Manu John Final Project

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 18th 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 and
recognized 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

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

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
India’s 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

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

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 Brokers
Limited (CSBL). CSBL was incorporated on 28-12-1999 having membership in National Stock
Exchange and Bombay Stock Exchange. CSBL’s 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

e) AREA OF OPERATION
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 muts in to a
national level integrated liquid mutt.
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
of the exchange is now on a deputation to its subsidiary CSBL.
f) OWNERSHIP PATTERN
TABLE No.1
Sl.No. Name & Address Designation

1. Shri T.N.T Nayar(IRS Retd) Public Interest. Director

Retd. Chief Commissioner of Income Tax and Member, Central

Administrative Tribunal.
Shri.A.S Narayanamoorthy Chartered Accountant
2 Public Interest Director
Shri.C.J.Mathew Member(Rtd.), Postal Services Board, India

3 Public Interest Director
Shri Robins Jacob

4 Share Holder Director
Shri M.Vijayakumar
Shri Varghese Menachery

Shri. Varghese Mathew

7 Member Director
Shri Abraham P.Korah

8 Member Director
Shri K.Jacob George

9 Member Director
Shri P.C. Cyriac, IAS

10 Shareholder Director
Shri V A Vijayan Menon

11 Shareholder Director
Retired ROC
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
revolution has given the company the first mover advantage in online trading. As a creative
innovator, Geojit BNP Paribas uses advanced technology in online trading to meet client
requirements such as customized online trading platforms and many other services. Geojit BNP
Paribas offers a wide range of trading and investment products and solutions. Certified financial
advisors help clients to arrive at the right financial solution to meet their individual needs.
The wide range on offer includes - Equities | Derivatives | Currency Futures | Custody Accounts |
Mutual Funds | Life Insurance & General Insurance | IPOs | Portfolio Management Services |
Property Services | Margin Funding | Loans against Shares.
2.JRG SECURITIES LIMITED
JRG Securities Limited (JRG) is an India-based company. The Company, along with its
subsidiaries, is primarily engaged in the business of retail broking (equity and commodity
broking), direct insurance agent and financial services. JRG's product suite includes equity
trading, commodity trading, currency derivatives, insurance broking, margin financing and loans
against shares, among others. The Company's segments include Equity broking, which includes
equity broking; Commodity broking, which includes commodity broking services; Insurance
broking, which includes insurance product distribution services; Client financing, which includes
margin financing to broking clients, gold loans and loan against shares and commodities, and
Financial distribution support services. JRG offers an online product, through a brand, Inditrade,
to offer services to the online customers. The Company is 44.8%-owned by Duckworth Limited,
a subsidiary of Baring India Private Equity Fund II Limited.
3.VERTEX SECURITIES
Vertex Securities Limited (VSL) is engaged in retail stock broking with close to 250 offices
across southern and western India; retail commodity broking (through its wholly owned
subsidiaries companies); merchant banking, and institutional broking. On April 1, 2009, the
Company amalgamated with Transwarranty Capital Private Ltd. (TCPL), which is engaged in the
business of shares, derivatives, stock broking, depository services, merchant banking and
distribution of mutual funds. Vertex Commodities and Finpro Private Ltd. (VCFPL) is the

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

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. An
optical 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 broker’s 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
Broker-Sub-Broker client
agreement
Combined risk disclosure

document
Investors Rights and

Obligations
Voluntary Documents for

requests
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

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 client’s account to be accepted only if the
client is willing for the same.
j)ACHIEVEMENTS OR AWARDS
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
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.

3.MCKENSEY’S 7-S FRAMEWORK
The 7-S framework was developed by the consultants at the McKinney Company, a very well
known management consultancy firm in United States towards the end of the 1970 to diagnose
the causes of organizational problem and to formulated programs for improvement.
7-S model a systematic approach in improving organizations
The 7-s diagram illustrates the multiplicity-interconnectedness of elements that define the
organization ability to change. It looks as the seven key elements that make the organizations
successful, or not, strategy, structure, systems, styles, skills, staff, and shared values.

CHART No.2
1.STRUCTURE
ORGANIZATION STRUCTURE OF COCHIN STOCK EXCHANGE
BOARD OF
DIRECTORS
EXECUTIVE
DIRECTOR

MARKE
TING
SURVE ADMINI
SYSTE SETTLE LISTIN AND FINAN
LEGAL CDSL ILLAN STRATI
MS MENT G PUBLI CE
CE ON
CATIO
N
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.

 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 Departments
Guided 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

· 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

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

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 each
such 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 in
response 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.
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

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.

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.

 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 its
future 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.

 Tough competition from various other stock broking firms.
 After the availability of online and internet trading services the role of brokers
have reduced a lot.
 Newer firms will challenge traditional concept followed by the stock exchange,
which follows
5.ANALYSIS OF FINANCIAL STATEMENT

BALANCE SHEET AS AT 31ST MARCH , 2010

Particulars As at 31st march 2010 As at 31st march 2009
SOURCES OF FUNDS
SHAREHOLDER’S 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 120811380 132306775
CURRENT ASSETS,LOANS AND

ADVANCES
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 420700 504840

project appraisal of commodity
exchangeSAHYADRI COLLEGE OF ENGINEERING AND MANAGEMENT Page 25
SIGNIFICANT ACCOUNTING 2137930671 2078552820

POLICIES AND NOTES ON
ACCOUNTS
PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED AS AT 31ST MARCH, 2010
PARTICULARS For the Year ended as at 31st March, For the Year ended as at 31st March,
2010 2009
INCOME
Operating income 52833180 47961016
Investments from Investments and 170894067 145679564

Deposits
Other Services/Income 14012752 10258377
237739999 203898957
EXPENDITURE
Computer maintenance and Service 16199080 19075853

charges
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 protection 926086 1059732

fund
Contribution to settlement guarantee 62177737 62999988

fund
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

Profit after tax 15228656 17863777
ADD- impairment of assets of pre- 1329421 527271

demutualization period adjusted with
general reserve
Loss on discard of assets of pre- - 408082

demutualization period adjusted
with general reserve
Loss on safe of assets of pre- - 28002

demutualizati0n period adjusted with
general reserve
Loss on surrender of land of pre - 1878593

demutualization period adjusted wit
general reserve
Bad debts of pre demutualization

period adjusted
With general reserve 23123865 1127974
Provision for doubtful debts of pre 7652760 -

general reserve
Sundry balance written off related to 5701416 -

pre demutualization period adjusted
with general reserve
Expenses incurred on behalf of 3626332 4193735

investors services fund written back
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 74759 1322137

general reserve
Liability to SEBI written back of pre 2298407 -

general reserve
Profit on sale of assets of pre 82494 -

demutualization period transferred

to general reserve
Proposed dividend 4277000 4277000
Tax on dividend 726876 726876
22099010 20856363
Surplus carried to profit and loss 39133555 10845528

account
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 firm’s stability. A high ratio indicates sound solvency position and a low ratio
indicates in adequate working capital.
CURRENT RATIO = Current Asset / Current Liability
Year Current Assets Current Liabilities Current Ratio

2009 3159243499 1244844330 2.43
2010 3305790024 1320507605 2.47
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
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 Current Liabilities Cash Ratio

Balances
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
Year Current Assets Net Worth Current Assets to Net

Worth Ratio
2009 3159243499 2078552820 1.51
2010 3305790024 2137930671 1.55
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 Ratio
2009 1244844330 2078552820 0.60
2010 1320507605 2137930671 0.62
INTERPRETATION

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.

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.

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 integrated
with 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.

INVESTOR DEPOSITORY DEPOSITORY

PARTICIPANT 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

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

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

Both primary and secondary data’s are collected for the study. But more important was
the collection of primary data. Secondary data’s are collected from internal as well as external
sources like journals, published sources of DP, website etc.
PRIMARY DATA
The primary data’s 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

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.

 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 DP’s.
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

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 a
proof 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

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

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 NSDL’s website
and NEST update-a monthly newsletter of NSDL.
ELIGIBILITY CRITERIA FOR A DEPOSITORY

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.

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 and
often 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

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 MARCH 2008

LIMITED (SHCL)
2. INDIAN BANK MERCHANT BANKING MARCH 1998
SERVICES LIMITED
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 JUNE 2000

PRIVATE LIMITED
8. KOMAL SECURITIES (KOLAK) SEPTEMBER 2000
9. HDFC BANK SEPTEMBER 2001
10. APOLLO SINTHOORI CAPITAL INVESTMENT OCTOBER 2000

LIMITED
TABLE No:2

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 DP’s.

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
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

NO. REASON FREQUENCY PERCENTAGE

1. FASTER SETTLEMENT TRADES 25 50
2. NO MINIMUM BALANCE 10 20
REQUIRED
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

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

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

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 FREQUENCY PERCENTAGE

1. REPUTATION 5 10
2. PROMPT SERVICE 10 20
3. LOW CHARGES 5 10

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

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 10
3. AVERAGE 35 70
4. LOW 10 20
TOTAL 50 100
GRAPH No.9

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

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 FREQUENCY PERCENTAGE

TRADING
1 TO 10 5 10
10 TO 20 30 60
20 TO 30 10 20
30 &ABOVE 5 10
TOTAL 50 100

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
RANK 1 2 3 4 5 6 MEAN WEIGHTED RANK

WEIGHTAGE SCORE AVERAGE
REPUTATION 3 20 90 20 5 6 144 6.86 5

FRIENDLY 10 10 15 40 75 30 180 8.57 2

RESPONSE
CONVENIENCE 15 20 15 20 50 30 150 7.14 4
PROMPT 10 20 45 40 15 12 142 6.76 6

SERVICES
LOW CHARGES 8 20 15 40 35 60 178 8.48 3
LONG SERVICE 12 10 30 8 5 12 185 8.8 1

EXPERIENCE 0
INFERENCE
The result of the weighted average method shows the following:-
TABLE No.15
FACTORS RANK
LONG SERVICE EXPERIENCE 1

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) maintaining

clients account.
 Due to ease in transaction and reduced cost many players increased their transactions.
This help in improving liquidity.

 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 the
DP.
 DP should improve the services to the clients.
 The process of dematting should be easy.

 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.

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.

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
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) Broker’s 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?
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…………………..

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

www.capitalline.com

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STUDY ON PERFORMANCE OF CSBL AS A DEPOSITORY PARTICIPANT

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

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.

OVER THE COUNTER EXCHANGE OF INDIA

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

SAHYADRI COLLEGE OF ENGINEERING AND MANAGEMENT Page 2

THE BOMBAY STOCK EXCHANGE (BSE).

THE NATIONAL STOCK EXCHANGE (NSE)

a.BACKGROUND AND INCEPTION OF THE COMPANY

LEGAL FRAMEWORK OF THE ORGANIZATION

b.NATURE OF BUSINESS CARRIED

SAHYADRI COLLEGE OF ENGINEERING AND MANAGEMENT Page 4

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.

2. Making all operations absolutely transparent.

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

d) PRODUCT OR SERVICE PROFILE

• Large client base in and around Kerala.

SAHYADRI COLLEGE OF ENGINEERING AND MANAGEMENT Page 5

Sl.No. Name & Address Designation

SAHYADRI COLLEGE OF ENGINEERING AND MANAGEMENT Page 6

Retd. Chief Commissioner of Income Tax and Member, Central

2 Public Interest Director

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

Shri Robins Jacob

Shri Varghese Menachery

Shri. Varghese Mathew

Shri Abraham P.Korah

Shri K.Jacob George

Shri P.C. Cyriac, IAS

Shri V A Vijayan Menon

2.JRG SECURITIES LIMITED

SAHYADRI COLLEGE OF ENGINEERING AND MANAGEMENT Page 8

2h) INFRASTRUCTURE FACILITIES

• Investor Grievance Service

Cochin Stock Exchange Training Centre

Cochin Stock Exchange Facilities

SAHYADRI COLLEGE OF ENGINEERING AND MANAGEMENT Page 9

2 i) WORK FLOW MODEL

Eligibility criteria for Listing .

Documents for Trading

Documents on policies and

Combined risk disclosure