Never miss a great news story!
Get instant notifications from Economic Times
AllowNot now

You can switch off notifications anytime using browser settings.
Stock Analysis, IPO, Mutual Funds, Bonds & More
Add to your Portfolio

BSE Ltd.

NSE:BSEEQ  |  58888:  |  IND:Exchange  |  ISIN code:  |  SECT:Financial Services






Prv. Close:


BSE Ltd.


BSE Ltd.









Prv. Close:


BSE Ltd.


BSE Ltd.





You can view full text of the Director's Report for BSE Ltd.
Director Report
Mar2016   Mar 2017

To the Members,

The Directors present the Twelfth Annual Report of BSE Limited (‘the Company’) along with the audited financial statements for the financial year (FY) ended March 31, 2017.


The financial performance of the Company for the year ended March 31, 2017 is summarized below:

(Rs. in Lakhs)








Total Revenue





Total Expenses





Profit before exceptional items & tax





Exceptional items





Profit before tax





Provision for tax





Share of Profit/Loss of Associate and Joint ventures





Net Profit for the year





Net Profit attributable to the shareholders of the Company





Net Profit attributable to the non-controlling interest





Other comprehensive income (net of tax)





Total comprehensive income for the year





Net Profit attributable to the shareholders of the Company





Net Profit attributable to the non-controlling interest





Consolidated Results

The total income of the Exchange during the FY 2016-17 on a consolidated basis was Rs.80,075 Lakh reflecting an increase of Rs.13,066 Lakh (19.50%) over previous year. The total expenses for the year were higher by Rs.6,375 Lakh (15.49%) at Rs.47,530 Lakh. During the year, the expenses were higher mainly due to technology related costs, employee costs and impairment loss on financial assets (mainly representing higher provisions for bad and doubtful debts/investments). The increase was offset by decrease in overall administrative expenses. It may be noted that during the financial year, Securities Contracts (Regulation) (Stock Exchanges and Clearing Corporations) Regulations, 2012 (“SECC Regulations”) have been amended whereby the requirement of transfer of 25% of profits to the Settlement Guarantee Fund (“SGF”) has been done away with from August 29, 2016; resulting in decrease in contribution to the SGF by 59.58% compared to previous year. In view of the same, the profit before tax was higher by Rs.9,272 Lakh (43.75%) to Rs.30,466 Lakh as against Rs.21,194 Lakh in the previous year and Net Profit attributable to the shareholders of the Company for the year was higher by Rs.8,764 Lakh (65.93%) to Rs.22,057 Lakh as against Rs.13,293 Lakh in the previous year.

Standalone Results

The total income of the Exchange during the FY 2016-17 on a standalone basis was Rs.55,099 Lakh reflecting an increase of Rs.3,557 Lakh (6.90%) over previous year. The total expenses for the year were higher by Rs.3,748 Lakh (11.94%) at Rs.35,137 Lakh. During the year, the expenses were higher mainly due to technology related costs, employee costs and impairment loss on financial assets (mainly representing higher provisions for bad and doubtful debts). The increase was offset by decrease in overall administrative expenses. It may be noted that during the financial year, SECC Regulations have been amended whereby the requirement of transfer of 25% of profits to the SGF has been done away with from August 29, 2016, resulting in decrease in contribution to SGF by 59.58% compared to previous year. In view of the same, the profit before tax was higher by Rs.7,500 Lakh (58.47%) to Rs.20,326 Lakh as against Rs.12,826 Lakh in the previous year and Net Profit attributable to the shareholders of the Company for the year was higher by Rs.6,578 Lakh (49.51%) to Rs.19,864 Lakh as against Rs.13,286 Lakh in the previous year.


The Board, in its meeting held on February 14, 2017 declared an interim dividend of Rs.5/- per equity share of the face value of Rs.2/each fully paid up. Further, the Board in its meeting held on May 5, 2017 has recommended a final dividend of Rs.23/- per equity share of the face value of Rs.2/- each fully paid up for the FY 2016-17 subject to the approval of the shareholders at the Twelfth Annual General Meeting (“AGM”) and if approved, would result in a cash outflow of approximately Rs.15,111 Lakh, including corporate dividend tax. The total dividend on equity shares including dividend tax for the FY 2016-17 would aggregate Rs.18,396 Lakh, resulting in a payout of 93% of the standalone profits of the Company.

Under Clause 5.3 of the BSE (Corporatisation and Demutualisation) Scheme, 2005 (the Scheme), the allotment of equity shares to 12 Trading Members of the erstwhile BSE has been kept in abeyance for various reasons as on March 31, 2017, as compared to 14 Trading Members, whose shares were kept in abeyance as on March 31, 2016. Meanwhile, all corporate benefits including dividend as may be declared by the Exchange from time to time are being provided for and would be payable on the allotment of these shares. For further details on allotment of Shares to two erstwhile members, please read Share Capital section of this report.

Transfer to Reserves

The Exchange does not propose to transfer any amount to the General Reserve out of amount available for appropriations.


The Company successfully completed its Rs.1,243 Crore Initial Public Offer through Offer For Sale route and listed its equity shares on the National Stock Exchange of India Limited (“NSE”) on February 3, 2017.


Economic Environment - Global Outlook

Global Gross Domestic Product (“GDP”) growth is projected to increase, rising from just under 3% in Calendar Year (“CY”) 2016 to 3.30% in CY 2017 and around 3.50% in CY 20181. There have been positive signs of accelerating activity and rising consumer and business confidence in recent months in advanced economies and a number of emerging market economies, including improved momentum around the turn of the year. The rise in interest rates and oil prices will offset this somewhat, although higher commodity prices will benefit some emerging market economies. Confidence has improved, but consumption, investment, trade and productivity are far from strong, with deceleration in growth and higher inequality. This comes against the background of a five-year period where the global economy has been in a low-growth trap.

The modest pick-up in global growth in CY 2017 and CY 2018 reflects the effect of ongoing and projected fiscal initiatives, notably in China and the United States, together with an easier stance in the Euro area and initiatives in other economies such as Canada. These are expected to catalyze private economic activity and push up global demand. Exiting the low-growth trap depends on the joint impact of macroeconomic, structural and trade policy choices, as well as on concerted and effective implementation of existing initiatives.

While global trade growth was weak in CY 2016 at around 2%, recent data suggest some improvement, particularly in Asia. However, trade growth is likely to remain below pre-2008 crisis growth rates, in part reflecting a slowdown or reversal of the expansion of global value chains.

Headline inflation is rising in most countries as the result of higher energy prices, following the OPEC agreement in November 2016 to cut oil production. However, underlying inflation in advanced economies is still subdued and will pick up only slowly as the expansion gains traction, and supports a more robust wage growth across all income groups. Inflation is easing in a number of emerging market economies as the effect of past exchange rate depreciations fades and the effect of monetary policy actions works through, commodity importers are exposed to rising commodity prices.

Domestic demand in the United States is set to strengthen over the next two years and expand at a solid pace, helped by gains in household wealth and a gradual upturn in energy production. Employment is rising steadily, although the pace is expected to ease, and wages should continue to pick up as the labour market tightens. GDP growth is projected to pick up to 2.40% in CY 2017 and 2.80% in CY 2018, supported by an anticipated fiscal expansion, especially in CY 2018, despite higher long-term interest rates and continued headwinds from the stronger US dollar. Policy choices, including on the composition of fiscal spending, taxation, regulation and trade, are likely to have a significant impact on growth outcomes.

In the United Kingdom, the pace of expansion in CY 2016 was lower than in previous years, despite support from resilient household spending, actions by the Bank of England and adjustment to the fiscal stance following the Brexit vote. The country’s growth is expected to ease further as rising inflation weighs on real incomes and consumption, and business investment weakens amidst uncertainty about the country’s future trading relations with its partners due to Brexit.

In the Euro area, GDP growth is projected to continue at the current moderate pace, supported by accommodative monetary policy and a modest fiscal easing over the coming years. There is fiscal space for more ambitious and effective fiscal initiatives in Europe. There are encouraging signs that business investment may be strengthening, but high non-performing loans and labour market slack in some Euro area countries continue to hold back growth prospects. Growth is set to remain solid in Germany, but will continue at a slower pace in France and Italy. Headline inflation has been pushed up a little, but the recovery is not yet sufficiently advanced to durably raise core inflation.

In most other major advanced economies, growth is projected to continue around the current modest path. In Japan, data revisions show a somewhat more positive picture of recent growth outcomes. Industrial production and exports have strengthened, helped by the depreciation of the Yen, but consumption spending remains subdued. The fiscal easing will help GDP growth pick up to 1.20% in CY 2017.

Growth in China is expected to edge down further to 6.30% by CY 2018 as the economy is undergoing a transition, including shifting towards consumption and services, adjustment in several heavy industries, working off excess housing supply and ensuring credit developments are sustainable. Demand is being supported by very expansionary fiscal policy, including via policy banks, which in turn is boosting private investment and trade. Producer price inflation has picked up strongly, but consumer price inflation remains low. Higher commodity prices and easing inflation are supporting a recovery from deep recessions in Brazil, Russia and some other commodity producers, although short-term supply restrictions will limit the positive impact of higher oil prices on production in some countries.

Economic Environment - Indian Outlook

Economic performance in financial year (“FY”) 2016-17

According to Government of India estimates2, economic growth slowed down marginally to 7.10% in FY 2016-17, below 7.90% growth in FY 2015-16. Much of growth in FY 2016-17 came from strong agriculture and Government services. Agriculture grew by a robust 4.40% as a healthy monsoon helped food grain production grow by 8.10% to new records. Excluding government services, growth in value added dropped from 6.70% to 6%. Overall, India remains the fastest growing large developing economy, as it benefits from strong private consumption and gradual introduction of significant domestic reforms.

After growing by 8.20% in FY 2015-16, industry decelerated to 5.80% in FY 2016-17. Mining slowed considerably as oil and natural gas production contracted. Manufacturing value added grew by a healthy 7.70%, though down from the 10.60% recorded a year earlier. Growth reflected robust performance by large private manufacturers, which benefitted from lower input costs. Construction was muted, growing by 3.10% as the cash crunch possibly affected real estate activity in the second half of the fiscal year.

Services growth also moderated, to 7.90%, with slowdowns in finance and real estate, as well as in trade, hotels, and transportation and communication services. Anemic credit growth continued to weigh on financial services, though deposit growth picked up substantially immediately after demonetization. Contraction in railway ridership and tonnage, and subdued growth in commercial vehicle sales restrained expansion in transportation services. By contrast, there was strong growth in government services, including public administration and defense, on account of salary hikes for central government employees. Government consumption is estimated to have grown at its fastest pace since FY 2010-11 to pay the higher wages and salaries. Despite a 10.60% increase in central government capital expenditure, overall investment remained flat, growing by only 0.60%, as private investment continued to be weighed down by low capacity utilization and slow progress toward deleveraging. GDP growth got a further impetus from a robust increase in net taxes, buoyed by strong indirect tax collection.

Inflation remained subdued for a second consecutive year, averaging 4.70%. While food inflation inched up in the first few months of FY 2016-17 with rises for vegetables, pulses, and sugar, subsequent months saw prices cooled by a better monsoon and summer crop. Retail inflation is down considerably since November 2016. Domestic fuel inflation has remained relatively subdued at 3%. Core inflation was also stable, ranging from 4.50% to 5%. Subdued inflation allowed the Reserve Bank of India, the central bank, to reduce policy rates by 50 basis points during FY 2016-17, for a cumulative decline of 175 basis points since January 2015. Moreover, with deposit accretion far outweighing credit growth, commercial banks lowered their lending rates by 40-90 basis points as their new deposit costs came down.

The central government budget for FY 2016-17 was presented a month earlier than usual at the beginning of February 2017 to speed appropriations. The central government succeeded in narrowing the fiscal deficit to 3.50% of GDP in FY 2016-17. This reduction was accompanied by improved quality of expenditure. While capital expenditure was originally targeted to contract by 2.40% in FY 2016-17 to compensate for higher government salaries, estimates show capital expenditure growing by 10.60%. Current expenditure grew by 12.80%. Subsidy spending continued to decline from the equivalent of 1.90% of GDP in FY 2015-16 to 1.70% as fertilizer and petroleum subsidies fell owing to low oil prices and the expansion of a program that pays the cooking gas subsidy directly into recipients’ bank accounts to reduce leakage.

Government revenue grew by a healthy 16.70% in FY 2016-17, aided by strong growth in tax revenue and public enterprise dividends and profits. Personal income tax witnessed robust growth at 22.80% as the government introduced in FY 2016-17 two tax amnesties to encourage income disclosure. Excise tax collection also grew strongly for a second year, partly on higher revenues from several hikes to excise rates on petroleum products in FY 2015-16. Buoyant excise tax collections can also be attributed to growth from other products.

Fiscal Responsibility and Budget Management (“FRBM”) committee set up to review avenues to fiscal consolidation, recommended sustainable debt as the principal macroeconomic anchor for fiscal policy and called for reining in the ratio of public debt to GDP from the current 67% to 60% by FY 2022-23. To achieve this target, the committee recommended capping the fiscal deficit at 3% of GDP in the 3 years following the FY 2016-17 budget, which had a deficit equal to 3.20% of GDP. This is in line with the FRBM recommendation.

Imports declined for a second consecutive year, contracting by an estimated 3.70% in FY 2016-17. Although oil imports fell by nearly 2% in FY 2016-17, much of the contraction was concentrated in the first half of the fiscal year. Oil prices firmed considerably in the second half, and oil imports picked up. Gold imports declined substantially because of softening global prices and demonetization. Imports other than oil and gold were relatively steady as commodity prices stabilized and domestic demand was muted.

Exports revived in the second half of FY 2016-17, growing by an estimated 2.50% for the year. The revival was driven largely by a pickup in refined petroleum exports and stronger demand from the advanced economies, especially the US and Germany. In particular, exports of gems and jewelry, iron and steel, and motor vehicles picked up in the second half of FY 2016-17. The net services trade surplus narrowed in FY 2016-17, tracking a slowdown in exports of software and financial services. Remittance inflows weakened a bit as low crude oil prices squeezed host economies in the Middle East.

Net Foreign Direct Investment (“FDI”) inflows remained strong for a second consecutive year at USD 36.7 Billion after the government simplified guidelines and allowed more FDI in sectors like real estate, airport and air transport services and e-commerce. Net Foreign Portfolio Investment (“FPI”) flows remained subdued by comparison. The Q3 FY 2016-17 brought a large outflow, possibly a result of a US interest rate hike in December 2016 and uncertainty following demonetization. Net portfolio debt outflows amounted USD 2 Billion in FY 2016-17. While varying month to month, equity inflows amounted to USD 7 Billion in FY 2016-17, which pushed stock prices on the S&P BSE Sensex up by 16% over the year. Net deposits by nonresident Indians turned negative in FY 2016-17 largely because of the repayment of maturing deposits that the central bank had attracted from them in FY 2012-13. However, because these outflows were buffered by a forward sale-and-swap arrangement established earlier by the central bank, they did not significantly drain holdings of foreign reserves, which stood at USD 367 Billion in March 2017.

Economic Prospects for FY 2017-18

With the central bank printing new currency to replace the demonetized notes and lifting limits on deposit withdrawals in March 2017, the cash crunch eased markedly toward the end of FY 2016-17. Consumption deferred from the second half of FY 2016-17 by the cash crunch will likely surface in FY 2017-18 and lift consumption growth. Consumption will receive a further boost as several state governments hike salaries and pensions for their employees in FY 2017-18 following a similar hike for central government employees in FY 2016-17. A good monsoon being experienced would allow rural consumption to grow at a healthy rate.

With the effects of demonetization turning out to be short-lived and modest relative to some early expectations, the outlook for FY 2017-18 has been brightened considerably by a number of factors. Firstly, with the accelerated pace of demonetization, discretionary consumer spending held back by demonetization is expected to have picked up from Q4 FY 2016-17 and will gather momentum over several quarters ahead. The recovery will also likely be aided by the reduction in banks’ lending rates due to large inflows of current and savings accounts (“CASA”) deposits, although the fuller transmission impact might be impeded by stressed balance sheets of banks and the tepid demand for bank credit.

Secondly, various proposals in the Union Budget FY 2017-18 are expected to be growth stimulating: stepping up of capital expenditure; boosting the rural economy and affordable housing; the flawless roll-out of the Goods and Services Tax (“GST”); and steps to attract higher FDI through initiatives like abolishing the Foreign Investment Promotion Board (“FIPB”).

Thirdly, global trade and output are expected to expand at a stronger pace in CY 2017 and CY 2018 than in recent years, easing the external demand constraint on domestic growth prospects. However, the recent increase in the global commodity prices, if sustained, could have a negative impact on our net commodity importing domestic economy.

Sentiment in the corporate sector improved during Q4 FY 2016-17, according to the Reserve Bank of India’s (“RBI”) industrial outlook survey. The improvement was led by optimism on future production, order books, exports, employment, financial situation, selling prices and profit margin. Amounts mobilized through initial public offerings (“IPOs”) in recent months and the number of companies filing red herring prospectus with the Securities and Exchange Board of India (“SEBI”) have been higher, which suggest investment optimism in the period ahead. Both manufacturing and services firms expected output to be higher a year from now, according to the Purchasing Managers’ Survey for March 2017. Professional forecasters surveyed by the RBI in March 2017, expected real Gross Value Added (“GVA”) growth to accelerate from 6.50% in Q4 FY 2016-17 to 7.60% in Q4 FY 2017-18, led by growth in services and industry.

Considering the baseline assumptions, the fast pace of demonetization, survey indicators and updated model forecasts, RBI staff’s baseline scenario projects that real GVA growth will improve from 6.60% in Q3 FY 2016-17 and 6.50% in Q4 to 7% in Q1 FY 2017-18 and 7.407.60% in the remaining three quarters of FY 2017-18, with risks evenly balanced around this baseline path. Looking beyond FY 2017-18 and assuming a normal monsoon, a congenial global environment, no policy induced structural change and no supply shocks, structural model estimates yield real GVA growth of 8.10% in FY 2018-19.

Higher oil prices will boost refined petroleum exports, which have contracted in the past two years. Global growth improvement would help exports, though an appreciating Rupee in real effective terms could dent India’s competitiveness. Price recovery for commodities like metals, chemicals, and food would lift exports, as volumes for them have held up. Overall, exports are forecast to grow by 6% in FY 2017-18.

The national GST implemented from July 2017 is expected to lower prices for capital goods, providing impetus to investment. After easing for four consecutive years, consumer price inflation is expected to inch up in FY 2017-18. With global prices for oil forecast to increase by 20% in FY 2017-18, and with most domestic fuel prices becoming deregulated, domestic fuel inflation is forecast to rise by 10-20 basis points. Higher procurement prices for pulses and wheat along with an uptick in rural wages pose an upside risk to the forecast for food inflation. Inflation is likely to average 5.20% in FY 2017-18, accelerating to 5.40% in FY 2018-19 with further firming of global commodity prices and strengthening of domestic demand.

The quality of expenditure is expected to improve further with capital spending in FY 2017-18 projected to grow by 10.70%, against growth in current expenditure by only 5.90%. The budget continues to prioritize infrastructure and rural development with higher outlay on roads and highways, railways, electric power, affordable housing, and irrigation. Subsidy payments are forecast to decline as petroleum and fertilizer subsidies are curtailed.

In FY 2016-17, India surpassed China to become the fastest growing economy and continues to be in FY 2017-18 despite the expected slowdown in growth. The agenda set for FY 2017-18 is ‘transform, energize and clean India’. The GST Bill is likely to lead to spurring growth, competitiveness, indirect tax simplification and greater transparency.

FY 2016-17 has been marked by historic economic policy developments, highlighted by structural reforms notably, the passing of the Bankruptcy and Insolvency Act and the Constitutional amendment paving the way for implementing GST. Demonetization has also brought the digital agenda to the fore like never before. Given the low rate of tax compliance in the country, the Government recognizes that in order to make quantum leaps in the levels of compliance and overall tax revenues, the digital payment infrastructure and GST can pave the way. The effect of flawless GST implementation would improve the sovereign credit rating as well as reduce personal income tax in the long run.

Digital Economy is one of key focus themes for establishing speed, accountability and transparency in the system. The demonetization drive resulted in people adopting the electronic payment options. The Government looks resolute to leave a mark as it forges ahead with all regulatory and operational measures necessary to achieve a more transparent and a resilient digital economy.

This push towards a cashless digital economy has the potential to generate long-term benefits in terms of reduced corruption, greater digitalization of the economy, increased flows of financial savings, and greater formalization of the economy, all of which could eventually lead to higher GDP growth, better tax compliances and greater tax revenues.

India continues to enhance its reputation as an attractive FDI destination by improving the ease of doing business and liberalizing regulations and sector caps for FDI. India’s economy has grown at a strong pace in recent years and growth prospects are favorable over the medium term due to the implementation of critical structural reforms, loosening of supply-side bottlenecks, appropriate fiscal and monetary policies, favorable terms of trade and lower external vulnerabilities.

Capital Market

BSE is the world’s fastest Stock Exchange and the largest stock exchange in terms of number of companies listed. As of March 2017, BSE is ranked #2 in currency options traded, #3 in currency futures traded and #10 by market capitalization3 among global stock exchange.

Primary Market

The total number of companies listed (Equity as well as Debt) on BSE as on March 31, 2017 was 5,834 as compared to 5,911 as on March 31, 2016.

During FY 2016-17, 25 companies came to the market through the IPO process on the Mainboard of BSE. The amount raised through Mainboard IPOs in FY 2016-17 was Rs.27,156.56 Crore as against Rs.15,374.99 Crore in FY 2015-16.

Further, there were no Mainboard Follow on Public Offer (“FPOs”) in FY 2016-17. In addition to 25 IPOs on the Mainboard, another 48 companies raised Rs.431.69 Crore through the Small and Mediumsized Enterprises (“SME”) IPO process in FY 2016-17. Further, one SME listed company raised Rs.9.99 Crore through FPO.

The total amount mobilized through Privately Placed Debt Instruments (“PPDI”) at BSE in FY 2016-17 was Rs.4,20,995 Crore as against Rs.2,35,402 Crore in FY 2015-16. During FY 2016-17, there were 16 public issues of bonds which mobilized Rs.29,547.15 Crore as against Rs.33,811.92 Crore in the FY 2015-16. Out of these 16 public issues, 8 issues (50%) were exclusively listed on BSE. BSE’s platform was used to collect Rs.37,621 Crore and the average bids garnered through BSE’s Internet based Book Building software (“iBBS”) platform for these debt public issuances was 90%.

BSE BOND - Electronic Book Platform for bidding of debt securities issued on private placement was made live effective from July 1, 2016 as per the guidelines of SEBI circular CIR/IMD/DF1/48/2016 dated April 21, 2016. The BSE BOND platform has been a preferred choice for companies to raise Debt Capital in India. In the FY 2016-17, 74 Issuers with 434 issues of bonds have successfully raised Rs.2,16,726 Crore using BSE BOND platform.

- Mutual Fund Segment [Innovations and unique Features for on BSE STAR MF Platform]

Innovations and unique features for on BSE STAR MF Platform.

Technology Infrastructure: BSE has invested and created world class robust technology and operational capabilities for accepting mutual funds orders and providing seamless settlement through Indian Clearing Corporation Limited (“ICCL”).

The technology Infrastructure has created a super highway, which has eliminated the barrier to expand mutual funds distribution for traditional distributors as well as new age e-commerce.

- Only platform in India that supports both Demat and Non demat mode for both Pool based settlement, Mutual Fund Investor (“MFI”) mode as well as direct settlement, Mutual Fund Distributor (“MFD”) / Registered Investment Advisor (“RIA”) mode with end Investors.

- 24X7 order acceptance is available on BSE STAR MF Platform.

- Overnight Investment framework facilitates BSE STAR MF Registered Investors:

- To route idle monies as overnight investments, monies can be invested even for a single day i.e. overnight.

- As an alternative investment avenue for idle monies with Investors by investing in MF Liquid Schemes for better returns and relatively lowers risk.

- Subscription and redemption can happen simultaneously on the same day.

- Only Platform in India that support 3 modes via Systematic Investment Plan (“SIPs”), which can be initiated as under:-

- Paperless SIP: Wherein the link for payment is created for 1st Installment as well as subsequent Installment, only available with BSE.

- X-SIP / National Automated Clearing House (“NACH”) based SIP Facility: Under this product, a single mandate can be used for investing in SIPs across all schemes and all Asset Management Company (“AMCs”) registered with STAR MF. The SIP administration and the cost of administration is borne by BSE and the money is debited to the client’s bank account directly instead of debiting the member pool account.

- X-SIP Facility with First order today flexibility: Enabling BSE STAR MF members to START SIP within couple of minutes instead of waiting for a month.

- Paperless Internet based SIP (“ISIP”), wherein BSE is Biller in leading banks of India, Single ISIP Mandates can be used across all schemes of different AMCs, with First order today flexibility. This facility is available only on BSE.

- Any day Systematic Transfer Plan (“STP”) and Systematic Switch Plan (“SWP”), with First order today facility.

- 6 day order holding facility.

- Multiple mode of payments viz. payment gateway, one time mandate, cheque, RTGS/NEFT.

- Completely digital and real time investor’s registration.

- Direct pay-out of units to client (“DPC”) Facility: DPC accounts option to member broker, available only on BSE.

- Connectivity: Multi mode of platform access;

a) Web - browser with CO-BRANDING facility,

b) APIs over leased lines,

c) WEB Services - APIs over internet.

- SMS/email based redemption order authentication in MFD mode

- Provision for Minimum redemption quantity facility, useful when the holdings fall below permitted minimum lot, only available with BSE

- Multi-ARN facility, useful when settlement of trades can be done for other AMFI registration no. (“ARNs”) of same group company or otherwise, only available on BSE.

- Android based mobile application.

Secondary Market - Equity Segment

The S&P BSE SENSEX ended FY 2016-17 at 29,621 compared to 25,342 at year end of FY 2015-16, an increase of 16.89% over the year which has been one of the factors for increased trading volumes this year. The average daily value of equity turnover on BSE in FY 2016-17 was Rs.4,025 Crore, an annual increase of about 34.35% from Rs.2,996 Crore in FY 2015-16.

- Equity Derivatives Segment

Equity derivatives daily average volume was 498 contracts per day in FY 2016-17 as compared to 4.32 Lakh contracts from FY 2015-16. BSE has decided to discontinue its Liquidity Enhancement Incentive Programme Scheme (“LEIPS”) that has been running for the past few years.

- Currency Derivatives Segment

In the currency derivatives, BSE’s market share increased to 38.09% in FY 2016-17 from 36.41% in FY 2015-16. Members’ participation in this segment increased to 332 (16 Banks and 316 Members) during FY 2016-17, compared to 285 (14 Banks & 271 Members) in FY 2015-16. Open Interest (“OI”) for FY 2016-17 was 17.42 Lakh contracts, an increase of over 35.35% as compared to 12.87 Lakh contracts during FY 2015-16.

- Interest Rate Derivatives

During FY 2016-17, BSE’s market share in interest rate derivatives increased to 29.20% from 17.19% in FY 2015-16.

Members’ participation increased to 104 (8 Banks, 4 Primary Dealers & 92 Members) in 2016-17 from 94 in FY 2015-16.

- BSE SME Platform

The framework for SME Platforms to serve small and mediumsized enterprises on stock exchanges were established by SEBI vide its circular dated May 18, 2010. The BSE SME platform received the final approval of SEBI on September 27, 2011. BSE SME IPO Index was launched on December 14, 2012 with 100 as the base.

On March 31, 2017 the value of this index reached 1,288.88. Additionally, the total market capitalization of all the 175 companies listed on BSE SME Platform reached Rs.16,925.72 Crore. During FY 2016-17 the SME platform continued to be a front-runner with a market share of over 80%.

During FY 2016-17, 48 companies raised Rs.436.46 Crore from the market.

- Migration to Main Board

BSE issued a circular on November 26, 2012 stating that companies have to be mandatorily listed and traded on the SME Platform for a minimum period of two years for them to migrate on to the Main Board as per SEBI guidelines.

During FY 2016-17, 9 BSE SME companies have migrated to the BSE Main Board.

- Global Recognition for the BSE-SME platform

In its research report of July 2015, International Organization of Securities Commissions (“IOSCO”) commended BSE’s SME platform for being the most cost effective platform for SME listing in the world. In March 2016, it also received the SKOCH Achiever Award from Shri. K. T. Rama Rao, Hon’ble Minister of IT, Government of Telangana. In the same period, the World Federation of Exchanges put forth a report on SME funding through exchanges and has used the BSE SME platform as a key case study.

- Debt Segment

The Fixed Income segment at BSE provides an array of products and services to market participants. In this space, BSE also offers reporting of Secondary Market Trades in Government Securities, Treasury Bills, Corporate Bonds, Certificate of Deposit (“CDs”) and Commercial Paper (“CPs”) on the Wholesale Debt Market platform called Indian Corporate Debt Markets (“ICDM”). BSE witnessed reporting of Over the Counter (“OTC”) trades in Corporate Bonds on ICDM worth Rs.2,88,372 Crore in FY 2016-17 as against Rs.2,07,652 Crore in the previous year, marking an increase of 39%. In case of Statutory Liquidity Ratio (“SLR”) securities i.e. Government Securities and Treasury Bills, trades worth Rs.2,00,469 Crore were reported on ICDM in the current year as against Rs.2,27,124 Crore in FY 2015-16.

Trading in Non-Convertible Debentures (“NCDs”) and Bonds on ‘F’ group on BOLT saw increased activity of Rs.4,770 Crore in FY 2016-17 as against Rs.4,608 Crore in the previous year. BSE has retained a market share of over 57.60% in the retail trading of Corporate Bonds in FY 2016-17. During the year, BSE introduced clean price mechanism for retail debt trading platform.

No significant activities were observed in trading in Government Securities on the Retail Debt Market (“RDM”) ‘G’ group across the entire market.

In accordance with RBI and SEBI guidelines, BSE has developed a platform called ‘E-settle’ to facilitate clearing and settlement of secondary market trades in corporate bonds, CPs and CDs on Delivery Vs Payment 1 (“DvP1”) basis through the ICCL.

The settlement volume for corporate bonds witnessed business of Rs.1,16,030 Crore in FY 2016-17 as against Rs.57,874 Crore in the previous year which is an increase of over 100% over previous FY 2015-16.

BSE had launched the New Debt segment (“BSE-NDS”) on March 20, 2014 in accordance with SEBI guidelines for new dedicated debt segment on stock exchanges issued in January, 2013 and the risk management framework therein, issued in September, 2013. 135 Trading Members and Institutional Members are registered on BSE NDS.

- Sovereign Gold Bonds

BSE’s got permission from RBI and SEBI for acting as a Receiving Office for the Sovereign Gold Bond (“SGB”) Scheme. Three tranches of SGB aggregation to RBI were carried by banks and post offices. From fourth tranche onwards, Stock Exchanges are allowed to act as a receiving office. In this receiving office role, BSE role would be limited to aggregation of applications and transfer of funds.

Please find below table on SGB bids received on BSE in the respective Tranches.


Total No. of Members

Total No. of Bids

Volume in Kgs.

Value in Rs. Crores





















- ebidXchange - Auction of FPI limits for debt

A custom designed platform called ‘ebidXchange’ for allocation of FPI limits for investment in government securities and corporate bonds was launched by BSE in May 2009.

The ebidXchange platform pioneered the auction of multiple products - Infrastructure Bonds, Corporate Bonds and Government Securities. During FY 2016-17, BSE conducted 5 auction sessions, all of which were conducted seamlessly and received positive response from market participants. The total cumulative amount bid for these 5 auctions was Rs.41,355 Crore.

- Exchange Traded Funds (“ETF”)

As at March 2017, BSE had 50 ETFs listed compared with 45 as on March 2016. During FY 2016-17, the average daily turnover in ETFs increased by 35% i.e. Rs.39.05 Crore from Rs.28.99 Crore in FY 2015-16.

- Offer for Sale (“OFS”) & Offer to Buy(“OTB”)

During FY 2016-17 there were 22 OFS issues, of which BSE was appointed as the Designated Stock Exchange in 19 issues (86%). Out of the 19 OFS issues, 15 issues were conducted exclusively on the BSE platform. In FY 2016-17, the total amount raised through OFS issues was Rs.5,672.86 Crore.

During FY 2016-17, there were 88 OTB issues, of which BSE was appointed as the Designated Stock Exchange in 86 issues (98%). Out of the 86 OTB issues, 81 issues were conducted exclusively on BSE platform, the total amount raised through OTB issues was Rs.29,206 Crore.

- Securities Lending & Borrowing (“SLB”)

ICCL acts as an Approved Intermediary under the SEBI Securities Lending and Borrowing Scheme, 1997. The registration of ICCL as an Approved Intermediary was renewed for a further period of three years from June 28, 2016 to June 27, 2019. The SLB turnover increased by 297% from Rs.313.23 Crore in F.Y. 2015-16 to Rs.1,244.38 Crore in F.Y. 2016-17, while the lending fees collected increased by 331% from Rs.1.46 Crore to Rs.6.29 Crore during this period.


FY 2015-16 (Rs. Crore)

FY 2016-17 (Rs. Crore)

Turnover for the period - 1st Leg of SLB transactions (quantity x underlying price of the stocks as on previous day)



Lending fees.



- BSE Hi-tech for Start Ups

The Company had launched a new segment BSE Hi-Tech, following the announcement of the new Institutional Trading Platform Regulations by SEBI in August 2015. This platform has been launched to facilitate young, fast growing companies to access capital and provide liquidity to early stage investors. The Company has formed an Advisory Panel comprising eminent persons from the ecosystem and organized several knowledge sessions. There has been no listing on this platform yet. Feedback has been gathered from the companies, investors and other stakeholders and the Advisory Panel which is shared with the policy makers to get benefit of this important initiative of the Government to help Start Up industry.

- Dissemination Board

SEBI issued a circular in October 2016, requiring all exclusively listed companies of Regional Stock Exchanges which are derecognized and which are on Dissemination Boards of Nationwide Stock Exchanges to either list on a nationwide stock exchange or to provide exit to its investors. Following this, BSE has reached out to over 1,500 such companies admitted to BSE’s Dissemination Board. BSE is working closely with SEBI to ensure smooth and proper exit to investors’ in such companies.

- Disinvestment Drive of GOI and BSE’s support

In the FY 2016-17, BSE’s iBBS platform has facilitated Government of India Disinvestment Programme through OFS, OTB and Central Public Sector Enterprises Exchange Traded Fund (“CPSE ETF”) to garner more than Rs.25,000 Crore, forming more than 50% of the Total Disinvestment by the Government of India in FY 2016-2017.

The Company also has extended the facility for acceptance of subscriptions for further Fund Offer of CPSE ETFs by introducing an online mechanism called BSE iBBS Platform for Mutual Fund (“BiMF”).

Business Operations Review Membership

During FY 2016-17, 52 Deposit Based Membership (“DBM”) applications were received at BSE. Since launch of new DBM scheme in April, 2010, BSE has received a total of 841 DBM applications.

Corporate Services (listing)

The Corporate Services segment of the Company registered healthy revenue growth in FY 2016-17. Annual Listing Fees (equity, debt and MF) increased by 2.82% to Rs.104.19 Crore compared to Rs.101.33 Crore in FY 2015-16. This increase in Annual Listing Fees is mainly attributed to an increase in number of companies listed under IPO.

The Company also provides other services to corporates such as book building software, buy-back facilities, reverse book building software, etc. Fees earned from such services were Rs.14.31 Crore in FY 201617 as compared to Rs.11.23 Crore in FY 2015-16, a rise of 27.43% from the previous year on account of new primary market issuances and the newly introduced OTB facility.

Data Information Products

The Company and Deutsche Bourse have entered into a partnership in October, 2013 under which Deutsche Bourse would act as the licensor of the Company’s market data and information to all international clients. Under the co-operation, Deutsche Bourse is responsible for sales and marketing of all the Company’s market data products to customers outside India, while the Company continues to serve its domestic clients. Deutsche Bourse also shares the joint responsibility along with the Company for product development and innovation, which includes extending its existing infrastructure and creation of new market data solutions to support the Company’s product offerings.

The business for sales and marketing of the Company’s market data products to International customers by Deutsche Bourse commenced from April, 2014. The total revenue from the sale of market data and information products was Rs.24.67 Crore in FY 2016-17 as compared to Rs.22.42 Crore in the previous year. The increase in revenue was on account of increase in subscription for the Company’s information products and services by new customers.


Asia Index Private Limited (“AIPL”) is a joint venture between S&P Dow Jones Indices LLC and BSE. AIPL launched 3 new indices in FY 2016-17:

- The S&P BSE Liquid Rate Index was launched on July 26, 2016; the index is designed to measure the returns from a daily rolling deposit at the Collateralized Borrowing and Lending Obligation (“CBLO”) rate.

- The S&P BSE SENSEX 50 Index was launched on December 6, 2016; the index is designed to measure the performance of the top 50 largest and most liquid stocks in the S&P BSE Large Mid Cap.

- The S&P BSE SENSEX Next 50 Index was launched on February 27, 2017; the index is designed to measure the performance of the next 50 largest and most liquid stocks after the constituents of the S&P BSE SENSEX 50 in the S&P BSE Large Mid Cap.

Secondary Market Policy Developments

Data analytics based systemic solution for tracking company news

The Company undertakes various regulatory policy and systemic measures for enhanced due-diligence, surveillance, corporate governance in the Indian capital markets to comply with SEBI regulations. In this regard, the Company has implemented artificial intelligence based framework for rumour detection since November, 2016.

The primary objective is to detect and mitigate potential risks of market manipulation, rumour and reduce information asymmetry arising from it on digital media platforms, including social media.

In recent past, news media has undergone a sea of changes with digital media and social media becoming the frontline in news reporting or sharing information digitally for easier, faster and wider reach. On this background, any material news or rumour floating in the social media can have potential impact on the sentiments of the investing population which can further impact price/volumes of securities traded on exchange platforms.

The data analytics based systemic solution relies on artificial intelligence based framework to track news related to listed companies on digital media using social media like twitter, etc.

Alerts generated by this social media solution is monitored by the Company from the standpoint of material information and also vis-a-vis possible rumours appearing in various media including print and on-line channels as per SEBI regulations.

Graded Surveillance Measure (“GSM”)

The Exchange has pro-actively taken series of surveillance actions on its stocks in recent past as a pre-emptive measure to ensure safety and integrity of the market.

In continuation to various surveillance measures already implemented, SEBI and Exchanges, pursuant to discussions in joint surveillance meetings, have decided that along with the aforesaid measures, there shall be additional GSM on securities which witness an abnormal price rise not commensurate with financial health and fundamentals like Earnings, Book Value, Fixed Assets, Net Worth, P/E Multiple, etc.

The main objective of these measures is to alert and advice investors to be extra cautious and advice market participants to carry out necessary due diligence while dealing in the securities.

Under the GSM framework which became effective from March 14, 2017, based on satisfaction of certain pre-defined objective criteria, the securities shall attract following additional graded surveillance actions:

I. Shifting of scrips on Trade to Trade (“T2T”) basis with price band of 5% or lower T2T

II. T2T with 100% Additional Surveillance Deposit (“ASD”) equivalent to buy value of transaction

III. T2T 100% ASD Once a week trading

IV. T2T 200% ASD Once a week trading

V. T2T 200% ASD Once a month trading

VI. T2T 200% ASD Once a month trading Freezing of price on upper side

As on April 25, 2017, a total of 778 companies have been identified to be a part of GSM framework. Out of these 141 companies are in Stage I, 54 companies are in Stage II while 5 companies are in Stage III.


Surveillance & Investigation

Statistics for FY 2016-17:

As part of market monitoring activities during FY 2016-17; 69,062 surveillance alerts were generated, of which 1,339 alerts were taken up for snap investigations. Subsequently, 173 cases were taken up for preliminary/detailed investigations, of which 111 preliminary/ investigation reports have been forwarded to SEBI. Based on the findings, 431 observations letters were issued to various members/ clients. Further, on account of surveillance measures, there were 1,833 price band reductions. The Company has also provided e-BOSS, the member level surveillance system to trading members to monitor their clients positions and manage risk at a nascent stage.

Broker Supervision

607 inspections of members were conducted during FY 2016-17, which include 518 routine inspections and 89 special inspections. This also included 25 inspections on the basis of risk based supervision.

Investor Services

The Company redresses investor complaints against trading members and listed companies by taking prompt action upon receiving the complaints. Investor complaints against trading members are received through the SEBI Complaints Redressal System (“SCORES”) of SEBI, a web based system where investors can lodge their complaints online. The Company in turn communicates the complaints to the members electronically through the BSE Electronic Filing System (“BEFS”), thereby reducing the communication time resulting in expeditious resolution of investor complaints. All actions taken in the process of redressal are then updated on this system. The investors can also lodge complaints directly with the Exchange. The complaints against trading members are redressed through mediation and counselling by Investor Grievances Redressal Committees (“IGRC”) wherein the IGRC is also empowered to decide the claim value.

The Company provides IGRC as well as arbitration services at its Regional Investor Service Centers located at Mumbai, Chennai, Delhi, Kolkata, Ahmedabad, Hyderabad, Kanpur, Indore, Jaipur, Pune, Bangalore, Patna, Vadodara, Lucknow. During the year, the Company commenced new investor services centres at ten cities namely, Bhubaneshwar, Chandigarh, Dehradun, Guwahati, Jammu, Kochi, Panaji Raipur, Ranchi and Shimla. Thus the Company currently provides IGRC and arbitration services from 24 investor services centres located at different parts of the country. BSE is the only Exchange in the country, where 13 Registrars and Transfer Agents (“RTAs”) regularly visit its Investor Service Centre at Mumbai, for redressal of investor complaints against companies listed on BSE.

Listing Compliance

Update on extensible Business Reporting Language (“XBRL”)

BSE is the first and only Exchange in India to introduce the globally accepted reporting format XBRL as it is more popularly known, for certain critical disclosures required under the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (“Listing Regulations”)These are Shareholding Pattern, Corporate Governance Report, Voting Results and Financial Results.

Since introduction of XBRL reporting in 2015, we have seen an increasing number of companies making their filings in XBRL voluntarily. Encouraged by this response and the improved efficiency of data dissemination, the Exchange has made the filing of Shareholding Pattern, Corporate Governance and Voting Results mandatory.

In continuation with these initiatives, the Exchange has recently made it mandatory for companies to file Financial Results in the XBRL format (initially in pdf and in XBRL within 24 hours) for all results filed from the quarter ended March 31, 2017 onwards. This important development has also been noted and reported in the Newsletter of XBRL International.

Compulsory Delisting

Trading in the securities of certain listed companies has been suspended for a long period of time on account of non-compliance with the critical clauses of the erstwhile Listing Agreement.

BSE under the guidance of SEBI, had advised companies that have been under suspension for a period of three years or more, to expedite the completion of all formalities for revocation or else be compulsorily delisted from the Exchange, as per the provisions of the SEBI (Delisting of Equity Shares) Regulations, 2009.

During the FY 2016-17, the Exchange has delisted 294 companies. This is an ongoing activity and is expected to be completed by September, 2017.

Corporate Announcement Filing System (“CAFS”)

The Company has been making continual efforts to improve on the turnaround time for disseminating critical information received from listed companies to the shareholders and the public at large, on its website, without compromising on the quality of the information.

Towards this objective, the Exchange introduced the Corporate Announcement Filing System (“CAFS”) with effect from March 1, 2017, in beta mode. The system provides for seamless dissemination of filings/disclosures by listed companies directly on the Exchange website without any pre-verification by the Exchange. This is done using security measures such as Two Factor Authentication (“TFA”) and has ensured almost instantaneous dissemination of price sensitive information to the investors. The system makes companies wholly accountable for their filings, leading to much faster, efficient and informed decisions by investors and the public at large.

Over 90% of listed companies at BSE have registered for this facility. In case of any inadequacies or discrepancies, clarifications are sought from the companies and the responses again disseminated on the website. Post dissemination of these critical announcements in the public domain, the Company carries out further checks with respect to adequacy and accuracy.


Social Media Analytics

The Company has implemented Social Media analytics using Artificial Intelligence to predict rumors and verification of news floating in the market on its listed companies and its impact on the stock market. Such real time approach has resulted in prompt dissemination of information pertaining to the companies. The Company has deployed this technological innovation to mitigate the potential risks of market manipulation and information asymmetry arising from it. This would enhance market integrity, orderly functioning and investor protection in the Indian Capital Markets.

As the first phase of the project, the Company implemented a live framework to monitor the news websites using data management and machine learning. In the subsequent phases, the framework for collecting data from Facebook and Twitter was implemented.

Social Media analytics has helped faster processing and dissemination of information. This was one of the primary criteria for success of this project. As the quantum of processing information increased, the Company was able to monitor impact of certain news on the prices. Employee involvement and productivity reached new highs, as the team involved were equipped with better and more information. Overall savings in cost in terms of resources deployed for manual tracking, and other indirect costs were drastically reduced.

Major milestones achieved by IPF

- BSE Investor Protection Fund (“IPF”) has done 4,499 investor awareness programs across 30 states during the year. Highest in a single year.

- Participated at the India International Trade Fair (held for 14 days) along with SEBI in New Delhi in November, 2016 to showcase the Company’s products and services to Investors.

- Participated at the Vibrant Gujarat Trade Fair (held for 4 days) in January, 2017 to showcase the Company’s products and services to Investors.

- Managing 25 Investors Service Centres covering major state capitals.

Enhanced Supervision of Stock Brokers

The Company has announced enhanced supervision of stock brokers to facilitate reporting of their Bank and Demat accounts.

This new initiative is in line with SEBI’s directive (vide SEBI Circular SEBI/HO/MIRSD/MIRSD2/CIR/P/2016/95 dated September 26, 2016. Reporting on most of the clauses has been made applicable w.e.f. July 1, 2017, and for the remaining clauses on various dates notified from time to time subsequently.

SEBI has issued guidelines which cover following broad areas:-

- Uniform nomenclature to be followed by stock brokers for Naming/Tagging of Bank and Demat Accounts and the reporting of such accounts to the Stock Exchanges/Depositories.

- Monitoring of Clients’ Funds lying with the Stock Broker by the Stock Exchanges, through a sophisticated alerting and reconciliation mechanism, to detect any misutilisation of client’s fund.

- Changes in the existing system of internal audit for stock brokers/depository participants, viz., appointment, rotation of Internal Auditors, formulation of objective sample criteria, monitoring of quality of Internal Audit Reports, timeline for submissions of Internal Audit Reports, etc.

- Monitoring of Financial Strength of Stock Brokers by Stock Exchanges so as to detect any signs of deteriorating financial health of stock brokers and serve as an early warning system to take preemptive and remedial measures.

- Imposition of uniform penal action on stock brokers/depository participants by the Stock Exchanges/Depositories in the event of non-compliance with specified requirements.

- Other Requirements:

a. Uploading client’s funds and securities balances by Stock Brokers to Stock Exchange System and onward transmission of the same to the clients for better transparency.

b. Clarification on Running Account Settlement.

c. Providing Permanent Account Number (“PAN”) details of Directors, Key Management Personnel and Dealers, to Stock Exchanges and any change thereof.


During the year, the Company continued with the task of educating investors and; supporting and launching new products.

The launch of the International Exchange and the listing of BSE were 2 significant events for the Company during the year. The International Exchange, India International Exchange (IFSC) Limited (India INX), was inaugurated by the Hon’ble Prime Minister of India, Shri Narendra Modi. The event had over 5000 people attending in person and millions witnessing it live on their television sets.

BSE emerged as India’s first listed stock exchange, a significant milestone supported by an integrated communication campaign covering television, print and social media.

The Company did get significant coverage in all leading national/ international newspapers and channels while its presence on social media grew manifold. The Company hosted more than 240 events ranging from international delegations to educational programs to roundtables on important national and international topics.

During the course of the year the Company witnessed many high profile visits and delegations from the government, industry and other sectors from India and abroad.

The dignitaries include:

1. Shri Narendra Modi, Hon’ble Prime Minister of India

2. Shri CH Vidyasagar Rao, Hon’ble Governor of Maharashtra

3. Shri Arun Jaitley, Hon’ble Union Minister of Finance, Corporate Affairs and Defence, Government of India

4. Shri Suresh Prabhu, Hon’ble Minister of Railways, Government of India.

5. Shri Venkaiah Naidu, Hon’ble Former Minister of Information and Broadcasting, Urban Development, Housing and Urban Poverty Alleviation, Government of India

6. Smt. Smriti Irani, Union Cabinet Minister of Textiles, Information and Broadcasting Government of India

7. Shri Devendra Fadnavis, Hon’ble Chief Minister of Maharashtra

8. Shri Vijay Rupani, Hon’ble Chief Minister of Gujarat

9. Shri Laxmikant Parsekar, Former Hon’ble Chief Minister of Goa

10. Shri Piyush Goyal, Minister of State with Independent Charge for Power, Coal, New & Renewable Energy and Mines in Government of India

11. Shri Ramdas Athawale, Minister of State for Social Justice & Empowerment, Government of India

12. Shri Hansraj Gangaram Ahir, Union Minister of State for Home Affairs.

13. Shri Jayant Sinha, Hon’ble Minister of State for Civil Aviation, Government of India

14. Shri Arjun Ram Meghwal, Minister of State Finance & Corporate Affairs, Government of India

15. Shri Arvind Sawant, Member of Parliament, Loksabha

16. Shri Sudhir Mungantiwar, Hon’ble Minister for Finance and Planning, Forest, Government of Maharashtra

17. Shri Rajkumar Badole, Hon’ble Minister for Social Justice and Special Assistance, Government of Maharashtra

18. Shri Ram Kadam, Member of Legislative Assembly of Maharashtra State

19. Prime Minister of Serbia, H.E. Mr. Aleksandar Vucic

20. Mr. John Tory, Hon’ble Mayor of Toronto

21. Mr. John Halligan T.D., Hon’ble Minister for Training, Skills and Innovation, Ireland

22. Mr. Navdeep Singh Bains, Hon’ble Minister of Innovation, Science, and Economic Development, Canada

23. Mr. Pat Breen TD, Hon’ble Minister of State for Employment and Small Business, Irish Government

24. Mr. Meng Jianzhu, Special Envoy of President Xi Jinping, Member of the Political Bureau of the Central Committee of the Communist Party of China (CPC), Secretary of the Political and Legislative Affairs Committee of the CPC Central Committee.

25. Mr. Panos Kalogerpoulos, Hon’ble Ambassador of Greece to India

26. Mr. Steven Armour, Director Huston Polo Club and National Governor of United States Polo Association

27. Mr. Taro Kono, Member of Japanese Parliament

28. Mr. Rajcoomar Rampertab, Hon’ble MP, Mauritius & Parliamentary Private Secretary and in charge Development Desk, Office of Prime Minister of Mauritius.

29. Shri Shaktikanta Das, Secretary (Economic Affairs), Ministry of Finance

30. Shri D. K. Jain, Addl. Chief Secretary, Govt. Of Maharashtra

31. Shri Praveen Garg, Joint Secretary, Department of Economic Affairs, Ministry of Finance, Govt. of India

32. Shri Ajay Tyagi, Chairman, SEBI

33. Shri. U. K. Sinha, Former Chairman, SEBI

34. Dr. Harshdeep Kamble, Commissioner, FDA, Maharashtra

35. Hon. Adv. Shri Prakash Yashwant Ambedkar, Head, Bharipa Bahujan Mahasangh

36. Smt. Nita Mukesh Ambani, Chairperson & Founder, Reliance Foundation and Non-Executive Director, Reliance Industries

37. Shri Azim Premji, Chairman, WIPRO

38. Shri Mukesh Kumar Suhana, CMD, HPCL

39. Shri Sanjeev Goenka, Chairman, CESC Ltd.


- Business World Digital Leadership and CIO Award

- The IDC Digital Transformation Awards 2017

- The Best Exchange of the year award for equity and currency derivatives in Tefla’s Commodity Economic Outlook Award 2017

- Best Brand award 2017 by Economic Times


- Best Corporate film encompassing Vision, History, Value and Spirit of Excellence award, Best Corporate film on Employer Branding award and Most Influential HR Leaders in India award at World HRD Congress 2017

- ’Best Exchange of the year’ award at 4th India Bullion & Jewellery awards 2017.

- Red Hat Innovation Awards 2016 by Red Hat Solutions.

- Skoch Achiever Award 2016 for SME Enablement.

- Best IT Implementation Award 2016 in the “Most Complex Project Category” by PCQuest.

- InfoSec Maestros Awards 2016.

- Lions CSR Precious Awards 2016.


During the year under review, the face value of the equity shares of the Company was consolidated from Rs.1/- (Rupee One only) to Rs.2/- (Rupees Two only) per share, vide resolution passed by the members of the Company on November 25, 2016.

Pursuant to clause 5 of BSE (Corporatisation and Demutualisation) Scheme, 2005 (BSE Scheme, 2005) approved by SEBI vide its notification dated May 20, 2005, every trading member having membership right of the Exchange or his nominee, as the case may be, as on record date was entitled to 10,000 equity shares of the face value of Rs.1/- per share, against membership right of erstwhile BSE. It may be noted that the entitlement against membership right post consolidation of share capital stands changed to 5000 equity shares of face value Rs.2/- per share. The said shares as on March 31, 2017, have been kept in abeyance for various reasons.

The Company on March 27, 2017 allotted 1,30,000 equity shares of the face value of Rs.2/- per share, along with corporate benefits accrued thereon as on the said date to two erstwhile trading members having membership rights whose entitlements to shares were kept in abeyance, pursuant to BSE Scheme, 2005. The said allotment of 65,000 equity shares to each of the above trading member comprised of 5,000 equity shares towards initial entitlement of equity shares pursuant to BSE Scheme, 2005 and 60,000 bonus equity shares issued by the Company in the year 2009.

The above share allotment resulted in an increase in equity share capital of the Company from Rs.10,73,56,344 to Rs.10,76,16,344, as on March 31, 2017. The authorised capital of the Company as on March 31, 2017, stood at Rs.3,00,00,00,000. As per BSE Scheme, 2005, remaining 12 erstwhile trading members, having an aggregate 12 membership rights, continue to remain in abeyance till date.


A detailed disclosure of the particulars relating to Loans and investments by the Company as per Section 186 of the Companies Act, 2013 (‘the Act’), is provided in notes to the financial statements.


The Company has the following sixteen subsidiary companies (direct and indirect) and one joint venture as on March 31, 2017 names of which are given below:-


BSE Investments Limited

BSE Sammaan CSR Limited

BSE CSR Integrated Foundation (Section 8 Company)

BSE Institute Limited

BFSI Sector Skill Council of India (Section 8 Company)

BSE Skills Limited

BIL - Ryerson Technology STARTup Incubator Foundation (Section 8 Company)

Central Depository Services (India) Limited

CDSL Ventures Limited

CDSL Insurance Repository Limited

CDSL Commodity Repository Limited (w.e.f. March 16, 2017)

India International Exchange (IFSC) Limited (w.e.f. September 12, 2016)

India International Clearing Corporation (IFSC) Limited (w.e.f. September 12, 2016)

Indian Clearing Corporation Limited

Marketplace Technologies Private Limited

Marketplace Tech Infra Services Private Limited

Joint Venture:

Asia Index Private Limited

The statement containing the salient features of the financial statements along with the names of the subsidiaries/ joint ventures of the Company are given in Form AOC - 1, which forms a part of this Annual Report.

Further, the financial statements of the Subsidiary companies are kept for inspection by the shareholders at the Registered Office of the Company. The Company shall provide a copy of the financial statements of its subsidiary companies to the shareholders upon their request in writing. The statements are also available on the website of the Company

BSE Skills Limited have filled application to Registrar of Companies (ROC) for removing its name from register of companies. There has been no material change in the nature of the business of the other subsidiaries and joint venture.

Changes in subsidiaries/ joint ventures/ associate company

The Company incorporated the following subsidiaries during the year ended March 31, 2017: -

1. India International Exchange (IFSC) Ltd. (India INX) was incorporated under the Act, on September 12, 2016.

2. India International Clearing Corporation (IFSC) Ltd. (India ICC) was incorporated under the Act, on September 12, 2016.

3. CDSL Commodity Repository Limited was incorporated under the Act, on March 16, 2017.

Central Depository Services (India) Limited (CDSL)

During the FY 2016-17, the Company sold 4.15% equity stake in its subsidiary, CDSL. The shareholders of the Company have also approved divestment of 26.05% equity stake in CDSL through a postal ballot during FY 2016-17. The Company has successfully tendered 27,217,850 equity shares, i.e. 26.05% of its equity stake in CDSL, through offer for sale, post which the aggregate shareholding of the Company stands reduced to 25,080,000 equity shares, i.e. 24%. Accordingly, CDSL along with its subsidiaries namely CDSL Venture Limited, CDSL Insurance Repository Limited and CDSL Commodity Repository Limited ceased to be subsidiaries of the Company and have become an associate companies with effect from June 29, 2017.

DIRECTORS AND KEY MANAGERIAL PERSONNEL (“KMP”) Appointment and Re - appointment of Directors

During the year under review, Shri Sumit Bose and Justice Vikramajit Sen were appointed as Public Interest Directors w.e.f. May 19, 2016.

In accordance with the provisions of the Act, read with the applicable rules, as amended, Dr. Sriprakash Kothari, Shareholder Director retires by rotation and being eligible, offered himself for re-appointment at the ensuing Annual General Meeting.

Cessation of Directors

Dr. Sanjiv Misra ceased to be Public Interest Director w.e.f. April 22, 2016. Shri Roland Schwinn was appointed as Shareholder Director in place of Shri Thomas Bendixen w.e.f. June 13, 2017.

Shri Sudhakar Rao ceased to be Public Interest Director and Chairman w.e.f. June 28, 2017, due to successful completion of his tenure.

The Company places on record its appreciation and gratitude for the valuable contributions made by them during their tenure as member of the Board.

Changes in KMP

During the year, Smt. Prajakta Powle was appointed as a Company Secretary & Compliance Officer of the Company w.e.f. September 7, 2016, in place of Smt. Neena Jindal, erstwhile Company Secretary of the Company.

Declarations by Public Interest Directors (‘PID’)

All PIDs have given declarations under section 149(7) of the Act that they met the criteria of Independence as laid down under Section 149(6) of the Act, and Regulation 16 of Listing Regulations. Further all PIDs have also given the declarations that they satisfy “fit and proper” criteria as stipulated under Regulation 20 of SECC Regulations.


As on March 31, 2017, eight (8) meetings of the Board were held during the year. For details of meetings of the Board, please refer to the Corporate Governance Report, forming part of this report.

Separate meetings of the Independent Directors was held on May 4, 2016 and February 13, 2017.


The Board of Directors of the Company carried out annual evaluation of its own performance, committees of Board and individual Directors pursuant to various provisions under the Act, Regulation 17, 19 and Schedule II of the Listing Regulations and based on the SEBI circular dated January 5, 2017 which provides further clarity on the process of board evaluation (“SEBI Guidance Note”).

The Company has implemented a system of evaluating performance of the Board of Directors and of its Committees and individual Directors on the basis of a structured questionnaire which comprises evaluation criteria taking into consideration various performance related aspects.

The procedure followed for the performance evaluation of the Board, Committees and individual Directors is enumerated in the Corporate Governance Report.

Board Committees

There are various Board constituted Committees as stipulated under the Act and Listing Regulations namely Audit Committee, Nomination & Remuneration Committee, Stakeholders Relationship Committee, Independent Directors’ Committee and Corporate Social Responsibility (CSR) Committee. Brief details pertaining to composition, terms of reference, meetings held and attendance thereat of these Committees during the year has been enumerated in Corporate Governance report.

Additionally, Company being an Exchange, has also constituted other Regulatory Committees as stipulated under SECC Regulations.


Statutory Audit

The auditors, Deloitte Haskins & Sells LLP, Chartered Accountants (Firm Registration No. 117366W/W-100018), Mumbai, had been appointed, in the Ninth AGM held on August 1, 2014, for a period of three years to hold the office from the conclusion of the Ninth AGM until the conclusion of the Twelfth AGM to be held in the year 2017, accordingly they retire at the AGM.

The Board in its meeting held on May 5, 2017 approved and recommended the appointment of S R Batliboi & Co. LLP, Chartered Accountants, (Firm Registration No. 301003E/E300005) as statutory auditors of the Company for a period of five years with effect from ensuing AGM of the Company, subject to ratification by shareholders at every AGM. The auditors have confirmed that, their appointment would be in accordance with the Section 139 of the Act, and the rules made thereunder and that they are not disqualified in terms of Section 141 of the Act.

The statutory auditors’ report dated May 5, 2017 on the financial statements of the Company for FY 2016-17 is unmodified and does not have reservations, qualifications or adverse remarks.

Secretarial Audit

The Board appointed M/s. Ragini Chokshi & Co., Practicing Company Secretaries to conduct Secretarial Audit of the Company for the financial year 2016-17.

Secretarial audit report for the year ended on March 31, 2017 as provided by M/s. Ragini Chokshi & Co., Practicing Company Secretaries is enclosed as Annexure A.

The secretarial auditor’s report does not contain any qualifications, reservations or adverse remarks.


Policy on Directors’ Appointment and Remuneration

The Company’s policy on Director’s appointment and remuneration provided in Section 178(8) of the Act, has been disclosed in the Annexure B enclosed with this report.

Corporate Social Responsibility (“CSR”)

The Company has constituted a CSR Committee in accordance with Section 135 of the Act. The details of the CSR Policy, its development and initiatives taken on CSR during the year as per annexure attached to the Companies (Corporate Social Responsibility Policy) Rules, 2014, have been enclosed as Annexure C to this report.

Whistle Blower Policy

The Company promotes ethical behaviour and has put in place a mechanism for reporting illegal or unethical behaviour. The Company has a Vigil Mechanism and Whistle-blower policy under which the employees are free to report violations of applicable laws and regulations and the Code of Conduct. Employees may report their genuine concerns to the Chairman of the Audit Committee. During the year under review, no employee was denied access to the Audit Committee.

The details of establishment of such mechanism has been disclosed on the website Blower_policy.pdf

Particulars relating to the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013

The Company has always believed in providing a safe and harassment free workplace for every individual working in its premises through various policies and practices. The Company always endeavours to create and provide an environment that is free from discrimination and harassment including sexual harassment.

The Company has adopted a policy on Prevention of Sexual Harassment at Workplace which aims at prevention of harassment of employees and lays down the guidelines for identification, reporting and prevention of undesired behavior. An Internal Complaints Committee (“ICC”) has been set up by the senior management (with women employees constituting the majority). The ICC is responsible for redressal of complaints related to sexual harassment and follows the guidelines provided in the Policy.

During the year ended March 31, 2017, no complaints pertaining to sexual harassment have been received


The risk management report discusses various dimensions of the Company’s enterprise risk management. The risk related information outlined in this section may not be exhaustive. The discussion may contain statements that are forward looking in nature. The business is subject to uncertainties that could cause actual results to differ materially from those reflected in the forward looking statements. Members are advised to refer the detailed discussion of the risk factors and related disclosures in the regulatory filings, and exercise their own judgment in accessing risks associated with the Company.


Risk Management is an enterprise wide function at the Company which covers major business and functional areas including strategy, operations, technology and compliance. Major risks identified by the businesses and functions are systematically addressed through mitigating actions on a continuing basis. Several risks can impact the achievement of a particular business objective. Similarly, a single risk can impact the achievement of several business objectives. The focus of risk management is to assess risks, deploy mitigation measures and review them, including the risk management policy on a periodic basis. This is done through periodic review meetings of the Risk Management Committee comprising of the Board members.

The risk in relation to internal control over financial recording and reporting is reviewed by the Audit Committee. The Company’s internal control systems are commensurate with the nature of its business and the size and complexity of operations. These systems are routinely tested and certified by Statutory as well as Internal Auditors. The Audit Committee reviews adequacy and effectiveness of the Company’s internal control environment and monitors the implementation of audit recommendations, including those relating to strengthening of the Company’s financial risk management policies and systems.

The key roles and responsibilities regarding risk management in the Company are summarized as follows:


Key Roles and Responsibilities

Board of Directors


Approving key business objectives to be achieved by the Company. Ensuring that the executive

management focuses on managing risks to key business objectives


Reviewing the performance of the Risk Management Committee

Risk Management Committee


Composition of Committee:

- Smt. Usha Sangwan

- Shr

Sumit Bose

- Shr

Sethurathnam Ravi

- Shr

Thomas Bendixen (Ceased to be Shareholder Director w.e.f. June 13, 2017)

- Shr

Nehal Vora

- Shr

V. Balasubramaniam (Ceased to be Member w.e.f. July 11, 2017)

- Shr

Nayan Mehta


Review and oversight with regards to identification, evaluation and mitigation of the strategic, operational,

technology and compliance risks


Reviewing and approving risk related disclosures


Monitoring and approving the risk management framework and associated practices of the Company

Role of Risk Team


Adhering to the risk management policies and procedures


Implementing prescribed risk mitigations actions


Reporting risk events and incidents in a timely manner

Risk Categories

The Company’s Risk Management Framework considers the following broad categories of risk:

(a) Strategy

Risks arising out of the choices we have made in defining our strategy and the risks to the successful execution of these strategies are covered in this category - for e.g., risks inherent in our industry and competitiveness are analyzed and mitigated through strategic choices of target markets, the Company’s market offerings, business models and talent base. Potential risk to the long term scalability and sustainability of the organization are also analyzed and mitigation plans are formulated. We periodically assess risks to the successful execution of devised strategy, such as the effectiveness of tactical programs that are being executed, the momentum in new initiatives, the impact of strategy on financial performance, leveraging of inorganic plans, effectiveness of organisation structure and processes, retention and development of high performing talent and leadership.

(b) Operational and Technology

Risks arising out of internal and external factors affecting the policies, procedures, people and systems in our support functions, thereby impacting delivery of services; compromises our core values. Risks not in accordance with generally accepted business practices or impacting the client’s operations are covered in this category. For e.g. risks of business activity disruption due to natural calamities, terrorist attacks, war or regional conflicts; or disruption in telecommunications, systems failures, virus attacks or breach of cyber security.

(c) Compliances

Risks arising out of threats posed to the financial, organisational, or reputational standing resulting from violations or non-conformance with laws, regulations, codes of conduct, prescribed practices or contractual compliances are covered in this category. For e.g. risks of potential litigations, breach of contractual agreements, non-compliances to regulations, potential risks arising out of major regulatory/geopolitical changes and potential risks arising out of strategic or operational business decisions.

Risk Management Procedure

(a) Risk Identification

Risk Management is a continuous interplay of actions that permeate the Company. It is brought into effect by the Company’s risk committee, management and other personnel. The risk management process of the Company aims at providing reasonable assurance regarding achievement of its objectives.

In order to provide reasonable assurance, the Company’s risk management process endeavors to help:

- Identify, assess and escalate new risks impacting the objectives of the Company,

- Define mitigation actions to respond to the new risks effectively,

- Monitor effectiveness of existing risk management mitigation actions and

- Report risks and risk management mitigation actions to the Risk Management Committee on a periodic basis.

The risk analysis and evaluation are carried out using scenario based assessments to decide the potential impact, likelihood of occurrence and in some cases, the ability to detect risk.

(b) Risk Mitigation

Mitigation actions are prepared and finalised, owners are identified and the progress of these actions are monitored and reviewed. The Risk Management Committee periodically evaluates the effectiveness of mitigating risks and provides its advice to the relevant teams.

(c) Risk Reporting

The top risk from the risk registers, its mitigation plans, periodic review of processes and new risks emanating from such reviews are assessed by the Risk Management Committee.

Risk Management Framework for the year

During the year, the Company’s risk management practices were primarily focused on the effectiveness of strategic programs in improving the competitive position and differentiation in market segments, the momentum of new initiatives to achieve longterm business aspirations, readiness to address any incidents that may cause business disruptions to the physical and technological infrastructure, strengthening internal controls to detect fraudulent activity, leadership development, leadership succession planning and monitoring possible impact of changes in the regulatory environment.

The following risk management activities were carried out during the last fiscal year:

- Assessed and strengthened the enterprise risk management framework for further standardization of risk identification, assessment and governance of risks across the organization.

- Identified top ten risks at the Company level and the same is broadly categorized under strategic and business risks, operational and technology risks, regulatory and compliance risks.

- Identified and established various risk mitigation controls to mitigate the risk.

- Assessment of our business momentum relative to competition and competitive position in key market segments comprising currency derivatives, interest rate derivatives and mutual fund segment were conducted.

- Regularly assessed progress on the execution of strategic programs, specifically, progress on the growth of new derivative products and performance of subsidiary businesses.

- Monitored key developments in the regulatory environment, especially amendments and notifications issued by SEBI and other authorities which are applicable to the business.


The Company has maintained adequate internal financial controls over financial reporting.

These includes policies and procedures -

a. Pertaining to the maintenance of records that is reasonably detailed, accurately and fairly reflects the transactions and dispositions of the assets of the Company,

b. To provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with Indian Accounting Standards (“IAS”) notified under the Companies (IAS) Rules 2015 as amended from time to time, and that receipts and expenditures of the Exchange are being made only in accordance with authorization of management and directors of the Company, and

c. To provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company’s assets that could have a material impact on the financial statements. Such internal financial controls over financial reporting were operating effectively as of March 31, 2017, based on the criteria established in COSO Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission in 2013 (COSO Framework).


The Company has formulated a policy on Related Party Transactions. The same is available on the Company’s website at http://www.

The Policy intends to ensure that proper reporting, approval and disclosure processes are in place for all transactions between the Company and related parties. This policy specifically deals with the review and approval of material related party transactions keeping in mind the potential or actual conflicts of interest that may arise because of entering into these transactions. Prior approval was obtained of Audit Committee for all the related parties and transactions thereof, entered in the ordinary course of business and at arm’s length. All related party transactions are placed before the Audit Committee for its review on a quarterly basis. All related party transactions are subjected to independent review by a reputed accounting firm to establish compliance with the requirements of related party transactions under the Act and Listing Regulations.

A detailed disclosure of these transactions with the related parties is enclosed with this report in Form AOC-2 as Annexure D.


The Company, through its IPF, regularly conducts Investor Awareness Programmes (“IAPs”) throughout the country. IPF has conducted a total of 4,499 IAPs during FY 2016-17. During the year, IPF conducted 103 Regional Investor Seminars exclusively with SEBI across different parts of the country. BSE IPF also periodically brings out advertisements on Do’s and Don’t’s for investors to educate investors and enable them to safeguard their interests.

IPF has Started publishing research reports on traded companies to fill the information gap for the benefit of investors in those companies. As of March 31, 2017 there were 1,508 Company Research Reports available free of cost on the Company’s website, for the investors. Search filters available on the website give easy access to initiation research reports as well as quarterly reports. During the year, several educational and other capital market awareness events were sponsored by BSE IPF to raise awareness about corporate best-practice. BSE IPF has also supported global conferences and seminars that enhance understanding of Indian markets both in India and abroad. IPF is currently managing 25 offices across India covering all the major state capitals. In order to create Capital Market Awareness with Post Graduate college students, IPF Secretariat has conducted more than 700 programs with Universities and Educational Institutions across India.

Major Initiatives include:

1) India International Trade Fair with SEBI, New Delhi from November 14, 2016 to November 27, 2016.

2) 44th National Convention of Institute of Company Secretaries, Ahmedabad, November 17, 2016.

3) Vibrant Gujarat Global Trade Show, Gandhinagar, from January 10, 2017 to January 13, 2017.

4) The Institute of Chartered Accountants of India (“ICAI”) Convention 2016, Chennai, on January 20, 2017.

5) BSE IPF opened new Investor Service Centers across 9 cities during 2016-17 as per the mandate from SEBI.

These include: Chandigarh; Dehradun; Guwahati; Bhubaneshwar; Ranchi; Panaji; Raipur; Shimla and Jammu.

Research Projects:

IPF supports research projects in the area of Capital Market. During FY 2016-17 IPF has completed following Research Projects:

1. “Analyzing investor behavior to increase the awareness of Investor awareness and Education Program” prepared by students of TA Pai Institute of Management Studies, Manipal under the BrandScan project.

2. “CFA Institute Research Challenge” hosted by the Indian Association of Investment Professionals Season 2016-17.

In order to spread awareness about capital market as part of financial inclusion and to educate investors at national level across India especially in tier 2, tier 3 & tier 4 cities, BSE IPF has used services of national level TV channels including leading Business channels and Doordarshan for spreading financial literacy programs related to capital market education, financial planning etc. BSE IPF has understanding with following TV channels in order to spread capital market awareness among masses:

1) CNBC TV18 and CNBC Awaaz

2) ZEE Business

3) Doordarshan (“DD”) - Prasar Bharati

4) ET Now


Conservation of Energy

(i) The steps taken and their impact on conservation of energy:

The Company uses electricity to run its electronics and the offices. During the year we have regularly replaced the induction ballasts with electronic ballasts and also replaced the fluorescent lights with LED lights where feasible. We conserve energy by switching off lights & other equipment when they are not required. We prefer to use lighter and brighter colors in our offices to maximize efficiency of lighting. Wherever possible, we have coated the glass windows to reduce the heat entering the building which reduces the air-conditioning load. The Company continuously strives to optimize its energy usage and efficiency.

(ii) The steps taken by the Company for utilising alternate sources of energy:

Since our building has a large surface covered by glass windows we also use the ambient light for lighting purposes as much as possible. This reduces the electricity consumption due to lesser need of lighting during the day.

(iii) The capital investment on energy conservation equipment:


Technology Absorption

Big Data Implementation and expanding its scope

Data at the Company is growing at an exponential rate and is expected to grow many-fold as we may START new lines of business. Data volume is doubling every two years. As per Statutory & Legal compliance mandates, most of the data had to be made available for a number of years to provide historical information to authorities. Our business demands complex on-demand analysis & reporting on terabytes of data. This is coupled with real time surveillance and fraud detection models, which was challenging with our legacy technologies.

Our previous investment in a proprietary system was almost fully utilized and required significant ongoing investments every year to keep pace with our complex analytics requirement and data growth. This would necessitate upgrade to newer releases of hardware and software every few years incurring significant investments.

To address this, the Company has migrated its enterprise Data Warehouse proprietary system to open source Big Data HADOOP platform and has built a real time analytics framework on the same. This move has brought in efficiency and lower cost of ownership which would provide for our requirements at a fraction of cost. In the new platform, we have consolidated multiple systems that processes and provide information into an Enterprise Data Lake. Data from systems like Trading, Risk Management, Clearing and Settlement and Backoffice is available in real time from Big Data platform.

Further to Big Data analytics, the Company has also implemented Social Media analytics using Artificial Intelligence to predict rumors and verification of news floating in the market on BSE listed companies and its impact on the stock market. Such real time approach has resulted in prompt dissemination of information pertaining to the companies. The Company has deployed this technological innovation to mitigate the potential risks of market manipulation and information asymmetry arising from it. This would enhance market integrity, orderly functioning and investor protection in the Indian Capital Markets.

As the first phase of the project, the Company implemented a live framework to monitor the news websites using data management and machine learning. In the subsequent phases, the framework for collecting data from Facebook and Twitter was implemented.

Social Media analytics has helped faster processing and dissemination of information. This was one of the primary criteria for success of this project. As the quantum of processing information increased, the Company was able to monitor impact of a certain news on the prices. Employee involvement and productivity reached new highs, as the team involved were equipped with better and more information. Overall savings in cost in terms of resources deployed for manual tracking, and other indirect costs were drastically reduced.

Adoption of Open source technologies for transaction processing work load

The Company is currently using proprietary relational databases for various transactional processing work loads of various systems. The proprietary relational databases are cost intensive and the Company incurs huge costs on licenses and annual maintenance contracts for the same. To have a control on this ever increasing license cost and in line with its overall outlook of moving towards the Open Source technologies, the Company has taken steps in the direction to migrate its existing database to PostGreSQL for majority of its systems which is also open source. This will result in substantial savings in overall licensing costs.

It is expected that by end of FY 2017-18, majority of the migration activity to be completed.

Augmentation of Trading infrastructure

In the past year, the Company has upgraded the trading system infrastructure to achieve an increased and improved performance. The latest hardware includes the Intel V4 series central processing units, the use of which has improved the performance of the system by around 15-20 microseconds. The hardware has been augmented by the creation of additional partitions for providing enhanced parallelism in the matching process. The product distribution on the various matching engines has been optimally arranged to offer the best performance.

The trading system’s internal network has been further augmented by the additional switches to handle the Administrative messages flowing through the system. The additional switches enable segregation of the Order flows and Administrative message flows in the system.

Unified Trading Interface - BOLTPLus on Web

The Company provides BOLTPLus on Web (“BOW”), the powerful real time trading solution, free of cost to its members. As BOW is provided on a cloud model by the Company, trading members do not have to invest and manage hardware, software or incur any other license costs.

BOW comes with features like trade from anywhere, anytime using internet, daily charts, portfolio views and other user based customisation. Risk management is also an integral part of BOW, it provides flexibility to trading members to manage and control the risks, profiling of clients, monitoring and surveillance. Overall it’s a complete package for all needs of trading members and their clients.

It has been a constant endeavor to innovate and provide high end trading solutions to the market participants. This as a vision, the following are the key deliverables done to enhance market participation.

1. Portfolio based margin implemented with the real time Mark to Market margins.

2. Keeping pace with the digital transactions, third party Payment Gateway solution has been integrated with the BOW Application which facilitates the user to do real time fund transfer.

3. BSE Mobile Based Trading Application now gives the user trading facility along with real time market data.

4. BOW now also supports new trading formats of NCDEX.

The BOW trading solution was also implemented for India’s first International Exchange, India INX at GIFT City.

With continuous contribution from user experience and to enhance customer satisfaction, our focus is towards product enhancements with newer cost effective technologies and platforms. Performance, Scalability and Robustness are the key drivers of BOW platform. Trading users will be aided with enhanced GUI coupled with a new Flexible Risk Management system.

Unified Experience - Identity and Access Management

The Company has a series of application on variety of platforms. Each applications had its own work-flow management. In order to do away with inconvenience of manageability and simplify the process, the Company implemented its home grown solution of Identity and Access Management (“IAM”) using open source technologies which helps to achieve Single-Sign On (“SSO”) with Two Factor Authentication.

SSO solution was based on open source technology, integrated with its internal domain authentication mechanism. SSO facilitated unification of work-flow and access methodology. It reduces the overhead of maintaining multiple interfaces, reduces cost, simplifies process and vastly reduces non-compliance related issues.

To highlight a few of the benefits:

1. Control the implementation of password policy across all applications

2. Have single credentials for all applications

3. New user provisioning and de-provisioning encompassing all applications and services

4. Reduction in user management calls at IT help desk

5. One portal for all available applications

Launch of India INX

BSE, world’s fastest exchange with the speed of 6 microseconds, is the first and only exchange to setup the country’s first International Exchange at the International Financial Services Centre (“IFSC”), Gujarat International Finance-Tec City (“GIFT”), Gandhinagar.

The Company signed an agreement with GIFT Special Economic Zone (“SEZ”) Ltd., in January 2015 to set up International Exchange and International Clearing Corporation at the GIFT IFSC. Built over an area of 880 acres, the GIFT City is envisaged as an International hub for capital market trade.

India INX and India ICC are wholly owned subsidiaries of the Company.

BSE IT team had been instrumental in setting up the India INX Data Centre. The Data Centre setup was completed in a record time of 2 months. This included the design, build, provisioning of power and cooling, infrastructure setup. It also provides for colocation services, facilitating high frequency trading. Variants of data dissemination streams are provided to choose from, such as Full order book, tick-by-tick and snapshot based. Correspondingly, solution team too was engaged in application development and deployments of about 20 applications with multiple dry runs.

One of the notable and important IT contributions was application development to cater to 22 hours trading. The application architecture has been designed to be robust as well as flexible enough to meet international requirements, facilitating ease of configuring new products and its underline business rules.

The trading and the peripheral systems have been setup in a high availability mode and is designed to run 22 hours a day. The daily beginning and end of day operations activities have been automated.

India INX was inaugurated by the Hon’ble Prime Minister, Shri Narendra Modi, on January 9, 2017 and further the trading activities commenced on January 16, 2017.

India INX provides the BOW terminals to enable its Members to trade. In addition Exchange also provides API’s in the form of Intermediate Message Layer (“IML”) or Enhanced Trading Interface (“ETI”) to Trading Members or Independent Software Vendors (“ISV”) for development of their OmniLink Merchant Services (“OMS”).

Upgradation of the Security Operations Center (SOC)

The Company lays special emphasis on improvement in its cybersecurity framework and information security management systems. It was identified as a National Critical Information Infrastructure by National Critical Information Infrastructure Protection Centre (“NCIIPC”).

There is an ongoing process to strengthen cyber security under the guidance from NCIIPC and other national agencies like Indian Computer Emergency Response Team (“CERT-In”), National Security Council Secretariat (“NSCS”), Ministry of Home Affairs (“MHA”) and SEBI. With the increase in cyber threats and attacks, cyber security is becoming more and more established in the corporate structure. Constant enhancement in the Cyber Security Framework and Information Security Management System has been our top priority. Moreover, the Company’s performance is dependent upon the volume and value of trades executed on its trading platform. This implies high availability and no compromise on security around trading and peripheral systems or its underlying processes.

To address this challenge, the Company envisaged transforming its current information security posture to next generation security analytics and operations. The Company has embarked on a monumental task of creating the Next Generation security operations center (“SOC”) to provide increased resilience and rapid response to events throughout its IT landscape.

The year 2016-17, witnessed hectic groundwork to build the foundation for SOC. After due diligence and assessment of current posture, technologies and solutions were identified for fortifying existing security infrastructure and adapting new strategies to combat advanced threats. SOC Team configurations and required skill sets were analysed. IT Team was revamped with resources with a focus area in cyber security.

Prime responsibility of SOC is to perform 24x7 monitoring, detecting, and isolating incidents which indicate compromise in confidentiality, integrity and availability of these critical systems. Management of the organization’s security products, devices and systems are evident activities of SOC maintenance and operations scheme. The Next-Generation SOC will not only enable the Company to strategize against advanced cyber threats but also enhance its efforts as an organization to safeguard against informational, reputational and financial losses arising from cyber security breaches.

To build, maintain and operate Next-Generation SOC in integration with the existing security infrastructure, the Company has evaluated and appointed team of consultants and awarded contract to implement various security solutions. The fully operational SOC will be ready by end of 2017.


The particulars of Foreign Exchange Earnings and Outgo during the year under review are furnished hereunder:

Foreign Exchange Earning: Rs.2,168 Lakh (Previous Year Rs.1,999 Lakh)

Foreign Exchange Outgo: Rs.585 Lakh (Previous Year Rs.663 Lakh)


Organizations that invest in human capital invest in the future. At BSE, the focus has been on making the right investments in human capital to take the Company and all its employees to the next level of competence and expertise. The Company has always believed that motivated employees are the core source of competitive advantage and these is continuous investments in training and development programs along with various other Human Resource (“HR”) initiatives.

The Company has aligned the compensation packages of management and successfully revamped many outdated HR policies to make benefits and compensation more transparent and employee-friendly.

Also, the organizational structure of the Company has undergone significant restructuring to enhance accountability and efficiency with a view to aligning performance management and reward strategies.

As of March 31, 2017 the Company had 369 officers and 121 staff level employees.

Material Developments in Human Resources/Industrial Relations Front, including number of people employed

The Company has been hiring talent both experienced as well as fresh post graduates from leading Business Schools in the recent years with a focus on matching skills and expertise to the relevant roles to enhance employee satisfaction. The Employee Relations scenario has also been satisfactory during the year. The clerical and sub staff are represented by an internal union.

Particulars of Employees

Pursuant to Section 197 (12) of the Act, read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, every listed company shall disclose in the Board’s report, the ratio of the remuneration of each director to the median employee’s remuneration and other particulars of the employees drawing remuneration in excess of the limits prescribed in the above rules. Accordingly, such information pertaining to the Company is provided as an Annexure E.


The Company has not accepted any public deposits during FY 201617 and as such, no amount on account of principal or interest on public deposits was outstanding as on the date of the balance sheet.


Since the Company has not accepted any deposits during FY 2016-17, there has been no non-compliance with the requirements of the Act.


Pursuant to sub-section (5) of Section 134 of the Act, with respect to the Directors’ Responsibility Statement, it is hereby confirmed that:-

a. in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;

b. the directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the Company for that period;

c. the directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

d. the directors had prepared the annual accounts on a going concern basis;

e. the directors, had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively; and

f. the directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

OTHER DISCLOSURES Extract of Annual Return

The details forming part of the extract of the Annual Return in form MGT 9 is enclosed herewith as per Annexure F.

Management Discussion & Analysis

The Management Discussion & Analysis Report forms part of this Annual Report.

Material Changes and Commitments Affecting the Financial Position of the Company

There have been no material changes and commitments affecting the financial position of the Company which have occurred between the end of the financial year to which the financial statements relate and the date of the report.

Change in the Nature of Business

Your Company has not undergone any changes in the nature of the business during the financial year.

The details of Significant and Material Orders passed by the Regulators or Courts or Tribunals impacting the going concern status and the Company’s operation in future

There are no significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and the Company’s operation in future.


No Fraud has been reported by the Auditors to the Audit Committee or the Board.

Corporate Governance

Pursuant to the SECC Regulations, Listing Regulations and the Act, report on Corporate Governance as at March 31, 2017, forms part of this Annual Report. A Certificate from Practicing Company Secretary, Mumbai confirming status of compliances of the conditions of Corporate Governance is annexed to this report.


The Board thanks the Government of India, SEBI, RBI, the Government of Maharashtra and other State Governments and various government agencies for their continued support, cooperation and advice.

The Board is grateful to the members of various committees constituted during the year.

The Board also acknowledges the support extended by trading members, issuers, investors in the capital market and other market intermediaries and associates.

The Board expresses sincere thanks to all its business associates, consultants, bankers, auditors, solicitors and lawyers for their continued partnership and confidence in the Company.

The Board wishes to thank all the employees for the exemplary dedication and excellence displayed in discharge of their duties for the Company.

Further, the Board expresses its gratitude to you as shareholders for the confidence reposed in the management of the Company.

For and on behalf of the Board of Directors

Place: Mumbai Dhirendra Swarup

Date: August 3, 2017 Chairman

Date Sources:Live BSE and NSE Quotes Service: TickerPlant | Corporate Data, F&O Data & Historical price volume data: Dion Global Solutions Ltd.
BSE Quotes and Sensex are real-time and licensed from the Bombay Stock Exchange. NSE Quotes and Nifty are also real time and licenced from National Stock Exchange. All times stamps are reflecting IST (Indian Standard Time).
By using this site, you agree to the Terms of Service and Privacy Policy.

Other useful Links

Copyright © 2020 Bennett, Coleman & Co. Ltd. All rights reserved. For reprint rights: Times Syndication Service