:\F\2011\F-599-11 NSEIL Annual Report 2010-2011-F-599-11-NSE-Infotech-Annual
NSE INFOTECH SERVICES LIMITED
Fifth Annual Report
BOARD OF DIRECTORS
DIRECTORS’ REPORT
To,
The Members,
Your Directors have pleasure in presenting the Fifth Annual Report and the Audited Accounts of NSE Infotech
Services Limited (NSETECH) for the Financial Year ended March 31, 2011.
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NSE INFOTECH SERVICES LIMITED
Fifth Annual Report
2
NSE INFOTECH SERVICES LIMITED
Fifth Annual Report
3
NSE INFOTECH SERVICES LIMITED
Fifth Annual Report
Uplinking permission for 48 Mhz from NOCC (Network Operations Control Center) was received
subsequent to surrender of 19.5 MHz unused space segments on INSAT-3A. Additionally, preventive
maintenance of BKC VSAT Antenna was successfully carried out in the month. In the NOW network,
all the three ISP firewall's (Checkpoint make) were upgraded to version R70. As part of Network and
Server rack cabling re-dressing across Datacenter, the old X.25 equipment and cables were removed
from the Data Centre.
SAN is the most critical component for data storage in core production systems (Risk, Clearing,
Index, Surveillance and Data warehousing). In order to meet the growth in terms of data volumes,
SAN setup was upgraded for additional storage capacity of 16TB (Terabyte) each at Mumbai
and Chennai with improved performance. The upgrade at Mumbai was successfully completed on
14th August 2010 and Chennai on 12th August 2010 with end to end application and infrastructure
testing.
Web Application Firewall (WAF) on NSE's website (http://www.nseindia.com) was implemented to
help mitigate HTTP attacks (such as SQL injection, Cross site scripting). It helps in detecting potential
Web application attacks in HTTP traffic before the request is served. If an anomalous and potentially
malicious pattern is detected in HTTP request headers, WAF can either issue an alert or block the
traffic altogether. The Web Application Firewall service provides a highly scalable, outer defensive
ring for the NSE website and enables continuous availability of the website.
(5) Other Systems
Corporate information page of the website has been enhanced for better usability, ease of navigation,
richer user interface and improved search facility. Corporate homepage on the NSE website has been
revamped with improved data architecture and better usability. The corporate information can now be
searched by Company, by Industry, by date and by Subject. Symbol suggest facility is also available
for easy identification of the company name.
MOST Shares M50 is an open ended Exchange Traded Fund (ETF) which is fundamentally a weighted
basket based on S&P CNX Nifty Index. The constituents of MOSt 50 Basket are same as the constituents
of Nifty. Weights assigned to constituents are dependent on their fundamental performance. The system
was made live on 19th July 2010.
Membership Application (earlier client server based) is now re-engineered to a new Web based
application. It has a rich web based front-end user interface with enhanced functionalities and fully
Re-designed normalised database. The design also takes care of scalability, configurability, improved
user management and charting features. With the web based interface, local environment configuration/
setups for end users has been eliminated thereby improving overall operational efficiency.
(6) New Initiatives
Segment revamp - Securities Lending & Borrowing (SLBM): Securities Lending and Borrowing scheme
framework has been modified in accordance with guidelines from SEBI. The major features introduced
are Extension of Tenure for SLB transactions up to 12 months, Facility for request of Early Recall of
securities by the lender and Facility for request of Early Repayment of securities by the borrower.
Changes were done in the Trading system with front end functionality for order entry, modification,
cancellation, inquiry and other new features. The Clearing and Settlement system was completely
changed to accommodate the new business rules and released on state of the art Itanium hardware.
Multiple mock sessions were conducted for the release.
Call auction in Pre-open (CM segment): The Exchange introduced a Pre-open session with a call
auction mechanism to reduce price volatility at market opening through price discovery. This facility
is currently enabled for Nifty stocks only. Functional enhancements have been made in CM Trading
4
NSE INFOTECH SERVICES LIMITED
Fifth Annual Report
system to support Pre-open session with indicative open price computation of securities /index on a
real-time basis. Concurrently, the Risk Management system has been enhanced to monitor the
provisional positions of members through pre-order risk management. The Pre-open information is
also disseminated to Tick by Tick, Infofeed, Interactive reports and on the NSE website.
Currency Options in CD segment: Trading in currency options on USD-INR (US Dollar-Indian Rupee)
pair was introduced in the currency derivatives segment. Changes were made to the Trading engine,
Risk management and Clearing & Settlement systems to handle the lifecycle of orders/trades for these
option pairs in the currency derivative segment.
TAP on Linux: A new version of Trading Access Point (TAP) for Linux operating system has been
released in CM, F&O and CD market segments, in an endeavor to enhance performance and flexibility,
co-existing with the earlier version of TAP on Windows.
India VIX using cubic spline: India VIX is a volatility index based on the Nifty 50 Index Option
prices. The volatility index indicates the investor's perception of the market's volatility in the near
term. From the best bid-ask prices of Nifty 50 Options contracts, a volatility figure (%) is calculated
indicating the expected market volatility over the next 30 calendar days. In the computation engine of
VIX, Cubic spline methodology has been implemented in the input validation process for identifying
bad quotes and reinstating them with new fitted values.
MFSS - Systematic Investment Plan (SIP): The Systematic Investment Plan (SIP) facility in Mutual
Fund Service System was introduced from 19th October 2010. Changes were made in the NEAT
MFSS system functionalities and the MFSS BackOffice systems to facilitate collection of SIP orders
from MFSS Trading system. The application also provides advance intimation to the investor via the
Trading member of upcoming SIP tranche, to enable appropriate fund collection.
NSE Electronic Application Processing System (NEAPS): NEAPS is a Web based application
facilitating listed companies on NSE to submit an application for listing of further issues such as
Foreign Currency Convertible Bond (FCCB), American/Global Depositary Receipt (ADR/GDR),
Qualified Institutional Placement (QIP), Bonus, and Employee Stock Ownership Plan (ESOP). The
new interface has enhanced the quality and speed of processing the application and also assisted the
companies to move towards paperless processing.
(7) HR Updates
The Company has 288 employees. The status of the number of employees joined in the year
2010-11 is as follows:
Employee Strength as April 01, 2010 315
Fresh recruitments (April, 2010-March 2011) 30
Total Employee Strength 345
Resignations (April, 2010 - March 2011) 57
Net Employee Strength as on March 31,2011 288
Total Requirement 320
In addition to lateral recruitments, 13 freshers from off-campus drive, had joined NSETECH as Trainee
Associate System Analysts (TASAs) in the period of 2010-11. Further, there were 5 students from
Campus recruitment 2009-10 drive, who were expected to join NSETECH as TASAs by May, 2010
but only 3 TASAs out of the 5, joined NSETECH. Total 16 TASAs joined NSETECH during the
period of 2010-11
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NSE INFOTECH SERVICES LIMITED
Fifth Annual Report
III. DIVIDEND
As the profit is required to augment operational needs, your Directors do not recommend any dividend for
the financial year 2010-11.
IV. CORPORATE GOVERNANCE
The Company is committed to maintain the highest standards of corporate governance and adhere to
corporate governance requirements. In continuation of its pursuit to establish good corporate governance
practice, your Company, while already complying by and large with a major part of the Corporate Governance
Voluntary Guidelines 2009 issued by the Ministry of Corporate Affairs, is in the process of complying
with/ examining the possibility of implementing, the remaining part of the said Guidelines.
V. DIRECTORS
Ms. Chitra Ramkrishna retires by rotation at the ensuing Annual General Meeting and is eligible for
re-appointment.
VI. DIRECTORS' RESPONSIBILITY STATEMENT
Your Directors confirm that –
i. in the preparation of the Annual Accounts, the applicable accounting standards had been followed
along with proper explanation relating to material departures, if any;
ii. the Directors had selected such accounting policies and applied them consistently and made judgments
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 i.e., 31st March, 2011 and of the profits of the Company
for that year;
iii. the Directors had taken proper and sufficient care for the maintenance of adequate accounting records
in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the
Company and for preventing and detecting fraud and other irregularities; and
iv. the Directors had prepared the annual accounts on a going concern basis.
6
NSE INFOTECH SERVICES LIMITED
Fifth Annual Report
Ravi Narain
Chairman
Place : Mumbai
Date : April 25, 2011
7
NSE INFOTECH SERVICES LIMITED
Fifth Annual Report
2 Mr. G. M. Shenoy 50 Senior Vice 6361470 4346818 27 October 1, 2006 Sr. Vice President
B.E, M.F.M President NSE.IT Limited
Notes :
1 Gross Remuneration includes Salary and other benefits, Company's contribution to Provident Fund, Superannuation
Fund, taxable value of perquisites, etc. Net remuneration represents gross remuneration less Company's contribution to
provident and superannuation funds, taxable value of perquisites, profession tax and income tax. Where applicable, the
amounts also includes certain allowances accrued during previous year(s) but claimed in the current year.
2 The employees are in permanent employment of the Company on contractual basis governed by the employment terms
& conditions and service rules.
4 None of the employees is holding equity shares in the company within the meaning of sub-clause (iii) of clause (a) of
sub-section (2A) of Section 217 of the Companies Act, 1956.
5 The Company does not have any Employees Stock Option Plan (ESOP) Scheme for its employees.
8
NSE INFOTECH SERVICES LIMITED
Fifth Annual Report
AUDITORS’ REPORT
To,
THE MEMBERS OF NSE INFOTECH SERVICES LIMITED
We have audited the attached Balance Sheet of NSE INFOTECH SERVICES LIMITED as at 31st March
2011, Profit & Loss Account and cash flow statement for the year ended on that date annexed thereto. These
financial statements are the responsibility of the Company's management. Our responsibility is to express
an opinion on these financial statements based on our audit.
We conducted our audit in accordance with auditing standards generally accepted in India. Those Standards
require that we plan and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable basis for our opinion.
1. As required by the Companies (Auditor's Report) Order, 2003 as amended by the Companies (Auditor's
Report) Amendment Order 2004 issued by the Central Government of India in terms of sub-section
(4A) of section 227 of the Companies Act, 1956, we enclose in the Annexure a statement on the
matters specified in paragraphs 4 and 5 of the said Order to the extent applicable to the Company.
(i) We have obtained all the information and explanations, which to the best of our knowledge and
belief were necessary for the purposes of our audit;
(ii) In our opinion, proper books of account as required by law have been kept by the Company so far
as appears from our examination of those books;
(iii) The Balance Sheet, Profit & Loss Account and Cash Flow Statement dealt with by this report are
in agreement with the books of account;
(iv) In our opinion, the Balance Sheet, Profit & Loss Account and Cash Flow Statement dealt with by
this report comply with the accounting standards referred to in sub-section (3C) of section 211 of
the Companies Act, 1956
(v) On the basis of written representations received from the directors, as on 31st March, 2011, and
taken on record by the Board of Directors, we report that none of the Director is disqualified as on
31st March 2011 from being appointed as a director in terms of clause (g) of sub-section (1) of
section 274 of the Companies Act, 1956.
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NSE INFOTECH SERVICES LIMITED
Fifth Annual Report
(vi) In our opinion and to the best of our information and according to the explanations given to us,
the Balance Sheet and Profit and Loss Account read with the Significant Accounting Policies and
notes on accounts give the information required by the Companies Act 1956 in the manner so
required and give a true and fair view in conformity with the accounting principles generally
accepted in India:
(a) in thein the case of the Balance Sheet, of the state of affairs of the Company as at 31st March
2011;
(b) in the case of the Profit & Loss Account, of the Profit for the year ended on that date; and
(c) in the case of the Cash Flow Statement, of the cash flows for the year ended on that date;
Place : Mumbai.
Date : 25th April 2011
Atul Kale
Partner
Membership No.: 109947
10
NSE INFOTECH SERVICES LIMITED
Fifth Annual Report
As required by the Companies (Auditors Report) Order 2003 as amended by the Companies (Auditors
Report) Amendment Order 2004 issued by the Central Government in terms of Section 227(4A) of the
Companies Act 1956, on the basis of the checks, as we considered appropriate, we report on the matters
specified in paragraph 4 and 5 of the said order to the extent applicable to the company.
(i) a) The Company has maintained proper records, showing full particulars including quantitative
details and situation of fixed assets.
b) We have been informed that the physical verification of fixed assets was carried out by the
management during the year which in our opinion is reasonable having regard to the nature of
the assets. We have been informed that no material discrepancy was noted on such verification.
c) The Company has not disposed off substantial part of the Fixed Assets during the year.
(ii) Considering the nature of the business and services rendered by the company, clause (ii) under clause
4 of the CARO is not applicable.
(iii) a) The Company has not granted any loan secured or unsecured to companies, firms, or other
parties covered in register maintained u/s 301 of the Companies Act, 1956. Therefore the provision
of clause 4 (iii) (b), (c) and (d) are not applicable to the company.
b) The Company has not taken any loans, secured or unsecured from companies, firms or other
parties covered in the register maintained u/s 301 of the Companies Act, 1956. Therefore, the
provisions of clause 4 (iii) (f) and (g) are not applicable to the Company
(iv) On the basis of selective checks carried out during the course of audit and according to the information
and explanation given to us, in our opinion there are adequate internal control system commensurate
with the size of the Company and the nature of business with regard to the purchase of fixed assets
and with regard to the service rendered. During the course of our audit we have not observed any
continuing failure to correct major weakness in internal controls system.
(v) a) In our opinion and according to the information and explanations given to us, there are no
contracts or arrangements that need to be entered into a register in pursuance of section 301 of
the Companies Act 1956. Therefore, reporting of transaction under the provision of clause 4 (v)
(b) is not applicable to the Company.
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NSE INFOTECH SERVICES LIMITED
Fifth Annual Report
(vi) The Company has not accepted any deposits from public and accordingly the provisions of section
58A, 58AA of the Act, and Rules framed there under and any directive issued by the Reserve Bank of
India are not applicable to the Company.
(vii) The company has an internal audit system commensurate with its size and nature of the business.
(viii) We have been informed that Central Government has not prescribed maintenance of cost records
under section 209 (1) (d) of the Companies Act, 1956 for the products of the Company.
(ix) a) According to the information and explanations given to us and the books and records examined
by us, the company was regular in depositing undisputed statutory dues with the appropriate
authorities. There were no undisputed amount payable in respect of Provident Fund, Employees
State Insurance, Income-tax, Sales-tax, Wealth Tax, Service Tax, Custom Duty, Excise Duty,
cess and any other statutory dues which have remained outstanding as at 31st March 2011 for a
period exceeding six months from the date they became payable.
b) According to the information and explanation given to us, there are no disputed dues of Income
Tax, Sales Tax, Wealth Tax, Service Tax, Custom Duty, Excise Duty, Cess which have not been
deposited on account of any dispute except the following:
Sr. No. Name of the Nature of Period to which Amount Forum where
Statute the dues the amount relates dispute is pending
1 Income Tax Act Fringe Benefit Tax 2006-07 38,204 Income Tax
Office-10(1)(4)
2 Income Tax Act Fringe Benefit Tax 2007-08 1,36,143 Income Tax
Office-10(1)(4)
3 Finance Acts Service Tax 02/08/2006 28,06,967 Additional
concerning to Commissioner
Service Tax 31/03/2009 of Service Tax,
Worli, Mumbai
(x) This being the fifth year since registration of the company this clause is not applicable.
(xi) In our opinion and according to the information and explanations given to us, the Company has not
taken any loan and no amounts were due towards principal or interest to any financial institution,
bank, or debenture holders during the year.
(xii) As per information given to us, the Company has not granted loans and advances on the basis of
security by way of pledge of shares, debentures and other securities.
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NSE INFOTECH SERVICES LIMITED
Fifth Annual Report
(xiii) In our opinion, the Company is not a chit fund or a nidhi/ mutual benefit fund/ society. Therefore, the
provisions of clause 4 (xiii) are not applicable to the Company.
(xiv) In our opinion, the Company is not dealing in or trading in shares, securities, debentures, and other
investments.
(xv) According to the information and explanations given to us the Company has not given any guarantee
for loans taken by others from bank or financial institutions.
(xvi) According to the information and explanations given to us the company has not taken any term loan.
(xvii) According to the information and explanations given to us, the company has not raised any funds on
short term basis.
(xviii)According to the information and explanations given to us, the Company has not made any preferential
allotment of shares.
(xix) According to the information and explanations given to us, the company has not issued any debentures
up to 31st March 2011.
(xx) During the period covered by our audit report, there was no public issue of the Company's shares.
(xxi) According to the information and explanations given to us no fraud on or by the Company has been
noticed or reported during the year.
ATUL KALE
PARTNER
Membership No.: 109947
Place : Mumbai
Date : 25th April 2011
13
NSE INFOTECH SERVICES LIMITED
Fifth Annual Report
I. SOURCES OF FUNDS
1. Shareholder's Funds
a Share Capital 1 500,000.00 500,000.00
b Reserves & Surplus 2 33,340,661.60 23,879,319.31
2. Investments 4 10,000,000.00
3. Current Assets, Loans and Advances 5
a Current Assets 19,809,541.65 14,800,755.30
b Loans & Advances 166,533,117.00 152,953,622.00
186,342,658.65 167,754,377.30
Less: Current Liabilities & Provisions 6 166,087,658.79 144,921,395.93
Net Current Assets 20,254,999.86 22,832,981.37
As per our report of even date attached For and on behalf of the Board of Directors
14
NSE INFOTECH SERVICES LIMITED
Fifth Annual Report
EXPENDITURE
Employee Remuneration & Benefits 10 331,729,196.66 315,940,969.60
Administration & other expenses 11 29,653,138.34 21,574,975.58
Depreciation 42,917.00 28,556.00
TOTAL 361,425,252.00 337,544,501.18
Appropriations :
- Balance carried to balance sheet 33,340,661.60 23,879,319.31
33,340,661.60 23,879,319.31
As per our report of even date attached For and on behalf of the Board of Directors
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NSE INFOTECH SERVICES LIMITED
Fifth Annual Report
16
SCHEDULES FORMING PART OF BALANCE SHEET
SCHEDULE 3 : FIXED ASSETS
1 OFFICE EQUIPMENT 143,707.00 125,667.00 94,167.00 175,207.00 71,081.00 42,917.00 74,382.00 39,616.00 135,591.00 72,626.00
NSE INFOTECH SERVICES LIMITED
GRAND TOTAL 143,707.00 125,667.00 94,167.00 175,207.00 71,081.00 42,917.00 74,382.00 39,616.00 135,591.00 72,626.00
17
Fifth Annual Report
NSE INFOTECH SERVICES LIMITED
Fifth Annual Report
As at 31.03.2011 As at 31.03.2010
Rs. Rs.
18
NSE INFOTECH SERVICES LIMITED
Fifth Annual Report
As at 31.03.2011 As at 31.03.2010
Rs. Rs.
SCHEDULE 6 : CURRENT LIABILITIES & PROVISIONS
A: CURRENT LIABILITIES
Sundry creditors
Due to SSI Undertakings – –
Others 15,284,245.74 20,423,568.88
Tax deducted at source - payable 2,546,080.00 3,220,850.00
Service Tax Payable
Advance received from customers 48,587,052.05 36,577,073.05
Other liabilities 89,238,258.00 75,268,085.00
TOTAL 155,655,635.79 135,489,576.93
B : PROVISIONS
TOTAL – 167,912.20
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NSE INFOTECH SERVICES LIMITED
Fifth Annual Report
20
NSE INFOTECH SERVICES LIMITED
Fifth Annual Report
Auditors Remuneration
21
NSE INFOTECH SERVICES LIMITED
Fifth Annual Report
a. Basis of Accounting
The financial statements have been prepared under the historical cost convention on accrual system
and in accordance with the generally accepted accounting principles.
b. Revenue recognition
Revenue from IT Services is recognized based on the terms agreed with the customers.
Sales excludes applicable taxes and other levies.
c. Expenditure
Expenses are accounted on accrual basis and provisions are made for all known losses and liabilities.
d. Fixed Assets
Fixed Assets are stated at cost of acquisition less accumulated depreciation. Cost of acquisition is
inclusive of freight, duties, taxes and other incidental expenses.
Depreciation on fixed assets is provided using straight line method at the rates specified in schedule
XIV to Companies Act, 1956.
Depreciation is charged on a pro-rata basis for assets purchased during the year.
e. Preliminary Expenses
Preliminary expenses are amortized over a period of 5 years, from the year of commencement of
business.
f. Employee Retirement Benefits
Gratuity
The Company has maintained a Group Gratuity Cum Life Assurance Scheme with the Life Insurance
Corporation of India towards which it annually contributes a sum determined by Life Insurance
Corporation of India. The company provides for the defined benefit with respect to gratuity liability
based on the present value of defined benefit obligation as reduced by the fair value of plan assets as
per the actuarial valuation calculation.
Superannuation
Superannuation benefit for employees designated as managers and above, as may be applicable is
covered by Group Superannuation Scheme with the Life Insurance Corporation of India towards
which it annually contributes a sum based on a specified percentage of each covered employees'
salary. The contribution paid for the year on the Group Superannuation Scheme is charged to
revenue.
22
NSE INFOTECH SERVICES LIMITED
Fifth Annual Report
Provident Fund
Company has established the NSE Infotech Services Limited Employees' Provident Fund Trust to
which both the employee and the employer make monthly contributions equal to 12% of the
employee's basic salary respectively. The company has an obligation to make good the short fall, if
any, between the return from its investments and the administered interest rate.
Leave Encashment
Provision for leave encashment on retirement is made on the basis of actuarial valuation at the end
of the year.
g. Investments
i) Long Term Investments are considered as held till maturity and are valued at cost.
ii) Short term investments are valued at cost or fair value whichever is lower.
h. Income Tax
Provision for Income Tax is made on the basis of the prevailing rates under the Income Tax Act,
1961. Company has accounted deferred tax liability/asset in accordance with the Accounting Standard
22 - Accounting for taxes on income.
2. Expenditure in foreign currency: Rs.85,352 (Previous Year Rs 1,62,787)
3. Earnings in foreign exchange: Rs Nil (Previous Year Rs Nil)
4. C.I.F value of imports in respect of Capital goods. Nil (Previous Year Nil)
5. (a) As on the Balance Sheet date, the amounts due to Small-Scale Industrial undertaking are not
outstanding for more than 30 days.
(b) There are no Micro, Small and Medium Enterprises, to whom the Company owes dues, which are
outstanding for more than 45 days at the Balance Sheet date, computed on unit wise basis.
6. The company is primarily engaged in the business of rendering of IT related services. Hence, information
with regard to other matters specified in Clauses 3, 4C and 4D of part II of Schedule VI of the Companies
Act, 1956 are not applicable to the company.
7. In the opinion of the management, the company has only one reportable business segment viz. offering "IT
related services". This takes into consideration the commonality in the risks and rewards of the services
offered, nature of service, type / class of customers for the services, management structure and system of
financial reporting. Accordingly, the results of the said segment have been disclosed in the financial
statements. Further, the company has no reportable geographical segments and on that basis, no secondary
segment information is furnished.
23
NSE INFOTECH SERVICES LIMITED
Fifth Annual Report
8. In compliance with Accounting Standard 18 "Related Party Disclosure", the required disclosures are given
in the table below:
A) Names of the related parties and relationship
Sr. Related Party Nature of Relationship
No.
1 National Stock Exchange of India Limited Holding Company
2 National Securities Clearing Corporation Limited Fellow Subsidiary
3 NSE.IT Limited Fellow Subsidiary
4 NSE.IT (UK) Limited Fellow Subsidiary
5 NSE.IT (US) Inc. Fellow Subsidiary
6 DotEx International Limited Fellow Subsidiary
7 India Index Services & Products Limited Fellow Subsidiary
8 National Commodity Clearing Limited Fellow Subsidiary
9 Power Exchange India Limited Joint Venture with Holding Company
10 NSE Infotech Services Limited Employees' Entity over which control exists
Provident Fund Trust
11 NSE Infotech Services Limited Employees' Entity over which control exists
Superannuation Scheme
12 NSE Infotech Services Limited Employees' Entity over which control exists
Group Gratuity Cum Life Assurance Scheme
13 National Stock Exchange of India Limited Employees' Entity over which Holding
Provident Fund Trust Company's control exists
14 National Stock Exchange of India Limited Employees' Entity over which Holding
Group Superannuation Fund Trust Company's control exists
15 National Stock Exchange of India Limited Employees' Entity over which Holding
Group Gratuity Cum Life Assurance Scheme Company's control exists
24
NSE INFOTECH SERVICES LIMITED
Fifth Annual Report
9. In accordance with Accounting Standard - 20 "Earning per Share", the required disclosure is given below:
The Company does not have any outstanding dilutive potential equity shares. Consequently, the basic and
diluted earning per share of the Company remains the same.
25
NSE INFOTECH SERVICES LIMITED
Fifth Annual Report
10. In accordance with the Accounting Standard 22 - "Accounting for Taxes on Income", the break up of
deferred tax assets / liabilities is as follows:
26
NSE INFOTECH SERVICES LIMITED
Fifth Annual Report
12. Statement of Long Term Investments at the end of the year is given below.
13. Statement of Short Term Investments at the end of the year is given below.
27
NSE INFOTECH SERVICES LIMITED
Fifth Annual Report
used to show the position as at March 31, 2011 is as under. Pursuant to the actuarial valuation
any amount recoverable from NSE.IT Limited on transfer of employee will be suitably dealt
with.
Particulars FY 2010-11 FY 2009-10
Obligation at period beginning 11,459,751 9,440,254
Add: Service Cost 2,392,554 2,126,289
Add: Interest Cost 916,780 914,983
Add: Actuarial (gain)/loss (1,548,442) (763,276)
Less: Benefits paid 120,000 258,500
Obligation at period end 13,100,643 11,459,750
Change in plan assets
Plan assets at period beginning, at fair value 10,126,702 6,515,837
Add: Expected return on plan assets 810,136 752,728
Add: Actuarial gain / (Loss) 274,784 94,121
Add: Contributions 1,822,084 3,022,516
Less: Benefits paid 120,000 258,500
Plan assets at period end, at fair value 12,913,706 10,126,702
28
NSE INFOTECH SERVICES LIMITED
Fifth Annual Report
As per our report of even date attached For and on behalf of the Board of Directors
29
NSE INFOTECH SERVICES LIMITED
Fifth Annual Report
2010-2011 2009-2010
(Rs.) (Rs.)
30
NSE INFOTECH SERVICES LIMITED
Fifth Annual Report
2010-2011 2009-2010
(Rs.) (Rs.)
As per our report of even date attached For and on behalf of the Board of Directors
31
NSE INFOTECH SERVICES LIMITED
Fifth Annual Report
I Registration Details
Registration No. U 7 2 9 0 0 MH 2 0 0 6 P L C 1 6 3 4 6 8 State Code 1 1
Sources of Funds
Paid-up Capital Reserves & Surplus
* * * * * * 5 0 0 * * * * 3 3 3 4 1
Application of Funds
Net Fixed Assets Investments
* * * * * * 1 3 5 * * * * 1 0 0 0 0
Accumulated Losses
* * * N I L * * *
32
NSE INFOTECH SERVICES LIMITED
Fifth Annual Report
V Generic Names of Three Principal Products / Services of Company (as per monetary terms)
Product I N F O R M A T I O N
Description T E C H N O L O G Y
S E R V I C E S
33
o o
National Commodity Clearing Limited
(Subsidiary of National Stock Exchange of India Limited)
BOARD OF DIRECTORS
Mr. R. Ramaseshan
SECRETARY
DIRECTORS’ REPORT
To,
The Members,
Your Directors have pleasure in presenting the Fifth Annual Report and the Audited Accounts of National
Commodity Clearing Limited (NCCL) for the financial year ended March 31, 2011.
Settlement
Particulars 2010-11 2009-10
MTM Settlement (Rs. in crores) 6,890.51 5,940.43
Physical Settlement (Rs. in crores) 1,560.14 1,664.65
Collaterals
Instrument 2010-11 2009-10
Count Amt. (Rs.Crores) Count Amt. (Rs.Crores)
Bank Guarantee 1,063 757.57 834 521.29
Fixed Deposit Receipts 1,193 807.62 1,073 320.78
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NATIONAL COMMODITY CLEARING LIMITED
Fifth Annual Report
III. DIVIDEND
As the profit is required to augment operational needs, your Directors do not recommend any dividend for
the financial year 2010-11.
IV. CORPORATE GOVERNANCE
The Company is committed to maintain the highest standards of corporate governance and adhere to
corporate governance requirements. In continuation of its pursuit to establish good corporate governance
practice, your Company, while already complying by and large with a major part of the Corporate Governance
Voluntary Guidelines 2009 issued by the Ministry of Corporate Affairs, is in the process of complying
with/examining the possibility of implementing, the remaining part of the said Guidelines.
V. DIRECTORS
In accordance with the provisions of the Companies Act, 1956 and the Company's Articles of Association,
Ms. Chitra Ramkrishna retires by rotation at the ensuing Annual General Meeting and is eligible for
re-appointment.
VI. DIRECTORS’ RESPONSIBILITY STATEMENT
Your Directors confirm that –
i. in the preparation of the Annual Accounts, the applicable accounting standards had been followed
along with the proper explanation relating to material departures, if any;
ii. the Directors had selected such accounting policies and applied them consistently and made judgments
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 i.e. March 31, 2011 and of the profits of the Company
for that year;
iii. the Directors had taken proper and sufficient care for the maintenance of adequate accounting records
in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the
Company and for preventing and detecting fraud and other irregularities; and
iv. the Directors had prepared the annual accounts on a going concern basis.
2
NATIONAL COMMODITY CLEARING LIMITED
Fifth Annual Report
Ravi Narain
Chairman
Place : Mumbai
Date : April 26, 2011
3
NATIONAL COMMODITY CLEARING LIMITED
Fifth Annual Report
1 Mr. R Nandakumar 45 Senior Vice 5779502 3894590 24 March 15, 1995 Staff Officer
B. Com., Grad. CWA, President (Finance),
MBA, CAIIB, FIII Unit Trust of India
Notes :
1 Gross Remuneration includes Salary and other benefits, Company's contribution to Provident Fund, Superannuation
Fund, taxable value of perquisites, etc. Net remuneration represents gross remuneration less Company's contribution to
provident and superannuation funds, taxable value of perquisites, profession tax and income tax.Where applicable, the
amounts also includes certain allowances accrued during previous year(s) but claimed in the current year.
3 The above employee is on deputation basis from the Company's holding company i.e. National Stock Exchange of India
Limited (NSEIL) and the proportionate remuneration mentioned above in respect of him has been reimbursed to NSEIL
by the Company.
4 The above employee is not holding equity shares in the Company within the meaning of sub-clause (iii) of clause (a) of
sub-section (2A) of Section 217 of the Companies Act, 1956.
5 The Company does not have any Employees Stock Option Plan (ESOP) Scheme for its employees.
4
NATIONAL COMMODITY CLEARING LIMITED
Fifth Annual Report
AUDITORS’ REPORT
To
The Members Of National Commodity Clearing Limited
1. We have audited the attached Balance Sheet of National Commodity Clearing Limited (‘the Company')
as at March 31, 2011 and also the Profit and Loss account and the cash flow statement for the year
ended on that date annexed thereto. These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial statements based on our
audit.
2. We conducted our audit in accordance with auditing standards generally accepted in India. Those
Standards require that we plan and perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our audit provides a reasonable
basis for our opinion.
3. As required by the Companies (Auditor's Report) Order, 2003, (as amended), issued by the Central
Government of India in terms of sub-section (4A) of Section 227 of ‘The Companies Act, 1956' of
India (the ‘Act') and on the basis of such checks of the books and records of the company as we
considered appropriate and according to the information and explanations given to us, we give in the
Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order.
5
NATIONAL COMMODITY CLEARING LIMITED
Fifth Annual Report
vi) In our opinion and to the best of our information and according to the explanations given to us,
the said accounts give the information required by the Companies Act, 1956, in the manner so
required and give a true and fair view in conformity with the accounting principles generally
accepted in India;
(a) in the case of the balance sheet, of the state of affairs of the Company as at March 31, 2011,
(b) in the case of the profit and loss account, of the profit for the year ended on that date, and
(c) in the case of cash flow statement, of the cash flows for the year ended on that date.
Prasad V. Paranjape
Partner
Membership No. 47296
Place: Mumbai
Date: April 26, 2011.
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NATIONAL COMMODITY CLEARING LIMITED
Fifth Annual Report
(i) (a) The Company has maintained proper records showing full particulars, including quantitative
details and situation of fixed assets.
(b) The fixed assets of the company have been physically verified by the management during the
year and no material discrepancies were noticed on such verification. In our opinion, the
frequency of verification is reasonable.
(c) There was no substantial disposal of fixed assets during the year.
(ii) The Company does not hold any Inventory. Therefore, the provisions of clauses 4(ii)(a),(b)&(c) of
the Companies (Auditor's Report) Order, 2003 (as amended) are not applicable to the Company.
(iii) As informed, the Company has not granted/accepted any loans, secured or unsecured to companies,
firms or other parties covered in the register maintained under section 301 of the Companies Act,
1956 and hence clauses 4(iii)(b), 4(iii)(c), 4(iii)(d), 4(iii)(f) and 4(iii)(g) of the Companies (Auditor's
Report) Order, 2003 (as amended) are not applicable to the company.
(iv) In our opinion and according to the information and explanations given to us, there is an adequate
internal control system commensurate with the size of the Company and the nature of its business
with regard to purchase of fixed assets and with regard to the sale of services. During the course of
our audit, no major weakness has been noticed in the internal control system in respect of these areas.
During the course of our audit, we have not observed any continuing failure to correct weakness in
internal control system of the company.
(v) According to the information and explanations given to us, there are no contracts or arrangements
during the year that need to be entered into the register maintained under section 301 hence clause
4(v)(b) of the Companies (Auditor's Report) Order, 2003 (as amended) is not applicable to the company.
(vi) The company has not accepted any deposits from the public within the meaning of Sections 58A and
58AA of the Act and the rules framed there under.
(vii) In our opinion, the Company has an internal audit system commensurate with the size and nature of
its business.
(viii) To the best of our knowledge and as explained, the Central Government of India has not prescribed
the maintenance of cost records under clause (d) of sub-section (1) of Section 209 of the Act for any
of the services of the company.
(ix) (a) The Company is regular in depositing with appropriate authorities undisputed statutory dues
including provident fund, investor education and protection fund, employees' state insurance,
income-tax, sales-tax, wealth-tax, service tax, customs duty, excise duty, cess and other material
statutory dues applicable to it.
7
NATIONAL COMMODITY CLEARING LIMITED
Fifth Annual Report
Further, since the Central Government has till date not prescribed the amount of cess payable
under section 441A of the Companies Act, 1956, we are not in a position to comment upon the
regularity or otherwise of the company in depositing the same.
(b) According to the information and explanations given to us, no undisputed amounts payable in
respect of provident fund, investor education and protection fund, employees' state insurance,
income-tax, wealth-tax, service tax, sales-tax, customs duty, excise duty, cess and other
undisputed statutory dues were outstanding, at the year end, for a period of more than six months
from the date they became payable.
(c) According to the information and explanation given to us, there are no dues of income tax,
sales-tax, wealth tax, service tax, customs duty, excise duty and cess which have not been
deposited on account of any dispute.
(x) The Company does not have any accumulated losses as on the balance sheet date. Further, the company
has not incurred cash losses during the financial year covered by our audit and the immediately
preceding financial year.
(xi) The Company does not have any dues to financial institution, bank or debenture holders.
(xii) According to the information and explanations given to us, the Company has not granted any loans or
advances on the basis of security by way of pledge of shares, debentures and other securities.
(xiii) In our opinion, the Company is not a chit fund or a nidhi / mutual benefit fund / society. Therefore, the
provisions of clause 4(xiii) of the Companies (Auditor's Report) Order, 2003 (as amended) are not
applicable to the Company.
(xiv) In our opinion, the Company is not dealing in or trading in shares, securities, debentures and other
investments. Accordingly, the provisions of clause 4(xiv) of the Companies (Auditor's Report) Order,
2003 (as amended) are not applicable to the Company.
(xv) In our opinion and according to the information and explanations given to us, the company has not
given any guarantee for loans taken by others from banks or financial institutions during the year.
(xvii) According to the information and explanations given to us and on an overall examination of the
balance sheet of the Company, we report that no funds raised on short-term basis have been used for
long-term investment.
(xviii) According to the information and explanations given to us, the company has not made any preferential
allotment of shares to parties and companies covered in the register maintained under section 301 of
the Act.
(xix) The Company did not have any outstanding debentures during the year.
(xx) The Company did not raise any money by way of public issue during the year.
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NATIONAL COMMODITY CLEARING LIMITED
Fifth Annual Report
(xxi) During the course of our examination of the books and records of the company, carried out in accordance
with the generally accepted auditing practices in India, and according to the information and
explanations given to us, we have neither come across any instance of fraud on or by the company,
noticed or reported during the year, nor have we been informed of such case by the management.
Prasad V. Paranjape
Partner
Membership No. 47296
Place: Mumbai
Date: April 26, 2011.
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NATIONAL COMMODITY CLEARING LIMITED
Fifth Annual Report
II APPLICATION OF FUNDS
1. Fixed Assets 3
Gross Block 9,168,102.82 9,168,102.82
Less :Accumulated Depreciation 8,091,889.82 6,669,385.41
Net Block 1,076,213.00 2,498,717.41
2. Investments 4 7,614,266.00 240,000.00
3. Current Assets, Loans
and Advances 5
a. Current Assets
1. Sundry Debtors 3,852,268.13 3,862,849.85
2. Cash & Bank Balances 18,706,572.42 923,527.70
3. Other Current Assets 37,672,424.69 57,753,575.56
(Refer Schedule 10: Point No.2 (a))
4. Interest accrued 1,409,315.00 9,904.04
b. Loans & Advances 14,250,110.01 75,890,690.25 18,045,048.77 80,594,905.92
Less : Current Liabilities
& Provisions 6
Current Liabilities 11,998,791.13 20,466,380.50
63,891,899.12 60,128,525.42
TOTAL 72,582,378.12 62,867,242.83
Notes forming part of the accounts 10
The Schedules referred to above form an integral part of the Balance Sheet and notes to Accounts
As per our report of even date attached For and on behalf of the Board of Directors
For HARIBHAKTI & CO.
Chartered Accountants
RAVI NARAIN CHITRA RAMKRISHNA
Chairman Director
PRASAD V. PARANJAPE
Partner
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NATIONAL COMMODITY CLEARING LIMITED
Fifth Annual Report
PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED MARCH 31, 2011
As per our report of even date attached For and on behalf of the Board of Directors
For HARIBHAKTI & CO.
Chartered Accountants
RAVI NARAIN CHITRA RAMKRISHNA
Chairman Director
PRASAD V. PARANJAPE
Partner
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Fifth Annual Report
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NATIONAL COMMODITY CLEARING LIMITED
SCHEDULE 3: FIXED ASSETS (Refer Schedule 10: Point No.1 (d)(ii)) (Rs)
QUOTED
TAXABLE BONDS
6.85% India Infrastructure Finance Company Limited 20-Mar-14 75.00 7,500,000.00 7,614,266.00 –
(net of amortisation)
UNQUOTED
TAXABLE BONDS
5.50 % Rural Electrifiction Corporation Ltd. 31-Mar-11 24.00 240,000.00 – 240,000.00
GRAND TOTAL 7,614,266.00 240,000.00
Note 1: Aggregate Market Value of the Investments is Rs. 73,87,500.00 (Previous Year : Rs. Nil)
Note 2: Aggregate Cost of Unquoted Investments is Rs. Nil (Previous Year : Rs. 2,40,000)
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f) Investments
(i) Long term investments are considered as held till maturity and are valued at cost. Provision is
made for diminution in the value of investment, if any, other than temporary in nature.
(ii) Premium/ Discount at the time of acquisition of Government / Debt securities is amortised /
recognised over the residual period of its maturity.
(iii) Current investments are valued at cost or fair value whichever is lower.
g) Income Tax
Income tax expense for the year, comprising current tax and deferred tax is included in determining
the net profit for the year.
A provision is made for the current tax based on tax liability computed in accordance with relevant
tax rates and tax laws. Deferred tax assets are recognised only to the extent that there is reasonable
certainty that sufficient future taxable income will be available against which such deferred tax
assets can be realised. In situations where the company has unabsorbed depreciation or carry forward
tax losses, all deferred tax assets are recognised only if there is virtual certainty supported by
convincing evidence that they can be realised against future taxable profits. At each balance sheet
date the Company re-assesses unrecognized deferred tax assets. It recognises unrecognised deferred
tax assets to the extent that it has become reasonably certain or virtually certain, as the case may be
that sufficient future taxable income will be available against which such deferred tax assets can be
realised.
The carrying amount of deferred tax assets are reviewed at each balance sheet date. The company
writes-down the carrying amount of a deferred tax asset to the extent that it is no longer reasonably
certain or virtually certain, as the case may be, that sufficient future taxable income will be available
against which deferred tax asset can be realised. Any such write-down is reversed to the extent that
it becomes reasonably certain or virtually certain, as the case may be, that sufficient future taxable
income will be available.
h) Provisions , contingent liabilities & contingent assets
Provisions involving substantial degree of estimations in measurement are recognised when there is
present obligation as result of past events and it is probable that there will be outflow of resources.
Provisions are not discounted to its present value and are determined based on best estimate required
to settle the obligation at the balance sheet date. These are reviewed at each balance sheet date and
adjusted to reflect the current best estimates.
Contingent liabilities are not recognised but are disclosed while, contingent assets neither are
recognised nor disclosed in financial statements .
i) Earning Per Share
Basic and diluted earning per share is computed by dividing the net profit attributable to equity
shareholders for the year by weighted average number of equity shares outstanding during the year.
j) Cash and cash equivalents
Cash and cash equivalents for the purposes of cash flow statement comprise cash at bank and in
hand and short-term investments with an original maturity of three months or less.
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2. Notes to Accounts :
a) Statement of Current Investments at the end of the year is given below:
As at 31.03.2011 As at 31.03.2010
Number of (Rs.) Number of (Rs.)
Units Units
MUTUAL FUNDS
Principal Cash Mgmt Fund LO-
I P - Dly Div – – 1,431,348.85 14,316,637.44
Birla Sun Life Savings Fund -
Ret- Dly Dividend – – 564,792.57 5,651,766.25
Canara Robeco Treasury
Advantage Fund - Ret -
Daily Dividend – – 327,377.72 4,061,808.08
DWS Ultra Short-Term Fund -
Dly Dividend – – 596,732.77 5,980,157.43
Templeton India Ultra Short
Bond Fund - Retail -
Wkly Dividend – – 302,878.26 3,030,172.84
ICICI Prudential Ultra Short
Term Plan - Sup Prem -
Wkly Dividend 328,004.57 3,294,228.81 299,397.84 3,004,397.79
IDFC Money Manager -
Treasury Plan - Plan A -
Dly Dividend 390,033.03 3,927,593.61 371,489.55 3,740,862.66
JM Money Manager Fund -
Super Plus Plan -
Daily Dividend – – 258,476.68 2,586,136.76
JP Morgan India Treasury
Fund - Super IP - Daily Dividend – – 352,049.67 3,523,629.91
UTI Treasury Advantage Fund -
IP - Dly Dividend 12.505.94 12,508,611.09 11,855.47 11,858,006.40
JPMorgan India Liquid Fund -
Super IP - Daily Dividend 361,818.95 3,621,047.82 – –
Kotak Floater - ST -
Daily Dividend 317,463.41 3,211,523.38 – –
SBI Magnum Insta Cash -
Daily Dividend 205,670.29 3,445,039.28 – –
Sundaram Money Fund -
IP - Dly Dividend 759,202.87 7,664,380.70 – –
TOTAL 37,672,424.69 57,753,575.56
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b) Statement of investments purchased and sold during the year at cost given below:
Scheme Name Number of units Cost (Rs.)
Birla Sun Life Cash Plus Retail Plan -
Daily Dividend- Reinvestment 225,054.96 3,684,014.66
Birla Sun Life Savings Fund - Retail -
Daily Dividend -Reinvestment 7,388.57 73,935.91
Canara Robeco Treasury Advantage
Retail Daily Dividend Fund 9,511.02 118,004.17
Dws Ultra Short Term Fund - Regular
Daily Dividend Plan 2,292.72 22,976.54
ICICI Prudential Interval Fund III -
Quarterly Interval Plan - Inst Dividend 365,548.43 3,655,484.34
ICICI Prudential Liquid Super Institutional
Plan - Div - Daily 70,992.94 7,100,881.07
ICICI Prudential Ultra Short Term Plan
Super Premium Weekly Dividend 38,455.83 386,389.47
IDBI Ultra Short Term Fund - Daily Dividend -
Reinvestment 261,271.66 2,612,716.58
JM Money Manager Fund Super Plus Plan -
Daily Dividend 3,611.16 36,130.79
JPMorgan India Treasury Fund - Super Inst Daily
Div Plan - Reinvest 5,210.11 52,147.51
Principal Cash Mgmt Fund - Liquid Option -
Inst Plan - Daily Dividend Reinvest 9,935.87 99,380.53
Tata Floater Fund - Daily Dividend 355,878.85 3,571,457.75
Tata Liquid Fund - Super High Investment Plan -
Daily Dividend 3,140.82 3,500,505.28
Templeton India Ultra Short Bond Fund Retail Plan -
Weekly Dividend Reinvestment 4,023.47 40,284.15
Total 24,954,308.75
c) In the opinion of the Board, current assets, loans and advances are approximately of the value
stated, if realised in the ordinary course of business.
d) Sundry creditors include amounts of Rs. NIL (Previous Year :Rs Nil ) including interest of Rs. NIL,
(Previous Year Rs. NIL) payable to Micro, Small & Medium Enterprises. Total outstanding dues to
Micro, Small & Medium Enterprises have been determined to the extent such parties have been
identified on the basis of information available with the Company.
e) Payments to and provision for employees represents the amount reimbursed by the company to The
National Stock Exchange of India Limited (NSEIL) in respect of employees on deputation to the
company on a rotational basis. These includes charges for all retirement benefits and other long term
employee benefits as per the requirements of Accounting Standard 15-" Employee Benefits" issued
by the Institute of Chartered Accountants of India. Necessary provisions are carried by NSEIL.
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f) In the opinion of the management, as the Company's operations comprise of only facilitating Clearing
& Settlement in commodity transactions and the activities incidental thereto within India, the
disclosures required in terms of Accounting Standard 17 - "Segment Reporting" issued by the Institute
of Chartered Accountants of India are not applicable.
g) In compliance with Accounting Standard 18 "Related Party Disclosures" issued by the Institute of
Chartered Accountants of India, the required disclosures are given in the table below:
i) Name of related parties and relationship:
Sr. Related Party Nature of Relationship
No.
1 National Stock Exchange of India Limited (NSEIL ) Holding Company
2 National Securities Clearing Corporation Limited (NSCCL) Fellow Subsidiary
3 NSE.IT Limited Fellow Subsidiary
4 Dot Ex International Limited Fellow Subsidiary
5 NSE Infotech Services Limited Fellow Subsidiary
6 NSE .IT (UK) Limited Fellow Subsidiary
7 NSE .IT (US) Inc. Fellow Subsidiary
8 India Index Services & Products Ltd. Fellow Subsidiary
9 Power Exchange of India Limited Fellow Subsidiary
ii) Details of transactions (including Service tax wherever levied) with related parties
are as follows:
Name of the Nature of Transactions Year ended Year ended
Related Party 31/03/2011 31/03/2010
(Rs.) (Rs.)
National Stock • Reimbursement paid for expenses on staff on
Exchange of deputation inclusive of Service Tax 1,63,27,946.50 77,81,285.44
India Ltd. • Reimbursement paid for other expenses incurred
inclusive of Service Tax 80,71,749.70 88,76,522.32
• Space & Infrastructure Usage Charges paid
on predetermined basis inclusive of Service Tax 62,57,984.00 1,60,35,878.00
• Closing Balance (Credit)/Debit (1,06,62,460.08) (1,87,07,236.45)
National • Software usage charges paid inclusive of
Securities Service Tax 55,15,000.00 55,15,000.00
Clearing • Closing Balance (Credit)/Debit – –
Corporation
Limited
h) In accordance with Accounting Standard - 20 "Earning per Share" issued by the Institute of Chartered
Accountants of India, the required disclosure is given below.
Year ended Year ended
31/03/2011 31/03/2010
Net Profit attributable to Equity Shareholders (Rs.) 99,53,765.66 93,38,652.88
Weighted Average number of equity shares
outstanding at the end of the period (No.) 47,50,000.00 47,50,000.00
Basic/Diluted earning per share of Rs.10/- each (in Rs.) 2.10 1.97
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The Company does not have any outstanding dilutive potential equity shares. Consequently, the basic and
diluted earning per share of the Company remain the same.
i) In accordance with the provisions of Accounting Standard-22 relating to "Accounting for taxes on
income" , the breakup of deferred tax Liability/(Asset) is shown below:
j) Administration & other expenses include expenses allocated by the holding company, The National
Stock Exchange of India Limited (NSEIL) on equitable basis.
k) Previous years' figures are regrouped, reclassified and rearranged wherever necessary to make them
comparable with current year figures.
l) Information with regard to other matters specified in Clauses 3, 4C & 4D of Part II to Schedule VI
of the Companies Act, 1956 are either nil or not applicable to the company.
As per our report of even date attached For and on behalf of the Board of Directors
For HARIBHAKTI & CO.
Chartered Accountants
RAVI NARAIN CHITRA RAMKRISHNA
Chairman Director
PRASAD V. PARANJAPE
Partner
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Fifth Annual Report
CASH FLOW STATEMENT FOR THE YEAR ENDED 31ST MARCH, 2011
2010-2011 2009-2010
(Rs.) (Rs.)
(4,872,303.23) (5,284,046.65)
Operating Profit Before Working Capital Changes 9,551,262.47 8,190,946.42
Adjustments for :
(Increase)/ Decrease in Sundry Debtors 10,581.72 617,866.16
( Increase )/ Decrease in Loans & Advances (59,674.44) (281,513.10)
Increase /( Decrease ) in Current Liabilities & Provisions (8,467,589.37) 79,075.23
Net Cash from (used in) Operating Activities - Total (A) 2,592,257.58 3,152,737.00
Net cash from (used in) Investing activities - Total (B) (2,434,212.86) (2,888,697.20)
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NATIONAL COMMODITY CLEARING LIMITED
Fifth Annual Report
2010-2011 2009-2010
(Rs.) (Rs.)
As per our report of even date attached For and on behalf of the Board of Directors
For HARIBHAKTI & CO.
Chartered Accountants
RAVI NARAIN CHITRA RAMKRISHNA
Chairman Director
PRASAD V. PARANJAPE
Partner
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NATIONAL COMMODITY CLEARING LIMITED
Fifth Annual Report
I Registration Details
Registration No. 1 6 3 5 5 0 State Code 1 1
Sources of Funds
Paid-up Capital Reserves & Surplus
* * * * 4 7 5 0 0 * * * * 2 4 9 1 2
Application of Funds
Net Fixed Assets Investments
* * * * * 1 0 7 6 * * * * * 7 6 1 4
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V Generic Names of Three Principal Products / Services of Company (as per monetary terms)
Product F A C I L I T A T I N G C L E A R I N
Description G A N D S E T T L E M E N T O F
C O M M O D I T I E S
25