Disclosure in board of directors report explanatory

BOArD’S rEPOrT

To,

The Members,

Your Directors have pleasure in presenting the Twenty-third Annual Report and Audited Financial Statements of the Company for the year ended March 31, 2015.

1.            OPErATIONS AND MAJOr DEVELOPMENTS DUrING THE yEAr

1.1          Global rankings - Equity Derivatives Market

1.1.1      Stock Futures

During the year 2014, NSE was ranked as the 2nd largest exchange in respect of contracts traded in stock futures. The details of top 5 exchanges trading stock futures are given in Table 1 below:

Table 1

(In millions)

Sr. No.  Exchange             Contracts traded during 2014

1              Moscow Exchange          343

2              National Stock Exchange India    211

3              EUREX   124

4              ICE Futures Europe         99

5              Korea Exchange                96

Source: WFE

1.1.2      Index Options

NSE is ranked 1st in the world in respect of contracts traded in index options. The details of top 5 exchanges in index options are given in Table 2 below:

Table 2

(In millions)

Sr. No.  Exchange             Contracts traded during 2014

1              National Stock Exchange India    1057

2              BSE India              516

3              Korea Exchange                462

4              Chicago Board Options Exchange              406

5              EUREX   340

Source: WFE

1.1.3      Index Futures

During the year 2014, NSE was ranked as the 7th largest exchange in the world in index futures. The details of top 10 exchanges in index futures are given in Table 3 as under:

Table 3

(In millions)

Sr. No.  Exchange             Contracts traded during 2014

1              CME Group         566

2              EUREX   368

3              Osaka SE              249

4              Moscow Exchange          245

5              China Financial Futures Exchange             217

6              Singapore  Exchange      108

7              National Stock Exchange India    105

8              BM&FBOVESPA                67

9              CBOE Future Exchange  51

10           Hong Kong Exchanges    49

Source: WFE

1.1.4      Nifty Index Global rankings

Nifty Index options ranked 1st across the top 20 Index options traded globally during the year 2014.

(Source: www.futuresindustry.org rankings based on number of contracts traded or cleared between Jan 14 - Dec 14)

1.1.5      All products

NSE continued to be ranked 4th across all the Derivatives exchanges in the world based on the volume of contracts traded during the year 2014.

(Source: www.futuresindustry.org rankings based on number of contracts traded or cleared between Jan 14 - Dec 14)

1.2          Global rankings-Capital Market

In the Capital Market segment, NSE was ranked fourth in the world based on the number of trades during the calendar year 2014. The details of top 10 Exchanges are given below in the Table 4 below :-

Table 4

(in Thousands)

Sr. No.  Exchange             No of Trades

1              BATS Global Markets - US            2024993.6

2              NASDAQ OMX   1734590.0

3              Shenzhen SE      1712970.8

4              National Stock Exchange India    1706181.1

5              Shanghai SE        1590878.0

6              NYSE      1538961.6

7              Korea Exchange                1140518.2

8              Japan Exchange Group - Tokyo  638018.0

9              BATS Chi-x Europe           418339.1

10           BSE India              387044.7

Source: WFE

1.3          Membership at NSE

32 new members (14 in CM, F&O and CD segments; 8 in CM and F&O segments, 1 in CM and CD segments, 2 in CM segment, 5 in F& O segment, 1 in CD segment and 1 in Debt segment) were registered during the Financial Year 2014-15.

The Exchange also granted additional segment membership to 14 members during the Financial Year 2014-15.

Table 5 showing membership details for the Financial year 2014-15

Particulars           CM

segment              F&O segment    CD

segment              Composite membership (CM, F&O, CDS, WDM

and Debt)            Total members

SEBI registered trading members            

25          

27          

16          

1254      

1419

Members registered in additional segments      

1             

2             

11          

Registered Sub-brokers                25580    Nil           Nil          

Authorised persons        13209    12099    4418      

Surrender of membership           33           21           12          

Till March 31, 2015, a total of 243 members were enabled in the first dedicated debt trading segment

1.4          Capital Market (CM segment)

The total turnover of CM segment in the year 2014-15 is ` 4329655 crores as compared to ` 2808488 crores in the year 2013-14, showing an increase of 54 %. The average daily traded value in 2014-15 is ` 17818 Crores as compared to ` 11189 Crores in 2013-14.

As on March 31, 2015, the number of listed companies available for trading was 1,511 compared to 1,631 at the end of March 31, 2014.

Figure 1: Month-wise Turnover and Average Daily Turnover in CM segment

The changes in turnover statistics over the preceding year are presented in Table No.6

Table No.6: Turnover Statistics on CM segment

Sr.

No.         Details  2014-15                2013-14                % Rise / (Fall) in 2014-15

1              Total Number of trades (In lakhs)             18328    14431    27.00

2              Total no. of shares traded (in lakhs)         2361779                1533716                53.99

3              Total Turnover (` Cr.)      4329655                2808488                54.16

4              Market Capitalization at the end of year (` Cr.)   9930122                7277720                36.45

5              Turnover of CNX Nifty Securities (` Cr.)  1952171                1579587                23.59

6              Total number of listed companies for trading.     1511       1631       -7.36

1.4.1      Index movement

CNX Nifty saw upward movement of 26.65% moving from 6704.20 to 8491.00 over the financial year 2014-15. During the year 2014-15 the CNX Nifty touched a high of 9119.20 on March 04, 2015 and low of 6638.55 on

May 08, 2014. Movement of CNX Nifty is shown in Figure 2:

The turnover of CNX Nifty securities was ` 1952171 crores in the year 2014-15 as compared to ` 1579587 crores. The contribution of CNX Nifty securities turnover to total turnover during the year 2014-15 was 45.09% compared to 56.24% in the year 2013-14.

Figure 2: Nifty movement

1.4.2      Market Capitalisation

The market capitalization of securities available for trading on CM segment has increased by 36.45% during 2014-15 from ` 7277719.97 crores as on March 31, 2014 to ` 9930122.02 crores as on March 31, 2015. Out of total market capitalization of ` 9930122.02 crores as on March 31, 2015, ` 33188 crores was contributed by newly listed securities. The market capitalisation growth is shown in Figure 3.

Figure 3- Market Capitalisation during year 2014-15

1.4.3      Distribution of Turnover

Turnover-wise distribution of trading members

About 74% of the trading members had an average daily turnover of ` 1 crore or more in 2014-15. In 2014-15 around 28% of the trading members have daily turnover more than ` 10 Crores.

Figure No. 6 : Average Daily Turnover - wise distribution of TMs

1.4.4      New Developments during the year

In year 2014-15 various new developments have been initiated by the Exchange. The details of the same are given below:-

April 2014 - Institutional Trading Platform for SME securities

Pursuant to SEBI circular no. CIR/MRD/DSA/33/2013 dated October 24, 2013, an Institutional Trading Platform (ITP) for SME securities was made available w.e.f. April 25, 2014.

May 2014 - revision in operating ranges for No band securities

In the event of a market trend in either direction, the dynamic price bands may be relaxed during the day in co-ordination with the other Exchange. For the purpose of relaxing the dynamic price bands, the Exchange will take into account that a minimum of 10 trades must be executed with multiple UCC on both sides of the trade at or above 9.90 % or more of the base price and in further multiples of 5% of the price movement. The same is made applicable w.e.f May 13, 2014.

May 2014 - Dissemination of NI15 Index on trading system in Capital Market segment

The Exchange incorporated NI15 Index on trading system for its on-line dissemination w.e.f. May 30, 2014.

July 2014 – Market Data

The Exchange has issued a circular for providing consolidated information to members regarding type of market broadcast provided by Exchange.

September 2014 - revised scheme - Offer for Sale through Exchange Platform

Pursuant to SEBI circular on expanding the framework for Offer for Sale (OFS) of shares, the Exchange has issued detailed revised scheme for OFS of shares through exchange mechanism. In order to participate in the OFS, trading members and the issuer will be required to comply with the revised scheme.

October 2014 - Dissemination of NIFTy Strategy Indices on trading system in Capital Market segment

The Exchange incorporated the following four NIFTY Strategy Indices on trading system for its on-line dissemination

w.e.f. October 13, 2014:

Sr. No    Index Name       Broadcast Name

1              Nifty PR 1X Inverse Index             Nifty PR 1X Inv

2              Nifty TR 1X Inverse Index             Nifty TR 1X Inv

3              Nifty PR 2X Leverage Index         Nifty PR 2X Lev

4              Nifty TR 2X Leverage Index          Nifty TR 2X Lev

October 2014 - Tick by Tick (TBT) market data over Multicast in Capital Market segment

With effect from November 10, 2014, the Exchange started providing Tick by Tick market data over multicast.

November 2014 - Discontinuation of trading in retail Debt Market (rDM) securities

In an endeavor to centralize trading in all debt instruments into a single platform, Exchange discontinued trading in Central Government securities in Retail Debt Market of Capital Market segment w.e.f. January 01, 2015.

January 2015 - Trading system Password policy

The Exchange has implemented the revised password policy for trading system w.e.f. January 05, 2015. The revised password policy is applicable to all users i.e. NEAT,NEAT+ and NNF users.

January 2015 - revised scheme - Offer for Sale through Exchange Platform

Pursuant to SEBI circular no.CIR/MRD/DP/32/2014 dated December 1, 2014 on ‘Modification of the Offer for Sale (OFS) Mechanism through Stock Exchanges and with an objective to facilitate orderly use of Offer for sale of shares by promoters / non promoters and to make various conditions and or requirements governing the use of OFS facility in transparent manner the Exchange has issued Revised Scheme for Offer for Sale.

1.6          FUTUrES AND OPTIONS SEGMENT

The financial year 2014-15 witnessed a significant increase of 46% in volumes and an increase in number of contracts traded by 43% vis-à-vis 2013-14 and in daily average open interest, it increased by 37.80% over previous year in the F&O segment. The average contribution of proprietary category increased to 50.92 % in 2014-15 from 47.73% in 2013-14.

1.6.1.     Comparison of the close prices of the NIFTy Near Month Futures Contract (F&O segment) with the underlying movement of the NIFTy Index (Cash segment) along with the Daily Traded value of the F&O segment:

Note: Special trading sessions on February 28, 2015 and October 23, 2014 (Muhurat Trading)

1.6.2      records Achieved in the F&O Segment during 2014-15:

Category              Traded Value (` Crs)        Date of Record

Stock Options    28,002   12-Apr-13

Index Options   4,61,864               26-Feb-15

Total F&O Traded Value                5,81,563               26-Feb-15

Number of trades            57,99,586             28-Jan-15

Number of contracts traded       2,40,41,817         24-Dec-14

It may be observed that during 2014-15, new records were set in Index options, Total F&O traded value, number of trades and number of contracts traded.

1.6.3      (a)  Basic Statistics of the F&O segment:

Particulars          

Apr 14

to Jun 14             

July 14

to Sep 14            

Oct 14

to Dec 14            

Jan 15

to Mar 15            

2014-15               

2013-14               

% Change

Traded Value (` in crores)            

Daily Average   

1,85,862              

2,24,145              

2,43,828              

2,69,574              

2,28,833              

1,52,237              

50.31

Number of Contracts    

Daily Average   

50,81,722            

57,01,369            

86,67,461            

1,08,10,304        

75,59,840            

51,17,228            

47.73

Open Interest (` in crores)          

End of day averages      

1,77,824              

1,96,377              

2,17,111              

2,26,191              

2,04,352              

1,43,538              

42.37

% of Open interest to Daily Average Traded value           

96          

88          

89          

83          

89          

94          

1.6.3(b)  A graphical presentation of monthly product wise contribution is given below:

Among all products, Index Options continued to dominate the Total Turnover with their contribution observed at

71.79% in 2014-15

1.6.4      Institutional retail & Proprietary Investors – Turnover Analysis:

No          Month  Institutional        Retail     Proprietary

                                Average Gross Traded Value

(` Crs.)   Percentage Contribution              Average Gross Traded Value

(` Crs.)   Percentage Contribution              Average Gross Traded Value

(` Crs.)   Percentage Contribution

1              2013-14                10,50,969             16.50     22,79,202             35.79     30,38,397             47.71

2              2014-15                11,88,031             12.82     33,47,545             36.12     47,32,166             51.06

It may be observed that the average contribution of proprietary category has increased in the year 2014-15 as compared to 2013-14.

1.6.5      Comparative analysis of the Traded Value in the F&O segment with the Cash segment:

The ratio of F&O segment turnover to cash segment turnover was 13 for the year 2014-2015 as compared to 14 for 2013-2014.

1.6.6      Product-wise Basic Statistics:

Category              Product                Apr 14 to

Jun 14   Jul 14 to

Sep 14   Oct 14 to

Dec 14   Jan 15 to

Mar 15  2014-15                2013-14                %

Change

Daily Average Traded Value (` Crs)           Stock Futures    36,415   34,094   31,362   34,515   34,122   19,718   73.05

                Index Futures    15,725   15,639   15,418   20,749   16,911   12,292   37.58

                Stock Options    13,165   13,621   13,656   13,587   13,508   9,600     40.71

                Index Options   120,556 160,789 174,391 200,723 164,290 110,627 48.51

Daily Average No. of Contracts  Stock Futures    978,915 872,587 967,894 1,092,885             977,797 678,941 44.18

                Index Futures    435,503 400,001 530,282 761,735 532,157 419,404 26.88

                Stock Options    346,023 345,945 401,730 413,272 376,457 319,420 17.86

                Index Options   3,321,279             4,082,834             6,767,553             8,542,410             5,673,427             3,699,463                53.36

Average

OI Value (` Crs)  Stock Futures    55,561   61,808   69,053   75,650   65,518   37,162   76.30

                Index Futures    18,788   21,583   30,176   32,788   25,834   19,426   32.99

                Stock Options    16,091   20,445   20,385   20,618   19,385   14,950   29.67

                Index Options   103,577 142,187 150,739 146,756 135,815 107,380 26.48

Average Number of OI contracts              Stock Futures    1,607,493             1,719,022             2,203,030             2,526,777                2,014,081             1,209,181             66.57

                Index Futures    513,564 548,434 1,126,437             1,352,958             885,348 592,339 49.47

                Stock Options    450,804 566,430 639,519 683,980 585,183 449,396 30.22

                Index Options   2,833,920             3,622,493             5,460,733             5,863,541             4,445,172             3,214,032                38.31

Number of trading Days                60           63           58           62           243         251        

1.6.7      TOP 5 TrADED SyMBOLS

Futures:

Note: Index Futures includes India VIX* data.

1.6.8      New Developments during the year for the year 2014-15

In year 2014-15 various new developments have been initiated by the Exchange. The details of the same are given below:-

May 2014 - revision in Operating range of Stocks Futures:

In the event of a market trend in either direction, the dynamic price bands may be relaxed during the day in co-ordination with the other Exchange. For the purpose of relaxing the dynamic price bands, the Exchange will take into account that a minimum of 10 trades must be executed with multiple UCC on both sides of the trade at or above 9.90 % or more of the base price and in further multiples of 5% of the price movement.

June 2014 - Quantity freeze limit for Indices:

Quantity freeze limit for all contracts on indices shall be on the following methodology for computation of quantity freeze for Index underlying :-

Index Level         Quantity Freeze Limit

From     To          

0              5750       15000

5751       8625       10000

8626       11500    7500

11501    17250    5000

> 17250 2500

All orders entered in the trading system having quantity more than the specified freeze quantity limit for contracts on indices shall be frozen.

July 2014 – Market Data

The Exchange has issued circular for providing consolidated information to members regarding type of market broadcast provided by Exchange.

December 2014 - Clarification on long term options contracts:

Exchange has decided that the lot size of an existing Nifty (long term) expiry options contract shall be revised from 50 to 25 once it becomes a Far month expiry contract. This way, the lot size for Near, Mid and Far month Nifty futures and options contracts shall continue as 25 and the lot size of Nifty (long term) Options contracts shall continue as 50.

December 2014 - Order Number format change:

Order number is a unique identification for an order. As soon as order is received by Exchange, a unique order number is generated by Exchange and is sent to the Trader with order response. Order number is a 16-digit numeric field. Only the format of the order number has been changed. No change is there in structure. In new format, first 2 digits will contain the stream number and the next 14 digits will be allotted to the order sequence number.

January 2015 - Trading system Password policy:

The Exchange has implemented the revised password policy for trading system w.e.f. January 05, 2015. The revised password policy is applicable to all users i.e. NEAT, NEAT+ and NNF users.

February 2015 - Trade Execution range:

Trade Execution Range was introduced in April 2014 and subsequently revised.

Orders shall be matched and trades shall take place only if the trade price is within the reference price and execution range.

Execution range is the range on both sides of the reference price as given below:

Segment              Reference Price (`)          % of Reference Price      Minimum absolute Range (`)

Futures                All           5%          –

Options                0.05 to 25             –             7.50

                >25         30%        10.00

•             There is no change to the existing applicable operating ranges for valid order entry and all orders that are within the operating range shall be accepted as is being done currently.

•             Any incoming order, if it results in execution of a trade outside the reference price and execution range, such an order (full or partial as the case may be) shall be automatically cancelled by the Exchange.

•             The Exchange may modify the execution range as and when necessary.

1.7          CUrrENCy DErIVATIVES SEGMENT

The financial year 2014-15 witnessed a decrease in currency derivatives (Currency Futures and Options) volumes. The average daily turnover in currency derivatives dropped by 22.74% and stood at `12,705 crores in 2014-15 compared to ` 16,445 crores in 2013-14.

The daily average number of contracts dipped by 25.36% in 2014-15 and stood at 20,19,600 contracts as compared to 27,05,707 contracts traded in 2013-14.

The daily average open interest increased by 34.77% in 2014-15 as compared to what was observed last year during the same period.

The number of members registered in currency derivative segment has risen to 872 (823 in 2013-14), of which 35 are banks and 2 Primary dealers.

Currency Futures: Average daily turnover in Currency futures for the financial year 2014-15 decreased by 21.63% and stood at ` 9,445 crores as compared to ` 12,053 crores seen in 2013-14. Futures trading constituted 74% of the total turnover in the segment. USD-INR currency pair was the most traded futures contracts. The average market share of NSE in currency futures stood at 37.40% in 2014-15.

Currency Options: Average daily turnover in currency options also decreased by 26% in 2014-15 at ` 3,260 crores compared to ` 4,392 crores observed during 2013-14. The average market share of NSE in currency options stood at 62.09% in 2014-15.

Interest rate Futures: Cash Settled Interest Rate Futures (IRF) contracts were introduced on January 21, 2014. Average daily turnover is ` 1,771 crores and daily average open interest is 1,71,287 contracts.

1.7.1.     New Developments during the year 2014-15

In year 2014-15 various new developments have been initiated by the Exchange. The details of the same are given below:-

July 2014: Market Data Broadcast:

The Exchange has issued circular for providing consolidated information to members regarding type of market broadcast provided by Exchange.

August 2014: revised expiry time for Currency Derivatives contracts:

RBI issued Press Releases ref. no. 2014-2015/276 dated August 07, 2014, regarding revised methodology for computation and dissemination of Reference Rates polled in a five minute window from 11:30 AM to 12.30 PM chosen randomly. These rates are used as final settlement price for Currency Derivatives contracts on the day of expiry.

In view of the above, the Exchange decided to modify the Expiry Time of all Currency Derivative Contracts from 12:15 PM to 12:30 PM. The time for corresponding Expiry i.e. Trade CXL / Modification and Position Limit setup time was revised to 13:00 PM from 12:45 PM. The revised timings are applicable for all the following contracts:

•             USDINR Futures and Options

•             EURINR, GBPINR and JPYINR Futures

December 2014: Order Number format change:

Order no. is a unique identification for an order. As soon as order is received by Exchange, a unique order number is generated by Exchange and is sent to the Trader with order response. Order number is a 16-digit numeric field. Only the format of the order number has been changed. No change is there in structure. In new format, first 2 digits will contain the stream number and the next 14 digits will be allotted to the order sequence number.

January 2015 - Trading system Password policy

The Exchange has implemented the revised password policy for trading system w.e.f. January 05, 2015. The revised password policy is applicable to all users i.e. NEAT, NEAT+ and NNF users.

February 2015: Trade Execution range:

Trade Execution Range was introduced in March 2014 and subsequently revised.

Orders shall be matched and trades shall take place only if the trade price is within the reference price and execution range.

Execution range is the range on both sides of the reference price as given below:

Segment              Contract Months              Reference Price (`)          % of Reference Price      Minimum absolute Range (`)

Futures                Tenure upto 6 months   All           1%          –

                Tenure greater than 6 months   All           2%          –

Options                                0.0025 to 0.50    –             0.05

                                >0.50     10%        –

•             There is no change to the existing applicable operating ranges for valid order entry and all orders that are within the operating range shall be accepted as is being done currently.

•             Any incoming order, if it results in execution of a trade outside the reference price and execution range, such an order (full or partial as the case may be) shall be automatically cancelled by the Exchange.

•             The Exchange may modify the execution range as and when necessary

1.8.        Debt segment

NSEIL has launched the Country’s first dedicated debt trading platform in May 2013. Further, the Exchange has introduced reporting of negotiated trades and anonymous trading in one debt platform. The Debt segment provides an opportunity for retail investors to invest in corporate bonds on a liquid and transparent exchange platform. It also helps Institutions, an ideal platform to buy and sell at optimum prices and to help Corporates to get adequate demand, when they are issuing the bonds.

During 2014-15, to centralize trading in all debt instruments in the Debt segment, Exchange has closed Retail Debt Market segment available for Central Government Securities and which is part of the capital market segment on December 31, 2014, and all securities (central government securities) available in RDM were made available for trading in the New Debt segment. Further, the WDM segment will also be closed on June 30, 2015 and those securities will be made available in the New Debt segment. Subsequent to this all debt instruments will be available in one place – New Debt Segment.

2.            SErVICES TO INVESTOrS

During the Year 2014-15, the Exchange dealt with 9034 investor complaints against trading members and companies and facilitated 669 arbitration and appellate arbitration cases. With a view to enhance access and reach to investors, the Exchange commenced the Investor Services Centres at three more cities - Vadodara, Patna and Lucknow.

The Exchange totally has fourteen Investor Service Centres at Mumbai, Delhi, Chennai, Kolkata, Ahmedabad, Hyderabad, Indore, Kanpur, Bangalore, Pune, Jaipur, Vadodara, Patna and Lucknow to facilitate query resolution, complaint resolution and to provide arbitration facilities. The Exchange has empaneled 109 Arbitrators and 111 IGRP members across 14 centres.

The Exchange also has the mechanism of interim relief to investors against their admissible claim during pendency of their claim before arbitrators or court as per SEBI guidelines. Further, the Exchange also sends to respective investors their trade related information through an SMS and e-mail at the end of each day, whose details of mobile number and e-mail are uploaded to the Exchange. Facility of trade verification is also provided to investors on the Exchange website.

3.            NSE’S rESEArCH INITIATIVES IN 2014-15

3.1          Tie-up with IFMr Finance Foundation

The National Stock Exchange of India (NSE) and the IFMR Finance Foundation (IFF) entered into a partnership for research in the area of Financial Inclusion.

3.2          NSE-IGIDr International Conference in Corporate Governance

The first annual international conference in corporate governance was organized in July, 2014 under the aegis of the NSE-IGIDR research collaboration called the “Corporate Governance Research Initiative”.

3.3          NSE –NyU Conference in Capital Markets

Under the NSE-NYU research partnership called the “Initiative on the Study of Indian Capital Markets”, the second annual international conference in capital markets was held in August, 2014.

3.4          Quarterly  Briefings  under  the  aegis  of  the  NSE  Centre  for  Excellence  in  Corporate  Governance (NSE CECG)

To project NSE as thought leader in corporate governance and engage with our listed companies on important governance issues, the NSE Centre for Excellence in Corporate Governance (NSE CECG) was established in 2012-13. Under the aegis of NSE CECG, four issues of Quarterly Briefing were released and circulated among Directors of all NSE listed companies and top SEBI officials in 2014-15.

3.5          Publications of NSE

Indian Securities Market Review (ISMR) and the NSE Factbook are two NSE publications which are prepared on an annual basis. In addition, edited transcripts of two international conferences organized by NSE were circulated among various stakeholders in the securities markets. Besides, a ‘White Paper Series’ of the NSE-NYU conference was widely circulated.

3.6          Seminars and Panel Discussions

In 2014-15, the Economic Policy and Research (EPR) department continued to organize seminars and panel discussions by eminent people on securities market, corporate governance and macroeconomic issues.

3.7          Dr. r. H. Patil Memorial Lecture

The third Dr. R. H. Patil Memorial Lecture was organized by the Indian Economic Association (IEA) as part of its annual conference and was supported by NSE.

4.1          FINANCIAL rESULTS

The working of NSEIL during the year has resulted in a net profit after tax of ` 779.68 crores as per particulars given below: -

Particulars           2014-15

(` In crores)         2013-14

(` In crores)

Income 1,918.12               1,669.78

Expenditure       631.35   548.65

Profit before prior period adjustments, exceptional item, contribution to NSCCL Core SGF & tax                1,286.77                1,121.13

Add/(Less): Prior Period Adjustments    (0.22)    (5.65)

Profit before exceptional item, contribution to NSCCL Core SGF &tax      1286.55 1115.48

Add: Profit on sale of shares of Long term Equity investment      –             227.34

Less: Contribution to NSCCL Core SGF    (170.00)                –

Profit before tax              1116.55 1342.82

Tax expenses (including deferred tax)   336.87   323.54

Profit after tax  779.68   1,019.28

Particulars           2014-15

(` In crores)         2013-14

(` In crores)

Surplus brought forward from previous year       567.72   466.55

Less: Provisional appropriation towards NSCCL SGF in respect of FY 2012-13         –             219.40

Less: Adjustment of Depreciation due to Companies Act, 2013   9.99        0.00

Add:Deferred tax impact on depreciation adjustment    3.40        –

Amount available for appropriation         1,340.81               1,266.43

Appropriations                 

Provisional transfer to NSCCL SGF (for current year, net of contribution to NSCCL Core SGF amounting to `170 crores)                52.97     254.82

General Reserve              –             105.00

Proposed Dividend         357.75   306.00

Corporate Dividend Tax                43.06     32.89

Balance carried to Balance Sheet              887.03   567.72

4.2          DIVIDEND

In view of the above results, the Directors recommend payment of dividend of ` 79.50 per share for the year 2014-15 i.e, a dividend of 720% (`72/- per equity share of `10/- each) and a special onetime dividend of 75% ( ` 7.50 per equity share of `10/- each).

4.3          PArTICULArS OF LOANS, GUArANTEES Or INVESTMENTS UNDEr SECTION 186

No loan or guarantee is given to any person during the year. The investments made by Company during the year are in accordance with the provisions of the Companies Act, 2013.

4.4          PArTICULArS OF CONTrACTS Or ArrANGEMENTS wITH rELATED PArTIES

The particulars of contracts or arrangements with related parties are given in Form AOC-2 and is attached herewith as Annexure -1 to this Report.

4.5          DETAILS IN rESPECT OF ADEQUACy OF INTErNAL FINANCIAL CONTrOLS wITH rEFErENCE TO THE FINANCIAL STATEMENTS

Currently there is a high degree of automation in most of the key areas of operations and processes. Also, all the processes are well documented with comprehensive and well defined Standard Operating Procedures (SOPs) which inter alia includes the financial controls in the form of maker checker, strict adherence to financial delegation given by the Board at various levels, systemic controls, information security controls as well as role based access controls, etc. Further, these controls are periodically reviewed for change management in the situations of introduction of new processes/change in processes, change in the systems, change in personnel handling the activities, etc. These controls are independently reviewed by the internal auditors /operations reviewers of the Company including conducting the routine internal audit/ operations review by them where by the audit activity embeds validation/ review of the controls to establish their adequacy and effectiveness. Besides the above, the Internal Auditors, Operational review and Practicing Company Secretary review the compliances by the Company with respect to various laws, rules, regulations, etc. as applicable to it on a quarterly basis.

4.6          SUBSIDIArIES, JOINT VENTUrES AND ASSOCIATE COMPANIES

4.6.1.     National Securities Clearing Corporation Limited (NSCCL)

CM segment: NSCCL successfully continued its track record of completing all settlements in a timely manner. During the period under review, 244 rolling settlements were handled in de-materialised mode. Per settlement figures in value terms in the current year are as follows:

The average value of securities handled per settlement was ` 5,233.03 crores in 2014-15 compared to ` 3,292.17 crores in 2013-14. The average funds pay-in per settlement was ` 1,500.30 crores in 2014-15 compared to

` 1,087.36 crores in 2013-14. The average number of shares processed per settlement was about 2,617.55 lakhs in 2014-15 compared to 1,695.72 lakhs in 2013-14. Short deliveries per settlement averaged around 0.14% in 2014-15 as compared to 0.15% in 2013-14.

The highest deliverable value of ` 10,714.23 crores was observed on December 10, 2014. Percentage of number of shares deliverable to number of shares traded decreased to 27.46% in 2014-15 from 28.17% in 2013-14. Percentage of value of shares deliverable to value of shares traded decreased to 29.52% in 2014-15 from 29.70% in 2013-14. The Core Settlement Guarantee Fund stood at ` 125 crores as on 31st March 2015.

F&O segment: The period April 2014 - March 2015 witnessed an increase in the total value of settlement from

` 59,131.04 crores in 2013-14 to ` 95,653.57 crores in 2014-15. The highest monthly settlement was `10,181.56 crores in the month of June 2014. March 2015 witnessed the highest monthly trading volumes of ` 56,91,523.72 crores while the highest daily trading volumes on NSE during this period was ` 5,81,563.86 crores, witnessed on February 26, 2015 with total of 2,34,91,112 contracts being traded. As on March 31, 2015, the Core Settlement Guarantee Fund in F&O segment stood at ` 489 Crores.

Currency Derivatives segment: The year 2014-15 witnessed an increase in the total settlement values from

` 6,550.73 crores in 2013-14 to ` 6,569.67 crores. The highest monthly settlement value was ` 878.55 crores in the month of December 2014. The highest trading value in Currency Futures on NSE during this period was

` 23,710.45 crores witnessed on Jan 15, 2015 with total of 37,56,441 contracts being traded & in Currency Options it was ` 13,869.78 crores, witnessed on Jan 15, 2015 with total of 22,08,678 contracts being traded. The highest trading volume in Interest Rate Futures on NSE during this period was ` 9,392.88 crores witnessed on Feb 26, 2015 with total of 4,48,861 contracts being traded. As on Mar 31, 2015, the Core Settlement Guarantee Fund in Currency Derivatives segment stood at ` 77 Crores.

Securities Lending and Borrowing segment: NSCCL is an Approved Intermediary (AI)  for  SLBS  with  SEBI.  In 2014-15, the volumes in SLBS increased by 6.09% from ` 4,836.50 crores in 2013-14 to ` 5,131.24 crores. As compared to previous year, during 2014-15, securities traded in SLBS increased from 110 to 117 and number of participants traded decreased from 61 to 57. As on March 31, 2015, there are 117 participants, 4 custodian-cum-participants and 5 custodians registered in SLBS.

Mutual Fund Service System (MFSS): As on March 31, 2015, 33 mutual fund houses with 7833 schemes were enabled under the revised MFSS scheme. The average daily value of funds settled for subscription of mutual fund units for the period April 1, 2014 to March 31, 2015 was ` 7.17 Crores. The average daily value of funds settled for redemption of mutual fund units for the period April 1, 2014 to March 31, 2015 was ` 12.71 crores.

Corporate Debt Instruments: National Securities Clearing Corporation Limited (NSCCL) provides DVP-1 based settlement for OTC trades in Corporate Bonds, Repo in Corporate Bonds, Commercial Papers (CP) and Certificate

of Deposits (CD). The average daily settlement value at NSCCL for OTC trades in Corporate Bonds, Commercial Papers (CP) and Certificate of Deposits (CD) during the financial year 2014-15 stands at ` 2,864.21 crores, ` 2,740.37 crores and ` 5,982.84 crores respectively. The highest settlement value, during this period, of ` 27,665.03 crores (across all corporate debt instruments) was recorded on March 27, 2015. During the financial year 2014-15, NSCCL settled 63 repo trades valuing ` 1998.60 crores as compared to 25 repo trades valuing ` 1962.20 crores settled in the previous year.

During the F.Y. 2014-15, NSCCL earned net profit after tax of ` 218.80 crores as compared to net profit after tax of

` 186.51 crores during the FY 2013-14. The Board of NSCCL has accordingly recommended a dividend of ` 32.50 per equity shares to its shareholders in respect of FY 2014-15.

4.6.2.     NSE Strategic Investment Corporation Limited

NSE Strategic Investment Corporation Limited (NSICL) was incorporated to, inter alia, make or hold all strategic investments in the equity shares and/or other securities of NSE group companies and other companies. The paid up share capital of NSICL as on March 31, 2015 is ` 825.99 crores which is being held by National Stock Exchange of India Limited (NSEIL) and National Securities Clearing Corporation Limited (NSCCL) in the ratio of 99.90 and

0.10 respectively. During the year under review, NSICL has not made any further acquisitions/investments and the investment portfolio remains the same as the previous year. During the F.Y. 2014-15, NSICL earned net profit after tax of ` 70.34 crores as compared to net profit after tax of ` 0.72 crores during the FY 2013-14. NSICL was formed with an intention to conserve resources for the group to invest in the capital of other companies in the group or outside. Hence, NSICL Directors did not recommend any dividend to be paid in respect of 6% Non-cumulative Compulsorily Convertible Preference Shares and the equity shares.

4.6.3.     India Index Services & Products Limited

The CNX Nifty Futures traded on National Stock Exchange (NSE) recorded a turnover of ` 27,12,439 crore in the financial year 2014-15 as compared to a turnover of ` 22,73,236 crore in the financial year 2013-14, thus registering an increase of 19%. Turnover of CNX Nifty Options traded on NSE increased to ` 3,56,67,743 crore in the financial year 2014-15 from ` 2,60,00,268 crore in the financial year 2013-14, registering an increase of 37%.

The CNX Nifty Futures traded on Singapore Exchange (SGX) recorded volume of 19.93 million contracts in the financial year 2014-15 as compared to a volume of 16.50 million contracts in the financial year 2013-14, registering an increase of 21%.

1)            During the year under review, IISL has widened the client base that uses IISL Indices and index data.

2)            During the financial year 2014-15, IISL granted 8 licenses each to domestic and international clients for launching exchange traded funds, active funds, index funds and structured products.

3)            Currently, 19 index funds & 26 Exchange Traded Funds (ETFs) are linked to IISL’s indices in Domestic market.

4)            Six ETFs on CNX Nifty Index are listed outside India.

5)            The corpus of index linked funds/ ETFs based on IISL’s indices as on March 31, 2015 is ` 16, 467 crores as against

` 6,059 as on 31 March 2014.

6)            In continuation with its strategy of developing indices that meet the requirements of market participants, IISL launched eleven new indices. Also, IISL launched one fixed income index i.e. NSE GSECBM Clean price index during the year.

During the F.Y. 2014-15, IISL earned net profit after tax of ` 34.29 crores as compared to net profit after tax of ` 19.64 crores during the FY 2013-14. The Board of IISL has accordingly recommended a dividend of `130/- per equity shares to its shareholders in respect of FY 2014-15.

4.6.4      NSE Infotech Services Limited

OPErATIONS AND MAJOr EVENTS DUrING THE yEAr

Technology is a key differentiator and a strategic driver for NSE and as strategic partner NSETech continues to deliver and maintain technology products and services for NSE.

TrANSFOrMATION THrOUGH NEw TECHNOLOGy

Tick by Tick data was made available over multicast in FO and CM segments so that the tick latency is same as order confirmation latency. The design provided for better resilience with minimal downtime for end clients.

Latency: Several initiatives in trading system were implemented to improve the latency which resulted in reducing latency in derivatives segment to less than 500usecs. Low Latency Net improved the latency by 55%.

Password policy changes were implemented on trading front ends to mitigate the security risks

Technology upgrade

•             End of life technology upgrade: Versions for messaging protocol, Operating system, Database were upgraded

•             Additional Infrastructure was added to trading system to cater to growing volumes

Hadoop Implementation: Hadoop Based Appliance for Enterprise Data Warehouse Orders Data at Primary Site & for entire data at BCP was setup in the Jan – Mar 2015 quarter. At Primary site a tiered approach was adopted. Prior to this, there was no DR for Enterprise Data Warehouse. It’s a high compression, cost-effective solution comprising scalability with High Availability.

COLO 10 G: NSE has provided 10 G Connectivity at Colocation DC for Members to further reduce latency and provide latest technology offerings to its members in Colocation.

Legacy Listing System to NEAPS transition: With the objective to have an Integrated flow of data between corporates and exchange, all the listing functions currently available on the legacy platform are being transitioned to this on-line portal. Wherever applicable, the self-service functionality will be provided to corporates to facilitate the paperless submission of listing documents with the Exchange.

Paperless Submission of Internal Audit: Inspection Department: As per the earlier system, Auditors use to make this report manually and submit the same to TM. The Trading Member then enters the data in ENIT and uploads the scanned report. In this year, NSE took a new initiative and provided an end-to-end automation of this requirement which reduces errors, effort of auditors, TMs and verification efforts at exchange end.

GrOwTH THrOUGH NEw PrODUCTS AND SErVICES

Trade Price Protection: Exchange has taken several order and risk management measures including limits and controls. To further strengthen orderly trading, Trade Price Protection was introduced in derivatives segment.

Order Identifier Transformation: Order handling capabilities of trading system were improved to cater to growing volumes.

Multicast Tick by Tick Bucket Service: Bucket service were made available in multicast Tick by Tick for derivatives segment

Surveillance Alert Engine: Surveillance Alert Engine was built to reduce TAT for identifying and intimating price band flexes to the operations team. It also led to an error free and automated process thereby significantly saving man hours.

OFS: To boost participation by retail segment, various measures were taken up. These include - introduction of ‘RS’ series (Sep’14), provision for orders at cut-off price (Jan’15), inclusion of cash equivalent component like FDs, BGs, MFs, etc. as collateral and changes in margining rules for the same (Jan’15). To ensure high availability, Risk systems were migrated to fault tolerant hardware in Jan’15. The system was benchmarked for 7.5 million orders in a day. To protect against software failures, development of software fault tolerant architecture is in progress.

SLB rollover: Rollover functionality is being introduced in SLB segment which will provide an opportunity to participants to extend the existing contracts up to maximum of 2 months. Additional rollover contracts will be introduced with new series like JF, JM, FM, and FA.

Single Click operations in DT segment: To improve operational efficiency, changes were carried out to clearing and risk management systems to incorporate "Single Click" operations in NSCCL. Changes were deployed to production in May’14.

E-FDr: E-FDR API was introduced in Feb-2015 across all segments to empanelled banks to accept digitally signed message based electronic confirmations for issuance of Fixed Deposits. Responses to requests made by CMs/TMs for FD additions/renewals which were earlier a manual process with turnaround being more than a day in some cases, was brought down to seconds.

Extended Market for CD segment: Support for extended market hours for selected instruments is ready for deployment to Production. Members who do not wish to participate in extended session will be provided with provisional reports.

Colo Phase 3: The new Datacenter (Colo Phase III) has been setup and made live with 10G connectivity between members and exchange. NSE has scaled Colocation capacity by additional 104 half racks. This facility is in-line with the existing 10G enabled infrastructure in Colo Phase 1 & 2 in terms of Network architecture. This network has been integrated successfully with the Trading Network.

Membership: Colocation: Members can apply for Lease line and VSAT via ‘Electronic Interface for Trading Members’ (ENIT). However, applications for Colocation IP are accepted physically. This involves manual processing, delay in retrieval of data, delay in intimation to members etc. Hence the same was automated. At Exchange end, a change in the process will lead to elimination of manual processing and error, timely updation of database, reduction of call

/ queries pertaining to status of these applications.

risk based Supervision- SEBI has come out with a new approach on Risk based Supervision moving away from rule based supervision. Various business/activity specific risks faced by Trading Members are identified. These business/ activity specific risks, termed as ‘risk parameters’, are grouped into broad categories, such as, credit risk, market risk, operational risk, etc., as applicable. To facilitate the above requirement, a system was developed in ENIT to capture the data from Trading Members as well as across various Departments within NSE. Various Reports as required by SEBI have been generated and submitted.

OPErATIONS STrENGTHENING

Latency monitoring using tool: A tool has been implemented for online Latency measurement in trading and risk system for CM, FO & CD. It is now possible to monitor latency performance of trading system on day-to-day basis in a non-intrusive manner, online monitoring and alerting of SLA parameters is now feasible, real-time latency visibility into the entire execution chain and microsecond level accuracy is achieved. Tool is also used to assist in fine-tuning of trading systems to meet SLAs and Measurement of Latency Improvement after releases (Application, Hardware or Network).

Monitoring Dashboard using Tool: There was a need to facilitate quick troubleshooting by means of providing visualization and correlation of various ‘out of tune’ parameters. Towards meeting this objective, it was proposed to have a real time dashboard of the Trading Ecosystem comprising of hardware servers, network devices, middle wares, databases and the trading application (software).The Dashboard is envisioned to depict real time view of the health state of above infrastructure by monitoring key performance parameters of each of the component. The project planned is to be implemented in 4 phases with each phase covering market segments FO, CD, CM and other system .Phase I (FO) is in advanced stage of completion. Phase II & III are expected to be completed by August 2015.

Command Centre Initiatives: Currently, various IT Operations teams (trading, other apps, network, data center), IT security team, Trading Operations and Physical Security Operations are staggered across multiple locations not only in NSE corporate headquarters but also other locations. From perspective of better co-ordination especially during resolution, it is important to collocate these teams. Command Centre Initiative project has been initiated which includes creation of Integrated Situational Awareness Room and deployment of Command Centre Visual Dashboards at ISAR for effective monitoring using monitoring tools for speeding up identification and resolution of incidents.

rISK MANAGEMENT & rEGULATOry COMPLIANCE

BCP 2.0: SEBI issued letter dated 25th Sept 2014 for conducting live session from DR site for two consecutive working days and first such live session was to be conducted before 31st Dec 2014. In compliance to this, exchange conducted two full day live sessions on 5th and 7th Nov 2014. External drill for intra Day switchover from primary site to DR site was conducted on 21-Mar-2015.

It was further decided to take scope beyond compliance and cover all aspects of exchange and associate companies that is critical to its operations. Hence, project BCP 2.0 was initiated on Dec’2014. BCP crack team has been formed. Members of crack team are representatives both from business and technology teams. Processes for DR invocation and execution were fine-tuned for all areas. Further gaps in terms of infrastructure were identified and action has been initiated on the same.

With BCP 2.0, exchange shall be able to demonstrate its readiness of switchover to DR site in two hours and be ready for any unforeseen emergency requiring continuation of operations from DR site for prolonged period.

GrC (Governance risk and Compliance) Framework: To further strengthen the Governance Risk and Compliance, Group Information Security Policy (GISP) was rolled out. Information Security Forum (ISF) responsible for overseeing information security initiatives for the organization was constituted. By enforcing GISP, management will be able to establish and maintain controls and security over the organization’s information assets while protecting confidentiality, maintaining integrity and ensuring availability of the information assets.

For proactive risk management

•             Build Secure initiative is being functionalized where in processes are rolled out for incorporating information security inputs at build stage itself. Hardening standards and secure coding guidelines are published. Sign-off is now required from IT Risk & Compliance team before production deployment.

•             A Business Process Review has been initiated to identify information Security risks across the business departments.

•             Assessment of offsite-vendors  from information security perspective has  been initiated and should be complete in the current financial year.

QUALITy

Quality Control (QC): IQC Testing is operationalized in FO & CD segments for functional testing. Automated Regression testing is completed in 48 hrs resulting in significant productivity benefits also resulting in higher confidence in Quality. Success of the implementation has increased the scope to cover reliability, end-to-end utilities, front-end and performance testing for FO, CD and CM Applications.

SDLC Process Improvement: Zero Defect Program is initiated. The objective of program is to strengthen processes and practices in organization that will lead to reduction in overall Cost of Quality. Defect Prevention, Software Configuration Processes have been rolled out. Project Management, Demand Management, SDLC Processes, Release and Deployment Processes are being redesigned including best practices adopted from NASA, Boeing and similar organizations that aims towards Zero Defect. ALM Tool is identified to automate all the processes that will result in better traceability, improved productivity and continuous integration.

During the F.Y. 2014-15, NSETECH earned net profit after tax of ` 0.86 crores as compared to net profit after tax of

` 0.06 crores during the FY 2013-14.

4.6.5      NSE.IT Limited

Continuing its foray in the information technology, online assessments space as well as the infrastructure management services domain, the Company has been battling against various competitive, political, socio- economic and market related adverse factors, particularly for mid-sized IT companies like NSE.IT. Despite the above, NSE.IT has managed to achieve a modest but progressive turnover of ` 125 crores.

In the software products and services domain, the Company continued to provide innovative business solutions using domain expertise, Mobility and UX (User Experience Design) and achieved significant entries in the insurance industry in India and US markets. During the year, various measures were taken to optimize resources, enhance productivity and following innovative delivery practices to significantly increase software profitability.

NSE.IT consolidated and enhanced its Algorithmic Trading solution by implementing key Technology implementation for latency improvement with less than 60 micro seconds. The Company successfully added new logos. NSE.IT, during the year has made inroads into new initiatives around Mobility which has resulted in NSE.IT being awarded a new project for claim module app development for android, windows and iOS platforms for a general insurance company, and delivering an iOS development for both iPhone and iPad for STR. Further, initial steps have also been taken this year to foray into BigData and Data analytics space using Revolution R partnership. Skill development process is in progress to develop expertise in Hadoop framework, and various products from Revolution R. Other key achievements like ISO 27001 re-certification for information security compliance and ISO

9001:2008 re-certification for Software Processes by BSI UK. NSE.IT is also successfully assessed at CMMI for Dev L3, preparation is in progress to achieve Level 5 in FY2015-16.

In the online examination space, NSE.IT continued its foray of undertaking online assessments for various clients, opening up new centers, multiplying as well as optimizing its existing capacity and maintaining its cost effective model of low cost high capacity. In the online assessments space new logos were added during the year. During the year, NSE.IT operated through its 224 centers all across the country. During the year the Company opened up two new centers at Itanagar in Arunachal Pradesh and Gangtok in Sikkim thus making its mark across the length and breadth of the country. Thus NSE.IT now operates in 29 states and 4 Union Territories. Further, NSE.IT continued to provide online assessments services to its existing clients. During the year, NSE.IT conducted 14.65 lakh assessments cumulatively from April 2014 to March 2015. During the current year, NSE.IT expects to venture into self-service mode examination portal, Remote Proctoring and Proctor less examinations.

On the Infrastructure management services front, NSE.IT continued to support its existing client projects which was consistent and flawless during the year. During the year the IMS vertical successfully launched an on-demand security based services called CNAM (Comprehensive Network Attack Management). This is an all-encompassing Security solution which ensures immediate Network attack mitigation on Real Time Basis and ensures a 360 degree Security for our customers. During the year, ISRC (Internet Security Response Center) solution automates DRaaS services, which ensures that the breakdowns are immediately identified and a switch over to the DR can be done in an automated and controlled way. It takes the stress away from the people during the critical times by switching over to DR by automated well defined processes. NSE.IT has huge experience in solving Performance Engineering Issues for Ultra Low Latency networks from Infrastructure perspective. The tools, people and process deployed can help identify the bottle necks and solve the hidden issues. A POC was done with the clients and NSE. It is hopeful of converting it into a potential business opportunity. NSE.IT also has huge experience in solving Performance Engineering Issues for Ultra Low Latency networks from Infrastructure perspective. These tools and processes can benchmark against the best practices in the industry.

The employee count for NSE.IT at the end of the year was 685 as compared to 738 in the previous year, a nominal dip of around 7%. The Training department successfully got its processes ISO 9001:2008 re-certified. "Pegasus" the leadership development program was crafted to prepare leaders to battle in today’s ambiguous environment. This nine month program included individual coaching sessions, three-way meeting with the managers, class room training and presentations.

With a strong existing clientele and new customers with high potential, NSE.IT plans to take innovative steps in all its verticals to cater to its customers and take NSE.IT to greater heights.

During the financial year 2014-15, NSE.IT earned net profit after tax of ` 1,523.17 lakhs as compared to the net profit after tax of ` 1,403.79 lacs in the previous year. The Board of NSE.IT has recommended a dividend of ` 5.20 per equity share to its shareholders in respect of the financial year 2014-15.

4.6.6      DotEx International Limited

4.6.6.1   Datafeed business

The revival of capital markets and new pricing policy for non- display data feed should help in healthy revenue growth in financial year 2015-16. The key focus areas of DotEx in financial year 2015-16 would be identification

of international and domestic data vendors for empanelment, targeting existing clients for additional products

& upgrading the products, on-boarding new clients for non-display policy, focusing on historical data needs of academicians and researchers and continuing with identification of illegal data vendors for converting them into authorised data vendors.

4.6.6.2   NOw (NEAT on web) platform

DotEx also provides a shared platform called NEAT on Web (NOW) which is a shared CTCL and risk management tool for the trading members.

During the year, DotEx started providing the following additional facilities through NOW platform:-

•             Facility to clients to trade in NCDEX spread contracts is offered through NOW platform.

•             facility to clients to place bids in OFS through the NOW mobile trading platform.

•             Indian bank payment gateway enabled for fund transfer from client account to member’s bank account on NOW Web platform.

The above initiatives have resulted in NOW maintaining the user base and trading turnover through NOW platform on NOW platform during the financial year 2014-15.

4.6.6.3   Know your client (KyC) registration Agency (KrA)

As on March 31, 2015, 862 SEBI registered intermediaries are recognised by DotEx, around 12 Lakh existing KYC records and 1.42 Lakh New KYC records have been uploaded with DotEx KRA and approximate 10.74 Lakh records consisting of both existing as well as new KYC have been processed. New features have been introduced in the DotEx KRA system include bulk image upload facility via SFTP and KYC approval letter download to intermediaries, SMS alerts to clients on KYC registration.

The Forwards Market Commission (FMC), in its circular dated March 13, 2015 has permitted all members of the commodity market to avail the services of KRA’s for the purpose of client registration and uploading/downloading of client data to/from the servers of the KRA’s

DotEx, being a SEBI registered KRA, was also awarded the project for Central KYC Registry initiated by Central Registry of Securitisation Asset Reconstruction and Security Interest of India (CERSAI). The project aims to consolidate and validate personal identity data, and generate Unique KYC ID for clients and make it available to the complete Financial Services industry. A pilot of the software platform for the Central KYC Registry based on the securities market KYC format has been launched in May 2013 and demonstrated to CERSAI in August 2013. CERSAI has written to some Financial Institutions to participate in the software pilot. However, Financial Institutions await an official communication from their regulators for participation in the Central KYC project.

The Ministry of Finance, Department of Financial Services (DFS) has advised that a Common KYC Templates for Central KYC Registry will be finalised in consultation with all regulators and the Ministry of Finance, with RBI taking a lead role in the same. This template is in the last stages of finalization. Changes are being made to the pilot software platform to accommodate the changes in the template.

During the year 2014-15, DotEx earned a profit of INR 2825.33 lakhs as compared to a profit of INR 6345.50 lakhs during 2013-14. The Board of DotEx has recommended a dividend of INR 12/- per equity share to its shareholders in respect of the financial year 2013-14.

4.6.7      Other Associate and Joint Venture companies

Besides the above, National Securities Depository Limited, is an associate of NSE. NSE has made equity investment in BFSI Sector Skill Council of India. Further, NSDL e-governance Infrastructure Limited, Computer Age Management Services Private Limited, Market Simplified India Limited and Power Exchange India Limited are associates of NSE Strategic Investment Corporation Limited (NSICL), a subsidiary of NSE. NSICL also has equity investments in Goods and Services Tax Network.

4.7          DEPOSITS

The Company has not invited, accepted or renewed any deposits within the meaning of Section 73 of the Companies Act, 2013. Accordingly, the requirement to furnish details relating to deposits covered under Chapter V of the Companies Act, 2013 does not arise.

4.8          rISK MANAGEMENT POLICy

The Company has an enterprise-wide risk assessment and review mechanism which inter alia consists of risk identification, assessment and categorisation of risks taking into account the impact and likelihood of risks and putting in place adequate controls and mitigation plans which has helped in reducing the overall risk exposure for the Company and also the impact thereof.

In this direction, the Company has a Risk Assessment & Review Committee, a sub-committee of the Board, which meets periodically to review the efficacy and adequacy of the Company’s risk management exercise and the controls and mitigation plans put in place to reduce the overall impact of the various inherent risks.

The Company has also appointed a management consultancy firm to assist in identifying, assessing and minimising the risk exposure of the Company. For each of the identified risk areas, the Company maintains detailed Risk Registers mainly containing details such as risk description, risk indicators, categorisation of the risk, current controls and mitigation plans etc.

4.9          MATErIAL CHANGES AND COMMITMENTS, IF ANy, AFFECTING FINANCIAL POSITION OF THE COMPANy wHICH HAVE OCCUrrED BETwEEN THE END OF THE FINANCIAL yEAr OF THE COMPANy AND THE DATE OF THE rEPOrT

None

4.10        DETAILS OF SIGNIFICANT AND MATErIAL OrDErS PASSED By THE rEGULATOrS Or COUrTS Or TrIBUNALS IMPACTING THE GOING CONCErN STATUS AND COMPANy’S OPErATIONS IN FUTUrE

None

4.11        EXPLANATIONS Or COMMENTS ON THE QUALIFICATION, rESErVATION Or ADVErSE rEMArK Or DISCLAIMEr MADE By THE AUDITOr IN HIS rEPOrT

There is no qualification, reservation or adverse remark or disclaimer made by the Statutory Auditors appointed under Section 139 and the Secretarial Auditors appointed under Section 204 of the Companies Act, 2013, in their reports. Hence the need for explanations or comments by the Board does not arise. The report of the Secretarial Auditors is attached herewith as Annexure -2. The report of Statutory Auditors forms part of the financial statements.

4.12        SHArE CAPITAL

During the FY 2014-15, there is no change in the equity capital structure.

4.13        EXTrACTS OF THE ANNUAL rETUrN

The extracts of the annual return as on the financial year ended on March 31, 2015 in Form MGT-9 is attached herewith as Annexure-3 and shall form part of Board’s Report.

5.            HUMAN rESOUrCES

Following developments have taken place in Human Resources / Industrial Relations front in the Financial Year 2014-15.

5.1.         Talent Management and Development: During the Financial Year 2014-15, NSEIL has focused on the implementation of the Talent Management Study undertaken in the previous financial years. The training needs for each employee was based on the competency framework. In line with the Business Strategy, company has continued to focus on the functional and behavioral training based on the individual and the organizational need. Various cross functional learning initiatives were initiated in the year. NSE has been extensively working on the Executive Coaching initiative for the executives at the Strategic and Tactical Band. Monthly coaching and feedback sessions are conducted to give them developmental feedback. “Idea lab” initiative was rolled out for generating ideas from employees. Job Descriptions were revalidated with the role holders and the line managers. Employee communication was facilitated based on the communication matrix. The emphasis was on the performance management system to drive desired performance and behavior. The company has also implemented Job rotations as per the career path framework.

5.2          Employee Engagement Study / Perception Study: Based on the previous Employee Engagement study and action plan, HR team has implemented the initiatives to enhance the perception levels of the employees. HR team has also conducted various perception studies at regular intervals to gauge the employee perception levels and has taken various steps to maintain or improve the perception levels as per the market benchmark. NSE also conducted an employee engagement study during the financial year 2014-15 and the employee satisfaction levels have improved vis-à-vis the previous years. Some of the employee engagement activities conducted by the company are NSE’s participation in Standard Chartered Mumbai marathon 2015, employee’s participation in the investothon, Zumba, Kick boxing, employee appreciation corner, coffee day express outlet, dental awareness and check up camp, cancer awareness program, employee assistance program, Talk to me initiative with the HR Head and various Staff Welfare initiatives so as to build synergy among the various teams.

5.3          People soft: NSE is focusing on the People soft –ERP implementation in the entire gamut of Human resources management.

5.4          Employee relations: The employee relations scenario has been harmonious throughout the period under consideration.

5.5          Employee Strength as on March 31st 2015 is 497

5.6          Disclosures under Sexual Harassment of women at workplace (Prevention, Prohibition & redressal) Act, 2013

The disclosures required to be under Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal) Act, 2013 are given in the following table:-

1              Number of complaints of sexual harassment received in the year             Nil

2              Number of complaints disposed off during the year        Not applicable

3              Number of cases pending for more than 90 days               Not applicable

4              Number of workshops or awareness programs against sexual harassment carried out    Awareness  program  for  all employees was done

5              Nature of action taken by the employer                Not applicable

6.1          DIrECTOrS AND KEy MANAGErIAL PErSONNEL

As per the provisions of Securities Contracts Regulation (Stock Exchanges and Clearing Corporations) Regulations, 2012, the governing board of every recognised stock exchange shall include (a) public interest directors; (b) shareholder directors; and  (c)  Managing  Director.  Mr.  S.B.  Mathur  (Chairman  of  the  Board),  Mr.  Y.H.  Malegam, Dr. K. R. S. Murthy, Mrs. Pratima Umarji, Dr. S.Sadagopan and Mr. Justice B.N. Srikrishna (Retd.) fall under ‘Public Interest Directors’ category. Mr. S.B. Mainak, Mr. Abhay Havaldar, Mr.Prakash Parthasarathy and Mr. Ravi Narain, fall under Shareholder Directors category. Ms. Chitra Ramkrishna is the Managing Director & CEO of the Company.

Mr. Abhay Havaldar retires by rotation at the ensuing Annual General Meeting and is eligible for re-appointment subject to approval of SEBI. The Board recommends the re-appointment of Mr. Abhay Havaldar as Director of the Company to the shareholders at the forthcoming annual general meeting of the Company subject to approval of SEBI.

During the Financial Year 2014-15, there was no change in the directors or key managerial personnel of the Company.

6.2          NUMBEr OF MEETINGS OF THE BOArD OF DIrECTOrS

The Board met four times during the year i.e. on May 6, 2014, July 11, 2014, November 3, 2014 and February 4, 2015.

6.3          DECLArATION By INDEPENDENT DIrECTOrS

As per the requirements of the Companies Act, 2013, the Company has appointed Mr. S.B. Mathur, Mr. Y.H. Malegam, Dr. K. R. S. Murthy, Dr. S.Sadagopan and Mr. Justice B.N. Srikrishna (Retd.) as Independent Directors on its Board based on the declaration that they meet criteria of independence. Further, every Independent Director shall at the first meeting of the Board in every financial year or whenever there is a change in the circumstances which may affect his status as an independent director give a declaration that he meets the criteria of Independence. Accordingly, the above Independent Directors have given declarations of independence in the first meeting of the Board of NSEIL held on May 26, 2015.

6.4          COMPANy’S POLICy ON DIrECTOrS’ APPOINTMENT AND rEMUNErATION INCLUDING CrITErIA FOr DETErMINING QUALIFICATIONS, POSITIVE ATTrIBUTES, INDEPENDENCE OF DIrECTOrS

Pursuant to requirements of The Companies Act, 2013, the Company has framed a policy on appointment of Directors and Senior Management personnel and a policy on remuneration of Directors and Key Management Persons identified under SCR (SECC) Regulations and under the Companies Act, 2013 and other employees and the same are in force. The relevant extracts from the above policies are given in Annexure-4

6.5          MANNEr IN wHICH FOrMAL ANNUAL EVALUATION OF PErFOrMANCE By THE BOArD OF ITS OwN PErFOrMANCE AND THAT OF ITS COMMITTEES AND INDIVIDUAL DIrECOTrS

The Board has put in place an Evaluation Policy vide which the Board evaluates its own performance, that of its Committees and of the individual directors.

I.             The criteria for evaluation for each of the above are as follows:

(a)          Performance evaluation of the Board

The performance of the Board of Directors is evaluated on the basis of various governance and business related parameters which include, inter-alia, Corporate Governance standards adopted by the Board and its implementation, understanding roles and responsibilities of Directors, commitment to highest ethical standards of integrity and probity, understanding of the objectives, values, vision and business of the Company, provision of entrepreneurial leadership, guidance to drive financial and business performance of the Company and periodic review of the same, ensuring necessary financial and human resource support to achieve Company's objectives, etc.

(b)          Performance evaluation of the Committees

In addition to the principles stated above for evaluation of Board, to the extent applicable to the respective committees, constructive recommendations made by the Committee(s) to the Board are also kept in mind while evaluating their performance.

(c)           Performance evaluation of the Directors

The individual director's performance has been largely evaluated based on his/her level of participation and contribution to the performance of Board/Committee(s) in respect of the above areas. Besides the same, the skills, knowledge, experience, attendance record, devotion of sufficient time and efficient discharge of responsibilities towards the Company, Board and Committees of which he/she is a member and timely disclosure of personal interest, compliance of Code of Conduct and Ethics, Code for Independent Directors etc., is also taken into account.

II.            The following process has been adopted by the Company for performance evaluation:

(a)          Independent Directors review the performance of the Chairperson, the Non-Independent Directors and the Board;

(b)          The Nomination and Remuneration Committee ("NRC") carries out the evaluation of every Director's performance. The NRC, while doing so, also takes into account the inputs of review by Independent Directors;

(c)           The Board evaluates the performance of the Board, its Committees and each Director and while doing so, takes into account the inputs received from the NRC and the review by Independent Directors.

The performance evaluation by Independent Directors, the NRC and the Board respectively, is carried out on the basis of criteria laid down in the Board Evaluation Policy, which, inter-alia, includes the abovementioned parameters.

6.6          DIrECTOrS’ rESPONSIBILITy STATEMENT

Your Directors confirm that -

(i)            in the preparation of the annual accounts, the applicable accounting standards had been followed along with

proper explanation relating to material departures, if any;

(ii)           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 NSEIL at the end of the financial year i.e., 31st March, 2015 and of the profits of NSEIL for that year;

(iii)          the Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of NSEIL and for preventing and detecting fraud and other irregularities ;

(iv)         the Directors had prepared the annual accounts on a going concern basis; and

(v)          the Directors had devised proper systems to ensure compliance with the provisions of all applicable laws and such systems are adequate and were operating effectively

7.            COrPOrATE  SOCIAL  rESPONSIBILITy

NSE is covered under the purview of Section 135 of the Companies Act 2013. Similarly many of its subsidiaries are also covered. However, contribution to CSR by some of these Companies as required under the Section 135 will be negligible. Moreover, there could be duplication of efforts if each individual Company undertakes CSR activities on its own and there would be difficulties in scaling up these activities. Therefore, it has been decided by the Boards of the respective Companies in NSE Group that CSR efforts for the Group be undertaken commonly and the actual spend be allocated to the respective Companies in proportion to their legal obligations. Therefore, a common CSR function for NSE and its subsidiaries has been created under NSE as a group resource and the actual CSR amount spend is proportionately allocated to the respective Companies. However, the CSR Committees for these Companies are separate. A common CSR policy has been prepared and approved by respective CSR Committees and Boards. The disclosures required to be made in the Board’s Report as per Rule 9 of Companies (Corporate Social Responsibility Policy) Rules, 2014 is attached herewith as Annexure-5

8.            COrPOrATE GOVErNANCE

The Company is committed to maintain the highest standards of corporate governance and adhere to the corporate governance requirements.

National Stock Exchange of India Limited (NSEIL) is a public limited company, whose securities are not listed on any of the stock exchanges. As per Regulation 35 of the Securities Contracts (Regulation) (Stock Exchanges and Clearing Corporations) Regulations, 2012, the disclosure requirements and corporate governance norms as specified for listed companies are mutatis mutandis applicable to a recognised clearing corporation. NSEIL has always been involved in good governance practices and endeavors continuously to improve upon the same. A report on corporate governance for the financial year 2014-15 is furnished as part of the Annual Report for the information of all its stakeholders as Annexure-6. The certificate from a Practicing Company Secretary confirming compliance with the conditions of Corporate Governance as stipulated under clause 49 of Listing Agreement is also attached with the above report.

9.            AUDIT COMMITTEE

The Audit Committee comprises three Directors viz., Mr. Y. H. Malegam, Mr. Ravi Narain and Dr. S. Sadagopan as its  members.  Mr.  Y.H.Malegam  is  the  Chairman  of  the  Audit  Committee.  The  Committee  met  four  times  during

the year i.e., on May 6, 2014, July 11, 2014, November 3, 2014 and January 29, 2015. The details of the attendance of members of the Audit Committee at their meetings held on the above dates are given hereunder:-

Name    Number of meetings held during the year            Number of meetings attended

Mr. Y. H. Malegam           4              4

Mr. Ravi Narain 4              4

Dr. S. Sadagopan              4              3

10.          STAKEHOLDErS rELATIONSHIP COMMITTEE

The Committee comprises of Mr. Y. H. Malegam, Mr. S. B. Mathur, Mr. Ravi Narain and Ms. Chitra Ramkrishna. Mr. Y.H. Malegam is the Chairman of the Committee. The Committee meets as and  when  the  need  arises  to discharge its functions.

The Committee met four times during the year, i.e. on May 6, 2014, November 3, 2014, January 29, 2015 and March 17, 2015. The details of the attendance of members of the NRC at their meetings held on above dates are given hereunder:-

Name    Number of meetings held during the year            Number of meetings attended

Mr. Y.H. Malegam            4              4

Mr. S.B. Mathur                4              4

Mr. Ravi Narain 4              4

Ms. Chitra Ramkrishna   4              4

11.          NOMINATION & rEMUNErATION COMMITTEE

The NRC comprises Mr. Y.H.Malegam, Mr. S.B. Mathur, Dr. K R S Murthy, Mrs. Pratima Umarji and Mr. Ravi Narain as its members with Mr. Y.H.Malegam as its Chairman for the purpose of discharging its functions required under both Companies Act, 2013 and under SEBI requirements.

The Committee met two times during the year, i.e. on May 6, 2014 and January 29, 2015. The details of the attendance of members of the NRC at their meetings held on above dates are given hereunder:-

Name    Number of meetings held during the year            Number of meetings attended

Mr. Y.H. Malegam            2              2

Mr. S.B. Mathur                2              2

Mr. Ravi Narain 2              2

Dr. K.R.S. Murthy             2              2

Mrs. Pratima Umarji       2              2

12.          MANAGEMENT DISCUSSION AND ANALySIS rEPOrT

Management’s Discussion and Analysis Report for the year under review is presented in a separate section forming part of the Annual Report.

13.          VIGIL MECHANISM

National Stock Exchange of India Limited (“NSEIL” or “the Company”) has, in continuation of Company’s pursuit to establish good corporate governance practice, formulated ‘Whistle Blower Policy’ and the policy is in force since December 2010. The Policy, as on date, provides mechanism to the Directors and employees of the Company for reporting instances of unethical conduct, actual or suspected fraud or violation of the Company’s Code of conduct or Ethics policy or law to the Chairman of Audit Committee (cases of financial nature) / Ethics Committee (other cases) or the Ethics Counselor, as the case may be. Protected Disclosures should preferably be reported in writing as soon as possible after the whistle blower becomes aware of the same.

All Protected Disclosures reported under the Policy will be thoroughly investigated by the Ethics Counselor or Chairman of the Audit Committee/Ethics Committee or a suitable competent person of their choice, as the case may be, of the Company. No unfair treatment will be meted out to a Whistle Blower by virtue of his/her having reported a Protected Disclosure. Complete protection will be given to whistleblowers against any unfair practice.

If the findings of investigator(s) conclude commission of an unethical and improper act, disciplinary action or any other action, as deemed appropriate, will be initiated against the person concerned.

A report is being submitted to the Chairman of the Ethics Committee/Audit committee on a regular basis about receipt of Protected Disclosures, the results of investigations and the action initiated with regard to the same.

14.          AUDITOrS

Currently, M/s. Khandelwal Jain & Co., Chartered Accountants, are Auditors of the Company and their term shall expire at the forthcoming Annual General Meeting of the Company. As per the provisions of the Companies Act, 2013, no audit firm which has completed two terms of five consecutive years as Auditors shall be eligible for re-appointment as Auditors and every company is required to comply with this requirement within a period of three years from April 1, 2014. The Audit committee, after considering the above requirement, recommended the re-appointment of M/s. Khandelwal Jain & Co., Chartered Accountants as Auditors for a period of two years. The Company has received a certificate from the Auditors stating that they are fulfilling the conditions prescribed in the Companies Act, 2013 and the Rules laid down thereunder and they are eligible to be appointed as Auditors under the Companies Act, 2013.

The Board recommends the re-appointment of M/s. Khandelwal Jain & Co., Chartered Accountants, as Auditors of the Company by the members at the forthcoming Annual General Meeting for a period of 2 years. i.e from the conclusion of 23rd Annual General Meeting till the conclusion of 25th Annual General Meeting.

15.          CONSErVATION OF ENErGy, TECHNOLOGy ABSOrPTION AND FOrEIGN EXCHANGE EArNINGS / OUTGO

a.            Conservation of Energy and Technology Absorption

The disclosure of particulars with respect to conservation of energy and technology absorption in terms of Section 134(1)(m) of the Companies Act, 2013 read with Rule 8 of Companies (Accounts) Rules, 2014 are given hereunder:-

NSE has undertaken to use the following major technological initiatives towards ‘‘Effective Energy Conservation’’ as well as ‘‘Load Management System’’ namely:

i.              Under the ‘Renewable Power Scheme’, NSEIL has commissioned its ‘Wind Power Project’ of the capacity

of 6.25 MW at Satara in Maharashtra to set off around 65 % of energy consumption at Exchange Plaza building

ii.             Constructed  a  ‘Tire-IV  compatible  Colocation-III  Data  Centre  to  ensure  that  the  ‘Power  Utilisation Effectiveness’ (PUE) of new Data Centre does not exceed the benchmarked PUE

iii.            Implementing on the audit done on the Carbon and Water Foot Print of Exchange Plaza.

iv.           Active participation in ‘Thermal Energy Storage Programme’ being conducted by M/s. Tata Power Co. (TPC).

v.            As an alternative to the conventional Heating Ventilation and Air Conditioning System (HVAC), NSEIL has the ‘Thermal Energy Storage' for air-conditioning system during the peak hours.

vi.           Revamped the ‘Building Management System’ for effective and efficient operations of the Services especially the Air Handling Units (AHUs).

vii.          NSEIL has Motion/Occupancy Sensors installed in the lighting systems in the general staff areas.

viii.         NSEIL has ‘Lighting Transformers’ for regulated voltage of Lighting System.

ix.           ‘Electronic Ballast and Compact Fluorescent Lamps’ are used in Lighting System.

x.            NSEIL has ‘Automatic Power Factor Control Units’ to step up power factor of the building.

xi.           NSEIL has ‘Solar Power Plant’ to cater the part of lighting load at Exchange Plaza.

xii.          NSEIL has ‘Rain Water Harvesting System’ to harvest the rain water in the periphery of Exchange Plaza.

xiii.         NSEIL has the ‘Vermiculture Plant’ installed wherein compostable material like food waste collected from canteen, paper & cardboard are collected and post processing in the Vermiculture Unit, the manure is generated which is used for Gardening purposes.

xiv.         NSEIL has the ‘Sewerage Treatment Plant’ to reuse building's domestic and flushing water (i.e. after treatment) for its Cooling Towers associated with HVAC System and for Gardening purposes every day.

b.            Foreign Exchange earnings/outgo during the year under review

Foreign exchange earnings during the year amounted to ` 0.08 crores. Foreign exchange outgo during the year was ` 18.49 crores.

16.          PArTICULArS OF EMPLOyEES

A Statement of Particulars of Employees covered under the provisions of Rule 5 (2) & (3) of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is enclosed herewith as Annexure-7

17.          ACKNOwLEDGMENT

Your Directors are grateful for the support and co-operation extended by the Government of India, Securities and Exchange Board of India and Reserve Bank of India. Yours Directors would like to place on record their sincere appreciation of support provided by the shareholders and also their deep appreciation of the contribution made by the employees at all levels to the continued growth of the Company.

For and on behalf of the Board of Directors

Place: Mumbai                                                                                                                                                   S.B. Mathur

Date: May 26, 2015                                                                                                                                               Chairman

ANNEXUrE 1 TO BOArD’S rEPOrT

Form No. AOC-2

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

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

Nil

(a)          Name(s) of the related party and nature of relationship – N.A.

(b)          Nature of contracts/arrangements/transactions – N.A.

(c)           Duration of the contracts / arrangements/transactions – N.A.

(d)          Salient terms of the contracts or arrangements or transactions including the value, if any – N.A.

(e)          Justification for entering into such contracts or arrangements or transactions – N.A.

(f)           Date(s) of approval by the Board – N.A.

(g)          Amount paid as advances, if any – N.A.

(h)          Date on which the special resolution was passed in general meeting as required under first proviso to section 188 – N.A.

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

(a)          Name(s) of the related party and nature of relationship Please see Annexure to AOC -2

(b)          Nature of contracts/arrangements/transactions Please see Annexure to AOC -2

(c)           Duration of the contracts / arrangements/transactions Please see Annexure to AOC -2

(d)          Salient terms of the contracts or arrangements or transactions including the value, if any:

Please see Annexure to AOC -2

(e)          Date(s) of approval by the Board, if any:

Approved by the Audit Committee on May 6, 2014 as all transactions are in the ordinary course of business and at arm’s length basis.

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

For and on behalf of the Board of Directors

Place: Mumbai  S.B. Mathur

Date: May 26, 2015          Chairman

ANNEXUrE TO AOC-2

(a)   Names of the related parties and related party relationship

Sr. No.  Related Party     Nature of Relationship

1              National Securities Clearing Corporation Limited                Subsidiary Company

2              NSE Strategic Investment Corporation Limited   Subsidiary Company

3              NSE.IT Limited   Subsidiary Company (upto 29.06.2013)

Subsidiary's Subsidiary Company

(w.e.f. 30.06.2013)

4              DotEx International Limited         Subsidiary Company (upto 30.12.2013)

Subsidiary's Subsidiary Company

(w.e.f. 31.12.2013)

5              India Index Services & Products Limited                Subsidiary's Subsidiary Company

6              NSE Infotech Services Limited    Subsidiary's Subsidiary Company

7              National Commodity Claring Limited        Subsidiary Company (upto 28.05.2013)

8              NSE.IT (US) Inc. Subsidiary's Subsidiary's Subsidiary Company

9              National Securities Depository Limited (new)      Associate Company

10           BFSI Sector Skill Council of India Associate Company

(w.e.f. 21.05.2013)

11           Power Exchange India Limited   Associate Company (upto 21.07.2013)

Subsidiary's Associate

(w.e.f. 22.07.2013)

12           NSDL e-Governance Infrastructure Limited (formerly known as National Securities Depository Limited) Associate Company (upto 29.09.2013)

Subsidiary's Associate

(w.e.f. 30.09.2013)

13           Omnesys Technologies Private Limited  Subsidiary's Associate (upto 11.09.2013)

14           Market Simplified India Limited (formerly known as INXS Technologies Limited)                Subsidiary's Associate

15           Computer Age Management Services Private Limited     Subsidiary's Associate

(w.e.f. 07.01.2014)

16           Ms Chitra Ramkrishna Managing Director & CEO                Key Management Personnel

Name of the Related Party          Nature of Relationship  Nature of Transactions  Year ended 31.03.2015  Year ended 31.03.2014

National Securities Clearing Corporation Ltd.       Subsidiary           Usage charges received                13.43     8.14

                                Space and Infrastructure usage charges received              3.97        5.61

                                Reimbursement received for expenses on staff on deputation  12.89     10.94

                                Reimbursement received for other expenses incurred  33.85     29.69

                                Dividend received           112.50   146.25

                                Clearing and Settlement charges paid     102.45   84.98

                                Contribution to NSCCL Core SGF               170.00   –

                                Closing balance (Credit)/Debit   24.65     23.69

                                Investment in Equity Share Capital           5.64        5.64

NSE.IT Ltd.          Subsidiary Company

(upto 29.06.2013)

Subsidiary's Subsidiary Company

(w.e.f. 30.06.2013)          Reimbursement received for other expenses incurred  0.67        0.22

                                Software license procured           –             –

                                Software Development Charges paid     1.19        0.07

                                Software Expenses         0.83        0.17

                                Repairs and maintenance – Computer trading , Telecommunication   systems     34.12     32.12

                                STP charges received     0.01        0.01

                                Rent received                    –

                                NCFM Test expenses paid           6.52        7.89

                                CTCL Empanelment charges received     0.11        0.09

                                IT Mgt. & Consultancy charges paid         4.08        3.90

                                Installation commissioning & warranty charges for trading system            0.35        0.22

                                Dividend received           –             2.10

                                Closing balance (Credit)/Debit   (1.05)    (2.19)

DotEx International Ltd.                Subsidiary Company

(upto 30.12.2013)

Subsidiary's Subsidiary Company

(w.e.f. 31.12.2013)          Space and Infrastructure usage charges received              0.74        0.95

                                Reimbursement received for expenses on staff on deputation  2.07        2.10

                                Reimbursement for expenses incurred 2.03        24.24

                                CTCL Empanelment charges received     0.06        0.05

                                Amount received towards revenue sharing on account of info feed services       13.47     10.56

                                Purchase of asset            –             –

                                Data Subscription charges paid  –             –

                                Web trading related expenses   19.07     20.06

                                Dividend received           –             2.40

                                Closing balance (Credit)/Debit   (0.89)    0.82

Name of the Related Party          Nature of Relationship  Nature of Transactions  Year ended 31.03.2015  Year ended 31.03.2014

India Index Services & Products Ltd.        Subsidiary's Subsidiary Company              License fees paid             8.95        7.97

                                Usage Charges received               0.84        0.84

                                Space and Infrastructure usage charges received              0.50        0.54

                                Reimbursement received for expenses on staff on deputation  1.44        0.86

                                Reimbursement received for other expenses incurred  1.19        9.73

                                Dividend received           –             –

                                Closing balance (Credit)/Debit   0.23        0.37

National Commodity Clearing Ltd.            Subsidiary Company       Space and Infrastructure usage charges received                              0.08

                                Reimbursement received for expenses on staff on deputation                  0.09

                                Reimbursement received for other expenses incurred                  0.11

                                Closing balance (Credit)/Debit                   –

                                Investment in Equity Share Capital                           –

NSE Infotech Services Ltd.           Subsidiary's Subsidiary Company              IT Mgt. & Consultancy charges paid         25.65                18.74

                                Repairs and maintenance – Computer trading , Telecommunication   systems     19.12     16.26

                                Rent received    0.22        0.23

                                Reimbursement received for expenses incurred               12.44     9.37

                                Advance paid                    

                                Closing balance (Credit)/Debit   0.21        (0.31)

NSE Strategic Investment Corporation Limited   Subsidiary Company       Investment in Non-Cumulative Compulsorily Convertible Preference Shares  –             390.08

                                Investment in Equity Shares       –             390.08

                                Sale of Equity shares of Power Exchange India Limited   –             15.00

                                Sale of Preference shares of Power Exchange India Limited         –             5.00

                                Sale of Equity shares of Dotex International Limited        –             122.40

                                Sale of Equity Shares of NSDL e_governance Infrastructure Ltd  –             55.10

                                Sale of Equity Shares of NSE.IT Ltd           –             60.00

                                Reimbursement received for expenses incurred               0.06        0.39

                                Closing balance (Credit)/Debit   –             –

                                Investment in Preference Share Capital                412.56   412.56

                                Investment in Equity Share Capital           412.61   412.61

Name of the Related Party          Nature of Relationship  Nature of Transactions  Year ended 31.03.2015  Year ended 31.03.2014

Power Exchange India Ltd.           Associate Company

(upto 21.07.2013)

Subsidiary's Associate

(w.e.f. 22.07.2013)          Investment in equity shares       –             –

                                Reimbursement received for other expenses incurred  1.15        –

                                Closing balance (Credit)/Debit   –             1.15

NSDL

e-Governance Infrastructure Limited (formerly known as National Securities Depository Limited)             Associate Company

(upto 29.09.2013)

Subsidiary's Associate

(w.e.f. 30.09.2013)          Dividend received           –             5.51

                                Reimbursement received for expenses incurred                               –

                                Closing balance (Credit)/Debit   –             0.01

National Securities Depository Limited (new)      Associate Company        Dividend received           2.50        2.50

                                Closing balance (Credit)/Debit   0.01        –

                                Investment in Equity Share Capital           61.49     61.49

Omnesys Technologies Private Limited  Subsidiary's Associate

(upto 11.09.2013)             CTCL Empanelment charges received                     –

                                Closing balance (Credit)/Debit                   –

BFSI Sector Skill Council of India Associate Company

(w.e.f. 21.05.2013)          Closing balance (Credit)/Debit   –             –

                                Investment in Equity Share Capital           1.00        1.00

Computer Age Management Services Private Limited     Subsidiary's Associate

(w.e.f. 07.01.2014)          Reimbursement paid for expenses incurred        –             0.12

                                Reimbursement received for expenses incurred               –             0.04

                                Closing balance (Credit)/Debit   –             (0.08)

Key Management Personnel      Key Management Personnel      Gross remuneration including allowances, non-cash perquisites and contribution to Provident Fund and Superannuation Fund etc.   7.45        4.46

S.N.ANANTHASUBrAMANIAN & CO.

COMPANy  SECrETArIES

10/26, Brindaban, Thane 400 601 Tel 2534 5648 / 2543 2704  Fax 2539 0292  Email sna@snaco.net I Website www.snaco.net

ANNEXUrE 2 TO BOArD'S rEPOrT

To,

The Members,

National Stock Exchange of India Limited CIN: U67120MH1992PLC069769

Exchange Plaza, C-1, Block G, Bandra Kurla Complex, Bandra (E)

Mumbai - 400051

Our Secretarial Audit Report of even date is to be read along with this letter.

Management's responsibility

1.            The Company's Management is responsible for preparation and maintenance of secretarial records and for devising proper systems to ensure compliance with the provisions of applicable laws and regulations.

2.            It is the responsibility of the management of the Company to maintain secretarial records, devise proper systems to ensure compliance with the provisions of all applicable laws and regulations and to ensure that the systems are adequate and operate effectively.

Auditor's responsibility

3.            Our responsibility is to express an opinion on these secretarial records, standards and procedures followed by the Company with respect to secretarial compliances.

4.            We believe that audit evidence and information obtained from the Company's management is adequate and appropriate for us to provide a basis for our opinion.

5.            Where ever required, we have obtained the management's representation about the compliance of laws, rules and regulations and happening of events, etc.

Disclaimer

6.            The Secretarial Audit Report is neither an assurance as to the future viability of the Company nor of the efficacy or effectiveness with which the management has conducted the affairs of the Company.

For S. N. ANANTHASUBRAMANIAN & CO

S. N. Ananthasubramanian Date : 13th May 2015

Place: Thane

S.N.ANANTHASUBrAMANIAN & CO.

COMPANy  SECrETArIES

10/26, Brindaban, Thane 400 601 Tel 2534 5648 / 2543 2704  Fax 2539 0292  Email sna@snaco.net I Website www.snaco.net

Form No. Mr-3

SECrETArIAL AUDIT rEPOrT

FOR THE FINANCIAL YEAR ENDED 31st  March, 2015

[Pursuant to section 204(1) of the Companies Act, 2013 and rule No.9 of the Companies (Appointment and Remuneration Personnel) Rules, 2014]

To,

The Members,

National Stock Exchange of India Limited CIN: U67120MH1992PLC069769

Exchange Plaza, C-1, Block G, Bandra Kurla Complex, Bandra (E),

Mumbai-400051.

We have conducted the secretarial audit of the compliance of applicable statutory provisions and the adherence to good corporate practices by National Stock Exchange of India Limited (hereinafter called the Company). Secretarial Audit was conducted in a manner that provided us a reasonable basis for evaluating the corporate conducts/statutory compliances and expressing our opinion thereon.

Based on our verification of the Company's books, papers, minute books, forms and returns filed and other records maintained by the Company and also the information provided by the Company, its officers, agents and authorised representatives during the conduct of this review, we hereby report that in our opinion, the Company has, during the financial year ended 31st March 2015, complied with the statutory provisions listed hereunder and also that the Company has proper Board processes and compliance mechanism in place to the extent, in the manner and subject to the reporting made hereinafter:

We have examined the books, papers, minute books, forms and returns filed and other records maintained by the Company for the year ended 31st March, 2015 according to the provisions of:

(i)            The Companies Act, 2013 (the Act) and the rules made thereunder; applicable provisions of the Companies Act, 1956;

(ii)           The Securities Contracts (Regulation) Act, 1956 ('SCRA') and the rules made thereunder;

(iii)          The Depositories Act, 1996 and the Regulations and Bye-laws framed thereunder;

(iv)         Foreign Exchange Management Act, 1999 and the rules and regulations made thereunder to the extent of Foreign Direct Investment, Overseas Direct Investment and External Commercial Borrowings; -

(v)          The following Regulations and Guidelines prescribed under the Securities and Exchange Board of India Act, 1992 ('SEBI Act'):

a.            The Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations,

2011- Not applicable as the shares of the Company are not listed with any Stock Exchange;

b.            The Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 1992;

c.             The Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009- Not applicable as the Company has not issued any shares during the financial year under review;

d.            The Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999/Securities And Exchange Board Of India (Share Based Employee Benefits) Regulations, 2014 (effective 28th October 2014)- Not applicable as the shares of the Company are not listed with any Stock Exchange;

e.            The Securities and Exchange Board of India (Issue and Listing of Debt Securities) Regulations, 2008- Not applicable as the Company has not issued any Debt securities which are listed during the financial year under review;

f.             The Securities and Exchange Board of India (Registrars to an Issue and Share Transfer Agents) Regulations, 1993 regarding the Companies Act and dealing with client - Not applicable as the  Company  is  not registered as Registrar to Issue and Share Transfer Agent during the financial year under review;

g.            The Securities and Exchange Board of India (Delisting of Equity Shares) Regulations, 2009 - Not applicable as the shares of the Company are not listed with any Stock Exchange; and

h.            The Securities and Exchange Board of India (Buyback of Securities) Regulations, 1998- Not applicable as the Company has not bought back any of its securities during the financial year under review.

(vi)         The other laws as are applicable specifically to the company are:

1.            Securities Contracts (Regulation) Act, 1956

2.            Securities and Exchange Board of India Act, 1992

3.            Rules, Regulations, Circulars, Orders, Notification and Directives issued under the above statutes to the extent applicable.

4.            Prevention of Money Laundering Act, 2002

We have also examined compliance with the applicable clauses of the following:

i.              Secretarial Standards issued by The Institute of Company Secretaries of India. [Not applicable as not notified during the year under review],

ii.             The Listing Agreements entered into by the Company with the Stock Exchange(s), if applicable; [to the extent applicable as a recognised Stock Exchange pursuant to Securities Contracts (Regulation) (Stock Exchanges and Clearing Corporations) Regulations, 2012]

During the period under review, the Company has complied with the provisions of the Act, Rules, Regulations, Guidelines, Standards, etc. mentioned above.

we further report that:

?             The Board of Directors of the Company is duly constituted with proper balance of Executive Directors, Non Executive Directors and Independent Directors. The changes in the composition of the Board of Directors that took place during the period under review were carried out in compliance with the provisions of the Act.

?             Adequate notice is given to all directors to schedule the Board Meetings (including Committees), agenda and detailed notes on agenda were sent sufficiently in advance, and a system exists for seeking and obtaining further information and clarifications on the agenda items before the meeting and for meaningful participation at the meeting.

?             Majority decision is carried through while the dissenting members' views, if any, are captured and recorded as part of the minutes.

we further report that there are adequate systems and processes in the Company commensurate with the size and operations of the Company to monitor and ensure compliance with applicable laws, rules, regulations and guidelines.

we further report that during the audit period, there are no specific events/actions having a major bearing on the Company's affairs in pursuance of the laws, rules, regulations, guidelines, standards, etc. referred to above.

For S. N. ANANTHASUBRAMANIAN & CO

S. N. Ananthasubramanian FCS No. 4206

C P No. 1774

Date : 13th May 2015

ANNEXUrE 3 TO BOArD'S rEPOrT

Form No. MGT-9

EXTRACT OF ANNUAL RETURN

as on the financial year ended on March31, 2015

[Pursuant to section 92(3) of the Companies Act, 2013 and rule 12(1) of the Companies (Management and Administration) Rules, 2014]

I.             rEGISTrATION AND OTHEr DETAILS:

i               CIN         U67120MH1992PLC69769

ii              Registration Date             November 27, 1992

iii             Name of the Company  National Stock Exchange of India Limited

iv             Category/Sub-category of the Company               Limited by shares / Indian Non-Govt. Co.

v              Address of the Registered office and contact details       Exchange Plaza, Plot C-1, Block 'G' Bandra-Kurla Complex, Bandra (East), Mumbai-400  051

Tel :022-2659 8222 Fax : 022-2659 8198

vi             Whether listed company (Yes/No)           No

vii            Name , Address & Contact details of Registrar  & Transfer Agent, if any  Link Intime India Pvt. Ltd.

C-13, Pannalal Silk Mills Compound

L.B.S. Marg, Bhandup (West), Mumbai-400 078 Tel.: 022-2594 6970 Fax: 022-2594 6969

II.            PrINCIPAL BUSINESS ACTIVITIES OF THE COMPANy

All the business activities contributing 10% or more of the total turnover of the company shall be stated:-

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

1              Recognised stock exchange providing financial market operational services         6611       71%

III.           PArTICULArS OF HOLDING, SUBSIDIAry AND ASSOCIATE COMPANIES

Sl.

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

1              National Securities Clearing Corporation Limited                U67120MH1995PLC092283           Subsidiary Company                100%     2(87) (ii) of the Companies Act, 2013

2              NSE Strategic Investment Corporation Limited   U65999MH2013PLC240078           Subsidiary Company       100%                2(87) (ii) of the Companies Act, 2013

3              India Index Services & Products Limited                U73100MH1998PLC114976           Subsidiary Company       100%                2(87) (ii) of the Companies Act, 2013

4              NSE.IT Limited   U72200MH1999PLC122456           Subsidiary Company       100%     2(87) (ii) of the Companies Act, 2013

Sl.

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

5              DotEx International Limited         U72900MH2000PLC126952           Subsidiary Company       100%     2(87) (ii) of the Companies Act, 2013

6              NSE Infotech Services Limited    U72900MH2006PLC163468           Subsidiary Company       100%     2(87) (ii) of the Companies Act, 2013

7              Computer Age Management Services Pvt. Ltd.  U65910TN1988PTC015757            Associate             44.99%  2(6) of the Companies Act, 2013

8              Market Simplified India Ltd.        U72900TN2000PLC045869             Associate             30%        2(6) of the Companies Act, 2013

9              NSDL e-Governance Infrastructure Ltd. U72900MH1995PLC095642           Associate             25.045%               2(6) of the Companies Act, 2013

10           Power Exchange India Ltd.           U74900MH2008PLC179152           Associate             30.95%  2(6) of the Companies Act, 2013

11           National Securities Depository Limited   U74120MH2012PLC230380           Associate             25.045%               2(6) of the Companies Act, 2013

IV.          SHArEHOLDING PATTErN (Equity Share Capital Break-up as percentage of Total Equity)

(i)            CATEGORY-WISE SHARE HOLDING

Category of Shareholders            No. of Shares held at the beginning of the year No. of Shares held at the end of the year                % Change during  the year

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

A.    Promoter and Promoter Group                                                                                                                                        

(1)  Indian                                                                                                                                           

a)  Individual/HUF            –             –             –             –             –             –             –             –             –

b) Central Govt.                –             –             –             –             –             –             –             –             –

c) State Govt(s)                –             –             –             –             –             –             –             –             –

d) Bodies Corp. –             –             –             –             –             –             –             –             –

e)  Banks/FI        –             –             –             –             –             –             –             –             –

f )  Any other (specify)   –             –             –             –             –             –             –             –             –

Sub-total(A)(1):                –             –             –             –             –             –             –             –             –

(2)  Foreign         –             –             –             –             –             –             –             –             –

a)  Individual (Non- Resident Individuals/Foreign Individuals)      –             –             –             –             –             –             –             –                –

b)  Other - Individuals    –             –             –             –             –             –             –             –             –

c) Bodies Corp.  –             –             –             –             –             –             –             –             –

d) Banks/FI         –             –             –             –             –             –             –             –             –

Category of Shareholders            No. of Shares held at the beginning of the year No. of Shares held at the end of the year                % Change during  the year

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

e) Any other…   –             –             –             –             –             –             –             –             –

Sub-total(A)(2):                –             –             –             –             –             –             –             –             –

Total Shareholding of Promoter (A)= (A)(1)+(A)(2)           –             –             –             –             –             –             –             –             –

B.   PUBLIC SHAREHOLDING                                                                                                                                        

(1)   Institutions                                                                                                                                               

a)  Mutual Funds              –             –             –             –             –             –             –             –             –

b) Banks/FI         1,28,87,302         –             1,28,87,302         28.64     1,26,97,429         –             1,26,97,429         28.22     –

c)  Central Govt –             –             –             –             –             –             –             –             –

d) State Govt(s)                –             –             –             –             –             –             –             –             –

e)  Venture Capital Funds             16,35,246             –             16,35,246             3.63        18,25,119             –             18,25,119             4.05                –

f )  Insurance Companies              82,53,500             –             82,53,500             18.34     82,53,500             –             82,53,500                18.34     –

g) FIIs    64,30,155             –             64,30,155             14.29     64,30,155             –             64,30,155             14.29     –

h)  Foreign Venture Capital Funds            –             –             –             –             –             –             –             –             –

i)   Others (specify) - Foreign Direct Investments               96,75,000             –             96,75,000             21.50     96,75,000             –                96,75,000             21.50     –

Sub-total(B)(1):                3,88,81,203         –             3,88,81,203         86.40     3,88,81,203         –             3,88,81,203         86.40     –

(2)   Non - Institutions                    –                                                             –                                             –

a)   Bodies Corp.               –             –             –             –             –             –             –             –             –

i) Indian                5,647,368             –             5,647,368             12.55     5,647,368             –             5,647,368             12.55     –

ii) Overseas        –             –             –             –             –             –             –             –             –

b) Individuals                                                                                                                                    

i) Individual shareholders holding nominal share capital upto `1 lakh         –             –             –             –             –             –             –                –             –

ii)  Individual shareholders holding nominal share capital in excess of ` 1 lakh        4,71,429               –             4,71,429               1.05                4,71,429               –             4,71,429               1.05        –

c)  Others (specify)                                                                                                                                          –

Sub-total(B)(2):                61,18,797             –             61,18,797             13.60     61,18,797             –             61,18,797             13.60     –

Total Public Shareholding (B)= (B)(1)+(B)(2)         4,50,00,000         –             4,50,00,000         100         4,50,00,000         –                4,50,00,000         100         –

C.   Shares held by Custodian for GDRs & ADRs   –             –             –             –             –             –             –             –             –

Grand Total (A+B+C)      4,50,00,000         –             4,50,00,000         100         4,50,00,000         –             4,50,00,000         100         –

ii)            SHArE HOLDING OF PrOMOTErS

Nil

Sl No      Shareholder’s Name      Share holding at the beginning of the year           Share holding at the end of the year      

                                No. of

Shares  % of total Shares of the

company             %of Shares Pledged /

encumbered to total shares        No. of

Shares  % of total Shares of the

company             %of Shares Pledged /

encumbered to total shares        % change in share holding during the year

–             –             –             –             –             –             –             –             –

iii)           CHANGE IN PrOMOTErS' SHArEHOLDING (PLEASE SPECIFy, IF THErE IS NO CHANGE)

There is no change in Promoters' shareholding during Fy 2014-15

Sl.

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

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

                At the beginning of the year       N.A.       N.A.       N.A.       N.A.

                Date wise increase/decrease in Promoters Shareholding during the year specifying the reasons for increase/decrease

(e.g. allotment/transfer/ bonus/sweat equity etc.)         N.A.       N.A.       N.A.       N.A.

                At the end of the year   N.A.       N.A.       N.A.       N.A.

iv)           Shareholding Pattern of top ten Shareholders (other than Directors, Promoters and Holders of GDrs

& ADrs):

Sl.

No.         Name    Shareholding     Datewise increase/ decrease in shareholding during the year specifying the reasons for increase/ decrease (eg. Allotment/ transfer/ bonus/ sweat equity etc.)                Cumulative Shareholding during the year (01-04-2014 to 31-03-2015)

                                No.of shares at the  beginning (01-04-2014)/

end of the year (31-03-2015)      % of total shares of the

company             Date      Increase/ Decrease in share- holding      Reason No of shares      % of total shares of the

company

1              Life Insurance Corporation of India          4,728,500             10.51     1-Apr-14              0              Nil movement during the year                      

                                4,728,500             10.51     31-Mar-15                                           4,728,500             10.51

2              State Bank of India          4,587,500             10.19     1-Apr-14              0              Nil movement during the year                  

                                4,587,500             10.19     31-Mar-15                                           4,587,500             10.19

Sl.

No.         Name    Shareholding     Datewise increase/ decrease in shareholding during the year specifying the reasons for increase/ decrease (eg. Allotment/ transfer/ bonus/ sweat equity etc.)                Cumulative Shareholding during the year (01-04-2014 to 31-03-2015)

                                No.of shares at the  beginning (01-04-2014)/

end of the year (31-03-2015)      % of total shares of the

company             Date      Increase/ Decrease in share- holding      Reason No of shares      % of total shares of the

company

3              IFCI Limited        2,497,750             5.55        1-Apr-14              0              Nil movement during the year                  

                                2,497,750             5.55        31-Mar-15                                           2,497,750             5.55

4              IDFC Limited       2,396,410             5.33        1-Apr-14                                                             

                                                                6-Dec-14              189,873 Transfer                              

                                2,206,537             4.9          31-Mar-15                                           2,206,537             4.9

5              Stock Holding Corporation of India Limited           2,250,000             5.00        1-Apr-14              0              Nil movement during the year                

                                2,250,000             5.00        31-Mar-15                                           2,250,000             5.00

6              GA Global Investments Limited 2,250,000             5.00        1-Apr-14                                                             

                                                                5-Jun-15               2,250,000             Transfer to its wholly  owned subsidiary                               

                                0              0.00        31-Mar-15                                           0              0.00

7              GS Strategic Investments Limited             2,250,000             5.00        1-Apr-14              0              Nil movement during the year                      

                                2,250,000             5.00        31-Mar-15                                           2,250,000             5.00

8              SAIF II SE

Investments Mauritius Limited  2,250,000             5.00        1-Apr-14              0              Nil movement during the year                  

                                2,250,000             5.00        31-Mar-15                                           2,250,000             5.00

9              Aranda Investments (Mauritius) Pte. Ltd.             2,250,000             5.00        1-Apr-14              0              Nil movement during the year                

                                2,250,000             5.00        31-Mar-15                                           2,250,000             5.00

10           IDBI Bank Limited             2,249,153             4.998     1-Apr-14              0              Nil movement during the year                  

                                2,249,153             4.998     31-Mar-15                                           2,249,153             4.998

11           GAGIL FDI Limited           0              0              1-Apr-15                                                             

                                                                5-Jun-15               2,250,000             Transfer from its holding company                          

                                2,250,000             5.00        31-Mar-15                                           2,250,000             5.00

v)            Shareholding of Directors and Key Managerial Personnel: Nil

Sl.

No.         For Each of the Directors and KMP           Shareholding at the beginning of the year            Cumulative Shareholding during the year

                                No. of

shares   % of total shares of the company             No. of

shares   % of total shares of

the company

                At the beginning of the year       N.A.       N.A.       N.A.       N.A.

                Date wise increase/decrease in Shareholding during the year specifying the reasons for increase/decrease (e.g. allotment/transfer/bonus/ sweat equity etc.)    N.A.       N.A.       N.A.       N.A.

                At the end of the year   N.A.       N.A.       N.A.       N.A.

V.            INDEBTEDNESS

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

                Secured Loans excluding deposits            Unsecured Loans             Deposits              Total Indebtedness

Indebtedness at the beginning of the financial year         N.A.       N.A.       N.A.       N.A.

i)             Principal Amount             N.A.       N.A.       N.A.       N.A.

ii)    Interest due but not paid     N.A.       N.A.       N.A.       N.A.

iii)   Interest accrued but not due              N.A.       N.A.       N.A.       N.A.

Total (i+ii+iii)      N.A.       N.A.       N.A.       N.A.

Change in Indebtedness during the financial year             N.A.       N.A.       N.A.       N.A.

•             Addition               N.A.       N.A.       N.A.       N.A.

•             Reduction           N.A.       N.A.       N.A.       N.A.

Net Change        N.A.       N.A.       N.A.       N.A.

Indebtedness at the end of the financial year     N.A.       N.A.       N.A.       N.A.

i)             Principal Amount             N.A.       N.A.       N.A.       N.A.

ii)    Interest due but not paid     N.A.       N.A.       N.A.       N.A.

iii)   Interest accrued but not due              N.A.       N.A.       N.A.       N.A.

Total (i+ii+iii)      N.A.       N.A.       N.A.       N.A.

VI.          rEMUNErATION OF DIrECTOrS AND KEy MANAGErIAL PErSONNEL

A.            remuneration to Managing Director, whole-time Directors and/or Manager

Sl.

No.         Particulars of Remuneration       Name of MD/WTD/Manager Ms. Chitra Ramkrishna - MD             Total Amount (` In crores)

1              Gross salary                                                       

                (a) Salary as per provisions contained in section 17(1) of the Income Tax, 1961    –             –             –             4.88

                (b) Value of perquisites u/s 17(2) of the Income Tax Act, 1961    –             –             –             1.09

                (c ) Profits in lieu of salary under section 17(3) of the Income Tax Act, 1961           –             –             –             –

2              Stock Option      –             –             –             –

3              Sweat Equity      –             –             –             –

4              Commission       –             –             –            

                - as % of profit   –             –             –             1.48

                - others, specify…            –             –             –             –

5              Others, please specify   –             –             –             –

                Total (A)               –             –             –             7.45

                Ceiling as per the Act      –             –             –             64.74

B.            remuneration to other directors

Sl.

No.         Particulars of Remuneration       Name of Directors                                           Total Amount (`)

1              Independent Directors  Mr. S.B.

Mathur Mr. Y.H.

Malegam             Mr. K.R.S.

Murthy Mr. S.

Sadagopan          Mr. B.N.

Srikrishna           

                (a)  Fee for attending board/ committee meetings           1,840,000             2,000,000             2,220,000             800,000                280,000 7,140,000

                (b) Commission                –             –             –             –             –             –

                (c ) Others, please specify            –             –             –             –             –             –

                Total (1)               1,840,000             2,000,000             2,220,000             800,000 280,000 7,140,000

2              Other Non-Executive Directors  Mr. Abhay Havaldar        LIC (Mr. S.B.

Mainak)               Mr. Prakash Parthasarthy             Mrs. Pratima Umarji       Mr. Ravi Narain

                (a)  Fee for attending board/ committee meetings           560,000 320,000 280,000 2,380,000             1,460,000                5,000,000

                (b) Commission                –             –             –             –             –             –

                (c ) Others, please specify            –             –             –             –             –             –

                Total (2)               560,000 320,000 280,000 2,380,000             1,460,000             5,000,000

                Total (B)=(1+2)  –             –             –             –             –             12,140,000

                Total Managerial Remuneration                –             –             –             –             –             12,140,000

                Overall Ceiling as per the Act      –             –             –             –             –             1,00,000

per director per meeting

C.            rEMUNErATION TO KEy MANAGErIAL PErSONNEL OTHEr THAN MD/MANAGEr/wTD

Sl.

No.         Particulars of Remuneration       Key Managerial Personnel

                                CEO        Company Secretary        CFO        Total Amount

(` in crores)

1              Gross Salary                                                      

                (a)          Salary as per provisions contained in section 17(1) of the Income Tax Act, 1961   Please refer       col. VI A for details as MD is also holding  CEO  position           2.48        1.38        3.82

                (b)   Value of perquisites u/s 17(2) of the Income Tax Act, 1961  Same as above  0.51        0.24        0.75

                (c)           Profits in lieu of salary under section 17(3) of the Income Tax Act, 1961  Same as above  –             –             –

2              Stock Option      Same as above  –             –             –

3              Sweat Equity      Same as above  –             –             –

4              Commission      

Same as above  –             –             –

                - as % of profit                   –             –             –

                - others, specify…                            –             –             –

5              Others, please specify

Withheld Performance Based Variable Pay (where applicable), non-taxable medical, PF/Pension contribution, allowable superannuation contribution, tax on perquisite borne by employer         –             0.57        0.07        0.64

                Total      –             3.56        1.65        5.21

VII.         PENALTIES/PUNISHMENT/COMPOUNDING OF OFFENCES:

Nil

Type      Section of the

Companies Act  Brief Description              Details of Penalty/ Punishment/ Compounding fees imposed     Authority [RD/NCLT/

Court]   Appeal made, if any (give details)

A.            COMPANy

Penalty N.A.       N.A.       N.A.       N.A.       N.A.

Punishment       N.A.       N.A.       N.A.       N.A.       N.A.

Compounding   N.A.       N.A.       N.A.       N.A.       N.A.

B.            DIrECTOrS

Penalty N.A.       N.A.       N.A.       N.A.       N.A.

Punishment       N.A.       N.A.       N.A.       N.A.       N.A.

Compounding   N.A.       N.A.       N.A.       N.A.       N.A.

C.            OTHEr OFFICErS IN DEFAULT

Penalty N.A.       N.A.       N.A.       N.A.       N.A.

Punishment       N.A.       N.A.       N.A.       N.A.       N.A.

Compounding   N.A.       N.A.       N.A.       N.A.       N.A.

For and on behalf of the Board of Directors

Date: 26.05.2015               S.B. Mathur

Place: Mumbai  Chairman

ANNEXUrE 4 TO BOArD'S rEPOrT

rELEVANT EXTrACTS FrOM NOMINATION AND rEMUNErATION POLICIES OF NSEIL

(a)          Criteria for determining qualifications, positive attributes and independence of a director:

•             Satisfaction of the ‘fit & proper criteria’ stipulated under SCR (SECC) Regulations 2012 and other requirements as prescribed by SEBI from time to time.

•             Assessment of the appointee against a range of criteria which includes, but not be limited to, qualifications, skills, diverse industry experience, background and other qualities relevant to the business of the Company and required to operate successfully in the position. Additionally the Board may consider appointment of experts from various specialised fields such as finance, law, information technology, corporate strategy, marketing and business development, international business, operations management so as to bring diversified skill sets on board or succeed any outgoing director with the same expertise

•             The extent to which the appointee is likely to contribute to the overall effectiveness of the Board, work constructively with the existing directors and enhance the efficiencies of the Company

•             The nature of existing positions held by the appointee including directorships or other relationships and the impact they may have on the appointee’s ability to exercise independent judgment

•             Ability of the appointee to represent the company

•             Ability to work individually as well as a member of the Board and with the senior management

•             Influential communicator with power to convince other in a positive way

•             Ability to participate actively in deliberation and group processes

•             Strategic thinking and facilitation skills

•             Act impartially keeping in mind the interest of the company on priority basis

•             Criteria for determining independence

(b)          Policy on directors' remuneration:

•             The remuneration / compensation / commission, etc. to be paid to Directors is determined by the Nomination & Remuneration Committee and recommended to the Board for approval.

•             The remuneration / compensation / commission etc. shall be subject to the approval of the shareholders of the Company, the Central Government and SEBI, wherever required. It shall be as per the statutory provisions of the Companies Act, 2013 read with the rules made thereunder for the time being in force. The requirements prescribed by SEBI from time to time in this regard shall be followed while determining the compensation payable to Directors

----

ANNEXUrE 5 TO NSE BOArD'S rEPOrT

ANNUAL REPORT ON CSR ACTIVITIES TO BE INCLUDED IN THE BOARD'S REPORT

NSE is covered under the purview of Section 135 of the Companies Act 2013. Similarly many of its subsidiaries are also covered. However, contribution to CSR by some of these Companies as required under the Section 135 will be negligible. Moreover, there could be efforts duplication if each individual Company undertakes CSR activities on its own and there would be difficulties in scaling up these activities. Therefore it has been decided by the Boards of the respective Companies in NSE Group that CSR efforts for the Group be undertaken commonly and the actual spend be allocated to the respective Companies in proportion to their legal obligations. Therefore a common CSR function for NSE and its subsidiaries has been created under NSE as a group resource and the actual CSR spend is proportionately allocated to the respective Companies. However the CSR Committees for these Companies are separate. A common CSR policy has been prepared and approved by respective CSR Committees and Boards.

1.            A brief outline of the Company's CSR policy, including overview of projects or programs proposed to be undertaken and a reference to the web-link to the CSR policy and projects or programs.

CSR Vision: NSE Group has been constantly working to improve the financial well being of people at large through a committed approach to offer  investment products that suits varied needs  of people. It has improved access of the financial market to people across the country, improved safety measures for investors, empowered investors through improved awareness and education on financial planning, investor protection and investment related issues. Besides this, NSE Group also has been continuously improvising on the conduct of business in a responsible manner through conservation of energy, use of renewable sources of energy, eco- friendly infrastructure etc., In order to strengthen its CSR initiatives, in 2012, a CSR Focus Group was formed consisting of employees volunteering to contribute part of their time to undertake CSR activities internally. The group has since organised various activities such as organising environment awareness building programs, exposure visits on environmental issues etc. with the help of NGO partners like BNHS, organising blood donation camps, promoting social entrepreneurship by facilitating sale of articles produced by different NGOs etc.. Besides, different eco-friendly activities like Wind Power generation, Rain Water Harvesting, Use of Solar Energy, Solid Waste Management through promoting Vermicomposting out of the waste from NSE Group Companies’s premises etc., have also been undertaken.

NSE Group, in order to further its CSR aspiration of helping the underprivileged sections of the population in improving their quality of life is now embarking upon undertaking to reach out to them. An MOU has been entered into with Tata Institute of Social Sciences (TISS) to guide NSE with the CSR Policy-making, Gap analysis, CSR plan and community engagement strategy, Project and Partner evaluation and screening, implementation monitoring, measurement of results etc., TISS is guiding NSE on its CSR efforts.

CSR Objectives and Goals: To begin with NSE Group has taken up, i) Primary Education and ii) Elder Care, iii) Sanitation and Safe Drinking Water as the focus areas. The CSR objectives have been identified based on the larger mandate of the Companies Act 2013 and CSR Rules 2014 and to meet NSE’s community engagement aspirations. Projects undertaken under these verticals will not be one-time activities but will only be on a project or program mode with a timeline to achieve pre-determined goals. In the initial phase efforts are concentrated in on Primary Education and Elder Care. On the basis of the experiences gained in the first year, other areas will be included throughout the period. Besides the same small scale CSR activities such as Blood Donation Camps, NGO-Melas related to social entrepreneurship, education, health awareness, environmental

awareness, organising awareness building programs, screening documentaries on environmental & social issues, organising guest lectures on social issues, nature awareness walk, observing of National / International Days such as Children’s Day, Women’s Day etc. are undertaken by the CSR Focus Group of NSE Group.

The core areas of focus, objective and goals are elaborated in the sections below vertical-wise.

Primary Education: While selecting projects under primary education, NSE Group has emphasized intervention in capacity building & training of highly motivated, equipped and qualified teachers that will augment teacher- student ratio and directly impact the quality and quantity of attention that is currently provided per student. Besides this, to enhance foundational skills at the primary education level in the areas of reading, writing, critical thinking, arithmetic and problem-solving, application skills and behavioural skills. The projects which have commenced implementation will contribute to the holistic development of the children which includes addressing their physical, mental and aspirational needs through supplementary and in-school programs.

Elder Care: Project considered under elder care is focusing enhancing the physical and mental well-being of underprivileged ageing population by improving access to cost effective healthcare services.

Sanitation and Safe Drinking Water: NSE Group has taken ‘sanitation and safe drinking water’ as one of the focus areas under the CSR policy of NSE group. Proposals from NGOs specialising in this area have been invited and the proposals reviews are being executed. Under this NSE Group will support sanitation projects in the schools, communities, awareness building on sanitation and safe drinking water, solid waste management, WASH (Water, Sanitation and hygiene) etc.

Prime Minister’s National Relief Fund: India being a vast country susceptible to the vagaries of nature. From time to time various geographical areas are affected by natural calamities such as floods, storm, earthquake, etc. unfortunate calamities such as storm in Andhra, floods in Kashmir and last year’s calamities such as storm in Orissa, flash flood in Uttaranchal are some of such calamities witnessed by India. Relief is granted, by the State Govt. & Central Govt., NGOs etc. and also through Prime Minister’s National Relief Fund among other NGOs, through Prime Minister’s National Relief Fund. NSE Group has taken contribution to the ‘’Prime Minister’s National Relief Fund’ as one of the focus area in such circumstances if and when need arises.

CSR Activities under NSE CSR Focus Group: CSR focus group consisting of employee volunteers conducts/ coordinatesvarioussocialactivitiessuchasBloodDonationCamps,NGO-Melasrelatedtosocialentrepreneurship, education, health awareness, environmental awareness, organising awareness building programs, screening documentaries on environmental & social issues, organising guest lectures on social issues, nature awareness walk, observing of National / International Days such as Children’s Day, Women’s Day etc. The CSR Focus Group will continue to engage in such activities.

Monitoring and evaluation of CSR initiatives: Appropriate monitoring mechanisms being evolved for tracking the progress and impact of the various CSR programmes in consultation with TISS.

Web-link for NSE Group CSR Policy: http://nseindia.com/global/content/about_us/NSE_CSR_Policy.pdf

2.            The Composition of the CSR Committee of National Stock Exchange of India Ltd (NSEIL): The CSR Committee consists of Mr. Ravi Narain, Mrs. Pratima M. Umarji, Mr. Prakash Parthasarathy, Dr. KRS Murthy and Ms. Chitra Ramkrishna. Mr. Ravi Narain is the Chairman of the NSEIL CSR Committee.

3.            Average net profit of NSEIL for last three financial years: The average net profit of NSEIL calculated pursuant to Section 135 read with Section 198 for last three Financial Years is ` 1093,95,47,210.50

4.            Prescribed CSR Expenditure (2% of the amount as in item 3 above): The prescribed CSR expenditure budget at 2% of the amount as in item no. 3 above is ` 20,94,87,295.84

5.            (a)          Total amount to be spent for the financial year: ` 20,94,87,295.84

                                (i)            Total amount already committed: ` 5,74,69,700.95

                                (ii)           Total amount already disbursed/spent: ` 63,31,015.49

                                (iii)  Committed with NGOs yet to be disbursed: ` 5,22,91,240.60

                (b)          Amount unspent, if any: 20,31,56,280.35, out of which

` 5,22, 91,240.60 has been already committed.

                (c)           Manner in which the amount spent during the financial year is detailed below.

1              2              3              4              5              6              7              8

Sr.

No.         CSR Project or activity identified               Sector in which  the project is covered   Projects or programs (1) Local area or other

(2) Specify the state and district where projects or programs was undertaken    Amount outlay (budget) (Committed Budget)                Amount spent on the projects or programs sub- heads (1) Direct expenditure on projects or programs (2) Overheads          Cumulative expenditure up to the reporting period         Amount spent Direct or through implementing agency

                                                                Outlay for the Group      Outlay for the Company               Spent by the Group        Spent by the Company     Spent by the Group        Spent by the Company  Spent by the Group        Spent by the Company

1             

Primary Education          

Primary Education           Pune City, District- Pune, State-

Maharashtra     

11,44,100.00      

8,55,573.78        

4,29,039.00        

3,20,841.29        

4,29,039.00        

3,20,841.29        

4,29,039.00        

3,20,841.29

2             

Primary Education          

Primary Education           Haveli- Mulashi Tehasil,

District- Pune State- Maharashtra           

42,07,000.00      

31,46,052.71      

14,00,000.00      

10,46,939.34      

14,00,000.00      

10,46,939.34      

14,00,000.00      

10,46,939.34

3             

Primary Education          

Primary Education          

District- Buldhana State- Maharashtra   

36,26,700.00      

27,12,096.36      

11,66,625.00      

8,72,418.29        

11,66,625.00      

8,72,418.29        

11,66,625.00      

8,72,418.29

4             

Primary Education          

Primary Education           Ulhasanagar City District- Thane State- Maharashtra       

54,82,400.00      

40,99,814.45      

8,93,750.00        

6,68,358.60        

8,93,750.00        

6,68,358.60        

8,93,750.00        

6,68,358.60

5              Primary Education           Primary Education           Mankhurd, Mumbai State- Maharashtra              

37,35,690.00      

27,93,600.58      

10,20,285.00      

7,62,983.22        

10,20,285.00      

7,62,983.22        

10,20,285.00      

7,62,983.22

6             

Elder Care          

Elder Care           Mumbai and Chennai

State- Maharashtra and Tamilnadu         

1,65,89,430.00  

1,24,05,804.91  

20,15,100.00      

15,06,919.62      

20,15,100.00      

15,06,919.62      

20,15,100.00      

15,06,919.62

7              Primary Education           Primary Education           Thane and Pune State- Maharashtra      

2,10,32,480.00  

1,57,28,379.07  

0.00       

0.00       

0.00       

0.00       

0.00       

0.00

8             

Primary Education          

Primary Education           Medha Dist- Satara

State- Maharashtra        

2,10,32,480.00  

1,57,28,379.07  

0.00       

0.00       

0.00       

0.00       

0.00       

0.00

7              CSR Focus Group              Various Activities*           Mumbai, Maharashtra  

NA         

NA         

60,508.75            

45,249.28            

60,508.75            

45,249.28            

60,508.75            

45,249.28

8              Capacity Building              Capacity Building              Mumbai, Maharashtra  

NA         

NA         

14,80,724.00      

11,07,305.86      

14,80,724.00      

11,07,305.86      

14,80,724.00      

11,07,305.86

                                                Total      7,68,50,280.00   5,74,69,700.94   84,66,031.75       63,31,015.50       84,66,031.75       63,31,015.50                84,66,031.75       63,31,015.50

*             Activities undertaken by NSE Group CSR Focus Group covers Blood Donation Camp, NGO Melas for Children’s Day, Environment Awareness, Swachha Bharat Drive.

Details of implementing agency:

Door Step School: It is working in the area of Quality Education in Primary Education. Door Step has impacted lives of over 300000 children since inception.

Vikas Sahayog Pratishtan: Vikas Sahayog Pratishtan has been working with marginalized communities such as VJNT tribes, poor farmers, women etc., addressing various issues like human rights, livelihood, education etc.

Magic Bus India Foundation: Magic Bus is mentoring organisation, working to take a million children living in poverty on a journey from childhood to livelihood. It trains and guide local, community mentors to deliver a programme that focuses on education, health and gender equity. The mentors do this by using a curriculum that uses sports as a tool for engagement and as a metaphor for learning.

Tata Institute of Social Sciences: Tata Institute of Social Sciences is the pioneer & premier institute of social work. It is an autonomous university.

Dignity Foundation: Dignity Foundation is working on the issue of the elder care. Dignity Foundation has a physical presence in 6 cities through offices and activity centres - Mumbai, Pune, Bangalore, Kolkata, Chennai and Ahmedabad.

All India Institute of Local Self Governance(AIILSG): AIILSG is working on various issues like Primary Education, Disaster Management, Health, Livelihood, Women Empowerment,  Research  and  Documentation  etc.  across India.

6.            The reasons for not spending the amount: This being the first year after introduction of Section 135 of Companies Act 2013, the NSE Group is in the process of preparing the CSR Policy, identifying projects, capacity building for project identification, implementation etc. Capacity augmentation is a key for project identification and monitoring implementation and the Company is in the process of building the same. Moreover, identifying new projects alongside the monitoring of implementation of projects is a time consuming and knowledge oriented activity. Selecting good and result oriented project requires time, knowledge, skill and availability. Accordingly though allocated, the actual spend is expected to gather steam only over a period of 2-3 years after which the Company will be in position to achieve the budgeted spend within the respective year itself. However the Company remains committed to meet its CSR obligations on annual basis.

7.            The implementation and monitoring of CSR Policy, is in compliance with CSR objectives and Policy of the company.

Chitra Ramkrishna           Ravi Narain

Managing Director & CEO             Chairman

CSR Committee

ANNEXUrE 6 TO BOArD'S rEPOrT rEPOrT ON COrPOrATE GOVErNANCE

Corporate Governance is the application of best management practices, compliance of law and commitment to values and ethical business conduct to achieve the Company’s objective of enhancing shareholder value and effective discharge of its social responsibility. National Stock Exchange of India Limited (“NSEIL” or “NSE” or “the Exchange”) is a public limited company, incorporated under the Companies Act, 1956 whose securities are not listed on any of the stock exchanges. NSEIL is also a recognised stock exchange under Securities Contracts (Regulation) Act, 1956. Therefore, NSEIL is additionally required to comply with Securities Contracts (Regulation) Act, 1956, the Rules and Regulations laid down thereunder and the directives and circulars issued by Securities and Exchange Board of India (SEBI) from time to time for the purpose of its governance. As per Regulation 35 of the Securities Contracts (Regulation) (Stock Exchanges and Clearing Corporations) Regulations, 2012, the disclosure requirements and corporate governance norms as specified for listed company has become mutatis mutandis applicable to a recognised Stock Exchange. However, NSEIL has always been involved in good governance practices and endeavours continuously to improve upon the same. In continuation of its pursuit to establish good corporate governance practice and for the information of its stakeholders, NSEIL is furnishing this Report for the financial year ended on 31st March, 2015.

I.             Board of Directors

A.            Composition of the Board

The Board consists of 11 Directors of which 4 Directors represent Shareholders, 6 are Public Interest Directors, who are chosen from among eminent persons or experts in the field of Law, Finance, Accounting, Taxation, Information Technology, Economics, Commerce, management, etc. and 1 Executive Director. None of the Directors of the Company are inter-se related with each other.

With the approval of SEBI, the Company has appointed Mr. S.B. Mathur, a Non-Executive Director as well as a Public Interest Director as Chairman of the Board of Directors.

Number of Board Meetings

The Board of Directors met four times during the year on May 6, 2014, July 11, 2014, November 3, 2014 and February 4, 2015. The maximum gap between any two meetings was less than one hundred and twenty days.

Directors' Attendance record and Directorships held

As mandated by the Clause 49, Directors are neither members of more than ten Board level Committees nor are they Chairman of more than five such Committees in which they are members. Table 1 gives the details of the composition of the Board, attendance and details of Committee Membership and Committee Chairmanships.

(1)          Details of Directors along with the Directorship(s) and Chairmanship(s)/Membership(s) of Committees in other companies for the year 2014-15:

Name of the Director     Category              Attendance Particulars  No. of Directorships / Chairmanships and Committee Chairmanships / Memberships

                                Number of Board Meetings        Last AGM            Other Directorship(s)/ Chairmanship(s)*              Other Committee Membership(s)**   Other Committee Chairmanship(s)

**

                                Held       Attended                                                           

Mr. S. B. Mathur, Chairman         Public Interest Director 4              4              Y              9              5              2

Mr. Ravi Narain, Vice Chairman  Shareholder Director      4              4              Y              9              7              1

Ms. Chitra Ramkrishna, Managing   Director

& CEO   Executive Director           4              4              Y              7              2              2

Mr. Y.H. Malegam            Public Interest Director 4              4              Y              4              2              2

Mr. Abhay Havaldar        Shareholder Director      4              4              N             0              0              -*

Mr. S.B. Mainak                Shareholder Director      4              3              N             6              0              1

Dr. K. R. S. Murthy           Public Interest Director 4              4              N             2              2              -

Mr.Prakash Parthasarathy           Shareholder Director      4              3              N             1              -*            -*

Mrs. Pratima Umarji       Public Interest Director 4              4              N             -*            -*            -*

Dr. S.Sadagopan               Public Interest Director 4              3              N             1              1              -*

Mr. Justice

B.N. Srikrishna (Retd.)   Public Interest Director 4              1              N             1              -*            -*

Y= Yes; N=No

*             The Directorships/ Committee memberships held by Directors as mentioned above, do not include Directorships/ Committee memberships of Foreign Companies, Section 8 Companies and Private Companies.

**           Memberships/Chairmanships of only the Audit Committee and Stakeholders Relationship Committee of all Public Companies have been considered.

(2)          Separation of Offices of Chairman & Chief Executive Officer

Since inception, the Company has been following the principle of separation of the role of Chairman and the Chief Executive Officer. Mr. S. B. Mathur is the Non-Executive Chairman of the Board. Ms. Chitra Ramkrishna is the Managing Director & Chief Executive Officer of the Company and is entrusted with the day to day management of the affairs of the Company. The Managing Director carries out her functions subject to superintendence, control and management of the Board of Directors of the Company.

B.            responsibilities of the Board

The Company conducts an orientation programme for new Directors covering various operations of the Exchange so as to familiarise themselves with the various functions being carried out by the Exchange. The Company also provides training in various fields such as operation, risk management, compliance, etc. to every Public Interest Director each year. Every director inducted on the Board is well known in the financial services industry and has the ability to understand basic financial statements and information and related documents/papers.

The regular updates inter-alia provided by the Company to the Board include the following:

•             Annual operating plans and capital and revenue budgets and updates

•             Quarterly financial results.

•             Status report on the Exchange operations and operations of different segments.

•             Minutes of the meetings of Audit Committee and other committees of the Board including minutes of the meetings of the Board of all subsidiaries company.

•             Details of joint ventures, acquisitions of companies or collaboration agreements, etc.

•             Details of foreign exchange exposures and the steps taken to limit the risk of adverse exchange rate movements.

•             Details of significant transactions and arrangements entered into by material unlisted subsidiary.

•             Review of market surveillance.

•             Other information, which is required to be placed before the Board as per clause 49 of the Listing Agreement, is taken to the Board as and when the event occurs.

A quarterly report on compliance of various laws, rules and regulations, to which the Company is subjected, is placed before the Audit Committee for its review. The Audit Committee from time to time reviews the report and gives suggestions for improvement of compliance level/process. On its review, a consolidated report on a quarterly basis is placed before the Board at its subsequent meetings.

C.            Code of Conduct

A code of conduct for Public Interest Directors and Key Management Personnel of the Company is framed. They have affirmed compliance with the Code of Conduct. As per the requirement of Clause 49, the code of conduct, has been hosted on the website of the Company. The MD & CEO has affirmed to the Board of Directors that the Code of Conduct has been complied by the Directors and Senior Management Personnel.

D.            Independent Directors

(1)          Independent Directors on the Board of NSE are not less than 21 years in age and do not hold any shares in NSE.

(2)          Attributes

The Company as a policy inducts only those persons as Independent Directors who have integrity, experience and expertise, foresight, managerial qualities and ability to read and understand financial statements.

(2)          Tenure

The tenure of Independent Directors is in line with the directives issued by SEBI from time to time.

(3)          Freedom to Independent Directors

The Company takes all possible efforts to enable the Independent Directors to perform their functions effectively. However, as per SEBI requirement, the elected directors shall not interfere in the day- to- day management of the Exchange particularly relating to the surveillance and risk management functions of the Exchange. The Company always strives to strike a balance between both the above requirements without compromising on compliance of such requirements.

E.            remuneration of Directors

In order to align compensation levels with market levels and at the same time attract, retain and motivate Directors of the quality required to run the company successfully, the compensation being paid to Managing Director is periodically reviewed and revised. The composition of remuneration includes both fixed and variable components.

SEBI had laid down certain norms in terms of the compensation policy for the Key Management Personnel which are as under:-

A.            The variable pay component will not exceed one third of the total pay.

B.            50 % of the variable pay will be paid on a deferred basis after 3 years.

C.            ESOPs and other equity linked instruments will not form part of the Compensation.

Accordingly, the Company has framed Remuneration policy in conformity with norms specified by SEBI for its employees, which include Key Management Personnel and Managing Director.

None of the Directors of the Company hold any shares or any convertible instruments in the Company.

A sitting fee is being paid to non-executive Directors for attending the meetings of the Board or the Committees constituted by it.

The details of remuneration paid to Managing Director & CEO during FY 2014-15 are given in the following table:-

(` in crores)

Name & Designation      Salary & Allowances        Variable Pay       Perquisites in cash or in kind       Contribution to PF and other Funds       Total

Ms. Chitra Ramkrishna, Managing Director & CEO             3.78        1.10*     0.82        0.65        6.35

* Excludes 50% of the Variable Pay to be paid on deferred basis after 3 years

The sitting fees paid to the Non-Executive Directors for attending the meetings of the Board and Committees during the year is as follows:

Name    Board meetings                Board Committees’ meetings     Total

                No. of meetings attended           Amount (`)          No. of meetings attended           Amount (`)         

Mr. S. B. Mathur, Chairman         4              3,20,000               38           15,20,000             18,40,000

Mr. Ravi Narain, Vice Chairman 

4             

3,20,000              

29          

11,40,000            

14,60,000

Mr. Y.H. Malegam            4              3,20,000               42           16,80,000             20,00,000

Mr. Abhay Havaldar        4              3,20,000               6              2,40,000               5,60,000

LIC (Mr. S.B. Mainak)      3              2,40,000               2              80,000   3,20,000

Dr. K. R. S. Murthy           4              3,20,000               48           19,00,000             22,20,000

Mr. Prakash Parthasarathy          3              2,40,000               1              40,000   2,80,000

Mrs. Pratima Umarji       4              3,20,000               52           20,60,000             23,80,000

Dr. S.Sadagopan               3              2,40,000               14           5,60,000               8,00,000

Mr. Justice

B.N. Srikrishna (Retd.)  

1             

80,000  

5             

2,00,000              

2,80,000

II.            Committees of the Board

1)            Audit Committee

The primary function of the Audit Committee is to assist the Board of Directors in fulfilling its oversight responsibilities by reviewing the financial information to be provided to the shareholders and others, the systems of internal controls, which the management and the Board of Directors have established, financial reporting and the compliance process. The Committee maintains open communication with statutory auditors and internal auditors.

The Audit Committee reviews the reports of the internal auditors and operational auditors. The role of Audit Committee of NSEIL, inter-alia, covers the following:

(a)          Oversight of the company’s financial reporting process and the disclosure of its financial information to ensure that the financial statement is correct, sufficient and credible;

(b)          Recommendation for appointment, remuneration and terms of appointment of auditors of the company;

(c)           Approval of payment to statutory auditors for any other services rendered by the statutory auditors;

(d)          Reviewing,  with  the  management,  the  annual  financial  statements  and  auditor's  report  thereon  before submission to the board for approval, with particular reference to:

i.              Matters required to be included in the Director’s Responsibility Statement to be included in the Board’s report in terms of clause (c) of sub-section 3 of section 134 of the Companies Act, 2013

ii.             Changes, if any, in accounting policies and practices and reasons for the same

iii.            Major accounting entries involving estimates based on the exercise of judgment by management

iv.           Significant adjustments, if any, made in the financial statements arising out of audit findings

v.            Compliance with listing and other legal requirements relating to financial statements

vi.           Disclosure of any related party transactions

vii.          Qualifications, if any, in the draft audit report

(e)          Reviewing, with the management, the quarterly financial statements before submission to the board for approval;

(f)           Review and monitor the auditor’s independence and performance, and effectiveness of audit process;

(g)          Approval or any subsequent modification of transactions of the company with related parties;

(h)          Scrutiny of inter-corporate loans and investments,if any;

(i)            Valuation of undertakings or assets of the company, wherever it is necessary;

(j)           Evaluation of internal financial controls and risk management systems;

(k)          Reviewing, with the management, performance of statutory and internal auditors, adequacy of the internal control systems;

(l)            Reviewing the adequacy of internal audit function, if any, including the structure of the internal audit department, staffing and seniority of the official heading the department, reporting structure coverage and frequency of internal audit;

(m)         Discussion with internal auditors of any significant findings and follow up there on;

(n)          Reviewing the findings of any internal investigations by the internal auditors into matters where there is suspected fraud or irregularity or a failure of internal control systems of a material nature and reporting the matter to the board;

(o)          Discussion with statutory auditors before the audit commences, about the nature and scope of audit as well as post-audit discussion to ascertain any area of concern;

(p)          To look into the reasons for substantial defaults, if any, in the payment to the depositors, debenture holders, shareholders (in case of non-payment of declared dividends) and creditors;

(q)          To review the functioning of the Whistle Blower mechanism;

(r)           The Audit Committee shall mandatorily review the following information:

a.            Management discussion and analysis of financial condition and results of operations;

b.            Statement of significant related party transactions (as defined by the Audit Committee), submitted by management;

c.             Management letters / letters of internal control weaknesses issued by the statutory auditors;

d.            Internal audit reports relating to internal control weaknesses; and

e.            The appointment, removal and terms of remuneration of the Chief internal auditor shall be subject to review by the Audit Committee.

(s)           Carrying out any other function as is mentioned in the terms of reference of the Audit Committee under clause 49 of the listing agreement and section 177 of the Companies Act, 2013.

The Audit Committee comprises three Directors viz., Mr. Y. H. Malegam, Mr. Ravi Narain and Dr. S. Sadagopan as its members. Mr. Y.H.Malegam is the Chairman of the Audit Committee. The Committee met four times during the year i.e., on May 6, 2014, July 11, 2014, November 3, 2014 and January 29, 2015. The details of the attendance of members of the Audit Committee at their meetings held on the above dates are given hereunder:-

Name    Number of meetings held during the year            Number of meetings attended

Mr. Y. H. Malegam           4              4

Mr. Ravi Narain 4              4

Dr. S. Sadagopan              4              3

The Officer responsible for the finance function, the representative of the statutory auditors, internal auditors and operational auditors are regularly invited to the Audit Committee meetings. The Company Secretary is the Secretary to the Committee.

All members of the Audit Committee have requisite accounting and financial management expertise. The Chairman of the Audit Committee attended the Annual General Meeting (AGM) held on August 8, 2014 to answer shareholders queries.

2)            Nomination & Remuneration Committee (NRC)

The NRC laid down the policy for compensation of employees including key Management Personnel in terms of the compensation norms prescribed by the SEBI. As per SEBI Regulations, the Compensation Committee shall consist of majority of Public Interest Directors and shall be chaired by a Public Interest Director. Further as per requirements of the Companies Act, 2013, the Company is required to constitute a Nomination and Remuneration Committee (NRC) consisting of three or more non executive directors out of which not less than one-half shall be independent directors. The Chairman of NRC shall be different from Chairman of the Board. Accordingly, the Board constituted Nomination & Remuneration Committee of NSEIL. At present, NRC comprises Mr. Y.H.Malegam, Mr. S.B. Mathur, Dr. K R S Murthy, Mrs. Pratima Umarji and Mr. Ravi Narain as its members with Mr. Y.H.Malegam as its Chairman for the purpose of discharging its functions required under both Companies Act, 2013 and under SEBI requirements.

The Committee met two times during the year, i.e. on May 6, 2014 and January 29, 2015. The details of the attendance of members of the NRC at their meetings held on above dates are given hereunder:-

Name    Number of meetings held during the year            Number of meetings attended

Mr. Y.H. Malegam            2              2

Mr. S.B. Mathur                2              2

Mr. Ravi Narain 2              2

Dr. K.R.S. Murthy             2              2

Mrs. Pratima Umarji       2              2

3)            Stakeholders Relations Committee

The Committee besides discharging the function of approving share transfers and deciding on any matter incidental to or connected with the transfer, also discharges the function of redressal of shareholder grievances like transfer of

shares, non-receipt of Annual report, non-receipt of declared dividends, etc.

The Committee comprises  Mr.  Y.  H.  Malegam,  Mr.  S.  B.  Mathur,  Mr.  Ravi  Narain  and  Ms.  Chitra  Ramkrishna. Mr. Y.H. Malegam is the Chairman of the Committee. The Committee meets as and  when  the  need  arises  to discharge its functions.

The Committee met four times during the year, i.e. on May 6, 2014, November 3, 2014, January 29, 2015 and March 17, 2015. The details of the attendance of members of the NRC at their meetings held on above dates are given hereunder:-

Name    Number of meetings held during the year            Number of meetings attended

Mr. Y.H. Malegam            4              4

Mr. S.B. Mathur                4              4

Mr. Ravi Narain 4              4

Ms. Chitra Ramkrishna   4              4

4)            Risk Assessment and Review Committee

The Committee carries out the identification and assessment of existing risk and also recommend risk minimisation procedures & reporting system thereof on an ongoing basis. The Committee comprises three Directors viz., Mr. Y. H. Malegam, Mr. Ravi Narain and Dr. S. Sadagopan as its members. Mr. Y.H.Malegam is the Chairman of the Risk Assessment and Review Committee. The Committee met once during the year i.e, on January 29, 2015 and all the members attended the meeting.

5.            Corporate Social Responsibility (CSR) Committee

Pursuant to the provisions of the Companies Act, 2013, the Board of NSEIL has constituted a Corporate Social Responsibility (CSR) Committee consisting of Mr. Ravi Narain, Dr. K R S Murthy, Mr. Prakash Parthasarathy, Mrs. Pratima Umarji and Ms. Chitra Ramkrishna with Mr. Ravi Narain as the Chairman to formulate and recommend to the Board, a Corporate Social Responsibility Policy, to recommend the amount of expenditure to be incurred on the activities, and to monitor the Corporate Social Responsibility Policy of the company from time to time.

5)            In addition to Committees covered specifically in detail, the Company also has following Committees, namely:

(i)            SEBI mandated Committees

1.            Membership Selection Committee

2.            Disciplinary Action Committee

3.            Defaulters Committee

4.            Standing Committee on Technology

5.            Sub-committee for monitoring compliance of suggestions given in SEBI Inspection Reports

6.            Investor Services Committee

7.            Public Interest Directors Committee

8.            Arbitration Committee

9.            Ethics Committee

10.          Independent Oversight Committees of the Governing Board for Member regulation, Listing Functions, Trading & Surveillance Functions

11.          Advisory Committee

12.          Committee to decide on Compulsory Delisting

(ii)           Other Functional Committees

1.            Committee for Declaration of Defaults

2.            Technology Budget Committee

3.            Committee for Approval of Acquisition of Premises

4.            Business Development Committee

5.            Pricing Committee

6.            Premises Advisory Committee

7.            Membership Recommendation Committee

8.            Sub-broker Recognition Committee

9.            Trade Annulment Committee

III.           Subsidiary Companies

Clause 49 defines a “material non-listed Indian subsidiary” as an unlisted subsidiary, incorporated in India, whose turnover or net worth (i.e. paid up capital and free reserves) exceeds 20% of the consolidated turnover or net worth respectively, of the listed holding Company and its subsidiaries in the immediately preceding accounting year.

NSEIL has one ‘material non-listed Indian subsidiary' i.e National Securities Clearing Corporation Limited (NSCCL). A statement of all significant transactions and arrangements entered into by NSCCL is periodically brought to the attention of the Board of Directors of NSEIL. The minutes of the meetings of the Board of Directors of all the subsidiary companies of NSEIL are also periodically brought to the meeting of the Board of Directors of NSEIL for its noting.

IV.          Auditors

The Audit Committee considers the profile of the audit firms, qualifications and experience of partners auditing books and accounts of the Company, strengths and weaknesses, if any, of the audit firm and other related aspects and then recommends appointment of Auditor and the remuneration payable to them to the Board/shareholders. The Audit Committee also periodically discusses with the Auditor the annual audit programme and the depth and detailing of the audit plan to be undertaken by him.

The Board has appointed an external firm of Chartered Accountants as its internal auditor in order to ensure the independence and credibility of the internal audit process.

V.            Secretarial Audit

The Company has engaged the services of M/s. S.N. Ananthasubramanian & Co., Practicing Company Secretaries, to conduct Secretarial Audit pursuant to the requirements of the Companies Act, 2013 and the rules laid down thereunder for the financial year ended 31st  March, 2015. The report of the Secretarial Auditors is being placed

before the Audit Committee and the Board . The Annual Report containing the Secretarial Audit Report is also circulated to the Shareholders of NSEIL.

VI.          Disclosures

(1)          Basis of related party transactions

The transactions entered with Related parties are entered in the ordinary course of business and at arm’s length price. The details of the related party transactions are disclosed in the Annual Report.

(2)          Disclosure of Accounting Treatment in the preparation of Financial Statements.

NSEIL follows the guidelines of Accounting Standards laid down by the Central Government under the provisions of Section 133 of the Companies Act, 2013 in the preparation of its financial statements.

VII.         Management Discussion and Analysis

The Annual Report has a detailed report on Management Discussion and Analysis.

VIII.        CEO/ CFO certification

The CEO and CFO certification of the financial statements for the financial year 2014-15 is enclosed at the end of the report.

IX.           Shareholders

A.            Disclosures regarding the appointment/re-appointment of directors

Mr. Abhay Havaldar retires by rotation at the ensuing Annual General Meeting and is eligible for re-appointment. The profile of Mr. Abhay Havaldar, Director is being provided in the Notice convening the Annual General Meeting.

B.            Communication with Shareholders

The data related to quarterly and annual financial results, shareholding pattern, Board meetings, general meetings, terms and conditions of appointment of independent directors, the details of vigil mechanism, etc., are provided on the web-site of NSE for the information of the shareholders. The Exchange disseminates all material information to its shareholders through periodical communications.

Annual Report: Annual report containing, inter alia, Audited Accounts, Directors’ Report, Report on Corporate Governance, Management Discussion & Analysis and other material and related matters/information are circulated to the shareholders and others entitled thereto.

C.            redressal of shareholders’ complaints

The Company has already constituted a Stakeholders Relations Committee to look into and redress Shareholders and investor complaints. During the year, the Company did not receive any grievance from its shareholder(s) in respect of transfer of shares, non-receipt of Annual Report, non-receipt of declared dividends, etc

D.            General Body Meetings

Location, date and time of the general meetings held in the last three years till March 31, 2015:-

Type of meeting               Date      Time      Venue  Special Resolution passed

22nd Annual General Meeting   August 8, 2014   12:30 p.m.           Exchange Plaza, Bandra-Kurla  Complex Bandra (East)

Mumbai- 400 051             -

21st Annual General Meeting     September 26, 2013        10.00 a.m             Exchange Plaza, Bandra-Kurla  Complex Bandra (East)

Mumbai- 400 051             •             Re-appointment of Auditors under Section 224A

•             Alteration of Article of Association of the Company.

Extra-ordinary General Meeting               January 17, 2013               10.00 a.m.           Exchange Plaza, Bandra-Kurla  Complex Bandra (East)

Mumbai- 400 051             -

20th Annual General Meeting    September 27, 2012        11.00 a.m             Exchange Plaza, Bandra-Kurla  Complex Bandra (East)

Mumbai- 400 051             •             Re-appointment of Auditors under Section 224A

The Company did not pass any resolution through postal ballot in the last year. The requirement of passing any resolution by postal ballot is not applicable to NSEIL as the number of shareholders of NSEIL is less than 200.

E.            Shareholding pattern of the Exchange and Top 10 Shareholders as on 31st March, 2015. Distribution of Shareholding as on 31st March, 2015:

Category              No. of shareholders in each category      % of the category            No. of shares held           % to the total paid up equity capital

Individuals          5              7.35        4,71,429               1.05

Corporates-Listed            4              5.88        6,87,200               1.53

Corporates-Unlisted       11           16.18     49,60,168             11.02

Financial Institutions/Banks         11           16.18     1,26,97,429         28.22

Insurance Companies    7              10.29     82,53,500             18.34

Venture capital fund      4              5.88        18,25,119             4.06

Foreign holding 26           38.24     1,61,05,155         35.79

Total      68           100         4,50,00,000         100

Top 10 Shareholders as on 31st March, 2015

Sr.

No.         Name of the shareholder             No. of shares held           Percentage of shareholding

1              Life Insurance Corporation of India          47,28,500             10.51

2              State Bank of India          45,87,500             10.19

3              IFCI Limited        24,97,750             5.55

4              Stock Holding Corporation of India Limited           22,50,000             5.00

5              GAGIL FDI Limited           22,50,000             5.00

6              GS Strategic Investments Limited             22,50,000             5.00

7              SAIF II-SE Investments Mauritius Limited              22,50,000             5.00

8              Aranda Investments (Mauritius) Pte. Ltd.             22,50,000             5.00

9              IDBI Bank Limited             22,49,153             4.998

10           IDFC Limited       22,06,537             4.90

As per Securities Contracts (Regulation) (Stock Exchanges and Clearing Corporations) Regulations, 2012, the Exchange is required to ensure that at least 51% of the equity share capital is held by public. The Exchange ensures compliance thereof.

F.            registrar and Transfer Agent:

The address for communication and contact details of the Registrar and Transfer Agent are as under:

M/s. Link Intime India Pvt Ltd., C-13, Pannalal Silk Mills Compound, L.B.S. Marg, Bhandup (West) Mumbai 400 078. Tel. No. + 91 22 2596 3838 and Fax No. +91 22 2594 6969.

G.           Addresses for Correspondence:

Shareholders are requested to intimate all changes pertaining to their Bank details, email addresses, Power of Attorney, change of name, change of address, contact details, etc. to their Depository Participants (DP).

H.            Certificate on compliance of corporate governance norms

As required in Clause 49 of the Listing Agreement read with Regulation 35 of Securities Contracts(Regulation) (Stock Exchanges and Clearing Corporations) Regulations, 2012, NSEIL has, obtained a certificate regarding the compliance of conditions of Corporate Governance therein from a Practicing Company Secretary. The same is given as an Annexure to the Directors’ Report.

I.             Compliance with the non-mandatory requirements of Clause 49 of the Listing agreement

In addition to the above, NSEIL also complies with non-mandatory requirements of Clause 49 like maintaining a Chairman’s office at the company’s expense, reimbursement of expenses incurred by Chairman in performance of his duties, tenure for Directors, requisite qualifications and experience for independent directors, remuneration committee, dissemination of  financial results to  the shareholders on  a quarterly basis, unqualified financial statements, etc.

J.             whistle Blower Policy

The Company has established a mechanism for Directors and employees to report concerns about unethical behavior, actual or suspected fraud, or violation of the code of conduct or ethics policy or law. The Company also provides for adequate safeguards against victimisation of employees who avail of the mechanism and also allows direct access to the Audit Committee (for financial matters) or Chairman of the Ethics committee (for other matters) in exceptional cases. Details of the Policy have been disclosed on the website of the Exchange.

K.            Details of non-compliance by the Company, penalties, strictures imposed on the Company by SEBI or any other statutory authority on any matter related to capital markets

SEBI, vide its order dated October 10, 2014, censured the exchange in the matter of the market fall caused by an abnormal order by a trading member.

---

DECLArATION rEGArDING COMPLIANCE By BOArD MEMBErS AND SENIOr MANAGEMENT PErSONNEL wITH THE COMPANy’S CODE OF CONDUCT

I hereby confirm that the Company has obtained from all the members of the Board and Senior Management Personnel, affirmation that they have complied with the code of conduct for the Financial Year 2014-15

For the purpose of this declaration, Senior Management Personnel means Key Management Persons appointed under SCR(SECC) Regulations, 2012 and Key Managerial personnel appointed under the Companies Act, 2013 as on March 31, 2015.

Mumbai,                                                                                                                                       Chitra Ramkrishna

26.05.2015                                                                                                                                   Managing Director & CEO

MANAGEMENT DISCUSSION & ANALySIS

Economic & Business Environment

The global economic growth scenario remained mixed in 2014-15. While growth has been firming up in the US led by improved labour and housing market conditions, economic activity remains bleak in the euro area although some pick-up is being observed in Q4 of 2014 and the early months of 2015. Economic activity in most of the Emerging Market Economies (EMEs) continues to totter at lower levels. The growth of the Chinese economy witnessed a slowdown during the past three quarters primarily due to subdued growth in investment demand and real estate sector. While falling oil prices weighed on the Russian economy, high inflation level contracted the growth in the Brazilian economy. The sharp fall in oil prices and moderation in commodity prices also weighed on growth prospects of countries in the Middle East, Eastern Europe and Latin America.

In India, the latest national accounts data as per the new base year (2011-12) indicates that the recovery in economic growth which had started in 2013-14, gained further momentum in 2014-15. Advance estimates of the Central Statistics Office (CSO) indicate that the growth of real GDP picked up to 7.4% in 2014-15 from 6.9% in 2013-14. While the growth rates for industry sector and services sector is estimated to improve to 5.9% and 10.6% respectively in 2014-15 (compared to 4.5% and 9.1% respectively in 2013-14), the growth in the agriculture & allied sectors are estimated to decline to 1.1% in 2014-15 (compared to 3.7% in 2013-14).

The average Inflation (based on consumer prices) declined sharply to 5.9% in FY 15 compared to 10% in FY 14 due to the combined effects of decline in global commodity prices, falling food prices domestically and favourable ‘base effect’. Similarly, the average inflation based on the Wholesale Price Index fell to 2% in FY 15 – lowest level for over three decades – compared to 6% in FY 14.

On the external sector front, India’s trade deficit increased marginally in 2014-15 to USD 136.9 billion compared to USD 133.9 billion in the previous fiscal. In 2014-15, merchandise exports were USD 310.5 billion (y-o-y decline of 1.2%) and merchandise imports were USD 447.5 billion (y-o-y decline of 0.6%). In April-December 2014, India’s current account deficit (CAD) was USD 26.4 billion, which was 1.7% of GDP compared to 2.3% of GDP in the corresponding period of 2013 mainly due to a narrower trade deficit and a modest rise in net services receipts. In April-December 2014, India’s trade deficit narrowed to USD 112.5 billion from USD 116.9 billion in the corresponding period of 2013. According to the Economic Survey 2014-15, CAD is expected to further moderate in FY15 and FY16 to 1.3% and sub-1% of GDP, respectively assuming a further decline in price of crude petroleum and other products. India’s foreign exchange reserves were at an all-time high of USD 341.6 billion at end-March 2015 (compared to USD 304.2 billion at end-March, 2014). As a result, the import cover ratio – an important indicator of a country’s external sector vulnerability – has risen to 9.2 months.

The improved macroeconomic fundamentals had a strong positive impact on the investment climate which revived both portfolio and foreign direct investment inflows into India. In FY 15, the net FII investment was USD 45.7 billion compared to USD 8.9 billion in FY 14. In April-February of FY 15, the FDI inflows into India was USD 28.8 billion compared to USD 20.8 billion in the corresponding period of FY 14.

Outlook

The Advanced Economies are yet to fully recover from the consequences of the global financial crisis, although the medium-term outlook looks positive. On the other hand, the medium-term outlook for the EMEs appears subdued.

Overall, the sluggish global recovery so far has warranted successive downward adjustments to forecasts the world over, raising concerns of ‘secular stagnation’. Against this backdrop, however, the outlook for the Indian economy looks promising and in fact, the International Monetary Fund (IMF) has projected India as the only bright spot. The stronger macroeconomic fundamentals are expected to further bolster the investment climate in India.

risks and concerns

While the fundamentals of Indian Economy remain strong, the domestic capital market and especially the inflow of foreign funds are to a large extent susceptible to the developments in the global economy. However, with key policy changes and domestic growth expectations within the country and improvement in global economy these risks would be largely mitigated.

Internal control systems and their adequacy

The Company has well established internal control systems commensurate with the size and nature of its business and are adequate to ensure compliance with various internal processes and procedures as well as with various statutory and legal requirements. The Company has appointed reputed firms of Chartered Accountants to review the effectiveness of the internal control systems and submits its observations, if any to the Audit Committee of the Board for its review / recommendations.

Financials

The financial statements have been prepared in compliance with the requirements of the Companies Act, 2013, including revised Schedule VI, Generally Accepted Accounting Principles (GAAP) in India and as per the applicable Accounting Standards laid down by the Institute of Chartered Accountants of India. A well known and reputed firm of Chartered Accountants performs the audit and they have confirmed that our practices are as stringent and complete as internationally. Consolidated Financial statements have also been presented.

Financial performance (2014-15)

During the year 2014-15, the total revenue has increased by around 15% from ` 1,669.78 crores for the year 2013-14 to ` 1,918.12 crores for the year 2014-15.

The total expenditure for the year 2014-15 was ` 801.57 crores as compared to ` 554.30 crores for the year 2013-14, an increase of around 44.61% over the previous year.

The total Profit Before tax for the year 2014-15 was ` 1,116.55 crores as against ` 1,342.82 crores for the year 2013-14, a decrease of around 17% over the previous year.

The total Provision for tax (including deferred tax) for the year 2014-15 was ` 336.87 crores as against ` 323.54 crores for the year 2013-14.

The total Profit after tax for the year 2014-15 was ` 779.68 crores as against ` 1,019.28 crores for the year 2013-14, a decrease of around 12% over the previous year.

Operating revenues Transaction charges

During the year, there was a healthy increase of around 30% in the income from Transaction charges from ` 825.72

crores for the year 2013-14 to ` 1,075.21 crores for the year 2014-15. The average daily turnover on the Exchange during the year 2014-15 was ` 17,788 crores in Cash Market (CM segment) as against ` 11,203 crores for the year 2013-14 indicating an increase of around 59%. In F&O segment the average daily turnover (billable) for the year 2014-15 was `52,380 crores as against `33,167 crores for the year 2013-14 indicating an increase of around 58%. In Currency Derivatives Segment the average daily turnover (billable) for the year 2014-15 was ` 9,458 crores as against

`12,083 crores for the year 2013-14 indicating a decline of around 22%.

Listing Fees

During the year, there was a healthy increase of around 38% in the income of Listing Fees from ` 34.79 crores for the year 2013-14 to ` 47.91 crores for the year 2014-15. The Exchange as of March 31, 2015 had 1733 listed companies. The total market capitalisation of these companies as of March 31, 2015 stood at around `99 lakhs crores.

Book Building Fees

The total book building fees during the year 2014-15 has decreased by around 15% from ` 3.90 crores for the year 2013-14 to 3.30 crores for the year 2014-15.

Interest & Other Investment income

During the year 2014-15, the total investment income decreased from ` 536.82 crores for the year 2013-14 to

` 497.92 crores for the year 2014-15. Mainly on account of dividend from subsidiary companies for the year 2014-15 decreased from ` 150.75 crores to ` 112.50 crores

NSE’s Certification in Financial Markets (NCFM)

The income from NCFM activity stood at ` 22.31 crores for the year 2014-15. Also, the total number of candidates taking examination during the year 2014-15 was around 79,000.

Other Operating revenues

During the year 2014-15, the other operating revenues has increased by around 11% from ` 194.17 crores for the year 2013-14 to `214.95 crores for the year 2014-15.

Other Income

During the year 2014-15, the other income had increased by around 5% from `53.88 crores for the year 2013-14 to

` 56.52 crores for the year 2014-15.

Expenditure

IT & Telecom expenses

Technology is the backbone of our business and also the key differentiator. The Exchange continued to invest in the state of the art technology in different areas of its business keeping clear focus on its cost efficiency. Accordingly, during the year, the total IT & Telecom expenses for the year 2014-15 increased by around 6% from `164.68 crores for the year 2013-14 to `174.98 crores for the year 2014-15.

Other expenses

During the year 2014-15 other expenses has increased by around 25% from `150.10 crores for the year 2013-14 to

` 187.61 crores for the year 2014-15.

Clearing & Settlement charges

National Securities and Clearing Corporation Limited (NSCCL), a wholly owned subsidiary of the Exchange, carries out the clearing and settlement of the trades executed in the CM, F&O and CD segments. Consequent to the increase in income from transaction charges, the clearing & settlement charges for the year 2014-15 paid to NSCCL, increased by around 20.55% i.e. from ` 75.63 crores in FY 2013-14 to ` 91.18 crores in FY 2014-15.

Employee cost

The Exchange recognises the value of its human capital deployed at all levels. To continue to provide best in class services to its members and other market participants it is essential for the Company to attract and retain the best talent available. In this direction, the Company continues to take various initiatives to follow HR best practices and also keeps benchmarking it with other forward looking organisations. During the year 2014-15, the Company has taken number of HR initiatives in the areas of employee developments and training, harnessing knowledge and skill levels as well as various staff welfare measures etc. During the year 2014-15, the total employee strength remained stable as compared to the year 2013-14 and the employee related expenses stood at ` 91.79 crores which was

` 81.27 crores for the year 2013-14. For the year 2014-15, the total employee cost as a percentage to total income was

4.79% and as a percentage of expenditure was 14.55% which is comparable to the industry standards.

Depreciation

Depreciation increased by around 24% from `76.97 crores for the year 2013-14 to `95.78 crores for the year 2014-15.

In accordance with the Companies Act, 2013, the Company has revised the useful lives of certain assets namely Building from 61.35 Years to 60 Years, Furniture and Fixture from 15 years to 10 Years, Office Equipments from 15 Years and 21 Years to 5 Years, Electrical Installations and Equipments from 15 years and 21 Years to 10 Years. As a result of the same, the provision for depreciation for the year ended March 31, 2015 is higher by ` 16.74 crores

Financial Statement as on March 31, 2015 Share Capital

The total paid up capital of the Company as on March 31, 2015 is ` 45 crores divided in to 4,50,00,000 equity shares

of ` 10 each.

reserves & Surplus

The total Reserves & Surplus as on March 31, 2015 is ` 4,628.53 crores comprising of Share Premium of ` 40 crores, Investor Compensation reserves ` 10 crores, staff welfare reserves of ` 1.50 crores, General reserve of ` 3,690 crores and balance in P&L A/c of ` 887.03 crores.

Thus the total Net worth of the Company as on March 31, 2015 is ` 4,673.53 crores and the book value is ` 1,038.56 per share. Thus the total Net worth of the Company as on March 31, 2014 is ` 4,354.22 crores and the book value is

` 967.60 per share.

Deposits from members (Unsecured)

The total deposits from members as on March 31, 2015 stood at `1,056.60 crores as against ` 1,066.57 crores as on March 31, 2014.

Fixed Assets

Total Gross Block as on March 31, 2015 was ` 1,165.97 crores. Total Accumulated depreciation up to March 31, 2015 was ` 646.85 crores. Net fixed Assets (including Capital W.I.P) were ` 535.66 crores. As part of the total investments in technology areas, during the year 2014-15 the total additions to fixed assets were `100.39 crores mainly pertaining to the Trading systems, Computer system, telecom equipment’s and computer software. Total deletions at cost were at `3.04 crores.

Investments

The prudential policy of the Company permits to invest both long term and short term surplus funds in to deposits of highly rated banks, bonds issued by the Central / State governments, institutions and various corporates and into the debt oriented schemes of high performing mutual funds. As on March 31, 2015 the total non-current investments were ` 2,050.92 crores as against ` 1,515.26 crores as on March 31, 2014, increase of `535.66 crores. Current investments were ` 2,040.79 crores as on March 31, 2015 as against ` 715.41 crores as on March 31, 2014, increase of `1,325.38 crores.

Other Non-Current and Current Assets

Total other assets (non-current and current) as on March 31, 2015 stood at `2,588.20 crores comprising of interest accrued on investments and Fixed Deposits amounting to `259.30 crores, Trade Receivables amounting to ` 169.98 crores and cash and bank balances in current and Fixed Deposits and certificates of deposits amounting to `2,010.09 crores and Loans advances of `146.02 crores.

Other Non-Current and Current Liabilities

Total other liabilities (non-current and current) as on March 31, 2015 stood at ` 1,072.18 crores mainly comprising of dues from subsidiary companies ` 1.94 crores, security deposits as per listing agreement amounting to ` 36.87 crores, Securities Transaction Tax of ` 126.87 crores, provision for leave encashment of ` 11.12 crores, Provisional appropriation towards NSCCL SGF ` 527.19 and other current liabilities amounting to ` 368.19 crores.

Taxation

The total Provision for tax (including deferred tax) for the year 2014-15 was ` 394.65 crores as against ` 323.54 crores for the year 2013-14. Though the present Indian Corporate tax rate is 33.99% comprising of base rate and surcharge and cess, due to investments into various debt schemes of mutual funds the effective tax rate works out to 30.17%

Event occurring after the balance sheet date

There are no transactions of material nature that have occurred after March 31, 2015 which could have any impact on the financial performance of the Company for the year 2014-15.

CEO – CFO CErTIFICATE

To,

The Board of Directors

National Stock Exchange of India Limited

We, Chitra Ramkrishna, Managing Director & CEO and Yatrik Vin, Financial Controller & Treasury Head of the National Stock Exchange of India Limited hereby certify to the Board that:

a.            We have reviewed financial statements and the cash flow statement for the year ended on March 31, 2015 and that to the best of our knowledge and belief:

i.              these statements do not contain any materially untrue statement or omit any material fact or contain statements that might be misleading;

ii.             these statements together present a true and fair view of the Company's affairs and are in compliance with existing accounting standards, applicable laws and regulations.

b.            There are, to the best of our knowledge and belief, no transactions entered into by the Company during the year which are fraudulent, illegal or violative of the Company's code of conduct.

c.             We accept responsibility for establishing and maintaining internal controls for financial reporting and that we have evaluated the effectiveness of internal control systems of the company pertaining to financial reporting and we have disclosed to the auditors and the Audit Committee, deficiencies in the design or operation of such internal controls, if any, of which we are aware and the steps we have taken or propose to take to rectify these deficiencies.

d.            We have indicated to the auditors and the Audit committee

i.              significant changes, if any, in internal control over financial reporting during the year;

ii.             significant changes, if any, in accounting policies during the year and that the same have been disclosed in the notes to the financial statements; and

iii.            instances of significant fraud of which we have become aware and the involvement therein, if any, of the management or an employee having a significant role in the Company's internal control system over financial reporting.

Mumbai               Chitra Ramkrishna           Yatrik Vin

May 26, 2015      Managing Director & CEO             Financial Controller

                                & Treasury Head

S.N.ANANTHASUBrAMANIAN & CO.

COMPANy  SECrETArIES

10/26, Brindaban, Thane 400 601  Tel 2534 5648 / 2543 2704  Fax 2539 0292  Email sna@snaco.net I Website www.snaco.net

COrPOrATE GOVErNANCE COMPLIANCE CErTIFICATE

To,

The Members,

National Stock Exchange of India Limited,

Exchange Plaza, C-1, Block G, Bandra Kurla Complex, Bandra (East),

Mumbai 400051.

We have examined all relevant records of National Stock Exchange of India Limited (the Company) for the purpose of certifying compliance of the disclosure requirements and corporate governance norms as specified for the Listed Companies for the financial year ended 31st March 2015. In terms of Regulation 35 of the Securities Contracts (Regulation) (Stock Exchanges and Clearing Corporations) Regulations, 2012, the disclosure requirements and corporate governance norms as specified for listed companies have become mutatis mutandis applicable to a recognised Stock Exchange. We have obtained all the information and explanations to the best of our knowledge and belief, which were necessary for the purpose of this certification.

The compliance of the conditions of Corporate Governance is the responsibility of the Management. Our examination was limited to the procedures and implementation thereof, adopted by the Company for ensuring the compliance of the conditions of the Corporate Governance. This certificate is neither an assurance as to the future viability of the Company nor of the efficacy or effectiveness with which the management has conducted the affairs of the Company.

In our opinion and to the best of our information and according to the explanations given to us, we certify that the Company has complied with disclosure requirements and corporate governance norms as specified for Listed Companies.

S. N. ANANTHASUBRAMANIAN & CO.

Company Secretaries

Date: 19th  May, 2015 Place: Thane

S.  N.  Ananthasubramanian

Proprietor C.P.No. 1774

ANNEXUrE  7 TO BOArD'S rEPOrT

STATEMENT PUrSUANT TO rULE 5(2) OF THE

COMPANIES (APPOINTMENT AND rEMUNErATION OF MANAGErIAL PErSONNEL) rULES, 2014

Sr.

No.         Name & Qualifications   Age in years       Designation/ Nature of Duties   Remuneration Received (`)         Experience (No.of years)     Date of Commencement of Employment             Last Employment

                                                                Gross    Net                                       

1              Ms. Chitra Ramkrishna #

B. Com, FCA       52           Managing Director

& CEO   63484130             29593510             30           October 15, 1994              Dy. Manager, Industrial Development Bank of India

2              Mr. J. Ravichandran #

B. Com, B.L.,FCS               54           Group President (F&L)& Company Secretary      31578338             15339760             29                August 12, 1994                Dy. Secretary

& Manager  (Legal), Raymond Synthetics Limited

3              Mr. Yatrik Vin M.Com, AICWA    48           Financial Controller

& Treasury Head              16568752             8494373                28           February 21, 2000            Manager (Finance & Accounts), Godrej & Boyce Mfg. Co. Ltd.

4              Mr. Ravi Varanasi

B. Sc., ACA          52           Chief - Business Development   17432110             10869619             28           July 3, 1995         Sr. Dy. Manager, Vysya Bank

5              Mr. Umesh Jain * B.Tech.             45           Chief - Technology          16157061             9980901                15           September 3, 2012  President,

Yes Bank Limited

6              Mr. N Muralidaran

M. Sc.,MBA        54           Chief - Special Projects  14695101             9187923                32           April 1, 2013        Chief Executive Officer, NSE Infotech Sevices Ltd.

7              Dr.V. R. Narasimhan # *

M. Com., ACS, MBA, Ph.D            58           Chief  -Regulatory Affairs             13654968             9017476                31           May 30, 2013       Sr. Vice President, Kotak  Mahindra Bank Limited

8              Mr. Mukesh Agarwal @ BE, M.Sc., MMS               48           Chief - BE , New Products, IISL & DotEx  2771543                1659742                23           January 16, 2015               President - Research, CRISIL Limited

9              Mr. Chandrashekhar Mukherjee,

B. Com., PGPM & IR        51           Chief- People Officer     12103626             7596647                22           April 9, 2010        Associate Vice President

Bennett Coleman & Company Ltd.

10           Ms. Kamala K. # B.Com, FCA       49           Head - MF           12207638             6245085                25           March 16, 2006  Vice President (Risk Mgmt. & Ops.), IL&FS Investsmart Limited

11           Mr. Hari K. AICWA, ACS 48           Product Head - Currency              14321488             8256018                24           May 29, 1995       Cost Accountant, KCP Ltd.

12           Mr. Suprabhat Lala

B. Sc.     48           Deputy Head - Regulatory            10073769             6599390                25           October 1, 2001                Sr. Vice President, Geojit Securities Ltd.

13           Mr. Nirmal Mohanty M.A., MBA               56           Chief Economist               9317449                6162911                28           April 1, 2009  Principal / Vice President, Infrastructure Development

Finance Company Limited

14           Mr.M Vasudev Rao

B. Com., LL. B, FCS           47           General Counsel              9583910                6231269                19           November 1, 2012                Associate Vice President

Bennett Coleman & Company Ltd.

15           Mr. Kashinath Katakdhond B.E., MBA, GEMBA(US)          46           Product Head - NBF        8609931                6133089                20           September 12, 2013        Sr. Vice President, Citigroup

Sr.

No.         Name & Qualifications   Age in years       Designation/ Nature of Duties   Remuneration Received (`)         Experience (No.of years)     Date of Commencement of Employment             Last Employment

                                                                Gross    Net                                       

16           Mr. Mayur Sindhwad AICWA, ACS            40           Chief - Trading Operations           7272269                4995144                18                June 1, 2009       Assistant Vice President,  Edelweiss Securities Ltd

17           Ms. Rana Usman B.Com, PGDBM             45           Senior Assistant Vice President - DRO     7648410                4282715                20           June 1, 1995       -

18           Ms. Nisha Subhash B.Com, ACA                44           Head - Investigation and Exchange Compliance  6858881                4590119                20           December 26, 1995         Equity Analyst, Mahesh  Kothari Share and Stock Broker Pvt. Ltd.

19           Mr. Mahesh Haldipur

B.E. (Civil), AMIE               55           Head - Admin and Premises        8809375                4817608                32           April 25, 1995                Project Engineer, Tata Electric Company Limited

20           Mr. Chandrakant Upadhyay

ACA, LL.M           51           Assistant Vice President               7772913                4289854                23           September 16,

2004       Executive Director, Saurashtra Kutch Stock

Exchange Limited

21           Mr. Ravindra Mohan Bathula *

LL.B.       45           General counsel               6145996                4213070                21           December 1, 1994            -

22           Ms. Rehana D'souza MBA            43           Head - SBU Education    6194856                4169461                21           February 6, 1995       Officer, Gujarat Securities Ltd

23           Mr. Nagendra Kumar SRVS PGDM            42           Head - Equity and ED      6454513                3734995                19           July 16, 2009                Manager, Accenture India Ltd

24           Mr. R. Sundararaman @

B. Sc., CAIIB, AICWA, FRM            52           Chief - BE , New Products, IISL & Dotex  19874805             10615504             32                March 13, 1995  Grade 'B' Officer, Industrial Development Bank of India

25           Mr. R Nandakumar # @

B. Com., Grad. CWA, MBA, CAIIB, FIII     49           Chief - Operations           9477218                6691160                28           March 15, 1995       Staff Officer (Finance), Unit Trust of India

Notes :

1              Gross Remuneration includes Salary and other benefits, Company's contribution to Provident Fund, Pension, Superannuation Fund, taxable value of perquisites etc. Net remuneration represents gross remuneration less Company's contribution to provident, Pension and superannuation funds, taxable value of perquisites, profession tax and income tax. Where applicable, the amounts also include certain allowances accrued during previous year(s) but claimed in the current year.

2              Ms. Chitra Ramkrishna was appointed as Managing Director & CEO for a period of five years with effect from April 1, 2013.

3              Employees, whose names were marked with #, are Key Management Personnel under SCR (SECC) Regulations, 2012 of SEBI. Their remuneration excludes 50% of their Variable Pay to be paid on deferred basis after 3 years.

4              Other employees are in permanent employment of the company on contractual basis governed by the employment terms & conditions and service rules. Employees whose names have been marked with @ were employed with the company for part of the year.

5              None of the employees mentioned above is a relative of any Director.

6              Employees, in respect of whom Rule 5(2) applies but are on deputation to subsidiary company and in respect of whom the remuneration is recovered are shown under statement prepared under Rule 5(2) of that subsidiary company(ies) to avoid duplication. Employees whose names have been marked with @ are also on deputation to subsidiary company(ies) and in respect of whom the proportionate remuneration recovered from the subsidiary company(ies) is shown in the statement prepared under Rule 5(2) of that subsidiary company(ies).

7              None of the employees is holding equity share(s) in the company within the meaning of clause (iii) of sub-rule 2 of Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014

8              The Company does not have any Employees Stock Option Plan(ESOP) Scheme for its employees.

BUSINESS rESPONSIBILITy rEPOrT

[ In line with the National Voluntary Guidelines (NVG) on Social, Environmental and Economic Responsibilities of Business]

Section A: General Information about the Company

1.            Corporate Identity Number (CIN) of the Company : U67120MH1992PLC069769

2.            Name of the Company :

NATIONAL STOCK EXCHANGE OF INDIA LIMITED (NSEIL)

3.            Registered  address  :

Exchange Plaza, Plot C-1, Block ‘G’ Bandra Kurla Complex, Bandra (East) Mumbai-400 051

4.            Website : www.nseindia.com

5.            E-mail id : cc_nse@nse.co.in

6.            Financial Year reported: 2014-2015

7.            Sector(s) that the Company is engaged in (industrial activity code-wise): Sector: Infrastructure Company in the securities market industry Activity: Stock Exchange

NIC Code: 6611

[As per National Industrial Classification Code 2008 – Ministry of Statistics and Programme Implementation]

8.            List three key products/services that the Company manufactures/provides (as inbalance sheet)

i.              Trading platform for securities

ii.             Listing of securities

iii.            Educational testing

9.            Total number of locations where business activity is undertaken by the Company

i.              Number of International Locations (Provide details of major 5) :

None

ii.             Number of National Locations:

Twelve [Ahmedabad, Bengaluru, Chennai, Cochin, Delhi, Hyderabad, Indore, Jaipur, Kanpur, Kolkata, Mumbai and Pune]

10.          Markets served by the Company - Local/State/National/International : National

Section B: Financial Details of the Company

1.            Paid up Capital (INR): 45 crore

2.            Total Turnover (INR): 1918.12 crore

3.            Total profit after taxes (INR): 779.68 crore

4.            Total Spending on Corporate Social Responsibility (CSR) as percentage of profitafter tax (%) :

The Company has allocated ` 20,94,87,295.84 (Rupees twenty crore ninety four lakhs eighty seven thousand two hundred ninety-five and paise eighty four only), being 2% of the average net profits for the past three years, for CSR purposes. Out of the same, ` 5,74,69,700.95 (Rupees five crore seventy-four lakhs sixty nine thousand seven hundred and paise ninety five only) has already been committed with NGOs. Out of the same, ` 63,31,015.49 (Rupees sixty three lakhs thirty one thousand fifteen and paise forty-nine only) has already been disbursed.

This being the first year of spend on CSR, the Company was in the process of preparing the CSR Policy, identifying projects, capacity building for project identification, implementation, etc. Capacity augmentation was a key for project identification and monitoring implementation and the Company was in the process of building the same. Moreover, identifying new projects alongside the monitoring of implementation of projects is a time consuming and knowledge oriented activity. Selecting good and result oriented project requires time, knowledge, skill and availability. Accordingly, though 2% of average net profits (of the immediately preceding three years) is allocated, the actual spend is expected to gather steam only over a period of 2-3 years, after which the Company will be in position to achieve the budgeted spend within the respective year itself. However, the Company remains committed to meet its CSR obligations on an annual basis.

5.            List of activities in which expenditure in 4 above has been incurred:-

Sr. No.  Sector   Location

a.            Primary Education           Pune City, District-Pune, State-Maharashtra

b.            Primary Education           Haveli- Mulashi Tehasil,

District-Pune,  State-Maharashtra

c.             Primary Education           District-Buldhana, State-Maharashtra

d.            Primary Education           Ulhasanagar City, District- Thane, State- Maharashtra

e.            Primary Education           Mankhurd, Mumbai, State- Maharashtra

f.             Elder Care           Mumbai and Chennai,

State-Maharashtra and Tamil Nadu

g.            Primary Education           Thane and Pune, State- Maharashtra

h.            Primary Education           Medha, District-Satara, State-Maharashtra

i.              Various Activities*           Mumbai, Maharashtra

j.             Capacity Building              Mumbai, Maharashtra

(*Activities undertaken by NSE Group CSR Focus Group covers blood donation camp, NGO Melas for Children’s Day, Environment awareness, Swachha Bharat Drive)

Section C: Other Details

1.            Does the Company have any Subsidiary Company/Companies?

Yes. The Company has subsidiary companies.

2.            Do the Subsidiary Company/Companies participate in the BR Initiatives of theparent company? If yes, then indicate the number of such subsidiary company(s)

Yes. All subsidiaries are participating in the BR initiatives of the parent company. The subsidiaries also participate in the BR activities and initiatives of the Group to the extent applicable.

3.            Do any other entity/entities (e.g. suppliers, distributors etc.) that the Company doesbusiness with, participate in the BR initiatives of the Company? If yes, thenindicate the percentage of such entity/entities?

[Less than 30%, 30-60%, Morethan 60%]

Yes. The number of entities that the Company does business with, which participate in the BR initiatives, is less than 30%.

Section D: Br Information

1.            Details of Director/Directors responsible for Br

a)            Details of the Director/Director responsible for implementation of the BRpolicy/policies DIN Number: 00062654

Name: Ms. Chitra Ramkrishna

Designation: Managing Director & Chief Executive Officer

b)            Details of the BR head - to be nominated

Sr. .No. Particulars           Details

1.            DIN Number (if applicable)          N.A.

2.            Name    N.A.

3.            Designation        N.A.

4.            Telephone number         N.A.

5.            e-mail id               N.A.

2.            Principle-wise (as per NVGs) Br Policy/policies (reply in y/N)

The Company has put in place various policies and /or adopted various practices in respect of matters contained in NVG principles on ESG (Environmental, Social and Governance) norms from time to time. The Company is now in the process of formulating/formalizing the same in accordance with the process laid down and expects the same to be completed in FY 2015-16. Hence, answers to specific queries will be given in the Annual Report for the FY 2015-16.

Section E: Principle-wise performance Principle 1

Businesses should conduct and govern themselves with Ethics, Transparency and Accountability

1.            Does the policy relating to ethics, bribery and corruption cover only the company? Yes/No. Does it extend to the Group/Joint Ventures/Suppliers/Contractors/NGOs/Others:

The Company has a policy relating to ethics, which covers not only all individuals working with it, but also its group companies at all levels and grades.

2.            How many stakeholder complaints have been received in the past financialyear and what percentage was satisfactorily resolved by the management?If so, provide details thereof, in about 50 words or so.

The Company has not received any complaint against it. There are complaints from investors against the companies listed on the exchange or against the trading members of the Exchange. The details on the number of complaints received and redressed are given as under:

No. of complaints pending as on April 1, 2014      No. of complaints received during the year FY 2014-15   No. of complaints redressed during the year FY 2014-15     No. of complaints pending as on March 31, 2015

Companies         Trading Members            Companies         Trading Members            Companies         Trading Members                Companies         Trading Members

187         546         1905       7129       1846       7094       246         581

Principle 2

Businesses should provide goods and services that are safe and contribute to sustainability throughout their life cycle

1.            List up to 3 of your products or services whose design has incorporated socialor environmental concerns, risks and/or  opportunities.

i.              Financial Educational Services for investors

The Company conducts various investor awareness programs across the Country as a part of the initiative to educate investors and create awareness about the securities market. The awareness programs endeavor to educate the investors about the advantages and mantras of financial planning, the dos and don’ts of investing, rights and responsibilities of the investors. The programs also talk of the securities market structure and inform the investors about the investor services provided by the Exchange.

These programs are conducted throughout the country by associating with the following entities:

1.            SEBI registered investor associations

2.            Institute of Chartered Accountants of India (ICAI), Institute of Company Secretaries of India (ICSI)

3.            Rotary clubs, Lions group, etc.

4.            Schools and Colleges

5.            Corporates

6.            Open programs with public

Some of these programs are also jointly conducted with SEBI.

ii.             Hedging of financial risks NSE Bond Futures (NBF-II)

Interest rates are linked to a variety of economic conditions. They can change rapidly, influencing investments and debt obligations. The volatility of interest rates has increased manifold in the last few years. The risks arising out of movements in interest rate impacts not only to the institutional, but also to corporate and retail investors.

NSE Bond Futures are Interest Rate Futures contract which can be used to hedge against the risk of interest rate movements (such as volatility movements or simple directional movements) in an adverse direction, causing a cost to the institutional, corporate and retail investors.

Currency  Derivatives

Every business is subject to the risk of unforeseeable changes in the business environment. Volatility in exchange rates affects corporates business growth and can be significant. Importers and exporters are directly exposed to exchange rate fluctuation and indirect exposures are exposed to those who are purchasing imported goods from local agencies.

It is possible to mitigate these risks by using suitable hedging instruments. Currency Derivatives provide liquid, transparent market for foreign exchange risk management. The platform provides equal access to all type of participants.

iii.            Savings products

NSE facilitates, through its different platforms, availability of various financial products to the investors.

2.            For each such product, provide the following details in respect of resource use(energy, water, raw material etc.) per unit of product (optional):

i.              Reduction during sourcing/production/ distribution achieved since theprevious year throughout the value chain?

Not applicable

ii.             Reduction during usage by consumers (energy, water) has been achieved since the previous year?

a)            By using Thermal Energy Storage System, the Company & the Group has saved 11,500 Demand Kilo-

Volt-ampere (KVA) in the previous year

b)            By  using  Wind  Power  System,  the  Company  &the  Group  has  generated  &  inturn  saved 11,95,791   units   Kilowatt-hour   (Kwh)   from   the   date   of   commissioning   of   the   System

i.e. on December 12, 2014.

c)            By using Solar Power System, the Company & the Group have saved 5720 units (Kwh) in the previous year.

3.            Does the company have procedures in place for sustainable sourcing (includingtransportation)?

i.              If yes, what percentage of your inputs was sourced sustainably? Also, provide details thereof, in about 50 words or so.

The Company keeps in mind sustainable sourcing for the inputs. For example, electricity which is an important input for the Company’s business, the Company has set up wind and solar plants.

4.            Has the company taken any steps to procure goods and services from local & small producers, including communities surrounding their place of work?If yes, what steps have been taken to improve their capacity and capability of local and small vendors?

Generally, the Company procures goods and services from the original equipment manufacturer. However, where feasible, procurement is also done from local and small vendors.

5.            Does the company have a mechanism to recycle products and waste? If yes what is the percentage of recycling of products and waste (separately as <5%, 5-10%, >10%). Also, provide details thereof, in about 50 words or so.

Yes.

Details - 1) E-Waste - As per the Company’s E-Waste Policy, the E-Waste in Exchange Plaza building as well as its Branch Office premises is recycled through authorized E-Waste Vendor shortlisted by Central Pollution Control

Board (CPCB)/ Maharashtra Pollution Control Board (MPCB).

2)            Food Waste - Food Waste generated at Company’s Exchange Plaza building is processed through Vermiculture System installed at its building wherein manure (i.e. Vermicompost) generated through it is used for Gardening Purpose.

3)            Water Recycling - Sewage Water generated at Exchange Plaza is recycled through Sewage Treatment Plant installed at its Exchange Plaza building and the processed water is used for secondary purposes i.e. for cleaning, for Cooling Towers associated with Heating, Ventilation and Air Conditioning (HVAC) System.

Principle 3

Businesses should promote the wellbeing of all employees

1.            Please indicate the Total number of employees.

497

2.            Please indicate the Total number of employees hired ontemporary/contractual/casual basis.

136

3.            Please indicate the Number of permanent women employees.

171

4.            Please indicate the Number of permanent employees with disabilities.

None. However, the Company has hired 5 employees on temporary/contractual/casual basis with disabilities.

5.            Do you have an employee association that is recognized by management?

No

6.            What percentage of your permanent employees is members of thisrecognized employee association?

Not applicable

7.            Please indicate the Number of complaints relating to child labour, forcedlabour, involuntary labour, sexual harassment in the last financialyear and pending, as on the end of the financial year.

Sr. No.  Category              No. of complaints filed during the financial year No. of complaints pending as on end of the financial year

1.            Child      labour/forced    labour/ involuntary labour           NIL         NIL

2.            Sexual harassment          NIL         NIL

3.            Discriminatory  employment       NIL         NIL

8.            What percentage of your under mentioned employees were given safety & skill upgradation training in the last year?

•             Permanent Employees :

Safety- 100%; Skill upgradation-77%

•             Permanent Women Employees Safety- 100%; Skill upgradation-72%

•             Casual/Temporary/Contractual  Employees  : Safety-100%

•             Employees with Disabilities : Safety-100%

Principle 4

Businesses should respect the interests of, and be responsive towards all stakeholders, especially those who are disadvantaged, vulnerable and marginalised

1.            Has the company mapped its internal and external stakeholders? Yes/No

Yes. The Company has mapped its internal and external stakeholders as presented below:

2.            Out of the above, has the company identified the disadvantaged, vulnerable & marginalized stakeholders?

Yes. The Company has identified the disadvantaged, vulnerable & marginalized stakeholders and is working towards improving their lives.

3.            Are there any special initiatives taken by the company to engage with the disadvantaged, vulnerable and marginalized stakeholders.If so, provide details thereof, in about 50 words or so.

The Company periodically conducts financial literacy education programs. It also created an Investor Protection Fund Trust to compensate investors affected by a defaulter trading member. Moreover, the Company conducts various CSR programs through NGOs. For specific details, please refer to Report on CSR.

Principle 5

Businesses should respect and promote human rights

1.            Does the policy of the company on human rights cover only the companyorextendtotheGroup/Joint Ventures/Suppliers/Contractors/NGOs/Others?

No, the Company‘s has various policies on human rights like ‘Work Life Balance’ and ‘Talk to me’ cover not only the Company, but all its Group Companies.

2.            How many stakeholder complaints have been received in the past financial year and what percent was satisfactorily resolved by the management?

No stakeholder complaints were received in the past financial year.

Business should respect, protect, and make efforts to restore the environment

1.            Does the policy related to Principle 6 cover only the company or extends to the Group/Joint Ventures/ Suppliers/Contractors/NGOs/others.

No, the Company has an “Environment Policy” covering not only the company, but all its Group Companies. Environmental protection initiatives also extend across the Group.

2.            Does the company have strategies/ initiatives to addressglobal environmental issues such as climate change, global warming, etc.? Y/N. If yes,please give hyperlink for webpage etc.

The Company is committed to a better tomorrow, for which it is stringently pursuing to minimize its impact on the environment by taking measures like measuring and reducing its carbon and water foot print, checking and preventing pollution and ensure better Air and Water quality, make efficient use of energy. The Company has installed Scrubber System [i.e. associated with Distributed Generation (DG) Sets installed at Exchange Plaza] wherein the smoke generated through DG Sets is processed and then it is released to environment.

The hyperlink for the “Environment Policy” is: http://www.nseindia.com/global/content/about_us/nseil_disc_others.htm

3.            Does the company identify and assess potential environmental risks? Y/N Yes.

4.            Does the company have any project related to Clean Development Mechanism? If so, provide details thereof, in about 50 words or so. Also, if Yes, whether any environmental compliance report is filed?

Yes. The Company has installed following System/ Project towards Clean Development Mechanism:

1)            Thermal Energy Storage System: The ‘Thermal Energy Storage System’ has been introduced in the HVAC System. It was observed that most of the Services [i.e. HVAC-Chillers, Air Handling Units (AHUs), Lifts, Lighting, Personal Computer (PC), Plumbing System etc.] at Exchange Plaza were operated mainly during office / day hours. Whereas, Chillers and its associated equipments used to consume more than 30% of total peakdemand load. M/s. Tata Power Company Limited had made an appeal to its consumers for conserving the energy as there was shortage of power supply vis-à-vis, its demand in Mumbai especially during peak hours. In view of this, NSEIL had decided to reduce its demand load and to achieve this, NSE incorporated the ‘Thermal Energy Storage System’ with the existing HVAC system. In this system, the Chillers are being operated at night hours to form the Chill (i.e. temperature below zero degree centigrade of glycol water) which gets stored in the Thermal Storage Tank. The following next day the stored Chill is being utilized through Heat Exchangers for air-conditioning the Office Area. In this manner, the total load (i.e. HVAC-Chillers, AHUs, Lifts, Lighting, PC, Plumbing System, etc.) which were operating mainly during office hours have been distributed and NSEIL has surrendered the Extra Power.

2)            Wind Power Plant: On account of the high electricity consumption that the NSE has been facing, mainly owing to the continuous operation of the Data Center, a need had been felt to ascertain possible alternatives of energy conservation including sourcing of energy from a cost effective alternative which are also environment friendly (“Green Power”). In fact, from the energy conservation point of view, NSEIL has already taken various initiatives including setting up a Thermal Energy Storage System for its air conditioning plant, Solar Power Plant at its available terraces, Power Savers for its lighting system, Light- Emitting Diode (LED) lighting, etc. which have helped to reduce the power consumption substantially. However, going further, to reduce our carbon foot print, the Company has gone into generating green power. Accordingly, on sourcing front, various alternatives were examined and among the various

proposals, the power generated by Wind Mills was found to be more beneficial especially since it is a Renewable Source of Energy. In Wind Power Project, the Wind Electric Generator (WEG) converts the Kinetic Energy (KE) available in the Wind to Electrical Energy (EE) by using a Rotor, Gearbox and Generator. It may be noted that there is a defined range of Wind speed, which is a basic pre-requisitefor the WEG to generate electricity. The Ministry of Non-Conventional Energy Sources (MNES), by a proper survey has identified certain ‘geographical areas’ within every State, suitable to develop Wind Farms (an area where a number of WEGs are installed is known as a Wind Farm). Considering the current power consumption requirements of NSE at its office building at Exchange Plaza, it was estimated that the total sizing of Wind Mills would be around 6.25 Megawatt(MW) (i.e. 5 fans of 1.25 MW Wind Mills). Accordingly, the aforesaid capacity of project has got commissioned through M/s. Suzlon Energy Ltd. at Satara in Maharashtra recently (i.e. on December 06, 2014) successfully by taking necessary compliances.

3)            Solar Power Plant: In addition to various power saving measures being undertaken at the building, a need had been felt to ascertain the possible alternatives of energy conservation including sourcing of energy from natural resources which is environment friendly (i.e. Green Power). In view of this, Solar Power Plant has been installed in the Exchange Plaza building which harnesses the Solar Power and then convert the same into Electrical Power to cater the part of lighting load at Exchange Plaza.

The expected electricity generation which could be considered for the set off facility against NSE’s own power consumption at Exchange Plaza is in the tune of around 1 crore units per year.

5.            Has the company undertaken any other initiatives on - clean technology,energy efficiency, renewable energy, etc. Y/N. If yes, please give hyperlink for web page, etc.

Yes. NSEIL has undertaken following initiatives towards energy conservation, green/ renewable energy:

1)            Thermal Energy Storage System

2)            Automation in Operation of the Services

3)            Regulated Voltage for Lighting System

4)            Electronic Ballast and Compact Fluorescent Lamps (CFL) used in Lighting System, Use of LED Lights

5)            Automatic Power Factor Control Units

6)            Solar Power Plant

7)            Rain Water Harvesting System

8)            Wind Power Plant

9)            Use of energy efficient * rated products. The hyperlink for the “E-waste Policy” is:

http://www.nseindia.com/global/content/about_us/nseil_disc_others.htm

6.            Are the Emissions/Waste generated by the company within the permissiblelimits given by CPCB/SPCB for the financial year being reported?

Yes. All the emission/ waste generated are within permissible limits given by CPCB/SPCB (State Pollution Control Board).

7.            Number of show cause/ legal notices received from CPCB/SPCB which are pending (i.e. not resolved to satisfaction) as on end of Financial Year.

Nil

Principle 7

Businesses, when engaged in influencing public and regulatory policy, should do so in a responsible manner

1.            Is your company a member of any trade and chamber or association?If Yes, Name only those major ones that your business deals with:

a.            World Federation of Exchanges (WFE)

b.            International Options Market Association (IOMA)/ International Options Clearing Association (IOCA)

c.             Federation of Indian Chambers of Commerce and Industry (FICCI)

d.            Confederation of Indian Industry (CII)

e.            The Associated Chambers of Commerce of India (ASSOCHAM)

2.            Have you   advocated/lobbied   through   above   associations   for   the   advancementor   improvement of public good? Yes/No; if yes, specify the broad areas (Governance and Administration, Economic Reforms, Inclusive Development Policies, Energy security, Water, Food Security, Sustainable Business Principles, Others)

Yes. NSEIL has advocated and lobbied through the above associations for the advancement or improvement of public good in the specific areas of Governance and Administration, and Economic Reforms.

Principle 8

Businesses should support inclusive growth and equitable development

1.            Does  the  company  have  specified  programmes/initiatives/projects  in  pursuit  of  the  policy  related  to Principle 8? If yes details thereof.

In order to strengthen its CSR initiatives, in 2012, a CSR Focus Group was formed consisting of employees, volunteering to contribute part of their time to undertake CSR activities internally. The Group has since then organised various activities such as environment awareness building programs, exposure visits on environmental issues, etc. with the help of NGO partners like Bombay Natural History Society (BNHS), blood donation camps, promoting social entrepreneurship by facilitating sale of articles produced by different NGOs, etc. Besides, different eco-friendly activities like Wind Power generation, Rain Water Harvesting, Use of Solar Energy, Solid Waste Management through promoting Vermicomposting out of the waste from NSE Group Companies’ premises etc., have also been undertaken.

NSE, in order to further its CSR aspiration of helping the underprivileged sections of population  in improving their quality of life is now embarking upon undertaking to reach out to them. A Memorandum of Understanding (MOU) has been entered into with Tata Institute of Social Sciences (TISS) to guide NSE with the CSR Policy-making, Gap analysis, CSR plan and community engagement strategy, Project and Partner evaluation and screening, implementation monitoring, measurement of results, etc.

CSR Objectives and Goals: To begin with, the Company has taken up i) Primary Education ii) Elder Care and

iii) Sanitation and Safe Drinking Water, as the focus areas. The CSR objectives have been identified based on the larger mandate of the Companies Act, 2013 and CSR Rules, 2014 to meet the Company's community engagement aspirations. Projects undertaken under these verticals will not be a one-time activity, but will only be on a project or program mode with a timeline to achieve pre-determined goals. In the initial phase,

efforts are concentrated on Primary Education and Elder Care. On the basis of the experiences gained in the first year, other areas will be included throughout the period.

The core areas of focus, objective and goals are elaborated in the sections below vertical-wise :

Primary Education: While selecting projects under primary education, NSE Group has emphasized intervention in capacity building & training of highly motivated, equipped and qualified teachers, that will augment teacher-student ratio and directly impact the quality and quantity of attention that is currently provided per student. Besides this, to enhance foundational skills at the primary education level in the areas of reading, writing, critical thinking, arithmetic problem-solving, application skills and behavioural skills are being focused on. The projects which have been implemented will contribute to the holistic development of children which includes addressing their physical, mental and aspirational needs through supplementary and in-school programs.

Elder Care: Project considered under elder care is focusing on enhancing the physical and mental well-being of underprivileged ageing population by improving access to cost effective healthcare services.

Sanitation and Safe Drinking Water: NSE Group has taken ‘sanitation and safe drinking water’ as one of the focus areas under the CSR policy of NSE group. Proposals from NGOs specializing in this area have been invited and their reviews are being executed. Under this NSE Group will support sanitation projects in the schools, communities, awareness building on sanitation and safe drinking water, solid waste management, WASH (Water, Sanitation and Hygiene) etc.

Prime Minister’s National Relief Fund: India is a vast country susceptible to the vagaries of nature. From time to time, various geographical areas are affected by natural calamities such as floods, storm, earthquake, etc. Unfortunate calamities such as storm in Andhra, floods in Kashmir and last year’s calamities such as storm in Orissa, flash flood in Uttaranchal are some of such calamities witnessed by India. Relief is granted, by the State Govt. & Central Govt., NGOs, etc. and also through Prime Minister’s National Relief Fund. NSE Group has contributed to the Prime Minister’s National Relief Fund as one of the focus area in such circumstances, if and when need arises.

CSR Activities under the Company's CSR Focus Group: CSR focus group consisting of employee volunteers conducts/coordinates various social activities such as Blood Donation Camps, NGO Melas related to social entrepreneurship, education, health awareness, environmental awareness, awareness building programs, screening documentaries on environmental & social issues, organising guest lectures on social issues, nature awareness walk, observing of National / International Days such as Children’s Day, Women’s Day, etc.

2.            Are  the  programmes/projects  undertaken  through  in-house  team/ownfoundation/external  NGO/ government structures/any other organization?

The programs are undertaken through the NSE CSR Focus Group as well as by specialised NGOs. For specific details, please refer to the CSR Report.

3.            Have you done any impact assessment of your initiative?

Appropriate monitoring mechanisms have been evolved for tracking the progress and impact of the various CSR programmes. Impact assessment of these initiatives will be done at the end of the project.

4.            What is your company's direct contribution to community development projects? Amount in INR and the details of the projects undertaken?

Sector   Location               Amount Sanctioned        Amount Disbursed

Primary Education           Pune City, District- Pune, State- Maharashtra    

8,55,573.78        

3,20,841.29

Primary Education           Haveli- Mulashi Tehasil, District- Pune, State- Maharashtra          

31,46,052.71      

10,46,939.34

Primary Education           District- Buldhana, State- Maharashtra   27,12,096.36       8,72,418.29

Primary Education           Ulhasanagar City, District- Thane, State- Maharashtra    

40,99,814.45      

6,68,358.60

Primary Education           Mankhurd, Mumbai, State- Maharashtra              27,93,600.58       7,62,983.22

Elder Care           Mumbai and Chennai, State- Maharashtra and Tamil Nadu          

1,24,05,804.91  

15,06,919.62

Various Activities*           Mumbai, Maharashtra   N.A.       45,249.28

Capacity Building              Mumbai, Maharashtra   N.A.       11,07,305.86

                Total      5,74,69,700.94   63,31,015.50

(*Activities undertaken by NSE Group CSR Focus Group covers blood donation camp, NGO Melas for Children’s Day, Environment awareness, Swachha Bharat Drive)

5.            Have you taken steps to ensure that this community development initiative is successfully adopted by the community? Please explain in 50 words, or so.

The Company is covered under the purview of Section 135 of the Companies Act 2013. As per requirement the CSR Committee of the Board was formed and approved by the Board. A full time manager level employee, qualified and experienced in social work, was also recruited. The CSR Budget based on the average 3 years annual profit calculated pursuant to Section 198 of the Companies Act, 2013 for FY 2014-15 was proposed to the CSR Committee and the Board for approval. The CSR budget was approved by the Board.

In order to strengthen CSR initiatives in the community, the Company has approached TISS to guide NSE with the CSR Policy-making, Gap analysis, CSR plan and community engagement strategy, Project and Partner evaluation and screening, implementation monitoring, measurement of results etc., TISS is guiding NSE on its CSR efforts. CSR policy has been prepared and approved by the CSR Committee and the Board; with Primary Education, Elder Care and Sanitation & Safe Drinking Water, as focus areas. The Board authorised the CSR committee to approve CSR projects to be funded by NSE. The Board also noted that NSE has entered into the engagement with Tata Institute of Social Sciences (TISS) to evaluate and recommend proposals. The Board also approved the CSR budget recommended by the CSR Committee.

Subsequently, 8 Proposals from 6 NGOs were shortlisted for approval which were approved by the CSR Committee. Out of the same 7 Proposals fall under primary education category and 1 proposal falls under ‘Elder Care’ category. These proposal were taken to the CSR Committee for consideration and recommendation to the Board. The Board has approved 8 projects. Project Co-operation Agreements with NGOs have already been signed and disbursement is done for the first installment as specified under the agreements. The rest committed funds under the ‘Project Cooperation Agreement’ signed between NSE and NGOs will be disbursed as per its milestones.

Principle 9

Businesses should engage with and provide value to their customers and consumers in a responsible manner

1.            What percentage of customer complaints/consumer cases are pending as on the end of financial year.

None

2.            Does the company display product information on the product label, over andabove what is mandated as per local laws? Yes/No/N.A./Remarks(additional information)

Not Applicable

3.            Is there any case filed by any stakeholder against the company regarding unfairtradepractices,irresponsible advertising and/or anti-competitive behaviour during the last five years and pendingasonendoffinancial year. If so, provide details thereof, in about 50 words or so.

No stakeholder has filed a case against the Company. However, a case has been filed by a competitior against the Company, against which the Competition Commission of India imposed ` 55.50 crore penalty (along with interest @9% per annum), which was stayed by the Hon'ble Supreme Court of India.

4.            Did your company carry out any consumer survey/ consumer satisfaction trends?

Yes, Annual Customer Satisfaction Survey was conducted by IMRB (Indian Market Research Bureau) International on behalf of the Company.

Description of state of companies affair

BOARDS REPORT To, The Members, Your Directors have pleasure in presenting the Twenty-third Annual Report and Audited Accounts of the Company for the year ended March 31, 2015. 1. OPERATIONS AND MAJOR DEVELOPMENTS DURING THE YEAR 1.1 Global rankings - Equity Derivatives Market 1.1.1 Stock Futures During the year 2014, NSE was ranked as the 2nd largest exchange in respect of contracts traded in stock futures. The details of top 5 exchanges trading stock futures are given in Table 1 below: Table 1 (In millions) Sr. No.ExchangeContracts traded during 2014 1Moscow Exchange343 2National Stock Exchange India211 3EUREX124 4ICE Futures Europe99 5Korea Exchange96 Source: WFE 1.1.2 Index Options NSE is ranked 1st in the world in respect of contracts traded in index options. The details of top 5 exchanges in index options are given in Table 2 below: Table 2 (In millions) Sr No.ExchangeContracts traded during 2014 1National Stock Exchange India1057 2BSE India516 3Korea Exchange462 4Chicago Board Options Exchange406 5EUREX340 Source: WFE 1.1.3 Index Futures During the year 2014, NSE was ranked as the 7th largest exchange in the world in index futures. The details of top 10 exchanges in index futures are given in Table 3 as under: Table 3 (In millions) Sr No ExchangeContracts traded during 2014 1CME Group566 2EUREX368 3Osaka SE249 4Moscow Exchange245 5China Financial Futures Exchange217 6Singapore Exchange108 7National Stock Exchange India105 8BM&FBOVESPA67 9CBOE Future Exchange51 10Hong Kong Exchanges49 Source: WFE 1.1.4 Nifty Index Global rankings Nifty Index options ranked 1st across the top 20 Index options traded globally during the year 2014. (Source: www.futuresindustry.org rankings based on number of contracts traded or cleared between Jan 14 - Dec 14) 1.1.5 All products NSE continued to be ranked 4th across all the Derivatives exchanges in the world based on the volume of contracts traded during the year 2014. (Source: www.futuresindustry.org rankings based on number of contracts traded or cleared between Jan 14 - Dec 14) 1.2 Global Rankings-Capital Market In the Capital Market segment, NSE was ranked fourth in the world based on the number of trades during the calendar year 2014. The details of top 10 Exchanges are given below in the Table 4 below Table 4 (in Thousands) Sr. No.ExchangeNo of Trades 1BATS Global Markets - US2024993.6 2NASDAQ OMX1734590.0 3Shenzhen SE1712970.8 4National Stock Exchange India1706181.1 5Shanghai SE1590878.0 6NYSE1538961.6 7Korea Exchange1140518.2 8Japan Exchange Group - Tokyo638018.0 9BATS Chi-x Europe418339.1 10BSE India387044.7 Source: WFE 1.3 Membership at NSE 32 new members (14 in CM, F&O and CD segments; 8 in CM and F&O segments, 1 in CM and CD segments, 2 in CM segment, 5 in F& O segment, 1 in CD segment and 1 in Debt segment) were registered during the Financial Year 2014-15. The Exchange also granted additional segment membership to 14 members during the Financial Year 2014-15. Table 5 showing membership details for the Financial Year 2014-15 ParticularsCM SegmentF&O segmentCD segmentComposite membership (CM, F&O, CDS, WDM and Debt)Total members SEBI registered trading members25271612541419 Members registered in additional segments1211 Registered Sub-brokers25580NilNil Authorised persons13209120994418 Surrender of membership332112 Till March 31, 2015, a total of 243 members were enabled in the first dedicated debt trading segment 1.4 Capital Market (CM segment) The total turnover of CM segment in the year 2014-15 is Rs. 4329655 crores as compared to Rs. 2808488 crores in the year 2013-14, showing an increase of 54 %. The average daily traded value in 2014-15 is Rs. 17818 Crs as compared to Rs. 11189 Crs in 2013-14. As on March 31, 2015, the number of listed companies available for trading was 1511 compared to 1631 at the end of March 31, 2014. Figure 1: Month-wise Turnover and Average Daily Turnover in CM segment The changes in turnover statistics over the preceding year are presented in Table No.6 Table No.6: Turnover Statistics on CM segment Sr. No.Details2014-152013-14% Rise / (Fall) in 2014-15 1Total Number of trades (In lakhs)183281443127.00 2Total no. of shares traded (in lakhs)2361779153371653.99 3Total Turnover (Rs. Cr.)4329655280848854.16 4Market Capitalization at the end of year (Rs. Cr.)9930122727772036.45 5Turnover of CNX Nifty Securities (Rs. Cr.)1952171 1579587 23.59 6Total number of listed companies for trading.15111631-7.36 1.4.1 Index movement CNX Nifty saw upward movement of 26.65% moving from 6704.20 to 8491.00 over the financial year 2014-15. During the year 2014-15 the CNX Nifty touched a high of 9119.20 on March 04, 2015 and low of 6638.55 on May 08, 2014. Movement of CNX Nifty is shown in Figure 2: The turnover of CNX Nifty securities was Rs. 1952171 crores in the year 2014-15 as compared to Rs. 1579587 crores. The contribution of CNX Nifty securities turnover to total turnover during the year 2014-15 was 45.09% compared to 56.24% in the year 2013-14. Figure 2: Nifty movement 1.4.2 Market Capitalisation The market capitalization of securities available for trading on CM segment has increased by 36.45% during 2014-15 from Rs. 7277719.97 crores as on March 31, 2014 to Rs. 9930122.02 crores as on March 31, 2015. Out of total market capitalization of Rs. 9930122.02 crores as on March 31, 2015, Rs. 33188 crores was contributed by newly listed securities. The market capitalization growth is shown in Figure 3. Figure 3- Market Capitalization during year 2014-15 1.4.3 Distribution of Turnover Turnover-wise distribution of trading members About 74% of the trading members had an average daily turnover of Rs. 1 crore or more in 2014-15. In 2014-15 around 28% of the trading members have daily turnover more than Rs. 10 Crs.Figure No. 6 1.4.4 New Developments during the year In year 2014-15 various new developments have been taken by the Exchange. The details of the same are given below:- April 2014 - Institutional Trading Platform for SME securities Pursuant to SEBI circular no. CIR/MRD/DSA/33/2013 dated October 24, 2013 an Institutional Trading Platform (ITP) for SME securities was made available w.e.f. April 25, 2014. May 2014 - Revision in operating ranges for No band securities In the event of a market trend in either direction, the dynamic price bands may be relaxed during the day in co-ordination with the other Exchange. For the purpose of relaxing the dynamic price bands, the Exchange will take into account that a minimum of 10 trades must be executed with multiple UCC on both sides of the trade at or above 9.90 % or more of the base price and in further multiples of 5% of the price movement. The same is made applicable w.e.f May 13, 2014. May 2014 - Dissemination of NI15 Index on trading system in Capital Market segment The Exchange incorporated NI15 Index on trading system for its on-line dissemination w.e.f. May 30, 2014. July 2014 Market Data The Exchange has issued a circular for providing consolidated information to members regarding type of market broadcast provided by Exchange. September 2014 - Revised scheme - Offer for Sale through Exchange Platform Pursuant to SEBI circular on expanding the framework for Offer for Sale (OFS) of shares, the Exchange has issued detailed revised scheme for OFS of shares through exchange mechanism. In order to participate in the OFS, trading members and the issuer will be required to comply with the revised scheme. October 2014 - Dissemination of NIFTY Strategy Indices on trading system in Capital Market segment The Exchange incorporated the following four NIFTY Strategy Indices on trading system for its on-line dissemination w.e.f. October 13, 2014: Sr. No Index Name Broadcast Name 1 Nifty PR 1X Inverse Index Nifty PR 1X Inv 2 Nifty TR 1X Inverse Index Nifty TR 1X Inv 3 Nifty PR 2X Leverage Index Nifty PR 2X Lev 4 Nifty TR 2X Leverage Index Nifty TR 2X Lev October 2014 - Tick by Tick (TBT) market data over Multicast in Capital Market segment With effect from November 10, 2014, the Exchange started providing Tick by Tick market data over multicast. November 2014 - Discontinuation of trading in Retail Debt Market (RDM) securities In an endeavor to centralize trading in all debt instruments into a single platform, Exchange discontinued trading in Central Government securities in Retail Debt Market of Capital Market segment w.e.f. January 01, 2015. January 2015 - Trading system Password policy The Exchange has implemented the revised password policy for trading system w.e.f. January 05, 2015. The revised password policy is applicable to all users i.e. NEAT,NEAT+ and NNF users. January 2015 - Revised scheme - Offer for Sale through Exchange Platform Pursuant to SEBI circular no.CIR/MRD/DP/32/2014 dated December 1, 2014 on Modification of the Offer for Sale (OFS) Mechanism through Stock Exchanges and with an objective to facilitate orderly use of Offer for sale of shares by promoters / non promoters and to make various conditions and or requirements governing the use of OFS facility in transparent manner the Exchange has issued Revised Scheme for Offer for Sale. 1.6 FUTURES AND OPTIONS SEGMENT The financial year 2014-15 witnessed a significant increase of 46% in volumes and an increase in number of contracts traded by 43% vis-?is 2013-14 and in daily average open interest, it increased by 37.80% over previous year in the F&O segment. The average contribution of proprietary category increased to 50.92 % in 2014-15 from 47.73% in 2013-14. 1.6.1. Comparison of the close prices of the NIFTY Near Month Futures Contract (F&O segment) with the underlying movement of the NIFTY Index (Cash segment) along with the Daily Traded value of the F&O segment: Note: Special trading sessions on February 28, 2015 and October 23, 2014 (Muhurat Trading) 1.6.2 Records Achieved in the F&O Segment during 2014-15: CategoryTraded Value (Rs. Crs)Date of Record Stock Options28,00212-Apr-13 Index Options4,61,86426-Feb-15 Total F&O Traded Value5,81,56326-Feb-15 Number of trades 57,99,58628-Jan-15 Number of contracts traded 2,40,41,81724-Dec-14 It may be observed that during 2014-15, new records were set in Index options, Total F&O traded value, number of trades and number of contracts traded. 1.6.3 (a) Basic Statistics of the F&O segment: ParticularsApr 14 to Jun 14July 14 to Sep 14Oct 14 to Dec 14Jan 15 to Mar 152014-152013-14% Change Traded Value (Rs in crores) Daily Average1,85,8622,24,1452,43,8282,69,5742,28,8331,52,23750.31 Number of Contracts Daily Average50,81,72257,01,36986,67,4611,08,10,30475,59,84051,17,22847.73 Open Interest (Rs in crores) End of day averages1,77,8241,96,3772,17,1112,26,1912,04,3521,43,53842.37 % of Open interest to Daily Average Traded value968889838994 1.6.3(b) A graphical presentation of monthly product wise contribution is given below: Among all products, Index Options continued to dominate the Total Turnover with their contribution observed at 71.79% in 2014-15 1.6.4 Institutional Retail & Proprietary Investors Turnover Analysis: No Month Institutional RetailProprietary Average Gross Traded Value (Rs Crs.) Percentage ContributionAverage Gross Traded Value (Rs Crs.)Percentage ContributionAverage Gross Traded Value (Rs Crs.)Percentage Contribution 12013-1410,50,96916.522,79,20235.7930,38,39747.71 22014-1511,88,03112.8233,47,54536.1247,32,16651.06 It may be observed that the average contribution of proprietary category has increased in the year 2014-15 as compared to 2013-14. 1.6.5 Comparative analysis of the Traded Value in the F&O segment with the Cash segment: The ratio of F&O segment turnover to cash segment turnover was 13 for the year 2014-2015 as compared to 14 for 2013-2014. 1.6.6 Product-wise Basic Statistics: CategoryProductApr 14 to Jun 14Jul 14 to Sep 14Oct 14 to Dec 14Jan 15 to Mar 152014-152013-14% Change Daily Average Traded Value (Rs. Crs)Stock Futures36,41534,09431,36234,51534,12219,71873.05 Index Futures15,72515,63915,41820,74916,91112,29237.58 Stock Options13,16513,62113,65613,58713,5089,60040.71 Index Options120,556160,789174,391200,723164,290110,62748.51 Daily Average No. of ContractsStock Futures978,915872,587967,8941,092,885977,797678,94144.18 Index Futures435,503400,001530,282761,735532,157419,40426.88 Stock Options346,023345,945401,730413,272376,457319,42017.86 Index Options3,321,2794,082,8346,767,5538,542,4105,673,4273,699,46353.36 AverageStock Futures55,56161,80869,05375,65065,51837,16276.30 OI Value (Rs. Crs)Index Futures18,78821,58330,17632,78825,83419,42632.99 Stock Options16,09120,44520,38520,61819,38514,95029.67 Index Options103,577142,187150,739146,756135,815107,38026.48 AverageStock Futures1,607,4931,719,0222,203,0302,526,7772,014,0811,209,18166.57 Number of OI contractsIndex Futures513,564548,4341,126,4371,352,958885,348592,33949.47 Stock Options450,804566,430639,519683,980585,183449,39630.22 Index Options2,833,9203,622,4935,460,7335,863,5414,445,1723,214,03238.31 Number of trading Days60635862243251 1.6.7 TOP 5 TRADED SYMBOLS Futures: Options: Note: Index Futures includes India VIX* data. 1.6.8 New Developments during the year for the year 2014-15 In year 2014-15 various new developments have been taken by the Exchange. The details of the same are given below:- May 2014 - Revision in Operating Range of Stocks Futures: In the event of a market trend in either direction, the dynamic price bands may be relaxed during the day in co-ordination with the other Exchange. For the purpose of relaxing the dynamic price bands, the Exchange will take into account that a minimum of 10 trades must be executed with multiple UCC on both sides of the trade at or above 9.90 % or more of the base price and in further multiples of 5% of the price movement. June 2014 - Quantity freeze limit for Indices: Quantity freeze limit for all contracts on indices shall be on the following methodology for computation of quantity freeze for Index underlying. Index Level FromToQuantity Freeze Limit 0575015000 5751862510000 8626115007500 11501172505000 > 172502500 All orders entered in the trading system having quantity more than the specified freeze quantity limit for contracts on indices shall be frozen. July 2014 Market Data The Exchange has issued circular for providing consolidated information to members regarding type of market broadcast provided by Exchange. December 2014 - Clarification on long term options contracts: Exchange has decided that the lot size of an existing Nifty (long term) expiry options contract shall be revised from 50 to 25 once it becomes a Far month expiry contract. This way, the lot size for Near, Mid and Far month Nifty futures and options contracts shall continue as 25 and the lot size of Nifty (long term) Options contracts shall continue as 50. December 2014 - Order Number format change: Order number is a unique identification for an order. As soon as order is received by Exchange, a unique order number is generated by Exchange and is sent to the Trader with order response. Order number is a 16-digit numeric field. Only the format of the order number has been changed. No change in structure. In new format, first 2 digits will contain the stream number and the next 14 digits will be allotted to the order sequence number. January 2015 - Trading system Password policy: The Exchange has implemented the revised password policy for trading system w.e.f. January 05, 2015. The revised password policy is applicable to all users i.e. NEAT, NEAT+ and NNF users. February 2015 - Trade Execution Range: Trade Execution Range was introduced in April 2014 and subsequently revised. Orders shall be matched and trades shall take place only if the trade price is within the reference price and execution range. Execution range is the range on both sides of the reference price as given below: SegmentReference Price (Rs.)% of Reference PriceMinimum absolute Range (Rs.) FuturesAll5%- Options0.05 to 25-7.50 >2530%10.00 There is no change to the existing applicable operating ranges for valid order entry and all orders that are within the operating range shall be accepted as is being done currently. Any incoming order, if it results in execution of a trade outside the reference price and execution range, such an order (full or partial as the case may be) shall be automatically cancelled by the Exchange. The Exchange may modify the execution range as and when necessary. 1.7 CURRENCY DERIVATIVES SEGMENT The financial year 2014-15 witnessed a decrease in currency derivatives (Currency Futures and Options) volumes. The average daily turnover in currency derivatives dropped by 22.74% and stood at Rs.12,705 crores in 2014-15 compared to Rs. 16,445 crores in 2013-14. The daily average number of contracts dipped by 25.36% in 2014-15 and stood at 20,19,600 contracts as compared to 27,05,707 contracts traded in 2013-14. The daily average open interest increased by 34.77% in 2014-15 as compared to what was observed last year during the same period. The number of members registered in currency derivative segment has risen to 872 (823 in 2013-14), of which 35 are banks and 2 Primary dealers. Currency Futures: Average daily turnover in Currency futures for the financial year 2014-15 decreased by 21.63% and stood at Rs. 9,445 crores as compared to Rs. 12,053 crores seen in 2013-14. Futures trading constituted 74% of the total turnover in the segment. USD-INR currency pair was the most traded futures contracts. The average market share of NSE in currency futures stood at 37.40% in 2014-15. Currency Options: Average daily turnover in currency options also decreased by 26% in 2014-15 at Rs. 3,260 crores compared to Rs. 4,392 crores observed during 2013-14. The average market share of NSE in currency options stood at 62.09% in 2014-15. Interest Rate Futures: Cash Settled Interest Rate Futures (IRF) contracts were introduced on January 21, 2014. Average daily turnover is Rs. 1,771 crores and daily average open interest is 1,71,287 contracts. 1.7.1. New Developments during the year 2014-15 In year 2014-15 various new developments have been taken by the Exchange. The details of the same are given below:- July 2014: Market Data Broadcast: The Exchange has issued circular for providing consolidated information to members regarding type of market broadcast provided by Exchange. August 2014: Revised expiry time for Currency Derivatives contracts: RBI issued Press Releases ref. no. 2014-2015/276 dated August 07, 2014, regarding revised methodology for computation and dissemination of Reference Rates polled in a five minute window from 11:30 AM to 12.30 PM chosen randomly. These rates are used as final settlement price for Currency Derivatives contracts on the day of expiry. In view of the above, the Exchange decided to modify the Expiry Time of all Currency Derivative Contracts from 12:15 PM to 12:30 PM. The time for corresponding Expiry i.e. Trade CXL / Modification and Position Limit setup time was revised to 13:00 PM from 12:45 PM. The revised timings are applicable for all the following contracts: USDINR Futures and Options EURINR, GBPINR and JPYINR Futures December 2014: Order Number format change: Order no. is a unique identification for an order. As soon as order is received by Exchange, a unique order number is generated by Exchange and is sent to the Trader with order response. Order number is a 16-digit numeric field. Only the format of the order number has been changed. No change in structure. In new format, first 2 digits will contain the stream number and the next 14 digits will be allotted to the order sequence number. January 2015 - Trading system Password policy The Exchange has implemented the revised password policy for trading system w.e.f. January 05, 2015. The revised password policy is applicable to all users i.e. NEAT, NEAT+ and NNF users. February 2015: Trade Execution Range: Trade Execution Range was introduced in March 2014 and subsequently revised. Orders shall be matched and trades shall take place only if the trade price is within the reference price and execution range. Execution range is the range on both sides of the reference price as given below: SegmentContract MonthsReference Price (Rs.)% of Reference PriceMinimum absolute Range (Rs.) FuturesTenure upto 6 monthsAll1%- Tenure greater than 6 monthsAll2%- Options0.0025 to 0.50-0.05 >0.5010%- There is no change to the existing applicable operating ranges for valid order entry and all orders that are within the operating range shall be accepted as is being done currently. Any incoming order, if it results in execution of a trade outside the reference price and execution range, such an order (full or partial as the case may be) shall be automatically cancelled by the Exchange. The Exchange may modify the execution range as and when necessary 1.8. Debt segment NSEIL has launched the Countrys first dedicated debt trading platform in May 2013. Further, the Exchange has introduced reporting of negotiated trades and anonymous trading in one debt platform. The Debt segment provides an opportunity for retail investors to invest in corporate bonds on a liquid and transparent exchange platform. It also helps Institutions, an ideal platform to buy and sell at optimum prices and to help Corporates to get adequate demand, when they are issuing the bonds. During 2014-15, to centralize trading in all debt instruments in the Debt segment, Exchange has closed Retail Debt Market segment available for Central Government Securities and which is part of the capital market segment on December 31, 2014, and all securities (central government securities) available in RDM were made available for trading in the New Debt segment. Further, the WDM segment will also be closed on June 30, 2015 and those securities will be made available in the New Debt segment. Subsequent to this all debt instruments will be available in once place New Debt Segment. 2. SERVICES TO INVESTORS During the Year 2014-15, the Exchange dealt with 9034 investor complaints against trading members and companies and facilitated 669 arbitration and appellate arbitration cases. With a view to enhance access and reach to investors, the Exchange commenced the Investor Services Centres at three more cities - Vadodara, Patna and Lucknow. The Exchange totally has fourteen Investor Service Centres at Mumbai, Delhi, Chennai, Kolkata, Ahmedabad, Hyderabad, Indore, Kanpur, Bangalore, Pune, Jaipur, Vadodara, Patna and Lucknow to facilitate query resolution, complaint resolution and to provide arbitration facilities. The Exchange has empaneled 109 Arbitrators and 111 IGRP members across 14 centres. The Exchange also has the mechanism of interim relief to investors against their admissible claim during pendency of their claim before arbitrators or court as per SEBI guidelines. Further, the Exchange also sends to respective investors their trade related information through an SMS and e-mail at the end of each day, whose details of mobile number and e-mail are uploaded to the Exchange. Facility of trade verification is also provided to investors on the Exchange website. 3. NSEs Research Initiatives in 2014-15 3.1 Tie-up with IFMR Finance Foundation The National Stock Exchange of India (NSE) and the IFMR Finance Foundation (IFF) entered into a partnership for research in the area of Financial Inclusion. 3.2 NSE-IGIDR International Conference in Corporate Governance The first annual international conference in corporate governance was organized in July, 2014 under the aegis of the NSE-IGIDR research collaboration called the Corporate Governance Research Initiative. 3.3 NSE NYU Conference in Capital Markets Under the NSE-NYU research partnership called the Initiative on the Study of Indian Capital Markets, the second annual international conference in capital markets was held in August, 2014. 3.4 Quarterly Briefings under the aegis of the NSE Centre for Excellence in Corporate Governance (NSE CECG) To project NSE as thought leader in corporate governance and engage with our listed companies on important governance issues, the NSE Centre for Excellence in Corporate Governance (NSE CECG) was established in 2012-13. Under the aegis of NSE CECG, four issues of Quarterly Briefing were released and circulated among Directors of all NSE listed companies and top SEBI officials in 2014-15. 3.5 Publications of NSE Indian Securities Market Review (ISMR) and the NSE Factbook are two NSE publications which are prepared on an annual basis. In addition, edited transcripts of two international conferences organized by NSE were circulated among various stakeholders in the securities markets. Besides, a White Paper Series of the NSE-NYU conference was widely circulated. 3.6 Seminars and Panel Discussions In 2014-15, the Economic Policy and Research (EPR) department continued to organize seminars and panel discussions by eminent people on securities market, corporate governance and macroeconomic issues. 3.7 Dr. R. H. Patil Memorial Lecture The third Dr. R. H. Patil Memorial Lecture was organized by the Indian Economic Association (IEA) as part of its annual conference and was supported by NSE.

Details regarding energy conservation

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS / OUTGO a. Conservation of Energy and Technology Absorption The disclosure of particulars with respect to conservation of energy and technology absorption in terms of Section 134(1)(m) of the Companies Act, 2013 read with Rule 8 of Companies (Accounts) Rules, 2014 are given hereunder:- NSE has undertaken to use the following major technological initiatives towards ‘‘Effective Energy Conservation’’ as well as ‘‘Load Management System’’ namely: i. Under the ‘Renewable Power Scheme’, NSEIL has commissioned its ‘Wind Power Project’ of the capacity of 6.25 MW at Satara in Maharashtra to set off around 65 % of energy consumption at Exchange Plaza building ii. Constructed a ‘Tire-IV compatible Colocation-III Data Centre to ensure that the ‘Power Utilisation Effectiveness’ (PUE) of new Data Centre does not exceed the benchmarked PUE iii. Implementing on the audit done on the Carbon and Water Foot Print of Exchange Plaza. iv. Active participation in ‘Thermal Energy Storage Programme’ being conducted by M/s. Tata Power Co. (TPC). v. As an alternative to the conventional Heating Ventilation and Air Conditioning System (HVAC), NSEIL has the ‘Thermal Energy Storage' for air-conditioning system during the peak hours. vi. Revamped the ‘Building Management System’ for effective and efficient operations of the Services especially the Air Handling Units (AHUs). vii. NSEIL has Motion/Occupancy Sensors installed in the lighting systems in the general staff areas. viii. NSEIL has ‘Lighting Transformers’ for regulated voltage of Lighting System. ix. ‘Electronic Ballast and Compact Fluorescent Lamps’ are used in Lighting System. x. NSEIL has ‘Automatic Power Factor Control Units’ to step up power factor of the building. xi. NSEIL has ‘Solar Power Plant’ to cater the part of lighting load at Exchange Plaza. xii. NSEIL has ‘Rain Water Harvesting System’ to harvest the rain water in the periphery of Exchange Plaza. xiii. NSEIL has the ‘Vermiculture Plant’ installed wherein compostable material like food waste collected from canteen, paper & cardboard are collected and post processing in the Vermiculture Unit, the manure is generated which is used for Gardening purposes. xiv. NSEIL has the ‘Sewerage Treatment Plant’ to reuse building's domestic and flushing water (i.e. after treatment) for its Cooling Towers associated with HVAC System and for Gardening purposes every day.

Details regarding technology absorption

The disclosure of particulars with respect to conservation of energy and technology absorption in terms of Section 134(1)(m) of the Companies Act, 2013 read with Rule 8 of Companies (Accounts) Rules, 2014 are given hereunder:- NSE has undertaken to use the following major technological initiatives towards Effective Energy Conservation as well as Load Management System namely: i. Under the Renewable Power Scheme, NSEIL has commissioned its Wind Power Project of the capacity of 6.25 MW at Satara in Maharashtra to set off around 65 % of energy consumption at Exchange Plaza building ii. Constructed a Tire-IV compatible Colocation-III Data Centre to ensure that the Power Utilisation Effectiveness (PUE) of new Data Centre does not exceed the benchmarked PUE iii. Implementing on the audit done on the Carbon and Water Foot Print of Exchange Plaza. iv. Active participation in Thermal Energy Storage Programme being conducted by M/s. Tata Power Co. (TPC). v. As an alternative to the conventional Heating Ventilation and Air Conditioning System (HVAC), NSEIL has the Thermal Energy Storage' for air-conditioning system during the peak hours. vi. Revamped the Building Management System for effective and efficient operations of the Services especially the Air Handling Units (AHUs). vii. NSEIL has Motion/Occupancy Sensors installed in the lighting systems in the general staff areas. viii. NSEIL has Lighting Transformers for regulated voltage of Lighting System. ix. Electronic Ballast and Compact Fluorescent Lamps are used in Lighting System. x. NSEIL has Automatic Power Factor Control Units to step up power factor of the building. xi. NSEIL has Solar Power Plant to cater the part of lighting load at Exchange Plaza. xii. NSEIL has Rain Water Harvesting System to harvest the rain water in the periphery of Exchange Plaza. xiii. NSEIL has the Vermiculture Plant installed wherein compostable material like food waste collected from canteen, paper & cardboard are collected and post processing in the Vermiculture Unit, the manure is generated which is used for Gardening purposes. xiv. NSEIL has the Sewerage Treatment Plant to reuse building's domestic and flushing water (i.e. after treatment) for its Cooling Towers associated with HVAC System and for Gardening purposes every day.

Details regarding foreign exchange earnings and outgo

Foreign exchange earnings during the year amounted to ` 0.08 crores. Foreign exchange outgo during the year was ` 18.49 crores.

Disclosures in director’s responsibility statement

Your Directors confirm that - in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures, if any; (i) 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 NSEIL at the end of the financial year i.e., 31st March, 2015 and of the profits of NSEIL for that year; (ii) the Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of NSEIL and for preventing and detecting fraud and other irregularities; (iii) the Directors had prepared the annual accounts on a going concern basis; and (iv) the Directors had devised proper systems to ensure compliance with the provisions of all applicable laws and such systems are adequate and were operating effectively