A Oneindia Venture
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Mar 31, 2025
(*) Represent allotment of shares held in abeyance including bonus entitlements on such shares.
(a) The Exchange has only one class of shares referred to as equity shares having a par value of ? 2/-. Each holder of equity shares is entitled to one vote per share.
(b) Pursuant to the BSE (Corporatisation & Demutualisation) Scheme, 2005, (the Scheme) the Exchange had allotted 5,000 equity shares of ? 2/- each to each of those card based Members of the erstwhile Bombay Stock Exchange Limited whose names appeared on the Register of Members under Rule 64 in accordance with Rules, Bye-laws and Regulations, on the Record Date fixed for the purpose.
(c) Out of the total 4,77,75,000 equity shares of ? 2/- (including 4,41,00,000 bonus shares of ? 2/- each) issuable to the card based Members, the Exchange has allotted 4,71,25,000 equity shares (4,71,25,000 equity shares as on March 31, 2024) upon implementation of the BSE (Corporatisation and Demutualisation) Scheme, 2005 (âThe Schemeâ). The allotment of 6,50,000 equity shares (6,50,000 equity shares as on March 31, 2024) of ? 2/- each have been kept in abeyance for specific reasons pursuant to the provisions of the Scheme. However, all corporate benefits as declared from time to time, including dividend and bonus are accrued to all the 4,77,75,000 equity shares, as per the provisions of the Scheme.
(d) i) The holders of equity shares are entitled to dividends, if any, proposed by the board of directors and approved by the shareholder at the Annual General Meeting. ii) In the event of liquidation of the Company, the holders of equity shares will be entitled to receive any of the remaining assets of the Company, after distribution of preferential amounts. However, no such preferential amounts exists currently. The distribution will be in proportion to the number of equity shares held by the shareholders.
The general reserve created from time to time transfer profits from retained earnings for appropriation purposes. As the general reserve created by a transfer from one component of equity to another and is not an item of other comprehensive income, items included in general reserve will not be reclassified to the Statement of Profit and Loss.
The general reserve of ? 38 is earmarked towards issue of bonus shares held in abeyance.
Pursuant to the BSE (Corporatisation & Demutualisation) Scheme, 2005, (the Scheme) the balance in Contribution by Members, Forfeiture of Members Application Money, Technology Reserve, Stock Exchange building, Seth Chunnilal Motilal Library, Charity, Income and Expenditure Account as at 19th August, 2005 as appearing in the Exchange are transferred to Capital Reserve being reserves which shall not be used for purposes other than the operations of the Exchange.
The same reflects surplus/deficit after taxes in the Statement of Profit and Loss. The amount that can be distributed by the Company as dividends to its equity shareholders is determined based on the balance in this reserve and also considering the requirements of the Companies Act, 2013.
The following methods and assumptions were used to estimate the fair values:
(a) The fair value of the quoted bonds, debentures and equity shares are based on price quotations at reporting date.
(b) The fair value of unquoted instruments and other financial liabilities, as well as other non-current financial liabilities is estimated by discounting future cash flows using rates currently available for debt on similar terms, credit risk and remaining maturities, except for unquoted instruments where observable inputs are available.
(c) The fair values of the unquoted equity shares have been estimated using a discounted cash flow model. The valuation requires management to make certain assumptions about the model inputs, including forecast cash flows, discount rate, credit risk and volatility. The probabilities of the various estimates within the range can be reasonably assessed and are used in management''s estimate of fair value for these unquoted equity investments.
(d) In determining fair value measurement, the impact of potential climate-related matters, including legislation, which may affect the fair value measurement of assets and liabilities in the financial statements has been considered.
Level 1 - Quoted prices (unadjusted) in active markets for identical assets or liabilities.
Level 2 - Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).
Level 3 - Inputs for the assets or liabilities that are not based on observable market data (unobservable inputs).
Except as detailed in the above table, the Company consider that the carrying amounts of financial assets and financial liabilities recognised in the balance sheet approximate their fair values.
There were no transfers between Level 1 and 2 in the period.
The Company''s principal financial liabilities comprise trade and other payables, primarily to support its operations. Principal financial assets include trade and other receivables, and cash and short-term deposits derived directly from its operations.
The Company''s investment activities expose it to a variety of financial risks: credit risk, liquidity risk and market risk. The Company''s primary focus is to foresee the unpredictability of financial markets and seek to minimize potential adverse effects on its financial performance.
The Company does not engage in derivative trading for speculative purposes. The Board of Directors reviews and approves policies for managing each of these risks, which are summarised below:
Credit risk is the risk of financial loss to the Company if a customer or counterparty fails to meet contractual obligations, arising principally from the receivables and investment securities. It also arises from cash held with banks and financial institutions, including outstanding accounts receivable. The maximum exposure to credit risk is equal to the carrying value of the financial assets. The objective of managing counterparty credit risk is to prevent losses in financial assets, by assessing their financial position, past experience, adequate deposit and other factors.
⢠Trade and other receivables
The Company''s exposure to credit risk is influenced mainly by the individual characteristics of each customer.
The demographics of the customer, including the default risk of the industry in which the customer operates, also has an influence on credit risk assessment.
The Company provides the stock exchange services to its listed customers and registered members, operating with large number of customer portfolio, thus not concentrating revenue on a small number of customers.
The company''s exposure to customer includes only one customer contributing more than 10% of outstanding accounts receivable as on March 31,2025 and Nil as on March 31,2024. The concentration of credit risk is limited due to the fact that the customer base is large and unrelated.
The Company limits its exposure to credit risk by making investment as per the investment policy. The Company addresses credit risk in its investments by mandating a minimum rating against the security / institution where the amounts are invested and is further strengthened by mandating additional requirement like Capital Adequacy Ratio (CAR), Allowable Net Non-Performing Asset (NNPA) Levels, Minimum Average Assets Under Management (AAUM) etc. for certain types of investments. Further the investment committee of the Company reviews the investment portfolio on bi-monthly basis and recommend or provide suggestion to the management. The Company does not expect any losses from non-performance by these counter-parties, other than losses which are already provided, and does not have any significant concentration of exposures to specific industry sectors. The Company does not take direct exposure in equity unless they are strategic in nature, the Company has made some allocation towards Sensex ETF which is a highly diversified benchmark index. Allocation is rebalanced basis Price earning ratio band.
Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they become due. The Company liquidity management framework is designed to ensure that it maintains sufficient liquidity to meet its short term and long term liabilities under both normal and stressed market conditions.
The Company''s corporate treasury department is responsible for liquidity, funding, operational requirements, capital expenditure and unforeseen contingencies management. In addition, processes and policies related to such risks are overseen by Investment Committee.
The management monitors the Company''s net liquidity position on daily basis through forecasts on the basis of expected cash flows.
The Company''s size and operations result in it being exposed to the market risks that arise from its use of financial instruments. These risks may affect the Company''s income or the value of its financial instruments. The objective of the Company''s management of market risk is to maintain this risk within acceptable parameters, while optimising returns. The Company''s exposure to, and management of, these risks is explained below:
The Company is mainly exposed to the price risk due to its investment in mutual funds and exchange traded funds. The price risk arises due to uncertainties about the future market values of these investments.
In order to manage its price risk arising from investments in mutual funds and exchange traded funds, the Company diversifies its portfolio in accordance with the Asset class and limits set in the Investment Policy as approved by the Investment Committee and the Board.
At March 31,2025, the exposure to price risk due to investment in own mutual funds and exchange traded funds amounted to ? 1,07,650 Lakhs (March 31,2024: ? 46,375 Lakhs).
As an estimation of the approximate impact of price risk, with respect to mutual funds and exchange traded funds, the Company has calculated the impact of a 0.25% increase in prices. A 0.25% increase in prices would have led to approximately an additional ? 269 Lakhs gain in the Statement of Profit and Loss (2023-24: ? 116 Lakhs gain). A 0.25% decrease in prices would have led to an equal but opposite effect.
1. The Company''s pending litigations comprise of claims against the Company primarily by the customers/ vendors and proceedings pending with Tax and other regulatory authorities. The Company has reviewed all its pending litigations and proceedings and has adequately provided for where provisions are required and disclosed the contingent liabilities where applicable, in its standalone financial statements. The Company does not expect the outcome of these proceedings to have a material adverse effect on its standalone financial statements at March 31,2025.
2. It is not practicable for the Company to estimate the timing of cash outflow, if any, in respect of the above pending resolution of the respective proceedings as it is determinable only on the receipt of judgements/decisions pending with various forums/authorities.
Estimated amount of contracts remaining to be executed on capital account and not provided for are ? 16,022 Lakhs as at March 31, 2025 (? 7,315 Lakhs as at March 31,2024).
39.1 The "Company" operates only in one Operating Segment i.e. "Facilitating Trading in Securities and other related ancillary Services", hence have only one reportable Segment as per Indian Accounting Standard 108 "Operating Segments". The reportable business segments are in line with the segment wise information which is being presented to the CODM, who is Managing Director and CEO of the Company.
39.2 Information about geographical area
The plan assets in respect of gratuity represent funds managed by the BSE employee Gratuity Fund. The Employer''s best estimate of the contributions expected to be paid to the plan during the next year is ? 291 Lakhs.
The weighted average duration to the payment of these cash flows is 3.8 years.
⢠Discount Rate: The discount rate is based on the prevailing market yields of Indian government securities as at the balance sheet date for the estimated term of the obligations.
⢠Salary Escalation Rate: The estimates of future salary increase considered takes into account the inflation, seniority, promotion and other relevant factors.
41.2 Defined Contribution Plan- Provident Fund, Pension Fund and New Pension Scheme:
These are plans in which the Company pays pre-defined amounts to separate funds and does not have any legal or informal obligation to pay additional sums. The Company offers its employees defined contribution plan in the form of provident fund and family pension fund. Provident fund and family pension fund cover substantially all regular employees. While both, the employees and the Company pay predetermined contributions into the provident fund and New National Pension Scheme, contributions into the family pension fund are made by only the Company. The contributions are based on a certain proportion of the employee''s salary.
The Company has an obligation to fund any shortfall on the yield of the trust''s investment over the administered interest rates on an annual basis. These administered interest rates are determined annually predominantly considering the social rather than economic factors and, in most cases, the actual return earned by the Company has been higher in the past years. There is no provision for diminution in value of investment except provision for accrued interest.
The Company has recognised charge of following contribution in the statement of profit and loss:
Notes: Immovable properties, in the nature of freehold land and buildings, as indicated in the above table, were transferred to the Company pursuant to the Order of Scheme of Corporatisation and Demutualisation dated May 20, 2005. However, the title deeds in respect of these properties continue to be held in the name of the erstwhile entity and the company has filed an application with superintendent of land records during the year to update the name of BSE Limited in the property card of land record authority.
SEBI had introduced regulatory fees on annual turnover payable by the stock exchanges vide regulation effective from January 01,2007. The Company received a letter on April 26, 2024 from SEBI which inter alia advises the Company to pay the regulatory fees on the âAnnual Turnover'' considering notional value in case of option contracts from the year 2006-07 onwards.
During the year, the Company had received the response from SEBI vide letter dated 14th August, 2024 reiterating the advise to comply with payment of regulatory fees on the above methodology. Accordingly, the Company has appropriately accounted based on the SEBI''s advice as prescribed in the letter.
47. Events After Reporting Date
There are no events that have occurred between the end of the reporting period and the date when the standalone financial statements are approved that provide evidence of conditions that existed at the end of the reporting period.
48. Maintenance of Books of Accounts and Servers
The Company has complied with the Rule 3 of Companies (Accounts) Rules, 2014 amended on August 5, 2022 relating to maintenance of electronic books of account and other relevant books and papers. The Company''s books of accounts and relevant books and papers are accessible in India at all times and backup of accounts and other relevant books and papers are maintained in electronic mode within India and kept in servers physically located in India on daily basis.
The Company has used accounting software for maintaining its books of account which has a feature of recording audit trail (edit log) facility and the same has operated throughout the year for all relevant transactions recorded in the software. Further, there are no instance of audit trail feature being tampered with.
During the previous year, the Company had implemented a scheme of buyback ("the scheme"). The Buyback opened on September 21,2023 and closed on September 27, 2023. The Company had bought back 86,532 equity shares at ? 1,080 per share resulting in cash outflow of ? 935 Lakhs (excluding expenses towards buyback). As provided in the scheme, an amount of ? 933 Lakhs was utilized from General Reserve and Share capital is reduced by ? 2 Lakhs. Further, Capital Redemption Reserve of ? 2 Lakhs (representing the nominal value of the shares bought back and extinguished) had been created from balance in Retained earnings as per the requirements of the Companies Act, 2013.
51. During the year ended March 31,2024, the Company had divested its 5% stake in its associate company Central Depository Services (India) Limited ("CDSL") to meet the requirement of SEBI directive. The profit on such divestment amounting to ? 50,417 Lakhs has been shown as an "Exceptional Item" in the standalone statement of financial results for the year ended March 31,2024. Tax of ? 3,910 Lakhs on the said profit is included as a part of tax expenses for the year ended March 31,2024.
52. Other Statutory Information
i) There are no promoters identified for the Company.
ii) The Company, for the current year as well as previous year, do not have any Benami property, where any proceedings has been initiated or pending against the company for holding any Benami property.
iii) The Company, for the current year as well as previous year, does not have any charges or satisfaction to be registered with ROC.
iv) The Company, during the current year as well as previous year, has not carried out or traded or invested in crypto currency or virtual currency.
v) The Company, for the current year as well as previous year, has not carried out any such transaction which is not recorded in the books of accounts that has been surrendered or disclosed as income during the year in the tax assessment under Income Tax Act, 1961 (Such as search, survey any any other relevant provisions of the Income Tax Act, 1961).
vi) The Company, for the current year as well as previous year, has not advanced any loan or invested funds to any other person(s) or entity(ies), including foreign entities (intermediaries) with the understanding that the intermediaries shall:
a) Directly or indirectly lend or invest in other persons or entities identified in any manner, whatsoever by or on behalf of the Company (Ultimate Beneficiary) or
b) Provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiary.
vii) The Company, for the current year as well as previous year, has not received any fund from any person(s) or entity(ies), including foreign entities (Funding party) with the understanding (whether recorded in writing or otherwise) that the Group shall:
a) Directly or indirectly lend or invest in other persons or entities identified in any manner, whatsoever by or on behalf of the Funding Party (Ultimate Beneficiary) or
b) Provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiary.
viii) The Company has not been declared as willful defaulter by any bank or financial institution or other lender, since the Company has not undertaken any borrowing during the current year and previous year.
ix) The Company, during the current year and previous year has not made any investment in downstream companies which are not in compliance with Clause (87) of Section 2 of the Act read with the Companies (Restriction on number of layers) Rules, 2017.
x) The Company has not entered into any scheme of arrangement in terms of Sections 230 to 237 of the Companies Act, 2013 during the current year and previous year.
xi) The Company has not revalued its property plant and equipment or intangible assets or both during current year or previous year.
xii) The Company has not granted/given any loans or advances during the current year and previous year to the directors, KMP and the related party (as defined under Companies Act, 2013), either severally or jointly with any other person that are repayable on demand or without specifying any terms or period of repayment.
Mar 31, 2024
The carrying value of land & building as on March 31, 2024 is '' 2,787 (? 2,916 as on March 31, 2023) shown under the head "Property Plant and Equipment" in the books of accounts. Out of which, the land and building having a carrying amount of '' 262 (? 315 as at March 31,2023), includes two properties for which title deeds are not available and for the remaining two properties, the title deeds are in the name of erstwhile legal entity. The process for transfer of the same in the name of BSE is currently under process. Refer note 44.
(*) Represent allotment of shares held in abeyance including bonus entitlements on such shares.
(a) The Exchange has only one class of shares referred to as equity shares having a par value of '' 2/-. Each holder of equity shares is entitled to one
vote per share.
(b) Pursuant to the BSE (Corporatisation & Demutualisation) Scheme, 2005, (the Scheme) the Exchange had allotted 5,000 equity shares of '' 2/- each to each of those card based Members of the erstwhile Bombay Stock Exchange Limited whose names appeared on the Register of Members under Rule 64 in accordance with Rules, Bye-laws and Regulations, on the Record Date fixed for the purpose.
(c) Out of the total 4,77,75,000 equity shares of '' 2/- (including 4,41,00,000 bonus shares of '' 2/- each) issuable to the card based Members,
the Exchange has allotted 4,71,25,000 equity shares (4,71,25,000 equity shares as on March 31, 2023) upon implementation of the BSE (Corporatisation and Demutualisation) Scheme, 2005 ("The Schemeâ). The allotment of 6,50,000 equity shares (6,50,000 equity shares as on March 31, 2023) of '' 2/- each have been kept in abeyance for specific reasons pursuant to the provisions of the Scheme. However, all corporate benefits as declared from time to time, including dividend and bonus are accrued to all the 4,77,75,000 equity shares, as per the provisions of the
Scheme. During the previous year 1,95,000 equity shares were released from share kept in abeyance and accordingly added to paidup equity share
capital.
(d) As a part of the demutualisation process, the Exchange in order to fulfill its obligations under the Scheme and the Securities Contracts (Regulation) (Manner of Increasing and Maintaining Public Shareholding in Recognised Stock Exchanges) Regulations, 2006 (the SEBI Regulations) dated 13th November, 2006, and further amendments thereto on 23rd December, 2008, had issued shares to Deutsche Boerse AG (DBAG) and Singapore Exchange Limited (SGX).
(e) i) The holders of equity shares are entitled to dividends, if any, proposed by the board of directors and approved by the shareholder at the Annual
General Meeting.
ii) In the event of liquidation of the Company, the holders of equity shares will be entitled to receive any of the remaining assets of the Company, after distribution of preferential amounts. However, no such preferential amounts exists currently. The distribution will be in proportion to the number of equity shares held by the shareholders."
The general reserve created from time to time by transfer of profits from retained earnings for appropriation purposes. As the general reserve created by a transfer from one component of equity to another and is not an item of other comprehensive income, items included in general reserve will not be reclassified to the Statement of Profit and Loss.
Pursuant to the BSE (Corporatisation & Demutualisation) Scheme, 2005, (the Scheme) the balance in Contribution by Members, Forfeiture of Members Application Money, Technology Reserve, Stock Exchange building, Seth Chunnilal Motilal Library, Charity, Income and Expenditure Account as at 19th August, 2005 as appearing in the Exchange are transferred to Capital Reserve being reserves which shall not be used for purposes other than the operations of the Exchange.
The same reflects surplus/deficit after taxes in the Statement of Profit and Loss. The amount that can be distributed by the Company as dividends to its equity shareholders is determined based on the balance in this reserve and also considering the requirements of the Companies Act, 2013.
15.4 Share application money pending allotment
Share Application money includes '' 0.40 received from four members who became shareholders pursuant to the BSE (Corporatisation & Demutualisation) Scheme, 2005.
15.5 Capital redemption reserve
Capital redemption reserve has been created on account of buy back of shares in current year. (refer note 50)
The management assessed that fair value of cash and short-term deposits, trade receivables, trade payables and other current financial assets and
liabilities approximate their carrying amounts largely due to the short-term maturities of these instruments.
The fair value of the financial assets and financial liabilities is included at the amount at which the instrument could be exchanged in a current
transaction between willing parties, other than in a forced or liquidation sale.
The following methods and assumptions were used to estimate the fair values:
(a) The fair value of the quoted bonds and debentures are based on price quotations at reporting date. The fair value of unquoted instruments and other financial liabilities, as well as other non-current financial liabilities is estimated by discounting future cash flows using rates currently available for debt on similar terms, credit risk and remaining maturities except for unquoted instruments where observable inputs are available.
(b) The fair values of the unquoted equity shares have been estimated using a discounted cash flow model. The valuation requires management to make certain assumptions about the model inputs, including forecast cash flows, discount rate, credit risk and volatility, the probabilities of the various estimates within the range can be reasonably assessed and are used in managementâs estimate of fair value for these unquoted equity investments.
(c) In determining fair value measurement, the impact of potential climate-related matters, including legislation, which may affect the fair value measurement of assets and liabilities in the financial statements has been considered.
Level 1 - Quoted prices (unadjusted) in active markets for identical assets or liabilities.
Level 2 - Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).
Level 3 - Inputs for the assets or liabilities that are not based on observable market data (unobservable inputs).
The following table presents fair value hierarchy of the financial assets (other than subsidiaries) and liabilities:
The Companyâs principal financial liabilities comprise trade and other payables. The main purpose of these financial liabilities is to support its operations. The Companyâs principal financial assets include trade and other receivables, and cash and short-term deposits that derive directly from its operations.
The Companyâs activities expose it to a variety of financial risks: credit risk, liquidity risk, market risk (including foreign currency and interest rate risk), regulatory risk and clearing & settlement risk. The Companyâs primary focus is to foresee the unpredictability of financial markets and seek to minimize potential adverse effects on its financial performance.
It is the Companyâs policy that no trading in derivative for speculative purposes maybe undertaken. The Board of Directors reviews and agrees policies for managing each of these risks, which are summarised below:
Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual obligations and arises principally from the Companyâs receivables from customers and investment securities. Credit risk arises from cash held with banks and financial institutions, as well as credit exposure to clients, including outstanding accounts receivable. The maximum exposure to credit risk is equal to the carrying value of the financial assets. The objective of managing counterparty credit risk is to prevent losses in financial assets. The Company assesses the credit quality of the counterparties, taking into account their financial position, past experience and other factors.
⢠Trade and other receivables
The Companyâs exposure to credit risk is influenced mainly by the individual characteristics of each customer.
The demographics of the customer, including the default risk of the industry in which the customer operates, also has an influence on credit risk assessment.
The Company provides the stock exchange services to its listed customers and registered members (who have provided the collaterals and other securities for trading done on its platform), hence the Company operates with large number of customers portfolio and its revenue is not concentrated on small number of customers.
None of the customers accounted for more than 10% of the receivables and revenue for the year ended March 31,2024 and March 31,2023.
The Company limits its exposure to credit risk by making investment as per the investment policy. The Company addresses credit risk in its investments by mandating a minimum rating against the security / institution where the amounts are invested and is further strengthened by mandating additional requirement like Capital Adequacy Ratio (CAR), Allowable Net Non-Performing Asset (NNPA) Levels, Minimum Average Assets Under Management (AAUM) etc. for certain types of investments. Further the investment committee of the Company reviews the investment portfolio on bi-monthly basis and recommend or provide suggestion to the management. The Company does not expect any losses from nonperformance by these counter-parties, other than losses which are provided, and does not have any significant concentration of exposures to specific industry sectors. The Company does not invest in equity instruments unless they are strategic in nature.
Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they become due. The Company manages its liquidity risk by ensuring, as far as possible, that it will always have sufficient liquidity to meet its liabilities when due.
The Companyâs corporate treasury department is responsible for liquidity, funding as well as settlement management. In addition, processes and policies related to such risks are overseen by senior management.
The management monitors the Companyâs net liquidity position through forecasts on the basis of expected cash flows.
The Companyâs business, financial condition and results of operations are highly dependent upon the levels of activity on the exchange, and in particular upon the volume of financial assets traded, the number of listed securities, the number of new listings and subsequent issuances, liquidity and similar factors, as a significant portion of our revenue depends, either directly or indirectly, on trading, listing, clearing and settlement transaction-based fees.
The Companyâs financial condition and results of operations are also dependent upon the success of our clearing, settlement and other issuer services, which, in turn, are directly dependent on the liquidity and financial strength of our customers, namely financial intermediaries such as brokers, and their respective clients.
In addition to the above risk, market risk also includes foreign currency risk and interest rate risk.
The Companyâs exchange risk arises from its foreign operations, foreign currency revenues and expenses, (primarily in U.S. Dollars and Euros). Companyâs revenues insignificant portion are in these foreign currencies, while a significant portion of its costs are in Indian rupees.
As a result, if the value of the Indian rupee appreciates relative to these foreign currencies, the Companyâs revenues measured in rupees may decrease. The exchange rate between the Indian rupee and these foreign currencies has changed substantially in recent periods and may continue to fluctuate substantially in the future. Due to lessor quantum of revenue and expenses from foreign currencies the Company is not much exposed to foreign currency risk.
Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. Interest rates are sensitive to many factors, including governmental, monetary and tax policies, domestic and international economic and political considerations, fiscal deficits, trade surpluses or deficits, regulatory requirements and other factors beyond the Companyâs control.
Changes in the general level of interest rates can affect the profitability by affecting the spread between, amongst other things, income which Company receives on investments in debt securities, the value of interest-earning investments, its ability to realise gains from the sale of investments.
The Company requires a number of regulatory approvals, licenses, registrations and permissions to operate business, including at a corporate level as well as at the level of each of itâs components. For example, the Company have licenses from SEBI in relation to, among others, introducing derivatives contracts on various indices of the exchange, introduction of futures and options contracts on various indices of the exchange, setting up an SME platform and trading in government securities. Some of these approvals are required to be renewed from time to time. The Companyâs operations are subject to continued review and the governing regulations may change. The Companyâs regulatory team constantly monitors the compliance with these rules and regulations.
There have been several changes to the form and manner in which recognised stock exchanges must make contributions to a Settlement Guarantee Fund and Core Settlement Guarantee Fund in the last few years. Should SEBI in the future vary the required contribution amounts to the Settlement Guarantee Fund, the Company may have to contribute more of funds to the Settlement Guarantee Fund which could materially and adversely affect the Companyâs financial ability. The Companyâs regulatory team keeps a track regarding the amendments in SEBI circulars / regulations pertaining to such settlement guarantee fund.
Parties to a settlement may default on their obligations for reason beyond the control of the Company. The clearing and settlement operations are conducted through a wholly owned subsidiary Indian Clearing Corporation Limited (ICCL). ICCL guarantees the settlement of trade executed on Companyâs platform and maintains a core settlement guarantee fund to support its guarantee obligations.
The Companyâs policy is to maintain a strong capital base so as to maintain investor, creditor and market confidence and to sustain future development of the business. The Company monitors the return on capital as well as the level of dividends on its equity shares. The Companyâs objective when managing capital is to maintain an optimal structure so as to maximize shareholder value.
The Company is predominantly equity financed which is evident from the capital structure. Further, the Company has always been a net cash Company with cash and bank balances along with investment which is predominantly investment in liquid and short term mutual funds being far in excess of financial liabilities.
Compliance with externally imposed capital requirements:
In accordance with regulation 14 of Securities Contracts (Regulation) (Stock Exchanges and Clearing Corporations) Regulations, 2018, the Company shall have a minimum networth of '' 100 Crore at all times. The Company has maintained net worth of '' 100 Crores at all times during the year.
Terms and conditions of transactions with related parties
The sales to and purchases from related parties are made on terms equivalent to those that prevail in armâs length transactions. Outstanding balances at the year-end are unsecured and interest free and settlement occurs in cash. There have been no guarantees provided or received for any related party receivables or payables. For the year ended March 31,2024, the Company has not recorded any impairment of receivables relating to amounts owed by related parties (31 March 2023: INR Nil). This assessment is undertaken each financial year through examining the financial position of the related party and the market in which the related party operates.
1. The Companyâs pending litigations comprise of claims against the Company primarily by the customers / vendors and proceedings pending with Tax and other regulatory authorities. The Company has reviewed all its pending litigations and proceedings and has adequately provided for where provisions are required and disclosed the contingent liabilities where applicable, in its standalone financial statements. The Company does not expect the outcome of these proceedings to have a material adverse effect on its standalone financial statements at March 31,2024.
Estimated amount of contracts remaining to be executed on capital account and not provided for are '' 7,315 lakhs as at March 31,2024 (? 4,192 lakhs as at March 31,2023)
38.1 The "Companyâ operates only in one Operating Segment i.e. "Facilitating Trading in Securities and other related ancillary Servicesâ, hence have only one reportable Segment as per Indian Accounting Standard 108 "Operating Segmentsâ. The reportable business segments are in line with the segment wise information which is being presented to the CODM, who is Managing Director and CEO of the Company.
40. Employee Benefits:40.1 Defined Benefit Plan - Gratuity:
The Company offers its employees defined-benefit plans in the form of a gratuity scheme (a lump sum amount). Benefits under the defined benefit plans are typically based on years of service and the employeeâs compensation (generally immediately before retirement). The gratuity scheme covers substantially all regular employees.
⢠Discount Rate: The discount rate is based on the prevailing market yields of Indian government securities as at the balance sheet date for the estimated term of the obligations.
⢠Salary Escalation Rate: The estimates of future salary increase considered takes into account the inflation, seniority, promotion and other relevant factors.
40.2 Defined Contribution Plan- Provident fund, Pension Fund and New pension Scheme:
These are plans in which the Company pays pre-defined amounts to separate funds and does not have any legal or informal obligation to pay additional sums. The Company offers its employees defined contribution plan in the form of provident fund and family pension fund. Provident fund and family pension fund cover substantially all regular employees. While both, the employees and the Company pay predetermined contributions into the provident fund and New National Pension Scheme, contributions into the family pension fund are made by only the Company. The contributions are based on a certain proportion of the employeeâs salary.
The Company has an obligation to fund any shortfall on the yield of the trustâs investment over the administered interest rates on an annual basis. These administered interest rates are determined annually predominantly considering the social rather than economic factors and, in most cases, the actual return earned by the Company has been higher in the past years. There is no provision for diminution in value of investment except provision for accrued interest.
The Company recognised charge for the year ended March 31, 2024 and for the year ended March 31, 2023 of '' 230 Lakhs and '' 196 Lakhs respectively for provident fund and family pension fund contribution in the Profit or Loss.
The Company recognised charge for the year ended March 31, 2024 and for the year ended March 31, 2023 of '' 64 Lakhs and '' 45 Lakhs respectively for New National pension Scheme contribution in the Profit or Loss.
The Company recognised charge for the year ended March 31, 2024 and for the year ended March 31, 2023 of '' 511 Lakhs and '' 489 Lakhs respectively for Compensated Absences in the Profit or Loss.
41. Pursuant to SEBI Circular CIR/MRD/DP/14/2014 dated April 23, 2014 and BSE Notice no-20190805-10, 20190925-31,20191108-25, with effect from November 25, 2019, the Company has introduced the Liquidity Enhancement Scheme (LES) in derivatives. The said scheme was discontinued w.e.f. April 1,2023 and an expense of '' 2,277 Lakhs has been incurred towards the scheme for the year ended March 31,2023.
42. LONG TERM CONTRACT INCLUDING DERIVATIVE CONTRACTS
The Company did not have any long term contracts including derivative contracts for which there were any material foreseeable losses during the year ended March 31,2024 and March 31,2023.
SEBI had introduced regulatory fees on annual turnover payable by the stock exchanges vide regulation effective from January 01, 2007. Subsequent to the Balance Sheet date, the Company received a letter on April 26, 2024 from SEBI which inter alia advises the Company to pay the regulatory fees on the âAnnual Turnoverâ considering notional value in case of option contracts from the year 2006-07 onwards, with interest at the rate of 15% per annum. Further, SEBI has also advised the Company to pay regulatory fee for the full year for FY 2006-07, against regulatory fee of one quarter paid by the company.
The Company, for the purpose of paying regulatory fee, has been computing âturnoverâ of the Option contracts considering the value of premium traded on its platform. The company has decided to present its position to SEBI and request to reconsider its advisory to the company. Pending finalisation of the outcome, based on the prudence, the Company has provided in the current period '' 16,977 lakhs (including '' 7,347 lakhs in respect of periods up to March 31,2023) towards differential regulatory fees.
48. MAINTENANCE OF BOOKS OF ACCOUNTS AND SERVERS
The Company has complied with the Rule 3 of Companies (Accounts) Rules, 2014 amended on August 5, 2022 relating to maintenance of electronic books of account and other relevant books and papers. The Companyâs books of accounts and relevant books and papers are accessible in India at all times and backup of accounts and other relevant books and papers are maintained in electronic mode within India and kept in servers physically located in India on daily basis.
The Company has used accounting software for maintaining its books of account which has a feature of recording audit trail (edit log) facility and the same has operated throughout the year for all relevant transactions recorded in the software. Further, there are no instance of audit trail feature being tampered with.
As approved by the Directors and Shareholders, the Company had implemented a scheme of buyback ("the schemeâ). The Buyback opened on September 21,2023 and closed on September 27, 2023. The Company has bought back 86,532 equity shares at '' 1,080 per share resulting in cash outflow of '' 935 Lakh (excluding expenses towards buyback). As provided in the scheme, an amount of '' 933 lakhs was utilized from General Reserve and Share capital is reduced by '' 2 lakhs. Further, Capital Redemption Reserve of '' 2 lakhs (representing the nominal value of the shares bought back and extinguished) has been created from balance in Retained earnings as per the requirements of the Companies Act, 2013.
51. OTHER STATUTORY INFORMATION
i) There are no promoters identified for the Company.
ii) The Company, for the current year as well as previous year, do not have any Benami property, where any proceedings has been initiated or pending against the company for holding any Benami property.
iii) The Company, for the current year as well as previous year, does not have any charges or satisfaction to be registered with ROC.
iv) The Company, during the current year as well as previous year, has not carried out or traded or invested in crypto currency or virtual currency.
v) The Company, for the current year as well as previous year, has not carried out any such transaction which is not recorded in the books of accounts
that has been surrendered or disclosed as income during the year in the tax assessment under Income Tax Act, 1961 (Such as search, survey any any other relevant provisions of the Income Tax Act, 1961).
vi) The Company, for the current year as well as previous year, has not advanced any loan or invested funds to any other person(s) or entity(ies), including foreign entities (intermediaries) with the understanding that the intermediaries shall:
a) directly or indirectly lend or invest in other persons or entities identified in any manner, whatsoever by or on behalf of the Company (Ultimate Beneficiary) or
b) provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiary.
vii) The Company, for the current year as well as previous year, has not received any fund from any person(s) or entity(ies), including foreign entities (Funding party) with the understanding (whether recorded in writing or otherwise) that the Group shall:
a) directly or indirectly lend or invest in other persons or entities identified in any manner, whatsoever by or on behalf of the Funding Party (Ultimate Beneficiary) or
b) provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiary.
viii) The Company has not been declared as willful defaulter by any bank or financial institution or other lender, since the Company has not undertaken any borrowing during the current year and previous year.
ix) The Company, during the current year and previous year has not made any investment in downstream companies which are not in compliance with clause (87) of section 2 of the Act read with the Companies (Restriction on number of layers) Rules, 2017.
x) The Company has not entered into any scheme of arrangement in terms of sections 230 to 237 of the Companies Act, 2013 during the current year
and previous year.
xi) The Company has not revalued its property plant and equipment or intangible assets or both during current year or previous year.
xii) The Company has not granted / given any loans or advances during the current year and previous year to the directors, KMP and the related party
(as defined under companies Act, 2013), either severally or jointly with any other person that are repayable on demand or without specifying any
terms or period of repayment.
Mar 31, 2023
(*) Represent allotment of shares held in abeyance including bonus entitlements on such shares.
(a) The Exchange has only one class of shares referred to as equity shares having a par value of '' 2/-. Each holder of equity shares is entitled to one vote per share.
(b) Pursuant to the BSE (Corporatisation & Demutualisation) Scheme, 2005, (the Scheme) the Exchange had allotted 5,000 equity shares of '' 2/- each to each of those card based Members of the erstwhile Bombay Stock Exchange Limited whose names appeared on the Register of Members under Rule 64 in accordance with Rules, Bye-laws and Regulations, on the Record Date fixed for the purpose.
(c) Out of the total 4,77,75,000 equity shares of '' 2/- (including 4,41,00,000 bonus shares of '' 2/- each) issuable to the card based Members, the Exchange has allotted 4,70,60,000 equity shares (4,70,60,000 equity shares as on March 31, 2022) upon implementation of the BSE (Corporatisation and Demutualisation) Scheme, 2005 ("The Schemeâ). The allotment of 7,15,000 equity shares (7,15,000 equity shares as on March 31,2022) of '' 2/- each have been kept in abeyance for specific reasons pursuant to the provisions of the Scheme. However, all corporate benefits as declared from time to time, including dividend and bonus are accrued to all the 4,77,75,000 equity shares, as per the provisions of the Scheme. During the year 1,95,000 equity shares were released from share kept in abeyance and accordingly added to paidup equity share capital.
(d) âPursuant to the approval of the Shareholders through Postal ballot as on March 14, 2022, the Company had allotted 13,74,12,891 (Including 14,30,000 abeyance Shares) Bonus Equity Shares of '' 2/- each in ratio of 2 (Two) Equity Share for 1 (one) Equity Share held (2:1) to the Equity Shareholder(s) whose names appeared in the Register of Members on March 22, 2022 i.e. the "Record Dateâ. After the issue, the Equity Share Capital stood at '' 2,748.
Consequently, the subscribed and paid up Equity Share Capital as on March 31,2022 was '' 2,705 divided into 13,52,67,891 Equity Shares of '' 2/- each. Total no. of shares kept in abeyance are 19,50,000 shares as on March 31,2023 (21,45,000 as on March 31,2022).
(e) As a part of the demutualisation process, the Exchange in order to fulfill its obligations under the Scheme and the Securities Contracts (Regulation) (Manner of Increasing and Maintaining Public Shareholding in Recognised Stock Exchanges) Regulations, 2006 (the SEBI Regulations) dated 13th November, 2006, and further amendments thereto on 23rd December, 2008, had issued shares to Deutsche Boerse AG (DBAG) and Singapore Exchange Limited (SGX).
(f) i) The holders of equity shares are entitled to dividends, if any, proposed by the board of directors and approved by the shareholder at the
Annual General Meeting.
ii) In the event of liquidation of the Company, the holders of equity shares will be entitled to receive any of the remaining assets of the Company, after distribution of preferential amounts. However, no such preferential amounts exists currently. The distribution will be in proportion to the number of equity shares held by the shareholders.
The general reserve created from time to time transfer profits from retained earnings for appropriation purposes. As the general reserve created by a transfer from one component of equity to another and is not an item of other comprehensive income, items included in general reserve will not be reclassified to the Statement of Profit and Loss.
Pursuant to the BSE (Corporatisation & Demutualisation) Scheme, 2005, (the Scheme) the balance in Contribution by Members, Forfeiture of Members Application Money, Technology Reserve, Stock Exchange building, Seth Chunnilal Motilal Library, Charity, Income and Expenditure Account as at 19th August, 2005 as appearing in the Exchange are transferred to Capital Reserve being reserves which shall not be used for purposes other than the operations of the Exchange.
The same reflects surplus / deficit after taxes in the Statement of Profit and Loss. The amount that can be distributed by the Company as dividends to its equity shareholders is determined based on the balance in this reserve and also considering the requirements of the Companies Act, 2013.
The Board of Directors, in its meeting on May 11, 2023, have proposed a final dividend of '' 12/- per equity share of face value '' 2/- per share for the financial year ended March 31,2023. The proposal is subject to the approval of shareholders at the Annual General Meeting to be held and if approved would result in a cash outflow of approximately '' 16,490.
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The management assessed that fair value of cash and short-term deposits, trade receivables, trade payables and other current financial assets
and liabilities approximate their carrying amounts largely due to the short-term maturities of these instruments.
The fair value of the financial assets and financial liabilities is included at the amount at which the instrument could be exchanged in a current
transaction between willing parties, other than in a forced or liquidation sale.
The following methods and assumptions were used to estimate the fair values:
(a) The fair value of the quoted bonds and debentures are based on price quotations at reporting date. The fair value of unquoted instruments and other financial liabilities, as well as other non-current financial liabilities is estimated by discounting future cash flows using rates currently available for debt on similar terms, credit risk and remaining maturities except for unquoted instruments where observable inputs are available.
(b) The fair values of the unquoted equity shares have been estimated using a discounted cash flow model. The valuation requires management to make certain assumptions about the model inputs, including forecast cash flows, discount rate, credit risk and volatility, the probabilities of the various estimates within the range can be reasonably assessed and are used in managementâs estimate of fair value for these unquoted equity investments.
Level 1 - Quoted prices (unadjusted) in active markets for identical assets or liabilities.
Level 2 - I nputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).
Level 3 - Inputs for the assets or liabilities that are not based on observable market data (unobservable inputs).
The Companyâs principal financial liabilities comprise trade and other payables. The main purpose of these financial liabilities is to support its operations. The Companyâs principal financial assets include trade and other receivables, and cash and short-term deposits that derive directly from its operations.
The Companyâs activities expose it to a variety of financial risks: credit risk, liquidity risk, market risk (including foreign currency and interest rate risk), regulatory risk and clearing & settlement risk. The Companyâs primary focus is to foresee the unpredictability of financial markets and seek to minimize potential adverse effects on its financial performance.
It is the Companyâs policy that no trading in derivative for speculative purposes maybe undertaken. The Board of Directors reviews and agrees policies for managing each of these risks, which are summarised below:
Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual obligations and arises principally from the Companyâs receivables from customers and investment securities. Credit risk arises from cash held with banks and financial institutions, as well as credit exposure to clients, including outstanding accounts receivable. The maximum exposure to credit risk is equal to the carrying value of the financial assets. The objective of managing counterparty credit risk is to prevent losses in financial assets. The Company assesses the credit quality of the counterparties, taking into account their financial position, past experience and other factors.
⢠Trade and other receivables
The Companyâs exposure to credit risk is influenced mainly by the individual characteristics of each customer.
The demographics of the customer, including the default risk of the industry in which the customer operates, also has an influence on credit risk assessment.
The Company provides the stock exchange services to its listed customers and registered members (who have provide the collaterals and other securities for trading done on its platform), hence the Company operates with large number of customers portfolio and its revenue is not concentrated on small number of customers.
None of the customers accounted for more than 10% of the receivables and revenue for the year ended March 31,2023 and March 31, 2022.
The Company limits its exposure to credit risk by making investment as per the investment policy. The Company addresses credit risk in its investments by mandating a minimum rating against the security / institution where the amounts are invested and is further strengthened by mandating additional requirement like Capital Adequacy Ratio (CAR), Allowable Net Non-Performing Asset (NNPA) Levels, Minimum Average Assets Under Management (AAUM) etc. for certain types of investments. Further the investment committee of the Company reviews the investment portfolio on bi-monthly basis and recommend or provide suggestion to the management. The Company does not expect any losses from non-performance by these counter-parties, other than losses which are provided, and does not have any significant concentration of exposures to specific industry sectors. The Company does not invest in equity instruments unless they are strategic in nature.
Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they become due. The Company manages its liquidity risk by ensuring, as far as possible, that it will always have sufficient liquidity to meet its liabilities when due.
The Companyâs corporate treasury department is responsible for liquidity, funding as well as settlement management. In addition, processes and policies related to such risks are overseen by senior management.
The management monitors the Companyâs net liquidity position through forecasts on the basis of expected cash flows.
The Company manages contractual financial liabilities and contractual financial assets on net basis.
The Companyâs business, financial condition and results of operations are highly dependent upon the levels of activity on the exchange, and in particular upon the volume of financial assets traded, the number of listed securities, the number of new listings and subsequent issuances, liquidity and similar factors, as a significant portion of our revenue depends, either directly or indirectly, on trading, listing, clearing and settlement transaction-based fees.
The Companyâs financial condition and results of operations are also dependent upon the success of our clearing, settlement and other issuer services, which, in turn, are directly dependent on the liquidity and financial strength of our customers, namely financial intermediaries such as brokers, and their respective clients.
In addition to the above risk, market risk also includes foreign currency risk and interest rate risk.
The Companyâs exchange risk arises from its foreign operations, foreign currency revenues and expenses, (primarily in U.S. Dollars and Euros). Companyâs revenues insignificant portion are in these foreign currencies, while a significant portion of its costs are in Indian rupees.
As a result, if the value of the Indian rupee appreciates relative to these foreign currencies, the Companyâs revenues measured in rupees may decrease. The exchange rate between the Indian rupee and these foreign currencies has changed substantially in recent periods and may continue to fluctuate substantially in the future. Due to lessor quantum of revenue and expenses from foreign currencies the Company is not much exposed to foreign currency risk.
Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. Interest rates are sensitive to many factors, including governmental, monetary and tax policies, domestic and international economic and political considerations, fiscal deficits, trade surpluses or deficits, regulatory requirements and other factors beyond the Companyâs control. Changes in the general level of interest rates can affect the profitability by affecting the spread between, amongst other things, income which Company receives on investments in debt securities, the value of interest-earning investments, its ability to realise gains from the sale of investments.
The Company requires a number of regulatory approvals, licenses, registrations and permissions to operate business, including at a corporate level as well as at the level of each of its components. For example, the Company have licenses from SEBI in relation to, among others, introducing derivatives contracts on various indices of the exchange, introduction of futures and options contracts on various indices of the exchange, setting up an SME platform and trading in government securities. Some of these approvals are required to be renewed from time to time. The Companyâs operations are subject to continued review and the governing regulations may change. The Companyâs regulatory team constantly monitors the compliance with these rules and regulations.
There have been several changes to the form and manner in which recognised stock exchanges must make contributions to a Settlement Guarantee Fund and Core Settlement Guarantee Fund in the last few years. Should SEBI in the future vary the required contribution amounts to the Settlement Guarantee Fund, the Company may have to contribute more of funds to the Settlement Guarantee Fund which could materially and adversely affect the Companyâs financial ability. The Companyâs regulatory team keeps a track regarding the amendments in SEBI circulars / regulations pertaining to such settlement guarantee fund.
Parties to a settlement may default on their obligations for reason beyond the control of the Company. The clearing and settlement operations are conducted through a wholly owned subsidiary Indian Clearing Corporation Limited (ICCL). ICCL guarantees the settlement of trade executed on Companyâs platform and maintains a core settlement guarantee fund to support its guarantee obligations.
The Companyâs policy is to maintain a strong capital base so as to maintain investor, creditor and market confidence and to sustain future development of the business. The Company monitors the return on capital as well as the level of dividends on its equity shares. The Companyâs objective when managing capital is to maintain an optimal structure so as to maximize shareholder value.
The Company is predominantly equity financed which is evident from the capital structure. Further, the Company has always been a net cash Company with cash and bank balances along with investment which is predominantly investment in liquid and short term mutual funds being far in excess of financial liabilities.
Compliance with externally imposed capital requirements:
I n accordance with regulation 14 of Securities Contracts (Regulation) (Stock Exchanges and Clearing Corporations) Regulations, 2018, the Company shall have a minimum networth of '' 100 Crore at all times.
1. The Companyâs pending litigations comprise of claims against the Company primarily by the customers / vendors and proceedings pending with Tax and other regulatory authorities. The Company has reviewed all its pending litigations and proceedings and has adequately provided for where provisions are required and disclosed the contingent liabilities where applicable, in its standalone financial statements. The Company does not expect the outcome of these proceedings to have a material adverse effect on its standalone financial statements at March 31,2023.
Estimated amount of contracts remaining to be executed on capital account and not provided for are '' 4,192 lakhs as at March 31, 2023 '' 6,188 lakhs as at March 31,2022)
38. The Managing Director and CEO of the Company has been identified as the Chief Operating Decision Maker (CODM) as defined by Ind AS 108, Operating Segments. The CODM evaluates the Companyâs performance and allocates resources.
38.1 The "Companyâ or the "Exchangeâ operates only in one Operating Segment i.e. "Facilitating Trading in Securities and other related ancillary Servicesâ, hence have only one reportable Segment as per Indian Accounting Standard 108 "Operating Segmentsâ. The reportable business segments are in line with the segment wise information which is being presented to the CODM.
38.2 Information about geographical area
40. EMPLOYEE BENEFITS:40.1 Defined Benefit Plan - Gratuity:
The Company offers its employees defined-benefit plans in the form of a gratuity scheme (a lump sum amount). Benefits under the defined benefit plans are typically based on years of service and the employeeâs compensation (generally immediately before retirement). The gratuity scheme covers substantially all regular employees.
Such plan exposes the Company to actuarial risks such as: investment risk, interest rate risk, demographic risk and salary risk.
Actual return on the assets for the period ended March 31,2023 and year ended March 31,2022 were '' 177 Lakhs and '' 183 Lakhs respectively.
There is no compulsion on the part of the Company to fully pre fund the liability of the Plan. The Companyâs philosophy is to fund the benefits based on its own liquidity and tax position as well as level of underfunding of the plan.
The plan assets in respect of gratuity represent funds managed by the BSE employee Gratuity Fund. The Employerâs best estimate of the contributions expected to be paid to the plan during the next year is '' 163 Lakhs.
The weighted average duration to the payment of these cash flows is 3.82 years.
⢠Discount Rate: The discount rate is based on the prevailing market yields of Indian government securities as at the balance sheet date for the estimated term of the obligations.
⢠Salary Escalation Rate: The estimates of future salary increase considered takes into account the inflation, seniority, promotion and other relevant factors.
40.2 Defined Contribution Plan - Provident fund, Pension Fund and New Pension Scheme:
These are plans in which the Company pays pre-defined amounts to separate funds and does not have any legal or informal obligation to pay additional sums. The Company offers its employees defined contribution plan in the form of provident fund and family pension fund. Provident fund and family pension fund cover substantially all regular employees. While both, the employees and the Company pay predetermined contributions into the provident fund and New National Pension Scheme, contributions into the family pension fund are made by only the Company. The contributions are based on a certain proportion of the employeeâs salary.
The Company has an obligation to fund any shortfall on the yield of the trustâs investment over the administered interest rates on an annual basis. These administered interest rates are determined annually predominantly considering the social rather than economic factors and, in most cases, the actual return earned by the Company has been higher in the past years. There is no provision for diminution in value of investment except provision for accrued interest.
The Company recognised charge for the year ended March 31,2023 and for the year ended March 31,2022 of '' 196 Lakhs and '' 200 Lakhs respectively for provident fund and family pension fund contribution in the Profit or Loss.
The Company recognised charge for the year ended March 31, 2023 and for the year ended March 31, 2022 of '' 45 Lakhs and '' 36 Lakhs respectively for New National Pension Scheme contribution in the Profit or Loss.
The Company recognised charge for the year ended March 31,2023 and for the year ended March 31,2022 of '' 489 Lakhs and '' 484 Lakhs respectively for Compensated Absences in the Profit or Loss.
41. Pursuant to SEBI Circular CIR/MRD/DP/14/2014 dated April 23, 2014 and BSE Notice no-20190805-10, 20190925-31, 20191108-25, with effect from November 25, 2019, the Company has introduced the Liquidity Enhancement Scheme (LES) in derivatives. An expense of '' 2,277 Lakhs and '' 2,174 Lakhs has been incurred towards the scheme for the year ended March 31,2023 and year ended March 31,2022 respectively.
42. The Code on Social Security, 2020 (âCodeâ) relating to employee benefits during employment and post-employment benefits received Presidential assent in September 2020. The said code is made effective prospectively from May 3, 2023. The Company is assessing the impact, if any, of the Code.
43. LONG TERM CONTRACT INCLUDING DERIVATIVE CONTRACTS
The Company did not have any long term contracts including derivative contracts for which there were any material foreseeable losses during the year ended March 31,2023 and March 31,2022.
44. STANDARDS NOTIFIED BUT NOT YET EFFECTIVE
Ministry of Corporate Affairs ("MCAâ) notifies new standards or amendments to the existing standards under Companies (Indian Accounting Standards) Rules as issued from time to time. On March 31, 2023, MCA amended the Companies (Indian Accounting Standards) Amendment Rules, 2023, as below:
⢠Ind AS 1 - Presentation of standalone financial statements - This amendment requires the entities to disclose their material accounting policies rather than their significant accounting policies. The effective date for adoption of this amendment is annual periods beginning on or after April 1,2023. The Company has evaluated the amendment and the impact of the amendment is insignificant in the standalone financial statements.
⢠Ind AS 8 - Accounting Policies, Changes in Accounting Estimates and Errors - This amendment has introduced a definition of accounting estimatesâ and included amendments to Ind AS 8 to help entities distinguish changes in accounting policies from changes in accounting estimates. The effective date for adoption of this amendment is annual periods beginning on or after April 1, 2023. The Company has evaluated the amendment and there is no impact on its standalone financial statements.
⢠Ind AS 12 - Income Taxes - This amendment has narrowed the scope of the initial recognition exemption so that it does not apply to transactions that give rise to equal and off setting temporary differences. The effective date for adoption of this amendment is annual periods beginning on or after April 1,2023. The Company has evaluated the amendment and there is no impact on its standalone financial statements.
48. EVENTS AFTER REPORTING DATE
There are no events that have occurred between the end of the reporting period and the date when the standalone financial statements are approved that provide evidence of conditions that existed at the end of the reporting period.
49. MAINTENANCE OF BOOKS OF ACCOUNTS AND SERVERS
The Company has complied with the Rule 3 of Companies (Accounts) Rules, 2014 amended on August 5, 2022 relating to maintenance of electronic books of account and other relevant books and papers. The Companyâs books of accounts and relevant books and papers are accessible in India at all times and backup of accounts and other relevant books and papers are maintained in electronic mode within India and kept in servers physically located in India on daily basis.
50. OTHER STATUTORY INFORMATION
i) There are no promoters identified for the Company.
ii) The Company, for the current year as well as previous year, do not have any Benami property, where any proceedings has been initiated or pending against the Company for holding any Benami property.
iii) The Company, for the current year as well as previous year, does not have any charges or satisfaction to be registered with ROC.
iv) The Company, during the current year as well as previous year, has not carried out or traded or invested in crypto currency or virtual currency.
v) The Company, for the current year as well as previous year, has not carried out any such transaction which is not recorded in the books of accounts that has been surrendered or disclosed as income during the year in the tax assessment under Income Tax Act, 1961 (Such as search, survey any any other relevant provisions of the Income Tax Act, 1961).
vi) The Company, for the current year as well as previous year, has not advanced any loan or invested funds to any other person(s) or entity(ies), including foreign entities (intermediaries) with the understanding that the intermediaries shall:
a) directly or indirectly lend or invest in other persons or entities identified in any manner, whatsoever by or on behalf of the Company (Ultimate Beneficiary) or
b) provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiary.
vii) The Company, for the current year as well as previous year, has not received any fund from any person(s) or entity(ies), including foreign entities (Funding party) with the understanding (whether recorded in writing or otherwise) that the Group shall:
a) directly or indirectly lend or invest in other persons or entities identified in any manner, whatsoever by or on behalf of the Funding Party (Ultimate Beneficiary) or
b) provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiary.
viii) The Company has not been declared as willful defaulter by any bank or financial institution or other lender, since the Company has not undertaken any borrowing during the current year and previous year.
ix) The Company, during the current year and previous year has not made any investment in downstream companies which are not in compliance with clause (87) of section 2 of the Act read with the Companies (Restriction on number of layers) Rules, 2017.
x) The Company has not entered into any scheme of arrangement in terms of sections 230 to 237 of the Companies Act, 2013 during the current year and previous year.
xi) The Company has not revalued its property plant and equipment or intangible assets or both during current year or previous year.
xii) The Company has not granted / given any loans or advances during the current year and previous year to the directors, KMP and the related party (as defined under companies Act, 2013), either severally or jointly with any other person that are repayable on demand or without specifying any terms or period of repayment.
51. Previous yearâs figures have been regrouped / reclassified and rearranged wherever necessary to correspond with the current yearâs classification / disclosure.
Mar 31, 2022
Pursuant to the BSE (Corporatisation & Demutualisation) Scheme, 2005, (the Scheme) the Exchange had allotted 5,000 equity shares of '' 2/- each to each of those card based Members of the erstwhile Bombay Stock Exchange Limited whose names appeared on the Register of Members under Rule 64 in accordance with Rules, Bye-laws and Regulations, on the Record Date fixed for the purpose.
Out of the total 4,77,75,000 equity shares of '' 2/- (including 4,41,00,000 bonus shares of '' 2/- each) issuable to the card based Members, the Exchange has allotted 4,70,60,000 equity shares (4,69,95,000 equity shares as on March 31, 2021) upon implementation of the BSE (Corporatisation and Demutualisation) Scheme, 2005 ("The Schemeâ). During the year 65,000 shares were released from shares kept in abeyance towards one share holder and accordingly added to paidup equity share capital. The remaining allotment of 7,15,000 equity shares (7,80,000 equity shares as on March 31, 2021) of '' 2/- each have been kept in abeyance for specific reasons pursuant to the provisions of the Scheme. However, all corporate benefits as declared from time to time, including dividend and bonus are accrued to all the 4,77,75,000 equity shares, as per the provisions of the Scheme.
Pursuant to the approval of the Shareholders through Postal ballot, the company had allotted 9,16,08,594 (Including 14,30,000 shares against shares which kept in abeyance) Bonus Equity Shares of '' 2/- each in ratio of 2 (Two) Equity Shares for 1 (one) Equity Share held to the Equity Shareholder(s) whose names appeared in the Register of Members on March 22, 2022 i.e. the "Record Dateâ. Consequently, the subscribed and paid up Equity Share Capital as on March 31,2022 was '' 2,705 Lakh divided into 13,52,67,891 Equity Shares of '' 2/- each.
Total number of shares kept in abeyance are 21,45,000 as on March 31,2022.
Accordingly, as per the IND AS 33 - Earning per share, the calculation of basic and diluted earnings per share for all periods presented have been adjusted and restated.
As a part of the demutualisation process, the Exchange in order to fulfill its obligations under the Scheme and the Securities Contracts (Regulation) (Manner of Increasing and Maintaining Public Shareholding in Recognised Stock Exchanges) Regulations, 2006 (the SEBI Regulations) dated November 13, 2006, and further amendments thereto on December 23, 2008, had issued shares to Deutsche Boerse AG (DBAG) and Singapore Exchange Limited (SGX).
i) The holders of equity shares are entitled to dividends, if any, proposed by the board of directors and approved by the shareholder at the Annual General Meeting.
ii) I n the event of liquidation of the Company, the holders of equity shares will be entitled to receive any of the remaining assets of the Company, after distribution of preferential amounts. However, no such preferential amounts exists currently. The distribution will be in proportion to the number of equity shares held by the shareholders.
The general reserve created from time to time transfer profits from retained earnings for appropriation purposes. As the general reserve created by a transfer from one component of equity to another and is not an item of other comprehensive income, items included in general reserve will not be reclassified to the Statement of Profit and Loss. During the year '' 1,629 is utilised towards issue of bonus shares.
Pursuant to the BSE (Corporatisation & Demutualisation) Scheme, 2005, (the Scheme) the balance in Contribution by Members, Forfeiture of Members Application Money, Technology Reserve, Stock Exchange building, Seth Chunnilal Motilal Library, Charity, Income and Expenditure Account as at August 19, 2005 as appearing in the Exchange are transferred to Capital Reserve being reserves which shall not be used for purposes other than the operations of the Exchange.
a) The same reflects surplus/deficit after taxes in the Statement of Profit and Loss. The amount that can be distributed by the Company as dividends to its equity shareholders is determined based on the balance in this reserve and also considering the requirements of the Companies Act, 2013.
b) The Board of Directors, in its meeting on May 11,2022, have proposed a final dividend of '' 13.50/- per equity share of face value '' 2/- per share for the financial year ended March 31,2022. The proposal is subject to the approval of shareholders at the ensuing Annual General Meeting to be held and if approved would result in a cash outflow of approximately '' 18,551.
Share application money pending allotment
Share Application money includes '' 0.40 received from four members who became shareholders pursuant to the BSE (Corporatisation & Demutualisation) Scheme, 2005.
Capital redemption reserve of '' 176 as at March 31,2021 represents the nominal value of the shares bought back in previous years. The same is fully utilised in current year against issue of bonus shares.
Bank Balance and Bank Deposits have been earmarked against these liabilities.
Current accounts have been earmarked against this liability.
Income earned on earmarked funds.
Bank deposits of '' 733 ('' 619 as at March 31, 2021) and accrued interest of '' 78 ('' 66 as at March 31,2021) have been earmarked against these liabilities.
Taxation Laws (Amendment) Ordinance, 2019 ("Ordinanceâ) on September 20, 2019 has amended the Income Tax Act, 1961 and Finance (No. 2) Act, 2019, by which the option has been provided for the lower tax regime without any incentives for the domestic companies. Under the revised tax regime, accumulated Minimum Alternate Tax (MAT) credit is not allowed. Considering the substantial accumulated MAT credit, the management has assessed that it is beneficial not to opt for the option of availing revised income tax rate for certain period of time. The tax liability for the current year and previous year has been accordingly calculated.
The management assessed that fair value of cash and short-term deposits, trade receivables, trade payables and other current financial assets
and liabilities approximate their carrying amounts largely due to the short-term maturities of these instruments.
The fair value of the financial assets and financial liabilities is included at the amount at which the instrument could be exchanged in a current
transaction between willing parties, other than in a forced or liquidation sale.
The following methods and assumptions were used to estimate the fair values:
(a) The fair value of the quoted bonds and debentures are based on price quotations at reporting date. The fair value of unquoted instruments and other financial liabilities, as well as other non-current financial liabilities is estimated by discounting future cash flows using rates currently available for debt on similar terms, credit risk and remaining maturities except for unquoted instruments where observable inputs are available.
(b) The fair values of the unquoted equity shares have been estimated using a discounted cash flow model. The valuation requires management to make certain assumptions about the model inputs, including forecast cash flows, discount rate, credit risk and volatility, the probabilities of the various estimates within the range can be reasonably assessed and are used in managementâs estimate of fair value for these unquoted equity investments.
Level 1 - Quoted prices (unadjusted) in active markets for identical assets or liabilities.
Level 2 - I nputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).
Level 3 - Inputs for the assets or liabilities that are not based on observable market data (unobservable inputs).
The Companyâs principal financial liabilities comprise trade and other payables. The main purpose of these financial liabilities is to support its operations. The Companyâs principal financial assets include trade and other receivables, and cash and short-term deposits that derive directly from its operations.
The Companyâs activities expose it to a variety of financial risks: credit risk, liquidity risk, market risk (including foreign currency and interest rate risk), regulatory risk and clearing & settlement risk. The Companyâs primary focus is to foresee the unpredictability of financial markets and seek to minimize potential adverse effects on its financial performance.
It is the Companyâs policy that no trading in derivative for speculative purposes maybe undertaken. The Board of Directors reviews and agrees policies for managing each of these risks, which are summarised below:
Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual obligations and arises principally from the Companyâs receivables from customers and investment securities. Credit risk arises from cash held with banks and financial institutions, as well as credit exposure to clients, including outstanding accounts receivable. The maximum exposure to credit risk is equal to the carrying value of the financial assets. The objective of managing counterparty credit risk is to prevent losses in financial assets. The Company assesses the credit quality of the counterparties, taking into account their financial position, past experience and other factors.
⢠Trade and other receivables
The Companyâs exposure to credit risk is influenced mainly by the individual characteristics of each customer.
The demographics of the customer, including the default risk of the industry in which the customer operates, also has an influence on credit risk assessment.
The Company provides the stock exchange services to its listed customers and registered members (who have provide the collaterals and other securities for trading done on its platform), hence the Company operates with large number of customers portfolio and its revenue is not concentrated on small number of customers.
None of the customers accounted for more than 10% of the receivables and revenue for the year ended March 31,2022 and March 31, 2021.
The Company limits its exposure to credit risk by making investment as per the investment policy. The Company addresses credit risk in its investments by mandating a minimum rating against the security / institution where the amounts are invested and is further strengthened by mandating additional requirement like Capital Adequacy Ratio (CAR), Allowable Net Non-Performing Asset (NNPA) Levels, Minimum Average Assets Under Management (AAUM) etc. for certain types of investments. Further the investment committee of the Company reviews the investment portfolio on bi-monthly basis and recommend or provide suggestion to the management. The Company does not expect any losses from non-performance by these counter-parties, other than losses which are provided, and does not have any significant concentration of exposures to specific industry sectors. The Company does not invest in equity instruments unless they are strategic in nature.
Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they become due. The Company manages its liquidity risk by ensuring, as far as possible, that it will always have sufficient liquidity to meet its liabilities when due.
The Companyâs corporate treasury department is responsible for liquidity, funding as well as settlement management. In addition, processes and policies related to such risks are overseen by senior management.
The management monitors the Companyâs net liquidity position through forecasts on the basis of expected cash flows.
The Company manages contractual financial liabilities and contractual financial assets on net basis.
The Companyâs business, financial condition and results of operations are highly dependent upon the levels of activity on the exchange, and in particular upon the volume of financial assets traded, the number of listed securities, the number of new listings and subsequent issuances, liquidity and similar factors, as a significant portion of our revenue depends, either directly or indirectly, on trading, listing, clearing and settlement transaction-based fees.
The Companyâs financial condition and results of operations are also dependent upon the success of our clearing, settlement and other issuer services, which, in turn, are directly dependent on the liquidity and financial strength of our customers, namely financial intermediaries such as brokers, and their respective clients.
In addition to the above risk, market risk also includes foreign currency risk and interest rate risk.
The Companyâs exchange risk arises from its foreign operations, foreign currency revenues and expenses, (primarily in U.S. Dollars and Euros). Companyâs revenues insignificant portion are in these foreign currencies, while a significant portion of its costs are in Indian rupees.
As a result, if the value of the Indian rupee appreciates relative to these foreign currencies, the Companyâs revenues measured in rupees may decrease. The exchange rate between the Indian rupee and these foreign currencies has changed substantially in recent periods and may continue to fluctuate substantially in the future. Due to lessor quantum of revenue and expenses from foreign currencies the Company is not much exposed to foreign currency risk.
I nterest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. Interest rates are sensitive to many factors, including governmental, monetary and tax policies, domestic and international economic and political considerations, fiscal deficits, trade surpluses or deficits, regulatory requirements and other factors beyond the Companyâs control. Changes in the general level of interest rates can affect the profitability by affecting the spread between, amongst other things, income which Company receives on investments in debt securities, the value of interest-earning investments, its ability to realise gains from the sale of investments.
Interest rate risk primarily arises from floating rate investment. The Companyâs investments in floating rate are primarily short-term, which do not expose it to significant interest rate risk.
The Company requires a number of regulatory approvals, licenses, registrations and permissions to operate business, including at a corporate level as well as at the level of each of itâs components. For example, the Company have licenses from SEBI in relation to, among others, introducing derivatives contracts on various indices of the exchange, introduction of futures and options contracts on various indices of the exchange, setting up an SME platform and trading in government securities. Some of these approvals are required to be renewed from time to time. The Companyâs operations are subject to continued review and the governing regulations may change. The Companyâs regulatory team constantly monitors the compliance with these rules and regulations.
There have been several changes to the form and manner in which recognised stock exchanges must make contributions to a Settlement Guarantee Fund and Core Settlement Guarantee Fund in the last few years. Should SEBI in the future vary the required contribution amounts to the Settlement Guarantee Fund, the Company may have to contribute more of funds to the Settlement Guarantee Fund which could materially and adversely affect the Companyâs financial ability. The Companyâs regulatory team keeps a track regarding the amendments in SEBI circulars/ regulations pertaining to such settlement guarantee fund.
Parties to a settlement may default on their obligations for reason beyond the control of the Company. The clearing and settlement operations are conducted through a wholly owned subsidiary Indian Clearing Corporation Limited (ICCL). ICCL guarantees the settlement of trade executed on Companyâs platform and maintains a core settlement guarantee fund to support its guarantee obligations.
The Companyâs policy is to maintain a strong capital base so as to maintain investor, creditor and market confidence and to sustain future development of the business. The Company monitors the return on capital as well as the level of dividends on its equity shares. The Companyâs objective when managing capital is to maintain an optimal structure so as to maximize shareholder value.
The Company is predominantly equity financed which is evident from the capital structure. Further, the Company has always been a net cash company with cash and bank balances along with investment which is predominantly investment in liquid and short term mutual funds being far in excess of financial liabilities.
Compliance with externally imposed capital requirements:
I n accordance with regulation 14 of Securities Contracts (Regulation) (Stock Exchanges and Clearing Corporations) Regulations, 2018, the Company shall have a minimum networth of '' 100 Crore at all times.
1. During the year ended March 31,2020, the company has received SEBI Directives on BSE towards Cyber Security Audit and in response to the above, the company has submitted its reply to SEBI for reconsideration and to the extent the amount of '' 70 is considered as contingent liability.
2. The Companyâs pending litigations comprise of claims against the Company primarily by the customers/ vendors and proceedings pending with Tax and other regulatory authorities. The Company has reviewed all its pending litigations and proceedings and has adequately provided for where provisions are required and disclosed the contingent liabilities where applicable, in its financial statements. The Company does not expect the outcome of these proceedings to have a material adverse effect on its financial statements at March 31,2022.
Estimated amount of contracts remaining to be executed on capital account and not provided for are '' 6,188 as at March 31,2022 ('' 617 as at March 31,2021)
38. The Managing Director and CEO of the Company has been identified as the Chief Operating Decision Maker (CODM) as defined by Ind AS 108, Operating Segments. The CODM evaluates the Companyâs performance and allocates resources.
38.1 The "Companyâ or the "Exchangeâ operates only in one Operating Segment i.e. "Facilitating Trading in Securities and other related ancillary Servicesâ, hence have only one reportable Segment as per Indian Accounting Standard 108 "Operating Segmentsâ. The reportable business segments are in line with the segment wise information which is being presented to the CODM.
39. Employee Benefits:39.1 Defined Benefit Plan - Gratuity:
The Company offers its employees defined-benefit plans in the form of a gratuity scheme (a lump sum amount). Benefits under the defined benefit plans are typically based on years of service and the employeeâs compensation (generally immediately before retirement). The gratuity scheme covers substantially all regular employees.
Such plan exposes the Company to actuarial risks such as: investment risk, interest rate risk, demographic risk and salary risk.
39. Employee Benefits: (Contd.)..
Actual return on the assets for the period ended March 31,2022 and year ended March 31,2021 were '' 183 and '' 195 respectively.
There is no compulsion on the part of the Company to fully pre fund the liability of the Plan. The Companyâs philosophy is to fund the benefits based on its own liquidity and tax position as well as level of underfunding of the plan.
The plan assets in respect of gratuity represent funds managed by the BSE employee Gratuity Fund. The Employerâs best estimate of the contributions expected to be paid to the plan during the next year is '' 162.
⢠Discount Rate: The discount rate is based on the prevailing market yields of Indian government securities as at the balance sheet date for the estimated term of the obligations.
⢠Salary Escalation Rate: The estimates of future salary increase considered takes into account the inflation, seniority, promotion and other relevant factors.
39.2 Defined Contribution Plan - Provident fund, Pension Fund and New pension Scheme:
These are plans in which the Company pays pre-defined amounts to separate funds and does not have any legal or informal obligation to pay additional sums. The Company offers its employees defined contribution plan in the form of provident fund and family pension fund. Provident fund and family pension fund cover substantially all regular employees. While both, the employees and the Company pay predetermined contributions into the provident fund and New National Pension Scheme, contributions into the family pension fund are made by only the Company. The contributions are based on a certain proportion of the employeeâs salary.
The Company has an obligation to fund any shortfall on the yield of the trustâs investment over the administered interest rates on an annual basis. These administered interest rates are determined annually predominantly considering the social rather than economic factors and, in most cases, the actual return earned by the Company has been higher in the past years. There is no provision for diminution in value of investment except provision for accrued interest.
The Company recognised charge for the year ended March 31,2022 and for the year ended March 31,2021 of '' 200 and '' 205 respectively for provident fund and family pension fund contribution in the Profit or Loss.
The Company recognised charge for the year ended March 31,2022 and for the year ended March 31,2021 of '' 36 and '' 38 respectively for New National pension Scheme contribution in the Profit or Loss.
The Company recognised charge for the year ended March 31,2022 and for the year ended March 31,2021 of '' 484 and '' 611 respectively for Compensated Absences in the Profit or Loss.
40. S & P Dow Jones Indices LLC and SPDJ Singapore Pte Ltd (hereinafter collectively called as "SPDJâ) had filed arbitration proceedings against BSE under Singapore International Arbitration Centerâs rules, inter alia, challenging the termination of index licensing arrangement by BSE Limited. The Final Award passed by the Arbitrator Tribunal dated September 17, 2020 inter-alia, held that the termination of the Agreements by BSE is invalid, the Agreement continue to remain in force and the costs of arbitration, legal and other costs incurred by SPDJ shall be borne by BSE. Accordingly, an amount of '' 1,453 is paid by BSE to SPDJ with interest upto the date of payment. The said amount has been paid and has been disclosed as an "Exceptional itemâ for the year ended March 31,2021. Interest paid to SPDJ of '' 17 has also been disclosed as finance cost for the year ended March 31,2021.
41. I nteroperability among clearing corporations was implemented from June 2019. After implementation of interoperability, the members have the option to choose the clearing corporation to clear their trades. Based on their selection, the trades of BSE are cleared by respective clearing corporations.
As per the requirement arising out of August 27, 2014 SEBI Circular on CIR\MRD\DRMNP\25\2014, for contribution by exchange to Core Settlement Guarantee Fund ("Core SGFâ), BSE needs to contribute to Core SGFs of all the Clearing corporations through which its trades are cleared.
BSE has already contributed '' 14,488 to Indian Clearing Corporation Ltd., which is in excess by '' 11,777 as compared to the requirement, as of March 31,2021. Based on the transactions executed on BSE and which are cleared by other Clearing Corporations, requirement of Core SGF is '' 1,599 as on March 31,2021, which has been duly paid.
Based on representation made by the company, SEBI allowed transfer of excess contribution made by the Stock Exchanges from Core SGF of one Clearing Corporation to the Core SGF of another Clearing Corporation and hence there is no additional charge to profit and loss account in this regard.
42. The Company had earlier received observations from SEBI in respect of inspection conducted for the period 2005 - 2017, in which the Company was asked to plough back certain amount to Investorsâ Services Fund ("ISFâ) and BSE Investors Protection Fund Trust ("IPFâ) in respect of expenses charged in the earlier years to these funds. On the basis of response submitted by the Company, in the year ended March 2020, SEBI concluded and instructed the Company to plough back an amount of '' 1,037 along with interest to the said funds. Consequently, an expense of '' 1,385 was charged to the profit and loss account for the year ended March 31,2020 along with expense of '' 476 for the year ended March 31, 2018. Accordingly, an amount aggregating to '' 1,861 was disclosed as "Provision for Additional Contribution to ISF and IPFâ for the year ended March 31,2020. Subsequently, based on final amount arrived by SEBI, the Company had reassessed amount chargeable to the fund for earlier years and has written back '' 595 to "Other incomeâ in the year ended March 31,2021.
43. MD and CEO is paid remuneration based on the resolution approved by SEBI and shareholders.
The Board of Directors of the company has approved compensation to employees in lieu of capping of increment during 2020-21 due to COVID-19 pandemic. Accordingly, an amount of '' 99 is proposed to be paid to MD & CEO which has been provided in the statement of profit and loss for the quarter and year ended 31 March 2022. The payment of said compensation is subject to approval from SEBI and shareholders.
The total compensation payable to MD & CEO including the additional compensation mentioned above is within the limits specified under Section 197 read with Schedule V of the Companies Act, 2013.
44. Pursuant to SEBI Circular CIR/MRD/DP/14/2014 dated April 23,2014 and BSE Notice no-20190805-10, 20190925-31, 20191108-25, with effect from November 25, 2019, the Company has introduced the Liquidity Enhancement Scheme (LES) in derivatives. An expense of '' 2,174 and '' 1,910 has been incurred towards the scheme for the year ended March 31,2022 and year ended March 31,2021 respectively.
45. The Code on Social Security,2020 (âCodeâ) relating to employee benefits during employment and post-employment benefits received Presidential assent in September 2020. The Code has been published in the Gazette of India. However, the date on which the code will come into effect has
not been notified and the final rules/interpretation have not yet been issued. The Company will assess the impact of the Code when it comes into effect and will record any related impact in the period the Code becomes effective.
46. The management has, at the time of approving the financial statements, assessed the potential impact of the COVID-19 on the Company. Based on the current assessment, the management is of the view that impact of COVID-19 on the operations of the Company and the carrying value of its assets and liabilities is minimal.
47. LONG TERM CONTRACT INCLUDING DERIVATIVE CONTRACTS
The Company did not have any long term contracts including derivative contracts for which there were any material foreseeable losses during the year ended March 31,2022 and March 31,2021.
48. STANDARDS NOTIFIED BUT NOT YET EFFECTIVE
Ministry of corporate affaires have made amendments on March 23, 2022 in certain Indian Accounting Standards (Ind AS) namely Ind AS 101, Ind AS 103, Ind AS 109, Ind AS 16, Ind AS 37 and Ind AS 41. The Same are effective from April 01,2022.
52. OTHER STATUTORY INFORMATION
i) There are no promoters identified for the Company.
ii) The Company, for the current year as well as previous year, do not have any Benami property, where any proceedings has been initiated or pending against the company for holding any Benami property.
iii) The Company, for the current year as well as previous year, does not have any charges or satisfaction to be registered with ROC.
iv) The Company, during the current year as well as previous year, has not carried out or traded or invested in crypto currency or virtual currency.
v) The Company, for the current year as well as previous year, has not carried out any such transaction which is not recorded in the books of accounts
that has been surrendered or disclosed as income during the year in the tax assessment under Income Tax Act, 1961 (Such as search, survey any any other relevant provisions of the Income Tax Act, 1961).
vi) The Company, for the current year as well as previous year, has not advanced any loan or invested funds to any other person(s) or entity(ies), including foreign entities (intermediaries) with the understanding that the intermediaries shall:
a) directly or indirectly lend or invest in other persons or entities identified in any manner, whatsoever by or on behalf of the Company (Ultimate Beneficiary) or
b) provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiary.
vii) The Company, for the current year as well as previous year, has not received any fund from any person(s) or entity(ies), including foreign entities (Funding party) with the understanding (whether recorded in writing or otherwise) that the Group shall:
a) directly or indirectly lend or invest in other persons or entities identified in any manner, whatsoever by or on behalf of the Funding Party (Ultimate Beneficiary) or
b) provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiary.
viii) The Company has not been declared as willful defaulter by any bank or financial institution or other lender, since the company has not undertaken any borrowing during the current year and previous year.
ix) The Company, during the current year and previous year has not made any investment in downstream companies which are not in compliance with clause (87) of section 2 of the Act read with the Companies (Restriction on number of layers) Rules, 2017.
x) The Company has not entered into any scheme of arrangement in terms of sections 230 to 237 of the Companies Act, 2013 during the current year and previous year.
xi) The Company has not revalued its property plant and equipment or intangible assets or both during current year or previous year.
xii) The Company has not granted/given any loans or advances during the current year and previous year to the directors, KMP and the related party (as defined under companies Act, 2013), either severally or jointly with any other person that are repayable on demand or without specifying any terms or period of repayment.
53. Previous yearâs figures have been regrouped / reclassified and rearranged wherever necessary to correspond with the current yearâs classification / disclosure.
Mar 31, 2021
(*) Represent allotment of shares held in abeyance including bonus entitlements on such shares.
(a) The Exchange has only one class of shares referred to as equity shares having a par value of '' 2/-. Each holder of equity shares is entitled to one vote per share.
(b) Pursuant to the BSE (Corporatisation & Demutualisation) Scheme, 2005, (the Scheme) the Exchange had allotted 5,000 equity shares of '' 2/- each to each of those card based Members of the erstwhile Bombay Stock Exchange Limited whose names appeared on the Register of Members under Rule 64 in accordance with Rules, Bye-laws and Regulations, on the Record Date fixed for the purpose.
(c) Out of the total 4,77,75,000 equity shares of '' 2/- (including 4,41,00,000 bonus shares of '' 2/- each) issuable to the card based Members, the Exchange has allotted 4,69,95,000 equity shares (4,69,95,000 equity shares as on March 31, 2020) upon implementation of the BSE (Corporatisation and Demutualisation) Scheme, 2005 ("The Schemeâ). The allotment of 7,80,000 equity shares (7,80,000 equity shares as on March 31,2020) of '' 2/- each have been kept in abeyance for specific reasons pursuant to the provisions of the Scheme. However, all corporate benefits as declared from time to time, including dividend and bonus are accrued to all the 4,77,75,000 equity shares, as per the provisions of the Scheme.
(d) As a part of the demutualisation process, the Exchange in order to fulfill its obligations under the Scheme and the Securities Contracts (Regulation) (Manner of Increasing and Maintaining Public Shareholding in Recognised Stock Exchanges) Regulations, 2006 (the SEBI Regulations) dated 13th November, 2006, and further amendments thereto on 23rd December, 2008, had issued shares to Deutsche Boerse AG (DBAG) and Singapore Exchange Limited (SGX).
(e) i) The holders of equity shares are entitled to dividends, if any, proposed by the board of directors and approved by the shareholder at the
Annual General Meeting.
ii) I n the event of liquidation of the Company, the holders of equity shares will be entitled to receive any of the remaining assets of the
Company, after distribution of preferential amounts. However, no such preferential amounts exists currently. The distribution will be in proportion to the number of equity shares held by the shareholders.
The general reserve created from time to time transfer profits from retained earnings for appropriation purposes. As the general reserve created by a transfer from one component of equity to another and is not an item of other comprehensive income, items included in general reserve will not be reclassified to the Statement of Profit and Loss.
Pursuant to the BSE (Corporatisation & Demutualisation) Scheme, 2005, (the Scheme) the balance in Contribution by Members, Forfeiture of Members Application Money, Technology Reserve, Stock Exchange building, Seth Chunnilal Motilal Library, Charity, Income and Expenditure Account as at 19th August, 2005 as appearing in the Exchange are transferred to Capital Reserve being reserves which shall not be used for purposes other than the operations of the Exchange.
The same reflects surplus/deficit after taxes in the Statement of Profit and Loss. The amount that can be distributed by the Company as dividends to its equity shareholders is determined based on the balance in this reserve and also considering the requirements of the Companies Act, 2013.
The Board of Directors, in its meeting on May 13, 2021, have proposed a final dividend of '' 21/- per equity share of face value '' 2/- per share for the financial year ended March 31,2021. The proposal is subject to the approval of shareholders at the Annual General Meeting to be held and if approved would result in a cash outflow of approximately '' 9,619.
The management assessed that fair value of cash and short-term deposits, trade receivables, trade payables and other current financial assets and liabilities approximate their carrying amounts largely due to the short-term maturities of these instruments.
The fair value of the financial assets and financial liabilities is included at the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale.
The following methods and assumptions were used to estimate the fair values:
(a) The fair value of the quoted bonds and debentures are based on price quotations at reporting date. The fair value of unquoted instruments and other financial liabilities, as well as other non-current financial liabilities is estimated by discounting future cash flows using rates currently available for debt on similar terms, credit risk and remaining maturities except for unquoted instruments where observable inputs are available.
(b) The fair values of the unquoted equity shares have been estimated using a discounted cash flow model. The valuation requires management to make certain assumptions about the model inputs, including forecast cash flows, discount rate, credit risk and volatility, the probabilities of the various estimates within the range can be reasonably assessed and are used in managementâs estimate of fair value for these unquoted equity investments.
The Companyâs principal financial liabilities comprise trade and other payables. The main purpose of these financial liabilities is to support its operations. The Companyâs principal financial assets include trade and other receivables, and cash and short-term deposits that derive directly from its operations.
The Companyâs activities expose it to a variety of financial risks: credit risk, liquidity risk, market risk (including foreign currency and interest rate risk), regulatory risk and clearing & settlement risk. The Companyâs primary focus is to foresee the unpredictability of financial markets and seek to minimize potential adverse effects on its financial performance.
It is the Companyâs policy that no trading in derivative for speculative purposes maybe undertaken. The Board of Directors reviews and agrees policies for managing each of these risks, which are summarised below:
Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual obligations and arises principally from the Companyâs receivables from customers and investment securities. Credit risk arises from cash held with banks and financial institutions, as well as credit exposure to clients, including outstanding accounts receivable. The maximum exposure to credit risk is equal to the carrying value of the financial assets. The objective of managing counterparty credit risk is to prevent losses in financial assets. The Company assesses the credit quality of the counterparties, taking into account their financial position, past experience and other factors.
33. FINANCIAL RISK MANAGEMENT (Contd.)..
⢠Trade and other receivables
The Companyâs exposure to credit risk is influenced mainly by the individual characteristics of each customer.
The demographics of the customer, including the default risk of the industry in which the customer operates, also has an influence on credit risk assessment.
The Company provides the stock exchange services to its listed customers and registered members (who have provide the collaterals and other securities for trading done on its platform), hence the Company operates with large number of customers portfolio and its revenue is not concentrated on small number of customers.
None of the customers accounted for more than 10% of the receivables and revenue for the year ended March 31,2021 and March 31, 2020.
The Company limits its exposure to credit risk by making investment as per the investment policy. The Company addresses credit risk in its investments by mandating a minimum rating against the security / institution where the amounts are invested and is further strengthened by mandating additional requirement like Capital Adequacy Ratio (CAR), Allowable Net Non-Performing Asset (NNPA) Levels, Minimum Average Assets Under Management (AAUM) etc. for certain types of investments. Further the investment committee of the Company reviews the investment portfolio on bi-monthly basis and recommend or provide suggestion to the management. The Company does not expect any losses from non-performance by these counter-parties, other than losses which are provided, and does not have any significant concentration of exposures to specific industry sectors. The Company does not invest in equity instruments unless they are strategic in nature.
Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they become due. The Company manages its liquidity risk by ensuring, as far as possible, that it will always have sufficient liquidity to meet its liabilities when due.
The Companyâs corporate treasury department is responsible for liquidity, funding as well as settlement management. In addition, processes and policies related to such risks are overseen by senior management.
The management monitors the Companyâs net liquidity position through forecasts on the basis of expected cash flows.
The Companyâs business, financial condition and results of operations are highly dependent upon the levels of activity on the exchange, and in particular upon the volume of financial assets traded, the number of listed securities, the number of new listings and subsequent issuances, liquidity and similar factors, as a significant portion of our revenue depends, either directly or indirectly, on trading, listing, clearing and settlement transaction-based fees.
33. FINANCIAL RISK MANAGEMENT (Contd.)..
The Companyâs financial condition and results of operations are also dependent upon the success of our clearing, settlement and other issuer services, which, in turn, are directly dependent on the liquidity and financial strength of our customers, namely financial intermediaries such as brokers, and their respective clients.
In addition to the above risk, market risk also includes foreign currency risk and interest rate risk.
The Companyâs exchange risk arises from its foreign operations, foreign currency revenues and expenses, (primarily in U.S. Dollars and Euros). Companyâs revenues insignificant portion are in these foreign currencies, while a significant portion of its costs are in Indian rupees.
As a result, if the value of the Indian rupee appreciates relative to these foreign currencies, the Companyâs revenues measured in rupees may decrease. The exchange rate between the Indian rupee and these foreign currencies has changed substantially in recent periods and may continue to fluctuate substantially in the future. Due to lessor quantum of revenue and expenses from foreign currencies the Company is not much exposed to foreign currency risk.
I nterest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. Interest rates are sensitive to many factors, including governmental, monetary and tax policies, domestic and international economic and political considerations, fiscal deficits, trade surpluses or deficits, regulatory requirements and other factors beyond the Companyâs control. Changes in the general level of interest rates can affect the profitability by affecting the spread between, amongst other things, income which Company receives on investments in debt securities, the value of interest-earning investments, its ability to realise gains from the sale of investments.
Interest rate risk primarily arises from floating rate investment. The Companyâs investments in floating rate are primarily short-term, which do not expose it to significant interest rate risk.
The Company requires a number of regulatory approvals, licenses, registrations and permissions to operate business, including at a corporate level as well as at the level of each of itâs components. For example, the Company have licenses from SEBI in relation to, among others, introducing derivatives contracts on various indices of the exchange, introduction of futures and options contracts on various indices of the exchange, setting up an SME platform and trading in government securities. Some of these approvals are required to be renewed from time to time. The Companyâs operations are subject to continued review and the governing regulations may change. The Companyâs regulatory team constantly monitors the compliance with these rules and regulations.
There have been several changes to the form and manner in which recognised stock exchanges must make contributions to a Settlement Guarantee Fund and Core Settlement Guarantee Fund in the last few years. Should SEBI in the future vary the required contribution amounts to the Settlement Guarantee Fund, the Company may have to contribute more of funds to the Settlement Guarantee Fund which could materially and adversely affect the Companyâs financial ability. The Companyâs regulatory team keeps a track regarding the amendments in SEBI circulars/ regulations pertaining to such settlement guarantee fund.
Parties to a settlement may default on their obligations for reason beyond the control of the Company. The clearing and settlement operations are conducted through a wholly owned subsidiary Indian Clearing Corporation Limited (ICCL). ICCL guarantees the settlement of trade executed on Companyâs platform and maintains a core settlement guarantee fund to support its guarantee obligations.
The Companyâs policy is to maintain a strong capital base so as to maintain investor, creditor and market confidence and to sustain future development of the business. The Company monitors the return on capital as well as the level of dividends on its equity shares. The Companyâs objective when managing capital is to maintain an optimal structure so as to maximize shareholder value.
The Company is predominantly equity financed which is evident from the capital structure. Further, the Company has always been a net cash company with cash and bank balances along with investment which is predominantly investment in liquid and short term mutual funds being far in excess of financial liabilities.
Compliance with externally imposed capital requirements:
I n accordance with regulation 14 of Securities Contracts (Regulation) (Stock Exchanges and Clearing Corporations) Regulations, 2018, the Company shall have a minimum networth of '' 100 Crore at all times.
1. During the previous year, the Company has received SEBI Directives on BSE towards Cyber Security Audit and in response to the above, the Company has submitted its reply to SEBI for reconsideration and to the extent the amount of '' 70 is considered as contingent liability.
2. The Companyâs pending litigations comprise of claims against the Company primarily by the customers/ vendors and proceedings pending with Tax and other regulatory authorities. The Company has reviewed all its pending litigations and proceedings and has adequately provided for where provisions are required and disclosed the contingent liabilities where applicable, in its financial statements. The Company does not expect the outcome of these proceedings to have a material adverse effect on its financial statements at March 31,2021.
Estimated amount of contracts remaining to be executed on capital account and not provided for are '' 617 as at March 31,2021 ('' 2,238 as at March 31,2020)
38. The Managing Director and CEO of the Company has been identified as the Chief Operating Decision Maker (CODM) as defined by Ind AS 108, Operating Segments. The CODM evaluates the Companyâs performance and allocates resources.
38.1 The "Companyâ or the "Exchangeâ operates only in one Operating Segment i.e. "Facilitating Trading in Securities and other related ancillary Servicesâ, hence have only one reportable Segment as per Indian Accounting Standard 108 "Operating Segmentsâ. The reportable business segments are in line with the segment wise information which is being presented to the CODM.
39. Employee Benefits:39.1 Defined Benefit Plan - Gratuity:
The Company offers its employees defined-benefit plans in the form of a gratuity scheme (a lump sum amount). Benefits under the defined benefit plans are typically based on years of service and the employeeâs compensation (generally immediately before retirement). The gratuity scheme covers substantially all regular employees.
39. Employee Benefits: (Contd.)..
There is no compulsion on the part of the Company to fully pre fund the liability of the Plan. The Companyâs philosophy is to fund the benefits based on its own liquidity and tax position as well as level of underfunding of the plan.
The plan assets in respect of gratuity represent funds managed by the BSE employee Gratuity Fund. The Employerâs best estimate of the contributions expected to be paid to the plan during the next year is '' 169.
39.2 Defined Contribution Plan- Provident fund, Pension Fund and New pension Scheme:
These are plans in which the Company pays pre-defined amounts to separate funds and does not have any legal or informal obligation to pay additional sums. The Company offers its employees defined contribution plan in the form of provident fund and family pension fund. Provident fund and family pension fund cover substantially all regular employees. While both, the employees and the Company pay predetermined contributions into the provident fund and New National Pension Scheme, contributions into the family pension fund are made by only the Company. The contributions are based on a certain proportion of the employeeâs salary.
The Company has an obligation to fund any shortfall on the yield of the trustâs investment over the administered interest rates on an annual basis. These administered interest rates are determined annually predominantly considering the social rather than economic factors and, in most cases, the actual return earned by the Company has been higher in the past years. There is no provision for diminution in value of investment except provision for accrued interest.
The Company recognised charge for the year ended March 31,2021 and for the year ended March 31,2020 of '' 205 and '' 231 respectively for provident fund and family pension fund contribution in the Profit or Loss.
The Company recognised charge for the year ended March 31,2021 and for the year ended March 31,2020 of '' 38 and '' 55 respectively for New National pension Scheme contribution in the Profit or Loss.
The Company recognised charge for the year ended March 31,2021 and for the year ended March 31,2020 of '' 611 and '' 497 respectively for Compensated Absences in the Profit or Loss.
40. a) During the previous year, the Company had divested its 4% stake in its associate company Central Depository Services (India) Limited
("CDSLâ) through offer for sale. The profit on divestment amounting to '' 9,158 was reflected as an "Exceptional Itemâ for the year ended March 31,2020.
b) S & P Dow Jones Indices LLC and SPDJ Singapore Pte Ltd (hereinafter collectively called as "SPDJâ) had filed arbitration proceedings against BSE under Singapore International Arbitration Centerâs rules, inter alia, challenging the termination of index licensing arrangement by BSE Limited. The Final Award passed by the Arbitrator Tribunal dated September 17, 2020 inter-alia, held that the termination of the Agreements by BSE is invalid, the Agreement continue to remain in force and the costs of arbitration, legal and other costs incurred by SPDJ shall be borne by BSE. Accordingly, an amount of '' 1,453 is paid by BSE to SPDJ with interest upto the date of payment. The said amount has been paid and has been disclosed as an "Exceptional itemâ for the year ended March 31,2021. Interest paid to SPDJ of '' 17 has also been disclosed as finance cost for the year ended March 31,2021.
41. I nteroperability among clearing corporations was implemented from June 2019. After implementation of interoperability, the members have the option to choose the clearing corporation to clear their trades. Based on their selection, the trades of BSE are cleared by respective clearing corporations.
As per the requirement arising out of August 27, 2014 SEBI Circular on CIR\MRD\DRMNP\25\2014, for contribution by exchange to Core Settlement Guarantee Fund ("Core SGFâ), BSE needs to contribute to Core SGFs of all the Clearing corporations through which its trades are cleared.
BSE has already contributed '' 14,488 to Indian Clearing Corporation Ltd., which is in excess by '' 11,777 as compared to the requirement, as of March 31,2021. Based on the transactions executed on BSE and which are cleared by other Clearing Corporations, requirement of Core SGF is '' 1,599 as on March 31,2021, which has been duly paid.
Based on representation made by the Company, SEBI allowed transfer of excess contribution made by the Stock Exchanges from Core SGF of one Clearing Corporation to the Core SGF of another Clearing Corporation and hence there is no additional charge to profit and loss account in this regard.
42. The Company had earlier received observations from SEBI in respect of inspection conducted for the period 2005 - 2017, in which the Company was asked to plough back certain amount to Investorsâ Services Fund ("ISFâ) and BSE Investors Protection Fund Trust ("IPFâ) in respect of expenses charged in the earlier years to these funds. On the basis of response submitted by the Company, in the year ended March 2020, SEBI concluded and instructed the Company to plough back an amount of '' 1,037 along with interest to the said funds. Consequently, an expense of '' 1,385 was charged to the profit and loss account for the year ended March 31,2020 along with expense of '' 476 for the year ended March 31,2018. Accordingly, an amount aggregating to '' 1,861 was disclosed as "Provision for Additional Contribution to ISF and IPFâ for the year ended March 31,2020. Subsequently, based on final amount arrived by SEBI, the Company had reassessed amount chargeable to the fund for earlier years and has written back '' 595 to "Other incomeâ in the year ended March 31,2021.
43. Pursuant to SEBI Circular CIR/MRD/DP/14/2014 dated April 23,2014 and BSE Notice no-20190805-10, 20190925-31, 20191108-25, with effect from November 25, 2019, the Company has introduced the Liquidity Enhancement Scheme (LES) in derivatives. An expense of '' 1,910 and '' 219 has been incurred towards the scheme for the year ended March 31,2021 and year ended March 31,2020 respectively.
44. The Code on Social Security,2020 (âCodeâ) relating to employee benefits during employment and post-employment benefits received Presidential assent in September 2020. The Code has been published in the Gazette of India. However, the date on which the code will come into effect has not been notified and the final rules/interpretation have not yet been issued. The Company will assess the impact of the Code when it comes into effect and will record any related impact in the period the Code becomes effective.
45. The novel coronavirus (COVID-19) pandemic continues to spread across the globe including India. COVID-19 has taken its toll on not just human life, but business and financial markets too. With substantial increase in COVID-19 cases across different parts of the country, governments have introduced a variety of measures to contain the spread of the virus, including lockdowns and restrictions on movement of people and goods across different geographies.
Certain establishments including securities market intermediaries are permitted to operate and continue to remain exempted from restrictions. In case there is disruption in the functioning of the capital markets, the business of the Company may be affected.
The management has, at the time of approving the financial statements, assessed the potential impact of the COVID-19 on the Company. Based on the current assessment, the management is of the view that impact of COVID-19 on the operations of the Company and the carrying value of its assets and liabilities is minimal.
46. The Company has opted for the Sabka Vishwas (Legacy Dispute Resolution) scheme, 2019 for the settlement of service tax matter of earlier years. Accordingly, an amount of '' 366 was paid under the said scheme, which was charged to the statement of profit and loss for the year ended March 31,2020.
47. Previous yearâs figures have been regrouped / reclassified and rearranged wherever necessary to correspond with the current yearâs classification / disclosure.
Mar 31, 2018
1. COMPANY OVERVIEW
BSE Limited (Formerly known as Bombay Stock Exchange Limited) herein after referred to as the âExchangeâ or âthe Companyâ was established in 1875 and is Asia''s first Stock Exchange and one of India''s leading exchange groups. The registered office of the Company is at 25th floor, P. J. Towers, Dalal Street, Mumbai 400 001, Maharashtra, India. Over the past 143 years, BSE has provided a capital-raising platform and provided a platform for trading in equity, debt instruments, derivatives and mutual funds. It also has a platform for trading in equities of small-and-medium enterprises (SME). Pursuant to the BSE (Corporatization and Demutualization) Scheme, 2005 (the Scheme) notified by Securities and Exchange Board of India (âSEBIâ) on May 20, 2005, the Exchange completed demutualization and corporatization in May 2007 bringing about the separation of the ownership and management.
The equity shares of the Company are listed on the National Stock Exchange of India Limited (NSE).
The financial statements were authorized for issue by the Company''s Board of Directors on May 4, 2018.
2. SIGNIFICANT ACCOUNTING POLICIES
2.1 Basis of preparation and presentation
2.1.1 Statement of compliance
The financial statements as at and for the year ended March 31, 2018 have been prepared in accordance with Indian Accounting Standards (âInd ASâ) notified under the Companies (Indian Accounting Standards) Rules, 2015 and Companies (Indian Accounting Standards) Amendment Rules, 2016.
2.1.2 Basis of measurement
The financial statements have been prepared on a historical cost convention and on an accrual basis, except for certain items that are measured at fair value as required by relevant Ind AS:
(i) Financial assets and financial liabilities measured at fair value (refer accounting policy on financial Instruments);
(ii) Defined benefit and other long-term employee benefits.
2.1.3 Functional and presentation currency
The financial statements of the Company are presented in Indian rupees, the national currency of India, which is the functional currency of the Company and the currency of the primary economic environment in which the Company operates. All financial information presented in Indian rupees has been rounded to the nearest lakh except share and per share data in terms of Schedule III unless otherwise stated.
2.1.4 Use of estimates and judgment
The preparation of financial statements in conformity with Ind AS requires management to make judgments, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income, expenses, disclosure of contingent assets and disclosure of contingent liabilities. Actual results may differ from these estimates.
Estimates and underlying assumptions are reviewed on a periodic basis. Revisions to accounting estimates are recognised in the period in which the estimates are revised and in any future periods affected. In particular, information about significant areas of estimation, uncertainty and critical judgments in applying accounting policies that have the most significant effect on the amounts recognised in the financial statements is included in the following notes:
(i) Income taxes and deferred tax: The Company''s tax jurisdiction is in India. Significant judgments are involved in determining the provision for income taxes, deferred tax assets and liabilities including the amount expected to be paid or recovered in connection with uncertain tax positions.
(ii) Minimum Alternate Tax (âMATâ) paid in accordance with the tax laws, which gives future economic benefits in the form of adjustment to future income tax liability, is considered as an asset if there is convincing evidence that the Company will pay normal income tax.
2. SIGNIFICANT ACCOUNTING POLICIES (Contd.)..
Accordingly, MAT is recognised as a deferred tax asset in the Balance Sheet when it is highly probable that future economic benefit associated with it will flow to the Company. The management estimate the Company to pay normal tax and benefit associated with MAT will flow to the Company within permissible time limit under Income Tax Act, 1961 to the extent MAT asset recognised.
(iii) Impairment of Goodwill: Determining whether goodwill is impaired requires an estimation of the value in use of the cash generating unit to which goodwill has been allocated. The value in use calculation requires to estimate the future cash flows expected to arise from the cash-generating unit and discount rate in order to calculate present value. Where the actual future cash flows are less than expected, a material impairment loss may arise. Goodwill is tested for impairment on annual basis.
(iv) Defined employee benefit assets/ liabilities determined based on the present value of future obligations using assumptions determined by the Company with advice from an independent qualified actuary.
(v) Property, plant and equipment and investment property: The charge in respect of periodic depreciation is derived after determining an estimate of an asset''s expected useful life and the expected residual value at the end of its life. The useful life and residual values of the Company''s assets at the end of its useful life are estimated by management at the time the asset is acquired and reviewed periodically, including at each financial year end. The useful life are based on historical experience with similar assets as well as anticipation of future events, which may impact their life, such as changes in technology.
(vi) Impairment of trade receivables: The Company estimates the probability of collection of accounts receivable by analyzing historical payment patterns, customer status, customer credit-worthiness and current economic trends. If the financial condition of a customer deteriorates, additional allowances may be required.
(vii) Fair value measurement of financial instruments: The Company estimates fair values of the unquoted equity shares using discounted cash flow model. The valuation requires management to make certain assumptions about the model inputs, including forecast cash flows, discount rate, credit risk and volatility, the probabilities of the various estimates within the range can be reasonably assessed and are used in management''s estimate of fair value for these unquoted equity investments (refer note 32).
2.1.5 Summary of significant accounting policies (i) Foreign currency transactions and balances
Transactions in foreign currency are translated into the respective functional currencies using the exchange rates prevailing at the dates of the respective transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at the exchange rates prevailing at reporting date of monetary assets and liabilities denominated in foreign currencies are recognised in the Statement of Profit and Loss and reported within foreign exchange gains/ (losses).
(ii) Investment properties
Investment properties are properties held to earn rentals and/ or for capital appreciation (including properties under construction for such purposes). Investment properties are measured initially at cost including transaction costs, subsequent to initial recognition, investment properties are measured in accordance with Ind AS 16''s requirements for cost model.
Investment property is derecognised upon disposal or when the investment property permanently withdrawn from use and no future economic benefits are expected from the disposal. Any gain or loss arising on DE recognition of the property is included in the Statement of Profit or Loss in the period in which the property is derecognised.
(iii) Financial instruments
Financial assets and financial liabilities are recognised when the Company becomes a party to the contractual provisions of the instruments.
All financial instruments are recognised initially at fair value. Transaction costs that are attributable to the acquisition of the financial asset (other than financial assets recorded at fair value through profit or loss) are included in the fair value of the financial assets. Purchase or sales of financial assets that require delivery of assets within a time frame established by regulation or convention in the market place (regular way trade) are recognised on trade date. While, loans and borrowings are recognised net of directly attributable transactions costs.
For the purpose of subsequent measurement, financial instruments of the Company are classified in the following categories: financial assets (debt instrument) comprising amortised cost, financial assets (debt instrument) comprising Fair Value Through Other Comprehensive Income (âFVTOCIâ), financial asset (equity instruments) at Fair Value Through Profit and Loss account (âFVTPLâ) and FVTOCI and financial liabilities at amortised cost or FVTPL.
The Company derecognises a financial asset when the contractual rights to the cash flows from the financial asset expire or it transfers the financial asset and the transfer qualifies for derecognition under Ind AS 109. A financial liability (or a part of a financial liability) is derecognised from the Company''s Balance Sheet when the obligation specified in the contract is discharged or cancelled or expires.
The classification of financial instruments depends on the objective of the business model for which it is held. Management determines the classification of its financial instruments at initial recognition.
Financial assets (a) Financial assets (debt instrument) at amortised cost
A financial asset shall be measured at amortised cost if both of the following conditions are met:
- the financial asset is held within a business model whose objective is to hold financial assets in order to collect contractual cash flows and
- the contractual terms of the financial asset give rise on specified dates to cash flows that are Solely Payments of Principal and Interest on the principal amount outstanding (âSPPIâ).
They are presented as current assets, except for those maturing later than 12 months after the reporting date which are presented as non-current assets. Financial assets are measured initially at fair value plus transaction costs and subsequently carried at amortised cost using the effective interest method, less any impairment loss.
Amortised cost are represented by investment in interest bearing debt instruments, trade receivables, security deposits, cash and cash equivalents, employee and other advances and eligible current and non-current assets.
Cash and cash equivalents comprise cash on hand and in banks and demand deposits with banks with original maturity less than 3 months which can be withdrawn at any time without prior notice or penalty on the principal.
For the purposes of the cash flow statement, cash and cash equivalents include cash on hand, in banks and demand deposits with banks, net of outstanding bank overdrafts that are repayable on demand, book overdraft and are considered part of the Company''s cash management system.
(b) Financial asset (debt Instrument) at FVTOCI
A debt instrument shall be measured at fair value through other comprehensive income if both of the following conditions are met:
2. SIGNIFICANT ACCOUNTING POLICIES (Contd.)..
- the objective of the business model is achieved by both collecting contractual cash flows and selling financial assets and
- the asset''s contractual cash flow represent SPPI debt instruments included within FVTOCI category are measured initially as well as at each reporting period at fair value plus transaction costs.
Fair value movements are recognised in Other Comprehensive Income (âOCIâ). However, the Company recognises interest income, impairment losses & reversals and foreign exchange gain loss in Profit or Loss. On derecognition of the asset, cumulative gain or loss previously recognised in OCI is reclassified from equity to profit and loss. Interest earned is recognised under the expected interest rate (EIR) model.
Currently the Company has not classified any interest bearing debt instrument under this category.
(c) Equity instruments at FVTOCI and FVTPL
All equity instruments are measured at fair value other than investment in subsidiaries, joint venture and associate. Equity instruments held for trading is classified as FVTPL. For all other equity instruments, the Company may make an irrevocable election to present subsequent changes in the fair value in OCI. The Company makes such election on an instrument-by-instrument basis.
If the Company decides to classify an equity instrument as at FVTOCI, then all fair value changes on the instrument, excluding dividend are recognised in OCI which is not subsequently recycled to Profit or Loss.
Currently the Company has not classified any equity instrument at FVTOCI.
If the Company decides to classify an equity instrument as at FVTPL, then all fair value changes on the instrument and dividend are recognised in Profit or Loss.
(d) Equity investments in Subsidiaries and Associates
All equity investment in subsidiaries and associates are measured at cost.
(e) Financial assets at FVTPL
FVTPL is a residual category for financial assets. Any financial asset which does not meet the criteria for categorization as at amortised cost or as FVTOCI, is classified as FVTPL. In addition the Company may elect to designate the financial asset, which otherwise meets amortised cost or FVTOCI criteria, as FVTPL if doing so eliminates or significantly reduces a measurement or recognition inconsistency.
Earmarked Funds
Earmarked funds represent deposits, margins, etc. held for specific purposes. These amounts are invested and the same are earmarked in the Balance Sheet. Investment income earned on financial instrument measured at amortised cost is credited to respective earmarked liabilities and not credited to the Statement of Profit or Loss. The Gain/ (Loss) on Fair Value of the investments from these earmarked funds are shown as liabilities/ asset and are not routed through the Profit or Loss.
Financial liabilities (a) Financial liabilities at amortised cost
Financial liabilities at amortised cost represented by trade and other payables are initially recognised at fair value, and subsequently carried at amortised cost using the effective interest method.
(b) Financial liabilities at FVTPL
Financial liabilities at FVTPL represented by contingent consideration that are measured at fair value with all changes recognised in the Statement of Profit and Loss.
Equity Instruments (Share capital)
Ordinary shares: - Ordinary shares are classified as equity. Incremental costs directly attributable to the issuance of new ordinary shares or buyback of existing equity shares are recognised as a deduction from equity, net of any tax effect (if any).
(iv) Fair value of financial instruments
In determining the fair value of its financial instruments, the Company uses a variety of methods and assumptions that are based on market conditions and risks existing at each reporting date. The methods used to determine fair value include discounted cash flow analysis, available quoted market prices and dealer quotes. All methods of assessing fair value result in general approximation of value, and such value may never actually be realized.
(v) Property, Plant and Equipment
(a) Recognition and measurement: Property, plant and equipment are measured at cost less accumulated depreciation and impairment losses, if any. Cost includes expenditures directly attributable to the acquisition of the asset.
Freehold land is not depreciated.
Depreciation methods, useful life and residual values are reviewed at each reporting date, with the effect of any changes in estimate accounted for on a prospective basis.
When parts of an item of property, plant and equipment have different useful life, they are accounted for as separate items (major components) of property, plant and equipment. Subsequent expenditure relating to property, plant and equipment is capitalized only when it is probable that future economic benefits associated with these will flow to the Company and the cost of the item can be measured reliably. Repairs and maintenance costs are recognised in the Statement of Profit and Loss when incurred. The cost and related accumulated depreciation are eliminated from the financial statements upon sale or disposition of the asset and the resultant gains or losses are recognised in the Profit or Loss.
Amounts paid towards the acquisition of property, plant and equipment outstanding as of each reporting date and the cost of property, plant and equipment not ready for intended use before such date are disclosed under capital work-in-progress.
(vi) Intangible assets
Intangible assets are stated at cost less accumulated amortization and impairment. Intangible assets are amortised over their respective estimated useful life on a âWritten Down Valueâ, from the date that they are available for use. The estimated useful life of an identifiable intangible asset is based on a number of factors including the effects of obsolescence, demand, competition and other economic factors (such as the stability of the industry and known technological advances) and the level of maintenance expenditures required to obtain the expected future cash flows from the asset.
Amortisation methods, useful life and residual values are reviewed at each reporting date, with the effect of any changes in estimate accounted for on a prospective basis.
Derecognition of intangible assets
An intangible asset is derecognised on disposal, or when no future economic benefits are expected from use or disposal. Gains or losses arising from derecognition of an intangible asset, measured as the difference between the net disposal proceeds and the carrying amount of the asset, and are recognised in profit or loss when the asset is derecognised.
(vii) Leases:
Leases under which the Company assumes substantially all the risks and rewards of ownership are classified as finance leases. All other leases are classified as operating leases.
Finance Lease:
When acquired, such assets are capitalized at fair value or present value of the minimum lease payments at the inception of the lease, whichever is lower. Corresponding liability to the lessor is included in the financial statements as finance lease obligation.
Operating Lease:
Lease payments under operating leases are recognised as an income/ expense on a straight line basis in the Statement of Profit and Loss over the lease term except where the lease payments are structured to increase in line with expected general inflation.
(viii) Impairment
(a) Financial assets carried at amortised cost and FVTOCI
In accordance with Ind AS 109, the Company applies Expected Credit Loss (ECL) model for measurement and recognition of impairment loss. The Company follows âsimplified approach'' for recognition of impairment loss allowance on trade receivable.
The application of simplified approach does not require the Company to track changes in credit risk. Rather, it recognises impairment loss allowance based on lifetime ECLs at each reporting date, right from its initial recognition.
For recognition of impairment loss on other financial assets and risk exposure, the Company determines that whether there has been a significant increase in the credit risk since initial recognition. If credit risk has not increased significantly, 12-month ECL is used to provide for impairment loss. However, if credit risk has increased significantly, lifetime ECL is used. If in subsequent period, credit quality of the instrument improves such that there is no longer a significant increase in credit risk since initial recognition, then the entity reverts to recognising impairment loss allowance based on 12 month ECL. Lifetime ECLs are the expected credit losses resulting from all possible default events over the expected life of a financial instrument. The 12 month ECL is a portion of the lifetime ECL which results from default events that are possible within 12 months after the reporting date. ECL is the difference between all contractual cash flows that are due to the Company in accordance with the contract and all the cash flows that the entity expects to receive (i.e. all shortfalls), discounted at the original EIR. When estimating the cash flows, an entity is required to consider:
- All contractual terms of the financial instrument (including prepayment, extension etc.) over the expected life of the financial instrument. However, in rare cases when the expected life of the financial instrument cannot be estimated reliably, then the entity is required to use the remaining contractual term of the financial instrument.
- Cash flows from the sale of collateral held or other credit enhancements that are integral to the contractual terms.
The Company has used a practical expedient by computing the expected credit loss allowance for trade receivable based on a detailed analysis of trade receivable by individual departments.
ECL impairment loss allowance (or reversal) recognised during the year is recognised as income/ expense in the Statement of Profit and Loss.
Financial assets measured at amortised cost, contractual revenue receivable: ECL is presented as an allowance, i.e. as an integral part of the measurement of those assets in the balance sheet. The allowance reduces the net carrying amount. Until the asset meets write off criteria, the Company does not reduce impairment allowance from the gross carrying amount.
(b) Impairment of equity investments measured at cost
Investments in subsidiaries and associates which are measured at cost are tested for impairment at the end of each reporting period. Any impairment loss is recognized in the statement of profit and loss, if the amount of impairment loss decreases subsequently then the previously recognized impairment loss is reversed in the statement of profit and loss.
(c) Non-financial assets:
The Company assesses at each reporting date whether there is any observable evidence that a non-financial asset or a group of non-financial assets is impaired. If any such indication exists, the Company estimates the amount of impairment loss. An impairment loss is calculated as the difference between an asset''s carrying amount and recoverable amount. Losses are recognised in profit or loss and reflected in an allowance account. When the Company considers that there are no realistic prospects of recovery of the asset, the relevant amounts are written off. If the amount of impairment loss subsequently decreases and the decrease can be related objectively to an event occurring after the impairment loss was recognised, then the previously recognised impairment loss is reversed through profit or loss except for goodwill.
The recoverable amount of an asset or cash-generating unit (as defined below) is the greater of its value in use and its fair value less costs to sell. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. For the purpose of impairment testing, assets are grouped together into the smallest group of assets that generates cash inflows from continuing use that are largely independent of the cash inflows of other assets or groups of assets (the âcash-generating unitâ).
(d) Impairment of Goodwill
Goodwill is tested for impairment on an annual basis. Any Impairment loss for goodwill is recognized in profit or loss. An impairment loss recognized for goodwill is not reversed in subsequent periods.
(ix) Employee Benefits
The Company participates in various employee benefit plans. Post-employment benefits are classified as either defined contribution plans or defined benefit plans. Under a defined contribution plan, the Company''s only obligation is to pay a fixed amount with no obligation to pay further contributions if the fund does not hold sufficient assets to pay all employee benefits. The related actuarial and investment risks fall on the employee. The expenditure for defined contribution plans is recognised as expense during the period when the employee provides service. Under a defined benefit plan, it is the Company''s obligation to provide agreed benefits to the employees. The related actuarial and investment risks fall on the Company. The present value of the defined benefit obligations is calculated using the projected unit credit method.
The Company has the following employee benefit plans:
(a) Gratuity:
In accordance with the Payment of Gratuity Act, 1972, the Company provides for a lump sum payment to eligible employees, at retirement or termination of employment based on the last drawn salary and years of employment with the Company. The Company''s obligation in respect of the gratuity plan, which is a defined benefit plan, is provided for based on actuarial valuation using the projected unit credit method.
Actuarial gains or losses are recognised in other comprehensive income. Further, the profit or loss does not include an expected return on plan assets. Instead net interest recognised in profit or loss is calculated by applying the discount rate used to measure the defined benefit obligation to the net defined benefit liability or asset. The actual return on the plan assets above or below the discount rate is recognised as part of re-measurement of net defined liability or asset through Other Comprehensive Income.
Remeasurements comprising actuarial gains or losses and return on plan assets (excluding amounts included in net interest on the net defined benefit liability) are not reclassified to profit or loss in subsequent periods.
(b) Compensated absences:
The employees of the Company are entitled to compensated absences. The employees can carry forward a portion of the unutilised accumulating compensated absences and utilise it in future periods or receive cash at retirement or termination of employment. The Company records an obligation for compensated absences in the period in which the employee renders the services that increases this entitlement. The Company measures the expected cost of compensated absences as the additional amount that the Company expects to pay as a result of the unused entitlement that has accumulated at the end of the reporting period. The Company recognises accumulated compensated absences based on actuarial valuation. Nonaccumulating compensated absences are recognised in the period in which the absences occur. The Company recognises actuarial gains and losses immediately in the Statement of Profit and Loss.
(c) Provident fund, pension fund and new national pension scheme:
The Company offers its employees defined contribution plan in the form of provident fund, family pension fund and new national pension scheme. The Company recognises contribution made towards provident fund, family pension fund and new national pension scheme in the Statement of Profit and Loss.
The employer and employees'' contribution to provident fund is managed by BSE Employees'' Provident Fund Trust. The trust invests in specific designated instruments as permitted by Indian law. The remaining portion is contributed to the government administered pension fund. The rate at which the annual interest is payable to the beneficiaries by the trust is being administered by the Government. The Company has an obligation to make good the shortfall, if any, between the return from the investments of the Trust and the notified interest rate.
(x) Provisions
Provisions are recognised when the Company has a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation.
The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the end of the reporting period, taking into account the risks and uncertainties surrounding the obligation.
When some or all of the economic benefits required to settle a provision are expected to be recovered from a third party, the receivable is recognised as an asset, if it is virtually certain that reimbursement will be received and the amount of the receivable can be measured reliably.
Provisions for onerous contracts are recognised when the expected benefits to be derived by the Company from a contract are lower than the unavoidable costs of meeting the future obligations under the contract. Provisions for onerous contracts are measured at the present value of lower of the expected net cost of fulfilling the contract and the expected cost of terminating the contract.
If the effect of the time value of money is material, provisions are discounted using a current pre-tax rate that reflects, when appropriate, the risks specific to the liability.
Provisions are reviewed at each balance sheet date adjusted to reflect the current best estimates. Contingent assets and contingent liabilities are not recognised but disclosed in the Financial Statements when economic inflow is probable.
(xi) Revenue
The Company derives revenue primarily from Services to Corporate and Securities Services. The Company recognises revenue when the significant terms of the arrangement are enforceable, services have been delivered and the collectability is reasonably assured. The method for recognizing revenues and costs depends on the nature of the services rendered:
(a) Time and service contracts
Revenues and costs relating to time and service contracts are recognised as the related services are rendered.
(b) Annual/ monthly fee contracts
Revenue from annual/ monthly fee contracts is recognised ratably over the period of the contract using the percentage of completion method. When services are performed through an indefinite number of repetitive acts over a specified period of time, revenue is recognised on a straight line basis over the specified period or under some other method that better represents the stage of completion.
The Company accounts for volume discounts and pricing incentives to customers by reducing the amount of revenue recognised at the time of sale/ services rendered. Revenues are shown net of goods and service tax, sales tax, value added tax, service tax and applicable discounts and allowances.
(xii) Investment income and interest expense
Investment income consists of interest income on funds invested, dividend income and gains on the disposal of FVTPL financial assets. Interest income on bond is recognised as it accrues in the Statement of Profit and Loss, using the effective interest method and interest income on deposits with banks is recognised on a time proportion accrual basis taking into the account the amount outstanding and the rate applicable.
Dividend income is recognised in the Profit or Loss on the date that the Company''s right to receive payment is established.
Interest expenses consist of interest expense on loans, borrowings and finance lease. Borrowing costs are recognised in the Profit or Loss using the effective interest method.
(xiii) Income tax
Income tax comprises current and deferred tax. Income tax expense is recognised in the Profit or Loss except to the extent it relates to items directly recognised in equity or in other comprehensive income.
(a) Current income tax
Current income tax for the current and prior periods are measured at the amount expected to be recovered from or paid to the taxation authorities based on the taxable income for the period. The tax rates and tax laws used to compute the current tax amount are those that are enacted at the reporting date and applicable for the period. The Company offsets current tax assets and current tax liabilities, where it has a legally enforceable right to set off the recognised amounts and where it intends either to settle on a net basis or to realize the asset and liability simultaneously.
(b) Deferred income tax
Deferred income tax is recognised using the balance sheet approach. Deferred income tax assets and liabilities are recognised for deductible and taxable temporary differences arising between the tax base of assets and liabilities and their carrying amount in financial statements, except when the deferred income tax arises from the initial recognition of goodwill or an asset or liability in a transaction that is not a business combination and affects neither accounting nor taxable profits or loss at the time of the transaction.
Deferred income tax asset are recognised to the extent that it is probable that taxable profit will be available against which the deductible temporary differences, and the carry forward of unused tax credits and unused tax losses can be utilized. Deferred income tax liabilities are recognised for all taxable temporary differences.
The carrying amount of deferred income tax assets is reviewed at each reporting date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred income tax asset to be utilized. Deferred income tax assets and liabilities are measured at the tax rates that are expected to apply in the period when the asset is realized or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the reporting date.
Deferred tax assets include Minimum Alternate Tax (MAT) paid in accordance with the tax laws in India, which is likely to give future economic benefits in the form of availability of set off against future income tax liability. Accordingly, MAT is recognised as deferred tax asset in the balance sheet when the asset can be measured reliably and it is probable that the future economic benefit associated with the asset will be realised.
The Company recognises interest levied and penalties related to income tax assessments in income tax expenses.
(xiv) Earnings per share
The Company reports basic and diluted earnings per share in accordance with Ind AS 33 on Earnings per share. Basic earnings per share is computed using the weighted average number of equity shares outstanding during the period.
Diluted earnings per share is computed by dividing the net profit after tax by the weighted average number of equity shares considered for deriving basic earnings per share and also weighted average number of equity shares that could have been issued upon conversion of all dilutive potential equity shares. Dilutive potential equity shares are deemed converted as of the beginning of the period, unless issued at a later date. Dilutive potential equity shares are determined independently for each period presented. The number of equity shares and potentially dilutive equity shares are adjusted for bonus shares, consolidation of shares, etc. as appropriate.
(xv) Current/ Non-current classification
The company present assets and liabilities in the balance sheet based on current/ non-current classification
Assets: An asset is classified as current when it satisfies any of the following criteria:
(a) it is expected to be realised in, or is intended for sale or consumption in, the entity''s normal operating cycle;
(b) it is held primarily for the purpose of being traded;
(c) it is expected to be realised within twelve months after the balance sheet date; or
(d) it is cash or a cash equivalent unless it is restricted from being exchanged or used to settle a liability for atleast twelve months after the balance sheet date
(e) All other assets are classified as non-current.
Liabilities: A liability is classified as current when it satisfies any of the following criteria:
(a) it is expected to be settled in, the entity''s normal operating cycle;
(b) it is held primarily for the purpose of being traded; it is due to be settled within twelve months after the balance sheet date; or
(c) the Company does not have an unconditional right to defer settlement of the liability for at least twelve months after the balance sheet date.
(d) All other liabilities are classified as non-current.
(e) Deferred tax assets and liabilities are classified as non-current assets and liabilities.
Operating Cycle
Based on the nature of products/ activities of the Company and the normal time between acquisition of assets and their realisation in cash or cash equivalents, the Company has determined its operating cycle as 12 months for the purpose of classification of its assets and liabilities as current and non-current.
14. EQUITY SHARE CAPITAL (Contd.)..
(a) The Exchange has only one class of shares referred to as equity shares having a par value of '' 2/-. Each holder of equity shares is entitled to one vote per share.
(b) Pursuant to the BSE (Corporatisation & Demutualisation) Scheme, 2005, (the Scheme) the Exchange had allotted 5,000 equity shares of '' 2/- each to each of those card based Members of the erstwhile Bombay Stock Exchange Limited whose names appeared on the Register of Members under Rule 64 in accordance with Rules, Bye-laws and Regulations, on the Record Date fixed for the purpose.
(c) Out of the total 4,77,75,000 equity shares of Rs, 2/- each (including 4,41,00,000 bonus shares of Rs, 2/- each) issuable to the card based Members, the Exchange has allotted 4,69,85,000 equity shares (4,69,85,000 equity shares as on March 31, 2017) upon implementation of the BSE (Corporatisation and Demutualisation) Scheme, 2005 (âThe Schemeâ). The allotment of 7,80,000 equity shares (7,80,000 equity shares as on March 31, 2017) of Rs, 2/- each have been kept in abeyance for specific reasons pursuant to the provisions of the Scheme. However, all corporate benefits as declared from time to time, including dividend and bonus are accrued to all the 4,77,75,000 equity shares, as per the provisions of the Scheme.
(d) As a part of the demutualisation process, the Exchange in order to fulfill its obligations under the Scheme and the Securities Contracts (Regulation) (Manner of Increasing and Maintaining Public Shareholding in Recognised Stock Exchanges) Regulations, 2006 (the SEBI Regulations) dated 13th November, 2006, and further amendments thereto on 23rd December, 2008, had issued shares to Deutsche Boerse AG (DBAG) and Singapore Exchange Limited (SGX).
(e) i) The holders of equity shares are entitled to dividends, if any, proposed by the board of directors and approved by the shareholder at
the Annual General Meeting.
ii) In the event of liquidation of the Company, the holders of equity shares will be entitled to receive any of the remaining assets of the Company, after distribution of preferential amounts. However, no such preferential amounts exists currently. The distribution will be in proportion to the number of equity shares held by the shareholders.
(f) No shareholder holds more than 5% of the Share Capital of the Company.
15.1 General reserve
The general reserve created from time to time transfer profits from retained earnings for appropriation purposes. As the general reserve created by a transfer from one component of equity to another and is not an item of other comprehensive income, items included in general reserve will not be reclassified to the Statement of Profit and Loss.
15.2 Capital reserve
Pursuant to the BSE (Corporatisation & Demutualisation) Scheme, 2005, (the Scheme) the balance in Contribution by Members, Forfeiture of Members Application Money, Technology Reserve, Stock Exchange building, Seth Chunnilal Motilal Library, Charity, Income and Expenditure Account as at 19th August, 2005 as appearing in the Exchange are transferred to Capital Reserve being reserves which shall not be used for purposes other than the operations of the Exchange.
15.3 Securities premium
Securities premium reserve reflects issuance of the shares by the Company at a premium, whether for cash or otherwise i.e. a sum equal to the aggregate amount of the premium received on shares is transferred to a âsecurities premium reserveâ as per the provisions of the Companies Act, 2013. The reserve is utilized in accordance with the provisions of the Companies Act, 2013.
15.4 Retained earnings
The same reflects surplus/ deficit after taxes in the Statement of Profit and Loss. The amount that can be distributed by the Company as dividends to its equity shareholders is determined based on the balance in this reserve and also considering the requirements of the Companies Act, 2013.
The Board of Directors, in its meeting on May 4, 2018, have proposed a final dividend of Rs, 31/- per equity share of face value Rs, 2/- per share for the financial year ended March 31, 2018. The proposal is subject to the approval of shareholders at the Annual General Meeting to be held and if approved would result in a cash outflow of approximately Rs, 20,196 including corporate dividend tax.
16.1 Secured by the leased asset. The liability is at a fixed rate of interest with original repayment period of 5 years.
16.2 Bank Balance and Bank Deposits have been earmarked against these liabilities.
16.3 Current accounts have been earmarked against this liability.
16.4 Includes income earned on earmarked fund.
Note: The Board of Directors of the Company at its meeting held on January 15, 2018, has inter-alia approved the Buyback proposal for purchase by the Company of its fully paid-up equity shares of face value of Rs, 2/- each (âEquity Sharesâ and such buyback, the âBuybackâ), from the shareholders/ beneficial owners of the Company. As on March 31, 2018, the scheme of buyback was open and 5,48,640 equity shares were bought back of which 5,02,920 equity shares were extinguished. Accordingly, the weighted average number of equity shares (issued share capital) is worked out to 5,45,43,037 equity shares for the calculation of Earnings Per Share.
31. LEASE
31.1 Finance Lease
(i) Assets acquired on finance lease mainly comprise computer equipments.
(iii) No contingent rent recognised/ (adjusted) in the Profit or Loss in respect of finance lease.
31.2 Operating lease
The Company leases office facilities and residential facilities under cancellable operating leases. The rental expense under cancellable operating lease during the year ended March 31, 2018 was Rs, 101 (for the year ended March 31, 2017: Rs, 133).
The Company does not have non-cancellable operating lease other than lease facilities towards investor services centers. Investor services centers rent expenses are incurred through investor services fund which is set aside from listing fee collected for investor services and shown under other liabilities.
The management assessed that fair value of cash and short-term deposits, trade receivables, trade payables and other current financial assets and liabilities approximate their carrying amounts largely due to the short-term maturities of these instruments.
The fair value of the financial assets and financial liabilities is included at the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale.
The following methods and assumptions were used to estimate the fair values:
(a) The fair value of the quoted bonds and debentures are based on price quotations at reporting date. The fair value of unquoted instruments and other financial liabilities, as well as other non-current financial liabilities is estimated by discounting future cash flows using rates currently available for debt on similar terms, credit risk and remaining maturities except for unquoted instruments where observable inputs are available.
(b) The fair values of the unquoted equity shares have been estimated using a discounted cash flow model. The valuation requires management to make certain assumptions about the model inputs, including forecast cash flows, discount rate, credit risk and volatility, the probabilities of the various estimates within the range can be reasonably assessed and are used in management''s estimate of fair value for these unquoted equity investments.
The Company has reviewed all its pending litigations and proceedings and has adequately provided for where provisions are required and disclosed the contingent liabilities where applicable, in its financial statements. The Company does not expect the outcome of these proceedings to have a material adverse effect on its financial statements at March 31, 2018.
1. CAPITAL COMMITMENTS
Estimated amount of contracts remaining to be executed on capital account and not provided for are mentioned in below table:-
2. The Managing Director and CEO of the Company has been identified as the Chief Operating Decision Maker (CODM) as defined by Ind AS 108 Operating Segments. The CODM evaluates the Company''s performance and allocates resources.
3. The âCompanyâ or the âExchangeâ operates only in one Operating Segment i.e. âFacilitating Trading in Securities and other related ancillary Servicesâ, hence have only one reportable Segment as per Indian Accounting Standard 108 âOperating Segmentsâ. The reportable business segments are in line with the segment wise information which is being presented to the CODM.
38.2.2The Company does not have non-current assets outside India.
4. The following regulation/ circulars issued by SEBI from time to time requires the recognition by the Company of a Settlement Guarantee Fund and the transfer of the same to its clearing corporation and the contribution of a Minimum Required Corpus to a Core Settlement Guarantee Fund (âCore SGFâ) from time to time.
5 As per Regulation 33 of The Securities Contracts (Regulations) (SECC) Regulations, 2012 (the âRegulationâ) issued on June 20, 2012, every recognised stock exchange is required to transfer twenty five percent of its annual profits every year to a fund of the recognised clearing corporation which clears and settles trades executed on that stock exchange to guarantee the settlement of trades.
6 As per Circular CIR/MRD/DRMNP/25/2014 dated August 27, 2014 issued by the Securities & Exchange Board of India (âSEBIâ) regarding a Core Settlement Guarantee Fund, every stock exchange shall contribute at least 25% of the Minimum Required Corpus (can be adjusted against transfer of profit by Stock Exchange as per Regulation 33 of SECC Regulations) to a Core SGF established and maintained by its clearing corporation.
7 Further, a clarification was issued as per Circular No SEBI/HO/MRD/DRMNP/CIR/P/2016/54 dated May 4, 2016 based on a recommendation given by the Expert Committee constituted by SEBI. It was clarified that twenty five per cent of profits till the date of amendment of Regulation 33 of SECC Regulations, 2012, shall be transferred by the Stock Exchange to the Core SGF maintained by Clearing Corporation within such time as may be specified by SEBI.
8 Thereafter, on August 29, 2016, SEBI has amended Regulation 33 of SECC Regulations, 2012. Accordingly, the Company has made provision for transfer of twenty-five percent of its profit till August 29, 2016 (pro-rata based on profit for the six months ended September 30, 2016), being the date of the amendment, towards Settlement Guarantee Fund.
The above Regulations/ Circulars were given effect to in the Financial Statements as under:
During the year ended March 31, 2017 '' 2,079 has been charged to the Profit or Loss, being 25% of the profits earned till August 29, 2016 (pro-rata based on profit for the six months ended September 30, 2016), as an âExceptional Itemâ. As at March 31, 2017 the amount of '' 6,276 payable by the Exchange in respect of the settlement guarantee fund has been disclosed under the head âOther current liabilitiesâ and subsequently paid to the Core Settlement Guarantee Fund.
9. EMPLOYEE BENEFITS:
10 Defined Benefit Plan - Gratuity:
The Company offers its employees defined-benefit plans in the form of a gratuity scheme (a lump sum amount). Benefits under the defined benefit plans are typically based on years of service and the employee''s compensation (generally immediately before retirement). The gratuity scheme covers substantially all regular employees.
The Company assesses these assumption with its projected long-term plans of growth and prevalent industry standards. The discount rate is based on the government securities yield.
The following table summarizes the impact on the reported defined benefit obligation at the end of the reporting period arising on account of an increase or decrease in the reported assumption by 50 basis points:-
Sensitivity for the significant actuarial assumptions is computed by varying one actuarial assumption used for the valuation of the defined benefit obligation by 50 basis points, keeping all other actuarial assumption constant.
Actual return on the assets for the year ended March 31, 2018 and year ended March 31, 2017 were '' 136 and '' 141 respectively.
There is no compulsion on the part of the Company to fully pre fund the liability of the Plan. The Company''s philosophy is to fund the benefits based on its own liquidity and tax position as well as level of under funding of the plan.
The plan assets in respect of gratuity represent funds managed by the BSE Employee Gratuity Fund. The Employer''s best estimate of the contributions expected to be paid to the plan during the next year is '' 200.
The weighted average duration to the payment of these cash flows is 4.03 years.
11. EMPLOYEE BENEFITS: (Contd.)..
- Discount Rate: The discount rate is based on the prevailing market yields of Indian government securities as at the balance sheet date for the estimated term of the obligations.
- Salary Escalation Rate: The estimates of future salary increases considered takes into account the inflation, seniority, promotion and other relevant factors.
12 Defined Contribution Plan - Provident fund, Pension Fund and New Pension Scheme:
These are plans in which the Company pays pre-defined amounts to separate funds and does not have any legal or informal obligation to pay additional sums. The Company offers its employees defined contribution plan in the form of provident fund and family pension fund. Provident fund and family pension fund cover substantially all regular employees. While both, the employees and the Company pay predetermined contributions into the provident fund and New National Pension Scheme, contributions into the family pension fund are made by only the Company. The contributions are based on a certain proportion of the employee''s salary.
The Company has an obligation to fund any shortfall on the yield of the trust''s investment over the administered interest rates on an annual basis. Theses administered interest rates are determined annually predominantly considering the social rather than economic factors and in most cases the actual return earned by the Company has been higher in the past years.
The Company recognised charge for the year ended March 31, 2018 and for the year ended March 31, 2017 of '' 199 and '' 184 respectively for provident fund and family pension fund contribution in the Profit or Loss.
The Company recognised charge for the year ended March 31, 2018 and for the year ended March 31, 2017 of '' 33 and '' 35 respectively for New National pension Scheme contribution in the Profit or Loss.
13 Compensated Absences
The Company recognised charge for the year ended March 31, 2018 and for the year ended March 31, 2017 of '' 489 and '' 343 respectively for Compensated Absences in the Profit or Loss.
14 a) The Company implemented a Voluntary Retirement Scheme 2017 (VRS) for all its eligible employees. Post the closure of the Scheme
an expense of '' 47 has been recognised for the year ended March 31, 2018 and has been disclosed as an âExceptional Itemâ.
b) The Company has partially divested its stake in a subsidiary company, on June 29, 2017. The profit on divestment amounting to '' 31,603 is reflected in the statement of profit and loss for the year ended March 31, 2018. The residual investment retained in the subsidiary is now considered as an investment in an associate. Further the Company had earlier partially divested its stake in subsidiary company in October, 2016 and profit amounting to '' 2,443 was credited to statement of profit and loss for the year ended March 31, 2017. Considering the nature of the income and its impact on the profit, the same has been disclosed as an exceptional item in the respective periods.
15. BUYBACK
The Board of Directors of the Company at its meeting held on January 15, 2018, has inter-alia approved the Buyback proposal for purchase by the Company of its fully paid-up equity shares of face value of '' 2/- each (âEquity Sharesâ and such buyback, the âBuybackâ), from the shareholders/ beneficial owners of the Company, at a price not exceeding '' 1,100 (Rupees One Thousand and One Hundred only) per Equity Share (âMaximum Buyback Priceâ) from the open market through stock exchange mechanism in such manner as may be prescribed in the Securities and Exchange Board of India (Buy Back of Securities) Regulations, 1998 (âBuy-back Regulationsâ) and the Companies Act, 2013 (âActâ) (including any statutory modification(s) or re-enactment of the Act or Buy-back Regulations, for the time being in force).
The Buyback shall not exceed Rs, 166 Crore (Rupees One Hundred Sixty Six Crore only), excluding brokerage costs, fees, turnover charges, taxes such as securities transaction tax and goods and service tax (if any), stamp duty and other transaction charges (âMaximum Buyback Sizeâ). The Maximum Buyback Size represents 9.99% of the aggregate of the Company''s paid-up Equity Share capital and free reserves based on the standalone audited financial statements of the Company as at March 31, 2017, which is in compliance with the maximum permissible limit of 10% of the total paid-up equity share capital and free reserves in accordance with Section 68(2) of the Companies Act, 2013.
As of March 31, 2018, the scheme of buyback was open and as of March 31, 2018, the Company bought back 5,48,640 equity shares as part of the aforementioned buy back process resulting in total cash outflow of Rs, 4,497. Out of 5,48,640 equity shares bought back, the Company extinguished 5,02,920 equity shares as at March 31, 2018 and the remaining 45,720 equity shares were extinguished in the month of April 2018 as per the records of the depositories. In line with the requirement of the Companies Act 2013, an amount of Rs, 4,487 has been utilized from the securities premium account for the buy back. Further, capital redemption reserve of Rs, 10 (representing the nominal value of the shares bought back) has been created.
16. RECENT ACCOUNTING PRONOUNCEMENTS:
Indian Accounting Standard 115 âRevenue from Contract with Customersâ (Ind AS 115): On March 28, 2018, Ministry of Corporate Affairs notified the Ind AS 115. The core principle of the new standard is that an entity should recognise revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. Further the new standard requires enhanced disclosures about the nature, amount, timing and uncertainty of revenue and cash flows arising from the entity''s contracts with customers. The effective date for adoption of Ind AS 115 is financial periods beginning on or after April 1, 2018. The effect on adoption of Ind AS 115 is yet to be determined.
17. The financial statements for the year ended March 31, 2018 has been audited by S. R. Batliboi & Co. LLP, Chartered Accountants. The financial statements for the year ended March 31, 2017 has been audited by Deloitte Haskins & Sells LLP, Chartered Accountants.
18. Previous year''s figures have been regrouped/ reclassified and rearranged wherever necessary to correspond with the current year''s classification/ disclosure.
Mar 31, 2017
1. COMPANY OVERVIEW
BSE Limited (Formerly known as Bombay Stock Exchange Limited) herein after referred to as the âExchangeâ or âthe Companyâ was established in 1875 and is Asiaâs first Stock Exchange and one of Indiaâs leading exchange groups. The registered office of the Company is at 25th floor, P. J. Towers, Dalal Street, Mumbai 400 001, Maharashtra, India. Over the past 140 years, BSE has provided a capital-raising platform and provided a platform for trading in equity, debt instruments, derivatives and mutual funds. It also has a platform for trading in equities of small-and-medium enterprises (SME). Pursuant to the BSE (Corporatization and Demutualization) Scheme, 2005 (the Scheme) notified by Securities and Exchange Board of India (âSEBIâ) on May 20, 2005, the Exchange completed demutualization and Corporatization in May 2007 bringing about the separation of the ownership and management.
The equity shares of the Company got listed on the National Stock Exchange of India Limited (NSE) on February 3, 2017.
The financial statements were authorized for issue by the Companyâs Board of Directors on May 05, 2017.
2. NEW STANDARDS AND INTERPRETATIONS NOT YET ADOPTED
Standards issued but not yet effective
In March 2017, the Ministry of Corporate Affairs issued the Companies (Indian Accounting Standards) (Amendments) Rules, 2017, notifying amendments to Ind AS 7, âStatement of cash flowsâ and Ind AS 102, âShare-based payment.â These amendments are in accordance with the recent amendments made by International Accounting Standards Board (IASB) to IAS 7, âStatement of cash flowsâ and IFRS 2, âShare-based payment,â respectively. The amendments are applicable to the company from April 1, 2017.
Amendment to Ind AS 7:
The amendment to Ind AS 7 requires the entities to provide disclosures that enable users of financial statements to evaluate changes in liabilities arising from financing activities, including both changes arising from cash flows and non-cash changes, suggesting inclusion of a reconciliation between the opening and closing balances in the balance sheet for liabilities arising from financing activities, to meet the disclosure requirement.
The Company is evaluating the requirements of the amendment and the effect on the financial statements is being evaluated.
Amendment to Ind AS 102:
The amendment to Ind AS 102 provides specific guidance to measurement of cash-settled awards, modification of cash-settled awards and awards that include a net settlement feature in respect of withholding taxes. It clarifies that the fair value of cash-settled awards is determined on a basis consistent with that used for equity-settled awards. Market-based performance conditions and non-vesting conditions are reflected in the âfair valuesâ, but non-market performance conditions and service vesting conditions are reflected in the estimate of the number of awards expected to vest. Also, the amendment clarifies that if the terms and conditions of a cash-settled share-based payment transaction are modified with the result that it becomes an equity-settled share-based payment transaction, the transaction is accounted for as such from the date of the modification. Further, the amendment requires the award that include a net settlement feature in respect of withholding taxes to be treated as equity-settled in its entirety. The cash payment to the tax authority is treated as if it was part of an equity settlement.
The Company does not have share based payments hence there will be no impact on the financial statements.
3. EXPLANATION OF TRANSITION TO IND AS
The transition as at April 1, 2015 to Ind AS was carried out from Previous GAAP. The exemptions and exceptions applied by the Company in accordance with Ind AS 101 First-time Adoption of Indian Accounting Standards, the reconciliations of equity and total comprehensive income in accordance with Previous GAAP to Ind AS are explained below.
3.1 First-time adoption - Mandatory exception, Optional exemptions:
3.1.1 Deemed Cost
The Company has elected to continue with the carrying value of all the property, plant and equipment, investment properties and intangible assets recognised as of April 1, 2015 (transition date) measured as per the previous GAAP and used that carrying value as its deemed cost as of the transition date.
3.1.2 Past business combinations
The Company has elected not apply Ind AS 103 Business Combination retrospectively to past business combinations that occurred before the transition date of April 1, 2015. Consequently,
(i) The Company has kept the same classification for the past business combinations as in its previous GAAP financial statements.
(ii) The Company has not recongnised assets and liabilities that was not recognised in accordance with previous GAAP in the balance sheet of the acquirer and would also not qualify for the recognition in accordance with Ind AS in the separate balance sheet of the acquiree.
(iii) The Company has excluded from its opening balance sheet those items recognised in accordance with previous GAAP that do not qualify for recognition as an asset or liability under Ind AS;
(iv) The Company has tested the goodwill for impairment at the transition date based on the conditions as of the transition date;
The above exemption in respect of business combinations has also been applied to past acquisitions of investments in associates, interests in joint ventures and interests in joint operations in which the activity of the joint operation constitutes a business, as defined in Ind AS 103
3.1.3 Classification of debt instruments
The Company has determined the classification of debt instruments in terms of whether they meet amortised cost criteria or the FVTOCI criteria based on the facts and circumstances that existing as of transition date.
3.1.4 Impairment of financial assets
The Company has applied the impairment requirements of Ind AS 109 retrospectively; however, as permitted by Ind AS 101, it has used reasonable and supportable information that is available without undue cost or effort to determine the credit risk at the date that financial instruments were initially recognised in order to compare it with the credit risk at the transition date. Further, the Company has not undertaken an exhaustive search for information when determining, at the date of transition to Ind ASs, whether there have been significant increases in credit risk since initial recognition, as permitted by Ind AS 101.
3.1.5 Determining whether an arrangement contains a lease
The Company has applied Appendix C of Ind AS 17 determining whether an arrangement contains a Lease to determine whether an arrangement existing at the transition date contains a lease on the basis of facts and circumstances existing at that date.
3.1.6 Equity investments at FVTPL
The Company has designated investment in equity shares at FVTPL on the basis of facts and circumstances that existed at the transition date.
3.2.5 Effect of Ind AS adoption on the statement of cash flows for the year ended March 31, 2016
There were no significant reconciliation items between cash flows prepared under IGAAP and those prepared under Ind AS.
3.2.6 Notes to Reconciliations
a Under previous GAAP, all prior period items are included in determination of net profit or loss for the period in which error pertaining to a prior period is discovered and are separately disclosed in the Statement of Profit and Loss in a manner that impact on current profit or loss can be perceived. Under Ind AS, such errors are corrected retrospectively by restating comparative amounts for the prior periods presented in which the error occurred or if the error occurred before the earliest period presented, by restating the opening Balance Sheet. The effect of this change is an decrease in total equity as at March 31, 2016 of nil (Rs.2,579 as at April 1, 2015) and a increase in profit before tax of Rs.2,579 for the year ended March 31, 2016.
b Under previous GAAP, dividends on equity shares recommended by the board of directors after the end of the reporting period but before the financial statements were approved for issue were recognised in the financial statements as a liability. Under Ind AS, such dividends are recognised when declared by the members in a general meeting. The effect of this change is an increase in total equity as at March 31, 2016 of Rs.5,256 (Rs.6,570 as at April 1, 2015), but does not affect profit before tax and total profit for the year ended March 31, 2016.
c Under previous GAAP, actuarial gains and losses were recognised in profit or loss. Under Ind AS, the actuarial gains and losses form part of remeasurement of the net defined benefit liability / asset is recognised in other comprehensive income. Consequently, the tax effect of the same has also been recognised in other comprehensive income under Ind AS instead of profit or loss. The actuarial gains for the year ended March 31, 2016 were Rs.8 and the tax effect thereon Rs.3.
This change does not affect total equity, but there is a decrease in profit before tax of Rs.8, and in total profit of Rs.5 for the year ended March 31, 2016.
d Under previous GAAP, there was no requirement to present investment property separately and the same was included under property, plant and equipment and measured at cost less accumulated depreciation. Under Ind AS, investment property is required to be presented separately in the balance sheet and depreciation is charged on it as per Ind AS 16 âProperty plant and equipmentâ. Accordingly, the carrying value of investment property as at March 31, 2016 of Rs.501 (Rs.526 as at April 1, 2015) under previous GAAP has been reclassified to a separate line item on the face of the balance sheet and depreciation provided based on the estimated useful life. This change does not affect total equity.
e Under previous GAAP, Interest bearing long term investments including current maturity of interest bearing long term investments were measured at cost less diminution in value which is other than temporary. Under Ind AS, these financial assets have been classified at amortised cost and interest income is accounted as per effective interest rate method. On the date of transition to Ind AS, these financial assets have been measured at value which would have been the value if these investment would have accounted as per Ind AS. The net effect of these changes is an increase in total equity as at March 31, 2016 of Rs.74 (Rs.15 as at April 1, 2015) and there is a increase in profit before tax of Rs.59 for the year ended March 31, 2016.
f Under previous GAAP, non-interest bearing non-current investments and current investments in mutual funds, equity instruments other than investment in subsidiaries, joint ventures and associate were measured at cost less diminution in value. Under Ind AS, these financial assets have been classified at FVTPL on the date of transition to Ind AS. The fair value changes are recognised in profit or loss and credited to respective earmarked liabilities for investment earmarked against them. On transitioning to Ind AS, these financial assets have been measured at their fair values which is higher than cost as per previous GAAP, resulting in an increase in carrying amount by Rs.121 as at March 31, 2016 and by Rs.24 as at April 1, 2015. The corresponding deferred taxes have also been recognised as at March 31, 2016 and as at April 1, 2015. The net effect of these changes is an increase in total equity as at March 31, 2016 of Rs.121 (Rs.24 as at April 1, 2015), increase in profit before tax of Rs.97 for the year ended March 31, 2016.
g Under previous GAAP, there was no concept of other comprehensive income. Under Ind AS, specified items of income, expense, gains, or losses are required to be presented in other comprehensive income.
h Under previous GAAP, Goodwill on amalgamation (business combination) in nature of purchase was required to be amortised over a period not exceeding five years, where the Company had decided to amortised goodwill on amalgamation with respect to amalgamation of United Stock Exchange of India Limited with BSE Limited. These goodwill are not amortised but tested for impairment as per Ind AS. The Company has applied the exemption available on not accounting business combination transaction retrospectively hence on transitioning to Ind AS, goodwill have been measured at carrying value and tested for impairment. Impairment loss is accounted in Profit or Loss in the period in which impairment is identified. Carrying value as per previous GAAP and Ind AS was same as at March 31, 2016 and April 1, 2015. The net effect of these changes is an increase in total equity as at March 31, 2016 of Nil (Nil as at April 1, 2015) and there is a no impact in profit before tax for the year ended March 31, 2016. Further classification of amortisation and impairment loss in Profit or Loss is different hence cause for difference in depreciation and amortisation expense and administration and other expenses of Rs.785 on face of Profit or Loss for the year ended March 31, 2016.
i Under previous GAAP, all financial assets other than investments and cash and bank balances were initially measured at cost however on transitioning to Ind AS, same were measured initially at fair value and subsequently at amortised. On the date of transition to Ind AS, these financial assets have been measured at value which would have been the value if these financial assets would have accounted as per Ind AS. Further the impact of bringing it at amortised cost given to the respective expense and prepaid expenses based on the nature of individual transaction. The net effect of these changes is a decrease in total equity as at March 31, 2016 of Rs.14 (Rs.12 as at April 1, 2015) and there is a decrease in profit before tax of Rs.2 for the year ended March 31, 2016.
j Under previous GAAP deferred taxes are computed for the timing differences in respect of recognition of items of profit or loss for the purpose of financials reporting and for income taxes. Under Ind AS, deferred taxes are computed for the temporary differences between carrying amount of an asset or liability in the Balance Sheet and its tax base. On the date of transition, deferred taxes have been calculated as per the approach defined under Ind AS on Balance Sheet as per Ind AS and accordingly difference has been accounted under Balance Sheet, Profit or Loss and Other Comprehensive Income. The effect of this change is an decrease in total equity as at March 31, 2016 of Rs.63 (Rs.9 as at April 1, 2015), and decrease in profit after tax Rs.51 for the year ended March 31, 2016.
k Under previous GAAP equity instruments were carried at cost and diminution in value of investment was provided in Profit or Loss. However under Ind AS equity instruments measured at fair value and corresponding gain / loss is accounted to the Profit or Loss on equity instruments measured at FVTPL. Accordingly the Company has accounted for Rs.206 as decrease in Fair value of equity instrument and reversed the provision for diminution of Rs.206. There is no impact on net profit on account of same however presentation of both is different on the face of Profit or Loss.
l Bank balance with remaining maturity of more than 12 months are regrouped to other financials assets from cash and bank balances.
m Refundable deposits to members reclassified from non-current to current liabilities as the Company does not have an unconditional right to defer settlement of liability for at least twelve months from the reporting period.
Note : For the purpose of impairment testing, goodwill is allocated to a cash generating unit, representing the lowest level within the Company at which goodwill is monitored for internal management purposes pertaining to the Companyâs operating segment i.e. Facilitating Trading in Securities and other related ancillary services. The recoverable amount of the cash generating unit has been determined based on value in use. Value in use has been determined based on future cash flows, after considering current economic conditions and trends, estimated future operating results, growth rates and anticipated future economic conditions. the Company carried out the annual goodwill impairment assessment as at March 31, 2016, based on which an impairment of Rs.785 was recognised for the year ended March 31, 2016 as the carrying amount of the cash generating unit exceeded its recoverable amount.
The Company is required to reduce its investment in Central Depository Services (India) Limited (ââCDSLââ) pursuant to the SEBI Regulations and SEBI Letter No MRD/DSA/OW/9183/1/2017 dated April 24, 2017, whereby the Company is required to bring down its shareholding in CDSL to 24% of the Share Capital of CDSL by June 30, 2017.
4.1 Change in the Companyâs ownership interest in a Joint Ventures
As at April 1, 2015 the Company held a 49% interest in BOI Shareholding Limited which was disposed off during the year ended March 31, 2016 to a third party for Rs.784. The same resulted in a gain of Rs.686 recorded in the Statement of Profit and Loss during the year ended March 31, 2016.
4.2 Change in the Companyâs ownership interest in an associate
As at April 1, 2015 the Company held a 30% interest in Institutional Investor Advisory Services (India) Limited which was disposed off during the year ended March 31, 2016 to third parties for Rs.300. The same resulted in a loss of Rs.100 recorded in the Statement of Profit and Loss during the year ended March 31, 2016.
1. Trade receivables are dues in respect of services rendered in the normal course of business.
2. The Normal credit period allowed by the Company ranges from 0 to 60 days.
3. The Company has used a practical expedient by computing the expected credit loss allowance for trade receivables based on a detailed analysis of trade receivables by individual departments.
4. There are no dues by directors or other officers of the Company or any of them either severally or jointly with any other person or debts due by firms or private companies respectively in which any director is a partner or a director or a member.
(*) Represent allotment of shares held in abeyance including bonus entitlements on such shares and share issued to shareholders of United Stock Exchange of India Limited.
(a) The Exchange has only one class of shares referred to as equity shares having a par value of Rs.2/-. Each holder of equity shares is entitled to one vote per share.
(b) Pursuant to the BSE (Corporatisation & Demutualisation) Scheme, 2005, (the Scheme) the Exchange had allotted 5,000 equity shares of Rs.2/- each to each of those card based Members of the erstwhile Bombay Stock Exchange Limited whose names appeared on the Register of Members under Rule 64 in accordance with Rules, Bye-laws and Regulations, on the Record Date fixed for the purpose.
(c) Out of the total 47,775,000 equity shares of Rs.2/- (including 44,100,000 bonus shares of Rs.2/- each) issuable to the card based Members, the Exchange has allotted 46,985,000 equity shares (46,865,000 equity shares as on March 31, 2016) upon implementation of the BSE (Corporatisation and Demutualisation) Scheme, 2005 (âThe Schemeâ). The allotment of 7,80,000 equity shares (9,10,000 equity shares as on March 31, 2016) of Rs.2/- each have been kept in abeyance for specific reasons pursuant to the provisions of the Scheme. However, all corporate benefits as declared from time to time, including dividend and bonus are accrued to all the 47,775,000 equity shares, as per the provisions of the Scheme.
(d) As a part of the demutualisation process, the Exchange in order to fulfill its obligations under the Scheme and the Securities Contracts (Regulation) (Manner of Increasing and Maintaining Public Shareholding in Recognised Stock Exchanges) Regulations, 2006 (the SEBI Regulations) dated 13th November, 2006, and further amendments thereto on 23rd December, 2008, had issued shares to Deutsche Boerse AG (DBAG) and Singapore Exchange Limited (SGX).
(e) i) The holders of equity shares are entitled to dividends, if any, proposed by the board of directors and approved by the shareholder at the Annual General Meeting.
ii) In the event of liquidation of the Company, the holders of equity shares will be entitled to receive any of the remaining assets of the Company, after distribution of preferential amounts. However, no such preferential amounts exists currently. The distribution will be in proportion to the number of equity shares held by the shareholders.â
(f) The shareholders of the Company, at the Extraordinary General Meeting (EGM) held on November 25, 2016 accorded their consent to the consolidation of the entire authorised and issued share capital of the Company by increasing the nominal value of the equity share from Rs.1/- (Rupee one only) each to Rs.2/- (Rupees two only) each, so that every two equity shares with nominal value of Rs.1/- (Rupee one only) each held by a shareholder are consolidated and re-designated into one equity share with a nominal value of Rs.2/- each. Accordingly, the revised share capital of the Company now stands at 54,588,172 equity shares of Rs.2/- each. Para 28 of Indian Accounting Standard (Ind AS) 33 on âEarnings per shareâ, requires an adjustment in the calculation of basic and diluted earnings per share for all the periods presented if the number of equity or potential equity shares outstanding decreases as a result of consolidation of shares.
(g) No shareholder holds more than 5 % of the Share Capital of the Company.
5.1 General reserve
The general reserve created from time to time transfer profits from retained earnings for appropriation purposes. As the general reserve created by a transfer from one component of equity to another and is not an item of other comprehensive income, items included in general reserve will not be reclassified to the Statement of Profit and Loss.
5.2 Capital reserve
Pursuant to the BSE (Corporatisation & Demutualisation) Scheme, 2005, (the Scheme) the balance in Contribution by Members, Forfeiture of Members Application Money, Technology Reserve, Stock Exchange building, Seth Chunnilal Motilal Library, Charity, Income and Expenditure Account as at 19th August, 2005 as appearing in the Exchange are transferred to Capital Reserve being reserves which shall not be used for purposes other than the operations of the Exchange.
5.3 Securities premium
Securities premium reserve reflects issuance of the shares by the Company at a premium, whether for cash or otherwise i.e. a sum equal to the aggregate amount of the premium received on shares is transferred to a âsecurities premium reserveâ as per the provisions of the Companies Act, 2013. The reserve is utilized in accordance with the provisions of the Companies Act, 2013.
5.4 Settlement guarantee fund
Refer Note 41 for the nature and purpose settlement guarantee fund.
5.5 Retained earnings
The same reflects surplus/deficit after taxes in the Statement of Profit and Loss. The amount that can be distributed by the Company as dividends to its equity shareholders is determined based on the balance in this reserve and also considering the requirements of the Companies Act, 2013.
The Board of Directors, at its meeting on May 5, 2016, proposed a final dividend of Rs.4/- per equity share and the same was approved by the shareholders at the Annual General Meeting held on June 24, 2016. The amount was recognised as distributions to equity shareholders during the year ended March 31, 2017 and the total appropriation was Rs.5,256 including corporate dividend tax (Refer note 4.2 for impact on transition to Ind AS). The amount of dividend per share recognised as distributions to equity shareholders during the year ended March 31, 2016 was Rs.8.5/- per equity share of face value Rs.1/- each (including interim dividend of Rs.3.5/- per equity share).
The Board of Directors, at its meeting on May 5, 2017, have proposed a final dividend of Rs.23/- per equity share of face value Rs.2/- per share for the financial year ended March 31, 2017. The proposal is subject to the approval of shareholders at the Annual General Meeting to be held and if approved would result in a cash outflow of approximately Rs.15,111, including corporate dividend tax.
6.1 Secured by leased asset. The liability is at a fixed rate of interest with original repayment period of 5 years.
6.2 Investments and Bank Deposits have been earmarked against these liabilities.
6.3 Current accounts have been earmarked against this liability.
7. TAXES
(a) Income tax expenses
The major components of income tax expenses for the year ended March 31, 2017
(i) Profit or loss section
(ii) Other comprehensive income section
Note: The shareholders of the Company have, at the Extraordinary General Meeting (EGM) held on November 25, 2016 accorded their consent to the consolidation of the entire authorised and issued share capital of the Company by increasing the nominal value of the equity share from Rs.1/- (Rupee one only) each to Rs.2/- (Rupees two only) each, so that every two equity shares with nominal value of Rs.1/- (Rupee one only) each held by a shareholder are consolidated and re-designated into one equity share with a nominal value of Rs.2/- each. Accordingly, the revised share capital of the Company now stands at 54,588,172 equity shares of Rs.2/- each. Para 28 of Indian Accounting Standard (Ind AS) 33 on âEarnings per shareâ, requires an adjustment in the calculation of basic and diluted earnings per share for all the periods presented if the number of equity or potential equity shares outstanding decreases as a result of consolidation of shares.
8. LEASE
8.1 Finance Lease
(i) Assets acquired on finance lease mainly comprise computer equipments.
(ii) The Minimum lease rentals and the present value of minimum lease payments in respect of assets acquired under finance lease are as follows:
(iii) No contingent rent recognised / (adjusted) in the Profit or Loss in respect of finance lease.
8.2 Operating lease
The Company leases office facilities and residential facilities under cancellable operating leases. The rental expense under cancellable operating lease during the year ended March 31, 2017 was Rs.133 Lakh (for the year ended March 31, 2016: Rs.132 Lakh).
The Company does not have non-cancellable operating lease other than lease facilities towards investor services centers. Investor services centers rent expenses are incurred through investor services fund which is set aside from listing fee collected for investor services and shown under other liabilities.
9. FINANCIAL INSTRUMENTS
The carrying value and fair value of financial instruments by categories as at March 31, 2017, March 31, 2016 and April 1, 2015 is as follows:
The management assessed that fair value of cash and short-term deposits, trade receivables, trade payables and other current financial assets and liabilities approximate their carrying amounts largely due to the short-term maturities of these instruments.
The fair value of the financial assets and financial liabilities is included at the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale.
The following methods and assumptions were used to estimate the fair values:
(a) The fair value of the quoted bonds and mutual fund are based on price quotations at reporting date. The fair value of unquoted instruments and other financial liabilities, as well as other non-current financial liabilities is estimated by discounting future cash flows using rates currently available for debt on similar terms, credit risk and remaining maturities.
(b) The fair values of the unquoted equity shares have been estimated using a discounted cash flow model. The valuation requires management to make certain assumptions about the model inputs, including forecast cash flows, discount rate, credit risk and volatility, the probabilities of the various estimates within the range can be reasonably assessed and are used in managementâs estimate of fair value for these unquoted equity investments.
Fair value hierarchy
Level 1 - Quoted prices (unadjusted) in active markets for identical assets or liabilities.
Level 2 - Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).
Level 3 - Inputs for the assets or liabilities that are not based on observable market data (unobservable inputs).
The following table presents fair value hierarchy of the assets and liabilities measured at fair value on a recurring basis:
Except as detailed in the above table, the directors consider that the carrying amounts of financial assets and financial liabilities recognised in the balance sheet approximate their fair values.
There were no transfers between Level 1 and 2 in the period.
10. FINANCIAL RISK MANAGEMENT
The Companyâs principal financial liabilities, comprise trade and other payables. The main purpose of these financial liabilities is to support its operations. The Companyâs principal financial assets include trade and other receivables, and cash and short-term deposits that derive directly from its operations.
The Companyâs activities expose it to a variety of financial risks: credit risk, liquidity risk, market risk (including foreign currency and interest rate risk), regulatory risk and clearing & settlement risk. The Companyâs primary focus is to foresee the unpredictability of financial markets and seek to minimize potential adverse effects on its financial performance.
It is the Companyâs policy that no trading in derivative for speculative purposes maybe undertaken. The Board of Directors reviews and agrees policies for managing each of these risks, which are summarised below:
Credit risk
Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual obligations, and arises principally from the Companyâs receivables from customers and investment securities. Credit risk arises from cash held with banks and financial institutions, as well as credit exposure to clients, including outstanding accounts receivable. The maximum exposure to credit risk is equal to the carrying value of the financial assets. The objective of managing counterparty credit risk is to prevent losses in financial assets. The Company assesses the credit quality of the counterparties, taking into account their financial position, past experience and other factors.
- Trade and other receivables
The Companyâs exposure to credit risk is influenced mainly by the individual characteristics of each customer.
The demographics of the customer, including the default risk of the industry in which the customer operates, also has an influence on credit risk assessment.
The Company provides the stock exchange services to its listed customers and registered members (who have provide the collaterals and other securities for trading done on its platform), hence the Company operates with large number of customers portfolio and its revenue is not concentrated on small number of customers.
None of the customers accounted for more than 10% of the receivables and revenue for the year ended March 31, 2017.
- Investments
The Company limits its exposure to credit risk by making investment as per the investment policy. The Company addresses credit risk in its investments by mandating a minimum rating against the security / institution where the amounts are invested and is further strengthened by mandating additional requirement like Capital Adequacy Ratio (CAR), Allowable Net Non- Performing Asset (NNPA) Levels, Minimum Average Assets Under Management (AAUM) etc. for certain types of investments. Further the investment committee of the Company reviews the investment portfolio on bi-monthly basis and recommend or provide suggestion to the management. The Company does not expect any losses from non- performance by these counter-parties, and does not have any significant concentration of exposures to specific industry sectors. The Company does not invest in equity instruments unless they are strategic in nature.
Liquidity risk
Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they become due. The Company manages its liquidity risk by ensuring, as far as possible, that it will always have sufficient liquidity to meet its liabilities when due.
The Companyâs corporate treasury department is responsible for liquidity, funding as well as settlement management. In addition, processes and policies related to such risks are overseen by senior management.
The management monitors the Companyâs net liquidity position through forecasts on the basis of expected cash flows.
The table below provides details regarding the contractual maturities of significant financial liabilities as at March 31, 2017, March 31, 2016 and April 1, 2015
* Investment does not include investment in equity investment of subsidiaries, joint ventures, associate and others.
The Company manages contractual financial liabilities and contractual financial assets on net basis.
Market risk
The Companyâs business, financial condition and results of operations are highly dependent upon the levels of activity on the exchange, and in particular upon the volume of financial assets traded, the number of listed securities, the number of new listings and subsequent issuances, liquidity and similar factors, as a significant portion of our revenue depends, either directly or indirectly, on trading, listing, clearing and settlement transaction-based fees.
The Companyâs financial condition and results of operations are also dependent upon the success of our clearing, settlement and other issuer services, which, in turn, are directly dependent on the liquidity and financial strength of our customers, namely financial intermediaries such as brokers, and their respective clients.
In addition to the above risk, market risk also includes foreign currency risk and interest rate risk.
- Foreign Currency risk
The Companyâs exchange risk arises from its foreign operations, foreign currency revenues and expenses, (primarily in U.S. Dollars and Euros). Companyâs revenues insignificant portion are in these foreign currencies, while a significant portion of its costs are in Indian rupees.
As a result, if the value of the Indian rupee appreciates relative to these foreign currencies, the Companyâs revenues measured in rupees may decrease. The exchange rate between the Indian rupee and these foreign currencies has changed substantially in recent periods and may continue to fluctuate substantially in the future. Due to lessor quantum of revenue and expenses from foreign currencies the Company is not much exposed to foreign currency risk.
- Interest rate risk
Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. Interest rates are sensitive to many factors, including governmental, monetary and tax policies, domestic and international economic and political considerations, fiscal deficits, trade surpluses or deficits, regulatory requirements and other factors beyond the Groupâs control. Changes in the general level of interest rates can affect the profitability by affecting the spread between, amongst other things, income the Group receives on investments in debt securities, the value of interest-earning investments, itâs ability to realise gains from the sale of investments.
Interest rate risk primarily arises from floating rate investment. The Companyâs investments in floating rate are primarily short-term, which do not expose it to significant interest rate risk.
Regulatory risk
The Company requires a number of regulatory approvals, licenses, registrations and permissions to operate our business, including at a corporate level as well as at the level of each of itâs components. For example, the Company have licenses from SEBI in relation to, among others, introducing derivatives contracts on various indices of the exchange, introduction of futures and options contracts on various indices of the exchange, setting up an SME platform and trading in government securities. Some of these approvals are required to be renewed from time to time. The Companyâs operations are subject to continued review and the governing regulations may change. The Companyâs regulatory team constantly monitors the compliance with these rules and regulations.
There have been several changes to the form and manner in which recognised stock exchanges must make contributions to a Settlement Guarantee Fund and Core Settlement Guarantee Fund in the last few years. Should SEBI in the future vary the required contribution amounts to the Settlement Guarantee Fund, the Group may have to contribute more of funds to the Settlement Guarantee Fund which could materially and adversely affect the Groupâs financial ability. The Groupâs regulatory team keeps a track regarding the amendments in SEBI circulars/regulations pertaining to such settlement guarantee fund.
Clearing and Settlement Risk
Parties to a settlement may default on their obligations for reason beyond the control of the Company. The clearing and settlement operations are conducted through a wholly owned subsidiary Indian Clearing Corporation Limited (ICCL). ICCL guarantees the settlement of trade executed on Companyâs platform and maintains a core settlement guarantee fund to support its guarantee obligations.
11. CAPITAL MANAGEMENT
The Companyâs policy is to maintain a strong capital base so as to maintain investor, creditor and market confidence and to sustain future development of the business. The Company monitors the return on capital as well as the level of dividends on its equity shares. The Companyâs objective when managing capital is to maintain an optimal structure so as to maximize shareholder value.
The Company is predominantly equity financed which is evident from the capital structure. Further, the Company has always been a net cash company with cash and bank balances along with investment which is predominantly investment in liquid and short term mutual funds being far in excess of financial liabilities.
Compliance with externally imposed capital requirements:
In accordance with regulation 14 of Securities Contracts (Regulation) (Stock Exchanges and Clearing Corporations) Regulations, 2012, the Company shall have a minimum networth of Rs.100 Crore at all times.
12. The Managing Director and CEO of the Company has been identified as the Chief Operating Decision Maker (CODM) as defined by Ind AS 108, Operating Segments. The CODM evaluates the Companyâs performance and allocates resources.
12.1 The âCompanyâ or the âExchangeâ operates only in one Operating Segment i.e. âFacilitating Trading in Securities and other related ancillary Servicesâ, hence have only one reportable Segment as per Indian Accounting Standard 108 âOperating Segmentsâ. The reportable business segments are in line with the segment wise information which is being presented to the CODM.
12.2.1 The Company does not have non-current assets outside India.
13. The following regulation / circulars issued by SEBI from time to time requires the recognition by the Company of a Settlement Guarantee Fund and the transfer of the same to its clearing corporation and the contribution of a Minimum Required Corpus to a Core Settlement Guarantee Fund (âCore SGFâ) from time to time.
13.1 As per Regulation 33 of The Securities Contracts (Regulations) (SECC) Regulations, 2012 (the âRegulationâ) issued on June 20, 2012, every recognised stock exchange is required to transfer twenty five percent of its annual profits every period / year to a fund of the recognised clearing corporation which clears and settles trades executed on that stock exchange to guarantee the settlement of trades.
13.2 As per Circular CIR/MRD/DRMNP/25/2014 dated August 27, 2014 issued by the Securities & Exchange Board of India (âSEBIâ) regarding a Core Settlement Guarantee Fund, every stock exchange shall contribute at least 25% of the Minimum Required Corpus (can be adjusted against transfer of profit by Stock Exchange as per Regulation 33 of SECC Regulations) to a Core Settlement Guarantee Fund established and maintained by its clearing corporation.
13.3 Further, a clarification was issued as per Circular No SEBI/HO/MRD/DRMNP/CIR/P/2016/54 dated May 4, 2016 based on a recommendation given by the Expert Committee constituted by SEBI. It was clarified that twenty five per cent of profits till the date of amendment of Regulation 33 of SECC Regulations, 2012, shall be transferred by the Stock Exchange to the Core SGF maintained by Clearing Corporation within such time as may be specified by SEBI.
13.4 Thereafter, on August 29, 2016, SEBI has amended Regulation 33 of SECC Regulations, 2012. Accordingly, the Company has made provision for transfer of twenty-five percent of its profit till August 29, 2016 (pro-rata based on profit for the six months ended September 30, 2016), being the date of the amendment, towards Settlement Guarantee Fund.
The above Regulations / Circulars were given effect to in the Financial Statements as under:
(i) The Company deposited Rs.2,579 (including interest) towards the Minimum Required Corpus (MRC) to the Core Settlement Guarantee Fund established and maintained by its clearing corporation (a wholly owned subsidiary) during FY 2014-15.
(ii) The deposit amount of Rs.2,579 was accounted as prior period item and adjusted to opening retained earnings in total equity.
(iii) The Companyâs contribution of Rs.1,741 towards the MRC has been charged to the Profit or Loss under the head âAdministration and Other Expensesâ during the year ended March 31, 2016. The contribution to the Core SGF has been adjusted against the transfer of profit by the Company as per the Regulation mentioned above.
(iv) Based on the clarification included in SEBI circular SEBI/HO/MRD/DRMNP/CIR/P/2016/54 dated May 4, 2016 (the â2016 circularâ) the provision of 25% of profits has to be made and transferred to the Settlement Guarantee Fund (SGF). Accordingly, the cumulative amount required to be provided and transferred to the said SGF till March 31, 2016 amounts to Rs.9,742 being 25% of the profits of the Company after tax, before making such contribution for FY 2012-13 to FY 2015-16. The Exchange had already contributed and charged Rs.4,320 to the Profit or Loss towards 25% of the MRC to the Core Settlement Guarantee Fund as explained in â43.2â above. After adjusting the investment income accrued on the Companyâs contribution to the Core SGF for the period up to March 31, 2016 of Rs.279, the balance amount of Rs.5,143 (including Rs.4,598 for FY 2015-16) is now charged to the Profit or Loss as an âExceptional Itemâ. The amount payable by the Exchange in respect of the SGF as at March 31, 2016 has been disclosed under the head âOther current liabilitiesâ and is payable to the Core Settlement Guarantee Fund within such time as specified by SEBI.
(v) During the year ended March 31, 2017 Rs.2,079 has been charged to the Profit or Loss, being 25% of the profits earned till August 29, 2016 (pro-rata based on profit for the six months ended September 30, 2016), as an âExceptional Itemâ. As at March 31, 2017 the amount of Rs.6,276 payable by the Exchange in respect of the settlement guarantee fund has been disclosed under the head âOther current liabilitiesâ and is payable to the Core Settlement Guarantee Fund within such time to be specified by SEBI.
14. EMPLOYEE BENEFITS:
14.1 Defined Benefit Plan - Gratuity:
The Company offers its employees defined-benefit plans in the form of a gratuity scheme (a lump sum amount). Benefits under the defined benefit plans are typically based on years of service and the employeeâs compensation (generally immediately before retirement). The gratuity scheme covers substantially all regular employees.
Such plan exposes the Company to actuarial risks such as: investment risk, interest rate risk, demographic risk and salary risk.
Actual return on the assets for the period ended March 31, 2017 and year ended March 31, 2016 were Rs.141 and Rs.149 respectively.
There is no compulsion on the part of the Company to fully pre fund the liability of the Plan. The Companyâs philosophy is to fund the benefits based on its own liquidity and tax position as well as level of under funding of the plan.
The plan assets in respect of gratuity represent funds managed by the BSE employee Gratuity Fund. The Employerâs best estimate of the contributions expected to be paid to the plan during the next year is NIL.
The weighted average duration to the payment of these cash flows is 9.83 years.
- Discount Rate: The discount rate is based on the prevailing market yields of Indian government securities as at the balance sheet date for the estimated term of the obligations.
- Salary Escalation Rate: The estimates of future salary increases considered takes into account the inflation, seniority, promotion and other relevant factors.
14.2 Defined Contribution Plan- Provident fund, Pension Fund and New pension Scheme :
These are plans in which the Company pays pre-defined amounts to separate funds and does not have any legal or informal obligation to pay additional sums. The Company offers its employees defined contribution plan in the form of provident fund and family pension fund. Provident fund and family pension fund cover substantially all regular employees. While both, the employees and the Company pay predetermined contributions into the provident fund and New National Pension Scheme, contributions into the family pension fund are made by only the Company. The contributions are based on a certain proportion of the employeeâs salary.
The Company has an obligation to fund any shortfall on the yield of the trustâs investment over the administered interest rates on an annual basis. Theses administered interest rates are determined annually predominantly considering the social rather than economic factors and in most cases the actual return earned by the Company has been higher in the past years.
The Company recognised charge for the year ended March 31, 2017 and for the year ended March 31, 2016 of Rs.184 and Rs.192 respectively for provident fund and family pension fund contribution in the Profit or Loss.
The Company recognised charge for the year ended March 31, 2017 and for the year ended March 31, 2016 of Rs.33 and Rs.23 respectively for New National pension Scheme contribution in the Profit or Loss.
14.3 Compensated Absences
The Company recognised charge for the year ended March 31, 2017 and for the year ended March 31, 2016 of Rs.343 and Rs.221 respectively for Compensated Absences in the Profit or Loss.
15. a) Pursuant to SEBI Circular CIR/DNPD/5/2011 dated June 2, 2011 (BSE Notice no-20110602-18, dated June 02, 2011), permitting stock exchanges to introduce Liquidity Enhancement Schemes (LES) for illiquid securities in their equity derivatives segment, the Exchange has launched a series of Liquidity Enhancement Incentive Programmes (LEIPS) to enhance liquidity in BSEâs Futures & Options Segment. The programme was launched on 28th September, 2011 and has been discontinued with effect from April 01, 2016 and hence the Company has incurred during year ended March 31, 2017 and for the year ended March 31, 2016 amounting to Nil and Rs.1,724 respectively. Considering the special nature of this expense and its impact on the profit of the Exchange, the same has been recognised as an exceptional item.
b) Based on a direction received from SEBI during the financial year 2015-16, the Company has charged an amount of Rs.460 to the Profit or Loss which was to be reimbursed to The Stock Exchange Investorâs Protection Fund (BSE IPF) towards Contribution to the IFRS Foundation pertaining to earlier years. Considering the nature of the expense and its impact on the profit of the Company, the same has been disclosed as an exceptional item during year ended March 31, 2016.
16. Disclosure on Specified Bank Notes (SBNs)
Pursuant to the MCA notification G.S.R. 308(E) dated March 30, 2017, the details of Specified Bank Notes (SBNs) held and transacted during the period from November 8, 2016 to December, 30 2016, are given below:
Mar 31, 2016
Notes:
(a) The Exchange has only one class of shares referred to as equity shares having a par value of Rs, 1/-. Each holder of equity shares is entitled to one vote per share.
(b) Pursuant to the BSE (Corporatization & Demutualization) Scheme, 2005, (the Scheme) the Exchange had allotted 10,000 equity shares of Rs, 1/- each to each of those card based Members of the erstwhile Bombay Stock Exchange Limited whose names appeared on the Register of Members under Rule 64 in accordance with Rules, Bye-laws and Regulations, on the Record Date fixed for the purpose.
(c) Out of the total 95,550,000 equity shares of Rs, 1/- (including 88,200,000 bonus shares of Rs, 1/- each) issuable to the card based Members, the Exchange has allotted 93,730,000 equity shares (93,730,000 equity shares as on March 31, 2015) upon implementation of the BSE (Corporatization and Demutualization) Scheme, 2005 ("The Scheme"). The allotment of 1,820,000 equity shares (1,820,000 equity shares as on March 31, 2015) of Rs, 1/- each have been kept in abeyance for specific reasons pursuant to the provisions of the Scheme. However, all corporate benefits as declared from time to time, including dividend and bonus are accrued to all the 95,550,000 equity shares, as per the provisions of the Scheme.
(d) As a part of the demutualization process, the Exchange in order to fulfill its obligations under the Scheme and the Securities Contracts (Regulation) (Manner of Increasing and Maintaining Public Shareholding in Recognized Stock Exchanges) Regulations, 2006 (the SEBI Regulations) dated 13th November, 2006, and further amendments thereto on 23rd December, 2008, had issued shares to Deutsche Boerse AG (DBAG) and Singapore Exchange Limited (SGX). The Exchange has further agreed to issue additional shares to DBAG and SGX so as to maintain their holding percentage.
(e) i) The holders of equity shares are entitled to dividends, if any, proposed by the board of directors and approved by the shareholder at the Annual General Meeting.
ii) In the event of liquidation of the Company, the holders of equity shares will be entitled to receive any of the remaining assets of the Company, after distribution of preferential amounts. However, no such preferential amounts exists currently. The distribution will be in proportion to the number of equity shares held by the shareholders.
* Represents allotment of shares held in abeyance.
Note:
Capital Reserve
Pursuant to the BSE (Corporatization & Demutualization) Scheme, 2005, (the Scheme) the balance in Contribution by Members, Forfeiture of Members Application Money, Technology Reserve, Stock Exchange building, Seth Chunnilal Motilal Library, Charity, Income and Expenditure Account as at 19th August, 2005 as appearing in the Exchange are transferred to Capital Reserve being reserves which shall not be used for purposes other than the operations of the Exchange.
Disclosures required under section 22 of the Micro, Small and Medium Enterprises Development Act, 2006
Based on the information available with the Company, the balance due to Micro, Small and Medium Enterprises as defined under the MSMED Act, 2006 is Nil. Further, no interest during the year has been paid or payable under the terms of the MSMED Act, 2006 (previous year is Nil).
As per SEBI directive, from 1996-97, BSE decided to set aside 20% of the Annual listing fees received to an Investors'' Services Account. The Exchange has charged all direct expenses incurred towards Investors Services to this Account. The balance in the Account as on March 31, 2016 is Rs, 2,057 Lakh (As at March 31, 2015 is Rs, 1,185 Lakh) which is shown as under and the same is forming part of Other Liabilities.
b) Other Liabilities includes dividend for earlier years in respect of shares held in abeyance as referred to in Note 2(c), amounting to Rs, 698 lakh (As at March 31, 2015 Rs, 543 lakh).
2. CSR Expenditure
a) The gross amount required to be spent by company during the year is Rs, 114 Lakh (Rs, 147 Lakh for the year ended March
31, 2015).
b) Amount mentioned above were paid in cash during the respective financial year and were incurred for the purpose other than construction / acquisition of any asset.
Note: During the year 2012-13, the Exchange has received notices from Department of Telecommunication (DoT), Government of India to pay a revised VSAT Network License Fees, Royalty etc. aggregating Rs, 636 Lakh against which amount of Rs, 235 Lakh has been paid and expensed during the earlier years. In respect of the balance of Rs, 401 lakh the Management has filed a reply, after legal consultations, with DoT challenging the claim stating that the demand notices are based on an incorrect interpretation of the existing guidelines / orders. Hence no provision for the same is made in the accounts and the amount has been considered as a Contingent Liability.
3. Estimated amount of contracts remaining to be executed on capital account and not provided for (net of advances) is Rs, 1,128 lakh as on March 31, 2016 (Rs, 3,153 lakh as on March 31, 2015).
4. The following regulation / circulars issued by SEBI from time to time requires the recognition by the Company of a Settlement Guarantee Fund and the transfer of the same to its clearing corporation and the contribution of a Minimum Required Corpus to a Core Settlement Guarantee Fund from time to time:
1. As per Regulation 33 of The Securities Contracts (Regulations) (SECC) Regulations, 2012 (the "Regulation") issued on June 20, 2012, every recognized stock exchange is required to transfer twenty five percent of its annual profits every year to a fund of the recognized clearing corporation which clears and settles trades executed on that stock exchange to guarantee the settlement of trades.
2. As per Circular CIR/MRD/DRMNP/25/2014 dated August 27, 2014 issued by the Securities & Exchange Board of India ("SEBI") regarding a Core Settlement Guarantee Fund, every stock exchange shall contribute at least 25% of the Minimum Required Corpus (can be adjusted against transfer of profit by Stock Exchange as per Regulation 33 of SECC Regulations) to a Core Settlement Guarantee Fund established and maintained by its clearing corporation.
3. Further, a clarification was issued as per Circular SEBI/HO/MRD/DRMNP/CIR/P/2016/54 dated May 4, 2016 based on a recommendation given by the Expert Committee constituted by SEBI.
Accordingly, the above Regulations / Circulars were given effect to in the Financial Statements as under:
a) The Company had appropriated Rs, 5,144 lakh during FY 2014-15 being 25% of the profit for FY 2012-13, FY2013-14 and FY 2014-15.
b) The Company deposited Rs, 2,579 lakh (including interest) towards the Minimum Required Corpus (MRC) to the Core Settlement Guarantee Fund established and maintained by its clearing corporation (a wholly owned subsidiary) during FY 2014-15.
c) The deposit amount of Rs, 2,579 lakh has been charged during the year to the Statement of Profit and Loss under the head "Prior period item".
d) The Company''s current year''s contribution of Rs, 1,741 lakh towards the MRC has also been charged to the Statement of Profit and Loss under the head "Administration and Other Expenses". The contribution to the Core SGF has been adjusted against the transfer of profit by the Company as per the Regulation mentioned above.
e) Further, based on the clarification included in SEBI circular SEBI/HO/MRD/DRMNP/CIR/P/2016/54 dated May
4, 2016 (the "2016 circular") the provision of 25% of profits has to be made and transferred to the Settlement Guarantee Fund (SGF). Accordingly, the cumulative amount required to be provided and transferred to the said SGF till March 31, 2016 amounts to Rs, 9,742 lakh being 25% of the profits of the Company after tax, before making such contribution for FY 2012-13 to FY 2015-16. The Exchange had already contributed and charged Rs, 4,320 lakh to the Statement of Profit and Loss towards 25% of the MRC to the Core Settlement Guarantee Fund as explained in ''c'' and ''d'' above. After adjusting the investment income accrued on the Company''s contribution to the Core SGF for the period upto March 31, 2016 of Rs, 279 lakh, the balance amount of Rs, 5,143 lakh (including Rs, 4,598 lakh for FY 2015-16) is now charged to the Statement of Profit and Loss as an "Exceptional Item". The amount payable by the Exchange in respect of the SGF as at March 31, 2016 has been disclosed under the head "Current Liabilities" and is payable to the Core Settlement Guarantee Fund within such time as specified by SEBI.
5. In terms of the Scheme of Amalgamation ("the Scheme"), approved by the Court, with an appointed date of April 01, 2014 and an effective date of May 14, 2015 (''the Effective Date''), being the date on which all the requirements under the Companies Act, 1956 United Stock Exchange of India Limited (USE) has been amalgamated with the Company (Transferee Company). Upon the amalgamation undertaking and the entire business, including all assets and liabilities of USE stand transferred to and vested in the Company. The amalgamation has been accounted under "Purchase Method" as envisaged in the Accounting Standard - 14 "Accounting for Amalgamations" notified under the Companies (Accounting Standards) Rules, 2006. Accordingly, the assets and liabilities taken over on amalgamation of the Transferor Company are fair valued as on the date of the acquisition by a firm of Chartered Accountants as at the appointed date. Further, in consideration, the Company has issued equity shares in accordance with the swap ratio approved by the Hon''ble High Court of Judicature at Bombay (Court). These shares are fair valued for the purpose of recording in the books of account based on the equity valuation considered in arriving at the swap ratio by a firm of Chartered Accountants. Further the Company had obtained a fairness opinion on the ratio approved by the Court.
6. In 2010-11, United Stock Exchange of India Limited (USE) the entity amalgamated with the Company in Financial year 2014-15, had set up a Settlement Guarantee Fund to guarantee the settlement of bonafide transactions of members of the exchange, which forms part of the exchange settlement system so as to ensure timely completion of settlement of trades and thereby protect the interest of investors and the members of the exchange. The Constitution of the fund was approved by The Securities and Exchange Board of India (SEBI). USE had contributed a sum of Rs, 250 lakh as initial contribution during the year 2010-11. The fund is maintained by Indian Clearing Corporation Limited (ICCL) and the income earned on these deposits is credited to the Statement of Profit and Loss and then appropriated to the Fund (net of applicable taxes). This fund amounting to Rs, 328 lakh has been transferred to the Company as part of the Scheme of Amalgamation as described in note no 29.
7. The Company operates only in one Business Segment i.e. "Facilitating Trading in Securities and other related ancillary Services", the operations have been carried out within India and hence does not have any reportable segments as per Accounting Standard 17 on "Segment Reporting".
8. As per the Accounting Standard-18 "Related Party Disclosures" the related parties of the Exchange are as follows:
a) Subsidiaries:
NAME_
Indian Clearing Corporation Limited Marketplace Technologies Private Limited BSE Institute Limited
Central Depository Services (India) Limited BSE Investments Limited (w.e.f March 28, 2014)
BSE Sammaan CSR Limited (w.e.f September 10, 2015)
BSE CSR Integrated Foundation (w.e.f March 7, 2016)
b) Indirect Subsidiaries:
NAME_
Marketplace Tech Infra Services Private Limited
CDSL Ventures Limited
CDSL Insurance Repository Limited
BSE Skills Limited
BFSI Sector Skill Council of India
c) Entities under control:
NAME_
The Stock Exchange Investors'' Protection Fund
The Stock Exchange Education & Research Services
The Stock Exchange Foundation
The Stock Exchange Charities
Seth K. R. P. Shroff Stock Exchange Sarvajanik Fund
Shri Phiroze Jeejeebhoy Memorial Trust
9. The Exchange offers Deposit Based Membership. Trading Members are required to deposit a specified amount with the Exchange which is included in Deposits from Members. As at March 31, 2016 the deposit amount of '' 1,900 lakh (Rs, 1,900 lakh as at March 31, 2015) have a lock in period of more than a year and have been disclosed as Non-Current Liabilities. Current portion of deposits from Trading Members amounting to Rs, 7,162 lakh (Rs, 7,157 lakh as at March 31, 2015) have been disclosed as Other Current Liabilities.
10. Disclosure as required under Accounting Standard -15 on "Employee Benefits" is as under:
Defined Benefit Plan - Gratuity:
The Company offers its employees defined-benefit plans in the form of a gratuity scheme (a lump sum amount). Benefits under the defined benefit plans are typically based on years of service and the employee''s compensation (generally immediately before retirement). The gratuity scheme covers substantially all regular employees. Commitments are actuarially determined at year-end. These commitments are valued at the present value of the expected future payments, with consideration for calculated future salary increases, using a discount rate corresponding to the interest rate estimated by the actuary having regard to the interest rate on government bonds with a remaining term that is almost equivalent to the average balance working period of employees. On adoption of the Accounting Standard - 15 (AS 15) on "Employee Benefits", actuarial valuation is done based on "Projected Unit Credit" method. Gains and losses of changed actuarial assumptions are charged to the Statement of Profit and Loss.
Other Details:
The discount rate is based on the prevailing market yields of Indian Government Securities as at the balance sheet date for the estimated term of the obligations.
The estimates of future salary increase considered in the actuarial valuation take into account inflation, seniority, promotion and other relevant factors such as supply and demand in the employment market. The above information is certified by the actuary and relied upon by the Auditors.
Expected rate of return on Plan Assets is based on expectation of the average long term rate of return expected on investments of the fund during the estimated term of the obligations.
The plan assets in respect of gratuity represent funds managed by the BSE employee Gratuity Fund. The Employer''s best estimate of the contributions expected to be paid to the plan during the next year is NIL (NIL for the year ended March 31, 2015).
Defined Contribution Plan:
These are plans in which the Company pays pre-defined amounts to separate funds and does not have any legal or informal obligation to pay additional sums. The Company offers its employees defined contribution plan in the form of provident fund and family pension fund. Provident fund and family pension fund cover substantially all regular employees. While both, the employees and the Company pay predetermined contributions into the provident fund and New National Pension Scheme, contributions into the family pension fund are made by only the Company. The contributions are based on a certain proportion of the employee''s salary.
The Company recognized charge of Rs, 192 Lakh (Rs, 198 Lakh for the year ended March 31, 2015) for provident fund and family pension fund contribution in the Statement of Profit and Loss.
The Company recognized charge of Rs, 23 Lakh (Nil for the year ended March 31, 2015) for New National Pension Scheme contribution in the Statement of Profit and Loss.
11. a) Pursuant to SEBI Circular CIR/DNPD/5/2011 dated June 2, 2011 (BSE Notice no-20110602-18, dated June 02, 2011),
permitting stock exchanges to introduce Liquidity Enhancement Schemes (LES) for illiquid securities in their equity derivatives segment, the Exchange has launched a series of Liquidity Enhancement Incentive Programmes (LEIPS) to enhance liquidity in BSE''s Futures & Options Segment. The programme was launched on 28th September, 2011 and an expense of Rs, 1,724 lakh has been incurred towards the same for the year ended March 31, 2016 (Rs, 3,425 lakh for the year ended March 31, 2015). Considering the special nature of this expense and its impact on the profit of the Exchange, the same has been recognized as an exceptional item.
b) During the previous year, the Company implemented a Voluntary Retirement Scheme 2014 (VRS) for all its eligible employees. Post the closure of the Scheme, an expense of Rs, 1,277 Lakh was incurred and the same was treated as an exceptional item during the financial year ended March 31, 2015.
c) Consequent to the scheme of amalgamation with USE, the Company had terminated a software development contract and paid Rs, 218 Lakh as full and final settlement which was recognized as expenses and the same was treated as an exceptional item during the financial year ended March 31, 2015.
d) Based on a direction received from SEBI during the year, the Company has charged an amount of Rs, 460 Lakh to the Statement of Profit and Loss which is to be reimbursed to The Stock Exchange Investor''s Protection Fund (BSE IPF) towards Contribution to the IFRS Foundation pertaining to earlier years. Considering the nature of the expense and its impact on the profit of the Company, the same has been disclosed as an exceptional item.
12. The Board of Directors at its meeting held on February 03, 2016 have recommended a payment of interim dividend of Rs, 3.50 per equity share of Rs, 1/- each and at its meeting held on May 05, 2016 have recommended a payment of final dividend of Rs, 4/- per equity share of Rs, 1/- each.
13. Previous year''s figures have been regrouped / reclassified wherever necessary to correspond with the current year''s classification / disclosure.
Mar 31, 2012
(a) The Company has only one class of shares referred to as equity
shares having a par value of Rs. I/-. Each holder of equity shares is
entitled to one vote per share. .
(b) Pursuant to the BSE (Corporatisation & Demutualisation) Scheme,
2005, (the Scheme) the Exchange had allotted 10,000 equity shares ofRs. I
/- each to each of those card based Members of the erstwhile Bombay
Stock Exchange Limited whose names appeared on the Register of Members
under Rule 64 of the erstwhile Bombay Stock Exchange Limited - Rules,
Bye-laws and Regulations, on the Record Date fixed for the purpose.
(c) Out of the total 95,550,000 equity shares ofRs. I/- (including
88,200,200 bonus shares ofRs. I/- each) issuable to the card based
Members, the Exchange has allotted 93,340,000 equity shares (93,210,000
equity shares as on 31st March, 2011) upon corporatisation. The
allotment of 2,210,000 equity shares (2,340,000 equity shares as on
31st March, 2011) of Rs. I/- each has been kept in abeyance for specific
reasons. However, all corporate benefits as declared from time to
time, including dividend and bonus are accrued to all the 95,550,000
equity shares.
(d) As a part of the demutualisation process, the Exchange in order to
fulfill its obligations under the Scheme and the Securities Contracts
(Regulation) (Manner of Increasing and Maintaining Public Shareholding
in Recognised Stock Exchanges) Regulations, 2006 (the SEBI Regulations)
dated 13th November, 2006, and further amendments thereto on 23rd
December, 2008, had issued shares to Deutsche Boerse AG (DBAG) and
Singapore Exchange Limited (SGX). The Exchange has further agreed to
issue additional shares to DBAG and SGX so as to maintain their holding
percentage.
Capital Reserve
Pursuant to the Scheme, the balance in Contribution by Members,
Forfeiture of Members Application Money, Technology Reserve, Stock
Exchange Building, Seth Chunnilal Motilal Library, Charity, Income and
Expenditure Account as at 19th August, 2005 as appearing in BSE are
transferred to Capital Reserve being reserves which shall not be used
for purposes other than the operation of The Exchange.
Trade Guarantee Fund (TGF):
In 1997, BSE had set up the Trade Guarantee Fund to guarantee the
settlement of bonafide transactions of members of the Exchange, which
form part of the Exchange settlement system so as to ensure timely
completion of settlement of trades and thereby protect the interest of
investors and the members of the Exchange. The constitution of the Fund
and its rules and bye-laws were approved by the Securities and Exchange
Board of India (SEBI). BSE had contributed a sum of Rs. 6,000 Lakh from
the accumulated contribution from its members in the year 1997-98.
Every member contributes a fixed sum at the time of commencement of
business and there after a percentage of the gross turnover as
prescribed from time to time. The Fund is represented by earmarked
investments and the income earned on these investments is credited to
the Profit and Loss Account and then appropriated to the Fund (net of
applicable taxes). Pursuant to the Scheme of Arrangement approved by
Humble High Court, Bombay, as referred to in note 27, the balance in
Trade Guarantee Fund has been transferred to General Reserve.
Trade Guarantee Fund (G-Sec Segment):
In 2003, BSE had set up a distinct Trade Guarantee Fund known as Trade
Guarantee Fund- G-Sec for trading in Central Government Securities and
the Fund was created with an initial contribution of Rs. 500 Lakh by
transferring the said amount from the free reserves of BSE. The Fund is
represented by earmarked investments and the income earned on these
investments is credited to the Profit and Loss Account and then
appropriated to the Fund (net of applicable taxes).Pursuant to the
Scheme of Arrangement approved by Humble High Court, Bombay, as
referred to in note 27, the balance in Trade Guarantee Fund has been
transferred to General Reserve.
Trade Guarantee Fund (CDX):
In 2008, BSE had set up a distinct Trade Guarantee Fund known as Trade
Guarantee Fund-CDX for trading in Currency Derivatives and such fund
was created with an initial contribution of Rs. 1,000 Lakh by
transferring the said amount from the Capital Reserves of the Exchange.
The Fund is represented by earmarked investments and the income earned
on these investments is credited to the Profit and Loss Account and
then appropriated to the Fund (net of applicable taxes). Pursuant to
the Scheme of Arrangement approved by Humble High Court, Bombay, as
referred to in note 27, the balance in Trade Guarantee Fund has been
transferred to General Reserve. .
Brokers'' Contingency Fund (BCF):
In 1997, BSE had set up the Brokers'' Contingency Fund with a view to
make temporary refundable advance(s) to the members facing financial
mismatch so as to protect the interests of the investors dealing
through members of BSE by ensuring timely completion of settlement. The
initial contribution of BSE to the corpus of the fund was Rs. 951 Lakh
The Fund is represented by earmarked investments. As there has been no
utilisation from the BCF in the recent past, the Exchange has decided
that the income earned on these investments and initial contribution
from members should not be appropriated to the Fund with effect from
1st April, 2008. Pursuant to the Scheme of Arrangement approved by
Humble High Court, Bombay, as referred to in note 27, the balance in
Brokers'' Contingency Fund has been transferred to General Reserve.
Other Details:
The estimates of future salary increase considered in the actuarial
valuation, take into account inflation, seniority, promotion and other
relevant factors such as supply and demand in the employment market.
The above information is certified by the actuary and relied upon by
the Auditors.
Expected rate of return on Plan Assets is based on expectation of the
average long term rate of return expected on investments of the fund
during the estimated term of the obligations.
The Employer''s best estimate of the contributions expected to be paid
to the plan during the next year is Rs. NIL (Rs. 100 lakh for the year
ended 31st March, 2011)
- Amount recognised as an expense in respect of Compensated Leave
Absences is Rs. 155 lakh (Rs. 244 lakh credit for the year ended 31st
March, 2011).
Defined Contribution Plan: .
Amount recognised as an expense and included under the head
"Contribution to Provident and Other Funds" of Profit and Loss
Statement is Rs. 189 lakh (Rs. 301 lakh for the year ended 31st March,
2011).
1. Pursuant to SEBI Circular CIR/DNPD/5/2011 dated June 2, 2011 (BSE
Notice No. 20110602-18, dated June 02, 2011), permitting stock
exchanges to introduce Liquidity Enhancement Schemes (LES) for illiquid
securities in their equity derivatives segment, the Exchange has
launched a series of Liquidity Enhancement Incentive Programmes (LEIPS)
to enhance liquidity in BSE''s Futures & Options Segment. The programme
was launched on 28th September, 2011 and an expense of Rs. 6,049 lakh has
been incurred towards the same in financial year 2011 -12. Considering
the special nature of this expense and its impact on the profit of the
Exchange, the same has been recognised as an exceptional item.
2. Due to the "Scheme of Arrangement", during the current year,
with ICCL previous years'' figures are not strictly comparable. The
Revised Schedule VI has become effective from I April, 2011 for the
preparation of financial statements. This has significantly impacted the
disclosure and presentation made in the financial statement. Previous
year''s figures have been regrouped/reclassified wherever necessary to
correspond with the current year''s classification/disclosure.
Mar 31, 2011
1. Corporatisation & Demutualisation:
(a) Pursuant to the BSE (Corporatisation & Demutualisation) Scheme,
2005, (the Scheme) the Exchange had allotted 10,000 equity shares of
Rs.1/- each to each of those card based Members of the erstwhile BSE
whose names appeared on the Register of Members under Rule 64 of the
erstwhile BSE - Rules, Bye-laws and Regulations, on the Record Date
fixed for the purpose.
(b) As on 31st March, 2011, out of the total 95,550,000 equity shares
of Rs. I /- (including 88,200,200 bonus shares ofRs. I /- each)
issuable to the card based Members, the Exchange has allotted
93,210,000 equity shares (93,080,000 equity shares as on 31st
March, 2010). The allotment of 2,340,000 equity shares (2,470,000
equity shares as on 31st March, 2010) ofRs. I/- each has been kept
in abeyance for specific reasons. However, all corporate benefits
as declared from time to time, including dividend, are accrued to
all the 95,550,000 equity shares.
(c) As a part of the demutualisation process, the Exchange in order to
fulfill its obligations under the Scheme and the Securities Contracts
(Regulation) (Manner of Increasing and Maintaining Public Shareholding
in Recognised Stock Exchanges) Regulations, 2006 (the SEBI Regulations)
dated 13th November, 2006, and further amendment thereto on 23rd
December, 2008, had issued shares to Deutsche Boerse AG (DBAG) and
Singapore Exchange Limited (SGX).The Exchange has further agreed to
issue additional shares to DBAG and SGX so as to maintain their holding
percentage.
2. Contingent Liabilities not Provided for in respect of:
(Rs.)
Sr. Particulars As at As at
No. 31st March, 31st March,
2011 2010
(a) Claims against the Exchange not
acknowledged as debts in respect
of:
(i) Service Tax matters 4,397,615 6,933,638
(ii) Other matters 1,181,627,606 1,070,769,206
(Including Rs. 1,031,631,108/-
(Rs. 1,033,450,927/- for the year
ended 31st March, 2010) which
in the opinion of the
Management are remote)
(b) Guarantees given by the
Exchange to the loan provider: 20,202,696 27,314,159
Aggregate loans outstanding
from employees of the Exchange
as on date. The employees
have mortgaged their flats/
properties with the loan
provider.
(c) Guarantee given by the bank on
behalf of the Exchange 26,185,000 26,185,000
3. Estimated amount of contracts remaining to be executed on capital
account and not provided for (net of advances) is Rs. 73,650,236/- as
on 31st March, 2011 (Rs. 130,583,913/- as on 31st March, 2010).
4. As per the definitions of ''business segment'' and ''geographical
segment'', contained in Accounting Standard-17 "Segment
Reporting", the Management is of the opinion that as the Exchange''s
operations comprise of only facilitating trading in securities and the
activities incidental thereto, there is neither more than one
reportable business segment nor more than one reportable geographical
segment, and, therefore, segment information as per Accounting
Standard-17 is not required to be disclosed.
5. Various Funds/Reserves setup and administered by the Exchange:
5.1 Trade Guarantee Fund (TGF):
In 1997, BSE had set up the Trade Guarantee Fund to guarantee the
settlement of bonafide transactions of members of the Exchange, which
form part of the Exchange settlement system so as to ensure timely
completion of settlement of trades and thereby protect the interest of
investors and the members of the Exchange. The constitution of the Fund
and its rules and bye-laws were approved by the Securities and Exchange
Board of India (SEBI). BSE had contributed a sum of Rs. 600,000,000/-
from the accumulated contribution from its members in the year 1997-98.
Every member contributes a fixed sum at the time of commencement of
business and there after a percentage of the gross turnover as
prescribed from time to time. The Fund is represented by earmarked
investments and the income earned on these investments is credited to
the Profit and Loss Account and then appropriated to the Fund (net of
applicable taxes).
5.2 Trade Guarantee Fund (G-Sec Segment):
In 2003, BSE had set up a distinct Trade Guarantee Fund known as Trade
Guarantee Fund- G-Sec for trading in Central Government Securities and
the Fund was created with an initial contribution of Rs. 50,000,000/- by
transferring the said amount from the free reserves of BSE. The Fund is
represented by earmarked investments and the income earned on these
investments is credited to the Profit and Loss Account and then
appropriated to the Fund (net of applicable taxes).
5.3 Trade Guarantee Fund (CDX):
In 2008, BSE had set up a distinct Trade Guarantee Fund known as Trade
Guarantee Fund-CDX for trading in Currency Derivatives and such fund
was created with an initial contribution of Rs. 100,000,000/- by
transferring the said amount from the Capital Reserves of the Exchange.
The Fund is represented by earmarked investments and the income earned
on these investments is credited to the Profit and Loss Account and
then appropriated to the Fund (net of applicable taxes).
5.4 Brokers'' Contingency Fund (BCF):
In 1997, BSE had set up the Brokers'' Contingency Fund with a view to
make temporary refundable advance(s) to the members ; facing financial
mismatch so as to protect the interests of the investors dealing
through members of BSE by ensuring timely » completion of settlement.
The initial contribution of BSE to the corpus of the fund was Rs.
95,126,433/-. The Fund is represented by earmarked investments. As
there has been no utilisation from the BCF in the recent past, the
Exchange has decided that the income earned on these investments and
initial contribution from members should not be appropriated to the
Fund with effect from Ist April, 2008.
6. Amount of Rs. 2,973,500,000/- (Rs. 2,782,000,000/- as at 31st March,
2010) appearing as "Deposits from Trading Members" in the Balance
Sheet represents refundable deposits received from deposit based
trading members. These deposits have a lock in period.
7. On the basis of the information available with the Exchange, there
are no suppliers registered under the Micro, Small, and Medium
Enterprises Development Act, 2006. Hence, the information as required
by the Act is not given.
8. Computer Technology Related Expenses'' include Repairs and
Maintenance on Computers amounting to Rs. 229,549,715/-
(Rs. 213,873,244/- as at 31st March, 2010).
9. Miscellaneous Expenses include Foreign Exchange Loss of Rs.
610,887/- (Rs. 2,152,090/- as at 3151 March, 2010).
Other Details:
The estimates of future salary increase considered in the actuarial
valuation, take into account inflation, seniority, promotion and other
relevant factors such as supply and demand in the employment market.
The above information is certified by the actuary and relied upon by
the Auditors.
Expected rate of return on Plan Assets is based on expectation of the
average long term rate of return expected on investments of the fund
during the estimated term of the obligations.
The Employer''s best estimate of the contributions expected to be paid
to the plan during the next year is Rs. 10,000,000/- (Rs. 10,000,000/-
for the year ended 31st March, 2010).
- Amount recognised as an expense in respect of Compensated Leave
Absences is credit of Rs. 24,375,959/- (Rs. 29,034,086/- for the year
ended 31st March, 2010).
Defined Contribution Plan:
- Amount recognised as an expense and included under the head
"Contribution to Provident and Other Funds" of Profit and Loss
Account is Rs. 28,379,847/-. (Rs. 24,192,497/- for the year ended 31st
March, 2010).
10. The Exchange has made cumulative provision towards the additional
Property Tax demanded by Brihanmumbai Municipal Corporation as at 3 Ist
March, 2011 ofRs. 13,213,464/- (Rs. 13,213,464/- as at 31st March, 2010).
11. Employee cost of previous year includes Rs. 31,991,120/- towards
arrears of Salaries, Allowances and Bonus, Rs. 812,900/- towards arrears
of Contribution to Provident and Pension Funds and Rs. 9,760,798/-
towards arrears of Staff Welfare Expenses.
12. Pursuant to the BSE (Corporatisation & Demutualisation) Scheme,
2005, (the Scheme) the Company intends to reorganize its operations
through a Court approved Scheme of Arrangement by transferring its
Clearing & Settlement business and related assets and liabilities to a
wholly-owned subsidiary effective April 01, 2011.
This proposed reorganization would be subject to receipt of necessary
approvals/registrations from shareholders, statutory authorities and
the approval of the Scheme by the Court.
13. The previous year''s figures have been regrouped / reclassified,
wherever necessary, to conform to the current year''s presentation.
Mar 31, 2010
1. Contingent Liabilities not Provided for in respect of: (Rupees)
Sr. particulars As at As at
31st March, 31st March,
2010 2009
a) Claims against the Exchange not
acknowledged as debts in respect of
i) Service Tax matters 6,933,638 6,933,638
ii) Other matters 1,070,769,206 1,878,792,240
(Including Rs.1,033,450,927/-
(Rs. 1,872,662,244/- for the year ended
31st March, 2009) which in the opinion
of the Management are remote)
b) Guarantees given by the Exchange to the
loan provider: 104,000,000 104,000,000
Aggregate loans outstanding from
employees of the Exchange were Rs.
27,314,159/-,
(Rs. 31,653,679/- as at 31 st March,
2009) The employees have mortgaged
their flats/
properties with the loan provider.
c) The Exchange has procured corporate credit
cards for its Senior Executives.
The total amount outstanding is 34,760 158,507
d) Guarantee given by the bank on behalf
of the Exchange 26,185,000 26,185,000
2. Estimated amount of contracts remaining to be executed on capital
account and not provided for (net of advances) is Rs. 130,583,9121-as
on 31 st March, 2010 (Rs. 118,884,305/- as on 31 st March,2009).
3. As per the definitions of business segment and geographical
segment, contained in Accounting Standard-17 "Segment Reporting", the
Management is of the opinion that as the Exchanges operations comprise
of only facilitating trading in securities and the activities
incidental thereto, there is neither more than one reportable business
segment nor more than one reportable geographical segment, and,
therefore, segment information as per Accounting Standard-17 is not
required to be disclosed.
4. Various Funds / Reserves setup and administered by the Exchange:
4.1 Trade Guarantee Fund (TGF):
In 1997, BSE had set up the Trade Guarantee Fund to guarantee the
settlement of bonafide transactions of members of the Exchange, which
form part of the Exchange settlement system so as to ensure timely
completion of settlement of trades and thereby protect the interest of
investors and the members of the Exchange. The constitution of the Fund
and its rules and bye-laws were approved by the Securities and Exchange
Board of India (SEBI). BSE had contributed a sum of Rs. 600,000,000/-
from the accumulated contribution from its members in the year 1997-98.
Every member contributes a fixed sum at the time of commencement of
business and there after a percentage of the gross turnover as
prescribed from time to time. The Fund is represented by earmarked
investments and the income earned on these investments is credited to
the Profit and Loss Account and then appropriated to the Fund (net of
applicable taxes).
4.2 Trade Guarantee Fund (G-Sec Segment):
In 2003, BSE had set up a distinct Trade Guarantee Fund known as Trade
Guarantee Fund- G-Sec for trading in Central Government Securities and
the Fund was created with an initial contribution of Rs. 50,000,000/-
by transferring the said amount from the free reserves of BSE. The Fund
is represented by earmarked investments and the income earned on these
investments is credited to the Profit and Loss Account and then
appropriated to the Fund (net of applicable taxes).
4.3 Trade Guarantee Fund (CDX):
In 2008, BSE had set up a distinct Trade Guarantee Fund known as Trade
Guarantee Fund-CDX for trading in Currency Derivatives and such fund
was created with an initial contribution of Rs. 100,000,000/- by
transferring the said amount from the Capital Reserves of the Exchange.
The Fund is represented by earmarked investments and the income earned
on these investments is credited to the Profit and Loss Account and
then appropriated to the Fund (net of applicable taxes).
The following amounts have been appropriated to the above funds during
the year out of Operational Charges Recovered and Income from
Investments and Deposits;
4.4 Brokers Contingency Fund (BCF):
In 1997, BSE had set up the Brokers Contingency Fund with a view to
make temporary refundable advance(s) to the members facing financial
mismatch so as to protect the interests of the investors dealing
through members of BSE by ensuring timely completion of settlement. The
initial contribution of BSE to the corpus of the fund was Rs.
95,126,433/-. The Fund is represented by earmarked investments. As
there has been no utilisation from the BCF in the recent past, the
Exchange has decided that the income earned on these investments and
initial contribution from members should not be appropriated to the
Fund with effect from 1 st April, 2008.
4.5 Investors Services Fund (ISF):
As per SEBI directive, from 1996-97, BSE decided to set aside 20% of
the Annual listing fees received to an Investors Services Account. The
Exchange has charged all direct expenses incurred towards Investors
Services to the Account and has also charged on a pro-rata basis other
relevant revenue expenses. The balance in the Account as on 31st March,
2010, is Re 1 /- which is shown under the other liabilities in Schedule
"H" is arrived as under:
5. Amount of Rs. 2,782,000,000/- (Rs. 2,638,000,000/- as at 31 st
March, 2009) appearing as "Deposits from Trading Members" in the
Balance Sheet represents refundable deposits received from deposit
based trading members. These deposits have a lock in period.
6. On the basis of the information available with the Exchange, there
are no suppliers registered under the Micro, Small, and Medium
Enterprises Development Act, 2006. Hence, the information as required
by the Act is not given.
7. Computer Technology Related Expenses include Repairs and
Maintenance on Computers amounting to Rs. 213,873,244/- (Rs.
217,648,826/ -as at 31st March, 2009).
8. Computer Technology Related Expenses includes Rs. 107,092,130/-
being technical fees paid in advance by the Exchange to an overseas
software vendor for improvements in the trading, clearing and
settlement systems of the Exchange. The above amount has been expensed
after adjusting Rs. 16,899,670/- refunded by the software vendor, upon
termination of the contract in the current year.
9. Miscellaneous Expenses include Foreign Exchange Loss of Rs.
2,152,090/- (Miscellaneous Income for the year ended 31st March, 2009
included Foreign Exchange Gain of Rs. 1,331,409/-).
10. Disclosure as required under Accounting Standard -15 on "Employee
Benefits" is as under:
Other Details:
The estimates of future salary increase considered in the actuarial
valuation, take into account inflation, seniority, promotion and other
relevant factors such as supply and demand in the employment market.
The above information is certified by the actuary and relied upon by
the Auditors.
Expected rate of return on Plan Assets is based on expectation of the
average long term rate of return expected on investments of the fund
during the estimated term of the obligations.
The Employers best estimate of the contributions expected to be paid
to the plan during the next year is Rs. 10,000,000/- (Rs. 12,500,000/ -
for the year ended 31st March, 2009)
-Amount recognised as an expense in respect of Compensated Leave
Absences is Rs. 29,034,086/- (Rs. 3,626,077/- for the year ended 31st
March, 2009).
Defined Contribution Plan:
-Amount recognised as an expense and included under the head
"Contribution to Provident and Other Funds" of Profit and Loss Account
is Rs. 24,192,497/-, including Rs. 812,900/- paid towards arrears (Rs.
17,369,413/- for the year ended 31st March, 2009).
11. Arrears of employee cost includes Rs. 31,991,120/- towards
Salaries, Allowances and Bonus, Rs. 812,900/- towards Contribution to
Provident and Pension Funds and Rs. 9,760,798/- towards Staff Welfare
Expenses.
12. The Exchange has made provision of Rs. 6,606,732/- being the
additional Property Tax demanded by Brihanmumbai Municipal Corporation
for the year ended 31 st March, 2010. Cumulative provision as at 31st
March, 2010 is Rs. 13,213,464/-. (Rs. 6,606,732/- for the year ended
31st March, 2009).
13. The previous years figures have been regrouped / reclassified,
wherever necessary, to conform to the current years presentation.
Mar 31, 2009
1. Corporatisation & Demutualisation :
a. Pursuant to the BSE (Corporatisation & Demutualisation) Scheme,
2005, (the Scheme) the Exchange had allotted 10,000 equity shares of
Re.I/- each to each of those card based Members of the erstwhile BSE
whose names appeared on the Reg1ster of Members under Rule 64 of the
erstwhile BSE - Rules, Bye-laws and Regulations, on the Record Date,
fixed for the purpose.
b. The Exchange in its Extraordinary General Meeting held on 20th
February, 2009 passed a resolution to issue bonus shares to its members
in the ratio of 12 equity shares of Re.1/- each for every one equity
share of Re.1/- held as at 13th March, 2009 being the Record Date
(94,493,328 bonus shares of Re.1/- each issued).The Securities Premium
Account was utilised for the issue of bonus shares to the extent of Rs.
94,493,328/- for the issue.
c. As on 31st March, 2009, out of the total 95,550,000 equity shares
of Rs.1/- each (including 88,200,200 bonus shares of Rs.1/- each)
issuable to the card based Members, the Exchange has allotted
92,180,000 equity shares.The allotment of 3,370,000 equity shares of
Re.1/- each has been kept in abeyance for specific reasons. However,
all corporate benefits as declared from time to time, including
dividend, are accrued to all the 95,550,000 equity shares..
d. Pursuant to the Scheme, the Capital Reserve was created as at 19th
August, 2005, which shall not be used for purposes other than the
operations of the Exchange. During the current year amount of Rs
100,000,000/- is transferred to Trade Guarantee Fund (CDX) Account from
the Capital Reserve towards initial contribution by the Exchange.
e. As a part of the demutualisation process, the Exchange in order to
fulfill its obligations under the Scheme and the Securities Contracts
(Regulation) (Manner of Increasing and Maintaining Public Shareholding
in Recognised Stock Exchanges) Regulations, 2006 (the SEBI Regulations)
dated 13th November, 2006, had issued shares to Deutsche BoerseAG
(DBAG) and Singapore Exchange Limited (SGX).The Exchange has further
agreed to issue additional shares to DBAG and SGX so as to maintain
their holding percentage.
2. Contingent Liabilities not Provided for:
(Rupees)
As at As at
31st
March, 2009 31st March, 2008
a) Claims against the Exchange nor
acknowledged as debts in respect of:
i) Service Tax matters 6,933,638 5,405,954
ii) Other matters 1,878,792,240 1,107,065,950
(Including Rs. 1,872,662,244/- (Rs. 1,086,152,822/- for the year ended
31st March, 2008) which in the opinion of the Management are remote)
b) Guarantees given by the Exchange to the loan provider: 104,000,000
104,000,000 Aggregate loans outstanding from employees of the Exchange
were Rs. 31,653,679/-, as at 31st March, 2009 (Rs. 35,977,190/- as at
31st March. 2008) The employees have mortgaged their flats/ properties
with the loan provider.
c) The Exchange has procured corporate credit cards for its Senior
Executives. 158,507 45,557 The total amount outstanding is
d) Guarantees given by the bank on behalf of the Exchange. 26,185,000
26,185,000
3. The Staff Union and OfficersAssociation have submitted Charters of
Demands, which are under negotiation.
4. Estimated amount of contracts remaining to be executed on capital
account and not provided for (net of advances) is Rs. 118,884,305/- as
on 31st March, 2009 (Rs. 937,862,620/- as on 31st March,2008).
5. As per the definitions of business segment and geographical
segment, contained in Accounting Standard - 17 (AS-17) "Segmen
Reporting", the Management is of the opinion that as the Exchanges
operations comprise of only facilitating trading in securitie and the
activities incidental thereto, there is neither more than one
reportable business segment nor more than one reportabl geographical
segment, and, therefore, segment information as per AS-17 is not
required to be disclosed.
6. Various Funds / Reserves setup and admin1stered by the Exchange :
6.1 Trade Guarantee Fund (Cash & Derivative)
In 1997, BSE had set up the Trade Guarantee Fund to guarantee the
settlement of bonafide transactions of members of the Exchange, which
form part of the Exchange settlement system so as to ensure timely
completion of settlement of trades and thereby protect the interest of
investors and the members of the Exchange.The constitution of the Fund
and its rules and bye- laws were approved by the Securities and
Exchange Board of India (SEBI). BSE had contributed a sum of Rs.
600,000,000/- from the accumulated contribution from its members in the
year 1997-98. Every member contributes a fixed sum at the time of
commencement of business and there after a percentage of the gross
turnover as prescribed from time to time. The Fund is represented by
earmarked investments and the income earned on these investments is
credited to the Profit and Loss Account and then appropriated to the
Fund (net of applicable taxes).
6.2 Trade Guarantee Fund (G-Sec Segment)
In 2003, BSE had set up a d1stinct Trade Guarantee Fund known as Trade
Guarantee Fund - G-Sec for trading in Central Government Securities and
the Fund was created with an initial contribution of Rs. 50,000,000/-
by transferring the said amount from the free reserves of BSE.The Fund
is represented by earmarked investments and the income earned on these
investments is credited to the Profit and Loss Account and then
appropriated to the Fund (net of applicable taxes).
6.3 Trade Guarantee Fund (CDX)
In 2008, BSE had set up a d1stinct Trade Guarantee Fund known as Trade
Guarantee Fund - CDX for trading in Currency Derivatives and such fund
was created with an initial contribution of Rs. 100,000,000/- by
transferring the said amount from the Capital Reserves of the Exchange.
The Fund is represented by earmarked investments and the income earned
on these investments is credited to the Profit and Loss Account and
then appropriated to the Fund (net of applicable taxes).
6.4 Brokers Contingency Fund (BCF)
In 1997, BSE had set up the Brokers Contingency Fund with a view to
make temporary refundable advance(s) to the members facing temporary
financial mismatch so as to protect the interests of the investors
dealing through members of BSE by ensuring timely completion of
settlement.The initial contribution of BSE to the corpus of the fund
was Rs 95,126,433/-.
The Fund is represented by earmarked investments. As there has been no
utilisation from the BCF in the recent past and its corpus has grown
substantially as on 31st March, 2008, the Exchange decided that the
income earned on these investments and initial contribution from
members should not be appropriated to the Fund with effect from 1st
April, 2008.
7. Exceptional Item for the previous year ended 31st March, 2008
represents a sum of Rs. 95.82 million realised on sale of assets of
defaulter members on account of whom the Trade Guarantee Fund had met
the pay-in obligation in earlier years.The same had been transferred to
the fund (net of applicable taxes) of Rs.32.57 million.
8. The previous years figures have been regrouped / restated /
reclassified, wherever necessary, to confirm to the current years
presentation
Mar 31, 2008
1. Contingent Liabilities not Provided for:
(Rupees)
Sr. Particulars As at As at
No. 31st March, 2008 31st March, 2007
a) Claims against the Exchange
not acknowledged as debts in respect of:
i) Sales Tax matters Nil 616,280
ii) Service Tax matters 5,405,954 5,405,954
iii) Other matters 20,913,128 2,428,128
b) Guarantees given by the
Exchange to the loan provider: 104,000,000 104,000,000
Aggregate loans outstanding from employees of the Exchange were Rs.
35,977,190/- as at 31st March, 2008 (Rs. 43,166,827/- as at 31st March,
2007) The employees have mortgaged their flats/ properties with the
loan provider.
c) The Exchange has procured corporate credit cards for its Senior
Executives. ] 45,557 68,946 The total amount outstanding is
2. Estimated amount of contracts remaining to be executed on capital
account and not provided for (net of advances) is Rs. 937,862,620/- as
on 31st March, 2008 (Rs. 43,142,823/- as on 31st March, 2007).
3. No provision for Fringe Benefit Tax (FBT) was made for the period
from 1st April, 2005 to 19th August, 2005 in the books of account of
the erstwhile BSE as the Management is of the opinion that it will be
granted exemption under Section 11 & 10(23C)(iv) of the Income- Tax
Act, 1961. However, in the event that such exemption is not granted,
there would be estimated tax liability of Rs. 1,657,716/-. However,
Fringe Benefit Tax has been paid for the subsequent period.
4. As per the definitions of business segment and geographical
segment, contained in (AS-17) "Segment Reporting", the Management is
of the opinion that as the Companys operations comprise of only
facilitating trading in securities and the activities incidental
thereto, there is neither more than one reportable business segment nor
more than one reportable geographical segment, and, therefore, segment
information as per AS-17 is not required to be disclosed.
5. Various Funds / Reserves setup and administered by the Exchange:
5.1 Trade Guarantee Fund (TGF):
In 1997, BSE had set up the Trade Guarantee Fund to guarantee the
settlement of bona fide transactions of members of the Exchange
inter-se, which form part of the Stock Exchange settlement system so as
to ensure timely completion of settlement of trades and thereby protect
the interest of investors and the members of the Exchange. The
constitution of the Fund and its rules and bye-laws were approved by
the Securities and Exchange Board of India (SEBI). BSE had contributed
a sum of Rs. 600,000,000/- from the accumulated contribution from its
members in the year 1997-98. Every member contributes Rs. 10,000/- at
the time of commencement of business and thereafter a percentage of the
gross turnover as prescribed from time to time (Presently Rupee 0.01
per Lac of Gross Turnover).
The Fund is represented by earmarked investments and the income earned
on these investments is credited to the Profit and Loss Account and
then appropriated to the Fund (net of applicable taxes).
During the year the Exchange realised a sum of Rs. 95,822,316/- on the
sale of assets of defaulter members on account of whom the Fund had met
pay in obligations in earlier years. The same has been transferred to
the Fund (net of applicable taxes of Rs. 32,570,005/-).
5.2 Trade Guarantee Fund - G-Sec Segment:
In 2003, BSE had set up a distinct Trade Guarantee Fund known as G- Sec
Trade Guarantee Fund for trading in Central Government Securities and
such fund was created with an initial contribution of Rs. 50,000,000/-
by transferring the said amount from the free reserves of BSE.
The Fund is represented by earmarked investments and the income earned
on these investments is credited to the Profit and Loss Account and
then appropriated to the Fund (net of applicable taxes).
5.3 Brokers Contingency Fund (BCF):
In 1997, BSE had set up the Brokers Contingency Fund with a view to
make temporary refundable advance(s) to the members facing temporary
financial mis-match so as to protect the interests of the investors
dealing through members of BSE by ensuring timely completion of
settlement. The initial contribution of BSE to the corpus of the fund
was Rs. 95,126,433/-. Every member contributes Rs. 250,000/- at the
time of admission.
The Fund is represented by earmarked investments and the income earned
on these investments is credited to the Profit and Loss Account and
then appropriated to the Fund (net of applicable taxes).
6. BSE had issued Fixed Deposits / Debentures in the early 1980s of
which an amount of Rs. 696,301/- (Rs. 696,301 /- as at 31st March,
2007) (including Interest) is unclaimed and has been shown under other
liabilities in Schedule "G". The Exchange is in the process of getting
a clarification from the Department of Company Affairs on the
applicability of Section 205C of the Companies Act, 1956 on the above
mentioned amounts. Based on the clarification, appropriate action will
be taken by the Exchange.
7. Amount of Rs. 2,356,250,000/- (Rs. 1,678,250,000/- as at 31st
March, 2007) appearing as "Deposit from Trading Members" in the Balance
Sheet represents refundable deposits received from deposit based
trading members. These deposits have a lock in of 3 years with an
additional notice period of one year.
8. The diminution in the value of current investments as shown in the
Profit and Loss Account amounting to Rs. 6,813,399/- (Write back
amounting to Rs. 1,410,800/- for the period ended 31st March, 2007)
does not include the write back/diminution in the value of earmarked
current investments of Defaulters Account.
9. The Exchange has contributed a sum of Rs. 1,663,550/- (Rs.
2,503,637/- for the period ended 31st March, 2007) for the
rehabilitation of the "Victims of the 2001 Gujarat earthquake".
10. On the basis of the information available with the Company, there
are no suppliers registered under the Micro, Small, Medium Enterprises
Development Act, 2006. Hence, the information as required by the Act is
not given.
11. Computer Technology Related Expenses include Repairs and
Maintenance on Computers amounting to Rs. 263,092,793/- (Rs.
204,560,520/- as at 31st March, 2007).
12. Miscellaneous Expenses includes Foreign Exchange Loss of Rs.
123,796/- (Rs. 162,892/- as at 31st March, 2007).
13. Effective April 01, 2007, the Company has adopted the Accounting
Standard 15 on "Employee Benefits" (Revised).
Pursuant to the adoption, the transitional obligations of the Company
on account of compensated absences aggregated Rs. 16,343,811/- and on
account of Gratuity agreegated to Rs. (7,662,180/-).The net impact of
Rs. 5,731,631/- (net of tax Rs. 2,950,000/-) have been debited to
General Reserve.
Mar 31, 2007
1. Contingent Liabilities Not Provided for:
(Rupees)
Sr. Particulars As at As at
No. 31st March, 2007 31st March, 2006
(a) Claims against the Exchange
not acknowledged as debts in respect
of:
(i) Income Tax matters Nil 4,034,072,349
(ii) Sales Tax matters 616,280 776,440
(iii) Service Tax matters 5,405,954 5,403,454
(iv) Other matters 2,428,128 2,398,528
(b) Guarantees given by the
Exchange. 104,000,000 104,000,000
Aggregate loans outstanding from employees of the Stock Exchange were
Rs. 43,166,827 as at 31st March, 2007 (Rs. 48,778,677 as at 31st March,
2006) The employees have mortgaged their flats/ properties with the
loan provider.
(c) The Exchange has procured corporate credit cards for its Senior
Executives. 68,946 48,977
The total amount outstanding is
2. Estimated amount of contracts remainingto be executed on capital
account and not provided for (net of advances) is Rs. 43,142,823/- as
on 3 I * March, 2007 (Rs. 74,453,7I I /- as on 31st March, 2006).
3. No provision for Fringe Benefit Tax (FBT) was made for the period
from 1st April to 19th August, 2005 in the books of account as the
Management is of the opinion that it will be granted exemption under
Section I I & 10(23C)(iv) of the Income-Tax Act, 1961. However, in the
event that such exemption is not granted, there would be estimated tax
liability of Rs. 1,657,716/-. However, Fringe Benefit Tax has been paid
for the subsequent period.
4. As per the definitions of business segment and geographical
segment, contained in (AS-17) "Segment Reporting", the Management is
of the opinion that as the Companys operations comprise of only
facilitating trading in securities and the activities incidental
thereto, there is neither more than one reportable business segment nor
more than one reportable geographical segment, and, therefore, segment
information as per AS-17 is not required to be disclosed.
5. Various Funds / Reserves setup and administered by the Exchange.
5.1 Trade Guarantee Fund (TGF):
In 1997, BSE had set up the Trade Guarantee Fund to guarantee the
settlement of bonafide transactions of members of the Exchange
inter-se, which form part of the Stock Exchange settlement system so as
to ensure timely completion of settlement of trades and thereby protect
the interest of investors and the members of the Exchange. The
constitution of the Fund and its rules and bye-laws were approved by
the Securities and Exchange Board of India (SEBI). BSE had contributed
a sum of Rs. 600,000,000 from the accumulated contribution from its
members in the year 1997-98. Every member contributes Rs. 10,000/- at
the time of commencement of business and there after a percentage of
the gross turnover as prescribed from time to time (Presently 0.01
Rupee per Lac of Gross Turnover).
The Fund is represented by earmarked investments and the income earned
on these investments is credited to the Profit & Loss Account and then
appropriated to the Fund net of tax.
5.2 Trade Guarantee Fund - G-Sec Segment:
In 2003, BSE had set up a distinct Trade Guarantee Fund known as GSEC
Trade Guarantee Fund for trading in Central Government Securities and
such fund was created with an initial contribution of Rs. 50,000,000 by
transferringthe said amount from the free reserves of BSE.
The Fund is represented by earmarked investments and the income earned
on these investments is credited to the Profit & Loss Account and then
appropriated to the Fund net of tax.
5.3 Brokers Contingency Fund (BCF):
In 1997, BSE had set up the Brokers Contingency Fund with a view to
make temporary refundable advance(s) to the members facing temporary
financial mis-match so as to protect the interests of the investors
dealing through members of BSE by ensuring timely completion of
settlement. The initial contribution of BSE to the corpus of the fund
was Rs. 95,126,433. Every member contributes Rs. 250,000/- at the time
of admission.
The Fund is represented by earmarked investments and the income earned
on these investments is credited to the Profit & Loss Account and then
appropriated to the Fund net of tax.
6. BSE had issued Fixed Deposits/Debentures in the early 1980s of
which an amount of Rs. 696,301 /- (Rs. 696,301 /- as at 31st March,
2006) (including Interest) is unclaimed and has been shown under other
liabilities in schedule "G". The Exchange is in the process of getting
a clarification from the Department of Company Affairs on the
applicability of Sec. 205C on the above mentioned amounts. Based on the
clarification, appropriate action will be taken by the Exchange.
7. The Exchange has made provision of Rs. 2,433,812/- being the
additional property tax demanded by Brihanmumbai Municipal Corporation
for the year ended 3 Ia March, 2007. Cumulative provision as at 31st
March, 2007 is Rs. 7,301,436/- (Rs. 4,867,624/- as at 31st March,
2006),
8. Amount of Rs. 1,678,250,000/- (Rs. 1,155,000,000/- as at 31st
March, 2006) appearing as "Deposit from Trading Members" in the Balance
Sheet represents refundable deposits received from deposit based
trading members. These deposits have a lock in of 3 years with an
additional notice period of one year.
9. The write back in the value of current investments as shown in the
Profit & Loss Account amounting to Rs. 1,410,800 /- (Diminution
amounting to Rs. 1,742,405/- for the period ended 31st March, 2006)
does not include the write back/diminution in the value of earmarked
current investments of Defaulters Account.
10. The Exchange has contributed a sum of Rs. 2,503,637/- (Rs.
625,736/- for the period ended 31 st March, 2006) for the
rehabilitation of the "Victims of the 2001 Gujarat earthquake".
11. The following amounts have been appropriated to the BCF & TGF
during the Year/Period out of Operational Charges Recovered and Income
from Investments and Deposits;
12. (a) The Company has not received any intimation from "suppliers"
regarding their status under the Micro, Small and Medium Enterprises
Development Act, 2006 and hence disclosures, if any, relating to
amounts unpaid as at the year end together with interest paid/ payable
as required under the said Act have not been given.
(b) As per information available with the Management, Sundry Creditors
do not include any amounts due to small-scale industrial undertakings
and this has been relied upon by the Auditors.
13. Computer Technology Related Expenses includes Repairs and
Maintenance on Computers amounting to Rs. 204,560,520/- (Rs. I
10,975,957/- as at 31st March, 2006).
14. Miscellaneous Expenses includes Foreign Exchange Loss of Rs.
162,892 /- (Rs. NIL as at 31st March, 2006)
15. The Previous Periods figures have been regrouped / reclassified,
wherever necessary to conform to the current years presentation.
Previous figures are for the period from 8th August 2005 to 31 st
March, 2006 and hence are not comparable with that of current period.
Mar 31, 2005
1. Contingent Liabilities Not Provided for:
(Rs. Million)
Sr.No. Particulars 31st March, 31st March,
2005 2004
a) Claims against the Exchange not
acknowledged as debts in respect of
i) Income Tax matters 3911.27 3911.27
ii) Sales Tax matters 17.56 20.97
iii) Service Tax matters 5.40 1.03
iv) Other matters 1.76 --
v) Trade Guarantee Fund 6.38 40.55
b) Guarantees given by the Exchange to HDFC Ltd. Aggregate loans
outstanding from 104.50 105.00 employees of the Stock Exchange were Rs
58.23 Million as on 31 st March 2005 (Previous Year Rs 66.20 Million).
The employees have mortgaged their flats/ properties with HDFC Ltd.
2. Estimated amount of contracts remaining to be executed on capital
account and not provided for (net of advances) is Rs. 209.55 Million
(31.03.2004 - Rs. 86.40 Million).
3. No provision for Taxation for the year ended 31st March, 2005 has
been made in the accounts as the Management is of the opinion that the
appeals before the Income Tax Appellate Tribunal in respect of earlier
years will be disposed off in the Exchanges favour and the Exchange
will be granted exemption under Sections 11 & 10 (23C)(iv) of The
Income-Tax Act, 1961. However, in the event that such exemption is not
granted, there would be estimated tax liability of Rs. 270.10 Million
for the year (31/3/2004 - Rs. 228.70 Million). The total cumulative
income tax liability not provided for is estimated at Rs. 774.40
Million (excluding the amounts referred to in Note 2(a) above)
(31/3/2004 - Rs. 504.30 Million)
4. As per the definitions of business segment and geographical
segment, contained in (AS-17) "Segment Reporting", Management is of
the opinion that there is neither more than one reportable business
segment nor more than one reportable geographical segment, hence
segment information as per is not required to be disclosed.
5. As required by Accounting Standard (AS-28) "Impairment of Assets",
issued by the Institute of Chartered Accountants of India, the Exchange
has carried out the assessment of impairment of assets. There has been
no impairment loss during the year.
6. Various Funds / Reserves setup and administered by the Exchange.
6.1 Trade Guarantee Fund (TGF)
The Exchange in the year 1997 set up the Trade Guarantee Fund to
guarantee the settlement of bonafide transactions of members of the
Exchange inter-se which form part of the Stock Exchange settlement
system so as to ensure timely completion of settlement of trades and
thereby protect the interest of investors and the members of the
Exchange. The constitution of the Fund and its rules and bye laws were
approved by the Securities and Exchange Board of India (SEBI). The
Exchange contributed a sum of Rs. 600 Million from accumulated
contribution from its members in the year 1997-98. Every member
contributes Rs 10,000 /- at the time of commencement of business and
there after a percentage of the gross turnover as prescribed from time
to time (Presently 0.01 Rupee per Lac of Gross Turnover). The Fund is
represented by the earmarked investments and the income earned on these
investments is credited to the Fund.
6.2 Trade Guarantee Fund - G-Sec Segment
The Governing Board in its meeting held on 13th January, 2003 decided
to set up a distinct Trade Guarantee Fund to be known as GSEC Trade
Guarantee Fund for trading in Central Government Securities and such
fund be created with an initial contribution of Rs. 50 Million by
transferring the said amount from the free reserves of the Exchange.
The Fund is represented by the earmarked investments and the income
earned on these investments is credited to the Fund.
6.3 Technology Reserve
The Technology reserve was set up with a view to keep abreast with the
changes in the field of information technology as critical activities
of the Exchange are dependent on information technology. The reserve
consists of appropriation from Income and Expenditure Account and
contributions from members.
Additions during the year financed out of Technology Reserve are Rs.
70,479,016/- (Previous Year Rs. 170,970,539/-). Accumulated
utilisation upto 31st March, 2005 out of the Technology reserve is Rs.
1,222,387,019/- (Previous Year Rs. 1,151,908,003/-).
6.4 Investors Services Reserve
As per SEBI directive, from 1996-97, the Exchange decided to set aside
20% of the listing fees received to an Investors Services Account. The
Exchange has charged all direct expenses incurred towards Investors
Services to the Account and has also charged on a pro-rata basis other
revenue expenses.
6.5 Brokers Contingency Fund (BCF)
The Exchange in the year 1997 has set up the Brokers Contingency Fund
with a view to make temporary refundable advance(s) to the members
facing temporary financial mis-match so as to protect the interests of
the investors dealing through members of the Exchange by ensuring
timely completion of settlement. The initial contribution of the
Exchange to the corpus of the fund was Rs 95.10 Million. Every member
contributes Rs 250,000/- at the time of admission to the Exchange. The
Fund is represented by the earmarked investments and the income earned
on these investments is credited to the Fund.
7. From the year 2004-05, in view of the size of the corpus of
Investors Protection Fund, the Management of the Exchange has reduced
the Contribution to Investors Protection Fund from 2.5% to 1% of the
listing fees earned during the year.
8. The Exchange has made provision of Rs. 2.43 Million being the
additional property tax demanded by Brihanmumbai Municipal Corporation
for the year ended 31st March, 2005.
9. During the year, a memorandum of settlement was signed between the
Exchange & the Officers Association culminating into payment of
arrears amounting to Rs 12.73 Million. No provision for wage settlement
for the period 1st April, 2003 to 31st March, 2005 has been made as
negotiations are on with the Staff Union. The amount for the same
cannot be quantified presently.
10. Charity and Donations under administrative and other expenses
includes an amount of Rs. 10 Million contributed by the Exchange to The
Prime Ministers National Relief fund for rehabilitation of Tsunami
victims.
11. Prior period adjustments comprises of excess /short Provisions/
Accrual pertaining to earlier years amounting to Rs 90.15 Million,
interest on Income Tax refund received in earlier years Rs 2.29 Million
and interest income transferred to Defaulters Liabilities Rs 5.35
Million.
12. SEBI, vide its order no. SEBI/MRD/40967/2005, dated May 20, 2005,
has approved the BSE (Corporatisation & Demutualisation) Scheme, 2005
whereby the Exchange is required to get itself corporatised within
three months from the date of the order.
13. The previous years figures have been regrouped/reclassified,
wherever necessary to confirm to the current years presentation.
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