Corporate Information Chairman Registered Office Mr Bhaskar Sen 7, Lyons Range Public Interest Director Kolkata ‐ 700 001 Registrar & Share Transfer Agents Managing Director & CEO C B Management Services (P) Limited Mr. Subrato Das (w.e.f. 20/05/2016) P‐22, Bondel Road, Kolkata ‐ 700 019 Tel. (033) 40116726 Public Interest Directors Dr. Bhaskar Banerjee Bankers Prof. Partha Ray Axis Bank HDFC Bank Limited United Bank of India Auditors Shareholder Directors S.R. Batliboi & Co. LLP Mr. Ravi Poddar Chartered Accountants Mr. Sanjay Budhia Mr. Mohan Goenka Internal Auditors Mr. Purushoam Saraf Singhi & Co. Chartered Accountants Solicitors Victor Moses & Co. Sinha & Co. Ninety-three Annual General Meeting Day : Thursday Date : September 29th, 2016 Venue : Stock Exchange Building, 7 Lyons Range, Kolkata ‐ 700001 Time : 4.30 pm Book‐Closure : September 23rd, 2016 to September 29th, 2016 (Both days inclusive) CONTENTS Directors' Report ... 3 Management Discussion … 22 Report on Corporate Governance ... 26 Cerficate on Corporate Governance ... 34 Independent Auditors' Report ... 35 Financial Statements ... 42 Independent Auditors’ Report on consolidated financial statements ... 74 Statements relang to Subsidiary Company ... 79 Board of Directors The Calcutta Stock Exchange Limited Bhaskar Sen Chairman, Public Interest Director Dr. Bhaskar Banerjee Prof. Partha Ray Public Interest Director Public Interest Director Ravi Poddar Sanjay Budhia Mohan Goenka Purushottam Saraf Shareholder Director Shareholder Director Shareholder Director Shareholder Director Subrato Das Managing Director & CEO ANNUAL REPORT 2015-16 NOTES TO FINANCIAL STATEMENTS AS AT AND FOR THE YEAR ENDED MARCH 31, 2016 DIRECTORS’ REPORT 1. Audited Results : 1.1 Financial Highlights During the year under review : Dear Shareholders, The total income of the Exchange on a stand‐alone basis was Rs. 1895.84 Lacs. During the year the The Board of Directors of The Calcutta Stock Exchange Exchange has recognized income from listing fees only Limited (the 'Exchange / Company / CSE') take great in respect of Companies which are paying the fees pleasure in presenting the 93rd Annual Report for the regularly. The profit after tax for the financial year Financial Year 2015‐16 together with the Audited Financial 2015‐16 was Rs. 308.26 lacs, which is lower than the Statements for the Year ended 31st March, 2016. last year's profit after tax of Rs. 399.74 lacs due to Consolidated performance of the Company and its lower income on account of interest/dividend and subsidiaries has been referred to wherever required. extra‐ordinary items written back in the last year. Financial Highlights [Rupees in Lakh] Standalone Consolida ted 2015 ‐16 2014 ‐15 2015 ‐16 2014 ‐15 Total Income 1895.84 2122.37 1948.14 2168.14 Total Expenses 1392.54 1504.19 1406.72 1513.12 Profit before Depreciation 503.30 618.18 541.42 655.02 Depreciation 64.20 88.77 64.36 88.77 Profit before Tax 439.10 529.41 477.06 566.25 Provision for Tax 130.84 129.67 142.86 140.26 Profit after Tax 308.26 399.74 334.20 425.98 Less Transfer to : Income (net of expenses) related (2.47) 62.44 (2.47) 62.44 to pre‐demutualization period transferred to General Reserve Investor Service Fund 70.82 64.84 70.82 64.84 Settlement Guarantee Fund 167.11 184.61 167.11 184.61 Profit Attributable to Equity 72.80 87.84 98.74 114.08 Shareholders Profit brought forward from last 306.02 404.81 409.41 481.96 year Surplus before appropriation 378.82 492.65 508.15 596.04 Appropriated to: General Reserve 30.00 40.00 30.00 40.00 Proposed Dividend 122.25 122.20 122.25 122.20 Tax on Proposed Dividend 24.89 24.43 24.89 24.43 Surplus carried to Balance Sheet 201.68 306.02 331.01 409.41 1.2. Appropriations: 2015‐16, which if approved at the forthcoming Annual 1.2.1 Dividend: General Meeting, shall be paid to those members Your Directors have recommended Rs. 20/‐ per equity whose names appear in the Registrar of Members as share on the face value of Re. 1/‐ for the financial year on the date of Book Closure. A sum of Rs. 147.14 lacs 3 The Calcutta Stock Exchange Limited will be the outflow towards the payment of dividend The Exchange updates the action taken to resolve the including dividend distribution tax. Investors' Grievances in 'SCORES 'regularly. 1.2.2 Transfer to Reserves: 6. Investor Awareness and Education: The Exchange proposed to transfer Rs.30,00,000/‐ The Exchange continuing its efforts to reach large (Rupees Thirty Lacs) to the General Reserve out of Rs. number of participants to create financial inclusion 378.82. lacs available for appropriations in standalone conducted 194 awareness programmes during the accounts. financial year that have reached more than 14000 2. Business Development & New Initiatives at CSE: people including students across different parts of During the year CSE has commenced NISM Test Centre Eastern India. at CSE from August 2015 and it is attracting large The "CU‐CSE Centre of Excellence in Financial number of candidates not only from this Region but Markets" launched the "Basic Certification Course in also from entire north‐eastern region. The Company Financial Markets' a five day programme, with a view has appointed NISM, an Educational Initiative of SEBI to educate students about the basics of finance and for suggesting ways forward for the business investment. The centre continues to conduct seminars, development of the Company in the form of a workshops and also publishes news letters on the comprehensive document on Business Plan. capital markets and the recent happenings in the 3. Operations: financial sector. The Exchange is continuing to provide trading CSE undertook commendable efforts and continue to opportunity to its members to trade in Capital Market extend Investor Awareness, Research and Literacy and F&O segments of both BSE and NSE under Section Program in collaboration with Calcutta University, 13 of Securities Contract (Regulation) Act, 1956. Listing Centre for Social Studies, and Indian Institute of at CSE has seen an inflow of companies from other Management, Calcutta with strategic tie ups. RSEs. During the year 13 Companies listed with other 7. Code of Conduct for Directors: RSEs have been listed at CSE under Direct Listing To outline the Exchange's value and principles and to norms of CSE. Revenue collection of Listing set out the standards for professional and ethical Department during the Financial Year 2015‐16 was Rs. behavior, the Code of Conduct for Directors, as 4.96 Cr as against Rs. 4.93 Crore in the Financial Year recommended by SEBI, has been adopted by the 2014‐15. CSE has approved Voluntary Delisting of 62 Exchange. These are applicable to all Directors. All the Companies under S E B I Voluntary Delisting Directors of the Exchange have affirmed compliance to Regulations. At the end of 31st March 2016 there are the Code for the financial year ending March 31, 2016. 2500 companies listed with the Exchange. A copy of the Code has been put on the Company's 4. Depository Services: website: www.cse‐india.com. CSE Capital Markets Pvt. Ltd. (CCMPL), the wholly 8. CSE Board Structure and Governance: owned subsidiary company of CSE has commenced Pursuant to SECC Regulations 2012 notified by SEBI on depository operations of both CDSL and NSDL. June 20, 2012, the Governing Board of every 5. Investors' Services: recognized stock exchange shall include: The Exchange, being a Self Regulatory Organization has (a) Public Interest Directors taken significant strides in protecting the interest of (b) Shareholder Directors; and investors and also to promote education of investors in (c) Managing Director & CEO the capital markets. The number of public interest directors shall not be The Investor Services Cell of the Exchange takes care of less than the number of shareholder directors in a complaints received from investors against the listed recognized stock exchange. According to SECC corporate entities and/or against trading members and Regulations as referred above, presently there are no assists in resolving complaints at the earliest. This goes Trading Members or their associates and agents on the a long way in restoring Investors' confidence in the Board of Directors of the Exchange. capital markets. Additionally, the Exchange also takes an active part in resolution of Investor Grievances for Managing Director & CEO: complaints uploaded on SEBI's online complaint On the basis of recommendation of the Selection resolution system called "SCORES". Committee, the Board recommended the name of Mr. Subrato Das to SEBI for its approval for appointment as 4 ANNUAL REPORT 2015-16 Managing Director. SEBI has accorded its' consent and 9. Change in constitution / name of the Board approval vide its letter dated 31st March, 2016 for Committees: appointment of Mr. Subrato Das as Managing Director In accordance with SEBI Circular dated December 13, cum Chief Executive Officer. The Board has accordingly 2012 on procedural norms on recognition, ownership appointed Mr. Subrato Das as Managing Director and and governance for Stock Exchanges and Clearing CEO with effect from 20th May, 2016. Corporations, new Committees were constituted by Public Interest Directors: the Board of CSE. The details of Committees formed, Mr. Prasad Ranjan Ray and Mr. Dipankar Chatterji, meeting details and attendance of Directors in the Public Interest Directors ceased to be so upon the meetings of the various committees form part of expiry of their respective terms on and from 30th Corporate Governance Report annexed to the November, 2015 and 13th January, 2016. Mr. Bhaskar Directors' Report. The Company is not required to Sen, Dr. Bhaskar Banerjee and Prof. Partha Ray appoint statutory committees enunciated under the continue to act as Public Interest Directors of the provisions of Section 178 read with Rule 6 of the Companies (Meetings of the Board and its Powers) Exchange.