70Th Annual Report 2017-18 Governing Board

70th Annual Report 2017-18

Governing Board

Mr Vijay Bhushan (Chairman) Mr Mahender Kumar Gupta Director Mr Vinod Kumar Goel Director Mr. Hans Raj Kapoor Director

Company Secretary Mr Sunil Bhatia

Auditors P. Bholusaria & Co. Chartered Accountants

Bankers: Canara Bank HDFC Bank

Registered Office: DSE House, 3/1, Asaf Ali Road New Delhi-110 002

Registrar & Transfer Agent : Abhipra Capital Limited Dilkhush Industrial Estate A-387, G. T. Karnal Road, Azadpur New Delhi-110 033

1 Delhi Stock Exchange Limited CIN:U91120DL1947PLC001239

CONTENTS

Governing Board 1 Notice 3 Directors’ Report 5 Corporate Governance Report 8 Form AOC-2 12 MGT-9 13 Independent Auditors’ Report 22 Balance Sheet 27 Profit & Loss Account 28 Cash Flow Statement 29 Notes 31 Form AOC-1 49 Consolidated Financial Report Independent Auditors’ Report 50 Balance Sheet 55 Profit & Loss Account 56 Cash Flow Statement 57 Notes 58

DSE Financial Services Ltd. (A subsidiary of Delhi Stock Exchange) Governing Board 78 Notice 79 Directors’ Report 81 Corporate Goverance Report 84 MGT-9 87 Form AOC-2 94 Independent Auditors’ Report 95 Balance Sheet 100 Profit & Loss Account 101 Cash Flow Statement 102 Notes 103 Map 116

2 70th Annual Report 2017-18

NOTICE TO SHAREHOLDERS

NOTICE is hereby given that 70th Annual General Meeting of the shareholders of Delhi Stock Exchange Limited will be held on Saturday, , September 29, 2018 at 11:30 AM at DSE House, 3/1, Asaf Ali Road, New Delhi – 110002 to transact the following business:

Ordinary Business: 1. To receive, consider and adopt: a. the Audited Financial Statements of the Company for the financial year ended March 31, 2018, together with the Reports of the Board of Directors and the Auditors thereon; and b. the Audited Consolidated Financial Statements of the Company for the financial year ended March 31, 2018, together with the Report of the Auditors thereon. 2. To appoint a person in place of Mr Vinod Kumar Goel (DIN: 00039086) who retires by rotation and being eligible offers himself for re-appointment. 3. To appoint statutory auditors of the Company and to fix their remuneration and in this regard to consider and if thought fit, to pass the following resolution as an Ordinary Resolution: RESOLVED THAT pursuant to the provisions of Sections 139, 142 and all other applicable provisions, if any, of the Companies Act, 2013 and the rules framed thereunder as amended from time to time, the Company hereby appoints M/s Bholusaria & Co. (Firm Registration No. 000468N), as Statutory Auditors of the Company, to hold office from the conclusion of this Annual General Meeting until the conclusion of the 75th Annual General Meeting of the Company on such remuneration as may be mutually decided by the Board of Directors of the Company and the Statutory Auditors.

Special Business: 4. To consider and pass with or without modification(s) the following resolution as a Special Resolution: RESOLVED THAT the entire amount of ` 66,94,92,106 (Rupees sixty six crores ninety four lacs ninety two thousand one hundred six only) standing to the credit of the Settlement Guarantee Fund Reserve of the Company shall be reclassified and credited to the ‘Surplus Account’ of the Company, and subsequent thereto, such amount credited to the ‘Surplus Account’ of the Company shall be reclassified as, and constitute accumulated profits of the Company in accordance with the provisions of the Companies Act, 2013 and subject to such approvals as may be necessary.

By Order of the Board For Delhi Stock Exchange Ltd.

Place : New Delhi Dated : August 31, 2018 (Sunil Bhatia) Company Secretary

3 Delhi Stock Exchange Limited CIN:U91120DL1947PLC001239

Notes: 1. A SHAREHOLDER ENTITLED TO ATTEND AND VOTE AT THE MEETING IS ENTITLED TO APPOINT A PROXY TO ATTEND AND VOTE INSTEAD OF HIMSELF AND THE PROXY NEED NOT BE A SHAREHOLDER OF THE COMPANY. THE INSTRUMENT APPOINTING PROXIES, IN ORDER TO BE EFFECTIVE, MUST BE RECEIVED AT THE REGISTERED OFFICE OF THE COMPANY NOT LATER THAN FORTY-EIGHT HOURS BEFORE COMMENCEMENT OF THE MEETING. 2. In terms of Section 105 of the Companies Act, 2013 read with Rule 19 of the Companies (Management and Administration) Rules, 2014 a person can act as proxy on behalf of members not exceeding fifty and holding in the aggregate not more than ten percent of the total share capital of the company carrying voting rights. A member holding more than ten percent of the total share capital of the company carrying voting rights may appoint a single person as proxy and such person shall not act as a proxy for any other shareholder. 3. Register of Members and Share Transfer Books of the Company will remain closed from September 24, 2018 to September 29, 2018 (both days inclusive) for the purpose of Annual General Meeting. 4. Shareholders are requested to send their queries at least ten days in advance of the meeting so that the information can be made available at the time of meeting and also to meaningfully answer the queries raised by them. 5. The Corporate Shareholders intending to send their authorized representatives to attend the meeting are requested to send a certified copy of the Board Resolution authorizing their representative to attend and vote on their behalf at the meeting, in respect of above matters. 6. Shareholders/ Proxies should bring the Attendance Slip sent herewith duly filled in for attending the meeting. 7. Shareholders are also requested to bring their copy of the Annual Report at the time of Annual General Meeting. 8. An Explanatory Statement pursuant to section 102 of the Companies Act, 2013 is appended.

EXPLANATORY STATEMENT PURSUANT TO SECTION 102 OF THE COMPANIES ACT, 2013 It is submitted that the company after de-recognition as a Stock Exchange is no longer required to maintain Settlement Guarantee Fund Reserve which it had created under the rules and regulations of Securities and Exchange Board of India. The Fund consists of contribution of the company and its members over a period of time and income thereon. It is proposed that the Settlement Guarantee Fund Reserve,which is in the nature of free reserve, be transferred to Surplus Account. Subsequent to this transfer the Surplus Account shall constitute accumulated profits of the Company. None of the Directors or Key Managerial Personnel of the company or their relatives of the company is in any way concerned or interested in the resolution except to the extent of pay out, if any, from these funds in respect of their holding in the company.

By Order of the Board For Delhi Stock Exchange Ltd.

Place : New Delhi Dated : August 31, 2018 (Sunil Bhatia) Company Secretary

4 70th Annual Report 2017-18

DIRECTORS’ REPORT

Dear Shareholders, Your Directors take pleasure in presenting 70th Annual Report on the operations of the Company and the audited accounts for the year ended March 31, 2018. The financial highlights including consolidated results of the Company for the year are as under:-

FINANCIAL HIGHLIGHTS (` in lacs) Particulars Stand-alone Consolidated 2017-18 2016-17 2017-18 2016-17

Gross Income 378.49 481.93 451.68 547.57 Total Expenditure 229.52 223.49 300.05 280.58 Depreciation 53.18 62.95 53.66 63.27 Surplus after Depreciation 95.80 195.49 97.97 203.72 Exceptional Item 25.92 0 25.92 0 Provision for Taxation 23.76 71.49 23.76 71.49 Net Surplus 46.11 126.32 48.29 132.23 Balance brought forward (4189.71) (4316.03) (4375.51) (4507.74) Balance (4143.60) (4189.71) (4327.22) (4375.51)

PERFORMANCE HIGHLIGHTS YEAR 2017-18 FOR THE COMPANY OPERATIONS With the issue of Exit Order by SEBI on January 23, The gross revenue of the company during the financial 2017, SEBI regulations and directives stopped year 2017-18 declined to ` 378.49 lacs from ` 481.93 applying to your company. The new management lacs in 2016-17. This decline was on account of took over reins of the company on December, 2017 decrease in interest income which was lower by and immediately got down to important and pending ` 135.48 lacs. This reduction was on account of fall task of refunding brokers’ deposits to them. The in interest rates coupled with reduced funds of the management is happy to inform that most of the company due to payment of brokers’ outstanding brokers have been paid back. turnover fee and sub-brokers fees to SEBI. DIRECTORS The other expenses increased marginally due to CSR Expenses and various old unrecoverable balances During the financial year 2017-18 Mr Shanker Singal written off during the year under review. and Mr Sudhangshu S. Biswal, Directors resigned from the Board on October 11, 2017 and October The Company earned profit after taxation amounting 13, 2017 respectively. Mr Mohinder Singh who was to ` 46.11 lacs in 2017-18 as against ` 126.32 lacs appointed as an additional director after his in 2016-17. completion of tenure as a Public Interest Director on DIVIDEND January 20, 2017 ceased to be chairman and director from December 20, 2017. The Board does not recommend any dividend for the year under review in view of the provisions of section Mr Rajinder Goel and Mr Sanjiv Gandhi were 123 (1) of the Companies Act, 2013 which prohibits appointed as additional directors on October 20, 2017 the companies to declare dividend unless carried over and November 9, 2017 respectively. They ceased to losses of previous years are set off against profit of be directors on the date of last annual general the company for the current year. meeting on December 20, 2017.

5 Delhi Stock Exchange Limited CIN:U91120DL1947PLC001239

The Board records with gratitude the contribution and b. they have selected such accounting policies and services rendered by them during their association applied them consistently and made judgments with the Company. and estimates that are reasonable and prudent Mr Vijay Bhushan, Mr Mahender Kumar Gupta, Mr so as to give a true and fair view of the state of Vinod Kumar Goel, and Mr Hans Raj Kapoor were affairs of the Company at the end of the financial appointed as Director of the company on December year and of the profit of the Company for that period; 20, 2017. c. they have taken proper and sufficient care for Mr Vinod Kumar Goel retires at the forthcoming the maintenance of adequate accounting records Annual General Meeting and being eligible, offers in accordance with the provisions of the Act for himselves for re-appointment. safeguarding the assets of the Company and for preventing and detecting fraud and other SUBSIDIARY COMPANY irregularities; DSE Financial Services Limited, a 100 percent d. they have prepared the annual accounts on a Subsidiary of your Company is providing a trading going concern basis; platform to the members of DSE in National Stock e. they have laid down internal financial controls to Exchange and Bombay Stock Exchange for Cash be followed by the Company and such internal and F&O segments. DFSL, also a depository financial controls are adequate and operating participant of CDSL provides the depository facilities effectively; to its clients. f. they have devised proper systems to ensure During the financial year 2017- 2018 the revenue compliance with the provisions of all applicable from operations (net) was ` 73.44 Lacs against laws and that such systems were adequate and ` 71.28 last year. The profit before provision, operating effectively. depreciation and interest amounted to ` 16.54 lacs RELATED PARTY TRANSACTIONS as against ` 6.30 lacs for the previous year. After accounting for depreciation of ` 0.48 lacs, Profit All transactions entered into with related parties after tax amounted to ` 2.17 lacs against the Profit during the financial year were in the ordinary course of ` 5.91 Lacs last year. of business. None of the Directors has any pecuniary relationships or transactions vis-a-vis the Company. The turnover of the company during the year in NSE (Cash and F&O) and BSE (Cash) is ` 1843.73 crores Information on transactions with related parties against ` 1655.17 crores witnessing an increase of pursuant to section 134(3)(h) of the Companies Act, 11.4 percent. The company saw a increase in number 2013 read with rule 8(2) of the Companies (Accounts) of active trading clients by 15.22% during the year. Rules, are given in Annexure in Form AOC-2 and the The audited annual accounts of the subsidiary same forms part of this report. company for the financial year 2017-18 together with CORPORATE SOCIAL RESPONSIBILITY the Report of Directors and Auditors and the The Corporate Social Responsibility Committee has statement under section 129 of the Companies Act, formulated and recommended to the Board, a 2013 are annexed with this report. Corporate Social Responsibility Policy indicating the activities to be undertaken by the Company, which BOARD MEETINGS has been approved by the Board. As per the provisions During the year, ten Board meetings were convened of section 135, the Company does not have CSR and held. The details are given in the Corporate obligation for the year 2017-18. Governance Report. The intervening gap between the meetings was within the period prescribed under PARTICULARS OF LOANS, GUARANTEES OR Companies Act, 2013. INVESTMENTS The details of investments made by the company DIRECTORS’ RESPONSIBILITIES STATEMENT are given in the notes to the financial accounts. Pursuant to Section 134(5) of the Companies Act, 2013, the Board of Directors, to the best of their DISCLOSURE UNDER THE SEXUAL knowledge and ability, confirm that: HARASSMENT OF WOMEN AT WORK PLACE (PREVENTION, PROHIBITION & REDRESSAL) a. in the preparation of the annual accounts, the ACT, 2013 applicable accounting standards have been followed and there are no material departures; The Company has set up Internal Complaints Committee to redress complaints, if any. During the

6 70th Annual Report 2017-18 year under review, no complaint has been received Point (i) of Emphasis of Matter on note no. 29 in respect of Sexual Harassment from any of the regarding accounts being prepared on going employees of the Company. concern basis: ANNUAL RETURN The going concern concept of the company will not be impacted merely because of the Company has The extracts of Annual Return in Form MGT- 9, been de-recognised as a Stock Exchange as the pursuant to the provisions of Section 92 (3) read with company will continue to be a corporate entity. Rule 12 (1) of the Companies (Management and administration) Rules, 2014 is in Annexure 1 and Point (ii) of Emphasis of Matter on note no. 10.1 is attached to this Report. regarding accumulated losses of wholly owned Subsidiary company DSE Financial Services FIXED DEPOSITS Ltd.: Your Exchange has not accepted any fixed deposits No provision is required to be made for any diminution during the year under review. in the value of investment in view of long term/ strategic involvement of the company and in view of CORPORATE GOVERNANCE such diminution being considered to be of temporary Your Directors are of the firm belief that corporate in nature. governance is the system by which business corporations are directed and controlled. DETAILS RELATING TO REMUNERATION OF DIRECTORS, KEY MANAGERIAL PERSONNEL Your Company has adopted highest standards of AND EMPLOYEES Corporate Governance principles. A report on Corporate Governance for the period under review is No director of the Company receives any given as a separate statement and forms part of the remuneration except sitting fee for attending the Annual Report. meetings of the Board and Committees. The Company does not have any employee whose AUDITORS remuneration falls under the limits prescribed under M/s P. Bholusaria & Co., Chartered Accountants section 197 of the Companies Act, 2013 read with retire at the ensuing Annual General Meeting and Rule 5(2) of the Companies (Appointment and are eligible for re-appointment. remuneration of managerial personnel) Rules, 2014. AUDITORS’ OBSERVATIONS ACKNOWLEDGEMENT The comments on the observation in the report of Your Directors thankfully acknowledge and place on the Auditors on the stand-alone financial statements record the sincere appreciation for the continuous for the financial year 2017-18 are as under: support, assistance and cooperation extended by Qualification on note no. 30 regarding non- the Securities and Exchange Board of India, Central provision of outstanding Registration fees of Government, Registrar of Companies, Local brokers/sub-brokers (including interest) paid to Administration and DSE Financial Services Limited SEBI: during the year under review. Your Board feels that Company is not liable to pay Your Directors appreciate the valuable contributions the said outstanding dues of brokers/sub-brokers and made by the employees of the Company and look has paid the same to SEBI ‘without prejudice’ to get forward to their continued dedication and involvement the refund of amount from SEBI if the excess amount as hitherto. has been paid. The amounts are recoverable from Your Directors are also grateful to the shareholders respective brokers. Upto the year end the Company for their continued support and co-operation in the has recovered amount of ` 7,25,688 from some successful conduct of affairs of the Company. brokers, sub-brokers. Subsequent to the year end, the Company has further recovered ` 25,67,791 On behalf of the Board of Directors including ` 11,58,222 refund received from SEBI. The Board is making efforts to recover the remaining amount Vijay Bhushan of ` 15,51,16,386. Hence, no provision is necessary at Place : New Delhi Chairman present. Dated: August 31, 2018 DIN : 00002421

7 Delhi Stock Exchange Limited CIN:U91120DL1947PLC001239

CORPORATE GOVERNANCE REPORT

1. BRIEF STATEMENT ON THE COMPANY’S CODE ON CORPORATE GOVERNANCE The Company’s Code on Corporate Governance is based on ethical business conduct by adhering to laws, rules and regulations and amendments thereto that determine the management’s ability to take decisions in convergence with its members, creditors, employees and regulators. The Company believes and strongly recommends that sound Corporate Governance is vital for boosting stakeholders’ confidence and ensuring transparent and efficient conduct of the business with integrity. Hence, Corporate Governance provides a framework to govern the Company as per the highest standards of ethical and responsible conduct of business and translate into a much higher level of stakeholders confidence which is crucial to ensure the long term sustainability and value generation by business. 2. ABOUT THE COMPANY Delhi Stock Exchange Limited (DSE) was incorporated under the Indian Companies Act, 1913 and was a recognized Stock Exchange within the meaning of Section 4 of the Securities Contacts (Regulation) Act, 1956 (SCRA). The Ministry of Finance, Government of India vide notification published on March 15, 2016 in the Gazette of India withdrew the recognition granted under the above section. SEBI also issued Exit Order to DSE on January 23, 2017. The Board of Directors and various Committees of DSE are responsible for the overall management of the Company. 3. BOARD OF DIRECTORS i. Directors During the financial year 2017-18, Mr Shanker Singal and Mr Sudhangshu S. Biswal, Directors resigned from the Board on October 11, 2018 and October 13, 2018 respectively. Mr Mohinder Singh who was appointed as an additional director after his completion of tenure as a Public Interest Director on January 20, 2017 ceased to be chairman and director from December 20, 2017. Mr Rajinder Goel and Mr Sanjiv Gandhi were appointed as additional directors on October 20, 2017 and November 9, 2017 respectively. They held office till the annual general meeting and ceased to be directors on December 20, 2017. Mr Vijay Bhushan, Mr Mahender Kumar Gupta, Mr Vinod Kumar Goel, and Mr Hans Raj Kapur were appointed as Director of the company in the annual general meeting on December 20, 2017. ii. Composition and Attendance of each Director at the Board meetings from April 1, 2017 to March 31, 2018: During 2017-18, ten Board meetings were held on May 19, 2017, June 7, 2017, August 18, 2017, October 3, 2017, October 20, 2017, October 24, 2017, November 11, 2017, November 22, 2017, December 20, 2017 and January 5, 2018. The time-gap between two consecutive meetings was within the period prescribed under the Companies Act, 2013. The composition of the Board during the financial year 2017-18, the Board meetings attended by them during the Financial Year under review and their attendance at the last Annual General Meeting are as follow: Sl. Name of the Director Designation Held during No. of Attendance at No. tenure meetings the last AGM attended

1. Mr. Mohinder Singh* Additional Director 8 8 Yes 2. Mr. Sudhangshu S. Biswal** Director 4 3 Not Applicable 3. Mr. Shanker Singal*** Director in 4 2 Not Applicable casual vacancy

8 70th Annual Report 2017-18

4. Mr. Sanjeev Gandhi* Additional Director 2 2 No 5. Mr. Rajinder Kumar Goel* Additional Director 4 4 Yes 6. Mr. Vijay Bhushan# Director 2 2 Not Applicable 7. Mr. Mahender Kumar Gupta# Director 2 2 Not Applicable 8. Mr. Vinod Kumar Goel# Director 2 2 Not Applicable 9. Mr. Hans Raj Kapoor# Director 2 1 Not Applicable * Ceased to be director on 20.12.2017 ** Resigned as director on October 11, 2017 *** Resigned on October 13, 2017. # Appointed as a director on December 20, 2017

iii) Sitting fees paid by the Company to Directors for attending Board and Committee meetings during Financial Year 2017-18 are given below: Sl. Name of the Director Amount ` No. 1. Mr. Mohinder Singh 80,000 2. Mr Sudhangshu S. Biswal 30,000 3. Mr. Shanker Singal 20,000 4. Mr. Sanjeev Gandhi 30,000 5. Mr. Rajinder Kumar Goel 55,000 6. Mr. Vijay Bhushan 10,000 7. Mr. Mahender Kumar Gupta 10,000 8. Mr. Vinod Kumar Goel 10,000 9. Mr. Hans Raj Kapoor - 4. COMMITTEES a) AUDIT COMMITTEE The scope of the Audit Committee constituted is as under: (i) The recommendation for appointment, remuneration and terms of appointment of auditors of the company; (ii) Review and monitor the auditor’s independence and performance, and effectiveness of audit process; (iii) Examination of the financial statement and the auditors’ report thereon; (iv) Approval or any subsequent modification of transactions of the company with related parties; (v) Scrutiny of inter-corporate loans and investments; (vi) Valuation of undertakings or assets of the company, wherever it is necessary; (vii) Evaluation of internal financial controls and risk management systems; During the year under review, two meetings of the Audit Committee were held on November 9, 2017 and November 11, 2017. The composition of the Audit Committee and the attendance at its meetings during the financial year 2017-18 are given hereunder:

Sl. Name of the Member Designation Held during No. of meetings No. tenure attended 1. Mr Mohinder Singh Additional Director 2 2 2. Mr Sanjeev Gandhi Additional Director 2 2 3. Mr Rajinder Goel Additional Director 2 2

9 Delhi Stock Exchange Limited CIN:U91120DL1947PLC001239

c) OTHER COMMITTEES In addition, the company constituted the CSR Committee during 2017-18. One meeting of the CSR Committee was held on October 24, 2017.

5. DETAILS OF COMPLIANCE OFFICER

Name Designation Contact No. and e-mail id Mr Sunil Bhatia Company Secretary 23298988 [email protected]

6. GENERAL BODY MEETINGS Location and time of last three AGMs and EGMs are as follows: Annual General Meeting September 29, 2015 DSE House, at 4:00 PM 3/1, Asaf Ali Road, New Delhi – 110 002 Extra Ordinary General Meeting November 29, 2016 DSE House, at 4:00 PM 3/1, Asaf Ali Road, New Delhi – 110 002 Annual General Meeting December 31, 2016 DSE House, at 11:30 AM 3/1, Asaf Ali Road, New Delhi – 110 002 Extra Ordinary General Meeting July 22, 2017 DSE House, at 11:00 A.M. 3/1, Asaf Ali Road, New Delhi – 110 002 (Adjourned) Annual General Meeting December 20, 2017 DSE House, at 4:00 PM 3/1, Asaf Ali Road, New Delhi – 110 002

7. DISCLOSURES

i. During the year there have been no materially significant related party transactions that may have potential conflict with the interest of the Company at large. ii. The Company has complied with the requirements of the SEBI and other regulatory authorities as applicable from time to time. During the last three years, there has been no non-compliance to the provisions/ requirements of SEBI or any other regulatory authorities.

8. GENERAL SHAREHOLDER INFORMATION i. Forthcoming AGM - Date, time and venue: The 70th Annual General Meeting of the Company is scheduled for Saturday, September 29, 2018 at 4:00 P.M. at DSE House, 3/1, Asaf Ali Road, New Delhi-110002 ii. Financial year: The Company’s financial year was from April 1, 2017 to March 31, 2018.

10 70th Annual Report 2017-18

iii. Book Closure: The Register of Members of the Company shall be closed during the period September 24, 2018 to September 29, 2018 (both days inclusive).

iv. Registrar & Share Transfer Agent: Abhipra Capitals Limited Abhipra Complex, A-387, Dilkhush Industrial Area, G.T. Karnal Road, Azadpur Delhi - 110 033

v. Demat of Shares: Equity Shares of the Company have been admitted in NSDL and CDSL. The ISIN no. is INE275I01021. Face value of the shares is Re. 1/- per share. Out of total Share Capital, 96.60% is held in demat form as on March 31, 2018.

vi. Address for correspondence: Delhi Stock Exchange Limited DSE House, 3/1, Asaf Ali Road, New Delhi- 110002 Ph: 23298988 The website of the Company is www.dseindia.org.in vii. Nomination facility: In terms of Section 72 of the Companies Act, 2013, the members are allowed to nominate any person to whom they desire of making / changing a nomination in respect of their shareholding in the company. Members can avail the nomination facility by submitting Form SH. 13 (in duplicate) to the company or it’s R&T Agent Abhipra Capitals Limited. The form can be furnished by Abhipra Capitals Limited on request.

On behalf of the Board of Directors (Vijay Bhushan ) Chairman Date : August 31, 2018 DIN : 00002421 Place: New Delhi

11 Delhi Stock Exchange Limited CIN:U91120DL1947PLC001239

Form No. AOC-2 (Pursuant to clause (h) of sub-section (3) of section 134 of the Act and Rule 8(2) of the Companies (Accounts) Rules, 2014)

Form for disclosure of particulars of contracts/arrangements entered into by the company with related parties referred to in sub-section (1) of section 188 of the Companies Act, 2013 including certain arms length transactions under third proviso thereto

1. Details of contracts or arrangements or transactions not at arm’s length basis:

Delhi Stock Exchange Limited has not entered into any contract or arrangement or transaction with its related parties which is not at arm’s length during financial year 2017-18.

2. Details of material contracts or arrangement or transactions at arm’s length basis:

(a) Name(s) of the related party and nature of relationship: DSE Financial Services Limited (DFSL), wholly owned subsidiary of Delhi Stock Exchange Limited.

(b) Nature of contracts/arrangements/transactions: By as resolution in its meeting held on January 5, 2018 the Board approved a Leave and License Agreement under which space in DSE House 3/1, Asaf Ali Road, New Delhi was continued to be given to DSE Financial Services Limited for its operational use against payment of rent, maintenance charges and electricity expenses.

(d) Salient terms of the contracts or arrangements or transactions including the value, if any: The terms provided for payment of rent and maintenance charges for the usage of space, fixtures, furniture and security provided by the company to DFSL at monthly charges for ` 2,100/-/- on account of rent and maintenance and ` 10,000/-/- for electricity consumption.

(e) Date of approval by the Board, if any: The decision was approved by the Board of Directors of the Exchange in its meeting held on January 5, 2018

(f) Amount paid as advances, if any: Nil

On behalf of the Board of Directors (Vijay Bhushan) Chairman Date : August 31, 2018 DIN : 00002421 Place: New Delhi

12 70th Annual Report 2017-18

Form No. MGT-9 EXTRACT OF ANNUAL RETURN for the financial year ended on 31st March 2018 Pursuant to Section 92 (3) of the Companies Act, 2013 and Rule 12(1) of the Company (Management & Administration) Rules, 2014

I. REGISTRATION AND OTHER DETAILS:

i) CIN : U91120DL1947PLC001239

ii) Registration Date : 25.06.1947

iii) Name of the Company DELHI STOCK EXCHANGE LIMITED

iv) Category / Sub-Category of the Company : Non-Government Company Limited by shares

v) Address of the Regd. Office : DSE HOUSE of the Company 3/1, Asaf Ali Road, New Delhi - 110002 & contact details Phone: 011-23278988

vi) Whether listed company : No

vii) Name Address & Contact details : Abhipra Capital Limited of the Registrar & Transfer Agent, if any Dilkhush Industrial Estate A-387, G. T. Karnal Road, Azadpur New Delhi - 110033

II. PRINCIPAL BUSINESS ACTIVITIES OF THE COMPANY All the business activities contributing 10 % or more of the total turnover of the company shall be stated:

S. Name and Description NIC Code of the % to total turnover No. of main products / services Product / service of the company

1 Nil NA Nil

III. PARTICULARS OF HOLDING, SUBSIDIARY AND ASSOCIATE COMPANIES

S. Name and Address CIN / GLN Holding / % of shares Applicable No. of the Company Subsidiary/ held Section Associate

1. DSE Financial U67110DL1996PLC079973 Subsidiary 100% Section 2 Services Limited Company (87) (ii)

Delhi Stock Exchange Limited

IV. SHARE HOLDING PATTERN (Equity Share Capital Breakup as percentage of Total Equity) i) Category-wise Share Holding

Category of Shareholder No. of Shares held at the No. of Shares held % beginningof the year at the end of the year Change during the Demat Phy- Total % of Demat Physical Total % of year sical Total Total Shares Shares

(A) Promoters

1 Indian (a) Individuals/ HUF 0 0 0 0 0 0 0 0 0 (b) Central Government/ State Government(s) 0 0 0 0 0 0 0 0 0 (c) Bodies Corporates 0 0 0 0 0 0 0 0 0 (d) Banks/FI 0 0 0 0 0 0 0 0 0 (e) Any Other (Specify) 0 0 0 0 0 0 0 0 0

Sub Total(A)(1) 0 0 0 0 0 0 0 0 0 2 Foreign a NRI-Individuals 0 0 0 0 0 6 6 0 0 b Other-Individuals 0 0 0 0 0 6 6 0 0 c Bodies Corporate 0 0 0 0 0 6 6 0 0 d Banks/FI 0 0 0 0 0 6 6 0 0 e Any Other (Specify) 0 0 0 0 0 6 6 0 0

Sub Total(A)(2) 0 0 0 0 0 0 0 0 0

(B) Public shareholding 1 Institutions (a) Mutual Funds 0 0 0 0 0 0 0 0 0 (b) Banks/FI 80,000 0 80,000 0.27 80,000 0 80,000 0.27 0 (c) Central Government/ 0 0 0 0 0 0 0 0 0 State Government(s) 0 0 0 0 0 0 0 0 0 (d) Venture Capital Funds 0 0 0 0 0 0 0 0 0 (e) Insurance Companies 0 0 0 0 0 0 0 0 0 (f) FIIs 0 0 0 0 0 0 0 0 0 (g) Foreign Venture 0 0 0 0 0 0 0 0 0 Capital Funds (h)Any Other (specify) 0 0 0 0 0 0 0 0 0

Sub-Total (B)(1) 80,000 0 80,000 0.27 80,000 0 80,000 0.27 0 70th Annual Report 2017-18

2 Non- institutions (a) Bodies Corporate i) Indian 15392720 749600 16142320 53.37 15500819 749600 16250419 53.73 -0.36 ii) Overseas (b) Individuals i. Individual shareholders 7251167 280031 7531198 24.90 7299068 280031 7579099 25.06 -0.16 holding nominal share capital up to ` 1 lac ii. Individual shareholders 156000 0 156000 0.52 0 0 0 0 0.52 holding nominal share capital in excess of ` 1 lac (d) Others: NRIs 4000 — 4000 0.01 4000 — 4000 0.01 - HUF 48982 — 48982 0.16 48982 — 48982 0.16 - Foreign 6283500 — 6283500 20.77 6283500 — 6283500 20.77 - Corporate Bodies Sub-Total (B)(2) 29136369 1029631 30166000 99.73 29136369 1029631 30166000 99.73 0 (B) Total Public 29216369 1029631 30246000 100 29216369 1029631 30246000 100 0 Shareholding (B)= (B)(1)+(B)(2)

GRAND TOTAL 29216369 1029631 30246000 100 29216369 1029631 30246000 100 0 (A)+(B)+(C)

(ii) Shareholding of Promoters Sl. Name of Shareholders Shareholding at the Shareholding at the end % change No. beginning of the year of the year in share

holding No. of % of % of No. of % of % of during Shares total Shares Shares total Shares the shares Pledged shares Pledged year of the /encum- of the / encum- Company bered Company bered to total to total shares shares

NIL Delhi Stock Exchange Limited

(iii) Change in Promoters’ Shareholding

Sl. Particulars Shareholding at the Cumulative Shareholding No. beginning of the year during the year

No. of % of total No. of % of total shares shares of shares shares of the company the company

1 At the beginning of the year 2 Date wise increase / decrease in Promoters Shareholding during the year specifying the reasons for increase / decrease Not Applicable ( e.g. allotment / transfer / bonus / sweat equity etc) : 3 At the end of the year

(iv) Shareholding of top ten shareholders (other than directors, promoters and holders of GDRs and ADRs)

Sl For each of the top Shareholding at the Shareholding at the No. 10 shareholders end of the year beginning of the year

No. of % of total No. of % of total shares shares of shares shares of the company the company

1. Parsvnath Developers Ltd 1496500 4.95 1496500 4.95 2. Omaxe Limited 1496500 4.95 1496500 4.95 3. 63 Moons Technologies Limited 1496500 4.95 1496500 4.95 4. Bennett, Coleman and Company Ltd. 1496500 4.95 1496500 4.95 5. New Vernon Private Equity Limited 1496500 4.95 1496500 4.95 6. EHL Eastern Holdings Ltd 1496500 4.95 1496500 4.95 7. Wilmette Holdings Limited 1496500 4.95 1496500 4.95 8. LFP DSE Limited 1495000 4.94 1495000 4.94 9. TV18 Broadcast Limited 748250 2.97 748250 2.97 10. Nahar Capital and Financial Services 898500 2.47 898500 2.47 Ltd. 70th Annual Report 2017-18

(v) Shareholding of Directors and Key Managerial Personnel

Sl Director’s Name Shareholding at the Shareholding at the No. end of the year beginning of the year

Mr Vijay Bhushan No. of % of total No. of % of total shares shares of the shares shares of the company company

1. At the beginning of the year 36037 0.12 36037 0.12 2. Date wise increase/ decrease — — — — in shareholding during the year specifying the reasons for increase/ decrease (e.g. allotment/ transfer / bonus/ sweat equity shares etc.) 3. At the end of the year 36037 0.12 36037 0.12

Sl Director’s Name Shareholding at the Shareholding at the No. end of the year beginning of the year

Mr Mahender Kumar Gupta No. of % of total No. of % of total shares shares of the shares shares of the company company

1. At the beginning of the year 34031 0.11 34031 0.11 2. Date wise increase/ decrease — — — — in shareholding during the year specifying the reasons for increase/ decrease (e.g. allotment/ transfer / bonus/ sweat equity shares etc.) 3. At the end of the year 34031 0.11 34031 0.11

Sl Director’s Name Shareholding at the Shareholding at the No. end of the year beginning of the year

Mr Vinod Kumar Goel No. of % of total No. of % of total shares shares of the shares shares of the company company

1. At the beginning of the year 60000 0.20 60000 0.20 2. Date wise increase/ decrease — — — — in shareholding during the year specifying the reasons for increase/ decrease (e.g. allotment/ transfer / bonus/ sweat equity shares etc.) 3. At the end of the year 60000 0.20 60000 0.20 Delhi Stock Exchange Limited

Sl Director’s Name Shareholding at the Shareholding at the No. end of the year beginning of the year

Mr Hans Raj Kapoor No. of % of total No. of % of total shares shares of the shares shares of the company company

1. At the beginning of the year 0 0 0 0 2. Date wise increase/ decrease — — — — in shareholding during the year specifying the reasons for increase/ decrease (e.g. allotment/ transfer / bonus/ sweat equity shares etc.) 3. At the end of the year 0 0 0 0

Sl Key Managerial Person Shareholding at the Shareholding at the No. end of the year beginning of the year

Mr Sunil Bhatia No. of % of total No. of % of total shares shares of the shares shares of the company company

V. INDEBTEDNESS Indebtedness of the Company including interest outstanding/accrued but not due for payment:

Secured Loans Unsecured Deposits Total excluding deposits Loans Indebtedness

Indebtedness at the beginning of the financial year i) Principal Amount ii) Interest due but not paid iii) Interest accrued but not due

Total (i+ii+iii)

Change in Indebtedness during the financial year - Addition NIL - Reduction

Net Change

Indebtedness at the end of the financial year i) Principal Amount ii) Interest due but not paid iii) Interest accrued but not due

Total (i+ii+iii)

VI. REMUNERATION OF DIRECTORS AND KEY MANAGERIAL PERSONNEL

A. Remuneration to Managing Director, Whole-time Directors and/or Manager Sl. No Particulars of Remuneration Name of Total MD/WTD/Manager Amount Gross Salary (a) Salary as per provisions contained in section 1 17(1) of the Income-tax Act, 1961 (b) Value of perquisites u/s17(2) Income-tax Act, 1961 (c) Profit in lieu of salary under section 17(3) income tax Act, 1961 2 Stock Option NIL 3 Sweat Equity 4 Commission - as % of Profit 5 Others, please specify Total (A) Ceiling as per the Act Delhi Stock Exchange Limited

B. Remuneration to Other Directors: (in `)

Sr. Particulars of Fee for Fee for Commission Others Total No. Remuneration attending attending (please Amount Board Committee specify) Meetings Meetings

Non-Executive Directors

1. Mr. Mohinder Singh 70,000 10,000 NIL NIL 80,000 2. Mr. Shanker Singal 20,000 NIL NIL NIL 20,000 3. Mr. Sudhangshu S Biswal 30,000 NIL NIL NIL 30,000 4. Mr Sanjiv Gandhi 20,000 10,000 NIL NIL 30,000 5. Mr Rajinder Kumar Goel 40,000 15,000 NIL NIL 55,000 6. Mr Vijay Bhushan 10,000 NIL NIL NIL 10,000 7. Mr Mahender Kumar Gupta 10,000 NIL NIL NIL 10,000 8. Mr Vinod Kumat Goel 10,000 NIL NIL NIL 10,000 9. Mr Hans Raj Kapoor NIL NIL NIL NIL NIL

Sl. Particulars of Remuneration Name of MD/WTD/Manager Total No. Amount Independent Directors

a) Fee for attending Board Meeting b) Fee for attending Committee Meeting c) Commission d) Other, Please Specify Total (1) NIL 2 Other Non-Executive Directors a) Fee for attending board Committee Meeting b) Commission c) Other, Please Specify

Total (2)

Total (B)=(1+2)

Total Managerial Remuneration Overall Ceiling as per the Act 70th Annual Report 2017-18

C. REMUNERATION TO KEY MANAGERIAL PERSONNEL OTHER THAN MD/MANAGER/WTD

Sl. Particulars of Remuneration Key Managerial Personnel no CEO Company CFO Total Secretary

1 Gross Salary (a) Salary as per provisions — 11,09,581 — 11,09,581 contained in section 17(1) of the Income-tax Act, 1961 (b) Value of perquisites u/s17(2) — — — — Income-tax Act, 1961 (c) profit in lieu of salary under — — — — section 17(3) of the income tax Act, 1961 2 Stock Option — — — — 3 Sweat Equity — — — — 4 Commission - as % of Profit — — — — 5 Others, please specify — — — — Total — 11,09,581 — 11,09,581

VII. PENALTIES / PUNISHMENT/ COMPOUNDING OF OFFENCES:

Type Section of the Brief Details of Authority Appeal made, Companies Act Description Penalty/Punish (RD/NCLT/ if any (give ment/Compo- Court Details) unding fees imposed A. Company - Exit order issued by SEBI on 23.01.2017 Penalty NIL NIL NIL NIL Punishment NIL NIL NIL NIL Compounding NIL NIL NIL NIL B. DIRECTORS Penalty NIL NIL NIL NIL Punishment NIL NIL NIL NIL Compounding NIL NIL NIL NIL C. OTHER OFFICERS IN DEFAULT Penalty NIL NIL NIL NIL Punishment NIL NIL NIL NIL Compounding NIL NIL NIL NIL

By Order of the Board of Directors For Delhi Stock Exchange Ltd. Date : August 31,2018 Vijay Bhushan Place: New Delhi Chairman DIN : 00002421

21 Delhi Stock Exchange Limited CIN:U91120DL1947PLC001239

Independent Auditors' Report

To The Members of Auditor’s Responsibility Delhi Stock Exchange Limited Our responsibility is to express an opinion on these (Formerly, The Delhi Stock Exchange Association standalone financial statements based on our audit. Limited) We have taken into account the provisions of the Report on the Standalone Financial Statements Act, the accounting and auditing standards and matters which are required to be included in the audit We have audited the accompanying standalone report under the provisions of the Act and the Rules financial statements of DELHI STOCK EXCHANGE made there under. LIMITED (“the Company”), which comprise the We conducted our audit in accordance with the Balance Sheet as at March 31, 2018, the Statement Standards on Auditing specified under Section of Profit and Loss and Cash Flow Statement for the 143(10) of the Act. Those Standards require that we year then ended, and a summary of significant comply with ethical requirements and plan and accounting policies and other explanatory perform the audit to obtain reasonable assurance information. about whether the financial statements are free from material misstatement. Management’s Responsibility for the Standalone Financial Statements An audit involves performing procedures to obtain The Company’s Board of Directors is responsible for audit evidence about the amounts and the the matters stated in Section 134(5) of the Companies disclosures in the financial statements. The Act, 2013 (“the Act”) with respect to the preparation procedures selected depend on the auditor’s and presentation of these standalone financial judgment, including the assessment of the risks of statements that give a true and fair view of the material misstatement of the financial statements, financial position, financial performance and cash whether due to fraud or error. In making those risk flows of the Company in accordance with the assessments, the auditor considers internal financial accounting principles generally accepted in India, control relevant to the Company’s preparation of the including the Accounting Standards specified under financial statements that give a true and fair view in Section 133 of the Act, read with Rule 7 of the order to design audit procedures that are appropriate Companies (Accounts) Rules, 2014. This in the circumstances. An audit also includes responsibility also includes maintenance of adequate evaluating the appropriateness of the accounting accounting records in accordance with the provisions policies used and the reasonableness of the of the Act for safeguarding the assets of the Company accounting estimates made by the Company’s and for preventing and detecting frauds and other Directors, as well as evaluating the overall irregularities; selection and application of appropriate presentation of the financial statements. accounting policies; making judgments and We believe that the audit evidence we have obtained estimates that are reasonable and prudent; and is sufficient and appropriate to provide a basis for design, implementation and maintenance of our audit opinion on the standalone financial adequate internal financial controls, that were statements. operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to Basis for Qualified Opinion the preparation and presentation of the financial Reference is invited to Note no. 30 of financial statements that give a true and fair view and are free statements regarding non-provision of amount of ‘ from material misstatement, whether due to fraud or ` 15,51,16,386/- in respect of fees of brokers/sub- error. brokers (inclusive of interest) paid to SEBI during

22 70th Annual Report 2017-18 the previous year (net of recovery and refund). In Qualified Opinion the opinion of management no provision is required In our opinion and to the best of our information and for the said amount. In our opinion, on the basis of according to the explanations given to us, except for information and explanations made available to us the effects of the matter described in the Basis for by the management, there is uncertainty of the Qualified Opinion Paragraph, the aforesaid financial refund / recovery of the aforesaid amount and, statements give the information required by the Act therefore, provision is required to be made for the in the manner so required and give a true and fair same. As a result of this, profit for the year as view in conformity with the accounting principles shown in the statement of Profit & loss is higher generally accepted in India of the state of affairs of by ` 15,51,16,386/-; amount of Reserve & Surplus the Company as at 31 March 2018 and its profit and as shown in the Balance sheet is overstated to its cash flows for the year ended on that date. that extent; Short Term loans and advances as shown in the Balance sheet is overstated to that Report on Other Legal and Regulatory extent. Our opinion is qualified on this issue. We Requirements had also given qualified opinion on this issue in 1. As required by the Companies (Auditor’s Report) our audit report on the financial statements as on/ Order, 2016 (“the Order”) issued by the Central for the year ended 31st March 2016 and 31st March Government of India in terms of sub-section (11) 2017. of section 143 of the Act, we give in the Annexure A, a statement on the matters specified in the Emphasis of Matter paragraph 3 and 4 of the Order. Without qualifying our opinion, we invite reference to: 2. As required by section 143 (3) of the Act, we report that: i) Note no. 31 regarding account being prepared on (a) we have sought and obtained all the going concern basis. information and explanations which to the SEBI vide order no. WTM/ SR/ SEBI/ MRD- best of our knowledge and belief were DSA/ 04/01/2017 dated January 23, 2017 had necessary for the purposes of our audit. passed exit order allowing the exit of the (b) in our opinion proper books of account as Company as stock exchange. In the opinion of required by law have been kept by the management, the going concern concept of the Company so far as it appears from our company will not be impacted merely because examination of those books; of exit option through voluntary surrender of the recognition as a Stock Exchange, as the (c) the Balance sheet, the Statement of profit company intends to continue as a corporate and loss and the Cash flow statement dealt entity. with by this Report are in agreement with the books of account; ii) Note no. 9.1 regarding accumulated losses of (d) in our opinion, the aforesaid standalone wholly owned subsidiary company DSE Financial financial statements comply with the Services Ltd. Accounting Standards specified under As per Audited Financial Statements of the wholly Section 133 of the Act, read with Rule 7 of owned subsidiary company DSE Financial Services the Companies (Accounts) Rules, 2014; Ltd., it has accumulated losses of ` 1,83,62,048/- (e) on the basis of the written representations as on 31.03.2018. In the opinion of the management, received from the directors as on 31 March no provision is required to be made for any diminution 2018 taken on record by the Board of in the value of investment in view of long term/ Directors, none of the directors is strategic involvement of the company and in view of disqualified as on 31 March 2018 from being such diminution being considered to be of temporary appointed as a director in terms of Section in nature. 164 (2) of the Act;

23 Delhi Stock Exchange Limited CIN:U91120DL1947PLC001239

(f) with respect to the adequacy of the internal assets. No material discrepancies were financial controls over financial reporting of noticed on such physical verification. the Company and the operating c. According to the information and effectiveness of such controls, refer to our explanations given to us, the title deeds of separate report in “Annexure B”; and immovable properties are held in the name of the Company. (g) with respect to the other matters to be included in the Auditor’s Report in 2. The Company does not hold any inventory. accordance with Rule 11 of the Companies 3. As explained to us, the Company has not (Audit and Auditors) Rules, 2014, in our granted any loans, secured or unsecured to opinion and to the best of our information companies, firms or other parties covered in the and according to the explanations given to register maintained under Section 189 of the us: Companies Act, 2013(‘the Act’). 4. In our opinion and according to the information i. the Company has disclosed the impact and explanations given to us, the company has of pending litigations on its financial complied with the provision of section 185 and position in its financial statements- Refer 186 of the Act, with respect to the investment Note no. 29 to the financial statements; made, to the extent applicable to the company. As per the information and explanation given to ii. the Company did not have any long-term us, the Company has neither given any loan nor contracts including derivative contracts given any guarantee or provided any security in for which there were any material connection with a loan to any other body foreseeable losses; corporate or person. iii. There were no amounts which were 5. The Company has not accepted any deposits required to be transferred to the Investor from the public. However sum of ` 156000/- is Education and Protection Fund by the reflected as Share allotment kept in abeyance Company. as explained in note no. 4 of financial statements. FOR P. BHOLUSARIA & CO. 6. The nature of the company’s business/activities Chartered Accountants is such that maintenance of Cost Records under Firm Registration No. 000468N section 148(1) of the Act is not applicable to the company. Place : New Delhi AMIT GOEL 7. a. According to the records of the Company, Date : August 31, 2018 (Partner) undisputed statutory dues including M.No. 092648 Provident Fund, Employees’ State Insurance, Income Tax, Sales-Tax, Service Annexure ‘A’ to Independent Auditors’ Report Tax, Goods and Service Tax, Value added (Delhi Stock Exchange Limited) tax, Cess and other statutory dues to the The annexure referred to in our report to the members extent and as applicable to the company of the company on the standalone financial have been generally regularly deposited by statements for the year ended on 31st March, 2018, the company during the year with the we Report that: appropriate authorities. However, there are some delays in few cases. Further amount 1. a. The Company has maintained proper records of ` 20,82,113/- on account of ESI demand showing full particulars including quantitative (including interest) was outstanding payable details and situation of fixed assets on the as on 31/03/2018 as explained in Note no. basis of available information. 27 of financial statements. According to the b. As explained to us, the management during information and explanations given to us, the year has physically verified the fixed other than above, no undisputed amounts assets in a phased periodical manner, which payable in respect of the aforesaid dues were in our opinion is reasonable, having regard outstanding as at 31st March, 2018 for a to the size of the company and nature of its

24 70th Annual Report 2017-18

period of more than six months from the date 14. According to the information and explanations of becoming payable. given to us and based on our examination of the b. The disputed statutory dues aggregating to ‘ record of the Company, the Company has not 33,600/- that has not been deposited on made any preferential allotment or private account of matters pending before placement of shares or fully or partly convertible appropriate authorities are as under : debentures during the year. S. Nature of Forum where Amt. (`) 15. According to the information and explanations No. the Dues Dispute is given to us and based on our examination of the pending record of the Company, the Company has not entered into non-cash transactions with directors 1. Income Response 33,600 or persons connected with him. Accordingly, Tax dem- filed before paragraph 3(xv) of the order is not applicable. and creat- CPC ed u/s 16. The Company is not required to be registered 143(1) by under section 45-IA of the Reserve bank of India CPC for Act, 1934. A.Y. FOR P. BHOLUSARIA & CO. 2015-16 Chartered Accountants Firm Registration No. 000468N Total 33,600 Place : New Delhi AMIT GOEL 8. The Company does not have any loans or Date : August 31, 2018 (Partner) borrowings from any financial institution, banks, M.No. 092648 government or debenture holders during the year. Accordingly, paragraph 3(viii) of the Order is not applicable. Annexure – B to the Auditors’ Report (Delhi Stock Exchange Limited) 9. The Company did not raise any money by way of initial public offer or further public offer Report on the Internal Financial Control under (including debt instruments) and term loans clause (i) of sub section 3 of section 143 of the during the year. Accordingly, paragraph 3(ix) of Companies Act, 2013 (“the Act”) the order is not applicable. We have audited the internal financial controls over 10. In our opinion and according to the information financial reporting of Delhi Stock Exchange and explanation given to us, no fraud by the Limited (“the Company”) as of 31 March 2018 in company or on the Company by its officers or conjunction with our audit of the standalone financial employees has been noticed or reported during statements of the Company for the year ended on the course of our audit. that date. 11. According to the information and explanations given to us and based on our examination of the Management’s Responsibility for Internal record of the Company, the Company has not Financial Controls paid any managerial remuneration during the The Company’s management is responsible for year. establishing and maintaining internal financial 12. In our opinion and according to the information controls based on the internal control over financial and explanations given to us, the Company is reporting criteria established by the Company not a Nidhi Company. Accordingly, paragraph considering the essential components of internal 3(xii) of the order is not applicable. control stated in the Guidance Note on Audit of 13. According to the information and explanations Internal Financial Controls over Financial Reporting given to us and based on or examinations of the issued by the Institute of Chartered Accountants of records of the Company, transactions with the India (‘ICAI’). These responsibilities include the related parties are in compliance with sections design, implementation and maintenance of 177 and 188 of the Act where applicable and adequate internal financial controls that were details of such transaction have been disclosed operating effectively for ensuring the orderly and in the financial statements as required by the efficient conduct of its business, including adherence applicable accounting standards. to company’s policies, the safeguarding of its

25 Delhi Stock Exchange Limited CIN:U91120DL1947PLC001239 assets, the prevention and detection of frauds and financial control over financial reporting includes errors, the accuracy and completeness of the those policies and procedures that (1) pertain to the accounting records, and the timely preparation of maintenance of records that, in reasonable detail, reliable financial information, as required under the accurately and fairly reflect the transactions and Companies Act, 2013. dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded Auditors’ Responsibility as necessary to permit preparation of financial Our responsibility is to express an opinion on the statements in accordance with generally accepted Company’s internal financial controls over financial accounting principles, and that receipts and reporting based on our audit. We conducted our audit expenditures of the company are being made only in accordance with the Guidance Note on Audit of in accordance with authorisations of management Internal Financial Controls over Financial Reporting and directors of the company; and (3) provide (the “Guidance Note”) and the Standards on Auditing, reasonable assurance regarding prevention or timely issued by ICAI and deemed to be prescribed under detection of unauthorised acquisition, use, or section 143(10) of the Companies Act, 2013, to the disposition of the company’s assets that could have extent applicable to an audit of internal financial a material effect on the financial statements. controls, both applicable to an audit of Internal Financial Controls and, both issued by the Institute Inherent Limitations of Internal Financial of Chartered Accountants of India. Those Standards Controls Over Financial Reporting and the Guidance Note require that we comply with Because of the inherent limitations of internal financial ethical requirements and plan and perform the audit controls over financial reporting, including the to obtain reasonable assurance about whether possibility of collusion or improper management adequate internal financial controls over financial override of controls, material misstatements due to reporting was established and maintained and if such error or fraud may occur and not be detected. Also, controls operated effectively in all material respects. projections of any evaluation of the internal financial Our audit involves performing procedures to obtain controls over financial reporting to future periods are audit evidence about the adequacy of the internal subject to the risk that the internal financial control financial controls system over financial reporting and over financial reporting may become inadequate their operating effectiveness. Our audit of internal because of changes in conditions, or that the degree financial controls over financial reporting included of compliance with the policies or procedures may obtaining an understanding of internal financial deteriorate. controls over financial reporting, assessing the risk that a material weakness exists, and testing and Opinion evaluating the design and operating effectiveness of In our opinion, the Company has, in all material internal control based on the assessed risk. The respects, an adequate internal financial controls procedures selected depend on the auditor’s system over financial reporting and such internal judgment, including the assessment of the risks of financial controls over financial reporting were material misstatement of the financial statements, operating effectively as at 31 March 2018, based on whether due to fraud or error. the internal control over financial reporting criteria We believe that the audit evidence we have obtained established by the Company considering the is sufficient and appropriate to provide a basis for essential components of internal control stated in our audit opinion on the Company’s internal financial the Guidance Note on Audit of Internal Financial controls system over financial reporting. Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India. Meaning of Internal Financial Controls over Financial Reporting FOR P. BHOLUSARIA & CO. Chartered Accountants A company’s internal financial control over financial Firm Registration No. 000468N reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting Place : New Delhi AMIT GOEL and the preparation of financial statements for Date : August 31, 2018 (Partner) external purposes in accordance with generally M.No. 092648 accepted accounting principles. A company’s internal

26 70th Annual Report 2017-18

Balance Sheet as at 31st March, 2018 (Amount in `) Particulars Note As At As At 31st March, 2018 31st March, 2017 EQUITY AND LIABILITIES Shareholders’ Funds Share Capital 2 3,02,42,000 3,02,42,000 Reserves and Surplus 3 76,92,76,748 76,46,65,357 79,95,18,748 79,49,07,357

Share Allotment Kept in abeyance 4 1,56,000 1,56,000 Non-Current Liabilities Other Long-term Liabilities 5 3,48,63,958 4,42,18,321 Long Term Provisions 6 8,93,236 3,12,751 3,57,57,194 4,45,31,072 Current Liabilities Other Current Liabilities 7 1,66,02,744 2,11,48,591 Short Term Provisions 6 21,49,118 70,97,735 1,87,51,862 2,82,46,326 85,41,83,804 86,78,40,755 ASSETS Non-Current Assets Fixed Assets 8 Tangible assets 5,88,74,580 6,41,92,411 Capital work In Progress 22,16,900 29,24,500 Non-Current Investments 9 18,00,00,000 6,00,00,000 Deferred Tax Assets (Net) 10 11,49,996 12,48,617 Long-term Loans and Advances 11 72,31,406 90,40,941 24,94,72,882 13,74,06,469 Current Assets Current Investments 12 46,28,083 0 Trade Receivables 13 24,43,805 29,25,950 Cash and Bank balances 14 40,10,52,351 52,92,11,433 Short-Term Loans and Advances 11 18,64,42,412 18,90,32,973 Other Current Asssets 15 1,01,44,271 92,63,930 60,47,10,922 73,04,34,286 85,41,83,804 86,78,40,755 SIGNIFICANT ACCOUNTING POLICIES AND NOTES ON ACCOUNTS 1 to 35 As per our report on even date For P. BHOLUSARIA & CO. FOR AND ON BEHALF OF THE BOARD Chartered Accountants Firm Regd. No. 000468N VIJAY BHUSHAN MAHENDER KUMAR GUPTA VINOD KUMAR GOEL (CHAIRMAN) (DIRECTOR) (DIRECTOR) Amit Goel DIN:00002421 DIN:00039086 DIN:00989487 (Partner) M.No. 092648 Place : New Delhi SUNIL BHATIA HANS RAJ KAPOOR Date : August 31, 2018 (Company Secretary) (DIRECTOR) DIN:01194791

27 Delhi Stock Exchange Limited CIN:U91120DL1947PLC001239

Statement of Profit and Loss for the year ended 31st March, 2018 (Amount in `) Particulars Note Year ended Year ended 31st March, 2018 31st March, 2017 Income: Other Income 16 3,78,49,210 4,81,92,741 Total Revenue 3,78,49,210 4,81,92,741 Expenses: Employee Benefit Expense 17 60,43,511 54,10,582 Finance Costs 18 2,79,927 74,062 Depreciation and Amortisation expense 8 53,17,832 62,94,640 Provision for Impairment 8 7,07,600 3,97,700 Other Expenses 19 1,59,20,507 1,62,34,566 Total Expenses 2,82,69,377 2,84,11,550 Profit for the year before exceptional items and Tax 95,79,834 1,97,81,191 Exceptional Item [Employee State insurance 27 25,92,363 0 (ESI) demand] Profit for the year before Tax 69,87,471 1,97,81,191 Tax expense: Provision for Taxation - Current 19,00,000 67,00,000 - Earlier Year 3,77,459 381 - Deferred 98,621 4,48,935 Profit for the year 46,11,390 1,26,31,875 Earning per share: 20 Equity share of Par value ` 1/-each Basic 0.15 0.42 Diluted 0.15 0.42 SIGNIFICANT ACCOUNTING POLICIES AND 1 to 35 NOTES ON ACCOUNTS

As per our report on even date For P. BHOLUSARIA & CO. FOR AND ON BEHALF OF THE BOARD Chartered Accountants Firm Regd. No. 000468N VIJAY BHUSHAN MAHENDER KUMAR GUPTA VINOD KUMAR GOEL (CHAIRMAN) (DIRECTOR) (DIRECTOR) Amit Goel DIN:00002421 DIN:00039086 DIN:00989487 (Partner) M.No. 092648 Place : New Delhi SUNIL BHATIA HANS RAJ KAPOOR Date : August 31, 2018 (Company Secretary) (DIRECTOR) DIN:01194791

28 70th Annual Report 2017-18 CASH FLOW STATEMENT for the year ended 31ST March, 2018

Amount in ``` Amount in ``` year ended year ended 31st March, 2018 31st March, 2017 A) CASH FLOW FROM OPERATION ACTIVITIES Net Profit/(Loss) before tax as per statement 69,87,471 1,97,81,191 of Profit & Loss Adjustment for : Depreciation 53,17,832 62,94,640 Exceptional Items 25,92,363 0 Interest on Income Tax 2,79,927 74,062 Provision for Impairment 7,07,600 3,97,700 Interest Income (3,31,50,254) (4,66,97,725) Rental Income (3,17,276) (13,48,140) Profit on redemption of mutual funds (23,083) 0 Operating Profit/Loss before Working (1,76,05,420) (2,14,98,272) Capital Changes Adjustment for : Trade,other Receivables and loans and advances 1,00,417 (15,04,74,467) Current and Non-current Liabilities (1,39,49,873) (36,95,697) Cash Generated from operation (3,14,54,875) (17,56,68,436) Income tax paid 52,86,809 48,72,568 Net Cash from Operation Activities (3,67,41,684) (18,05,41,004)

B) CASH FLOW FROM INVESTMENTS ACTIVITIES Interest Income 3,31,50,254 4,66,97,725 Rental Income 3,17,276 13,48,140 Purchase of investments (13,25,05,000) 0 Sale/Redemption of investments 79,00,000 0 Net Cash used in Investing Activities (9,11,37,471) 4,80,45,865

29 Delhi Stock Exchange Limited CIN:U91120DL1947PLC001239

Amount in ``` Amount in ``` year ended year ended 31st March,2018 31st March,2017

C) CASH FLOW FROM FINANCING ACTIVITIES Interest on Income Tax (2,79,927) (74,062) Net Cash used in Financing Activities (2,79,927) (74,062) Net Increase in Cash & Cash Equivalents (A+B+C) (12,81,59,081) (13,25,69,202) Cash and Cash Equivalents 52,90,17,375 66,15,86,575 (Opening Balance) Cash and Cash Equivalents 40,08,58,294 52,90,17,373 (Closing Balance) Components of Cash and Cash Equivalents at the end of the year Balances with Banks In Current and Deposit Accounts 40,08,58,169 52,90,00,238 Cash-on-hand 124 17,137 Total (I) 40,08,58,293 52,90,17,375 Other Bank Balances Deposit with bank 1,94,058 1,94,058 (Lien marked with Registrar of High Court.) Total (II) 1,94,058 1,94,058 Total Cash and Bank Balances (I+II) 40,10,52,351 52,92,11,433

30 70th Annual Report 2017-18 NOTES FORMING PART OF ACCOUNTS

SIGNIFICANT ACCOUNTING POLICIES AND NOTES TO ACCOUNTS FOR THE YEAR ENDED 31st MARCH, 2018

1. SIGNIFICANT ACCOUNTING POLICIES

1.1 GENERAL 1.1.1 These financial statements are prepared in accordance with Indian Generally Accepted Accounting Principles (GAAP) under the historical cost convention on the accrual basis. GAAP comprises mandatory accounting standards as prescribed under Section 133 of the Companies Act,2013 (‘Act’) read with Rule7of the Companies (Accounts) Rules,2014 and the relevant provisions of the Act. 1.1.2 The preparation of Financial Statements in conformity with generally accepted accounting principles (GAAP) requires Management to make estimates and assumptions that affect the reported amount of assets and liabilities and the disclosure of contingent liabilities on the date of Financial Statements and reported amount of revenue and expenses for that year. Actual results could differ from these estimates. Any revision to accounting estimates is recognized prospectively in current and future periods.

1.2 BASIS OF ACCOUNTING Income and Expenditure are accounted for on accrual basis, except to the extent stated otherwise.

1.3 REVENUE RECOGNITION 1.3.1 Income is accounted for on accrual basis. Where the ability to assess the ultimate collection with reasonable certainty is lacking, revenue recognition is postponed to the extent of uncertainty involved as per Accounting Standard – Revenue Recognition (AS-9). 1.3.2 Interest earned is recognized as income on accrual basis.

1.4 INVESTMENTS Non Current/Long Term Investments are carried at cost and decline in value other than temporary, is provided for.Current investments are valued at lower of cost and fair value.

1.5 FIXED ASSETS Fixed assets are stated at cost of acquisition including installation expenditure, if any less accumulated depreciation and impairment loss, if any.

1.6 DEPRECIATION 1.6.1 Depreciation on tangible assets except Leasehold land is provided on Written down value method over the useful life of assets in the manner specified in Schedule II to the Companies Act, 2013. 1.6.2 Leasehold land is amortized over unexpired period of lease. 1.6.3 Intangible Assets viz., Softwares are amortised over a period of three years.

31 Delhi Stock Exchange Limited CIN:U91120DL1947PLC001239 Notes forming part of Accounts...

1.7 EMPLOYEE BENEFITS Employee Benefits are recognized/accounted for on the basis of revised AS-15 detailed as under :- 1.7.1 Short term employee benefits are recognized as expense at the undiscounted amount in the Statement of Profit & Loss for the year in which they are incurred. 1.7.2 Employee benefits under defined contribution plans, comprises of contribution to Provident Fund. Contributions to Provident Fund are deposited with appropriate authorities and charged to Statement of Profit & Loss. 1.7.3 Employee Benefits under defined benefit plans, comprises of gratuity and leave encashment, which are accounted for, as at the year end, based on actuarial valuation by following the Projected Unit Credit (PUC) method. Liability for gratuity is funded with Life Insurance Corporation of India. 1.7.4 Termination benefits are recognized as an expense, as and when incurred. 1.7.5 The actuarial gains and losses arising during the year are recognized in the Statement of Profit & Loss for the year without resorting to any amortization.

1.8 TAXATION Tax expenses for the year comprises of Current tax and Deferred tax charge or credit. The Deferred Tax Asset/Liability is calculated by applying tax rates and tax laws that have been enacted or substantially enacted by the Balance Sheet date. Deferred Tax Assets arising mainly on account of brought forward losses and unabsorbed depreciation under tax law are recognized only if there is virtual certainty of its realisation. Other Deferred Tax Assets are recognized only to the extent there is a reasonable certainty of realisation in future. Deferred Tax Assets/Liabilities are reviewed at each balance sheet date based on development during the year, further future expectations and available case laws to reassess realisation/liabilities.

1.9 CONTINGENCIES The company creates a provision when there is present obligation as result of a past event that probably requires an outflow of resources and a reliable estimate can be made of the amount of the obligation. A disclosure for a contingent liability is made when there is a possible obligation or a present obligation that may, but probably will not, requires an outflow of resources. When there is a possible obligation or a present obligation in respect of which the likelihood of outflow of resources is remote, no provision or disclosure is made.

32 70th Annual Report 2017-18 Notes forming part of Accounts... (Amount in `)

Particulars As at As at 31st March, 2018 31st March, 2017

2. SHARE CAPITAL Authorised 10,00,00,000 (Previous Year 10,00,00,000) 10,00,00,000 10,00,00,000 Equity Shares of ` 1/- each 10,00,00,000 10,00,00,000 Issued 3,03,20,000 (Previous Year 3,03,20,000) 3,03,20,000 3,03,20,000 Equity Shares of ` 1/- each 3,03,20,000 3,03,20,000

Subscribed 3,03,20,000 (Previous Year 3,03,20,000) 3,03,20,000 3,03,20,000 Equity Shares of ` 1/- each 3,03,20,000 3,03,20,000

Paid up 3,02,42,000 (Previous Year 3,02,42,000) 3,02,42,000 3,02,42,000 Equity Shares of ` 1/- each fully paid up

3,02,42,000 3,02,42,000

- Issued Share Capital of the company has only one class of shares referred to as equity shares having par value of ` 1/-. Each holder of Equity Shares is entitled to One vote per share. - In the event of the Liquidation of the company,the holder of equity shares will be entitled to receive any of the remaining assets of the Company, after distribution of all Preferential amounts.The distribution will be in proportion to the number of equity shares held by the shareholders. - In certain Secretarial records of the Company, there is difference of 4000 equity shares in the paid up capital. The correct figure of paid up equity share is 30242000 shares of Rs. 1/- each as stated above. However, as per certain secretarial records, the total no. of shares are 30246000. The rectification in the secretarial records is pending. - The Dividend Proposed, if any, by the Board of Directors is subject to the approval of the Shareholders in the ensuing Annual General Meeting. - Reconcilation of the number of shares outstanding and amount of Share Capital as on 31st March, 2018 & 31st March, 2017 is as under: Particulars As at 31st March, 2018 As at 31st March, 2017 No. of shares Amount (```) No. of shares Amount (`) Number of shares at the beginning 3,02,42,000 3,02,42,000 3,02,42,000 3,02,42,000 Number of shares at the end 3,02,42,000 3,02,42,000 3,02,42,000 3,02,42,000

- There are no shareholders holding more than 5% shares in the company as at 31st March, 2018 & 31st March, 2017.

33 Delhi Stock Exchange Limited CIN:U91120DL1947PLC001239 Notes forming part of Accounts... (Amount in `)

Particulars As at As at 31st March, 2018 31st March, 2017 3. RESERVES AND SURPLUS Capital Reserve - Opening Balance 51,35,66,587 51,35,66,587 51,35,66,587 51,35,66,587

Settlement Guarantee Fund (SGF)-Opening Balance* 66,94,92,106 68,20,02,106 Add:Transfer from Member settlement Reserve (as per contra) 0 30,00,000 Less: Refundable to brokers transferred to other 0 1,55,10,000 current liabilities in terms of SEBI Order (Refer Note no. 28) 66,94,92,106 66,94,92,106

Member Settlement Reserve-Opening Balance** 0 30,00,000 Less: Transfer to Settlement Guarantee Fund (as per Contra) 0 30,00,000 0 0 General Reserve-Opening Balance 5,77,717 5,77,717 5,77,717 5,77,717 Surplus - opening balance (41,89,71,053) (43,16,02,928) Add: Net Profit/(Loss) after tax transferred 46,11,390 1,26,31,875 from Statement of Profit & Loss Surplus-Closing balance (41,43,59,662) (41,89,71,053) 76,92,76,748 76,46,65,357

* Settlement Guarantee Fund had been created with the objective of guarantee of the settlement of bonafide transactions of the members of the exchange, inter se, which formed part of the erstwhile exchange’s settlement system. Fund balance represents initial contribution of the exchange and certain collections made from the members and income on investments attributable to fund balances upto 31/03/2016 (Also refer Note No. 28) ** Created in earlier years by way of contribution by members. The objective was primarily the same as in case of Settlement Guarantee Fund, therefore transferred to Settlement Guarantee Fund Reserve in the previous year.

34 70th Annual Report 2017-18 Notes forming part of Accounts...

4. SHARE ALLOTMENT KEPT IN ABEYANCE (Amount in `) Particulars As at As at 31st March, 2018 31st March, 2017 Share allotment kept in abeyance 1,56,000 1,56,000 1,56,000 1,56,000

Share allotment kept in abeyance represents amount of ` 78000/- each received from two persons during the Financial Year 2007-08. The same is pending allotment because of pending completion of legal formalties/requirements by the applicant. Against the share application money, equity shares of face value of ` 1/- each, will be issued at par, in accordance with the provison of the Act and after completion of legal formalties/requirements by the applicants such as production of Letter of Probate, Court Order, Succession certificate etc. No separate interest is payable on the amount. The present authorised share capital of the company is sufficient to cover the shares to be issued against the share allotment kept in abeyance. However, the issued Capital and consequently the subscribed capital will be required to be increased by 78000 Shares if all the 156000 Shares are allotted. As a precautionery measure and as a matter of prudence, the Company has made earmarked bank FDRs of equivalent amount of ` 156000/- in the name of the aforesaid applicants.

5. OTHER LONG TERM LIABILITIES (Amount in `)

Particulars As at As at 31st March, 2018 31st March, 2017 Margin Money, Capital Adequacy Norms Deposits, 3,05,67,208 3,76,27,213 Earnest Money Deposit* Other Security Deposits 3,06,000 3,38,000 Payable for Capital contracts 15,21,509 34,80,619 Other Liabilities 24,69,241 27,72,489 3,48,63,958 4,42,18,321

* Net of admission fees receivable of ` 64,00,000/- (Previous Year ` 64,00,000/-)

35 Delhi Stock Exchange Limited CIN:U91120DL1947PLC001239 Notes forming part of Accounts...

6. PROVISIONS (Amount in `) Particulars As At 31st March, 2018 As At 31st March, 2017 Long Term Short term Long Term Short term

Provisions For Employees Benefit Leave encashment 5,99,273 90,852 2,54,827 2,92,761 Gratuity 2,93,963 1,58,266 57,924 1,04,974 Others Income Tax 0 19,00,000 0 67,00,000 8,93,236 21,49,118 3,12,751 70,97,735

(Amount in `)

Particulars As at As at 31st March, 2018 31st March, 2017

7. OTHER CURRENT LIABILITIES Investor Service Cell Fund-Payable to SEBI 13,61,406 13,61,406 Amount Refundable to brokers towards Settlement 98,10,000 1,55,10,000 Guarantee Fund (SGF / TGF) in terms of SEBI order (Refer Note no. 28) Income Received in Advance 16,000 11,48,896 Statutory dues payable 22,00,796 1,47,854 Expenses Payable 32,14,542 24,30,286 Other Liabilities 0 5,50,149 1,66,02,744 2,11,48,591

36 70th Annual Report 2017-18 1 0 0 0

`) 2017 As on 7,18,098 3,85,095 2,09,524 3,27,891 29,24,500 35,10,659 6,41,92,41 2,47,66,279 3,42,74,865 7,04,87,051 31st March 0 0 0 0 0 0 0 Net Block (Amount in 2018 As on 6,30,704 3,85,095 1,34,535 3,14,995 22,16,900 22,16,900 29,24,500 29,24,500 33,22,200 24,82,013 6,71,16,912 7,38,09,250 6,10,91,480 6,71,16,910 6,41,92,412 5,88,74,580 31st March al ot upto T 2018 2,97,749 4,36,167 54,82,596 54,82,596 54,82,596 77,31,485 22,62,944 80,81,064 9,46,25,407 9,46,25,407 9,39,17,807 3,18,55,886 1,18,25,172 4,91,08,759 2,16,57,895 2,11,15,960 3,32,69,343 March 31 22,67,97,757 23,28,23,189 12,73,97,354 13,27,15,186 for ment ment 3,97,700 7,07,600 7,07,600 7,07,600 3,97,700 Adjust- Impair- 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 the year ction Dedu- during 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 year 87,394 74,989 12,896 For the 62,94,640 53,17,832 10,28,647 31,08,384 10,05,522 62,94,640 53,17,832 Depreciation/Amortisation Upto 2017 1,02,714 2,97,749 4,36,167 54,82,596 54,82,596 21,87,955 80,68,168 77,31,485 9,39,17,807 3,08,27,239 1,17,37,778 4,60,00,375 2,01,10,438 12,1 22,67,97,757 12,73,97,354 31st March As at March 2,97,749 4,36,167 54,82,596 54,82,596 54,82,596 54,82,596 23,97,479 83,96,059 81,16,580 31, 2018 9,68,42,307 9,39,17,807 9,68,42,307 9,68,42,307 9,35,20,107 3,43,37,899 1,24,55,876 7,07,66,654 5,43,85,303 29,39,14,669 22,01,05,417 29,39,14,669 19,15,89,766 19,15,89,766 ions during Deduct- the year

0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 during the year Additions Gross Block at Cost April As at 2017 2,97,749 4,36,167 1st 54,82,596 54,82,596 54,82,596 23,97,479 83,96,059 81,16,580 9,68,42,307 9,68,42,307 9,68,42,307 3,43,37,899 1,24,55,876 7,07,66,654 5,43,85,303 29,39,14,669 29,39,14,669 19,15,89,766 19,15,89,766 ork ear) Y ear ear ear Assets Y Y Y angible (A+B+C) otal T Furniture & Fixtures Assets (B) In Progress (Previous In Progress (C ) & Equipments Peripherals Assets (A) Online Trading System& Communication Equipments T angible otal Capital W otaL otal Intangible FIXED ASSET Capital Work Previous T Previous 3 Electric Installation T 4 2 Buildings T 5 Vehicles T 1 Land (Lease hold) Intangible Assets 8 Liabrary Books 6 Office Equipment Previous 7 Computers & 9 A C

1 Softwares Notes forming part of Accounts... B 8. No.Particulars S.

37 Delhi Stock Exchange Limited CIN:U91120DL1947PLC001239 Notes forming part of Accounts...

8.1 Capital Work-in-Progress consists of amount paid for development of On-Line Trading Platform/ Data Centre and it comprises of following:- (Amount in `) Particulars As at As at 31 March, 2018 31 March, 2017

8.2 Provision for Impairment on capital work in progress has been made on the basis of Valuation Report by Independent Valuer. The total provision made is ` 9,46,25,407/- (Previous Year ` 9,39,17,807/-). In the opinion of management,the same has been made as a matter of prudence and to reflect a true and fair picture of the financial statements. 9. NON CURRENT INVESTMENTS (Amount in `)

Particulars Face As at 31st March,2018 As at 31st March,2017 Value Qty. Amount Qty. Amount (`) (Nos.) (in `)`)`) (Nos.) (in `)

LONG TERM INVESTMENTS (At Cost) NON TRADE (Unquoted) (A) Investment in Equity Instruments -Fully Paid up Equity Shares - In Wholly Owned Subsidiary Company DSE Financial Services Ltd. 1000 60000 6,00,00,000 60000 6,00,00,000 TOTAL 60000 6,00,00,000 60000 6,00,00,000 (B) INVESTMENTS IN MUTUAL FUNDS -FULLY PAID UP UNITS Aditya Birla Sun Life Credit Risk 10 4539642 6,00,00,000 0 0 Fund - Growth HSBC FTS 131- Growth Direct Plan 10 6000000 6,00,00,000 0 0 TOTAL B 10659642 12,00,00,000 0 0 TOTAL (A+B) 10719642 18,00,00,000 60000 6,00,00,000

38 70th Annual Report 2017-18 Notes forming part of Accounts... 9.1 As per Audited Financial Statements of the wholly owned subsidiary company DSE Financial Services Ltd., it has accumulated losses of ` 1,83,62,048/- as on 31.03.2018 (Previous year ` 1,85,79,458/-). In the opinion of the management, no provision is required to be made for any diminution in the value of investment in view of long term/strategic involvement of the company and in view of such diminution being considered to be of temporary in nature. 9.2 Aggregate cost of investment in mutual fund as on 31.03.2018 ` 1,20,000,000/- (previous year Nil). Net Asset Value thereof as on 31.03.2018 ` 1,20,609,489/- (previous year Nil).

10. DEFERRED TAX ASSETS (Net) (Amount in `) Particulars As At As At 31st March,2018 31st March,2017 Deferred Tax Asset Expenses allowable under Income Tax Act 3,17,803 1,95,757 on payment basis Expenses on VRS allowable under Income Tax Act 9,40,623 13,97,368 in subsequent years Less:Deferred Tax Liability Fixed Assets 1,08,430 3,44,508 11,49,996 12,48,617 11. LOANS AND ADVANCES (Amount in `) Particulars As At 31st March, 2018 As At 31st March, 2017 Long Term Short term Long Term Short term Unsecured, Considered Good, Unless otherwise stated: Others Security Deposit with Government 22,98,000 0 41,65,510 0 Department and others Prepaid Expenses/Advance 0 8,78,294 0 7,82,616 against expenses Amount paid to SEBI toward broker / 0 15,76,84,177 0 15,82,99,834 Sub broker fees (Net of recovery) (Refer Note no. 30) GST/Service Tax Recoverable 49,33,406 0 48,75,431 0 Advance Tax/TDS/Income Tax 0 2,78,79,940 0 2,99,50,523 refunds due Recoverable from Financial Technologies (India) Ltd. (Refer Note No. 11.1) —Considered Doubtful 7,15,90,627 0 7,15,90,627 0 Less: Provision for Doubtful Advances -7,15,90,627 0 -7,15,90,627 0 72,31,406 18,64,42,412 90,40,941 189,0,32,973

39 Delhi Stock Exchange Limited CIN:U91120DL1947PLC001239 Notes forming part of Accounts...

11.1 The company had entered into a technology agreement in September 2008 with Financial Technologies (India) Ltd. (hereinafter referred to as “FTIL”) for availing license of its trading software. Due to various deficiencies/defects in the license/software and services, the agreement was terminated by the company in April 2011. The company had paid/incurred a sum of ` 7,80,13,317/- (` 7,15,90,627/- net of service tax) which includes payments made to FTIL, other expenses like travelling, Legal and Professional Charges etc., in connection therewith, and also service tax of ` 64,22,690/-. Consequent upon the termination of the agreement, the amount had been shown recoverable from FTIL. On the other hand, FTIL has made counter claim of further amount of ` 10,09,17,161/-. In the opinion of management, the claim of FTIL is not tenable at all and the management is hopeful of recovery of the amount from FTIL. However,as a matter of prudence, provision for the amount of ` 71590627/- was made and charged in the Statement of Profit & Loss in the earlier year. 12. Current Investments (valued at lower of cost and fair value) Particulars As at As at 31st March, 2018 31st March, 2017 No. of Amount No. of Amount Units in ` Units in ` Investment in Mutual Funds- (Unquoted, fully paid up) Non-Trade ICICI Prudential Saving Fund- Direct Plan-Growth* 13852 46,28,083 0 0

13852 46,28,083 0 0

* Includes ` 2,000,000/- for 5961 units paid on 21st March,2018 but units allotted on 4th April,2018. Net ` Asset Value as on 31.03.2018 4,643,929/- (Previous year Nil). (Amount in `)

Particulars As at As at 31st March, 2018 31st March, 2017

13. TRADE RECEIVABLES Outstanding for a Period exceeding six months Unsecured Considered Good 24,43,805 29,25,950 24,43,805 29,25,950 14. CASH AND BANK BALANCES Cash & Cash equivalents Balances with Banks -In Current Accounts 5,22,287 64,75,481 -In Deposit Accounts* 40,03,35,882 52,25,24,757 Cash-on-Hand 124 17,137 Other Bank balances Deposit with bank** 1,94,058 1,94,058 40,10,52,351 52,92,11,433

* Balance with Banks in deposits accounts represents time deposits with banks which can be withdrawn by the company at any point of time without prior notice or penalty on the Principal. Balance with banks in deposits accounts includes deposits of ` Nil/- (Previous year ` 99,00,000/-) With maturity of more then 12 months. ** Lien marked with Registrar of High Court. 40 70th Annual Report 2017-18 Notes forming part of Accounts...

(Amount in `)

Particulars Year ended Year ended 31st March, 2018 31st March, 2017

15. OTHER CURRENT ASSETS Interest accrued on bank deposits 35,15,853 27,45,719 Recoverable from subsidiary company 54,48,016 52,98,280 (Rent & other) Recoverable from Customer Protection Fund 25,620 25,620 Other recoverable (including Cabin rent, expense 9,98,782 10,38,311 recoverable etc.) Bank FDR earmarked against amount of 1,56,000 1,56,000 Share Allotment Kept in abeyance (Refer Note No. 4) [Value with accrued interest as on 31/03/2018 ` 302386/- (Previous Year ` 282993/-)] 1,01,44,271 92,63,930

16. OTHER INCOME Interest (Gross) on a) Fixed Deposits with banks 3,30,66,785 4,56,35,309 b) Electricity Security Deposit 83,469 69,930 c) Income Tax Refund 0.00 9,92,486 3,31,50,254 4,66,97,725 3,31,50,254 4,66,97,725 Profit on sale/redemption of current investments 23,083 0 Distribution of Transfer deeds 75,390 1,20,784 Miscellaneous Income 67,767 26,092 Rent Income 3,17,276 13,48,140 Liabilities/Balances no longer required written back 42,15,440 0 3,78,49,210 4,81,92,741

17. EMPLOYEE BENEFIT EXPENSES Salaries and Benefits 52,49,924 48,46,531 Contribution to Provident Fund and Gratuity Fund 6,14,893 3,85,264 Staff Welfare 1,78,694 1,78,787 60,43,511 54,10,582

18. FINANCE COSTS Interest on Income Tax 2,79,927 74,062 2,79,927 74,062

41 Delhi Stock Exchange Limited CIN:U91120DL1947PLC001239 Notes forming part of Accounts...

(Amount in `)

Particulars Year ended Year ended 31st March, 2018 31st March, 2017 19. Other Expenses Electricity and Water 41,77,237 31,43,006 Property Management Services 36,05,021 36,10,682 Repairs and Maintenance - Building 0 67,065 - Others 3,62,858 3,62,858 2,43,378 3,10,443 Rates & Taxes 8,36,106 8,21,017 Insurance 8,37,284 7,86,276 Sitting Fees 2,45,000 4,70,000 Communication 2,20,724 4,12,617 Auditor’s Remuneration 3,80,000 5,45,690 Legal and Professional 10,03,900 15,95,506 Depository Charges 10,350 9,090 Contribution to SEBI 0 25,00,000 Printing and Stationery 1,75,085 1,76,101 Travelling and Conveyance 68,796 3,02,614 Refund of Addmission and other fees 2,19,783 0 Board and Committee Meetings 34,889 94,548 Vehicle Running and Maintenance 1,25,170 1,72,322 Bad debts/Advances / Misc. Balances written-off 10,86,461 1,15,214 CSR Expenditure 9,08,264 0 Festival 1,12,721 1,34,192 General Meetings of Members 2,27,793 1,22,771 Claim/ Interest paid pursuant to Court 8,18,076 5,22,901 Order/ Settlement Miscellaneous 4,64,988 3,89,576

1,59,20,507 1,62,34,566

42 70th Annual Report 2017-18 Notes forming part of Accounts...

20. Earning Per Share pursuant to Accounting Standard (AS-20) “Earning Per Share”

Particulars Current Year Previous Year (`)(`)(`) (`)

Net Profit/(Loss) after Tax as per Statement 4611390 12631875 of Profit and Loss Net Profit/(Loss) attributable to Equity Shareholders 4611390 12631875 Basic Earning Per Share Face Value Per Share (`) 1 1 Weighted Average No. of Equity Shares Outstanding 3,02,42,000 3,02,42,000 Basic Earning per share (`) 0.15 0.42 Diluted Earning Per Share Face Value Per Share (`) 1 1 Weighted Average No. of Equity Shares Outstanding 3,03,98,000 3,03,98,000 Diluted Earning per share (`) 0.15 0.42

21. CONTINGENT LIABILITIES AND COMMITMENTS (To The Extent Not Provided For) (a) Claims against the Company not acknowledged as debts:- ` 11,09,11,025/- (Previous Year ` 27,33,11,088/-) (b) The Assessing Officer had disallowed the Company’s claim of exemption under section 11 of Income Tax Act, 1961 from the Assessment Year 1996-97 to 1999-2000 and from Assessment Year 2001-02 to 2006-07.The total demands raised by assessing officer for these years were ` 31,44,40,999/- .The Commissioner of Income Tax (Appeals) as well as Income Tax Appellate Tribunal (ITAT) upheld the claim of exemption by the Company for all the above years. As per the information to the company, the Income Tax Department has filed appeal before Hon’ble High Court of Delhi against the decision of ITAT. 22. RELATED PARTY TRANSACTIONS 22.1 List of related parties with whom transactions have taken place and relationship: a) Wholly owned Subsidiary Company DSE Financial Services Ltd. b) Key Managerial Personnel Mr. Sunil Bhatia (Company Secretary) c) Directors Current Year Previous Year Mohinder Singh Mohinder Singh Shanker Singal Venkat Rao Sudhangshu S. Biswal Anish Kumar Sharma Vijay Bhushan Shanker Singal Mahender Kumar Gupta Sudhangshu S Biswal Vinod Kumar Goel Sanjeev Gandhi Rajinder Kumar Goel d) Concerns in which directors are interested: Vijay Bhushan & Co. (Mr. Vijay Bhushan is Proprietor) Bharat Bhushan & Co. (Mr. Vijay Bhushan is Partner)

43 Delhi Stock Exchange Limited CIN:U91120DL1947PLC001239 Notes forming part of Accounts... Emmkay Share & Stock Brokers Ltd. ( Mr. Mahender Kumar Gupta is Director and Member) Vinod Kumar Goel & Co ( Mr. Vinod Kumar Goel is Proprietor) e) Relative of Director: Murari Lal Goel (Father of Mr. Vinod Kumar Goel)

22.2 Transaction during the with related Parties : Sr. Name of the Related party Nature of Transactions Amount Amount No. Current Year Previous Year 1 DSE Financial Services Ltd. Rent income and 29,736 5,86,623 Maintanance Charges Expenses recovered 1,20,000 4,31,660 Amount recoverable 54,48,016 52,98,280 at year end Investments as at the 6,00,00,000 6,00,00,000 year end 2 Sunil Bhatia Remuneration paid 11,09,581 9,32,984 3 Mohinder Singh Sitting Fees paid 80,000 1,35,000 4 Venkat Rao Sitting Fees paid 0 1,20,000 5 Anish Kumar Sharma Sitting Fees paid 0 1,15,000 6 Shanker Singal Sitting Fees paid 20,000 45,000 7 Sudhangshu S Biswal Sitting Fees paid 30,000 55,000 8 Vijay Bhushan Sitting Fees paid 10,000 0 9 Mahender Kumar Gupta Sitting Fees paid 10,000 0 10 Vinod Kumar Goel Sitting Fees paid 10,000 0 11 Sanjeev Gandhi Sitting Fees paid 30,000 0 12 Rajinder Kumar Goel Sitting Fees paid 55,000 0 13 Vijay Bhushan & Co. Refund of Margin Deposits 12,500 0 Turnover fees recovered 11,753 0 14 Bharat Bhushan & Co. Refund of Margin 64,500 0 and TGF Deposits Sub broker fees recovered 5,000 0 15 Emmkay Share & Stock Refund of Margin and 1,99,779 0 Brokers Ltd. TGF Deposits Cabin rent and other dues 900 0 recovered 16 Vinod Kumar Goel & Co. Refund of Margin and TGF 62,500 0 Deposits Cabin rent and other dues 2,566 0 recovered 17 Murari Lal Goel Refund of Margin and TGF 62,500 0 Deposits Cabin rent and other dues 1,929 0 recovered

44 70th Annual Report 2017-18 Notes forming part of Accounts...

23. DISCLOSURE PURSUANT TO ACCOUNTING STANDARD-15 Defined Contribution Plan Amount recognized as expense for defined contribution plans are as under: (Amount in `) Particulars Current Year Previous Year Head under which Amount Amount shown in Statement (```) (```) of Profit & Loss Contribution to Provident Fund 3,25,562 3,11,460 Contribution to Provident fund and Gratuity fund Defined Benefit Plan Movement in net liability Particulars Gratuity Leave Encashment (Funded) (Unfunded) Current Previous Current Previous Year Year Year Year Present value of obligations as 14,45,035 22,14,612 5,47,588 6,76,893 at beginning of the year (A) Interest Cost (B) 92,482 1,57,237 35,046 48,059 Past service cost (C) 572 Nil Nil Nil Current service cost (D) 1,29,760 1,18,412 1,07,168 1,05,485 Benefits paid (E) (2,42,308) (9,84,375) (35,600) (2,96,592) Actuarial loss/(gain) on obligation (F) 1,63,635 (60,851) 35,923 13,743 Present value of obligations as at the end of the year 15,89,176 14,45,035 6,90,125 5,47,588 (G=A+B+C+D-E+F)

The amounts recognized in the Balance Sheet and the Statement of Profit & Loss are as follows : Particulars Gratuity Leave Encashment (Funded) (Unfunded) Current Previous Current Previous Year Year Year Year Present value of obligation (A) 15,89,176 14,45,035 6,90,125 5,47,588 Estimated fair value of plan 11,36,947 12,82,137 Nil Nil Assets (B) Net Liability/(Asset) (C=A-B) 4,52,229 1,62,898 6,90,125 5,47,588 Amounts in the Balance Sheet Liabilities/(Asset) 4,52,229 1,62,898 6,90,125 5,47,588 Amount charged to Profit & Loss Account Current Service Cost 1,29,760 1,18,412 1,07,168 1,05,485 Interest Cost 92,482 1,57,237 35,046 48,059 Past Service Cost 572 Nil Nil Nil Expected Return on Plan Asset (1,05,776) (1,62,284) Nil Nil Actuarial(Gain)/Loss 1,72,293 (39,561) 35,923 13,743 2,89,331 73,804 1,78,137 1,67,287 Head under which shown in the Contribution to Provident Salaries and Benefits Statement of Profit & Loss Fund and Gratuity Fund

45 Delhi Stock Exchange Limited CIN:U91120DL1947PLC001239 Notes forming part of Accounts...

The Actual Return on Plan Assets is as follows (Amount in `) Particulars Gratuity Current Year Previous Year Actual return on plan assets 1,05,776 1,62,284

Following are the Principal Actuarial Assumptions used as at the Balance Sheet date: Particulars Gratuity Current Year Previous Year Discount Rate 7.40% 6.40% Expected Rate of Return on Plan Assets 7.65% 8.25% Salary Escalation Rate 10.00% 10.00%

A reconciliation of the opening and closing balances of the fair value of plan assets : (Amount in `) Sl. Particulars Gratuity No. Current Year Previous Year i) Opening Fair Value of Plan Assets 12,82,137 19,43,519 ii) Expected Return on Plan Assets 1,05,776 1,62,284 iii) Contribution by the Employer Nil 1,81,999 iv) Benefits Paid (2,42,308) (9,84,375) v) Acturial Gain/(Loss) (8,658) (21,290) Closing Fair Value of Plan Assets 11,36,947 12,82,137

24. Due to Micro,Small and Medium Enterprises To the extent information available with the company, it has no dues to the Micro, Small and medium enterprises as at 31st March, 2018 and 31st March, 2017. 25. The company is a small and medium sized company (SMC) as defined in the general instructions in respect of Accounting Standards notified under the Companies Act. Accordingly, the company has complied with the Accounting Standards as applicable to a small and medium sized company. 26. Auditor Remuneration includes the following: (Amount in `)

Current Year Previous year

Statutory Audit Fees 3,00,000 3,00,000 Tax Audit Fees 0 60,000 Income Tax Matters 0 75,000 Consolidation 50,000 50,000 Out of Pocket Expenses 30,000 36,000 Other 0 24,690 3,80,000 5,45,690

46 70th Annual Report 2017-18 Notes forming part of Accounts...

27. Employee State Insurance Corporation had passed an order dated 15/07/1996 for the recovery of ` 10,20,565 towards contribution and interest. The Company had filed petition u/s 75 of ESI Act challenging the action of ESI Corporation. Vide order dated 12/10/2017 passed by Hon’ble SCJ-Cum-RC (Central), Tis Hazari Courts, Delhi, the petition of the Company has been dismissed. Consequently demand of ` 2592363 ( including interest) has been raised by the ESI Corporation. Sum of ` 5,10,250 was paid by the Company in the earlier year and the same was shown as advances. Balance of ` 20,82,113 was outstanding payable as at the year end. 28. As per Exit order no. WTM/ SR/ SEBI/ MRD-DSA/ 04/01/2017 dated January 23, 2017 passed by Whole Time member, SEBI, the company is to refund SGF / TGF deposit (refundable) to the stock brokers including their initial contribution / deposit to Settlement Gurantee Fund / Trade Gurantee Fund (SGF/ TGF). Accordingly amount of Rs. 1,55,10,000 as identified and certified by the management and also by Internal auditors of the Company, had been transferred during the previous year from Settlement Gurantee Fund (as shown in note no. 3- Reserve & Surplus) to Other Current liabilities (as shown in Note no. 7) 29. Litigation a) The Impact of pending litigation has been considered and disclosed in the Contingent Liabilities in Note No. 21. b) In addition,the company is subject to legal proceedings and claims,which have arisen in the ordinary course of activities.The Company’s management does not reasonably expect that these legal claims and proceedings, when ultimately concluded and decided will have a meterial and adverse effect on the company’s results of operations or financial statements. 30. In terms of SEBI Circular No. CIR/MRD/DSA/14/2012 dated May 30,2012,Circular No.CIR/MRD/DSA/ 33/2012 dated December 13,2012 and Securities Contracts (Regulation) (Stock Exchanges and Clearing Corporations) Regulations, 2012 dated June 20,2012,and as approved by the members of the company in their meeting held on May 23,2014, the company had opted for exit through voluntary surrender of recognition as a Stock Exchange. SEBI Vide Letter No. MRD/DSA/DSEL/LR/OW/10684/2015 dated April 17,2015 asked the company to comply with the following in order to exit from the business of stock exchange: i) To transfer the Investor Protection Fund,Investor Services Fund and 1% Security deposit available with DSEL including interest accrued on this amount till date to SEBI IPEF. ii) To transfer the dues outstanding to SEBI including 10% of listing fee and the annual regulatory fee. iii) To transfer the outstanding registration fees of brokers/sub-brokers as specified in the SEBI (Stock Brokers and Sub Brokers) Regulations,1992 to till date. In terms of aforesaid letter of SEBI,the company had, remitted/transferred the balance of Investor Protection Fund,Investor Services Fund and 1% Security deposit to SEBI in the earlier year. However,with regard to amount of outstanding registration fee of brokers/sub-brokers,in the opinion of management,the company is not liable to pay the outstanding fees of brokers/sub-brokers, if any. The company wrote a letter dated July 13,2015 to SEBI stating that the company is not liable to pay the outstanding registration fees of brokers. Earlier SEBI informed the company about outstanding brokers/subbrokers turnover fee amounting to ` 25,38,11,200. Subsequentely after several representations and meetings, SEBI re- calculated the brokers fee at ` 15,61,98,365 and sub-brokers fees at ` 22,11,500 totalling to ` 15,84,09,865 (inclusive of interest) as of September, 2016. SEBI informed the company the liability in respect of members which were party to the appeal in the matter of SEBI vs. Alliance Finstock Private Limited and their corresponding trensferees and the members which were party to the appeal in the matter of Association for welfare of Delhi Stock Brokers & Ors. vs. Union of India & Ors. (W.P.(C) 17349/2004 was under calculation and will be informed by SEBI separately. During the previous year, the Company had paid the aforesaid amount of ` 15,84,09,865. According to the management , the amounts have been paid to SEBI without prejudice to rights to get the refund of the amount from SEBI if excess amount has been paid. Upto the Year end the Company has recovered amount of Rs. 7,25,688

47 Delhi Stock Exchange Limited CIN:U91120DL1947PLC001239 Notes forming part of Accounts...

(Previous year ` 1,10,031) from some brokers against the turnover fees/ sub- broker fee. The amount paid to to SEBI net of aforesaid recovery has been shown in note no. 11 of the Financial Statements. Subsequent to the year end, the Company has further recovered turnover fees/ sub broker fees of ` 25,67,791 ( including refund of ` 11,58,222 received from SEBI). In the opinion of management the company is also not liable for the liability of remaining amount of ` 15,51,16,386 (i.e. amount paid by it to SEBI less recovery made and refund received) as this amount of ` 15,51,16,386 will also be recoverable from the respective brokers/sub-brokers and, therefore, no provision for expense/liability is required to be made for the same. 31. SEBI vide order no. WTM/ SR/ SEBI/ MRD-DSA/ 04/01/2017 dated January 23, 2017 had passed exit order allowing the exit of the Company as stock exchange. In the opinion of management,the going concern concept of the company will not be impacted merely because of exit option through voluntary surrender of the recognition as a Stock Exchange ,as the company intends to continue as a corporate entity. 32. The Company did not have any long term contracts including derivative contracts for which there were any material foreseeable losses. 33. Disclosure u/s 186(4) of the Companies Act, 2013: The detail of investments are given under the respective head. 34. During the year, the Company has spent Rs. 9,08,264/-(Previous year Rs. Nil) on Corporate Social Responsibility (CSR activities) which it was required to spent in the previous year. 35. Previous year’s figures have been regrouped/reclassified, wherever considered necessary to conform to the Current Year’s presentation.

48 70th Annual Report 2017-18

Form AOC-1 (Pursuant to first proviso to sub-section (3) of section 129 read with Rule 5 of Companies (Accounts) Rules, 2014) Statement containing salient features of the financial statements of subsidiaries/ associate companies/ joint ventures.

Part “A”: Subsidiaries (Amount in `) Sl. Particulars No.

1. Name of the subsidiary DSE Financial Services Limited 2. Reporting period for the subsidiary concerned, if different from the holding company’s reporting period N.A 3. Reporting currency and Exchange rate as on the last date of the relevant Financial year in the case of foreign subsidiaries. N.A 4. Share capital 6,00,00,000 5. Reserves & surplus 1,83,62,048 6. Total assets 6,85,84,071 7. Total Liabilities 6,85,84,071 8. Investments 69,64,800 9. Turnover 73,44,159 10. Profit before taxation 2,17,410 11. Provision for taxation NIL 12. Profit after taxation 2,17,410 13. Proposed Dividend NIL 14. % of shareholding 100%

Notes: 1. Names of subsidiaries which are yet to commence operations – N.A 2. Names of subsidiaries which have been liquidated or sold during the year – N.A

Part “B”: Associate and Joint Ventures

Statement pursuant to Section 129 (3) of the Companies Act, 2013 related to Associate Companies and Joint Ventures — Not Applicable —- FOR AND ON BEHALF OF THE BOARD VIJAY BHUSHAN MAHENDER KUMAR GUPTA VINOD KUMAR GOEL (CHAIRMAN) (DIRECTOR) (DIRECTOR) DIN:00002421 DIN:00039086 DIN:00989487

Place : New Delhi SUNIL BHATIA HANS RAJ KAPOOR Date : August 31, 2018 Company Secretary (DIRECTOR) DIN:01194791

49 Delhi Stock Exchange Limited CIN:U91120DL1947PLC001239

Independent Auditors' Report on Consolidated Financial Statements

To, operating effectively for ensuring the accuracy and The Members completeness of the accounting records, relevant to of the preparation and presentation of the financial DELHI STOCK EXCHANGE LIMITED statements that give a true and fair view and are free (Formerly The Delhi Stock Exchange Association from material misstatement, whether due to fraud or Ltd.) error, which have been used for the purpose of preparation of the consolidated financial statements Report on the Consolidated Financial Statements. by the Directors of the Holding Company, as aforesaid. We have audited the accompanying consolidated financial statements of DELHI STOCK EXCHANGE Auditor’s Responsibility LIMITED (hereinafter referred to as “the Holding Our responsibility is to express an opinion on these Company”) and its subsidiary (the Holding company consolidated financial statements based on our audit. and its subsidiary together referred to as ‘the group’) While conducting the audit, we have taken into account comprising of the Consolidated Balance Sheet as at the provisions of the Act, the accounting and auditing March 31, 2018, the Consolidated Statement of Profit standards and matters which are required to be and Loss, the Consolidated Cash Flow Statement for included in the audit report under the provisions of the year then ended, and a summary of significant the Act and the Rules made there under. accounting policies and other explanatory information (herein after referred to as “the consolidated financial We conducted our audit in accordance with the statements”). Standards on Auditing specified under Section 143(10) of the Act. Those Standards require that we comply Management’s Responsibility for the Consolidated with ethical requirements and plan and perform the Financial Statements audit to obtain reasonable assurance about whether The Holding Company’s Board of Directors is the consolidated financial statements are free from responsible for the preparation of these consolidated material misstatement. financial statements in terms of the requirements of An audit involves performing procedures to obtain the Companies Act, 2013 (hereinafter referred to as audit evidence about the amounts and the disclosures “the Act”) that give a true and fair view of the in the consolidated financial statements. The consolidated financial position, consolidated financial procedures selected depend on the auditor’s performance and consolidated cash flows of the Group judgment, including the assessment of the risks of in accordance with the accounting principles generally material misstatement of the consolidated financial accepted in India, including the Accounting Standards statements, whether due to fraud or error. In making specified under Section 133 of the Act, read with Rule those risk assessments, the auditor considers internal 7 of the Companies (Accounts) Rules, 2014. The financial control relevant to the Holding Company’s respective Board of Directors of the companies preparation of the consolidated financial statements included in the Group are responsible for maintenance that give a true and fair view in order to design audit of adequate accounting records in accordance with procedures that are appropriate in the circumstances. the provisions of the Act for safeguarding the assets An audit also includes evaluating the appropriateness of the Group and for preventing and detecting frauds of the accounting policies used and the and other irregularities; the selection and application reasonableness of the accounting estimates made by of appropriate accounting policies; making judgments the Holding Company’s Board of Directors, as well as and estimates that are reasonable and prudent; and evaluating the overall presentation of the consolidated the design, implementation and maintenance of financial statements. adequate internal financial controls, that were

50 Consolidated Financial Report 2017-18

We believe that the audit evidence obtained by us and (ii) As per the audit report of subsidiary company:- the audit evidence obtained by the other auditors in Note No. 38 terms of their reports referred to in sub-paragraph (a) of the Other Matters paragraph below, is sufficient and (A) Trade Receivables outstanding for more than six appropriate to provide a basis for our audit opinion on months aggregating to ` 86.29 Lakhs (Previous the consolidated financial statements. year ` 87.48 lakhs) out of which ` 69.08 lacs pertains to the debtors under litigation for which Basis for Qualified Opinion transactions have been stopped and balance confirmation as on 31st March 2018 have also Reference is invited to Note no. 34 of financial not been obtained. In the opinion of the statements regarding non-provision of amount of ` Management these balances are partially doubtful 15,51,16,386/- in respect of fees of brokers/sub- for recovery and hence provision for doubtful brokers (inclusive of interest) paid to SEBI during debts of ` 13.82 Lacs has been made in the the previous year (net of recovery and refund). In the books of accounts (being 20% on net opinion of management no provision is required for outstandings of ` 69.08 lacs), even though the said amount. In our opinion, on the basis of awards under arbitration have been received in information and explanations made available to us favor of the company and execution petitions by the management, there is uncertainty of the have been filed in the court which are pending. refund / recovery of the aforesaid amount and, therefore, provision is required to be made for the B) The company has not made provision for doubtful same. As a result of this, profit for the year as shown debts in respect of Trade Receivables in the statement of Profit & loss is higher by ` outstanding other than litigation cases amounting 15,51,16,386/-; amount of Reserve & Surplus as to ` 17.21 Lacs (including ` 7.17 lacs & ` 0.60 shown in the Balance sheet is overstated to that lacs due from CDSL & MCX debtors respectively) extent; Short Term loans and advances as shown in for more than six months as neither any recovery the Balance sheet is overstated to that extent. Our process nor any legal action is initiated for the opinion is qualified on this issue. We had also given recovery of outstanding dues by the Company. qualified opinion on this issue in our audit report on However, these balances are good for recovery the financial statements as on/ for the year ended and necessary action for recovery has now 31st March 2016 and 31st March 2017. been initiated and the amount would be fully recovered/adjusted in the financials year 2018- Emphasis of Matter 19.

Without qualifying our opinion, we invite reference Qualified Opinion to: In our opinion and to the best of our information and (i) Note no. 35 regarding accounts being prepared according to the explanations given to us, except for on going concern basis by Holding Company. the effects of the matter described in the Basis for Qualified Opinion Paragraph, the aforesaid SEBI vide order no. WTM/ SR/ SEBI/ MRD- consolidated financial statements give the information DSA/ 04/01/2017 dated January 23, 2017 had required by the Act in the manner so required and give passed exit order allowing the exit of the a true and fair view in conformity with the accounting Company as stock exchange. In the opinion of principles generally accepted in India of the management,the going concern concept of the consolidated state of affairs of the group as at 31 March company will not be impacted merely because 2018 and their consolidated profit and their of exit option through voluntary surrender of the consolidated cash flows for the year ended on that recognition as a Stock Exchange, as the date. company intends to continue as a corporate Other matters entity.

51 Delhi Stock Exchange Limited CIN:U91120DL1947PLC001239

We did not audit the financial statements / financial (d) In our opinion, the aforesaid consolidated financial information of one subsidiary, whose financial statements comply with the Accounting Standards statements / financial information reflect total assets specified under Section 133 of the Act, read with of ` 6,85,84,071/- as at 31st March, 2018, total Rule 7 of the Companies (Accounts) Rules, 2014. revenues of ` 73,44,159/- and net cash flows (e) On the basis of the written representations amounting to ` (2,04,67,776)/- for the year ended on received from the directors of the Holding that date, as considered in the consolidated financial Company as on 31st March, 2018 taken on record statements. These financial statements / financial by the Board of Directors of the Holding Company information have been audited by other auditors whose and the reports of the statutory auditors of its reports have been furnished to us by the Management subsidiary company, none of the directors of the and our opinion on the consolidated financial group is disqualified as on 31stMarch, 2018 from statements, in so far as it relates to the amounts and being appointed as a director in terms of Section disclosures included in respect of the subsidiary, and 164 (2) of the Act. our report in terms of sub-sections (3) and (11) of Section 143 of the Act, insofar as it relates to the (f) with respect to the adequacy of the internal aforesaid subsidiary, is based solely on the reports of financial controls over financial reporting of the the other auditor. Group and the operating effectiveness of such controls, refer to our separate report in “Annexure Our opinion on the consolidated financial statements, A”; and and our report on Other Legal and Regulatory Requirements below, is not modified in respect of the (g) With respect to the other matters to be included above matter with respect to our reliance on the work in the Auditor’s Report in accordance with Rule done and the report of the other auditors and the 11 of the Companies (Audit and Auditor’s) Rules, financial statements / financial information certified by 2014, in our opinion and to the best of our the Management. information and according to the explanations given to us: Report on Other Legal and Regulatory i. The Consolidated financial statements Requirements disclose the impact of pending litigations on 1. As required by Section 143(3) of the Act, we the consolidated financial position of the report, to the extent applicable, that: Group. – Refer Note 33 to the consolidated financial statements; (a) We have sought and obtained all the information ii. The Group did not have any long-term and explanations which to the best of our contracts including derivative contracts for knowledge and belief were necessary for the which there were any material foreseeable purposes of our audit of the aforesaid consolidated losses; financial statements. iii. There were no amounts which were required (b) In our opinion, proper books of account as required to be transferred to the Investor Education by law relating to preparation of the aforesaid and Protection Fund by the Group. consolidated financial statements have been kept so far as it appears from our examination of those FOR P. BHOLUSARIA & CO. books and the reports of the other auditors. Chartered Accountants (c) The Consolidated Balance Sheet, the Firm Registration No. 000468N Consolidated Statement of Profit and Loss, and AMIT GOEL the Consolidated Cash Flow Statement dealt with Place : New Delhi (Partner) by this Report are in agreement with the relevant Date : August 31, 2018 M.No. 92648 books of account maintained for the purpose of preparation of the consolidated financial statements.

52 Consolidated Financial Report 2017-18

Annexure - A to the Auditors’ Report controls, both applicable to an audit of Internal Report on the Internal Financial Control under Financial Controls and, both issued by the Institute of clause (i) of sub section 3 of section 143 of the Chartered Accountants of India. Those Standards and Companies Act, 2013 (“the Act”) the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain In conjunction with our audit of the consolidated reasonable assurance about whether adequate financial statements of Delhi Stock Exchange Limited internal financial controls over financial reporting was and its subsidiary company (Collectively referred to established and maintained and if such controls as “the group”) as of and for the year ended 31 March operated effectively in all material respects. 2018, We have audited the internal financial controls over financial reporting of DELHI STOCK EXCHANGE Our audit involves performing procedures to obtain LIMITED (“the Holding Company”) and its subsidiary audit evidence about the adequacy of the internal company which is company incorporated in India, as financial controls system over financial reporting and of that date. their operating effectiveness. Our audit of internal financial controls over financial reporting included Management’s Responsibility for Internal Financial obtaining an understanding of internal financial controls Controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating The respective Board of Directors of the Holding the design and operating effectiveness of internal Company and its subsidiary company, which is a control based on the assessed risk. The procedures company incorporated in India, are responsible for selected depend on the auditor’s judgment, including establishing and maintaining internal financial controls the assessment of the risks of material misstatement based on the internal control over financial reporting of the financial statements, whether due to fraud or criteria established by the Company considering the error. essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls We believe that the audit evidence we have obtained over Financial Reporting issued by the Institute of and the audit evidence obtained by the other auditor Chartered Accountants of India (‘ICAI’). These in terms of their report referred to in the Other Matters responsibilities include the design, implementation and paragraph below, is sufficient and appropriate to maintenance of adequate internal financial controls provide a basis for our audit opinion on the group’s that were operating effectively for ensuring the orderly internal financial controls system over financial and efficient conduct of its business, including reporting. adherence to respective company’s policies, the safeguarding of its assets, the prevention and detection Meaning of Internal Financial Controls over of frauds and errors, the accuracy and completeness Financial Reporting of the accounting records, and the timely preparation of reliable financial information, as required under the A company’s internal financial control over financial Companies Act, 2013. reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting Auditors’ Responsibility and the preparation of financial statements for external purposes in accordance with generally accepted Our responsibility is to express an opinion on the accounting principles. A company’s internal financial group’s internal financial controls over financial control over financial reporting includes those policies reporting based on our audit. We conducted our audit and procedures that (1) pertain to the maintenance of in accordance with the Guidance Note on Audit of records that, in reasonable detail, accurately and fairly Internal Financial Controls over Financial Reporting reflect the transactions and dispositions of the assets (the “Guidance Note”) and the Standards on Auditing, of the company; (2) provide reasonable assurance that issued by ICAI and deemed to be prescribed under transactions are recorded as necessary to permit section 143(10) of the Companies Act, 2013, to the preparation of financial statements in accordance with extent applicable to an audit of internal financial generally accepted accounting principles, and that

53 Delhi Stock Exchange Limited CIN:U91120DL1947PLC001239 receipts and expenditures of the company are being established by the group considering the essential made only in accordance with authorizations of components of internal control stated in the Guidance management and directors of the company; and (3) Note on Audit of Internal Financial Controls Over provide reasonable assurance regarding prevention Financial Reporting issued by the Institute of Chartered or timely detection of unauthorized acquisition, use, Accountants of India except that the auditor of or disposition of the company’s assets that could have subsidiary company in their report has reported about a material effect on the financial statements. need for improvement in internal control procedures especially in areas relating to:- Inherent Limitations of Internal Financial Controls Over Financial Reporting (a) Compliance requirements of various exchanges of which the company is a member Because of the inherent limitations of internal financial & SEBI. controls over financial reporting, including the (b) Process of recovery of dues from Clients/sub possibility of collusion or improper management brokers. override of controls, material misstatements due to error or fraud may occur and not be detected. Also, Other Matters projections of any evaluation of the internal financial controls over financial reporting to future periods are Our aforesaid report under Section 143(3)(i) of the Act subject to the risk that the internal financial control over on the adequacy and operating effectiveness of the financial reporting may become inadequate because internal financial controls over financial reporting of changes in conditions, or that the degree of insofar as it relates to subsidiary company, which is compliance with the policies or procedures may audited by another auditor, which is company deteriorate. incorporated in India, is based on the corresponding report of the auditor of such company incorporated in Opinion India. In our opinion, the Holding Company and its subsidiary FOR P. BHOLUSARIA & CO. company, which is a company incorporated in India, Chartered Accountants have, in all material respects, an adequate internal Firm Registration No. 000468N financial controls system over financial reporting and such internal financial controls over financial reporting AMIT GOEL were operating effectively as at 31 March 2018, based Place : New Delhi (Partner) on the internal control over financial reporting criteria Date : August 31, 2018 M.No. 92648

54 Consolidated Financial Report 2017-18 Consolidated Balance Sheet as at 31st March, 2018 (Amount in `) Particulars Note As At As At 31st March, 2018 31st March, 2017 EQUITY AND LIABILITIES Shareholders’ Funds Share Capital 2 3,02,42,000 3,02,42,000 Reserves and Surplus 3 75,09,14,699 74,60,85,899 78,11,56,699 77,63,27,899 Share Allotment Kept in abeyance 4 1,56,000 1,56,000 Non-Current Liabilities Other Long-term Liabilities 5 3,49,63,958 4,43,18,321 Long Term Provisions 6 14,14,080 9,59,252 3,63,78,038 4,52,77,573 Current Liabilities Trade Payables 7 1,29,50,930 2,98,49,290 Other Current Liabilities 8 2,43,68,691 3,23,21,474 Short Term Provisions 6 23,09,500 72,37,064 3,96,29,121 6,94,07,828 85,73,19,858 89,11,69,300 ASSETS Non-Current Assets Fixed Assets 9 Tangible assets 5,90,35,942 6,42,89,334 Intangible assets 8,478 21,811 Capital work In Progress 22,16,900 29,24,500 Non-Current Investments 10 12,69,64,800 67,64,000 Deferred Tax Assets (Net) 11 11,49,996 12,48,617 Long-term Loans and Advances 12 3,57,73,416 3,83,43,869 Other Non-Current Assets 13 1,34,90,027 1,16,39,650 23,86,39,559 12,52,31,781 Current Assets Current Investments 14 61,28,083 0 Trade Receivables 15 1,39,39,728 1,47,91,551 Cash and Bank balances 16 40,49,64,182 55,35,91,040 Short-Term Loans and Advances 12 18,67,86,689 18,92,23,936 Other Current Assets 17 68,61,617 83,30,992 61,86,80,299 76,59,37,519 85,73,19,858 89,11,69,300 SIGNIFICANT ACCOUNTING POLICIES AND NOTES ON ACCOUNTS 1 to 45

55 Delhi Stock Exchange Limited CIN:U91120DL1947PLC001239 Consolidated Statement of Profit and Loss for the year ended 31st March, 2018 (Amount in `)

Particulars Note Year ended Year ended 31st March, 2018 31st March, 2017 Revenue from operations 18 34,96,589 34,58,831 Other Income 19 4,16,71,581 5,12,98,642 Total Revenue 4,51,68,170 5,47,57,473 Expenses: Employee Benefits Expense 20 95,83,107 88,98,141 Finance costs 21 2,79,927 74,062 Depreciation/Amortisation 9 53,65,641 63,26,600 Provision for Impairment 9 7,07,600 3,97,700 Other Expenses 22 1,80,52,981 1,86,88,583 Provision for Doubtful Debts 13,81,671 0 Total Expenses 353,70,927 3,43,85,086 Profit for the year before exceptional items and Tax 97,97,243 2,03,72,387 Exceptional Item [Employee State insurance (ESI) demand]31 25,92,363 0 Profit for the year before Tax 72,04,880 2,03,72,387

Tax expense: Provision for Taxation - Current 19,00,000 67,00,000 - Earlier Year 3,77,459 381 - Deferred 98,621 4,48,935 Profit/(Loss) for the year after Taxation 48,28,800 1,32,23,071

Earning Per Share: 24 Equity share of par value ` 1/-each Basic 0.16 0.44 Diluted 0.16 0.43 SIGNIFICANT ACCOUNTING POLICIES AND NOTES ON ACCOUNTS 1 to 45

56 Consolidated Financial Report 2017-18 CASH FLOW STATEMENT st For the year ended 31 March 2018 (Amount in `)

Year ended Year ended 31st March,2018 31st March,2017 A) CASH FLOW FROM OPERATION ACTIVITIES Net Profit/(Loss) before tax and Extraordinary Items 72,04,880 2,03,72,387 Adjustment for : Depreciation 53,65,641 63,26,600 Exceptional Items 25,92,363 0 Provisions for Doubtful debts 13,81,671 0 Interest on Income Tax 2,79,927 74,062 Provision for Impairment 7,07,600 3,97,700 Interest Income (3,42,80,146) (4,76,35,127) Rental Income (2,92,076) (7,84,080) Profit on redemption of mutual funds (32,452) 0 Operating Profit/-Loss before Working Capital Changes (1,70,72,592) (2,12,48,458) Adjustment for : Trade,other Receivables and loans and advances / 15,77,039 (16,70,17,224) Other Bank Balances Current and Non-current Liabilities (3,57,41,445) 292,63,166 Cash Generated from operation (5,12,36,997) (15,90,02,516) Income tax paid 52,86,809 48,72,568 Net Cash from Operation Activities (5,65,23,806) (16,38,75,084) B) CASH FLOW FROM INVESTMENTS ACTIVITIES Interest Income 3,42,80,146 476,35,127 Rental Income 2,92,076 7,84,080 Purchase of Fixed Assets (98,916) 1,828 Purchase of Investments (13,62,05,800) 0 Sale/Redemption of Investments 99,09,369 0 Net Cash used in Investing Activities (9,18,23,125) 4,84,21,035 C) CASH FLOW FROM FINANCING ACTIVITIES Income Tax (2,79,927) (74,062) Net Cash used in Financing Activities (2,79,927) (74,062) Net Increase in Cash & Cash Equivalents A+B+C (14,86,26,858) (11,55,28,111) Cash and Cash Equivalents 55,33,96,982 66,89,25,093 (Opening Balance) Cash and Cash Equivalents 40,47,70,124 55,33,96,982 (Closing Balance) Components of Cash and Cash Equivalents at the end of the year Balances with Banks In Current and Deposit Accounts 40,47,68,854 55,33,72,465 Cash-on-hand 1,270 24,517 Total (I) 40,47,70,124 55,33,96,982 Other Bank Balances Deposit with bank 1,94,058 1,94,058 Lien marked with Registrar of High Court Total (II) 1,94,058 1,94,058 Total Cash and Bank Balances (I+II) 40,49,64,182 55,35,91,040

As per our report on even date FOR AND ON BEHALF OF THE BOARD For P. BHOLUSARIA & CO. Chartered Accountants VIJAY BHUSHAN MAHENDER KUMAR GUPTA VINOD KUMAR GOEL Firm Regd. No. 000468N (CHAIRMAN) (DIRECTOR) (DIRECTOR) Amit Goel DIN:00002421 DIN:00039086 DIN:00989487 (Partner) M.No. 092648 SUNIL BHATIA HANS RAJ KAPOOR Place : New Delhi (Company Secretary) (DIRECTOR) Date : August 31, 2018 DIN:01194791

57 Delhi Stock Exchange Limited CIN:U91120DL1947PLC001239 NOTES FORMING PART OF ACCOUNTS SIGNIFICANT ACCOUNTING POLICIES AND NOTES TO ACCOUNTS ON CONSOLIDATED ACCOUNTS FOR THE YEAR ENDED 31ST MARCH, 2018 1. SIGNIFICANT ACCOUNTING POLICIES ON CONSOLIDATED ACCOUNTS 1.1 PRINCIPLES OF CONSOLIDATION The Consolidated Financial Statements relates to Delhi Stock Exchange Ltd. (the company) and its subsidiary company DSE Financial Services Ltd. The Consolidated Financial Statements have been prepared in accordance with Accounting Standard (AS-21) “Consolidated Financial Statements” on the following basis: 1.1.1 The Financial Statements of the Company and the subsidiary company have been combined on a line by line basis by adding together the book values of like items of assets, liabilities, income and expenses, after fully eliminating intra-group balances and intra-group transactions resulting in unrealised profit or losses. 1.1.2 As far as materially possible, the Consolidated Financial Statements have been prepared using uniform accounting policies for like transactions and other events in the similar circumstances and are presented to, in the same manner as the company’s separate financial statements. 1.2 OTHER SIGNIFICANT ACCOUNITNG POLICY a) BASIS OF PREPRATION OF FINANCIAL STATEMENTS i These financial statements are prepared in accordance with Indian Generally Accepted Accounting Principles (GAAP) under the historical cost convention on the accrual basis. GAAP comprises mandatory accounting standards as prescribed under Section 133 of the Companies Act,2013 (‘Act’) read with Rule7of the Companies (Accounts) Rules,2014 and the provisions of the Act. ii The preparation of Financial Statements in conformity with generally accepted accounting principles (GAAP) requires Management to make estimates and assumptions that affect the reported amount of assets and liabilities and the disclosure of contingent liabilities on the date of Financial Statements and reported amount of revenue and expenses for that year. Actual results could differ from these estimates. Any revision to accounting estimates is recognized prospectively in current and future periods. b) BASIS OF ACCOUNTING Income and Expenditure are accounted for on accrual basis, except to the extent stated otherwise. c) REVENUE RECOGNITION i Income is accounted for on accrual basis. Where the ability to assess the ultimate collection with reasonable certainty is lacking, revenue recognition is postponed to the extent of uncertainty involved as per Accounting Standard – Revenue Recognition (AS-9). ii Interest earned is recognized as income on accrual basis. d) INVESTMENTS Non Current/Long Term Investments are carried at cost and decline in value other than temporary, is provided for.Current investments are valued at lower of cost and fair value. e) FIXED ASSETS Fixed assets are stated at cost of acquisition including installation expenditure, if any less accumulated depreciation and impairment loss, if any. f) DEPRECIATION i Depreciation on tangible assets except Leasehold land is provided on Written down value method over the useful life of assets in the manner specified in Schedule II to the Companies Act, 2013. ii Leasehold land is amortized over unexpired period of lease. iii Intangible Assets viz., Softwares are amortised over a period of three years. g) EMPLOYEE BENEFITS Employee Benefits are recognized/accounted for on the basis of revised AS-15 detailed as under :- i Short term employee benefits are recognized as expense at the undiscounted amount in the 58 Consolidated Financial Report 2017-18 Notes forming part of Accounts... Statement of Profit & Loss for the year in which they are incurred. ii Employee benefits under defined contribution plans, comprises of contribution to Provident Fund. Contributions to Provident Fund are deposited with appropriate authorities and charged to Statement of Profit & Loss. iii Employee Benefits under defined benefit plans, comprises of gratuity and leave encashment, which are accounted for, as at the year end, based on actuarial valuation by following the Projected Unit Credit (PUC) method. Liability for gratuity is funded with Life Insurance Corporation of India. iv Termination benefits are recognized as an expense, as and when incurred. v The actuarial gains and losses arising during the year are recognized in the Statement of Profit & Loss for the year without resorting to any amortization. h) TAXATION Tax expenses for the year comprises of Current tax and Deferred tax charged or credited. The Deferred Tax Asset/Liability is calculated by applying tax rates and tax laws that have been enacted or substantially enacted by the Balance Sheet date. Deferred Tax Assets arising mainly on account of brought forward losses and unabsorbed depreciation under tax law are recognized only if there is virtual certainty of its realisation. Other Deferred Tax Assets are recognized only to the extent there is a reasonable certainty of realisation in future. Deferred Tax Assets/Liabilities are reviewed at each balance sheet date based on development during the year, further future expectations and available case laws to reassess realisation/liabilities. i) CONTINGENCIES: The company creates a provision when there is present obligation as result of a past event that probably requires an outflow of resources and a reliable estimate can be made of the amount of the obligation. A disclosure for a contingent liability is made when there is a possible obligation or a present obligation that may, but probably will not, requires an outflow of resources. When there is a possible obligation or a present obligation in respect of which the likelihood of outflow of resources is remote, no provision or disclosure is made.

2. SHARE CAPITAL (Amount in `)

Particulars As at As at 31st March, 2018 31st March, 2017 Authorised 100000000 (Previous Year 100000000) 10,00,00,000 10,00,00,000 Equity Shares of ` 1/- each 10,00,00,000 10,00,00,000 Issued 30320000 (Previous Year 30320000) 3,03,20,000 3,03,20,000 Equity Shares of ` 1/- each 3,03,20,000 3,03,20,000 Subscribed 30320000 (Previous Year 30320000) 3,03,20,000 3,03,20,000 Equity Shares of ` 1/- each 3,03,20,000 3,03,20,000

Paid up 30242000 (Previous Year 30242000) 3,02,42,000 3,02,42,000 Equity Shares of ` 1/- each fully paid up 3,02,42,000 3,02,42,000

59 Delhi Stock Exchange Limited CIN:U91120DL1947PLC001239 Notes forming part of Accounts...

- Issued Share Capital of the Company has only one class of shares referred to as equity shares having par value of ` 1/-. Each holder of Equity Shares is entitled to One vote per share. - In the event of the Liquidation of the company,the holder of equity shares will be entitled to receive any of the remaining assets of the exchange,after distribution of all Preferential amounts.The distribution will be in proportion to the number of equity shares held by the shareholders. - In certain Secretarial records of the Company, there is difference of 4000 equity shares in the paid up capital. The correct figure of paid up equity share is 30242000 shares of ` 1/- each as stated above. However, as per certain secretarial records, the total no. of shares are 30246000. The rectification in the secretarial records is pending. - The Dividend Proposed, if any, by the Board of Directors is subject to the approval of the Shareholders in the ensuing Annual General Meeting. No dividend has been proposed for the current year or for the previous year. - Reconcilation of the number of shares outstanding and amount of Share Capital as on 31st March, 2018 & 31st March, 2017 is as under: Particulars As at 31st March, 2018 As at 31st March, 2017 No. of shares Amount (```) No. of shares Amount (`) Number of shares at the beginning 3,02,42,000 3,02,42,000 3,02,42,000 3,02,42,000 Number of shares at the end 3,02,42,000 3,02,42,000 3,02,42,000 3,02,42,000 - There are no shareholders holding more than 5% shares in the company as at 31st March, 2018 & 31st March, 2017. 3. RESERVES AND SURPLUS (Amount in `)

Particulars As at As at 31st March, 2018 31st March, 2017 Capital Reserve-Opening Balance 51,35,66,587 51,35,66,587 51,35,66,587 51,35,66,587

Settlement Guarantee Fund Reserve (SGF)- 66,94,92,106 68,20,02,106 Opening Balance* Add:Transfer from Member settlement Reserve (as per contra) 0 30,00,000 Less: Refundable to brokers transferred to other 0 1,55,10,000 current liabilities in terms of SEBI Order (Refer Note no. 32) 66,94,92,106 66,94,92,106 Member Settlement Reserve-Opening Balance** 0 30,00,000 Less: Transfer to Settlement Guarantee Fund (as per Contra) 0 30,00,000 0 0 General Reserve-Opening Balance 5,77,717 5,77,717 5,77,717 5,77,717

Surplus -opening balance (43,75,50,511) (45,07,73,582) Add: Net Profit/(Loss) after tax transferred from 48,28,800 1,32,23,071 Statement of Profit & Loss Surplus-Closing balance (43,27,21,711) (43,75,50,511) 75,09,14,699 74,60,85,899

60 Consolidated Financial Report 2017-18 Notes forming part of Accounts...

* Settlement Guarantee Fund had been created with the objective of guarantee of the settlement of bonafide transactions of the members of the exchange, inter se, which formed part of the erstwhile exchange’s settlement system. Fund balance represents initial contribution of the exchange and certain collections made from the members and income on investments attributable to fund balances upto 31/03/2016 (Also refer Note no. 32) ** Created in earlier years by way of contribution by members. The objective was primarily the same as in case of Settlement Guarantee Fund, therefore transferred to Settlement Guarantee Fund Reserve in the previous year.

(Amount in `) 4. SHARE ALLOTMENT KEPT IN ABEYANCE Particulars As At As At 31st March, 2018 31st March, 2017 Share allotment kept in abeyance 1,56,000 1,56,000 1,56,000 1,56,000

Share allotment kept in abeyance represents amount of ` 78000/- each received from two persons during the Financial Year 2007-08. The same is pending allotment because of pending completion of legal formalties/ requirements by the applicant. Against the share application money, equity shares of face value of ` 1/- each, will be issued at par, in accordance with the provison of the Act and after completion of legal formalties/ requirements by the applicants such as production of Letter of Probate, Court Order, Succession certificate etc. No separate interest is payable on the amount. The present authorised share capital of the company is sufficient to cover the shares to be issued against the share allotment kept in abeyance. However, the issued Capital and consequently the subscribed capital will be required to be increased by 78000 Shares if all the 156000 Shares are allotted. As a precautionery measure and as a matter of prudence, the Company has made earmarked bank FDRs of equivalent amount of ` 156000/- in the name of the aforesaid applicants.

(Amount in `) Particulars As at As at 31st March, 2018 31st March, 2017

5. OTHER LONG TERM LIABILITIES Margin Money,Capital Adequacy Norms Deposits, 3,05,67,208 3,76,27,213 Earnest Money Deposit* Other Security Deposits 4,06,000 4,38,000 Payable for Capital contracts 15,21,509 34,80,619 Other Liabilities 24,69,241 27,72,489 3,49,63,958 4,43,18,321 * Net of admission fees receivable of ` 64,00,000/- (Previous Year ` 64,00,000/-)

61 Delhi Stock Exchange Limited CIN:U91120DL1947PLC001239 Notes forming part of Accounts...

6. PROVISIONS (Amount in `) Particulars As At 31st March, 2018 As At 31st March, 2017 Long Term Short term Long Term Short term Provisions For Employees Benefit Leave encashment 5,99,273 2,51,234 2,54,827 4,32,090 Gratuity 8,14,807 1,58,266 7,04,425 1,04,974 Others Income Tax 0 19,00,000 0 67,00,000 14,14,080 23,09,500 9,59,252 72,37,064

(Amount in `) Particulars As at As at 31st March, 2018 31st March, 2017

7. TRADE PAYABLES Credit balance of Clients 1,29,50,930 2,98,49,290 1,29,50,930 2,98,49,290

8. OTHER CURRENT LIABILITIES Investor Service Cell Fund-Payable to SEBI 13,61,406 13,61,406 Amount Refundable to brokers towards Settlement 98,10,000 1,55,10,000 Guarantee Fund (SGF / TGF) in terms of SEBI order (Refer Note no. 32) Margin from Sub-brokers 57,59,974 79,69,841 Book overdraft in Current accounts 38,457 21,022 Income Received in Advance 16,000 11,48,896 Statutory dues Payable 24,06,730 4,40,382 Expenses Payable 49,76,124 53,19,778 Other Liabilities 0 5,50,149 2,43,68,691 3,23,21,474

62 Consolidated Financial Report 2017-18 0 0 1 1

`) 2017 As on 21,81 21,81 20,735 31st March 7,30,505 2,09,524 3,22,292 4,46,736 35,39,133 29,24,500 29,24,500 2,47,66,279 3,42,74,865 6,42,89,334 6,72,35,644 Net Block 0 1 0 (Amount in As on 8,478 8,478 21,81 6,39,969 1,34,535 3,62,142 4,61,572 25,10,486 22,16,900 22,16,900 29,24,500 33,22,200 3,32,69,343 5,90,35,942 6,42,89,334 7,05,89,225 6,72,35,645 7,39,32,160 6,12,61,319 2018 2018 As at 1,15,960 4,36,167 2,97,749 31st March 31st March 22,62,944 69,08,692 82,45,929 69,08,692 68,85,859 92,27,641 2,1 3,19,54,654 4,91,08,759 2,16,57,895 1,18,63,820 9,46,25,407 9,46,25,407 9,39,17,807 13,45,13,623 12,91,70,815 22,99,74,481 23,60,47,722 for ment impair- 7,07,600 3,97,700 7,07,600 7,07,600 3,97,700 0 0 0 ment ment Adjust- Adjust- 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 tion Depreciation/Amortisation during during 8172 Deduc- 8,172 the year the year 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 the For year 2,664 90,536 74,989 22,833 32,066 22,833 17,037 10,28,647 31,08,384 10,05,522 63,09,563 53,42,808 63,26,600 53,65,641 Upto 2017 March 31 4,36,167 2,97,749 21,87,955 68,85,859 82,13,863 92,24,977 3,09,26,007 4,60,00,375 2,01,10,438 1,17,73,284 9,39,17,807 2018 As at March 31 4,36,167 2,97,749 23,97,479 69,17,170 86,08,071 69,17,170 68,85,859 69,07,670 68,68,822 96,89,213 3,44,65,140 7,07,66,654 5,43,85,303 1,25,03,789 9,68,42,307 9,68,42,307 9,39,17,807 9,68,42,307 9,35,20,107 19,34,60,149 12,28,69,424 19,35,49,565 12,91,70,815 29,72,10,126 22,32,58,353 29,73,09,042 22,99,74,481 0 0 0 0 0 0 0 ions during Deduct- the year 10,000 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 13

Accounts... during 1,500 9,500 9,500 the year 1 18,1 89,416 71,916 17,500 29,613 10,000 98,916 Additions Gross Block at Cost April 2017 As at 1st 4,36,167 2,97,749 23,97,479 69,07,670 85,36,155 69,07,670 68,89,557 96,71,713 3,44,65,140 7,07,66,654 5,43,85,303 1,25,03,789 9,68,42,307 9,68,42,307 9,68,42,307 19,34,58,649 19,34,60,149 29,71,90,513 29,72,10,126 s ork In allation & al W Asset s ear) ear ear ear ork in s Y Y Y Y ASSET angible rading System Assets T angible (A+B+C) al W s (B) s (A) twares al Capit aL al Int al T angible fice Equipment ehicles ot ot ot ot angible Particulars T Electric Inst T Buildings Land (Lease hold) Equipment Furniture & Fixtures Asset Previous V Int & Communication Equipment Sof Of T Asset Previous Online Computers & Peripherals Capit Progress T Liabrary Books (Previous Progress (C ) Previous T FIXED 3 A 2 1 4 5 B 1 6 9 7 C 8 9. Notes forming part of S. No.

63 Delhi Stock Exchange Limited CIN:U91120DL1947PLC001239 Notes forming part of Accounts...

9.1 Capital Work-in-Progress consists of amount paid for development of On-Line Trading Platform/ Data Centre and it comprises of following:- (Amount in `) Particulars As at As at 31 March,2018 31 March,2017

CAPITAL WORK IN PROGRESS Amount paid for development of Data Center 2,29,99,046 2,29,99,046 Paid for Hardware Equipments 3,09,03,158 3,09,03,158 Networking & Cabling 94,14,406 94,14,406 Other Expenditures 86,78,146 86,78,146 License/service fee paid for Customized Exchange 2,48,47,551 2,48,47,551 Technology and other License Fees Total Capital Work in Progress 9,68,42,307 9,68,42,307 Less:Provision for Impairment (9,46,25,407) (9,39,17,807) Balance 22,16,900 29,24,500 9.2 Provision for Impairment on capital work in progress has been made on the basis of Valuation Report by Independent Valuer. The total provision made is ` 94625407/- (Previous Year ` 93917807/-).In the opinion of management,the same has been made as a matter of prudence and to reflect a true and fair picture of the financial statements.

10. NON CURRENT INVESTMENTS (Amount in `)

Particulars Face As at 31st March,2018 As at 31st March,2017 Value Qty. Amount Qty. Amount (`) (Nos.) (in `)`)`) (Nos.) (in `)

LONG TERM INVESTMENTS (At Cost)) (Non Trade) (A) Investment in Equity Instruments (Quoted) -Fully Paid up Equity Shares Bombay Stock Exchange Limited 2 65000 67,64,000 65000 67,64,000 TOTAL A 65000 67,64,000 65000 67,64,000 (B) INVESTMENTS IN MUTUAL FUNDS (Unquoted) -FULLY PAID UP UNITS Aditya Birla Sun Life Credit Risk 10 4539642 6,00,00,000 0 0 Fund - Growth HSBC FTS 131- Growth Direct Plan 10 6000000 6,00,00,000 0 0 TOTAL B 10539642 12,00,00,000 0 0 (C) INVESTMENTS IN BONDS (Quoted, Fully paid up) 9.40% IFCI Bond 2025 1000 200 2,00,800 0 0 TOTAL C 200 2,00,800 0 0 TOTAL (A+B+C) 10604842 12,69,64,800 65000 67,64,000

64 Consolidated Financial Report 2017-18 Notes forming part of Accounts...

Aggregate cost of Quoted investments ` 69,64,800/-(Previous year ` 67,64,000/-) Market value of Quoted Investments ` 4,93,53,800/- (Previous year of ` 6,34,47,250/-) Aggregate cost of investment in mutual fund as on 31.03.2018 ` 1,20,000,000/- (previous year Nil). Net Asset Value thereof as on 31.03.2018 ` 1,20,609,489/- (previous year Nil).

11. DEFERRED TAX ASSETS (NET) (Amount in `) Particulars As at As at 31st March, 2018 31st March, 2017

Deferred Tax Asset Expenses allowable under Income Tax Act on payment basis 3,17,803 1,95,757 Expenses on VRS allowable under Income Tax Act 9,40,623 13,97,368 in subsequent years Less: Deferred Tax Liability Fixed Assets 1,08,430 3,44,508 11,49,996 12,48,617

12. LOANS AND ADVANCES (Amount in `) Particulars As At 31st March, 2018 As At 31st March, 2017 Long Term Short term Long Term Short term Unsecured, Considered Good, unless otherwise stated: Others Security Deposit with Government 2,98,73,000 0 3,22,15,510 0 Department and others Prepaid expenses/Advance 0 11,26,476 0 8,80,662 against expenses Amount paid to SEBI toward broker / 0 15,76,84,177 0 15,82,99,834 Sub broker fees (Refer Note no. 34) GST/Service Tax Recoverable 49,33,406 0 48,75,431 0 TDS/Income Tax refunds due 9,67,010 2,79,76,036 12,52,928 3,00,43,440 Recoverable from Financial Technologies (India) Ltd. (Refer Note No. 12.1) —Considered Doubtful 7,15,90,627 0 7,15,90,627 0 Less: Provision for Doubtful Advances -7,15,90,627 0 -7,15,90,627 0

3,57,73,416 18,67,86,689 3,83,43,869 18,92,23,936

65 Delhi Stock Exchange Limited CIN:U91120DL1947PLC001239 Notes forming part of Accounts...

12.1 The company had entered into a technology agreement in September 2008 with Financial Technologies (India) Ltd. (hereinafter referred to as “FTIL”) for availing license of its trading software. Due to various deficiencies/defects in the license/software and services, the agreement was terminated by the company in April 2011. The company had paid/incurred a sum of ` 7,80,13,317/- (` 7,15,90,627/- net of service tax) which includes payments made to FTIL, other expenses like travelling, Legal and Professional Charges etc., in connection therewith, and also service tax of ` 64,22,690/-. Consequent upon the termination of the agreement, the amount had been shown recoverable from FTIL. On the other hand, FTIL has made counter claim of further amount of ` 10,09,17,161/-. In the opinion of management, the claim of FTIL is not tenable at all and the management is hopeful of recovery of the full amount from FTIL. However,as a matter of prudence, provision for the amount of ` 7,15,90,627/- was made and charged in the Statement of Profit & Loss in the earlier year. (Amount in `)

Particulars As at As at 31st March, 2018 31st March, 2017

13. OTHER NON-CURRENT ASSETS FDR’s (including interest accrued) pledged with Stock Exchanges & other given as Security Deposits 1,33,90,027 1,14,27,792 Margin Deposit with Orbis Finanacial corporation Ltd. 1,00,000 2,11,858 (MCX- SX) 1,34,90,027 1,16,39,650

14. CURRENT INVESTMENTS (valued at lower of cost and fair value)

Particulars As At As At 31st March,2018 31st March,2017 No. of Amount No. of Amount Units in ` Units in ` Investment in Mutual Funds- (Unquoted, fully paid up) Non-Trade ICICI Prudential Saving Fund- Direct Plan-Growth* 13852 46,28,083 0 0 JM High Liquidity Fund (Direct)-Growth Option 31603 15,00,000 45455 61,28,083 0 0

* Includes ` 2,000,000/- for 5961 units paid on 21st March,2018 but units allotted on 4th April,2018. Net Asset Value as on 31.03.2018 ` 61,47,377/- (Previous year Nil).

66 Consolidated Financial Report 2017-18 Notes forming part of Accounts... (Amount in `)

Particulars As at As at 31st March, 2018 31st March, 2017

15. TRADE RECEIVABLES Outstanding for a Period exceeding six months Unsecured Considered Good 96,91,330 1,16,73,274 Considered doubtful 13,81,671 0 Less: Provision for doubtful debts -13,81,671 0 96,91,330 1,16,73,274 Others Debts Unsecured,Considered Good 42,48,398 31,18,277 1,39,39,728 1,47,91,551

16. CASH AND BANK BALANCES Cash & Cash equivalents Balances with Banks -In Current Accounts 44,32,972 3,08,47,708 -In Deposit Accounts* 40,03,35,882 52,25,24,757 Cash-on-Hand 1,270 24,517 Other Bank balances Deposit with bank** 1,94,058 1,94,058 40,49,64,182 55,35,91,040

* Balance with Banks in deposits accounts represents time deposits with bank which can be withdrawn by the company at any point of time without any penalty on Principal. Balance with banks in deposits accounts includes deposits of Rs. Nil/- (Previous year ` 99,00,000/-) With maturity of more then 12 months. ** lien marked with Registrar of High Court (Amount in `) Particulars As at As at 31st March, 2018 31st March, 2017

17. OTHER CURRENT ASSETS Interest accrued on bank deposits 35,15,853 27,45,719 Margin Deposit with IL&FS (for NSE (F&O)) 18,50,000 38,50,000 Advance charges paid to NSE 0 19,451 Rent Receivable 9,98,782 10,38,311 Recoverable from Customer Protection Fund 25,620 25,620 Other Receivables 3,15,362 4,95,891 Bank FDR earmarked against amount of Share Allotment 1,56,000 1,56,000 Kept in abeyance ( Refer Note No. 4)[Value with accrued interest as on 31/03/2018 Rs. 302386/- (Previous Year Rs. 282993/-)] 68,61,617 83,30,992

67 Delhi Stock Exchange Limited CIN:U91120DL1947PLC001239 Notes forming part of Accounts...

(Amount in `)

Particulars Year ended Year ended 31st March, 2018 31st March, 2017 18. REVENUE FROM OPERATIONS Brokerage Income (Net)* 27,21,768 27,75,185 Depository Income 7,40,501 6,70,723 Other Fees & Claims 34,320 12,923 34,96,589 34,58,831 * Net of ` 82,24,966/- (previous year ` 79,90,426/-) paid to Sub-brokers/ clearing member

19. OTHER INCOME Interest (Gross) on a)Fixed Deposits with banks 3,39,97,994 4,65,72,711 b)Others 2,82,152 3,42,80,146 10,62,416 4,76,35,127 Profit on sale/redemption of 32,452 0 Non-current Investments and current investments Distribution of Transfer deeds 75,390 1,20,784 Miscellaneous Income 9,48,569 16,60,998 Rent Income 2,92,076 7,84,080 Liability No Longer Required Written Back 42,20,569 2,52,653 Dividend Income on Long term/ 18,22,379 8,45,000 Non Current Investments 4,16,71,581 5,12,98,642

20. EMPLOYEE BENEFIT EXPENSES Salaries and Benefits 85,12,630 81,24,430 Contribution to Provident fund and Gratuity fund 6,83,352 4,73,447 Staff welfare 3,87,125 3,00,264 95,83,107 88,98,141

21. FINANCE COSTS Interest on Income Tax 2,79,927 74,062

2,79,927 74,062

68 Consolidated Financial Report 2017-18 Notes forming part of Accounts...

(Amount in `)

Particulars Year ended Year ended 31st March, 2018 31st March, 2017

22. OTHER EXPENSES Electricity and Water 43,17,829 35,97,521 Property Management Services 36,05,021 36,10,682 Repairs and Maintenance - Building 0 67,065 - Others 6,45,345 6,45,345 4,93,520 5,60,585 Rates & Taxes 8,36,106 8,21,017 Insurance 8,37,284 7,86,276 Sitting Fees 3,40,000 5,22,980 Communication 3,94,710 4,86,332 Auditor’s Remuneration 5,15,000 6,80,690 Legal and Professional 12,58,873 18,68,119 Connectivity 17,054 21,512 Settlement Fees & Clearing House Operation 8,05,796 7,79,260 Contribution to SEBI 0 25,00,000 Printing and Stationery 1,75,085 1,76,101 Travelling and Conveyance 1,07,595 3,42,214 Refund of Admission and other fees 2,19,783 0 Board and Committee Meetings 34,889 94,548 Vehicle Running and Maintenance 1,25,170 1,72,322 Bad debts/Advances/ Misc. Balances written-off 10,86,461 1,15,214 CSR Expenditure 9,08,264 0 Festival 1,12,721 1,34,192 General Meetings of Members 2,27,793 1,22,771 Claim/ Interest paid pursuant to court order 8,18,076 5,22,901 Miscellaneous 6,64,126 7,73,346

1,80,52,981 1,86,88,583

23. The accompanying Consolidated Financial Statement includes the accounts of Delhi Stock Exchange Ltd. and its following subsidiary:- Name of Company Country of Proportion of Financial Year Incorporation ownership interest ended and relationship

DSE Financial Services Ltd. India 100% subsidiary 31.03.2018

69 Delhi Stock Exchange Limited CIN:U91120DL1947PLC001239 Notes forming part of Accounts... 24. Earning Per Share pursuant to Accounting Standard (AS-20) “Earning Per Share”

Particulars Current Year Previous Year ``` ``` Net Profit/(Loss) after Tax as per Statement of 4828800 13223071 Profit and Loss Net Profit/(Loss) attributable to Equity Shareholders 4828800 13223071 Basic Earning Per Share Face Value Per Share (`) 1 1 Weighted Average Nos. of Equity Share Outstanding 3,02,42,000 3,02,42,000 Basic Earning per share (`) 0.16 0.44 Diluted Earning Per Share Face Value Per Share (`) 1 1 Weighted Average Nos. of Equity Share Outstanding 3,03,98,000 3,03,98,000 Diluted Earning per share (`) 0.16 0.43

25. CONTINGENT LIABILITIES AND COMMITMENTS (TO THE EXTENT NOT PROVIDED FOR) (a) Claims against the Group not acknowledged as debts:- ` 11,09,38,025 /- (Previous Year ` 27,38,58,088/-) (b) The Assessing Officer has disallowed the holding company claim of exemption under section 11 of Income Tax Act, 1961 from the Assessment Year 1996-97 to 1999-2000 and from Assessment Year 2001-02 to 2006-07.The total demands raised by assessing officer for these years were ` 31,44,40,999/- The Commissioner of Income Tax (Appeals) as well as Income Tax Appellate Tribunal (ITAT) upheld the claim of exemption by the Company for all the above years. As per the information available with the company, the Income Tax Department has filed appeal before Hon’ble High Court of Delhi against the decision of ITAT. 26. RELATED PARTY TRANSACTIONS 24.1 List of Related Parties with whom transactions have taken place and relationship: a) Key Managerial Personnel Mrs. Rachna Prakash (Company Secretary) Mr. Sunil Bhatia (Company Secretary) b) Directors Current Year Previous Year Mohinder Singh Mohinder Singh Shanker Singal Shanker Singal Sudhangshu S Biswal Sudhangshu S Biswal Vijay Bhushan Venkat Rao Mahender Kumar Gupta Mahender Kumar Gupta Vinod Kumar Goel Subhash C. Chugh Sanjeev Gandhi Anish Kumar Sharma I C Singhal I C Singhal Vijay kumar Gupta Vijay kumar Gupta Rajinder Kumar Goel c) Concerns in which directors are interested: Vijay Bhushan & Co. (Mr. Vijay Bhushan is Proprietor) Bharat Bhushan & Co. (Mr. Vijay Bhushan is Partner) Emmkay Share & Stock Brokers Ltd. ( Mr. Mahender Kumar Gupta is Director and Member) Vinod Kumar Goel & Co ( Mr. Vinod Kumar Goel is Proprietor)

70 Consolidated Financial Report 2017-18 Notes forming part of Accounts...

d) Relative of Director: Murari Lal Goel (Father of Mr. Vinod Kumar Goel)

26.2 Transactions during the year with Related Parties:- (Amount in `)

Sr. Name of the Related party Nature of Transactions Amount Amount No. Current Year Previous Year 1 Sunil Bhatia Remuneration paid 1109581 932984 2 Rachna Prakash Remuneration paid 356388 326684 Reimbursement of Expenses 0 27010 3 Mohinder Singh Sitting Fees paid 80000 135000 4 Venkat Rao Sitting Fees paid 0 120000 5 Anish Kumar Sharma Sitting Fees paid 0 115000 6 Shanker Singal Sitting Fees paid 20000 45000 7 Sudhangshu S Biswal Sitting Fees paid 30000 55000 8 Vijay Bhushan Sitting Fees paid 10000 0 9 Mahender Kumar Gupta Sitting Fees paid 45000 26480 10 Vinod Kumar Goel Sitting Fees paid 10000 0 11 Sanjeev Gandhi Sitting Fees paid 30000 0 12 Rajinder Kumar Goel Sitting Fees paid 55000 0 13 Vijay Kumar Gupta Sitting Fees paid 25000 7500 14 I C Singhal Sitting Fees paid 35000 12000 15 Subhash C Chugh Sitting Fees paid 0 7000 16 Vijay Bhushan & Co. Refund of Margin Deposits 12500 0 Turnover fees recovered 11753 0 17 Bharat Bhushan & Co. Refund of Margin and 64500 0 TGF Deposits Sub broker fees recovered 5000 0 18 Emmkay Share & Stock Refund of Margin and 199779 0 Brokers Ltd. TGF Deposits Cabin rent and other dues 900 0 recovered 19 Vinod Kumar Goel & Co. Refund of Margin and TGF 62500 0 Deposits Cabin rent and other dues 2566 0 recovered 20 Murari Lal Goel Refund of Margin and TGF 62500 0 Deposits Cabin rent and other dues 1929 0 recovered

27.1 DISCLOSURE PURSUANT TO ACCOUNTING STANDARD-15 (in case of Holding Company) Defined Contribution Plan Amount recognized as expense for defined contribution plans are as under: - Particulars Current Year Previous Year Head under which shown in Amount (```) Amount (```) Statement of Profit & Loss Contribution to 3,25,562 3,11,460 Contribution to Provident Fund Provident Fund and Gratuity Fund

71 Delhi Stock Exchange Limited CIN:U91120DL1947PLC001239 Notes forming part of Accounts...

Defined Benefit Plan Movement in net liability (Amount in `) Particulars Gratuity Leave Encashment (Funded) (Unfunded) Current Year Previous Year Current Year Previous Year Present value of obligations 14,45,035 22,14,612 5,47,588 6,76,893 as at beginning of the year (A) Interest Cost (B) 92,482 1,57,237 35,046 48,059 Past service cost (C) 572 Nil Nil Nil Current service cost (D) 1,29,760 1,18,412 1,07,168 1,05,485 Benefits paid (E) (2,42,308) (9,84,375) (35,600) (2,96,592) Actuarial loss/(gain) on 1,63,635 (60,851) 35,923 13,743 obligation (F) Present value of obligations as 15,89,176 14,45,035 6,90,125 5,47,588 at the end of the year (G=A+B+C+D-E+F) The amounts recognized in the Balance Sheet and the Statement of Profit & Loss are as follows : Particulars Gratuity Leave Encashment (Funded) (Unfunded) Current Year Previous Year Current Year Previous Year Present value of obligation (A) 15,89,176 14,45,035 6,90,125 5,47,588 Estimated fair value of plan 11,36,947 12,82,137 Nil Nil Assets (B) Net Liability/(Asset) (C=A-B) 4,52,229 1,62,898 6,90,125 5,47,588 Amounts in the Balance Sheet Liabilities/(Asset) 4,52,229 1,62,898 6,90,125 5,47,588 Amount charged to Profit & Loss Account Current Service Cost 1,29,760 1,18,412 1,07,168 1,05,485 Interest Cost 92,482 1,57,237 35,046 48,059 Past Service Cost 572 Nil Nil Nil Expected Return on Plan Asset (1,05,776) (1,62,284) Nil Nil Actuarial(Gain)/Loss 1,72,293 (39,561) 35,923 13,743 2,89,331 (73,804) 1,78,137 1,67,287 Head under which shown in the Contribution to Provident Fund Salaries and Benefits Statement of Profit & Loss and Gratuity Fund (Amount in `) The Actual Return on Plan Assets is as follows Particulars Gratuity Current Year Previous Year Actual return on plan assets 1,05,776 1,62,284

72 Consolidated Financial Report 2017-18 Notes forming part of Accounts... (Amount in `) Following are the Principal Actuarial Assumptions used as at the Balance Sheet date Particulars Gratuity Current Year Previous Year Discount Rate 7.40% 6.40% Expected Rate of Return on Plan Assets 7.65% 8.25% Salary Escalation Rate 10.00% 10.00% A reconciliation of the opening and closing balances of the fair value of plan assets Sl.No. Particulars Gratuity Current Year Previous Year i) Opening Fair Value of Plan Assets 12,82,137 19,43,519 ii) Expected Return on Plan Assets 1,05,776 1,62,284 iii) Contribution by the Employer Nil 1,81,999 iv) Benefits Paid (2,42,308) (9,84,375) v) Acturial Gain/(Loss) (8,658) (21,290) Closing Fair Value of Plan Assets 11,36,947 12,82,137

27.2 DISCLOSURE PURSUANT TO ACCOUNTING STANDARD-15 (in case of Subsidiary Company) I) Defined Contribution Plan As the provisions of the Employees Provident Fund and Miscellaneous Provisions Act, 1952 are not presently applicable to the Subsidiary Company, employer’s contribution during the year is ` NIL (previous year is ` NIL). II) Defined Benefit Plans a) Gratuity liability is accounted as per the company’s policy for employees who have completed six months as at Balance Sheet date, computed as per the provisions of the Payment of Gratuity Act, 1972. b) Leave encashment liability of employees is accounted for on accrual basis computed as per the Subsidiary company policy on the basis of last pay drawn at the end of the year. 28. DUE TO MICRO, SMALL AND MEDIUM ENTERPRISES To the extent information available with the Group, it has no dues to the Micro, Small and medium enterprises as at 31st March, 2018 and 31st March, 2017. 29. The Group is a small and medium sized company (SMC) as defined in the general instructions in respect of Accounting Standards notified under the Companies Act . Accordingly, the Group has complied with the Accounting Standards as applicable to a small and medium sized company. 30. Auditor Remuneration includes the following: (Amount in `) Current Year Previous year Statutory Audit Fees 4,00,000 4,00,000 Tax Audit Fees 10,000 70,000 Income Tax Matters 0 75,000 Others 25,000 49,690 Consolidation 50,000 50,000 Out of Pocket Expenses 30,000 36,000 5,15,000 6,80,690

73 Delhi Stock Exchange Limited CIN:U91120DL1947PLC001239 Notes forming part of Accounts...

31. Employee State Insurance Corporation had passed an order dated 15/07/1996 for the recovery of ` 10,20,565 towards contribution and interest. The Company had filed petition u/s 75 of ESI Act challenging the action of ESI Corporation. Vide order dated 12/10/2017 passed by Hon’ble SCJ-Cum- RC (Central), Tis Hazari Courts, Delhi, the petition of the Company has been dismissed. Consequently demand of ` 2592363 ( including interest) has been raised by the ESI Corporation. Sum of ` 5,10,250 was paid by the Company in the earlier year and the same was shown as advances. Balance of ` 20,82,113 was outstanding payable as at the year end. 32. As per Exit order no. WTM/ SR/ SEBI/ MRD-DSA/ 04/01/2017 dated January 23, 2017 passed by Whole Time member, SEBI, the company is to refund SGF / TGF deposit (refundable) to the stock brokers including their initial contribution / deposit to Settlement Gurantee Fund / Trade Gurantee Fund (SGF/ TGF). Accordingly amount of ` 1,55,10,000 as identified and certified by the management and also by Internal auditors of the Company, had been transferred during the previous year from Settlement Gurantee Fund (as shown in note no. 3- Reserve & Surplus) to Other Current liabilities (as shown in Note no. 8) 33. Litigation a) The Impact of pending litigation has been considered and disclosed in the Contingent Liabilities in Note No. 25 b) In addition,the Group is subject to legal proceedings and claims,which have arisen in the ordinary course of business.The group’s management does not reasonably expect that these legal claims and proceedings, when ultimately concluded and decided will have a meterial and adverse effect on the company’s results of operations or financial statements. 34. In terms of SEBI Circular No. CIR/MRD/DSA/14/2012 dated May 30,2012,Circular No.CIR/MRD/DSA/ 33/2012 dated December 13,2012 and Securities Contracts (Regulation) (Stock Exchanges and Clearing Corporations) Regulations, 2012 dated June 20,2012,and as approved by the members of the holding company in their meeting held on May 23,2014, the holding company had opted for exit through voluntary surrender of recognition as a Stock Exchange. SEBI Vide Letter No. MRD/DSA/DSEL/LR/ OW/10684/2015 dated April 17,2015 asked the holding company to comply with the following in order to exit from the business of stock exchange: i) To transfer the Investor Protection Fund,Investor Services Fund and 1% Security deposit available with DSEL including interest accrued on this amount till date to SEBI IPEF immediately. ii) To transfer the dues outstanding to SEBI including 10% of listing fee and the annual regulatory fee. iii) To transfer the outstanding registration fees of brokers/sub-brokers as specified in the SEBI (Stock Brokers and Sub Brokers) Regulations,1992 to till date. In terms of aforesaid letter of SEBI,the company had, remitted/transferred the balance of Investor Protection Fund,Investor Services Fund and 1% Security deposit to SEBI in the earlier year. However,with regard to amount of outstanding registration fee of brokers/sub-brokers,in the opinion of management,the company is not liable to pay the outstanding fees of brokers/sub-brokers,if any. The company wrote a letter dated July 13,2015 to SEBI stating that the company is not liable to pay the outstanding registration fees of brokers. Earlier SEBI informed the company about outstanding brokers/ subbrokers turnover fee amounting to ` 25,38,11,200. Subsequentely after several representations and meetings, SEBI re-calculated the brokers fee at ` 15,61,98,365 and sub-brokers fees at ` 22,11,500 totalling to `15,84,09,865 (inclusive of interest) as of September , 2016. SEBI informed the company the liability in respect of members which were party to the appeal in the matter of SEBI vs. Alliance Finstock Private Limited and their corresponding trensferees and the members which were party to the appeal in the matter of Association for welfare of Delhi Stock Brokers & Ors. vs. Union of India & Ors. (W.P.(C) 17349/2004 was under calculation and will be informed by SEBI separately. During the previous year, the Company had paid the aforesaid amount of ` 15,84,09,865. According to the

74 Consolidated Financial Report 2017-18 Notes forming part of Accounts...

management , the amounts have been paid to SEBI without prejudice to rights to get the refund of the amount from SEBI if excess amount has been paid. . Upto the Year end the Company has recovered amount of ` 7,25,688 (Previous year ` 1,10,031) from some brokers against the turnover fees/ sub- broker fee. The amount paid to to SEBI net of aforesaid recovery has been shown in note no. 11 of the Financial Statements. Subsequent to the year end, the Company has further recovered turnover fees/ sub broker fees of ` 25,67,791 ( including refund of ` 11,58,222 received from SEBI). In the opinion of management the company is also not liable for the liability of remaining amount of `15,51,16,386 (i.e. amount paid by it to SEBI less recovery made and refund received) as this amount of ` 15,51,16,386 will also be recoverable from the respective brokers/sub-brokers and, therefore, no provision for expense/liability is required to be made for the same. 35. SEBI vide order no. WTM/ SR/ SEBI/ MRD-DSA/ 04/01/2017 dated January 23, 2017 had passed exit order allowing the exit of the Company as stock exchange. In the opinion of management,the going concern concept of the company will not be impacted merely because of exit option through voluntary surrender of the recognition as a Stock Exchange ,as the company intends to continue as a corporate entity. 36. Additional information as per schedule III of the Companies Act, 2013. Name of the entity in the Net Assets Share in Profit/ Loss i.e Total assets minus total Liabilities As % of Amount As % of Amount consolidated consolidated net assets Profit/Loss 1 2 3 4 5 Parent Delhi Stock Exchange Limited 102.35 79,95,18,747 96.98 69,87,470 (102.39) (79,49,07,357) (97.10) (1,97,81,196) Subsidiary (Indian) DSE Financial Services Limited -2.35 -1,83,62,048 3.02 2,17,410 (-2.39) (-1,85,79,458) (2.90) (5,91,191) Total 100.00 78,11,56,699 100.00 72,04,880 (100.00) (77,63,27,899) (100.00) (2,03,72,387)

37. As per financial statements of Subsidiary Company, it is having a procedure for sending quarterly confirmation letters / accounts statements to its debtors / creditors and other parties as per the requirement of SEBI / Various Stock Exchanges. However confirmation in respect of debtors and creditors are still pending for reconciliations, and adjustments, if any, in this regard would be done in the year in which such reconciliations / confirmations take place. 38. (A) As per financial statements of Subsidiary Company, (A) Trade Receivables outstanding for more than six months aggregating to Rs. 86.29 Lakhs (Previous year Rs 87.48 lakhs) out of which Rs 69.08 lacs pertains to the debtors under litigation for which transactions have been stopped and balance confirmation as on 31st March 2018 have also not been obtained. In the opinion of the Management these balances are partially doubtful for recovery and hence provision for doubtful debts of Rs. 13.82 Lacs has been made in the books of accounts (being 20% on net outstandings of Rs. 69.08 lacs), even though awards under arbitration have been received in favor of the company and execution petitions have been filed in the court which are pending.

75 Delhi Stock Exchange Limited CIN:U91120DL1947PLC001239 Notes forming part of Accounts...

B) The company has not made provision for doubtful debts in respect of Trade Receivables outstanding other than litigation cases amounting to ` 17.21 Lacs (including ` 7.17 lacs & ` 0.60 lacs due from CDSL & MCX debtors respectively) for more than six months as neither any recovery process nor any legal action is initiated for the recovery of outstanding dues by the Company. However, these balances are good for recovery and necessary action for recovery has now been initiated and the amount would be fully recovered/adjusted in the financials year 2018-19. 39. As per financial statements of Subsidiary Company, due to uncertainty in realization of Delayed Payment Charges (DPC), levy on debtor’s under arbitration has not been recognized as per AS-9, the same has been accounted as income on actual realization basis. As such, a sum of ` 47,634 (previous year- ` 9,10,434) has been accounted as income realized on sale of shares belongs to sub-brokers and their clients who are under arbitration during the year 2017-18. 40. As per financial statements of Subsidiary Company,FDRs amounting to ` 15 Lakhs (Previous year ` 14 lakhs) have been pledged by Sub-Brokers with Bombay Stock Exchange Ltd. in the name of the subsidiary company as additional capital against margin as on 31.03.2018 without routing it through the books of the accounts of the subsidiary company and accordingly interest thereon are also not credited to the account. 41. During the year, the Holding Company has spent ` 9,08,264(Previous year ` Nil) on Corporate Social Responsibility (CSR activities) which it was required to spent in the previous year. 42. As per financial statements of Subsidiary Companiey, there are some unclaimed shares lying for more than 3 years in the Demat account of the Subsidiary Company, which do not belong to it and the board of directors of the Company is look into the matter. 43. The Group did not have any long term contracts including derivative contracts for which there were any material foreseeable losses. 44. Disclosure u/s 186(4) of the Companies Act, 2013: The detail of investments are given under the respective head. 45. Previous year’s figures have been regrouped/reclassified, wherever considered necessary to conform to the Current Year’s presentation.

76 22nd22nd AnnualAnnual ReportReport 20201717 -- 20201818

DSE Financial Services Ltd. (A subsidiary of Delhi Stock Exchange Limited) DSE Financial Services Ltd. (A subsidiary of Delhi Stock Exchange Limited)

Board of Directors and KMP’s

Chairman : Shri M. K. Gupta

Shareholder’s Director : Shri I. C. Singhal Shri Vinod Kumar Goel

Representative Director : Shri Sunil Bhatia

Company Secretary: Ms. Rachana Prakash

Statutory Auditors : Thakur, Vaidyanath Aiyar & Co. Chartered Accountants 221-223, Deen Dayal Marg, New Delhi-110 002

Bankers : Canara Bank HDFC Bank

Corporate Office : DSE House 3 /1, Asaf Ali Road New Delhi - 110 002

Registered Office : DSE Chambers 3 & 4/4B, Asaf Ali Road New Delhi - 110 002

78 Annual Report 2017-18

Notice to Members

NOTICE is hereby given that the Twenty Second Annual General Meeting of the Members of DSE Financial Services Limited will be held on Thursday, the September 27,2018 at 4:00 P.M. at the Board Room, DSE House, 3/1, Asaf Ali Road, New Delhi-110002 to transact the following business: ORDINARY BUSINESS : 1. To receive, consider and adopt the Audited Balance Sheet as at March 31, 2018 and the Statement of Profit & Loss for the year ended on that date and the Reports of Directors and Auditors thereon. 2. To appoint a Director in place of Shri Mahender Kumar Gupta , who retires by rotation and being eligible, offers himself for re-appointment.

Special Business : 3. Appointment of Statutory Auditor to fill casual vacancy: To appoint Auditors of the Company and to fix remuneration and if thought fit, to pass, with or without modification(s), the following Resolution as an Ordinary Resolution: “RESOLVED that pursuant to the provisions of Section 139,142 of the Companies Act, 2013 read with the Companies (Audit and Auditors) Rules, 2014 and other applicable provisions, if any, (including any statutory modification(s), clarifications, exemptions or re-enactments thereof for the time being in force) M/s SMA & Associates, Chartered Accountants ,Delhi bearing Registration number 009912N.with ICAI be and are hereby appointed as Statutory Auditors of the Company to fill the casual vacancy caused by the resignation of M/s. Thakur Vaidyanath Aiyar & Co, Chartered Accountants, (Firm Registration No: 000038N) “RESOLVED FURTHER that M/s. SMA & Associates, Chartered Accountants, (Firms Registration No 009912N, be and are hereby appointed as Statutory Auditors of the Company to hold office for a period of five years, from the conclusion of the 22nd Annual General Meeting of the Company, subject to ratification of the appointment by the Members at every Annual General Meeting at such remuneration as may be determined in consultation with the Auditors and duly approved by the Director of the Company.” “RESOLVED FURTHER THAT any of the Director or Company Secretary of the Company, be and are hereby authorized to do such acts, deeds and things and to file necessary e forms with the concerned RoC ,to give effect to the aforementioned resolution.” 4. Any other item with the permission of the Chair. By order of the Board of Directors For DSE Financial Services Ltd. Date: 27.08.2018 Corporate Office: Rachana Prakash 3/1, Asaf Ali Road Company Secretary New Delhi-110 002

NOTES: a. A member entitled to attend and vote is entitled to appoint a proxy and vote instead of himself and the proxy need not be a member. b. The instrument appointing the proxy should, however, be deposited at the Registered Office of the Company not less than forty-eight hours before the commencement of the Meeting. c. None of the Directors seeking re-appointment is related to any member of the Board of Directors or to any Management Personnel.

79 DSE Financial Services Ltd. (A subsidiary of Delhi Stock Exchange Limited)

EXPLANATORY STATEMENT PURSUANT TO SECTION 102 OF THE COMPANIES ACT , 2013

The Members of the Company at its 21st AGM held on Friday, 29th September 2017 had appointed M/s. Thakur Vaidyanath Aiyar & Co, Chartered Accountants, (Firm Registration No: 000038N as the Statutory Auditors of the Company to hold office from the conclusion of 21st AGM till the conclusion of 22nd Annual General Meeting of the Company.

M/s. Thakur Vaidyanath Aiyar & Co, Chartered Accountants, (Firm Registration No: 000038N vide their letter dated 26th August, 2018 have resigned from the position of Statutory Auditors of the Company, resulting into a casual vacancy in the office of Statutory Auditors of the Company as envisaged by section 139(8) of the Companies Act, 2013.

The Board of Directors at its meeting held on 27th August, 2018, pursuant to the provisions of Section 139(8) of the Companies Act, 2013, have appointed M/s SMA & Associates, Chartered Accountants ,Delhi bearing Registration number 009912N, to fill the casual vacancy and the Company needs to approve the appointment of M/s SMA & Associates, Chartered Accountants, in the General Meeting of the Company within three(3) months from the date of appointment by the Board. Hence, the Company has proposed their approval of the members in the Item No. 3 of the Notice for appointment of the Statutory Auditors.

The Company has received consent letter and eligibility certificate from M/s SMA & Associates, Chartered Accountants ,Delhi bearing Registration number 009912N, to act as Statutory Auditors of the Company in place M/s. Thakur Vaidyanath Aiyar & Co, Chartered Accountants, along with a confirmation that, their appointment, if made, would be within the limits prescribed under the Companies Act, 2013.

Further, a Special Notice has been received from a shareholder proposing the appointment of M/s SMA & Associates, Chartered Accountants ,Delhi bearing Registration number 009912N, as the statutory auditors of the company to hold office for a period of five years, from the conclusion of the 22nd Annual General Meeting of the Company.The Board recommends passing of resolution.

Accordingly, consent of the Members is sought for passing an Ordinary Resolution as set out in.

None of the Directors, Key Managerial Personnel and their relatives are in any way, concerned or interested, financially or otherwise, in the aforesaid Ordinary Resolution.

The Board recommends an Ordinary Resolution set out in the Notice for approval by the Members.

By order of the Board of Directors For DSE Financial Services Ltd. Date: 27.08.2018 Corporate Office: Rachana Prakash 3/1, Asaf Ali Road Company Secretary New Delhi-110 002

80 Annual Report 2017-18

Directors' Report

Dear Members, PERFORMANCE HIGHLIGHTS The Board of Directors hereby submits the 22nd Your directors are pleased to report that your Annual Report of the business and operations of Company has earned a net profit of ``` 2.18 Lakhs your company (‘the Company’ or ‘DFSL’), along with subsequent to the profit of ``` 5.91 Lakhs made the audited financial statements, for the financial during the previous financial year. year ended March 31, 2018. I. OPERATIONS TURNOVER Your Company is a member of the National During the year, the turnover (for and on behalf of Stock Exchange of India Limited (NSE) for cash clients/sub-brokers) of company is as under: and Future and Options Segments and of the (Amount in ` crores) Bombay Stock Exchange Limited for Cash Product 2017-18 % change 2016-17 Segment and MCX for Currency Derivatives. since Your Company is a Depository Participant (DP) last year with Central Depository Services Limited (CDSL). BSE (cash) 327.60 -15.24 386.54 There are 1256 no of active clients as on March NSE (cash) 962.96 +05.46 913.10 31, 2018 against 1090 last year who were NSE (F&O) 553.17 +55.60 355.53 trading showing an increase of 15.22 % during MCX-SX — —— the year. II. DEPOSITORY PARTICIPANT SERVICES Total 1843.73 +11.40 1655.17 The number of Demat accounts of your RESULTS OF OUR OPERATIONS Company has registered a modest increase of The standalone performance of the Company for the about 1.63 % to the tune of 3237 as on March financial year ended March 31, 2018 is summarized 31, 2018 from 3185 as on March 31, 2017. below: (Amount in ` Lakhs) DIVIDEND In view of the accumulated losses in previous years, Particulars 2017-18 2016-17 your Directors do not recommend any dividend for the Net Sales /Income 34.96 34.58 year ended March 31, 2018. from Business Operations Add: Other Income 38.47 36.69 TRANSFER OF UNCLAIMED DIVIDEND TO INVESTOR EDUCTION AND PROTECTION FUND Total Income 73.43 71.27 Less : Expenses 70.78 65.05 The provisions of Section 125(2) of the Companies Profit/(Loss) before 2.65 6.22 Act, 2013 do not apply as there was no dividend Depreciation declared and paid by the Company till date. Less Depreciation 0.47 0.32 TRANSFER TO RESERVES Profit/(Loss) after 2.18 5.91 In view of the accumulated losses in previous years, depreciation and the Company has not made any transfer to the reserves expenses during the financial year ended March 31, 2018. Less Current Income Tax — — Less Previous year — — DIRECTORS adjustment of Income Tax During the financial year 2017-18 the following Less Deferred Tax — — changes took place in the Board of Directors of Net Profit /Loss after Tax 2.18 5.91 the Company: Less:Dividend (including — — Interim if any and final) Mr. Vinod Kumar Goel was appointed as a Director of Net Profit after dividend the Company w.e.f. January 05,2018. and Tax 2.18 5.91 Mr. Vijay Kumar Gupta ceased to be Director of the Company w.e.f. January 05, 2018.

81 DSE Financial Services Ltd. (A subsidiary of Delhi Stock Exchange Limited) The Board places on record its appreciation for the of Statutory Auditor of the Company on 26th August valuable contribution made by the outgoing Director. 2018 resulting into casual vacancy. The Board of In accordance with the Companies Act, 2013, and Directors have appointed M/s SMA & Associates, Article of Association one of the Director, Mr. M. K. Chartered Accountants, Delhi bearing Registration Gupta retires by rotation and being eligible, offers number 009912N, to hold office till AGM , subject to himself for reappointment. Seeing his rich experience approval of the appointment by the Members at Annual of capital market, your board recommends his re- General Meeting at such remuneration as may be appointment. determined in consultation with the Auditors and duly approved by the Director of the Company. ANNUAL RETURN As required under Section 141 of the Companies Act, The extracts of Annual Return pursuant to the 1956, the Company has obtained from them a provisions of Section 92 read with Rule 12 of the confirmation to the effect that their appointment, if Companies (Management and administration) Rules, made, would be within the limits prescribed in the said 2014 is furnished in Annexure 1 and is attached to section. this Report. Further, a Special Notice has been received from a NUMBER OF BOARD MEETINGS CONDUCTED shareholder proposing the appointment of M/s SMA & DURING THE YEAR UNDER REVIEW Associates, Chartered Accountants, Delhi bearing Registration number 009912N, to as the statutory During the year, 5 Board Meetings were held details auditors of the company hold office for a period of five of which are given in Corporate Governance Report. years, from the conclusion of the 22nd Annual General DIRECTORS RESPONSIBILITY STATEMENT Meeting of the Company.The Board recommends passing of resolution. In accordance with the provisions of Section 134(5) of the Companies Act, 2013 the Board hereby submit its CORPORATE GOVERNANCE responsibility Statement:— Your Company has adopted high standard of Corporate (a) in the preparation of the annual accounts, the Governance principles by ensuring strict compliance applicable accounting standards had been of various SEBI Guidelines and Companies Act, 2013. followed along with proper explanation relating to A report on Corporate Governance for the year 2015- material departures; 16 is given as a separate statement and forms part of the Annual Report. (b) the directors had selected such accounting policies and applied them consistently and made MATERIAL CHANGES AND COMMITMENT IF ANY judgments and estimates that are reasonable and AFFECTING THE FINANCIAL POSITION OF THE prudent so as to give a true and fair view of the COMPANY OCCURRED BETWEEN THE END OF state of affairs of the company at the end of the THE FINANCIAL YEAR TO WHICH THIS financial year and of the profit and loss of the FINANCIAL STATEMENTS RELATE AND THE DATE company for that period; OF THE REPORT (c) the directors had taken proper and sufficient care No material changes and commitments affecting the for the maintenance of adequate accounting financial position of the Company occurred between records in accordance with the provisions of this the end of the financial year to which this financial Act for safeguarding the assets of the company statements relate on the date of this report. and for preventing and detecting fraud and other irregularities; CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS (d) the directors had prepared the annual accounts AND OUTGO on a going concern basis; and The provisions of Section 134(m) of the Companies (e) The directors had devised proper systems to Act, 2013 do not apply to our Company. There was no ensure compliance with the provisions of all foreign exchange inflow or Outflow during the year applicable laws and that such systems were under review. adequate and operating effectively. RISK MANAGEMENT POLICY AUDITORS The Company has a proper Risk Management The Auditors M/s. Thakur, Vaidyanath Aiyar & Co. Policy in place. Chartered Accountants, have resigned from the office DETAILS OF POLICY DEVELOPED AND 82 Annual Report 2017-18

IMPLEMENTED BY THE COMPANY ON ITS PARTICULARS OF EMPLOYEES CORPORATE SOCIAL RESPONSIBILITY There are no employees drawing remuneration in INITIATIVES excess of the limits prescribed under section 197of The Company has not developed and implemented the Companies Act, 2013 read with rule 5(1) of the any Corporate Social Responsibility initiatives as the Companies (Appointment and Remuneration of said provisions are not applicable. Managerial Personnel) Rules 2014, as amended. PARTICULARS OF LOANS, GUARANTEES OR AUDITOR’S OBSERVATION INVESTMENTS MADE UNDER SECTION 186 OF The comments on the opinion in the report of THE COMPANIES ACT, 2013 Auditors on the financial statements for the financial There were no loans, guarantees or investments year 2017-18 are as under: made by the Company under Section 186 of the 1. Compliance requirements of various exchanges Companies Act, 2013 during the year under review of which company is a member & SEBI. and hence the said provision is not applicable. 2. Process of recovery of dues from Clients/sub- PARTICULARS OF CONTRACTS OR brokers. ARRANGEMENTS MADE WITH RELATED In regard to the above mentioned matter : PARTIES 1. Management has already taken effective steps There was no contract or arrangements made with and controls and in this regard is hopeful that no related parties as defined under Section 188 of the further penalties would be levied on the Company. Companies Act, 2013 during the year under review. 2. Management also feels that more stringent COMPANY’S POLICY RELATING TO DIRECTORS steps are being taken for regular recovery of APPOINTMENT, PAYMENT OF REMUNERATION dues from clients. AND DISCHARGE OF THEIR DUTIES ACKNOWLEDGEMENTS The provisions of Section 178(1) relating to constitution Your Directors acknowledge with deep sense of of Nomination and Remuneration Committee are not appreciation for the guidance and co-operation applicable to the Company and hence the Company received from the Board and the management of Delhi has not devised any policy relating to appointment of Stock Exchange Ltd. Your Directors also acknowledge Directors, payment of Managerial remuneration, for the support and guidance received from Securities Directors qualifications, positive attributes, & Exchange Board of India(SEBI),Bombay Stock independence of Directors and other related matters Exchange (BSE), National Stock Exchange (NSE), as provided under Section 178(3) of the Companies Multi Commodity Exchange of India Ltd.(MCX), United Act, 2013. Stock Exchange (USE), National Securities Depository SUBSIDIARIES, JOINT VENTURES AND Ltd.(NSDL), Central Depository Services Ltd.(CDSL), ASSOCIATE COMPANIES Bankers, local administration and agencies and The Company does not have any Subsidiary, Joint patronage for the extended during the year. Your venture or Associate Company. directors express deep sense of gratitude for the cooperation extended by the sub brokers/ authorized DEPOSITS persons in improving the trading volumes and in The Company has neither accepted nor renewed ensuring the progress of your company year on year. any deposits under the Companies Act, 2013 during the year under review. For and on behalf of the Board of DECLARATION OF INDEPENDENT DIRECTORS DSE Financial Services Ltd. The Independent Director has given declaration that Mahender Kumar Gupta he meets the criteria of independence as laid down Chairman under section 149(6) of the Companies Act,2013. Ishwar Chand Singhal SHARES Director The Company has not bought back any of its securities and also not issued any Sweat Equity Shares during the year under review. Date: August 27, 2018 The Company has not provided any Stock Option Place: New Delhi Scheme to the employees. 83 DSE Financial Services Ltd. (A subsidiary of Delhi Stock Exchange Limited)

Corporate Governance Report

1. COMPANY’S PHILOSOPHY ON CORPORATE GOVERNANCE The Company believes that the Code prescribes only a minimum framework for governance of a business corporate framework. The company recognizes that transparency, disclosure, financial controls and accountability are the pillars of any good system of corporate governance. The Company pursues growth by adopting best corporate practices and disclosures in order to enhance the long term value and aspiration of stakeholders. Good Corporate Governance, apart from enhancing the image of Company, also helps in retaining stakeholders’ confidence on a sustainable basis. 2. BOARD OF DIRECTORS A. Composition and Category of Directors: The composition of the Board of the Company is governed by the Article of Association of the Company. The Directors can be nominated by Delhi Stock Exchange Limited. In addition there should be CEO who shall be Director on the Board. B. As on March 31, 2018 there were following Directors on the Board of the Company: Sr. Name of Director Nature of Directorship Date of Appointment No. 1 Mr. M.K. Gupta Trading Member Director 01.03.2016 2 Mr. I. C. Singhal Shareholder’s Director 09.09.2017 3 Mr.Vinod Kumar Goel Director 05.01.2018 4 Mr. Sunil Bhatia DSE Nominee Director 01.01.2014 C. In the financial year 2017-18, the attendance of Directors is as follows: Sr. Name of Director Date of Date of Meeting held Meetings No. Appointment Cessation during the tenure attended 1 Mr.M.K.Gupta 01.03.2016 - 5 5 2 Mr.I.C.Singhal 09.09.2017 - 5 5 3 Mr.Vijay Kr Gupta 09.09.2017 05.01.2018 4 4 4 Mr. Sunil Bhatia 01.01.2014 - 5 4 5 Mr.Vinod Kumar Goel 05.01.2018 - 1 0

Notes:-

Mr.Vinod Kumar Goel was appointed as a Directors of the Company w.e.f. January 05,2018.

Mr.Vijay Kr Gupta ceased to be a Director of the Company w.e.f. January 05,2018 .

84 Annual Report 2017-18

3. BOARD MEETINGS BOARD 134th 135th 136th 137th Adjourned 138th MEETING 137th Meeting Date 06.04.2017 17.05.2017 28.09.2017 03.11.2017 06.12.2017 10.01.2018

Time 03:30 P.M 04:00 P.M 05:00 P.M 04:00 P.M 04:00 P.M 04:00 P.M

Venue Board Room, Board Room, Board Room, Board Room, Board Room, Board Room, 3/1, 3/1, 3/1, 3/1, 3/1, 3/1, Asaf Ali Road, Asaf Ali Road, Asaf Ali Road, Asaf Ali Road, Asaf Ali Road, Asaf Ali Road, New Delhi-02 New Delhi-02 New Delhi-02 New Delhi-02 New Delhi-02 New Delhi-02

4. COMMITTEE MEETINGS

MEETING INTEREST & DPC COMMITTEE

Date 05th February 2018

Time 4:00 P.M

Venue Board Room,3/1,Asaf Ali road,New Delhi-02

PRESENT Mr. M.K.Gupta- Director Mr.Sunil Bhatia - Director OFFICIALS Mr.Surender Singh – Asst Manager Accounts

5. GENERAL BODY MEETINGS Location and time of last three AGMs are as follows:- For the 2014-15 2015-16 2016-17 Financial year

AGM 19th 20th 21st Date September 15, 2015 September 30, 2016 September 29, 2017 Time 4:00 P.M. 4:00 P.M 4:00 P.M Venue Board Room Board Room Board Room DSE House DSE House DSE House 3/1, Asaf Ali Road 3/1, Asaf Ali Road 3/1, Asaf Ali Road New Delhi-110002 New Delhi-110002 New Delhi-110002

Whether any special resolution was passed during last year through Postal Ballot : The rules of postal ballot are not applicable to the Company being an un-listed Company.

85 DSE Financial Services Ltd. (A subsidiary of Delhi Stock Exchange Limited) 6. DISCLOSURES i) During the year there have been no materially significant related party transactions that may have potential conflict with the interest of the company at large except trading by the Company in which a Board member is a director. ii) The Company has complied with the requirement of the SEBI and other regulatory authorities as applicable from time to time. iii) During the year 2017-18 the Company has paid Rs. 95,000/-(previous year Rs. 92,580/-) as sitting fees to the Directors.

6. GENERAL SHAREHOLDERS INFORMATION i) 22nd Annual General Meeting

Date & Time September 27, 2018 at 4.00 P.M. Venue Board Room, DSE House, 3/1 Asaf Ali Road, New Delhi -110002

ii) Financial Year: The Company’s financial year was from April 1st, 2017 to March 31st, 2018.

iii) Address for Correspondence: DSE Financial Services Limited DSE House, 3/1, Asaf Ali Road, New Delhi-110002. Phone No. 011- 46470000 Official website is http://www.dsefl.com and Investor’s Grievances I. D. is [email protected]

For and on behalf of the Board of DSE Financial Services Ltd. Mahender Kumar Gupta Chairman

Date : August 27, 2018 Ishwar Chand Singhal Place : New Delhi. Director

86 Annual Report 2017-18

Form No. MGT-9 EXTRACT OF ANNUAL RETURN as on the financial year ended on 31st March 2018 Pursuant to Section 92 (3) of the Companies Act, 2013 and Rule 12(1) of the Company (Management & Administration) Rules, 2014

I. REGISTRATION AND OTHER DETAILS:

i) CIN : U67110DL1996PLC079973

ii) Registration Date : 28/6/1996

iii) Name of the Company : DSE FINANCIAL SERVICES LIMITED

iv) Category / Sub-Category of the Company : Company Limited by shares

v) Address of the Regd. Office : DSE CHAMBERS & contact details 3 & 4/4B, ASAF ALI ROAD, New Delhi - 110002

vi) Whether listed company : No

vii) Name Address & Contact details : NIL of the Registrar & Transfer Agent, if any

II. PRINCIPAL BUSINESS ACTIVITIES OF THE COMPANY All the business activities contributing 10 % or more of the total turnover of the company shall be stated:-

Sl. Name and Description NIC Code of the % to total turnover No. of main products / services Product / service of the company

1 BROKING SERVICES FOR DEALING 6499 100 OF SHARES AND SECURITIES ON EXCHANGES

III. PARTICULARS OF HOLDING, SUBSIDIARY AND ASSOCIATE COMPANIES - S. Name and Address CIN / GLN Holding / % of shares Applicable No. of the Company Subsidiary held Section Associate

1. DELHI STOCK EXCHANGE U91120DL1947PLC001 HOLDING 100 2(87) LIMITED

87 DSE Financial Services Ltd.

IV. SHARE HOLDING PATTERN (Equity Share Capital Breakup as percentage of Total Equity) i) Category-wise Share Holding

Category of Shareholder No. of Shares held at the No. of Shares held % Change beginningof the year at the end of the year during the year

Demat Physical Total % of Demat Physical Total % of Total Total Shares Shares

(A) Promoters No change

1 Indian (a) Individuals/ HUF 6 6 0 6 6 0 (b) Central Government/ State Government(s) 0 0 0 0 0 0 0 0 © Bodies Corporates* 0 59994 59994 100 0 59994 59994 100 (d) Banks/FI 0 0 0 0 0 0 0 0 (e) Any Others(Specify) 0 0 0 0 0 0 0 0

Sub Total(A)(1) 0 60000 60000 100 0 60000 60000 100 2 Foreign a NRI/Individuals b Other /Individuals c Bodies Corporate d Banks/FI NIL e Any Others(Specify)

Sub Total(A)(2) Total Shareholding of Promoter and Promoter Group (A)= (A)(1)+(A)(2) 0 60000 60000 100 0 60000 60000 100 (B) Public shareholding 1 Institutions (a) Mutual Funds/ UTI (b) Banks/FI (c) Central Government/ State Government(s) (d) Venture Capital Funds (e) Insurance Companies NIL (f) FIIs (g) Foreign Venture Capital Funds (i) Any Other (specify)

Sub-Total (B)(1)

88 Annual Report 2017-18

2 Non-institutions (a) Bodies Corporate I Indian ii) Overseas (b) Individuals I i. Individual shareholders holding nominal share capital up to ` 1 lakh II ii. Individual shareholders NIL holding nominal share capital in excess of ` 1 lakhs (d) Any Other (specify)

Sub-Total (B)(2)

(B) Total Public Shareholding (B)= (B)(1)+(B)(2)

GRAND TOTAL (A)+(B)+( C ) 0 60000 60000 100 0 60000 60000 100

*DSE FINANCIAL SERVICES LTD. IS WHOLLY OWNED SUBSIDIARY OF DELHI STOCK EXCHANGE LTD.

(ii) Shareholding of Promoters Sl. NAME OF SHAREHOLDERS Shareholding at the Shareholding at the end % change No. beginning of the year of the year in share

1 DELHI STOCK EXCHANGE 60000 100 0 60000 100 0 NIL LIMITED

TOTAL 60000 100 0 60000 100 0 NIL

89 DSE Financial Services Ltd.

(iii) Change in Promoters’ Shareholding : No Change

Sl. Particulars Shareholding at the Cumulative Shareholding No. beginning of the year during the year No. of % of total No. of % of total shares shares of shares shares of the company the company

1 At the Beginning of the year 2 Date wise Increase / Decrease in Promoters Shareholding during the year specifying the reasons for increase / decrease NO CHANGE ( e.g. allotment / transfer / bonus / sweat equity etc) : 3 At the End of the year

(iv) Shareholding Pattern of TOP TEN Shareholders (other than Directors, Promoters and Holders of GDRs and ADRs):

Sr. For each of the Shareholding at the Shareholding at the No. Top 10 beginning of the year end of the year Shareholder’s No. of % of No. of % of Shares total Shares total Shares Shares of the of the company company 1. SUNIL BHATIA 1* 0 1 0 2. SALIL KUMAR 1* 0 1 0 3. Mrs. SEEMA PRADNANI 1* 0 1 0 4. MRS. NEETA LODHA 1* 0 1 0 5. V.K.YADAV 1* 0 1 0 6. Ms. RUCHI JAIN 1* 0 1 0

Total 6 0 0 6

*as nominee of Delhi Stock Exchange Ltd.

90 Annual Report 2017-18

(v) Shareholding of Directors & KMP : NIL

Sl. Shareholding at the Cumulative Shareholding No. end of the year during the year No. of % of total No. of % of total shares shares of shares shares of the company the company

V. INDEBTEDNESS :

Indebtedness of the Company including interest outstanding/accrued but not due for payment

Secured Loans Unsecured Deposits Total excluding Loans / Advances Indebted- deposits ness

Indebtedness at the beginning of the financial year i) Principal Amount ii) interest due but not paid iii) interest accrued but not due

Total (i+ii+iii)

Change in Indebtedness during the financial year * Addition * Reduction NIL

Net Change

Indebtedness at the end of the Financial Year i) Principal Amount ii) Interest due but not paid iii) Interest accrued but not due

Total (i+ii+iii)

91 DSE Financial Services Ltd.

VI. REMUNERATION TO KEY MANAGERIAL PERSONNEL A. Remuneration to Managing Director, Whole time director and/or Manager Sl. Particulars of Remuneration Name of the MD/WTD/Manager no

1 Gross Salary (a) Salary as per provisions contained in section 17(1) of the Income-tax Act, 1961 (b) Value of perquisites u/s17(2) of the Income-tax Act, 1961 (c) profit in lieu of salary under NIL section 17(3) of the Income-tax Act, 1961 2 Stock Option 3 Sweat Equity 4 Commission - as % of Profit 5 Others, please specify

Total A Ceiling as per the Act

B. REMUNERATION TO OTHER DIRECTORS:

Sl. Particulars of Remuneration Name of the Directors Total no Amount 1 Independent Director a) Fee for attending Board Committee Meeting b) Commission c) Other, Please Specify

Total (1)

2 Other Non-Executive Mr. M. K. Mr I. C. Mr. Vijay Mr. Vinod TOTAL Directors Gupta Singhal Gupta Kumar Goel AMOUNT

a) Fee for attending board Committee Meeting 35,000 35,000 25,000 0 95,000 b) Commission c) Other, Please Specify Total (2) 35,000 35,000 25,000 0 95,000 Total (B)=(1+2) Total Managerial Remuneration Overall Ceiling as per the Act

92 Annual Report 2017-18

C. REMUNERATION TO KEY MANAGERIAL PERSONNEL OTHER THAN MD/MANAGER/WTD

Particulars of Remuneration Key Managerial Personnel Sl. CEO Company CFO Total no. Secretary 1 Gross Salary (a) Salary as per provisions contained in section 17(1) of the Income-tax Act, 1961 3,56,388 3,56,388 (b) Value of perquisites u/s17(2) of the Income-tax Act, 1961 (c) profit in lieu of salary under section 17(3) of the Income-tax Act, 1961 2 Stock Option 3 Sweat Equity 4 Commission - as % of Profit 5 Others, please specify

Total 3,56,388 3,56,388

VII. PENALTIES / PUNISHMENT/ COMPOUNDING OF OFFENCES:

B. DIRECTOR Penalty NIL NIL NIL NIL Punishment NIL NIL NIL NIL Compounding NIL NIL NIL NIL

C. OTHER OFFICERS IN DEFAULT Penalty NIL NIL NIL NIL Punishment NIL NIL NIL NIL Compounding NIL NIL NIL NIL

 For and on behalf of the Board of Directors For DSE Financial Services Ltd. Date : 27-08-2018 Mahender Kumar Gupta Place: New Delhi Chairman

93 DSE Financial Services Ltd. (A subsidiary of Delhi Stock Exchange Limited)

FORM NO. AOC -2

(Pursuant to clause (h) of sub-section (3) of section 134 of the Act and Rule 8(2) of the Companies (Accounts) Rules, 2014.

Form for Disclosure of particulars of contracts/arrangements entered into by the company with related parties referred to in sub section (1) of section 188 of the Companies Act, 2013 including certain arms length transaction under third proviso thereto.

1. Details of contracts or arrangements or transactions not at Arm’s length basis.

SL. Particulars Details No. a) Name (s) of the related party & nature of relationship NIL b) Nature of contracts/arrangements/transaction NIL c) Duration of the contracts/arrangements/transaction NIL d) Salient terms of the contracts or arrangements or NIL transaction including the value, if any e) Justification for entering into such contracts NIL or arrangements or transactions’ f) Date of approval by the Board NIL g) Amount paid as advances, if any NIL h) Date on which the special resolution was passed NIL in General meeting as required under first proviso to section 188

2. Details of contracts or arrangements or transactions not at Arm’s length basis.

For and on behalf of the Board of DSE Financial Services Ltd. Mahender Kumar Gupta Chairman

Date : August 27, 2018 Ishwar Chand Singhal Place : New Delhi. Director

94 Annual Report 2017-18

Independent Auditor’s Report

To the Act, the accounting and auditing standards THE MEMBERS OF and matters which are required to be included in DSE FINANCIAL SERVICES LTD. the audit report under the provisions of the Act and the Rules made there under. We conducted 1. Report on Financial Statements our audit in accordance with the Standards on We have audited the accompanying financial Auditing, issued by the Institute of Chartered statements of DSE Financial Services Limited Accountants of India, as specified under Section (“the Company”), which comprise the Balance 143(10) of the Act. Those Standards require that Sheet as at March 31, 2018 and the Statement we comply with ethical requirements and plan of Profit and Loss for the year then ended, and a and perform the audit to obtain reasonable summary of significant accounting policies and assurance about whether the financial statements other explanatory information. are free from material misstatements. 2. Management’s Responsibility for the Financial An audit involves performing procedures to obtain Statements audit evidence about the amounts and disclosures in the financial statements. The procedures The Company’s Board of Directors is responsible selected depend on the auditor’s judgment, for the matters stated in Section 134(5) of the including the assessment of the risks of material Companies Act, 2013 (‘the Act’) with respect to misstatement of the financial statements, whether the preparation of these financial statements due to fraud or error. In making those risk that give a true and fair view of the financial assessments, the auditors considers internal position, financial performance of the Company financial control relevant to the Company’s in accordance with accounting principles preparation of the financial statements that give a generally accepted in India, including the true and fair view in order to design audit Accounting Standards specified under Section procedures that are appropriate in the 133 of the Act, read with Rule 7 of the circumstances but not for the purpose of Companies (Accounts) Rules, 2014. This expressing an opinion on whether the Company responsibility also includes maintenance of has in place an adequate internal financial controls adequate Accounting Standards in accordance system over financial reporting and the with the provisions of the Act for safeguarding of effectiveness of such controls. An audit also the assets of the Company and for preventing includes evaluating the appropriateness of and detecting fraud and other irregularities; accounting policies used and the reasonableness selection and application of appropriate of the accounting estimates made by the accounting policies; making judgments and Company’s Directors, as well as evaluating the estimates that are reasonable and prudent; and overall presentation of the financial statements. the design, implementation and maintenance of We believe that the audit evidence we have adequate internal financial control that were obtained is sufficient and appropriate to provide a operating effectively for ensuring the accuracy basis for our audit opinion on the financial and completeness of the accounting records, statements. relevant to the preparation and presentation of the financial statements that give a true and fair 4. Unqualified Opinion view and are free from material misstatement, In our opinion and to the best of our information whether due to fraud or error. and according to the explanations given to us, financial statements gives the information required 3. Auditor’s Responsibility by the Act in the manner so required and give a Our responsibility is to express an opinion on true and fair view, in conformity with the accounting these financial statements based on our audit. principles generally accepted in India: We have taken into account the provisions of

95 DSE Financial Services Ltd. (A subsidiary of Delhi Stock Exchange Limited) AUDITORS' REPORT....Contd.

a) in the case of the Balance Sheet, of the state outstanding other than litigation cases of affairs of the Company as at March 31, amounting to Rs. 17.21 Lacs (including Rs. 2018; 7.17 lacs & Rs. 0.60 lacs due from CDSL & b) in the case of the Statement of Profit and Loss, MCX debtors respectively) for more than of the profit for the year ended on that date; six months as neither any recovery and process nor any legal action is initiated for the recovery of outstanding dues by the c) in the case of the Cash Flow Statement, of Company. However, in the opinion of the the cash flows for the year ended on that date. Management these balances are good for recovery and necessary action for 5. Emphasis of Matter: recovery has now been initiated and the We draw attention in respect of: amount would be fully recovered/adjusted in the financials year 2018-19. 1. Note No. 1 of Annexure 1B of regarding preparation of the financial statements of 6. Report on Other Legal and Regulatory the company on the basis “as a going Requirements concern” despite the Holding company i.e 1. As required by the Companies (Auditor’s Delhi Stock Exchange Limited stands de- Report) Order, 2016 (“the Order”) issued by recognised as per the publication of the Central Government of India, in terms of notification of the Ministry of Finance sub section (11) of section of the Act, we have dated 15th March,2016. The Management given a statement in the Annexure on the of the Company has confirmed that de- matters specified in paragraphs 3 and 4 of recognition of the holding company, Delhi that order. Stock Exchange Limited (DSEL) from the business of the stock exchange will not 2. As required by section 143(3) of the Act, we affect the activities of the company “as a report that: going concern”. a) we have sought & obtained all the 2. Note No. 4(A) of Annexure 1B regarding information and explanations which to the Trade Receivables outstanding for more best of our knowledge and belief were than six months aggregating to Rs 86.29 necessary for the purpose of our audit; Lacs net of credit balances(Previous Year b) in our opinion proper books of account Rs 87.48 lacs) out of which Rs 69.08 lacs as required by law have been kept by the pertains to the debtors under litigation for Company so far as appears from our which transactions have been stopped and examination of those books; balance confirmation as on 31st March c) the Balance Sheet and Statement of Profit 2018 have also not been obtained. In the and Loss dealt with by this Report are in opinion of the Management these balances agreement with the books of account; are partially doubtful for recovery and hence provision for doubtful debts of Rs. d) in our opinion, the Balance Sheet and 13.82 Lacs has been made in the books of Statement of Profit and Loss comply with accounts (being 20% on net outstandings the Accounting Standards referred to in of Rs. 69.08 lacs), even though awards Section 133 of the Companies Act, 2013, under arbitration have been received in read with Rule 7 of the Companies favor of the company and execution (Accounts) Rules, 2014; petitions have been filed in the court which e) on the basis of written representations are pending. received from the directors as on March 31, 2018 and taken on record by the 3. Note No. 4(B) of Annexure 1B The company Board of Directors, none of the directors has not made provision for doubtful debts is disqualified as on March 31, 2018 from in respect of Trade Receivables

96 Annual Report 2017-18

being appointed as a director in terms of clauses ii (a), (b), (c) of the said order are not sub-section (1) & (2) of section 164 of the applicable to the Company. Companies Act, 2013; 3. The Company has not granted any loans, secured f) With respect to the adequacy of internal or unsecured to companies, firms or other financial controls over financial reporting parties covered in the register maintained under of the company and the operating Section 189 of the Companies Act, 2013. effectiveness of such controls, refer to our Accordingly, the provisions of clause iii (a), (b) of separate report in “Annexure B” the said order are not applicable to the company. g) with respect to the other matters to be included in the Auditor’s Report in 4. The Company has not given any loans to accordance with Rule 11 of the directors and no investments are made. Companies (Audit and Auditors) Rules, Accordingly the said clause is not applicable. 2014, in our opinion and to the best of our information and according to the 5. The Company has not accepted any deposits explanations given to us:- from the public and therefore, there is no question of contravention of the directives issued i. the Company has disclosed the by the Reserve Bank of India and the provisions impact of pending litigations in its of section 73 to 76 or any other relevant financial statements. provisions of the Companies Act, 2013 and rules ii. The requirement of transferring the framed there under. Fund to Investor Education and Protection Fund is not applicable to 6. The requirement of maintenance of cost records the company. as specified by the Central Government u/s 148(1) of the Companies Act, 2013 is not For Thakur, Vaidyanath Aiyar & Co. applicable on the company. Chartered Accountants Firm Regn. No. 000038N 7. According to the information and explanations given to us and the records of the Company Place : New Delhi (Anil Kumar Aggarwal) examined by us, the Company has generally Date: August 27, 2018 Partner been regular in depositing undisputed statutory M. No. : 087424 dues including Service Tax, Income Tax and other statutory dues as applicable to it with the appropriate authorities. No undisputed Statutory Annexure A to the Auditor’s Report dues were outstanding as at 31st March, 2018. 1. (a) The Company has maintained proper records 8. According to the records of the Company showing full particulars, including quantitative examined by us and the information and details and situation of fixed assets. explanations given to us, the Company has not (b) Fixed assets have been physically verified taken any loans from any banks and financial by the Management as on 31.03.2018 and institutions during the year. Accordingly, provisions discrepancies reported which are not of clause viii are not applicable. material, have been properly dealt in the books of accounts. In our opinion, the 9. The Company did not raise any money by way of frequency of verification is reasonable. initial public offer or further public offer (including debt instruments) and term loans (c) According to the information and during the year. Accordingly, paragraph 3 (ix) of explanations given to us and on the basis of the Order is not applicable. our examination of the records of the Company, there are no immovable properties 10. Based upon the audit procedures performed for which are held in the name of the Company. the purpose of reporting the true & fair view of the financial statements and as per the 2. The Company is not carrying any inventories information and explanations given by the either during the year or at the year end, thus management, we report that no fraud on or by

97 DSE Financial Services Ltd. (A subsidiary of Delhi Stock Exchange Limited) the company has been noticed or reported Annexure - B to the Auditors’ Report during the course of audit. Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the 11. According to the information and explanations Companies Act, 2013 give to us and based on our examination of the records of the Company, the Company has not 1. We have audited the internal financial controls paid/provided for managerial remuneration. over financial reporting of DSE financial services Accordingly this clause is not applicable. Limited as of 31 March 2018 in conjunction with our audit of the standalone financial 12. In our opinion and according to the information statements of the Company for the year ended and explanations given to us, the Company is on that date. not a Nidhi Company. Accordingly, paragraph 3(xii) of the Order is not applicable. Management’s Responsibility for Internal Financial Controls 13. According to the information and explanations 2. The Company’s management is responsible for given to us and based on our examination of the establishing and maintaining internal financial records of the Company, transactions with the controls based on the internal control over related parties are in compliance with sections financial reporting criteria established by the 177 and 188 of the Act where applicable and Company considering the essential components details of such transactions have been disclosed of internal control stated in the Guidance Note in the financial statements as required by the on Audit of Internal Financial Controls over applicable accounting standards. Financial Reporting issued by the Institute of Chartered Accountants of India (‘ICAI’). These 14. According to the information and explanations responsibilities include the design, give to us and based on our examination of the implementation and maintenance of adequate records of the Company, the Company has not internal financial controls that were operating made any preferential allotment or private effectively for ensuring the orderly and efficient placement of shares or fully or partly convertible conduct of its business, including adherence to debentures during the year. company’s policies, the safeguarding of its assets, the prevention and detection of frauds 15. According to the information and explanations and errors, the accuracy and completeness of given to us and based on our examination of the the accounting records, and the timely records of the Company, the Company has not preparation of reliable financial information, as entered into non-cash transactions with directors required under the Companies Act, 2013. or persons connected with him. Accordingly, paragraph 3(xv) of the Order is not applicable. Auditors’ Responsibility 16. The Company is not required to be registered 3. Our responsibility is to express an opinion on under section 45-IA of the Reserve Bank of the Company’s internal financial controls over India Act 1934. financial reporting based on our audit. We conducted our audit in accordance with the For Thakur, Vaidyanath Aiyar & Co. Guidance Note on Audit of Internal Financial Chartered Accountants Controls over Financial Reporting (the “Guidance Firm Regn. No. 000038N Note”) and the Standards on Auditing, issued by Place : New Delhi (Anil Kumar Aggarwal) ICAI and deemed to be prescribed under section Date: August 27, 2018 Partner 143(10) of the Companies Act, 2013, to the M. No. : 087424 extent applicable to an audit of internal financial controls, both applicable to an audit of Internal Financial Controls and, both issued by the Institute of Chartered Accountants of India. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable

98 Annual Report 2017-18

assurance about whether adequate internal disposition of the company’s assets that could financial controls over financial reporting was have a material effect on the financial statements. established and maintained and if such controls operated effectively in all material respects. Inherent Limitations of Internal Financial Controls over Financial Reporting 4. Our audit involves performing procedures to 7. Because of the inherent limitations of internal obtain audit evidence about the adequacy of the financial controls over financial reporting, including internal financial controls system over financial the possibility of collusion or improper reporting and their operating effectiveness. Our management override of controls, material audit of internal financial controls over financial misstatements due to error or fraud may occur reporting included obtaining an understanding of and not be detected. Also, projections of any internal financial controls over financial reporting, evaluation of the internal financial controls over assessing the risk that a material weakness financial reporting to future periods are subject to exists, and testing and evaluating the design the risk that the internal financial control over and operating effectiveness of internal control financial reporting may become inadequate based on the assessed risk. The procedures because of changes in conditions, or that the selected depend on the auditor’s judgment, degree of compliance with the policies or including the assessment of the risks of material procedures may deteriorate. misstatement of the financial statements, whether due to fraud or error. Opinion 5. We believe that the audit evidence we have 8. In our opinion, the Company has, in all material obtained is sufficient and appropriate to provide respects, an adequate internal financial controls a basis for our audit opinion on the Company’s system over financial reporting and such internal internal financial controls system over financial financial controls over financial reporting, subject reporting. to the need for improvement in Internal Control procedures especially in areas relating Meaning of Internal Financial Controls over to:- Financial Reporting (a) Compliance requirements of various 6. A company’s internal financial control over exchanges of which the company is a financial reporting is a process designed to member and SEBI. provide reasonable assurance regarding the reliability of financial reporting and the preparation (b) Process of recovery of dues from Clients/ of financial statements for external purposes in sub brokers, were operating effectively as accordance with generally accepted accounting at 31 March 2018, based on the internal principles. A company’s internal financial control control over financial reporting criteria over financial reporting includes those policies established by the Company considering the and procedures that (1) pertain to the essential components of internal control maintenance of records that, in reasonable detail, stated in the Guidance Note on Audit of accurately and fairly reflect the transactions and Internal Financial Controls Over Financial dispositions of the assets of the company; (2) Reporting issued by the Institute of Chartered provide reasonable assurance that transactions Accountants of India. are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and For Thakur, Vaidyanath Aiyar & Co. that receipts and expenditures of the company Chartered Accountants are being made only in accordance with Firm Regn. No. 000038N authorizations of management and directors of Place : New Delhi (Anil Kumar Aggarwal) the company; and (3) provide reasonable Date: August 27, 2018 Partner assurance regarding prevention or timely M. No. : 087424 detection of unauthorized acquisition, use, or

99 DSE Financial Services Ltd. (A subsidiary of Delhi Stock Exchange Limited) BALANCE SHEET as at March 31, 2018 CIN NO. U67110DL1996PLC079973 (Amount in `) Note No. As At As At 31.3.2018 31.3.2017

I. EQUITY AND LIABILITIES (1) Shareholder’s Funds (a) Share Capital 1 6,00,00,000 6,00,00,000 (b) Reserves and Surplus 2 (1,83,62,048) (1,85,79,458) (2) Non-Current Liabilities (a) Long-term borrowings - - (b) Long term provisions 3 5,20,844 6,46,501 (3) Current Liabilities (a) Trade payables 4 1,29,50,930 2,98,49,290 (b)Other current liabilities 5 1,33,13,963 1,65,71,163 (c) Short-term provisions 6 1,60,382 1,39,329 Total 6,85,84,071 8,86,26,825

II. Assets (1) Non-current assets (a) Fixed assets 7 (i) Property, Plant & Equipments 1,61,363 96,924 (ii) Intangible assets 8,478 21,811 (b) Non-current investments 8 69,64,800 67,64,000 (c) Other non-current assets 9 4,20,32,037 4,09,42,578 (2) Current assets (a) Trade receivables 10 1,14,95,923 1,18,65,601 (b) Cash and cash equivalents 11 39,11,831 2,43,79,606 (c) Other current assets 12 40,09,639 45,56,305 Total 6,85,84,071 8,86,26,825

Statement on Significant Accounting Policies Annexure 1 and Notes on Accounts referred to above form an integral part of Balance Sheet.

As per our report attached of even date. FOR THAKUR, VAIDYANATH AIYAR & CO. Chartered Accountants For and on behalf of the Board of Directors of Firm Regn. No. 000038N DSE Financial Services Ltd. Anil Kumar Aggarwal M.K. Gupta I. C. Singhal Vinod Kumar Goel Sunil Bhatia Partner Director Director Director Director M. No. 087424 DIN: 01194791DIN: 00898743 DIN: 00039086 DIN: 06793244 Place : New Delhi Rachana Prakash Date : August 27, 2018 (Company Secretary)

100 Annual Report 2017-18 STATEMENT OF PROFIT AND LOSS for the Year Ended March 31, 2018 CIN NO. U67110DL1996PLC079973 (Amount in `)

Note No. Year ended Year ended 31.03.2018 31.03.2017

(A) Revenue : Revenue from operations 13 34,96,588 34,58,831 Other Income 14 38,47,571 36,69,961 Total Revenue (A) 73,44,159 71,28,792 (B) Expenses : Operating Expenses 15 8,31,037 9,62,485 Employee benefit expense 16 35,39,597 34,19,490 Other expenses 17 13,19,571 21,16,995 Financial costs 18 7,064 6,670 Depreciation 7 47,809 31,960 Provision for Doubtful Debts 10 13,81,671 - Total Expenses (B) 71,26,749 65,37,600

Profit before exceptional and extraordinary items and tax(A-B) 2,17,410 5,91,191 Exceptional Items —— Profit before tax 2,17,410 5,91,191 Tax expense: Current Tax —— Deferred tax —— Profit for the year 2,17,410 5,91,191 Basic Earning per equity share of face value of 3.62 9.85 ` 1000 each Statement on Significant Accounting Policies Annexure 1 and Notes on Accounts referred to above form an integral part of statement of Profit and Loss

As per our report attached of even date. FOR THAKUR, VAIDYANATH AIYAR & CO. Chartered Accountants For and on behalf of the Board of Directors of Firm Regn. No. 000038N DSE Financial Services Ltd. M.K. Gupta I. C. Singhal Vinod Kumar Goel Sunil Bhatia Anil Kumar Aggarwal Partner Director Director Director Director M. No. 087424 DIN: 01194791DIN: 00898743 DIN: 00039086 DIN: 06793244

Place : New Delhi Rachcna Prakash Date : August 27, 2018 (Company Secretary)

101 DSE Financial Services Ltd. (A subsidiary of Delhi Stock Exchange Limited) CASH FLOW STATEMENT for the Year ended March 31, 2018 (Amount in `) Year ended Year ended 31st March, 2018 31st March, 2017

A) CASH FLOW FROM OPERATION ACTIVITIES Net Profit/(Loss) before tax and Extraordinary Items 2,17,410 5,91,191 Adjustment for : Depreciation 47,809 31,960 Provisions for Doubtful Debts,Gratuity, Leave encashment (14,86,275) 53,320 and employee benefits Interest Income (11,29,892) (9,37,402) Dividend Income (18,22,379) (8,45,000) Operating Profit/Loss before Working Capital Changes (41,73,327) (11,05,931) Adjustment for : Trade, other Receivables and loans and advances 12,08,556 (36,35,484) Current and Non-current Liabilities (2,01,55,560) 2,00,27,885 Cash Generated from operation (2,31,20,331) 1,52,86,470 Income tax paid — — Net Cash from Operation Activities (2,31,20,331) 1,52,86,470 B) CASH FLOW FROM INVESTMENTS ACTIVITIES Dividend Income 18,22,379 8,45,000 Interest Income 11,29,892 9,37,403 Purchase of Fixed Assets (98,916) (29,613) Investments in Bonds (2,00,800) — Sale of Fixed Assets — 1,828 Net Cash used in Investing Activities 26,52,555 17,54,618 C) CASH FLOW FROM FINANCING ACTIVITIES Net Increase in Cash & Cash Equivalents A+B+C (2,04,67,776) 17,041,088 Cash and Cash Equivalents 2,43,79,606 73,38,518 (Opening Balance) Cash and Cash Equivalents 39,11,831 2,43,79,606 (Closing Balance) Components of Cash and Cash Equivalents at the end of the year Balances with Banks In Current Accounts 39,10,685 2,43,72,227 Cash-in-hand 1,146 7,379 Total 39,11,831 2,43,79,606 Statement on Significant Accounting Policies and Annexure -1 Notes on Accounts referred to above form an integral part of Balance Sheet

As per our report attached of even date. FOR THAKUR, VAIDYANATH AIYAR & CO. For and on behalf of the Board of Directors of Chartered Accountants DSE Financial Services Ltd. Firm Regn. No. 000038N M.K. Gupta I. C. Singhal Vinod Kumar Goel Sunil Bhatia Anil Kumar Aggarwal Director Director Director Director Partner DIN: 01194791DIN: 00898743 DIN: 00039086 DIN: 06793244 M. No. 087424

Place : New Delhi Rachana Prakash Date : August 27, 2018 (Company Secretary)

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Annexure “1”

SIGNIFICANT ACCOUNTING POLICIES AND NOTES TO ACCOUNTS

Background: DSE Financial Services Limited (DFSL) is the wholly owned subsidiary company of Delhi Stock Exchange Limited. It has trading membership of both cash and Future & Options w.e.f. 13th July, 2009 segments of NSE, Cash segment of BSE.DFSL is also a depository participant of Central Depository Services (India) Limited. DFSL also provides all types of connectivity options for trading.

Basis of Preparation of Financial Statements: a) The Financial statements have been prepared “as a going concern” under the historical cost convention in accordance with generally accepted accounting principles (GAAP) in India, the accounting standards referred to in section 133 of the Companies Act, 2013, read together with paragraph 7 of Companies (Accounts) Rules, 2014 as applicable and the provisions of the Companies Act, 2013. The financial statements are prepared and presented in the revised Schedule III notified under Companies Act, 2013. b) The Company follows the mercantile system of Accounting and recognizes significant items of income and expenditure on accrual basis except to the extent stated otherwise. The accounting policies adopted in the preparation of financial statements are consistent with those of previous year.

A. SIGNIFCANT ACCOUNTING POLICIES 1. Use of Estimates The preparation of financial statements in conformity with the generally accepted accounting principles requires estimates and assumptions to be made that affect the reported amounts of assets and liabilities on the date of the financial statements and the reported amounts of revenues and expenses during the reported period. The estimates and assumptions used in the accompanying financial statements are based upon Management’s evaluation of the relevant facts and circumstances as on the date of financial statements. Actual results may differ from the estimates used in preparing the accompanying financial statements. Differences between the actual results and estimates are recognized in the period in which the results are known / materialize.

2. Revenue Recognition Revenue is recognized on accrual basis in accordance with AS – 9. However, delayed payment charges for default pay in and claims have been accounted for on cash receipt basis. Penalty levied by Exchange’s or others is provided on payment basis. NSE & BSE transaction charges levied, are being recovered from the clients hence entries are not disclosed in the statement of Profit & Loss.

3. Property, plant and equipment An item of property, plant and equipment that qualifies for recognition as an asset is stated at cost less accumulated depreciation and impairment losses, if any. Cost of acquisition comprises the purchase price and is inclusive of any directly attributable costs such as freight, duties, taxes, after deducting trade discounts and rebate, if any and all attributable expenditure required bringing the asset to its working condition for its intended use.

103 DSE Financial Services Ltd. (A subsidiary of Delhi Stock Exchange Limited) 4. Depreciation Schedule II to the Companies Act 2013 prescribes useful lives for assets. However, Schedule II allows companies to use higher/ lower useful lives and residual values if such useful lives and residual values can be technically supported and justification for difference is disclosed in the Financial Statements. The Management believes that depreciation rates currently used fairly reflect its estimate of the useful lives and residual values of fixed assets. Assets are depreciated on the basis of No. of Days in the useful life, on Written Down Value Method as given below, using the rates specified in Schedule II of the Companies Act, 2013: Particulars Useful lives (In years) Computer and Computer equipment 3 years Furniture and Fittings 10 years Servers and Networks 6 years Leasehold Improvement Over the lease period Office Equipment 5 years

Intangible assets are amortized over the estimated useful life of the asset. 5. Impairment of tangible and intangible assets The carrying amounts of assets are reviewed at each balance sheet date if there is any indication of impairment based on internal/external factors. An impairment loss is recognized wherever the carrying amount of an asset exceeds its recoverable amount. The recoverable amount is the greater of the asset’s net selling price and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value at the weighted average cost of capital. After impairment, depreciation is provided on the revised carrying amount of the asset over its remaining useful life.

6. Investments a. Current investments are stated at cost or fair value, whichever is lower. b. Non Current Investments – Investments in Equity Shares of BSE Limited, being long term, are stated at cost. Cost represents amount deposited for card based membership (Rs. 67.64 Lacs i.e 65,000 shares of face value of Rs. 2/- each) earlier against which allotment of shares have been made to the Company.

7. Provisions and Contingent Liabilities Provisions involving substantial degree of estimation in measurement are recognized when there is a present obligation as a result of past events and it is probable that there will be an outflow of resources. Contingent liabilities are not recognized but are disclosed in the notes. 8. Staff Benefits a) At present, the provisions of the Employees Provident Fund and Miscellaneous Provisions Act 1952 are not applicable to the company since the total number of employees is lesser than the minimum stipulated requirements of the Act. b) The company is making provision for Gratuity and Leave Encashment to staff as per Provisions of Payment of Gratuity Act, 1972 and Leave Rules of the company respectively.

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9. Taxation a. Tax expense for the year, comprising current tax and deferred tax is included in determining the net profit/ (loss) for the year. b. Deferred tax assets are recognized only if there is reasonable certainty that they will be realized and are reviewed for the appropriateness of their respective carrying values at each balance sheet date.

B. Notes to Accounts 1. Delhi Stock Exchange Limited (DSEL), the holding Company has opted to voluntarily exit from the business as Stock Exchange vide its letter dated May 24, 2014 to Securities Exchange Board of India (SEBI). Now the DSE officially stands de-recognized as per the publication of notification of Ministry of Finance in gazette of India dated March 15, 2016. However, de-recognition of the holding company, Delhi Stock Exchange Limited (DSEL) from the business of the stock exchange will not affect DSE Financial services Limited. Hence, the accompanying financial statements of the company have been prepared on the basis of “as a going concern”. 2. In the opinion of the Board, Sundry Debtors, current assets, loans and advances are approximately of the value stated if realized in the ordinary course of business, unless otherwise stated. 3. The Company is having a procedure for sending quarterly confirmation letters / accounts statements to its debtors and other parties as per the requirement of SEBI / Various Stock Exchanges. However confirmation in respect of debtors are still pending for reconciliations, and adjustments, if any, in this regard would be done in the year in which such reconciliations / confirmations take place. 4. A) Trade Receivables outstanding for more than six months aggregating to ` 86.29 Lacs net of credit balances(Previous Year ` 87.48 lacs) out of which ` 69.08 lacs pertains to the debtors under litigation for which transactions have been stopped and balance confirmation as on 31st March 2018 have also not been obtained. In the opinion of the Management these balances are partially doubtful for recovery and hence provision for doubtful debts of ` 13.82 Lacs has been made in the books of accounts (being 20% on net outstandings of ` 69.08 lacs), even though awards under arbitration have been received in favor of the company and execution petitions have been filed in the court which are pending. B) The company has not made provision for doubtful debts in respect of Trade Receivables outstanding other than litigation cases amounting to ` 17.21 Lacs (including ` 7.17 lacs & ` 0.60 lacs due from CDSL & MCX debtors respectively) for more than six months as neither any recovery process nor any legal action is initiated for the recovery of outstanding dues by the Company. However, these balances are good for recovery and necessary action for recovery has now been initiated and the amount would be fully recovered/adjusted in the financials year 2018-19. 5. Due to uncertainty in realization of Delayed Payment Charges (DPC), levy on debtor’s under arbitration has not been recognized as per AS-9, the same has been accounted as income on actual realization basis. As such, a sum of ` 47,634 (previous year- ` 9,10,434) has been accounted as income realized on sale of shares belongs to sub-brokers and their clients who are under arbitration during the year 2017-18. 6. FDRs amounting to Rs. 15 Lacs (Previous year Rs. Rs.14.00 lacs) have been pledged by Sub-Brokers directly with BSE Ltd. in the name of the company as Base Minimum Capital & Additional Margin as on 31.03.2018 without routing it through the books of the accounts of the company and accordingly interest thereon are also not credited to the account of the Company. 7. As per Accounting Standard 22 on “Accounting for taxes on income”, virtual certainty supported by conclusive evidence is necessary to credit deferred tax asset on unabsorbed losses under the income tax laws. The management do not foresee substantial profitability in the near future, thus no deferred tax asset is being created.

105 DSE Financial Services Ltd. (A subsidiary of Delhi Stock Exchange Limited) 8. Income tax refunds aggregating to ` 3.85 Lacs (net of ` 5.82 lacs received after 01.04.2018) for the prior years are still pending for recovery from the income tax department, for which effective action is initiated by the Management for the recovery. 9. There are some unclaimed shares (quoted value of ` 7.38 lacs as on 31.03.2018) lying for more than 3 years in the Demat account of the Company, which do not belong to it. The Board of Directors of the Company is looking into the matter and would take appropriate decisions shortly. 10. Director’s Remuneration- NIL There is no Whole time Executive Director in the Company during the Financial Year 2017-18 and immediately preceding Financial year. 11. The disclosures of “Employee Benefits “as defined in the Accounting Standard 15 are as under:- (i) Defined Contribution Plan As the provisions of the Employees Provident Fund and Miscellaneous Provisions Act, 1952 are not presently applicable to the Company, employer’s contribution during the year is Rs NIL (previous year is Rs NIL). (ii) Defined Benefit Plans a) Gratuity liability is accounted as per the company’s policy for employees who have completed six months as at Balance Sheet date, computed as per the provisions of the Payment of Gratuity Act, 1972 b) Leave encashment liability of employees is accounted for on accrual basis computed as per the company’s policy on the basis of last pay drawn at the end of the year. 12. As per AS-18, issued by The Institute of Chartered Accountants of India, the Company’s related parties and transactions with them are disclosed below: a) Relationship disclosure of related parties : Holding company Key Management Personnel (A) (B) Delhi Stock Exchange Ltd. Mrs. Rachna Prakash

b) Transactions with related parties: (Amount in `) Nature of transactions (A) (B) 31.03.2018 31.03.2018 (31.03.2017) (31.03.2017) Office Rent 25,200 - (5,56,003) Re-imbursement ofexpenses/electricity, 1,20,000 - Water charges and Maintenance (5,12,240) (27,010) Charges, etc. Remuneration Paid/ Payable - 3,56,388 (3,26,684) Amount payable 54,48,016 - (52,98,280)

13A. The information as required to be disclosed under the Micro, Small and Medium Enterprises Development Act, 2006 has been determined to the extent such parties have been identified on the basis of information available with the company, accordingly, there are no micro, small and medium enterprises, to whom the company owes dues.

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13B. As the company is covered under the definition of Small and Medium Enterprises (SME), the disclosure required under the mandatory accounting standards have only been furnished in the Notes to Accounts of the accompanying financial statements.

14. Annualized Earning per share has been calculated based on the net profit of ` 2,17,410 (Previous Year ` 5,91,191/-) and the weighted average number 60,000 of equity shares (Previous Year 60,000).

15. The management is of the opinion that there is no impairment of assets as contemplated in Accounting Standard 28.

16. Penalty of ` 18,536 has been paid during the year on account of delay submission of Net Worth Certificate. Regular Inspection by NSE for the year 2016-17 has been completed in that period only and DFSL has submitted the replies on the observations but the final report is still awaited.

17. Contingent Liability of ` 0.27 Lacs (being TDS defaults) appearing on TRACES Web Portal (previous year ` 5.47 Lacs).

18. Previous year figures has been regrouped/rearranged in the following heads which is necessary in order to make them comparable with the current year figures as per the requirement of Companies Act,2013. (Amt in `) Head Note Increase No. (Decrease) Trade Receivable 10 (7414338) Trade Creditors 4 (5779781) Other Current Liabilities- Margin from Sub-brokers 5 (1132964) Other Current Liabilities- Sub-brokerage payable 5 (501593)

Place : New Delhi Rachana Prakash Date : 27.08.2018 (Company Secretary)

107 DSE Financial Services Ltd. (A subsidiary of Delhi Stock Exchange Limited) NOTES ON ACCOUNTS

NOTE I SHARE CAPITAL (Amount in `) Particulars As At As At 31.03.2018 31.03.2017 AUTHORISED 2,50,000 (Previous Year 2,50,000) equity shares 25,00,00,000 25,00,00,000 of ` 1000/- (Previous Year ` 1000/-) each 25,00,00,000 25,00,00,000 ISSUED, SUBSCRIBED AND PAID UP 60,000 (Previous Year 60,000) equity shares 6,00,00,000 6,00,00,000 of ` 1000/- (Previous Year ` 1000/-) each fully paid up 6,00,00,000 6,00,00,000 a) List of persons holding more than 5 percent shares in the Company Equity Share Capital Name of the shareholder As At As At 31.03.2018 31.03.2017 No. of % No. of % shares holding shares holding Delhi Stock Exchange Limited - (including 6 Representative 60,000 100 60,000 100 Share Holders) b) Reconciliation of the number of shares outstanding at the beginning and at the end of the reporting period Equity Share Capital Particulars As At As At 31.03.2018 31.03.2017 Number of shares at the beginning of the year 60,000 60,000 Number of shares issued during the year NIL NIL Number of shares outstanding at the end of the year 60,000 60,000

NOTE 2 (Amount in `) RESERVES AND SURPLUS Particulars As At As At 31.03.2018 31.03.2017 General Reserve Opening balance (1,85,79,458) (1,91,70,649) Profit/(Loss) during the year 2,17,410 5,91,191 Closing Balance (1,83,62,048) (1,85,79,458)

108 Annual Report 2017-18 Notes on Accounts...contd.

(Amount in `) Particulars As At As At 31.03.2018 31.03.2017

NOTE 3 LONG TERM PROVISIONS Provision for Employee Benefits Provision for Gratuity 5,20,844 6,46,501 5,20,844 6,46,501 NOTE 4 TRADE PAYABLES Trade Creditors 1,29,50,930 2,98,49,290 1,29,50,930 2,98,49,290 NOTE 5 OTHER CURRENT LIABILITIES Security deposit from Sub-broker (for VSAT) 1,00,000 1,00,000 Margin from Sub-Brokers 57,59,974 79,69,841 Delhi Stock Exchange Ltd. 54,48,016 52,98,280 Book Overdraft in Current Accounts* 38,457 21,022 TDS Payable 72,715 1,53,715 Expenses Payable 5,51,182 7,32,425 Service Tax / GST Payable 1,33,219 1,38,813 Sub Brokerage Payable - 4,96,360 Stale Cheques 10,10,400 14,39,698 Payable to Sub-Broker Against FDR 2,00,000 2,00,000 Payable to Ex-Staff - 21,009

1,33,13,963 1,65,71,163 * Book overdraft is due to cheques issued but not presented, however no overdraft facility has been availed. NOTE 6 SHORT TERM PROVISIONS Provision for Leave Encashment 1,60,382 1,39,329

1,60,382 1,39,329

109 DSE Financial Services Ltd. (A subsidiary of Delhi Stock Exchange Limited) - - - - - 1 As At 8,727 21,81 20,735 96,924 13,084 13,169 22,823 30,739 ` 30,193 1,02,178 31.3.2017 - - - - - 1 NET BLOCK 8,478 7,047 1,431 As At Amount in 21,81 96,923 10,027 75,568 45,575 30,193 1,61,363 Upto 1,066 8,069 1,948 1,807 1 40,000 93,600 63,165 6,1 7,1 5,36,414 1,25,000 2,52,605 7,70,857 14,26,097 14,03,263 17,98,434 17,73,458 31.3.2018 31.3.2018 ------8,172 Sales during the Year ------the For Year 8,727 3,142 8,069 2,664 22,833 17,037 24,976 14,923 19,170 - Upto Dep. 5,029 6,037 1,948 1,807 6,1 7,1 31.3.2017 ACCUMULATED DEPRECIATION/AMORTIZATION 13 9,500 1,948 As At 18,1 40,000 40,000 93,600 93,600 73,192 60,023 6,1 5,36,413 5,27,687 1,25,000 1,25,000 3,28,174 2,33,435 8,16,432 7,68,193 7,42,000 14,34,574 14,03,264 14,25,074 13,86,226 19,59,798 17,73,458 18,70,382 17,66,706 31.3.2018 ------Sales 10,000 the Year ------13 the Year 9,500 1,500 9,500 during during 18,1 1 89,416 71,916 17,500 Additions - GROSS BLOCK AT COST 13 As At 1,948 18,1 40,000 93,600 73,192 6,1 5,36,413 1,25,000 2,56,258 7,98,932 7,42,000 1.4.2017 14,25,074 14,06,961 18,70,382 18,68,883 s t s s tware) tware tware Asset ear ear Y Y ,Plant & Equipment fice Livesof irus Sof al al angible fice Equipment ebsite ebtel Sof ot ot Anti V NOTE 7 FIXED ASSETS Previous T Previous W

T Firewall W Int Back Of CTCL BSE IM UD (Computer Sof Furniture & fixture Of Computers(End User Devices) Computers(Server & Network) Property Notes forming part of the Balance Sheet as at March31, 2018 Particulars

110 Annual Report 2017-18 Notes on Accounts...contd.

(Amount in `) Particulars As At As At 31.03.2018 31.03.2017 NOTE 8 NON-CURRENT INVESTMENTS 65,000 Equity Shares of BSE Ltd. 67,64,000 67,64,000 (Previous Year 65,000) of face value of ` 2/- each) Quoted Aggregate Market Value of Quoted 65,000 Shares @ ` 756.20 i.e. ` 4,91,53,000/- (Previous Year ` 6,35,47,250/-) Investment in 9.40% IFCI Bond 2025 2,00,800 -

69,64,800 67,64,000

NOTE 9 OTHER NON-CURRENT ASSETS Security Deposits (Interest Free) - National Stock Exchange India Ltd. 2,01,00,000 2,01,00,000 - National Securities clearing corporation Ltd. 34,00,000 34,00,000 - National Stock Exchange Ltd. 20,00,000 20,00,000 - National Stock Exchange Ltd.(Base additional capital) 15,00,000 15,00,000 - BSE Ltd.(Base capital) 2,00,000 2,00,000 - BSE Ltd.(Minimum Base capital) 1,25,000 6,00,000 - Central Depository Services(India) Ltd. 2,50,000 2,50,000

Margin deposits Margin Deposit with Orbis Financial corporation Ltd.(MCX-SX) 1,00,000 2,11,858

Fixed Deposits with: HDFC Bank -Pledged with BSE Ltd. as additional Capital- 91,00,000 76,00,000 including `10 lac in TGF FDR Pledged with BSE Ltd. (Base Minimum Capital) 4,75,000 — -Pledged with National Securities clearing corporation Ltd. 25,00,000 25,00,000 as Security and Margin -Pledged with National Securities clearing corporation Ltd. 10,00,000 10,00,000 as Security through IL&FS FDR Pledged with National Securities clearing corporation Ltd 2,00,000 2,00,000 by Sub-broker Interest Accrued on FDR’s with Banks 94,907 89,994 Interest Accrued on Deposit with IL&FS & Others 20,120 37,798 Income Tax Refund Due ( For Previous Years) 9,67,010 12,52,928 4,20,32,037 4,09,42,578

111 DSE Financial Services Ltd. (A subsidiary of Delhi Stock Exchange Limited) Notes on Accounts...contd.

(Amount in `) Particulars As At As At 31.03.2018 31.03.2017 NOTE 10 TRADE RECEIVABLES Unsecured, considered good (unless otherwise stated): Sundry Debtors Due for a period exceeding six months 72,47,525 87,47,324 Due for a period exceeding six months - considered doubtful13,81,671 - Others 42,48,398 31,18,277 1,28,77,594 1,18,65,601 Less: Provision for Doubtful Debts (20% of ` 6908357 (13,81,671) - net O/S under Litigation Branches 1,14,95,923 1,18,65,601

NOTE 11 CASH AND CASH EQUIVALENTS Cash in hand 1,146 7,379 Balances with banks: In Current accounts* Capital Market 36,39,405 CDSL 2,71,280 39,10,685 2,43,72,227 39,11,831 2,43,79,606

* Book Overdraft in Current Accounts is shown under other current liabilities “Note 5”.

NOTE 12 OTHER CURRENT ASSETS

Margin Deposit with IL&FS 18,50,000 38,50,000 (for National Stock Exchange Ltd.-F&O) TDS Recoverable(Current Year) 96,095 92,917 Prepaid Expenses 2,48,182 98,046 Advance Charges Paid to NSE — 19,451 Sebi sub-brokers registeration fee recoverable — 1,24,432 Other Receivables 3,15,362 3,71,459 Investment in Mutual Fund with JM Financial 15,00,000 — 40,09,639 45,56,305

112 Annual Report 2017-18 Notes on Accounts...contd.

(Amount in `) Particulars Year ended Year ended 31.03.2018 31.03.2017 NOTE 13 REVENUE FROM OPERATIONS Brokerage Income 1. CASH SEGMENT Bombay Stock Exchange Ltd. - Transactions Gross Receipts 35,48,327 Less : Paid to Sub-Brokers 27,47,763 8,00,564 10,01,389 National Stock Exchange Ltd. - Transactions Gross Receipts 68,73,091 Less : Paid to Sub-Brokers 51,21,208 17,51,883 16,69,335 2. DERIVATIVE SEGMENT - F&O National Stock Exchange Ltd. - Transactions Gross Receipts 5,25,315 Less : Paid to Clearing Member (IL&FS) 14,828 Less : Paid to Sub-Brokers 3,41,167 1,69,320 1,04,461 Depository Income 7,40,501 6,70,723 Misc. Income 34,320 12,923

34,96,588 34,58,831

NOTE 14 OTHER INCOME Interest Income 11,29,892 9,37,402 STCG on sale of Mutual Fund 9,369 — Amount written back-Liabilities No longer required 5,129 2,52,653 Dividend Income 18,22,379 8,45,000 Delayed Payment Charges* 8,80,802 16,34,906

38,47,571 36,69,961

113 DSE Financial Services Ltd. (A subsidiary of Delhi Stock Exchange Limited) Notes on Accounts...contd.

(Amount in `) Particulars Year ended Year ended 31.03.2018 31.03.2017

NOTE 15 Opreating Expenses Depository Charges paid to CDSL & ILFS 4,37,460 4,05,907 Connectivity Charges 2,82,986 2,89,263 Broad Band Charges 17,055 21,512 Annual Subscription & other charges to NSE Ltd. 75,000 75,000 Dotex Now Charges (Net) — 3,052 Penalty for Non Compliance 18,536 1,67,751

8,31,037 9,62,485

NOTE 16 EMPLOYEE BENEFIT EXPENSES Salary to Staff 30,74,314 29,18,919 Ex-Gratia — 2,10,886 Leave Travel Allowance 65,362 61,158 Grauity 68,459 88,183 Leave Encashment 1,23,030 18,867 Staff Welfare 2,08,432 1,21,477

35,39,597 34,19,490

NOTE 17 Other Expenses Rent Expenses 25,200 5,56,003 Electricity & water expenses( Includes ` 1,20,000 to DSE) 140,592 4,54,516 Legal &Professional Charges -Internal / System / Concurrent Audit/Physical 95,100 1,01,700 -Tax Audit 10,000 10,000 -Others professional charges 54,260 74,874 -Certification Charges 23,574 30,198 Auditor Remuneration : -Audit Fees 1,00,000 1,00,000 -Certification work 25,000 25,000

114 Annual Report 2017-18 Notes on Accounts...contd. (Amount in `) Particulars Year ended Year ended 31.03.2018 31.03.2017

Web Maintenance exp 2,965 9,405 Conveyance Expenses 38,799 68,069 Sitting Fees to Directors 95,000 52,980 Travelling & Conveyance to Directors - 39,600 Printing & Stationery Charges 82,039 65,841 Filing Fees 10,818 50,021 Processing Fee for DIR 16,000 - Postage & Courier Charges 99,551 22,150 Repair & Maintenance Charges 13,920 88,895 Computer Expenses & AMC Charges 1,28,471 90,846 Telephone Expenses 74,435 51,565 Office Expenses 1,40,096 1,50,981 Subscription / Membership Fees to ANMI 13,000 13,000 Misc.Expenses 55,489 59,837 Interest on TDS 11,508 1,514 Prior Period Expenses 63,7534 -

13,19,571 21,16,995

NOTE 18 FINANCIAL COSTS Bank Charges 7,064 6,670 7,064 6,670

As per our report attached of even date. FOR THAKUR, VAIDYANATH AIYAR & CO. Chartered Accountants Firm Regn. No. 000038N For and on behalf of the Board of Directors of DSE Financial Services Ltd. Anil Kumar Aggarwal Partner M.K. Gupta I. C. Singhal Vinod Kumar Goel Sunil Bhatia M. No. 087424 Director Director Director Director DIN: 01194791DIN: 00898743 DIN: 00039086 DIN: 06793244 Place : New Delhi Date : August 27,2018 Rachana Prakash (Company Secretary)

115