SECURITY ANALYSIS AND PORTFOLIO MANAGEMENT Assignment-1

Submitted To: Dr. Lokesh Verma submitted By: Anu Agarwal Roll No. : 12034 Date: 28-10-13

INDIAN EXCHANGE
The Indian exchanges space is headed for robust growth on the back of improving penetration and structural transition into a more organized industry. Indian exchanges can be categorized into three primary segments commodities, equities and currency, with power and spot exchanges the other emerging segments. The industry is expected to register 19% CAGR over the next five years to reach a size of US$10trn (in terms of turnover) from US$4trn currently. Taking cognizance of the shorter evolution cycle of the industry, we believe penetration would be achieved over the course of time and hence have appropriately discounted global benchmarks to arrive at this potential.

Types of exchanges: Stock exchange Commodity exchange Foreign exchange Spot exchange Power exchange STOCK EXCHANGE

A stock exchange is a form of exchange which provides services for stock brokers and traders to trade stocks, bonds, and other securities. Stock exchanges also provide facilities for issue and redemption of securities and other financial instruments, and capital events including the payment of income and dividends. Securities traded on a stock exchange include shares issued by companies, unit trusts, derivatives, pooled investment products and bonds. To be able to trade a security on a certain stock exchange, it must be listed there. Usually, there is a central location at least for record keeping, but trade is increasingly less linked to such a physical place, as modern markets are electronic networks, which gives them advantages of increased speed and reduced cost of transactions. Trade on an exchange is by members only. The initial offering of stocks and bonds to investors is by definition done in the primary market and subsequent trading is done in the secondary market. A stock exchange is often the most important

component of a stock market. Supply and demand in stock markets are driven by various factors that, as in all free markets, affect the price of stocks (see stock valuation). There is usually no compulsion to issue stock via the stock exchange itself, nor must stock be subsequently traded on the exchange. Such trading is said to be off exchange or over-the-counter. This is the usual way that derivatives and bonds are traded. Increasingly, stock exchanges are part of a global market for securities. Stock Exchanges are an organized marketplace, either corporation or mutual organization, where members of the organization gather to trade company stocks or other securities. The members may act either as agents for their customers, or as principals for their own accounts. Stock exchanges also facilitates for the issue and redemption of securities and other financial instruments including the payment of income and dividends. The record keeping is central but trade is linked to such physical place because modern markets are computerized. The trade on an exchange is only by members and stock broker do have a seat on the exchange.

Types of stock exchanges: There are two leading stock exchanges in India which
help us trade are:

i. National Stock Exchange: National Stock Exchange incorporated in the year 1992 provides trading in the equity as well as debt market. Maximum volumes take place on NSE and hence enjoy leadership position in the country today. ii. Bombay Stock Exchange: BSE on the other hand was set up in the year 1875 and is the oldest stock exchange in Asia. It has evolved in to its present status as the premier stock exchange. The list maintained by the Securities and Exchange Board of India (SEBI) is given as under: Bombay Stock Exchange (BSE) National Stock Exchange of India (NSE) Indian Commodity Exchange (ICEX) United Stock Exchange of India (USE) Multi Commodity Exchange (MCX) Over the Counter Exchange of India (OTCEI) Inter-connected Stock Exchange of India (ISE) Madras Stock Exchange (MSE) Coimbatore Stock Exchange (CSX) Ahmadabad Stock Exchange (ASE) Bhubaneswar Stock Exchange (BhSE) Cochin Stock Exchange (CSE) Hyderabad Stock Exchange (HSE) Calcutta Stock Exchange (CSE) Delhi Stock Exchange (DSE) Bangalore Stock Exchange(BgSE)

Madhya Pradesh Stock Exchange, Indore Jaipur Stock Exchange (JSE) Magadh Stock Exchange, Patna UP Stock Exchange (UPSE)

Introduction to BSE:
As we read in the history of Indian stock exchange; the stock exchange, Mumbai, popularly known as "BSE". BSE was established in 1875 as "The Native Share and Stock Brokers Association". It is the oldest one in Asia, even older than the Tokyo Stock Exchange, which was established in 1878. It is a voluntary non-profit making Association of Persons (AOP) and has converted itself into demutualised and corporate entity. It has evolved over the years into its present status as the Premier Stock Exchange in the country. It is the first Stock Exchange in the Country to have obtained permanent recognition in 1956 from the Govt. of India under the Securities Contracts (Regulation) Act, 1956. The Exchange, while providing an efficient and transparent market for trading in securities, debt and derivatives upholds the interests of the investors and ensures redress of their grievances whether against the companies or its own member-brokers. It also strives to educate and enlighten the investors by conducting investor education programmes and making available to them necessary informative inputs. A Governing Board having 20 directors is the apex body, which decides the policies and regulates the affairs of the Exchange. The Governing Board consists of 9 elected directors, who are from the broking community (one third of them retire every year by rotation), three SEBI nominees, six public representatives and an Executive Director & Chief Executive Officer and a Chief Operating Officer. The Executive Director as the Chief Executive Officer is responsible for the 18day-to-day administration of the Exchange and he is assisted by the Chief Operating Officer and other Heads of Department

Introduction to NSE:
The National Stock Exchange (NSE) is India's leading stock exchange covering 364 cities and towns across the country. NSE was set up by leading institutions to provide a modern, fully automated screenbased trading system with national reach. The Exchange has brought about unparalleled transparency, speed & efficiency, safety and market integrity. It has set up facilities that serve as a model for the securities industry in terms of systems, practices and procedures. NSE has played a catalytic role in reforming the Indian securities market in terms of microstructure, market practices and trading volumes. The market today uses state-of-art information technology to provide an efficient and transparent trading, clearing and settlement mechanism, and has witnessed several innovations in products & services viz. demutualisation of stock exchange governance, screen based trading, compression of settlement cycles, dematerialisation and electronic transfer of securities, securities lending and 19borrowing, professionalisation of trading members, fine-tuned risk management systems, emergence of clearing corporations to assume counterparty risks, market of debt and derivative instruments and intensive use of information technology. The National Stock Exchange of India Limited has genesis in the report of the High Powered Study Group on Establishment of New Stock Exchanges, which recommended promotion of a National Stock Exchange by financial institutions (FIs) to provide access to investors from all across the country on an equal footing. Based on the recommendations, NSE was promoted by leading Financial Institutions at the behest of the Government of India and was incorporated in November 1992 as a tax-

paying company unlike other stock exchanges in the country. On its recognition as a stock exchange under the Securities Contracts (Regulation) Act, 1956 in April 1993, NSE commenced operations in the Wholesale Debt Market (WDM) segment in June 1994. The Capital Market (Equities) segment commenced operations in November 1994 and operations in Derivatives segment commenced in June 2000. NSE's mission is setting the agenda for change in the securities markets in India. The NSE was set-wide trading facility for equities, debt providing a fair, efficient and transparent securities market to investors using

COMMODITY EXCHANGE
Commodity trading in India has a long history. In fact, commodity trading in India started much before it started in many other countries. However, years of foreign rule, droughts and periods of scarcity and Government policies caused the commodity trading in India to diminish. Commodity trading was, however, restarted in India recently. Today, apart from numerous regional exchanges, India has four national commodity exchanges namely, Multi Commodity Exchange (MCX), National Commodity and Derivatives Exchange (NCDEX), National Multi-Commodity Exchange (NMCE) and Indian Commodity Exchange (ICEX). The regulatory body is Forward Markets Commission (FMC) which was set up in 1953.Following were included in commodity exchange:

I. II. III. IV. V.

Precious metal(gold and silver) Metal(copper, lead) Energy(crude oil, natural gas) Oil and oilseed(mustard and castor oil, soya bean) Minerals(iron ore)

There are 24 commodity exchanges in India. There are three national level commodity exchanges to trade in all permitted commodities. They are: Multi Commodity Exchange of India Ltd, Mumbai (MCX)

www.mcxindia.com MCX is an independent and de-mutualised multi commodity exchange. MCX features amongst the world's top three bullion exchanges and top four energy exchanges. Its key shareholders are Financial Technologies (I) Ltd., State Bank of India and it's associates, National Bank for Agriculture and Rural Development (NABARD), National Stock Exchange of India Ltd. (NSE), Fid Fund (Mauritius) Ltd. - an affiliate of Fidelity International, Corporation Bank, Union Bank of India, Canara Bank, Bank of India, Bank of Baroda, HDFC Bank and SBI Life Insurance Co. Ltd. National Commodity and Derivative Exchange, Mumbai (NCDEX) www.ncdex.com A consortium of institutions promotes NCDEX. These include the ICICI Bank Limited (ICICI Bank), Life Insurance Corporation of India (LIC), National Bank for Agriculture and Rural Development (NABARD) and National Stock Exchange of India Limited (NSE) National Multi Commodity Exchange of India Ltd, Ahmedabad (NMCE)

www.nmce.com It is the first de-mutualised electronic multi-commodity Exchange of India. Some of its key promoters are Central Warehousing Corporation (CWC), National Agricultural Co Operative Marketing Federation of India Limited (NAFED), Gujarat Agro Industries Corporation Limited (GAIC) and Punjab National Bank (PNB).

List of Exchanges in India

1. Bhatinda Om & Oil Exchange Ltd., Batinda. 2. The Bombay Commodity Exchange Ltd., Mumbai 3. The Rajkot Seeds oil & Bullion Merchants` Association Ltd 4. The Kanpur Commodity Exchange Ltd., Kanpur 5. The Meerut Agro Commodities Exchange Co. Ltd., Meerut 6. The Spices and Oilseeds Exchange Ltd. 7. Ahmedabad Commodity Exchange Ltd. 8. Vijay Beopar Chamber Ltd., Muzaffarnagar 9. India Pepper & Spice Trade Association, Kochi 10. Rajdhani Oils and Oilseeds Exchange Ltd., Delhi 11. National Board of Trade, Indore 12. The Chamber Of Commerce, Hapur 13. The East India Cotton Association, Mumbai 14. The Central India Commercial Exchange Ltd., Gwalior 15. The East India Jute & Hessian Exchange Ltd. 16. First Commodity Exchange of India Ltd, Kochi 17. Bikaner Commodity Exchange Ltd., Bikaner 18. The Coffee Futures Exchange India Ltd, Bangalore 19. Esugarindia Limited 20. National Multi Commodity Exchange of India Limited 21. Surendranagar Cotton oil & Oilseeds Association Ltd 22. Multi Commodity Exchange of India Ltd 23. National Commodity & Derivatives Exchange Ltd 24. Haryana Commodities Ltd., Hissar 25. e-Commodities Ltd Of these 25 commodities exchanges the MCX, NCDEX and NMCEIL are the major Commodity Exchanges. Multi commodity exchange of India Ltd - MCX is an independent and de-mutualised exchange based in Mumbai. Established on 10 November, 2003, it is the third largest bullion exchange and fourth largest energy exchange in the world. Recognized by the Government of India it deals in numerous commodities and carries out online trading, clearing and settlement processes for commoditie future market countrywide. MCX COMDEX is India's foremost and sole composite commodity futures price index National Commodity & Derivatives Exchange of India Ltd (NCDEX) located in Mumbai, is a public limited company incorporated on 23rd April 2003. Promoted by national level establishments it is run by

professional management. Regulated by the Forward Market Commission with reference to futures trading in commodities, it trades in various commodities online. The NCDEX is covered by: Companies Act Stamp Act Contracts Act Forward Commission (Regulation) Act National Multi-Commodity Exchange of India Limited (NMCEIL) is considered the first de-mutualised, online exchange dealing in numerous commodities. Incorporated on 20th December 2001, it is promoted and run by: Central Warehousing Corporation National Agricultural Cooperative Marketing Federation of India Limited Gujarat Agro Industries Corporation Limited National Institute of Agricultural Marketing Gujarat State Agricultural Marketing Board Neptune Overseas Limited The Commodity Exchanges with their extensive reach embrace new participants, resulting in a powerful price discovery process.

FOREIGN EXCHANGE

The foreign exchange market provides the physical and institutional structure through which the money of one country is exchanged for that of another country, the rate of exchange between currencies is determined, and foreign exchange transactions are physically completed. A foreign exchange transaction is an agreement between a buyer and a seller that a given amount of one currency is to be delivered at a specified rate for some other currency. The foreign exchange market assists international trade and investment by enabling currency conversion. For example, it permits a business in the United States to import goods from the European Union member states, especially Eurozone members, and pay euros, even though its income is in United States dollars. It also supports direct speculation in the value of currencies, and the carry trade, speculation based on the interest rate differential between two currencies.

Foreign Exchange Dealers:

Banks, and a few nonbank foreign exchange dealers, operate in both the interbank and client markets. They profit from buying foreign exchange at a bid price and reselling it at a slightly higher ask price. Worldwide competitions among dealers narrows the spread between bid and ask and so contributes to making the foreign exchange market efficient in the same sense as securities markets. Dealers in the foreign exchange departments of large international banks often function as market makers. They stand
willing to buy and sell those currencies in which they specialize by maintaining an inventory position in those currencies.

TYPES OF FOREIGN EXCHANGE INSTRUMENTS IN INDIA

Foreign Exchange Forwards Currency futures Currency swaps Currency options

SPOT EXCHANGE
Foreign Exchange bought and sold for immediate delivery - in practice almost invariably for delivery two business days after the conclusion of the deal. National Spot Exchange Limited (NSEL) is the national level, institutionalized, electronic, transparent spot trading platform for commodities. It is a structured market place, set-up to transform the commodity market by way of reducing the cost of intermediation and thereby improving marketing efficiency. Its state-of-the-art technology facilitates risk free and hassle free purchase and sale of various commodities. NSEL provides customized solution to farmers, traders, processors, exporters, importers, arbitrageurs, investors and other stakeholders pertaining to commodity procurement, storage, marketing, warehouse receipt financing, etc.

NSEL commenced Live trading on October 15, 2008. At present, NSEL is operational in 16 States in India, providing delivery-based spot trading in 52 commodities.

Mission: To develop a pan-India, institutionalized, electronic, transparent Common Indian Market offering compulsory delivery-based spot contracts in various agricultural and non agricultural commodities with a reduce cost of intermediation by improving marketing efficiency and, thereby, improving producers price realization coupled with reduction in consumer paid price. Objectives: The main objective of NSEL is to develop a vibrant electronic spot market in various commodities and to offer a value proposition to different segments of the commodity ecosystem. The idea is to reduce cost of intermediation and create an electronic linkage between buyers and sellers across the country. The Exchange provides counterparty guarantee in terms of quantity, quality and payment. Hence, the participants get a safety net against credit risk and counterparty default. USPs OF NSEL Provides an effective method of spot price discovery in various commodities in a transparent manner Provides a market where farmers/producers/importers/Government companies can sell their commodities and realize proceeds at the best prevailing price in a risk-free manner Offers a market where the processors, end-users, exporters, corporates (both private and Government) and other upcountry traders can purchase commodities at the most competitive price without any counterparty and quality risk Provides investment instruments in commodities for retail investors and HNIs Offers a transparent market where investors and arbitrageurs can invest money in buying various commodities across the country without going through the physical market hassles Provides authentic spot price of various commodities that can be used by the futures market as the benchmark price for settlement of their contracts on the date of expiry Helps the futures exchanges, Forward Markets Commission (FMC) and the Government in achieving the target of compulsory delivery in all agricultural produce by way of creating a linkage between physical market and futures market Promotes grading and standardization of agricultural produce and facilitates warehouse receipt financing to farmers and traders by financial institutions Creates a market for trading in negotiable warehouse receipts, both in physical and electronic form

National Spot Exchange (NSEL) is a Commodities exchange in India, and is a joint venture of Financial Technologies (India) Ltd. (FTIL) and National Agricultural Cooperative Marketing Federation of India (NAFED). National Spot Exchange commenced its live trading operations in different commodities on Wednesday, 15 October 2008. It began trading in pre-certified cotton bales for Mumbai delivery and imported gold and silver bars for Ahmedabad delivery immediately, and has since added a number of commodities. National Spot Exchange's stated mission is to develop a common Indian market by setting up a nationwide electronic spot market and providing state of art trading, delivery, and settlement facilities in various commodities. This exchange is now in the middle of a controversy due to a major commodity scam and all the trades have been stopped.

POWER EXCHANGE
Power Exchange India Limited (PXIL) is Indias first institutionally promoted Power Exchange that provides innovative and credible solutions to transform the Indian Power Markets. A deep understanding of the local markets is matched by PXILs non-partisan, unbiased and often fearless functioning, at times even in the face of uncomfortable conclusions. Our core values are integrity, excellence, commitment and continued innovation. These are the bedrock on which the edifice of PXIL stands. PXILs unique combination of local insights and global perspectives helps its stakeholders to make better informed business and investment decisions, improves the efficiency of the power markets, and helps shape policies and projects. PXIL is India's first and only Quality Management System "ISO 9001:2008" certified Power Exchange in the country. PXIL is promoted by two of Indias biggest exchanges National Stock Exchange of India Limited (NSEIL) National Commodity & Derivatives Exchange Limited (NCDEX

Screen Based Trading

The trading on stock exchanges in India used to take place through open outcry without use of information technology for immediate matching or recording of trades. This was time consuming and inefficient. This imposed limits on trading volumes and efficiency. In order to provide efficiency, liquidity and transparency, NSE introduced a nationwide on-line fully-automated screen based trading system

(SBTS) where a member can punch into the computer quantities of securities and the prices at which he likes to transact and the transaction is executed as soon as it finds a matching sale or buy order from a counter party. SBTS electronically matches orders on a strict price/time priority and hence cuts down on time, cost and risk of error, as well as on fraud resulting in improved operational efficiency. It allows faster incorporation of price sensitive information into prevailing prices, thus increasing the informational efficiency of markets. It enables market participants to see the full market on real-time, making the market transparent. It allows a large number of participants, irrespective of their geographical locations, to trade with one another simultaneously, improving the depth and liquidity of the market. It provides full anonymity by accepting orders, big or small, from members without revealing their identity, thus providing equal access to everybody. It also provides a perfect audit trail, which helps to resolve disputes by logging in the trade execution process in entirety. This diverted liquidity from other exchanges and in the very first year of its operation, NSE became the leading stock exchange in the country, impacting the fortunes of other exchanges and forcing them to adopt SBTS also. As a result, manual trading disappeared from India. Technology was used to carry the trading platform to the premises of brokers. NSE carried the trading platform further to the PCs in the residences of investors through the Internet and to hand-held devices through WAP for convenience of mobile investors. This made a huge difference in terms of equal access to investors in a geographically vast country like India.

Trading Network of NSE: The NSE trading system (NEAT) generates and maintains an audit trail of the orders entered in the system by assigning a unique order number to all the orders placed on the NEAT system. The system is normally made available for trading on all days except Saturdays, Sundays and other holidays. Holidays are declared by the Exchange from time to time.

NEAT System
The NEAT system has four types of market. They are: 1. Normal Market:All orders which are of regular lot size or multiples thereof are traded in the Normal Market. For shares that are traded in the compulsory dematerialized mode the market lot of these shares is one. Normal market consists of various book types wherein orders are segregated as Regular lot orders, Special Term orders, Negotiated Trade Orders and Stop Loss orders depending on their order attributes. 2. Odd Lot Market:All orders whose order size is less than the regular lot size are traded in the odd-lot market. An order is called an odd lot order if the order size is less than regular lot size. These orders do not have any special terms attributes attached to them. In an odd-lot market, both the price and quantity of both the orders (buy and sell) should exactly match for the trade to take place. Currently the odd lot market facility is used for the Limited Physical Market as per the SEBI directives. 3. Auction Market:In the Auction Market, auctions are initiated by the Exchange on behalf of trading members for settlement related reasons. There are 3 participants in this market. (i) Initiator - the party who initiates the auction process is called an initiator (ii) Competitor - the party who enters orders on the same side as of the initiator (iii) Solicitor - the party who enters orders on the opposite side as of the initiator

RETDEBT: The RETDEBT market facility on the NEAT system of capital market segment is used for transactions in Retail Debt Market session. Trading in Retail Detail Market takes place in the same manner as in equities (capital market) segment. The main features of this market are detailed in a separate on RETDEBT market. Corporate hierarchy: The trading member has the facility of defining a hierarchy amongst its users of the NEAT system. This hierarchy comprises: The users of the trading system can logon as either of the user type. The significance of each type is explained below: Corporate Manager: - The corporate manager is a term assigned to a user placed at the highest level in a trading firm. Such a user receives at the End of the Day Reports for all branches of the trading member. The facility to set Branch Order Value Limits and User Order Value Limits is available to the corporate manager. Branch Manager: - The branch manager is a term assigned to a user who is placed under the corporate manager. The branch manager receives at End of the Day reports for all the dealers under that branch. The branch manager can set user order value limit for each of his branch. Dealer: - Dealers are users at the lower most level of the hierarchy. A dealer can view and perform order and trade related activities only for himself and does not have access to information about other dealers under the same branch or other branches.

Logging on to the neat system On starting NEAT application, the logon screen appears with the following details: User ID Trading Member ID Password New Password Understanding Neat System
In order to sign in to the system, the User must specify a valid User ID, Trading Member ID and the corresponding password. A valid combination of User ID, Trading Member ID and the password is needed to access the system. Press [Tab] key to move to the next field. [Shift+Tab] keys can be used to move to the previous field(s). After entering IDs and password, press the [Enter] key to complete the logon procedure. STEP 1 1) Select the Exchange you want to place an order on. 2) Select the Instrument Equity to place an Equity order. 3) Type in the first 3 characters of the script you want to Buy & choose the company you wish to trade in. 4) Select Product as "Cash" to place a Delivery order. 5) Type in the Quantity of scripts you want to Buy.

6) To buy at Market price select the option Market / To Buy at a specific price select Limit. 7) Enter the price you want to buy at, iincase you have chosen the Limit option. 8) Choose Day for Validity for the order to be valid for the entire day. 9) Click Place Order.

Step 2: You will get an Order Verification screen . Click Confirm Order if all details are correct.

Step 3 : If you have not placed Funds on Hold or if you have no Limit, You will get a prompt to Hold Funds Online Click Submit.

Step 4 : If your funds have been placed on Hold successfully you will get a Funds Hold confirmation. Select OK

You will get a prompt for Order Verification once again - Click Confirm Order

You will get an Order Reference Number. Your Order has been placed Successfully with the Exchange.

Guidelines and qualifications of listing of shares on indexes in BSE

Listing means admission of securities to dealings on a recognised stock exchange. The securities may be of any public limited company, Central or State Government, quasi governmental and other financial institutions/corporations, municipalities, etc. The objectives of listing are mainly to :

provide liquidity to securities; mobilize savings for economic development; protect interest of investors by ensuring full disclosures.

The BSE Limited has a dedicated Listing Department to grant approval for listing of securities of companies in accordance with the provisions of the Securities Contracts (Regulation) Act, 1956, Securities Contracts (Regulation) Rules, 1957, Companies Act, 1956, Guidelines issued by SEBI and Rules, Bye-laws and Regulations of BSE. BSE has set various guidelines and forms that need to be adhered to and submitted by the companies. These guidelines will help companies to expedite the fulfillment of the various formalities and disclosure requirements that are required at various stages of Public Issues o o o o o o Initial Public Offering Further Public Offering Preferential Issues Indian Depository Receipts Amalgamation Qualified Institutions Placements

A company intending to have its securities listed on BSE has to comply with the listing requirements prescribed by it. Some of the requirements are as under : Minimum Listing Requirements for New Companies Minimum Requirements for Companies Delisted by BSE seeking relisting on BSE Permission to Use the Name of BSE in an Issuer Company's Prospectus Submission of Letter of Application Allotment of Securities Trading Permission Requirement of 1% Security Payment of Listing Fees

Compliance with the Listing Agreement Cash Management Services (CMS) - Collection of Listing Fees

1. Minimum Listing Requirements for New Companies

The following eligibility criteria have been prescribed for listing of companies on BSE, through Initial Public Offerings (IPOs) & Follow-on Public Offerings (FPOs):

The minimum post-issue paid-up capital of the applicant company (hereinafter referred to as "the Company") shall be Rs. 10 crore for IPOs & Rs.3 crore for FPOs; and

The minimum issue size shall be Rs. 10 crore; and The minimum market capitalization of the Company shall be Rs. 25 crore (market capitalization shall be calculated by multiplying the post-issue paid-up number of equity shares with the issue price). Further : In respect of the requirement of paid-up capital and market capitalization, the issuers shall be required to include in the disclaimer clause forming a part of the offer document that in the event of the market capitalization (product of issue price and the post issue number of shares) requirement of BSE not being met, the securities of the issuer would not be listed on BSE.

The applicant, promoters and/or group companies, shall not be in default in compliance of the listing agreement.

The above eligibility criteria would be in addition to the conditions prescribed under SEBI (Issue of Capital & Disclosure Requirements) Regulations, 2009.

The Issuer shall comply to the guidance/ regulations applicable to listing as bidding inter alia from o o o o o Securities Contracts (Regulations) Act 1956 Securities Contracts (Regulation) Rules 1957 Securities and Exchange Board of India Act 1992 And any other circular, clarifications, guidelines issued by the appropriate authority. Companies Act 1956

2. Minimum Requirements for Companies Delisted by BSE seeking Relisting on BSE

Companies delisted by BSE and seeking relisting at BSE are required to make a fresh public offer and comply with the existing guidelines of SEBI and BSE regarding initial public offerings.

3. Permission to Use the Name of BSE in an Issuer Company's Prospectus

Companies desiring to list their securities offered through a public issue are required to obtain prior permission of BSE to use the name of BSE in their prospectus or offer for sale documents before filing the same with the concerned office of the Registrar of Companies. BSE has a Listing Committee , comprising of market experts, which decides upon the matter of granting permission to companies to use the name of BSE in their prospectus/offer documents. This Committee evaluates the promoters, company, project , financials, risk factors and several other aspects before taking a decision in this regard. Decision with regard to some types/sizes of companies has been delegated to the Internal Committee of BSE.

4. Submission of Letter of Application

As per Section 73 of the Companies Act, 1956, a company seeking listing of its securities on BSE is required to submit a Letter of Application to all the stock exchanges where it proposes to have its securities listed before filing the prospectus with the Registrar of Companies.

5. Allotment of Securities
As per the Listing Agreement, a company is required to complete the allotment of securities offered to the public within 30 days of the date of closure of the subscription list and approach the Designated Stock Exchange for approval of the basis of allotment. In case of Book Building issues, allotment shall be made not later than 15 days from the closure of the issue, failing which interest at the rate of 15% shall be paid to the investors.

6. Trading Permission
As per SEBI Guidelines, an issuer company should complete the formalities for trading at all the stock exchanges where the securities are to be listed within 7 working days of finalization of the basis of allotment. A company should scrupulously adhere to the time limit specified in SEBI (Disclosure and Investor Protection) Guidelines 2000 for allotment of all securities and dispatch of allotment letters/share certificates/credit in depository accounts and refund orders and for obtaining the listing permissions of all the exchanges whose names are stated in its prospectus or offer document. In the event of listing permission to a company being denied by any stock exchange where it had applied for listing of its securities, the company cannot proceed with the allotment of shares. However, the company may file an appeal before SEBI under Section 22 of the Securities Contracts (Regulation) Act, 1956.

7. Requirement of 1% Security
Companies making public/rights issues are required to deposit 1% of the issue amount with the Designated Stock Exchange before the issue opens. This amount is liable to be forfeited in the event of the company not resolving the complaints of investors regarding delay in sending refund orders/share certificates, non-payment of commission to underwriters, brokers, etc.

8. Payment of Listing Fees

All companies listed on BSE are required to pay to BSE the Annual Listing Fees by 30th April of every financial year as per the Schedule of Listing Fees prescribed from time to time. The schedule of Listing Fees for the year 2011-12, is given here under:
Securities *other than Privately Placed Debt Securities and Mutual Funds Sr.No. 1 2 (i) (ii) (iii) (iv) (v) Particulars Initial Listing Fees Annual Listing Fees Upto Rs. 5 Crs. Rs.5 Crs. To Rs.10 Crs. Rs.10 Crs. To Rs.20 Crs. Rs.20 Crs. To Rs.30 Crs. Rs.30 Crs. To Rs.100 Crs. Rs. 15,000/Rs. 25,000/Rs. 40,000/Rs. 60,000/Rs. 70,000/- plus Rs. 2,500/- for every increase of Rs. 5 crs or part thereof above Rs. 30 crs. Rs. 125,000/- plus Rs. 2,500/- for every increase of Rs. 5 crs or part thereof above Rs. 100 crs. Rs. 375,000/- plus Rs. 2,500/- for every increase of Rs. 5 crs or part thereof above Rs. 500 crs. Rs. 625,000/- plus Rs. 2,750/- for every increase of Rs. 5 crs or part thereof above Rs. 1000 crs. Norms Rs. 20,000/-

(vi)

Rs.100 Crs. to Rs.500 Crs.

(vii)

Rs.500 Crs. to Rs.1000 Crs.

(vi)

Above Rs. 1000 Crs.

Note: In case of debenture capital (not convertible into equity shares), the fees will be 75% of the above fees. * includes equity shares, preference shares, indian depository receipts, fully convertible debentures,.

Sr.No. 1 2 (i) (ii)

Particulars Initial Listing Fees Annual Listing Fees Issue size up to Rs.5 Crs. Above Rs.5 Crs. and up to Rs.10 Crs.

Norms NIL

Rs. 2,500/Rs. 3,750/-

(iii)

Above Rs.10 Crs. and up to Rs.20 Crs.

Rs. 7,500/Rs. 7,500/- plus Rs. 200/- for every increase Rs.1 Cr. or part thereof above Rs.20 crs. Subject to a maximum of Rs.30,000/- per instrument.

(iv)

Above Rs.20 Crs.

Note: Cap on the annual listing fee of debt instruments per issuer is Rs.5,00,000/- per annum.

Mutual Funds Sr.No. 1 Particulars Initial Listing Fees Norms NIL Payable per 'month or part thereof' Rs.1,000/Rs.2,000/Rs.3,600/Rs.5,900/Rs.9,800/Rs.15,600/-

Annual Listing Fee for tenure of the scheme

(i) (ii) (iii) (iv) (v) (vi) Note: 1.

Issue size up to Rs.50 Crs. Above Rs.50 Crs.and up to Rs.100 Crs. Above Rs.100 Crs.and up to Rs.300 Crs. Above Rs.300 Crs.and up to Rs.500 Crs. Above Rs.500 Crs.and up to Rs. 1000 Crs. Above 1000 Crs.

For tenure beyond One month, fees are payable for one month or any part thereof.

2.

Asset Under Management (AUM) of all such listed schemes of the Fund House exceed Rs. 10,000 crs, discount of 10% will be offered on future annual listing fees for all listed schemes of that Fund House. For eligibility of 10% discount on listing fees, the corpus of AUM will be taken as on March 31st of every year.

Applicability
The above schedule of Listing Fee is uniformly applicable for all companies irrespective of whether BSE is the designated stock exchange or not. PAYMENT DATE

The last date for payment of Listing Fee for the year 2011-12 is April 30, 2011. Failure to pay the Listing Fee (for equity debt segment and/or Mutual Fund) by the due date will attract interest @ 12%

per annum w.e.f. May SERVICE Service Tax is payable on the listing fee at the applicable rates.

1,

2011. TAX

9. Compliance with the Listing Agreement

Companies desirous of getting their securities listed at BSE are required to enter into an agreement with BSE called the Listing Agreement, under which they are required to make certain disclosures and perform certain acts, failing which the company may face some disciplinary action, including suspension/delisting of securities. As such, the Listing Agreement is of great importance and is executed under the common seal of a company. Under the Listing Agreement, a company undertakes, amongst other things, to provide facilities for prompt transfer, registration, sub-division and consolidation of securities; to give proper notice of closure of transfer books and record dates, to forward 6 copies of unabridged Annual Reports, Balance Sheets and Profit and Loss Accounts to BSE, to file shareholding patterns and financial results on a quarterly basis; to intimate promptly to the Exchange the happenings which are likely to materially affect the financial performance of the Company and its stock prices, to comply with the conditions of Corporate Governance, etc. The Listing Department of BSE monitors the compliance by the companies with the provisions of the Listing Agreement, especially with regard to timely payment of annual listing fees, submission of results, shareholding patterns and corporate governance reports on a quarterly basis . Penal action is taken against the defaulting companies.

10. Cash

Management

Services

(CMS)

Collection

of

Listing

Fees

In order to simplify the system of payment of listing fees, BSE has entered into an arrangement with HDFC Bank for collection of listing fees from 141 locations all over the country. Details of the HDFC Bank branches are available on our website site www.bseindia.com as well as on the HDFC Bank website www.hdfcbank.com This facility is being provided free of cost. Companies intending to utilize this facility for payment of listing fee should furnish the information (as mentioned below) in the Cash Management Cash Deposit Slip. These slips are available at all the HDFC Bank branches.