Overview of NSDL1.

PREFACE
ONE CAN LEARN MORE ABOUT A ROAD BY TRAVELLING IT,

“THAN BY CONSULTING ALL THE MAPS IN THE WORLD”.
As apart of degree of MBA, every student has to undergo for training in a

commercial organization. With the help of this training research students come to
know that how the academic knowledge is applied in actual business situation.
They also come to know about the working conditions under which they will have
to work in the near future.
In our SUMMER TRAINING REPORT we studied, “STUDY ON NSDL” We must

forewarn the readers that this project is not a work of excellence by a scholar. It
is a student attempt to watch, record, analyze and understand the business
activities and practical aspects of business by applying his/her theoretical
knowledge and concepts. Even then we dare to say that we made the best
possible attempt to accomplish this work.
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Acknowledgement
“Our personalities are based on the foundation of
education teachers who are next to god”
It is by the grace of Almighty that we have been able to present this humble piece of
work for which we are extremely indebted to him.
It is glad to present our project report on “Study of NSDL”.
To start with,we would like to thank Mr.Jagjit Singh Arneja(Sr. Manager& Head
Training Dept.) Mr. Satwant singh (Depository Section), Mr. Dinesh Joshi (LSE
Commodities Tradin
g Services Ltd.), Mr.Narayan (Listing Section), Mrs. Sangeeta Gupta(Personnel
Department), Mr. Ravinder Rana (legal section),Mr.Shammi Kohli (Computer
Section) and Mr. H.N.Paul(Account Section) for there sincere advice and whole-
hearted co-operation and support.
We express our sincere thanks and a sense of gratitude to special people for there
valuable guidance and for their kind support through out the project which we
can’t forgot in whole life.
Special thanks to the Managing director Mr.H.S.Sidhu for letting us to join LSE for
getting training over here.
And our warmest thanks to one and all including our family and friends who helped
and assisted us in various capacities during the various activioties.
Shwetank Gupta
(Mata Gujri College,Fatehgarh sahib)
Rajeev kumar
(G.N.I.M.T. Model Town,Ludhiana)
Gurvinder Singh
(D.I.M.T. Doraha)
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Stock Exchange
According to the securities contract act 1956, define stock exchange as the body
of individuals, whether incorporated or not, constituted for the purpose of
assisting, regulating or controlling the business of buying, selling and dealings in
securities.
Thus, the stock exchange is the place or market where securities, share,
debentures, bonds or mutual funds of various joint stock companies, central,
state or semi govt., organizations, local bodies and foreign govt. are bought and
sold.The stock exchange is never center of capital market .it reflects the hopes ,
aspirations and fears of people regarding the performance of economy.
A stock exchange, share market or bourse is a corporation or mutual
organization which provides facilities for stock brokers and traders, to trade
company stocks and other securities. Stock exchanges also provide facilities for
the issue and redemption of securities, as well as, other financial instruments and
capital events including the payment of income and dividends. The securities
traded on a stock exchange include: shares issued by companies, unit trusts and
other pooled investment products and bonds. To be able to trade a security on a
certain stock exchange, it has to be listed there. Usually there is a central
location at least for recordkeeping, but trade is less and less linked to such a
physical place, as modern markets are electronic networks, which gives them
advantages of speed and cost of transactions. Trade on an exchange is by
members only. The initial offering of stocks and bonds to investors is by definition
done in the primary market and subsequent trading is done in the secondary
market. A stock exchange is often the most important component of a stock
market. Supply and demand in stock markets is driven by various factors which,
as in all free markets, affect the price of stocks
Origin and development of Stock Exchange

The earliest records on security dealings indicate that trading in securities in
India was vogue as early as 1793.
There was as major increase in the volume of trading only
during the 19th century thanks to the enactment of Indian company’s act 1850
which introduced the concept of limited liabilities and the out break of American
civil war which created huge demand for Indian cotton in Europe and which
resulted in substantial export earning of country. The earnings were channeled
into capital market. As the consequences the security market drew the attention
of tremendous investor’s issue of shares 7impart speculation in the outstanding
share of the existing company but when the American civil war came to end in
1853, there was disastrous slump in the capital market.This slump resulted in
great disenchantment with the stock market & the criticism of broker community.
The broker relies that investor interest in the security market can be sustained
only by organizing themselves into well regulated body with definite rules and
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regulations. this lead to the formation of the “The native share and stock broker
association” in 1857, which later came to called as “Bombay Stock Exchange”.
The formation of BSE was followed by one
being set up as Ahmedabad by 1894 7 the other at Calcutta in 1908. In 1956 the
govt. came out with the comprehensive legislation called securities contract
(Regulation) act 1956 to regulate the functioning in any notified state or area to
obtain recognition from the central govt. and lay down the criteria such
recognition.
The recognition accorded to the stock
exchange is normally, valid for 5 years, subject to the satisfactory performance to
the stock exchange during this period. However, the stock exchange located at
Bombay, Madras, Ahmedabad, Delhi, Hyderabad and Bangalore has been
granted permanent recognition.
At present secondary market in India consist
22 Stock Exchanges, recognized contracts(regulation) act 1956.These stock
rules, by laws and regulations approved by the govt. which constitutes an
originals market for the outstanding securities.
Function of Stock Exchanges

 The stock exchange provides a ready market, which is continuously
available for conversion of existing securities into cash and vice-versa.
 The stock exchange provides appropriates conditions where by the
purchase and sale of securities takes place at a reasonable and fair price.
 To protect the interest of investor through stict enforcement of rules and
regulations.
 The stock exchange ensures inevitable funds for capital to flow in the most
profitable enterprise.
 The stock exchange plays an effective role in encouraging people to
invest their saving in Industrial & govt. securities.
With the facilities provided by stock

exchange for buying & selling securities. The demand and supply for particular
securities are equalized and price fluctuation are kept within reasonable limits,
people who expect rise in price of securities by them in advance to make profits
when the prices go up as expected.
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MAIN STOCK EXCHANGES IN INDIA
Name of Stock Exchange Year of establishment Type of Organization

1. Bombay Stock Exchange 1875 Voluntary Non Profit
2. Ahmedabad Stock 1897 Voluntary Non Profit
Exchange
3. Calcutta Stock Exchange 1908 Public Ltd. Co.
4. Indore Stock Exchange 1930 Voluntary Non Profit
5. Madras Stock Exchange 1937 Co. Ltd. By guarantee
6. Hyderabad Stock Exchange 1943 Co. Ltd by guarantee
7. Delhi Stock Exchange 1947 Public Ltd. Co.
8. Bangalore Stock Exchange 1957 Public Ltd. Co.
9. Cochin Stock Exchange 1978 Public Ltd. Co.
10. Kanpur Stock Exchange 1982 Public Ltd. Co.
11. Pune Stock Exchange 1982 Co. Ltd. By guarantee
12. Ludhiana Stock Exchange 1983 Public Ltd. Co.
13. Jaipur Stock Exchange 1983 Public Ltd. Co.
14. Guwahati Stock Exchange 1984 Public Ltd. Co.
15. Magadh Stock Exchange 1986 Co. Ltd. By guarantee
16. Bhubaneshwar Stock 1989 Co. Ltd. By guarantee
Exchange
17. Vadodara Stock Exchange 1990 Co. Ltd. By guarantee
18. Mangalore Stock Exchange N.D
19. National Stock Exchange 1994 N.D
20. Coimbatore Stock Exchange 1996 N.D
21. O.T.C.E.I Stock Exchange 1997 N.D
TYPES OF OPERATORS
Transaction of business on stock exchange is allowed to be undertaken only by
members of exchange. There are two types of members to transact business in
stock exchange:
• Broker: Broker is a commission agent who transacts business in
securities on behalf of non-members.
• Jobber: Jobber is an independent dealer in securities.
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TYPES OF SPECULATORS
Members who are engaged in speculations in stock exchange are given different
names according to the nature of their speculative activity:
• Bulls: Those who are expects rise in the price of certain securites and act
on the basis are known as Bull Speculators.
• Bears: A Bear speculator is one who anticipates fall in the price of

particular securities.
Listing of Securities
Securities bought and sold in Stock exchange may include shares and
debentures, bonds and securities issued by various companies.But a stock
exchange does not allow transactions in securities issued by all companies.
Listing of securities mean inclusion of
securities permitted to be traded in the official list of stock exchange. The names
of companies of which securities are allowed to be traded are included in official
trade list of stock exchange. Govt. securities do not require listing like other
corporate securities.
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LUDHIANA STOCK EXCHANGE
Introduction
The Ludhiana Stock Exchange Limited was established in 1983, by Sh. S.P.
Oswal and Sh. B.M. Munjal, leading industrial luminaries, to fulfill a vital need of
having a Stock Exchange in this region. Since its inception, the Stock Exchange
has grown phenomenally. The Stock Exchange has played an important role in
channelising savings into capital for the various industrial and commercial units
of the State of Punjab and other parts of the country. By 1999-2000, the
exchange had a total of 284 brokers, out of which 79 were corporate brokers.
Among 284 brokers, it was further classified as 212 proprietor broker, 2
partnership broker and 70 corporate broker. Then, there was only 23 sub-brokers
registered.
Ludhiana Stock Exchange became the second bourse in India to introduce

modified carry forward system after BSE on April 6, 1998. On the same date,
LSE also introduced a settlement guarantee fund (SGF). The SGF guarantees
settlement of transactions and the carry forward facility provides liquidity to the
market.
LSE became the first in India to start LSE Securities Ltd., a 100% owned
subsidiary of the exchange. The LSE Securities got the ticket as sub-broker of
the NSE. In 1998, the exchange also got permission to start derivative trading.
For the settlement of dematerialized securities, the Ludhiana Stock Exchange

has also been linked up with National Securities Depository Ltd. (NSDL).
LSE has played an important role in generating the companies in the

state of Punjab, Haryana, Himachal Pradesh and Jammu and Kashmir.
GOVERNING COUNCIL, COMMITTEES AND ADMINISTRATION
The Council of Management of the Exchange consists of nine members, out of

which two are Government Nominees, four are Public Representatives and one
Executive Director who is also Ex-officio member of the Board. At every Annual
General Meeting, one third of the elected Directors retire by rotation.
Administration of the Exchange is managed by the Executive Director who is
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assisted by a Company Secretary and a team of Executives, Assistants,
Technicians and Sub-staff. The Exchange has four Statutory Committees namely
Disciplinary Committee, Arbitration Committee and Defaults Committee and
Investor Services Committee. In addition, it has Advisory and Standing
committees to assist the administration.
CORPORATE GOVERNANCE
Although the Ludhiana Stock Exchange is not a listed Company, yet it has
followed a model of corporate governance, which is evident from the composition
of the Statutory Committees, the Investor Services Committee and Audit
Committee. The Investor Services Committee comprises of four Public
Representatives and one broker members. It is headed by Sh. D.K.Malhotra,a
legal expert. The audit committee is headed by Sh. R.K. Bansal, Chartered
Accountant. Statutory Committees are represented by brokers and non-brokers
in 20:80 ratio.
OPERATIONS OF LUDHIANA STOCK EXCHANGE
♦ TURNOVER
Ludhiana Stock Exchange is one of the leading Stock Exchanges among the
Regional Stock Exchanges of the country, and has been providing trading
platform for the investors situated in Punjab, J&k, Himachal Pradesh &
Chandigarh. At present, it has 357 listed companies and among them, 231 are
listed as regional companies. It had been generating significant amount of the
business in the secondary market. It recorded a peak turnover of Rs.9154 crores
during the year 2000-2001. The structural changes that took place in the recent
past in the Capital Market of the country had a negative impact on the trading
volume of the Regional Stock Exchanges. There has been a significant reduction
of turnover during the financial year 2001-2002, but the reduction in the turnover
of the Exchange has been more than adequately compensated by substantial
rise in the turnover of LSE Securities Limited, a subsidiary of Ludhiana Stock
Exchange.
♦ LISTING
Listing is one of the major functions of a Stock Exchange wherein the securities
of the Companies are enlisted for trading purpose. Any Company incorporated
under Companies Act,1956, coming out with an IPO, has to mandatorily list its
shares on a Stock Exchange.
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The Listing Department of Ludhiana Stock Exchange deals with listing of
securities, further listing of issues like bonus and rights issues, post listing
compliance of the companies which are already listed with Ludhiana Stock
Exchange. The Companies desirous of listing its securities on the Exchange
have to sign a Listing Agreement with the Stock Exchange. After getting the
listing approval, the Company has to ensure and report compliance of the post
listing requirements. The listing section of the LSE monitors the post-listing
compliance of all the listed companies and follows up with the companies, which
are found deficient in compliance.
♦ SETTLEMENT GUARANTEE FUND (SGF)
The Stock Exchange established a Settlement Guarantee Fund (SGF) on April 6,

1998. It provides guarantee of all the genuine trades made through the Screen
Based Trading System of the Stock Exchange.
♦ END OF AN ERA
The management of the Stock Exchange apprehended that the smaller regional
Stock Exchanges would not be able to meet the challenges imposed by
expansion of bigger Stock Exchanges like NSE and BSE and might end up
loosing their entire business to VSAT counters of the bigger Stock Exchanges. In
order to prepare for such an eventuality, Stock Exchange set up a broking arm in
the name of LSE Securities Limited (a Subsidiary Company of the Stock
Exchange) in January 2000 and built infrastructure and IT based sophisticated
systems to enable its members and investors to trade on NSE and BSE through
the subsidiary route. The Stock Exchange was thus able to convert the "threat" it
faced from expansion of NSE and BSE into an opportunity for its members and
investors. As expected, there was a marked shift in the trading volumes from the
Stock Exchange to the NSE and BSE through the Subsidiary Company. This shift
became more prominent when SEBI introduced compulsory Rolling Settlement
and banned the deferral products like Badla, MCFS and ALBM w.e.f. July 2,
2001 causing thereby an end to arbitrage opportunities between the Stock
Exchange and NSE/BSE. Ultimately, there was complete shift of trading from the
Stock Exchange to the LSE Securities Limited in January 2002.
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ACHIEVEMENT OF LUDHIANA STOCK EXCHANGE
Oct 1981 Incorporation of stock Exchange

Aug 1983 Commencement of operations
Aug 1983 Shifting of operation to own building
Nov 1996 Online Screen Trading
April 1998 Modified carry forward system (MCTS) and settlement
Guarantee fund.
Nov1998 Trading and settlement in demat scrips
Sep1999 Trading at remote sites through VSAT counters
Jan 2000 Introduction of rolling settlement
Aug 2000 Commencement of online real time depository services
Dec 2000 Trading on N.S.E in C.M. segment (Through NSEL)
Sep 2000 Trading on B.S.E in CM segment (Through LSEL)
July2001 Introduction of Compulsory rolling settlement
January 2002 Complete shift to trading CM segment from ISE to LSE
Securities Ltd.
Feb 2002 Trading in F&O segment of N.S.E.
April 2002 Rolling settlement cycle prevailing at LSE on T+3 basis
April 2003 Incorporation of LSE commodities trading services Ltd.,
A subsidiary of LSE. Securities Ltd.
March 2004 Introduction of MCX (Multi commodity Exchange of India)
MCX offers 14 different commodities such as steel, kapas,
rubber, black pepper, oil soil seeds, precious metal etc.
March 2005 There was 27 sub brokers of company have been trading
through VSAT on NSE and 13 on BSE.
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The LSE Security Limited
The trade in market is through the authorized members who have duly registered
with concerned stock exchange and SEBI.
A stock exchange discharges three important functions of capital market. These
are:
 It provides place for sale and purchase of securities i.e. .shares, bonds
and debentures etc.
 It provides linkage between the savings of household sector and

investment in corporate sector and economy.
 It provides market quotations for shares, debentures and bonds and

serves role of a barometer, not only of the state of health of individual
companies, but also of the economy as whole.
The stock exchange discharge these functions by laying down a number of

regulations, which is to compiled with while making public issues e.g. offerings at
least a prescribed percentage of capital to the public, keeping subscription list
open at least for three days making provisions for receiving applications, allotting
the shares against on a fair and unconditional basis etc.
Traditionally, trading of scripts was done under the tree where three or
four came and traded. The earliest records in security dealing indicate that
trading in securities was vogue in India as early as 1973 but with the
development of capital market, the need for proper place to trade was
recognized, thus first stock exchange in India i.e. BOMBAY STOCK
EXCHANGE (BSE) came into begin 1875. The process led to the establishment
of stock exchanges, which gradually spread to other cities of the country like
Ahmedabad, Calcutta, and Madras etc.
As stated in the preceding para, the Exchange acquired the membership of NSE
& BSE through its subsidiary, the LSE Securities Limited, with the objective of
providing an enabling mechanism to its member brokers to trade on NSE and
BSE as sub-brokers of LSE Securities Limited. Trading at BSE and NSE was
commenced through the subsidiary route from September 2000 and December
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2000, respectively, and the trading in F&O segment of NSE commenced in
February 2002.
INVESTOR RELATED SERVICES

i. Investor Grievances
The Exchange has made special arrangements to handle investor's complaints

and grievances. It has established an Investor Grievance Cell which receives
complaints from investors and follows up the complaints with companies and
member-brokers to ensure their satisfactory redressal. Recording of complaints
and monitoring of their redressal has been fully computerised.The Committee
meets periodically to concile the grievances between investors and broker
members.
ii. Investor Protection Fund
The Exchange has set-up an Investor Protection Fund in the month of January,
1990 for providing compensation to individual investors in case of default by a
member of the Exchange.In case any member-broker defaults to meet his
obligation towards investors in respect of deals that took place through the
trading system of the Stock Exchange, then the concerned investors are
compensated from this fund.
iii. Investor Service Centre
The Exchange has set-up an Investor Service Centre in its premises for providing
information relating to Capital Market to the general public. The Centre has a well
equipped library, which subscribes to leading economic, financial dailies and
periodicals. It also stores the Annual Reports of the companies listed at the Stock
Exchange. The Investor Service Centre is also equipped with a Terminal for
providing "live" rates of trading at NSE and BSE. A large number of the investors
visit the centre to utilize the services being provided by the Exchange.
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AUDIT REPORT
To
The Board of Directors
The Ludhiana Stock Exchange Ltd
1. We have examined the attached Consolidated Balance Sheet of The

Ludhiana Stock Exchange Ltd, (“the Company”) and its subsidiaries as at
31st March,2005 and the Consolidated Income and Expenditure Account
for the year ended on that date annexed thereto. These financial
statements are the responsibility of the company’s management. Our
responsibility is to express an opinion on these financial statements based
on our audit.
2. We conducted our audit in accordance with auditing standards generally
accepted in India. Those standards require that we plan and perform the
audit to obtain reasonable assurance whether the financial statements are
free of all material misstatements. An audit includes, examining on a test
basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as
evaluating the overall financial statements. We believe that our audit
provides a reasonable basis for our opinion
3. We did not audit the financial statements of the subsidiaries whose
financial statements reflect total assets of Rs.4852.00 Lacs as at 31st
March, 2005 and total revenue of Rs.395.16 Lacs. The financial
statements and other financial information have been audited by another
auditors whose report have been furnished to us, and our opinion, in so far
as it relates to the amounts included in respect of those entities are based
solely on the report of other auditors.
4. We report that the consolidated financial statements have been prepared
by the company’s management in accordance with the requirements of
Accounting Standard (AS) 21, “Consolidated Financial Statement” issued
by the Institute of Chartered Accountants of the India and on the basis of
the separate audited financial statements of the company and its
subsidiaries included in the consolidated financial statements
5. We report that: The company has provided contribution to SEBI on actual
amount of listing fees received instead of on accrual basis according
access of income over expenditure overstated by Rs. 11320/-.
Subject to above, in our opinion and to best of the information and explanations given to
us and on the consideration of the separate audit reports on individual audited financial
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statements of the company and its subsidiaries, we are of the opinion that the
consolidated financial statements read together with the notes thereon, give a true and fair
view in conformity with the accounting principles generally accepted in India;
a. in the case of the consolidated balance sheet, of the consolidated state of

affairs of the company and its subsidiaries as at 31st March,2005;and
b.
in the case of the consolidated income and expenditure account, of the

consolidated results of operation of the company and its subsidiaries for the year
then ended.
1. FINANCIAL RESULTS
The Financial Results of the Stock Exchange for the year under review as
compared to the previous year are summarised below:
Amount Rs.(In lacs)
PARTICULARS 31.03.2005 31.03.2004
Surplus of receipt over expenditure
before charging depreciation,
162.76 211.34
interest, provisions and
appropriation.
Less: i. Depreciation 40.08 46.07
ii. Contribution to Customer
0.47 0.62
Protection Fund
Net surplus 122.21 164.65
Appropriation
Balance B/F from last accounts (105.48) (231.17)
Income of SGF transferred to Fund
15.39 19.21
A/C
Transferred to Investor Service
17.59 19.75
Fund
Transferred to General Reserve (16.25)
Balance carried to Balance Sheet Nil (105.48)
2. ECONOMY AND CAPITAL MARKET
The last decade has witnessed ample changes in Indian economy as a
result of Government policies towards liberalization. The corporate sector
is showing its strength with each passing year and has adopted well to the
globalization needs. During the year 2004-05, the GDP growth rate of
Indian economy has grown up by 6.9% as compared to revised estimate
of 8.5%. The decline in the GDP was mainly due to fall in the agricultural
sector because of poor monsoon, which grew by mere 1.1%. A closer look
at the GDP growth during the year 2004-05 reveals that the robust
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corporate growth has played an important role in achieving the 6.9%
growth rate. The services sector was the main driver of the growth rate in
Indian economy, and grew by 8.6% during the year.
The Market regulator, SEBI continued with the policy initiatives, and the
year 2004-05 was no exception. A number of reforms were undertaken by
SEBI in both the Market segments, Primary and Secondary. To cite a few
reforms, SEBI during the year, increased the allocation of shares to retail
investors from 25% to 35% of the total issue in the book building issues.
The retail investor has been redefined as the investor who invests not
exceeding Rs. 1 lakh as against the earlier limit of Rs. 50,000.
3. BUSINESS PERFORMANCE AND OPERATIONAL REVIEW
Your Directors give below the business performance and operational
review of the Exchange during the year 2004-05:-
a. Financial Results
The Stock Exchange during the year under review recorded a net
surplus of Rs. 122.21 lacs as against Rs. 164.65 lacs for the year
2003-04. However, its surplus (before charging depreciation,
interest and contribution to Customer Protection Fund), during the
year, was Rs. 162.76 lacs as against Rs. 211.34 lacs during the
previous year.
A closer look at the Income and Expenditure Account reveals that
Income from the Interest on deposits was down by Rs. 32.00 lacs
due to continued falling interest rates. Listing fee was down by Rs.
4.09 lacs. Other Income was down by 1.15 lacs. Similarly, profit on
sale of Assets was down by Rs. 11.52 lacs due to only one member
getting room leased in his favour as compared to 20 members last
year. Further, the Exchange exercised tight control over expenses
and because of measures taken, personnel expenses fell by Rs.
2.37 lacs. But due to increase in maintenance costs and increase in
fuel prices, increase in Administrative and other expenses was
unavoidable. These all factors stated above, contributed to the
overall decline in Net surplus by Rs. 42.44 lacs during the current
financial year. The Exchange, during the year, also contributed Rs.
2.00 lacs towards Prime Minister Relief Fund for Tsunami victims.
b. Guarantee/Pledge for LSE Securities Ltd.
The Exchange has deposited FDRs, amounting to Rs. 62 lacs with
NSCCL for the purpose of obtaining the trading limits on NSE for its
subsidiary Company i.e. LSE Securities Limited.
The Exchange has pledged its FDRs worth Rs.4.00 crores with
banks against which the banks have given an OD Limit of Rs.75
lacs to the LSE Securities Limited (Subsidiary Company) and bank
Guarantee of Rs. 3.00 Crores. Thus, the Exchange has committed
its funds to the tune of Rs.4.62 crores for LSE Securities Ltd
c. Claim of CMC and counter claim of the Exchange
M/s CMC Ltd., the software vendor for MULTEX trading software
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served a legal notice to the Exchange for non payment of the
balance amount of Rs.41.10 lac along with 18% per annum w.e.f.
June 1, 2001 till the date of actual payment against the supply of
the software. M/s CMC Ltd. referred the matter to the Arbitration
under the Arbitration and Conciliation Act, 1996. The Exchange had
not recognised the said amount as liability and decided to contest
the matter through its arbitrator. The Exchange also lodged a
counter claim of Rs.34.90 lacs paid by it to M/s CMC Ltd. including
expenses incurred thereon. The Exchange further lodged a claim of
Rs.72 lacs on account of wasteful investments made by the
Exchange on the advice of CMC Ltd. to facilitate MULTEX, Rs.75
lacs spent by the Exchange to procure BOLT and NSE.IT System
and Rs.1 crores against all losses suffered by the Exchange and its
constituents on account of breach of agreement by CMC Ltd. The
matter is still sub-judice.
d. Claim against State Bank of India, (LSE Branch)
The Exchange had provided space to the State Bank of India in its
building for banking operations. The Exchange raised a bill for rent,
and other facilities to SBI. The State Bank of India did not pay the
said amount and contested the same in the District Sessions Court
at Ludhiana. The Exchange had not provided that amount in its
books of accounts because of the uncertainty in the ultimate
collection. State Bank of India has since vacated the premises in
May' 2005 and the Exchange is also taking up the matter with SBI
to settle it amicably.
e. Appeal on House Tax
The building of the Exchange is assessed by the Municipal
Corporation for the purpose of house tax. The Municipal Authorities
during the year 2001 added Rs.1,53,329.02 on account of arrears
and raised a bill of Rs.11,20,756. The Exchange during the year
has lodged an appeal to the Secretary, Local Bodies, Punjab
Government at Chandigarh against the House Tax bill. Meanwhile,
pending the appeal, the Exchange is proportionately debiting the
portion of House Tax to Citi Bank N.A., Ludhiana branch Bank. The
Municipal Authorities have further revised the bill for the year 2005-
06 to Rs. 19,02,398.00 as against Rs. 9,46,030 being paid by the
Exchange under protest. The Exchange has preferred an appeal
with the Secretary, Local bodies, Govt. of Punjab & Chandigarh.
f. Taxation-Appeal on Income Tax Case(A.Y. 2001-2002 &
A.Y.2003-2004)
Income Tax Officer raised a demand of Rs. 2,01,51,281 vide notice
u/s156 of I.T.Act,1961 while assessing the Income of the Exchange
for A.Y. 2003-2004 on the similar grounds as in the Income Tax
Case for A.Y. 2001-2002. Income Tax Officer has further
disallowed all the expenses while assessing the tax liability. The
Exchange has filed an Appeal against the order and is hopeful of its
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positive out-come as appeal for A.Y. 2001-2002 has been decided
in favour of Exchange. As regards the Income Tax case for A.Y.
2001-2002, Income Tax Department has filed an appeal with
Appellate Tribunal, Chandigarh against the order the CIT (Appeals).
The Exchange is pursuing both the cases through its legal counsel.
4. MANAGEMENT DISCUSSION AND ANALYSIS
1. Listing
The Year 2004-2005 saw numerous IPOs hitting the market,
notable among them were M/s. TCS, PNB, Jet Airways, NDTV etc.
Most of the public issues did well and are being traded at premium,
but some of the public issues could not perform well at the bourses.
The secondary market, however, remained bullish throughout the
year. Sensex touched all time high of 7921(intra day high) on
18.08.2005. The turnover of two leading Stock Exchanges i.e NSE
and BSE also touched all time highs. Despite the healthy conditions
in the stock markets, no company came out with Initial Public Offer
from the region under Ludhiana Stock Exchange. There were
however listings on the Stock Exchange on account of preferential
issues, conversion of FCCBs into equity shares etc.
As on 31st March, 2005, there were 371 companies listed with the
Exchange, 244 being Regional and 127 Non-Regional. The
combined market capitalisation of the listed companies stood at
Rs.19,617 crores.
2. Post Listing Compliance
The Exchange is regularly monitoring the compliance of post-listing
requirements by the listed Companies on a continuous basis. A
large number of companies have defaulted in complying with the
various provisions of the Listing Agreement including non-payment
of Listing Fees. The Exchange has been initiating suitable action
against the defaulting companies like serving of show-cause
notices to the companies, suspension of the trading of the scrips.
The trading in the scrips of 264 companies has been suspended so
far on account of non-compliance to various provisions of the
Listing Agreement
3. Delisting
SEBI issued delisting guidelines in 2003, wherein any company
which is listed at Stock Exchange having nationwide terminals i.e.
Bombay Stock Exchange or National Stock Exchange etc., can get
its shares delisted from other Stock Exchanges, whether it is
Regional Stock Exchange or not. In view of these guidelines, 32
companies have got their shares delisted from Exchange. It has
adversely affected the income of the Exchange. However, your
Exchange has made representation to SEBI to ease the eligibility
norms for Regional Companies for inclusion in the BSE Indonext in
respect of companies which are eligible for BSE Indonext, to
17
encourage the companies not to insist on delisting from the
Exchange.
2. FUTURE OUTLOOK
1. Demutualisation
Govt. of India amended Securities Regulations (Contract) Act in
Nov.'2004 with regard to provisions relating to Corporatisation and
Demutualisation of Stock Exchanges and advised the Exchange to
resubmit its scheme of demutualization. The General House in its
meeting held on Jan 17, 2005 approved the amendments in
Memorandum and Articles of Association (Post Demutualization),
and also approved the scheme of demutualization. Final Scheme of
Demutualisation was sent to SEBI. SEBI sought certain
amendments in the scheme which was submitted after
incorporating suitable changes in the scheme as directed by SEBI.
SEBI again advised Exchange to submit its scheme of
demutualization in the light of BSE(Corporatisation and
Demutualization) Scheme, 2005 as approved by it. The Board of
Exchange approved the revised scheme prepared in accordance
with BSE (Corporatisation and Demutualization) Scheme. SEBI
again sought some amendments/modifications in the scheme of
Demutualisation.
It is pertinent to mention that in the latest scheme, prepared in
accordance with BSE Scheme, there is no exemption for Income
Tax and the Exchange would have to pay Income Tax on its
unutilized accumulated reserves upon Demutualization. The
Exchange is taking up the matter with SEBI, FISE and Ministry of
Finance for seeking income tax exemption upon Demutualisation.
2. Revival of Regional Stock Exchanges – INDO NEXT

BSE-Indo Next Trading Platform was launched to serve dual
purpose of reviving Regional Stock Exchanges along with providing
trading opportunities to small and mid cap Companies. It is a joint
initiative of BSE and FISE. The members of Regional Stock
Exchanges have been allowed to trade in the segment of Capital
market. The Indonext trading platform is being implemented in
phases. As on date, the trading on BSE-Indonext has been started,
wherein all the scrips of 'S' category are traded. Your Exchange
has also recommended 23 companies to BSE for inclusion in
Indonext segment. Federation of Indian Stock Exchanges has
further advised all stock Exchanges to forward the names of more
companies for inclusion in the list of Indonext. The Exchange has
also recommended the names of 38 more companies which are
good in making compliances of listing agreement irrespective of the
fact that whether the company is profit making or not, and has
18
requested SEBI to ease the norms for inclusion in Indonext Market.
Your directors hope to have a positive reply from SEBI towards
easing of norms for trading of all those companies which are
recommended by Ludhiana Stock Exchange in Indonext segment.
3. Certification Programme in Capital Market
Your Exchange is going to start a Certification course in Capital
Market in association with CIIPP, Punjab University Chandigarh.
LSE is the second Exchange in India after Bombay Stock
Exchange, which will offer this kind of certification course in Capital
Market. Punjab University has granted its approval to the course
and Exchange is likely to commence the first batch in September'
2005. This course will fulfill the requirements of skilled workforce in
the domain of Capital Market and its related areas like derivatives,
depository and practical aspects of trading etc.
3. Contribution to society (Gurukul)

The Exchange is contributing to the society by providing training to
the students of various streams i.e. MBA, M.Com, B.Tech., MCA etc. so
as enable them to become future leaders, professionals and
entrepreneurs. The Exchange provides the best infrastructure facilities to
the students such as fully equipped classrooms, Audio visual
presentations, study material etc. Your Exchange will continue in its
efforts towards this gracious endeavor in future also.
4. Web site of the Stock Exchange

Your Exchange is in the process of developing its own Web Site for
the benefit of its members and investing public at large. This site
will provide latest information to Investors relating to various
aspects of Capital Market, detailed information about the listed
companies in India including their financial and corporate
announcements, latest circulars of SEBI, Members' directory and
information about the subsidiary i.e. LSE Securities Limited. The
website will also provide a platform for investors to view their demat
holding of shares and trade through subsidiary company.
5. SEBI(Stock Brokers and Sub Brokers) (Amendment),
Regulations, 2003
SEBI amended SEBI (Stock Brokers and Sub-Brokers)
(Amendment) Regulations, 1992 vide notification dated 23.09.2003.
Further, SEBI vide its circular no. SEBI/MIRSD/DPS-1/Cir-31/2004
dated August 26, 2004 had prescribed the model format of the
Tripartite Agreement between Broker-Sub broker and clients. The
amended SEBI (Stock Brokers and Sub-Brokers) (Amendment)
Regulations, 2003 provides that :
1. There shall be a privity of relationship between the trading
member and the sub-broker’s client.
19
2. The trading member shall issue contract notes to the sub-
broker’s client instead of the sale/purchase note by the sub-
broker.
3. The delivery of securities and the payment of funds relating
to the transactions shall also be directly between the trading
member and the client of the sub-broker.
4. No Director of a Stock Broker shall act as a Sub-broker to
the same Stock Broker.
 The implementation of the above said SEBI regulation has

been made effective w.e.f. 01.06.2005 for all subsidiaries of
Regional Stock Exchanges.
 Following steps have been taken by LSE Securities Limited
for implementing the aforesaid SEBI circular:
 The company had opened various Bank Accounts with
HDFC Bank for settlement of funds under the new system
 The company had opened various Demat accounts with its
DP for settlement of securities under the New System.
 The process of registration of existing clients of the sub-
brokers in the new trading system has been completed
 The installation of back office software by
InternetExchangenext.Com has been completed and is all
set to be commissioned shortly.
 The active sub-brokers of the company, being the members
of its Board had submitted their resignations to the Board of
LSE Securities Limited, which were accepted by the Board
of LSE Securities Limited.
2. SECURITIES MARKET AWARENESS CAMPAIGN (SMAC)
During the year 2004-05, as per directions of Market Regulator, the
Exchange organized more than 121 Investor Awareness Wokshops under
the aegis of Securities Market Awareness Campaign in various parts of
Punjab, H.P. & U.T. of Chandigarh and adjoining states of Rajasthan and
Haryana. The motto of the campaign has been "An educated Investor is a
protected Investor". It was a massive exercise of Investor's Interface
undertaken by the Exchange. The Exchange officials during these
workshops, apprised the investors about their rights, responsibilities and
Dos and Don'ts for dealing in the stock market. Investors appreciated the
role of Exchange in taking this initiative for their welfare and protection.
The main message during these workshops has been "Invest with
Knowledge".
The Exchange during the year also launched a massive advertisement
campaign by issuing a series of advertisements in the interests of
investors in English and Punjabi language. The contents of these
advertisements were prepared in simple language. Your exchange also
distributed educative material for the workshops.
20
3. INVESTOR SERVICE CENTRE
The Exchange continues to provide value added services to the investors
through its Investor Service Centre at Ludhiana and other centres at
Amritsar, Jalandhar and Chandigarh. The Exchange is providing following
services to the investors through its service centres:
i. Investor Education Study Material

ii. Books, periodicals on capital Market and leading financial dailies.
iii. Terminals for live trading at BSE and NSE.
iv. Investor Awareness Workshops
v. InvestorService Cell
2. STATUS OF SUBSIDIARY COMPANY (LSE SECURITIES LIMITED)
Your Subsidiary Company i.e. the LSE Securities Limited, had an
outstanding performance during 2004-05. Plans of the visionary team on
the Governing Board of Exchange and Subsidiary Company are being
translated into operations by the untiring staff, thus taking the company to
dazzling heights.
i. Trading at NSE and BSE (Capital Market)
Trading volumes at Cash Segment of BSE and NSE conitued to
grow. The company during the year recorded turnover of Rs.
7975.13 Crores at NSE and Rs. 3833.60 Crores at BSE
respectively.
ii. F&O Segment of NSE
Trading counter at NSE(F&O) continued to catch the fancy of the
members and investors. F&O segment of NSE continued to
outperform the cash segment. The Company achieved yet another
outstanding performance by trading, a record turnover of Rs.
25707.89 crores at F&O Counter during the year.
iii. Depository Participant Services
The subsidiary company has DPs of both the depositories i.e.
NSDL and CDSL. The depository services of the subsidiary
company also outperformed as compared to other DPs in the
region. This was due to the fact that the company has been
providing value added services to the members and Investors at
very optimal rates.
3. SUBSIDIARY COMPANY
Statement pursuant to Section 212 of the Companies Act, 1956 relating to
aforesaid subsidiary is given hereunder :
Name of Financial Holding Company's Net Net Holding
Subsidiary year to interest as at close aggregate aggregate Company's
Company which of Financial year of amount of amount of interest as at
Accounts Subsidiary Company Subsidiary Subsidiary 31.03.2005
relate Company's Company's incorporating
Profits after Profits after changes
deducting deducting since close
its losses its losses of Financial
21
or vice- or vice- year/ period
versa, so versa, of Subsidiary
far as it dealt within Company
concerns the
Members Company's
of Holding Account
Company
which are
not dealt
within the
Company's
Account
(Rupees in
lacs)
30,89,700 56.07%
LSE shares (Extent
Securities 31.03.2005 ofRs.10 of 37.81 NIL NIL
Limited each(Shar holding
e Holding) )
4. COMMITTEE OPERATIONS
Various Committees constituted by the Board of Directors such as
Arbitration Committee, Defaults Committee, Disciplinary Committee,
Facilities Management Committee, Investor Grievance Committee, Audit
Committee, Ethics Committee, Delisting Committee, Computer
Committee, Management Sub Committee, Sub Committee for compliance
of SEBI Inspection Report, played an important role in the efficient
performance of functions of the Exchange by providing valuable guidance
to the Administration from time to time.
5. DIRECTORS
Sh. R.C.Singal, Director and Sh. R.K.Bansal, Director would be retiring
pursuant to the provisions of Article 107 of the Articles of Association of
the Exchange. Your Directors place on record their appreciation for
sincere and dedicated services rendered by these gentlemen as Directors
on the Board of Directors of the Exchange.
6. PUBLIC REPRESENTATIVES
Sh. Dina Nath Sharma, Dr. O.P. Sahni, Dr. Ajit Singh Dua, are the
outgoing Public Representatives on the Board of Directors of your Stock
Exchange. The Board wishes to place on record their appreciation for
sincere and dedicated services rendered by these gentlemen to the
Exchange.
Further, during the year, SEBI re-nominated Prof. Rajinder Bhandari and
nominated Sh. D.K.Malhotra, Sh. Rajiv Dewan and Sh. G.S.Bains as
Public Representative Directors on the Board of Exchange.
Your directors welcome these new Public Representatives on the Board of
the Exchange and wish them all the best.
22
7. SEBI NOMINEES
Sh. S.C. Aggarwal, Principal Secretary, Department of Industries and
Commerce, Govt. of Punjab, was nominated as SEBI Nominee in terms of
Article 96 of the Articles of the Association of the Exchange. SEBI also
nominated Sh. Har Lal, RoC as its Nominee in place of Sh. D.C.Kwatra
who has since been transferred from Jallandhar to headquarters at Delhi.
Your Directors place on record their appreciation for sincere and
dedicated services rendered by Sh. D.C.Kwatra, Sh. S. C. Aggarwal and
Sh. Har Lal as SEBI Nominees on the Board of Directors of the Exchange.
8. PERSONAL
Your Directors place on record their heartiest appreciation for the sincere,
devoted and dedicated services rendered by the staff for the smooth
functioning of the Exchange and implementation of new systems required
by the structural changes brought in the Capital Market by SEBI.
9. PARTICULARS OF EMPLOYEES
Pursuant to the provisions of Section 217 (2A) of the Companies Act,
1956, read with Companies (Particulars of Employees) Rules, 1975, as
amended, none of the employees is in receipt of remuneration which
requires disclosure under the said Section.
10. AUDITORS
M/s S.C. Vasudeva & Co.,Chartered Accountants and the Statutory
Auditors of the Exchange, retire at the conclusion of the forthcoming
Annual General Meeting and being eligible, offer themselves for re-
appointment.
11. FIXED DEPOSITS
The Exchange has not accepted Fixed Deposits from the Public and is
therefore not required to furnish information in respect of outstanding
deposits under the Non Banking, Non Financial Companies (Reserve
bank) Directions, 1996 and Companies(Acceptance of Deposits) Rules
1975.
12. AUDITORS’ REPORT
The auditors have observed at para 4(f) in their report regarding the
method of providing contribution to SEBI. The Company is contributing
five percent of the listing fee received during a year to SEBI. The
Exchange has provided the contribution on the basis of actual amount of
listing fee received.
13. CORPORATE GOVERNANCE
Though it is not necessary for the Exchange to comply with the
requirements of Corporate Governance, yet the Exchange has persistently
been observing high standards of Corporate Governance. As a part of
good governance practice, your Exchange is complying with the important
requirements of Corporate Governance with regard to the composition of
Audit Committee. The Audit Committee is headed by Sh. R. K. Bansal,
Director who is also a qualified Chartered Accountant. Other members of
the Audit Committee are Prof. Rajinder Bhandari, Public Representative,
Dr. Ajit Singh Dua, Public Representative, Dr. O. P. Sahni, Public
23
Representative, Sh.Rajnish Garg, Director, Sh. Manoj Sarna, Director.
The Audit Committee reviews the Final Accounts of the Exchange before
submission to the Board for its consideration. Further, the Investor
Grievance Committee is headed by Sh. Dina Nath Sharma, who is a
Retired Additional Session Judge. All three Statutory Committees viz.
Arbitration, Disciplinary and Defaults, are headed by an Independent
Director and have a ratio of 40:60 between Broker Directors and Public
Representatives.
The names of members of Board of Directors, their attendance at the
Board meeting and the number of their directorships are set out below:
No. of Board Meetings held and attended by the Directors during the
Financial year 2004-05
No of Board
No of Board
Name of Directorship meetings held
meetings
Director held as during his
attended
tenure
Sh. Dina Nath Non-Broker
7 5
Sharma Member
Executive
Sh. H.S. Sidhu 7 7
Director
Prof. Rajinder Non-Broker
7 6
Bhandari Member
Non-Broker
Dr. Ajit Singh Dua 7 7
Member
Non-Broker
Dr. O.P. Sahni 7 6
Member
Sh. Mukul Joshi SEBI nominee 2 -
Sh. D.C. Kwatra SEBI nominee 7 5
Sh. S.C.
SEBI nominee 5 1
Aggarwal
Sh. Manoj Sarna Broker Member 4 4
Sh. Jaspal Singh Broker Member 7 6
Sh. R.C. Singal Broker Member 7 5
Sh. Rajnish Garg Broker Member 7 7
Sh. R.K. Bansal Broker Member 7 4
Sh. H.S. Arora Broker Member 3 2
Sh. S.K.
Broker Member 7 6
Sabharwal
14.
Following is the list mentioning the attendance of members in various
committees of the Exchange.
Management Sub-Committee : Meetings held during the year : 2
Name of Member Membership held as Membership held as
Sh. Dina Nath Sharma Non-Broker Member 1
24
Sh. H.S. Sidhu Executive Director 2
Dr. O.P. Sahni Non-Broker Member 1
Dr. Ajit Singh Dua Non-Broker Member Nil
Prof. Rajinder Bhandari Non-Broker Member Nil
15.
Audit Committee: Meetings held during the year : 4
No of meetings
Name of Member Membership held as
attended
Sh. R.K. Bansal Broker Member 2
Sh. H.S.Sidhu Executive Director 4
Sh. Rajnish Garg Broker Member Nil
Sh. Harjeet Singh Arora Broker Member 2
Sh. Manoj Sarna Broker Member 1
Sh. Ajit Singh Dua Non-Broker Member 4
Prof. Rajinder Bhandari Non-Broker Member 2
Sh. Ashwani Kumar Non-Broker Member Nil
16.
Delisting Committee: Meetings held during the year : 4
No of meetings
attended
Sh. D.C. Kwatra SEBI Nominee 1
Dr. Ajit Singh Dua Non-Broker Member 4
Secretary, ICSI Non-Broker Member 3
Sh. Jaspal Singh Broker Member 4
Sh. R.K. Bansal Broker Member 1
Sh. R.C. Singal Broker Member 1
17.
SEBI Inspection Committee: Meetings held during the year: 3
No of meetings
attended
Sh. D.C. Kwatra SEBI Nominee 1
Prof. Rajinder Bhandari Non-Broker Member 3
18.
Ethics Committee: Meetings held during the year: 3
25
No of meetings
attended
Dr. Ajit Singh Dua Non-Broker Member 3
Prof. Rajinder Bhandari Non-Broker Member Nil
Sh. Jaspal Singh Non-Broker Member 3
Sh. R.C. Singal Non-Broker Member 3
19.
Disciplinary Committee : Meetings held during the year : 1
No of meetings
attended
Sh. Ajit Singh Dua Non-Broker Member 1
Sh. R.C. Singal Non-Broker Member Nil
20.
21. CASH FLOW AND CONSOLIDATED FINANCIAL STATEMENTS
The Company during the year has made compliance to the Accounting
Standard 3 (AS-3) relating to Cash Flow Statement and Accounting
Standard (AS-21) relating to Consolidated Financial Statement issued by
the Institute of Chartered Accountants of India.
22. CONSERVATION OF ENERGY
The Company is engaged in providing infrastructure for marketing for sale
and purchase of securities and has no activity pertaining to manufacturing
and as such furnishing of details regarding conservation of energy is not
applicable.
23. TECHNOLOGY ABSORPTION
The particulars as prescribed under sub section (1)(e) of section 217 of
the Companies Act 1956, read with the Companies (Disclosures of
Particulars in the report of Board of Directors) Rules, 1988, in respect to
Technology absorption are Nil.
24. FOREIGN EXCHANGE EARNINGS AND OUTGO
The particulars as prescribed under sub section (1)(e) of section 217 of
the Companies Act 1956, read with the Companies (Disclosures of
Particulars in the report of Board of Directors) Rules, 1988, in respect to
foreign exchange earnings and outgo are Nil.
25. DIRECTORS’ RESPONSIBILTY STATEMENT
Pursuant to Section 217(2AA) of the Companies (Amendment) Act, 2000,
the Directors confirm that:
i. in the preparation of the annual accounts, the applicable
Accounting Standards have been followed.
26
ii. appropriate accounting policies have been selected and applied
consistently and judgments and estimates have been made that are
reasonable and prudent so as to give a true and fair view of the
state of affairs of the Exchange as at 31st March, 2005 and of
Income and Expenditure of the Exchange for the year ended on
31st March, 2005.
iii. Proper and sufficient care has been taken for the maintenance of
adequate accounting records in accordance with the provisions of
the Companies Act, 1956 for safeguarding the assets of the
Exchange and for presenting and detecting fraud and other
irregularities, and
iv. The annual accounts have been prepared on going concern basis.
LSE LINKS-
BSE NSE SEBI RBI
Ministry Of Finance NSDL CDSL Commerce Ministry
Department of
Company affairs
DEPARTMENTS
The main aim of LUDHIANA STOCK EXCHANGE is to ensure the safety and
security to the investments of the investors and to provide the proper
services under the prescribed guidelines of SE 131. So to maintain the
proper system of working of exchange, there are so many different
departments, in which particular functions are performed, assigned to
those departments. Following in the last of various departments of LSE:-
Operational departments
27
 Margin Section
 Clearing House
 Market Surveillance
 Computer Section and information System department
Service Departments
 Legal Department
 Secretarial department
 I.G.C (investor Grievance Cell)
 Listing Section
 Accounting Section
 Membership department/Personnel Department
All the sections performs specific function. There is nowhere duplication of

work; even then all the sections are interconnected with each other. There
is an organized network of recording of activities performed there. But
before studying the inter dependence of section, here is the details of all
department i.e. actually what function is performed by each and every
section.
1. SECRETARIAL DEPARTMENT
The functions and duties of the secretarial department include

maintenance of record of minutes of the meetings like:
 Meeting of Board of Directors

 Meeting of various Committees
 Meeting of the members
 Minutes of AGM
 Minutes of EGM
These minutes are statutory requirements and are preserved by secretarial

department.
SOME OTHER FUNCTIONS OF SECRETARIAL DEPARTMENT
 To send notices with direction of Board of Directors to the respective directions

to attend Board Meetings.
 To ensure that every meeting is help as per the law every meeting is a :
valid meeting, having the quorum otherwise it would effect towards unlawfulness.
28
 It also deals with transfer of shares. In order to be a member of exchange, a
person has to hold at least one share. In order to be a member of exchange, a
person has to hold at least one share. If a member wishes to sell his ticket, he has
to initiate the Secretarial Department in advance. A notice is given thereafter, in
newspapers for objectives, if any. Within 10 days of such a notice, the creditors
or clients can lodge their claims. A day notice is also displayed on the notice
board of Exchange for objectives to be raised by members. The complete set of
Share Transfer Form is to be filled in by the buyer members and submitted to
Secretarial Department.
2 LISTING DEPARTMENT
Listing means admission of securities of a public limited company on a recognized

Stock Exchange which provides a forum for the purchase and sale of securities. For
doing trading in LSE, the company first has to be listed and the function of listing of
the companies is done by listing department. For getting listed, the concerned
company has to pay certain fee and that fee depends upon the authorized capital of
the company.
REQUIREMENTS
The company which listed has to give:
 Quarterly Reports
 Reports of Annual General Meeting
 Reports of Profit or Loss if any of the company
 Listing fee
If above requirements are not fulfilled by the listed companies then company can be
delisted by listed department.
The below written amount is required for a listing company:
Capital up to Rs.1 crore Rs.8400

Above Rs.1 crore & up to Rs.5 crore Rs.16800
Above Rs.5 crore & up to Rs.10 crore Rs 28000
Above Rs.10 crore & up to Rs20 crore Rs56000
Above Rs.20 crore & up to Rs.50 crore Rs.84000
Above Rs.50 crore Rs.14000
Company having a paid up share/ debentures capital more than Rs.50 crore will pay
additional fee of Rs.2800. If exchange is not a regional stock exchange then fee will
be 50% of fee indicated above.
3 MEMBERSHIP DEPARTMENT
29
There are two types of members in stock exchanges.
• Corporate members
• Individual member
This department deals with membership of exchange. The trade in market is through
the authorized members who have duly registered with concerned stock exchange
and SEBI.
Following are the requirements to be an individual member of exchange.
Age Limit: To be member of stock exchange there is age limit

Minimum age is 21yrs Maximum age is 60yrs.
Qualification: To be member minimum qualification matriculation

is plus person has three-year experience interview.
Including written test and membership department
deal with all above requirements of members.
Following requirements are for corporate members

 Company must be registered under 322 of the company Act i.e. Directors with
unlimited liability.
 Two copies of memorandums & Articles of association.
 Qualification & Proof of age of the at least two directors, who will deal in
securities.
4. PERSONAL SECTION
This department carries out all the activities related to persons. Functions of this
department are:-
 Recruitment of staff members.
 Maintenance of attendance registers.
 Keeping leave records: Total leave of 30 days is given to those whose basic
income is Rs2000, if more than Rs2000, then the leave are for 35 days.
 Having a book on the matter related to Provident Fund, Gratuity, TA, DA,
Bonus etc.
30
 Loan: For two basic loans a minimum of six months service and for eight basic
loans, three year basic service and proof of necessity is required.
5. MAINTENANCE DEPARTMENT
This department of LSE is regulating the activities related to the files of electrical,
mechanical and civil engineering besides having other functions like that of security.
Here are some of the important aspects:
 Electrification of Building
 Air conditioning of plant
 Maintenance of lifts
 Maintenance of generators
 Maintenance of safety equipments such as smoke detectors, fire
extinguishers etc.
 Maintenance of Telephone Exchange
The electricity bill of stock exchange is 6 lakh to 7 lakh per month. It has also
given its some portion on rent to three banks i.e. 4500 sq. feet to HDFC and
7000sq. feet to CITIBANK. Stock exchange gets rental income of Rs. 7lakh to 8
lakh.
SECURITY: - This is an additional charge given to this department. The

supervision staff maintenance of mental detectors is also under preview.
6. COMPUTER DEPARTMENT
The growing technicalities and the increasing workload have enhanced the
importance of this department at LSE. Now days, this is the backbone of LSE. It
remains active all the times and is directly or indirectly involved in all activities of
exchanges from the beginning of settlement period till its end. The whole function
of the exchanges would come to a half, if this department becomes inactive.
Various sessions involved are:
 At beginning of the day at 8.00 A.M., the servers are booted and net worth of
the brokers is checked.
 At the time of opening, the investors can put their bid and if this bid is traded it
becomes opening rate of the day. Also index is checked and their rates are displayed.
 In trading, the information system department ensures smooth trading and in
case any problem arises, this section with the help of NSEIT revolves it.
 At the time of closing, it checks volume traded and evaluation is done.
7. ACCOUNTS DEPARTMENT
31
It evolves the preparation of trial balance, income and expenditure account and
balance sheet with the help of computers.
Mains books that account section of LSE maintenance are:
 Half Day Book: This book contains information regarding

 Daily records of receipts and payments.
 Cash Book
 Ledger
 Bank Book
 Bank Reconciliation Statement
 Receipt Book
 Vouchers
Most of the work in account section of LSE is done manually, although help is taken
through computers for the purpose of making trial balance, Income and Expenditure
statement and Balance Sheet. The annual report of LSE is generally published in
August every year. Some of the important policies of LSE are:
• The company follows accrual system of accounting recognizes income and

expenditure accordingly.
• Depreciation is provided on written down, value method in accordance with and
din the manner specified in schedule XIV of the Companies Act 1956.
• Fixed costs are stated at historical costs less depreciation.
• Stock/Inventory (stationary) is valued at cost.
• Interest on funds borrowed which is attributable to construction of fixed assets
and other indirect expenditure during construction is included under work in progress.
Function of Accounts Section
The account section performs the following function.
• To make and receive payments to the outside agencies, these agencies include
company listed at LSE and brokers working at LSE.
• To disburse personnel expenses.
• To keep the records of all incoming and outgoing money depreciation of financial
statements at the end of financial year.
• To get their accounts audited from the third party.
8. LEGAL DEPARTMENT
Legal department assists the members and to settle their dispute through the
Arbitration Committee or investor Grievance Committee so that they may be settled at
earliest without incurring heavy dues on amount regarding account fee, advocate fee
32
etc. The main objective of the legal department is to stream line and make effective by
the laws and regulation of the exchange and to see that guidelines, circulars and
amendments in rules made by SEBI are enforced at the appropriate time so that the
future complication may be reduced or avoided.
9. CLEARING HOUSE AND SETTLEMENT SECTION:

It acts as a common agent of members for clearing contracts of the members.
Clearing House takes case of pay in and pay out of securities and funds as well as bad
deliveries of the securities. It maintains DP of the members and brokers and it is
mandatory for the brokers to have securities sold by them in their clearing member’s
business partner’s identification number. There is a weekly settlement cycle prevailing
at LSE, which commences on Monday and on end settlement numbers are given scrip
wise delivery notes.
The settlement procedure is as follows:
T= Trading Day (say: Monday)
T+2= Pay in securities (Wednesday) by 10:30 A.M.

T+2= Payout of funds (Wednesday) by 4 P.M.
T+3= Auction of undelivered scrip (Thursday)
T+5= Auction pay in securities and funds on Saturday by 10:30 A.M.
T+5= Auction pay out securities and funds on Saturday by 4 P.M.
10. DEPOSITORY SECTION

A depository is an organization where the securities of the shareholders are held in
electronic form at the request of the shareholders through DP.
The main aims are:
 To reduce the settlement cycle
 To eliminate the bad delivery
 To minimize paper work
Functions performed by depository participant of LSE:
 Account Maintains
 Transfer & Transmission
 Dematerialization
 Pledge creation & closure
 Settlement of trades
33
 Dematerialization
11. MARGIN SECTION

Margin Section is an important section. This section apart from dealing in the
regulating the trading of brokers keeps a check on excessive trading in speculating.
Margin is the amount, which is collected from tile brokers for the safety of transactions.
As the transactions are to be finalized on basis, in the mean time the rates may
fluctuate which may lead to default. So to make the transaction safe, daily margins are
collected from brokers. When a member gets registered in the exchange and with
securities exchange of India (SEBI), then before starting trading he is supported to
deposit some fixed by SEBI as security. Now in SEBI s rolling settlement prevails.
Ultimately margin is the difference between the limit and trade done by the member.
The security deposit by member is called Base Minimum Capital. If any member wants
to do trade up to greater limit then he can deposit Additional Base Minimum Capital.
Present Margin System: Base capital requirements are as follows:-
Total Cash Cash/FDR/ Gross Net limit

(B.M.C.) Portion BG/scrips Limit (Daily) Weekly
A) Cash Trades
Only Rs. 4 lac Rs. 125 Rs2.75 33 Times 10

(1.32crs) (Times)
TYPES OF MARGINS
As we have discussed earlier margins, collected from members to avoid the losses
and to provide security to the investors.
There are different types of margins, which are imposed given as follows:
a) MARKET TO MARKET MARGIN
The exchange collects this margin on daily bases, broker-wise 100% national
loss of each member for every scrip, at the end of the day. This is also called
loss margin. The margin is payable in cash or in bank guarantee.
b) VALUE AT RISK OR VAR MARGIN
For the scrips in the compulsory rolling settlement len 99% VAR based
margin system would be introduced w.e.f. July, 02, 2001. the computation of
this margin is done by software developed by CHICAGO Stock Exchange.
34
c) ADDITIONAL MARGIN
Thus margin is 12% would be levied over and above the VAR margin.
This margin is collected from brokers on T+1 basis.
d) SPECIAL MARGIN
The brokers will be required to deposit margin as per the percentage

prescribed by stock exchange in this regard from time to time.
PAYMENT OF MARGIN
The broker’s shall be required to deposit margin demanded from

them by 11:00A.M on T+1 day. That is on next trading day. The
Margin brokers shall be collected by way of cheques drawn on the
Prescribed banks, demand draft or by way of direct debit to the
Bank account to broker.
CLEARING HOUSE
Clearing house takes care of pay in hand and pay-out securities. At this time
there is weekly trading system (Monday to Friday) prevails. And securities are settled by
rolling settlement. Means pay- in and pay-out of securities is settled on T+3 basis would
commence form 1st April, 2002. SEBI decide the following activity schedule for
exchanges for the T+3 rolling settlement.
SETTLEMENT CYCLE SCHEDULE
____________________________________________________________ Sr.
Day Description of Activity Trade
No.
____________________________________________________________
1 T Trade date
2 T+1 Custodial Confirmation
3 T+3 Securities and Funds pay in and pay-out
4 T+4 Auction of shortage in deliveries
5 T+6 Auction pay-in/pay-out as soon as possible
____________________________________________________________
35
T means TRADING PERIOD
PAY IN/ PAYOUT OF SECURITIES
On trading day brokers buy and sold the securities or scrips, and pay-in and
Pay out of securities will be completed on T+3 basis e.g. If broker buy/sell shares on
Monday then pay in of securities will be on Wednesday, 11:00A.M. And pay out of scrips
will also on Wednesday up to 4:00P.M. Pay-in/pay-out of securities cycle will be
completed.
AUCTION OF UNDELIVERED SRIPS:
In this in case if broker fails to deliver ihe scrips on T+3 delivery day. Then it is
responsibility of clearing house to settle the undelivered scrips. Then T+4 cycle will start in
above example auction of pending securities will be conducted on Thursday. In auction
price securities may will fluctuate 20% high or low of that trading day. In this way T+4
schedules is settled.
CLOSE OUT
In case the shares of particular scrips is not available on the date of auction. Then it is
obligation of solicitor(exchange) to give monetary benefit to initiator (buyer) against the
default of defaulter of securities in this manner settlement schedule has completed.
12. MARKET SURVEILLANCE SECTION

The main task of this section is to see the market sanctity and maintenance so that the
investors are not cheated. So market surveillance entails scientifically identifying points
in a stock price movement or trading volumes, which don’t match with the company’s
fundamentals. So the price and volume trends in stock exchange are checked for
abnormalities scientifically.
13. INVESTOR GRIEVANCE SECTION

LSE has a separate investor’s grievance cell, which receives complaints from investors
and follows up the complaints with companies and member broker to ensure their
satisfactory redressal. For providing better services to the investors the stock
exchanges has maintained investor protection fund. In this fund Rs.500 is collected from
each member annually. A part from this one percent of the total listing fee collected and
ten percent interest covered on company deposits is also transferred do the investor
protection fund.
36
One more fund investor service fund has been set up 20% listing a fee is transferred to it.
The funds of it are used for maintenance of investor service center, holding of seminars for
investor/brokers benefit, and publication of LSE Bulletin
INTRODUCTION
NSDL, the first depository in India, established in August 1996 and

promoted by institutions of national stature responsible for economic
development of the country has since established a national
infrastructure of international standards that handles most of the
securities held and settled in dematerialized form in the Indian capital
market Although India had a vibrant capital market which is more than
a century old, the paper-based settlement of trades caused substantial
problems like bad delivery and delayed transfer of title till recently.
The enactment of Depositories Act in August 1996 paved the way for
establishment of NSDL, the first depository in India. This depository
37
promoted by institutions of national stature responsible for economic
development of the country has since established a national
infrastructure of international standards that handles most of the
securities held and settled in dematerialized form in the Indian capital
market.
Using innovative and flexible technology systems, NSDL works to

support the investors and brokers in the capital market of the country.
NSDL aims at ensuring the safety and soundness of Indian
marketplaces by developing settlement solutions that increase
efficiency, minimise risk and reduce costs. At NSDL, we play a quiet
but central role in developing products and services that will continue
to nurture the growing needs of the financial services industry.
In the depository system, securities are held in depository accounts,

which is more or less similar to holding funds in bank accounts.
Transfer of ownership of securities is done through simple account
transfers. This method does away with all the risks and hassles
normally associated with paperwork. Consequently, the cost of
transacting in a depository environment is considerably lower as
compared to transacting in certificates.
In the NSDL system, the depository extends its services to investors
through intermediaries called Depository Participants (DP) who as per
SEBI regulations could be organisations involved in the business of
providing financial services like banks, brokers, custodians and
financial institutions.
Realising the potential in this market, all the custodians in India and a
number of banks, financial institutions and major brokers have already
joined as DPs and they are providing services in a number of cities.
Many more organisations are in various stages of establishing
connectivity with NSDL.
The admission of the DPs involves an evaluation by NSDL of their

capability to meet with the strict service standards of NSDL and a
further evaluation and approval by SEBI.
Management
38
Chairman & Managing Director
(Mr. C. B. Bhave)
Executive Director
Executive Director (IT)
(Business Operations)
(Mr. Rajesh Doshi)
(Mr. Gagan Rai)
Departments Departments
Corporate Communications, Infrastructure –Office & New
Administration & Human Projects
Resources (Mukesh Mistry - SVP)
(Jayesh Sule - EVP)
TIN & Special Projects Systems - New Projects
(T. Koshy – EVP) (Yatin Nerurkar - SVP)
Surveillance Cell, CC Interface, BP Computer Operations & Production
Training & Investor Grievances Monitoring
(Chandrashekhar Tilak - SVP) (Nityanand Phatarphod - SVP)
BP Inspection Systems - Depository Applications
(Amit Sinha - SVP) (Dharmesh Parekh - VP)
Infrastructure - Depository &
Accounts & TIN-FC Inspection
Special Projects
(Tejas Desai - VP)
(Milind Mungale - VP)
Legal & Arbitration
(Ganesh Subbaram - VP)
Participant Interface
(Bhushan Maideo – VP)
Issuer Interface
(Samar Banwat – VP)
Promoters / Shareholders
NSDL is promoted by Industrial Development Bank of India Limited (IDBI) - the

largest development bank of India, Unit Trust of India (UTI) - the largest mutual
fund in India and National Stock Exchange of India Limited (NSE) - the largest
stock exchange in India. Some of the prominent banks in the country have taken
a stake in NSDL.
Promoters
• Industrial Development Bank of India Limited
39
• Unit Trust of India
• National Stock Exchange of India Limited
Other Shareholders
• State Bank of India

• Oriental Bank of Commerce
• Citibank NA
• Standard Chartered Bank
• HDFC Bank Limited
• The Hong Kong and Shanghai Banking Corporation Limited
• Deutsche Bank
• Dena Bank
• Canara Bank
• Union Bank of India
Business Partners
NSDL carries out its activities through various functionaries called "Business
Partners" who include Depository Participants (DPs), Issuing companies and
their Registrars and Share Transfer Agents, Clearing corporations/ Clearing
Houses of Stock Exchanges. NSDL is electronically linked to each of these
business partners via a satellite link through Very Small Aperture Terminals
(VSATs) or through Leased land lines. The entire integrated system (including
the electronic links and the software at NSDL and each business partner's end) is
called the "NEST" [National Electronic Settlement & Transfer] system.
40
Milestones
September
Drafting of the Depositories Ordinance
1995
December
NSDL incorporation
1995
August 1996 Depositories Act
November
NSDL Inauguration
1996
December
Commencement of Demat trading at NSE
1996
June 1997 Total value of demat securities at NSDL crosses US$ 1
41
bn.
December
Commencement of Demat trading at BSE
1997
January 1998 Compulsory demat trading for Institutional investors
Total value of demat securities at NSDL crosses US$ 5
March 1998
bn.
April 1998 Demat delivery in physical segment at NSE and BSE
November
Investor accounts with NSDL cross 100,000
1998
December Establishment of NSDL branches at Chennai, Delhi &
1998 Kolkata
December
Introduction of Demat of Government Securities
1998
Commencement of compulsory trading for retail
January 1999
investors
May 1999 NSDL launches NCFM - Depository Operations Module
February 2000 NSDL launches internet based service - SPEED - for CMs
May 2000 Investor accounts with NSDL cross 2.5 mn
June 2000 Commencement of Demat of Debt Instruments
June 2000 98% settlement in demat form
Introduction of T+5 Rolling Settlement and Uniform
July 2001
Settlement Cycle
September
NSDL launches SPEED-e
2001
April 2002 Introduction of T+3 Rolling Settlement
November
Launch of STEADY - An STP initiative by NSDL
2002
December
Investor Accounts cross 5 million
2002
April 2003 Introduction of T+2 Rolling Settlement
October 2003 Investor Accounts cross 6 million
October 2003 Introduction of Demat of NSC / KVP
November Launch of Market Participants and Investors Database
2003 (MAPIN)
November
Introduction of demat of Warehouse Receipts
2003
January 2004 Launch of IDeAS
January 2004 Launch of Tax Information Network (TIN)
June 2004 Launch of PAN card services
June 2004 Launch of Online Tax Accounting System (OLTAS)
42
Incorporation of NSDL Database Management Limited
June 2004
(NDML) - wholly owned subsidiary company of NSDL
October 2004 Intraday production shifting to Disaster Recovery Site
July 2005 Launch of Tax Information Network - PAN Ledger
October 2005 Investor Accounts cross 10 million
Issuing Companies/ their Registrar & Transfer Agents :

Securities issued by issuers who have entered into an agreement with NSDL can
be dematerialized in the NSDL depository. As per this agreement, issuer agrees
to verify the certificates submitted for dematerialization before they are
dematerialized and to maintain electronic connectivity with NSDL. Electronic
connectivity facilitates dematerialization, dematerialization, daily reconciliation
and corporate actions.
43
Clearing Corporation House:
The clearing corporations/houses of stock exchanges also have to be
electronically linked to the depository in order to facilitate the settlement of the
trades done on the stock exchanges for dematerialized shares. At present, all the
major clearing corporations/houses of stock exchanges are electronically
connected to NSDL.
The following stock exchanges have linked up with NSDL to facilitate trading and
settlement of dematerialized securities:
• Madras Stock Exchange Ltd. (MSE)

• National Stock Exchange of India Ltd. (NSE)
• Inter-connected Stock Exchange of India Ltd. (ISE)
• OTC Exchange of India (OTCEI)
• The Calcutta Stock Exchange Association Ltd. (CSE)
• The Delhi Stock Exchange Association Ltd. (DSE)
• The Stock Exchange, Mumbai (BSE)
• The Stock Exchange, Ahmedabad (ASE)
Benefits of Depository System

In the depository system, the ownership and transfer of securities takes place by
means of electronic book entries. At the outset, this system rids the capital
market of the dangers related to handling of paper. NSDL provides numerous
direct and indirect benefits like:
44
• Elimination of bad deliveries In the depository environment, once
holdings of an investor are dematerialised, the question of bad delivery
does not arise i.e. they cannot be held "under objection". In the physical
environment, buyer was required to take the risk of transfer and face
uncertainty of the quality of assets purchased. In a depository environment
good money certainly begets good quality of assets.
• Elimination of all risks associated with physical certificates- Dealing
in physical securities have associated security risks of theft of stocks,
mutilation of certificates, loss of certificates during movements through
and from the registrars, thus exposing the investor to the cost of obtaining
duplicate certificates etc. This problem does not arise in the depository
environment.
• No stamp duty for transfer of any kind of securities in the depository. This
waiver extends to equity shares, debt instruments and units of mutual
funds.
• Immediate transfer and registration of securities - In the depository
environment, once the securities are credited to the investors account on
pay out, he becomes the legal owner of the securities. There is no further
need to send it to the company's registrar for registration. Having
purchased securities in the physical environment, the investor has to send
it to the company's registrar so that the change of ownership can be
registered. This process usually takes around three to four months and is
rarely completed within the statutory framework of two months thus
exposing the investor to opportunity cost of delay in transfer and to risk of
loss in transit. To overcome this, the normally accepted practice is to hold
the securities in street names i.e. not to register the change of ownership.
However, if the investors miss a book closure the securities are not good
for delivery and the investor would also stand to loose his corporate
entitlements.
• Faster settlement cycle - The settlement cycle follow rolling settlement
on T+2 basis i.e. the settlement of trades will be on the 2nd working day
from the trade day. This will enable faster turnover of stock and more
liquidity with the investor.
• Faster disbursement of non cash corporate benefits like rights,
bonus, etc. - NSDL provides for direct credit of non cash corporate
entitlements to an investors account, thereby ensuring faster
disbursement and avoiding risk of loss of certificates in transit.
• Reduction in brokerage by many brokers for trading in
dematerialised securities Brokers provide this benefit to investors as
dealing in dematerialised securities reduces their back office cost of
handling paper and also eliminates the risk of being the introducing
broker.
• Reduction in handling of huge volumes of paper
• periodic status reports to investors on their holdings and transactions,
leading to better controls.
45
• Elimination of problems related to change of address of investor - In
case of change of address, investors are saved from undergoing the entire
change procedure with each company or registrar. Investors have to only
inform their DP with all relevant documents and the required changes are
effected in the database of all the companies, where the investor is a
registered holder of securities.
• Elimination of problems related to transmission of demat shares - In
case of dematerialised holdings, the process of transmission is more
convenient as the transmission formalities for all securities held in a demat
account can be completed by submitting documents to the DP whereas, in
case of physical securities the surviving joint holder(s)/legal heirs/nominee
has to correspond independently with each company in which shares are
held.
• Elimination of problems related to selling securities on behalf of a
minor - A natural guardian is not required to take court approval for selling
demat securities on behalf of a minor.
• Ease in portfolio monitoring since statement of account gives a
consolidated position of investments in all instruments.
SAFETY
There are various checks and measures in the depository system to ensure
safety of the investor holdings. These include:
• A DP can be operational only after registration by SEBI, which is based on

the recommendation from NSDL and their own independent evaluation.
SEBI has prescribed criteria for becoming a DP in the regulations.
46
• DPs are allowed to effect any debit and credit to an account only on the
basis of valid instruction from the client.
• Every day, there is a system driven mandatory reconciliation between DP
and NSDL.
• All transactions are recorded at NSDL Central System and in the
databases maintained by business partners.
• There are periodic inspections into the activities of both DP and R&T
agent by NSDL. This also includes records based on which the debit/credit
are effected.
• All investors have a right to receive their statement of accounts
periodically from the DP.
• Every month NSDL forwards statement of account to a random sample of
investors as a counter check.
• In the depository, the depository holds the investor accounts on trust.
Therefore, if the DP goes bankrupt the creditors of the DP will have no
access to the holdings in the name of the clients of the DP. These
investors can transfer their holdings to an account held with another DP.
• The data interchange between NSDL and its business partners is
protected by protection measures of international standards such as
encryption hardware lock. The protection measures adopted by NSDL are
more than what is prescribed in the SEBI Regulations.
• Freeze Facility: A depository account holder (beneficiary account) may
freeze securities lying in the account for as long as the account holder
wants it. By freezing the account, account holder can prevent unexpected
debits or credits or both, creeping into its account. The following types of
freeze facility available in the NSDL system may be availed of by
submitting freeze instruction to the DP in the prescribed form.
 Freeze for debits only
 Freeze for debits as well as credits
 Freeze a particular ISIN in the account
 Freeze a specific number of securities held under an ISIN in an
account
• Certification in Depository Operations : NSDL has introduced a
Certification Programme in Depository Operations (popularly known as
NCFM certification), and it has been made compulsory for all DPs to
appoint a person qualified in this certification in each of its branches. This
way, NSDL wants to ensure that each branch of a DP that services
investors has atleast one person who has thorough knowledge about
depository system.
• Investor grievance: All grievances of the investors are to be resolved by
the concerned business partner. If they fail to do so, the investor has the
right to approach NSDL at the following address: Officer-In-Charge
Investor Relationship Cell
NSDL
4th floor, A Wing, Trade World
Kamala Mills Compound
47
Senapati Bapat Marg
Lower Parel Mumbai- 400013
email: relations@nsdl.co.in
The investor relationship cell of NSDL would work towards resolution of
the grievance.
• Insurance Cover: NSDL has taken a comprehensive insurance policy to
help DP to indemnifying investors for the loss accrued to them due to
errors, omissions, commission or negligence of DP.
• Computer and communication infrastructure: NSDL and its business
partners use hardware, software and communication systems, which
conform to industry standards. Further, the systems are accepted by
NSDL only after a rigorous testing procedure. NSDL's central system
comprises an IBM mainframe system with a back-up facility and a remote
disaster back-up site.
• Machine level back-up: The IBM mainframe in which the data is
processed has adequate redundancy built into its configuration. There is a
standby central processing unit (CPU) to which processing can be
switched over to in case of main system CPU failure. The disk has RAID
implementation, which ensures that a failure of hard disk will not lead to
loss in data. System has spare disk configuration where data is
automatically copied from the main disk upon encountering the first failure
(due to RAID implementation - first failure does not result in loss of data).
All network components like router, communication controllers etc., have

on-line redundancy and thus a failure does not result in loss of transaction.
Disaster back up site: A disaster back up site equipped with a computer

identical to the mainframe computer & computing resources has been set
up at a distant location about 175 km away from Mumbai. The depository
operations are often switched between the computing resources at
Mumbai office and disaster back up site to ensure that the disaster site is
always operational.
Charges
NSDL provides depository services to investors and clearing members through
market intermediaries called Depository Participants (DPs). NSDL does not
charge the investors and clearing members directly but charges its DPs, who are
48
free to have their own charge structure for their clients. NSDL charges to DPs are
uniform for all DPs. Some charges are payable by Issuers also.
• Fee Payable by Depository Participants.

• Fee Payable by Issuers.
• A Comparative Chart of Fees Charged by the DPs.
FEE PAYABLE BY DEPOSITORY PARTICIPANTS
ENTRY FEES
Each DP shall pay, to the Depository, a non-refundable Entry Fee of Rs. 25,000.
TRANSACTION RELATED FEES
The following transaction related fees shall be payable by the DPs to the
Depository:
Settlement fee:
i. A settlement fee at the rate of Rs. 6 per debit instruction in a Client's

account shall be charged to the DP of the Client.
ii. A settlement fee at the rate of Rs.1.00 per instruction in respect of

securities received from the clearing Corporation into the Receipt-in
account of each Clearing Member maintained with the DP subject to a
minimum of Rs.1000 and a maximum of Rs.20,000 per quarter per CM
Account shall be charged to the DP.
iii. A settlement fee at the rate of Rs.6 per debit instruction for transfer of
securities by way of inter-settlement transfers in the CM Account(s) shall
be charged to the DP.
iv. A settlement fee at the rate of Rs.6 per debit instruction for transfer of
securities from the CM account of a Clearing Member to the CM account
of another Clearing Member shall be charged to the DP of the delivering
Clearing Member.
Provided however that no settlement fee shall be charged :
a. in respect of commercial papers and short term debt instruments such as

certificate of deposits, MIBOR linked papers etc.; and
49
b. in case of :
i. transfers necessitated by transmission on death of the Client; and
ii. transfer of the accounts of Clients from one DP to another as a
consequence of expulsion or suspension of such DP.
Pledge fee
A fee at the rate of Rs.25 per instruction for creation of pledge / hypothecation
shall be charged to the Participant of the pledgor/ hypothecator. No fee shall be
charged when a pledge / hypothecation is closed or invoked.
Lending and Borrowing fee
A fee at the rate of Rs.25 per instruction shall be charged to the Participant of the
borrower in respect of credit of securities to the account of the borrower. No fee
shall be charged at the time of repay or recall of securities.
CUSTODY FEES
Nil
FEE FOR DEMATERIALISATION & REMATERIALISATION
No fee shall be charged by the Depository on dematerialisation requests.

However, in case of rematerialisation request, a flat fee of Rs.10 per certificate or
Rs. 10 for every hundred securities or part thereof, whichever is higher, shall be
charged to the Participant.
MINIMUM FEE
In case the total fee billed to the Participant in a financial year is less than the
minimum fee of Rs. 1,50,000 then the Participant shall be charged the difference
thereof.
SECURITY DEPOSIT
Every Participant shall pay to the Depository Rs.10 lakh by way of interest free
refundable security deposit. However, a Clearing Corporation or a Clearing
House of a Stock Exchange will be exempt from payment of security deposit.
50
FEE PAYABLE BY ISSUERS
ANNUAL CUSTODY FEE
i. With effect from April 1, 2005, an Issuer of listed securities shall pay an
annual custody fee at the rate of Rs. 5 per folio (ISIN position) in NSDL,
subject to a minimum amount as mentioned below, plus service tax as
applicable:
Nominal Value of Securities admitted (Rs.) Amount (Rs.)

Upto 5 crore 4,000
Above 5 crore and upto 10 crore 10,000
Above 10 crore and upto 20 crore 20,000
Above 20 crore 30,000
ii.
iii. The above fee would be applicable on all securities i.e. equity, debt, Units
of mutual funds, pass through certificates, certificates of deposit,
commercial papers, preference shares etc., except Government
securities.
iv. The fee will be based on the total ISIN positions (folios) as on March 31, of
the previous financial year.
Provided however that, in case the issued capital or ISIN positions

increase during the financial year due to issue of further shares, by way of
public offer, the annual custody fee would be charged on a pro-rata basis,
at the time of such issue.
v. The fee will be charged every year on a financial year basis and shall be
payable by April 30 of that financial year.
If an Issuer fails to pay the fees mentioned under "Annual Custody Fee"
by the due date, the Depository may charge interest @ 12% p.a. on the
amount, from the due date of payment till the payment is received by the
Depository. Provided further that the Depository may stop providing details
of clients / clearing members / clearing corporation / intermediary to the
Issuer and / or its Registrar and Transfer Agent as mentioned in the Bye
Laws and Business Rules.
Provided further that the Depository may not permit the Issuer to use its
infrastructure including for issue of further securities in electronic form.
FEE FOR DISTRIBUTION OF NON-CASH CORPORATE BENEFITS
51
i. In case of offers for sale by an offerer or disinvestment by GOI, bonus,
rights, public issue, preferential issue, split, merger, demerger, capital
reduction, redemption, etc., a fee at the rate of Rs. 6 per record for debits
or credits to accounts as the case may be, shall be charged to the Issuer,
subject to a minimum fee of Rs.500 per corporate action.
ii. In case of conversion of shares of non pari-passu to pari-passu, partly-

paid to fully-paid etc., no fee shall be charged.
iii. In case of issue of Commercial Papers, a flat fee of Rs.10,000 shall be

levied on the Issuer for all issues of Commercial Papers during the
financial year.
Provided further that for the first quarter of the calendar year 2005, an
amount of Rs. 2,500 shall be levied on the Issuer for all such issues during
the first quarter of calendar year 2005.
iv. In case of issue of short term debt instruments viz., certificate of deposits,
MIBOR linked papers etc., a flat fee of Rs.10,000 shall be levied on the
Issuer for ten such issues made in a financial year and an additional fee of
Rs. 1,000 shall be levied on the Issuer for each subsequent issue.
Provided further that for the first quarter of the financial year 2005, an
amount of Rs. 2,500 would be charged to issuers for three such issues
and an additional fee of Rs. 1,000 shall be levied on the Issuer for each
subsequent issue.
ONE TIME CUSTODY FEES
An Issuer may pay a one time custody fee to NSDL at the rate of 0.05% plus
service tax as applicable on the market capitalisation of the company. The
market capitalisation of a company will be determined on the basis of the
average market price for a period of 26 weeks preceding the date on which the
company agrees to make such payment. Consequent upon such payment, NSDL
shall not levy any custody fee on the Participants or annual custody fee on the
Issuer.
If a company opts to pay the aforesaid one time fee, it will also be required to
agree to pay on the newly issued shares, a custody fee at the rate of 0.05% (five
basis points) on the value of shares calculated on the basis of issue price of
newly issued shares. In case the company does not pay this amount, NSDL shall
charge annual custody fee or custody fee as per provision mentioned hereunder,
as the case may be. However, the Issuer shall not be required to pay any one
time custody fee on any subsequent issue of Bonus shares by the company.
JOINING FEE BY ISSUERS
52
With effect from November 15, 2005, an Issuer of unlisted securities shall pay a
joining fee of Rs. 20,000 plus taxes at the applicable rate at the time of joining
NSDL, for the purpose of making its shares available for dematerialization.
NSDL Facts & Figures

As on June 30, 2007
Number of certificates eliminated (Approx.) 418 Crore

Number of companies in which more than 75%
1793
shares are dematted
Average number of accounts opened per day since
3237
November 1996
74% of all pincodes in
Presence of demat account holders in the country
the country
Depository participant:-
In the NSDL system, the depository extends its services to investors through
intermediaries called Depository Participants (DP) who as per SEBI regulations
53
could be organisations involved in the business of providing financial services
like banks, brokers, custodians and financial institutions.
Realising the potential in this market, all the custodians in India and a number of
banks, financial institutions and major brokers have already joined as DPs and
they are providing services in a number of cities. Many more organisations are in
various stages of establishing connectivity with NSDL.
The admission of the DPs involves an evaluation by NSDL of their capability to

meet with the strict service standards of NSDL and a further evaluation and
approval by SEBI.
Depository Participant /Eligibility

As per Regulation 19(a) of SEBI (Depositories & Participants) Regulations,
following are the categories that are eligible to become DPs:
• Public financial institution

• Scheduled bank
• State financial corporation
• Custodian
• Clearing corporation or a clearing house of a stock exchange
• Stock broker
• Non-banking finance company
• Registrar to an issue or share transfer agent
Depository Participant /Procedure

• The SEBI Regulations specify the format in which any of the eligible
entities can apply to become a DP. An applicant has to submit the duly
filled application form to NSDL along with the details specified in the Bye
Laws.
• On receiving this application, NSDL requests for specific organisational
and network details from the applicant vide specified formats.
• After this the applicant has to install the requisite hardware, system
software & VSAT equipment and intimate NSDL of the completion of
installation vide a specified format. On verification of these details, NSDL
confirms installation of necessary hardware and VSAT connectivity and
forwards the application form to SEBI.
• A comprehensive training programme covering all operational aspects of
the depository system is conducted at NSDL for all the applicants. NSDL
then requests for details of the software resources available with the
applicant, which the applicant has to furnish vide a specified format. On
furnishing these details, the applicant is instructed to install the software
54
required for DP operations (DPM) in the test environment. On completion
of successful installation of the software, NSDL organises for the pilot
testing of the system. After completion of successful pilot testing the
applicant re-installs the software in the live environment as per the
directions given by NSDL.
• The applicant completes the registration process by paying the registration
and annual fees to SEBI.
• As per the Bye Laws, the DP also has to sign a bilateral agreement with
NSDL. After signing the agreement, the applicant pays the entry fee and
security deposit to NSDL to become operational.
Depository Participant /Services

NSDL provides the following services through its network of DPs.
Dematerialisation
Dematerialisation is the process by which a client can get physical certificates
converted into electronic balances maintained in its account with the DP.
Settlement of Market trades in dematerialised securities

Trades which are settled through the Clearing Corporation/ Clearing House of an
exchange are classified as "Market Trades".
Settlement of off market trades

Trades which are not settled through the Clearing Corporation/ Clearing House of
an exchange are classified as "Off Market Trades".
Pledging / hypothecation of dematerialised securities

NSDL provides beneficial owners with the facility to pledge/ hypothecate
securities held in electronic form.
Receipt of allotment in the electronic form in public offerings of companies

In case an investor prefers the electronic mode, he has to mention his account
number and name of his Participant so that the allotted securities are credited
into his account.
Receipt of non-cash corporate benefits such as bonus, rights in electronic

form
If the investor chooses to receive bonus, rights in the electronic form, he can get
a direct credit to his account, thereby avoiding the risk of loss of certificates in
transit.
Lending and borrowing of securities

A client (lender/borrower) having a beneficiary account with a DP can lend or
borrow securities in electronic form through an approved intermediary, who has
opened a special 'intermediary' account with a DP. The creation of lend/borrow
55
instruction will be initiated by lender/borrower respectively through his DP. The
intermediary will instruct its DP to confirm the instruction. Recall/ repay of lend/
borrow order can be initiated by the lender/ borrower or by the intermediary and
is to be confirmed by the counter party.
Facilitation of cash corporate actions such as dividends

NSDL provides details of beneficial owners as on a given day (the record date) to
the issuer company/ registrar so as to enable the company to calculate the
benefits arising out of these holdings. The cash benefits are forwarded to the
investor by the company's registrar and transfer agents directly.
Nomination
A client can make a nomination of his account in favour of any person by filing
the nomination form with his DP. Such nomination is considered to be conclusive
evidence of the account holder'(s) disposition in respect of all the securities in the
account for which the nomination is made.
Transmission of securities
NSDL facilitates transmission of securities balances of any client due to death,
lunacy, bankruptcy, insolvency or by any other lawful means other than transfer.
Change in Address
The client can change his address by submitting the changes in writing to the
DP. The changes conveyed to the DP will be automatically communicated to the
companies in which he is holding shares in dematerialised form.
Bank Account Details

Details of bank account of the client, including the 9-digit code number of the
bank and branch appearing on the MICR cheques issued by the bank have to
given to the DP at the time of account opening. Companies use this information
for printing them on dividend/interest warrants etc. to prevent its misuse. In case
the client wish to change this bank account details, he can do so by submitting
the changes in writing to the DP.
Depository Participant Guided Tour/System
The Participant will have its own I.T. set up installed, which will be connected to
the Depository system situated at National Securities Depository Limited,
Tradeworld, 4th Floor, Kamala Mills Compound, Lower Parel, Mumbai 400 013,
using appropriate telecommunication links. The hardware, software &
telecommunication equipment should be as specified by NSDL. The Participant
should ensure continuous electronic means of communication (connectivity ) with
NSDL.
56
The minimum I.T. set up required for a Participants entry level system would
comprise of single CPU Server (upgradable to dual or quad CPUs), at least one
client/ node and networking hardware. The Participant may configure additional
CPU, memory, disks and nodes based on the volume of business envisaged.
Depository Participant Guided Tour/Cost
The estimate of initial capital cost to be incurred by a Participant is divided into

the following, viz.:
a] Infrastructural Cost
Amount
Payable
Sr.No. Particulars (Rs.)
to
(appox.)
1. Hardware
Server (branded)
1,75,000/-
High End Server (Max. Client A/c – 5,00,000
(a) Vendor to
and No. of Transaction / day – 1,00,000)
2,40,000/-
Entry Level Server with Hardware (onboard) 1,25,000/-
(b) RAID (Max. Client A/c – 1,50,000 and No. of Vendor to
Transaction / day – 40,000) 1,80,000/-
Entry Level Server without Hardware RAID 1,20,000/-
(c) (Max. Client A/c – 1,00,000 and No. of Vendor to
Transaction / day – 22,500) 1,58,000/-
Desktop as Server (Max. Client A/c – 75,000 35,000/- to
(d) Vendor
and No. of Transaction / day – 15,000) 45,000/-
30,000/- to
Node / Client Vendor
37,000/-
3,500/- to
Scanner Vendor
5,500/-
6,000/- to
Printer (Deskjet Printer) Vendor
7,500/-
20,000/- to
Printer (Entry level Laserjet Printer) Vendor
25,000/-
Router + cables Vendor 90,000/-
Dial up (Async – Only PPP Connectivity) Vendor 1,000/-
UPS Vendor 20,000/- to
57
30,000/-
Hardware Token (Dongle) NSDL 1,550/-
3,27,050/-
Total Hardware charges with server stated in
* to
(a)
4,30,050/-
2,77,050/-
* to
(b)
3,70,050/-
2,72,050/-
* to
(c)
3,48,050/-
1,87,050/-
* to
(d)
2,13,050/-
2. VSAT Charges
VSAT [deposit recovered over 3 yrs.] NSE 2,00,000/-
HCL
VSAT activation charges 17,750/-
Comnet
Total VSAT related initial charges 2,17,750/-
3. Lease Line Charges
Local Leased Line users within Mumbai and
Delhi (Hierarchical Network) - (inclusive of local NSDL 75,000/-
leased line charges)
Inter-city Leased Line users from any other city
connecting directly to NSDL – Mumbai (This
includes Delhi BPs who have not availed of
NSDL 36,500/-
Hierarchical Network) – Only NSDL Charges
Leased Line charge shall be extra and payable
on actual (as per circuit bills)
4. ISDN Charges (optional)
Annual charges for dedicated ISDN line
(Charges towards reserving one ISDN line and NSDL 83,900/-
associated port for Participant at NSDL end)
5. Software
DPM Application Software license (New set-up) NSDL 2,50,000/-
DPM Application Software license (Scale Down) NSDL 1,25,000/-
58
Windows 2000 Server with Service Pack Vendor 30,000/-
Windows 2000 Professional Vendor 10,500/-
SQL server 2000 software with 5 user license ** Vendor 55,000/-
WINZIP Software License (minimum two) Vendor 2,000/-
Anti-virus Vendor 1,000/-
Total Software (Full Set-up) 3,48,500/-
Total Software (Scale Down) 2,23,500/-
* Price variation is due to the Local / MNC make system with memory ranging
from 512 MB to 2 GB.
** MS-SQL full server pack comes with five user license. Of these five user
licenses, one is used for server itself and one is used by NSDL Helpdesk for
remote login set-up. Participants having more than three desktop clients shall
procure additional MS-SQL client access licenses in proportion to the additional
number of desktop clients.
Notes:
1. The cost of hardware is only indicative as different vendors may have

different price structure.
b] Security Deposit and Initial Fees

Payable Time of Amount
Particulars
to Payment (Rs.)
After intimation
Application Fees SEBI 5,000
from NSDL
After SEBI
Registration Fees SEBI 1,00,000
approval
After SEBI
Entry Fee NSDL 25,000
approval
Security Deposit
After SEBI
[refundable but NSDL 10,00,000
approval
interestfree]
After SEBI
Insurance charges NSDL 32,000
approval
Total (b) 11,62,000
Depository Participant /Safety
59
NSDL has established extensive back up systems for computer and
communication infrastructure.
NSDL uses hardware, software and communication systems, which conform to

industry standards. Further, the systems are accepted by NSDL only after a
rigorous testing procedure. NSDL's central system comprises an IBM mainframe
system with a back-up facility and a remote disaster back-up site.
The NSDL hardware, software and communication systems are continuously

reviewed in order to make them more secure. These reviews are a part of an
ongoing exercise wherein security considerations are given as much importance
as operational efficiency.
In addition to the enhancement of the services offered through the depository,

NSDL is also working towards strengthening the systems and procedures to
comply with the stringent international standards, that would further the
confidence of the users of the system.
Broker:-
Members of the stock exchanges are an important link between investors and the
clearing house in the depository system. Securities bought or sold are routed
through the clearing member account for settlement in the depository system.
Therefore, to settle trades in dematerialised securities, a stock exchange

member must open a clearing member account with any DP.
Clearing member account: Member brokers of stock exchanges which have

established electronic connectivity with NSDL need to open a clearing member
account, with a DP of its choice, to settle trades in the demat form. This account
is meant only to transfer shares to and receive shares from the clearing
corporation/ house and hence, the member broker does not have any ownership
(beneficiary) rights over the shares held in such an account.
In order to open a clearing member account, the clearing member has to:
• Fill up the relevant account opening form which is available with the DP.
• Sign the DP-client agreement and submit it alongwith documents
regarding references specified by the DP.
• Submit a letter from the clearing corporation/ house of your stock
exchange regarding allotment of CM-Id to the clearing member. Receive
your clearing member account number.
60
A clearing member can close its clearing member account with one DP and open
another clearing member account with another DP.
Broker /Settlement - Sell

Trades which are settled through the Clearing Corporation/ Clearing House of an
exchange are classified as "Market Trades".
Market Trade:
Settlement of 'Sale trades' will be in accordance with the settlement calendar of

respective stock exchanges. The pay-in process has the following steps:
• Your clients give instruction to their DPs to transfer securities from their
accounts to your pool account well within the pay-in time.
• For pay in of securities, you should give an instruction to transfer the
securities from your pool account to your delivery account well within the
pay-in time.
• Your transfer instruction to delivery account is taken as an authorisation to
transfer securities from the delivery account to the clearing corporation/
house on the pay in day.
• You receive payment from the clearing house/ corporation on pay-out
Off Market Trade:
Trades not settled through the clearing house or the clearing corporation/ house
of the stock exchanges are called "off-market trades".
• The selling client gives a delivery instruction to his DP to transfer

securities from his depository account to the buying client's depository
account.
Broker /Settlement – Buy

Market Trade:
• At the time of pay out of securities, you receive credit of the securities into
your receipt account from the clearing house/ corporation
• These securities are then moved into your pool account automatically.
• You give an instruction to your DP to transfer securities from your pool
account to the receiving clients' accounts.
Off Market Trade:
61
• To receive securities from the selling client's depository account, the
buying client must give a receipt instruction if he has not already given a
standing receipt instruction to his DP.
Broker /Facilities
Instructions in electronic form:
The clearing member can give the instructions in an electronic form (on a floppy
or tape) if the DP is willing to accept the same. This eliminates the need for
manual data entry at the DP's office.
Part pay-in of securities:

If the securities available in the clearing member account is less than the
securities to be delivered for pay-in, then at the time of settlement, the securities
to the extent available in the clearing member account will be transferred. The
instruction for the full quantity will not be rejected.
Automatic delivery out instructions (Auto dos):

Delivery-out instructions for moving securities from CM Pool Account to CM
Delivery Account can be generated automatically by the respective Clearing
Corporations based on the net delivery obligations of its Clearing Members. The
Clearing Corporation can generate Auto DOs on behalf of those Clearing
Members who have authorised it in this regard. The Auto DOs will be generated
around the time of download of the delivery obligations to the Clearing Members.
Such Clearing Members will not be required to give delivery-out instruction forms
to the Participants for Pay-in to the Clearing Corporation in respect of the
automatically generated DOs. The Clearing Members can know the Auto DOs
either by way of download from the Clearing Corporation or through the Auto DO
Report from the Participants or from SPEED facility on Internet.
Irreversible Delivery-out instructions:

Clearing members can give "Irreversible Delivery-out Instruction" which can't be
canceled once they are executed. Such irreversible instructions are used for pre
pay-in of securities for margin purposes.
SPEED:
NSDL offers a secured Internet based service for clearing members (such as
brokers) of the stock exchanges linked to NSDL. This service named SPEED
(Securities Position Easy Electronic Dissemination) enables the clearing
members to view details of their clearing member pool accounts directly on the
Internet. Data available include:
• Balance lying in CM Pool account

• Transactions for securities delivered by the clients (for Pay-in)
62
• Transactions for securities delivered by clearing member to Clearing
Corporation (Pay-in) including instructions in status 'Overdue', i.e. those
pending for credits from clients and Inter-Settlement transfers
• Transactions for securities delivered by Clearing Corporation to clearing
member (Pay-out)
• Transactions for securities delivered by clearing member to clients (after
Pay-out) including instructions in status 'Overdue', i.e. those pending for
credit from pay-out
All the above data can be downloaded and input in clearing member's back office
for further use. This facility will be of immense help to the clearing members as
the downloaded data can be applied in their back-office system to automatically
flag the clients who are yet to deliver the securities for pay-in. This will enable
them to follow-up with such clients for pending deliveries.
Broker /Safety
safety of the investor holdings. These include:
• A DP can be operational only after registration by SEBI, which is based on

the recommendation from NSDL and their own independent evaluation.
SEBI has prescribed criteria for becoming a DP in the regulations.
• Depository Participants are allowed to effect any debit and credit to an
account only on the basis of valid instruction from the client.
• Every day, there is a system driven mandatory reconciliation between
participant and NSDL.
are effected.
63
Certification Programme in Depository Operations, and it has been made
compulsory for all DPs to appoint a person qualified in this certification in
each of its branches. This way, NSDL wants to ensure that each branch of
a DP that services investors has atleast one person who has thorough
knowledge about depository system.
right to approach NSDL at the following address:
Officer-In-Charge
NSDL
Trade World
Senapati Bapat Marg
Lower Parel
Mumbai- 400013
Email: relations@nsdl.co.in
The investor grievance cell of NSDL would work towards resolution of the
grievance.

protect the interest of the investors in cases of failure of the DP to resolve
a genuine loss.
• Computer and communication infrastructure
NSDL and its business partners use hardware, software and
communication systems, which conform to industry standards. Further, the
systems are accepted by NSDL only after a rigorous testing procedure.
NSDL's central system comprises an IBM mainframe system with a back-
up facility and a remote disaster back-up site.
Machine level back-up: The IBM mainframe in which the data is

implementation, which ensures that a single point failure will not lead to

64
Disaster back up site: A disaster back up site equipped with a computer identical
to the mainframe computer & computing resources has been set up at a remote
location about 175 km away from Mumbai. The depository operations are often
switched between the computing resources at Mumbai office and disaster back up
site to ensure that the disaster site is always operational.
Investor / Benefits:-
In the depository system, the ownership and transfer of securities takes place by
means of electronic book entries. At the outset, this system rids the capital
market of the dangers related to handling of paper. NSDL provides numerous
direct and indirect benefits, like:
• Elimination of bad deliveries - In the depository environment, once

holdings of an investor are dematerialised, the question of bad delivery
does not arise i.e. they cannot be held "under objection". In the physical
environment, buyer was required to take the risk of transfer and face
uncertainty of the quality of assets purchased. In a depository environment
good money certainly begets good quality of assets.
• Elimination of all risks associated with physical certificates - Dealing
in physical securities have associated security risks of theft of stocks,
mutilation of certificates, loss of certificates during movements through
and from the registrars, thus exposing the investor to the cost of obtaining
duplicate certificates and advertisements, etc. This problem does not arise
in the depository environment.
• No stamp duty for transfer of any kind of securities in the depository. This
waiver extends to equity shares, debt instruments and units of mutual
funds.
• Immediate transfer and registration of securities - In the depository
environment, once the securities are credited to the investors account on
pay out, he becomes the legal owner of the securities. There is no further
need to send it to the company's registrar for registration. Having
purchased securities in the physical environment, the investor has to send
it to the company's registrar so that the change of ownership can be
registered. This process usually takes around three to four months and is
rarely completed within the statutory framework of two months thus
exposing the investor to opportunity cost of delay in transfer and to risk of
loss in transit. To overcome this, the normally accepted practice is to hold
the securities in street names i.e. not to register the change of ownership.
However, if the investors miss a book closure the securities are not good
for delivery and the investor would also stand to loose his corporate
entitlements.
65
• Faster settlement cycle -The exclusive demat segments follow rolling
settlement cycle of T+2 i.e. the settlement of trades will be on the 2nd
working day from the trade day. This will enable faster turnover of stock
and more liquidity with the investor
• Faster disbursement of non cash corporate benefits like rights,
bonus, etc.- NSDL provides for direct credit of non cash corporate
entitlements to an investors account, thereby ensuring faster
disbursement and avoiding risk of loss of certificates in transit.
• Reduction in brokerage by many brokers for trading in

dematerialised securities - Brokers provide this benefit to investors as
dealing in dematerialised securities reduces their back office cost of
handling paper and also eliminates the risk of being the introducing
broker.
• Reduction in handling of huge volumes of paper
• Periodic status reports to investors on their holdings and transactions,
leading to better controls.
• Elimination of problems related to change of address of investor,
transmission, etc. - In case of change of address or transmission of
demat shares, investors are saved from undergoing the entire change
procedure with each company or registrar. Investors have to only inform
their DP with all relevant documents and the required changes are
effected in the database of all the companies, where the investor is a
registered holder of securities.
• Elimination of problems related to selling securities on behalf of a
minor - A natural guardian is not required to take court approval for selling
demat securites on behalf of a minor.
• Ease in portfolio monitoring since statement of account gives a
consolidated position of investments in all instruments.
Investor / Safety
safety of the investor holdings. These include the following:
• An entity can be made operational as a DP only after registration by SEBI,

which is based on the recommendation from NSDL and SEBI’s own
independent evaluation. SEBI has prescribed criteria for becoming a DP in
the regulations.
• Depository Participants are allowed to effect any debit and credit to an
account only on the basis of valid instruction from the client.
• Every day, there is a system driven mandatory reconciliation between DP
and NSDL.
are effected.
66
Certification Programme in Depository Operations, and it has been made
compulsory for all DPs to appoint a person qualified in this certification in
each of its branches. This way, NSDL wants to ensure that each branch of
a DP that services investors has atleast one person who has thorough
knowledge about depository system.
right to approach NSDL at the following address:
Officer-In-Charge
National Securities Depository Limited.
Trade World
4th Floor, A – Wing,
Senapati Bapat Marg
Lower Parel
Mumbai- 400013
The investor relationship cell of NSDL would work towards resolution of

the grievance.

protect the interest of the investors in cases of failure of the DP to resolve
a genuine loss.
• Computer and communication infrastructure
NSDL and its business partners use hardware, software and
communication systems, which conform to industry standards. Further, the
systems are accepted by NSDL only after a rigorous testing procedure.
67
NSDL's central system comprises an IBM mainframe system with a back-
up facility and a remote disaster back-up site.
Machine level back-up: The IBM mainframe in which the data is

implementation, which ensures that a single point failure will not lead to

Disaster back up site: A disaster back up site equipped with a computer

identical to the mainframe computer & computing resources has been set
up at a remote location about 175 km away from Mumbai. The depository
operations are often switched between the computing resources at
Mumbai office and disaster back up site to ensure that the disaster site is
always operational.
Back-up in case of power failure: Continuity in power supply to the main

systems is assured by providing for;
o dual uninterrupted power supply (UPS) for IBM-Mainframe and

related components wherein the two UPSs are connected in
tandem. In case of failure of primary UPS, the secondary UPS
takes over instantaneously and thus, there is no interruption in
operation, and
o back-up diesel generator set.
Periodic Review: The NSDL hardware, software and communication

systems are continuously reviewed in order to make them more secure
and adequate for the size of business. These reviews are a part of an
ongoing exercise wherein security considerations are given as much
importance as operational efficiency.
Investor / Open a Demat Account

Note:
1. You can open more than one demat account in the same name with single
DP/ multiple DPs.
2. No minimum balance is required to be maintained in a demat account.
68
3. You can give a one time standing instruction to your DP to receive all the
credits coming to your demat account automatically.
4. You may choose your DP based on your evaluation of their reputation,
service standards, charges, comfort level, other conveniences, etc.
5. Open the demat account in single or joint names. If the same set of joint
holders held securities in different sequence of names, these joint holders
were earlier required to open different demat accounts in NSDL depository
system. NSDL has introduced "Transposition-cum-Demat" facility to help
joint holders, to dematerialise securities in the same account even though
share certificates are in different sequence of names. For this purpose,
Transposition-cum-Demat Form should be submitted to the DP.
Eg: If 100 securities of company ABC are registered in the name of

Suresh as first holder & Rajesh as second holder & 200 securities of
company PQR are registered in the name of Rajesh as first holder &
Suresh as second holder, both these securities can be held in one single
demat account opened in the name of Suresh as first holder & Rajesh as
second holder or Rajesh as first holder & Suresh as second holder.
6. Account opening procedure should typically take 1-5 days.
7. In case of holdings of a partnership firm, the account should be opened in
the name of the 'partner(s)'.
8. In case of holdings of a HUF, the account should be opened in the name
of the 'karta'.
9. In case of a minor, the demat account should be opened in the name of
the minor and the guardian's name should be mentioned. The guardian
will sign as signatory on behalf of the minor.
10. In case of any difficulties, contact your DP.
Procedure:
1. Fill account opening form (available with your DP).

2. Give your DP the duly filled account opening form with proof of identity
and proof of address documents as may be required.
3. Sign agreement with DP (agreement will state rights & obligations of both
parties). The agreement will contain the fee structure of your DP. Your DP
would give you a copy of this signed agreement for your record.
4. DP would give you "Client Id" no. (account no.) once your demat account
is opened. This 'Client Id' number alongwith your 'DP Id' number forms a
unique combination. Both these numbers should be quoted in all your
future dealings with DP/NSDL/ Issuing company/their registrar & transfer
(R&T) agent.
5. Your DP would give you instruction slips for depository services viz.,
dematerialisation, delivery instruction for trades, etc. These instruction
slips will bear preprinted serial numbers and your client-id prestamped.
Preserve these carefully.
69
6. Your DP would give you a list of deadlines for giving instructions for
various depository activities viz., transfer for effecting sale, purchase, etc.
If not, check with the DP.
Investor / Dematerialisation
Note:
1. Dematerialisation of your holdings is not mandatory. You can hold your

securities either in demat form or in physical form. You can also keep part
of your holdings (in the same scrip) in demat form & part in physical form.
However, a select list of securities announced by SEBI can be delivered
only in demat form in the stock exchanges connected to NSDL.
2. Only securities admitted by depositories can be dematerialised.
3. Only securities registered in the name of the account holder can be
dematerialised.
4. Dematerialisation is normally completed within 15 days after the share
certificates have reached the issuer/ its R&T Agent. Thus it may take you
a month from the date you hand over shares, to receive demat credit.
5. Dematerialisation would be done only when the issuer / its R&T Agent is
satisfied of genuineness of securities & ownership status.
6. All the joint holders should sign the DRF.
7. In case of joint holdings, if the same set of joint holders held securities in
different sequence of names, the securities can be dematerialised in the
same account even though share certificates are in different sequence of
names. For this purpose, Transposition-cum-Demat form should be
submitted to the DP.
8. Demat requests with name(s) not matching exactly with the name(s)
appearing on the certificates merely on account of initials not being spelt
out fully or put after or prior to the surname, would be processed, provided
the signature(s) of the client(s) on the DRF tallies with the specimen
signature(s) available with the issuer/ its R & T agent.
9. If the signature in the DRF does not match with the signature available
with the issuer/ its R & T agent, the issuer/ its R & T agent may at the time
of demat confirmation, ask for additional documentation (like bank
attestation/ notarisation, etc.) to prove that the certificate belongs to the
person who forwarded the DRF.
10. In case there is any problem in processing the DRF, contact your DP and
if he cannot resolve the problem you may contact NSDL.
Procedure
1. Fill demat request form (DRF) (obtained from DP with whom your demat
account is opened).
2. Deface the share certificate(s) you want to dematerialise by writing across
"Surrendered for dematerialisation".
70
3. Submit the DRF & share certificate(s) to DP. DP would forward them to
the issuer / its R&T Agent .
4. After dematerialisation, your demat account with your DP, would be
credited with the dematerialised securities.
Investor / Trading & Settlement in Dematerialised

Securities
Securities transactions can be settled in demat form for the transactions done on
stock exchanges connected to NSDL. At present, NSE, BSE, CSE, DSE, OTCEI,
MSE, ISE & ASE are connected to NSDL.
Procedure
Trading in dematerialised securities is done through your broker just like trading
in physical securities.
Sell dematerialised securities
1. You sell your dematerialised securities in any of the stock exchanges

linked to NSDL through a broker of your choice.
2. You give instruction to your DP for debit of your depository account and
credit of your broker's clearing member account before the deadline (pay
in/non pay in )prescribed by your DP, so that your broker's clearing account is
credited at the time arranged with him. This instruction should be given
using the 'delivery instruction slip' allotted to you by your DP.
3. On the pay-in day, your broker gives instruction to his DP for delivery to
clearing corporation/clearing house of the relevant stock exchange.
4. The broker receives payment from the clearing corporation/ clearing
house.
5. You receive payment from the broker for the sale in the same manner you
would receive payment for a sale in the physical mode.
Buy dematerialised securities
1. You purchase securities in any of the stock exchanges connected to

NSDL through a broker of your choice and make payment to your broker.
Make sure you tell your broker you want only demat shares.
2. Broker arranges payment to clearing corporation/ clearing house of the
stock exchange.
3. Broker receives credit in his clearing account with his DP on the pay-out
day. He can immediately transfer these securities to your depository
account, provided your account is already active.
71
4. Broker gives instructions to his DP to debit his clearing account and credit
your depository account.
Investor / Other Services

You will receive corporate action (as announced by the issuing company) for
securities held in demat form.
a] Cash corporate action (dividend, interest, etc.)

Issuer / its R&T agent directly forwards the dividend warrant/ interest to the
depository account holder. NSDL does not handle funds. The issuer/ its R&T
Agent calculates the benefits due to you on the basis of ownership data
forwarded by NSDL.
b] Non cash corporate action (bonus, rights, etc.)

Issuer / its R&T agent would arrange to credit your depository account with
bonus/rights securities to the extent of your entitlement on the basis of ownership
data forwarded by NSDL.
Note:
1. NSDL does not handle cash corporate actions. In case of non-receipt of

the same, contact the issuer/ its R&T agent. In future, when NSDL
handles cash corporate actions, you may contact NSDL in case of non-
receipt of the same.
2. In case you wish to avail of the ECS facility for receiving your cash
corporate action, you may do so by informing the issuer/ its R&T Agent
(provided the issuer gives this facility). You will need to inform the
company even if you were availing this facility for your physical securities
which were dematerialised.
3. Ensure that you give your bank particulars correctly in the account
opening form. This would be printed on the dividend warrant.
4. In case of right/ bonus entitlement, irrespective of the form of your existing
holding, you have to intimate issuer/ its R&T agent your choice of the form
(physical/ demat) in which you would prefer to receive your right / bonus
securities and the client id and DP id of the account in which you would
like to have the securities credited. Although this depository account can
be different from the account in which your existing securities are held,
they should be in the same combination of names as the depository
account where your existing securities are held. If there is any mistake in
your depository account details mentioned in the rights application/
intimation letter indicating the choice of form of bonus securities, you
would receive physical securities directly from the issuer/ its R&T agent.
5. In case you have not intimated issuer/ its R&T agent your choice of the
form (physical/ demat) in which you would prefer to receive your right /
72
bonus securities, you will get your non-cash corporate benefits in the form
of your original holdings.
6. In case of rights issue, the rights issue form will be forwarded by the
issuer/ its R&T Agent.
7. In case of problem in credit in your depository account, contact your DP. If
they fail to resolve your problem, you may contact NSDL.
TRANSACTION STATEMENT:
For each account opened with your DP, you will receive a "Statement of
Account" from your DP on a quarterly basis. If your account has a debit/ credit
during the intervening period, you will receive a "Statement of Account" within 30
days of the debit/ credit to your account.
Note:
1. You can arrange with your DP to get the "Statement of Account" at shorter
intervals. They may charge for this facility.
2. In case of any discrepancy in the "Statement of Account", contact your
DP. If they fail to resolve your problem you may contact NSDL.
3. The "Statement of Account" is your proof of holding and in case you loose
it you would not loose your holding.
GENERAL:
1. Public issues: You can opt for allotment directly in demat form, provided
the company has joined NSDL & gives you this facility.
2. Pledge: You can pledge your demat holdings.
3. Lending/ Borrowing: You can lend/ borrow demat securities to/ from an
authorised intermediary.
4. Freezing of account: You can freeze your account any time. When your
account is frozen, no transactions will be made from your account until
you unfreeze it. Further, you also have the facility to freeze your account
for debits only. In such a case, credits will automatically flow to your
account.The way you can freeze your entire account, you can freeze
securities of select companies in your account or you can even freeze
select quantity of securities for a particular company and keep balance
quantity of securities in free status.
5. Closure of account: In case you want to close your account with one DP,
you can do so by shifting your holding to a depository account with
another DP or by rematerialising your holding. You can rematerialise part
or whole of your holdings any time.
6. Transmission: If the account holder passes away, the DP of the account
holder would be able to process the transmission of these securities to the
legal heirs. You do not have to take up with each of the issuer/ its R&T
agent. NSDL does not charge its DP for transmission.
73
7. Nomination: You have the facility to appoint a nominee for your
depository account. However, you can nominate only one person per
account.
8. Change in client details: In case of any change in client details provided
in the account opening form viz. Address, bank details etc., you can
contact your DP. The DP will ensure that the change is updated for all
holdings credited in your account.
9. Investor Grievance: In case of any unresolved dispute with a DP you can
contact NSDL for resolution of your grievance at the following address:
Officer-In-Charge,
Investor Relationship Cell,
National Securities Depository Limited
Tradeworld,4th Floor, A - Wing,
Kamala Mills Compound,
Lower Parel,
Mumbai 400 013.
Phone: 022-24994200
Fax: 022-24972993/ 24976351
Investor / Trading & Settlement in

Dematerialised Securities
Securities transactions can be settled in demat form for the transactions done on
stock exchanges connected to NSDL. At present, NSE, BSE, CSE, DSE, OTCEI,
MSE, ISE & ASE are connected to NSDL.
Procedure
Trading in dematerialised securities is done through your broker just like trading
in physical securities.
Sell dematerialised securities
1. You sell your dematerialised securities in any of the stock exchanges

linked to NSDL through a broker of your choice.
2. You give instruction to your DP for debit of your depository account and
credit of your broker's clearing member account before the deadline (pay
in/non pay in )prescribed by your DP, so that your broker's clearing account is
credited at the time arranged with him. This instruction should be given
using the 'delivery instruction slip' allotted to you by your DP.
74
3. On the pay-in day, your broker gives instruction to his DP for delivery to
clearing corporation/clearing house of the relevant stock exchange.
4. The broker receives payment from the clearing corporation/ clearing
house.
5. You receive payment from the broker for the sale in the same manner you
would receive payment for a sale in the physical mode.
Buy dematerialised securities
1. You purchase securities in any of the stock exchanges connected to

NSDL through a broker of your choice and make payment to your broker.
Make sure you tell your broker you want only demat shares.
2. Broker arranges payment to clearing corporation/ clearing house of the
stock exchange.
3. Broker receives credit in his clearing account with his DP on the pay-out
day. He can immediately transfer these securities to your depository
account, provided your account is already active.
4. Broker gives instructions to his DP to debit his clearing account and credit
your depository account.
Investor / Other Services

You will receive corporate action (as announced by the issuing company) for
securities held in demat form.
a] Cash corporate action (dividend, interest, etc.)

Issuer / its R&T agent directly forwards the dividend warrant/ interest to the
depository account holder. NSDL does not handle funds. The issuer/ its R&T
Agent calculates the benefits due to you on the basis of ownership data
forwarded by NSDL.
b] Non cash corporate action (bonus, rights, etc.)

Issuer / its R&T agent would arrange to credit your depository account with
bonus/rights securities to the extent of your entitlement on the basis of ownership
data forwarded by NSDL.
Note:
1. NSDL does not handle cash corporate actions. In case of non-receipt of

the same, contact the issuer/ its R&T agent. In future, when NSDL
handles cash corporate actions, you may contact NSDL in case of non-
receipt of the same.
2. In case you wish to avail of the ECS facility for receiving your cash
corporate action, you may do so by informing the issuer/ its R&T Agent
(provided the issuer gives this facility). You will need to inform the
75
company even if you were availing this facility for your physical securities
which were dematerialised.
3. Ensure that you give your bank particulars correctly in the account
opening form. This would be printed on the dividend warrant.
4. In case of right/ bonus entitlement, irrespective of the form of your existing
holding, you have to intimate issuer// its R&T agent your choice of the
bonus securities and the client id and DP id of the account in which you
would like to have the securities credited. Although this depository account
can be different from the account in which your existing securities are
held, they should be in the same combination of names as the depository
account where your existing securities are held. If there is any mistake in
your depository account details mentioned in the rights application/
intimation letter indicating the choice of form of bonus securities, you
would receive physical securities directly from the issuer/ its R&T agent.
5. In case you have not intimated issuer/ its R&T agent your choice of the
bonus securities, you will get your non-cash corporate benefits in the form
of your original holdings.
6. In case of rights issue, the rights issue form will be forwarded by the
issuer/ its R&T Agent.
7. In case of problem in credit in your depository account, contact your DP. If
they fail to resolve your problem, you may contact NSDL.
TRANSACTION STATEMENT:
For each account opened with your DP, you will receive a "Statement of
Account" from your DP on a quarterly basis. If your account has a debit/ credit
during the intervening period, you will receive a "Statement of Account" within 30
days of the debit/ credit to your account.
Note:
1. You can arrange with your DP to get the "Statement of Account" at shorter
intervals. They may charge for this facility.
2. In case of any discrepancy in the "Statement of Account", contact your
DP. If they fail to resolve your problem you may contact NSDL.
3. The "Statement of Account" is your proof of holding and in case you loose
it you would not loose your holding.
GENERAL:
1. Public issues: You can opt for allotment directly in demat form, provided
the company has joined NSDL & gives you this facility.
2. Pledge: You can pledge your demat holdings.
76
3. Lending/ Borrowing: You can lend/ borrow demat securities to/ from an
authorised intermediary.
4. Freezing of account: You can freeze your account any time. When your
account is frozen, no transactions will be made from your account until
you unfreeze it. Further, you also have the facility to freeze your account
for debits only. In such a case, credits will automatically flow to your
account.The way you can freeze your entire account, you can freeze
securities of select companies in your account or you can even freeze
select quantity of securities for a particular company and keep balance
quantity of securities in free status.
5. Closure of account: In case you want to close your account with one DP,
you can do so by shifting your holding to a depository account with
another DP or by rematerialising your holding. You can rematerialise part
or whole of your holdings any time.
6. Transmission: If the account holder passes away, the DP of the account
holder would be able to process the transmission of these securities to the
legal heirs. You do not have to take up with each of the issuer/ its R&T
agent. NSDL does not charge its DP for transmission.
7. Nomination: You have the facility to appoint a nominee for your
depository account. However, you can nominate only one person per
account.
8. Change in client details: In case of any change in client details provided
in the account opening form viz. Address, bank details etc., you can
contact your DP. The DP will ensure that the change is updated for all
holdings credited in your account.
77
THINGS YOU SHOULD KNOW ABOUT YOUR DEMAT ACCOUNT
How many accounts do I need?
 You can open more than one Demat Account if your requirements so
demand.
 You can hold shares, debentures, bonds, NSC, KVP in a single account.
 You can save charges on multiple accounts by consolidating your holdings
into one account, if there are no other compelling reasons to keep
separate accounts
. What are the value added facilities on my account?
 SPEED-e
A facility to submit delivery instructions through Internet is available. Check with

your DP for this service.
 IDeAS
It enables account holders to view details of their holdings on the Internet. Check
with your DP for this service.
Can I take a loan on my demat holdings?
 You can pledge the securities in your account in favour of a lender (say a
bank) to avail of a loan.
Is there nomination facility in Demat account?
 Nomination can be made only by individuals holding beneficiary accounts

either singly or jointly.
 The Nominee needs to complete a few formalities with the DP and get the
securities transferred into its account, in case the account holder dies.
Do I have to contact all companies for any updations in my personal

details?
 For your demat shares, your one point contact for all changes/updations
is your DP.
78
What precautions should I take to prevent misuse of securities lying in my
account?
 Keep DIS book in safe custody.

 When writing an instruction on DI slip, strike-out the empty spaces.
 Change your password frequently if you are using internet facility for your
Demat Account.
 Before giving power of attorney (POA) to any person for operating for
Demat Account, understand the content and implications of such POA.
I am not a frequent trader on stock exchanges. What should I do with

Transaction Statement?
 Check your transaction statement for any unauthorized debits/unintended

credits from/into your account.
 Checks for direct credit of securities through corporate actions say bonus,
rights, mergers, etc into your account.
How much do I pay for my Demat Account?
 You will have to contact your DP for the details of charge structure.
 Different DPs charge different fees.
 NSDL charges DP at a uniform rate.
What kind of help can I get if I have any problem with my NSDL Demat
Account?
 You can contact your DP.

 You can contact NSDL at 022-24994200 or email NSDL at info@nsdl.co.in or
relations@nsdl.co.in.
79

Overview of NSDL1.

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PREFACE

ONE CAN LEARN MORE ABOUT A ROAD BY TRAVELLING IT,

As apart of degree of MBA, every student has to undergo for training in a

In our SUMMER TRAINING REPORT we studied, “STUDY ON NSDL” We must

Origin and development of Stock Exchange

Function of Stock Exchanges

With the facilities provided by stock

Name of Stock Exchange Year of establishment Type of Organization

• Jobber: Jobber is an independent dealer in securities.

• Bears: A Bear speculator is one who anticipates fall in the price of

Ludhiana Stock Exchange became the second bourse in India to introduce

For the settlement of dematerialized securities, the Ludhiana Stock Exchange

LSE has played an important role in generating the companies in the

GOVERNING COUNCIL, COMMITTEES AND ADMINISTRATION

The Council of Management of the Exchange consists of nine members, out of

OPERATIONS OF LUDHIANA STOCK EXCHANGE

♦ SETTLEMENT GUARANTEE FUND (SGF)

The Stock Exchange established a Settlement Guarantee Fund (SGF) on April 6,

Oct 1981 Incorporation of stock Exchange

 It provides linkage between the savings of household sector and

 It provides market quotations for shares, debentures and bonds and

The stock exchange discharge these functions by laying down a number of

INVESTOR RELATED SERVICES

The Exchange has made special arrangements to handle investor's complaints

ii. Investor Protection Fund

iii. Investor Service Centre

1. We have examined the attached Consolidated Balance Sheet of The

a. in the case of the consolidated balance sheet, of the consolidated state of

in the case of the consolidated income and expenditure account, of the

2. Revival of Regional Stock Exchanges – INDO NEXT

3. Contribution to society (Gurukul)

4. Web site of the Stock Exchange

 The implementation of the above said SEBI regulation has

i. Investor Education Study Material

BSE NSE SEBI RBI

Ministry Of Finance NSDL CDSL Commerce Ministry

All the sections performs specific function. There is nowhere duplication of

The functions and duties of the secretarial department include

 Meeting of Board of Directors

These minutes are statutory requirements and are preserved by secretarial

SOME OTHER FUNCTIONS OF SECRETARIAL DEPARTMENT

 To send notices with direction of Board of Directors to the respective directions

Listing means admission of securities of a public limited company on a recognized

The company which listed has to give:

The below written amount is required for a listing company:

Capital up to Rs.1 crore Rs.8400

Following are the requirements to be an individual member of exchange.

Age Limit: To be member of stock exchange there is age limit

Qualification: To be member minimum qualification matriculation

Following requirements are for corporate members

 Two copies of memorandums & Articles of association.

 Recruitment of staff members.

 Maintenance of attendance registers.

SECURITY: - This is an additional charge given to this department. The

 Half Day Book: This book contains information regarding

• The company follows accrual system of accounting recognizes income and

Function of Accounts Section

The account section performs the following function.

9. CLEARING HOUSE AND SETTLEMENT SECTION:

T= Trading Day (say: Monday)

T+2= Pay in securities (Wednesday) by 10:30 A.M.

10. DEPOSITORY SECTION