You are here » Home » Companies » Company Overview » Central Depository Services (India) Ltd

Central Depository Services (India) Ltd.

BSE: 538434 Sector: Financials
NSE: CDSL ISIN Code: INE736A01011
BSE 05:30 | 01 Jan Central Depository Services (India) Ltd
NSE 00:00 | 22 Mar 226.70 0.10






52-Week high 0.00
52-Week low 0.00
Mkt Cap.(Rs cr) 0
Buy Price
Buy Qty
Sell Price
Sell Qty
52-Week high 0.00
52-Week low 0.00
Mkt Cap.(Rs cr) 0
Buy Price
Buy Qty
Sell Price
Sell Qty

Central Depository Services (India) Ltd. (CDSL) - Director Report

Company director report


Your Directors have pleasure in presenting the Twentieth Annual Report along withAudited Statement of Accounts of your company for the year ended March 31 2018. Due toimproved market conditions the operational income of the company has increased from Rs.12161.89 Lakhs to Rs. 15416.79 Lakhs resulting in an increase of total income from Rs.15522.41 Lakhs to Rs. 17887.12 Lakhs.

Financial Highlights

Particulars Year ended March 31 2018 Year ended March 31 2017
(Rs. in Lakhs) (Rs. in Lakhs)
Income from Operations 15416.79 12161.89
Other Income 2470.33 3360.52
Total Income 17887.12 15522.41
Expenditure 6194.17 5529.74
Profit before Depreciation and Taxation 11692.95 9992.67
Depreciation 646.42 349.27
Profit before exceptional items and tax 11046.53 9643.40
Exceptional items (Income) -
Profit before contribution to IPF & Tax 11046.53 9643.40
Contribution to IPF 408.39 459.75
Profit Before Tax 10638.14 9183.65
Provision for Taxation 2962.40 2700.00
Provision for Deferred Tax for the year (92.96) (301.41)
Profit after Tax 7768.70 6785.06
Other Comprehensive Income (Net of Tax) (0.45) (31.34)
Total Comprehensive Income 7768.25 6753.72
Balance brought forward 35779.49 32170.12
Profit available for appropriation 43547.74 38923.84
Dividend 3135.00 2612.50
Tax (including surcharge and education cess on dividend) 638.21 531.85
Surplus carried to Balance Sheet 39.774.53 35.779.49

The income from operations comprising of transaction charges annual issuers feesaccount maintenance charges settlement charges corporate action charges etc. during theyear under review increased from Rs. 12161.89 Lakhs to Rs. 15416.79 Lakhs recording anincrease of 27% over the year 2016-17. As per SEBI (Depositories & Participants)(Amendment) Regulations 2012 transfer of Rs. 408.39 Lakhs is made to investor protectionFund. After contribution to Investor Protection Fund Profit Before Tax (PBT) for the yearended March 31 2018 is Rs. 10638.14 Lakhs as against Rs. 9183.65 Lakhs of previousyear. Similarly Profit After Tax (PAT) is atRs. 7768.70 Lakhs as against Rs. 6785.06Lakhs. However Profit before Tax & Profit after Tax for the year ended March 31 2018has increased by 16% and 14% 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 ofRs. 3.50 (Rupees Three and paise fifty only) per share (35%) for the year endedMarch 31 2018.

Share Capital and Shareholding

As on March 31 2018 the Share Capital of the Company is as given hereunder:

Authorised Share Capital: 1500000000 divided into 150000000 equity shares of Rs10 each.

Issued and Paid Up Share Capital: 1045000000 divided into 104500000 equity sharesof Rs 10 each.

Demat holding of Shareholders

As of March 31 2018 out of 104500000 shares 104499490 shares are in demat modeand 510 shares are in physical mode.

The Capital Market Environment

During FY 2017-18 the stock markets witnessed a bullish sentiment due to which theBSE-30 Sensex opened at 29910 on April 3 2017 and touched a high of 36443 in Jan 2018only to close at 32968 on March 28 2018. From the high of 36443 market has correcteddue to implementation of Long Term Capital Gain Tax (LTCG) political uncertainty andglobal factors including rising oil prices

According to World Bank India's growth forecast for FY 2018-19 is projected at 7.3%and is seen bottoming out from the impact of demonetisation and GST. India is stillforecasted to retain its position as the world's fastest growing major economy ahead ofChina which is forecasted to grow at 6.4%. India's growth rate in FY 2018-19 is projectedto hit 7.3% and 7.5% in the subsequent year according to the World Bank as the countryhas "enormous growth potential" compared to other emerging economies with theimplementation of comprehensive reforms.

Correspondingly capital raised from equity markets has gone up 3.46 times compared tothe previous year. The total equity capital raised during FY 2017-18 was about Rs.177116 crores as against about Rs. 51120 crores raised during FY 2016-17. Of the abovethe funds raised through IPOs was Rs. 84357 crores while the funds raised throughQualified Institutional Placement (QIP) route was Rs. 62358 crores and through Offer forSale (OFS) was Rs. 18438 crores.

Operational Highlights

With the buoyant market conditions and greater retail participation your company couldregister a good growth in its depository operations during the FY 2017-18. Due to positivesentiment prevailing in the capital markets the primary market has seen encouragingresponse from retail as well as institutional investors. Such positive outlook isreflected in the increase in the number of demat accounts opened in the Depository. Themove towards digitisation of various processes has also helped in offering a convenienthassle-free and cost effective depository services. In order to sustain the growth in itsdepository business your company continues to focus on enhancement of operationalefficiency upgradation of technology service quality and enhanced emphasis on investoreducation through seminars / workshops.

Securities admitted

Securities like equity shares preference shares mutual fund units debt instrumentsgovernment securities certificates of deposit commercial papers and a host of otherinstruments are available for dematerialisation by the investors. Details of thesecurities admitted with CDSL are given below:

Securities Year ended March 31 2018 Year ended March 31 2017 (%) change over the previous year
Equity Shares 9938 9240 7.55
Debt Instruments 8503 8792 -3.28
Other Securities 22257 23371 -4.76
Total 40698 41403 -1.70

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 March 31 2018 Year ended March 31 2017 Increase over the previous year (%)
Value (in million Rs. ) 19839810 17735853 11.86
Volume (in million) 283920 255227 11.24

Depository Participants and Service Centers

As on March 31 2018 594 depository participants held valid registration certificatesof Securities and Exchange Board of India (SEBI) as compared to 588 valid SEBIregistrations as on March 31 2017. During the year new registrations were received for 9DPs and registrations of 3 DPs were withdrawn/ cancelled. With a large DP networkinvestors spread across 28 States and 7 Union Territories can avail of CDSL's depositoryservices. Further investors have access to 17473 DP service centers spread across India.

Beneficial Owner Accounts

During the year under review 29.08 Lakh Beneficial Owner (BO) accounts were addedtaking the total number of such accounts to 194.04 Lakhs with the net BO accounts at148.40 Lakhs as on March 31 2018. The comparative figures of gross and net BO accounts ason March 31 2017 and March 31 2018 are given in the following table:

Year ended Year ended Increase over the previous year's cumulative figure
March 31 2018 March 31 2017 Number Percentage (%)
(Gross) (Gross) 2908032 17.62
19404479 16496447
(Net) (Net) 2572626 20.97
14840058 12267432

Investor Awareness / Education Seminars

CDSL regularly conducts Investor Awareness Programs in association with various marketintermediaries Mils and SEBI. Capital Market Awareness for retail investors through suchprograms has been a major focus area. We believe investor education can become asignificant key to achieving financial inclusion in the capital market. To this end CDSLIPF has conducted more than 300 Investor Awareness Programs (IAPs) in this year. Out ofthese more than 200 programs are conducted in tier 2 & tier 3 cities and towns. Thisinitiative allowed investors across geographies professions and age groups includingstudents corporate employees government servants to come together and learn the basicsof Capital Markets

advantages of holding securities in demat form importance of Financial PlanningInvestment avenues available etc. CDSL IPF has also conducted IAPs in association withfinancial institutions ICSI AMCs and regional Seminars & IAPs with SEBI in variouscities. We have also conducted webinar to reach investors digitally. Although these IAPsreach out to investors in major metros we have focus to reach the investors in tier-2 andtier-3 cities to inculcate the habit of investment in securities. CDSL IPF has tied upwith various regional newspapers to attract large number of investors to attend theseIAPs. During the IAPs informative booklets in English Hindi and other regional languageswere distributed for the benefit of investors.

Awards and recognition

During the year 2017-2018 your Company has won the following awards:

Award Category Organiser
InfoSec Maestros Award Information Security Bitstream Mediaworks
Express Uptime champion Award Infrastructure Indian Express
Data Center Innovation Award Infrastructure Management UBS
Digital Leadership and CIO Award CIO of the year Business World
Networking pioneer Award Business scalability IDG
Innovative CIO Award CIO Bitstream Mediaworks
BFSI IT Leadership Award IT Leadership Exito
BFSI Digital Innovation Award Enterprise Application Indian Express
Big50 CISO Award CISO Trescon
BFSI Innovative Technology Award Leadership Eletsonline
NetApp Innovation Award Data Visionary NetApp

New Initiatives

Consolidated Account Statement (CAS) Your company provides to a demat account holderholding mutual fund units in Statement of Account (SOA) form the CAS with informationabout transactions and securities held across multiple demat accounts with variousDepository Participants - across depositories along with mutual fund units held in SOAform. The CAS also provides additional information with respect to mutual fund investmentslike total purchase value / cost of investment in each scheme of mutual fund in monthlytransaction CAS and information like the amount of actual commission paid by AMCs/MutualFunds (MFs) to distributors (in absolute terms) during the half- year period against theconcerned investor's total investments in each MF scheme the scheme's average TotalExpense Ratio (in percentage terms) for the half-year period etc. CDSL also provides afacility to its demat account holders to access its website and download CAS afterproviding certain security information. The demat account holders can also update/ modifythe email ID and opt for receipt of electronic CAS using CDSL's website.

System Enhancements

During the year your company released a number of system enhancements for increasingthe efficacy of processes

a. Online registration of demat account holder for easiest facility enabling the demataccount holder to submit electronic instructions through CDSL website eliminating need ofsubmission physical registration form to the respective DPs.

b. Recording of Non-Disposal Undertaking (NDU) where NDUs are undertakings given by ashareholder generally promoters (Borrowers) not to transfer or otherwise alienate thesecurities and are in the nature of negative lien given in favour of another BO (Lender).

c. Transfer in favor of demat account of the Investor Education and Protection fundAuthority of securities in respect of which dividend has not been paid or claimed for aperiod of seven consecutive years or more. CDSL maintains the details of shareholderswhose securities have been transferred and the subsequent corporate actions thereon.

d. Implementation of various other SEBI initiatives like (i) Tender offers throughsettlement mechanism (ii) Enhanced supervision of brokers (iii) Electronic book mechanismfor issuance of securities on private placement basis.

Transaction Cum Holding Statements

As of March 31 2018 196 DPs have availed of the service of dispatch of transactioncum holding statements (DOTS and e-DOTS). In FY 2017-18 CDSL has processed 22.39 Lakhstatements.

Corporate Bond database

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 over20701 bonds issued in demat form by over 2280 Issuers. The database providescomprehensive information on the corporate debt instruments including details of IssuersInstruments issued along with the listing status Redemption details Names of DebentureTrustees and Credit Ratings along with the names of the Rating Agencies.

The credit rating agencies CRISIL CARE ICRA and India Rating are accessing yourcompany's corporate bond database through the secure login and are verifying the creditrating displayed and also updating subsequent rating migrations. The comprehensive andupdated information disseminated by your company at a single place provides valuableinformation to the investors and assists them in taking a more informed investmentdecision.

Trade Repository of Corporate Bonds

Your company is pleased to inform you that the trade repository for primary issuanceswas launched in November 2016. Your company has data of about 6710 ISINs for primarymarket issuances and about 7443 ISINs pertaining to secondary market being traded in thestock exchanges.

Technology Initiatives:

In order to keep pace with the new technology and provide greater flexibility and easeof use CDAS application has been made available to the users as a browser based service.As a part of continual upgrade process CDSL has commenced migrating its front end to newtechnology using Dot Net. Further considering growth over next 5 years CDSL has procuredand deployed new servers at Main and DR site. To strengthen security your depository hasimplemented APT solution from McAfee and has implemented SOC for proactive and continuousmonitoring of security events. CDSL always benchmarks its practices against ISO standardsand accordingly has undergone recertification audit for ISO 27001 conducted by DNV and isnow certified for ISO 27001:2013 for 3 years. Further CDSL has also undergone periodicaudit for ISO 22301:2012 (Business Continuity Management System) and has been recommendedfor continuation of the Certificate. CDSL's e-Voting Service has also undergone periodicaudit for ISO 9001:2015 certification and has been recommended for continuation of theCertificate.

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 35 programs for 566 participants during the year.

CVL's National Academic Depository(C-NAD)

The Union Cabinet approved establishing a Digital Depository of Academic Awards (X& XII Certificates Diplomas Degrees Marksheets Transcripts etc.) on the patternof Securities Depository to be known as National Academic Depository (NAD). Government ofIndia Ministry of Human Resources Department (MHRD) designated University GrantsCommission (UGC) as the authorised body for implementation of NAD. NAD a Project ofnational importance was officially launched by Hon'ble President of India Shri PranabMukherjee on July 9 2017.

CVL NAD renders its services to all of its Stakeholders [Academic Institutions (AIs)Students and Verifiers (Employers Consulates VISA issuing Authorities BackgroundCheckers etc.)] under one platform. CVL NAD provides secured and online access for AIs toupload Academic Awards enables Students to store & share their Awards with Verifiersfor online verification. In a span of one year over 240 AIs have registered andbenefitted by using CVL's NAD services.


As on March 31 2018 5037 companies have signed agreements with CDSL to conducte-Voting. So far the e-Voting system recorded 16561 instances of voting carried out by4405 Companies.


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 itsshareholders electronically. As on March 31 2018 a total of 309 companies have signedfor availing this service.

Corporate Social Responsibility (CSR)

The Ministry of Corporate Affairs (MCA) vide its circular dated February 27 2014notified Section 135 and Schedule VII of the Companies Act 2013 relating to CorporateSocial Responsibility (CSR) the provisions of which came into effect from April 1 2014.The CSR provisions require companies satisfying certain criteria to spend 2% of itsaverage net profits of the last three years on CSR activities defined in the rules framedin this regard. The Company has been actively associated with various NGOs in providingvarious facilities involving capital expenditure for a sustainable impact of CSRactivities. Even during the FY 17-18 your company has sponsored various projects and thereport on CSR activities as required under Companies (Corporate Social ResponsibilityPolicy) 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 July 1 2005. Subsequent amendments had been done to the PMLA Act 2002 andPrevention of Moneylaundering (Maintenance of Records) Rules 2005 vide SEBI circularCIR/MIRSD/1/2014 dated March 12 2014. CDSL and its depository participants fall under thecategory of ‘intermediaries' under section 12 of the SEBI Act and hence PMLA and thepolicy guidelines issued by the regulators to combat money laundering are applicable todepository operations.

As required under the guidelines CDSL has designated Principal Officer AlternateOfficer and Designated Director to ensure compliance with these guidelines. CDSL hasprepared policy guidelines for implementation of PMLA and the same is reviewedperiodically.

CDSL conducts training programs and updates depository participants on compliance withthe aforesaid guidelines. During FY 2017-18 CDSL organised special training programmeswherein the Additional Director from FIU-IND updated DPs in the matter of compliance withPMLA provisions filing of Suspicious Transaction Reports and directly interacted withPrincipal Officers of DPs at 4 metro cities.

Details of Subsidiary Companies

Your Company has following subsidiary Companies as on March 31 2018

1. CDSL Ventures Limited

(CIN U93090MH2006PLC164885)

2. CDSL Insurance Repository Limited (CIN U74120MH2011PLC219665)

3. CDSL Commodity Repository Limited (CIN U74999MH2017PLC292113)

> 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 largestKYC Registration Agency (KRA) controlling about 60% of the market share in the KYC ofcapital market. In addition to its core business of being a KRA for capital market CVLhas also initiated work on the following business lines which are in various stages ofimplementation / completion.

1. National Academic Depository (NAD)

2. eKYC as KYC User Agency (KUA) and Authentication User Agency (AUA)

3. eSign (electronic signature based on aadhaar number)

4. Claim registry for life insurance companies that offer Pradhan Mantri Jeevan JyotiBima Yojana (PMJJBY)

5. GST Suvidha Provider Services

Further CVL has also received approval from SEBI to act as a Registrar and TransferAgent (RTA).

> 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. At the time of launch in August 2013 theinsurance repository services was restricted only to Life insurance policies. Howeverlater on during the current year IRDAI has extended the scope of services to Healthinsurance policies and Motor insurance policies. As on March 31 2018 the repository hasopened about 3.50 Lakh e-Insurance Accounts (e-IA) in which it holds about 85000 lifeinsurance Health insurance and Motor insurance policies in electronic form. CDSL IR hadtied up with twenty-four life insurance companies four health insurance companies andtwenty nine general insurance companies for holding policies in electronic form.

> Central 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.

CDSL Commodity Repository Limited has received a formal registration certificate asCommodity Repository on September 26 2017 from Shri. Ram Vilas Paswan Hon'ble UnionMinister of Consumer Affairs Food and Public Distribution at a function organised byWarehousing Development and Regulatory Authority (WDRA) for the launch of WDRA portal andelectronic Negotiable Warehouse Receipts (eNWR).

Multi Commodity Exchange of India Ltd. (MCX) and BSE Investments Ltd. have expressedtheir desire to take up each 24% of the stake in CCRL and accordingly MCX picked up 24%stake in CCRL in the month of May 2018.

During the year the Board of Directors of the Company reviewed the affairs of thesubsidiaries. In accordance with section 129 (3) of the Companies Act 2013 we haveprepared the consolidated financial statements of the Company which forms part of thisannual report. Further a statement containing the salient features of the financialstatement of our subsidiaries in the prescribed format AOC 1 is appended as Annexure B tothe Board's report. The statement also provides details of the performance and financialposition of each of the subsidiary.

In accordance with section 136 of the Companies Act 2013 the audited financialstatements including the consolidated financial statements and related information of theCompany and audited accounts of each of the subsidiary are available on our website . These documents will be available forinspection till the date of AGM during business hours at the registered office of theCompany.

Listing of Securities

As at the start of the financial year on April 1 2017 your company was a subsidiarycompany of BSE Ltd. The Company got its shares listed on National Stock Exchange on June30 2017 through Offer for Sale where BSE Ltd. divested its stake from 50.05 % to 24 %.Consequently your company has become an Associate Company of BSE Ltd.

Fixed Deposits

Your company has not accepted any deposits within the meaning of Section(s) 73 74 75& 76 of the Companies Act 2013 and the Rules made thereunder.

Directors and KMPs

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 April 24 2017 approved appointment of Smt.Usha Narayanan as Public Interest Director/ Independent Director.

SEBI vide its letter dated June 16 2017 approved appointment of Shri Nayan MehtaChief Financial Officer-BSE Ltd as Shareholder Director of the company.

Further SEBI vide its letter dated February 14 2018 approved appointment of ShriKumarapuram Venkateswaran Subramanian Head-Strategy Process & Governance forStandard Chartered Bank as Shareholder Director of the company.

During the year under review Shri Balasubramaniam Venkataramani ceased to be ashareholder Director w.e.f April 24 2017.

Shri Anant Narayan Gopalakrishnan Regional Head Financial Markets ASEAN & SouthAsia-Standard Chartered Bank who was the shareholder Director resigned vide letter datedJuly 29 2017.

The Board has placed on record its appreciation for the valuable services rendered byShri Balasubramaniam Venkataramani and Shri Anant Narayan Gopalakrishnan during theirtenure as Directors of the company.

The Independent Directors have given declaration under sub-section (7) of section 149of the Companies Act 2013 confirming that they satisfy the criteria of"independence" under section 149(6) the Companies Act 2013.

As per the provisions of Section 152(6) (d) of the Companies Act 2013 Shri C. VenkatNageswar the Shareholder Director was considered for Director liable to retire byrotation and being re-appointed at the ensuing Annual General Meeting. A brief resume ofShri C. Venkat Nageswar is enclosed as an Annexure C.

The term of Shri P.S. Reddy MD & CEO expired on March 31 2018. On therecommendation of Nomination and Remuneration/Compensation Committee the Board ofDirectors in its meeting dated January 20 2018 approved reappointment of Shri Reddy for aperiod of five years w.e.f. April 1 2018 subject to approval of SEBI and shareholders.SEBI vide its letter dated March 28 2018 has granted an extension of one year i.e. up toMarch 31 2019 and has advised the Company to frame policy on appointment / reappointmentof MD & CEO keeping in view the recommendations of Gandhi Committee.

During the year under report Shri Nirogi Venkata Sesha Pavan Kumar VP-Legal and GroupCompany Secretary and Compliance Officer resigned from his duties w.e.f. July 31 2017 andShri Amol Purandare was appointed as A VP-Legal and Company Secretary and ComplianceOfficer w.e.f. August 7 2017. Shri Amol Purandare also resigned w.e.f. June 26 2018.

Statutory Auditors & Audit Report

M/s. Deloitte Haskins & Sells Chartered Accountants Mumbai were last re-appointedas Statutory Auditors of the company for the year 2017-2018 to hold office from theconclusion of the 19th Annual General Meeting till the conclusion of the 20thAnnual General Meeting.

There are no qualifications reservations or adverse remarks or disclaimer made by M/s.Deloitte Haskins & Sells Chartered Accountants Mumbai Statutory Auditors in theirreport.

Considering the provisions of Sections 139 141 142 143 and 144 of the Companies Act2013 read with Rule 5 & 6 of the Companies (Audit and Auditors) Rules 2014 the Boardof Directors based on recommendations of the Audit Committee considered and approved theappointment of M/s. S. R. Batliboi & Co as Statutory Auditors of the Company who haveexpressed their willingness and confirmed their eligibility for being appointed asStatutory Auditors of the Company.

Accordingly M/s. S. R. Batliboi & Co will hold office as Statutory Auditors of theCompany from the conclusion of the 20th Annual General Meeting till theconclusion of the 24th Annual General Meeting for FY 2018-19 subject toapproval of shareholders.

Internal Auditors

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. Mittal &Associates Chartered Accountants as Internal Auditors & Concurrent Auditors of theCompany for the FY 2017-18. The Board of Directors have approved the appointment of M/s.Ray & Ray Chartered Accountants as Internal Auditors and Concurrent Auditors of theCompany for the FY 2018- 2019.

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 were asSecretarial Auditor of the Company for the FY 2017-18. A copy of the secretarial auditreport issued in form MR-3 by M/s Pramod Shah & Associates Secretarial Auditors isenclosed as an Annexure D to this report.

The Board of Directors have approved the appointment of M/s. Ragini Choksi &Company Practicing Company Secretary as Secretarial Auditors of the Company for a periodof three years from April 1 2018 to March 31 2021 subject to ratification every year.

Related party transactions:

The Members of the Company have vide an Ordinary Resolution passed in the 19thAnnual General Meeting held on May 29 2017 consented to the Company entering intoRelated Party Transactions to the extent of Rs. 1133.07 Lakhs during the year 2017- 18.In accordance with the Members' consent your company has entered into transactions withrelated party within the aforesaid limit. All such transactions were in the ordinarycourse of business and on an arm's length basis. Although the provisions of Section 188 ofthe Companies Act 2013 are not attracted your company had sought Members' approval forall related party transactions as a measure of good corporate governance. Suitabledisclosure as required by the Accounting Standards (AS 18) has been made in the notes tothe Financial Statements. Similarly an Ordinary Resolution has also been proposed in theNotice convening 20th Annual General Meeting seeking Members' approval forrelated party transactions to

the extent ofRs. 1598.27 Lakhs to be entered into with related parties during the FY2018-19

Disclosure of related party transactions is required to be made u/s 134 (3) (h) readwith Rule 8(2) of the Companies (Accounts) Rules 2014 in form AOC 2 which is attached asAnnexure E

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 though the Companyuses all the possible ways in conserving energy. The company has however usedinformation technology extensively in its operations.

Foreign Exchange Earnings and Outgo

Details of foreign exchange earnings and outgo during the year under review are asunder:

Particulars Year ended March 31 2018 Year ended March 31 2017
(Rs. in Lakhs) (Rs. in Lakhs)
Earnings Nil Nil
T ravel expenses 19.25 25.15
Others 8.18 78.67
Total 27.43 103.82

Directors' Responsibility Statement Pursuant to Section 134(3)(c) and 134(5) of theCompanies 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 them consistently and thejudgements and estimates made are reasonable and prudent so as to give a true and fairview of the state of affairs of the company at the end of the financial year and of theprofit of the company 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 for safeguarding the assets of the company and for preventing and detectingfrauds and other irregularities;

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.

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 beenobserving the Code of Corporate Governance by adopting most of the good corporategovernance policies as under Schedule V Regulation 34(3) and 53(f) of Securities ExchangeBoard of India (Listing Obligation & Disclosure Requirement) Regulation 2015. Thestatus of implementation of the Code of Corporate Governance is enclosed as Annexure F.

Management Discussion and Analysis Report

The Management Discussion and Analysis Report for the year ended March 31 2018 isenclosed as Annexure G.

Board Evaluation

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 theevaluation 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 Sec. 197(12) read with Rule 5 of Companies (Appointmentand Remuneration of Managerial Personnel) Rules 2014 is enclosed to this report asAnnexure H.

Human Resource Development

The company always recognised 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 cadres. 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.

Particulars of Loans Guarantees or investments under section 186

Details of Loans Guarantees or investments under section 186 of the Companies Act2013 are given in the notes to the financial statements.

Details of significant and material orders passed by the regulators or courts ortribunals impacting the going concern status and company's operations in future:

There are no significant and material orders passed by the regulators or courts ortribunals impacting the going concern status and company's operations in future.

Extract of Annual Return

In accordance with provisions of section 134(3) (a) of the Companies Act 2013 theextract of the Annual Return in Form MGT 9 is enclosed as Annexure I.


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 Ltdthe Promoter sponsors all other shareholders Beneficial Owners DepositoryParticipants Stock Exchanges Clearing Houses Issuers and Registrar and TransferAgents. The Directors also express their appreciation for the unflinching dedication ofthe employees whose performance professionalism and commitment for rendering high qualityservices to the clientele of the company has been commendable.

For and on behalf of the Board
Taruvai Subbayya Krishna Murthy
Place : Mumbai Chairman
Date : April 21 2018 (DIN:00279767)