Manu John Final Project

8/6/2019 Manu John Final Project

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STUDY ON PERFORMANCE OF CSBL AS A DEPOSITORY PARTICIPANT

INDUSTRY PROFILE

EVOLUTION OF STOCK EXCHANGES IN INDIA

The origin of stock market relates back to the year 1494, when the Amsterdam Stock Exchange

was set up. In India it dates back to 18 th century and era when the East India Company was a

dominant institution in India.

The Bombay Stock Exchange (BSE) was founded in the year 1875.About 150 brokers formed

the Ahmadabad Shares and Stock Association on 15 June 1908.In the year 1920,one stock

exchange was established in Northern India and one in Madras called The Madras Stock

Exchange. The Madras Stock Exchange Association Pvt Ltd. was established in the year

1941.On 29th April 1959, it was reorganized as a company limited by guarantee under the name

and style of Madras Stock Exchange (MSE).The Lahore Stock Exchange was formed in the year

1934.However in the year after the Punjab Stock Exchange came in to existence, the Lahore

Stock Exchange merged with it. In Calcutta a second Stock Exchange by the name The Bengal

share and Stock Exchange ltd. was established in the year 1937 and likewise once again in the

year 1938,Bombay also witnessed a rival Stock Exchange formed in the name of Indian Stock

Exchange Ltd , the U.P. The Hyderabad Stock Exchange ltd. was incorporated in the year

1944.Subsequently the Bangalore Stock Exchange was registered in the year 1957 andrecognized in the year 1963.The third Stock Exchange in the state of Gujarat the Vadodara

Stock Exchange Ltd. Was incorporated in 1990.

STOCK EXCHANGES IN INDIA

1. Ahmadabad stock exchange.

2. Bangalore stock exchange.

3. Bhubaneswar stock exchange.

4. Bombay stock exchange.

5. Calcutta stock exchange.

SAHYADRI COLLEGE OF ENGINEERING AND MANAGEMENT Page 1


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6. Cochin stock exchange.

7. Coimbatore stock exchange.

8. Delhi stock exchange.

9. Guwahathi stock exchange.

10. Hyderabad stock exchange.

11. Indoor stock exchange.

12. Jaipur stock exchange.

13. Kanpur stock exchange.

14. Ludhiana stock exchange.

15. Madras stock exchange.

16. Magadha stock exchange.

17. Pune stock exchange

18. Vadodara stock exchange.

19. NSE.

OVER THE COUNTER EXCHANGE OF INDIA

Promoted by a consortium of leading Financial Institutions of India including Unit Trust of

India (UTI),Industrial Credit and Investment Corporation of India (ICICI) ,Industrial

Development Bank of India (IDBI),Industrial Financial Corporation of India (IFCI), Life

Insurance Corporation of India (LIC), others, OTCEI is a recognized stock exchange under the

securities contracts (Regulation) Act, 1956.It is set up to provide small and medium sized

companies access to the capital markets and to investors a convenient mode of investments. It is

ring less electronic national exchange listing an entirely new set of companies which companies



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will not be listed on other stock exchanges. The companies listed on any other stock exchanges

cannot be listed on OTCEI.

THE BOMBAY STOCK EXCHANGE (BSE).

Nine elected directors (one third of which retire every year by rotation, and Executive Director,

three Government nominees , a Reserve Bank of India nominee and five public representatives

constitute the Governing Board of this exchange which regulates the Exchange and decides its

policies. A president and Hon. Treasurer are annually elected from among the elected directors

by the Governing board following the election of Directors. The executive director as the Chief

Executive Officer is responsible for the day to day administration of the exchange.

THE NATIONAL STOCK EXCHANGE (NSE)

The National stock exchange considered as arrival exchange to the Bombay stock exchange is

Indias leading stock exchange covering more than 160 cities and towns across the country. It

provides a modern fully computerized trading system designed to offer investors across the

length and breadth of the country a safe and easy way to invest or liquidate investment in

securities. It was incorporated in November 1992, recognized as a stock exchange in April 1993,

went live for debt markets in June 1994 and commenced capital market operations in

November 1994.Today it is the largest exchange in India with a network that trades 1400 equity

stocks and 500 debt securities.

COMPANY PROFILE

a.BACKGROUND AND INCEPTION OF THE COMPANY



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The Cochin Stock Exchange Limited (CSE) is a capital stock market in Kochi, Kerala in India.

Incorporated in 1978, it has now over 350 Indian companies listed. CSBL a wholly owned

subsidiary of CSE is a member of NSE and BSE.

Cochin Stock Exchange (CSE) is one of the premier stock exchanges in India. Established in

the year 1978 the exchange has undergone tremendous transformation over the years. The

exchange had a humble beginning with just 5 companies listed in 1978-79 and had only 14

members. Today the exchange has 508 members and 240 listed companies. In 1989 the company

went for computerized of its offices. In order to keep pace with the changing scenario in the

capital but CSE took various initiative including trading in dematerialized trading called Cochin

online trading(COLT) on March 17, 1997. CSE was one of the interconnected stock exchanges

of India. The objective was to consolidate the small, fragmented and less liquid mutts in to a

national level integrated liquid mutt.

LEGAL FRAMEWORK OF THE ORGANIZATION

The Cochin stock exchange is directly under the control and supervision of Securities and

Exchange Board of India (SEBI), and is today a demutualized entity in accordance with the

Cochin stock exchange (demutualization) scheme 2005 approved and notified by SEBI on 29 th of

august 2005. Demutualization essentially means de-linking and separation of ownership and

trading rights and restructuring.

b.NATURE OF BUSINESS CARRIED

CSBL is the first subsidiary of a stock exchange to get membership in both NSE and BSE, and

became participant in the Central Depository Services Ltd. The main activity in CSE is the work

associated with its subsidiary Cochin Stock Brokers Ltd. So it was decided to allow CSBL to

utilize the whole system and other assets of CSE for functioning of its subsidiary a total

consideration of Rs.2075 crores since the main activity of trading is taking place in CSBL staff

of the exchange is now on a deputation to its subsidiary CSBL

c.VISION OF CSE



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1. Providing investors with high level of liquidity whereby the cost and time involved in the

entry and exit from the mutt becomes the least.

2. Built infrastructure for capital mutt by turning CSE in to a financial super market.

3. Spread equity call and to serve investors of the region.

4. Professional stock broking and investment management function.

5. Impart capital mutt knowledge to all intermediaries on a continuous basis.

6. Develop a winning team of professionals as employees of CSE and its associates.

MISSION OF CSE

1. To play a vital role in the economic development of the region and to protect investors.

2. Making all operations absolutely transparent.

3. Bringing high tech solutions for the stock broking problems.

d) PRODUCT OR SERVICE PROFILE

The Cochin Stock Exchange Ltd. decided to start a subsidiary called the Cochin Stock BrokersLimited (CSBL). CSBL was incorporated on 28-12-1999 having membership in National Stock

Exchange and Bombay Stock Exchange. CSBLs depository division began operations

in 2001, through CDSL.At present the service is well established with a large number of satisfied

clientele. In our continuous endeavour to offer best service to our customers we offer the

following features:

Large client base in and around Kerala.

Access over internet to statements and reports.

Easy /easiest facility for online viewing and electronic transfer of securities.

Dedicated specially trained customer care executives at our Depository, to handle all your

DP queries



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Retd. Chief Commissioner of Income Tax and Member, Central

Administrative Tribunal.

2

Shri.A.S Narayanamoorthy Chartered Accountant

Public Interest Director

3

Shri.C.J.Mathew Member(Rtd.), Postal Services Board, India

Public Interest Director

4

Shri Robins Jacob

Share Holder Director

5

Shri M.Vijayakumar


6

Shri Varghese Menachery


7

Shri. Varghese Mathew

Member Director

8

Shri Abraham P.Korah

Member Director

9

Shri K.Jacob George

Member Director

10

Shri P.C. Cyriac, IAS

Shareholder Director

11

Shri V A Vijayan Menon

Retired ROC

Shareholder Director

12 Shri. V Srinivasan Executive Director

g) COMPETITORS INFORMATION

1.GEOJIT BNP PARIBAS

Geojit BNP Paribas has 24 years of in-depth broking experience in the Indian Capital Market.

More than 5,76,000 clients and over Rs 13,800 crores (as of 31st Dec 2010) in Assets Under

Management reflect the trust reposed in our expertise. In the year 2000, Geojit BNP Paribas

pioneered the simple concept of providing individuals with the facility to trade online. This



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subsidiary of the Company. Vertex Securities Limited and its parent company, Transwarranty

Finance Limited, together represent a service, investment banking, brokerage and financial

services group.

2h) INFRASTRUCTURE FACILITIES

Cochin Stock Exchange Investor Protection Cell

CSE maintains a separate legal department which is headed by Manager-Legal. It advises the

management about the merits and demerits of legal issues including the exchange. The

department's major function is to bring to notice to members and the investing public about the

different rules, regulations and directives of SEBI with regard to trading in the capital market by

the brokers and sub-broker. .

The areas which are being looked after are:

Investor Grievance Service

Arbitration

Default

Cochin Stock Exchange Training Centre

The Institute educate members, investors and general public. It offers four essential modules.

They are as follows:

Capital Market

Derivatives

Depository

Mutual Funds

Cochin Stock Exchange Facilities

A software called MULTEX is given to all brokers. The brokers can simultaneously access to

BSE and NSE terminals. To analyse the market trends, the exchange has provided a software

http://www.corporateinformation.com/Company-Snapshot.aspx?cusip=C35600090http://www.corporateinformation.com/Company-Snapshot.aspx?cusip=C35600090


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package known as Meta Stock and ERS. It has gained wide acceptance from members, investors

and students from various institutes. The exchange maintains a good library with over 2500

books, journals, business magazines and reports. Beside all these, it also maintains various

committees for the betterment of the brokers, public and other associated with the exchange. Anoptical fibre connection has been laid down by Asianet Satellite Telecommunications to facilitate

more trading options.

2 i) WORK FLOW MODEL

The policy decisions of the CSE are taken by the Board Of Directors. The Board is constituted

with 12 members of whom less than one-fourth are elected from amongst the trading member of

CSE, another one fourth are Public Interest Directors selected by SEBI from the panel submitted

by the Exchange and the remaining are Shareholder Directors. The Board appoints the Executive

Director who functions as an ex-officio member of the Board and takes charge of the

administration of the Exchange

Eligibility criteria for Listing .

The issuer who decides to come out with Public Issue has to mandatorily get its securities listed

on the Regional Stock Exchange. The minimum issued capital of the company should not be

less than 3 crores of which a minimum of 25% should have been offered to the public.

According to the mandate of SEBI the Stock Exchange of Kochi trades for sub brokers clients.

Candidates interested in investing through the Cochin Stock Exchange are required to register

themselves with the sub brokers.

Documents for Trading


KYC Form

Documents on policies and

procedures


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CHART No.1

KYC Form

TO provide general information about the client.

Documents on policies and procedures

To provide information to clients on our policies and procedures on certain matters.

Broker-Sub-Broker client agreement

To finalise terms and conditions and rights and liabilities under broking services between broker

and direct client.

Combined risk disclosure document


Investors Rights and

Obligations

Combined risk disclosure

document

Voluntary Documents for

requests

Broker-Sub-Broker client

agreement


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To provide basic information or insight to the client about the risk associated with securities

market.

Investors Rights and Obligations

To provide basic information or insight to the client about their Rights Obligations related to

their transactions in the securities market.

Voluntary Documents for requests

Voluntary documents for operational convenience of clients account to be accepted only if the

client is willing for the same.

j)ACHIEVEMENTS OR AWARDS

CSBL is the first subsidiary of a stock exchange to get membership in both NSE and BSE, and

became participant in the Central Depository Services Ltd.The main activity in CSE is the work

associated with its subsidiary Cochin Stock Brokers Ltd.So it was decided to allow CSBL to

utilize the whole system and other assets of CSE for functioning of its subsidiary a total

consideration of Rs.2075 crores since the main activity of trading is taking place in CSBL staff

of the exchange is now on a deputation to its subsidiary CSBL

k) FUTURE GROWTH AND PROSPECTS

To provide investors a high level liquidity where the cost and time in the entry and exit

from the market becomes the least.

To provide a high tech solutions and absolute transparency of all the operations, to the

extent of possibilities.

To built an infrastructure for the capital market by turning it into a financial super market.

To spread equity cult and serve the investors of the region.

To provide professional stock broking and investment management function.

To impart capital market knowledge to all its intermediaries on a continuous basis.



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.

CHART No.2

1.STRUCTURE

ORGANIZATION STRUCTURE OF COCHIN STOCK EXCHANGE


BOARD OF

DIRECTORS

EXECUTIVE

DIRECTOR


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CHART No.3

1.Membership Department

The Membership Department screens applications from prospective members to ensure that they

are eligible to be members of the Exchange as per provisions of the Securities Contracts

Regulation Act. It is also verified whether they are Fit and Proper persons eligible to be

members as per the SEBI (Criteria for Fit and Proper persons) Regulation 2004. The eligible

applications are processed and forwarded to SEBI for the purpose of obtaining registration with

SEBI. The department continuously follows up the status of the applications with SEBI and

provides necessary data if any required by SEBI. The members are informed of their fee liability

as and when information in this regard is obtained from SEBI. The Membership Department

also assists SEBI by ensuring proper delivery of notices and letters issued by SEBI to the

concerned members. The changes in status and constitution of the Brokers are sent for approval

to the Governing Board of the Exchange and thereafter to SEBI and Members are given

necessary directions wherever required. Change in address and contact information are updated

in the Finance and Accounting System and SEBI intimated.

2.System Departments

The Systems Department is the heart of the various operations of CSE. The department provides

the necessary technical support for screen based trading and the computerized functioning of all

the other departments.

The activities of the department include: -

Developments of software needed for the functions of the exchange.

Maintenance of Multex software, which enables online trading with NSE and BSE.


LEGAL

SYSTE

MS

SETTLE

MENTCDSL

SURVE

ILLANCE

LISTIN

G

MARKE

TING

AND

PUBLICATIO

N

ADMINI

STRATION

FINAN

CE


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Maintenance of an effective network of computers for the smooth functioning of

the exchange.Providing the necessary services to the Settlement and Surveillance

Departments.

The support for maintenance of depository participants accounts with the CSBL DP.

The major back office system soft wares used are NESS and BOSS respectively for

NSE and BSE trades calculations. These software are developed in-house by the

software professionals At the Exchange and are used to maintain the entire records

of all the trades that occur each day.It also does all the required calculations for

deductions and also generates reports requiredby the brokers and their clients.

3.Legal DepartmentsGuided by the Officer-Legal, the Legal Department is primarily responsible for advising the

management of the merits and demerits of legal issues involving the Exchange. The department

consistently monitors the compliance parameters in terms of the Companies Act, SEBI Act,

Securities Contracts Regulation Act and other related statutes. Listing Guidelines and related

criteria stipulated by SEBI, and the rules, regulations, directives and circulars issued by SEBI

with regard to trading in the Capital Market are consistently scrutinized and necessary directions

are given to the concerned departments to ensure strict and continued compliance. Relevant

developments are brought to the notice of the members and the investing public. Officer-Legal is

the Compliance Officer as per the provisions of SEBI regulations and also functions as Secretary

to the Board of Directors. Other major activities undertaken by the department relate to Investor

Grievance Service, Arbitration and Resolution of issues pertaining to declared defaulters.

4.Finance Departments

The Finance Department controls the financial transactions of the Exchange and is the life line

of the organization. The department is headed by a Finance Officer.

The activities of the finance department include.

Fund Management

Interaction with bankers



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Maintaining general accounts of the Exchange

Preparation of various financial statements.

Maintaining payrolls and cash register.

Coordinating accounting transactions of different branches and departments. Taxation

Budgeting and Expense research.

Maintenance of internal control system.

Liaison with external and internal auditors

Annual Report Generation

5.Settlement Departments

Settlement Department is a key department of the Exchange, dealing with cash and securities. It

assists the brokers in settling the matters related to their pay-in and payout, recovery of dues and

settling issues related to bad deliveries. This department is headed by a Deputy Manager assisted

by two Senior Officers who take care of the operations involved in the settlement activities in

CSE. The Exchange follows the T+2 settlement system.

6.Marketing Departments

The Marketing Department interacts with the brokers of the exchange trading both within the

state and outside and collects their opinions and suggestions. These are brought to the notice of

the Committee constituted for the purpose and decisions of the committee are placed for

approval of the Governing Board of the Exchange .The efforts are aimed at improving the quality

and efficiency of the service offered. In addition, the department conducts extensive surveys and

campaigns in remote areas and where necessary organizes awareness programmes about capital

markets. Experts with sufficient experience in the trade brief the participants and address their

queries. Talk shows and interviews are conducted on television channels, clippings are displayed

in theatres all with a view to increase public awareness and motivate their interest in the Capital

Markets .The marketing wing also coordinates the off campus programmes of the CSE Institute



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and organizes regular classes at authorized centres after verifying the availability of suitable

infrastructure and facilities.

7.Surveillance Departments

The Exchange has set up the Surveillance Department to keep a close watch on price movements

of scrip and to detect market abuse like price rigging, monitor abnormal prices and volumes

which are not consistent with normal trading pattern etc. The main objective of the department is

to ensure a free and fair market, to avoid manipulations and to manage risks. The surveillance

function at the exchange has assumed greater importance in the last few years. SEBI has directed

the Exchange to set up a separate surveillance department with staff exclusively assigned for this

function.

The department conducts in-depth investigation based on preliminary enquiries made into

trading of the scrip as also at the instance of SEBI. . Conducting investigations involves the

following stages: -.

1) Identification of scrip based on the alerts thrown by the online system and offline reports.

2) Identification of Members from whom the client details have to be called for verification.

3) Preparation of company profile including Corporate News and Financial results

.4) Compilation of client details

5).Preparation of reports. In case irregularities are found, necessary action is initiated.

8.Arbitration Department

Arbitration is an alternative dispute resolution mechanism provided by the Exchange for

resolving disputes between trading members inters and between trading members and their

clients in respect of trades done on the Exchange.

All claims, differences or disputes between trading members, or between a member and a

remisier or authorized assistant, employee or other person sharing brokerage with him, arising

out of trades, contracts or transactions executed on the automated trading system of the



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Exchange will be, with the permission of the Board Of Directors, referred to arbitration in

accordance with the Rules, Bye-laws and Regulations in force.

The Bye-laws of the Exchange provide the procedure for Arbitration. The Exchange maintains a

panel of arbitrators. SEBI directives stipulate that not more than 20% of the members of the

Arbitration Committee shall be Trading Members. Parties to the dispute have the option to select

the arbitrator of their choice from the panel. In case either party is aggrieved by the Arbitration

award recourse can be had under the provisions in the Arbitration and Conciliation Act 1996.

9. Listing Department

Listing means admission of the securities of a company to trading privileges on a Stock

Exchange. The principal objectives of listing are to provide ready marketability and impart

liquidity and free negotiability to stocks and shares; ensure proper supervision and control of

dealings therein; and protect the interests of shareholders and of the general investing public.

According to Section 73 of the Companies Act, every company intending to offer shares or

debentures to the public for subscription by the issue of prospectus shall, before such issue,

make an application to one or more recognized Stock Exchanges for permission for the

shares and debentures intending to be offered, to be dealt within the Stock Exchanges or eachsuch Stock Exchange. Further if the issue amount exceeds 5 crores, the company has to make

arrangements to list the securities in one more Stock Exchange, apart from regional stock

Exchange.

2.STRATEGY

The route that organization has chosen for its future growth, a plan organization formulates to go

sustainable competitive advantage. Strategy means those actions that a company plans inresponse to or anticipation of change to its external environment.

Strategy refers to the determination of the purpose & the basic long term objectives of an

enterprise & the adoption of courses of action & allocation of resource necessary to achieve the

aims.



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3.SYSTEM

The formal & informal procedures, including innovation system, compensation system, MIS

capital allocation System that governed every activity. Changes in strategy may be implemented

with changes in systems rather than in the company structure. Changes in company structure, for

e.g., from functional to individual or functional to matrix or divisional to matrix could also

necessitate changes in the systems in various degrees. System refers to all the rules, regulations,

and procedures, both formal and informal that complement the organization structure.

4.SKILL

To import required skill, COCHIN STOCK EXCHANGE conducting training programme i.e.,

both on the job training and off the job training which increases the knowledge and skill of an

employee for doing the job.

On-the-Job Training Method

Cochin Stock Exchange provides On-the-Job training according to the need. For this method of

training, they are inviting experts from various training institutions. This type of training will be

conducting once in three months/six months/ a year.

The methods of on-the-job training, which are adopted by Cochin Stock Exchange, are as

follows:

Coaching

The trainer is placed under a particular supervision who functions as a coach in training the

individuals according to organization requirements. To give coach they are inviting experts from

various institutions like National Stock Exchange(NSE) , and sometimes top managers of the

organization etc.

Job Instructions



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The union conducting this type of training at the time of selected new employees. Under this

method the experts or the superior explains to the trainee the way of doing the job and allow him

to do the job.

Off the Job Training

Under this method of training, trainee is separated from the job situation. Here employee can

place his entire concentration to learn rather then spending time in performing job.

5.STYLE

The relationship approach of top management & the organizations overall operating approach,

also the Style in which the organizations makes decisions. Style impacts how they work interact

with each other & with customers. For the achievement of the objective of the enterprise there

must be exist a cordial owner employee relationship.

The owners are willing to pay good remuneration to employee if they are honest & efficient. At

the same time, employees ready to work hardly & sincerely, when they are job security &good

pay skills, good relationship between the owners & employees can make easily.

6.STAFF

The people in organization are very dedicated and work towards the improvement of

organization. The skill level of the workers is work oriented & they are specialized in their

respective field.

Staffs refer to people in the enterprise & their socialization into organizational culture. The staff

in Cochin Stock Exchange has good relationship with each other. The staff is well qualified and

suits for their respective jobs. They are satisfied with their work, which is reflected by the non

stoppage of any work in Cochin Stock Exchange.

Staff refers to the organizations human resources. Management is concerned with the

accomplishment of objectives by utilizing physical and financial resources through the efforts of

manpower.



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7.SHARED VALUE

It deals with the values & believes of the company. Ultimately they guide employees towards

behaviour. In other words share the same guiding values when started when value element

started are presented. Companies are usually successful at the strategy implementation.

Each and every company must follow shared value. Shared value refers to the attitude, culture,

beliefs, and philosophy of an organization. It is the backbone of an Organizational success.

These values have great meaning because they focus attention provide broader sense of

purpose.cse also give strong basis of stability to an organization in a rapidly changing

environment providing basic meaning to people working in the organization.

4.SWOT ANALYSIS

STRENGTHS

CSE have a highly professional stock broking and management function.

Advanced technology for transaction.

It makes use of fast track system for settlement.

It brings about better relationship between the management and employees, which

ensures smooth functioning of the organization.

Good industrial relations.



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There is considerable number of stock brokers to provide exclusive services to their

respective clients.

Provides online trading services with both National Stock Exchange (NSE) and

Bombay Stock Exchange (BSE).

WEAKNESSES

The institute fails to provide better training services to its employees.

The current level of facilities in the stock broking is not sufficient to meet itsfuture requirements.

The computer system used for trading is not according to the latest technology.

Concentration of market operations only in some areas.

OPPORTUNITIES

Since the capital market or stock market shows a rapid growth, the CSE

can make use of the available opportunities.

Since the number of potential investors is increasing day by day the

brokers have the corresponding advantage.

THREATS

The regional exchanges are faced with a serious challenge from NSE and BSE.



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Particulars As at 31st march 2010 As at 31st march 2009

SOURCES OF FUNDS

SHAREHOLDERS FUNDS

Capital 618750 618750

Reserves and surplus 2137311921 2077934070

2137930671 2078552820

APPLICATION OF FUNDS

FIXED ASSETS

Gross block 341480129 344916880

Less: Depreciation 283382383 281710048

Net block 58097746 63206832

INVESTMENTS

CURRENT ASSETS,LOANS AND

ADVANCES

120811380 132306775

Sundry debtors 49509703 59134206

Cash and bank balances 929996328 874221236

Other current assets 17593058 20362451

Loans and advances 2308690935 2205525606

3305790024 3159243499

LESS: CURRENT LIABILITIES

AND PROVISIONS

Current liabilities 1320507605 1244844330

Provisions 38598662 32919536

1359106267 1277763866

NET CURRENT ASSETS 1946683757 1881479633

DEFERRED TAX ASSETS 11917088 1054740

MISCELLANEOUS

EXPENDITURE

Deferred revenue expenditure on

project appraisal of commodity

exchange

420700 504840

SIGNIFICANT ACCOUNTING

POLICIES AND NOTES ONACCOUNTS

2137930671 2078552820


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PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED AS AT 31ST MARCH, 2010

PARTICULARS For the Year ended as at 31st March,

2010

For the Year ended as at 31st March,

2009

INCOME

Operating income 52833180 47961016

Investments from Investments and

Deposits

170894067 145679564

Other Services/Income 14012752 10258377

237739999 203898957

EXPENDITURE

Computer maintenance and Service

charges

16199080 19075853

Staff costs 41878123 42171159

VRS Expenses 20724958 -

Administration and other Expenses 71180562 33044222

Loss on surrender of land 1878593

Investors services expenses 3626332 4193735

Contribution to SEBI 4143320 4444825

Contribution to customers protectionfund

926086 1059732

Contribution to settlement guarantee

fund

62177737 62999988

220856198 168868107

Profit before depreciation 16883801 35030850

Depreciation 5635493 7707599

Profit before tax 112483801 27323251

Fringe benefit tax - 301515

Provision for deferred tax -10862348 -1342041

Provision for current tax 6882000 10500000

-3980348 9459474



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Profit after tax 15228656 17863777

ADD- impairment of assets of pre-

demutualization period adjusted with

general reserve

1329421 527271

Loss on discard of assets of pre-

demutualization period adjusted

with general reserve

- 408082

Loss on safe of assets of pre-

demutualizati0n period adjusted with

general reserve

- 28002

Loss on surrender of land of pre

demutualization period adjusted wit

general reserve

- 1878593

Bad debts of pre demutualizationperiod adjusted

With general reserve 23123865 1127974

Provision for doubtful debts of pre


general reserve

7652760 -

Sundry balance written off related to

pre demutualization period adjusted

with general reserve

5701416 -

Expenses incurred on behalf ofinvestors services fund written back

3626332 4193735

Settlement guarantee fund expenses 4570115 5674457

46003909 13838114

LESS- transferred to general reserve 10000000 10000000

Investors service fund 4639654 4530350

Sundry balances written back of pre


general reserve

74759 1322137

Liability to SEBI written back of pre


general reserve

2298407 -

Profit on sale of assets of pre 82494 -



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demutualization period transferred

to general reserve

Proposed dividend 4277000 4277000

Tax on dividend 726876 726876

22099010 20856363

Surplus carried to profit and loss

account

39133555 10845528

1.CURRENT RATIO

It is the most common ratio for measuring liquidity. The current ratio of the firm measures its

short term solvency, i.e., its ability to meet short term obligations. In a sound business a current

ratio of 2:1 is considered an ideal one. It provides a margin of safety to the creditors. It is an

index of the firms stability. A high ratio indicates sound solvency position and a low ratio

indicates in adequate working capital.

CURRENT RATIO = Current Asset / Current Liability

INTERPRETATION

There is no much fluctuation in the Current Ratio of the company. So the ratio is gaining stability

from year to year.

2.CASH RATIO


Year Current Assets Current Liabilities Current Ratio

2009 3159243499 1244844330 2.43

2010 3305790024 1320507605 2.47


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Cash Position Ratio is nothing but absolute liquid ratio. It is expressed as:

Cash Position Ratio = Cash on hand and bank

Current Liability

Year Cash and Bank

Balances

Current Liabilities Cash Ratio

2009 874221236 1244844330 0.70

2010 929996328 1320507605 0.70

INTERPRETATION

There is no fluctuation in the cash position of the company. So the ratio is gaining stability from

year to year.

3.CURRENT ASSETS TO NET WORTH RATIO

INTERPRETATION

There is no much fluctuation in the Current Assets to Net Worth Ratio. So the ratio is gaining

stability frm year to year.

4.CURRENT LIABILITIES TO NET WORTH RATIO

Year Current Liabilities Net Worth Current Liabilities to

Net Worth Ratio2009 1244844330 2078552820 0.60

2010 1320507605 2137930671 0.62

INTERPRETATION


Year Current Assets Net Worth Current Assets to NetWorth Ratio

2009 3159243499 2078552820 1.51

2010 3305790024 2137930671 1.55


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There is no much fluctuation in the Current Liabilities to Net Worth Ratio.So the ratio is gaining

stability from year to year.

6.LEARNING EXPERIENCE

The study which was undertaken at Cochin Stock Exchange Limited Kochi was a really

good experience. It helped me to learn the operations in a stock exchange, the working of the

stock exchange, how the share trading is done and what are the eligibity criteria for listing etc.

The study helped me to learn about the different departments in a stock exchange.. Most of the

employees have many years of experience. They provided information The study was helped me

to know what and how the depositories working in the company. The study was conducted by

taking the sample of investors from the company. It helped to understand the investors day to

day life in the company. They were very co-operative to us and gave enough data. Most of them

have many years of experience. They told about the history of the company and they shared their

experience with great pleasure. The management also gave more support to our work.



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GENERAL INTRODUCTION

INTRODUCTION OF DEPOSITORY

Due to liberalization, growth potential for investment, reforms, and changes brought in the

economic, industrial policy. Concession for investment that spread the equity cult so certain

elements trying to disturb the smooth functioning of the capital market through introduction of

fake, duplicate certificate etc. there by creating substantial problems and bad deliveries in the

Indian capital market. This made an impact in considering the introduction of depository, as it is

prevalent in the foreign countries.

DEPOSITORY SYSTEM

The erstwhile settlement system on Indian stock exchange was also inefficient and increased

risk, due to the time that that elapsed before the trading were settled. The transfer was by

physical rigging ;it was considered necessary for stock exchanges to have a professionally

managed environment.

NSE started with the concept of an independent governing body without any broker

representation. It was specified in 1993 that the governing boards of stock exchanges must have

50% non broker members and that on committees handling matters of discipline, default, etc.,

brokers would be in the minority.



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All stock exchanges were mandated to appoint a non broker executive director who

would be accountable to SEBI For implementing the policy directions of the central

Government\SEBI. In course of time, the position of the executive director in the management of

stock exchange has been strengthened. Indian securities market is getting increasingly integratedwith the rest of the world.

FIIs have been permitted to invest in all types of securities, including government

securities. Reserve Bank of India has recently allowed the limited two way fungibility for

subscribers of ADRs, GDRs, FCCBs ,ECBs. Indian stock exchanges have permitted to set up

trading terminals abroad.

The trading platform of Indian stock exchanges can now be accessed through the internet

from anywhere in world. In line with the global phenomena, Indian capital market have also

moved to rolling settlements on a T+2 bases where trades are settled on the second day after

trading.

With the internet becoming ubiquitous, many institutions have securities trading agencies

that provide online trading facilities to their clients from their homes. This has been possible

since all the players in the securities market, viz., stock brokers, stock exchanges, clearing

corporations, depositories, DPs, clearing banks etc. ,are linked electronically. thus information

flows amongst them on real time basis. The trading platform which was converted from the

trading hall to the computer terminals at the brokers premises have now shifted to the homes of

investors. This is introduced a higher degree of transparency in transactions.

The investor knows exactly when and at what rate his order was processed. It also creates

an end to end audit trail that makes market manipulation difficult. The availability of securities in

demat form has given a further fillip to this process .however the emergence of, what is known

as day traders has resulted in the business environment of brokers which has changed.

Investors who can now trade directly, no longer require their intermediation. Service charges

have therefore been declining all of which have been in favour of investors.



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INVESTOR DEPOSITORY

PARTICIPANT

DEPOSITORY

NSDL&CDSL

CHART No:4

1.STATEMENT OF THE PROBLEM

The study was conducted to to know the attitude of shareholders towards their present DP

and analyze the opinion of respondents about the DP.

2.OBJECTIVES OF THE STUDY

PRIMARY OBJECTIVE

This study is conducted to determine the performance of a Depository Participant

listed at Cochin Stock Exchange.

SECONDARY OBJECTIVES

The attitude of shareholders towards their present DP.

Analyze the opinion of respondents about the DP.

And also analyze the influence of brokers on investors in opening a depository

account.

3.SCOPE OF THE STUDY

Over the last decade, the Indian capital market has been growing by leaps and bonds. India has

among the largest number of listed companies in the world today. It also boasts of a large



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number of shareholders paradoxically, the problems associated with the settlement of traders are

also on the rise.

As against this, investors has to face a lot of inconvenience in affecting registration of securities

in his favour to ensure that they receive right full share of dividend, bonus, rights, and other

benefits .The large numbers in the capital market has also given rise to a large number of paper

work, bringing with the associated problems. In this scenario, it was felt that the setting up of a

depository and the introduction of scrip less settlement would improve the efficiency of markets

thus eliminating the various problems brought about when dealing in physical securities.

The Government of India promulgated the depositories ordinance in the country. SEBI notified

the regulations under the ordinance in may 1996 in order to provide the regulatory framework for

the depositories. National Securities Depositories Limited (NSDL) was registered on the 7th June

1996 with SEBI as the first depository in the country. The depositories are important

intermediaries in the securities market that is scrip less or moving towards such a state. In India,

the depositories act defines a depository to mean a company formed and registered under the

companies act,1956 and which has been granted a certification of registration under sub section

(IA) of section 12 of the Securities and Exchange board of India Act,1992.

The principle function of depository is dematerializing the securities and enables their

transaction in book entry form. Dematerializing of securities occurs when securities, issued in

physical form, are destroyed and an equivalent number of securities are credited in to the

beneficiary owners account. In a depositories system the investors stand to gain by way of lower

costs and lower risks of theft or forgery, etc. They also benefit in terms of efficiency of the

process. But the implementation of the system has to be secure and well governed. All the

players have to be conversant with the rules and regulations as well as with the technology for

processing .The intermediaries in this systems have to play strictly by the rules.

A depository established under the Depositories Act can provide any service connected with

recording of allotment of securities or transfer of ownership of securities in the record of a

depository.A depository cannot directly open accounts and provide services to clients.Any



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person willing to avail of the depository can do so by entering in to an agreement with the

depository through any of its Depository Participants.

4.RESEARCH METHODOLOGY

METHODOLOGY OF THE STUDY

This deals with the research design, data collection methods, sampling techniques used and

also the tools used for data analysis and interpretation.

RESEARCH DESIGN

A research design is a purely and simplify the framework or plan for a study that

guides the collection and analysis of data. In this study a combination of exploratory and

descriptive research design are used.

EXPLORATORY RESEARCH DESIGN

It is used to formulating a problem for more precise investigation or of developing the

working hypothesis from an operational point of view. The major emphasis in such studies is on

the discovery of ideas and insights.

DESCRIPTIVE RESEARCH DESIGN

This method is used to describe the characteristics of a particular individual or of a

group. This is used for knowing investors attitude towards their present DP, investor preferences

for opening an account etc.

DATA COLLECTION



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Both primary and secondary datas are collected for the study. But more important was

the collection of primary data. Secondary datas are collected from internal as well as external

sources like journals, published sources of DP, website etc.

PRIMARY DATA

The primary datas are collected from shareholders in Cochin and collected by the Questionnaire

survey.

SAMPLING PLAN

A sample is a segment of the population selected to represent the population as a whole,

sampling plan gives details on persons who were surveyed (sampling unit) ,how much were

surveyed (sampling size).

SAMPLING UNIT

Sampling Unit of this study consists of shareholders.

SAMPLING SIZE

This consists of 50 share holders.

STATISTICAL TOOLS

In this study important tools used are:

1. Percentage method

2.weighted average method



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1.PERCENTAGE METHOD

In this method the frequency of the various criteria or factors are tabulated. And the percentage

for each value with respect to the total is found out. They are presented pictorially by way of

graphs in order to have better understanding.

2.WEIGHTED AVERAGE METHOD

The weighted arithmetic mean is used whenever the relative importance of items in a series

differs. While calculating the weighted mean each item is given a weight judged by its relative

importance.

X =sum (w x )\sum (w).

Where, x =Frequency of number of respondents.

W =Weightage allotted to each factor

APPLICATION

Here this method is used to find the preferences given by the respondents for the

selection of depository participants.

5.LIMITATIONS OF THE STUDY

The limitations are:

Due to time constraints, I was not able to complete my project satisfactory.

The easiest way that to approach investors is through broking firms and the survey was

conducted during the trading time of BSE and NSE. So the respondents were busy at that

time the quality of responses was not up to the mark and therefore sample size reduced.



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The charges of DPs analyzed depend on the existing NSDL and CDSL charges and will

be revised on revision by NSDL and CDSL. It also subject to change at sole discretion of

the DPs.

OBJECTIVES OF DEPOSITORY

The main objectives of the depository are,

1).Speedy transfer of securities

2).Book entry accounts

3).Confidentiality

4).Detailed listing of investors by the type of securities.

5).Handling of corporate actions that track the benefits due to the clients.

6.)Distribution of dividends, interest and redemption of shares.

7.)Links to other depository system globally.

8.)Handling of all type of securities, both demat equity and their derivatives.

9)Elimination of company objections and stamp duty.

DEPOSITORY PARTICIPANTS

A Depository Participant (DP) is described as an agent of the depository. They are the

intermediaries between the depositories and the investors. The relationship between the DPs and

the depository is governed by an, agreement made between the two under the Depositories Act

.In a strictly legal sense a DP is an entity registered as such with SEBI Act. As per the provisions



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of this Act, a DP can offer depository related services only after obtaining a certificate of

registration from SEBI.

SEBI (DP) regulations 1996 prescribe a minimum net worth of Rs.50 lakhs for stock

brokers, R&T agents and non-banking finance companies (NBFC),for granting them a certificate

of registration to act as a DP in more than one depository. he should comply with specified net

worth criterion separately for each such depository. No minimum net worth criterion has been

prescribed for other categories of DP. However depositories can fix a higher net worth criterion

for their DPs. NSDL requires a minimum net worh of Rs.100 lakh to be eligible to become a DP

as against Rs.50 lakh prescribed by SEBI (DP) regulations.

OPENING AN ACCOUNT WITH DP

1) The process of opening a demat account through a DP of Central

Depository Service Limited (CDSL) is very easy and simple. It is similar to opening of a

bank account.

2) Investor has to choose a DP from the list of CDSL,DPs published in CDSL info line or

accessible through the website www.cdsl india.com.

3) Besides submitting an application in the prescribed form the investor has to provide aproof of his identity and address, such as pan card, passport, ration card etc. to the DP.

4) Before demat account is opened the investor will have to execute an agreement on a

stamp paper to be provided by the DP, which defines the rights and obligation of both the

investor and DP.

5) On opening an account a unique BOID (Beneficial Owner Identification) number is

allotted which should be quoted in all future transactions.

DEMATERIALISATION

Dematerialisation is the process by which physical certificates of an investor are

converted to an equivalent number of securities in electronic form and credited in the investors

account with its DP. In order to dematerialize certificates, an investor will have to first open an



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account with a DP and then request for the dematerialization of certificates by filling up a

dematerialization request form (DRF),which is available with the DP and submitting the same

along with the physical certificates. The investor has to ensure that before the certificates are

handed over to the DP for demat, they are defaced by marketing surrendered for

dematerialization on the face of certificates.

REMATERIALISATION

Rematerialisation is the exact reverse of dematerialization. It refers to the process of issuing

physical securities in place of the securities held electronically in book-entry form with a

depository. Under this process the depository account of a beneficial owner is debited for the

securities sought to be re- materialized and physical certificates for the equivalent number of

securities are issued.

SPEED-e

In order to extend the benefits of technological progress to investors ,NSDL has launched

speed-e services. Speed-e is a internet base facility for clients of all depository participants that

enables the account holders to submit instructions to their DPs through speed-e website on

internet. The clients can submit instructions at a time convenient to them using speed-e website

of NSDL. The account holders can also view the status of their instructions submitted through

speed-e on the website itself. Speed-e is expected to greatly reduce the time and efforts required

in processing the instructions.

SETTLEMENT

MARKET TRADERS



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In the depository system any trade those are cleared and settled through the clearing corporation

is called Market Trade.

OFF MARKET TRADERS

Off market traders are those traders which are not cleared and settled through the clearing

corporation-clearing house. The buyer and seller will negotiate the trade with each other.

DEPOSITORY SERVICES THROUGH DPs

The depositories can provide their services to investors through their agents called depository

participants. These agents are appointed subject to the conditions prescribed under Securities and

Exchange Board of India (Depositories and Participants),1996 and other applicable conditions. A

depository established under the Depositories Act can provide any service connected with

recording of allotment of securities or transfer of ownership of securities in the record of a

depository. Any person willing to avail the services of the depository can do so by entering in to

an agreement with the depository through any of its participants. A depository can provide

depository services only through a DP. Every depository in its bye laws must state which

securities are eligible for demat holding. Generally, the following securities are eligible

dematerialization.

Shares, scrips , stocks, bonds, debentures ,debenture stock or other marketable securities

of any incorporated companies or other body corporate.

Units of mutual funds, rights under collective investment schemes and venture capital

funds, commercial paper, certificate of deposit, money market instruments, government

securities and unlisted securities.

Securities admitted to NSDL depository are notified to all DPs through circulars sent by

email every day. Investors are informed about these securities through NSDLs website

and NEST update-a monthly newsletter of NSDL.

ELIGIBILITY CRITERIA FOR A DEPOSITORY



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Any of the following may promote a depository:-

A public financial institution as defined in the Companies Act 1956.

A bank included in the second schedule to the Reserve Bank of India Act,1934.

A foreign bank operating in India with the approval of the Reserve Bank of India.

A recognized stock exchange.

A custodian of securities approved by Government of India.

A foreign financial services institutions approved by Government of India.

An institution engaged in providing financial services where these institutions hold not

less than 75% of the equity jointly or severally.

The promoters of a depository are also known as its sponsors.A Depository company must have

a minimum net worth of Rs.100 crore. The sponsors of the depository have to hold at least 51%

of the equity capital of the depository company. Participants of the depository ,if any ,can hold

the balance of the equity capital.

REGISTRATION

As per the provisions of the SEBI Act, a depository can deal in securities only after obtaining a

certificate of registration from SEBI. The sponsors of the proposed depository should apply to

SEBI for a certificate of registration in the prescribed form. On being satisfied with the eligibility

parameters of a company to act as a depository, SEBI may grant a certificate of registration

subject to certain conditions.

FUNCTIONS OF A DP

DEMATERIALIZATION

One of the primary functions of depository is to eliminate or minimize the movement of physical

securities in the market. This is achieved through dematerialization of securities.



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Dematerialization is the process of converting securities held in physical form in to holdings

book entry form.

ACCOUNT TRANSFER

The depository gives effects to all transfers resulting from the settlement of trades and other

transactions between various beneficial owners by recording entries in the accounts of such

beneficial owners.

TRANSFER AND REGISTRATION

A transfer is the legal change of ownership of a security in the records of issuer. For

affecting a transfer certain legal steps have to be taking like endorsement, execution of transfer

instrument and payment of stamp duty. The depository accelerates the transfer process by

registering the ownership of entire issue in the name of the depository. Under a depository

system transfer of security occurs merely by passing book entries in the records of the

depositories, on the instruction of the beneficial owners.

CORPORATE ACTION

A depository may handle corporate actions in two ways. In the first case, it merely provides

information to the issuer about the person entitled to receive corporate benefits. In other case,

depository itself takes the responsibility responsibility of distribution of corporate benefits.

PLEDGE AND HYPOTHECATION

Depositories allow the securities placed with them to be used as collateral to secure loans and

other credits. In a manual environment borrowers are required to deliver pledged securities in

physical form to the lender or its custodian. These securities are verified for authenticity andoften need to be transferred in the name of lender. This has a time and money cost by way of

transfer fee or stamp duty.

If the borrower wants to substitute the pledged securities, these steps have to be repeated.

Use of depository services for pledging and hypothecating the securities makes the process very



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simple and cost effective. The securities pledged or hypothecated are transferred to a segregated

or collateral account through book entries in the records of depository.

SOME MAJOR DPs IN INDIA

No. NAME OF THE DP YEAR AND MONTH

1. STOCK HOLDING CORPORATION OF INDIA

LIMITED (SHCL)

MARCH 2008

2. INDIAN BANK MERCHANT BANKING

SERVICES LIMITED

MARCH 1998

3. CHOLAMANDALAM SECURITIES LIMITED APRIL 1998

4, SBI SECURITIES LIMITED JULY 1998

5. INTEGRATED ENTERPRISE LIMITED JULY 1998

6. GEOJITH SECURITIES LIMITED FEBRUARY 2000

7. INTEGRATED STOCK BROKING SERVICE

PRIVATE LIMITED

JUNE 2000

8. KOMAL SECURITIES (KOLAK) SEPTEMBER 2000

9. HDFC BANK SEPTEMBER 2001

10. APOLLO SINTHOORI CAPITAL INVESTMENT

LIMITED

OCTOBER 2000

TABLE No:2



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GROWTH OF DPs

TABLE No:3

YEAR 2002 2003 2004 2005 2006 2007 2008 2009 2010

No. 10 40 76 112 178 185 200 230 250

GRAPH No:1

Number of DPs.



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DATA ANALYSIS AND INTERPRETATION

The analyzed data covers the following objectives.

Shareholders attitude towards their present DP.

Shareholders willingness o open DP account with SEBI.

Shareholders preference on opening DP account.

Analyse the relationship between the frequency of share trading and number of

depository account.

Study the influence of brokers on opening depository account

1.PERCENTAGE METHOD



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1.CLASSIFICATION ON THE BASIS OF FORM OF SHARES

TABLE No.4

NO. FORM FREQUENCY PERCENTAGE

1. PHYSICAL 0 0

2. DEMAT 45 90

3. BOTH PHYSICAL AND DEMAT 5 10

TOTAL 50 100

GRAPH No.2

INFERENCE

From the above table it is evident that majority of the shareholders hold shares in demat

form. Only 10% are keeping shares in both physical and demat form.

2.REASON FOR KEEPING SHARES IN DEMAT FORM

TABLE No.5



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NO. REASON FREQUENCY PERCENTAGE

1. FASTER SETTLEMENT TRADES 25 50

2. NO MINIMUM BALANCEREQUIRED

10 20

3. HIGHER LIQUIDITY 15 30

TOTAL 50 100

GRAPH No.3

INFERENCE

Here 50% of shareholders are keeping shares in demat form because of faster settlement

of trades. And 30% keeps the in such a form because of higher liquidity.

3.INDICATING THE STRENGTH OF DEPOSITORY ACCOUNT

HOLDERS AND NON ACCOUNT HOLDERS

TABLE No.6

NO. DEPOSITORY ACCOUNT FREQUENCY PERCENTAGE



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1. YES 45 90

2. NO 5 10

GRAPH No.4

INFERENCE

Table shows that 90% of the shareholders having depository account.

4.MODE OF AWARENESS ABOUT DEPOSITORY PARTICIPANTS

TABLE No.7

NO. AWARENESS FREQUENCY PERCENTAGE

1. ADVERTISEMENT 5 10



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2. FRIENDS 25 50

3. CLIENTS OF THE SAME DP 20 40

TOTAL 50 100

GRAPH No.5

INFERENCE

Here 50% of the respondents came to know about the DPs through friends. This is followed

by client of same DP, which is 40%.

5.INDICATING THE PERIOD DURING WHICH THE SERVICES OF DP

WERE AVAILED.

TABLE No.8

No. PERIOD FREQUENCY PERCENTAGE

1. LESS THAN SIX MONTHS 15 30



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2. SIX MONTHS TO ONE YEAR 20 40

3. ONE TO TWO YEARS 10 20

4. MORE THAN TWO YEARS 5 10

TOTAL 50 100

GRAPH No.6

INFERENCE

40% of the clients are availing the services of Depository Participants from six months to

one year, and 10% are availing the services from more than two years.

6.INDICATING REASON FOR SELECTING A PARTICULAR DP

TABLE No.9

No. CHOISE FREQUENCY1. REPUTATION 5 10

2. PROMPT SERVICE 10 20

3. LOW CHARGES 5 10



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4. BROKERS REQUEST 30 60

TOTAL 50 100

GRAPH No.7

INFERENCE

Table shows that 60% of the respondents selected a particular DP on the basis of the

brokers request. It is followed by 20% on the basis of prompt services.

7.INDICATING NUMBER OF DP ACCOUNTS.

TABLE No.10

No. No. OF DP ACCOUNTS FREQUENCY PERCENTAGE

1. ONE 35 70

2. TWO 10 20

3. MORE THAN TWO 5 10



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TOTAL 50 100

GRAPH No.8

INFERENCE

The survey revealed that 70% of the respondents were having one depository account

each and 20% of the respondents were having two account each, rest were having more than two

account each.

8.RESPONDENTS OPINION ABOUT THE CHARGES OF THE DP.

TABLE No.11

No. OPINION FREQUENCY PERCENTAGE

1. TOO HIGH 0 O

2. HIGH 5 103. AVERAGE 35 70

4. LOW 10 20

TOTAL 50 100

GRAPH No.9



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INFERENCE

The research shows that 70% of the respondents have the opinion that the charges of

their DP are average. Only 20% said that the charges of their DP are low.

9.INDICATING THE RATING OF SERVICES OF DP.

TABLE No.12

No. RATING FREQUENCY PERCENTAGE

1. EXCELLENT 5 10

2. GOOD 20 40

3. SATISFACTORY 25 50

4. POOR 0 0

TOTAL 50 100



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GRAPH No.10

INFERENCE

Only 10% of the respondents rate the services of their DP as excellent.50% answered as

satisfactory which is followed by 40% as good .Nobody has the opinion that the that the services

of their DP as poor.

10.INDICATING THE FREQUENCY OF SHARE TRADING.

TABLE No.13

FREQUENCY OF SHARE

TRADING

FREQUENCY PERCENTAGE

1 TO 10 5 10

10 TO 20 30 60

20 TO 30 10 20

30 &ABOVE 5 10

TOTAL 50 100



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GRAPH No.11

INFERENCE

Here 60% of the shareholders purchase or sell 10 to 20 shares .

2.WEIGHTED AVERAGE METHOD

This method is used to find out the preferences given by the respondents for the selection of a

DP.

FACTORS

TABLE No.14

RANKWEIGHTAGE

1 2 3 4 5 6 MEANSCORE

WEIGHTEDAVERAGE

RANK

REPUTATION 3 20 90 20 5 6 144 6.86 5



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FRIENDLY

RESPONSE

10 10 15 40 75 30 180 8.57 2

CONVENIENCE 15 20 15 20 50 30 150 7.14 4

PROMPT

SERVICES

10 20 45 40 15 12 142 6.76 6

LOW CHARGES 8 20 15 40 35 60 178 8.48 3

LONG SERVICE

EXPERIENCE

12 10 30 8 5 12

0

185 8.8 1

INFERENCE

The result of the weighted average method shows the following:-

TABLE No.15

FACTORS RANK

LONG SERVICE EXPERIENCE

1



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FRIENDLY RESPONSE 2

LOW CHARGES 3

CONVENIENCE 4

REPUTATION 5

PROMPT SERVICES 6

FINDINGS

Cochin Stock Brokers Limited (CSBL) is a well-known broking firm. So they are having

a direct connection with shareholders and it helps for getting more accounts.

CSBL is a member of a Central Depositories Services Limited (CDSL) maintainingclients account.

Due to ease in transaction and reduced cost many players increased their transactions.

This help in improving liquidity.



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Due to faster settlement of trades majority of shareholders keeps their share in demat

form. Because of brokers request they select a particular DP.

Now 100% stock exchange trades are settled in demat form except for those in limited

physical market.

Only 10% of the respondents rate the services of their DP as excellent.50% answered as

satisfactory which is followed by 40% as good .Nobody has the opinion that the that the

services of their DP as poor.

The research shows that 70% of the respondents have the opinion that the charges of their

DP are average. Only 20% said that the charges of their DP are low.

The survey revealed that 70% of the respondents were having one depository account

each and 20% of the respondents were having two account each, rest were having more

than two account each.

The study shows that 60% of the respondents selected a particular DP on the basis of the

brokers request. It is followed by 20% on the basis of prompt services.

SUGGESTIONS

Better advertisement regarding the DPs can help them in gaining more clients.

More branches of CSBL should be open so that more people can use the services of theDP.

DP should improve the services to the clients.

The process of dematting should be easy.



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It was found that CSBL DP offers better services to the investors both in terms of charges

and other services compared to other DPs in Kerala.

CONCLUSION

Until the mid 1990s the legal and regulatory framework, within which the securities market

functioned in India had weaknesses resulting from fragmentation of authority and multiplicity of

rules and regulations .This created inefficiency in the enforcement of the regulations .It also led

to low efficiency in the allocation and utilization of resources between savers\investors and

industrial investment .The formalities in the process of issuing securities kept the cost of issue.

Also settlement of trades was cumbersome and market by delay as it required physical

movement of securities thus reducing liquidity in the hands of investors. The interests of

investors were subjugated to those of the market intermediaries. All these factors hampered the

growth and vitality of the capital market as a whole.



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The introduction of the depository system was an important step in the reform process .The

benefit of the depository system are thus related to removal of many of the inefficiencies and

problems of the erstwhile system and also to the various efficiencies created by it. Depository

provides instantaneous electronic transfer of securities.

This ensures transfer of securities with speed, accuracy and safety. Securities in the depository

mode are dematerialized and ownership records are maintained in a book entry form. In order to

stream line both the stages of the ownership process the depository act provides for transfer of

the ownership of securities by book entry without their physical movement between seller buyer

and issuer.

The depository system thus removes some of the physical structural as well as systematic risks

that are inherent to the physical securities based markets. Additionally, the application of IT has

made the task of operations and supervision of the new system possible and efficient.

It is observed that the majority of the investors are satisfied with the services of the DP. The

charges of the DP are average and it is affordable to the clients. Based on the questionnaire, most

of the respondents prefer long service experienced DPs. And they give second preference to

friendly response.

So I conclude that, the services to the clients should be at the minimum cost and at speed. The

performance of CSBL as a depository participant is satisfactory and I hope they will continue

in improving their services to the investors.



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ANNEXURE

QUESTIONNAIRE

Respected Sir/Madam,

As a part of my MBA curriculum, I am doing a project on A STUDY ON

PERFORMANCE OF COCHIN STOCK BROKERS LIMITED AS A DEPOSITORY

PARTICIPANT AT COCHIN STOCK EXCHANGE COCHIN.So, I will be pleased if you

could spare a few minutes to fill up this questionnaire and I assure that the information you

provided will be kept confidential and used only for academic purpose.

Name............

1.Do you invest in shares?

a) Yes b) No



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2.Form of your share?

a)Physical b)Demat c)Both a) & b)

3.If it is in demat form reason for keeping in such a form?

a) Faster settlement of trades

b) No minimum balance required

c) Higher liquidity

d) Other reason

4.Whether you have account with any of the DP?

a) Yes b) No

If yes, mention the name of DP, If no, go to Q# 11.

5.How did you come to know about the DP?

a)Advertisement b)Friends c)Client of the same DP.

6.How long are you using the service of DP?

a) Less than six months b) Six months to one year

c) One to two years c) More than two years

7.What made you to choose that DP?

a) Reputation b) prompt service

c) Low charges d) Brokers request

8.No.of depository you are having?

a) One b)Two c) More than two.

9.How do you feel the charges of DP you are currently dealing with?



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a)Too high b) High c) Average d) Low

10.How do you rate the service of the DP?

a) Excellent b) Good c) Satisfactory d) Poor

11.Frequency of share trading in a year?

a) 1 to 10 b) 10 to 20 c)20 to 30 d) 30 and above

12.Are you facing any problem with your present DP?

a) Yes b) No

13.Kindly rank the following for the selection of DP according to your preference?

Rank form 1 to six

a)Reputation b) Friendly response c) Convenience

d) Prompt service e) Low charges f) Long service experience

14.Any suggestion to improve your DP?

a) Yes b) No

If any please mention..



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BIBLIOGRAPHY

BOOKS USED

S.Saha - Quantitative Methods

Operations module - January 2009

CDSL Edition - January 2009

Audit Report of CSE - 2009-2010

Hand book for CDSL depository.

WEBSITES USED

www.nsdl.co.in

www.cdslindia.com

www.sebi.gov.in

www.cochinstockechange.com

http://www.sebi.gov.in/http://www.cochinstockechange.com/http://www.sebi.gov.in/http://www.cochinstockechange.com/


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