nineteenth annual report

NATIONAL STOCK EXCHANGEOF INDIA LIMITED

NINETEENTH ANNUAL REPORT2010-11

Y Y

Y Y

BOARD OF DIRECTORS

Dr. Vijay L. Kelkar : ChairmanMr. C. AchuthanMr. Anjan BaruaMrs. Ranjana KumarMr. A.P. KurianDr. Rajiv B. LallMr. S. B. MainakMr. Y.H. MalegamMr. S. B. MathurDr. K.R.S. MurthyDr. R.H. PatilMrs. Bhagyam RamaniDr. V.A. SastryMr. Deepak SatwalekarMr. Ravi Narain : Managing DirectorMs. Chitra Ramkrishna : Joint Managing Director

MANAGEMENT TEAM*

Mr. J. Ravichandran : Director (F&L) & Company SecretaryMr. R. Sundararaman # : Senior Vice PresidentMr. Yatrik R. Vin : Senior Vice PresidentMr. R. Nanda Kumar : Senior Vice PresidentMr. Ravi Varanasi : Senior Vice PresidentMr. Vidhu Shekhar : Vice PresidentMs. K. Kamala : Vice PresidentMr. Nirmal Mohanty : Vice PresidentMr. Hari K : Vice PresidentMr. Suresh Narayan : Vice PresidentMr. T. Venkat Rao : Vice President & Head-Northern RegionMr. Chandrashekhar Mukherjee : Vice PresidentMr. Suprabhat Lala : Vice PresidentMr. Mahesh Haldipur : Asst. Vice PresidentMr. C.N. Upadhyay : Asst. Vice PresidentMr. Arup Mukherjee : Asst. Vice PresidentMr. R. Jayakumar # : Asst. Vice PresidentMr. Ravindra Mohan Bathula : Asst. Vice PresidentMs. Nisha Subhash : Asst. Vice PresidentMr. Nilesh Tinaikar : Asst. Vice PresidentMs. Rana Usman # : Asst. Vice PresidentMr. Mayur Sindhwad : Asst. Vice PresidentMr. Nagendra Kumar # : Asst. Vice PresidentMr. Vitthal More : Asst. Vice PresidentMr. Sandip Mehta : Asst. Vice PresidentMr. Sumit Tyagi : Head- Sales & MarketingMr. Amol Mahajan : Asst. Vice PresidentMs. Divya Malik Lahiri : Asst. Vice PresidentMr. Rehena D’sauza : Asst. Vice PresidentMr. Sunitha Anand : Asst. Vice President & Head Southern Region

AUDITORS : M/s. Khandelwal Jain & Co.Chartered Accountants12-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 CompoundL B S Marg, Bhandup (West)Mumbai-400 078

# on deputation to NSCCL

Nineteenth Annual ReportNATIONAL STOCK EXCHANGE OF INDIA LIMITED

Nineteenth Annual Report

1

NATIONAL STOCK EXCHANGE OF INDIA LIMITED

DIRECTORS’ REPORTTo,

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.

1. OPERATIONS AND MAJOR DEVELOPMENTS DURING THE YEAR

1.1 Global rankings- Equity Derivatives Market

1.1.1 Stock Futures

During the year 2010, NSE continued to rank as the 2nd largest exchange in respect of contracts traded in stock

futures. The details of top 5 exchanges trading stock futures is given in Table 1 below:

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


3 Eurex 342.92

4 Chicago Board Options Exchange 270.01

5 Taifex 88.91

Source: WFE


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1.1.3 Index Futures

NSE continues to be ranked as the 3rd largest exchange in the world in index futures. The details of top 5

exchanges in index futures are given in Table 3 as under:

Table 3

Sr. No. Exchange Contracts tradedduring 2010(in millions)

1 CME Group 695.15

2 Eurex 407.77


4 Osaka SE 147.60

5 NYSE Liffe Europe 94.27

Source: WFE

1.1.4 Nifty Index Global rankings

Nifty Index options ranked 4th across the top 20 Index options traded globally during the year 2010. Nifty Indexfutures ranked 9th across the top 20 Index futures traded globally during the year 2010.

(Source: www.futuresindustry.org rankings based on number of contracts traded or cleared between Jan 10 - Dec 10)

1.1.5 All products

NSE ranked 5th across all the Derivatives exchanges in the world based on the volume of contracts traded duringthe year 2010.

(Source: www.futuresindustry.org rankings based on number of contracts traded or cleared between Jan 10 - Dec 10)

1.2 Global rankings-Capital Market

In capital market segment, NSE continues to remain the fourth largest exchange in the world based on the numberof transactions during the calendar year 2010. The details of top 10 Exchanges are given in the Table 4 below.

Table 4

Sr. No. Exchange No. oftransactions

(in Thousands)

1 NYSE Euronext (US) 2,050,985.2

2 NASDAQ OMX 1,743,302.2

3 Shanghai SE 1,661,489.0

4 National Stock Exchange of India 1,556,620.5

5 Shenzhen SE 1,329,287.6

6 Korea Exchange 921,843.2

7 Bombay SE 555,719.3

8 Tokyo SE Group 334,676.9

9 Taiwan SE Corp. 232,740.0

10 London SE Group 207,497.8

Source: WFE. The sale and purchase of a share are counted as one transaction


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1.3 Membership at NSE

92 new members (61 in CM, F&O and CD segments; 18 in CM and F&O segments; 12 in CD segment; and 1 in

CM and CD segments) were registered during the Financial Year 2010-11. The Exchange also granted additional

segment membership to 68 members during the Financial Year 2010-11.

Table 5 showing membership details for the Financial Year 2010-11

Particulars CM WDM F&O CD

segment segment segment segment

SEBI registered trading members 1,337 81 1,210 739

Members registered in additional segments 4 1 10 57

Registered Sub-brokers / Authorised persons 54,290 Nil 44,731 3,020

Surrender of membership 10 4 9 4

1.4 Wholesale Debt Market (WDM) segment

The WDM segment provides a trading platform for trading of a wide range of fixed income securities. Initially,

government securities, treasury bills and bonds issued by public sector undertakings (PSUs) were made available

for trading. This range has been widened to include non-traditional instruments like floating rate bonds, zero

coupon bonds, index bonds, structured products, corporate debentures, state government loans, SLR and

non-SLR bonds issued by financial institutions, units of mutual funds and Supra Institutions (Foreign institutions).

There were 4,479 securities available for trading as on March 31, 2011 all belonging to listed category.

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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Turnover in WDM segment for FY 2010-11 is presented in Figure 2 as under:-

Figure 2

The transaction in government securities account for a substantial share of transaction on the WDM segment with

54.49% in 2010-11. Market capitalisation of the WDM segment has witnessed a constant increase indicating an

increase in the number of securities available for trading on this segment. Total market capitalisation of the

securities available for trading on WDM segment stood at Rs 35,94,877.15 crores as on March 31,2011.

Table 6: Trades in WDM segment

Particulars 2010-11 2009-10

Number of Trades 20,383 24,069

Average monthly number of trades 1,699 2,006

Average daily number of trades 82 101

Average Trade Value (Rs. in crores) 27.45 23.42

Average Daily Turnover (Rs. in crores) 2,255.83 2,359.06

Turnover (Rs. in crores) 5,59,446.75 5,63,815.93

Number of Active Scrips 1,111 1,144

Number of Active members 35 36

1.4.1 Securities Profile

The turnover of government securities in WDM segment decreased by 7.02 % during 2010-11. Its share in total

turnover decreased from 58.15% in 2009-10 to 54.49% in 2010-11. The share of Treasury Bills increased from

16.49% in 2009-10 to 17.64% in 2010-11. The turnover of Non Government securities in WDM segment increased

by 9.01% during 2010-11. During 2010-11, the share of Non Government Securities in total turnover increased

to 27.87% as compared to 25.37% in 2009-10.

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Table 7 and Figure 3 represent security-wise distribution of turnover.

Table 7: Security-wise Distribution of Turnover

Securities 2010-11 2009-10

Turnover % of Turnover % of(Rs. in crores) Turnover (Rs.in crores) Turnover

Government Securities 3,04,836.02 54.49 3,27,837.41 58.15

T-Bills 98,713.15 17.64 92,961.12 16.49

PSU Bonds 53,641.20 9.59 60,883.20 10.80

Institutional Bonds 55,944.31 10.00 25,949.67 4.60

Bank Bonds and others 2,475.30 0.44 2,520.00 0.44

Corporate Bonds 43,836.77 7.84 53,664.53 9.52

Total 5,59,446.75 100.00 5,63,815.93 100.00

Figure 3: Security–wise Distribution of Turnover

1.4.2 Issuance in WDM

A total of 1080 securities were listed during the financial year 2010-11.As at end of March 2011, 4,479 securities

were available for trading on the WDM segment. Details of Issuance in WDM are provided in Table 8.

Table 8: Issuance in WDM

Financial Year No. of Total No. of Market Capitalisation

New Securities Securities (at year end Rs. in Crs)

Listed (at year end)

2004-05 1,299 3,097 14,61,734.37

2005-06 564 3,177 15,67,573.81

2006-07 661 3,252 17,84,800.57

2007-08 856 3,566 21,23,346.28

2008-09 1,026 3,954 28,48,315.50

2009-10 959 4,140 31,65,929.48

2010-11 1,080 4,479 35,94,877.15

WDM Security Trades for 2010-11


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1.4.3 Market Capitalisation

Total Market capitalisation of the securities available for trading in WDM segment increased to

Rs 35,94, 877.15 crores in 2010-11 from Rs. 31,65,929.48 crores in the previous year registering a growth of

13.55 %. The Central Government securities accounted for the largest share of the market capitalisation with

60.80% while Non Government Securities accounted for 18.07 %. The composition of market capitalisation of

various securities on WDM is presented in Table 9.

Table 9: Market Capitalisation of WDM segment

Securities As on March 2011 As on March 2010

Market % of total Market % of total

Capitalisation Capitalisation

(Rs.in crores) (Rs. in crores)

Central Government Securities 21,85,721.40 60.80 19,50,436 61.61

PSU Bonds 1,90,921.58 5.31 1,62,979 5.15

State Loans 6,22,069.31 17.30 5,36,996 16.96

T-Bills 1,37,677.03 3.83 1,35,696 4.29

Others 4,58,487.83 12.76 3,79,823 11.99

Total 35,94,877.15 100.00 31,65,930 100.00

Figure 4: Market Capitalisation of WDM segment

1.4.4 Corporate Bond Market

Currently for reporting trades in Corporate bonds, Exchanges provides two platform namely NEAT WDM and

Report CBT. The average daily traded value reported through corporate bond for 2010-11 was Rs.628.84 crores

(NEAT WDM & Report CBT) as compared to Rs 655.30 crores for 2009-10 with an average of around

32 trades being reported on a daily basis as compared to 51 trades for 2009-10.


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Turnover of Corporate Bond is presented in Table 10 and Figure 5

Table 10: Corporate Bond Turnover

Corporate Bond Turnover 2010-11 2009-10 % Change

Total Turnover (Rs Crs) 1,55,951.24 1,56,615.53 (0.42)

Average Daily Turnover (Rs Crs) 628.84 655.30 (4.04)

Total Number of Trades 8,006 12,231 (34.54)

Average Daily Trades 32 51 (37.25)

Figure 5: Corporate Bond Turnover for FY 2010-11

1.5 Capital Market (CM) segment

The total turnover of CM segment in the year 2010-11 is Rs. 35,77,410 crores as compared to

Rs. 41,38,023 crores in the year 2009-10, showing a decrease of 14 %. The average daily traded value in 2010-11

is Rs. 14,029.06 Crores as compared to Rs. 16,959.11 crores in 2009-10.

As on March 31, 2011, the number of listed companies available for trading was 1,484 compared to 1,359 at the

end of March 31, 2010. In the current year, Exchange allowed trading facility in 61 securities in permitted to trade

category.

Figure 6: Month-wise Turnover and Average Daily Turnover in CM segment

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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

1.5.1 Index Movement:-

S & P CNX Nifty saw an upward movement of 11.14% moving from 5,249.20 to 5,833.75 over the financial year

2010-11.

During the year 2010-11, the S&P CNX Nifty touched a high of 6,338.50 on November 05, 2010 and low of

4,786.45 on May 25, 2010. Movement of S&P CNX Nifty is shown in Figure 7

The turnover of S&P CNX Nifty securities was Rs. 16,89,977.59 crores in the year 2010-11 as compared to

Rs. 21,46,022.84 crores. The contribution of S&P CNX Nifty securities turnover to total turnover during the year

2010-11 was 47.21% compared to 51.86% in the year 2009-10.

Figure 7: S & P CNX Nifty movement

1.5.2 Market Capitalisation

The market capitalisation of securities available for trading on CM segment has increased by 11.54% during

2010-11 from Rs. 60,09,173 crores as on March 31, 2010 to Rs. 67,02,616 crores as on March 31, 2011. Increase

in market capitalisation is mainly on account of listing of new securities in capital market segment. The marketcapitalisation growth is shown in Figure 8.

During the year, the market capitalisation of S&P CNX Nifty and S&P CNX Nifty Junior also increased by

15.10% and 8.28% respectively.


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Figure 8 - Market Capitalisation during year 2010-11

1.5.3 Distribution of Turnover

Turnover-wise distribution of trading members

About 74.04% of the trading members had an average daily turnover of Rs. 1 crore or more in 2010-11 as

compared to 79.27% in the previous year. In 2010-11 around 28% of the trading members have daily turnover

more than Rs. 10 crores as against 34% in 2009-10.

Figure No. 9


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1.5.4 Listing: Initiatives taken during the financial year 2010-11

i) NEAPS

The Exchange has launched the online web based application - NEAPS (NSE Electronic Application

Processing System) to facilitate web based filing of applications for further issues by listed companies.

In the first phase, the facility has been made available for the following further issues - FCCB, ADR,

GDR, Bonus, QIP and ESOP. Salient features of NEAPS are as under:

• Submission of application with digital signature.

• Online processing of the listing application by the Exchange.

• Status of application and intimation of expected response time by the Exchange.

• Online intimation of pending requirement, in-principle approval letter, etc.

• Immediate updation of status of the application to the company and email alert.

This initiative has enhanced the quality and speed of processing the applications and will facilitate the

companies to move towards paperless processing.

ii) Compliance Calendar

All listed companies are required to comply with the various clauses of Listing Agreement quarterly,

annually and on happening of event in certain cases. In order to facilitate the compliances of critical

clauses by listed companies within stipulated time, the compliance calendar has been provided on the

Exchange website.

iii) ‘Know Your NSE' Program

‘Know your NSE' is an initiative aimed at building relationship with corporates and to provide an insight

into functioning of the Exchange. An overview about live trading, capital market, futures and options,

clearing, settlement, risk management, listing and surveillance was imparted during the session. The

program organised at Mumbai and Hyderabad was attended by the Chief Financial Officers and Company

Secretaries from corporates. More such programs are proposed to be organised in other cities.

iv) Corporate Homepage on Exchange website

The corporate homepage has been redesigned with enhanced features to facilitate stake holders to get the

information relating to corporates in a comprehensive and more user friendly manner. A quick grasp of

the features are as under:

• Standardisation of Company Names.

• Search Facility with multiple parameters like Company Name, Symbol, Short Description, Industry,

Period of Broadcast, etc.

• Links to other sub-sections within the corporate pages.

• Subject standardisation.

• Export the data to CSV formats.

1.5.5 New Developments during the year

In year 2010-11, various new developments have been taken by the Exchange. The details of the same are given

below:-


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June 2010 Introduction of Indian Depository Receipt

IDRs are negotiable receipts issued by an Indian bank or trust company, the depositary, to evidence ownership of

a stated number of shares of the securities of a foreign company that the company or shareholder has deposited

with the depositary's branch office, affiliate, or agent in the foreign country. IDR has not only given international

market exposure to Indian investors but also created a new asset class for the investor.

The first IDR of Standard Chartered Bank is listed and available for trading on Exchange on June 11, 2010.

July 2010 Real-time dissemination of India VIX

The Exchange started real - time calculation of India Volatility Index (India VIX) w.e.f. July 19, 2010. Volatility

Index is a measure of market's expectation of volatility over the near term. Volatility is often described as the

"rate and magnitude of changes in prices" and in finance often referred to as risk.

India VIX is a volatility index computed by NSE based on the order book of NIFTY Options. For this, the best

bid-ask quotes of near and next-month NIFTY options contracts which are traded on the F&O segment of NSE

are used. India VIX indicates the investor's perception of the market's volatility in the near term i.e. it depicts the

expected market volatility over the next 30 calendar days. Higher the India VIX values, higher the expected

volatility and vice-versa. India VIX uses the computation methodology of CBOE, with suitable amendments to

adapt to the NIFTY options order book using cubic splines, etc. Investors use it to gauge the market volatility and

base their investment decisions accordingly.

October 2010 Launch of Call Auction in Pre - Open Session

The Exchange has introduced call auction in pre-open session w.e.f. October 18, 2010. Pre open phase is the

session prior to the continuous trading. The session allows liquidity to be pooled during this session by allowing

the participants to place buy as well as sell orders. No matching takes place when the market is in pre-open phase.

The users are allowed to enter / modify / cancel orders. Pre-open session provides a trading facility where orders

are batched together for simultaneous execution at a predefined time and at a single price which best equates the

aggregated buy and sell. The pre-open session helps in better discovery of opening price, minimises opening

volatility of prices of securities and also allows for overnight news in securities to be suitably reflected in the

opening price.

The salient features of call-auction in pre-open session are given below:-

• The pre-open session is introduced in securities forming part of Nifty indices.

• The pre-open session is for 15 minutes; out of which first 8 minutes is for order entry with last minutes

will have a random closure. 4 minutes for order matching and trade confirmation and 3 minutes is buffer

timings.

• The equilibrium price of pre-open is an opening price of a security. The equilibrium price is a price at

which maximum value is executable.

• All unmatched order in pre-open is shifted to normal market.

• Risk management at order level in pre-open session.

1.6 FUTURES AND OPTIONS SEGMENT

The financial year 2010-11 witnessed an increase of 65.58% in volumes and 54.94% in average open interest.

The number of contracts traded also increased by 52.25% vis-à-vis 2009-10 in the F&O segment of the Exchange.

Average contribution of proprietary category increased to 38.14% in 2010-11 from 31.66% in 2009-10.


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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):

Note: Muhurat trading on October 17, 2009

1.6.2 Records achieved in the F&O segment during 2010-11 (Table 12):

Index Futures (traded value in Rs. crores) 40,123 23-Nov-10

Index Options (traded value in Rs. crores) 1,98,096 24-Feb-11

Stock Options (traded value in Rs. crores) 6,929 12-Aug-10

Total F&O Traded value (in Rs. crores) 2,77,277 24-Feb-11

Number of trades 30,29,676 24-Feb-11

Number of contracts traded 1,04,97,798 24-Feb-11

Open Interest on Contract Expiry (number of contracts) 74,36,882 26-Aug-10

It may be observed that during 2010-11, new records were set on most of the categories.


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1.6.3 (a) Basic Statistics of the F&O Segment (Table 13):

Particulars Apr 10 July 10 Oct 10 Jan 11 2010-11 2009-10 % Change

to Jun 10 to Sep 10 to Dec 10 to Mar 11

Traded Value (Rs. in crores)

Daily Average 92,567 1,01,847 1,27,304 1,39,500 1,15,150 72,392 59.06

Number of Contracts

Daily Average 34,32,844 36,08,592 42,16,291 50,57,126 40,71,701 27,83,991 46.25

Open Interest (Rs. in crores)

End of day averages 1,29,826 1,74,467 1,63,368 1,40,566 1,52,057 98,141 54.94

% of Open interest to

Daily Average

Traded value 140 171 128 101 132 136

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.

1.6.6. Product-wise Basic Statistics (Table 15):

Category Product Apr 10 July 10 Oct 10 Jan 11 2010-11 2009-10 % Changeto Jun 10 to Sep 10 to Dec 10 to Mar 11

Traded Value (Rs. in crores)

Daily Stock Futures 20,052 22,696 24,709 18,966 21,637 21,292 1.62

Average Index Futures 16,626 14,960 17,969 19,143 17,153 16,125 6.37

Stock Options 3,621 4,355 4,505 3,724 4,056 2,074 95.59

Index Options 52,268 59,835 80,121 97,669 72,305 32,901 119.76

Number of Contracts

Daily Stock Futures 6,26,377 7,59,445 8,14,926 7,26,782 7,32,447 5,96,685 22.75

Average Index Futures 6,83,546 5,66,674 6,24,427 7,28,437 6,49,699 7,30,766 -11.09

Stock Options 1,04,234 1,36,471 1,38,611 1,32,256 1,27,986 57,444 122.80

Index Options 20,18,687 21,46,001 26,38,326 34,69,651 25,61,569 13,99,096 83.09

Open Interest (end of respective expiry day)

Average Stock Futures 38,039 49,470 47,804 36,059 42,843 31,369 36.58

Value in Index Futures 22,545 26,891 24,042 21,591 23,767 18,648 27.45

Rs. Crore Stock Options 8,917 10,873 9,675 7,911 9,344 6,955 34.35

Index Options 85,500 1,13,233 1,04,039 98,185 1,00,239 61,299 63.52

Average Stock Futures 13,10,639 17,40,756 16,96,819 14,60,460 15,52,169 9,45,028 64.25

Number Index Futures 9,09,602 10,08,691 8,40,109 8,28,001 8,96,601 8,23,777 8.84

of Stock Options 2,92,478 3,68,112 3,31,485 3,05,785 3,24,465 2,11,739 53.24

contracts Index Options 32,91,548 40,08,950 34,93,658 35,30,581 35,81,184 26,09,386 37.24

Number of 63 65 64 62 254 244tradingDays


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1.6.7 TOP 5 TRADED SYMBOLS

Futures (Figure -13):

Options (Figure 14):

1.6.8 New Developments during the year

April 2010 Standardisation of Market Lot of Stock Derivative Contracts:

Based on new SEBI guidelines, Exchange has standardised market lot of derivative contracts on individualsecurities from April 2010. Under the new method, market lots are standardised for different underlying priceranges. The Exchange computes one month's average price of the underlying to arrive at its revised lot size as perthe specified price ranges. Further, on SEBI's recommendation, Exchange has started reviewing and revisingmarket lots once in every six months.

2010 Development in Index Options:

The Index options volume in the Exchange has witnessed a substantial rise in 2010 as compared to 2009.Approximately 530 million contracts were traded in 2010 over 321 million contracts in 2009 showing a staggering65% increase in the volumes.


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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.

1.7 Currency Derivatives segment

The financial year 2010-11 witnessed a phenomenal growth in Currency Derivatives (Currency Futures and

Options). The average daily turnover in currency derivatives, for the financial year stood at Rs.13,855 crores,

a growth of approximately 87% from Rs. 7,428 crores for the previous financial year. The number of members

registered in currency derivative segment stands at 742, of which 31 are banks and 3 Primary dealers.

Turnover in Currency futures for the financial year 2010-11 was Rs. 32,79,002 crores as compared to Rs. 17,82,608

crores during the previous financial year.

Trading in USD-INR currency options was introduced on 29th Oct 2010. Turnover in currency options was

1,70,786 crores for a period of five months. The growth in volume in currency options has been considerable

with the average daily volume for the period October, 2010 to March 2011 being 3,56,382 contracts, with 8,34,111

contracts being traded on average in the month of March, 2011. The launch of currency options has seen a

significant increase in the average open interest in currency derivatives from 6,65,054 contracts in April 2010 to

36,30,057 contracts in March 2011.

Total volume in Interest Rate futures has dropped to Rs.62 Crores.

Figure 15

TURNOVER IN CURRENCY DERIVATIVES


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Figure 16

AVERAGE VOLUME AND OPEN INTEREST IN CURRENCY DERIVATIVES

1.8 Surveillance System

The principal objective of surveillance function of the Exchange is to help maintain fair and efficient markets for

securities.

The Exchange achieves this objective through a combination of state of the art surveillance system, wide ranging

use of cutting edge data analytics and experienced team of analysts.

The surveillance system which monitors trading activity at every order and trade level has been developed piecing

together experience gathered over the years. The system generates alerts based on multiple parameters using a

complex algorithm. The parameters and the thresholds beyond which alerts are generated have been decided after

detailed statistical analysis and back testing.

A brief perspective on how complex the task of surveillance has become over the years is given as under:-

On an average about 3.40 crore orders are entered and about 70 lakh trades get executed in a day on the capital

market segment of the Exchange. This translates to an average of about 1500 orders and about 300 trades every

second. Added to this, there are about 1.28 crore investors registered with trading members of the Exchange for

trading on capital market segment. Unlike most advanced markets in US and Europe, retail investors directly

participate in the market. On NSE more than 40% of total trading activity is on account of individual clients.

Surveillance system has been designed and tuned to sift through this gigantic mix of orders, trades & investors to

generate meaningful alerts that point to possible market abuse.

Wherever market abuse practice is suspected, the system can replay the market at a much slower pace so as to

enable the analysts to examine the identified deviant activity order by order to piece together evidence for proving

manipulation.

The exchanges in India are in a unique position to identify and monitor trading activity at client level unlike most

markets in US and Europe where exchanges have access only up to the first layer of market participants, namely,

the trading members. During the period from April 1, 2010 to March 31, 2011, 248 reports on the investigations

conducted were completed of which 215 reports were submitted to SEBI.

NSE's expertise in putting data analytics tools to optimum use to mine this wealth of data to establish patterns in

trading activity at client level enables the Exchange to quickly identify potential market abuse and refer the


18


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.

3. NSE's KNOWLEDGE INITIATIVES

Several initiatives have been taken over the last few years with a view to develop the skills of market intermediaries,

educate the investors and promote high quality research in the securities market. Such initiatives include certification

programs, high school level courses, development of educational materials on financial markets, etc.

• NSE's Certification in Financial Markets (NCFM)

National Stock Exchange's Certification in Financial Markets (NCFM), is an online testing and certification

process which tests the practical knowledge and skills that are required to operate in the financial markets.

NCFM offers a comprehensive range of modules covering many different areas in finance. The entire

process from generation of question papers to testing, assessing, scores reporting and certifying is fully

automated. NCFM currently tests expertise in about 32 modules. So far more than 12 lakhs tests have been

conducted in various modules.

• NSE Certified Capital Market Professional (NCCMP)

National Stock Exchange in collaboration with reputed colleges and institutes in India, has been offering a

short-term course called NSE Certified Capital Market Professional (NCCMP) since August 2009. The

aim of the NCCMP Program is to develop skills and competencies in securities markets. It is a 100 hours

program, spanning over 3 - 4 months, covering theory and practical training. Around 50 agreements have

been signed so far under NCCMP.

• Financial Literacy in schools of Tamil Nadu state

National Stock Exchange in association with the Higher Education Department, Tamil Nadu has launched

a financial literacy program at the school level, in the state of Tamil Nadu. The curriculum designed by


19


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.

4. KNOWLEDGE MANAGEMENT OR REPOSITORY CREATION INITIATIVE

A Knowledge Management project was initiated last year to create an environment and to apply techniques to

discover, formally document, manage and maintain the tacit, individual or personal, context specific, experiential

and unstructured knowledge, which can be shared and used easily avoiding systemic glitches, rework, undue

noise (unwarranted communication) in the system and also reduce the time to market or turnaround time.

All the creation / documentation of the Knowledge has been completed for the NSCCL systems, Back office

systems, Trading systems as well as Index and Quarter Sigma systems.

The format defined was to keep the documents lean, tabulated and carry all the organisational knowledge capturing

the processes, inputs and its business validations, business rules, outputs, formats and structures, interface details,

triggers for the processes, dependencies, sample calculations, if required, etc. All these documents were reviewed

by the respective development group as well as in case of back office and trading by the end users (operations)

groups.

All the knowledge has been made available in a Knowledge Management portal and to the stake holders with due

access / security measures in place. Along with this, the process for the ongoing maintenance of the same has

been defined and implemented in the Knowledge Management portal for keeping the knowledge up to date.


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5. FINANCIAL RESULTS AND APPROPRIATION OF PROFITS

The working of the Company during the year has resulted in a net profit after tax of Rs. 637.51 crores as per

particulars given in Table 16 below:-

Table 16


(Rs. in crores) (Rs. in crores)

Income 1,378.47 1,266.38

Expenditure (excluding Depreciation) 427.07 377.80

Profit before depreciation, prior-period adjustment and tax 951.40 888.58

Depreciation 91.35 76.75

Profit before prior period adjustments 860.05 811.83

Add/(Less): Prior period adjustment (0.74) (0.34)

Profit before tax 859.31 811.49

Provision for tax 221.80 197.72

Profit after tax 637.51 613.77

Surplus brought forward from previous year 105.26 62.67

Excess Corporate Dividend Tax for last year transferred back 14.95 9.18

Amount available for appropriation 757.72 685.62

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

6. DIVIDENDIn 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.


21


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.

Mutual Fund Service System (MFSS)

Securities Exchange Board of India (SEBI) vide circular dated November 9, 2010 issued revised guidelines

for facilitating transactions in Mutual Fund schemes through the Stock Exchange infrastructure. As on

March 31, 2011, 25 mutual fund houses with 1,338 schemes were enabled under the revised MFSS scheme.

NSCCL carries out settlement for redemption of units in dematerialised form and funds settlement for subscription

requests. Details are as under:

The average daily value of funds settled for subscription of mutual fund units for the period January 1, 2011 to

March 31, 2011 was Rs. 112.54 lakhs. The average daily quantity of units allotted under subscription for the

period January 1, 2011 to March 31, 2011 was 3.89 lakhs.

The average daily value of funds settled for redemption of mutual fund units for the period January 1, 2011 to

March 31, 2011 was Rs. 45.15 lakhs. The average daily quantity of units redeemed for the period January 1, 2011

to March 31, 2011 was 1.83 lakhs.

During the financial year 2010-11, NSCCL earned net profit after tax of Rs. 238.13 crores as compared to net

profit after tax of Rs. 226.02 crores during 2009-10. The Board of NSCCL has recommended a dividend of

Rs. 20/- per equity share to its shareholders in respect of the financial year 2010-11.

7.2 NSE.IT Limited (NSE.IT)

With an objective to become a leading vertical specialist enterprise offering end-to-end Information Technology

(IT) products, solutions and services as well as specialising in providing complete IT solutions to Stock Exchanges,

Clearing Corporations, Brokerage Firms, Insurance Firms and other organisations in the Capital Market, Banking

and Insurance industry, NSE. IT, achieved a robust turnover of Rs.10,304 lakhs during the year 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


22


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.

7.3 DotEx International Limited (DotEx)

DotEx manages the data feed of NSEIL and supplies the same to its clients. Currently, the following products are

offered by DotEx:-

1) Real Time Data

2) Snapshot Data

3) End of Day Data

4) Historical Data

5) Corporate Data

The products related to real time data, snapshot data, end of day data and historical data are further segregated

into the following segments:

(i) Capital Market [CM] segment

(ii) Futures and Options Market [F&O] segment

(iii) Wholesale Debt Market [WDM] segment

(iv) Securities Lending & Borrowing Market [SLBM] segment

(v) Currency & Interest Rate Futures Market segment

Currently, real time feed is being subscribed by 33 clients, snapshot feed by 36 clients, end of day feed by 23

clients and Corporate data by 2 clients.

DotEx also operationalised the tick by tick data feed and the 1 minute snapshot feed during this financial year.

DotEx also provides a shared platform called NEAT on Web (NOW) which is a shared CTCL and risk management

tool for the trading members.


23


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.

7.4 India Index Services and Products Limited (IISL)

During the year under review, IISL continued to be the primary provider of indices and related products and

services to various participants in the Capital Market in India, in the thirteenth year of its operation. IISL has

granted eight additional licenses to asset management/ insurance companies for launching Exchange traded/

Index funds/ Insurance Funds. Currently, there are around 34 funds linked to IISL's indices.

IISL 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 IISL 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, IISL provided licenses to

various clients for using IISL'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. IISL also provides annual licenses to its

Clients who issue many structured products with IISL indices as underlying for such products.

During the year under review, IISL has widened the client base which uses its Indices and index data. IISL 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 services.

During the year 2010-11, IISL earned a profit of Rs. 1,183.74 lakhs as compared to a profit of Rs. 893.39 lakhs

during 2009-10. The Board of IISL has recommended a dividend of Rs. 9/- per equity share to its shareholders in

respect of the financial year 2010-11.


24


7.5 NSE Infotech Services Limited (NSETECH)

Technology has been a key differentiator and a strategic driver for NSE. Towards this, NSE Infotech Services

Limited continues to deliver and maintain technology products and services for NSE.

New Generation Initiatives

This financial year has been path-breaking with new architecture of the trading system that allows linear scalability,

providing capabilities to handle the multi-fold growth of order transactions. Net Market Rollout in the F&O

segment is a milestone towards capacity enhancement of trading system enabling horizontal scalability, to scale

up to on demand capacity, by adding multiple market machines. The Appletree Database has been replaced with

the newly developed SMFS (Shared Memory File System) in the post trade (PT) layer of the FO trading system.

In parallel, the earlier Stratus proprietary messaging solution (VMA) has been migrated to a new generation

messaging solution (29West) for communication across various layers of the Trading system. 29West messaging

is a high throughput, low latency solution that is being used to achieve throughput of over 100K messages /sec.

These implementations enable a low latency and high throughput architecture. The parallel redevelopment of the

matching engine (retooling project), currently underway, will result in a final capacity of 100,000 messages/sec.

Global Benchmarks

In keeping with global trends, the Exchange has provided members a co-location facility for low latency high

frequency trading. The Co-location phase II data center is an international standard, state of the art, highly robust,

resilient and secure infrastructure data center, built at the BKC premises. This Phase II data center has a capacity

of 54 full racks and 28 half racks.

With the advent of co-location, there was a market need for real-time data to be disseminated to these high

frequency algorithmic trading members, to enable them build the order book and help their algorithms to work

optimally. Tick by Tick data provides the latest order (new, modified and cancelled) and trade information to the

market. The Exchange has offered a new category of connectivity (Category T) for market data broadcast called

Tick by Tick.

New Product Launches

New business products like Securities lending and Borrowing (SLBM), Call auction in Pre-Open (CM segment),

Currency options in CD segment, India VIX, MFSS SIP, TAP on Linux, NSE Electronic Application Processing

System (NEAPS) have been introduced.

Customer focused self-services

Several initiatives have been taken to provide self service capabilities and improved customer experience. Some

of these are online client-code/trade modifications, Limit Setting and Auto enablement, Auto Give-ups and

Margining Professional Clearing Member (PCM) on T-Day.

Operational Excellence

With the increase in average number of order messages per day in the F&O segment from around 80 million to

100 million, the F&O trading capacity was increased by adding a third market machine (until the release of

Retooling project). With this, the capacity of FO Trading system has increased from 12,000 to 18,000 order

messages per second. CM trading capacity was also increased by adding a fourth market machine. With this, the

capacity of CM Trading system has increased from 5,000 to 7,000 order messages per second.

The time taken by the Securities Pay-in/Pay-out cycle of the settlement cycle on T+2 day was about 90 minutes.

The complete process was re-engineered along with the workflow and appropriate automation to reduce the

end-to-end time from 90 minutes to 3-5 minutes.


25


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.

7.6 National Commodity Clearing Limited

NCCL has completed the fourth full year of operations, since its commencement from September 1, 2006, in

providing IT and process support to NCDEX in respect of its clearing and settlement of trades done in derivatives

segment. The clearing and settlement covers contracts in 44 products ranging from agricultural commodities to

base metals, ferrous metals, energy, polymers and precious metals. NCCL carries out funds settlement through

13 clearing banks.

During the year 2010-11, NCCL earned net profit after tax of Rs. 99.54 lakhs as compared to the net profit after

tax of Rs.93.39 lakhs during 2009-10. As the profit is required to augment operational needs of the Company, the

Board of NCCL did not recommend any dividend to its shareholders.

8. MATERIAL DEVELOPMENTS IN HUMAN RESOURCES

The following developments have taken place in Human Resources / Industrial Relations front in the Financial

Year 2010-11:-

1) Total Remuneration & Reward Management: NSEIL has undertaken a benchmark study on total

remuneration and reward management in the FY 2010-11 in association with Aon Hewitt Associates. As

per the recommendation of the consulting firm, remuneration of the employees was revised.

2) Employee Engagement: The Company has started various Employee Engagement Initiatives to raise the

engagement levels of the employees across the organisation. Some of them are NSE's participation in

Standard Chartered Marathon 2011, employees' participation in the Investothon, restructuring the Quarterly

Induction Program, initiatives like Office Yoga on chair and various Staff Welfare initiatives so as to build

synergy among the various teams.

3) Talent Management and Development : During the Financial Year 2010-11, NSEIL has focused on the

following:-

a) The Company has partnered with Pricewaterhouse Coopers for creating the Talent Management

framework at NSEIL. In this process, NSEIL has identified the behavioral and functional competencies

and are working towards the creation of the career pathing framework for the Company to meet the

individual aspirations and the Company objectives.


26


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.

10. MANAGEMENT DISCUSSION AND ANALYSIS REPORT

Management's Discussion and Analysis Report for the year under review is presented in a separate section

forming part of the Annual Report.

11. CORPORATE SOCIAL RESPONSIBILITY (CSR) INITIATIVES

Your Company, being part of an integral part of society, recognises its corporate social responsibilities and has

been engaged in various CSR initiatives. Several energy efficiency measures have been taken to reduce the

consumption of energy and promote use of renewable energy. The details of various energy conservation measures

taken by your company are given under the heading ‘Conservation of energy, technology absorption and foreign

exchange earnings/outgo' in the Directors' Report.

Your Company along with its group companies organised and contributed to welfare programs with various

Non-Government Organisations (NGOs) to promote upliftment of disadvantaged sections of society. Also, a

number of ‘‘Go-Green’’ initiatives have been taken up contributing towards energy conservation and reducing

Carbon Footprint. Some of these programs are mentioned below-

• Tie up with HelpAge India which is a secular, not-for-profit organisation protecting the rights of India's

elderly and provides relief to them through various interventions. One thousand calendars were printed

from Archies Limited. The printing amount paid included the contribution towards HelpAge India NGO.

• A number of ‘‘Go Green’’ Initiatives were successfully launched and completed. A few of these are

• Global Warming awareness campaigns by email, videos, etc.

• Tree Plantation Drive near Exchange Plaza

• Invited NGO ‘Vaitarna' and put up a stall of Eco-Friendly products in Exchange Plaza.

• Leadership in Energy & Environmental Design (LEED) certification for office building.

• Installation and commissioning of the Solar Power System.

• Setup of Vermiculture plant which provides manure to the garden.


27


• 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.

13. 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 profit 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.

14. AUDIT COMMITTEE

The Audit Committee comprises four Directors viz., Dr. R. H. Patil, Mr. A. P. Kurian, Mr. Y. H. Malegam and

Dr. V. A. Sastry as its members. Dr. R. H. Patil is the Chairman of the Audit Committee. The Committee met four

times during the year i.e., on June 4, 2010, August 24, 2010, November 22, 2010 and February 1, 2011. The

details of the attendance of members of the Audit Committee at their meetings held on the above dates are given

in Table 17 hereunder:-


28


Table 17

Name Number of meetings Number of meetings

held during the year attended

Dr. R. H. Patil 4 2

Mr. A. P. Kurian 4 4

Mr. Y. H. Malegam 4 4

Dr. V. A. Sastry 4 3

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.

16. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND

FOREIGN EXCHANGE EARNINGS/OUTGO

a) Conservation of Energy, Technology Absorption

As the Company does not fall under any of the industries listed out in the schedule appended to Companies

(Disclosure of Particulars in the report of the Board of Directors) Rules, 1988, particulars required to be

disclosed with respect to conservation of energy and technology absorption in terms of Section 217(1)(e)

of the Companies Act, 1956, read with the aforesaid Rules are not applicable to the Company.

However, NSEIL continues to use the major technological initiatives like ‘Thermal Energy Storage System'

for air-conditioning system during the peak hours, ‘Building Management System' for automation in

operations of services in the building, Lighting Transformers for regulated voltage of Lighting system,

Electronic Ballast and Compact Fluorescent Lamps in lighting system, Automatic Power Factor Control

Units towards ‘‘Effective Energy Conservation’’ as well as ‘‘Load Management System’’:

In its pursuit of building a system for effective energy conservation, NSEIL has used the following further

technological initiatives during the year.

1) Solar Power Plant - In addition to various power saving measures being undertaken at the building,

a need had been felt to ascertain the possible alternatives of energy conservation including sourcing

of energy from natural resources which is environment friendly (i.e. Green Power). In view of this,

Solar Power Plant of the capacity of 10 KW has been installed in the building which harnesses the

solar power to cater the part of lighting load at Exchange Plaza.

2) Rain Water Harvesting System - Envisaging water scarcity in future as well as present water

shortages, the proper Hydro - Geological survey was conducted at Exchange Plaza to explore the

possibility of harvesting the rain water in the periphery of Exchange Plaza. The project is being

implemented and expected to complete by July, 2011. By using this system, there would be water

saving of around 1 lakh liters per day at Exchange Plaza.


29


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.

For and on behalf of the Board of Directors

Vijay Kelkar

Chairman

Place: Mumbai

Date: April 29, 2011


30


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

ANNEXURE TO DIRECTORS’ REPORT

STATEMENT PURSUANT TO SECTION 217 (2A) OF THE COMPANIES ACT, 1956 READ WITH

COMPANIES (PARTICULARS OF EMPLOYEES) RULES, 1975.


31


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.


32


REPORT ON CORPORATE GOVERNANCE

Corporate Governance is the application of best management practices, compliance of law and commitment to

values and ethical business conduct to achieve the Company's objective of enhancing shareholder value and

effective discharge of its social responsibility. National Stock Exchange of India Limited (NSEIL) is a public

limited company, whose securities are not listed on any stock exchanges and as such Clause 49 of the listing

agreement dealing with Corporate Governance for listed companies is not applicable to NSEIL. However, NSEIL

has always been involved in good governance practices and endeavours continuously to improve upon the same.

In continuation of its pursuit to establish good corporate governance practice and for the information of its

stakeholders, NSEIL is furnishing this Report for the financial year ended on 31st March, 2011.

NSEIL is a company incorporated under the Companies Act, 1956 and is also a recognised stock exchange under

Securities Contracts (Regulation) Act, 1956. Therefore, NSEIL is additionally required to comply with

Securities Contracts (Regulation) Act, 1956, the Rules laid down thereunder and the directives and circulars

issued by Securities and Exchange Board of India (SEBI) from time to time for the purpose of its governance.

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 andcommittees chairmanships/Memberships

Other Other OtherDirectorships/ Committee CommitteeChairmanship 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 – –


33


Name of the Director Category No. of Directorships / Chairmanships andcommittees chairmanships/Memberships

Other Other OtherDirectorships/ Committee CommitteeChairmanship Memberships ** Chairmanships **

Dr. V. A. Sastry Independent – – –

Mr. Deepak Satwalekar Public Interest Director 5 1 2

Mr. Ravi Narain Managing Director 12 2 2

Ms. Chitra Ramkrishna Joint Managing Director 9 3 1

Notes:

*The Directorships held by Directors as mentioned above, do not include Alternate Directorships and Directorships of Foreign Companies,

Section 25 Companies and Private Companies.

**Memberships/Chairmanships of only the Audit Committee and Shareholders/Investors' Grievances Committee of all Public Companies

have been considered. None of the Directors on the Board is a member of more than ten Committees and Chairman of more than five

Committees across all companies in which they are Directors.

Dr. Vijay Kelkar, Chairman, Dr. R.H. Patil, Director & Chairman-Audit Committee, Mr. Ravi Narain, Managing

Director and Ms. Chitra Ramkrishna, Joint Managing Director attended the 18th Annual General Meeting held

on September 27, 2010.

(2) Separation of Offices of Chairman & Chief Executive Officer

Since inception, the Company has been following the principle of separation of the role of Chairman and the

Chief Executive Officer. Dr. Vijay L. Kelkar is the Non Executive Chairman of the Board. Mr. Ravi Narain is the

Managing Director & Chief Executive Officer of the Company and is entrusted with the day to day management

of the affairs of the Company. Ms. Chitra Ramkrishna, Joint Managing Director of the Company, assists the

Managing Director in the discharge of his functions on day to day basis. The Managing Director and Joint

Managing Director carry out their functions subject to superintendence, control and management of the Board of

Directors of the Company.

(3) Number of companies in which an individual may become a Director

The non executive Directors follow the provisions prescribed under the Companies Act, 1956 with regard to

maximum number of directorships allowed for a Director. In respect of Executive Director(s), the number of

Directorships other than directorships in subsidiary companies is less than seven.

(B) Responsibilities of the Board

The Company conducts an orientation programme for new Directors covering various operations of the Exchange

so as to familiarise themselves with the various functions being carried out by the Exchange. Every director

inducted on the Board is well known in the financial services industry and has the ability to understand basic

financial statements and information and related documents/papers.

The regular updates inter-alia provided by the Company to the Board include the following:

• Annual operating plans and capital and revenue budgets and updates

• Quarterly financial results

• Status report on the Exchange operations and operations of different segments

• Minutes of the meetings of Audit Committee and other committees of the Board including minutes of the

meeting of the Board of material subsidiary company.

• Details of joint ventures, acquisitions of companies or collaboration agreements, etc

• Details of foreign exchange exposures and the steps taken to limit the risk of adverse exchange rate

movements

• Details of significant transactions and arrangements entered into by material unlisted subsidiary


34


• Review of market surveillance.

• Other information, which is required to be placed before the Board as per clause 49 of the Listing Agreement,

is taken to the Board as and when the event occurs.

A quarterly report on compliance of various laws, rules and regulations, to which the Company is subjected, is

placed before the Audit Committee for its review. The Audit Committee from time to time reviews the report and

gives suggestions for improvement of compliance level/process. On its review, a consolidated report on a quarterly

basis is placed before the Board at its subsequent meetings.

(C) Independent Directors

(1) Attributes

The Company as a policy inducts only those persons as Independent Directors who have integrity, experience

and expertise, foresight, managerial qualities and ability to read and understand financial statements.

(2) Tenure

The Company, being a stock exchange recognised under Securities Contracts (Regulation) Act, 1956, is required

to follow directives issued by SEBI from time to time. As per SEBI directives, no director shall hold office for

more than two consecutive terms. The Exchange follows the same with effect from August 18, 2009, being the

date of approval granted by SEBI for the reconstituted structure of the Board.

(3) Freedom to Independent Directors

The Company takes all possible efforts to enable the Independent Directors to perform their functions effectively.

However, as per SEBI requirement, the elected directors shall not interfere in the day to day management of the

Exchange particularly relating to the surveillance and risk management functions of the Exchange. The Company

always strives to strike a balance between both the above requirements without compromising on compliance of

such requirements.

(D) Other Committees of the Board

(1) Audit Committee

The primary function of the Audit Committee is to assist the Board of Directors in fulfilling its oversight

responsibilities by reviewing the financial information to be provided to the shareholders and others, the systems

of internal controls, which the management and the Board of Directors have established, financial reporting and

the compliance process. The Committee maintains open communication with statutory auditors and internal

auditors.

The Audit Committee reviews the reports of the internal auditors and operational auditors. Besides, the role of

Audit Committee of NSEIL, inter-alia, also covers the following:

(a) Oversight of the Company's financial reporting process and the disclosure of its financial information to

ensure that the financial statement is correct, sufficient and credible.

(b) Reviewing with management the annual financial statements before submission to the Board, focusing

primarily on-

• Any changes in accounting policies and practices.

• Major accounting entries based on exercise of judgment by management.

• Qualifications in draft audit report.

• Significant adjustments arising out of audit.

• The going concern assumption.

• Compliance with accounting standards.


35


• Compliance with legal requirements concerning financial statements.

• Any related party transactions i.e. transactions of the company of material nature, with promoters orthe management, their subsidiaries or relatives, etc. that may have potential conflict with the interests

of company at large.

(c) Reviewing with the management, external and internal auditors and the adequacy of internal control systems.

(d) Reviewing the adequacy of internal audit function including specification of terms of reference to firms

conducting internal audit.

(e) Discussion with internal auditors any significant findings and follow up there on.

(f) Reviewing the findings of any internal investigations by the internal auditors into matters where there issuspected fraud or irregularity or a failure of internal control systems of a material nature and reporting the

matter to the Board.

(g) Discussion with external auditors, before the audit commences, about the nature and scope of audit as well

as post-audit discussion to ascertain any area of concern.

(h) Reviewing the Company's financial management policies.

(i) To look into the reasons for substantial defaults, if any, in the payment to the depositors, debenture holders,shareholders (in case of non payment of declared dividends) and creditors.

The Audit Committee comprises four Directors viz., Dr. R. H. Patil, Mr. A. P. Kurian, Mr. Y. H. Malegam and

Dr. V. A. Sastry as its members. Dr. R. H. Patil is the Chairman of the Audit Committee. The Committee met fourtimes during the year i.e., on June 4, 2010, August 24, 2010, November 22, 2010 and February 1, 2011. The

details of the attendance of members of the Audit Committee at their meetings held on the above dates are given

hereunder:-

Name Number of meetings held Number of meetings attendance

during the year during the year

Dr. R. H. Patil 4 2

Mr. A. P. Kurian 4 4


Dr. V. A. Sastry 4 3

(2) Compensation Committee

The Compensation Committee has been vested with the powers and authority for overseeing performance evaluation

and recommending compensation package for employees including Managing Directors. It is ensured that no

Director is involved in deciding his or her own remuneration. The Compensation Committee comprises of five

non-executive directors viz., Dr. Vijay L Kelkar, Mr. S. B. Mathur, Mr. A.P.Kurian, Mr. Y.H. Malegam and

Dr. V.A.Sastry. Dr. Vijay Kelkar is the Chairman of the Compensation Committee. During the year, the Committee

met once on June 11, 2010. All the members of the Committee were present at the meeting held on June 11, 2010.

Dr. Kelkar, the Chairman of the Compensation Committee was present at the Annual General Meeting held on

September 27, 2010.

(3) Nomination Committee

The primary function of this Committee is to recommend to the Board the broad principles to be followed while

co-opting directors and to decide on the issues such as the optimum size for the Board, the Board tenure for

directors, qualification, experience and standing of persons to be co-opted including the designation levels for

shareholder representatives, rotational or group representation for shareholders with below 10% holding, application

of proposed principles to existing directors, etc. Keeping in mind the mandate of the SEBI and the Board of


36


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 corporategovernance 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 theadditional 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. 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)


37


2. Executive Committee (Currency Derivatives segment)

3. Sub-committee for monitoring compliance of suggestions given in SEBI Inspection Reports

(Board Committee)

4. Surveillance Committee (Board Committee)

5. Investor Services Committee (Board Committee)

6. Committee to decide on Compulsory Delisting

(iii) Other Functional Committees

1. Executive Committee

2. Membership Approval Committee (Board Committee)

3. Sub-broker recognition Committee

4. Committee for Declaration of Defaults (Board Committee)

5. Listing Advisory Committee

6. Technology Budget Committee (Board Committee)

7. Committee for Approval of Acquisition of Premises (Board Committee)

8. Business Development Committee (Board Committee)

9. Pricing Committee (Board Committee)

(E) Remuneration of Directors

In order to align compensation levels with market levels and at the same time attract, retain and motivate Directors

of the quality required to run the company successfully, the compensation being paid to Managing Directors are

periodically reviewed and revised. The composition of their remuneration includes both fixed and variable

components. Variable component forms significant portion of the total remuneration. Further, it is ensured that

the variable to total pay is higher at senior levels in the organisation and particularly for Managing Directors so

that the relationship of remuneration to performance is clear.

All of the comparable global exchanges (including an exchange in India) and other BFSI companies in India have

liberal ESOP schemes for its employees including executives on the Board over and above the direct employee

remuneration. However, the Company does not have ESOP Schemes for its employees and Directors. None of

the Directors of the Company hold any shares or any convertible instruments in the Company.

Variable incentive schemes are also put in place by the Company for Managing Directors besides employees.

A sitting fee is being paid to non executive Directors for the meetings of the Board or the Committees constituted

by it attended by them. As Non Executive Chairman, Dr. Vijay Kelkar provides guidance on an ongoing basis in

matters of strategic importance to the company management. As his experience and expertise is invaluable to the

Board in maintaining strategic leadership and governance, a fixed amount of remuneration of Rs. 25 lakhs per

annum is being paid to Dr. Kelkar in accordance with the terms approved by Board, Shareholders and the Central

Government.

The details of remuneration paid to Managing Director and Joint Managing Director during FY 2010-11 is given

in the following table:-

(Rs. in crores)

Name & Designation Salary & Variable Perquisites in Contribution Total

Allowances Pay cash or to PF and

in kind other Funds

Mr. Ravi Narain, 1.67 4.11 1.12 0.45 7.35

Managing Director

Ms. Chitra Ramkrishna, 1.25 2.65 0.65 0.34 4.90

Joint Managing Director


38


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 Amountmeetings (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.


39


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

Extra-ordinary General April 27, 2010 5.00 p.m. -do- • Alteration of

Meeting Articles of

Association of

the Company

17th Annual General September 30, 10.00 a.m. -do- • Re-appointment

Meeting 2009 of Auditors under

Section 224A

• Alteration of

Articles of

Association of

the Company

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.

Extra-ordinary General April 21, 2008 11.00 a.m. -do- • Alteration of

Meeting Articles of

Association of the

Company


40


(E) Shareholding pattern of the Exchange and Top 10 Shareholders as on 31st March, 2011.

Distribution of Shareholding as on 31st March, 2011:

Category No. of the % of the No. of % to the total

shareholders in each category shares held paid up equity

category capital

Individuals 6 9.68 18,21,429 4.05

Corporates-Listed 4 6.45 5,19,376 1.15

Corporates-unlisted 11 17.74 49,60,168 11.02

Financial Institutions/Banks 11 17.74 1,40,38,882 31.20

Insurance Companies 7 11.29 82,53,500 18.34

Mutual Funds 5 8.06 4,87,000 1.08

Venture capital fund 1 1.61 1,58,666 0.35

Foreign holding 17 27.42 1,47,60,979 32.80

Total 62 100.00 4,50,00,000 100.00

Top 10 Shareholders as on 31st March, 2011

Sr. No. Name of the shareholder No. of shares Percentage of

held shareholding

1 Life Insurance Corporation of India 47,28,500 10.51

2 State Bank of India 45,87,500 10.19

3 Infrastructure Development Finance Company Limited 35,47,990 7.88

4 IFCI Limited 24,97,750 5.55

5 Stock Holding Corporation of India Limited 22,50,000 5.00

6 GA Global Investments Limited 22,50,000 5.00

7 GS Strategic Investments Limited 22,50,000 5.00

8 SAIF II SE Investments Mauritius Limited 22,50,000 5.00

9 Aranda Investments (Mauritius) Pte. Ltd. 22,50,000 5.00

10 IDBI Bank Limited 22,49,153 4.998

As per Securities Contracts (Regulation) (Manner of Increasing and Maintaining Public Shareholding in Recognised

Stock Exchanges) Regulations, 2006, the Exchange is required to ensure that at least 51% of the equity share

capital is held by public. The Exchange ensures compliance thereof.

Stock Market Data : The equity shares of NSEIL are not listed on any stock exchange.

(F) Registrar and Transfer Agent:

The address for communication and contact details of the Registrar and Transfer Agent are as under:

M/s. Link Intime India Pvt. Ltd., C-13, Pannalal Silk Mills Compound, L.B.S. Marg, Bhandup (West)

Mumbai 400 078. Tel. No. + 91 22 2596 3838 and Fax No. +91 22 2594 6979.


41


(G) Addresses for Correspondence

Shareholders are requested to intimate all changes pertaining to their Bank details, email address, Power of

Attorney, change of name, change of address, contact details, etc., to their Depository Participants (DP).

(H) Certificate on compliance of corporate governance norms

Clause 49 of the Listing Agreement mandates for the companies which listed their securities with the Stock

Exchanges to obtain a certificate, from either the auditors or practicing company secretaries, regarding the

compliance of conditions of corporate governance covered therein and annex the certificate with the Directors'

Report, which is sent annually to the shareholders.NSEIL, being an unlisted company, has voluntarily adopted

compliance of corporate governance norms covered in the said clause 49 and has, accordingly, obtained a certificate

to this effect from a practicing company secretary. The same is given as an Annexure to the Directors' Report.

(I) Compliance with the non-mandatory requirements of Clause 49 of the Listing agreement

In addition to the above, NSEIL also complies with non-mandatory requirements of Clause 49 like maintaining

a Chairman's office at the company's expense, reimbursement of expenses incurred by Chairman in performance

of his duties, tenure for Directors, requisite qualifications and experience for independent directors, remuneration

committee, dissemination of financial results to the shareholders on a quarterly basis, unqualified financial

statements, etc.

During the year, the Company has established a mechanism for employees to report concerns about unethical

behavior, actual or suspected fraud, or violation of the code of conduct or ethics policy. The Company also

provides for adequate safeguards against victimisation of employees who avail of the mechanism and also allows

direct access to the Chairman of the Ethics committee in exceptional cases.


42


CORPORATE GOVERNANCE COMPLIANCE CERTIFICATE

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 & CO.

Company Secretaries

S. N. Ananthasubramanian

Proprietor

C.P.No.: 1774

Date: April 29, 2011

Place: Thane


43


MANAGEMENT DISCUSSION & ANALYSIS

Economic & Business environment

The Indian Economy growth in 2010-11 had been swift and broad-based. The economy regained its pre-crisis

growth trajectory. The Gross Domestic Product (GDP) of India is estimated to have grown at 8.6 per cent in

2010-11 in real terms. In 2010-11 agriculture is estimated to have grown at 5.4 per cent, industry at 8.1 per cent

and services at 9.6 per cent. All three sectors are contributing to the consolidation of growth. More importantly,

the economy has shown remarkable resilience to both external and domestic shocks. Fiscal consolidation has

been impressive. This year saw significant progress in critical institutional reforms that would set the pace for

double-digit growth in the near future.

With the strong innate economic fundamentals, India continues to be the highly attractive destination for investment,

globally. India is today rated as one of the most attractive investment destinations across the globe. The UNCTAD

World Investment Report (WIR) 2010, in its analysis of the global trends and sustained growth of Foreign Direct

Investment (FDI) inflows, has reported India to be the second most attractive location for FDI for 2010-2012.

The cumulative amount of FDI equity inflows from April 2000 to January 2011 stood at US$ 193.74 billion,

according to the data released by the Department of Industrial Policy and Promotion (DIPP). The huge increase

in investment mirrors the foreign investors' faith in the Indian markets. Even the net investments by FIIs for the

period November 1992 till March 31, 2011 was US $ 121.56 billion. The forex reserves increased to US $ 303

billion at end of March 25, 2011.

During 2010-11, the Indian securities industry also experienced a number of global, technological and regulatory

developments. In addition, demands for new products and services, particularly new asset classes and need for

faster and more cost efficient trade execution increased substantially.

Thus, the year 2010-11 witnessed major imperatives such as Launch of new products & services, Technological

advancements, Regulatory developments etc.

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.


44


Internal control systems and their adequacy

The Company has well established internal control systems commensurate with the size and nature of its business

and are adequate to ensure compliance with various internal processes and procedures as well as with various

statutory and legal requirements. The Company has appointed reputed firms of Chartered Accountants to review

the effectiveness of the internal control systems and submits its observations, if any to the Audit Committee of

the Board for its review / recommendations.

Financials

The financial statements have been prepared in compliance with the requirements of the Companies Act, 1956,

Generally Accepted Accounting Principles (GAAP) in India and as per the applicable Accounting Standards laid

down by the Institute of Chartered Accountants of India. A well known and reputed firm of Chartered Accountants

performs the audit and they have confirmed that our practices are as stringent and complete as internationally.

Financial performance (2010-11)

During the year 2010-11, the total revenue has increased by 9% from Rs.1266.38 crores for the year 2009-10 to

Rs.1378.47 crores for the year 2010-11.

The total expenditure for the year 2010-11 was Rs. 519.16 crores as compared to Rs. 454.89 crores for the year

2009-10. An increase of around 14% over the previous year.

The total Profit Before tax for the year 2010-11 was Rs. 859.31 crores as against Rs. 811.49 crores for the year

2009-10. An increase of 6% over the previous year.

The total Provision for tax (including deferred tax, wealth tax) for the year 2010-11 was Rs. 221.80 crores as

against Rs. 197.72 crores for the year 2009-10.

The total Profit after tax for the year 2010-11 was Rs. 637.51 crores as against Rs. 613.77 crores for the year

2009-10. An increase of 4% over the previous year.

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


45


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.


46


Financial Statement as on March 31, 2011

Share Capital

The total paid up capital of the Company as on March 31, 2011 is Rs. 45 crores divided into 4,50,00,000 equityshares of Rs. 10 each.

Reserves & Surplus

The total Reserves & Surplus as on March 31, 2011 is Rs. 2,923.40 crores comprising of Share Premium of Rs.40 crores, Investor Compensation reserves Rs. 10 crores, staff welfare reserves of Rs. 1 crores, General reserve ofRs. 2,755 crores and balance in P&L A/c of Rs. 117.40 crores.

Thus the total Net worth of the Company as on March 31, 2011 is Rs. 2,968.40 crores and the book value isRs.659.64 per share.

Deposits from members (Unsecured)

The total deposits from members as on March 31, 2011 stood at Rs. 1,115.20 crores as against Rs.1,043.58 croresas on March 31, 2010. An increase of Rs.71.62 crores.

Fixed Assets

Total Gross Block as on March 31, 2011 was Rs. 915.23 crores. Total Accumulated depreciation up to March 31,2011 was Rs. 484.23 crores. Net fixed Assets (including Capital W.I.P) were Rs. 458.00 crores. As part of thetotal investments in technology areas, during the year 2010-11 the total additions to fixed assets were Rs. 103.27crores mainly pertaining to the Building, Trading systems and telecom equipments where as total deletions atcost were at Rs. 13.82 crores. These equipments had become obsolete and are fully depreciated.

Investments

The prudential policy of the Company permits to invest both long term and short term surplus funds in to depositsof highly rated banks, bonds issued by the Central / State governments, institutions and various corporates andinto the debt oriented schemes of high performing mutual funds. As on March 31, 2011 the total Long terminvestments was Rs. 548.24 crores as against Rs. 317.33 crores as on March 31, 2010. Increase of Rs. 230.91crores. However, short term investments grouped under "Other Current Assets" were Rs. 110.77 crores as onMarch 31, 2011 as against Rs. 2,463.98 crores as on March 31, 2010, indicating an decrease of Rs. 2,353.21crores. This was mainly due to shifting of investments from mutual funds to Bank Fixed deposits to take advantageof higher yields in Fixed Deposits.

Current Assets, Loans & Advances (other than short term investments)

Total Current Assets, Loans & Advances (other than short term investments) as on March 31, 2011 stood atRs. 3,532.01 crores comprising of interest accrued on investments and Fixed Deposits amounting to Rs. 96.10crores, Debtors amounting to Rs. 150.68 crores and cash and bank balances in current and Fixed Deposits andcertificates of deposits amounting to Rs. 3,221.02 crores and Loans advances of Rs. 64.21 crores.

Current Liabilities & provisions

Total Current Liabilities as on March 31, 2011 stood at Rs. 552.66 crores comprising of Sundry creditors ofRs. 73.71 crores, Dues from subsidiary companies Rs. 20.01 crores, security deposits as per listing agreementamounting to Rs. 70.55 crores, Securities Transaction Tax of Rs. 120.24 crores, provision for Leave encashmentof Rs. 6.49 crores, proposed dividend of Rs. 94.50 crores, corporate dividend tax of Rs. 15.33 crores and othercurrent liabilities amounting to Rs. 151.83 crores.

Taxation

The total Provision for tax (including deferred tax, wealth tax) for the year 2010-11 was Rs.221.80 crores asagainst Rs. 197.72 crores for the year 2009-10. Though the present Indian Corporate tax rate is 33.22% comprisingof base rate and surcharge and cess, due to investments into various debt schemes of mutual funds the effectivetax rate works out to 25.95 %

Event occurring after the balance sheet date

There are no transactions of material nature that have occurred after March 31, 2011 which could have anyimpact on the financial performance of the Company for the year 2010-11.


47


To,

The Board of Directors


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.

Mumbai Ravi Narain J Ravichandran

April 29, 2011 Managing Director & CEO Director (F&L) &

Company Secretary


48


AUDITORS’ REPORT

To,

The Members,


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.

4. Further to our comments in the Annexure referred to above, we report that:

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;


49


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.

For KHANDELWAL JAIN & CO.,

Chartered Accountants,

Firm's Registration No.105049W

(NARENDRA JAIN)

PARTNER

Membership No.: 48725

Place : Mumbai

Date : April 29, 2011


50


ANNEXURE TO THE AUDITORS' REPORT

Annexure referred to in paragraph 3 of Auditors' Report of even date to the members of

NATIONAL STOCK EXCHANGE OF INDIA LIMITED on the financial statements for the year

ended March 31, 2011

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.


51


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:

Sr. Name of the Statute Nature of Period to Amount Forum where

No. the Dues which (Rs. in dispute is Pending

amount Crores)

relates

1. Income Tax Act, 1961 Income Tax 2002-2003 5.96 Income Tax Appellate Tribunal,

Mumbai

2007-2008 0.002 Commissioner of Income Tax

(Appeal) Mumbai

2008-2009 9.72 Addtl. Commissioner of Income

Tax, Mumbai

2. Wealth Tax Act, 1957 Wealth Tax 2000-2001 0.11 Income Tax Appellate Tribunal,

Mumbai - Wealth Tax Bench

3. Finance (No.2) Act, Securities 2006-2007 5.09 Income Tax Appellate Tribunal,

2004-Chapter VII Transaction Mumbai

Tax

2007-2008 0.97 Commissioner of

Income Tax (Appeals), Mumbai

2008-2009 0.48 Commissioner of Income Tax

(Appeals), Mumbai

4. Chapter V of Service Tax 2004-2005 28.10 Company is in the process of filing

Finance Act, 1994 to the reply to the show cause cum

2008-2009 demand notice to Commissioner of

Service tax, Mumbai

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.


52


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.



Firm's Registration No.105049W

(NARENDRA JAIN)

PARTNER


Place : Mumbai



53


BALANCE SHEET AS AT MARCH 31, 2011

Schedule As at 31.03.2011 As at 31.03.2010

(Rs. in Crores) (Rs. in Crores)

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

3. Deferred Tax Liabilities 12.76 14.16

TOTAL 4,096.36 3,484.00

II APPLICATION OF FUNDS

1. Fixed Assets 3

a Gross Block 915.23 825.78

Less: Depreciation till date 484.23 406.31

Net Block 431.00 419.47

b Capital work in progress 27.00 458.00 58.98 478.45

(including capital advances)

2. Investments 4 548.24 317.33


54




As per our report of even date attached For and on behalf of the Board of Directors


Chartered Accountants

DR. VIJAY L. KELKAR RAVI NARAIN

Chairman Managing Director

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

3. Current Assets, Loans 5

and Advances

a Current Assets 3,578.57 3,039.27

b Loans & Advances 64.21 133.42

3,642.78 3,172.69

Less: Current Liabilities & 6 552.66 484.47

Provisions

Net Current Assets 3,090.12 2,688.22

TOTAL 4,096.36 3,484.00

Notes forming part of the accounts 13


55


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


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


TOTAL 518.42 454.55

Profit before prior-period adjustments 860.05 811.83

Add/(Less) : Prior-period adjustments (0.74) (0.34)


Less : Provision for tax

- Current tax 223.00 198.00

- Wealth tax 0.20 0.20

- Deferred tax (1.40) (0.48)



Excess Corporate Dividend Tax for last year transferred back 14.95 9.18

Profit available for appropriation 757.72 685.62


56



Schedule 31.03.2011 31.03.2010







NARENDRA JAIN

Partner



Y. H. MALEGAM J. RAVICHANDRAN

Place : Mumbai Director Director (F&L) &


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



57


As at 31.03.2011 As at 31.03.2010


SCHEDULE 1 : SHARE CAPITAL

Authorised

5,00,00,000 (Previous Year 5,00,00,000) Equity Shares

of Rs 10 Each. 50.00 50.00

Issued, Subscribed and Paid-up

4,50,00,000 (Previous year 4,50,00,000) Equity shares of

Rs.10 each fully paid up. 45.00 45.00

TOTAL 45.00 45.00

SCHEDULE 2 : RESERVES & SURPLUS

Share Premium

As per last balance sheet 40.00 40.00

Investor Compensation Reserve


Less : Expenses Transferred from Profit & Loss account 0.14 0.11

Add : Transferred from profit & loss account 0.14 10.00 0.11 10.00

Technology Upgradation Reserve


Less: Transferred to General Reserve account 100.00 – – 100.00

Staff Welfare Reserve


Less: Expenses incurred Transferred from

profit & loss account 0.35 0.30

Add : Transferred from profit & loss account 0.35 1.00 0.30 1.00

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

Balance in profit & loss account 117.40 105.26

TOTAL 2,923.40 2,381.26

SCHEDULES FORMING PART OF THE BALANCE SHEET


58


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63


As at As at

31.03.2011 31.03.2010


SCHEDULE 5 : CURRENT ASSETS, LOANS & ADVANCES

A: CURRENT ASSETS

Interest Accrued

On Investments 4.74 4.09

On Certificate of Deposits 5.17 0.07

On Bank Deposits 86.19 96.10 5.49 9.65

Sundry Debtors (Considered good)

Outstanding for a period of over six months

[Unsecured Rs.0.59 crore (Previous year

Rs.0.41 crore)] 2.14 3.15

Other debts

[Unsecured Rs.1.01 crores (Previous year

Rs.1 crore)] 148.54 150.68 112.60 115.75

Cash and Bank Balances

Cash in hand 0.01 0.01

Balances with Scheduled Banks

In Current accounts 25.56 23.13

In Deposit accounts - Fixed deposits* 2,992.62 401.85

In Certificate of Deposits 202.83 3,221.02 24.90 449.89

Short term Investments (Refer Note No. 1f & 9 ) 110.77 2,463.98

3,578.57 3,039.27

*Includes earmarked Fixed Deposits amounting to Rs. 125.17 crores

(Previous year Rs.99.60 crores)

B : LOANS & ADVANCES

Secured, Considered Good

Loans to employees (Refer Note No.5 ) 0.05 0.19

Unsecured , considered good

Inter- Corporate Deposit – 63.28

Advances recoverable in cash or in kind 28.33 24.24

or for value to be received

Advance to Subsidiaries 10.53 2.59

Share Application Money – 2.89

Income Tax paid including TDS (Net of Provisions) 8.45 31.12

Fringe Benefit Tax (Net of Provisions) 2.14 –

Securities Transaction Tax paid 12.64 7.00

Deposit for premises 1.10 1.10

Other deposits 0.97 64.21 1.02 133.42

TOTAL 3,642.78 3,172.69



64



As at As at

31.03.2011 31.03.2010


SCHEDULE 6 : CURRENT LIABILITIES & PROVISIONS

A: CURRENT LIABILITIES

Sundry creditors (Refer Note No.11) 73.71 78.75

Subsidiary Companies 20.01 25.60

Secuity Deposit-Listing agreement 70.55 51.04

Deposit - Premises 31.88 30.69

Other deposits 6.64 1.50

Income received in advance 25.11 23.84

Securities Transaction Tax Payable 120.24 82.05

Tax deducted at source - payable 10.44 10.69

Defaulters Committee Account 49.19 46.01

Deposits of Defaulters members - SEBI 0.13 0.12

Other liabilities 27.21 435.11 23.21 373.50

B : PROVISIONS

Leave encashment (Refer Note No. 1h (iv) ) 6.49 4.77

Wealth Tax (Net of advances) 1.23 1.17

Fringe Benefit Tax (Net of advances) – 0.08

Proposed dividend 94.50 90.00

Corporate dividend tax 15.33 117.55 14.95 110.97

TOTAL 552.66 484.47


65


SCHEDULES FORMING PART OF THE PROFIT & LOSS ACCOUNT


31.03.2011 31.03.2010


SCHEDULE 7 : OPERATIONAL EXPENSES RECOVERY

VSAT expenses recovery 24.51 27.24

TBTN expenses recovery 0.34 0.05

Others 0.80 1.07

TOTAL 25.65 28.36

SCHEDULE 8 : INTEREST INCOME

On Investments

-Short Term (TDS Rs.Nil ,Previous Year Rs 0.25 crore ) 4.45 1.00

(Including Taxfree Income Rs.Nil

Previous Year Rs.Nil )

-Long Term (TDS Rs.Nil, Previous Year Rs.Nil) 9.78 9.94

(Including Taxfree Income Rs 8.86 crores,

Previous Year Rs.8.03 crores)

On Bank Deposits (TDS Rs.10.24 crores, Previous

Year Rs.2.66 crores) 102.12 18.80

On Certificate of Deposits 5.26 0.07

On Inter Corporate Deposits (TDS Rs.0.24 crore,

Previous Year Rs.0.65 crore) 2.40 6.52

On Income Tax Refund 4.33 –

On Others (TDS Rs Nil, Previous year Rs. Nil) 1.09 0.88

TOTAL 129.43 37.21

SCHEDULE 9 : OTHER INVESTMENT INCOME

Profit/ (Loss) on sale/redemption of Long Term investments 0.86 34.65

Profit/(Loss) on sale/redemption of Short Term investments 54.84 67.28

Dividend on Investment:

Long Term :

from Subsidiary Companies 90.76 54.28

from Others 4.78 95.54 2.00 56.28

Short Term 55.42 96.81

TOTAL 206.66 255.02

SCHEDULE 10 : OTHER INCOME

Usage charges 14.35 8.65

NCFM Registration & Test enrolment Fees 23.35 28.83

Fines 6.33 4.42

Rent Income 49.42 48.47

Processing Fees -Listing 22.35 21.52

Strategic Co-operation fees 10.67 3.78

Data Centre Charges 24.25 2.42

Miscellaneous income 20.44 16.93

TOTAL 171.16 135.02


66


SCHEDULE 11 : OPERATING, ADMINISTRATION & OTHER EXPENSES

Rent 3.90 3.74Transponder lease charges 4.27 5.00Licence fee for operating VSAT network 4.15 4.49Licence fees for Index 7.08 5.52Lease line charges 7.97 7.45Repairs & maintanence- To buildings 1.96 1.75- To computers, trading & telecommunication systems 70.17 68.06- To others 4.29 3.28Network Infrastructure Management charges 4.44 23.50IT management and consultancy charges 18.29 14.41Web Trading related expenses 24.50 16.94Insurance 0.80 0.92Rates & taxes 2.93 3.01Postage, telephone and fax charges 1.76 1.68Advertisement & publicity 6.09 4.20Printing & stationary and consumables 3.73 2.98Legal & Professional fees 16.24 10.34Travelling & Conveyance expenses 3.94 3.63Auditors' remuneration- Audit fees 0.12 0.12- Tax audit fees 0.03 0.02- Taxation matters 0.06 0.05- Certification matters 0.02 0.02- Other matters 0.02 0.25 0.01 0.22

Electricity charges 9.79 6.87Directors' sitting fees 0.10 0.08Software expenses (Refer Note no. 1e) 7.90 10.71Contribution to Investor protection fund trust 10.51 7.21Investor education expenses 2.98 3.63Compensation paid to Investors 0.14 0.11Less : Transferred to Investor Compensation Reserve 0.14 – 0.11 –

SEBI Regulatory Fees 4.32 3.93Donations 1.14 –Bad debts/Sundry balance written off (Refer Note No. 1b(ii) ) 0.07 0.55Loss on sale /discard of assets (Net) 0.10 0.12Amortisation of Premium on Govt/Debt Securities (Refer Note No 1f ) 0.33 1.18Other Expenses 18.75 13.76

TOTAL 242.75 229.16

SCHEDULE 12 : PAYMENTS TO AND

PROVISIONS FOR EMPLOYEES

Salaries and allowances (Refer Note No. 4) 57.79 47.86

Contribution to Provident and other funds (Refer Note No.1h) 4.54 3.30Employees' welfare expenses 2.45 1.87

Less : Transferred to Staff Welfare Reserve 0.35 2.10 0.30 1.57

TOTAL 64.43 52.73



31.03.2011 31.03.2010



67


SCHEDULE 13 : NOTES TO ACCOUNTS

1. Significant Accounting Policies:

a) Basis of Accounting

The accounts are maintained on a mercantile basis in accordance with generally accepted accounting

principles.

b) Revenue Recognition

(i) Revenue is being recognised as and when there is reasonable certainty of ultimate realisation.

(ii) Provision for Doubtful debts and Bad Debts.

(a) In respect of members who have been declared as defaulter or expelled during the year

by the company all amounts remaining to be recovered till the date of being declared

defaulter or expelled are written off as bad debts. All subsequent recoveries are

accounted for in the year of receipt.

(b) Other overdue amounts are provided for as doubtful debts or are written off as bad

debts, if the same are considered doubtful/ irrecoverable in the opinion of the

management.

c) Fixed Assets

Fixed Assets are stated at historical cost less accumulated depreciation. Historical cost is inclusive

of freight, duties, taxes, cost of installation, interest upto the date of installation and other incidental

expenses incurred towards acquisition and installation of fixed assets.

d) Depreciation

(i) Depreciation on assets is provided, using the straight line method, pro-rata to the period of

use of assets, at the rates specified in Schedule XIV to the Companies Act, 1956 or based on

the estimated useful life of the assets, whichever is higher. Where there is a revision of the

estimated useful life of an asset, the unamortized depreciable amount is charged over the

revised remaining useful life.

The details of the estimated useful life of the assets where the depreciation is provided at the

rate higher than the rate specified in Schedule XIV of the Companies Act, 1956 are as follows:

Assets Estimated Useful Lives

Computer Systems - Office Automation 3 years

Computer Systems - Others 4 years

Telecommunication Systems 4 years

Trading & Clearing Systems 4 years

Electrical Equipments & Installations 15-21 years

Furniture & Fixtures 5-16 years

Office Equipments 4-21 years

Vehicles 3-5 years

Fixed assets whose aggregate cost is Rs. 5,000 or less are depreciated fully in the year of

acquisition.


68


(ii) Leasehold land is amortised over the period of lease.

(iii) Computer Software is amortized over a period of 4 years.

e) Computer software

(i) Cost of development and production software is capitalised,

(ii) Cost towards software development incurred till the time software is put to use is capitalised,

and

(iii) Standard packaged software products are written off in the year of purchase.

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) Short term investments are valued at cost or fair value whichever is lower.

(iii) Premium paid/discount received at the time of acquisition of Government / Debt securities is

amortised 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 is adjusted towards the cost of investment.

Income on investments is accounted for on accrual basis.

g) Foreign currency transactions

(i) Transactions denominated in foreign currency are recorded at the exchange rate prevailing at

the time of the transaction.

(ii) Monetary items denominated in foreign currency at the year end are translated at the year

end rate except for those covered by forward cover contracts which are translated at contracted

rates.

(iii) Any income or expense on account of exchange difference between the date of transaction

and settlement or translation is recognised in the profit and loss account as income or expense.

The premium or discount on forward exchange contract are amortised and recognized in the

profit and loss account over the period of contract.

h) Employee Benefits

(i) Provident Fund: The Company has established National Stock Exchange of India Limited

Employee Provident Fund Trust to which both the employee and the employer make monthly

contribution equal to 12% of the employee's basic salary respectively. Company's contribution

to the provident fund for all employees, are charged to revenue. In case of any liability

arising due to short fall between the return from its investments and the administered interest

rate, the same is required to be provided for by the Company.

(ii) Superannuation: Superannuation benefits for employees designated as managers and above

are covered by group policies with the Life Insurance Corporation of India. Company's

contribution payable for the year is charged to revenue. There are no other obligations other

than the annual contribution payable.

(iii) Gratuity: The Company has maintained a Group Gratuity Cum Life Assurance Scheme with

the Life Insurance Corporation of India (LIC) towards which it annually contributes a sum

determined by LIC. 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.


69


(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 :

(Rs. in Crores)ParticularsCurrent 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


70


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.

Sr. Particulars Maturity Face As at 31.03.2011 As at 31.03.2010

No. Date Value

Number of Rs. in Number of Rs. in

Units Crores Units Crores

Unquoted :

A) Commercial Paper

1 Small Industrial Development

Bank of India 09-Apr-10 100000000 – 200 9.98

2 Small Industrial Development

Bank of India 09-Apr-10 150000000 – 300 14.97

3 L&T Finance Company Limited 27-May-11 100000000 200 9.50

4 HDFC Limited 15-Jul-11 150000000 300 14.13

5 Tata Motors Finance Limited 12-Oct-11 100000000 200 9.23

6 Aditya Birla Finance Limited 06-Jan-12 100000000 200 9.10

7 L&T Infrastructure Finance

Company Limited 29-Jul-11 50000000 100 4.77

8 L&T Infrastructure Finance

Company Limited 05-Aug-11 100000000 200 9.52

9 Aditya Birla Finance Limited 10-Aug-11 100000000 200 9.51

10 Blue Star Limited 07-Apr-11 100000000 200 9.92

11 Tata Motors Limited 04-Apr-11 100000000 200 9.96

Total (A) 85.64 24.95


71


B) Mutual Funds :

i) Liquid Growth Schemes

1 L&T Liquid Inst. Plus -

Cumulative – 32,341.6690 0.05

2 L&T Liq Sup Inst. Plan -

Cumulative – 26,319.5500 0.03

3 DWS Insta Cash Plus Fund -

Institutional Plan Growth – 1,76,280.6990 0.20

4 DSP Blackrock Liquidity Fund -

Institutional Plan - Growth – 100.0630 0.01

5 HDFC Cash Management Fund -

Saving Plan Growth – 1,85,560.2090 0.29

6 HSBC Cash Fund- Institutional

Plus - Growth – 70,904.0080 0.08

7 IDFC Savings Advantage Fund -

Plan A - Growth – 8,952.8950 0.96

8 ING Liquid Fund Super

Institutional - Growth Option – 93,722.9580 0.11

9 JM High Liquidity Fund -

Super Institutional }

Plan - Growth – 1,22,971.9810 0.15

10 Kotak Liquid (Institutional

Premium) - Growth – 2,50,984.1839 0.35

11 Principal Cash Management

Fund - Liquid Option - Instl.

Plan - Growth Plan – 5,326.9790 0.01

12 Principal Cash Management

Fund - Liquid Option - Instl.

Prem. Plan - Growth – 98,827.6610 0.11

13 Reliance Liquidity Fund -

Growth Option – 2,04,444.0290 0.21

14 TATA Liquid Super High

Inv.Fund - Appreciation – 948.5799 0.13

15 Templeton India Treasury

Management Account -

Institutional Plan Growth – 5,611.1264 0.66

16 UTI Liquid Cash Plan

Institutional - Growth Option – 2,183.0029 0.26

Total (i) – 3.61


No. Date Value




72


ii) Ultra Short Term Debt FundGrowth Schemes

1 Baroda Pioneer TreasuryAdvantage Fund - InstitutionalGrowth Plan – 9,69,88,074.4810 100.00

2 Canara Robeco TreasuryAdvantage Super InsttGrowth Fund – 3,62,10,892.2363 50.00

3 DWS Ultra Short Term Fund - Institutional Growth – 4,64,82,657.3210 50.00

4 HDFC Cash ManagementFund - Treasury AdvantagePlan - Wholesale - Growth – 2,49,29,822.5500 50.00

5 ICICI Prudential Ultra ShortTerm Plan SuperPremium Growth – 4,87,28,194.1330 50.00

6 JM Money Manager FundSuper Plus Plan - Growth – 3,87,59,089.0100 50.00

7 Kotak Floater Long Term -Growth – 6,88,35,230.6280 100.00

8 Reliance Medium Term Fund-Retail Plan - Growth Plan -Growth Option – 5,27,16,916.2910 100.00

9 Religare Ultra Short TermFund - Institutional Growth – 3,96,94,195.9150 50.00

10 TATA Floater Fund - Growth – 3,66,46,682.0130 50.00

11 Templeton India Ultra ShortBond Fund Super Institutional

Plan - Growth – 8,49,14,539.3840 100.00

Total (ii) – 750.00

iii) Ultra Short Term Debt Fund

Dividend Schemes

1 Baroda Pioneer Treasury

Advantage Fund - Institutional

Daily Dividend Plan – 3,07,77,047.4908 30.81

2 Birla Sun Life Savings Fund -

Instl. - Daily Dividend -

Reinvestment – 8,20,072.0587 0.82

3 Canara Robeco Treasury

Advantage Super Instt Daily

Div Reinv Fund – 8,41,17,871.2681 104.37

4 DWS Cash Opportunities

Fund - Institutional Weekly

Dividend - Reinvest – 14,94,51,609.8129 150.63


No. Date Value




73


5 Fortis Money Plus InstitutionalPlan Daily Dividend – 21,42,51,529.7194 214.32

6 HDFC Cash ManagementFund - Treasury AdvantagePlan - Wholesale -Daily Dividend – 8,94,75,819.7616 89.76

7 ICICI Prudential Ultra ShortTerm Plan Super PremiumWeekly Dividend – 14,02,37,472.0823 140.69

8 IDFC Money Manager Fund -TP - Super Inst Plan C -Daily Dividend – 15,66,04,108.3793 156.63

9 JM Money Manager FundSuper Plus Plan -Daily Dividend – 18,23,55,316.5466 182.45

10 JP Morgan India TreasuryFund - Super Inst. Daily DivPlan - Reinvest – 2,47,26,256.7749 24.75

11 Kotak Floater Long Term -Daily Dividend – 10,32,52,674.7719 104.08

12 Reliance Money ManagerFund-Institutional Option -Daily Dividend Plan – 1,47,303.6329 14.75

13 Reliance Medium Term Fund-Daily Dividend Plan – 4,18,33,636.4103 71.52

14 Religare Ultra Short TermFund - InstitutionalDaily Dividend – 50,00,448.0379 5.01

15 Tata Floater Fund -Daily Dividend – 11,62,51,926.8349 116.66

16 Taurus Ultra Short TermBond Fund - Super Insti DailyDividend Plan – 7,86,362.0821 78.73

17 Templeton Floating RateIncome Fund Long TermSuper Institutional -Daily Dividend – 15,37,05,751.1407 153.85

Total (iii) – 1,639.83

iv) Fixed Maturity Plan

1 Birla Sun Life Interval

Income Fund - INSTL -

Quarterly - Series 1 - Dividend 25-May-10 – 50,00,414.6910 5.00

2 Canara Robeco Interval

Series 2 - Quarterly Plan 2 -

Inst Dividend Fund 10-Jun-10 – 50,00,426.8500 5.00


No. Date Value




74


3 Kotak Quarterly Interval Plan

Series 4 - Dividend 03-Jun-10 – 50,00,412.5740 5.00

4 Kotak Quarterly Interval

Plan Series 3 - Dividend 20-May-10 – 50,20,799.3507 5.02

5 Kotak Quarterly Interval

Plan Series 8 - Dividevd 10-Jun-10 – 55,23,878.3470 5.53

6 Kotak Quarterly Interval Plan

Series 7 - Dividend 25-May-10 – 50,21,003.0629 5.02

7 Reliance Quarterly Interval

Fund - Series III - Institutional

Dividend Plan 07-Jun-10 – 49,98,789.9000 5.00

8 TATA Fixed Income Portfolio

Fund Scheme C3 Inst Monthly

Dividend 24-May-10 – 50,18,432.6639 5.02

9 UTI Fixed Income Interval

Fund-Quarterly Plan Series-III-

Institutional Dividend Plan-

Reinvestment 24-May-10 – 50,00,393.2900 5.00

10 ICICI Prudential Interval Fund

Half Yearly Interval Plan -

I Institutional Div 12-Apr-11 51,36,959.2420 5.13 – –

11 Kotak FMP 6M Series 10 -

Dividend 02-May-11 50,00,000.0000 5.00 – –

Total (iv) 10.13 45.59

v) Liquid Dividend Plans

1 Canara Robeco Liquid Super

Inst Daily Div Reinvest Fund – 464.6516 0

2 DSP BlackRock Liquidity

Fund-Institutional Plan-Daily

Dividend-Reinvestment – 8.6080 0

3 Kotak Floater - Short Term -

Daily Dividend 1,18,65,229.1777 12.00 -

4 Reliance Liquid Fund-Treasury

Plan-Institutional Option-

Daily Dividend 19,63,224.8994 3.00 –

Total (v) 15.00 0

Total (B) 25.13 2,439.03

Grand total (A+B) 110.77 2,463.98


No. Date Value




75


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




10 Blue Star Limited 200 9.79




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




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


76


29 Fidelity FMP Series 4 - Plan A - Dividend 5083153.0561 5.08

30 Fortis Money Plus Institutional Plan Daily Dividend 3997384.1204 4.00

31 HDFC Cash Management Fund - Treasury Advantage Plan - Wholesale - Dly Div 1321566.4128 1.33

32 HDFC Cash Management Fund Savings Plan-Daily Dividend-Reinvestment 18870272.9053 20.07

33 HDFC Liquid Fund Premium Plan - Dividend - Daily Reinvest 44029311.5572 53.98

34 HDFC Quarterly Interval Fund - Plan A Retail Dividend Reinvestment 5063275.2102 5.06

35 HSBC Cash Fund Institutional Plus-Daily Dividend-Reinvestment 21219505.7310 21.23

36 HSBC Floating Rate - Long Term Plan - Institutional Option - Weekly Dividend 18912208.9431 21.25

37 ICICI Prudential Institutional Liquid Plan - Super Institutional Daily Div 23879739.6021 238.85

38 ICICI Prudential Interval Fund I Quarterly Interval Plan Institutional Dividend 5080700.0000 5.08

39 ICICI Prudential Interval Fund II Quarterly Interval Plan A Inst Dividend 5077415.5140 5.08

40 ICICI Prudential Interval Fund II Quarterly Interval Plan B Institutional Div 5080217.4610 5.08

41 ICICI Prudential Interval Fund II Quarterly Interval Plan C - Institutional Div 5084580.2539 5.08

42 ICICI Prudential Interval Fund II Quarterly Interval Plan D Institutional Div 10161671.3390 10.16

43 ICICI Prudential Interval Fund III - Quarterly Interval Plan - Inst Dividend 5077061.5250 5.08

44 ICICI Prudential Interval Fund IV Quarterly Interval Plan B Inst Div - Reinvest 5066677.7460 5.07

45 ICICI Prudential Ultra Short Term Plan Super Premium Weekly Dividend 17848959.8160 17.93

46 IDBI Liquid Fund - Daily Dividend - Reinvestment 433346.8588 43.33

47 IDBI Ultra Short Term Fund - Daily Dividend - Reinvestment 35315474.6590 35.32

48 IDFC Cash Fund - Plan C - Super I P - Daily Div 180217643.2210 180.26

49 IDFC Fixed Maturity Quarterly Series-59 Dividend 5075550.0000 5.08

50 IDFC Fixed Maturity Quarterly Series-60 Dividend 5082150.0000 5.08

51 IDFC Money Manager Fund - Investment Plan - Inst Plan B - Daily Dividend 151586792.4629 151.81

52 IDFC Money Manager Fund - TP - Super Inst Plan C - Daily Div 709449.2476 0.71

53 JM High Liquidity Fund- Super Institutional Plan-Daily Dividend-Reinv 105632158.0991 105.81

54 JM Money Manager Fund Super Plus Plan - Daily Dividend 2100038.4805 2.10

55 JPMorgan India Liquid Fund - Super Inst.Daily Dividend Plan - Reinvest 326112140.6322 326.37

56 JPmorgan India Treasury Fund - Super Inst. Daily Div Plan - Reinvest 176347314.2717 176.50

57 Kotak Floater - Short Term - Daily Dividend 48131500.9491 48.69

58 Kotak Floater Long Term - Daily Dividend 247766393.5073 249.74

59 Kotak FMP 6M Series 9 - Dividend 5152381.1900 5.15

60 Kotak Liquid Institutional Premium Plan - Dividend - Daily 331746237.7195 405.66

61 Kotak Quarterly Interval Plan Series 10 - Dividend 5074032.9900 5.07








69 Principal Cash Management Fund-Dividend Reinvestment Daily 15000965.2377 15.00

70 Principal PNB Fixed Maturity Plan(FMP-61)91 Days - Series XXIII- Sep 10 Reg Div 5073744.6940 5.07

71 Principal PNB Fixed Maturity Plan(FMP-63)91 Days - Series XXIV- Oct 10 Reg Div 5073723.8530 5.07

72 Principal PNB Fixed Maturity Plan(FMP-64)91 Days - Series XXV- Oct 10 Reg Div 5078758.8520 5.08

73 Reliance Interval Fund - Quarterly Plan - Series I-Institutional Div Reinvest 5069229.3051 5.07

74 Reliance Liquid Fund-Treasury Plan-Institutional Option-Daily Dividend 127840048.8229 195.43


No. Rs. in Crores


77


75 Reliance Liquidity Fund -Daily Dividend Reinvestment 507746103.3170 508.01

76 Reliance Medium Term Fund-Daily Dividend Plan 44686863.8132 76.40

77 Reliance Money Manager Fund-Institutional Option - Daily Dividend Plan 1364588.3369 136.65

78 Reliance Quarterly Interval Fund - Series III - Institutional Dividend Plan 5131419.6064 5.13

79 Religare Fixed Maturity Plan Series IV - Plan A (3 Months) - Dividend 5079247.1950 5.08

80 Religare Liquid Fund - Super Institutional Daily Dividend 222623421.9239 224.98

81 Religare Ultra Short Term Fund - Institutional Daily Dividend 173030000.4817 173.33

82 SBI Debt Fund Series - 90 Days - 34 - Dividend 5072927.0080 5.07

83 SBI Debt Fund Series - 90 Days - 35 - Dividend 5077050.0000 5.08

84 SBI Magnum Insta Cash Fund - Daily Dividned Option 174980071.3897 293.10

85 SBI Premier Liquid Fund - Super Institutional - Daily Dividend 125899712.1636 126.31

86 SBI-SHF- Ultra Short Term Fund - Institutional Plan - Daily Dividend 143899756.6086 143.99

87 Sundaram Money Fund-Super Institutional -Dividend-Daily -Reinvestment 214593981.4906 216.64

88 Sundaram Ultra Short Term Fund Super Inst. Daily Dividend 78353700.3609 78.64

89 Tata Fixed Income Portfolio Fund Scheme B2 - Institutional - Qtly Div Reinvst 4993458.5690 5.00

90 Tata Fixed Income Portfolio Fund Scheme C3 Inst Monthly 34995.9790 0.04

91 Tata Floater Fund - Daily Dividend 148573471.7505 149.10

92 Tata Liquid Fund - SHIP - Dividend - Daily 1906228.7970 212.45

93 Taurus Liquid Fund - Super IP - Daily Dividend - Reinvestment 2383790.2720 238.38

94 Taurus Ultra Short Bond Fund - Super Insti Daily Dividend Plan 1165389.1240 116.72

95 Templeton Floating Rate Income Fund Super Inst Option - Daily Dividend Reinvest 148946409.6771 149.22

96 Templeton India TR Mgt Account- Super Inst Plan-Daily Div 5559423.1174 556.32

97 Templeton India Ultra Short Bond Fund Super Inst Plan - Daily Dividend Reinvest 199285344.0632 199.52

98 UTI- Fixed Income Interval Fund - Series II - Qtly Interval Plan V - Inst Div Pl 5082333.0450 5.08

99 UTI Fixed Income Interval Fund-Quarterly Interval Plan Series-I - Inst Dividend 5076113.1930 5.08

100 UTI Fixed Income Interval Fund-Quarterly Plan Series-III-Inst Div Plan-Reinvest 5145108.3200 5.15

101 UTI Liquid Cash Plan Institutional - Daily Income Option- 911230.4803 92.89

102 UTI Money Market Fund - Institutional Plan - Daily Dividend - Reinvestment 446374.9741 44.79

103 UTI Treasury Advantage Fund - Institutional Plan (Dly Div ) - Reinvest 396303.0871 39.64

Total Mutual Fund 6,36,71,61,951.63 8,764.72

Grand Total 8,896.61

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


No. Rs. in Crores


78


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%

ii) Table showing change in benefit obligation:

Current Year Previous Year

Rs. in Crores Rs. in Crores

Liability at the beginning of the year 6.11 4.65

Interest cost 0.52 0.41

Current Service Cost 0.65 0.64

Benefits Paid (0.40) (0.33)

Actuarial (gains) / loss on obligations 1.63 0.74

Liability at the end of the year 8.51 6.11

iii) Tables of Fair value of plan assets:



Fair Value of plan assets at the beginning of the year 4.33 3.27

Expected return on plan assets 0.40 0.33

Contributions 0.92 1.01

Benefits paid (0.40) (0.33)

Actuarial gain / (loss) on Plan Assets 0.07 0.05

Fair Value of plan assets at the end of the year 5.32 4.33

Total Actuarial Gain/(Loss) to be recognised 1.56 0.69

iv) Actual Return on Plan Assets:



Expected return on plan assets 0.40 0.33

Acturial gain/(loss) on plan assets 0.07 0.05

Actual Return on plan assets 0.47 0.38


79


v) Amount recognised in the balance sheet



Liability as at the end of the year 5.32 6.11

Fair value of plan assets as at the end of the year 8.51 4.33

Net liability / (asset) disclosed in the Balance Sheet 3.19 1.78

vi) Expenses recognised in the profit & loss account



Current Service cost 0.65 0.64

Interest Cost 0.52 0.41

Expected return on plan assets (0.40) (0.33)

Actuarial (Gain) or Loss 1.56 0.69

Expenses recognised in the profit & loss account 2.33 1.41

vii) Balance Sheet Reconciliation



Opening Net Liability 1.78 1.38

Expense as above 2.33 1.41

Employers Contribution (0.92) (1.01)

Amount recognised in the Balance Sheet 3.19 1.78

viii) Category of Assets



Insurer Managed Funds 5.32 4.33

Total 5.32 4.33

ix) Experience Adjustment



On Plan Liability (Gain) / Loss 1.82 0.74

On Plan asset (Loss) / Gain 0.07 0.05

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.


80


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:

A) Names of the related parties and relationship

Sr. Related Party Nature of Relationship

No.

1 National Securities Clearing Corporation Limited Subsidiary Company

2 NSE.IT Limited Subsidiary Company

3 DotEx International Limited Subsidiary Company

4 India Index Services & Products Limited Subsidiary Company

5 National Commodity Clearing Limited Subsidiary Company

6 NSE Infotech Services Limited Subsidiary Company

7 NSE.IT (UK) Limited Subsidiary Company

8 NSE.IT (US) Inc. Subsidiary Company

9 Power Exchange India Limited Joint Venture

10 National Securities Depository Limited Associate Company

11 (1) Dr. Vijay L. Kelkar - Chairman Key Management Personnel

(2) Mr. Ravi Narain - Managing Director

(3) Ms. Chitra Ramkrishna - Jt. Managing Director

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

Related PartyNature of Transactions

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


81


• STP charges received 0.01 0.01

• Rent received 0.22 0.24

• NCFM Test expenses paid 1.68 –

• CTCL Empanelment charges received 0.03 –

• IT Mgt. & Consultancy charges paid 8.21 1.18

• Installation commissioning & warranty charges

for trading system 0.26 0.49


• Loan given – 4.00

• Receipt towards repayment of loan – 4.00

• Interest received on loan – 0.21

• Sale of Asset – 0.01

• Closing balance (Credit)/Debit (1.75) (1.47)

• Investment in Equity Share Capital 10.00 10.00

DotEx • Space and Infrastructure usage charges received 1.01 0.01

International • Reimbursement received for expenses on staff on deputation 2.35 1.24

Ltd. • Reimbursement for expenses incurred 11.41 7.21

• CTCL Empanelment charges received 0.03 0.01

• Amount received towards revenue sharing on account

of info feed services 7.94 6.90

• Web trading related expenses 27.02 18.69


Closing balance (Credit)/Debit (15.99) (8.02)

Investment in Equity Share Capital 0.69 0.69

India Index • License fees paid 7.80 6.08

Services & • Space and Infrastructure usage charges received 0.35 0.07

Products Ltd. • Reimbursement received for expenses on staff on deputation 1.01 0.53



Closing balance (Credit)/Debit (0.06) 0.72

Investment in Equity Share Capital (Note no.19(i)) 0.67 0.67

National • Space and Infrastructure usage charges received 0.63 1.60

Commodity • Reimbursement received for expenses on staff on deputation 1.63 1.39

Clearing Ltd. • Reimbursement received for other expenses incurred 0.80 0.90

Closing balance (Credit)/Debit 1.07 1.87


NSE Infotech • IT Mgt. & Consultancy charges paid 17.14 16.65

Services Ltd. • Repairs and maintenance - Computer trading ,

Telecommunication systems 17.66 17.02

• Rent received 0.21 0.20

• Reimbursement for expenses incurred 8.05 8.29



31.03.2011 31.03.2010


82


• Advance paid 8.60 4.00

Closing balance (Credit)/Debit (2.19) (1.18)


Power Exchange • Space and Infrastructure usage charges received 2.95 2.81

India Ltd. • Reimbursement received for expenses on staff on deputation 0.04 0.21


• Security Deposit received 0.25 –

• Investment in equity shares 0.50 9.97

Closing balance (Credit)/Debit (0.18) 0.79

Investment in Equity Share Capital(Note no.19(ii)) 13.00 12.50

National Securities • Reimbursement received for expenses incurred 0.02 0.02

Depository Limited • Reimbursement paid for other expenses incurred 0.06 –


• Investment in equity shares – 84.40

Closing balance (Credit)/Debit 0.00 0.03


Key Management • Gross remuneration including allowances,

Personnel non-cash perquisites and contribution to

Provident Fund and Superannuation Fund etc. 12.50 11.05

• Housing Loan - Closing Balance 0.02 0.03

• Interest received on Housing Loan

[Rs. 5991/- (Prev Year : Rs.7990/-)] 0.00 0.00

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.



31.03.2011 31.03.2010


83


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.


84


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)


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.


For KHANDELWAL JAIN & CO.




NARENDRA JAIN

Partner



Place : Mumbai Y. H. MALEGAM J. RAVICHANDRAN

Date : April 29, 2011 Director Director (F&L) & Company Secretary


85


CASHFLOW STATEMENT FOR THE YEAR ENDED 31ST MARCH, 2011

2010-2011 2009-2010


A) CASHFLOW FROM OPERATING ACTIVITIES

NET PROFIT BEFORE TAX 859.31 811.49

Add : Adjustments for :

- Depreciation 91.35 76.75

- Amortisation of Premium on Govt/Debt Securities 0.33 1.18

- Bad debts/Sundry balances written off 0.07 0.55

- Loss on sale /discard of assets (Net) 0.10 0.12

Less : Adjustments for :

- Sundry Balances written back (0.11) –

- Staff welfare expenses debited to staff welfare Reserve (0.35) (0.30)

- Compensation paid to Investors debited to Investor compensation reserve (0.14) (0.11)

- Interest income on short term investments (4.45) (1.00)

- Interest income on long term investment (9.78) (9.94)

- Interest income on Bank deposit (102.12) (18.80)

- Interest income on Certificate of deposits (5.26) (0.07)

- Interest income on Inter Corporate deposits (2.40) (6.52)

- Interest on Income tax refund (4.33) –

- (Profit)/Loss on sale/redemption of long term investments (0.86) (34.65)

- (Profit)/Loss on sale/redemption of short term investments (54.84) (67.28)

- Dividend on investment

Long Term (95.54) (56.28)

Short Term (55.42) (96.81)

OPERATING PROFIT BEFORE WORKING CAPITAL CHANGES 615.56 598.33

Adjustments for :

- Sundry Debtors (35.00) (25.34)

- Loans & Advances (11.84) 0.60

- Current Liabilities & Provisions 63.43 (165.76)

CASH GENERATED FROM OPERATIONS 632.15 407.83

Direct Taxes paid (Net of Refunds) (208.32) (189.16)

NET CASH FROM (USED IN) OPERATING ACTIVITIES - Total (A) 423.83 218.67

B) CASHFLOW FROM INVESTING ACTIVITIES

Purchase of Fixed Assets/Capital work-in-progress (71.30) (139.14)

Sale of Fixed Assets 0.29 0.07

Interest received 41.89 47.73

Dividend received 150.96 153.09

Intercorporate Deposit 63.28 (3.28)

Share Application money 2.89 (2.89)

(Increase)/Decrease in Investment 2,177.67 (102.43)

NET CASH FROM (USED IN) INVESTING ACTIVITIES - Total (B) 2,365.68 (46.86)


86


2010-2011 2009-2010


C) CASHFLOW FROM FINANCING ACTIVITIES

Proceed of deposit from trading members/applicant 102.09 92.79

Refund of deposit to trading members/applicant (28.70) (30.97)

Refund of Equipments deposits (Net) (1.77) (16.25)

Dividend paid (90.00) (54.00)

NET CASH FROM (USED IN) FINANCING ACTIVITIES - Total (C) (18.38) (8.43)

NET INCREASE/(DECREASE) IN CASH AND

CASH EQUIVALENTS (A+B+C) 2,771.13 163.38

CASH AND CASH EQUIVALENTS : OPENING BALANCE 449.89 286.51

[includes fixed deposit with banks of Rs. 401.85 crores (Previous Year

Rs.255.69 crores) and certificates of deposits with banks Rs.24.90 crores

(Previous Year Rs. Nil) ]

CLOSING CASH AND CASH EQUIVALENTS : CLOSING BALANCE 3,221.02 449.89

[includes fixed deposit with banks of Rs.2992.62 crores(Previous Year

Rs.401.85 cores) and certificates of deposits with banks Rs.202.83 crores

(Previous Year Rs. 24.90 crores)]

NET INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENT 2,771.13 163.38

Notes to Cash Flow Statement :

1 Cash and cash equivalent represent cash, bank balances and balance in fixed deposit account.

2 The above Cash Flow Statement has been prepared under the "Indirect Method" as set out in the Accounting

Standard-3 on Cash Flow Statements issued by the Institute of Chartered Accountants of India






NARENDRA JAIN

Partner






87


ENCLOSURE FORMING PART OF ACCOUNTS AS AT 31.03.2011

(Information pursuant No.GSR No.388(E) [F.No.3/24/94-CLV] dated 15-5-95, issued by The Department of

Company Affairs, Ministry of Law, Justice and Company Affairs)

(Part IV of Schedule VI to the Companies, Act, 1956)

BALANCE SHEET ABSTRACT AND COMPANY'S GENERAL BUSINESS PROFILE

I Registration Details

Registration No. * 6 9 7 6 9 State Code 1 1

Balance Sheet Date 3 1 0 3 1 1

Date Month Year

II Capital raised during the year (Amount in Rs. Thousands)

Public Issue Rights Issue

* * * N I L * * * * * * N I L * * *

Bonus Issue Private Placement

* * * N I L * * * * * * N I L * * *

III Position of Mobilisation and Deployment of Funds (Amount in Rs. Thousands)

Total Liabilities Total Assets

* 4 6 4 9 0 0 8 2 * 4 6 4 9 0 0 8 2

Sources of Funds

Paid-up Capital Reserves & Surplus

* * * 4 5 0 0 0 0 * 2 9 2 3 3 8 1 8

Secured Loans Unsecured Loans / Deposits

* * * N I L * * * * 1 1 1 5 2 0 4 2


* * * 1 2 7 5 9 4

Application of Funds

Net Fixed Assets Investments

* * 4 5 7 9 9 5 6 * * 5 4 8 2 4 1 6

Net Current Assets Misc. Expenditure

* 3 0 9 0 1 0 8 2 * * * * * * * * *

Accumulated Losses

* * * N I L * * *


88


IV Performance of Company (Amount in Rs. Thousands)

Turnover Total Expenditure

* 1 3 7 8 4 7 4 3 * * 5 1 9 1 6 8 5

+ - Profit / Loss before tax + - Profit / Loss after tax

* * 8 5 9 3 0 5 8 * * 6 3 7 5 0 5 8

(Please tick Appropriate box + for Profit, - for Loss)

Earning per Share in Rs. Dividend rate %

* 1 4 1 . 6 7 2 1 0

V Generic Names of Three Principal Products / Services of Company (as per monetary terms)

Item Code No. N A

(ITC Code)

Product F A C I L I T A T I N G T R A D I N G

DescriptionI N S E C U R I T I E S






NARENDRA JAIN

Partner





��


89





CHITRA RAMKRISHNA DR. R. H. PATIL




Statement pursuant to Section 212 of the Companies Act,1956, relating to subsidiary company

1. Name of the subsidiary : National Securities Clearing Corporation Limited

2. Financial Year of the subsidiary company ended on : 31st March, 2011

3. Holding Company Interest

Number of Shares : 4,50,00,000

Extent of Holding : 100%

4. The Net Aggregate amount of the subsidiary

Profits/(losses) so far as it concerns members

of the holding company and is not dealt with

In Holding Company's account

(i) for the financial year of the company : Rs. 2,38,12,68,867

(ii) for the previous financial years of the : Rs. 10,56,60,53,325

subsidiary since it became the holding

Company's subsidiary

5. Net aggregate amount of the Profit/(Losses) of the

Subsidiary dealt with in the company's account

(i) for the financial year of the subsidiary : Rs. 90,00,00,000

(ii) for the previous financial years of the subsidiary : Rs. 3,43,12,50,000

since it became the subsidiary of the holding

company.


90


Statement pursuant to Section 212 of the Companies Act, 1956, relating to subsidiary company

1. Name of the subsidiary : NSE.IT Limited









(i) for the financial year of the company : Rs. 13,63,61,863

(ii) for the previous financial years of the : Rs. 28,20,87,673






(ii) for the previous financial years of the subsidiary : Rs. 8,00,00,080


company.









91



1. Name of the subsidiary : DotEx International Limited







Of the holding company and is not dealt with











company.









92



1. Name of the subsidiary : India Index Services & Products Limited



Number of Shares : 6,63,000












(i) for the financial year of the subsidiary : Rs. 59,67,000



company.









93



1. Name of the subsidiary : National Commodity Clearing Limited



Number of Shares : 30,87,500






(i) for the financial year of the company : Rs. 64,69,948

(ii) for the previous financial years of the : Rs. 97,22,792





(i) for the financial year of the subsidiary : Nil

(ii) for the previous financial years of the subsidiary : Nil


company.









94



1. Name of the subsidiary : NSE Infotech Services Limited



Number of Shares : 50,000






(i) for the financial year of the company : Rs. 94,61,342









company.









95



1. Name of the subsidiary : NSE.IT (UK) Limited



Number of Shares : 1 Equity Share of £ 1 face value






(i) for the financial year of the company : Rs. (1,58,461)

(ii) for the previous financial years of the : Rs. (3,40,936)








company.









96



1. Name of the subsidiary : NSE.IT (US) Inc.

2. Financial Year of the subsidiary company ended on : 31st December, 2010


Number of Shares : 1 Equity share of $ 1 face value






(i) for the financial year of the company : Rs.(26,02,755)

(ii) for the previous financial years of the : Rs. 4,15,285








company.








NATIONAL SECURITIES CLEARING

CORPORATION LIMITED

(A wholly owned subsidiary of National Stock Exchange of India Limited)

SIXTEENTH ANNUAL REPORT

2010-11

A A

A A

BOARD OF DIRECTORS

Mr. Ravi Narain : Chairman

Ms. Chitra Ramkrishna : Managing Director & CEO

Mr. R.P. Chitale

Mr. Y.H. Malegam

Dr. R.H. Patil

Dr. Ajay N. Shah

Mr. S. Venkiteswaran

SECRETARY

Mr. R. Jayakumar : Asst. Company Secretary

AUDITORS : M/s. Haribhakti & Co.


701, Leela Business Park

Andheri Kurla Road

Andheri (East)

Mumbai - 400 059

REGISTERED OFFICE : “Exchange Plaza”

Plot No. C-1, Block ‘G'

Bandra Kurla Complex,

Bandra (East)

Mumbai- 400 051

Sixteenth Annual ReportNational Securities Clearing Corporation Limited

Sixteenth Annual Report

1

National Securities Clearing Corporation Limited

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.

1. Settlement - Capital Market 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 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.


2


Table No. 1: Settlement Statistics for 2010-11 - Capital Market segment

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

*closing balance as on March 31, 2011

During the year under review, there was no physical settlement.

2. Securities Lending and Borrowing segment

The Securities Lending and Borrowing Scheme was implemented with effect from April 21, 2008.

The scheme has been revised twice since its launch. SEBI vide circular dated January 6, 2010 had

suggested further revisions to the scheme and revised scheme was implemented on June 28, 2010.

The revised scheme has performed comparatively well as compared to previous two schemes.

The volume of transactions for old scheme during the period April 1, 2010 to June 25, 2010 is

Rs. 7.98 crores with a total quantity of 1.39 lakh shares traded and a total of 29 trades were executed

and successfully settled for both the first and the reverse leg. The volume for revised scheme during

June 28, 2010 to March 31, 2011 is Rs. 757.33 crores with a total quantity of 109.05 lakh shares

traded and a total of 1,690 trades were executed and successfully settled for both the first and the

reverse leg.

3. Settlement - 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.


3


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)

Apr-10 5,82,30,570 16,71,620.00 3,295.10 83.05 794.96 105.02 4,278.13

May-10 8,09,60,515 21,24,495.66 7,062.30 203.46 1,037.30 152.05 8,455.10

Jun-10 7,70,78,089 20,35,598.98 5,116.60 47.70 944.81 200.51 6,309.61

Jul-10 6,77,56,807 18,29,910.06 3,381.50 56.91 795.88 132.91 4,367.19

Aug-10 7,37,12,025 20,53,727.62 3,466.40 49.21 932.30 127.23 4,575.14

Sep-10 9,30,89,649 27,36,391.84 4,175.40 105.00 1,623.10 314.46 6,217.96

Oct-10 9,08,01,023 28,24,493.12 6,684.60 181.99 1,123.70 162.82 8,153.11

Nov-10 9,87,99,250 29,65,846.19 10,170.00 191.04 1,052.90 183.16 11,597.10

Dec-10 8,02,42,319 23,57,108.95 7,242.40 77.04 1,011.80 223.71 8,554.95

Jan-11 9,87,28,755 28,41,833.90 6,458.00 160.13 1,074.20 165.35 7,857.69

Feb-11 10,93,65,434 29,29,294.60 6,202.90 359.05 1,247.00 151.72 7,960.66

Mar-11 10,54,47,626 28,77,900.17 4,032.70 76.04 1,065.50 199.97 5,374.22

As of March 31, 2011, the Settlement Guarantee Fund in F&O segment stood at

Rs. 29,759.29 Crores.


4


4. Settlement - 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. The details of turnover and month-wise settlement values

during the period April 1, 2010 to March 31, 2011 in Currency Futures & Options are as under:

Currency Futures Currency Options

Particulars No. of Turnover MTM Final No. of Notional Final Total

Contracts (in Rs. Settlement Settlement Contracts Turnover Exercise Settlement

Traded crs.) (in Rs. (in Rs. crs.) Traded (in Rs. Settlement (in Rs. crs.)

(in lakhs) crs.) (in lakhs) (in lakhs) crs.) (in Rs. crs.)

Apr-10 770.85 3,45,932.17 74.79 3.95 N.A. N.A. N.A. 78.75

May-10 777.45 3,59,679.85 303.70 12.32 N.A. N.A. N.A. 316.02

Jun-10 698.38 3,27,382.50 233.81 4.74 N.A. N.A. N.A. 238.56

Jul-10 449.25 2,13,353.41 187.25 3.16 N.A. N.A. N.A. 190.41

Aug-10 426.40 2,01,239.14 113.59 0.41 N.A. N.A. N.A. 114.00

Sep-10 615.86 2,84,704.06 173.75 7.78 N.A. N.A. N.A. 181.53

Oct-10 677.94 3,04,213.49 205.07 4.53 3.05 1,383.11 N.A. 209.59

Nov-10 553.97 2,53,101.03 216.91 6.42 29.07 13,230.66 11.53 234.86

Dec-10 488.71 2,23,555.38 272.00 1.32 30.65 14,009.11 10.26 283.59

Jan-11 547.13 2,52,560.92 171.17 8.11 48.59 22,271.88 7.25 186.53

Feb-11 472.95 2,18,253.03 227.82 9.80 79.34 36,400.60 10.61 248.23

Mar-11 642.94 2,95,027.14 237.88 9.03 183.50 83,490.24 24.79 271.70

Note : Currency options commenced trading on October 29, 2010.

N.A. - Not Applicable

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:


5


Interest Rate Futures

Particulars No. of Contracts Turnover MTM Final Total

Traded ( in Rs. crs.) Settlement Settlement Settlement

( in Rs. crs.) ( in Rs. crs.) ( in Rs. crs.)

Apr-10 407 7.44 0.70 Not Applicable 0.70

May-10 1,177 21.62 0.90 Not Applicable 0.90

Jun-10 917 17.16 0.49 13.40 13.89

Jul-10 205 3.80 0.04 Not Applicable 0.04

Aug-10 26 0.49 0.03 Not Applicable 0.03

Sep-10 79 1.47 0.01 0.22 0.23

Oct-10 24 0.44 0.00 Not Applicable 0.00

Nov-10 29 0.54 0.00 Not Applicable 0.00

Dec-10 442 8.16 0.00 0.02 0.02

Jan-11 17 0.31 0.00 Not Applicable 0.00

Feb-11 11 0.20 0.00 Not Applicable 0.00

Mar-11 14 0.26 0.00 0.00 0.00

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.

(ii) F&O & Currency Derivatives segments

NSCCL has in place many risk management measures including monitoring of exposure on a

real time basis through the system called PRISM (Parallel Risk Management System) and also

end of day monitoring of client level exposures.

The most critical component of PRISM is the online real time client level, portfolio based

margining and monitoring system. The robustness of the system is time tested and has proved

its efficient handling of volatile situations effectively, on numerous occasions in the past and

especially on highly volatile days in the year. The actual margining and position monitoring is

done on-line, on an intra-day basis. NSCCL uses the SPAN (Standard Portfolio Analysis of

Risk) system for the purpose of margining, which is a portfolio based system.

SPAN is a registered trademark of the Chicago Mercantile Exchange, used herein under License.

The objective of SPAN is to identify overall risk in a portfolio of futures and options contracts

for each member. The system treats futures and options contracts uniformly, while at the same

time recognising the unique exposures associated with options portfolios like extremely deep

out-of-the-money short positions and inter-month risk. As SPAN is used to determine margin


6


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.

6. Corporate Bond settlement

SEBI and RBI vide their respective circulars dated October 16, 2009 stipulated that all Over the

Counter (OTC) trades in corporate bonds between specified entities namely Mutual funds, Foreign

Institutional Investors, Venture Capital Funds, Foreign Venture Capital Investors, Portfolio managers,

and RBI regulated entities as specified by RBI shall necessarily be cleared and settled through the

National Securities Clearing Corporation Limited (NSCCL) or the Indian Clearing Corporation

Limited (ICCL) with effect from December 1, 2009.

The Employees' Provident Fund Organisation (Ministry of Labour & Employment, Govt. of India)

has issued a circular dated December 30, 2010, mandating reporting of transactions in corporate

bonds by all Exempted PF Trusts on authorised platforms and settlement through the authorised

clearing corporations (NSCCL or ICCL).

Trades in corporate bonds are reported on the various platforms made available for the same (NSE

website, WDM and FIMMDA platform supported by NSE, etc.). NSCCL has put in place a system

for settling corporate bonds transactions with effect from December 1, 2009. The month-wise

settlement statistics for the period are as under

Particulars No. of Trades No. of Settlement Nominal Value Average Daily

Settled Days of Bonds Settled Settlement Value

(Rs.Cr.) (Rs. Cr.)

Apr-10 3,020 19 43,726.57 2,301.40

May-10 3,606 20 47,930.68 2,396.53

Jun-10 2,982 22 37,891.21 1,722.33

Jul-10 3,300 21 47,181.02 2,246.72

Aug-10 2,581 21 37,167.12 1,769.86

Sep-10 2,545 20 38,154.19 1,907.71

Oct-10 2,528 21 37,809.13 1,800.43

Nov-10 2,118 20 28,458.21 1,422.91

Dec-10 1,868 22 26,658.79 1,211.76

Jan-11 1,814 20 26,863.57 1,343.18

Feb-11 1,731 19 23,648.35 1,244.65

Mar-11 2,854 22 37,142.82 1,688.31

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.


7


7. Mutual Fund Service System (MFSS)

Securities Exchange Board of India (SEBI) vide circular dated November 9, 2010 issued revised

guidelines for facilitating transactions in Mutual Fund schemes through the Stock Exchange

infrastructure. As on March 31, 2011, 25 mutual fund houses with 1,338 schemes were enabled

under the revised MFSS scheme.

(i) Subscription

The average daily value of funds settled for subscription of mutual fund units for the period

January 1, 2011 to March 31, 2011 was Rs. 112.54 lakhs. The highest settlement value was

Rs. 1,800.98 lakhs and was observed on January 25, 2011. The average daily quantity of units

allotted under subscription for the period January 1, 2011 to March 31, 2011 was 3.89 lakhs.

The highest quantity allotted was 20.26 lakhs and was observed on March 17, 2011.

(ii) Redemption

The average daily value of funds settled for redemption of mutual fund units for the period

January 1, 2011 to March 31, 2011 was Rs. 45.15 lakhs. The highest settlement value was

Rs. 282.55 lakhs and was observed on February 18, 2011.The average daily quantity of units

redeemed for the period January 1, 2011 to March 31, 2011 was 1.83 lakhs. The highest quantity

redeemed was 13.96 lakh units and was observed on February 18, 2011.

8. New Initiatives and Developments

During the year, several initiatives have been taken by NSCCL to bring about efficiency in clearing

& settlement operations as well as to provide enhanced financial services to its constituents. A few of

them are given as under:

(i) Longer tenure and early recall and repay facility in SLB

In accordance with SEBI circular dated January 6, 2010, the tenure of transactions in SLB has

been increased from one month to 12 months. Further, the borrowers and lenders have been provided

an optionality of doing an early repay and recall of the borrowed and lent securities. This is a

screen based facility and the scheme has seen improved participation subsequent to this.

(ii) Auction on T+2 day basis

Auction in respect of securities pay-in shortages in the Capital market segment was conducted

on a T+3 day basis and settled on the T+4 day of the original trade. Effective from

February 1, 2011, as specified by SEBI, auctions for shortages are conducted on the T+2 day

itself and settled on the T+3 day. This has further shortened the settlement cycle which is beneficial

for the market participants.

(iii) Intra-day client and CP code modification

Members were accorded a half an-hour time window post trading hours for carrying out their

client and CP code modifications ( 4:15 p.m.- 4:45 p.m). An interactive system National Clearing

Management System (NCMS) has now been provided wherein members can carry out such

modifications intra-day upto 4:15 p.m. While providing members more time for these

modifications, it also facilitates faster download of data to members.


8


(iv) On-line dissemination of India VIX

India VIX values which were earlier disseminated on the website only at the EOD are now

being disseminated on an online real time basis. This makes it amenable for introduction of

products on VIX.

(v) Faster payout to members

Payout of securities was being effected to members by around 12 noon or thereafter. The pay-in

and pay-out processes have been revamped to effect payout within five minutes of pay-in i.e. by

around 11:15 a.m. This facility is very helpful to members as they are able to use these securities

for providing for early pay-in of their outstanding transaction thereby getting margin benefits.

(vi) Process optimisations and automations

Existing manual processes were identified and automated and processes optimised to ensure

reduced turnaround time. This has reduced areas of errors and process time respectively. These

inter-alia include automation of corporate bonds settlement process, process re-sequencing and

optimisation for facilitating faster download of information / reports to members.

9. Other Achievements

CRISIL has continued its highest corporate credit rating of ‘AAA' to the National Securities Clearing

Corporation Ltd (NSCCL). ‘AAA' rating indicates highest degree of strength with regard to honoring

debt obligations. NSCCL is the first Indian Clearing Corporation to get this rating. The rating reflects

NSCCL's status as Clearing Corporation for NSE, India's largest stock exchange. The rating also

factors in NSCCL's rigorous risk management controls and adequate settlement guarantee cover.

NSCCL has been accorded this rating for the third consecutive year.

10. Opportunities and increased coverage

(i) Clearing Members

New Clearing Members have been added on both Capital Market and F&O segment thereby

providing a wider choice to clients. Clearing membership was granted to 33 new members in

the F&O segment and 83 new members in Capital Market segment. In Currency Derivatives

segment, 10 Clearing Members have been enabled.

(ii) Custodian Clearing Members & Professional Clearing Members (PCM)

In the Capital Market segment 18 Custodians are enabled as Custodian Clearing Members

through whom clients can settle their transactions. Of these, two custodians and one PCM has

been enabled during April 2010 to March 2011.

11. Multiple Depositories /Banks

NSCCL is electronically connected to both the depositories National Securities Depository Limited

(NSDL) and Central Depository Services (India) Limited (CDSL) for securities settlement and 13

clearing banks namely Axis Bank Ltd., Bank of India, Canara Bank, Citibank N.A, HDFC Bank


9


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.

II. FINANCIAL RESULTS

The working of NSCCL during the year has resulted in a net profit after tax of Rs. 238.13 crores as per

particulars given below: -


(Rs. in crores) (Rs. in crores)

Income 377.04 345.24

Expenditure 56.66 48.28


Provision for tax (including deferred tax) 82.25 70.94



Amount available for appropriation 339.93 286.50

Appropriations





Total 339.93 286.50

III. DIVIDEND

In view of the above results, the Directors recommend payment of dividend of Rs. 20/- per share for the

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, NSCCL, 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

Mr. Y. H. Malegam and Dr. Ajay Shah retire by rotation at the ensuing Annual General Meeting and being

eligible offer themselves for reappointment.


10


VI. DIRECTORS' RESPONSIBILITY STATEMENT


(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 NSCCL at the end of the financial year i.e., 31st March 2011 and of the profits of NSCCL 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 Companies Act, 1956 for safeguarding the assets of NSCCL


(iv) the Directors had prepared the annual accounts on a going concern basis.

VII. AUDIT COMMITTEE

The Audit Committee comprises of four Directors viz., Mr. Y. H. Malegam, Mr. R. P. Chitale,

Dr. R. H. Patil and Mr. S. Venkiteswaran as its members. Mr. Y. H. Malegam is the Chairman of the Audit

Committee. The Committee met four times during the year on June 4, 2010, August 24, 2010,

November 22, 2010 and February 1, 2011. The details of the attendance of members of the Audit Committee

at their meetings held on the above dates are given in the following table:-

Names Number of meetings held during Number of meetings

the year attended


Dr. R. H. Patil 4 2

Mr. R. P. Chitale 4 4

Mr. S. Venkiteswaran 4 1

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.

IX. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE

EARNINGS / OUTGO

1. Conservation of Energy, Technology Absorption

As the Company does not fall under any of the industries listed out in the Schedule appended to

Companies (Disclosure of particulars in the Report of the Board of Directors) Rules, 1988, particulars

required to be disclosed with respect to conservation of energy and technology absorption in terms of


11


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



12


ANNEXURE TO DIRECTORS' REPORT

STATEMENT PURSUANT TO SECTION 217 (2A) OF THE COMPANIES ACT, 1956 READ

WITH COMPANIES (PARTICULARS OF EMPLOYEES) RULES, 1975.

Sr. Name & Age in Designation/ Remuneration Experience Date of Last

No. Qualifications Years Nature of Received (Rs.) (No. of Commencement Employment

Duties Gross Net years) of Employment

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 :


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.


13


AUDITORS' REPORT TO THE MEMBERS OF

NATIONAL SECURITIES CLEARING CORPORATION LIMITED

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.


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.

4. Further to our comments in the 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, the profit and loss account and the cash flow statement dealt with by this

report are in agreement with the books of account;

iv. In our opinion, the balance sheet, the profit and loss account and the 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 the 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 is 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.


14


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.

FOR HARIBHAKTI & CO.

CHARTERED ACCOUNTANTS

FRN No.103523W

PRASAD V. PARANJAPE

PARTNER

Membership No. 47296

Place : Mumbai



15


[Referred to in paragraph 3 of the Auditors' Report of even date to the members of

NATIONAL SECURITIES CLEARING CORPORATION LIMITED on the

financial statements for the year ended March 31, 2011]

(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.


16


(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.


17


(xvi) The Company has not obtained any term loans.

(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.

FOR HARIBHAKTI & CO.

CHARTERED ACCOUNTANTS

FRN No.103523W

PRASAD V. PARANJAPE

PARTNER


Place : Mumbai



18




(Rs. In Lacs) (Rs. In Lacs)

I SOURCES OF FUNDS1. Shareholders' Funds

a Equity Share Capital 1 4,500.00 4,500.00b Reserves & Surplus 2 89,127.97 93,627.97 75,775.34 80,275.34

2. Deposits (Unsecured)a Deposit from Members 3 38,449.83 36,855.24b Deposits from Applicants 427.00 552.00c Deposits from Clearing Banks 12,450.00 51,326.83 11,900.00 49,307.24

3. Deferred Tax Liabilities 41.20 15.83

TOTAL 144,996.00 129,598.41

II APPLICATION OF FUNDS1. Fixed Assets 4

a. Gross Block 2,714.29 2,544.97Less : Accumulated Depreciation 2,171.33 2,041.47

Net Block 542.96 503.50

b. Capital Work-In-Progress 114.79 657.75 3.26 506.76

(Including Capital Advances)

2. Investments 5 16,375.40 10,234.34

3. Current Assets, Loans and Advances 6a. Current Assets

1. Interest Receivable 5,749.77 5,068.522. Sundry Debtors 465.00 1,881.113. Bank Balances 377,257.54 282,732.074. Other Current Assets 59,518.45 442,990.76 131,350.57 421,032.27

b. Loans & Advances 974.00 1,046.11

443,964.76 422,078.38 Less : Current Liabilities & Provisions 7

Current Liabilities 305,541.89 293,251.02

Provisions 10,460.02 316,001.91 9,970.05 303,221.07

Net Current Assets 127,962.85 118,857.31

TOTAL 144,996.00 129,598.41


The Schedules referred to above form an integral part of the Balance Sheet and notes to accounts


For HARIBHAKTI & CO.Chartered Accountants

RAVI NARAIN CHITRA RAMKRISHNAChairman Managing Director

PRASAD V.PARANJAPE Y. H. MALEGAM R. H.PATILPartner Director Director

Place : Mumbai R. JAYAKUMARDate : April 28 ,2011 Asst. Company Secretary


19


PROFIT & LOSS ACCOUNT FOR THE YEAR ENDED MARCH 31, 2011

For the year ended For the year endedSchedule 31.03.2011 31.03.2010

(Rs. in Lacs) (Rs. in Lacs)

INCOMEClearing & Settlement Charges 11,988.99 9,591.13IT & Process Support Charges 9.00 25.53Interest Income 8 15,696.60 13,977.01Other Investment Income 9 7,314.40 9,120.82Other Income 10 2,695.32 1,809.62

TOTAL 37,704.31 34,524.11

EXPENDITURE

Administration & Other Expenses 11 4,121.05 3,615.90Bad Debts (Refer Note No.1c (ii) ) – 8.20Payments to and provision for employees 12 1,295.48 968.91Depreciation 249.76 234.78

TOTAL 5,666.29 4,827.79

Net Profit before Tax 32,038.02 29,696.32Less : Provision for Taxation

- Current Tax 8,200.00 7,100.00- Deferred Tax 25.37 (5.71)

Net Profit after Tax 23,812.65 22,602.03

Add : Surplus brought forward from Previous Year 10,180.34 6,048.36

Net Profit available for Appropriation 33,992.99 28,650.39

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


The Schedules referred to above form an integral part of the Profit & Loss Account and Notes to Accounts


For HARIBHAKTI & CO.


RAVI NARAIN CHITRA RAMKRISHNA


PRASAD V.PARANJAPE Y. H. MALEGAM R. H.PATIL

Partner Director Director

Place : Mumbai R. JAYAKUMAR

Date : April 28 ,2011 Asst. Company Secretary


20


As at 31.03.2011 As at 31.03.2010



Authorised

4,50,00,000 Equity Shares(Previous Year :4,50,00,000) of Rs. 10 Each 4,500.00 4,500.00


4,50,00,000 (Previous Year 4,50,00,000) Equity Shares of

Rs. 10 each fully paid-up. 4,500.00 4,500.00

(all the above shares are held by the holding company-

National Stock Exchange of India Limited and its nominees)

(Of the above 4,49,99,994 equity shares are allotted as fully paid by

way of bonus shares on capitalisation of general reserves)

TOTAL 4,500.00 4,500.00


General Reserve

As per Last Balance Sheet 42,095.00 33,595.00

Add : Transferred from Technology

Upgradation Reserve 500.00 –

Add : Transferred from Profit & Loss Account 13,000.00 55,595.00 8,500.00 42,095.00

Special Contingency Reserve


Add : Transferred from Profit & Loss Account – 22,000.00 – 22,000.00

Technology Upgradation Reserve

As per Last Balance Sheet 500.00 500.00

Less : Transferred to General Reserve 500.00 – – 500.00

Capital Redemption Reserve


Add : Transferred during the year – 1,000.00 – 1,000.00

Balance in Profit & Loss Account 10,532.97 10,180.34

TOTAL 89,127.97 75,775.34

SCHEDULE 3 : DEPOSIT FROM MEMBERS

- Security Deposit from Clearing Members 32,235.48 30,426.15(Amount repayable within one year Rs.445 lacs(Previous Year : Rs. 57 lacs))

- Security Deposit in lieu of Bank Guarantee/securities 6,214.35 6,429.09from Clearing Members( Amount repayable within one year Rs 76 lacs(Previous Year: Rs. 25 lacs))

TOTAL 38,449.83 36,855.24



21


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24


As at 31.3.2011 As at 31.3.2010



A. CURRENT ASSETS

1 Interest Receivable :

- On Investments 496.53 189.57

- On Others 5,253.24 5,749.77 4,878.95 5,068.52

2 Sundry Debtors (Considered good)

(Unsecured, considered good)

a Non-Settlement Dues and Others

Over six months 4.69 0.13

2,514.78

Other debts (including dues from

Holding Company Rs.Nil (Previous

Year: Rs.1492.84 lacs)) 455.78 460.47 1,874.76 1,874.89

b Settlement Obligations Recoverable

Over six months – –

Other debts 4.53 4.53 465.00 6.22 6.22 1,881.11

3 Bank Balances


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


Advances recoverable in cash or in kind

or for value to be received 274.20 237.28

Advance tax (Net of Provisions of

Rs. 44111.09 Lacs( Previous 688.09 796.00

Year: Rs.35911.09 Lacs))

Other Deposits 11.71 12.83

974.00 1,046.11

TOTAL 443,964.76 422,078.38

* Includes deposits of Rs.1029.53 lacs ( Previous Year: Rs.964.78 lacs) made on behalf of members out of withheld

payouts/collateral deposits.


25



CURRENT LIABILITIES

Sundry Creditors (Refer Note No.2 (f))

(including amount due to holding company

Rs 945.32 Lacs (Previous Year: Rs Nil)

a) Total Outstanding Dues of Micro 0.02 0.15

Enterprises and Small Enterprises

b) Others 1230.23 1230.25 247.56 247.71

Margins From Members 106132.94 127,035.89

Settlement Obligations payable 197162.10 164,828.42

Amount payable to NSEIL IPFT 2.58 91.64

Other Liabilities 1014.02 305,541.89 1,047.36 293,251.02

PROVISIONS

Proposed Dividend 9,000.00 8,550.00

Corporate Dividend Tax 1,460.02 10,460.02 1,420.05 9,970.05

TOTAL 316,001.91 303,221.07

As at 31.3.2011 As at 31.3.2010




31.3.2011 31.3.2010



Interest on Investments 777.66 607.06

(TDS Rs 0.14 Lacs ( Previous Year : Rs.10.99 lacs) )

(Including Taxfree Income Rs.739.04 lacs

(Previous Year: Rs. 568.63 lacs) )

Interest on Bank Deposits (TDS Rs.1498.92 lacs , 14,906.35 13,356.72

(Previous Year : Rs.1572.38 lacs) )

Interest on delayed Receipt of dues 12.59 13.23

TOTAL 15,696.60 13,977.01

SCHEDULE 9 : OTHER INVESTMENT INCOME

Dividend from Mutual Funds 4,774.30 5,629.23

Profit on Sale/Redemption of Mutual Funds/Bonds (Net)

- Short Term 34.72 1,164.95

- Long Term 2,505.38 2,540.10 2,326.64 3,491.59

TOTAL 7,314.40 9,120.82


26



Profit on sale / discard of Fixed Assets (Net) – 0.02

Bad debts written back – 0.02

WAP Difference 2.98 2.67

Software Usage Charges 50.00 68.00

Other Operational income 0.07 0.08

Connect to NSE Services 268.65 190.93

Processing Charges 327.14 260.05

Fines & Penalties 2,021.14 1,259.83

Miscellaneous Income 25.34 28.02

TOTAL 2,695.32 1,809.62

SCHEDULE 11 : ADMINISTRATION & OTHER EXPENSES

Space & Infrastructure Usage Charges 561.47 228.94

Common Usage Expenses (Refer Note No. 1 d (i)) 575.00 475.00

Insurance Premium 10.83 17.45

Printing, Stationery & Consumables 52.86 43.79

Auditors' Remuneration

- Audit fees 5.00 5.00

- Other services 0.13 5.13 – 5.00

Professional fees 274.43 219.14

Repairs & Maintenance :

- On Building 14.86 46.32

- On Computer systems 1,263.26 1,302.29

- Others 13.44 16.20

IT Management & Consultancy Charges 498.05 417.42

Software Expenses 228.95 263.30

Directors' Sitting fees 2.40 2.20

Electricity expenses 130.65 104.60

Rates and Taxes 1.11 1.07

Loss on Sale of Assets (Net) 0.12 –

Amortisation of Premium on Government / Debt Securities 22.64 59.74

(Refer Note No.1e(iii) )

Other expenses 465.85 413.44

TOTAL 4,121.05 3,615.90

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


31.3.2011 31.3.2010



27


SCHEDULE 13 : SIGNIFICANT ACCOUNTING POLICIES AND NOTES TO ACCOUNTS


a) Basis of Accounting :

The financial statements have been prepared to comply in all material respects with the Accounting

Standards notified by Companies (Accounting Standards) Rules, 2006, (as amended) and the

relevant provisions of the Companies Act, 1956. The financial statements have been prepared

under the historical cost convention on an accrual basis except in case of assets for which provision

for impairment is made and revaluation is carried out. The accounting policies have been

consistently applied by the Company and are consistent with those used in the previous year.

b) Use of Estimates :

The preparation of financial statements in conformity with generally accepted accounting

principles requires management to make estimates and assumptions that affect the reported

amounts of assets and liabilities and disclosure of contingent liabilities at the date of the financial

statements and the results of operations during the reporting period. Although these estimates

are based upon management's best knowledge of current events and actions, actual results could

differ from these estimates.

c) Revenue Recognition :

Revenue is recognized to the extent that it is probable that the economic benefits will flow to the

company and the revenue can be reliably measured.

(i) Clearing and Settlement charges, IT & support charges are recognized on accrual basis as

and when the services are rendered.

(ii) In respect of Members who have been declared as defaulters by the company all amounts

(dues) remaining to be recovered, net of available security and insurance cover available if

any, till the date of being declared as defaulters are written off as bad debts. All subsequent

recoveries are accounted when received.

Shortages arising after the date of declaration of default are written off as bad debts in the

year in which it arises, after exhausting all remedies including forfeiture of securities and

insurance cover available if any.

Other overdue amounts are provided for as doubtful debts or are written off as bad debts,

if the same are considered doubtful/irrecoverable in the opinion of the management.

(iii) Penal Charges, in the year of declaration of default, in respect of shortages due from the

respective member, are booked to the extent such charges are recoverable.

(iv) Other insurance claims are accounted on accrual basis when the claims become due and

payable.

(v) Dividend on investments is recognized when a right to receive the same is established.

Income on investments is accounted for on accrual basis.

(vi) Interest is recognized on time proportionate basis taking into consideration the amount

outstanding and the rate applicable.

d) Usage charges & Fixed Assets :

(i) For the assets commonly used by the Company and National Stock Exchange of India Ltd.

(NSEIL) and which are owned by NSEIL, Usage charges are paid to NSEIL at 25 % per

annum of the proportionate Capital Cost of such assets.


28


(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.


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.


(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.


29


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.


30


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


31


BNP Paribas Overnight Fund - IP - Growth – – – – 79296.9840 8.31

Canara Robeco Liquid - IP - Growth – – – – 7604503.4908 1,117.54

Canara Robeco Treasury Advantage Fund -

Super IP - Daily Dividend 12,85,268.82 159.46 – 788276.2618 97.80

DSP BlackRock Liquidity Fund - IP - Dly

Dividend 3,53,819.41 3,539.31 (3,500) – –

DSP BlackRock Liquidity Fund - Regular Plan -

Growth – – 283873.4500 45.75

DWS Ultra Short-Term Fund - Growth – – 169698.5330 17.59

DWS Ultra Short-Term Fund - IP - Dly Dividend 12,37,645.69 123.99 (24) 15484025.3737 1,551.01

Fidelity Ultra Short Term Debt Fund - Super IP -

Dly Dividend – – 28871481.4385 2,887.87

HDFC Cash Mgmt Fund - Savings Plan - Growth – – – – 391559.0900 54.98

HDFC Cash Mgmt Fund - Treasury Advantage -

WP - Dly Div 18,55,605.54 186.15 (1) 121450970.5471 12,183.35

HSBC Cash Fund - I P - Growth – – 820935.4860 93.31

HSBC Cash Fund - Institutional Plus - Growth – – 669172.7580 74.36

HSBC Cash Fund - Reg - Growth – – 137302.0150 14.00

HSBC Ultra Short Term Bond Fund - IP Plus -

Growth – – – 26517362.6730 3,000.52

ICICI Prudential Flexible Income Plan -

Daily Dividiend 3,82,680.63 404.63 (391) 5948788.9648 6,291.29

ICICI Prudential Liquid - I P - Growth – – – 577362.8650 87.01

ICICI Prudential Liquid - Inst Plus - Growth – – – 505719.2750 84.58

ICICI Prudential Liquid - Super IP - Growth – – – 1400738.9960 146.15

ICICI Prudential Ultra Short Term Plan -

Sup Prem - Wkly Dividend 1,06,76,842.29 1,072.96 (1,025) 150132977.4015 15,064.32

IDBI Liquid Fund - Dly Dividend 9,04,774.65 9,047.75 (9,000) – –

IDFC Cash Fund - Plan B - IP - Growth – – – 785495.3490 97.80

IDFC Money Manager - Treasury Plan - Plan C -

Dly Dividend 19,99,262.35 199.96 – 101013131.8226 10,102.83

ING Liquid Fund - IP - Growth – - – – 5657599.4290 620.75

ING Liquid Fund - Super IP - Growth – – – – 2345772.3810 262.70

ING Treasury Advantage Fund - IP - Daily

Dividend – – – – 242365.6649 24.24

ING Treasury Advantage Fund - IP - Growth – – – – 9208193.3290 1,000.19


units (Rs. In Lacs) 31/03/2010Figures in brackets (Rs. In Lacs)indicates amount No. of Rs. In



32


JM High Liquidity - I P - Growth – – 170085.1880 18.16

JM High Liquidity - Super I P - Daily Div 1,58,35,422.09 1,586.16 (1,474) – –

JM High Liquidity - Super I P - Growth – – 3061888.3960 364.40

JM Money Manager Fund - Super Plus Plan -

Daily Dividend 25,35,480.30 253.68 (40) 16410412.6472 1,641.91

JM Money Manager Fund - Super Plus

Plan - Growth – – 13171431.9730 1,500.45

JP Morgan India Treasury Fund - Super IP -

Daily Dividend Reinvestment 15,00,209.29 150.15 (100) 133576052.9191 13,369.49

Kotak Floater - LT - Daily Dividend 19,01,779.28 191.70 (32) 14033530.6381 1,414.55

Kotak Floater - Short Term - Daily Dividend 11,00,88,594.43 11,136.78 (11,000) – –

Kotak Liquid - IP - Growth – – 1031683.5735 125.08

Kotak Liquid - Regular - Growth – – 24740.4100 2.82

L&T Liquid Fund - IP Plus - Growth – – 321482.1430 44.02

PRINCIPAL Cash Mgmt Fund LO - Growth – – 2424256.3700 265.74

PRINCIPAL Cash Mgmt Fund LO- IP- Growth – – 16862.1150 1.86

Principal Ultra Short Term Fund - Reg -

Dly Dividend – – 193746.1043 19.41

Reliance Liquidity Fund - Dly Dividend 8,09,36,179.06 8,097.75 (8,000) – –

Reliance Medium Term Fund - Daily Dividend 4,81,495.80 82.31 (15) 680682.6795 116.37

Religare Fmp - Series IV - Plan B - Dividend 50,00,000.00 500.00 – –

Religare Ultra Short Term Fund - IP -

Daily Dividend 21,488.13 215.25 (167) 83136753.8887 8,326.73

SBI Magnum DFS - 180 Days - 13 - Dividend 8,00,117.00 80.00 – –

SBI Magnum Insta Cash – Daily Dividend 36,65,356.84 613.96 (500) – –

SBI Premier Liquid Fund - Super IP -

Daily Dividend 0.22 0.00 – –

SBI SHF - Ultra Short Term - IP - Daily Dividend 1,75,683.66 17.59 34637155.7241 3,465.59

SBI SHF - Ultra Short Term - Retail - Daily

Dividend 49,739.83 4.98 47231.9017 4.73

Sundaram BNP Paribas Ultra Short Term -

Super IP - Growth – – 24108809.0640 2,629.81

Sundaram Money Fund - IP - Growth – – 16269.3200 2.31

Sundaram Money Fund - Super IP - Dly Div 1,07,82,427.40 1,088.52 (1,000) 263842.2061 26.64

Tata Floater Fund - Daily Div 16,95,469.51 170.15 52781290.3682 5,296.92

Tata Liquid Fund - SHIP - Growth – – 6494.0734 84.01







33







Templeton Floating Rate Income Fund - Super IP

- Dly Dividend 1,51,691.90 15.18 (13) 150731848.4260 15,088.26

Templeton India TMA - Super IP - Dly Div 6,37,765.61 6,381.95 (6,301) – –

Templeton India Ultra Short Bond Fund - S

uper IP - Dividend 26,60,829.06 266.39 (182) 70518524.0892 7,060.03

UTI Fixed Income Interval Fund - Quarterly

Plan III - IP - Dividend – – 5000393.2900 500.04

UTI Liquid Fund - Cash Plan - IP - Growth – – 4122.0770 43.87

UTI Money Market - IP - Dly Dividend 27,937.84 280.32 – –

UTI Treasury Advantage Fund - IP - Dly

Dividend 45,368.21 453.78 (217) 43090.0924 430.99

Sub-total (III) 52,479.80 (47,816) 1,31,350.57

Grand Total (I) + (II) + (III) 59,518.45 (49,652) 1,31,350.57

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


34



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


35


IDBI Liquid Fund - Daily Dividend - Reinvestment 30,09,18,372.59 30,091.84

IDFC Cash Fund - Super IP - Plan C - Daily Dividend Reinvestment 55,01,496.24 550.29

IDFC Money Manager Fund - TP - Super Inst Plan C - Daily Dividend 12,40,830.22 124.10

ING Treasury Advantage Fund - Institutional Daily Dividend 1,604.29 0.16

JM High Liquidity Fund - Super Institutional Plan - Daily Dividend 70,54,95,931.71 70,666.00

JM Money Manager Super Plus Plan - Daily Dividend 1,65,430.17 16.55

JPMorgan India Liquid Fund - Super Inst Daily Dividend Plan -

Reinvest 76,87,21,542.28 76,932.88

JPMorgan India Treasury Fund - Super Inst. Daily Div Plan - Reinvest 14,10,85,519.87 14,121.11

Kotak Floater - Short Term - Daily Dividend 9,88,51,347.34 10,000.00

Kotak Floater Long Term - Daily Dividend 14,85,61,168.70 14,974.67

Kotak Liquid Institutional Premium Plan-Daily Dividend-

Reinv 34,86,53,679.57 42,633.72

Kotak Quarterly Interval Plan - Series 1 - Dividend 53,37,396.25 533.74

Kotak Quarterly Interval Plan Series 10 - Dividend 6,80,014.89 68.00

Kotak Quarterly Interval Plan Series 6 - Dividend 50,79,828.94 507.98

Principal Ultra Short Term Fund - Dividend Reinvestment - Daily 3,719.95 0.37

Principal Ultra Short Term Fund - Dividend Reinvestment - Monthly 1,88,275.87 19.79

Reliance Liquidity Fund -Daily Dividend 23,60,86,556.75 23,620.70

Reliance Medium Term Fund - Daily Dividend Plan 5,90,77,212.51 10,099.78

Reliance Money Manager Fund-Institutional Option - Daily

Dividend Plan 8,02,336.48 8,034.37

Religare Fmp - Series IV - Plan C ( 3 Months) - Dividend 55,88,673.57 558.87

Religare Liquid Fund - Institutional Daily Dividend 3,79,973.03 38.01

Religare Liquid Fund - Super Institutional Daily Dividend 23,60,08,577.86 23,853.26

Religare Ultra Short Term Fund - Institutional Daily Dividend 7,04,20,454.84 7,057.21

SBI - Magnum Insta Cash Fund - Daily Dividend Option 38,18,15,323.57 63,955.21

SBI Magnum SDFS - 90 Days - 35 - Dividend 2,03,109.42 20.31

SBI Premier Liquid Fund - Institutional Daily Dividend 4,01,73,973.73 4,030.45

SBI Premier Liquid Fund - Super Institutional - Daily Dividend 11,79,60,367.79 11,834.37

SBI-SHF- Ultra Short Term Fund - Institutional Plan -

Daily Dividend 16,29,95,709.01 16,309.35

Sundaram Money Fund - Super Institutional - Dividend -

Daily Reinvest 19,13,98,635.59 19,322.27



36


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



37


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

The breakup of Cash Component in each SGF is as follows:

(Rs. in crores)

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


38


The above cash component of SGF has been earmarked as under:

(Rs. in Crores)

Sr. Particulars Amount Balance Sheet Earmarked

No. Reference No. Amount

1 Long term Investments 163.75 II/2 17.80

2 Short Term Investments 595.18 II/3(4) 496.52

3 Balances with Banks

in Current Account 23.02 Sch.6/A.3 14.92

in Deposit Accounts 3559.92 Sch.6/A.3 810.18

In Certificate of Deposits 189.65 Sch.6/A.3 68.10

Total (1 to 3) 4531.52 1407.52

A) Capital Market Segment:

I. Cash component in form of Interest Free Security Deposit of Rs. 147.16 Crores is

earmarked as under:

Particulars Amount

(Rs. in Crores)

Mutual Funds

RELIANCE MEDIUM TERM FUND - DAILY DIVIDEND PLAN 0.15

TATA FMP - SERIES 29 - PLAN A - GROWTH 2.56

Total Mutual Funds 2.71

Flexi Fixed Deposits

FLEXI FIXED DEPOSITS WITH HDFC BANK 35.26

FLEXI FIXED DEPOSITS WITH ICICI BANK 4.87

FLEXI FIXED DEPOSITS WITH STAN CHART BANK 0.97

Total Flexi Fixed Deposits 41.10

Fixed Deposits

7.45% YES BANK LIMITED 19.43

9.77% BANK OF BARODA 9.79

8.18% AXIS BANK LIMITED 15.00

Total Fixed Deposits 44.22

Certificate Of Deposit

CORPORATION BANK - CD - 07 SEP 2011 - 8.50% 13.98

AXIS BANK LIMITED - CD - 16 JAN 2012 - 9.80% 12.59

ICICI BANK LIMITED - CD - 19 AUG 2011 - 8.75% 23.46

Total Certificate Of Deposit 50.03

Commercial Paper

ADITYA BIRLA FINANCE LIMITED 9.10



39


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 with HDFC Bank 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




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


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



40


B) Futures & Options Segment:

I. Cash Component in form of Interest Free Security Deposit of Rs.120.50 Crores earmarked as under:

Particulars Amount

(Rs. in Crores)

Taxfree Bonds

6.85% INDIA INFRASTRUCTURE FINANCE COMPANY LIMITED -

SERIES I - 22 JAN 2014 10.24

Total Taxfree Bonds 10.24

Fixed Deposits

8.66% IDBI BANK - F&O SETT FUND 5.00

9.77% BANK OF BARODA 2.00

9.62% PUNJAB NATIONAL BANK 9.84

9.32% FEDERAL BANK LIMITED - 2011 24.76

8.18% AXIS BANK LIMITED 5.27


Commercial Paper

NABARD - CP - 22 SEP 2011 - 8.00% 9.26


Certificate Of Deposit

AXIS BANK LIMITED CD16 JAN 2012 - 9.80% 8.47

IDBI BANK - CD - 10 MAY 2011 - 8.60% 9.60

Total Certificate of Deposit 18.07

Mutual Funds

ICICI PRUDENTIAL ULTRA SHORT TERM PLAN SUPER PREMIUM

WEEKLY DIVIDEND 0.25



FLEXI FIXED DEPOSIT ICICI BANK 18.49

FLEXI FIXED DEPOSIT HDFC BANK 1.95

FLEXI FIXED DEPOSIT BANK OF INDIA 15.37


II Cash Component in form of Security Deposit of Rs.30.93 Crores earmarked as under:

Particulars Amount

(Rs. in Crores)





41


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


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


8.08% YES BANK LIMITED - F&O MARGIN 20.00





42


Particulars Amount

(Rs. in Crores)


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 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


C) Retail Debt Market Segment :

Cash component in form of Cash Deposit of Rs. 1.70 Crores is earmarked as under:

Particulars Amount

(Rs. in Crores)



D) Currency Derivative Segment:

I. Cash component in form of Interest Free Security Deposit of Rs. 30.00 Crores is earmarked as under:

Particulars Amount

(Rs. in Crores)

Mutual Funds


ICICI PRUDENTIAL FMP SERIES 56 - 1 YEAR PLAN D CUMMULATIVE 5.00

ICICI PRUDENTIAL ULTRA SHORT TERM PLAN SUPER PREMIUM

WEEKLY DIVIDEND 10.00


Bank Balances

BANK OF INDIA 0.06

CITI BANK 0.11

Total Bank Balances 0.17


CITI BANK 0.85

BANK OF INDIA 1.72

STANDARD CHARTERED BANK 0.41

KOTAK MAHINDRA BANK LTD 0.51


43


CANARA BANK 0.15

AXIS BANK 1.19


II Cash component in form of CDS Security Deposit of Rs. 7.82 Crores is earmarked as under:

Particulars Amount

(Rs. in Crores)


HDFC BANK LTD 3.01

AXIS BANK 0.74


Bank Balances

ICICI 4.07


III Cash component in form of CDS Margins of Rs. 48.28 Crores is earmarked as under:

Particulars Amount

(Rs. in Crores)



Bank Balances

ICICI Bank 10.68



HDFC Bank 3.96

CITI BANK 5.06

STANDARD CHARTERED BANK 2.66

BANK OF INDIA 1.45

INDUSIND BANK 0.41

AXIS BANK 9.06


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:


44


A) Name of related parties and relationship:

Sr. No. Related Party Nature of Relationship

1 National Stock Exchange of India Limited (NSE) Holding Company

2 NSE.IT Limited Fellow Subsidiary

3 NSE Infotech Services Limited Fellow Subsidiary

4 Dot Ex International Limited Fellow Subsidiary

5 National Commodity Clearing 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 India Limited Fellow Subsidiary

10 (1) Mr. Ravi Narain - Chairman

(2) Ms.Chitra Ramkrishna - Managing Director & CEO Keymanagement Personnel

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 10579.01Exchange of

• Usage charges paid 634.23 523.93India Ltd.

• 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

• Software usage charges paid 55.15 55.15Clearing Ltd.

• Outstanding Balance (Credit)/Debit – –

NSE Infotech • SGL- Related charges received – 0.01Services

• Repairs & Maintenance - Clearing & ComputerLimited

systems 600.85 604.79

• Outstanding balance - (Credit) / Debit (173.80) (131.21)

Power Exchange • Clearing and Settlement charges received – 49.19of India Ltd

• Interest on late payment of Clearing & Settlement

charges – 2.48

• Outstanding balance - (Credit) / Debit – –


45


l) In accordance with Accounting Standard - 20 "Earning per Share" issued by the Institute of Chartered


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


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)




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.






PRASAD V. PARANJAPE Y. H. MALEGAM R. H. PATIL



Date : April 28, 2011 Asst. Company Secretary


46


2010-11 2009-10


A) CASH FLOW FROM OPERATING ACTIVITIES

Net Profit before tax and Prior Period Adjustment 32,038.02 29,696.32

Add: Adjustments for :

Depreciation for current year 249.76 234.78

Amortisation of Premium on Govt/Debt Securities 22.64 59.74

Less: Adjustments for :

(Profit)/Loss on sale of fixed assets 0.12 (0.02)

Interest Income on short term Investments – (0.47)

Interest Income on long term Investments (777.66) (606.59)

Interest income on Bank Deposit (14,906.35) (13,356.72)

Profit on sale / redemption of Investments (2,540.10) (3,491.59)

Dividend on Investment (4,774.30) (5,629.23)

Operating Profit Before Working Capital Changes 9,312.13 6,906.22

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

B) CASH FLOW FROM INVESTING ACTIVITIES

Purchase of Fixed Assets / Capital Work in progress (402.43) (340.05)

Sale of Fixed Assets 1.56 0.85

Interest Income received 15,002.76 12,641.30

Dividend on Investment 4,774.30 5,629.23

(Increase)/Decrease in Investment 68,208.52 (8,697.51)

Net cash from (used in) Investing activities - Total (B) 87,584.71 9,233.82

CASH FLOW STATEMENT FOR THE YEAR ENDED 31ST MARCH, 2011


47


C) CASH FLOW FROM FINANCING ACTIVITIES

Proceed of deposit from Clearing members / Applicant 7,131.00 14,729.50

Refund of deposit to Clearing members / Applicant (5,111.40) (14,487.54)

Dividend Paid (incl. corporate dividend tax) (9,970.05) (6,054.49)

Net cash from (used in) financing activities - Total (C ) (7,950.45) (5,812.53)

Net Increase/(Decrease) in Cash & Cash equivalents (A+B+C) 94,525.47 23,130.97

Cash and Cash Equivalents : Opening Balance 282,732.07 259,601.10

(includes fixed deposit with banks of Rs.2,62,624 lacs)

(Previous Year : Rs.2,51,688.47 lacs)

Cash and Cash Equivalents : Closing Balance 377,257.54 282,732.07

(includes fixed deposit with banks of Rs.3,55,991.12 lacs)

(Previous Year : Rs.2,62,624 lacs)

NET INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENT 94,525.47 23,130.97


1 Cash and Cash equivalent represent bank balances and balances in fixed deposit accounts.

2 The above Cash Flow Statement has been prepared under the " Indirect Method" as set out in Accounting

Standard-3 on Cash Flow Statements issued by the Institute of Chartered Accountants of India.






PRASAD V. PARANJAPE Y. H. MALEGAM R. H. PATIL





48



(Information pursuant to Notification No. GSR No. 388(E) [F. No. 3/24/94 - CLV] dated 15-5-95, issued by

The Department of Company Affairs, Ministry of Law, Justice and Company Affairs)

(Part IV of Schedule VI to the Companies Act, 1956)



Registration No. * 9 2 2 8 3 State Code 1 1


Date Month Year

II Capital raised during the year (Amount in Rs. thousand)


N I L N I L


N I L N I L

III Position of Mobilisation and Deployment of Funds (Amount in Rs. thousand)


** 1 4 4 9 9 6 0 0 * 1 4 4 9 9 6 0 0

Sources of Funds


* * * 4 5 0 0 0 0 * * 9 3 6 2 7 9 7

Secured Loans Unsecured Loans

N I L * * 5 1 3 2 6 8 3


* * * * * 4 1 2 0



* * * * 6 5 7 7 5 * * 1 6 3 7 5 4 0


* 1 2 7 9 6 2 8 5 * * * * * * N I L

Accumulated Losses

* * * * * * N I L


49


IV Performance of Company (Amount in Rs. thousand)

Turnover / Total Income Total Expenditure

* 3 7 7 0 4 3 1 * * * 5 6 6 6 2 9


* * 3 2 0 3 8 0 2 * * 2 3 8 1 2 6 5



* * * * 5 2 . 9 2 2 0 0


Item Code No. N A

(ITC Code)

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


Date : April 28 ,2011 Asst. Company Secretary

��

NSE.IT LIMITED

(A wholly owned subsidiary of National Stock Exchange of India Limited)

TWELFTH ANNUAL REPORT

2010 - 11

Y Y

Y Y

BOARD OF DIRECTORS


Mr. Ramesh Padmanabhan : Managing Director & Chief Executive Officer

Mr. Bharat Doshi

Ms. Chitra Ramkrishna

Mr. Dileep Choksi

Mr. J. Ravichandran

Dr. R. H. Patil

Mr. V. Babuji

MANAGEMENT TEAM

Mr. Manoj Uppal : Sr. Vice President

Mr. V. Rajaraman : Vice President

Mr. Shailesh Chitre : Vice President

Mr. Anand Pachchhapur : Vice President

Mr. Kankesh Kamath : Chief Financial Officer

Ms. Anupama Pillai : Head - Human Resources

Mr. Chirag Shah : Company Secretary

AUDITORS : Gokhale & Sathe


302/303, Udyog Mandir No. 1

7-C, Bhagoji Keer Marg,

Mahim, Mumbai - 400 016

REGISTERED OFFICE : Trade Globe, Ground Floor,

Andheri-Kurla Road

Andheri (East), Mumbai - 400 059

Twelfth Annual ReportNSE.IT Limited

Twelfth Annual Report

1

NSE.IT Limited

EXECUTIVE SUMMARY

Dear Shareholders,

The economy evidenced signs of recovery in the previous year after having witnessed a global downturn in the recentpast. The Company formulated a strategy based on its existing customers and its strength, a large part of which wassuccessful and the Company was able to achieve a turnover of 10,304 lakhs which was 28% higher than the previouscorresponding year.

Continuing with its foray in online examinations, the IRDA project for achieving 100% online examination status byyear end was undertaken by the Company across the country and implemented in record time of9 months. This also included achieving important milestones of 100 new centers within 6 months and200+ centers going live by end of December 2010 within six months of starting the project. The assessments areconducted pan India for the insurance companies and the Company executes the end-to-end process from registrationto examination certificates. During the year the Company worked on adding new customers and bid for various tendersand requirements. The Company was successful in adding new clients such as NCFM, ITB, CCIL, IBPS etc to itscustomer list.

The assessments are conducted pan India for the insurance companies and the Company executes the end-to-endprocess from registration to examination certificates. The high end technology framework along with the robust monitoringsystem provided by the Company facilitates the conduct of the examinations in a transparent and efficient manner. TheCompany 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 9001:2008certification. NSE.IT through all the steps of ISO such as gap analysis, documentation, implementation of documentedprocesses, internal auditing, training and awareness. After extensive rounds of internal and external quality implementationefforts in past six months and audits conducted across country by Bureau Veritas Certification India (BVCI) auditors tillfirst 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 ascustom 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 medalin 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 routeacross all the six auction centres. Around 370 million kg of tea was sold this year, totaling the sales figure to 610 millionkg 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 algorithmictrading solutions for the Indian capital market that will replace the traditional methods of trading and provide brokersand financial intermediaries to trade in real time without human intervention. The Company will launch variousalgorithmic 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 resourcesthereby taking up the number to 714. The Company took various initiatives towards grooming of the employees byrolling out various training programs in the previous year. The Company continues to focus on building a pool oftalented 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 inthe products and services arena to cater to the technology requirements of its customers and take the Company togreater heights.

Sd/-

Ramesh Padmanabhan

MD & CEO


2

NSE.IT Limited

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:

Particulars 2010-2011 2009-2010


Income 10,304.23 8,060.71

Expenditure 8,095.97 6,245.65

Profit before tax, amortization and prior period adjustments 2,208.45 1,815.06

Amortization 224.15 266.35

Prior period adjustments (0.01) (0.60)

Profit before tax 1,984.29 1,548.11

Provision for taxation 589.82 583.77

Deferred Tax Liability/ (adjustments) 30.85 11.60


Balance bought forward from previous year 436.04 833.13

Amount available for appropriation 1,799.66 1,785.87

Appropriations





II. OPERATIONS AND MAJOR EVENTS DURING THE YEAR

For the year ended March 31, 2011, the Company earned a total income of Rs.10,304.23 lacs an increase

of 28 % over previous year's total income of Rs. 8,060.71 lacs. The net profit before tax of the Company

for the year increased to Rs.1,984.29 Lacs (19.26% of the total income) as compared to Rs. 1,548.11 lacs

(19.21 % of total income) in the previous year. The profit after tax of the Company for year rose to

Rs.1,363.62 lacs (13.23% of total income) as compared to Rs.952.74 (11.82% of total income) of the

previous year.


3

NSE.IT Limited

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.

HIGHLIGHTS OF VARIOUS ACTIVITIES DURING THE YEAR 2010-2011.

==> 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,


4

NSE.IT Limited

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.

2. IRDA Agency Licensing Portal

NSE.IT implemented a solution, IRDA Agency Licensing Portal, web application, which is

provided by IRDA to the Insurance Companies to license Insurance Agents. The IRDA Agency

Licensing portal implements all IRDA regulations that govern the process for recruitment of

Agents. The IRDA Agency Licensing portal also includes providing a dedicated Help Desk for

all users of the IRDA Agency Licensing Portal.

The objective of the system is:

- To provide a software application that would automate the entire recruitment cycle for

Insurance Agents

- To provide a software application that implements all IRDA regulations at each step of the

recruitment cycle

- To widen the scope of the application by including all entities involved in the recruitment

cycle

The portal is live since Jan 2010 and has already processed more than 16 Lakh fresh applications.

In the process, the portal has issued 5.7 Lakh new licenses, and renewed 5.2 Lakh licenses. The

portal also interfaces with our Online Exam Scheduling and Examination portal, thus supporting

an end to end business process flow. The portal has further added newer de-duplication methods

to ensure uniqueness of applicants.

The Company also provides technical support for the application and provides maintenance and

system administration support for the server systems in Mumbai and Bangalore.

3. MSE - Stock Exchange Solution

This year, company has delivered a stock exchange solution for one of the leading Regional

Stock Exchange in southern India. It is setup with the objective of having an online, transparent,

with anywhere access trading platform for members of the exchange through a single electronic

screen.

The scope of the project was to build a trading solution for Equities Market which includes

Front Office, Exchange Order Management System. With the successful completion of software

delivery by us and UAT completion by the client, the system is expected to go live in the ensuing

year on receiving the regulators' approval.

4. Power Exchange of India (PXIL)

The Company continues to provide support services to Power Exchange of India since the

exchange has gone live in October 2008. The services encompass application development,

testing and support areas along with technical support for various applications and provide

maintenance and system administration support for server systems in Mumbai.


5

NSE.IT Limited

In the previous year the Company has:

- Enhanced the solution to include Day Ahead contingency and Week Ahead facilities.

- Provided extensive support for proposed REC trading as well as Intra state trading and same

went live on the 29th March 2011.

- Enhanced solution to include point of contact charges (Zone master and zone entity) which

was new way in which charges is being charged to the buyer and seller.

- Implemented new matching algorithm for DAS product.

- Developed and deployed the Clearing and Settlement System for power trading.

- Added five new blade servers to the setup.

The Company continued to provide 24 X 7 operations support in running the Power Auction.

PXIL appreciated the efforts put in by the team in rolling out a new product for REC. PXIL is in

discussions with the Company for setting up a DR site and running the operations.

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.


6

NSE.IT Limited

The objective of the system is:

- To provide a software application that would assist the users to focus on creating a customer

database that represents a consistent picture of the customer's relationship with the company

and providing that information in specific format where company touches the customer

- This System assists the users to get details in form of Dashboard and will help in extracting

reports required for reporting.

- There will be a Research call screen which will assist the user in adding, editing or deleting

research call data.

- The user will be allowed to view a dashboard tool which will automate the process of

generation of client list based on rules.

NSE.IT is also providing support for their wealth management application called as e-Chopda

which is a Java-swing based solution and NSE.IT resources are carrying out enhancements and

defect fixing.

7. CCIL

During the year, the following projects have been undertaken by NSE.IT at CCIL (Clearing

Corporation of India Ltd.)

Internet and Intranet Portals

NSE.IT created Internet Portal, web application, which is Internet web site/portal for CCIL

(Clearing Corporation of India Ltd.).

The objective of the application is:

o To facilitate market information dissemination for various business.

o Allow market information to be displayed / downloaded by specific registered members

(registered through portal).

o Provide user authentication (external user, member user, employee). User authentication

should adhere to Client's password policy.

o Have search facilities at the web content and document level

o Support tagging and labeling for all documents / information

o Functionality for uploading statistical data (form of files such as (pdf, xls, doc, zip) so that

it is available in a query-able format by end users based on their access level

o Able to setup / alter different business workflows as and when desired.

The portal is in final stage of UAT.

Negotiated Dealing System (NDS) for Order Matching (OM) and Auction

NSE.IT has received a great opportunity through the medium of CCIL to prove its capabilities

in the Indian Debt market, by providing trading front end solution for Debt market (government

securities). The project is directly under the supervision of RESERVE BANK OF INDIA giving

it national importance.

The project has just completed requirements gathering phase and is currently in development

phase.


7

NSE.IT Limited

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


8

NSE.IT Limited

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


9

NSE.IT Limited

- 3-4 machine split in Cash market

- F&O re-tooling, 2-3 machine split and User-ID increase

- Utility testing for backend

- SLBM revamp project

- MF trading system - SIP system testing

- IPO - Reverse book building & Follow-on Public Offer

Future Roadmap

- Project Investment module.

- Project NFA.

- Project ENIT Re-engineering.

II IT infrastructure management

The company continues to provide 24 X 7 hardware and administration support for all

Stratus servers in Mumbai and Chennai.

Highlights:

• Installation of latest FT Servers alongwith Red HAT Linux OS.

• VOS upgrades on all production V Series Servers.

• NOW operations for new NMCE and ICEX Commodity markets

• Mobile trading application support

New activities planned:

• All Windows TAP servers to be migrated to Linux.

• Additional market segments under NOW

III NOW

During the year Dotex International Ltd. was added as a prestigious client to NSE.IT's

growing client list. The engagement with Dotex International was an innovative one with

services being offered across India covering help desk, customer care and sales. This unique

engagement has helped our client Dotex International Ltd., register sizable presence in the

Indian securities space and establish NOW as India's largest ASP service.

IV Co location Support

The company continued to provide 24 X 7 support to NSEIL COLO Operations in Mumbai.

Members have consistently praised the professionalism exhibited in the processes followed.

Highlights:

• 77 members gone live

• Colo team is trained on ITIL and ISO 20000 standards.

• All 5 Major service providers have installed there MUXES in NSE Colo Datacenter

Phase-I & Phase-II.

• ISO 20000 Certification for NSE Colo Service desk audit completed.

10. NCDEX

The company continued to provide 24 X 7 support services to the exchange and ensures minimal

disruption in the exchange operations. Stratus hardware support, Systems Administration, Data

Centre operations and CTCL operations continued as usual at both Mumbai and Chennai.


10

NSE.IT Limited

Major Activities

1. Benchmarking and Performance Testing of V-series server for Trading application

2. Drafted Policy and guidelines on Automated Trading Software

NCDEX Clearing Front End

NCFE Revamp: The existing NCFE website was revamped to give it a new look by using

flexigrid and JQuery. Also introduced workflow through Maker Checker framework.

Security related changes: To implement effective User Session management and two factor

Secured User Authentication in Web NCFE application.

Session Management mechanism includes having a separate CAJO server to provide following

features:-

a. Only one active session per user can exist at a time. Parallel logins to be disallowed

b. A Session Time Out functionality needs to be implemented which will remove all sessions

which lie idle for more than configured time duration

c. Resource (ASP page/Menu/Privilege) to Role ID mapping to be followed for managing

Resource level access

d. Flexibility to choose which resource needs access level privileges

The authentication mechanism in continuing with the two factor authentication principle enables

the user to authenticate himself by having access to the following:-

a. User ID, Password Combination

b. Secure Code generated through PIN

c. NUMPAD Utility: A client side utility which has to be developed and which will allow

users to type in digits from 0-9 to be taken as input. It will also be used as a wrapper class

to enable client side encryption and decryption.

SMS Gateway Application: Another major initiative this year is the SMS Gateway, which is a

standalone application that has been built to service numerous applications/departments within the

NCDEX. It has features like 9 types of messaging, SMS Reports, Scheduled SMS, User-Role

Management, and Address book facilities.

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.


11

NSE.IT Limited

11. NSDL Testing Project:

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 and currently it is in steady

state in 7 locations.

As a part of the e-Governance initiative, Ministry of Commerce (MOC) has entered into a

formal agreement with NSDL Database Management Limited (NDML) for establishing and

managing a nationwide integrated solution for administration of Special Economic Zones (SEZ)

of India. NSE.IT has been involved with System and Acceptance testing of various applications

at NSDL:

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.

12. Online Examinations

During the year the IRDA project for achieving 100% online examination status by year end

was undertaken 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 despite several

constraints faced during this phase.

• Overall the number of centers increased from 106 to 219 centers by March end.

• The number of registrations increased from 7.88 lacs in 2009-10 to 12.70 lacs in 2010-11.

• More language modules were added - 2 Languages in Life insurance & 8 Languages in

Non-Life insurance totalling 11 and 10 respectively.

• Practice test CDs/ solutions were made available in multiple languages to the insurance

companies for prospective agents appearing for the examination. Regular customer surveys

were conducted with very encouraging feedback (average rating between 4 to 5 on a scale

of 5) on all parameters such as center setup, Test administrator behavior, quality of services

offered etc.

The company took various initiatives during the pervious year which are highlighted below:


12

NSE.IT Limited

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.


13

NSE.IT Limited

Project 2x/ Gateway

In order to cater to new customers across major cities the Company intiated Project 2X adding capacities

and rooms in top 30 cities in existing centers and the same is in its advanced stage of completion.

Also to cater to large volume and one time exams on weekend, the Company also initiated Project

gateway wherein it tied up with colleges, institutes, infrastructure companies with installed PC base

of 50 to 400 numbers. Here except for chief proctor other services will be hired from the partner.

IT initiatives

� AIMS / IRDA / ITB

• Examination control strengthened by releasing modules such as "Batch Control/ Start

Batch"

• New production systems setup to deliver exams for ITB and other new clients

• New registration portal released. This is a self help candidate registration portal.

• SSL integration, now the exam sessions are conducted on Secured Socket Layer

• SMS integration in AIMS, SMS update to candidates for exam schedules/reschedules

� New Clients / New Codebase

• Question Bank Security (IP based)

• Question Bank management functionality

• Difficulty level / parameterization now available

• Save as you go, Frequency based saving of answers

• Single /Multiple questions per page now available

• Question Navigation bar with bookmark feature available

• Exams of different duration and multi client exams at the same time (multi domain)

� 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.


14

NSE.IT Limited

� Vigilance/ Security check

• Deployment of 400+ sophisticated CCTV cameras at the centers

• Video recordings at the centers

• Online continuous monitoring of center activity from central CCTV monitoring cell at

Mumbai

• Background screening of exam delivery resources

• Dedicated vigilance department headed by highly experienced professional Handling

tricky situations and escalations to IRDA

• Surprise visits/ Audits at all centers by vigilance staff

Future Road Map

- To add more locations across the country and enhance capacity in the big cities

o Project 2X and Gateway

- To implement Six Sigma/ Quality Certification of all 220 centers and adding more processes

in ISO certification

- Work on cost management across centers - Project 1/2X

- IT

o Enhancing exam software features

o Online payment and online scheduling features implementation

o Supporting new question types/ Voice based Tests/ Simulation Test

o Decentralisation (IT / Local Server)

o Building Content Development capability & Authoring tool acquisition

o Software Productisation for use at customer sites

o Result Reporting/ Analysis for client

o Dedicated link of 1 mbps for 2x centers and other critical centers.

o Setting up secure Data room for hosting Production, DR and UAT servers.

o Mobile centers, touch screen devices which are GSM/CDMA network enabled, which

can be used to conduct exams.

o DR site for IBPS, ICAI and AIMS

o Video Conferencing across top location

- Vigilance

o Create IT rooms at each center with access control

o End Point Security rollout for phase 1 locations

o Access control at Centers - Visitor management system

Biometrics implementation for additional security.

13. Software Products

1. Exchange Simulator

During the year, as initiative has been taken to revamp the Simulator system using Ultra

Low messaging system . The earlier version of the Simulator had limitation of handling

100-150 messages/second. The revamped Simulator will handle more than 1250 messages/


15

NSE.IT Limited

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.

III HUMAN RESOURCE DEVELOPMENT

The Company saw a steep growth of 48% in the number of employees and the total count at the

end of the year was 714 as compared to 480 in the previous year. The Company conducted

various training programs both externally and internally for the skill enhancement of the

employees during the year which included Java, Sturts, Hibernate, .Net, C#, Sharepoint, ITIL,

Linux, on the technical side and effective communication on the non-technical front. In the

ensuing year the Company will roll out more such programs for its employees.

==> FUTURE ROADMAP OF THE COMPANY

• In the ensuing year, the company plans to explore business in the insurance and banking vertical.

• The company plans to strengthen its testing practice and deliver world class solutions.

• The company intends to offer data center and remote infrastructure management services to

customers.

• In online examination arena, the company plans to expand its facilities in the top 30 locations

and tie up with external organizations to offer additional space.

• The company plans to develop new solutions in the algorithmic trading domain.

• The company plans to focus on the US geography and make inroads into the market.

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.


16

NSE.IT Limited

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.

VI DIRECTORS' RESPONSIBILITY STATEMENT

The Directors' report;

i. that in the preparation of the Annual Accounts, the applicable accounting standards had

been followed along with proper explanation relating to material departures;

ii. that 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 and of the profit

and loss account of the company for that period;

iii. that the directors had taken proper and sufficient care for the maintenance of adequate

accounting standards in accordance with the provisions of this Act for safeguarding the

assets of the company and for preventing and detecting fraud and other irregularities;

iv. that the directors had prepared the annual accounts on a going concern basis.

VII AUDIT COMMITTEE

The Audit Committee appointed by the Board comprised of the following members:

1. Mr. Dileep Choksi, Chairman of the Committee and an Independent Director

2. Mr. V.Babuji, an Independent Director

3. Dr. R. H. Patil an Independent Director; and

4. Mr. J. Ravichandran, Non-Executive Director.

During the course of the financial year 2010 - 11, the Audit Committee met on 27th April 2010,

15th September 2010, 10th December 2010 and 23rd February 2011.

VIII EMPLOYEES' STOCK OPTION

The Company has not offered any shares under the Stock Option Plans to any of its employees.

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.


17

NSE.IT Limited

XI BUY BACK OF SHARES

The Company has not offered for buy back of any of its shares from the shareholders. As such

the reasons for failure to complete the buy back within the time specified as is required to be

disclosed in terms of the requirements under Sub-section (4) of Section 77A of the Companies

Act, 1956 is not applicable to the Company.

XII CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN

EXCHANGE EARNING/OUTGO

1. Conservation of energy, technology absorption:

As the Company does not have any manufacturing activities, particulars required to be

disclosed with respect to conservation of energy and technology absorption in terms of

Section 217(1)(e) of the Companies Act, 1956, read with the Companies (Disclosure of

particulars in the Report of the Board of Directors) Rules, 1988, are not applicable.

2. Foreign Exchange earnings/outgo during the year under review:

During the period foreign exchange earnings were Rs.8.85 lacs and outgo was Rs. 1502.69 lacs.

XIII PARTICULARS OF EMPLOYEES

Pursuant to the provisions of Section 217(2A) of the Companies Act, 1956, read with Companies

(Particulars of Employees) Rules, 1975, as amended, a statement relating to particulars of

employees forming part of this report has been given in the annexure attached herewith.

XIV NOTE ON SUBSIDIARY

During the year, the Company's wholly owned subsidiary in USA won a contract from a US

client and is planning many new initiatives in the current year.

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


Place: Mumbai RAVI NARAIN

Date: 26th April 2011 CHAIRMAN


18

NSE.IT Limited


STATEMENT PURSUANT TO SECTION 217(2A) OF THE COMPANIES ACT, 1956 READ WITH

COMPANIES (PARTICULARS OF EMPLOYEES) RULES, 1975, AS AMENDED

Sr

Name and

Qualification

Age

in

Years

Designation/

Nature of

Duties

Experience

(no.

of yrs)

Date of

Commencement

of Employment

Last

employment

1 Mr. Ramesh

Padmanabhan

B.Sc and Post

Graduate in

Software

Technolgy

49 Managing

Director and

Chief

Executive

Office

13,173,687.44 22 May 15,2008 Chief

Delivery

Officer of

Mphasis Ltd

7,932,769.00

NetGross

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.


19

NSE.IT Limited

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.


(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


(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


Firm's Reg. No. 103264W

Kedar Mehendale

Place: Mumbai. Partner

Date : 26th April 2011 Membership No.: 116065


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NSE.IT Limited

FINANCIAL YEAR ENDED 31ST MARCH 2011

ANNEXURE TO THE AUDITOR'S REPORT AS REQUIRED BY THE COMPANIES

(AUDITOR'S REPORT) ORDER, 2003

(Referred to in Paragraph 1 of our Report of even date on accounts of

NSE.IT Ltd. as at 31st March 2011)

As required by the Companies (Auditors Report) Order 2003 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


b) We have been informed that the physical verification of fixed assets was carried out by the

management at the year end, which in our opinion is reasonable having regard to the size of the

company and 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 4 (ii) 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 and accordingly provision of

clause 4 (iii) (b), (c), (d) are not applicable.

e) 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 is an 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.

(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 is regular in depositing undisputed statutory dues with the appropriate authorities.

There were no undisputed amount payable in respect of Provident Fund, Income-tax, Sales-tax,


21

NSE.IT Limited

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


Firm's Reg. No. 103264W

Kedar Mehendale

Place : Mumbai. Partner

Date : 26th April 2011 Membership No.: 116065


22

NSE.IT Limited

BALANCE SHEET

Particulars Schedule As at 31-Mar-11 As at 31-Mar-10

No. Rs. Rs.

I. SOURCES OF 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

II. APPLICATION OF FUNDS

1. Fixed Assets

Gross Block 3 264,933,204.24 194,925,234.97

Depreciation till date (130,130,799.64) (107,715,984.18)

Net Block 134,802,404.60 87,209,250.79

Capital Work in Progress 22,863.00 136,762.64

134,825,267.60 87,346,013.43

2. Investments 4 22,792,478.19 22,792,478.19

3. Current Assets, Loans and Advances 5

Current Assets 333,440,781.02 297,624,940.04

Loans & Advances 113,438,540.42 67,984,792.99

446,879,321.44 365,609,733.03

Current Liabilities & Provisions 6 (208,992,122.30) (173,201,547.34)

Net Current Assets 237,887,199.14 192,408,185.69

TOTAL 395,504,944.93 302,546,677.31

Significant Accounting Policies &



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

Place : Mumbai CHIRAG SHAH



23

NSE.IT Limited

PROFIT AND LOSS ACCOUNT

Particulars For the year ended For the year ended

Schedule 31-Mar-2011 31-Mar-2010

No. Rs. Rs.

INCOMERevenue from Software Products and Services 7 1,012,031,706.67 789,040,862.22Other Income 8 18,390,895.91 17,030,265.23

TOTAL 1,030,422,602.58 806,071,127.45

EXPENDITUREPersonnel Expenses 9 315,969,719.67 239,074,644.29Purchases & Operating Expenses 10 266,441,798.29 223,839,527.42

Selling, General & Administrative Expenses 11 227,165,733.54 159,510,809.12

TOTAL 809,577,251.50 622,424,980.83

Profit Before Tax, Interest, Amortisation & Prior Period Adjustments 220,845,351.08 183,646,146.62Interest Cost - (2,139,773.00)Depreciation (22,414,815.46) (20,146,320.50)Impairment of Intangible Asset - (6,488,256.56)

Profit Before Tax & Prior Period Adjustments 198,430,535.62 154,871,796.56

Prior Period Adjustments (1,308.00) (60,589.00)

Profit before tax 198,429,227.62 154,811,207.56

Provision for taxCurrent Tax 51,000,000.00 57,500,000.00Deferred Tax 3,085,452.00 1,160,418.00Short / Excess Provision for taxes (net) 7,981,913.00 877,344.00

Profit after tax 136,361,862.62 95,273,445.56

Surplus brought forward from previous year 43,603,965.31 83,313,179.75

Profit available for appropriation 179,965,827.93 178,586,625.31

Appropriations :General Reserve 80,000,000.00 100,000,000.00Proposed Dividend 40,000,040.00 30,000,030.00Corporate Dividend Tax 6,489,007.00 4,982,630.00Balance carried to balance sheet 53,476,780.93 43,603,965.31

179,965,827.93 178,586,625.31

Basic & Diluted Earning Per Share (Rs) (Refer note no 15) 13.64 9.53

Significant Accounting Policies &Notes forming part of the accounts 12


For Gokhale & SatheChartered Accountants (Reg. No.103264W)

RAVI NARAIN RAMESH PADMANABHANChairman Managing Director & CEO.

KEDAR MEHENDALEPartner DILEEP CHOKSI J. RAVICHANDRANMembership No.116065 Director Director

Place : Mumbai CHIRAG SHAHDate : April 26, 2011 Company Secretary


24

NSE.IT Limited

SCHEDULES FORMING PART OF THE ACCOUNTS

Particulars As at 31-Mar-11 As at 31-Mar-10

Rs. Rs.


Authorised

15,000,000 (15,000,000) Equity Shares of Rs. 10/- each 150,000,000.00 150,000,000.00


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)

TOTAL 100,000,100.00 100,000,100.00

SCHEDULE 2 : RESERVES AND SURPLUS

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

Balance in Profit & Loss Account 53,476,780.93 43,603,965.31

TOTAL 291,982,849.93 202,110,034.31


25

NSE.IT Limited

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26

NSE.IT Limited

SCHEDULE 4 : INVESTMENTS (Long Term) - At Cost

In Quoted Mutual Funds

No. of Units As at As at

(as on 31-Mar-11 31-Mar-10

31.03.2011)

Can Liquid Fund Institutional Growth Plan 427,939.301 5,000,000.00 5,000,000.00

(Repurchase value as on 31.03.2011 - Rs 76,08,761 /-)

HDFC Cash Management Saving Plan Growth 579,494.081 7,792,358.94 7,792,358.94

(Repurchase value as on 31.03.2011 - Rs 1,18,74,993 /-)

DSP Merill Lynch Liquidity Fund - Growth 302,846.760 5,000,000.00 5,000,000.00


UTI Liquid Cash Plan Regular - Growth 4,521.583 5,000,000.00 5,000,000.00


Sub-Total (a) 22,792,358.94 22,792,358.94

In Wholly Owned Subsidiaries No.of Shares

(as on

31.03.2011)

NSE.IT(US) Inc. ( Equity share of $ 1 each fully paid ) 1 39.85 39.85

NSE.IT(UK) LIMITED (Equity Share of £ 1 each fully paid) 1 79.40 79.40

Sub-Total (b) 119.25 119.25

TOTAL OF INVESTMENTS ( a+b ) 22,792,478.19 22,792,478.19


27

NSE.IT Limited

PARTICULARS As at 31-Mar-11 As at 31-Mar-10

Rs. Rs.


A: CURRENT ASSETS

Interest Accrued but not due

On Bank Term Deposits & Auto Fixed Deposits (a) 5,861.77 84,811.91

Sundry Debtors

Outstanding for a period of more than six months

Unsecured, Considered good 29,191,757.29 12,834,348.00

Other Debts


(b) 132,248,303.57 118,723,380.78

Inventory (c) 179,189.08 230,398.80


Cash in hand – –


In Current accounts 72,855,672.91 2,627,049.33

In Current accounts (Including Auto Fixed Deposit Account) 126,682,300.00 174,645,981.84

In Term Deposits 1,469,453.69 1,313,317.38

(d) 201,007,426.60 178,586,348.55

TOTAL (a + b + c + d) 333,440,781.02 297,624,940.04


Advances recoverable in cash or in kind for value to be received 13,519,105.91 12,207,295.66

Income Taxes Paid (Net of Provisions) 49,041,135.51 15,753,589.33

Deposits 42,281,790.00 33,647,975.00

Prepaid Expenses 8,582,509.00 4,971,733.00

Employee Loans – 250,000.00

Unbilled Revenue 14,000.00 1,154,200.00

TOTAL 113,438,540.42 67,984,792.99



Sundry creditors

-- Due to SSI Undertakings – –

-- Others 62,875,192.40 43,856,371.64

Withholding and other taxes payable 5,891,591.03 5,611,968.25

Advance received from customers 41,599,839.06 39,732,079.69

Other liabilities 48,453,919.81 45,173,280.76

TOTAL (a) 158,820,542.30 134,373,700.34

B : PROVISIONS

For Proposed Dividend 40,000,040.00 30,000,030.00

For Corporate Dividend Tax 6,489,007.00 4,982,630.00

For Leave Encashment 3,682,533.00 3,845,187.00

(b) 50,171,580.00 38,827,847.00

TOTAL ( a + b ) 208,992,122.30 173,201,547.34


28

NSE.IT Limited

SCHEDULES TO PROFIT & LOSS ACCOUNT

For the For the

PARTICULARSyear ended year ended

31-Mar-11 31-Mar-10

Rs. Rs.

SCHEDULE 7: REVENUE FROM SOFTWARE SERVICES & PRODUCTS

Software Product Revenues 27,956,502.49 27,811,844.77

Application Development & Maintenance Services 182,704,854.42 168,685,787.00

Infrastructure Management Services 264,109,125.76 221,296,375.45

E- Learning Solutions 496,399,867.00 327,715,505.00

Customer Care Services 40,861,357.00 43,531,350.00

TOTAL 1,012,031,706.67 789,040,862.22


Interest :-

- on Short Term Deposits & Auto Fixed Deposits with banks 9,917,853.00 8,859,380.50

[TDS Rs. 1040684 ( Previous Year Rs.1098665 )]

- on Employee Loans – 2,902.79

Excess Provision Written Back 4,847,559.39 2,285,293.08

Gain from Foreign Exchange Fluctuations 1,119,585.12 621,122.65

Miscellaneous Income 2,505,898.40 5,261,566.21

TOTAL 18,390,895.91 17,030,265.23

SCHEDULE 9: PERSONNEL EXPENSES

Salaries & Allowances 297,614,735.67 222,386,960.86

Contribution to Provident Fund 9,517,252.00 6,844,179.43

Contribution to Group Gratuity Scheme 751,305.00 952,344.00

Contribution to Superannuation Scheme 907,742.00 830,700.00

Staff Welfare Expenses 7,178,685.00 8,060,460.00

TOTAL 315,969,719.67 239,074,644.29

SCHEDULE 10: PURCHASES & OPERATING EXPENSES

Project Expenses 2,935,812.72 1,252,412.60

Fees & Subscription 94,399,413.00 82,394,374.00

Anuual Maintenance Charges – 53,412.44

Technical & Sub Contract Charges 169,106,572.57 140,139,328.38

TOTAL 266,441,798.29 223,839,527.42


29

NSE.IT Limited

SCHEDULE 11: SELLING, GENERAL & ADMINISTRATIVE EXPENSES

Rent 103,945,908.93 73,701,938.05

Electricity charges 21,298,035.32 16,063,969.00

Repairs & Maintenance 6,977,247.66 5,089,307.93

Insurance 5,322,911.00 4,754,022.00

Rates & Taxes 184,712.00 144,937.00

Printing & stationary 3,949,583.35 2,597,434.00

Travelling expenses 17,032,612.70 13,643,128.62

Conveyance 5,601,574.25 4,023,650.00

Telephone & Internet Expenses 16,801,416.00 10,051,057.34

Professional Fees 6,356,970.48 3,285,355.00

Training expenses 1,064,064.00 393,486.00

Recruitment Charges 9,904,659.00 5,679,565.00

Pantry Expenses 1,668,458.00 1,221,638.59

Security Service Charges 12,031,591.00 5,721,212.98

Vehicle Expenses 167,279.00 563,309.45

Directors' sitting fees 85,000.00 125,000.00

Office Expenses 7,036,992.00 3,934,935.00

Advertisement Expenses 1,218,758.00 104,168.00

Business Promotion Expenses 1,239,943.00 –

Auditors Remuneration

- Audit fees 220,600.00 137,875.00

- Other Matters 49,635.00 137,875.00

Loss on Disposal of Fixed Asset – 193,107.03

Bad Debts Written Off 804,513.61 1,664,720.02

Other Expenses 4,203,269.24 6,279,118.11

TOTAL 227,165,733.54 159,510,809.12

For the For the

PARTICULARSyear ended year ended

31-Mar-10 31-Mar-09

Rs. Rs.


30

NSE.IT Limited

NSE.IT LIMITED

Schedule 12: NOTES TO ACCOUNTS


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.


31

NSE.IT Limited

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).


32

NSE.IT Limited

(ii) On account of bank guarantees: Rs.Nil (Previous Year: Rs. 5,000/-).

(iii) On account of corporate guarantee: Rs Nil (Previous Year: Rs. 2,815,750/-)

(iv) On account of disputed demand of income tax: Nil (Previous Year: Rs.Nil/-)

(v) On account of disputed demand of sales tax: Rs.1,79,169/- (Previous year Rs.1,79,169 /-)

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.

5. Expenditure in foreign exchange


31-Mar-2011 31-Mar-2010

Travelling 47,141 499,666

Subcontract/ Technical Fees 15,00,98,955 113,560,884

Software Licenses 1,23,110 Nil

Total 15,02,69,206 114,060,550


33

NSE.IT Limited

6. Earnings in foreign exchange:


31-Mar-2011 31-Mar-2010

Application Development and Maintenance

Services 8,84,601 919,600

Infrastructure Management Services NIL 115,731

Total 8,84,601 10,35,331

7. Details of exchange fluctuation:


31-Mar-2011 31-Mar-2010

(Loss) on Foreign Exchange transactions (3,75,913) (1,551,156)

Gain on Foreign Exchange Transactions 1,495,498 2,172,279

Net Gain / (Loss) 1,119,585 621,123

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:

Particulars Units (in No's) Value (In Rs.)

Digital Certificates

Opening Stock 465 2,30,398

Add: Purchases during the year 1,832 9,50,080

(Less): Sales Qty/ Purchase Cost of Units Sold (1,923) (10,01,289)

Closing stock 374 1,79,189


34

NSE.IT Limited

12. Segment Reporting:

In the opinion of the management, the company has two reportable business segment viz. offering "End to

End solutions" which includes revenues from sale and maintenance of software products, software consultancy

services, custom software development, information technology infrastructure services provided

predominantly to market participants in the securities and commodity markets and "E-learning Solutions"

which includes sale and maintenance of e-learning software products, online education and examination

services and other incidental services as its primary segments. This takes into consideration the commonality

in the risks and rewards of the products/ solutions and related services offered nature of services, type / class

of customers for the products / services, management structure and system of financial reporting. Accordingly,

the results of the said segments have been disclosed hereunder. Further, the company has no reportable

geographical segments and on that basis, no secondary segment information is furnished.

Primary Business Segments

Year ended March 31, 2011 Rupees

End to End E-learning Total

Solutions Solutions

Revenues 515,631,849 496,399,867 1012,031,706

461,231,347 327,809,515 789,040,862

Identifiable operating expenses 174,367,606 223,838,945 398,206,551

202,226,937 189,113,412 391,340,349

Allocated expenses 328,871,644 104,913,872 433,785,516

210,085,501 49,894,659 259,980,160

Segmental operating income / (loss) 12,392,590 167,647,050 180,039,640

49,918,909 88,801,444 137,720,353

Other income 18,390,896

17,030,265

Prior period adjustment (1,308)

60,589

Net profit before taxes 198,429,228

154,811,208

Income taxes 62,067,365

59,537,762

Net profit after taxes 136,361,863

95,273,446

(Figures in Italics are for Previous Year)

Fixed assets used in the Company's business or liabilities contracted have not been indentified to any of the

reportable segments, as the fixed assets and services are used interchangeably between segments. Accordingly

no disclosure relating to total segment assets and liabilities are made


35

NSE.IT Limited

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


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


Group Superannuation Fund Trust company's control exists


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

B) Details of transactions with related parties as follows:

Name of the Nature of transactions Year ended Year ended

related party 31/03/2011 31/03/2010

National Stock • Infrastructure Management Services 191,297,916 143,713,871

Exchange of • Application Development and

India Limited Maintenance Services 51,830,653 35,766,657

• Software Product Revenues 67,000 204,500

• E- Learning 15,242,330 Nil

• Applicable taxes recovered 31,115,203 21,248,220

• Reimbursement of expenses received 45,710 52,526

• CTCL empanelment fee paid 330,900 330,900

• Rent Paid 2,106,732 22,72,327

• Usage Charges paid - STP Central

HUB & other 48,519 136,862


36

NSE.IT Limited


related party 31/03/2011 31/03/2010

• Reimbursement paid for other expenses

incurred 337,208 80,871

• Purchase of fixed assets Nil 5,200

• Dividend paid 30,000,030 10,000,010

• Loan Taken during the Year Nil 40,000,000

• Loan Repaid during the Year Nil 40,000,000

• Interest on Loan paid during the Year Nil 2,139,179

Closing Balance - Dr./ (Cr.) 18,285,196 15,006,255

National Securities • Application Development and Maintenance

Clearing Corporation Services 10,601,873 6,555,544

Limited • Applicable taxes recovered 1,091,993 675,221

Closing Balance - Dr./ (Cr.) 1,369,693 753,677

NSE Infotech • Reimbursement of expenses received Nil Nil

Services • Reimbursement paid for expenses incurred Nil 3,460

Limited Closing Balance - Dr./ (Cr.) Nil 560

DotEx • Reimbursement of Expenses received 9,16473 624,265

International • Reimbursement for Expenses recoverable Nil 175,495

Limited • Application Development and Maintenance

Services 1,024,910 2,543,000

• Customer Care Services 39,181,357 42,411,350

• Infrastructure Management Services 3,878,458 2,121,009



National Stock • Software Product Revenues Nil 235,000

Exchange Investor • Infrastructure Management Services Nil 15,000

Protection Fund • Reimbursement of Expenses received 16,695 Nil

Trust • Applicable taxes recovered Nil 25,750

Closing Balance - Dr./ (Cr.) 16,695 Nil

Power Exchange • Application Development and

India Limited Maintenance Services 23,229,662 45,633,366

• Software Product Revenues Nil Nil

• Reimbursement of expenses received 34,638 Nil

• Infrastructure Management Services 5,276,623 10,232,501



NSE.IT US Inc • Software Product Revenues 884,601 Nil


NSE.IT (UK) Ltd • Expenses incurred on behalf of company 130,204 184,437

Closing Balance - Dr./ (Cr.) 426,909 278,981


37

NSE.IT Limited


related party 31/03/2011 31/03/2010

NSE.IT Limited • Contribution for shortfall of interest 1,54,283 340,095

Employees' Closing Balance - Dr./ (Cr.) 10,000 (404,894)

Provident Fund

Trust

Key Management • Gross remuneration including allowances,

Personnel - Ramesh perquisites and contribution to Provident

Padmanabhan - Fund and Superannuation Fund etc. 13,173,687 9,638,364

MD &CEO

The income figures are excluding applicable taxes recovered.

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:


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


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:


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)


38

NSE.IT Limited

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:

Particulars F.Y. 2010-11 F.Y. 2009-10

Performance Leave Performance Leave

Pay (Rs.) Encashment (Rs.) Pay (Rs.) Encashment (Rs.)

Carrying amount at the

beginning of the year 28,162,752 38,45,187 11,889,746 4,691,942

Amounts used during the

year 24,947,597 33,19,440 18,869,281 2,634,549

Amounts unused reversed

during the year 1,067,137 Nil 4,00,000 Nil

Provisions made during

the year 2,69,93,117 31,56,786 35,542,287 1,787,794

Carrying amount at the

end of the year 29,141,135 36,82,533 28,162,752 3,845,187

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.


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


39

NSE.IT Limited

18. Adjustment for Short / Excess Provision for Taxes :


Short Provision for Income Tax FY 2004-05 Nil 82,673

Short Provision for Income Tax FY 2007-08 Nil 794,671

Short Provision for Income Tax FY 2009-10 82,73,395 Nil

Excess Provision for Fringe Benefit Tax FY 2007-08 (27,120) Nil

Excess Provision for Fringe Benefit Tax FY 2008-09 (2,64,362) Nil

Total 79,81,913 877,344

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


Reconciliation of present value of the obligation

and the fair value of the plan assets:

Fair value of the plan assets at the end of the period 9,446,265 7,027,937

Present Value of the defined obligations at the end

of the period 7,491,774 6,093,592

Funded Status 1,954,491 934,345

Asset / (liability) recognised in Balance Sheet 1,954,491 934,345

Assumptions

Interest Rate 8.00% 8.00%


40

NSE.IT Limited

Gratuity Cost for the period

Service Cost 1,601,906 2,427,952


Expected return on plan assets (562,235) (544,523)

Net Actuarial (gain) / loss recognised in the year (791,087) (1,518,909)

Expenses recognised in statement of Profit & loss 751,305 952,344

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.

As per our report of even date attached

For Gokhale & Sathe For and on behalf of the Board of Directors


(Reg No : 103264W)

KEDAR MEHENDALE RAVI NARAIN RAMESH PADMANABHAN

Partner Chairman Managing Director & CEO

Membership No.116065

DILEEP CHOKSI J. RAVICHANDRAN

Director Director




41

NSE.IT Limited

2010-2011 2009-2010

(Rs.) (Rs.)


Net Profit before tax, & Prior Period Adjustments 198,430,535.62 154,871,796.56

Add : Adjustments for

Interest Cost – 2,139,773.00

Depreciation 22,414,815.46 20,146,320.50

Impairment of Intangible Asset – 6,488,256.56

Loss on Disposal / Sale of Fixed Assets – 193,107.24

Less :Adjustments for

Interest from Fixed Deposits (9,917,853.00) (8,859,380.50)

Operating profit before working Capital Change 210,927,498.08 174,979,873.36

Change in Working Capital

Decrease / (Increase) in Sundry Debtors (13,524,922.79) (35,583,719.24)

Decrease / (Increase) in Inventory 51,209.72 (230,398.80)

Decrease / (Increase) in Loans & Advances (12,166,201.25) (15,824,889.85)

Decrease / (Increase) in Interest accrued 78,950.14 1,731,711.23

(Decrease) / Increase in Current Liabilities & Prov 24,284,187.96 38,533,378.18

Cash Generated from Operations 209,650,721.86 163,605,954.88

Direct Taxes Paid (Net of Refunds) (92,269,459.18) (48,966,415.01)

Interest on Income Tax/Wealth tax Refund

Prior period adjustment (1,308.00) (60,589.00)

Net Cash from Operating Activities- Total (A) 117,379,954.68 114,578,950.87


Interest from Fixed Deposits 9,917,853.00 8,859,380.50

Addition to fixed assets (70,007,969.27) (50,216,071.41)

Addition to CWIP 113,899.64 (136,762.64)

Cash flow from investing activity - Total (B) (59,976,216.63) (41,493,453.55)

CASH FLOW STATEMENT FOR THE YEAR ENDED MARCH 31, 2011


42

NSE.IT Limited

2010-2011 2009-2010

(Rs.) (Rs.)

C) CASH FROM FINANCING ACTIVITY

Interest Cost – (2,139,773.00)

Loan received from NSE Limited – 40,000,000.00

Loan repaid to NSE Limited – (40,000,000.00)

Dividend Paid (30,000,030.00) (10,000,010.00)

Dividend distribution tax (4,982,630.00) (1,699,502.00)

(34,982,660.00) (13,839,285.00)

Net Increase/ (Decrease) In Cash & Cash Equivalent 22,421,078.05 59,246,212.32

Opening balance of Cash & Cash Equivalent 178,586,348.55 119,340,136.23

Closing balances of Cash & Cash Equivalent 201,007,426.60 178,586,348.55

Net Increase/ (Decrease) in Cash & Cash Equivalent 22,421,078.05 59,246,212.32


1 Cash and cash equivalent represent cash, bank balances and balances in fixed deposits

2 The above cash flow has been prepared under the "Indirect method" as set out in the Accounting Standard -3


For Gokhale & Sathe

Chartered Accountants ( Reg. No.103264W )



KEDAR MEHENDALE

Partner DILEEP CHOKSI J. RAVICHANDRAN

Membership No.116065 Director Director




43

NSE.IT Limited


Registration No. 122456

State Code 11

Balance Sheet Date 31-Mar-11

II Capital Raised during the Year

Public Issue NIL

Rights Issue NIL

Bonus Issue NIL

Private Placements NIL

III Position of Mobilisation and Deployment of Funds Rs. In Thousands

Total Liabilities 395,505

Total Assets 395,505

Sources of Funds

Paid-up Capital 100,000

Reserves & Surplus 291,983

Secured Loans NIL

Unsecured Loans NIL

Deferred Tax Liability 3,522


Net Fixed Assets 134,825

Investments 22,793

Net Current Assets 237,887

Misc. Expenditure NIL

Accumulated Losses NIL

IV Performance of Company Rs. In Thousands

Turnover 1,030,423

Total Expenditure 831,993

Profit Before Tax 198,430

Profit After Tax 136,362

Earning Per Share (Rs.), on par value of Rs.10 per share 13.64

Dividend Rate 40%

ENCLOSURE FORMING PART OF ACCOUNTS

Balance Sheet Abstract and Company's General Business Profile

(information pursuant to Notification No. GSR No. 388(E) [F No.3/24/94-CLV] dated 15-5-1995,

issued by the Department of Company Affairs, Ministry of Law, Justice and Company Affairs)



44

NSE.IT Limited

VI Generic Names of Three Principal products / Services of

Company (as per monetary terms)

Item Code No. (ITC Code) N.A.

Product Description Software Products and Services




DILEEP CHOKSI J.RAVICHANDRAN

Director Director

Mumbai CHIRAG SHAH



45

NSE.IT Limited

NSE.IT LIMITED

Statement pursuant to Section 212 of the Companies Act, 1956, relating to Subsidiary Companies

Sr. Particulars Name of the Subsidiary

No. NSE.IT (UK) Limited NSE.IT (US) Inc.

1 Financial Period ended 31-Mar-11 31-Dec-10

3 Shares held by the Holding Company in the

Subsidiary 1 Equity Share 1 Equity Share

4 Aggregate of profits or losses of the subsidiary

for the current period so far as it concerns the

Members of the holding company

(a) dealt with or provided for in the accounts

of the holding company NIL NIL

(b) not dealt with or provided for in the

accounts of the holding company (158,461) (2,602,755)

5 The net aggregate of profits or losses of previous

financial years of the subsidiary so far it concerns

the members of the holding Company

(a) dealt with or provided for in the accounts of

the holding company NIL NIL

(b) not dealt with or provided for in the

accounts of the holding company (340,936) 415,285

Issued, Subscribed & Paid-up Share Capital 73 45

Reserves (499,398) (2,187,469)

Loans – –

Total Assets (499,325) 9,548,060

Total Liabilities (499,325) 9,548,060

Investments – –

Turnover – –

Profit (158,461) (2,602,755)

Note :Figures are valued at Exchange rates prevailing as on 31st March 2011.




DILEEP CHOKSI J.RAVICHANDRAN

Director Director

Mumbai CHIRAG SHAH


NSE.IT (UK) LIMITED

(A wholly owned subsidiary of NSE.IT Limited)

FOURTH ANNUAL REPORT

2010-11

Y Y

Y Y

Fourth Annual Report

1

NSE.IT (UK) Limited

REPORT OF THE DIRECTORS AND FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31ST MARCH 2011

FOR NSE.IT (UK) LIMITED

CONTENTS OF THE FINANCIAL STATEMENTS


Page

Company Information 2

Report of the Directors 3

Report of the Independent Auditors 5

Profit and Loss Account 7

Balance Sheet 8

Notes to the Financial Statements 9



1

NSE.IT (UK) Limited

REPORT OF THE DIRECTORS AND FINANCIAL STATEMENTS


FOR NSE.IT (UK) LIMITED

CONTENTS OF THE FINANCIAL STATEMENTS


Page

Company Information 2

Report of the Directors 3

Report of the Independent Auditors 5


Balance Sheet 8

Notes to the Financial Statements 9



2

NSE.IT (UK) Limited

COMPANY INFORMATION


DIRECTORS

J Ravichandran

R Padmanabhan

SECRETARY

R Padmanabhan

REGISTERED OFFICE : Walmar House

288-292 Regent Street

London

W1B 3AL

REGISTERED NUMBER : 5994268 (England and Wales)

AUDITORS : Butler & Co

Chartered Accountant & Registered Auditors

3rd Floor,

Walmar House


London

W1B 3AL


3

NSE.IT (UK) Limited

REPORT OF THE DIRECTORS


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

STATEMENT OF DIRECTORS' RESPONSIBILITIES

The directors are responsible for preparing the Report of the Directors and the financial statements in accordance

with applicable law and regulations.

Company law requires the directors to prepare financial statements for each financial year. Under that law the

directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted

Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors

must not approve the financial statements unless they are satisfied that they give a true and fair view of the state

of affairs of the company and of the profit or loss of the company for that period. In preparing these financial

statements, the directors are required to:

- select suitable accounting policies and then apply them consistently;

- make judgements and accounting estimates that are reasonable and prudent;

- prepare the financial statements on the going concern basis unless it is inappropriate to presume that the

company will continue in business.

The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the

company's transactions and disclose with reasonable accuracy at any time the financial position of the company

and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also

responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention

and detection of fraud and other irregularities.


4

NSE.IT (UK) Limited

REPORT OF THE DIRECTORS


AUDITORS

The auditors, Butler & Co, will be proposed for re-appointment at the forthcoming Annual General Meeting.

ON BEHALF OF THE BOARD:

R Padmanabhan

Secretary

Date: April 7, 2011

STATEMENT AS TO DISCLOSURE OF INFORMATION TO AUDITORS

So far as the directors are aware, there is no relevant audit information (as defined by Section 418 of the Companies

Act 2006) of which the company's auditors are unaware, and each director has taken all the steps that he ought to

have taken as a director in order to make himself aware of any relevant audit information and to establish that the

company's auditors are aware of that information.


5

NSE.IT (UK) Limited

REPORT OF THE INDEPENDENT AUDITORS TO THE SHAREHOLDERS OF

NSE.IT (UK) LIMITED

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.

Respective responsibilities of directors and auditors

As explained more fully in the Statement of Directors' Responsibilities set out on page two, the directors are

responsible for the preparation of the financial statements and for being satisfied that they give a true and fair

view. Our responsibility is to audit the financial statements in accordance with applicable law and International

Standards on Auditing (UK and Ireland). Those standards require us to comply with the Auditing Practices

Board's Ethical Standards for Auditors.

Scope of the audit of the financial statements

An audit involves obtaining evidence about the amounts and disclosures in the financial statements sufficient to

give reasonable assurance that the financial statements are free from material misstatement, whether caused by

fraud or error. This includes an assessment of: whether the accounting policies are appropriate to the company's

circumstances and have been consistently applied and adequately disclosed; the reasonableness of significant

accounting estimates made by the directors; and the overall presentation of the financial statements.

Opinion on financial statements

In our opinion the financial statements:

- give a true and fair view of the state of the company's affairs as at 31st March 2011 and of its loss for the

year then ended;

- have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice;

and

- have been prepared in accordance with the requirements of the Companies Act 2006.

Opinion on other matter prescribed by the Companies Act 2006

In our opinion the information given in the Report of the Directors for the financial year for which the financial

statements are prepared is consistent with the financial statements.


6

NSE.IT (UK) Limited

REPORT OF THE INDEPENDENT AUDITORS TO THE SHAREHOLDERS OF

NSE.IT (UK) LIMITED

Matters on which we are required to report by exception

We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report

to you if, in our opinion:

- adequate accounting records have not been kept, or returns adequate for our audit have not been received

from branches not visited by us; or

- the financial statements are not in agreement with the accounting records and returns; or

- certain disclosures of directors' remuneration specified by law are not made; or

- we have not received all the information and explanations we require for our audit.

Sanjeev Phadke (Senior Statutory Auditor)

for and on behalf of Butler & Co


& Registered Auditors

3rd Floor Walmar House


London

W1B 3AL

Date: April 7, 2011.


7

NSE.IT (UK) Limited

PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 31ST MARCH 2011

Particulars Notes As at 31.3.2011 As at 31.3.2010

£ £

TURNOVER – –

Administrative expenses 2,171 693

OPERATING LOSS

ON ORDINARY ACTIVITIES

BEFORE TAXATION 3 (2,171) (693)

Tax on loss on ordinary activities 4 – –

LOSS FOR THE FINANCIAL YEAR

AFTER TAXATION (2,171) (693)

CONTINUING OPERATIONS

None of the company's activities were acquired or discontinued during the current year or previous year.

TOTAL RECOGNISED GAINS AND LOSSES

The company has no recognised gains or losses other than the losses for the current year or previous year.

The notes form part of these financial statements


8

NSE.IT (UK) Limited

BALANCE SHEET 31ST MARCH 2011

Particulars Notes As at 31.3.2011 As at 31.3.2010

£ £

CREDITORS

Amounts falling due within one year 5 6,841 4,670

NET CURRENT LIABILITIES (6,841) (4,670)

TOTAL ASSETS LESS CURRENT

LIABILITIES (6,841) (4,670)

CAPITAL AND RESERVES

Called up share capital 6 1 1

Profit and loss account 7 (6,842) (4,671)

SHAREHOLDERS' FUNDS 8 (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

The notes form part of these financial statements


9

NSE.IT (UK) Limited

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.

Financial Reporting Standard Number 1

Exemption has been taken from preparing a cash flow statement on the grounds that the company

qualifies as a small company.

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

£ £

Auditors' remuneration 630 630

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.


10

NSE.IT (UK) Limited

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31ST MARCH 2011

5. CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR

2011 2010

£ £

Amounts owed to group undertakings 5,850 4,040

Accrued expenses 991 630

6,841 4,670

6. CALLED UP SHARE CAPITAL

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)

8. RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS' FUNDS

2011 2010

£ £

Loss for the financial year (2,171) (693)

Share issued

Net reduction of shareholders' funds (2,171) (693)

Opening shareholders' funds (4,670) (3,977)

Closing shareholders' funds (6,841) (4,670)


11

NSE.IT (UK) Limited

PROFIT AND LOSS ACCOUNT


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

NET LOSS (2,171) (693)

This page does not form part of the statutory financial statements

NSE.IT (US) INC.

(A wholly owned subsidiary of NSE.IT Limited)

FOURTH ANNUAL REPORT

2010

Y

Y YY

1

Fourth Annual ReportNSE.IT (US) Limited

NSE.IT (US) INC.

A CORPORATION

NOTES TO FINANCIAL STATEMENTS

*UNAUDITED*

AS OF DECEMBER 31, 2010

SELECTED INFORMATION: SUBSTANTIALLY ALL DISCLOSURES REQUIRED ARE NOT INCLUDED

IN THESE NOTES TO FINANCIAL STATEMENTS

NOTE 1 : COMPANY PROFILE

The following is a brief profile of the business:

A: The business is a corporation.

B: The business's main source of revenue is from software development and maintenance services.

C: The business's year end is Decemeber 31 of each year.

NOTE 2 : ACCOUNTING POLICY

The corporation uses the accrual method of accounting, which is the method of recording transactions, by which

revenue and expenses are reflected in the accounts in the period which they are considered to be earned and

incurred, respectively, whether or not such transactions have been finally settled by receipt or payment of cash or

its equivalent. Also, depreciation expense is computed and recorded in the business's financial statements in

accordance with the Internal Revenue Code, which may result in material differences from depreciation computed

using useful lives.

NOTE 3 : METHOD OF DEPRECIATION

The business uses the methods prescribed by the Internal Revenue Code to calculate the current year's depreciation

expense.

The amount of depreciation claimed each month is estimated. At the end of the year the amounts are adjusted to

actual.

NOTE 4 : FEDERAL INCOME TAX

No provision for Federal income taxes has been made in business's financial statement on account of the net loss

incurred during the year.

2


NSE.IT (US) INC.

STATEMENT OF ASSETS, LIABILITIES, AND SHAREHOLDERS' EQUITY

AS OF DECEMBER 31,2010

As of As of

December 31,2010 December 31,2009

US $ US $

ASSETS

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

LIABILITIES AND SHAREHOLDERS' EQUITY

Current Liabilities:

Accounts payable – –

Accounts payable - related parties 220,531 220,531

Other current liabilities 40,722 11,433

Total Current Liabilities 261,253 231,964

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

For NSE.IT (US) Inc.

Ramesh Padmanabhan

Date : 24th March 2011 Director

3


NSE.IT (US) INC.

STATEMENT OF REVENUES AND EXPENSES

JANUARY THROUGH DECEMBER 2010

Year Ending Year Ending

December 31, 2010 December 31, 2009

US $ US $

REVENUE

Third parties – –

Related parities – –

Total Revenues – –

COST OF REVENUE

Personnel Expenses (Salaries) 43,333 –

Total Cost of Goods Sold 43,333 –

Gosss Profit (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

Operating Income (57,043) (6,494)

Interest on delayed payment of tax 76 –

Provision for Income Taxes ( Short Provision ) 823 2

Net Income / (Loss) (57,942) (6,496)

For NSE.IT (US) Inc.

Date : 24th March 2011 Ramesh Padmanabhan

Director

DotEx International Limited(A Wholly owned Subsidiary of National Stock Exchange of India Limited)

First with the next

ELEVENTH ANNUAL REPORT

2010 – 11

A A

A A

DotExDotExDotExDotExDotExDotExDotExDotExDotExDotEx

BOARD OF DIRECTORS



Mr. J. Ravichandran

Mr. Suresh Narayan : Director in-charge

SECRETARY

Mr. Ved Malla : Asst. Company Secretary

AUDITORS : M/s. K.S. Aiyar & Co.


F 7, Laxmi Mills,

Shakti Mills Lane,

(Off. Dr. E. Moses Road)

Mahalaxmi

Mumbai 400 011

REGISTERED OFFICE : “Exchange Plaza”

Plot C-1, Block ‘G'

Bandra Kurla Complex,

Bandra (East)

Mumbai- 400 051

Eleventh Annual ReportDotEx International Limited

Eleventh Annual Report

1

DotEx International Limited

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.

I. OPERATIONS AND MAJOR EVENTS DURING THE YEAR

DotEx manages the data feed of NSEIL and supplies the same to its clients. Currently, the following

products are offered by DotEx:-

1) Real Time Data

2) Snapshot Data

3) End of Day Data

4) Historical Data

5) Corporate Data

The products related to real time data, snapshot data, end of day data and historical data are further

segregated into the following segments:

(i) Capital Market [CM] segment

(ii) Futures and Options Market [F&O] segment

(iii) Wholesale Debt Market [WDM] segment

(iv) Securities Lending & Borrowing Market [SLBM] segment

(v) Currency & Interest Rate Futures Market segment

Currently, real time feed is being subscribed by 33 clients, snapshot feed by 36 clients, end of day

feed by 23 clients and Corporate data by 2 clients.

Your Company is pleased to inform you that during the year, DotEx also operationalised the tick by

tick data feed and the 1 minute snapshot feed.

DotEx also provides a shared platform called NEAT on Web (NOW) which is a shared CTCL and risk

management tool for the trading members.

During the year, 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:-


2


• 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:-

Particulars 2010–11 2009–10

(Rs. in Lakhs) (Rs. in Lakhs)

Income 5,445.23 4,356.87

Expenditure (other than depreciation) 2,977.88 2,188.61

Profit before depreciation and tax 2,467.35 2,168.26




Profit after tax 1,416.68 1,304.32

Profit / Loss brought forward from previous year 225.08 181.34

Excess corporate Dividend Tax for last year transferred back 0.69 –

Profit available for appropriation 1,642.45 1,485.66

General Reserve 1,200.00 1,050.00




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.


3



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,

Mr. Ravi Narain retires by rotation at the ensuing Annual General Meeting and being eligible offers himself for

re-appointment.


Your Directors confirm that –

i. in the preparation of the Annual Accounts, the applicable accounting standards have been followed


ii. the directors had selected such accounting policies and applied them consistently and made judgments


of the Company at the end of the financial year i.e., 31st March 2011 and of the profit of the company

for that year;

iii. the directors have taken proper and sufficient care for the maintenance of adequate accounting records

in accordance with the provisions of Companies Act, 1956 for safeguarding the assets of the Company


iv. the directors had prepared the annual accounts on a going concern basis.


The Audit Committee comprises of three Directors viz., Mr. Ravi Narain, Ms. Chitra Ramkrishna and

Mr. J. Ravichandran as its members. During the year under review, the Committee met four times i.e., on

April 26, 2010, August 12, 2010, November 29, 2010 and February 16, 2011. The details of the attendance

of the members of Audit Committee are presented in the following table:-

Names Number of meetings Number of meetings

held during the year attended

Mr. Ravi Narain 4 4

Ms. Chitra Ramkrishna 4 4

Mr. J. Ravichandran 4 3


4


VIII. AUDITORS

M/s. K. S. Aiyar and Co., Chartered Accountants, Auditors of the Company, retire at the forthcoming Annual


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.

IX. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN

EXCHANGE EARNINGS/OUTGO

a) Conservation of Energy, Technology Absorption:




Section 217(1)(e) of the Companies Act, 1956 read with the aforesaid Rules are not applicable to the

Company.

b) Foreign Exchange earnings/outgo during the year under review:

During the year, the foreign exchange earnings were Rs. 1,295.85 lakhs and the foreign exchange

outgo was Rs. 4.90 lakhs.


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



5






No. Qualifications Years Nature of Received (Rs.) (No. of commencement Employment


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.

2 The above 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 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.



6


AUDITORS' REPORT

To the Members of

DOTEX INTERNATIONAL LIMITED

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







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


(ii) In our opinion, proper books of account as required by law have been kept by the Company so far


(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


7


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,



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.

For K. S. AIYAR & CO.


Registration No: 100186W

Raghuvir M. Aiyar

Place : Mumbai Partner

Date : April 26, 2011 (M No. 38128)


8



(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.


9


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,


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.




Place : Mumbai RAGHUVIR M. AIYAR

Date : April 26, 2011 Partner

(M No: 38128)


10



Schedule As At 31.03.11 As At 31.03.10

Amount (Rs.) Amount (Rs.)

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

2. Deferred Tax Liabilities – 1,368,660.00

(Refer Note No.9)

TOTAL 468,325,068.76 348,876,398.19


1. Fixed Assets 3

a Gross Block 166,841,543.91 150,413,072.56

Less: Depreciation till date 86,250,538.79 52,521,094.84

Net Block 80,591,005.12 97,891,977.72

b Capital work in progress – 80,591,005.12 746,554.00 98,638,531.72

(including capital advances)

2. Investments 4 115,904,437.00 59,256,433.00

3. Current Assets, Loans & Advances 5

(a) Current Assets 295,842,924.40 194,162,469.49

(b) Loans & Advances 37,175,499.50 75,081,708.30

333,018,423.90 269,244,177.79

Less: Current Liabilities & Provisions 6 62,664,347.26 78,262,744.32


4. Deferred Tax Asset 1,475,550.00 –

( Refer Note no. 9)

TOTAL 468,325,068.76 348,876,398.19

Notes forming part of accounts 11





Chairman Director

RAGHUVIR M. AIYAR J.RAVICHANDRAN SURESH NARAYAN

Partner Director Director–in–charge

Membership No : 38128

Place : Mumbai VED MALLA



11


PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED MARCH 31,2011

Schedule For the year For the year

ended 31.03.2011 ended 31.03.2010


(I) INCOMEIncome from operations 7 533,206,569.54 420,341,255.04Other Income 8 11,316,533.45 15,345,991.71

544,523,102.99 435,687,246.75

(II) EXPENDITUREEmployee Cost 9 21,283,730.00 11,267,871.21Operating, Administration andOther Expenses 10 204,506,693.60 145,028,979.98Revenue sharing (Refer Note.11 ) 71,997,820.00 62,563,908.00Depreciation 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



For K. S. AIYAR & CO.Chartered Accountants

RAVI NARAIN CHITRA RAMKRISHNAChairman Director

RAGHUVIR M. AIYAR J.RAVICHANDRAN SURESH NARAYANPartner Director Director–in–chargeMembership No : 38128

Place : Mumbai VED MALLADate : April 26, 2011 Asst. Company Secretary


12



As At 31.03.11 As At 31.03.10



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

Issued, Subscribed and Paid up

1,20,00,000 (Prev. year 1,20,00,000) 120,000,000.00 120,000,000.00

Equity shares of Rs 10 each

(all the above shares are held by the

holding company,

NATIONAL STOCK EXCHANGE OF

INDIA LIMITED and its nominees)

TOTAL 120,000,000.00 120,000,000.00


General Reserve


Add : Transfer from Profit & Loss account. 120,000,000.00 325,000,000.00 105,000,000.00 205,000,000.00

Profit & Loss Account 23,325,068.76 22,507,738.19

TOTAL 348,325,068.76 227,507,738.19


13


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14



As At 31.03.11 As At 31.03.10


SCHEDULE 5 : CURRENT ASSETS,

LOANS & ADVANCES

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


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

Short Term Investments – 103,205,656.93

(Refer Note no.1 E.(ii) & 5 )

TOTAL 295,842,924.40 194,162,469.49

B: Loans and Advances (Unsecured, Considered good)

Advance Recoverable in Cash or Kind 37,081,666.50 64,982,875.30

Inter Corporate Deposit – 10,000,000.00

Sundry Deposits 93,833.00 98,833.00

TOTAL 37,175,499.50 75,081,708.30


15



As At 31.03.11 As At 31.03.10


SCHEDULE 6 : CURRENT LIABILITIES AND PROVISIONS

A : Current Liabilities

Sundry Creditors 14,407,967.58 23,372,962.55

Tax Deducted at Source 7,749,330.00 4,967,390.00


Other Current Liabilities 15,406,548.57 22,806,749.00

TOTAL 38,813,846.15 56,237,146.55

B : Provisions

Provisions for Tax (Net of Advance

Taxes Paid Including 2,930,451.11 966,497.77

TDS Rs. 20,24,57,842.89,

Previous year Rs.13,24,26,819.23)

Proposed Dividend 18,000,000.00 18,000,000.00

Corporate Dividend Tax 2,920,050.00 3,059,100.00

23,850,501.11 22,025,597.77

62,664,347.26 78,262,744.32

SCHEDULE 7 : INCOME FROM OPERATIONS

Income - Online Datafeed Service Fees 286,336,779.00 247,640,131.00

Income - Sale of Data 1,654,500.00 2,615,500.00

Income - Recovery of expenses from NSEIL 244,991,990.54 169,427,024.04

Income - Dealer Charges from NCDEX 223,300.00 658,600.00

TOTAL 533,206,569.54 420,341,255.04


Interest on Investments

(Including Taxfree Income Rs 6,85,000/-,

Previous Year Rs 35,657.54) 821,530.88 171,902.51

Interest on Fixed Deposit (Gross) 6,484,932.87 481,378.00

[TDS Rs.7,47,635.77 (Prev. year : Rs.48,800/-)]

Interest on Intercorporate Deposit 404,658.34 1,101,050.66

[TDS Rs.40,466/- (Prev. year : Rs.1,10,108/-)]

Dividend on Investment 3,476,344.73 3,910,312.66

Profit/(Loss) on sale of redemption of Investments 115,245.69 9,664,288.05

Profit on Sale of Fixed Assets 4,000.00 5,059.83

Miscellaneous Income 9,820.94 12,000.00

TOTAL 11,316,533.45 15,345,991.71


16



As At 31.03.11 As At 31.03.10


SCHEDULE 9 : EMPLOYEES COST

Manpower Deputation Expenses 21,283,730.00 11,267,871.21

TOTAL 21,283,730.00 11,267,871.21

SCHEDULE 10 : OPERATING, ADMINISTRATION

AND OTHER EXPENSES

Licence Fees 82,050,000.00 41,599,998.00

Repairs & Maintanence - Computers 17,397,857.64 12,853,166.55

Repairs & Maintenance - Others 44,119,130.00 45,670,003.00

Internet Charges 34,490,690.57 28,485,199.00

Legal & Professional Charges 7,828,377.00 4,427,941.67

Empanellement Charges 250,000.00 1,500,000.00

Software Expenses 147,472.00 1,911,546.26

Travelling Expenses 467,651.00 834,514.83

Data Subscription Fees 1,600,000.00 –

Telecom - Co-location charges 2,633,086.50 3,230,661.50

Telephone Expenses 589,706.01 1,027,810.16

Electricity Charges 805,975.10 11,325.86

Insurance 448,065.00 264,778.00

Space and Infrastructure usage charges 9,129,600.01 59,880.00

Profit/Loss on Exchange fluctuation (Net) – 175,091.00

Payment to Auditors

Audit Fees 75,000.00 75,000.00

Out of Pocket Expense 729.00 –

Bad debts / Sundry balance written off 168,709.00 –

Amortisation of Premium on Govt/Debt Sec. (Refer Note No.1E) 61,996.00 3,567.00

Other Expenses 2,242,648.77 2,898,497.15

TOTAL 204,506,693.60 145,028,979.98


17


Schedules forming part of the accounts


1. Significant Accounting policies

A. Basis of Accounting

The financial statements are prepared on the basis of historical cost convention and the mercantile

system of accounting in accordance with the generally accepted accounting principles.

B. Revenue recognition

Revenue from subscription received for dissemination of data (data feed) is recognised on time proportion

method.

C. Expenditure


D. Fixed Assets

Fixed Assets are stated at cost of acquisition / development less accumulated depreciation. Cost of

acquisition is inclusive of freight, duties, taxes and other incidental expenses.

Depreciation is provided on prorata basis for the period of use.

Depreciation on Office Equipment is provided using Straight Line Method at the rates specified in

Schedule XIV of the Companies Act, 1956,

Depreciation on Computer Software is provided at the rate of 33 1/3 % on Straight Line Method, which

is higher than the rate prescribed in the aforesaid schedule

Depreciation on Computer Hardware and Servers is provided at the rate of 25% on Straight Line

Method, which is higher than the rate prescribed in the aforesaid schedule.

Depreciation on Telecom Installations is provided at the rate of 25% on Straight Line Method, which is

higher than the rate prescribed in the aforesaid schedule.

E. Investments

(i) Long Term Investments are considered as held till maturity and are valued at cost.


(iii) Premium paid/discount received at the time of acquisition of Government / Debt Securities is

amortised over the residual period of its maturity.

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.


18


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 :

Particulars Current Year Previous Year

( Rs.) (Rs.)

Salary and Allowances 18,84,756.00 12,95,954.00

Contribution to Provident Fund and other Funds 1,13,249.00 64,784.00

Perquisites in Cash or in kind 1,10,285.00 29,082.00

4. The Company is primarily engaged in the business of dissemination of data. Additionally it provides a

facility to NSEIL/NCDEX members to access respective markets. Segmental information on the basis

of above mentioned operations as per Accounting Standard 17 ‘Segment Reporting’ is as below :

Particulars DataFeed Others Unallocated Total

(Rs.) (Rs.) (Rs.) (Rs.)

Segment Revenue. 287,991,279.00 245,215,290.54 11,316,533.45 544,523,102.99

(250,255,631.00) (170,085,624.04 ) ( 15,345,991.71 ) (435,687,246.75 )

Segment Result. 199,763,424.12 – 11,316,533.45 211,079,957.57

(176,277,843.62 ) – ( 15,345,991.71 ) (191,623,835.33 )

Taxes – – – 69,412,097.00

– – – ( 61,191,259.00)

Net Profit After Taxes – – – 141,667,860.57

– – – (130,432,576.33 )

Segment assets. 18,549,648.55 330,163,992.42 182,275,775.05 530,989,416.02

(69,492,541.94) (251,951,794.08) (193,493,409.97) (514,937,745.99)

Segment liabilities. 4,786,463.00 26,226,240.15 31,651,644.11 62,664,347.26

– (17,450,983.00) (149,979,024.80) (167,430,007.80)

Capital Expenditure 965,515.00 17,388,414.22 – 18,353,929.22

(5,469,542.00) (57,328,196.95) – (62,797,738.95)

Depreciation 3,230,828.27 32,424,073.55 – 35,654,901.82

(3,375,455.32) (21,827,196.91) – (25,202,652.23)

Note: Previous year figures are given in bracket.


19


5. The statement of Short Term Investments at the end of year is given below :

Sr. Particulars Number of As at Number of As at

No. Units 31.3.2011 Units 31.3.2010

Unquoted

Mutual Funds


Treasury Advantage Plan -

Wholesale - Dly Div – – 599,464.72 6,013,530.33

2 JM Money Manager Fund Super

Plus Plan - Daily Dividend – – 248,173.76 2,483,052.90

3 ICICI Prudential Flexible Income

Plan Premium - Daily Dividend – – 244,936.31 25,904,544.25

4 ICICI Prudential Ultra Short Term

Plan Super Premium

Weekly Dividend – – 2,402,796.13 24,104,289.04

5 Templeton India Ultra Short Bond

Fund - Retail Plan - Weekly Div

Reinvestment – – 655,031.45 6,557,541.95


Fund Retail Plan - Daily Dividend

Reinvest – – 608,504.52 6,091,495.38

7 UTI Treasury Advantage Fund -

Weekly Dividend Plan -

Re-Investment – – 6,344.00 6,540,710.45

8 Reliance Medium Term Fund-Daily

Dividend Plan – – 443,310.10 7,578,607.81

9 JP Morgan India Treasury Fund -

Super Inst. Daily Div Plan -

Reinvest – – 25,319.11 253,416.48

10 Baroda Pioneer Treasury Advantage

Fund - Regular Daily Dividend Plan – – 1,766,169.58 17,678,468.34

TOTAL – – 7,000,049.68 103,205,656.93


20


6. Statement of investments purchased and sold/redeemed during the year at cost is given below :

Sr. SCRIP NAME Units Sold Face Value Investment

No. Cost Sold

1 Baroda Pioneer Liquid Fund -

Institutional Daily Dividend Plan 1,599,184.91 16,001,923.99 16,001,923.99

2 Baroda Pioneer Treasury Advantage Fund -

Institutional Daily Dividend Plan 1,634,462.48 16,359,498.39 16,359,498.39

3 Baroda Pioneer Treasury Advantage Fund -

Regular Daily Dividend Plan 4,301.30 43,053.84 43,053.84

4 Birla Sun Life Cash Plus - Instl. Prem

Plan - Daily Dividend - Reinvestment 998,167.65 10,001,140.78 10,001,140.78

5 Birla Sun Life Savings Fund - Instl. -

Daily Dividend - Reinvestment 1,019,246.47 10,199,395.53 10,199,395.53

6 Canara Robeco Liquid Fund -

Dividend Reinvestment 427,057.42 4,300,468.21 4,300,468.21

7 Canara Robeco Treasury Advantage

Retail Daily Dividend Fund 349,260.38 4,333,308.47 4,333,308.47

8 DWS Cash Opportunities Fund -

Institutional Plan Weekly Dividend 1,273,149.79 12,834,273.85 12,834,273.85

9 DWS Insta Cash Plus Fund - Institutional

Plan - Daily Dividend-Reinvest 1,263,636.45 12,701,568.16 12,701,568.16

10 DWS Insta Cash Plus Fund - Regular

Plan Daily Dividend 145,632.53 1,500,160.69 1,500,160.69

11 DWS Ultra Short Term Fund -

Regular Daily Dividend Plan 150,972.94 1,512,975.27 1,512,975.27


Treasury Advantage Plan -

Wholesale - Dly Div 2,026.03 20,324.16 20,324.16

13 HSBC Cash Fund - Institutional -

Daily Dividend 957,926.73 10,000,850.90 10,000,850.90

14 HSBC Floating Rate - Long Term Plan -

Institutional Option - Weekly Dividend 894,093.38 10,047,074.11 10,047,074.11

15 ICICI Prudential Flexible Income Plan

Premium - Daily Dividend 5,124.63 541,853.26 541,853.26

16 ICICI Prudential Institutional Liquid Plan-

Super Institutional Daily Div 89,996.19 9,001,637.05 9,001,637.05

17 ICICI Prudential Ultra Short Term Plan

Super Premium Weekly Dividend 251,472.75 2,526,505.21 2,526,505.21

18 JM Money Manager Fund Super Plus

Plan - Daily Dividend 172.26 1,723.53 1,723.53


21


19 JPMorganIndia Liquid Fund -

Super Inst.Daily Dividend Plan - Reinvest 2,210,618.20 22,123,645.90 22,123,645.90

20 JPMorganIndia Treasury Fund - Super

Inst. Daily Div Plan - Reinvest 73.43 734.99 734.99

21 Reliance Liquid Fund-Treasury Plan-

Institutional Option-Daily Dividend 654,197.14 10,000,973.40 10,000,973.40

22 Reliance Medium Term Fund-Daily

Dividend Plan 593,743.02 10,150,571.29 10,150,571.29

23 SBI Debt Fund Series - 90 Days - 35 -

Dividend 507,775.06 5,077,750.63 5,077,750.63

24 SBI Magnum Insta Cash Fund - Daily

Dividend Option 1,260,429.68 21,112,575.25 21,112,575.25

25 SBI Premier Liquid Fund - Institutional -

Daily Dividend 498,449.31 5,000,692.75 5,000,692.75

26 SBI - SHF- Ultra Short Term Fund -

Institutional Plan - Daily Dividend 1,626,321.91 16,272,977.00 16,272,977.00

27 Sundaram Money Fund - Inst. -

Daily Div - Reinvestment 991,039.08 10,004,836.83 10,004,836.83

28 Tata Floater Fund - Daily Dividend 1,307,637.00 13,122,921.90 13,122,921.90

29 Tata Liquid Fund - Ship - Dividend - Daily 11,665.86 13,001,832.44 13,001,832.44

30 Taurus Liquid Fund - IP -

Daily Dividend - Reinvestment 10,000.70 10,001,101.23 10,001,101.23

31 Taurus Ultra Short Term Bond Fund -

Institutional Daily Dividend Plan 10,072.15 10,087,633.32 10,087,633.32

32 Templeton India Ultra Short Bond Fund -

Retail Plan - Weekly Div Reinvestment 10,972.26 109,865.20 109,865.20

33 Templeton India Ultra Short Bond Fund

Retail Plan - Daily Dividend Reinvest 6,688.54 66,956.26 66,956.26

34 UTI Treasury Advantage Fund -

Weekly Dividend Plan - Re-Investment 3.30 3,413.62 3,413.62

Grand Total 20,765,570.95 268,066,217.41 268,066,217.41

Sr. SCRIP NAME Units Sold Face Value Investment

No. Cost Sold


22


7. In compliance with Accounting Standard - 18 "Related Party Disclosures" issued by the Institute of Chartered




No.




4 NSE.IT (UK) Limited Fellow Subsidiary

5 NSE.IT (US) Limited Fellow Subsidiary

6 India Index Services & Products Limited Fellow Subsidiary

7 NSE InfoTech Services Limited Fellow Subsidiary


9 Power Exchange India Limited Joint Venture with Holding Co

10 Mr. Suresh Narayan - Director in Charge Key Management Personnel

B) Details of transactions with related parties are as follows

Name of Related Nature of Transactions Year ended Year ended

Party 31/03/2011 31/03/2010

National Stock Reimbursement paid for 2,34,75,905.00 1,24,27,281.21

Exchange of expenses on staff on

India Limited. deputation

Space and Infrastructure usage 1,00,69,952.00 66,048.00

charges paid

Capital Items Purchased 53,96,472.00 Nil

Amount paid towards revenue 7,94,13,598.00 6,90,07,991.00

sharing (refer note no.11)

Reimbursement paid for other 10,89,69,548.55 7,20,67,745.04

expenses incurred

Dividend Paid 1,80,00,000.00 1,20,00,000.00

Recovery of expenses 27,02,26,165.54 18,68,78,007.04

Outstanding balance included in 15,99,92,091.85 8,03,91,603.56

Current Assets. (Net)


23


Name of Related Nature of Transactions Year ended Year ended

Party 31/03/2011 31/03/2010

NSE.IT Limited. Amount payable towards Technical 4,88,74,598.00 5,26,03,508.00

Support charges, Professional Fees for

NOW testing automation products and

reimbursement of expenses.

Outstanding balance included in 55,77,575.00 1,45,27,258.00

Current Liabilities.

India Index Fees for right to create indices. 24,99,950.00 Nil

Services &

Products Limited.

Data Subscription Fees (Expenses) 16,00,000.00 Nil

Key Management Gross Remuneration including 21,08,290.00 13,89,820.00

Personnel allowances, non-cash perquisites

and contribution to Provident Fund

and Superannuation Fund etc.

8. Accordance with Accounting Standard - 20 "Earning per Share "issued by the Institute of Chartered


Year ended 31/03/2011 Year ended 31/03/2010

Net Profit attributable to Share holders 14,16,67,860.57 13,04,32,576.33

Weighted Average number of equity shares issued 1,20,00,000 1,20,00,000

Basic Earning per share of Rs. 10/- each (in Rs) 11.81 10.87

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.

9. In accordance with Accounting Standard - 22 "Accounting for Taxes on Income" issued by the Institute of

Chartered Accountants of India, the breakup of Deferred Tax Asset/Liabilities is as follows.

As at 31st March As at 31st March

2011 2010


Related to depreciation and other capital Expenditure Nil 20,19,097.00

Total (A) Nil 20,19,097.00

Less : Deferred Tax Assets

Related to depreciation and other capital Expenditure 5,43,529.41 Nil

Related to disallowance u/s 43B 2,72,165.21 1,84,504.00

Others (Provision for Doubtful Debts) 6,59,855.38 4,65,933.00

Total (B) 14,75,550.00 6,50,437.00

Net Deferred Tax Liability / (Asset) (A-B) (14,75,550.00) 13,68,660.00

Previous Years figures are reworked based on the filing of return of income for A.Y.2010-11.


24


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).

12 a) Expenditure in Foreign Currency: Rs.4,90,156.00 (Previous year : Rs. 5,87,320.00)

b) Earnings in Foreign Currency: Rs.12,95,85,053.00 (Previous year : Rs. 16,08,97,550.00 )

13. C.I.F. value of imports in respect of Capital goods : Rs. 4,36,944.00 (Previous Year : Rs 40,59,013.00)

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.


For K. S. Aiyar & Co.

Chartered Accoutants

Raghuvir M. Aiyar RAVI NARAIN CHITRA RAMKRISHNA

Partner Chariman Director

Membership No: 38128

J. RAVICHANDRAN SURESH NARAYAN

Director Director-in-charge




25


2010-2011 2009-2010

(Rs.) (Rs.)


Net Profit Before Tax 211,079,957.57 191,623,835.33


- Depreciation 35,654,901.82 25,202,652.23

- Bad debts / Sundry Balances Written Off 168,711.30 –

- Provision for Doubtful Debts 662,974.00 –

- Amortisation of premium on Govt/debt Securities 61,996.00 3,567.00

Less : Adjustments for :

- Interest on Investments (821,530.88) (171,902.51)

- Interest income on Bank & Inter-corporate deposits (6,889,591.21) (1,582,428.66)

- Dividend on Investment (3,476,344.73) (3,910,312.66)

- Profit on sale of redemption of Investments (115,245.69) (9,664,288.05)

- Profit on sale of assets (4,000.00) (5,059.83)

- Sundry Balances Written Back (4,773.94) –

Oprating Profit Before Working Capital Changes 236,317,054.24 201,496,062.85

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


Purchase of Fixed Assets (17,607,375.22) (63,505,292.95)

Sale of Fixed Assets 4,000.00 12,278.96

(Increase)/Decrease in Investment 46,610,902.62 (10,238,008.50)

Interest received on deposits 1,631,156.77 1,528,112.00


Interest on Investments 833,548.00 48,007.00

NET CASH FROM INVESTING ACTIVITIES - Total (B) 34,948,576.90 (68,244,590.83)



26


2010-2011 2009-2010

(Rs.) (Rs.)


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)

CASH AND CASH EQUIVALENTS : OPENING BALANCE 1,927,474.67 5,759,129.49

[ (includes fixed deposit with banks of Rs.Nil

(Previous Year Rs.Nil ) ]

CLOSING CASH AND CASH EQUIVALENTS : 115,451,734.16 1,927,474.67

CLOSING BALANCE

[ (includes fixed deposit with banks of Rs.11,05,00,000.00

(Previous Year Rs.Nil ) ]

NET INCREASE/(DECREASE) IN CASH AND 113,524,259.49 (3,831,654.82)

CASH EQUIVALENTS


1 Cash and cash equivalent represent cash, bank balances and balance in fixed deposit account as per balance sheet

2 The above Cash Flow Statement has been prepared under the "Indirect Method" as set out in the Accounting

Standard-3 on Cash Flow Statements issued by the Institute of Chartered Accountants of india

3 All figures in brackets are outflows

4 Previous Years figures have been regrouped/restated wherever necessary

5 Direct taxes Paid/ Refunded are treated as arising from operating Activities and not bifurcated between investing

andfinancing activities.


For K. S. Aiyar & Co.

Chartered Accoutants

Raghuvir M. Aiyar RAVI NARAIN CHITRA RAMKRISHNA

Partner Chariman Director

Membership No: 38128

J. RAVICHANDRAN SURESH NARAYAN





27



Balance Sheet Abstract and Company's General Business Profile


Registration No. 1 2 6 9 5 2 State Code 1 1


Date Month Year



* * * N I L * * * * * * N I L * * *


* * * N I L * * * * * * N I L * * *



* * * 5 3 0 9 8 9 * * * 5 3 0 9 8 9

Sources of Funds


* * * 1 2 0 0 0 0 * * * 3 4 8 3 2 5


* * * N I L * * * * * * N I L * * *


* * * N I L * * *



* * * * 8 0 5 9 1 * * * 1 1 5 9 0 4


* * * 2 7 0 3 5 4 * * * N I L * * *

Accumulated Losses Deferred Tax Asset.

* * * N I L * * * * * * * * 1 4 7 6


28




* * * 5 4 4 5 2 3 * * * 3 3 3 4 4 3

+ – Profit / Loss before tax + – Profit / Loss after tax

* * * 2 1 1 0 8 0 * * * 1 4 1 6 6 8



* * 1 1 . 8 1 1 5


Item Code No. N A

(ITC Code)

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 )



Chairman Director

J.RAVICHANDRAN SURESH NARAYAN


VED MALLA

Asst. Company Secretary

Place : Mumbai


��

India Index Services & Products Limited

(Subsidiary of National Stock Exchange of India Limited)

THIRTEENTH ANNUAL REPORT2010-11

E E

E E

IISL

BOARD OF DIRECTORS*



Ms. Roopa Kudva

Mr. J. Ravichandran

Mr. Arun Panicker

Mr. Mukesh Agarwal

Mr. Suresh Narayan : Director & CEO

AUDITORS : M/s. K. S. Aiyar & Co.


F-7, Laxmi Mills

Shakti Mills Lane

(Off. Dr. E. Moses Road.)

Mahalaxmi

Mumbai 400 011

REGISTERED OFFICE : "Exchange Plaza"

Plot C-1, Block ‘G’

Bandra-Kurla Complex, Bandra (East)

Mumbai - 400 051

*As on April 25, 2011

Thirteenth Annual ReportINDIA INDEX SERVICES & PRODUCTS LIMITED

Thirteenth Annual Report

1

INDIA INDEX SERVICES & PRODUCTS LIMITED

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.

I. OPERATIONS AND EVENTS DURING THE YEAR

Developments

Your Company continued to be the primary provider of indices and related products and services to

various participants in the capital market in India in the thirteenth year of its operation.

The benchmark index i.e. S&P CNX Nifty reached an all-time high of 6,312.45 on November 11, 2010

during the financial year. The turnover of S&P CNX Nifty Futures traded on National Stock Exchange

(NSE) increased from Rs. 34,71,988 Crores in the financial year 2009-10 to Rs. 37,18, 462 Crores in the

financial year 2010-11, registering an increase of 7.09 %. Turnover of S&P CNX Nifty Options traded on

NSE increased from Rs. 80,19,405 Crores in the financial year 2009-10 to Rs. 1,83,31,379 Crores in the

financial year 2010-11, registering an increase of 128.58%.

During the financial year 2010-11, your Company granted licenses to two additional Asset Management

Companies for launching Exchange traded funds, to four additional Asset Management Companies for

launching Index Funds and to two Insurance companies for launching Insurance funds.

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


2


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:

(I) Derivative Contracts:

1. Futures and Options on S&P CNX Nifty index traded on the NSE.

2. Futures and Options on CNX IT Index traded on the NSE.

3. Futures and Options on CNX Bank Index traded on the NSE.

4. Futures on S&P CNX Nifty Index traded on the SGX and CME.

(II) Mutual Fund Products:

1. Index Funds based on:

• S&P CNX Nifty

• S&P CNX 500 Index

• S&P CNX 500 Shariah Index

• CNX Nifty Junior Index

2. Exchange Traded Funds (ETFs) based on:

• S&P CNX Nifty Index

• CNX Nifty Junior Index

• CNX Bank Index

• CNX Midcap Index

• CNX PSU Bank Index.

• CNX Infrastructure Index

• S&P CNX Nifty Shariah Index.

3. Active funds using IISL indices as benchmarks.

4. Exchange Traded Notes (ETNs) based on S&P CNX Nifty.

(III) Debentures and insurance products based on S&P CNX Nifty Index and CNX Bank Index.

(IV) Other OTC / Structured Products

1. Index Linked Notes / Bonds

2. Index-linked Certificates of Deposit


3


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:-


(Rs. in lakhs) (Rs. in lakhs)

Income 2,097.53 1,516.89


Profit before depreciation and tax 1,747.98 1,327.53



Provision for tax 558.87 421.62

Net Profit after tax 1,183.74 893.39


Excess corporate dividend tax for last year transferred back 0.35 –

Amount available for appropriation 1,300.34 972.72

General Reserve 1,000.00 750.00



Balance carried forward to Balance Sheet 164.36 116.25


4


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.



i. in the preparation of the Annual Accounts, the applicable accounting standards had been followed


ii. the Directors had selected such accounting policies and applied them consistently and made judgments


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



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


under Section 224 (1B) of the Companies Act, 1956.


5



EARNINGS/OUTGO





Section 217(1)(e) of the Companies Act, 1956, read with the aforesaid Rules are not applicable to

the Company.


The foreign exchange earnings during the year were Rs. 858.24 lakhs. The foreign exchange outgo

during the year was Rs. 13.85 lakhs.


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. CERTIFICATE OF COMPLIANCE

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



6






No. Qualifications Years Nature of Received (Rs.) (No. of Commencement Employment


1 Mr. Suresh Narayan 41 Director & CEO 4919340 3392130 21 January 24, 2005 Manager,

B.Com, Grad. CWA National

Securities

Depository

Limited

Notes :


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.


7


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 27thApril 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 31st 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.


8


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.


9


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.


respect to the objects of the Company during the financial year under review.


respect to name of the Company during the financial year under review.


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.

Place: Thane Sd./-

Date: 9th April, 2011 Name of Company Secretary: S.N. Ananthasubramanian

C.P. No : 1774


10


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. AnanthasubramanianDate: 9th April, 2011 C.P. No : 1774


11


AUDITORS’ REPORT

To,

The Members,


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







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:




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;


12





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


Place : Mumbai



13



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


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.


14


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,


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.


15


21. The Company has not raised any term loans.

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

For K. S. AIYAR & CO,



RAGHUVIR M AIYAR

PARTNER


Place : Mumbai



16




(Rs.) (Rs.)

I SOURCES OF FUNDS


a Share Capital 1 13,000,000.00 13,000,000.00

b Reserve & Surplus 2 338,436,454.30 233,625,390.65

2. Deferred Tax Liability (Refer Note No.10) 29,728.33 147,269.33

TOTAL 351,466,182.63 246,772,659.98


1. Fixed Assets 3

Gross Block 5,950,878.53 5,966,168.53

Less: Depreciation 5,626,508.78 5,296,523.07

Net Block 324,369.75 669,645.46

2. Investments 4 78,936,200.11 20,219,260.20

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


Schedules referred to above form an integral part of the Balance Sheet


For K. S. AIYAR & CO. For and on behalf of the Board of Directors


RAGHUVIR M. AIYAR RAVI NARAIN CHITRA RAMKRISHNA

Partner Chairman Director


ROOPA KUDVA J RAVICHANDRAN

Director Director

ARUN PANICKER MUKESH AGARWAL

Director Director

Place : Mumbai SURESH NARAYAN

Date : April 25, 2011 Director & CEO


17


PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED MARCH 31, 2011

For the year ended For the year endedSchedule 31.03.2011 31.03.2010

(Rs.) (Rs.)

INCOMEIncome From Operation 7 192,593,393.00 142,286,042.00Other Income 8 17,159,251.74 9,403,185.02

Total 209,752,644.74 151,689,227.02

EXPENDITUREAdministration & Other Expenses 9 34,954,541.38 18,936,463.72Depreciation 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

Less: Provision for tax- Current 55,500,000.00 42,500,000.00- Deferred Tax (117,541.00) (338,061.67)- Short Provision of Tax 504,623.00 –

Net Profit after tax 118,373,953.65 89,338,753.47

Surplus brought forward from previous year 11,625,390.65 7,933,187.18Excess Corporate Dividend Tax for last yeartransferred back 35,150.00 –

Profits available for appropriations 130,034,494.30 97,271,940.66

Appropriations :- General Reserve 100,000,000.00 75,000,000.00- Proposed Dividend 11,700,000.00 9,100,000.00- Corporate Dividend Tax 1,898,040.00 1,546,550.00- Balance Carried to Balance Sheet 16,436,454.30 11,625,390.65

130,034,494.30 97,271,940.66

Basic/Diluted Earnings Per Share (Rs.) 91.06 68.72


Schedules referred to above form an integral part of the Profit and Loss Account








Director Director


Director Director




18


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


13,00,000 Equity shares of Rs. 10/- each 13,000,000.00 13,000,000.00

(of the above 6,63,000 (Previous year 6,63,000) shares are

held by the holding company-


and its nominees)

TOTAL 13,000,000.00 13,000,000.00

SCHEDULE 2 : RESERVE & SURPLUS

General Reserve


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

TOTAL 338,436,454.30 233,625,390.65

SCHEDULES FORMING PART OF BALANCE SHEET


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20



A. CURRENT ASSETS

Interest Accrued

on Investments 1,533,369.86 127,616.44

on Fixed Deposits with Bank 4,152,965.97 5,686,335.83 47,845.64 175,462.08

Sundry Debtors (Unsecured, Considered good)

Over six months – 633,453.00

Others 10,685,226.46 10,685,226.46 8,933,568.00 9,567,021.00

(includes dues from Holding Company Rs. 75,97,617/-

Previous year Rs. 39,43,665/- )

Cash & Bank Balances

Cash in hand 5,179.00 1,131.00


In Current Account 813,963.81 3,679,903.26

In Fixed Deposit 85,709,000.00 86,528,142.81 19,800,000.00 23,481,034.26

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

B: LOANS & ADVANCES

(Unsecured, Considered good)

Advances recoverable in cash or in kind or for

value to be received 21,168,168.00 16,988,245.00

TOTAL 21,168,168.00 16,988,245.00

SCHEDULE 6: CURRENT LIABILITIES & PROVISIONS

Current LiabilitiesAdvance Income – 5,229,322.00Sundry Creditors (Refer Note No. 13) 9,365,104.87 12,694,484.48(includes dues to Holding Company Rs.68,68,269.87previous year Rs.91,41,045.88)Duties & Taxes 1,319,854.00 1,865,208.00Other Liabilities 1,115,143.00 11,800,101.87 19,216.00 19,808,230.48

Provisions

Provisions for Tax (Net of Advance Taxes

Paid Including 2,284,384.29 2,913,229.58

TDS Rs.16,21,60,161.70, Previous year

Rs.12,14,37,957.41)

Proposed Dividend 11,700,000.00 9,100,000.00

Corporate Dividend Tax 1,898,040.00 15,882,424.29 1,546,550.00 13,559,779.58

TOTAL 27,682,526.16 33,368,010.06

As at 31.03.2011 As at 31.03.2010

(Rs.) (Rs.)



21



31.03.2011 31.03.2010

(Rs.) (Rs.)

SCHEDULE 7: INCOME FROM OPERATIONIndex License Fees Within India

: Derivatives Trading 70,460,087.00 55,100,977.00: Index Funds/Exchange Traded Funds 29,212,562.00 19,817,466.00

Index License Fees Outside India 66,452,011.00 54,789,976.00ETF Licensing Outside India 3,363,137.00 1,148,426.00Data Subscription Fees 15,821,172.00 11,429,197.00Revenue Sharing - S & P 7,284,424.00 –

TOTAL 192,593,393.00 142,286,042.00

SCHEDULE 8: OTHER INCOMEInterest on Investments (Including Taxfree IncomeRs 13,11,301.37, Previous Year Rs 1,876.71) 1,809,273.97 1,876.71Interest on Fixed Deposits (Gross ) (TDS Rs.5,90,648/-,Previous Year Rs.77,435/- ) 6,119,083.33 403,251.64Dividend From Mutual Funds 8,850,566.41 7,942,362.79Profit on redemption of investment 74,966.23 1,053,093.88Profit/Loss on Foreign Exchange Fluctuation (net) 295,348.41 –Profit on Sale of Fixed Assets 10,000.00 –Miscellaneous Income 13.39 2,600.00

TOTAL 17,159,251.74 9,403,185.02

SCHEDULE 9: OPERATING, ADMINISTRATION& OTHER EXPENSES

Deputed Personnel Cost 10,754,533.00 8,109,299.65Repairs And Maintenance 5,441,158.28 3,264,512.39Data Usage Charges 2,266,500.00 –Index Calculation Service Charges 7,500,000.00 –Revenue Sharing - S&P 1,160,522.00Software Expenses 109,169.00 73,832.00Auditors Remuneration - Audit fees 50,000.00 50,000.00Registration Fees 292,206.00 29,820.00Insurance Premium 21,239.00 16,946.78Lease Line Charges 135,877.86 145,165.24Committee Sitting Fees – 30,000.00Printing & Stationery 76,868.08 56,630.08Professional Fees 1,275,636.00 4,340,280.00Rates & Taxes 89,003.00 89,003.00Space & Infrastructure Usage Charges 3,292,941.49 685,687.00Electricity Charges 339,532.70 129,697.57Legal Fees/Expenses 67,720.00 47,930.00Postage and Courier 85,829.99 58,933.35Fees & Subscription 910,989.30 925,546.22Travelling & Conveyance expenses 398,197.00 79,266.20Telephone & Telex Charges 24,838.43 76,150.11Profession Tax 2,000.00 2,000.00Training Expenses 45,000.00 178,500.00Amortisation of Premium on Govt/Debt Sec.(Refer Note No.2E) 230,394.00 255.00Other Expenses 384,386.25 547,009.13

TOTAL 34,954,541.38 18,936,463.72

SCHEDULES FORMING PART OF THE PROFIT AND LOSS ACCOUNT


22


SCHEDULE 10 : NOTES TO ACCOUNTS

1. The main objective of the Company is to develop, construct, compile, compute and maintain equity and

commodity indices for domestic and international dissemination, marketing and market development and

to provide very high quality indices and index related services. :


a) The accounts have been prepared on historical cost convention and on mercantile basis of accounting

in accordance with generally accepted accounting policies.

b) Fixed Assets & Depreciation:

Fixed Assets are stated at historical cost less accumulated depreciation. Historical cost is inclusive

of freight, duties, taxes, cost of installation, interest upto date of installation and other incidental

expenses incurred towards acquisition and installation of fixed assets.

The details of the estimated useful life of the assets where the depreciation is provided at the rate

higher than the rate specified in Schedule XIV of the Companies Act, 1956 are as follows:

Assets Estimated Useful Lives

Computer Systems - Office Automation 3 years

Computer Systems - Others 4 years

Telecommunication Systems 4 years

Furniture & Fixtures 5-16 years

Office Equipments 4-21 years

Computer Software 4 years

c) Foreign Currency Transactions:

Transactions in foreign currency are recorded at the rate of exchange in force at the date of transaction.

Foreign currency assets and liabilities other than for financing fixed assets are stated at the rate of

exchange prevailing at the year end and resultant gains/losses are recognised in the profit and loss

account except in cases covered by forward exchange contracts in which case these are translated at

the contracted rates and the resultant gains/losses are recognised over the life of the contracts.

d) Revenue Recognition:

The Company recognises the revenue on account of subscription fees with respect to the period of

the contract on an accrual basis.

Subscription fees received in respect of unexpired period of the contract is treated as a current

liability and is recognised as income in the respective period.

e) 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.

(iii) Premium paid/discount received at the time of acquisition of Government / Debt Securities

is amortised over the residual period of its maturity.


23


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 valuestated, 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 –


24


8 HDFC Cash Mgmt Fund - Treasury

Advantage - Retail - Daily Dividend 875,092.84 8,778,493.87 8,347,737.43

9 ICICI Prudential Flexible Income Plan -

Daily Dividiend 303,735.54 32,122,423.49 34,796,050.79

10 ICICI Prudential Ultra Short Term Plan -

Sup Prem - Wkly Dividend 1,284,864.06 12,891,609.98 25,896,883.88

11 IDFC Cash Fund - Plan A - Daily Dividend -

Reinvestment 83.13 879.62 –

12 IDFC Money Manager - Treasury Plan -

Plan A - Daily Dividend – – 2,436,218.70

13 JPMorgan India Liquid Fund - Super IP

- Daily Dividend 118,910.87 1,190,046.10 –

14 JPMorgan India Treasury Fund - Super IP -

Daily Dividend 102,887.27 1,029,788.35 6,015,734.91

15 KOTAK Floater - LT - Daily Dividend. – – 4,352,791.84

16 PRINCIPAL Floating Rate Fund - SMP -

IP - Dly. Div – – 17,549,756.28

17 Reliance Liquid Fund -Treasury Plan -

Institutional Option - Daily Dividend 492,531.46 7,529,525.49 –

18 Reliance Money Manager Fund -

IP - Dly Dividend 8,261.46 8,270,944.65 17,722,957.240

19 Reliance Medium Term Fund -

Daily Dividend 405,789.58 6,937,279.37 2,510,819.880

20 Religare Liquid Fund - Institutional

Daily Dividend 1.79 1,794.50 –

21 Religare Ultra Short Term Fund - IP - Daily

Dividend 17,783.27 17,813,809.88 16,106,822.910

22 SBI Magnum Insta Cash Fund - Daily

Dividend Option 120,422.67 2,017,115.79 –

23 Tata Floater Fund - Daily Div 488,933.26 4,906,738.59 14,619,540.030

24 Templeton India Ultra Short Bond Fund -

IP - Dividend 871,258.31 8,722,254.07 8,268,803.100


Fund - IP - Weekly Dividend 1,037,845.28 10,583,028.84 10,042,106.430

26 UTI Treasury Advantage Fund - IP -

Dly Dividend 10,032.03 10,033,696.54 14,498,320.930

TOTAL 9,326,011.32 175,820,265.83 209,040,004.15


25


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


26


9 In compliance with Accounting Standard - 18 "Related Party Disclosures" issued by the Institute of Chartered



Sr.Related Party Nature of Relationship

No.


2 CRISIL Limited Joint Venturer with Holding Company




6 NSE.IT (US) Limited Fellow Subsidiary


8 NSE InfoTech Services Limited Fellow Subsidiary


10 Power Exchange India Limited Joint Venture with Holding Company

B) Details of transactions with related parties are as follows:

Name of Nature of Transactions Year ended Year ended

Related Party 31/03/2011 31/03/2010

National Stock Reimbursement of expenses for staff on deputation 99,80,203.00 53,44,762.65

Exchange of Space and Infrastructure usage charges 36,32,113.49 7,56,311.00

India Limited Reimbursement for other expenses incurred 5,97,42,804.77 4,62,18,897.07

Index Calculation Service Charges 82,72,500.00 Nil

Dividend Paid 46,41,000.00 33,15,000.00

Index License Fees Received 7,77,17,476.00 6,07,76,377.00

Data Subscription Fees Received 3,30,900.00 Nil

Outstanding balance included in Current Assets. 75,97,617.00 39,43,665.00

Outstanding balance included in Current liabilities 68,68,269.87 91,41,045.88

CRISIL Limited Reimbursement of expenses for staff on deputation 18,83,349.00 35,99,797.00

Index License Fees Received 6,11,563.00 Nil

Dividend Paid 44,59,000.00 31,85,000.00

Outstanding balance included in Current Assets. 1,51,563.00 Nil

Outstanding balance included in Current liabilities 16,95,019.00 32,39,817.00

DotEx Payment of fees for right to create indices. 24,99,950.00 Nil

International Data Subscription Fees 16,00,000.00 Nil

Limited


27


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


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


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:



(Rs.) (Rs.)

Deferred Tax Liability :

Depreciation Difference 29,728.33 1,47,269.33

12. a) Expenditure in Foreign Currency:


Meeting & Conference Expenses: Rs. 1,79,309.00 Rs.1,11,997.00

Refund of Excess License Fees: Rs. 45,010.00 Rs.28,01,027.16

Referral Fees: Rs. Nil Rs.5,92,293.75

Revenue Sharing - S&P : Rs. 11,60,522.00 Rs. Nil

TOTAL Rs. 13,84,841.00 Rs. 35,05,317.91

b) Earning in Foreign Exchange:


Index License Fees Outside India: Rs.6,64,52,011.00 Rs. 5,47,89,976.00

ETF Licensing Outside India: Rs.33,63,137.00 Rs. 11,48,426.00

Data Subscription Fees: Rs.87,24,744.00 Rs. 72,44,542.00

Revenue Sharing - S & P: Rs. 72,84,424.00 Rs. Nil

TOTAL Rs.8,58,24,316.00 Rs.6,31,82,944.00

13. Sundry creditors includes Rs 1,50,000/- (Previous Year Rs Nil) due to Micro, Small and Medium Enterprises.

Total outstanding dues to Micro, Small and Medium Enterprises have 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.


28


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.








Director Director


Director Director




29



2010-2011 2009-2010

(Rs.) (Rs.)


NET PROFIT BEFORE TAX 174,261,035.65 131,500,691.80

Add : Adjustments for :- Depreciation 537,067.71 1,252,071.50

- Sundry Balances written off 0.93 2.83

- Amortisation of Premium on Govt/Debt Sec. 230,394.00 255.00

Less :Adjustments for :

- Interest on Investments (1,809,273.97) (1,876.71)

- Interest income on Fixed deposits (6,119,083.33) (403,251.64)

- Dividend From Mutual Funds (8,850,566.41) (7,942,362.79)

- Profit on redemption of investment (74,966.23) (1,053,093.88)

- Sundry Balances Written Back (13.39) –

- Profit on Sale of Fixed Assets (10,000.00) –

OPERATING PROFIT BEFORE WORKING CAPITAL CHANGES 158,164,594.96 123,352,436.11

Adjustments for :Sundry Debtors (1,118,192.86) (221,344.00)

Loans & Advances (4,179,923.00) (9,391,891.37)

Current Liabilities & Provisions (8,008,128.61) (13,385,091.41)

CASH GENERATED FROM OPERATIONS 144,858,350.49 100,354,109.33

Direct Taxes paid (56,633,468.29) (41,010,737.13)

NET CASH FROM OPERATING ACTIVITIES - Total (A) 88,224,882.20 59,343,372.20


Purchase of Fixed Assets (191,792.00) –

Sale of Fixed Assets 10,000.00 –

(Increase)/Decrease in Investment (25,652,631.61) (61,500,753.36)

Interest received on deposits 2,013,963.00 1,702,813.00

Dividend From Mutual Funds 8,850,566.41 7,942,362.79

Interest on Investments 403,520.55 –

NET CASH FROM INVESTING ACTIVITIES - Total (B) (14,566,373.65) (51,855,577.57)


30


2010-2011 2009-2010

(Rs.) (Rs.)








Director Director


Director Director




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)

NET INCREASE/(DECREASE) IN CASH

AND CASH EQUIVALENTS (A+B+C) 63,047,108.55 (116,885.37)

CASH AND CASH EQUIVALENTS : OPENING BALANCE 23,481,034.26 23,597,919.63

[ includes fixed deposit with banks of Rs.1,98,00,000.00(Previous Year Rs.2,00,00,000.00) ]

CLOSING CASH AND CASH EQUIVALENTS : CLOSING BALANCE 86,528,142.81 23,481,034.26

[ includes fixed deposit with banks of Rs.8,57,09,000.00(Previous Year Rs. 1,98,00,000.00) ]

NET INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS 63,047,108.55 (116,885.37)


1 Cash and cash equivalent represent cash, bank balances and balance in fixed deposit account as per balance sheet

2 The above Cash Flow Statement has been prepared under the "Indirect Method" as set out in the AccountingStandard-3 on Cash Flow Statements issued by the Institute of Chartered Accountants of india

3 All figures in brackets are outflows

4 Previous Years figures have been regrouped/restated wherever necessary

5 Direct taxes Paid/ Refunded are treated as arising from operating Activities and not bifurcated between investing and

financing activities.


31



(Information pursuant to Notification No. GSR No. 388(E) [F. No. 3/24/94 - CLV] dated 15-5-95, issued by

The Department of Company Affairs, Ministry of Law, Justice and Company Affairs)





Balance Sheet Date 3 1 0 3 2 0 1 1

Date Month Year



N I L N I L


N I L N I L



* * * 3 7 9 1 4 9 * * * 3 7 9 1 4 9

Sources of Funds


* * * * 1 3 0 0 0 * * * 3 3 8 4 3 6


N I L N I L


* * * * * * * 2 9



* * * * * * 3 2 4 * * * * 7 8 9 3 6


* * * 2 7 2 2 0 5 N I L

Accumulated Losses

N I L


32



Turnover/Total Income Total Expenditure

* * * 2 0 9 7 5 3 * * * * 3 5 4 9 2


* * * 1 7 4 2 6 1 * * * 1 1 8 3 7 4



* * * * 9 1 . 0 6 9 0


Item Code No. N A

(ITC Code)

Product I N D I C E S

Description



Chairman Director


Director Director


Director Director

SURESH NARAYAN

Director & CEO

Place : Mumbai


��

NSE INFOTECH SERVICES LIMITED(A wholly owned subsidiary of National Stock Exchange of India Limited)

FIFTH ANNUAL REPORT2010-11

A A

A A

Sys8 E:\F\2011\F-599-11 NSEIL Annual Report 2010-2011-F-599-11-NSE-Infotech-Annual

BOARD OF DIRECTORS



Mr. Ravindra Apte

AUDITORS : M/s. Gokhale & Sathe


302/303, Udyog Mandir No. 1

7-C, Bhagoji Keer Marg

Mahim, Mumbai 400 016


Plot No. C-1, Block ‘G'


Mumbai - 400 051

Fifth Annual ReportNSE INFOTECH SERVICES LIMITED

Fifth Annual Report

1

NSE INFOTECH SERVICES LIMITED

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.


The focal areas of speed, quality, predictability, productivity and innovation have been institutionalised

across NSETECH. This financial year has been path-breaking in terms of the new architecture of the

trading system which allows for linear scalability thus enabling us to handle the four fold growth of order

transactions

Operations Highlights:

(1) Trading

The Trading system has seen volumes grow in leaps and bounds and the architecture of the system has

been changed to meet with the requirements. Net Market Rollout in the F&O segment is a milestone

towards capacity enhancement of trading system enabling horizontal scalability, to scale up to on

demand capacity by adding multiple market machines. The parallel redevelopment of the matching

engine (retooling project), currently underway, will result in a final capacity of 100,000 messages/sec.

The Appletree Database has been replaced with the newly developed SMFS (Shared Memory File

System) in the post trade (PT) layer of the FO trading system. In parallel, the earlier Stratus proprietary

messaging solution (VMA) has been migrated to a new generation messaging solution (29West) for

communication across various layers of the Trading system. 29West messaging is a high throughput,

low latency solution that is being used to achieve throughput of over 100K messages/sec. These

implementations enable a low latency and high throughput architecture. The NET layer hardware in

CD segments was upgraded from FT model 6210 to FT model 6300, along with the operating system

migration from Red Hat Linux Version 5.2 to Version 5.4.

With the advent of co-location, there was a market need for real-time data to be disseminated to these

High frequency algorithmic trading members, to enable them build the order book and help their

algorithms to work optimally. The Exchange has offered a new category of connectivity (Category T)

for market data broadcast called Tick by Tick. Tick by Tick data provides the latest order (new, modified

and cancelled) and trade information to the market.

With the increase in average number of order messages per day in the F&O segment from around

80 million to 100 million, the F&O trading capacity was increased by adding a third market machine

(until the release of Retooling project). With this, the capacity of FO Trading system has increased

from 12,000 to 18,000 order messages per second. CM trading capacity was also increased by adding

a fourth market machine. With this, the capacity of CM Trading system has increased from 5000 to

~7000 order messages per second.

In keeping with global trends, the Exchange has provided members a co-location facility for low

latency high frequency trading. The co-location phase II data center is an international standard, state

of the art, highly robust, resilient and secure infrastructure data center, built at the BKC premises. This

Phase II data center has a capacity of 54 full racks and 28 half racks.

Fifth Annual Report

2


(2) Clearing and Settlement

The time taken by the Securities Pay-in/Pay-out cycle of the settlement cycle on T+2 day was about

90 minutes. The complete process was re-engineered along with the workflow and appropriate

automation to reduce the end-to-end time from 90 minutes to 3-5 minutes.

Funds Shortage Collateral (FSC) is the collateral blocked from the member's total capital based on

disablements arising out of Funds shortage. The computation of FSC involves analysis and monitoring

of the member's funds shortage over a considerable period of time. This computation was being done

manually by Funds department. This release enables the automated computation of FSC blockages

that can be released back to member.

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 upto12 months,

Facility for request of Early Recall of securities by the lender and Facility for request of Early Repayment

of securities by the borrower. The Clearing and settlement system was completely changed to

accommodate the new business rules and released on state of art Itanium hardware.

The NSCCL Clearing Management System for Currency Derivatives (NCMS-CD) is a centralised

system where the trades and obligations management of all clearing members (CMs) with respect to

their Trading Members (TMs) and custodial participants (CPs) is consolidated. The primary purpose

of the system is to provide the CM to perform trade management by controlling the Trade Approvals

or Rejections of the TMs and CPs under him. Clearing Member can query/create/modify/delete the

intent request for the Trading Member/Custodial Participant and create a TM Enablement request for

all the TMs. The system was released to live on 21st June 2010 after a successful mock session.

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.

The Collateral application interfaces with DMS (Document Management System) to store and index

scanned copies of all physical documents submitted to NSCCL. While transferring instruments across

segments, users need to manually upload the scanned documents into the destination segment, as the

transferred instrument is treated as a new Collateral entry in the new segment. Similarly, manual

uploads are required during change of member code. As this is cumbersome and redundant activity,

changes have been made in the Collateral application to seamlessly transfer the scanned documents in

DMS, without any user intervention.

Custodians (PCM) have been providing trade confirmations for trades that shall be settled by them,

after end of trading on T day till T+1 Day 13:00 hrs. They were margined post this cut off on T+1 day.

With the new process, the confirmation process has been made online and the cutoff time changed to

18:00 hrs on T day.

The depository interface in the clearing and settlement system had to be changed to adapt to new

communication methodology adapted by NSDL. The new interface for segments CM, SLB and MFSS

application to facilitate seamless communication with NSDL for the Securities Pay-in/Pay-out

processing was released to live on 17th December 2010.

Design discussions are underway for the New generation Clearing and settlement. The key objectives

of the new generation clearing and settlement system are manageability, reliability and scalability of

the new architecture.

Fifth Annual Report

3


(3) Risk Management and Surveillance

The process of enabling members across segments when there is an increase in collateral deposits was

manual. Mails were exchanged between the risk team and the collateral team as and when the member

was disabled or when the member brings in more collateral. With the new changes in place, the risk

team gets a pop up message when the disabled member brings in additional collateral. In addition to

this, the process of making the member eligible (only for cases where member is disabled due to

collateral shortage) for enablement in the risk management system has also been automated.

In the existing system, CP code and Client code modifications on T day trade were permitted after the

end of market hours. The above facility is made online and modifications to CP/Client code any time

during the market hours is permitted. The resulting change in marginable positions will be reflected

online in CM Risk management.

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. The

Risk Management system has been enhanced to monitor the provisional positions of members through

pre-order risk management.

The risk management system is a real-time engine which calculates obligations for both sides of every

trade, maintains a client-wise portfolio and calculates margins at client level grossing it up to TM and

then CM Level. The margins at TM and CM are validated for capital adequacy and violations/

suspensions are sent to Trading System in case limits are exceeded. Post several benchmarks with pre-

set parameters (portfolio, trade rate, number of suspensions, intra-day changes) bottlenecks were

identified. The risk engines were optimised to reduce the average turnaround time within the risk

management considerably.

(4) Network & Security

The Internal Firewall, deployed for controlling access from the user segment to the servers hosted at

the 6th Floor Data Center and the Secondary network Firewall, deployed for controlling the third

party access from internet and leased lines to the various servers hosted in the DMZ segment were

upgraded from R65 running on Nortel Platform to R70.30 on Nokia Platform because the capacity of

the uplinks from the Floor Switches to the Core switch were upgraded from 1Gbps to 10 Gbps. The

firewall upgrade will result in performance improvement and simplified and efficient management of

firewall.

Earlier, Regional Offices (RO) LAN was operational on 8+ years old 3Com Switches. The obsolete

3Com based LAN switches across all ROs were upgraded using Cisco Switches for better support &

manageability. In the WAN domain, additional STM-4(Synchronous Transport Module) link was

implemented between DC & DR to cater to SAN and other traffic. In the new setup, traffic is configured

for 3 STM-4 links providing total bandwidth of 1.8 Gbps. In order to strengthen monitoring and

management of Cisco load balancers in IP network, GUI based management tool ANM (Application

Network Monitoring) was successfully implemented

NOW datacenter which was earlier present on ground floor (BKC) has been relocated to data center

on first floor. The new data center is an international standard, state of the art, robust and secure data

center. The entire project was split in five phases. Each phase was executed during the weekends

starting from 4th Sep 2010 till 2nd Oct 2010. During the shifting period, NOW operations were carried

from both the locations. A total of 104 servers, 41 switches/routers were moved in this shifting. The

entire shifting was meticulously planned and well co-ordinated with telecom service providers, hardware

vendors and support staff ensuring that there was no downtime in NOW operations.

Fifth Annual Report

4


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

Fifth Annual Report

5


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 fromCampus recruitment 2009-10 drive, who were expected to join NSETECH as TASAs by May, 2010but only 3 TASAs out of the 5, joined NSETECH. Total 16 TASAs joined NSETECH during theperiod of 2010-11

Fifth Annual Report

6



The financial results for the financial year 2010-11 are summarised hereunder:-

Particulars 2010-11 2009-10(Rs. in lakhs) (Rs. in lakhs)

Income 3,753.73 3,528.84

Expenditure other than depreciation 3,613.82 3,375.16

Profit before depreciation and tax 139.91 153.68







III. DIVIDEND

As the profit is required to augment operational needs, your Directors do not recommend any dividend forthe financial year 2010-11.


The Company is committed to maintain the highest standards of corporate governance and adhere tocorporate governance requirements. In continuation of its pursuit to establish good corporate governancepractice, your Company, while already complying by and large with a major part of the Corporate GovernanceVoluntary Guidelines 2009 issued by the Ministry of Corporate Affairs, is in the process of complyingwith/ 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 forre-appointment.



i. in the preparation of the Annual Accounts, the applicable accounting standards had been followedalong with proper explanation relating to material departures, if any;

ii. the Directors had selected such accounting policies and applied them consistently and made judgmentsand estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs ofthe Company at the end of the financial year i.e., 31st March, 2011 and of the profits of the Companyfor that year;

iii. the Directors had taken proper and sufficient care for the maintenance of adequate accounting recordsin accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of theCompany and for preventing and detecting fraud and other irregularities; and


Fifth Annual Report

7



Since the paid up capital of the Company is Rs.5.00 lakhs only, it is not mandatory for the Company to

constitute an Audit Committee as per the provisions of the Companies Act, 1956.

VIII. AUDITORS

M/s. Gokhale & Sathe, Chartered Accountants, Auditors of the Company, retire at the forthcoming Annual



under Section 224 (1B) of the Companies Act, 1956.


EARNINGS/OUTGO





Section 217(1)(e) of the Companies Act, 1956, read with the aforesaid Rules are not applicable to the

Company.


There were no foreign exchange earnings during the year. However, the foreign exchange outgo

during the year was Rs. 0.85 lakhs.


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.

XI. APPRECIATION

Your Directors are grateful for the support and co-operation extended by NSEIL and its group companies.

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


Fifth Annual Report

8








1 Mr. N. Muralidaran 51 Chief Excutive 11648450 7908031 30 October 1, 2006 Sr. Vice President

M.Sc, M.B.A Officer NSE.IT Limited

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 :



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.

3 None of the employees mentioned above is a relative of any Director.

4 None of the employees is holding equity shares in the company within the meaning of sub-clause (iii) of clause (a) of



Fifth Annual Report

9


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.






(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


Fifth Annual Report

10



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


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;

For Gokhale & Sathe


Firm Reg.No. 103264W

Place : Mumbai.

Date : 25th April 2011

Atul Kale

Partner


Fifth Annual Report

11


ANNEXURE TO THE AUDITOR'S REPORT AS REQUIRED BY THE

COMPANIES (AUDITOR'S REPORT) ORDER, 2003 AS AMENDED BY THE COMPANIES

(AUDITOR'S REPORT) AMENDMENT ORDER, 2004

(Referred to in Paragraph 1 of our Report of even date on accounts of

NSE INFOTECH SERVICES LIMITED as at 31st March 2011.)

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.

FINANCIAL YEAR ENDED 31ST MARCH 2011

Fifth Annual Report

12


(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.

Fifth Annual Report

13


(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.

For GOKHALE & SATHE


Firm Reg.No. 103264W

ATUL KALE

PARTNER


Place : Mumbai

Date : 25th April 2011

Fifth Annual Report

14


BALANCE SHEET AS AT 31st MARCH , 2011

Schedule As At 31.03.2011 As At 31.03.2010

(Rs.) (Rs.)

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

TOTAL 33,840,661.60 24,379,319.31


1. Fixed Assets 3

Gross Block 175,207.00 143,707.00

Less: Depreciation till date 39,616.00 71,081.00

Net Block 135,591.00 72,626.00

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


4. Deferred Tax Asset 3,450,070.74 1,305,799.74

5. Miscellaneous Expenditure 7 – 167,912.20

(To the extent not written off or adjusted)

TOTAL 33,840,661.60 24,379,319.31

Notes forming part of accounts 12


For GOKHALE & SATHEChartered AccountantsFirm No : 103264W


ATUL KALEPartnerMembership Number: 109947

Place : Mumbai RAVINDRA APTEDate : April 25, 2011 Director

Fifth Annual Report

15


PROFIT AND LOSS ACCOUNT FOR THEYEAR ENDED MARCH 31, 2011

Schedule For the year ended For the year ended

31.03.2011 31.03.2010

Rs. Rs.

INCOMEIncome from IT Services 369,973,066.00 352,299,778.95Interest income 8 9,955.00 18,656.00Other Income 9 5,390,405.29 565,160.17

TOTAL 375,373,426.29 352,883,595.12

EXPENDITUREEmployee Remuneration & Benefits 10 331,729,196.66 315,940,969.60Administration & other expenses 11 29,653,138.34 21,574,975.58Depreciation 42,917.00 28,556.00

TOTAL 361,425,252.00 337,544,501.18

Profit before tax 13,948,174.29 15,339,093.94Less : Provision for tax

Current Tax 7,400,000.00 5,534,000.00Deferred tax (2,144,271.00) (1,326,280.74)Short/ (Excess) provision of tax of earlier years (768,897.00) 1,150,670.00

Profit after tax 9,461,342.29 9,980,704.68Surplus brought forward from previous year 23,879,319.31 13,898,614.63

Profit available for appropriation 33,340,661.60 23,879,319.31

Appropriations :- Balance carried to balance sheet 33,340,661.60 23,879,319.31

33,340,661.60 23,879,319.31

Basic Earning per share (Rs) (Refer Note No 9) 189.23 199.61Notes forming part of the accounts 12






Fifth Annual Report

16


As at 31.03.2011 As at 31.03.2010

Rs. Rs.


Authorised

1,00,00,000 Equity Shares of Rs. 10/- each 100,000,000.00 100,000,000.00


50,000 Equity shares of Rs. 10/- each fully paid up

(all the above shares are held by the holding company - 500,000.00 500,000.00

National Stock Exchange of India Limited and its nominees)

TOTAL 500,000.00 500,000.00


Balance in Profit & Loss Account 33,340,661.60 23,879,319.31

TOTAL 33,340,661.60 23,879,319.31


Fifth Annual Report

17


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Fifth Annual Report

18



A: CURRENT ASSETS

Sundry Debtors

Outstanding for a period of more than

six months

Unsecured, Considered good 26,865.00 28,133.37

(Including dues from NSE.IT Limited

Rs. Nil Previous Year Rs. 1,268.37 )

Other Debts


(Including dues from National

Securities Clearing Corporation

Limited Rs. 32,21,772/-, Previous

Year Rs.27,83,871/-)

TOTAL 3,248,637.00 2,812,004.37


Cash in hand – –


In Current accounts 331,579.46 504,885.22

331,579.46 504,885.22

Short Term Investments 16,229,325.19 11,483,865.71

(Refer Note No. 1g & 13)

TOTAL 19,809,541.65 14,800,755.30


Advances recoverable in cash or in kind 98,987,482.00 86,108,105.00

for value to be received (Including dues

from National Stock Exchange of India

Limited Rs. 8,45,37,968/- Previous Year

Rs. 6,93,58,226/- and National Securities

Clearing Corporation Limited Rs.1,41,58,241/-

Previous Year Rs. 1,03,37,316/-)

Advance income tax paid including TDS 57,197,443.00 59,974,029.00

(Net of Provisions)

Advance Fringe Benefit Tax paid (Net of Provisions) 35,007.00 35,007.00

Deposits 19,500.00 7,500.00

Prepaid Expenses 9,901,303.00 6,242,595.00

Employee Loans 392,382.00 586,386.00

TOTAL 166,533,117.00 152,953,622.00

As at 31.03.2011 As at 31.03.2010

Rs. Rs.


Fifth Annual Report

19


As at 31.03.2011 As at 31.03.2010

Rs. Rs.




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


Other liabilities 89,238,258.00 75,268,085.00

TOTAL 155,655,635.79 135,489,576.93

B : PROVISIONS

For Leave Encashment 10,432,023.00 9,431,819.00

TOTAL 10,432,023.00 9,431,819.00

TOTAL (A + B) 166,087,658.79 144,921,395.93

SCHEDULE 7 : MISCELLANEOUS EXPENDITURE(To the extent not written off or adjusted)

Preliminary expenses – 167,912.20

TOTAL – 167,912.20

Fifth Annual Report

20


SCHEDULES FORMING PART OF PROFIT & LOSS ACCOUNT


31.03.2011 31.03.2010

Rs. Rs.


On Employee Loans 9,955.00 18,656.00

TOTAL 9,955.00 18,656.00


Income from Short Notice Dues 429,638.00 55,889.00

Dividend from Units 981,059.48 506,671.17

Interest Received On Income Tax Refund 3,979,277.00 –

Miscellaneous Income 430.81 2,600.00

TOTAL 5,390,405.29 565,160.17

SCHEDULE 10 : EMPLOYEE REMUNERATION & BENEFITS


Staff Welfare Expenses 3,491,166.66 1,997,866.60

Contribution to Provident Fund 4,207,013.00 4,131,924.00

Contribution to Pension Fund 1,967,120.00 2,030,820.00

Contribution to Group Gratuity Scheme 675,972.00 1,431,148.00

Contribution to Group Gratuity Scheme - LSA Premium 101,027.00 101,310.00

Contribution to Superannuation Scheme 763,425.00 691,380.00

TOTAL 331,729,196.66 315,940,969.60

Fifth Annual Report

21


SCHEDULE 11 : ADMINISTRATION & OTHER EXPENSES

Rent (Net) 1,071,102.00 1,037,944.00

Insurance 5,951,572.00 4,786,101.00

Rates & Taxes 2,000.00 2,000.00

Printing & Stationary 317,867.46 321,034.96

Travelling Expenses 622,970.00 764,136.00

Conveyance 307,567.00 298,311.00

Telephone Expenses 2,016,128.22 1,986,002.78

Professional & Consultancy Charges 5,158,473.05 3,461,806.50

Training Expenses 5,264,721.90 2,701,412.00

Pantry Expenses 3,990,495.48 3,728,576.82

Office Expenses 3,132.00 71,106.00

Recruitment Charges 617,646.25 230,773.00

Vehicle Expenses 1,504,941.96 1,177,921.13

Auditors Remuneration

- Audit Fees 50,000.00 50,000.00

Preliminary Expenses written off 167,912.20 167,912.20

Other Expenses 2,606,608.82 789,938.19

TOTAL 29,653,138.34 21,574,975.58


For the year ended For the period ended

31.03.2011 31.03.2010

Rs. Rs.

Fifth Annual Report

22




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


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.

Fifth Annual Report

23


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.

Fifth Annual Report

24


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


No.





5 NSE.IT (US) Inc. Fellow Subsidiary


7 India Index Services & Products 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


Superannuation Scheme


Group Gratuity Cum Life Assurance Scheme


Provident Fund Trust Company's control exists


Group Superannuation Fund Trust Company's control exists


Group Gratuity Cum Life Assurance Scheme Company's control exists

Fifth Annual Report

25


B) Details of transactions with related parties as follows:

Name of the Nature of Transactions Year ended Year ended

Related Party 31.03.2011 31.03.2010

National Stock • Income from IT Services (Net) 315,498,879 328,680,761

Exchange of India • Service Tax recoverable on above services 32,496,384 35,431,557

Limited • Advance against Services 48,587,052 36,577,073

• Rent Paid 2,021,143 1,676,147

• Expenses incurred by NSEIL reimbursed 80,422,417 82,893,427

Closing Balance Debit / (Credit) 21,963,748 13,194,444

National Securities • Income from IT Services (Net) 54,474,187 54,570,352

Clearing • Service Tax recoverable on above services 5,610,844 5,620,745

Corporation Closing Balance Debit / (Credit) 17,380,013 13,121,187

Limited

NSE.IT Limited • Reimbursement received against – 5,348

expenses incurred

• Expenses incurred by NSE.IT reimbursed 2.310 –

Closing Balance Debit / (Credit) – (561)

NSE Infotech • Expenses incurred on behalf of the Trust 1,424,483 –

Services Limited Closing Balance Debit / (Credit) (805) (805)

Employees’

Provident Fund

Trust

DotEx • Expenses incurred by DotEx reimbursed – 100,319

International Ltd. Closing Balance Debit / (Credit) – (100,319)

9. In accordance with Accounting Standard - 20 "Earning per Share", the required disclosure is given below:


31.03.2011 31.03.2010

Net Profit attributable to Shareholders (in Rs.) 9,461,342 9,980,705

Weighted Average number of equity shares issued (in Nos.) 50,000 50,000



diluted earning per share of the Company remains the same.

Fifth Annual Report

26


10. In accordance with the Accounting Standard 22 - "Accounting for Taxes on Income", the break up of

deferred tax assets / liabilities is as follows:


31.03.2011 31.03.2010


Advance Service Tax Paid allowed u/s 43B – 2,097,610

Total (A) – 2,097,610

Less: Deferred Tax Assets

Gratuity unpaid 60,652 453,103

Related to depreciation 18,767 9,939

Short Term Capital Loss – 1,270

Leave Encashment 3,370,651 2,939,054

Others 43

Total (B) 3,450,070 3,403,409

Net Deferred Tax Liability / (Asset) (A-B) (3,450,070) (1,305,799)

11. In accordance with the Accounting standard 29 "Provisions, Contingent Liabilities and Contingent Assets",

the Company has made provisions for employee related payments. The particulars of these provisions are

as under:

Particulars Performance Long Term Project LeavePay Retention Incentive Encashment

Bonus

FY -2010-11 (Rs.) (Rs.) (Rs.) (Rs.)

Carrying amount at the beginning of the year 17,931,559 16,211,895 33,827,197 9,431,819

Amount used during the year 17,931,559 16,177,019 33,827,197 741,790

Amount unused reversed during the year – 34,876 – –

Provisions made during the year 19,041,000 16,121,000 46,708,771 1,741,994

Carrying amount at the end of the year 19,041,000 16,121,000 46,708,771 10,432,023

FY-2009-10

Carrying amount at the beginningPrevious Year 14,260,000 – 29,230,725 7,940,208

Amount used during the Previous Year 14,260,000 – 27,800,240 464,237

Amount unused reversed during thePrevious Year – – 1,430,485 –

Provisions made during the Previous Year 17,931,559 16,211,895 33,827,197 1,955,848

Carrying amount at the end of the

Previous Year 17,931,559 16,211,895 33,827,197 9,431,819

Leave encashment includes liability transferred from NSE.IT Limited.

Fifth Annual Report

27


12. Statement of Long Term Investments at the end of the year is given below.

Sr. Particulars Number As at As at

No. of Units 31.03.2011 31.03.2010

Unquoted:

Mutual Funds:

1 Baroda Pioneer 380 Day FMP-

Series 1- Growth Plan 10,00,000.000 1,00,00,000.00 –

13. Statement of Short Term Investments at the end of the year is given below.

Sr. Particulars Number As at As at

No. of Units 31.03.2011 31.03.2010

Unquoted:

Mutual Funds:

1 Principal Cash Management Fund -

Liquid Option Dividend Reinvestment Daily 1,834.515 18,346.43 17,504.43

2 IDFC Liquid Plus Fund - Treasury Plan -

Institutional Plan B - Daily Dividend 218,592.856 2,201,295.64 2,088,827.44

3 ICICI Prudential Flexible Income Plan

Premium - Daily Dividend 132,467.749 14,006,477.44 9,377,533.85

4 Birla Sunlife Savings Fund - Instl Daily

Dividend - Reinvestment 146.673 1,469.59 –

5 Baroda Pioneer Liquid Fund - Instl Daily

Dividend Plan 1.735 1,736.09 –

Total 16,229,325.19 11,483,865.71

14. Disclosure under Revised Accounting Standard 15 on Employee Benefits.

(i) Defined Contribution Plan: Company's contribution towards superannuation amounting to Rs.

7,63,425/- has been charged to Profit & Loss account.

(ii) Defined Benefit Plan:

(a) Provident Fund : The Guidance on Implementing AS 15 (Revised 2005) Employee benefits

issued by the Accounting Standard Board (ASB) states 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 note from the Actuarial Society of

India, the Company is unable to reliably measure provident fund liability. Accordingly, the

Company is unable to exhibit the related information.

(b) Gratuity: Company has charged the gratuity expenses to Profit & Loss account based on the

actuarial valuation of gratuity liability at the end of the year. The projected unit credit method

Fifth Annual Report

28


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.


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

Reconciliation of present value of the obligation and the fair

value of the plan assets:

Fair value of the plan assets at the end of the period 13,100,643 11,459,750

Present Value of the defined obligations at the end of the period 12,913,706 10,126,702

Funded Status 186,937 1,333,048

Asset / (liability) recognised in Balance Sheet 186,937 1,333,048

Assumptions

Interest Rate 8.00% 8.00%

Gratuity Cost for the period

Service Cost 2,392,554 2,126,290


Expected return on plan assets 810,136 752,728

Net Actuarial (gain) / loss recognised in the year (1,823,226) (857,397)

Expenses recognised in statement of Profit & loss 675,972 1,431,148

Fifth Annual Report

29







14. Contingent Liability

On account of disputed matters , of Income Tax Rs.5,29,720/- (previous year Rs.1,36,24,118/-), of

Fringe Benefit Tax Rs.1,74,347/- (previous year Rs.1,74,347/-), of Service Tax Rs.28,06,967/- (previous

year Rs.28,06,967/-).

15. The previous year figures are regrouped, reclassified and rearranged, wherever necessary.

Fifth Annual Report

30


CASH FLOW STATEMENT FOR THEYEAR ENDED 31ST MARCH, 2011

2010-2011 2009-2010

(Rs.) (Rs.)


Net profit before tax 13,948,174.29 15,339,093.94

Add: Adjustments for:

Depreciation 42,917.00 28,556.00

Preliminary Expenses W/off 167,912.20 167,912.20

Dividend Received (981,059.48) (506,671.17)

Loss on Sale of Fixed Assets 16,785.00 –

Operating Profit before working capital change 13,194,729.01 15,028,890.97

Change in Working Capital

Decrease / (Increase) in Sundry Debtors (436,632.63) (2,173,080.15)

Increase in Loans & Advances (16,356,081.00) (32,428,535.50)

Increase in Current Liabilities & Provisions 21,166,262.86 23,938,997.87

Cash Generated from Operations 17,568,278.24 4,366,273.19

Taxes Paid (Including TDS) (3,854,517.00) (27,037,090.00)

Net Cash From Operating Activities - Total (A) 13,713,761.24 (22,670,816.81)


Purchase of Fixed Assets (125,667.00) (31,990.00)

Sale of Fixed Assets 3,000.00 –

Dividend Received 981,059.48 506,671.17

Investment in Mutual Fund (14,745,459.48) 14,544,863.19

Cash flow from investing activity - Total (B) (13,887,067.00) 15,019,544.36

Fifth Annual Report

31


2010-2011 2009-2010

(Rs.) (Rs.)






C) CASH FLOW FROM FINANCING ACTIVITY

Cash Flow from Financing Activity - Total (C) – –

Net Increase / (Decrease) In cash & Cash Equivalent (173,305.76) (7,651,272.45)

Opening balance of Cash & Cash Equivalent 504,885.22 8,156,157.67

Closing balance of Cash & Cash Equivalent 331,579.46 504,885.22

Net Increase / (Decrease) In cash & Cash Equivalent (173,305.76) (7,651,272.45)


1. Cash and cash equivalent represent cash and bank balances.

2. The above Cash Flow Statement has been prepared under the "Indirect Method" as set out in the Accounting

Standard-3 on Cash Flow Statements issued by the Institute of Chartered Accountants of India

Fifth Annual Report

32



Information pursuant to Notification No. GSR No. 388(E) [F.No.3/24/94-CLV] dated 15-5-95,

issued by the Department of Company Affairs, Ministry of Law, Justice and Company Affairs)

(Part IV of Schedule VI to the Companies Act,1956)


Registration No. U 7 2 9 0 0 M H 2 0 0 6 P L C 1 6 3 4 6 8 State Code 1 1


Date Month Year

II Capital raised during the period (Amount in Rs. Thousands)


* * * N I L * * * * * * N I L * * *


* * * N I L * * * * * * * * * * * *



* * * 1 9 9 9 2 8 * * * 1 9 9 9 2 8

Sources of Funds


* * * * * * 5 0 0 * * * * 3 3 3 4 1


* * * N I L * * * * * * N I L * * *



* * * * * * 1 3 5 * * * * 1 0 0 0 0


* * * * 2 0 2 5 5 * * * * * * N I L

Accumulated Losses

* * * N I L * * *

Fifth Annual Report

33




* * * 3 7 5 3 7 3 * * * 3 6 1 4 2 5


* * * * 1 3 9 4 8 * * * * * 9 4 6 1

(Please tick appropriate box + for Profit, – for Loss)


* 1 8 9 . 2 3 – –


Item Code No. N A

(ITC Code)

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

��




National Commodity Clearing Limited(Subsidiary of National Stock Exchange of India Limited)

FIFTH ANNUAL REPORT2010-11

o o

o o

BOARD OF DIRECTORS



Mr. Raghavan Putran

Mr. R. Ramaseshan

SECRETARY

Ms. Sneha Huddar : Asst. Company Secretary

AUDITORS : M/s. Haribhakti & Co.


701, Leela Business Park,

Andheri-Kurla Road,

Andheri (East)

Mumbai - 400 059


Plot C-1, Block ‘G'


Mumbai - 400 051

Fifth Annual ReportNATIONAL COMMODITY CLEARING LIMITED


1

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.


NCCL has completed the fourth full year of operations, since its commencement from September 1, 2006,

in providing IT and process support to NCDEX in respect of its clearing and settlement of trades done in

derivatives segment. The clearing and settlement covers contracts in 44 products ranging from agricultural

commodities to base metals, ferrous metals, energy, polymers and precious metals. NCCL carries out

funds settlement through 13 clearing banks namely, Bank of India, Canara Bank, Punjab National Bank,

Union Bank of India, Tamilnad Mercantile Bank, Axis Bank, ICICI Bank, Indus Ind Bank, HDFC Bank,

Kotak Mahindra Bank, Yes Bank, State Bank of India and Development Credit Bank Limited. The summary

of trading, settlement and collateral statistics for the financial year 2010-11 is given hereunder:-

Trading

The summary statistics of market during the financial years 2010-11 and 2009-10 are given below:


Total Number of Trades 2,71,08,027 2,20,04,805

Total Traded Quantity 83,11,50,740 41,71,76,039

Total Trading Value (Rs. in crores) 14,10,602.21 9,17,584.71

Settlement


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


2


During the year 2010-11, NCCL earned net profit after tax of Rs. 99.54 lakhs as compared to the net profit

after tax of Rs. 93.39 lakhs during 2009-10. The financial results for the financial year 2010-11 are

summarised hereunder:-

Particulars 2010 - 11 2009-10

(Rs. In Lakhs) (Rs. In Lakhs)

Income 479.59 488.30


Profit before prior period adjustments 125.97 42.13

Add/(Less): Prior-period adjustments 3.68 70.13

Net profit before tax 129.65 112.26

Less:/(Add): Provision for tax (including deferred tax) 30.11 18.87

Net profit after tax 99.54 93.39

Add: Surplus brought forward from previous year 149.58 56.19


III. DIVIDEND

As the profit is required to augment operational needs, your Directors do not recommend any dividend for

the financial year 2010-11.


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


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


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



3


Since the paid up capital of the Company is Rs. 4.75 crores only, it is not mandatory for the Company toconstitute an Audit Committee as per the provisions of Section 292A of the Companies Act, 1956.However, the Board had constituted an Audit Committee in August 2007. The Audit Committee presentlycomprises of Mr. Ravi Narain, Ms. Chitra Ramkrishna and Mr. R. Ramaseshan as its members. Mr. RaviNarain is the Chairman of the Audit Committee.

During the year, the Committee met four times i.e., on April 23, 2010, August 12, 2010, December 3, 2010and on February 23, 2011. The details of the attendance of the members of Audit Committee are presented

in the following table:-

Names Number of meetings held during Number of meetings

the year attended

Mr. Ravi Narain 4 4

Ms. Chitra Ramkrishna 4 4

Mr. R. Ramaseshan 4 4

VIII. AUDITORS

M/s. Haribhakti & Co., Chartered Accountants, Auditors of the Company, retire at the forthcoming AnnualGeneral Meeting of the Company and are eligible for re-appointment. The Company has received a certificatefrom the Auditors to the effect that their re-appointment, if made, would be within the limits prescribedunder Section 224 (1B) of the Companies Act, 1956.

IX. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGEEARNINGS/OUTGO


As the Company does not fall under any of the industries listed out in the Schedule appended to Companies(Disclosure of particulars in the Report of the Board of Directors) Rules, 1988, particulars required tobe disclosed with respect to conservation of energy and technology absorption in terms of Section217(1)(e) of the Companies Act, 1956, read with the aforesaid Rules are not applicable to the Company.


The foreign exchange earnings during the year were NIL. There was no foreign exchange outgo duringthe year.


All persons who are working with the Company 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 NCCL. AStatement under Section 217 (2A) of the Companies Act, 1956 read with Companies (Particulars of Employees)Rules, 1975 is enclosed.

XI. APPRECIATION

Your Directors are grateful for the support and co-operation extended by National Stock Exchange of IndiaLimited and National Commodity & Derivatives Exchange Limited. Your Directors would also like toplace 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



4







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 :



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




5

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.








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.

4. Further to our comments in the paragraph 3 above, we report that:

i) We have obtained all the information and explanations, which to the best of our knowledge and


ii) In our opinion, proper books of account as required by law have been kept by the Company so far


iii) The balance sheet, the profit and loss account and the cash flow statement dealt with by this

report are in agreement with the books of account;

iv) In our opinion, the balance sheet, the profit and loss account and the 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 the 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 is disqualified as

on March 31, 2011 from being appointed as a director in terms of clause (g) of sub-section (1) of



6

vi) In our opinion and to the best of our information and according to the explanations given to us,



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.

For Haribhakti & Co.


FRN No.103523W

Prasad V. Paranjape

Partner


Place: Mumbai



7

ANNEXURE TO AUDITORS' REPORTReferred to in paragraph 3 of the Auditors' Report of even date to the members of

National Commodity Clearing Limited on the financial statements for the year ended March 31, 2011

(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.


8

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.

(xvi) The Company has not obtained any term loans.

(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.


9

(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.

For Haribhakti & Co.


FRN No.103523W

Prasad V. Paranjape

Partner


Place: Mumbai



10



(Rs.) (Rs.)

I SOURCES OF FUNDS1. Shareholders’ Funds

a Share Capital 1 47,500,000.00 47,500,000.00

b Reserves & Surplus 2 24,911,908.16 72,411,908.16 14,958,142.50 62,458,142.50

2. Deferred Tax Liability 170,469.96 409,100.33

(Refer Schedule 10: Point No.2 ( i ))

TOTAL 72,582,378.12 62,867,242.83


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


The Schedules referred to above form an integral part of the Balance Sheet and notes to Accounts





Chairman Director

PRASAD V. PARANJAPE

Partner

Place : Mumbai R.RAMASESHAN SNEHA HUDDAR

Date : April 26, 2011 Director Asst. Company Secretary


11

PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED MARCH 31, 2011


Schedule 31.03.2011 31.03.2010

(Rs.) (Rs.)

INCOME

IT & Process Support Charges 43,086,983.00 43,473,606.00

(T.D.S Rs. 43,89,535.90 , Previous year Rs 4,906,384.57 )

Other Investment Income 7 4,872,303.23 5,356,904.53

TOTAL 47,959,286.23 48,830,510.53

EXPENDITURE

Administration & Other Expenses 8 18,626,230.95 28,562,706.13

Payments to and provision for employees 9 15,313,823.28 13,805,858.33

Depreciation (Refer Schedule 10: Point No.1d (ii)) 1,422,504.41 2,248,867.21

TOTAL 35,362,558.64 44,617,431.67

Net Profit before Prior-period Adjustments 12,596,727.59 4,213,078.86

Add/(Less) : Prior-period Adjustments 368,599.70 7,013,047.00

Net Profit before Tax 12,965,327.29 11,226,125.86

Less : Provision for Taxation

- Current Tax 2,700,000.00 2,063,000.00

- Deferred Tax (238630.37) (175527.02)

- Short Provision for Tax for earlier years 550,192.00 –

Net Profit after Tax 9,953,765.66 9,338,652.88

Add: Surplus brought forward from previous year 14,958,142.50 5,619,489.62

Net Profit carried to Balance Sheet 24,911,908.16 14,958,142.50

Appropriations :

- General Reserve – –

- Balance Carried to Balance Sheet 24,911,908.16 14,958,142.50

24,911,908.16 14,958,142.50

Basic /Dilutive Earning per share (Rs) (FV Rs.10) 2.10 1.97

(Refer Schedule 10:Point No. 2(h))


The Schedules referred to above form an integral part of the Profit & Loss Account

and notes to Accounts


For HARIBHAKTI & CO.Chartered Accountants


PRASAD V. PARANJAPEPartner

Place : Mumbai R.RAMASESHAN SNEHA HUDDARDate : April 26, 2011 Director Asst. Company Secretary


12

As at 31.03.2011 As at 31.03.2010

Rs. Rs.


Authorised

1,00,00,000 Equity Shares(Previous year 1,00,00,000)

of Rs. 10 Each 100,000,000.00 100,000,000.00


47,50,000 Equity Shares(Previous year 47,50,000)

of Rs. 10 Each fully paid up 47,500,000.00 47,500,000.00

( of the above shares 30,87,500

( Previous Year : 30,87,500) are

held by the holding company-


and its nominees)

TOTAL 47,500,000.00 47,500,000.00


Balance in Profit & Loss Account

As per Last Balance Sheet 14,958,142.50 5,619,489.62

Add : Profit for the year 9,953,765.66 24,911,908.16 9,338,652.88 14,958,142.50

TOTAL 24,911,908.16 14,958,142.50



13

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14


A. CURRENT ASSETS

1 Sundry Debtors


Over Six months – –

Other debts 3,852,268.13 3,852,268.13 3,862,849.85 3,862,849.85

2 Bank Balances


in Current Accounts 1,081,572.42 923,527.70

in Deposit Accounts 17,625,000.00 18,706,572.42 – 923,527.70

3. Other Current Assets

Investments in Mutual Funds 37,672,424.69 57,753,575.56

(Refer Schedule 10: Point No.2 (a) & (b))

4. Interest accrued

On Investments 477,154.00 9,904.04

On others 932,161.00 1,409,315.00 – 9,904.04

TOTAL : 61,640,580.24 62,549,857.15

B. LOANS & ADVANCES


Advance Recoverable in Cash or Kind 2,580,185.04 2,520,510.60

Advance Income tax paid including TDS 11,669,924.97 14,250,110.01 15,524,538.17 18,045,048.77

(Net of provisions of Rs.60,08,126)

(Previous Year : Rs 28,18,830)

TOTAL : 75,890,690.25 80,594,905.92


A. CURRENT LIABILITIES

Sundry Creditors (Refer Schedule 10: Point No.2 (d))

a) Total Outstanding dues of Micro Enterprises and Small

Enterprises – –

b) Others 11,183,172.13 11,183,172.13 19,774,730.50 19,774,730.50

Other Liabilities 815,619.00 691,650.00

11,998,791.13 20,466,380.50

B. PROVISIONS – –

TOTAL : 11,998,791.13 20,466,380.50

As at 31.03.2011 As at 31.03.2010

Rs. Rs.



15


31.03.2011 31.03.2010

Rs. Rs.


SCHEDULE 7: OTHER INCOME

a) Income from Long term Investments

Interest on Taxfree Bond 936,010.16 _

Interest on Taxable Bond 13,199.96 13,200.00

Interest on Fixed Deposits 1,035,737.00 _

b) Income From Current Investments

Dividend on Current Investments 1,923,500.34 1,781,241.27

Profit on Sale/Redemption -Mutual Funds 10,599.77 3,562,463.26

c) Interest on Income Tax Refund 953,256.00 –

TOTAL 4,872,303.23 5,356,904.53

SCHEDULE 8: ADMINISTRATION & OTHER EXPENSES

Space & Infrastructure Usage Charges 5,673,600.00 14,538,420.00

Software Usage Charges 5,000,000.00 5,000,000.00

Insurance 20,061.00 16,068.00

Printing & Stationery 202,527.90 291,115.28

Consumables 911,312.99 625,736.37

Travelling & Conveyance expenses 1,282,980.12 1,229,096.88

Auditors' Remuneration

- Audit fees 50,000.00 50,000.00

- Reimbursement of expenses – 520.00

Professional fees 1,787,043.49 2,649,318.65

Repairs & Maintenance :

- On Building 57,131.59 755,602.17

- Others – 1,955.55

Electricity expenses 868,494.46 1,223,493.99

Amortisation of premium on Govt/ Debt Securities 35,734.00 –

Other expenses 2,737,345.40 2,181,379.24

TOTAL 18,626,230.95 28,562,706.13

SCHEDULE 9: PAYMENTS TO AND PROVISION FOR EMPLOYEES

(Refer Schedule 10: Point No.2 (e))


Contribution to PF and other funds 497,057.00 415,514.20

Employee Welfare Expenses 596,762.78 500,086.69

TOTAL 15,313,823.28 13,805,858.33


16

SCHEDULE 10 : SIGNIFICANT ACCOUNTING POLICIES AND NOTES TO ACCOUNTS

1. Significant Accounting Policies

a) Basis of Accounting.

The financial statements have been prepared to comply in all material respects with the Accounting

Standards notified by Companies (Accounting Standards) Rules, 2006, (as amended) and the relevant

provisions of the Companies Act, 1956. The financial statements have been prepared under the

historical cost convention on an accrual basis except in case of assets for which provision for

impairment is made and revaluation is carried out. The accounting policies have been consistently

applied by the Company and are consistent with those used in the previous year.

b) Use of Estimates :

The preparation of financial statements in conformity with generally accepted accounting principles

requires management to make estimates and assumptions that affect the reported amounts of assets

and liabilities and disclosure of contingent liabilities at the date of the financial statements and the

results of operations during the reporting period. Although these estimates are based upon

management's best knowledge of current events and actions, actual results could differ from these

estimates.

c) Revenue Recognition.

(i) Revenue from IT & Process support charges are recognised on accrual basis when services

are rendered and there is reasonable certainty of ultimate realization.

(ii ) Dividends on Investments are recognized when a right to receive the same is established

(iii) Interest is recognized on time proportionate basis taking into consideration the amount

outstanding and the rate applicable.

d) Fixed Assets

(i) 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.

(ii) 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 :


Office Equipment 25.00%

Clearing and Settlement Systems 25.00 %

Telecommunications Systems 25.00 %

e) Impairment of Assets

The carrying amount of assets are reviewed at each balance sheet date if there is an indication of

Impairment based on internal & external factors. An asset is treated as impaired when the carrying

cost of the asset exceeds the recoverable amount on the reporting date, an impairment loss if any is

charged to Profit & Loss Account in the year in which the asset is identified as impaired .


17

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.


18

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


19

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 AdvantageRetail Daily Dividend Fund 9,511.02 118,004.17

Dws Ultra Short Term Fund - RegularDaily 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 InstitutionalPlan - Div - Daily 70,992.94 7,100,881.07

ICICI Prudential Ultra Short Term PlanSuper 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 DailyDiv 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 valuestated, 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 toMicro, Small & Medium Enterprises have been determined to the extent such parties have beenidentified on the basis of information available with the Company.

e) Payments to and provision for employees represents the amount reimbursed by the company to TheNational Stock Exchange of India Limited (NSEIL) in respect of employees on deputation to thecompany on a rotational basis. These includes charges for all retirement benefits and other long termemployee benefits as per the requirements of Accounting Standard 15-" Employee Benefits" issuedby the Institute of Chartered Accountants of India. Necessary provisions are carried by NSEIL.


20

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, thedisclosures required in terms of Accounting Standard 17 - "Segment Reporting" issued by the Instituteof Chartered Accountants of India are not applicable.

g) In compliance with Accounting Standard 18 "Related Party Disclosures" issued by the Institute ofChartered Accountants of India, the required disclosures are given in the table below:

i) Name of related parties and relationship:

Sr. Related Party Nature of RelationshipNo.

1 National Stock Exchange of India Limited (NSEIL ) Holding Company

2 National Securities Clearing Corporation Limited (NSCCL) Fellow Subsidiary


4 Dot Ex International 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 endedRelated Party 31/03/2011 31/03/2010

(Rs.) (Rs.)National Stock • Reimbursement paid for expenses on staff onExchange of deputation inclusive of Service Tax 1,63,27,946.50 77,81,285.44

India Ltd. • Reimbursement paid for other expenses incurredinclusive of Service Tax 80,71,749.70 88,76,522.32

• Space & Infrastructure Usage Charges paidon 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 ofSecurities Service Tax 55,15,000.00 55,15,000.00

Clearing • Closing Balance (Credit)/Debit – –CorporationLimited

h) In accordance with Accounting Standard - 20 "Earning per Share" issued by the Institute of CharteredAccountants of India, the required disclosure is given below.


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 sharesoutstanding 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


21

The Company does not have any outstanding dilutive potential equity shares. Consequently, the basic anddiluted earning per share of the Company remain the same.

i) In accordance with the provisions of Accounting Standard-22 relating to "Accounting for taxes onincome" , the breakup of deferred tax Liability/(Asset) is shown below:

Deferred Tax Liability/(Asset) for year ended 31st March , 2011

Particulars Opening Balance as at Closing Balance as at31st March 2010 (Rs) 31st March 2011 (Rs)

Fixed Assets 4,61,572.85 1,70,469.96

Unabsorbed losses – –

Preliminary expenses (52,472.53) –

Total 4,09,100.32 1,70,469.96

j) Administration & other expenses include expenses allocated by the holding company, The NationalStock Exchange of India Limited (NSEIL) on equitable basis.

k) Previous years' figures are regrouped, reclassified and rearranged wherever necessary to make themcomparable with current year figures.

l) Information with regard to other matters specified in Clauses 3, 4C & 4D of Part II to Schedule VIof the Companies Act, 1956 are either nil or not applicable to the company.





Chairman Director

PRASAD V. PARANJAPE

Partner




22

CASH FLOW STATEMENT FOR THE YEAR ENDED 31ST MARCH, 2011

2010-2011 2009-2010

(Rs.) (Rs.)


Net Profit before tax 12,965,327.29 11,226,125.86


Depreciation for current year 1,422,504.41 2,248,867.21

Amortisation of premium on Govt/ Debt Securities 35,734.00 –

1,458,238.41 2,248,867.21

Less: Adjustments for :

Dividend on Investment (1,923,500.34) (1,781,241.27)

Profit on sale / redemption of Investments (10,599.77) (3,562,463.26)

Interest on Fixed Deposits /Taxfree Bonds/Taxable Bonds (1,984,947.12) (13,200.00)

(Profit)/Loss on sale of fixed assets – 72,857.88

Interest on Income Tax Refund (953,256.00) –

(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

Cash Generated from Operating activities 1,034,580.38 8,606,374.71

Interest on Income Tax Refund 953,256.00 –

Direct taxes paid (Net of Refunds) 604,421.20 (5,453,637.71)

Net Cash from (used in) Operating Activities - Total (A) 2,592,257.58 3,152,737.00


Purchase of Fixed Assets/Capital Work in progress – (262,107.15)

Sale of Fixed Assets – 40,000.00

Interest on Fixed Deposits/Taxfree Bonds/Taxable Bonds 1,984,947.12 13,200.00


(Increase)/Decrease in Investment 11,282,339.68 (4,461,031.32)

Investment in Fixed Deposits (17,625,000.00)

Net cash from (used in) Investing activities - Total (B) (2,434,212.86) (2,888,697.20)


23

2010-2011 2009-2010

(Rs.) (Rs.)

C) CASH FLOW FROM FINANCING ACTIVITIES

Net cash from (used in) financing activities - Total (C ) – –

Net Increase/(Decrease) in Cash & Cash equivalents (A+B+C) 158,044.72 264,039.80

Cash and Cash Equivalents at the beginning of the year 923,527.70 659,487.90

(In Current A/c Rs 9,23,527.70 , Previous year Rs 6,59,487.90)

Cash and Cash Equivalents at the end of the year 1,081,572.42 923,527.70

(In Current A/c Rs 10,81,572.42 , Previous year Rs 9,23,527.70)

NET INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENT 158,044.72 264,039.80


1 Cash and Cash equivalent represent bank balances and balances in fixed deposit accounts.

2 The above Cash Flow Statement has been prepared under the " Indirect Method" as set out in Accounting

Standard-3 on Cash Flow Statements issued by the Institute of Chartered Accountants of India.

3 Cash and Bank balances as per Balance Sheet 18,706,572.42

Less: Investment in Fixed Deposits maturing over three months 17,625,000.00

Cash and Cash Equivalents at the end of the year 1,081,572.42





Chairman Director

PRASAD V. PARANJAPE

Partner




24


(Information pursuant to Notification No. GSR No. 388(E) [F. No. 3/24/94 - CLV] dated 15-5-95,

issued by The Department of Company Affairs, Ministry of Law, Justice and Company Affairs)






Date Month Year

II Capital raised during the year (Amount in Rs. thousands)


N I L N I L


* * * * * * * * * N I L

III Position of Mobilisation and Deployment of Funds (Amount in Rs. thousands)


* * * * 7 2 5 8 2 * * * * 7 2 5 8 2

Sources of Funds


* * * * 4 7 5 0 0 * * * * 2 4 9 1 2


N I L N I L


* * * * * * 1 7 0



* * * * * 1 0 7 6 * * * * * 7 6 1 4


* * * * 6 3 8 9 2 * * * * * * N I L


25

IV Performance of Company (Amount in Rs. thousands)

Turnover/Total Income Total Expenditure

* * * * 4 8 3 2 8 * * * * 3 5 3 6 3


* * * * 1 2 9 6 5 * * * * * 9 9 5 4



* * * * 0 2 . 1 0 - -


Item Code No. N A

(ITC Code)

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



Chairman Director

Place : Mumbai R. RAMASESHAN SNEHA HUDDAR


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