Disclosure in board of directors report explanatoryCentral Depository Services (India) LimitedBoard of Directors Public Interest Directors: Shri N. Rangachary (Former Chairman, CBDT & IRDA) Chairman Shri T. S. Narayanasami (Former CMD of Bank of India) Dr. R. N. Nigam [Principal Delhi College Of Arts & Commerce (Retd.)] Smt. Jayshree Vyas (Managing Director - Shree Mahila Sewa Sahakari Bank, Ahmedabad) Shareholder Directors : Shri Ashishkumar Chauhan (Managing Director & CEO - BSE Limited) Shri Ananth Narayan (Regional Head of Global Markets & Co-Head of Wholesale Banking - South Asia - Standard Chartered Bank Limited Appointed on 22nd July, 2014) Shri Parveen Kumar Gupta (Deputy Managing Director & GE (GM) & CFO State Bank of India Appointed on 25th April, 2015) Managing Director & CEO : Shri P. S. Reddy Management Team Shri P.S. Reddy Managing Director & CEO Shri Cyrus Khambata Executive Vice President – Business Development [Currently on deputation to CDSL Ventures Limited] Shri Joydeep Dutta Chief Technology Officer Shri Bharat Sheth Senior Vice President & Chief Financial Officer Shri Sunil Alvares Senior Vice President – New Projects Smt. Nayana Ovalekar Senior Vice President – Operations Shri Satish L. Budhakar Senior Vice President & Group Company Secretary Shri Ramkumar K. Senior Vice President [Currently on deputation to CDSL Insurance Repository Limited] Bankers Bank of India Auditors Deloitte Haskins & Sells Chartered Accountants ‘Heritage’, 3rd Floor, Near Gujarat Vidyapith Off Ashram Road, Ahmedabad - 380014 Registered Office 17th Floor, Phiroze Jeejeebhoy Towers, Dalal Street, Mumbai 400001 Corporate Identification Number: U67120MH1997PLC112443 Website of Central Depository Services (India) Limited and its subsidiaries CDSL : www.cdslindia.com CVL : www.cvlindia.com CIRL : www.cirl.co.in e-Voting : www.evotingindia.com Contents Directors’ Report ……………………………………………………………………………… Standalone Auditors’ Report ……………………………..………………………………. Standalone Financial Statements………………………………………………………….. Notes to Standalone Financial Statements………………………………………….…… Consolidated Auditors’ Report………………………………………………………………. Consolidated Financial Statements ………………………………………………………. Notes to Consolidated Financial Statements…………………………………………….
Directors’ ReportYour Directors have pleasure in presenting the Seventeenth Annual Report, along with Audited Statement of Accounts of your company for the year ended 31st March, 2015. Due to improved market conditions, operational income of the company has increased to Rs. 856.43 million from Rs. 754.39 million, though total income has marginally gone down from Rs. 1054.49 million to Rs. 1051.96 million, due to income of Rs. 130 million not booked for the year ended March 31, 2015 by rolling over investments in Fixed Maturity Plans of mutual fund for further period of 2 years on account of change in tax implications. The key financial indicators are given below: Financial Highlights Particulars | Year ended 31st March, 2015 (Rs. million) | Year ended 31st March, 2014 (Rs. million) |
Income from OperationsOther IncomeTotal Income | 1051.96 | 1054.49 | Expenditure | 402.49 | 379.24 | Profit before Depreciation and Taxation | 649.47 | 675.25 | Depreciation | 49.04 | 38.27 | Profit before exceptional items and tax | 600.43 | 636.98 | Extraordinary items – Fire Insurance claim received | - | 8.52 | Exceptional items (Refund of Municipal Tax) | 16.88 | - | Profit before contribution to BOPF & Tax | 617.31 | 645.50 | Contribution to BOPF | 123.46 | 129.10 | Profit Before Tax | 493.85 | 516.40 | Provision for Taxation | 160.28 | 95.50 | Provision for Deferred Tax for the year | (13.79) | 6.87 | Profit after Tax | 347.36 | 414.03 | Balance brought forward | 2117.40 | 1978.94 | Profit available for appropriation | 2464.76 | 2392.97 | Proposed dividend | 229.90 | 209.00 | Tax (including surcharge and education cess on dividend) | 46.80 | 35.52 | Transfer to General Reserve | - | 31.05 | Surplus carried to Balance Sheet | 2188.06 | 2117.40 |
The income from operations comprising of transaction charges, annual issuers fees, account maintenance charges, settlement charges, corporate action charges, etc. during the year under review increased to Rs. 856.43 million from Rs.754.39 million, recording a increase of 14% over the year 2013-14 though total income has gone down marginally. As per SEBI (Depositories & Participants) (Amendment) Regulations, 2012, transfer of Rs. 123.46 million is made to investor protection Fund. After contribution to Investor protection Fund, Profit Before Tax (PBT) for the year ended March 31, 2015 decreased to Rs. 493.85 million from Rs. 516.40 million of previous year, a fall by 4.37%. Profit After Tax (PAT) has decreased to Rs.347.36 million from Rs.414.03 million, a decline of 16%. The decline in the current year’s Profit After Tax could be mainly attributed to income to the postponed accrual of investment revenue of Rs. 130 million. Dividend Looking into the performance of the Company for the year under review and taking note of the increased economic and industrial activity in the present, your directors have recommended a dividend of Rs. 2.2 per share (22%) for the year ended 31st March, 2015. The Capital Market Environment During the first half of FY 2014-15, the Indian economy registered a growth of 5.5%. This is distinctly higher than the growth recorded in the previous year, 2013-14, and is also in tandem with the projection for the full year growth of 5.4 to 5.9% made in the Economic Survey 2013-14 as well as in line with the initial expectations of the Government of a gradual pick-up in growth. According to the October 2014 edition of the World Economic Outlook released by the International Monetary Fund, India’s GDP (Gross Domestic Product) growth is expected to be 5.6% for the year 2014-15. Further, in its October 2014 edition of 'South Asia Economic Focus' the World Bank has stated that India may see an acceleration of growth in FY 2015 to 5.6%. Such optimization is also reflected in the stock indices in the country. The BSE-30 Sensex which opened at 22,455 on 1st April, 2014, touched a high of 30,024 in March 2015 only to close at 27,957 on 31st March, 2015. The Sensex was up by about 25% on the back of inflows of approximately Rs.1,10,000 crores from FIIs and approximately Rs. 38,600 crores from MFs in FY 2014-15. Correspondingly, capital market activities also picked up and according to Prime Database, the total equity capital raised during 2014 – 15 was about Rs.58,801 crores as against Rs.29,381 crores raised during 2013 – 14. Of the above, the funds raised through IPOs was Rs.2,769 crores while the funds raised through Qualified Institutional Placement (QIP) route was approximately Rs.28,000 crores and through Offer for Sale (OFS) was approximately Rs.27,000 crores. Operational Highlights With the capital market looking up, your company could register a very good growth in its depository operations during the later part of 2014 – 15. Such positive outlook is reflected in the increase in the number of demat accounts opened as well as in the number of transactions executed in the Depository. In order to sustain the growth in its depository business, your company continues to focus on enhancement of operational efficiency, upgradation of technology, service quality and enhanced emphasize on investor education through seminars / workshops. Securities admitted Securities like equity shares, preference shares, mutual fund units, debt instruments, government securities, certificates of deposit, commercial papers and a host of other instruments are available for dematerialization by the investors. Details of the securities admitted with CDSL are given below:
Securities | Year ended 31st March 2015 | Year ended 31st March 2014 | Increase over the previous year (%) | Equity Shares | 8,309 | 7,743 | 7.30 | Debt Instruments | 8,481 | 7,274 | 16.59 | Other Securities | 20,293 | 17,783 | 14.11 | Total | 37,083 | 32,800 | 13.05 |
Position of Securities held in the System The value and volume of securities held with CDSL in the year under review as compared to the previous year are indicated below: Holding of Securities | Year ended 31st March, 2015 | Year ended 31st March, 2014 | Increase over the previous year (%) | Value (in millionRs.) | 13,942,638 | 10,876,032 | 28.19 | Volume (in million) | 206,012 | 177,311 | 16.18 |
Discontinuation of e-warehouse receipts As per SEBI directive your Board of Directors decided to exit the business of providing depository services for holding e-warehouse receipt balances. Accordingly, e-warehouse receipt balances pertaining to all commodity exchanges held in CDSL system have been extinguished except two exchanges, National Spot Exchange Ltd (NSEL) and National Commodity & Derivatives Exchange Limited (NCDEX) which are in the process of being extinguished because of some inherent issues still under settlement. Depository Participants and Service Centres As on 31st March, 2015, 574 depository participants held valid registration certificates of Securities and Exchange Board of India (SEBI) as compared to 578 valid SEBI registrations as on 31st March 2014. During the year new registrations were received for 30 DPs but registrations of 34 DPs were withdrawn/ cancelled. With a large DP network, investors spread across 28 States and 7 Union Territories can avail of CDSL’s depository services.Further, investors have access to 11,877 DP service centers spread across more than 2000 cities / towns as on 31st March 2015. A new category of DP called “Limited Depository Participant’ (LDP) was introduced to facilitate stock brokers having net worth in the range of Rs.1 crores to Rs.2 crores to become a DP which has evoked good response. Beneficial Owner Accounts During the year under review, 12.57 lakh Beneficial Owner (BO) accounts were added, taking the total number of such accounts to 130.87 lakhs with the net BO accounts at 96.10 lakhs as on 31st March, 2015. The comparative figures of gross and net BO accounts as on 31st March, 2014 and 31st March, 2015 are given in the following table: Year ended 31st March, 2015 | Year ended 31st March, 2014 | Increase over the previous year’s cumulative figure | Number | Percentage | (Gross) 13,087,397 | (Gross) 11,829,968 | 1,257,429 | 10.63 | (Net) 9,610,002 | (Net) 8,777,049 | 832,953 | 9.49 |
Investor Awareness / Education Seminars Financial inclusion through retail participation has been a major focus area of your company. We believe investor education can become a significant key to achieving financial inclusion in the capital market. To this end, CDSL conducted over 300 Investor Awareness Programs (IAPs) in the year. This initiative allowed investors across geographies, professions and age groups to come together and learn the basics of Capital Markets, advantages of holding securities in demat form, importance of Financial Planning, Investment avenues available, etc. Although, these IAPs reach out to investors in major metros, we have already initiated steps to reach the public in tier-2 and tier-3 cities to inculcate the habit of investment in securities. CDSL has tied up with various regional newspapers to attract large number of investors to attend these IAPs. During the IAPs, informative booklets in English, Hindi and other regional languages were distributed for the benefit of investors. Awards and recognition During the year 2014-2015, your Company has won the following awards: · EMC Transformers award for best use of IT to transform business for implementation of DRM tool from Sanovi. · IDC Insights award for innovation in implementation of WebCDAS application. · NetApp Innovation Award from amongst 154 entries in the Enterprise Mobility category. This Award recognizes the companies and the people that are aggressively and innovatively leveraging technology to make IT dramatically more proactive, productive, and essential to creating business value. · Infosec Maestro Awards for implementation of WAF and DOS / DDOS. New Initiatives Consolidated Account Statement (CAS) SEBI vide its Circular No. CIR/IMD/DP/31/2014 dated November 12, 2014 mandated depositories to issue a Consolidated Account Statement (CAS) to BOs to enable a single consolidated view of their investments in mutual funds (MF) and securities held in demat form across depositories (CAS). The basis for consolidation of account statement is ‘PAN’ and in case of multiple holding, it is based on PAN of the first holder and pattern of holding. In compliance with SEBI’s circular your company has developed internal systems to facilitate the receipt of data pertaining to MF units held in SoA form from AMCs/RTAs and the other depository and consolidate the same for issuance of CAS. Your company has successfully completed generation and dispatch of CAS (transaction and holding statements) for the months of February and March 2015. Revamp of Transfer & Transmission module During the year your company released many system enhancements for increasing the efficacy of processes. One of the important enhancements was revamp of transfer and transmission module which is used for executing transmission and shifting of account requests. The revamped module allows Inter Depository transactions and upload of transactions. It also allows transfer of securities under inactive / lock-in status and balances which are under Pending Demat to the target account. Further, the shifting of account (within CDSL) is allowed by the system only if PAN(s) of source and target demat account are same and in the same sequence as the source account. Transaction Cum Holding Statements As of 31st March, 2015, 198 DPs have signed up for the service of dispatch of statements. CDSL has commenced dispatch of bill cum statements for 6 DPs on pilot basis. In 2014 - 15 CDSL has processed 11.18 lakh statements. Corporate Bond database SEBI had, vide its Circular No. CIR/IMD/DF/17/2013 dated October 22, 2013, informed that while currently the information in respect of various Corporate Bonds/Debentures issued by Issuers is available in a fragmented manner and at multiple sources such as websites of Credit Rating Agencies, Depositories, Stock Exchanges, etc, there is a need for having a centralized database regarding Corporate Bonds/Debentures which are available in demat form for public dissemination. Accordingly, SEBI had vide the aforesaid circular advised the Depositories to obtain requisite information regarding Corporate Bonds/Debentures from Issuers, Stock Exchanges, Credit Rating Agencies and Debenture Trustees and to jointly act as a repository of information pertaining to the Corporate Bonds/Debentures. 1. In view of the above mentioned SEBI Circular, with effect from 1st December, 2013, CDSL has started obtaining the required information from the Issuers/RTAs in the specified format and displaying the same on the CDSL website. 2. As further instructed in aforesaid SEBI Circular, for historical information in respect of Corporate Bonds/Debentures for which ISINs were created in Depository System prior to 1st December, 2013, Issuers were requested to submit the required information to CDSL in the specified format. CDSL, in coordination with NSDL, regularly compiles the details and checks for correctness of its data received from Issuers prior to displaying the same on CDSL website. TRUST – Transaction Using SMS Texting TRUST is the acronym for the mobile based utility, “Transaction Using Secured Texting”. CDSL’s TRUST utility was formally launched in September 2013. GPRS based version of TRUST for iPhone, Blackberry and Windows based mobile devices was also released. The TRUST application has been hosted on Google Play Store for easy availability. As on March 31, 2015, 1878 BOIDs have sought registration for TRUST facility. KSA/ASA – KYC Servicing Agency/Authorized Servicing Agency UIDAI (Unique Identification Authority of India) is the agency which issues, manages and services Aadhaar numbers in the country. UIDAI has a scheme of checking the KYC of an Aadhaar card holder using a service called ASA (Authorized Service Agency). This allowed an ASA to get response from UIDAI in terms of ‘Yes’ or ‘No’ for providing informaiton of an Aadhaar card holder using authorised channel established between ASA and UIDAI. This system however was not found adequate by the market participants as a replacement to KYC, as there was no confirmation of photograph of the person. Moreover, the system had limitations in verifying names and addresses of several localities where the addresses could be written in multiple ways. Hence the ASA saw a rather tepid response from the capital market KYC users. UIDAI then brought in a concept of KSA (KYC Servicing Agency). In this system, the intermediary was required to obtain and transmit to UIDAI through the KSA the Aadhaar number along with the OTP (One time Password) or Biometric impression or Iris scan image. Thereafter, the demographic details of the Aadhaar card holder viz. Name, Date of Birth, residential address, correspondence address, telephone numbers, mobile number and photograph is shared by UIDAI through the KSA. The user can then view/download the information and ensure completion of KYC for the customer. CDSL has entered into an agreement with UIDAI for registering as an Authorized Service Agent (ASA). Further, CDSL chose to get itself upgraded to KSA from its existing status as ASA. UIDAI has granted approval to CDSL as ASA/KSA. The system is under testing and is expected to become operational shortly. Continuing Professional Education (CPE) Programs - Depository Operations Certification Examination (DOCE) National Institute of Securities Markets (NISM) has been offering Continuing Professional Education (CPE) Programs for Associated Persons in the Securities Market Intermediaries. CDSL, as a NISM Accredited CPE Provider for conducting CPE Programs., has successfully carried out 28 programs with more than 426 participants in the year. Browser based CDAS (Web CDAS) In order to keep pace with the new technology and provide greater flexibility and ease of use, CDAS application has been made available to the users as a browser based service. All Depository Participants and Registrar & Transfer Agents have successfully shifted to the browser based version during the current year. Upgraded version of EASI/EASIEST is also released which facilitates user to view real time information and execute transactions. Old CDAS system which was running in parallel with browser based system has since been discontinued. DIS Issuance, Processing and Scanning: SEBI had issued directive to strengthen the supervisory and monitoring role of the depositories and its DPs with respect to issuance, processing and scanning of Delivery Instruction Slips (DIS). Your company has successfully implemented all required features in CDSL system within the timelines prescribed by SEBI. While implementing the system, CDSL has ensured that its Depository Participants are required to incorporate minimal changes in their back office systems. Scanning of DISs is also a risk mitigating measure. Scanning of DIS will facilitate offsite inspection of depository participants. ISO 27001 Recertification Your company has undergone recertification audit for ISO 27001 conducted by DNV and now certified for ISO 27001:2013 for 3 years. ISO 22301:2012 Certificate Your company is also certified with ISO 22301:2012 for Business Continuity Management System. ISO 9001:2008 Your Depository has undergone periodic audit for ISO 9001:2008 certification by DNV for E-voting Service and has been recommended for continuation of the Certificate. Implementation of Web Application Firewall (WAF): WAF has been implemented in reverse-proxy mode which monitors to and fro traffic from Internet to web/application server. It can detect and prevent Open Web Application Security Project (OWASP) threats from Internet. Implementation of on-premise DoS/DDoS prevention system: On premise DoS/DDoS prevention system has been implemented at the perimeter level of Internet Infrastructure which is a real-time, behavioral based attack mitigation device that protects infrastructure against application vulnerability exploitation, malware spread, network anomalies, information theft and other emerging cyber-attacks. It also protects against emerging network security threats such as denial of service (DoS) attacks, distributed DoS attacks. Implementation of DR Automation tool: Your depository has implemented DR automation tool from Sanovi. This has helped in automating DR shifting process. This has also enabled CDSL to get real-time view of RTO/RPO and reducing the switchover time. DR drills are conducted quarterly and the system is run from DR site for at least one week. The switchover is completely seamless with no change required at user end. Designated Depository Participant (DDP) /Qualified Depository Participant (QDP) SEBI vide its notification in January 2014, issued fresh guidelines for a category of investors called Foreign Portfolio Investors (FPI) who are allowed to invest in securities by opening demat account with Designated Depository Participant. Certain eligibility criteria are stipulated for the existing QDPs to act as DDPs. Only FPIs registered with DDP will be allowed to buy, sell or deal in securities. Further, existing QFIs will be required to register themselves with DDP to act as FPI. e-Voting Ministry of Corporate Affairs had issued a notification dated 27th March 2014 stating that ‘every listed company or a company having not less than one thousand shareholders, shall provide to its members facility to exercise their right to vote at general meetings by electronic means’. This provided a fillip to the e-Voting system as more companies signed up resulting in larger participation. As on 31st March 2015, 3538 companies have signed agreements with CDSL to conduct e-Voting. CDSL has on the e-Voting system recorded 3921 instances of voting carried out by 3122 Companies. e-Notices In light of Green Initiative in the Corporate Governance by Ministry of Corporate Affairs, CDSL has started offering the services to companies for sending documents to its shareholders electronically. As on 31st March, 2015, a total of 199 companies have signed for availing the services. Corporate Social Responsibility (CSR) The Ministry of Corporate Affairs (MCA) vide its circular dated 27th February, 2014 notified Section 135 and Schedule VII of the Companies Act 2013 relating to Corporate Social Responsibility (CSR) the provisions of which came into effect from 1st April, 2014. The CSR provisions require companies satisfying certain criteria to spend 2% of its average net profits of the last three years on CSR activities defined in the rules framed in this regard. During the year the company was required to spend Rs. 114.06 lakhs on CSR activities. As per the recommendation of the CSR Committee and approval of the Board, for the financial year 2014-15 the company contributed Rs.20 lakhs, to Swachh Bharat Fund for Swachh Bharat Abhiyan undertaken by the Government of India as a CSR activity. Balance amount of Rs.94.06 lakhs will be spent on CSR project that will be undertaken in the year 2015-16. For the financial year 2015 – 16, your company has identified a registered Charitable Trust viz. Association of Parents of Mentally Retarded Children, Mumbai named as ADHAR for the CSR activity. ADHAR offers a lifetime shelter and vocational training to the Mentally Challenged adults. Currently they have 200 differently abled Children (145 males and 55 females) aged between 18 yrs to 75 years under their care at ADHAR in Badlapur and 51 male at their Nashik Site. Your Company along with CVL, a wholly owned subsidiary of CDSL, has decided to fund their current needs viz. generator set of 40 KVA, 36 Seater Bus and for construction of New Building of Vocational Training Centre and Administrative office. Accordingly the Board, on recommendation of CSR committee, had approved an amount of Rs.1.64 crores towards the ADHAR Project. The report on CSR activities as required under Companies (Corporate Social Responsibility Policy) Rules, 2014 is given in Annex A Employees’ initiative towards Social Responsibility: Employees of the company took initiative in the month of February 2015 to cater to NGOs to meet their basic requirements of clothing along with stationary items. Two NGOs viz. SUPPORT MUMBAI (Society undertaking Poor People Onus for Rehabilitation) and The Salvation Army (Home for Orphan, old & blind) were shortlisted for this purpose. Driven by the social obligation an overwhelming response was seen from the employees. 10 bags of clothes and stationery collected by the employees were donated to these NGOs. Prevention of Money Laundering Act The Prevention of Money Laundering Act, 2002 (PMLA) has been brought into force with effect from 1st July, 2005. Subsequent amendments had been done to the PMLA Act 2002 and Prevention of Money-laundering (Maintenance of Records) Rules 2005 vide SEBI circular CIR/MIRSD/1/2014 dated 12th March, 2014. CDSL and its depository participants fall under the category of ‘intermediaries’ under section 12 of the SEBI Act and hence, PMLA and the policy guidelines issued by the regulators to combat money laundering are applicable to depository operations. As required under the guidelines, CDSL has designated Principal Officer, Alternate Officer and Designated Director to ensure compliance with these guidelines. CDSL conducts training programs and updates depository participants on compliance with the aforesaid guidelines. CDSL has prepared policy guidelines for implementation of PMLA and the same is reviewed periodically. Subsidiaries of CDSL Ø CDSL Ventures Limited Your company had floated a wholly owned subsidiary in the year 2006 viz:- CDSL Ventures Ltd. (CVL) to undertake the common KYC for investors in Mutual Fund industry. CVL is the pioneer in the common KYC system. After promulgation of SEBI {KYC (Know Your Client) REGISTRATION AGENCY} Regulations, 2011, CVL became the first KRA registered with SEBI. The regulations mandate the intermediaries to upload the KYC of all clients to the KRA. An investor now does not have to do KYC again while approaching another intermediary in the capital market. CVL today holds about 132.54 lakh records of Capital Market Investors under the KRA i.e. the about 64% market share. Due to the large no of records, CVL has been able to achieve an all-time high operation income of Rs.19.49 Crores (Rs.13.50 Crores in 2014-15) and a profit before tax of Rs.13.89 Crores (Rs. 10.31 Crores in 2014-15). SEBI has permitted the KYCs in the KRA system to be used by intermediaries registered with other regulators who are notified by SEBI. CVL has been following up with FMC and SEBI for permitting commodity brokers to use the KRA platform. SEBI has given permission for the same and FMC has directed all commodity brokers to upload / download the information to and from the KRA system for all new clients registered after 1st June, 2015 and for existing clients from 1st April, 2016. Ø CDSL Insurance Repository Limited Your Company had under the “Guidelines on Insurance repositories and electronic issuance of insurance policies” issued by IRDA, floated a separate subsidiary viz:- CDSL Insurance Repository Ltd ( CIRL), in the year 2011 to provide policyholders a facility to keep insurance policies in electronic form and to undertake changes, modifications and revisions in the insurance policy with speed and accuracy in order to bring about efficiency, transparency and cost reduction in the issuance and maintenance of insurance policies. Leading public sector and private sector insurance companies have contributed to the equity capital of CIRL. CIRL has opened about 3.37 lakh e-Insurance Accounts (e-IA) until now in which it holds 47,393 insurance policies in electronic form. CIRL has tied-up with eighteen insurance companies for holding policies in electronic form. With a view to get advantage of the brand and lineage of the name of the parent i.e. CDSL, CIRL changed its name to CDSL Insurance Repository Limited during the year. Progress on this business has been affected somewhat in the earlier years due to lack of clarity in policy and approach. Ownership Pattern As at the end of the year under review, the shareholding pattern of your company is as under: Equity Share Capital Percentage of shareholding | Banks | 468,646 | 44.84 | Stock Exchanges | 576,346 | 55.16 | Others | 8 | Negligible | Total | 1,045,000 | 100.00 |
Details of the equity shares held by the shareholders of the company are given in Annex B to the Directors’ Report. In terms of directions issued by SEBI on the strength of the recommendations of the Jalan Committee, effective steps are under way to ensure that the Stock Exchange does not hold more than 24% of the equity shares in a depository.Listing of Securities Your company has applied to SEBI seeking approval to list its securities on any recognized stock exchange other than its sponsor exchange. This will provide an exit route to the shareholder/s who want to exit or off load part of their holding by way of offer for sale. However the holding of all sponsors taken together at all times shall not be less than 51% of the total share capital of the company. Fixed Deposits Your company has not accepted any deposits within the meaning of Section 73, 74, 75 & 76 of the Companies Act, 2013 and the Rules made thereunder. Directors As per SEBI (Depositories and Participants) (Amendment) Regulations, 2012, the appointment and re-appointment of all shareholder directors on the governing board of depository shall be with the prior approval of SEBI. Further the public interest directors on the governing board shall be nominated by SEBI. Accordingly, SEBI vide its letter dated 18th July, 2014 approved appointment of Shri Ananth Narayan, Regional Head of Global Markets and Co-Head of Wholesale Banking, South Asia, Standard Chartered Bank, as Shareholder Director on the Board of CDSL. Shri Ananth Narayan was appointed as additional director on 22nd July, 2014 and will hold office till commencement of the Seventeenth Annual General Meeting. Further SEBI vide its letter dated 18th March, 2015 approved appointment of Shri Parveen Kumar Gupta, Deputy Managing Director & GE (GM) & CFO, State Bank of India as Shareholder Director on the Board of CDSL. Shri Parveen Kumar Gupta was appointed as additional director on 25th April, 2015 and will hold office till commencement of the Seventeenth Annual General Meeting. During the year under review, Shri B. V. Chaubal, nominee director – State Bank of India resigned with effect from 31st December, 2014 and Shri V. Balasubramaniam, nominee director – BSE Limited resigned with effect from 5th March, 2015. Shri Ashishkumar Chauhan retires by rotation at the Seventeenth Annual General Meeting and is eligible for re-appointment. The Board recommends appointment of Shri Ananth Narayan, Shri Parveen Kumar Gupta and Shri Ashish Kumar Chauhan as Directors on the Board. The Board has placed on record its appreciation of the valuable services rendered by Shri B. V. Chaubal and Shri V. Balasubramaniam during their tenure as directors of the company. Auditors Deloitte Haskins & Sells, Chartered Accountants and the Statutory Auditors whose term is valid upto ensuing Annual General Meeting have furnished a certificate to the effect that their appointment, if made, would be in accordance with the limit specified under Section 139(1)) of the Companies Act, 2013. Their appointment as Statutory Auditors of the company is required to be made by a Special Resolution pursuant to Section 139 of the said Act. Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo Considering the nature of operations of your company, the provisions of Section 134(3) (m) of the Companies Act, 2013 read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988, relating to information to be furnished on conservation of energy and technology absorption are not applicable. The company has, however, used information technology extensively in its operations. Other Green Initiatives The company provides securities depository services and depository related services through robust IT infrastructure. Company has even advised its Depository Participants to restrict the use of paper, go paperless wherever possible and to send to those clients statement of accounts electronically who have opted to receive statements electronically by email. The company is popularizing execution of instructions electronically by the Depository Participants. The company is encouraging corporates to conduct e-Voting in general meetings as well as voting on certain resolutions electronically by providing them a system on cost effective basis. The company is also sending notices, annual reports on behalf of corporate to their clients. Filings are made by the companies electronically with CDSL using document manager. Whenever the company purchases servers, storages and computer machines, it is ensured that they are energy-efficient products using safer materials and reducing the environmental impact of technology and design for recyclability. During the year, the company entirely replaced traditional fluorescent tubes and Compact Fluorescent light fittings with environmental friendly, energy efficient, most economical and non-hazardous LED fittings. Foreign Exchange Earnings and Outgo Details of foreign exchange earnings and outgo during the year under review are as under: Particulars | Year ended 31st March, 2015 (Rs. in million) | Year ended 31st March, 2014 (Rs. in million) | Earnings | Nil | Nil | | Travel expenses | 2.27 | 2.01 | Others | 0.16 | 0.15 | Total | 2.43 | 2.16 |
Directors’ Responsibility StatementPursuant to Section 134(3)(c) and 134(5) of the Companies Act, 2013, the Board of Directors reports that: i) in preparation of the annual accounts, the applicable accounting standards have been followed and proper explanations relating to material departure, if any, have been provided; ii) accounting policies have been selected and applied consistently and the judgements and estimates made 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 of the company for that period; iii) proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013, for safeguarding the assets of the company and for preventing and detecting frauds and other irregularities; and iv) the annual accounts have been prepared on a going-concern basis. v) internal financial controls to be followed by the company are laid down and that such internal financial controls are adequate and were operating effectively. vi) proper systems have been devised to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively. The Independent Directors have given declaration under sub-section (6) of section 149 of the Companies Act, 2014 confirming that they satisfy the criteria of “independence”. Implementation of Code of Corporate Governance As per the SEBI (Depositories and Participants) (Amendment) Regulations, 2012, the disclosure requirements and corporate governance norms as specified for the listed companies mutatis mutandis are applicable to the depository. Your company had been, observing the Code of Corporate Governance by adopting most of the good corporate governance policies as per Clause 49 of the Listing Agreement. The status of implementation of the Code of Corporate Governance is given in Annex B. Management Discussion and Analysis Report The Management Discussion and Analysis Report for the year ended 31st March, 2015 is attached as Annex C. Appointment of Directors A brief resume of each director who will be appointed/ re-appointed at the ensuing Annual General Meeting is given in Annex D. Board Evaluation Pursuant to the provisions of the Companies Act, 2013, the Nomination and Remuneration committee and the Independent Directors have carried out separately an annual performance evaluation of its directors individually, the Board as a whole and its committees and the Chairperson of the Company. The manner in which the evaluation has been carried out has been explained in the Corporate Governance Report. Report by Internal Complaints Committee As per The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 (the Act) it is mandatory for every employer to constitute a committee to be known as the ‘Internal Complaints Committee’. Accordingly, the Committee was constituted by Board and it meets periodically to review the complaints, if any, received from female employees. The company is required to include in its Annual Report the number of cases filed under the Act, if any, and their disposal. During the year the committee did not receive any complaints in this regard. Particulars of Employees Information as required under Rule (5) (2) of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, read with the Companies (Particulars of Employees) Rules, 1975, as amended from time to time, is annexed herewith as Annex ‘E’. Human Resource Development The company always recognized its Human assets as a critical resource essential for the growth of the company. It, therefore, accords high importance to human resource development and consciously endeavors to enhance the quality and competence of its employees across cadres. It conducts induction programmes for new entrants. Nominating employees for training at reputed institutions and for attending seminars in India and abroad in capital market related areas, particularly relating to depositories, has always been a part of human resource development programme of the company. Industrial relations during the year continued to be cordial. Extract of Annual Return The details forming part of the extract of the Annual Return in Form MGT 9 is annexed herewith as Annex ‘F’. Acknowledgement Your Directors place on record their sincere gratitude for the support, guidance and cooperation the company received from Ministry of Finance, SEBI and other regulatory agencies. The Directors also acknowledge with thanks the continued support of the BSE Ltd. the holding company, Beneficial Owners, Depository Participants, Stock Exchanges, Clearing Houses, Issuers, and Registrar and Transfer Agents. The Directors also express their appreciation for the unflinching dedication of the employees whose performance, professionalism and commitment for rendering high quality services to the clientele of the company has been commendable. For and on behalf of the Board Sd/- Place : Mumbai N. Rangachary Date : 25th April, 2015 Chairman (00054437)
Annex A Annual Report on CSR activities. 1. It is company’s policy to spend the amount allocated for CSR expenditure on activities listed in schedule VII of the Companies Act, 2013 and the rules framed thereunder. 2. Consequently the Board constituted the Corporate Social Responsibility committee at its meeting held on 3rd May, 2014 consisting of following members: i. Shri N. Rangachary, chairman (Independent Director) ii. Dr. R. N. Nigam (Independent Director) iii. Smt. Jayshree Vyas (Independent Director) The CSR committee decided to identify Trusts / NGOs which carry out CSR activities and which have experience and expertise in implementing CSR projects. 3. The average of the Net Profit of the company for last three financial years: Rs.57.04 crores. 4. Prescribed CSR expenditure: Rs.114.06 lakhs (two per cent of the amount in item 3 above) 5. Details of CSR spent during the Financial Year a. Total amount to be spent for the financial year: Rs.114.06 lakhs b. Amount Unspent: Rs.94.06 lakhs c. The manner in which the amount spent during the financial year is detailed below:
Rs. in lakhs Sr. No | CSR Project or activity identified | Sector in which the project is covered | State where projects or program was undertaken | Amount outlay | Amount spent on the projects or programs | Cumulative Expenditure up to the reporting period | Amount Spent Direct or through implementing agency | 1. | Swachh Bharat Kosh | Fund Set up by Central Government | - | 20 | 20 | 20 | 20 | | Total | | | 20 | 20 | 20 | 20 |
6. Since company could not identify any suitable projects during the year, company could not spend Rs.94.06 lakhs. However, the company has decided to spend the aforesaid amount of Rs.94.06 lakhs on CSR project that will be undertaken in the year 2015-16. Your company has already identified a registered Charitable Trust viz Association of Parents of Mentally Retarded Children, Mumbai named as ADHAR which offers a lifetime shelter and vocational training to the Mentally Challenged adults. Your Company along with CVL, a wholly owned subsidiary of CDSL, has decided to fund their current needs viz. generator set of 40 KVA, 36 Seater Bus and for construction of New Building of Vocational Training Centre and Administrative office. Accordingly the Board, on recommendation of CSR committee, has approved an amount of Rs.1.64 crores towards the ADHAR Project. 7. The Chairman of the Committee has given a responsibility statement on behalf of the CSR Committee that the implementation and monitoring of CSR policy, is in compliance with CSR objectives and policy of the Company. Sd/- Sd/- P. S. Reddy N. Rangachary Managing Director & CEO Chairman of the CSR Committee Place: Mumbai Date : 25th April, 2015
Annex B Corporate Governance Company’s Philosophy on Code of Corporate Governance Corporate governance practices based on fairness, equity, accountability, transparency and commitment to ethical values have driven company’s business. The company has prescribed Code of Conduct and Ethics for its directors and Key Management Personnel. It has also framed a policy which is applicable for all employees of the company preventing them from dealing with any price sensitive capital market related information whether authenticated or otherwise. The policies and business strategies of the company aim at providing secure and efficient depository services to investors within the prescribed legal framework. Business strategies are framed and implemented within compliance requirements. Board of Directorsa) Composition As on 31st March 2015, the Board consisted of seven directors including the Managing Director & CEO. Amongst six non-executive directors, two are sponsor/shareholder directors and four are independent/public interest directors. Shri N. Rangachary, who is an independent director, is also the non-Executive Chairman of the company. All the Directors have informed about their Directorship and Membership on the Board Committees of other companies. Details of directorship and Board Committee membership of Directors in other companies as on 31st March, 2015 are as under:
Category | No. of directorships in other companies | No. of Board Committee memberships in other companies | No. of Chairmanships in Board Committees of other companies | Shri N. Rangachary, Chairman | Non-Executive- Independent | 11 | 4 | 2 | Shri T. S. Narayanasami | Non-Executive- Independent | 10 | 9 | - | Dr. R. N. Nigam | Non-Executive- Independent | 1 | 3 | 1 | Smt. Jayshree Vyas | Non-Executive- Independent | 4 | - | - | Shri Ashishkumar Chauhan | Non-Executive | 5 | 3 | - | Shri Ananth Narayan G. | Non-Executive | 2 | - | - | Shri P. S. Reddy | Managing Director & CEO | 1 | 1 | - |
b) Meetings and Attendance The Board meets atleast once in a quarter to review the quarterly financial results and operations of the company. In addition, the Board also meets as and when necessary to address specific issues relating to the business. During the year, the Board met five times i.e. on 3rd May, 2014, 22nd July, 2014, 11th October, 2014, 15th November, 2014, and 21st January, 2015. Details of attendance of the Directors at the Board meetings and the last Annual General Meeting are given hereunder:
Attendance of the Directors at the Board meetings : Sr. No. | Date of Meetings | Venue and time of the meeting | Directors present | Directors to whom Leave of absence was granted | 1 | Saturday 3rd May, 2014 | CDSL Board Room, 16th floor, Phiroze Jeejeebhoy Towers, Dalal Street, Mumbai 400 001 11.45 a.m | Shri N. Rangachary Shri T. S. Narayanasami Dr. R. N. Nigam Smt. Jayshree Vyas Shri Ashishkumar Chauhan Shri Neeraj Swaroop Shri B. V. Chaubal Shri P. S. Reddy | Shri V. Balasubramaniam | 2 | Tuesday 22nd July, 2014 | CDSL Board Room, 16th floor, Phiroze Jeejeebhoy Towers, Dalal Street, Mumbai 400 001 12.45 p.m | Shri N. Rangachary Shri T. S. Narayanasami Dr. R. N. Nigam Smt. Jayshree Vyas Shri Ashishkumar Chauhan Shri B. V. Chaubal Shri Ananth Narayan Shri V. Balasubramaniam Shri P. S. Reddy | - | 3 | Saturday 11th October, 2014 | CDSL Board Room, 16th floor, Phiroze Jeejeebhoy Towers, Dalal Street, Mumbai 400 001 11.45 p.m. | Shri N. Rangachary Shri T. S. Narayanasami Dr. R. N. Nigam Smt. Jayshree Vyas Shri Ashishkumar Chauhan Shri B. V. Chaubal Shri Ananth Narayan Shri V. Balasubramaniam Shri P. S. Reddy | - | 4 | Saturday 15th November, 2014 | CDSL Board Room, 16th floor, Phiroze Jeejeebhoy Towers, Dalal Street, Mumbai 400 001 12.45 p.m. | Shri N. Rangachary Shri T. S. Narayanasami Smt. Jayshree Vyas Shri B. V. Chaubal Shri Ananth Narayan Shri V. Balasubramaniam Shri P. S. Reddy | Dr. R. N. Nigam Shri Ashishkumar Chauhan | 5 | Wednesday 21st January, 2015 | CDSL Board Room, 16th floor, Phiroze Jeejeebhoy Towers, Dalal Street, Mumbai 400 001 12.30 p.m. | Shri N. Rangachary Shri T. S. Narayanasami Dr. R. N. Nigam Smt. Jayshree Vyas Shri Ashishkumar Chauhan Shri Ananth Narayan Shri V. Balasubramaniam Shri P. S. Reddy | - |
Attendance of the Directors at the Annual General Meeting : Date of Meeting | Venue and time of the meeting | Directors present | Thursday, 5th June, 2014 | BSE Convention Hall, First Floor, Phiroze Jeejeebhoy Towers, Dalal Street, Mumbai-400 001. 2.00 p.m. | Shri N. Rangachary Shri T. S. Narayanasami Dr. R. N. Nigam Smt. Jayshree Vyas Shri Ashishkumar Chauhan Shri P. S. Reddy |
To ensure smooth functioning of the company, the Board has constituted various Board committees, including Audit Committee, Remuneration / Compensation and Organization Committee, Nomination Committee and Ethics Committee. c. Board Procedures The Board meetings are governed by the predetermined agenda. The Agenda alongwith the comprehensive notes and background material are circulated well in advance before each meeting to all Directors for facilitating effective discussion and decision making. The information as specified in Annexure IA to the clause 49 of the Listing Agreement is regularly made available to the Board. The proceedings of the meetings of the Board and its committees are recorded in the form of minutes and the draft minutes are circulated to the Board / Committee for perusal. The important decisions taken at the Board meetings are communicated to the concerned departments promptly. d. Committees of the Board There are five Committees of the Board, viz. Audit Committee, Share Allotment & Transfer Committee, Nomination and Remuneration Committee, Ethics Committee and Corporate Social Responsibility Committee. The Board decides terms of reference for these committees. The minutes of the committees are placed before the Board for information. The details as to the composition, terms of reference, number of meetings and related attendance of these committees are provided hereunder:
I. Audit Committee a) Composition of the Committee The Audit Committee consists of 5 non-executive directors, out of which two third are independent/public interest directors. The members on the Audit Committee possess expertise in the fields of finance, accounting, banking and capital market. The Statutory Auditors, internal and concurrent auditors and heads of functional departments are permanent invitees to the Audit Committee meetings. The Company Secretary acts as the secretary to the Committee. The scope of activities and terms of reference of the Audit Committee is as set out in Clause 49 of the Listing Agreement read with Section 177 of the Companies Act, 2013. The following directors are members of the Committee: 1. Shri N. Rangachary 2. Shri T. S. Narayanasami 3. Dr. R. N. Nigam 4. Smt. Jayshree Vyas 5. Shri Ashishkumar Chauhan b) Role of the Audit Committee The Audit Committee overviews the financial reporting process and disclosure of financial information. The Committee examines the annual financial statements and discusses in detail the adequacy of financial control systems with the external and internal auditors. The Committee recommends appointment of internal, concurrent and statutory auditors and reviews reports submitted by internal and concurrent auditors. It also oversees the operations of depository participants on the basis of the audit and inspection reports submitted by the company’s own inspection teams.
c) Meetings and Attendance The Committee met four times during the 2014-15 i.e. on 3rd May 2014, 22nd July, 2014, 11th October 2014 and 21st January 2015. The record of attendance of the members of the Committee at these meetings is given hereunder: Sr. No. | Name of the member | No. of meetings held during the tenure | No. of meetings attended | 1. | Shri N. Rangachary | 4 | 4 | 2. | Shri Ashish Kumar Chauhan | 4 | 3 | 3. | Shri T. S. Narayanasami | 4 | 4 | 4. | Dr. R.N.Nigam | 4 | 4 | 5. | Shri B.V.Chaubal* | 3 | 3 | 6. | Smt. Jayshree Vyas | 4 | 4 |
*Resigned w.e.f. 31st December 2014 II. Nomination and Remuneration / Compensation Committee As per section 178(2) of the Companies Act, 2013 every listed company and such other class or classes of companies, as may be prescribed are required to constitute the Nomination and Remuneration Committee consisting of three or more non-executive directors out of which not less than one-half shall be independent directors. The company had in the past constituted two separate committees viz. Nomination Committee and Remuneration / Compensation. Therefore to comply with the provisions of the Companies Act, 2013 which came into effect from 1st April, 2014, the two committees were merged into one Nomination and Remuneration/Compensation Committee and reconstituted the same with following non- executive directors on 21st January, 2015: Shri T. S. Narayanasami, Chairman Shri N. Rangachary Smt. Jayshree Vyas Shri Ananth Narayan The Committee’s terms of reference includes identifying suitable candidates for various director positions, reviewing annually the remuneration to be paid to the whole time directors and employees and recommending fixation / revision in the remuneration for approval of the Board within the maximum limit approved by the members. Other responsibilities include reviewing and changing corporate governance policies. The Committee also decides on recruitment and personnel policy of CDSL. The record of attendance of the members of the Remuneration / Compensation and Organisational Committee meeting is given hereunder: Sr. No. | Name of the member | No. of meetings held during the tenure | No. of meetings attended | 1 | Shri N. Rangachary | 2 | 2 | 2 | Shri T. S. Narayanasami | 2 | 2 | 3 | Shri Ashishkumar Chauhan | 2 | 1 | 5 | Shri Neeraj Swaroop | 1 | 1 | 6 | Dr. R. N. Nigam | 2 | 1 | 7 | Smt. Jayshree Vyas | 2 | 2 | 8 | Shri B. V. Chaubal | 2 | 2 | 9. | Shri. Ananth Narayan | 1 | 1 |
The record of attendance of the members of the Nomination Committee meeting is given hereunder: Sr. No. | Name of the member | No. of meetings held during the tenure | No. of meetings attended | 1 | Shri T. S. Narayanasami | 2 | 2 | 2 | Shri N. Rangachary | 2 | 2 | 3 | Shri Ashishkumar Chauhan | 2 | 1 | 4 | Dr. R. N. Nigam | 2 | 1 | 5 | Shri V. Balasubramaniam | 2 | 2 | 6 | Smt. Jayshree Vyas | 2 | 2 | 7 | Shri Ananth Narayan | 2 | 2 | 8 | Shri B. V. Chaubal | 2 | 2 |
The record of attendance of the members at the reconstituted Nomination & Remuneration Committee meeting is given hereunder: Sr. No. | Name of the member | No. of meetings held during the tenure | No. of meetings attended | 1 | Shri N. Rangachary | 1 | 1 | 2 | Shri T. S. Narayanasami | 1 | 1 | 3 | Smt. Jayshree Vyas | 1 | 1 | 4 | Shri Ananth Narayan | 1 | 0 |
III. Corporate Social Responsibility Committee : As mentioned in Section 135 of the Companies Act, 2013 every company having net worth of rupees five hundred crore or more, or turnover of rupees one thousand crore or more or a net profit of rupees five crore or more during any financial year shall constitute a Corporate Social Responsibility Committee of the Board consisting of three or more directors, out of which at least one director shall be an independent director. In view of the above provisions your Company has formed a Corporate Social Responsibility Committee which is composed as under: 1. Shri N. Rangachary, Chairman 2. Smt. Jayshree Vyas 3. Dr. R. N. Nigam The Committee is responsible for identifying eligible CSR projects/activities and recommend to the Board expenditure to be incurred in this behalf and supervises the end use of funds. Meeting of Independent Directors (Public Interest Directors) During the year under review, the IndependentDirectors met three times i.e. on 22nd July, 2014, 21st January, 2015 and 24th March, 2015 to review the performance of the company and to exchange the views on critical issues. The Committee at its meeting held on 24th March, 2015 carried out evaluation of the performance of non independent directors, Board as a whole and its committee and the Chairperson of the Company. All the Independent Directors were present at the meeting. Details of remuneration paid to the directors Managing Director Currently the Board consists of only one Whole Time director viz. Shri P. S. Reddy, Managing Director & CEO. The remuneration payable to him has been approved by the Remuneration / Compensation and Organizational Committee. The remuneration payable to him is commensurate with the responsibility conferred upon him by the Board and scope of its operations. The Remuneration includes basic salary, performance linked incentive, other allowances, company’s contribution to provident fund and taxable value of perquisites. Non-Executive Directors: The non-executive Directors are paid remuneration by way of sitting fee. The Company pays sitting fee of Rs.25,000/- for attending each Board meeting and Committee meetings to the non-executive directors. The Chairman is paid sitting fee of Rs.50,000/- for attending each Board meeting and Committee meeting chaired by him. Details of the sitting fees/remuneration paid to the Non-Executive Directors and Managing Director & CEO during the year under review are as under: Name | Shri N. Rangachary | Shri T. S. Narayanasami | D. R. N. Nigam | Director Identification Number | 00054437 | 01786981 | 06566372 | Date of Birth | 10.06.1938 | 18.05.1949 | 21.02.1944 | Qualification | FCA, FICWAI, FCS | B.SC (Chennai University) | M.Com
(Delhi University) LLB, Post Graduate in Company Law Ph. D (Management Accounting) | Salary (Rs.) | - | - | - | Commission (Rs.) | - | - | - | Sitting fee (Rs.) | 1070000 | 590000 | 285000 | Other compensation (Rs.) | - | - | - | Total (Rs.) | 1070000 | 590000 | 285000 |
Name | Smt. Jayshree Vyas | Shri Ashishkumar Chauhan * | Shri Neeraj Swaroop $ | Director Identification Number | 00584392 | 00898469 | 00061170 | Date of Birth | 03.07.1953 | 16.03.1968 | 15.07.1958 | Qualification | B.Com CA with Advanced Accountancy (The Institute of Chartered Accountants of India & Financial Management) | B.Tech. in mechanical engineering (IIT), Post Graduate Diploma in Management (IIM) | MBA (IIM, Ahmedabad) Engineering Graduate (IIT, Delhi) | Salary (Rs.) | - | - | - | Commission (Rs.) | - | - | - | Sitting fee (Rs.) | 420000 | 195000 | 0 | Other compensation (Rs.) | - | - | - | Total (Rs.) | 420000 | 195000 | 0 |
Name | Shri V. Balasubramaniam*# | Shri B. V. Chaubal*@ | Shri Ananth Narayan % | Director Identification Number | 00625701 | 06497832 | 05250681 | Date of Birth | 30.07.1971 | 22.12.1954 | 18.05.1969 | Qualification | M.Com (Mumbai University) ICWAI Certified Information Systems Auditor | Post Graduate IIT, Mumbai | B. Tech (Electrical Engg.), Indian Institute of Technology (IIT) Bombay MBA, Indian Institute of Management (IIM) Lucknow | Salary (Rs.) | - | - | - | Commission (Rs.) | - | - | - | Sitting fee (Rs.) | 225000 | 260000 | 0 | Other compensation (Rs.) | - | - | - | Total (Rs.) | 225000 | 260000 | 0 |
Name | Shri P.S. Reddy | Director Identification Number | 01064530 | Date of Birth | 20.02.1963 | Qualification | B.A. (Economics), (Andhra University, Visakhapatnam) M.A. (Economics), (University of Hyderabad, Hyderabad) | Salary (Rs.)** | 8063485 | Perquisites (Rs.)** | 54,331 | Total salary to director | 81,17,816 | Sitting fee (Rs.) | - | Provident Fund | 5,02,128 | Variable compensation (Rs.) | 13,80,270 | Director remuneration (Rs.) | 1,00,00,210 |
* Sitting Fees are paid to the Nominating Institutions. $ Shri Neeraj Swaroop, Nominee Director of Standard Chartered Bank Limited ceased to be shareholder Director w.e.f. 5th June, 2014. @ Shri B. V. Chaubal, Nominee Director of State Bank of India ceased to be shareholder Director w.e.f. 31st December 2014. # Shri V. Balasubramaniam, Nominee Director of BSE Limited ceased to be shareholder Director w.e.f. 5th March, 2015. % Standard Chartered Bank does not wish to receive any sitting fees for the Board meetings attended by its Nominee Director on the Board. **Salary includes, sum total of Basic, HRA, MA, LTA, Leave Encashment paid during the year 2014-15. Perquisite includes cash reimbursement of Rs.39600 + Medical reimbursement of Rs.14331. The Company has not granted any Stock Options to any of its Directors. Annual Evaluation by the Board of its own performance and that of its Committees and Individual Directors: As required under section 178(2) of the Companies Act, 2013 and under Schedule IV to the Companies Act, 2013 on Code of conduct for Independent Directors, a comprehensive exercise for evaluation of the performances of every individual director, of the Board as a whole, its Committees and of the Chairperson of the Company has been carried by your company during the year under review as per the evaluation criteria approved by the Board and based on guidelines given in Schedule IV to the Companies Act, 2013. For the purpose of carrying out performance evaluation exercise, four types of Evaluation forms were devised in which the evaluating authority has allotted to the individual Director, the Board as a whole, its Committees and the Chairperson, appropriate rating such as Excellent, Very Good, Good or Satisfactory depending upon the performance. Such evaluation exercise has been carried out (i) on Independent Directors by the Board on 25th April, 2015. (ii) on Non-Independent Directors by all the Independent Directors in separate meeting held for the purpose on 24th March, 2015. (iii) on the Board as a whole and its Committees by all the Independent Directors in separate meeting held for the purpose on 24th March, 2015. (iv) on the Chairperson by the Independent Directors in separate meeting held on 24th March, 2015 after taking into account the views of the Executive/Non-Executive Directors (v) on individual Directors by the Nomination and Remuneration Committee on 24th March, 2015. Having regard to the industry, size and nature of business your company is engaged in, the evaluation methodology adopted is, in the opinion of the Board, sufficient, appropriate and is found to be serving the purpose. Directors with materially significant, pecuniary or business relationship with the company Notes to Financial Statements furnish the transactions with related parties, as stipulated under Accounting Standards. Apart from the related party transactions mentioned in the notes, there are no transactions of material nature with the Directors which may have conflict of interest with the company. There is no pecuniary or business relationship between the Non-executive Directors and the company.
General Body Meetings : | 14th Annual General Meeting | 15th Annual General Meeting | 16th Annual General Meeting | Day & Date | Monday 28th May, 2012 | Monday 10th June, 2013 | Thursday, 5th June, 2014 | Time | 2.30 p.m. | 1.30 p.m. | 2.00 p.m. | Venue | BSE Board Room, 26th Floor, Phiroze Jeejeebhoy Towers, Dalal Street, Mumbai- 400 001 | BSE Board Room, 26th Floor, Phiroze Jeejeebhoy Towers, Dalal Street, Mumbai- 400 001 | BSE Convention Hall, First Floor, Phiroze Jeejeebhoy Towers, Dalal Street, Mumbai- 400001 | Book Closure | - Nil - | - Nil - | - Nil - | Payment of Dividend | Rs. 1.5 per share i.e.15% | Rs. 2 per share i.e. 20% | Rs. 2 per share i.e. 20% | Dividend payment date | 28th May, 2012 | 10th June, 2013 | 5th June, 2014 | No. of Special resolutions set out at the AGM | 1 | 1 | 2 |
All special resolutions set out in the notices of the Annual General Meetings were passed by the shareholders by show of hand method at the respective meetings with requisite majority. CEO / CFO Certificate As required by Clause 49(V) of the Listing Agreement, the CEO/ CFO Certificate for the FY 2014-15 signed by Shri P. S. Reddy, Managing Director & CEO and Shri Bharat Sheth, Chief Financial Officer form part of the Annual Report.
Disclosures Disclosures on materially significant related party transactions Your Company has not entered into any transaction of a material nature except transactions with related parties which are furnished under “Related Party Disclosure”. Related party transactions The Members of the Company have, vide Special Resolution passed in the 16th Annual General Meeting held on 5th June, 2014, consented to the Company entering into Related Party Transactions to the extent of Rs.1100 lakhs during the year 2014-15. In accordance with the Members’ consent your company has entered into transactions with related party within the aforesaid limit. All such transactions were in the ordinary course of business and on an arm’s length basis. Although the provisions of Section 188 of the Companies Act, 2013 are not attracted, your company had sought Members’ approval for all related party transactions as a measure of good corporate governance. Suitable disclosure as required by the Accounting Standards (AS18) has been made in the notes to the Financial Statements. Similarly, a Special Resolution has also been proposed in the Notice convening 17th Annual General Meeting seeking Members’ approval for related party transactions to the extent of Rs.10 Crores to be entered into with related parties during the financial year 2015-16. Details of non-compliance(s) by the company Your company has complied with all the requirements of the Securities and Exchange Board of India (SEBI) on matters related to Capital Markets or any other matter, as may be applicable from time to time. There were no penalties imposed or strictures passed against the company by the statutory authorities in this regard. Compliance with mandatory requirements Your company has complied with all the mandatory requirements of the Code of Corporate Governance as stipulated under Clause 49 of the Listing Agreement to the extent they are applicable to a depository. A certificate from M/s. Pramod S. Shah & Associates, Practicing Company Secretaries confirming the compliance, is annexed to the Directors’ Report and forms part of the Annual Report. Your Company maintains the expenses relating to the office of the non-executive Chairman and reimburses all the expenses incurred in performance of his duties. All the independent directors of the company possess the requisite qualifications and experience which enable them to contribute effectively to the company. Audit Qualifications During the period under review, there are no audit qualifications in the Company’s financial statements. The Company continues to adopt the best practices to ensure a regime of unqualified financial statements. Training of Board Members Periodical updating of knowledge and the legal provisions applicable to your Company and the Directors is considered necessary. The companies Act, 2013 also requires independent directors to be well equipped. In the year under review two of the independent directors viz. Shri N. Rangachary and Dr. R. N. Nigam had undergone a 3 day training programme on "Directors' Development Programme (DDP)" organized by the ICSI Governance Research and Knowledge Foundation, promoted by the Institute of Company Secretaries of India. Whistle Blower Policy Your Company has adopted a Whistle Blower Policy with an objective to provide employees a framework and to establish a formal mechanism or process whereby concerns can be raised in line with the Company’s commitment to highest standards of ethical, moral and legal business conduct and its commitment to open communication. In accordance with the Policy and to comply with the Code of Ethics for Directors and Key Management Personnel as prescribed under SEBI (Depositories and Participants) (Amendment) Regulations, 2012, an Ethics Committee has been constituted comprising of Shri. N. Rangachary, Shri T. S. Narayanasami and Smt. Jayshree Vyas. The employees can make Disclosures to the Ethics Committee regarding any malpractices or event or activity that may have occurred in the organization and which may be considered as unethical or fraudulent. The employees may, where the matters are of grave nature, make Protected Disclosures directly to the Chairperson of the Ethics Committee of the Board of Directors of the Company. Means of Communications · The company issues communiqués to its depository participants and to Registrar and Transfer Agents as and when necessary. · Beneficial Owners registered for CDSL’s internet services easi and easiest can view and monitor their accounts online. · Beneficial Owners registered for CDSL’s SMS alert facility SMART are informed about any debit in their accounts by way of SMS. · The website of the Company www.cdslindia.com acts as the primary source of information regarding the operations of the Company. Important developments in the depository, financial results and media releases are being displayed on the Company’s website www.cdslindia.com. · ‘CDSL Infoline’, a bi-monthly publication and e-infoline, a monthly publication of the company, provides latest updates to the market participants. · Your Company also allows DPs to submit BO Grievance Reports and internal audit reports electronically. · The Company has 14 shareholders as on March 31, 2015. The main channel of communication to the shareholders is through annual report which includes inter alia, the Directors’ report, the Auditors’ report, Report on corporate governance, Audited financial statements and other important information. The quarterly results of the company are displayed on the website. · The Annual General Meeting is the principal forum for face-to-face communication with shareholders, where the Board responds to the specific queries of the shareholders. Code of Conduct The Board has laid down a Code of Conduct for all Board members and Key Management Personnel of the Company. All Board members and Key Management Personnel have affirmed compliance with the Code. The declaration to this effect signed by Shri P. S. Reddy, Managing Director and CEO forms the part of the report.
General Shareholder Information Seventeenth Annual General Meeting Day & Date | Thursday, 11th June, 2015 | Time | 3.15 p.m. | Venue | CDSL Board Room, 16th Floor, P.J. Towers, Dalal Street, Mumbai 400001. | Book Closure | - Nil - | Payment of Dividend | 22% | Dividend payment date | 11th June, 2015 |
Financial Year: The company’s Financial Year commences from 1st April and ends on 31st March of the following year. Listing on Stock ExchangeThe shares of the company are not listed on any Stock Exchange. Registrar and Transfer Agent The company has established in-house facility for the purpose of recording issue/ transfer of shares in both physical and dematerialized form. Hence the company has not appointed any Registrar and Transfer Agent. Share Transfer System: The company has Share Allotment and Transfer Committee. The Committee consists of non-executive directors. Shri N. Rangachary is the Chairman of the Committee. Shareholding Pattern The company’s issued and paid up capital of Rs.104.50 crores consists of 10.45 crore shares of Rs.10/- each. Details of the shares held by different shareholders as on 31st March, 2015 are as follows: Sr. No. | Name | No. of Shares held | Percentage | 1. | BSE Limited | 56,634,600 | 54.20 | 2. | Bank of India | 5,820,000 | 5.57 | 3. | Bank of Baroda | 5,300,000 | 5.07 | 4. | State Bank of India | 10,000,000 | 9.57 | 5. | HDFC Bank Ltd. | 7,500,000 | 7.18 | 6. | Standard Chartered Bank Limited | 7,500,000 | 7.18 | 7. | Canara Bank | 6,744,600 | 6.45 | 8. | Union Bank of India | 2,000,000 | 1.91 | 9. | Bank of Maharashtra | 2,000,000 | 1.91 | 10 | The Calcutta Stock Exchange Limited | 1,000,000 | 0.96 | 11. | Others | 800 | Negligible | | Total | 104,500,000 | 100.00 |
Annual Report Annual Report containing, inter alia, Audited Accounts, Directors’ Report, Auditors’ Report, Consolidated Financial Statements and other related information is circulated to all shareholders. The Management Discussion and Analysis Report and the Corporate Governance Report annexed to the Directors’ Report also forms part of the Annual Report. Address for Correspondence Any query on Annual Report may be addressed to Shri Satish Budhakar, Senior Vice President & Group Company Secretary at the following address: Central Depository Services (India) Limited 17th Floor, Phiroze Jeejeebhoy Towers, Dalal Street, Mumbai - 400001 Tel : (Direct) 022 – 22722847 / 22728432 (Board) 22723333 / 22723224 Fax : 022 – 22722072 Email : satishb@cdslindia.com For and on behalf of the Board Sd/- Place : Mumbai N. Rangachary Date : 25th April, 2015 Chairman (00054437)
Form No. MR-3 SECRETARIAL AUDIT REPORT FOR THE FINANCIAL YEAR ENDED 31st MARCH, 2015 [Pursuant to section 204(1) of the Companies Act, 2013 and rule No.9 of the Companies (Appointment and Remuneration Personnel) Rules, 2014] To, The Members, Central Depository Services (India) Limited We have conducted the secretarial audit of the compliance of applicable statutory provisions and the adherence to good corporate practices by Central Depository Services (India) Limited (hereinafter called the Company). Secretarial Audit was conducted in a manner that provided us a reasonable basis for evaluating the corporate conducts/statutory compliances and expressing our opinion thereon. Based on our verification of Central Depository Services (India) Limited’s books, papers, minute books, forms and returns filed and other records maintained by the company and also the information provided by the Company, its officers, agents and authorized representatives during the conduct of secretarial audit, we hereby report that in our opinion, the company has, during the audit period covering the financial year ended on 31st March 2015, complied with the statutory provisions listed hereunder and also that the Company has proper Board-processes and compliance mechanism in place to the extent, in the manner and subject to the reporting made hereinafter: We have examined the books, papers, minute books, forms and returns filed and other records maintained by the Company for the financial year ended on 31st March, 2015 according to the provisions of: (i) The Companies Act, 2013 (the Act) and the rules made there under; (ii) The Depositories Act, 1996 and the Regulations and Bye-laws framed there under We have also examined compliance with the applicable clauses of the following: (i) Secretarial Standards issued by The Institute of Company Secretaries of India. During the period under review the Company has complied with the provisions of the Act, Rules, Regulations, Guidelines, Standards, etc. mentioned above.
We further report that The Board of Directors of the Company is duly constituted with proper balance of ExecutiveDirectors, Non-Executive Directors and Independent Directors. The changes in the composition of the Board of Directors that took place during the period under review were carried out in compliance with the provisions of the Act. Adequate notice is given to all directors to schedule the Board Meetings, agenda and detailed notes on agenda were sent at least seven days in advance, and a system exists for seeking and obtaining further information and clarifications on the agenda items before the meeting and for meaningful participation at the meeting. Majority decision is carried through while the dissenting members’ views are captured and recorded as part of the minutes. We have relied on the representation made by the Company, its Officers and Reports of the Statutory Auditor, Internal Auditor for systems and mechanism framed by the Company for compliances under other Acts, Laws and Regulations applicable to the Company as listed in Annexure 1. We further report that there are adequate systems and processes in the company commensurate with the size and operations of the company to monitor and ensure compliance with applicable laws, rules, regulations and guidelines. (as mentioned above and listed in Annexure I ) We further report that during the audit period there were no specific events/ actions having a major bearing on the Company’s affairs. Place : Mumbai Date : 17/04/2015 Pramod Shah-Partner Pramod S. Shah & Associates FCS No.: 334 C P No.: 3804
Annexure I to Secretarial Audit Report 1. Employees’ Provident Fund Act,1952 and Rules 2. Professional Tax Act,1975 and Rules 3. Payment of Gratuity Act, 1972 4. Employees State Insurance Act, 1948 5. Equal Remuneration Act, 1976 6. Minimum Wages Act, 1948 7. Payment of Bonus Act, 1965 8. Shop and Establishment Act, 1948 9. Contract Labour Act, 1970 10. Labour Welfare Fund Act, 1953 11. Maternity Benefit Act, 1961 12. Income Tax Act, 1961
Annex CManagement Discussion and Analysis Report1. Introduction Your Company is engaged in the business of providing depository services in India in respect of various types of securities through depository participants. As a depository, your company is an important Market Infrastructure Institution and has put in place necessary infrastructure for recording allotment and transfer of securities in dematerialized form and to protect the interest of the investors. 2. Industry Structure and Developments As a depository, CDSL extends its services to investors through depository participants who provide an interface between the depository and the beneficial owners. The clearing corporations of stock exchanges are electronically connected for processing settlement of transactions. The activities like dematerialization and rematerialisation of securities, corporate actions such as issue of rights and bonus shares, consolidation, subdivision and redemption of securities are carried out by the issuers of securities or their Registrars and Transfer Agents who have established electronic connectivity with your company. To leverage the infrastructure and information for the benefit and protection of investors with a view to make the capital market a safer place, your company has launched many investor friendly systems such as TRUST, DNR database, CAS, etc. Gaining the experience over a period of 16 years of its operations, CDSL has leveraged its expertise by setting up CDSL Ventures Limited – the 1st KYC Registration Agency in the country and Central Insurance Repository Limited for demat of insurance policies. 3. Opportunities and Threats We believe that the competitive advantage in the services CDSL offers will set it apart as the depository of choice. Through efficient systems and processes and a customer centric approach, CDSL aims to be both differentiated and relevant to the needs of the investor. This is being done by focusing on increasing efficiencies, continuing investment in technologies, robust risk management systems and complete bouquet of products / services. Opportunities The Honorable Finance Minister in the Union Budget for FY 2014-15 expressed the government's commitment to introduce a single operating demat account as well as uniform KYC norms and inter-usability of KYC records across the entire financial sector, in order to encourage wider participation in Indian financial markets. The Government has managed to get Key Bills passed like Coal Mines Bill, Mines & Minerals Bill and Insurance Amendments Bill. Due to reforms carried out by the government, the economy is expected to pick up momentum. This will lead to increase in activity in Primary & Secondary Markets. The Ministry of Corporate Affairs (MCA) has notified that every listed company or a company having not less than one thousand shareholders should provide their shareholders a facility to exercise their right to vote at general meetings by electronic means. Further, SEBI has already made it mandatory for all the listed companies to register for e-Voting, in case of any Postal Ballots and General Meetings. CDSL has been offering e-Voting facility from November 2009 and more than 3500 companies have signed the agreement for availing of its e-Voting facility. Threats Although leading Indian Capital Market indices have gone up by 25% in the FY 2014-15, we could see some difficult times in future. This is due to above average market valuations and slow revival in Corporate Earnings. Further, the likely hike in interest rates by the US Fed reserve may lead to outflows from equity markets in India by Foreign Investors. This may lead to increased volatility in capital markets. During FY 2014-15, 33 DPs surrendered their DP registrations. Many DPs are finding it unviable to remain in this business due to increase in compliance and operational costs and therefore, surrender their DP registrations. DPs are the faces of the depository for BOs and a continuation of this trend may dent the availability of demat services. 4. Segment wise / product wise Performance The depository services of CDSL cannot be classified into different business segments or products. Its performance may, therefore, be viewed in an integrated manner from the data furnished hereunder: - Operational highlights:
Sr. No. | Particulars | Year ended 31st March, 2015 | Year ended 31st March, 2014 | Growth in percentage (%) terms | 1. | Beneficial Owner Accounts - Gross - Net | 13,087,397 9,610,002 | 11,829,968 8,777,049 | 10.63 9.49 | 2. | Holdings of securities | | | | Value (in million Rs.) | 13,942,638 | 10,876,032 | 28.20 | Volume (in million) | 206,012 | 177,311 | 16.19 | 3. | Number of Depository Participants | 574 | 578 | -0.69 |
b. Financial Performance The company registered a gross income of Rs. 1051.51 million in 2014–15 as against Rs. 1054.49 million in the previous financial year. The profit after tax amounted to Rs.350.66 million as against the net profit of Rs.414.03 million in the previous year, reflecting a decline of 15% over the previous year. The decline in Profit After Tax is mainly attributed to income to the extent of Rs. 130 million not booked for the year ended March 31, 2015 due to rollover of investments in Fixed Maturity Plans of mutual fund for a further period of 2 years. The financial performance of the company is mainly dependent on the capital market conditions.
Discussion on financial performance with respect to operational performance for the year 2013 - 14 1. Operating Revenues: The income from operations was Rs.855.93 million as against Rs.754.39 million for the previous year. The major contributors towards operational income were custodial fees from Issuers at Rs.354.63 million, Transaction charges at Rs.283.27 million and IPO / corporate action charges at Rs. 61.93 million. 2. Other Income : Other income consisting of interest on bank deposits, interest on debt investment, dividend from mutual funds, profit earned on sale of mutual fund units and rental income, was at Rs. 195.59 million, registering a decrease of 35% over the previous year. 3. Operating, Maintenance and Other expenses, Depreciation & Amortization: Total expenses including personnel cost, system maintenance charges, other expenses and depreciation amounted to Rs. 444.59 million as compared to Rs.417.51 million for the previous year. 4. Contribution to Beneficial Owners Protection Fund amounting to Rs.124.76 million is made in the current year as against Rs.129.10 million in the previous year. 5. Profit : (i) Profit Before Tax (PBT) amounted to Rs.499.03 million as against Rs.516.40 million for the previous year. (ii) A sum of Rs.148.37 million was provided for Income Tax for the year ended 31st March, 2015. The net profit for the year ended 31st March 2015 was Rs.350.66 million as against Rs.414.03 million for the previous year.
5. Future Outlook FY 2014-15 has been one of the best for equities in the last five years. FII and Mutual Fund inflows played a crucial role in keeping the capital market buoyant. The government plans to launch the disinvestment programme for 2015-16 for raising approximately Rs.69,500 crores through stake sale in government companies as compared to approximately Rs.24,200 crores raised in FY 2014-15. As per Asian Development Bank (ADB), India is all set to overtake China’s growth rate by clocking 7.8% GDP in 2015-16 and 8.2% during the following fiscal on the back of structural reforms and government’s “Pro-Investment” attitude. The International Monetary Fund (IMF) has also projected a growth rate of 7.5% for FY 2015-16. This will lead to significant pick up in Capital Market activities. Should this trend continue this augurs well for your company, whose major income component is closely linked to the number of debit transactions. 6. Risk Management Concurrent audit of all critical functional areas of the company like admission of Depository Participants, admission of securities, registration of RTAs, corporate actions etc. is carried out by an independent firm of Chartered Accountants. Operational as well as financial areas are covered in the internal audit which is carried out by the independent firm of Chartered Accountants. Assets verification and detecting revenue leakages, if any, fall within the scope of internal auditors. Post audit reviews are carried out to ensure follow up on the observations made. The scope of the internal and concurrent audit is determined by the Audit Committee and the audit reports are reviewed by this Committee on regular basis. A Risk Management Committee has been constituted to assess and recommend strategies to mitigate the risks involved in depository and depository participant business. SEBI vide its circular no. CIR/MRD/DP/1/2015 dated January 12, 2015 advised the depositories to appoint a Chief Risk Officer and to establish a clear comprehensive and well documented risk management framework to continuously identify, evaluate and assess applicable risks in depository system, suggest measures to mitigate risk wherever applicable. The Board consequently appointed Shri Satish Budhakar as Chief Risk Officer who shall organize meetings of risk management Committee and report to the Board. The company also appointed M/s M. P. Chitale & Co. for risk assessment and preparation of Risk Management policy of CDSL. They are expected to submit their report shortly. As a risk management measure, SMS alerts are sent by CDSL directly to BOs for any debit transaction, modifications in important client details like address, nominee etc., pledge transactions, credits received through dematerialization, IPOs and /or corporate actions. CDSL has continued with its policy to lay more stress on compliance so as to ensure that the integrity of the depository system is not compromised, since this is a key driver for sustainable growth. CDSL has also obtained a Special Contingency Insurance Policy to cover risks associated with Securities Depository Operations with indemnity limit of Rs.50 Crores (Any one Accident) and Rs.100 Crores (Any one Year) covering the company and its depository participants. The aforesaid policy also covers Cyber Risk Liability with a sub- limit of Rs.20 Crores. CDSL has also taken an insurance policy covering risks associated with operations in warehouse receipts held in electronic form with indemnity limit of Rs.5 Crores (Any one Accident) and Rs.10 Crores (Any one Year). CDSL performs periodic Information Systems Audit with a view to secure its IT environment and to improve various IT related processes. The comprehensive System Audits which covers entire IT infrastructure is carried out by external system auditors. CDSL has undergone recertification audit and is now certified for ISO 27001:2013. CDSL is also certified with coveted ISO 22301:2012 certification for its Business Continuity Management System. The compliance of audit is done promptly, the progress of which is monitored by IT Strategy Committee.
7. Monitoring of DP Operations Evaluation of adequacy of internal controls and procedures of the DPs is done by CDSL through annual inspections. Over and above the annual supervision, as mandated by SEBI, the DPs are required to upload their operational data and other information in a Risk Assessment Template to CDSL on half yearly basis to enable risk based assessment and rating of DPs as per their risk exposure. A module has been developed by CDSL for risk rating of its DPs. SEBI will issue guidelines on frequency of inspection and size of sample for inspection of DPs based on their risk rating. The depository participants have also to mandatorily appoint independent Chartered Accountant firms / Company Secretary / Cost Accountantto conduct concurrent audit of risk prone areas on 100% basis. This is in addition to the internal audit that they are required to carry out and submit report to CDSL every half year. CDSL also conducts regular inspection of depository participants and Registrar and Transfer Agents in order to improve the efficiency of operations of depository participants and ensure compliance with regulatory provisions. To enhance the overall compliance level, CDSL has taken initiatives to educate depository participants across the country. CDSL conducts compliance training programmes for depository participants. To ensure that internal auditors of depository participants are equipped with knowledge about depository participant operations, CDSL conducts training for internal auditors of depository participants with special focus on auditing tools and procedures. During the year CDSL conducted inspection of 573 Main DPs, 139 live connected branch DPs and 503 service centers (total 1215). Some of the common non-compliances observed were viz: KYC documents not uploaded to KRA within 10 days of opening of account, in case of rejection of demat request, share certificates and rejection letter received from RTA not returned to the concerned BO within 7 days, in case of off-market transfer, consideration/purpose not mentioned on DIS, details of verification with BO not mentioned on DIS for transactions in dormant account, all associated persons have not passes NISM Series VI examination, risk based client categorization as required under PMLA not done, income details of the clients not captured in the system etc. During the year 30 DPs were referred to the Disciplinary Action Committee. A penalty of Rs.1,32,200/- was imposed on 25 DPs for various non compliances and warning letters were issued to 5 DPs for delayed submission of compliance. Cautionary Statement: Observations made in the Management Discussion and Analysis describing CDSL’s objectives, expectations, aspirations and projections are based on experience relating to behavioural pattern of capital market. Actual results may vary in tandem with the capital market conditions and regulatory environment. For and on behalf of the Board Sd/- Place : Mumbai N. Rangachary Date : 25th April, 2015 Chairman (00054437)
Annex D Profile of Directors seeking appointment /reappointment at the Annual General Meeting. Shri Ananth Narayan G. Shri Ananth Narayan G., presently, is a Regional Head, Financial Markets, South Asia in Standard Chartered Bank Ltd. He has 20 years of experience in the banking industry. He holds a B. Tech (Electrical Engg.) from Indian Institute of Technology (IIT) Bombay and a MBA from Indian Institute of Management (IIM) Lucknow. He joined Standard Chartered Bank in August 2009. As Regional Head of Financial Markets in Standard Chartered Bank, he has responsibility for business strategy, performance and people for Financial Markets across South Asia. Prior to Standard Chartered Bank he was with Citibank in Mumbai till 2005 (Director & Head of FICC Trading), and with Deutsche Bank in Mumbai (Head of Rates Sales & Trading, South Asia – till August 2009). He is a director on the board of Fixed Income Money Market and Dealers Association (FIMMDA), on the board of Standard Chartered Securities (India) Ltd. He has been a part of various RBI committees (including the one that launched FX Options in India, Interest Rate Futures, Financial Stability, Financial Benchmarks etc). He appears in print and television media for views on financial markets. He is passionate about learning, ethics & integrity, people, collaboration, and innovation. Shri Parveen Kumar Gupta Shri Parveen Kumar Gupta is the Deputy Managing Director and Chief Financial Officer of the State Bank of India. He is also the Group Executive (Global Markets). Mr. Gupta joined State Bank of India in the year 1982 and has held various important assignments in the bank in India and abroad, some of which are as under: · Chief General Manager (Global Markets) looking after Bank’s treasury operations, including the Bank’s Investment Portfolio, Forex, Money Market and Equities market operations. · Chief General Manager of Bhubaneswar Circle of the Bank, heading the Bank’s operations in the State of Odisha. · General Manager – Network 1 at the State Bank of India Local Head Office at Guwahati, responsible for the Bank’s business in the States of Assam and Arunachal Pradesh. · Dy. Chief Executive Officer of the SBI Macquarie Infrastructure Fund, a Private equity Fund promoted by State Bank of India along with Macquarie Bank of Australia and IFC, Washington. · Chief Executive Officer of the Bahrain Offshore Banking Unit and the Regional Head for the Bank’s operations Middle East and North Africa regions. He worked earlier at Bank’s London office also. He is a Bachelor of Commerce, Associate Member of the Institute of Company Secretaries of India and Associate of the Indian Institute of Bankers Shri Ashishkumar Chauhan Shri Ashishkumar Chauhan currently works as the MD and CEO of BSE Ltd., the first stock exchange of India. BSE is ranked as the largest exchange in the world in terms of number of stocks listed. He has been given the Distinguished Alumnus Award for the year 2014 by his alma mater, Indian Institute of Technology, Bombay. In 2014, he has also received the best CEO in the Financial Markets in the Asia Pacific by the Asian Banker. He has been ranked amongst the 60 most influential Gujaratis in the world for last 2 consecutive years by Chitralekha, the largest selling Gujarati magazine. He was also ranked amongst the top 50 Chief Information Officer (CIO) by several magazines and institutions between 2005 and 2009 including CIO Magazine US, Information Week, US etc. Shri Ashishkumar Chauhan is best known as the father of modern financial derivatives in India. He was part of a small team of 5 people selected from IDBI to set up National Stock Exchange (NSE). At NSE, he set up the first commercial satellite network, initial technology platform, Nifty index, NSE’s certification in financial markets (NCFM), listing, derivatives markets etc. At BSE, he has been responsible to bring the fastest trading system in India with 200 microseconds response time. In addition, he has also been responsible for revamping of BSE Ltd., bringing equity, currency and interest rate derivatives to BSE Ltd., introducing mobile trading system in India and several other achievements. He is considered as one of the foremost experts in financial market policies, microstructure, Information technology, organized retail, telecommunications, Indian social issues, cricket etc. He also worked as the CEO of a cricket team in its formative years – Mumbai Indians in addition to his role as the President and CIO of Reliance group. He currently serves on the Board of ICCL, CDSL, BSE Institute Limited and Marketplace Technologies Limited. He is also a member of the Board of Governors of IIIT D&M, Jabalpur. He also serves as the Chairman of the Advisory Committee on Technology of FMC, member of several SEBI committees (including Primary Market Advisory Committee and Secondary Market Advisory Committee), Technical Advisory Committee (TAC) on Money, Foreign Exchange and Government Securities Markets of RBI and has served on various other government and regulatory committees; CBDT and FMC, among others in the past. He is also a member of the UK-India Financial Partnership constituted by the Ministry of Finance, Government of India. He is a member of the National Executive Committee and the Capital Markets Committee of FICCI as well as FICCI’s Inclusive Governance Council, National Committee on Capital Markets and National Council on Financial Sector Development of CII. He also serves on the managing committee of Indian Merchants Chamber. He is on the International Leadership Council of Ryerson Futures, an accelerator program that selects and assembles top technology based startups globally. He is also a distinguished visiting professor at the Ryerson University in Toronto, Canada. He and his writings have been quoted in various magazines, newspapers and other media - worldwide over last 2 decades. Shri Ashishkumar Chauhan holds a B.Tech in Mechanical Engineering from IIT Bombay and PGDM from IIM Calcutta.
Annex E Statement under Section 134(3) of the Companies Act 2013 read with the Rule (5)(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 and SEBI (Depositories and Participants)(Amendment) Regulations 2012 Name & Qualification | Age in years | Designation | Remuneration received (Rs.) | Experience (No. of years) | Date of commencement of employment | Last employment & designation | Shri P. S. Reddy M.A. | 52 | MD & CEO | 1,00,00,210* | 27 | 8th November, 2006 | BSE Chief General Manager – Surveillance & Inspection | Shri. Joydeep Dutta MS (Computer Science) B.E | 55 | CTO | 39,02,454 | 30 | 7th July, 2014 | CIO Advisory & IT Consultant | Shri Cyrus Khambata M.Com, LLB, CAIIB | 59 | Executive Vice President | 66,76,602** | 38 | 18th May,1998 | Bank of India - Officer | Shri Bharat Sheth B.Sc., CA | 55 | Senior Vice President & CFO | 41,45,253 | 26 | 27th May, 1998 | Practicing CA | Shri Sunil Alvares M.Sc., MBA | 49 | Senior Vice President | 40,99,383 | 25 | 23rd July, 1998 | Karvy Consultancy Ltd.-Manager | Shri Ramkumar K. B.Sc., MBA | 44 | Senior Vice President | 38,15,824 | 22 | 27th September, 2000 | TATA Share Registry Ltd.-Executive | Smt. Nayana Ovalekar B.Com, CS | 46 | Senior Vice President | 40,02,046 | 26 | 13th October, 2003 | Stock Holding Corporation of India Ltd.-Officer on special duty- | Shri. Satish Budhakar M.Com, LLB, ACS, CAIIB | 57 | Senior Vice President & GCS | 41,17,344 | 38 | 6th October, 2006 | BOI Shareholding Ltd. Company Secretary |
Notes: - Remuneration includes basic salary, performance linked incentive, other allowances, company’s contribution to provident fund and taxable value of perquisites.
- The said executives are not relatives of any Directors of the company.
*PLB of Rs.13,80,207 will be paid after completion of 3 years. Hence not included in remuneration ** Remuneration paid to Shri Cyrus Khambata is reimbursed by CDSL Ventures Limited
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