Your Directors have pleasure in presenting the Nineteenth Annual Report along withAudited Stateme nt of Accounts of your company for the year ended 31st March2017. Due to improve d marke t conditions the ope rational income of the company hasincreased from ' 1017.37 million to ' 1216.19 million resulting in an increase of totalincome from ' 1331.29 million to ' 1552.24 million.
|Particulars || |
Year ended 31st March 2017 (' million)
Year ended 31st March 201 6 (' million)
|Income from Operations ||1216.19 ||1017.37 |
|Other Income ||336.05 ||313.92 |
|Total Income ||1552.24 ||1331.29 |
|Expenditure ||552.97 ||493.96 |
|Profit before Depreciation and Taxation ||999.27 ||837.33 |
|Depreciation ||34.93 ||34.35 |
|Profit before exceptional items and tax ||964.34 ||802.98 |
|Exceptional items (Income) ||- ||33 1.04 |
|Profit before contribution to IPF & Tax ||964.34 ||1134.02 |
|Contribution to IPF ||45.97 ||2 3.12 |
|Profit Before Tax ||918.37 ||1110.90 |
|Provision for Taxation ||270.00 ||324.80 |
|Provision for Deferred Tax for the year ||(30.14) ||1 7.62 |
|Profit after Tax ||678.51 ||768.48 |
|Other Comprehensive Income ||(3.13) ||(0.51) |
|Total Comprehensive Income ||675.38 ||767.97 |
|Balance brought forward ||3217.01 ||2725.75 |
|Profit available for appropriation ||3892.39 ||3493.72 |
|Dividend ||261.25 ||229.90 |
|Tax (including surcharge and education cess on dividend) ||53.19 ||46.80 |
|Transfer to General Reserve ||- ||- |
|Surplus carried to Balance Sheet ||3577.95 ||3217.01 |
The income from operations comprising of transaction charges annual issuers feesaccount maintenance charges settlement charges corporate action charges etc. during theyear under review increased to ' 1216.19 million from ' 1017.37 million recording aincrease of 20% over the year 2014-15. As per SEBI (Depositories & Participants)(Amendment) Regulations 2012 transfer of ' 45.97 million is made to investor protectionFund. After contribution to Investor Protection Fund Profit Before Tax (PBT) for the yearended 31st March 2017 is ' 918.37 million as against ' 1110.90 million ofprevious year. Profit After Tax (PAT) is at ' 678.51 as against ' 768.48 million. HoweverProfit Before Tax & Profit After Tax for the year ended 31st March 2017has increased by 18% & 23% respectively over the previous year after excludingexceptional income earned in the previous year.
Looking into the performance of the Company for the year under review and taking noteof the buoyancy in the Capital Market at present your directors have recommended adividend of Rs. 3.00 (Rupees Three only) per share (30%) for the year ended 31stMarch 2017.
Details of Subsidiary Companies
Your Company has following subsidiary Companies as on 31st March 2017
1. CDSL Ventures Limited (CIN U93090MH2006PLC164885)
2. CDSL Insurance Repository Limited (CIN U74120MH2011PLC219665)
3. CDSL Commodity Repository Limited (CIN U74999MH2017PLC292113)
Share Capital and Shareholding
As on 31st March 2017 the Share Capital of the Company is as givenhereunder: Authorised Share Capital: 1500000000 divided into 150000000 equity sharesof Rs 10 each.
Issued and Paid Up Share Capital: 1040000000 divided into 100400000 equity sharesof Rs 10 each.
Demat holding of Shareholders
As on the date of this report all your shareholders are holding the entire sharecapital in electronic form.
The Capital Market Environment
During FY 2016-17 the stock markets witnessed a bullish sentiment due to which theBSE-30 Sensex opened at 25301 on 1st April 2016 and touched a high of 29824in March 2017 only to close at 29620 on 31st March 2017.
According to World Bank India's growth forecast for 2017 is 7% from 7.6% estimatedearlier attributing it partly to demonetization of high value currency notes. India isstill forecast to retain its position as the world's fastest growing major economy aheadof China which is forecast to grow 6.7%. India and the rest of emerging Asia aregenerally projected to continue growing at a robust pace with some countries likely toface strong headwinds from China's economic rebalancing and global manufacturing weakness.
Correspondingly capital raised from equity markets has gone up 5% compared to theprevious year. According to Prime Database the total equity capital raised during FY 2016- 17 was about Rs.51288 crores as against Rs.48952 crores raised during FY 2015 - 16. Ofthe above the funds raised through IPOs was Rs.29018 crores while the funds raisedthrough Qualified Institutional Placement (QIP) route was Rs.13871 crores and throughOffer for Sale (OFS) was Rs.8390 crores.
With the capital market looking up your company could register a good growth in itsdepository operations during the latter part of 2016 - 17. Due to positive sentimentprevailing in the capital markets the primary market has also performed well during thisperiod. Such positive outlook is reflected in the increase in the number of demat accountsopened in the Depository. In order to sustain the growth in its depository business yourcompany continues to focus on enhancement of operational efficiency upgradation oftechnology service quality and enhanced emphasis on investor education through seminars /workshops.
Securities like equity shares preference shares mutual fund units debt instrumentsgovernment securities certificates of deposit commercial papers
and a host of other instruments are available for dematerialization by the investors.Details of the securities admitted with CDSL are given below
|Securities || |
Year ended 31st March 2017
Year ended 31st March 2016
(%) change over the previous year
|Equity Shares ||9240 ||8814 ||4.83 |
|Debt Instruments ||8792 ||977 7 ||-10.07 |
|Other Securities ||23371 ||2108 3 ||10.85 |
|Total ||41403 ||39674 ||4.3 5 |
Position of Securities held in the System
The value and volume of securities held with CDSL in the year under review as comparedto the previous year are indicated below:
|Holding of Securities || |
Year ended 31 st March 2017
Year ended 31 st March 2016
Increase over the previous year (%)
(in million Rs.)
|17735853 ||13267966 ||33.67 |
|Volume (in million) ||255227 ||227549 ||12.1 6 |
Depository Participants and Service Centers
As on 31st March 2017 588 depository participants held valid registrationcertificates of Securities and Exchange Board of India (SEBI) as compared to 583 validSEBI registrations as on 31st March 2016. During the year new registrationswere received for 16 DPs but registrations of 1 1 DPs were withdrawn/ cancelled. With alarge DP network investors spread across 28 States and 7 Union Territories can avail ofCDSL's depository services. Further investors have access to 17489 DP service centersspread across more than 2000 cities / towns as on 31st March 2017.
Beneficial Owner Accounts
During the year under review 19.85 lakh Beneficial Owner (BO) accounts were addedtaking the total number of such accounts to 164.96 lakhs with the net BO accounts at122.67 lakhs as on 31st March 2017. The comparative figures of
gross and net BO accounts as on 31st March 2016 and 31st March2017 are given in the following table :
|Year ended 31 st March 2017 || |
Year ended 31 st March 2016
Increase over the previous year's cumulative figur e
| || || |
|1985545 ||13.68 |
|1476694 ||13.68 |
Investor Awareness / Education Seminars
Financial inclusion through retail participation has been a major focus area of yourcompany. We believe investor education can become a significant key to achieving financialinclusion in the capital market. To this end CDSL conducted around 285 Investor AwarenessPrograms (IAPs) in the year. This initiative allowed investors across geographiesprofessions and age groups to come together and learn the basics of Capital Marketsadvantages of holding securities in demat form importance of Financial PlanningInvestment avenues available etc. CDSL has also conducted IAPs in association with AMCsand regional Seminars with SEBI. CDSL also participate in Indian International Trade Fair(IIFT) at Delhi with other intermediaries in capital market for mass investor education.Although these IAPs reach out to investors in major metros we have already initiatedsteps to reach the public in tier-2 and tier-3 cities to inculcate the habit of investmentin securities. CDSL has tied up with various regional newspapers to attract large numberof investors to attend these IAPs. During the IAPs informative booklets in English Hindiand other regional languages were distributed for the benefit of investors.
Awards and recognition
During the year 2016-2017 your Company has won the following awards:
BFSI TECH Maestros Award- Risk/ Security and compliance
Dell EMC Transformers Award- Security Transformation
Exito BFSI IT leadership Award- IT Leadership
IDG's Intelligent Enterprise Champions Awards- Infrastructure
Innovative CIO Award CIO
Express Security Strategist Award - Information Security
FinTec India Award- Security
Consolidated Account Statement (CAS)
As directed by SEBI certain additional information with respect to mutual fundinvestments like total purchase value / cost of investment in each scheme of mutual fundin monthly transaction CAS and information like the amount of actual commission paid byAMCs/Mutual Funds (MFs) to distributors (in absolute terms) during the half-year periodagainst the concerned investor's total investments in each MF scheme the scheme's averageTotal Expense Ratio (in percentage terms) for the half-year period etc. was included inthe CAS to increase transparency of information to investors
During the year your company released many system enhancements for increasing theefficacy of processes
One of the important development was implementation of system driven disclosurespertaining to acquisition sale and pledge of securities under the SEBI (SAST Regulations)2011 and SEBI (PIT) Regulations 2015 as a parallel system. CDSL enabled update of Promoter/ Promoter group PANs by RTAs / Exchanges on the basis of which the transaction data ofpromoters / promoter group is informed on a daily basis directly to the stock exchangesfor dissemination of the necessary disclosures.
Your company also released the facility to appoint multiple nominees in a demataccount. You can now record the entitlement of securities for each such nominee in termsof percentage. At the time of transmission in favor of such nominees the DP shall divideall the securities at ISIN level in the same proportion as recorded at the time ofnomination. The fractional entitlements if any shall be transferred to the first holderin the event of absence of nomination for fractions.
Transaction Cum Holding Statements
As of 31st March 2017 193 DPs have availed of the service dispatch oftransaction cum holding statements (DOTS and e-DOTS). Dispatch of Bill-Cum- statementservices (DBS) are being provided for 21 DPs. In 2016-17 CDSL has processed 15.87 lakhstatements.
Corporate Bond database and Trade Repository
The Corporate Bond database maintained by your company as mandated by SEBI vide itsCircular No. CIR/IMD/DF/17/2013 dated October 22 2013 contains information on over17000 bonds issued in demat form by over 2000 Issuers. The database providescomprehensive information on the corporate debt instruments including the following:
Issuer details: Name type and nature of the Issuer Business sector
Name of the company secretary etc.
Instrument details: Face value and tenure whether tax free whether
guaranteed type of convertibility seniority in payment etc.
Redemption details: Redemption Date whether full redemption
redemption premium details total quantity value redeemed etc.
Debenture Trustee Details: Name of the debenture trustee etc
Stock Exchange Details: Name of the exchange Listing status (to be listedlisted) with date of listing.
Credit Rating Agency Details: Name of the credit rating agency along withcredit rating and date.
The credit rating agencies CARE ICRA India Rating etc. are accessing your company'scorporate bond database through the secure login provided to them and are verifying thecredit rating displayed and also updating subsequent rating migrations. The comprehensiveand updated information disseminated by your company at a single place provides valuableinformation to the investor and assists him in taking a more informed and valued decision.
Your company is pleased to inform you that the trade repository for primary issuanceswas launched in November 2016. Your company has data of about 3450 ISINs for primarymarket issuances and about 4000 ISINs pertaining to secondary market being traded in thestock exchanges.
Customer Communication Management System
For CAS generation which was outsourced since Feb 2015 CDSL has implemented a CustomerCommunication Management System which is capable of statement generation of CAS and anyother statements that CDSL and group companies need to send out to customers. Designlayout of the electronic and physical communication complete tracking and web-hosting ofstatements are automated through this software. The system allows us to engage withmultiple print vendors in a secure manner. Due to in-house generation of CAS statementsignificant cost savings is expected out of this project in addition to the capability ofconsolidation of all future customer communication through one platform.
Implementation of Advanced Persistent Threat (APT) at CDSL
Your Company is implementing Advance Threat Detection (ATD) system for strengtheningCyber security protec tion of CDSL infrastructure.
Mobile App Development for e-Voting
The e-Voting system which was available on web is now available on mobile platform onAndroid Apple iOS and Windows. The login credentials of web is also used for the mobileapplication making it convenient for shareholders to use the channel of their choice.
Implementation of two factor authentication for CDASWeb login As per regulatoryguideline CDSL has done implementation of two-factor authentication at the login of CDSLdepository application. This has enabled the CDSL DP / RTA to access CDSL applicationthrough Intranet as well as from Internet with same security meas ures.
Continuing Professional Education (CPE) Programs - Depository Operations CertificationExamination (DOCE)
National Institute of Securities Markets (NISM) has been offering ContinuingProfessional Education (CPE) Programs for Associated Persons in the Securities MarketIntermediaries.
CDSL as a NISM Accredited CPE Provider for conducting CPE Programs has successfullycarried out 39 programs for 607 participants during th ; year.
ISO 27001:2013 Certification
Your Company has undergone Periodic audit for ISO27001:2013 conducted by DNV and havebeen recommended for continuation of the Certi ficate.
ISO 22301:2012 Certification
Your Company has undergone Periodic audit for ISO 22301:2012 (Business ContinuityManagement System) conducted by DNV and have been recommended for continuation of theCertificate.
Your Depository has undergone periodic audit for ISO 9001:2015 certification by DNV fore-Voting Service and has been recommended for continuation of the Certificate
CVL's National Academic Depository(C-NAD)
National Academic Depository (NAD) is an initiative of Government of India facilitatedby Ministry of Human Resources Department (MHRD) / University Grants Com mission (UGC). Weare pleased to inform you that CVL one of the subsidiaries of your comp any has beenselected by MHRD/UGC to offer services of NAD. Accordingly CVL has signed an agreementwith MHRD/UGC on Novemb er 28 2016 to facilitate this initiative.
As on 31 st March 2017 4654 companies have signed agreements with CDSL toconduct e -Voting. So far the e-Voting system recorded 12200 instances of voting carriedout by 4091 Companies. You will be pleased to note that CDSL has successfully renewed STQC(Standardization Testing and Quality Certification) for a further period of three years.This is the second renewal.
In the light of Green Initiative in the Corporate Governance by Ministry of CorporateAffairs CDSL has started offering the services to companies for
sending documents to its shareholders electronically. As on 31st March2017 a total of 288 companies have signed for availing the services.
Corporate Social Responsibility (CSR)
The Ministry of Corporate Affairs (MCA) vide its circular dated 27thFebruary 2014 notified Section 135 and Schedule VII of the Companies Act 2013 relating toCorporate Social Responsibility (CSR) the provisions of which came into effect from 1stApril 2014. The CSR provisions require companies satisfying certain criteria to spend 2%of its average net profits of the last three years on CSR activities defined in the rulesframed in this regard. During the year the company was required to spend Rs. 292 lakhs onCSR activities inclusive of Rs. 162 lakhs unspent amount of previous year. As per therecommendation of the CSR Committee and approval of the Board for the financial year 2016-17 the company contributed Rs. 105.19 Lakhs to a registered Charitable TrustAssociation of Parents of Mentally Retarded Children Mumbai named as ADHAR. Balanceamount of Rs. 186 lakhs would be spent on other CSR project like:
i) Additional Support to ADHAR
ii) Varasidhi Visual Vidhyashram Trust
iii) The Nest India Foundatio n
The report on CSR activities as required under Companies (Corporate SocialResponsibility Policy) Rules 2014 is given in Annexure A.
Prevention of Money Laundering Act
The Prevention of Money Laundering Act 2002 (PMLA) has been brought into force witheffect from 1 st July 2005. Subsequent amendments had been done to the PMLAAct 2002 and Prevention of Money-laundering (Maintenance of Records) Rules 2005 vide SEBIcircular CIR/MIRSD/1/2014 dated 12th March 2014. CDSL and its depositoryparticipants fall under the category of intermediaries' under section 12 of the SEBIAct and hence PMLA and the policy guidelines issued by the regulators to combat moneylaundering are applicable to depository operations.
As required under the guidelines CDSL has designated Principal Officer AlternateOfficer and Designated Director to ensure compliance with these
guidelines. CDSL has prepared policy guidelines for implementation of PMLA and the sameis reviewed periodically .
CDSL conducts training programs and updates depository participants on compliance withthe aforesaid guidelines. CDSL organized special training programmes wherein theAdditional Director from FIU-IND updated DPs in the matter of compliance with PMLAprovisions filing of Suspicious Transaction Reports and directly interacted withPrincipal officers of DPs at 4 metro cities.
Subsidiaries of CDSL 0 CDSL Ventures Limited
Your company's wholly owned subsidiary CDSL Ventures Limited's main business continuesto be KYC business for the capital market intermediaries. CVL continues to be the largestKRA controlling about 65% of the market share in the KYC of capital market. In addition toits core business of being a KRA for capital market CVL has al s o initiated work on thefollowing business lines which are in various stages of implementation / completion.
1. National Academic Depository (NAD)
2. eKYC as KYC User Agency (KUA) and Authentication User Agency (AUA)
3. CKYC (Central KYC)
4. eSign (electronic signature based on aadhaar number)
5. OLAO (On line account Opening)
6. Claim registry for life insurance companies that offer Pradhan Mantri Jeevan JyotiBima Yojana (PMJJBY)
Further CVL has also applied to SEBI to act as a Registrar and Transfer Agent (RTA).The application is under consideration by SEBI.
0 CDSL Insurance Repository Limited (CDSL IR)
Your Company had under the "Guidelines on Insurance repositories and electronicissuance of insurance policies" issued by IRDAI floated a separate subsidiary viz:-CDSL Insurance Repository Ltd. (CDSL IR) in the year 2011 to provide policyholders afacility to keep insurance policies in electronic form and to undertake changesmodifications and revisions in the insurance policy with speed and accuracy in order tobring about efficiency transparency and cost reduction in the issuance and maintenance ofinsurance policies. Leading public sector and private sector insurance companies havecontributed to the equity capital of CDSL IR. As on March 31 2017 the repository hasopened about 3.21 lakh e-Insurance Accounts (e-IA) in which it holds 66648 life insurancepolicies in electronic form. Due to non-participation of LIC about 38000 insurancepolicies are pending conversion into electronic form. CDSL IR had tied up with twenty-twolife insurance companies two health insurance companies and five general insurancecompanies for holding policies in electronic form.
0 CDSL Commodity Repository Limited (CCRL):
Your company has floated a new subsidiary in the name and style of CDSL CommodityRepository Limited (CCRL) to establish and run a Commodity Repository on the lines of aSecurities Depository. In this regard Warehousing Development and Regulatory Authority(WRDA) has shortlisted CCRL as one of the two Repositories for undertaking the CommodityRepository activity. A formal registration as Repository will be issued by WDRA afterinspection of systems and other supporting infrastructure set up by CCRL. It is expectedthat the Repository will be operational by the end of the first quarter of the currentfinancial year.
In terms of the regulatory requirements CCRL must have a continuous networth of Rs. 25crores and minimum paid up capital of Rs. 50 crores to function as a Repository.Accordingly CCRL was established initially with a paid up capital of Rs. 50 crores. MultiCommodity Exchange of India Ltd. (MCX) and BSE Ltd have expressed their desire to take upeach 24% of the stake in CCRL.
As at the end of the year under review the shareholding pattern of your company is asunder:
|Category of shareholders || |
Equity Share Capital (Rs. in 000)
Percentage of shareholding
|Banks ||468646 ||44.84 |
|Stock Exchanges ||522979.85 ||50.05 |
|Others ||53374.15 ||5.11 |
|Total ||1045000 ||100.00 |
Details of the equity shares held by the shareholders of the company are given undershareholding pattern which is a part of AnnexureB to the Directors' Report. terms ofdirections issued by SEBI on the strength of the recommendations of the Jalan Committeeeffective steps are under way to ensure that the S tock Exchange does not hold more than24% of the equity shares in a depository.
Listing of Securities
During the year under review the members of the Company at their Extra OrdinaryGeneral Meeting held on 24th November 2016 approved the Initial Public Offering(IPO) through Offer for Sale of Shares (OFS) by the Promoter Selling Shareholder (BSELimited) and the other Selling Shareholders viz. Bank of Baroda State Bank of India andCalcutta Stock Exchange. The Selling Shareholders proposed to offer up to 35167208equity shares of Rs.10 each held by them in the Company by way of a book building processin an IPO through OFS. Post the offer Promoters (BSE Limited) who is currently holding52297850 equity shares (50.05%) will hold 25080000 equity shares equivalent to 24%of the paid up share capital of the Company. The other Selling shareholders who arecurrently holding 16300000 equity shares (15.6%) will hold 8350642 equity sharesequivalent to 7.99% of the paid up share capital of the Company. A detailed shareholdingand the changes during the financial year are given as an annexure to this report in MGT-9enclosed as an Annexure F.
Subsequent to the approval of the members of the Company the Board of Directors attheir meeting held on 24th December 2016 have approved the Draft Red HerringProspectus for the IPO through OFS and the same was submitted with the Securities andExchange Board of India (SEBI) on 27th December 2016 and obtained clearance togo ahead with the further process o f IPO subject to necessary compliances under ICDRregulations of the SEBI. The Company has also obtained the in-principle approval from theNational Stock Exchange of India (NSE) for the listing of the securities of the Company.The Board of Directors of the Company have deliberated the necessary compliances andaccordingly the Company represented to the SEBI for further extension of time for thecompletion of IPO process beyond 31 st March 2017 to enable compliance underthe Securities and Exchange Board of India (Depositories & Participants) Regulations1996. SEBI vide its letter dated 24th April 2017 has granted
extension of time to comply with the aforementioned regulations by 3 0thJune 2017.
Your company has not accepted any deposits within the meaning of Section(s) 73 74 75& 76 of the Companies Act 201 3 and the Rules made thereunder. Directors
As per SEBI (Depositories and Participants) (Amendment) Regulations 2012 theappointment and re-appointment of all Shareholder Directors on the board of depositoryshall be with the prior approval of SEBI. Further the Public Interest Directors on theboard shall be nominated by SEBI. Accordingly SEBI vide its letter dated 30thMarch 2016 had approved appointment of Shri Nehal Vora Chief Regulatory Officer-BSE Ltd.as Shareholder Director on the Board of the Company. SEBI vide its letter dated 10thJune 2016 approved appointments of Shri Aravamudan Krishnakumar and Shri Rajender MohanMalla as Public Interest Director/ Independent Director. Further SEBI vide its letterdated 7 th October 2016 approved appointment of Shri Bontha Prasada Rao asPublic Interest Director/ Independent Director on the Board of the Company.
SEBI vide its letter dated 23rd December 2016 approved appointment of ShriVenkat Nageswar Chalasani DMD State Bank of India as Shareholder Directors on the Board of the Company.
SEBI vide its letter dated 24th April 2017 approved appointment of Smt.Usha Narayanan as Public Intere st Director/ Independent Director. She is also nominatedas a member of Audit Committee Nomination and Remuneration / Compensation CommitteeEthics Committee Public Interest Director Committee and Corporate Social Responsibility(CSR) Committee w.e.f. 24th April 2017.
During the year under review Smt. Anshula Kant Deputy Managing Director & GE (GM)& CFO - State Bank of India who was the shareholder director of SBI had resignedw.e.f. 17th June 2016.
Shri Rangachary Nambiar Iyengar Dr. Ram Narain Nigam and Shri Tharmapuram SubramaniamNarayanasami ceased to be Public Interest Directors on Board of the Company due tocompletion of their tenure on 7th April 2016 as per SEBI approval letter No.MRD/DP/OW/8444/2013 dated 8th
April 2013. Further Smt. Jayshree Vyas ceased to be Public Interest Director as wellas Woman Director on Board of the Company due to completion of her tenure on 17thJanuary 2017 .
As per the provisions of Section 152(6) (d) of the Companies Act 2013 Shri NehalNaleen Vora and Shri Balasubramaniam Venkataramani the shareholder directors wereconsidered as directors liable to retire by rotation at the ensuing Annual GeneralMeeting. The company was in receipt of communication from BSE Ltd. stating that Shri NehalNaleen Vora being eligible offered himself for reappointment and Shri BalasubramaniamVenkataramani expressed his unwillingness to be reappointed. Upon his unwillingness to bereappointed and withdrawal by BSE Ltd. he ceases to be a shareholder director w.e.f 24thApril 2017.
The Board has placed on record its appreciation of the valuable services rendered byShri Rangachary Nambiar Iyengar Dr. Ram Narain Nigam and Shri Tharmapuram SubramaniamNarayanasami Smt. Anshula Kant Smt. Jayshree Vyas and Shri Balasubramaniam Venkataramaniduring their tenure as directors of the company.
Statutory Auditors & Audit Report
M/s. Deloitte Haskins & Sells Chartered Accountants Mumbai were last reappointedas Statutory Auditors of the company for the year 2016-2017 to hold office from theconclusion of the 18th Annual General Meeting till the conclusion of the 19thAnnual General Meeting.
Considering the provisions of Section(s) 139 141 142 143 and 144 of the CompaniesAct 2013 read with Rule 5 & 6 of the Companies (Audit and Auditors) Rules 2014 theBoard of Directors based on recommendations of the Audit Co mmittee considered andapproved the appointment of M/s. Deloitte Haskins & Sells Chartered AccountantsMumbai (ICAI Firm Registration No. 117365W as Statutory Auditors of the Company who haveexpressed their willingness and confirmed their eligibility for b eing appointed asStatutory Auditors of the Company.
Accordingly M/s Deloitte Haskins & Sells Chartered Accountants Mumbai (ICAI FirmRegistration No. 117365W as Statutory Auditors of the Company will
hold office from the conclusion of the 19 th Annual General Meeting till theconclusion of the 20th consecutive Annual General Meeting for financial year2017-2018 subject to approval of shareholders.
There are no qualifications reservations or adverse remarks or disclaimer made by M/s.Deloitte Haskins & Sells Chartered Accountants Mumbai Statutory Auditors in theirreport .
In terms of the provisions of Section 138 of the Companies Act 2013 read with Rule 13of the Companies (Accounts) Rules 2014 the Company had appointed M/s Sarda & PareekChartered Accountants as Internal Auditors& Concurrent Auditors of the Company for theperiod 2014-15 to 2016-2017. The Board of Directors have approved the appointment of M/s.Mittal & Associates Chartered Accountants as Internal Auditors and ConcurrentAuditors of the Company for the financial year 2017- 2018.
There are no qualifications reservations or adverse remarks or disclaimer made by theInternal Auditors and Concurrent Auditors in their report.
Secretarial Auditors and Secretarial Audit Report
M/s. Pramod Shah & Associates Practicing Company Secretaries Mumbai have beenappointed as Secretarial Auditor of the Company for the period 2016-17 to 2017-2018. Acopy of the secretarial audit report issued in form MR-3 by M/s Pramod Shah &Associates Secretarial Auditors is enclosed as an annexure to this report.
There are no qualifications reservations or adverse remarks or disclaimer made by theSecretarial Auditors in their report.
Conservation of Energy Technology Absorption and Foreign Exchange Earnings and Outgo
Considering the nature of operations of your company the provisions of Section 134(3)(m) of the Companies Act 2013 read with the Companies (Disclosure of Particulars in theReport of Board of Directors) Rules 1988 relating to information to be furnished onconservation of energy and technology absorption are not applicable. The company hashowever used information technology extensively in its operations.
Other Green Initiatives
The company provides securities depository services and depository related servicesthrough robust IT infrastructure. Company has even advised its Depository Participants torestrict the use of paper go paperless wherever possible and to send to those clientsstatement of accounts electronically who have opted to receive statements electronicallyby email. The company is popularizing execution of instructions electronically by theDepository Participants as a green initiative.
The company is encouraging corporates to conduct e-Voting in general meetings as wellas voting on certain resolutions electronically by providing them a system on costeffective basis. The company is also sending notices annual reports on behalf ofcorporates to their investors. Filings are made by the companies electronically with CDSLusing document manager.
Whenever the company purchases servers storages and computer machines it is ensuredthat they are energy-efficient products using safer materials and reducing theenvironmental impact of technology and design for recyclability.
The company entirely replaced traditional fluorescent tubes and Compact Fluorescentlight fittings with environmental friendly energy efficient most economical andnon-hazardous LED fittings.
Foreign Exchange Earnings and Outgo
Details of foreign exchange earnings and outgo during the year under review are asunder:
|Particulars || |
Year ended 31stMarch 2017 (Rs.in million)
Year ended 31stMarch 2016 (Rs.in million)
|Earnings ||Nil ||Nil |
|Travel expenses ||2.52 ||4.02 |
|Others ||7.87 ||0.34 |
|Total ||10.39 ||4.36 |
Directors' Responsibility Statement
Pursuant to Section 134(3)(c) and 134(5) of the Companies Act 2013 the Board
of Directors reports that:
i) in preparation of the annual accounts the applicable accounting standards have beenfollowed and proper explanations relating to material departure if any have beenprovided;
ii) accounting policies have been selected and applied consistently and the judgementsand estimates made are reasonable and prudent so as to give a true and fair view of thestate of affairs of the company at the end of the financial year and of the profit o f thecompany for that period;
iii) proper and sufficient care has been taken for the maintenance of adequateaccounting records in accordance with the provisions of the Companies Act 2013 forsafeguarding the assets of the company and for preven ting and detecting frauds and otherirregularities;
iv) the annual accounts have been prepared on a going-concern basis.
v) internal financial controls to be followed by the company are laid down and thatsuch internal financial controls are adequate and were operating effectively.
vi) proper systems have been devised to ensure compliance with the provisions of allapplicable laws and that such systems are adequate and operating effectively.
The Independent Directors have given declaration under sub-section (6) of
section 149 of the Companies Act 2013 confirming that they satisfy the criteria
Implementation of Code of Corporate Governance
As per the SEBI (Depositories and Participants) (Amendment) Regulations 2012 thedisclosure requirements and corporate governance norms as specified for the listedcompanies mutatis mutandis are applicable to the depository. Your
company has been observing the Code of Corporate Governance by adopting most of thegood corporate governance policies as under Schedule V Regulation 34(3) and 53(f) ofSecurities Exchange Board of India (Listing Obligation & Disclosure Requirement)Regulation 2015. The status of implementation of the Code of Corporate Governance isenclosed as Annexure B.
Management Discussion and Analysis Report
The Management Discussion and Analysis Report for the year ended 31st March2017 is enclosed as Annexure C.
Appointment of Directors
A brief resume of Shri Nehal Naleen Vora the shareholder Director who retires byrotation and being re-appointed at the ensuing Annual General Meeting is enclosed as anAnnexure D.
Pursuant to the provisions of the Companies Act 2013 the Nomination andRemuneration/Compensation Committee and the Independent Directors have carried outseparately an annual performance evaluation of its directors individually the Board as awhole and its Committees and the Chairperson of the Company. The manner in which theevaluat ion has been carried out has been explained in the Corporate Governance Report.
Report by Internal Complaints Committee
As per The Sexual Harassment of Woman at Workplace (Prevention Prohibition andRedressal) Act 2013 (the Act) it is mandatory for every employer to constitute aCommittee to be known as the Internal Complaints Committee'. Accordingly theCommittee was constituted by Board and it meets periodically to review the complaints ifany received from female employees.
During the year the Committee did not receive any complaints in this regard.
Particulars of Employees
Information as required under Rule (5) (2) of Companies (Appointment and Remunerationof Managerial Personnel) Rules 2014 is enclosed to this report as Annexure E.
Human Resource Development
The company always recognized its Human assets as a critical resource essential for thegrowth of the company. It therefore accords high importance to human resourcedevelopment and consciously endeavors to enhance the quality and competence of itsemployees across cadre s. It conducts induction programme for new entrants. Nominatingemployees for training at reputed institutions and for attending seminars in India andabroad in capital market related areas particularly relating to depositories has alwaysbeen a part of human resource development programme of the company. Industrial relationsduring the year continued to be cordial.
Extract of Annual Return
The details forming part of the extract of the Annual Return in Form MGT 9 is enclosedas Annexure F.
Your Directors place on record their sincere gratitude for the support guidance andcooperation the company received from Ministry of Finance SEBI and other regulatoryagencies. The Directors also acknowledge with thanks the continued support of the BSE Ltd.the Promoter and the holding company Beneficial Owners Depository Participants StockExchanges Clearing Houses Issuers and Registrar and Transfer Agents. The Directors alsoexpress their appreciation for the unflinching dedication of the employees whoseperformance professionalism and commitment for rendering high quality services to theclientele of the company has been commendable.
For and on behalf of the Board
| ||Taruvai Subbayya Krishna Murthy |
|Place : Mumbai ||Chairman |
|Date : 24th April 2017 ||(DIN: 00279767) |