AUDITED ACCOUNTS FOR THE FINANCIAL YEAR ENDED 31 … · BSE INCOME & EXPENDITURE ACCOUNT FOR THE YEAR ENDED 31ST MARCH, 2005 PARTICULARS Schedule Previous Year Rupees Rupees INCOME

AUDITED ACCOUNTS FOR THE FINANCIAL YEAR ENDED 31ST MARCH 2005

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Chartered Accountants12, Dr. Annie Besant Road,Opp. Shiv Sagar Estate,Worli, Mumbai -400 018INDIA

Tel: +91-22-56679000Fax: +91-22-56679100

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-'AUDITORS' REPORTTO THE MEMBERS OF BSE

We have audited the attached Balance Sheet of BSE, as at 31 5t March, 2005, the Income

and Expenditure Account and the Cash Flow Statement of the Exchange for the yearended on that date, both annexed thereto. These financial statements are the responsibilityof the Exchange's Management. Our responsibility is to express an opinion on thesefinancial statements based on our audit.

2.

We conducted our audit in accordance with the auditing standards generally accepted inIndia. These Standards require that we plan and perform the audit to obtain reasonableassurance about whether the financial statements are free of material misstatements. Anaudit includes examining, on a test basis, evidence supporting the amounts anddisclosures in the financial statements. An audit also includes assessing the accountingprinciples used and significant estimates made by the Management, as well as evaluatingthe overall financial statement presentation. We believe that our audit provides areasonable basis for our opinion.

3.

We report as follows:

(a) We have obtained all the information and explanations which to the best of ourknowledge and belief were necessary for the purposes of our audit.

(b) In our opinion, proper books of account have been kept by the Exchange so far as itappears from our examination of those books.

(c) The Balance Sheet and the Income and Expenditure Account dealt with by thisreport are in agreement with the books of account.

(d) As stated in Note 4 of Schedule "0", the Management is of the opinion that theExchange will be granted exemption from income-tax, and accordingly no provisionis required to be made in the accounts for the tax amount. However, should suchexemption not be granted, there would be an estimated current tax liability of Rs.270.10 million for the year and a cumulative liability of Rs. 4,685.67 million as at31st March, 2005. Deferred Tax Asset/Liability, if any, has not been quantifiedsince the tax assessment is subjudice.

Bangalore Chennai Goa Hyderabad Jamshedpur Kochi Kolkata Mumbai New Delhi Pune

(e) In our opinion and to the best of our information and according to t~xplanationsgiven to us, the said accounts, subject to our comments under paragraph 3( d) above,give a true and fair view in conformity with the accounting principles generallyaccepted in India:

(i) in the case of the Balance Sheet, of the state of affairs of the Exchange as at31 st

M arch 2005., ,

(ii) in the case of the Income and Expenditure Account, of the surplus of theExchange for the year ended on that date and

(iii) in the case of the Cash Flow Statement, of the cash flows of the Exchangefor the year ended on that date.

For S. B. BILLIMORIA & CO.

Chartered Accountants

~ JI) ..YltoJ..

Nalin M. Shah

Partner

(Membership No.1581 0)

MUMBAI, 11 th August, 2005

NMS/KJM/ AR

BSE BALANCE SHEET AS AT 31ST MARCH, 2005

PARTICULARS Schedule

Rupees Rupees Rupees Rupees

SOURCES OF FUNDS

1. Members' Funds:a) Contribution by Members A 3,446,767,571 3,296,847,558 b) Reserves and Surplus B 4,840,373,594 4,119,858,905

2. Loans:a) Secured C 11,513,685 117,668,377 b) Unsecured D 243,000 243,000

TOTAL 8,298,897,850 7,534,617,840

APPLICATION OF FUNDS

1. Fixed Assets

Net Block (Original Cost less Depreciation) E 412,273,147 385,936,261

2. Investments F 3,487,075,000 4,366,309,709

3. Earmarked Assets G 2,718,303,530 2,489,563,040

4. Current Assets, Loans & Advances H 5,643,512,640 3,076,852,971 Less: Current Liabilities & Provisions I 3,962,266,467 2,784,044,141 Net Current Assets 1,681,246,173 292,808,830

5. Miscellaneous Expenditure to the extent not written off - -

TOTAL 8,298,897,850 7,534,617,840

( For notes forming part of the Accounts see Schedule "O" ) For and on behalf of the Governing Board.

Schedules "A" to "O" annexed hereto form part of the Balance Rajnikant Patel S. JambunathanSheet and the Income & Expenditure Account. Executive Director & CEO Chairman

In terms of our report of even date.P. P. Vora Prakash R. KacholiaDirector Director

For S.B.BILLIMORIA & CO.Chartered Accountants

S. S. Bolar V. G. BhagatGeneral Manager - SecretaryInvestments & Accounts

Nalin M. ShahPartner

MUMBAI, 11th August, 2005

As at 31st March , 2004

BSE INCOME & EXPENDITURE ACCOUNT FOR THE YEAR ENDED 31ST MARCH, 2005

PARTICULARS Schedule Previous Year

Rupees Rupees

INCOME

Listing Fees 118,303,107 100,848,084 Operational Charges and Other Recoveries J 659,107,873 630,921,862 Rent and Maintenance Charges 44,108,494 38,167,386 Income from Investments and Deposits K 534,432,350 565,863,643 Income from Data Dissemination 41,983,854 36,222,016 Other Income L 133,334,694 143,034,084

1,531,270,372 1,515,057,075 Less: Contribution transferred to Investors' Services Reserv 23,280,221 20,057,617

TOTAL 1,507,990,151 1,494,999,458

EXPENDITURE

Staff Costs M 203,868,959 241,541,635 Administration and Other Expenses N 308,698,648 285,798,229 Contribution to SEBI 5,915,155 5,042,404 Computer Maintenance and Service Charges 228,986,001 224,005,163 Clearing House Expenses 12,700,000 12,000,000 Provision for Doubtful Accounts 15,077,995 16,012,947 Depreciation 159,978,749 217,237,445 Consumption of Stock 156,358 1,094,516

935,381,865 1,002,732,339 Less: Expenses transferred to Investors' Services Reserv 23,280,221 20,057,617

TOTAL 912,101,644 982,674,722

Surplus for the year before Prior Period Adjustments 595,888,507 512,324,736 Add: Prior Period Adjustments (Refer note no. 14 of Schedule ''O'' ) 87,089,308 - Surplus for the year after Prior Period Adjustments 682,977,815 512,324,736 Add: Surplus brought forward from PreviousYear 2,358,150,669 1,845,825,933

Surplus Transferred to Balance Sheet 3,041,128,484 2,358,150,669

( For notes forming part of the Accounts see Schedule "O" ) For and on behalf of the Governing Board.

Schedules "A" to " O" annexed hereto form part of the Balance Rajnikant Patel S. JambunathanSheet and the Income & Expenditure Account. Executive Director & CEO Chairman

In terms of our report of even date.P. P. Vora Prakash R. KacholiaDirector Director

For S.B.BILLIMORIA & CO.Chartered Accountants


Nalin M. ShahPartner


BSECASH FLOW STATEMENT FOR THE YEAR ENDED 31ST MARCH, 2005

Previous Year

Rupees Rupees Rupees RupeesA. CASH FLOW FROM OPERATING ACTIVITIES

Surplus for the year after Prior Period Adjustments 682,977,815 512,324,736

Adjustments for:Depreciation 159,978,749 217,237,445 Voluntary Retirement Scheme Amortisation - 62,473,129 Prior Period Adjustments (87,089,308) - Profit on sale of Fixed Assets (282,876) (4,495,030) Interest income (235,324,174) (312,514,562) Dividend Income (980,000) (490,000) Interest Expense 547,354 7,266,154 Profit on sale of Investments (301,080,956) (259,079,996) Provision for Doubtful Accounts 15,077,995 16,012,947 Provision for Disputed items 2,433,812 - Provision for Leave Encashment 4,641,000 5,254,000 Operating Income before working capital changes 240,899,411 243,988,823

Adjustments for:Current Assets, Loans and Advances 67,118,734 (23,701,341) Current Liabilities 788,690,477 468,369,750

Tax Refund received (Net of Advance Tax Paid) 59,158,715 236,439,403

Net cash from operating activities 1,155,867,337 925,096,635

B. CASH FLOW FROM INVESTING ACTIVITIES

Acquisition of Fixed Assets including Capital WIP (190,657,255) (166,292,699) Proceeds from disposal of Fixed Assets 3,608,347 45,274,002

(Increase) / Decrease in Deposits with Banks and Financial Institutions (2,756,159,231) 1,055,113,590

Investments(A) Long Term Investments Proceeds from disposal - Own 74,999,952 - - Earmarked Funds 25,000,000 99,999,952 80,000,000 80,000,000

(B) Net (Increase) / Decrease in Current Investments - Own 1,105,315,711 (1,559,586,625) - Earmarked Funds 616,024,015 1,721,339,726 (767,894,718) (2,327,481,343)

(Increase) / Decrease in Earmarked Funds - Other Assets (810,363,688) 515,887,865

Interest received on investments 137,631,844 494,922,156 Dividend received on investments 980,000 490,000

Net cash used in investing activities (1,793,620,305) (302,086,429)

C. CASH FLOW FROM FINANCING ACTIVITIES

Change in FundsTrade Guarantee Fund (656,118) 46,480,196 Brokers' Contingency Fund 25,051,424 19,874,237 Investors' Protection Fund 163,710 321,791 Deposits from Companies - 1% of their Public Issue 195,062,178 62,463,234 Withheld Funds 3,367,774 17,154,892 Defaulters' Liabilities (4,847,978) 218,140,990 108,677,790 254,972,140 Admission / Entrance fees paid by members 121,552,503 57,950,001 Contribution by members towards Technology Fund 1,336,500 606,500 Loans and borrowings (106,154,692) (776,282,425) Interest paid on borrowings (520,625) (7,266,154) Deposits received Under Deposit Based Membership 255,500,000 - Forfeiture of Membership Application Money received 1,500,000 -

Net cash from / (used in) financing activities 491,354,676 (470,019,938)

Net (Decrease) / Increase in cash and cash equivalents (146,398,292) 152,990,268

Cont…Previous Year


Cash and cash equivalents at the end of the Year 55,671,928 202,070,220

Cash and cash equivalents at the beginning of the Year 202,070,220 49,079,952

Change in cash and cash equivalents (146,398,292) 152,990,268

In terms of our report of even date. For and on behalf of the Governing Board.

For S.B.BILLIMORIA & CO. Rajnikant Patel S. JambunathanChartered Accountants Executive Director & CEO Chairman

Nalin M. Shah P. P. Vora Prakash R. KacholiaPartner Director Director



Note: Cash and cash equivalents comprise of cash in hand and balances in current accounts with banks.

CONTRIBUTION BY MEMBERS AS AT 31ST MARCH, 2005 SCHEDULE " A "


Balance as per Last Balance Sheet 1,809,403,587 1,751,453,586

Add: Fees Received from New Members :

Admission Fees (Cash) 15,750,000 4,750,000 Admission Fees (Derivatives) (200,000) (200,000)

1,824,953,587 1,756,003,586

Entrance fees (Corporate) 106,002,503 77,300,001 1,930,956,090 1,833,303,587

Less: Transferred During the Year - 23,900,000 1,930,956,090 1,809,403,587

Trade Guarantee Fund :(Refer note no. 9.1 of Schedule "O")


Add :

Initial Contribution by Members 410,000 100,000

Continuous Contribution by Members 1,674,751 5,151,375

Income from Investments :Long Term - 793,726 Interest on deposits with Banks 29,410,593 29,999,355 Profit on Sale of Current Investments 28,029,757 47,922,460

Interest on Income tax Refund 743,993 3,172,374

Transferred from Defaulters' Account - 7,263,366

1,494,264,590 1,433,995,496 Less :

Settlement of Defaulters' Clients Claims 34,167,330 - 1,460,097,260 1,433,995,496

Trade Guarantee Fund (G-Sec) :(Refer note no. 9.2 of Schedule "O")

Balance as per Last Balance Sheet 53,448,475 50,000,000

Add :

Income from Investments :Interest on Deposits with Banks 1,271,875 - Profit on Sale of Current Investments 993,871 3,448,475

55,714,221 53,448,475

TOTAL 3,446,767,571 3,296,847,558

As at31st March , 2004

RESERVES AND SURPLUS AS AT 31ST MARCH, 2005 SCHEDULE " B "


Stock Exchange Building 913,896 913,896

Sheth Chunilal Motilal Library 37,050 37,050

Charity 16,041 16,041

Forfeiture of Membership Application Money:

Balance as per Last Balance Sheet 5,000,000 5,000,000

Add: Forfeitures during the Year 1,500,000 - 6,500,000 5,000,000

Technology Reserve :(Refer note no. 9.3 of Schedule "O")


Add: Contribution during the Year 1,336,500 606,500 1,365,022,421 1,363,685,921

Investors' Services Reserve :(Refer note no. 9.4 of Schedule "O")

Balance as per last Balance Sheet 1 1

Add: Contribution received during the Year 23,280,221 20,057,617

23,280,222 20,057,618

Less: Expenses incurred during the Year 23,280,221 20,057,617 1 1

Brokers' Contingency Fund :(Refer note no. 9.5 of Schedule "O")

Balance as per last Balance Sheet 392,055,327 364,021,271

Add:

Initial contribution by Members 15,750,000 4,750,000

Income from Investments :Long Term 726,250 2,462,845 Interest on deposit with Banks 8,299,455 12,205,984 Profit on Sale of Current Investments 9,648,950 8,159,819

Interest on Income Tax Refund 274,897 404,287

Interest received on funding to Brokers 822 5,716

Transfer from Assets of Defaulter - 47,199 426,755,701 392,057,121

Less :

Interest on Bank Overdraft - 1,794 426,755,701 392,055,327

Income & Expenditure Account :

Surplus transferred from Income & Expenditure Account 3,041,128,484 2,358,150,669

TOTAL 4,840,373,594 4,119,858,905


SECURED LOANS AS AT 31ST MARCH, 2005 SCHEDULE " C "

As atPARTICULARS 31st March, 2004

Rupees Rupees

SHORT TERM LOAN FROM BANKS:Bank Overdraft 11,513,685 117,668,377

T O T A L 11,513,685 117,668,377

UNSECURED LOANS AS AT 31ST MARCH, 2005 SCHEDULE " D "

As atPARTICULARS 31st March, 2004

Rupees Rupees

FIXED DEPOSITS (UNCLAIMED) :

From Members 50,000 50,000

From Public 193,000 193,000

T O T A L 243,000 243,000

( The Overdraft facilities from Banks are fully secured against the Term Deposits pledged with them)

STATEMENT OF FIXED ASSETS FORMING PART OF THE BALANCE SHEET AS AT 31ST MARCH 2005

SCHEDULE "E"

Sr. No. Particulars of Assets Cost As at

1.4.2004 Additions During

the year Deductions / Adjustments

Cost As at 31.03.2005

Depreciation upto 31.3.2004

Depreciation for the year

Deductions / Adjustments

Accumulated Depreciation upto

31.03.2005

Net Assets 31.03.05

Net Assets 31.03.2004

A B C D = A +B - C E F G H = E + F - G I = D - H J

1 FREEHOLD LAND 2,227,857 - - 2,227,857 - - - - 2,227,857 2,227,857

2 BUILDINGS 267,465,173 2,350,906 - 269,816,079 194,411,701 7,511,144 - 201,922,845 67,893,234 73,053,472

3 PLANT & MACHINERY 150,034,771 1,474,211 - 151,508,982 114,764,508 9,018,956 - 123,783,464 27,725,518 35,270,263

4 ELECTRICAL INSTALLATIONS 71,958,604 7,438,716 - 79,397,320 54,699,457 5,500,495 - 60,199,952 19,197,368 17,259,147

5 COMPUTERS (#)

(A) HARDWARE AND NETWORKING EQUIPMENT 2,370,066,108 63,598,916 28,426,728 2,405,238,296 2,228,620,914 112,111,341 28,399,922 2,312,332,333 92,905,963 141,445,194

(B) SOFTWARE (Intangible Assets) 25,063,170 6,880,100 - 31,943,270 20,769,592 6,255,642 - 27,025,234 4,918,036 4,293,578

6 FURNITURE,FIXTURES AND OFFICE EQUIPMENTS 224,117,458 21,004,907 87,500 245,034,865 123,984,171 18,080,729 - 142,064,900 102,969,965 100,133,287

7 MOTOR VEHICLES 10,883,468 3,679,224 4,444,361 10,118,331 4,784,643 1,500,442 2,961,196 3,323,889 6,794,442 6,098,825

3,121,816,609 106,426,980 32,958,589 3,195,285,000 2,742,034,986 159,978,749 31,361,118 2,870,652,617 324,632,383 379,781,623

8 CAPITAL WORK IN PROGRESS 87,640,764 6,154,638

3,121,816,609 106,426,980 32,958,589 3,195,285,000 2,742,034,986 159,978,749 31,361,118 2,870,652,617 412,273,147 385,936,261

PREVIOUS YEAR 2,988,255,254 199,172,379 65,611,024 3,121,816,609 2,547,901,592 217,237,445 23,104,051 2,742,034,986 385,936,261 458,219,339

( # ) Refer Note no. 9.3 of Schedule "O"

INVESTMENTS AS AT 31ST MARCH, 2005 SCHEDULE " F "


Long-Term :

(At Cost)

Equity Shares :

98,000 shares of BOI Shareholding Ltd. of Rs.100/- each 9,800,000 9,800,000

38,254,600 Central Depository Services (India) Ltd. Of Rs.10/- each (Previous Year 44,999,200 shares) 382,546,000 449,992,000

392,346,000 459,792,000

Current :

(At Lower of Cost and Fair Value)

Mutual Funds :

Floating Rate Schemes 1,136,546,486 353,200,000

Income Schemes - 1,525,380,631

Equity Schemes - 89,538,000

MIP Schemes - 297,996,535

Short Term Fund - 1,036,089,755

Liquid Schemes 1,958,182,514 604,312,788 3,094,729,000 3,906,517,709

TOTAL 3,487,075,000 4,366,309,709

As at31st March, 2004

EARMARKED ASSETS AS AT 31ST MARCH, 2005 SCHEDULE " G "(Excluding Bank Balances in Current Accounts)

Rupees Rupees Rupees RupeesINVESTMENTS

Trade Guarantee Fund :

Current :

( At Lower of Cost and Fair Value)

Mutual Funds :

Income Schemes - 988,785,766

Short Term Fund - 76,870,000

Medium Term Plan - 39,400,000

Floating Rate Schemes 479,756,079 -

Liquid Schemes 81,925,094 1,302,548 561,681,173 1,106,358,314

Brokers' Contingency Fund :

Long-Term :

(At Cost)

Bonds :

250 10.50% IDBI of face value Rs.100,000/- - 25,000,000

140 10.00% ICICI Bank Ltd. of face value Rs.5,000/- 700,000 700,000 700,000 25,700,000

Current :


Mutual Funds :

Liquid Schemes 3,046,515 37,150,000

Medium Term Fund - 35,372,609


Floating Rate Schemes 159,202,357 - 162,248,872 266,643,241

Deposits from Companies - 1% of their Public Issue :

Current :


Mutual Funds :

Floating Schemes 122,297,337 5,600,378


Medium Term Fund - 4,437,998

Liquid Schemes 189,885,886 63,357,261 312,183,223 172,789,504

31st March, 2004As at

EARMARKED ASSETS AS AT 31ST MARCH, 2005 SCHEDULE " G " CONT…(Excluding Bank Balances in Current Accounts)


Defaulters' Accounts :

Current :


Mutual Funds :

Short Term Fund 1,299,714 35,000,000


Floating Rate Schemes 85,375,501 -

Liquid Schemes 195,021,981 5,751,825 281,697,196 328,642,603

OTHER ASSETS

Trade Guarantee Fund:

Deposit with Banks 927,202,961 314,774,665

Tax Deducted at Source on Interest 26,620,052 35,172,860 953,823,013 349,947,525

Brokers' Contingency Fund :


Accrued Interest on Bank Deposits 11,667 1,980,417


Withheld Funds :


Accrued Interest on Bank Deposits - 27,863

Tax Deducted at Source on Interest 266,004 73,635 32,253,897 27,670,274

Deposits from Companies - 1% of their Public Issue :


Accrued Interest on Bank Deposits 3,432,631 2,473,660


Defaulters' Accounts :


Accrued Interest on Bank Deposits 60,439 41,743

Tax Deducted at Source on Interest 170,625 1,772,876 11,091,064 22,973,278

TOTAL 2,718,303,530 2,489,563,040

As at31st March, 2004

CURRENT ASSETS, LOANS & ADVANCES AS AT 31ST MARCH, 2005 SCHEDULE " H "


Interest Accrued on Deposits 20,846,370 6,818,040

Cash and Bank Balances :

Cash on Hand 154,856 129,248

Balance with Scheduled Banks (Includes Balances for Earmarked Funds)

In Current Account 55,517,072 201,940,972

In Deposit Account 3,209,276,100 846,181,377

3,264,948,028 1,048,251,597

3,285,794,398 1,055,069,637

Advances Recoverable in Cash or in Kind :

Sundry Advances 49,875,187 106,935,740

Other Receivables 81,257,977 59,808,680

Income Receivable 29,227,796 87,873,947

160,360,960 210,463,627

Less: Provision for Doubtful Accounts 53,941,925 38,863,930 106,419,035 171,599,697

Deposit with Companies / Financial Institutions 2,130,763,026 1,654,034,518

Deposit with Public Bodies and Others 13,747,118 17,593,599

Advances to Staff 38,787,379 44,766,964

Tax Deducted at Source 66,920,702 126,079,417

Sheth Chunilal Motilal Library 5,050 5,050

Stock on Hand 1,075,932 7,704,089

TOTAL 5,643,512,640 3,076,852,971


CURRENT LIABILITIES & PROVISIONS AS AT 31ST MARCH, 2005 SCHEDULE " I "

Rupees Rupees Rupees Rupees Rupees Rupees

Current Liabilities :

Members (Including "deposit based " members) :

Deposits and Margins Received 1,827,211,715 1,448,086,157

Withheld Funds (*) 33,000,859 29,631,793

Income Received in Advance 369,076 494,905

Other Liabilities 24,767,293 98,220,990 1,885,348,943 1,576,433,845

Others :

1. Deposits :

(a) Deposits from Companies - 1% of their Public Issue (*) 471,540,382 267,868,148

(b) Other Deposits Received 547,767,128 367,015,628 1,019,307,510 634,883,776

2. Income Received in Advance 18,884,247 15,739,150

3. Advance Received for Disinvestment of Shareholding in Central Depository Services (India) Ltd.

75,000,000 75,000,000

4. Defaulters' Liabilities (*) 375,131,515 397,741,433

Less: Receivable from Defaulters 34,044,459 69,272,035 341,087,056 328,469,398

5. Other Liabilities 506,726,951 52,836,060

6. Sundry Creditors 88,286,948 80,131,911 2,049,292,712 1,187,060,296

Provisions :

Leave Encashment 25,191,000 20,550,000

Others (Refer note no. 11 of Schedule "O) 2,433,812 -

27,624,812 20,550,000

TOTAL 3,962,266,467 2,784,044,141

(*) Investments in Schedule "G" have been earmarked against these liabilities.


OPERATIONAL CHARGES AND OTHER RECOVERIES SCHEDULE "J"

PreviousSR. NO. P A R T I C U L A R S Year

Rupees Rupees

1 Membership Annual Subcription 4,947,280 4,762,970 2 Penalties and Fines 33,368,340 24,727,450 3 Charges Recovered from Members 620,792,253 601,360,856 4 Income from Internet Trading System - 70,586

659,107,873 630,921,862

INCOME FROM INVESTMENTS & DEPOSITSSCHEDULE "K"


Rupees Rupees

1 Income From Long Term Investmentsa. Interest on Bonds 767 1,058,301 b. Dividend Income 980,000 490,000 c. Profit on sale of Investments 7,553,952 - d. Profit on Redemption of Bonds - 660,000

2 Income from Current Investmentsa. Interest on Bonds - 1,947,521 b. Incentive on Mutual Fund Investments - 215,083 c. Profit from Mutual Fund Investments 293,527,004 259,079,996

3 Other Incomea. Interest on Fixed Deposits and Term Deposits 235,323,407 309,508,740 b. Incentive on Bonds / Fixed Deposits - 50,000 c. Interest on Security Deposit 139,463 110,237

537,524,593 573,119,878 Less: a. Interest on Loan - 6,128,675 b. Transferred to Defaulters' Account 2,544,889 - c. Interest on Overdraft / Arbitration Deposits 547,354 1,127,560

Net Income from Investments 534,432,350 565,863,643

OTHER INCOME SCHEDULE "L"


Rupees Rupees

1 Sale of Networking Equipments 484,951 2,551,608 2 Miscellaneous Income 127,669,106 98,682,891 3 Interest on Income Tax Refund 4,895,394 37,304,555 4 Net profit on Sale of Fixed Assets 282,876 4,495,030 5 Profit on Realisation of Forex Transactions 2,367 -

133,334,694 143,034,084

STAFF COSTS SCHEDULE 'M'


Rupees Rupees

1 Salaries, Wages and Bonus 148,441,135 129,530,395 2 Contribution to Provident and Other Funds 23,073,116 17,739,437 3 Staff Welfare Expenses 32,354,708 31,798,674 4 Staff Voluntary Retirement Scheme Expenses Amortised - 62,473,129

203,868,959 241,541,635

ADMINISTRATION AND OTHER EXPENSES SCHEDULE 'N'


Rupees Rupees

1 Printing and Stationery 5,749,308 6,057,176 2 Postage and Telephone Expenses 10,852,381 9,904,862 3 Electricity Charges 57,360,707 64,260,011 4 Building Repairs & Maintenance Expenses 15,726,079 13,553,084 5 Repairs to Other Assets 10,778,608 9,211,900 6 Rent & Property Taxes 14,821,879 20,974,503 7 Auditors' Remuneration (Refer note no. 5 of Schedule ''O'') 741,200 653,400 8 Professional & Legal fees 23,286,583 24,077,777 9 Non-Elected Directors' Fees (Board & Other Committees) 1,510,600 1,264,500

10 Contribution to Investors' Protection Fund (Refer note no. 10 of schedule 'O') 1,183,031 2,521,202

11 Advertising & Marketing Expenses 16,944,096 10,920,182 12 Incentive To Market Makers 49,838,300 43,750,000 13 Travelling Expenses 15,294,409 14,278,522 14 Insurance Premium 3,983,394 4,235,907 15 Corporate Social Responsibility 1,729,229 1,023,970 16 Charity and Donations (Refer note no. 13 of Schedule "O") 13,903,695 1,130,275 17 Miscellaneous Expenses 31,542,804 29,727,856 18 Sundry Balance Written Off - 392,000 19 Provision for disputed Items (Refer note no. 11 of Schedule

"O") 2,433,812 - 20 Internet Trading & Website Expenses 31,018,533 27,861,102

308,698,648 285,798,229

Schedule “O” Significant Accounting Policies and Notes on Accounts

1. Significant Accounting Policies

1.1 Basis of preparation of financial statements

The accompanying financial statements are prepared under the historical cost convention on accrual basis. Accounting policies are consistently applied, except where a newly issued accounting standard is initially adopted or a revision to an existing accounting standard requires a change in the accounting policy hitherto in use.

1.2 Use of Estimates

The preparation of financial statements requires Management to make estimates and assumptions that affect the reported balances of assets and liabilities and disclosures relating to contingent assets and liabilities as at the date of the financial statements and reported amounts of income and expenses during the period.

1.3 Revenue Recognition

Revenue in respect of services rendered to members is recognised when the service is rendered and there is a reasonable certainty of ultimate realisation.

1.4 Fixed Assets

Fixed Assets are stated at cost, less accumulated depreciation. Cost includes cost of acquisition and other incidental expenses incurred until the assets are ready for its intended use. Capital work-in-progress comprises outstanding advances paid to acquire fixed assets and the cost of fixed assets that are not yet ready for their intended use at the balance sheet date.

1.5 Depreciation

1.5.1 Tangible Assets Depreciation on fixed assets is provided on the ‘Written Down Value’ basis at the rates prescribed under the Income-Tax Act, 1961. In the year of acquisition, the depreciation is charged for the full year in case the asset is used for a period of more than 180 days and depreciation is charged for half year in case the asset is used for a period of less than 180 days during the financial year. In the year of disposal depreciation is provided pro-rata upto the month prior to the month of disposal. 1.5.2 Intangible Assets Intangible assets includes computer software, the depreciation of which is provided on the ‘Written Down Value’ basis at the rates prescribed under the Income-Tax Act, 1961.

1.6 Inventories

Inventories are stated at the lower of cost and net realisable value.

1.7 Investments

Long-term investments are stated at cost less provision for other than temporary diminution in value. Current investments are valued at the lower of cost and fair value. Investment income in respect of earmarked funds and other withheld accounts is credited to the respective fund and liability accounts.

1.8 Employee Benefits

1.8.1 Gratuity

In accordance with the provisions of The Payment Of Gratuity Act, 1972, the Exchange provides for gratuity, a defined benefit plan, in respect of eligible employees. The Gratuity plan provides a lump sum payment to vested employees at the time of retirement, death, incapacitation or termination of employment, of an amount based on the respective employee’s salary and the tenure of employment. Liabilities with regard to Gratuity are determined by an actuarial valuation as of the Balance Sheet date, based on which, the Exchange makes contribution to The Stock Exchange Staff Gratuity Fund, a trust setup and administered by the Exchange. This contribution is charged to Income and Expenditure Account of the Exchange.

1.8.2 Provident Fund

Eligible employees receive benefits from a provident fund, which is a defined contribution plan. Aggregate contributions along with interest thereon is paid at retirement, death, incapacitation or termination of employment. Both the employee and the Exchange make monthly contributions to The Stock Exchange Staff Provident Fund, a trust setup and administered by the Exchange.

1.8.3 Leave Encashment

Provision for leave encashment is made on the basis of actuarial valuation at the Balance Sheet date.

1.9 Foreign Currency Transactions

Foreign currency transactions are recorded at the exchange rate prevailing on the date of transaction. All foreign currency current asset/liabilities are translated into rupees at the rates prevailing on the date of the Balance Sheet. Foreign Exchange rate differences arising on settlement(s)/conversion(s) are recognised in the Income and Expenditure Account.

2. Contingent Liabilities Not Provided for: (Rs. Million)

Sr.No. Particulars

31st March, 2005

31st March, 2004

a)

Claims against the Exchange not acknowledged as debts in respect of i) Income Tax matters

ii) Sales Tax matters

iii) Service Tax matters

iv) Other matters

v) Trade Guarantee Fund

3911.27*

17.56

5.40

1.76

6.38

3911.27*

20.97

1.03

-----

40.55

b) Guarantees given by the Exchange to HDFC Ltd.

Aggregate loans outstanding from employees of the Stock Exchange were Rs 58.23 Million as on 31st March 2005 (Previous Year Rs 66.20 Million). The employees have mortgaged their flats/ properties with HDFC Ltd.

104.50

105.00

* Excluding Interest & Penalty. 3. Estimated amount of contracts remaining to be executed on capital account and not

provided for (net of advances) is Rs. 209.55 Million (31.03.2004 – Rs. 86.40 Million).

4. No provision for Taxation for the year ended 31st March, 2005 has been made in the

accounts as the Management is of the opinion that the appeals before the Income Tax Appellate Tribunal in respect of earlier years will be disposed off in the Exchange’s favour and the Exchange will be granted exemption under Sections 11 & 10 (23C)(iv) of The Income-Tax Act, 1961. However, in the event that such exemption is not granted, there would be estimated tax liability of Rs. 270.10 Million for the year (31/3/2004 – Rs. 228.70 Million). The total cumulative income tax liability not provided for is estimated at Rs. 774.40 Million (excluding the amounts referred to in Note 2(a) above) (31/3/2004 – Rs. 504.30 Million)

5. Remuneration to the Auditors: For the year ended

31st March, 2005 Rupees

31st March, 2004 Rupees

Audit Fees 400,000 400,000 Tax Audit Fees 100,000 100,000 Other Capacity 100,000 100,000 Other Services 70,000 5,000 Service Tax 71,200 48,400

Total 741,200 653,400

In addition to the above, Rs 50,000/- (31/3/2004- Rs 648,000/-) has been paid during the year to a firm in which some partners of the audit firm are also partners. This amount is included in Professional and Legal Fees in Schedule “N”.

6. As per the definitions of ‘business segment’ and ‘geographical segment’, contained in

(AS-17) “Segment Reporting”, Management is of the opinion that there is neither more than one reportable business segment nor more than one reportable geographical segment, hence segment information as per AS-17 is not required to be disclosed.

7. As per the Accounting Standard on “Related Party Disclosures” (AS-18) issued by

the Institute of Chartered Accountants of India, the related parties of the Exchange are as follows:

a) Entities under common control:

As at Name 31st March 2005 31st March 2004

The Stock Exchange Investors’ Protection Fund

The Stock Exchange Education & Research Services

The Stock Exchange Foundation

The Stock Exchange Charities Seth K. R. P. Shroff Stock Exchange Sarvajanik Fund

Shri Phiroze Jeejeebhoy Memorial Trust

Transactions with entities under common control:

(Rs. Million)

Name Particulars Current Year

Previous Year

EXPENDITURE The Stock Exchange Investors’ Protection Fund

Contribution to IPF 15.48 13.91

b) Associates

Associate as on Name 31st March 2005 31st March 2004 BOI Shareholding Ltd. Central Depository Services (India) Ltd.

Transactions with Associates:

(Rs. Million)

Name Particulars Current Year

Previous Year

INCOME Central Depository Services (India) Ltd.

Vsat Recoveries 14.74 14.80

Lease Line Equipment Charges

0.97 0.43

Rent 3.16 2.95 EXPENDITURE BOI Shareholding Ltd. Clearing House Expenses 12.00 12.00 ASSETS Central Depository Services (India) Ltd.

Investments 382.55 449.99

BOI Shareholding Ltd. Investments 9.80 9.80 LIABILITIES Central Depository Services (India) Ltd.

Deposit for Premises 63.83 63.83

c) Key Management Personnel

Name Relation

Shri Rajnikant Patel COO (Upto 14/9/2004) ED & CEO (From 15/9/2004)

Dr. Manoj Vaish ED & CEO (Upto 14/9/2004)

Transactions with Key Management Personnel:

(Rs. Million)

Particulars Current Year

Previous Year

INCOME Housing Loan Interest 0.10 0.05 EXPENDITURE Remuneration 5.25 3.84 ASSETS Housing Loan 0.73 1.51

8. As required by Accounting Standard (AS-28) "Impairment of Assets", issued by the

Institute of Chartered Accountants of India, the Exchange has carried out the assessment of impairment of assets. There has been no impairment loss during the year.

9. Various Funds / Reserves setup and administered by the Exchange.

9.1 Trade Guarantee Fund (TGF)

The Exchange in the year 1997 set up the Trade Guarantee Fund to guarantee the settlement of bonafide transactions of members of the Exchange inter-se which form part of the Stock Exchange settlement system so as to ensure timely completion of settlement of trades and thereby protect the interest of investors and the members of the Exchange. The constitution of the Fund and its rules and bye laws were approved by the Securities and Exchange Board of India (SEBI). The Exchange contributed a sum of Rs. 600 Million from accumulated contribution from its members in the year 1997-98. Every member contributes Rs 10,000 /- at the time of commencement of business and there after a percentage of the gross turnover as prescribed from time to time (Presently 0.01 Rupee per Lac of Gross Turnover). The Fund is represented by the earmarked investments and the income earned on these investments is credited to the Fund.

9.2 Trade Guarantee Fund - G-Sec Segment

The Governing Board in its meeting held on 13th January, 2003 decided to set up a distinct Trade Guarantee Fund to be known as GSEC Trade Guarantee Fund for trading in Central Government Securities and such fund be created with an initial contribution of Rs. 50 Million by transferring the said amount from the free reserves of the Exchange. The Fund is represented by the earmarked investments and the income earned on these investments is credited to the Fund.

9.3 Technology Reserve

The Technology reserve was set up with a view to keep abreast with the changes in the field of information technology as critical activities of the Exchange are dependent on information technology. The reserve consists of appropriation from Income and Expenditure Account and contributions from members.

Additions during the year financed out of Technology Reserve are Rs. 70,479,016 /- (Previous Year Rs. 170,970,539 /-). Accumulated utilisation upto 31st March, 2005 out of the Technology reserve is Rs. 1,222,387,019/- (Previous Year Rs. 1,151,908,003/-). 9.4 Investors’ Services Reserve

As per SEBI directive, From 1996-97, the Exchange decided to set aside 20% of the listing fees received to an Investors’ Services Account. The Exchange has charged all direct expenses incurred towards Investors Services to the Account and has also charged on a pro-rata basis other revenue expenses.

9.5 Brokers Contingency Fund (BCF)

The Exchange in the year 1997 has set up the Brokers Contingency Fund with a view to make temporary refundable advance(s) to the members facing temporary financial mis-match so as to protect the interests of the investors dealing through members of the Exchange by ensuring timely completion of settlement. The initial contribution of the Exchange to the corpus of the fund was Rs 95.10 Million. Every member contributes Rs 250,000/- at the time of admission to the Exchange. The Fund is represented by the earmarked investments and the income earned on these investments is credited to the Fund.

10.From the year 2004-05, in view of the size of the corpus of Investors’ Protection Fund,

the Management of the Exchange has reduced the Contribution to Investors’ Protection Fund from 2.5% to 1% of the listing fees earned during the year.

11. The Exchange has made provision of Rs. 2.43 Million being the additional property

tax demanded by Brihanmumbai Municipal Corporation for the year ended 31st March, 2005.

12. During the year, a memorandum of settlement was signed between the Exchange &

the Officers’ Association culminating into payment of arrears amounting to Rs 12.73 Million. No provision for wage settlement for the period 1st April, 2003 to 31st March, 2005 has been made as negotiations are on with the Staff Union. The amount for the same cannot be quantified presently.

13. Charity and Donations under administrative and other expenses includes an amount

of Rs. 10 Million contributed by the Exchange to The Prime Minister’s National Relief fund for rehabilitation of Tsunami victims.

14. Prior period adjustments comprises of excess /short Provisions/ Accrual pertaining to

earlier years amounting to Rs 90.15 Million, interest on Income Tax refund received in earlier years Rs 2.29 Million and interest income transferred to Defaulters’ Liabilities Rs 5.35 Million.

15. SEBI, vide its order no. SEBI/MRD/40967/2005, dated May 20, 2005, has approved

the BSE (Corporatisation & Demutualisation) Scheme, 2005 whereby the Exchange is required to get itself corporatised within three months from the date of the order.

16. The previous year’s figures have been regrouped/reclassified, wherever necessary to

confirm to the current year’s presentation. For and on behalf of the Governing Board. Rajnikant Patel S. Jambunathan Executive Director & CEO Chairman P. P. Vora Prakash R. Kacholia Director Director S. S. Bolar V. G. Bhagat General Manager - Secretary Investments & Accounts

Documents

AUDITED ACCOUNTS FOR THE FINANCIAL YEAR ENDED 31 … · BSE INCOME & EXPENDITURE ACCOUNT FOR THE YEAR ENDED 31ST MARCH, 2005 PARTICULARS Schedule Previous Year Rupees Rupees INCOME