Q3 19/20

Jan 29, 2020

Quarterly report

Ladies and gentlemen, thank you for standing by, and welcome to ZBSCO's Q3 FY 'twenty Earnings Conference Call. My name is Dheera. As a reminder, all participants lines will be in the listen only mode and there will be an opportunity for you to ask questions after the presentation concludes. Please note that this conference is being recorded. Please note that CDSL does not provide specific revenue or earnings guidance. Anything set to this call, which reflects CDSO's outlook for the future or which should be construed as forward looking statements must be reviewed in conjunction with the risks and the company faces. I now hand the conference over to Mr. Jiawagun from Axis Capital. I'll turn over to you, sir. Thank you, Nirav. Good evening, everyone, and a warm welcome to the 3Q FY20 Earnings Call of CDFL India Limited. From the management, we have Mr. Nehal Vohra, Managing Director and CEO Mr. Girish Amirthara, CFO Mr. Sunil Alvarez, COO, CDSL Ventures and Mr. Nilesh Kithur, AVP. I shall now hand over the phone to Mr. Vohra For the opening remarks, post which we'll open the floor for Q and A. Thank you and over to you sir. So first of all, I'd like to thank Thank all the investors for joining the call. I wish you all a very good afternoon. I welcome you all to the quarterly conference Call for the quarter ended December 12, 2019. We at CDSL have had an exceptional 1st month in this New Year. From launching the 1st depository branch in the in basically the IFRS in GIP City in the 1st week of the New Year To reaching a new milestone of being the 1st depository to cross 2 crore demat accounts last week, it's been really an amazing start to the calendar year We hope to continue the success streak through the year. In terms of the business highlights, the last calendar year, the number of beneficial owners As CDSL has increased from has increased to INR 1.97 crores as on December 31, 2019, from 1.67 crore as on December 31, 2018, which indicates growth of 17.96%. As on December 31, 2019, CDSL has 600 depository participants offering Depository participant services from over 19,000 locations across the country. These depository participants comprise of Clearing members, bank, custodians and non banking finance companies. The securities of almost all listed companies have been Being admitted with CDSL for Demat. Further, a large number of private limited and unlisted companies are also admitted with CDSL. As on 31 December 2019, the securities of 14,709 companies have been admitted for DMAT with CDSL. During the last 12 months, the volumes of securities under custody has increased by 28% And the value of security has increased by 7%. In terms of the new updates, Basically, as was stated briefly earlier by me, CDSL has set up a branch at Givcity as per the provisions of the extended regulations. CDSL is the 1st and only depository to have received the approval from Cebi to commence operations at the GIVE City. CDSL has Inaugurated the branch on 6th Jan, 2020. The branch will contribute to the development of the market with the introduction of delivery based Trading to the existing suite of products traded on the exchanges at the center. It would also enable the issuers to list the Like bonds and to I'm sorry, it would also enable issuers to list all the kinds of thing issuances out there, thereby enhancing the value proposition for the center. CDSL has been awarded the Internet Data Center Insights Award. The award is in recognition sustainable and measurable improvement in key business performance metrics via the innovation and our transformation, which results in the operational efficiency and enhancement As well as the benefit in time to market by the ecosystem of partners and suppliers, CDSL has received an award of excellence in basically the operations category also by the IDC Insight Award of 2019. Cedi has prescribed a webcast of Annual General Meetings, which will be compulsory for the top 100 listed companies by market capitalization With effect from financial year 20 eighteen-twenty 19, CDSL introduced the live webcast facility last year, which enables shareholders to gain access to the live proceedings at the AGM of Companies through their secure e voting login credentials. This facility facilitates wider participation of shareholders from different locations who are Unable to travel to the AGM venue, shareholders are able to gain knowledge about the company's future and also post questions to the management. CDSL's e voting system enables investors to cast their votes pertaining to company's resolutions throughout the Internet, the closure of an e voting event. At present, more than 4,600 companies have signed agreements with CDSL for its e voting facility, of which over 4,500 companies have used CDSO's key working platform. In terms of the financial performance, Participants, please stay connected the line for the management, Rob. Sir, please go ahead. Yes. So in terms of the financial performance, total income on a consolidated basis for the 9 months ended December 31, 2019, The total income has increased by INR 34.51 crores, which tantamounts 20% to INR INR 211.27 crores from INR176.76 crores. The net profit after tax on a consolidated basis for the 9 months ended December 31, 2019 is INR 78.58 crores compared to INR 80.64 crores for the 9 months ended December 31, 2018. Total income on a stand alone basis for the 9 months ended December 31, 2019, increased by INR 19.11 crores, which is 14 percent, to INR 156.59 crores from INR 137.48 crores. The net profit after tax on a consolidated basis for the 9 months ended December 31, 2019 is INR INR 56.35 crores compared to INR 59.95 crores for the 9 months ended December 31, 2018. It may be noted that the consolidated and standalone profits have decreased mainly on account of a provision of a non recurring previous years, Anticipated statutory liability of rupees INR 10.56 crores. The consistent Income growth is a reward for the core values that the company believes in of being convenient, secure and dependable. The dip in the net profit is a result of nonrecurring expense arising out of the past issues. We want to send out a clear message That we are strongly committed to the core principles of transparency and good governance as per the framework prescribed by the government and Sevi and the other regulators. Now I request to Shrissunil Alvaris to give an update about the operations of our wholly owned subsidiary With this overview, let me welcome you all once again and invite all of you for the questions and answers. Thank you. Over to you, Suneet. Good evening. So far as CDSL Ventures is concerned, there are 2 major Businesses, one is the KRA business and other is the heavy project, which we are handling. So far as the KRA business is concerned, The revenue is generated from new KYCs which come in as well as the KYCs which are fetched. During the period October to December 2019, we had 7 point 5 lakh KYCs generated as compared to 4.88 lakh in the same period last year, which was an increase of 2 point L97 lakhs or 21% as compared to the same period last year. With regard to the KYTs, which were fetched During the period October to December 2019, it was Lakh 24.48 as compared to Lakh 18.36 lakhs in the same period last year, which is an increase of 6.12 lakh or 33%. Coming to the next project that is the SEBI project. The revenue in this project was INR 9.40 lakhs in the 1st 9 months of Financial year 2019 2020 has compared to INR 2 crores, INR 85 lakhs, which was an increase of INR 6.5 crores. We have budgeted an expense of about 6,300,000 in this particular project. So far as the project is concerned, processing is underway, the applications and for all these new applications, there will be a new charge applicable on these applications. Next project is the NAD project. As of 31 December, We have 5 19 academic institutions who have registered with us, out of which 261 have gone live and have uploaded 2.5 crore awards into the system. As of 31 December, we have 8.5 lakh students who have registered. So far as the charges are concerned, MHRD had The LAD project was free for all users up to 30th September 2019 post that MHRD had appointed And was to decide on the charges? They are yet to decide on the charges. So there is no progress on that front. With regard to the other project, EKYC, we have applied to UIDi and we are in an advanced And second project is the eSign where we have received the approval from the CCA to start eSign So far as the operational income for the period April to December 2019 is concerned, total operational income was INR 41.36 crores as against INR 30 point INR57 crores in the same period last year, which was a jump of INR10.875 crores. And the total income, including the other income, was INR 49.77 crores For the 1st 3 quarters has against INR 36.14 crores compared to the last year. With this, I now would like to take any questions if you'd like. Thank you very much. We will now begin the question and answer The first question is from the line of Anshooman Bell from ICICI Securities. Please go ahead. Anshoom, your line is on top mode. Please go ahead with your question. Managers, please go ahead. Thank you for the opportunity. Sir, I just wanted to clarify on these costs, which have flown through in the 9 month. So just want to tell you that the one off costs, which would have flown in the 9 months and in order to arrive at More regular costs. Should I adjust the 10.6 crore for statutory liability, the 8 crore for bad debts, Which was done until the first half, these two costs? Or there are any other costs which also needs to be adjusted? No, that's about it. So and the other cost, which is the 6 crore, which is the SEBI project related cost, When does the project gets completed? Will it reoccur in FY 2021 or it was only meant To be executed until FY 2020? See, this cost of is for the Phase 1 of the project where we have made provisions, Okay. And even the income is against Phase 1. In case that we decide to have Phase 2 of the project, there will be both income and Expenses against that particular phase itself. Phase 1 stands executed in FY 2020 itself, that's how it is? No, it's an ongoing thing, but the expenses have been provisioned for. Okay, okay, okay. So just on the Cost side, if you adjust that 10.6 Is it correct, if I do it for the 9 month? So total cost reported by us for 9 months is around INR 110 crores, INR 111 crores. So of that you can Adjust INR 10 crores for the statutory liability and the rest cost may continue. So INR 8 crores of bad debt continues? No, that also you can add. Yes. Index is a function of the debtors. So if there were last year certain new debts, This year also there might be certain bad debts. So that would be decided at the year end. But is what was it something exceptional this year in 9 months versus last year? No, it is not an exception. No, Nayan Singh, if INR8 crores was there in 9 months of FY 2020, what was it in 9 months FY 2020 FY 2019 then? It was around INR 6 crores in FY? So it's more regular, Suraj? Yes, yes. Okay. My just last one more question. We gave out 2 data points. Responding revenue growth rate, it doesn't come to that number. So if you could help us understand your revenue line items To just tell us to just let help us figure out the growth in transaction and issuer and corporate action. So in terms of the Demat accounts, when you open account, it's only your charge when there is a debit transaction. The credit transactions are free. And for the corporate accounts, there's an annual charge. But for the individual retail that is most of it is free. In terms of the Know Your Clients, Huneet, do you want to take that? Yes, I guess the revenue breakup also for the quarter 3 9 months. So for the revenue breakup, our Mainly, our operating income consists of annual issuer fees, which is around 35% of total operating costs. Transaction charge from deposit fee participants is around 18%. This is for quarter 3, sir? I'm talking about 9 months. Okay. So issuer charges is 35%. Transaction from deposit fee participants is around 18%. Online data charges from KYC is around 15%. IPO corporate actions is around 9% to 10%. And the SEBI project is around 6%. Rates are all other income, which you can consider around 13%. In total, The holding company's revenue is around 79% and subsidiary CDSL's main revenue is around 21%. This consists of our total operating revenue. Okay, sir. Thank you. The next question is from the line of Yash Neerulkar from BPFAS Mutual Fund. Please go ahead. Hi, good afternoon. Am I audible? Yes, yes. Yes. So my first question is on the branch which you have opened in the Gil City. So could you just elaborate on what sort of prospects Do we see how scalable is this business and what sort of business do we hope to generate from this? So basically, the GIFCT, you already have an exchange and clearing corporation. You have 2 exchanges and 2 clearing corporation. There was no depository. Great. So that we kind of completed the loop. The parliament, the honorable parliament has passed The bill for creating a separate gift city authority, which should get now done in the next few months. So with this, obviously, the bond kind of issuances which companies have or Delivery based futures and options, which can be taken So various products which are delivery oriented would be now be possible with basically a depository being there. This is basically early stages. It has a volume of around $2,500,000 to $3,000,000 a day. But as and when now, there are newer hybrid products, etcetera, which are coming into play, which can have a Okay. So we'll have to see how this spans out as per the new regulator once it comes in. Great. Building blocks To be clear that the depository services are now already available out. So have we started charging for any of these services yet or any sort of model Already out there? Yes. So we are in close coordination with SEBI because all our charges have to be approved by SEBI. So we are in Discussion with them. And the depository participants also we've received around 3, 4 People who have sought the interest of creating a branch out there in Givecity. Great. Early days yet, but I think we should see some progress going forward. Okay. And my second question is, so Keeping aside the regulatory capital required for each and every business vertical, do we have any plans for any other sort of capital allocation anywhere? So see, basically, cybersecurity is one of the critical aspects. Technology Investments will be critical going forward. Our main line of business is obviously technology driven. Great. Obviously, there has to be constant investment as well as innovation, which has to be done in technology. Secondly, also the financial strength of the company because when we have to take up larger projects like the one which is Sebi has They look at financial strength of the balance sheet as one of the key attributes. So obviously, till we reach kind of a Sufficient level is something which we would like to basically Invest more into our financial strength of the company. And third is obviously newer products So I'm going to be being involved. The Finance Minister has announced previously in the 2 Financial speeches about a single demat account, so where all the financial assets come under 1 demat account. So all this would require Investment into technology. All right. And the last question, right now we fall under which bracket of taxation, is it 25%? Yes. All right, all right. All right. That's it from my side. Okay. Done. Thank you. Thank you. Next question is from the line of Utkarsh Solaburwala from Davos Capital. Please go ahead. Good afternoon, sir. Good afternoon. Yes. Good afternoon. Can you lay out strategy for the insurance repository? Yes. So basically, the insurance repository is basically kind of a new product where all the Insurance policies which are getting issued would move from a physical mode to an electronic mode. However, basically, the IRDA has not made it mandatory. So a lot of the private insurers as of Now we're keen to move from a physical mode to an electronic mode. And this as we move forward With really the central government's push in moving things from a physical mode to an electronic mode, we are going to see all the financial assets Finally, coming into electronic mode. And therefore, there is value in terms of the subsidiary of retaining that License of being able to convert the physical insurance policies into an electronic mode. But I think once the critical mass is reached, then probably the regulators will make it mandatory. And would LIC's would go for its own thing or opt for either NSDL or CDSL's Services for the insurance repository. That will be difficult for me to answer as to what LIC wants to do. But obviously, there will be basically efficiencies seen in terms of Moving from physical mode to an economic mode both in terms of retrieval of policies And also saving of cost for the insurance company. Which service provider they choose would be as per their own Internal? Current market share in this segment? It's not very Significant. I think it's very early days yet. So I think what would be the percent? After the total physical policy sales, it is Yes. So the total is it is nothing to talk about because it's not mandatory. Physical policy as a percentage is 0 point 1% of the entire of all the insurance revolving, please. Thank you, sir. Thank you. Next question is from the line of Srivastran Pramchandran from Spark Capital. Please go ahead. Yes, hi. Just wanted to get your sense on the Varo's depository receipt initiative. And then also on the economic depository, why are you Sorry, you're not audible clearly. Hello? Yes, sir. Yes. So I was asking one of the Varo's depositories that started out as a JV between MCX BAC and CDSL, just wanted to get what's the status on that? And then the second question was on while on the academic capacity, The committee is head to commerce numbers, but on the verification side, the depositors are free to go ahead and have their own charges. Any Transactions that have started happening on the verification side? Yes. On the verification side, transactions are happening, but the numbers are very Small because the numbers of verifiers who are registered are about 150 so far. So The verification is happening, but it's not as much nothing much to talk about. So on the warehouse depository, you think? Yes. On the warehouse, Ram would like to ask. So on the warehouse depository receipt, As of now, it is new initiative. To that extent, there is not much volumes here. Again, it is mandated by the exchanges that all the deliveries that In the exchanges, all the clearing corporations in terms of aero facilities will be in electronic form. So we are talking about a very small population of the total commodities that's in the market. So to that extent, it is in the initial stages of formation. Okay. My last question was on the e voting bit with some changes The competitive dynamics, it's an area where the alternative is materially more expensive than what we offer. Is there any thoughts on taking Price hikes, what are clients selling on that front? See, Evoting the way the business is it's very competitive right now. So I don't really The only way we see it, maybe the prices could come down. There doesn't seem any chance for the prices to really go up. So I think any business, there are 2 data points. 1 is the number of companies And second is the margin impact. So while margins may come down, but the number of companies which is expected to go up. So I think it's a function of both these aspects. Sure. Thank you. Thank you. Next question is from the line of Pavan Kumar from Ratnathria Capital. Please go ahead. So what is the investment income component of this particular quarter's revenue? And are there any mark to market Gains or losses? And secondly, if you could give up give the breakup of all the heads revenue heads for the quarter, please? Look, the investment income is around INR 14 crores in the quarter compared to December last year, December quarter of INR 16 crores. The mark to mark It's not significant compared to last year's Q1. The component of income For the quarter to quarter comparison last year and if any income is around 36%, Transaction charges from DP is around 21%. Our KYC business contribution is around 17%. IPO and corporate Contribution is around 9%. Pardon? Yes, are all new skill contribution. Yes, rest are on, what sir? They are 1 or 2 percentage units, miniscule compared to this all, as a percentage of income. Okay. And the CDSL Ventures, The rule is separate? I spoke about that. It is around 17% I said the KYC business is around 17% compared to last quarter. Okay. Okay. Okay, thanks. Thank you. Thank you. Thank you. Next question is from the line of Abhishek Vigneshwar from Trustline. Please go ahead. Hi, sir. At the first, you have explained about the rate Sorry to cut you. I requested to speak a little louder. Yes, okay. Am I audible now? Yes. Yes. Actually, at first, you have explained about the CBSL Winters breakup, the heavy project breakup on the KYC breakup. Can you repeat that again, sir, please? So the project on Sebi work is around 6% from in the contribution of total operating income. And KYC is around 15% From the total operating income contribution on a 9 months to 9 months comparison basis. Sir, I want to know about the index that you spoke about the sound point, like KYC and all, sir. I just want to know about that volumes. Yes. As compared to the last quarter, the KYCs generated were about 2.97 lakh up And the KYCs which are fetched were about SEK 6 lakhs higher. Okay, sir. Thank you. Thank you. Next question is from the line of Neeraj Kamtekar from Prosperity, please go ahead. Hello. Yes. Thanks for the opportunity. Sir, While data entry and storage charges are lower in Q3 compared to Q2 and so EBIT is also lower and As it ever comes in discussion with Sebi that they may post a decrease in transaction charges that are allowed to be charged by the depository like you and NSTL. The reason for asking the same is that over the period of time, SEBI has decreased the rate across all categories like mutual front, brokerage and The line for the participant was disconnected. We move on to the next participant. Next question is from the line of Pratesh Cherda from Lucky Investment Managers. Please go ahead. Yes, sir. So, in short, during the percentage, can you just give the Number so that it helps us do the Y o Y growth rate numbers for 9 months only, transaction issuer and corporate action. So annual issue income is INR58 crores compared to INR49 crores For 9 months, transaction charge income is around INR 30 crores compared to INR 29 crores. KYC business is around INR25 crores compared to INR24 crores last year. INR25 versus INR24 crores? Yes. IPO corporate action is around INR15 crores compared to similar amount during last 9 months. The heavy project is around INR 9.4 crores in this 9 months compared to 0 during last year. Perfect. So this covers all major heads of income. Now I have 1 or 2 observations here. We somewhere gave the Transaction value growth up and we gave the number for KYC annual number, Which is 33% higher. So then is there a rate reduction wherein the KYC growth rate in revenue terms is So not visible. And in transaction also, the growth rate is not visible where you said that the value up is about 8%. So Just wanted to So the transaction charge are only on the debit that happens, it's not on the credit. And it is not on value. And sir, this is on We said that volume of securities is up 27% and that's how some data points we gave. So I'm just trying to correlate the 2. So the reason for that is that we only charge on the debits that happens in the transaction otherwise? Yes, irrespective of the value and volume of the transactions. Okay. And what about the KYC, where your KYC volume number is up 30 percent, but your KYC revenue Yes, there could be some large players who have been charged a slightly lower rate. So that could be a possibility. Okay, okay. And lastly, there's an issuer charge, which is subject to review for a rate hike next year. So any status there? As of now, the status quo remains. Status quo. Okay. Thank you very much. All the best. Thank you. Next question is from the line of Harit Shah from Indian Avesh. Please go ahead. Yes, sir. My question has been answered. Thank you. Okay. Thank you. Next question is from the line of Agam Shah, an individual investor. Hi, sir. Can you just Please tell about the Chevi project, what was which was done? And going ahead, what's the plans are you like? Sir, might I have missed the opening remarks? Yes. The SEBI project was to send out a refund to investors in a particular company, we processed about INR 1.5 crore applications of which we have already started sending out refunds. And There were 2 phases of the project. The first phase, we have done the processing, but the payments will be made as and when funds are made available to us. The Phase 2 of the project calls for getting the certificate, etcetera, from the investor. But That, Sebi has to take a call. If they take a call, then there could be additional revenue for us at that point in time. So what we have done, we have provided the That's right. We have created a website, collected data, processed that data and given that to Savi to make sense. And on any I don't know, can you just brief on the privatization of the unrestricted securities and demand form? So what's happening in that space or anything? Can you just throw it on that? Yes, we are adding around 200 to 250 unlisted companies every So if you see that has been the run rate across. Okay, okay. Thank you and all the rest. Thank you. Thank you. Next question is from the line of Amit Chander Rao from HDFC Securities. Please go ahead. Yes, thanks for the opportunity. Sir, my question is a follow-up on the unlisted opportunity that you just mentioned. So as you said that we have been adding 100 to 200 companies per month. But if I see the data that hasn't published in terms of the number of companies I will leave it for Demat. And if I do the math there, then in this quarter, we have added only 96 unlisted companies. And if I see the Rate in terms of monthly addition is only around 30 companies that has been added versus NGL which is added around 3 60 companies. I know that the rate has come down If I compare it on a Y o Y basis, what's been there? And as you have mentioned earlier also that you have been working on some schemes where So I think Amit, you got some figures wrong. Last quarter, we added 588 companies or rather one second. This is Yes. Last quarter, we've added 588 companies and in for the last three quarters, we've added 1694 companies. So I think somewhere you got the numbers wrong. Okay. Because the total companies were 14,000 Where it is, we also published the iZins, which are listed. So just I think there could be some confusion in that space out there. Okay. Okay, sir. I'll just reconfirm that then. And in terms of the branch that we opened In the Legacity, so as of now, there is no revenue. But if you can just provide The expense that we're doing there in terms of the annual rate that we have planned or what is the monthly expense there? And is that expensing the are we expensing it out? So as of now, The charges have to be approved by SEBI. And so we've already given the proposal. It's not yet out in the public domain. In terms of expenses, so how has been the expenses there? So how many employees are there? So Today, we have around 3, 4 employees out there. It's finally a branch. It's So as of now, the costs are not really significant. This property had been Taken on a long term lease, pretty around 2 or 3 years ago. So it was just that we've got it Refurbished. Basically, refurbished and the levy approval has been got. So In terms of starting the branch. Okay. Sir, sorry to cut you off. I'll allow to ask you to come back in the question for a follow-up question. Okay. Thank you. Thank you. A request to all the participants, please proceed to one question per participant. The next question is from the line of Manish Bhandari from Valem Capital. Please go ahead. Hi, good evening. My question is regarding this bad debt, if you could explain that is there any possibility of reducing this number, which has been concerned, 26 to 8 crores and maybe slightly higher. So going forward, can we change if that number can change? See, basically, the bad debts are those numbers for which And having said that, there is already an internal policy to follow-up after the bad debts are recorded. And in some cases, the people customers grew pain after recording as bad debt. So this trend is going to continue like this. Roughly, our bad debts would be in this bandwidth. Sure. So my other question is regarding the Interesting point made during the conversation was related to the cash, which we want to hold on the books and The various streams of things, regulatory and IT, so I mean that looks an unending process where the cash will keep on And which will depress the return on capital employed and return on equity for the shareholders. So is there any this is a listed entity and that is all Obligations to the minority shareholders. So is there any line which you are putting up that this is the cash what we require and above that we will distribute back to the shareholders to the rightful Yes, we do have a certain number, but obviously, that's a forward looking statement. So I would rather not Go as to what that number is, but we do have some numbers in our mind as to what we would look at. But having said that, there is going to be newer business opportunity. So I think the way we have I really addressed this issue is that we have a dividend policy in terms of which we have been adhering as a percentage of the stand alone profits And that we have been adhering on a year on year basis to ensure that there is fairness, which has been granted to the shareholders also whilst we are doing this particular objective. Yes. But then this still doesn't answer and it's very vague answer. If you can It cannot be specific because it's about doing about the future, and I would not be able to commit right now about the future. So the way we the Board has taken this up is that created a policy of the dividend payout, which has to happen, And that has been really adhered to. Okay. Thank you. Thank you. Thank you. Next question is from the line of Ashish Asoud from Vishuddhi Capital. Please go ahead. Hello, sir. Thanks for taking my question. So I was looking at the annual report. So in annual report, there was a contingent liability of around SEK 40,000,000 relating to service tax matter. And this time, you have taken a charge of SEK 10,000,000 for the settlement of this service tax matters. So can I assume that this 40 CR is fully set off against the payment of 10 CR that you have taken the charge or it is still? No, no, yes, you can take that certainty. Okay. So this is all is removed. And just related to the previous point regarding the SEBI project, so again, when the Phase 2 will come, it will again depress your margin because it's a low margin product. So are you planning to charge higher fees in the Phase 2 or it will be like this because it's very difficult for us to estimate when the project will start and then again the margin dips. So what is the overall strategic index? We will talk online. Okay. Okay. Thank you. Thank you. Next question is from the line of Anish Jobalya from Banyan Capital. Please go ahead. Yes. Hi, good evening. I wanted to get a sense around your total expenses. So Like in this 9 months, if I were to adjust for the government and one off like initially you mentioned like MTM I mean, employee related expenses, which happened in the past quarters. But despite of that, our adjusted expenses have grown by around 28%. So of course, one of the reasons was like the hike in the salary of the employees, but the other line items have also been A bit much higher than the revenue growth. So how do you see this panning out in the next year? Is this going to Like kind of grow at inflation or still one should continue expecting this to grow at a higher range? Apart from cost that you have mentioned, there is one cost which is pertaining to SEBI project for which there is a separate income. This cost is around INR 6.5 crores in this total cost. About the other costs, there will be inflationary pressure for incurring similar costs. So that might continue. So what is the inflationary expectation here because the long term growth in your cost Like over a 5, 10 year period is like, I think, more than 10%. So is that the kind of inflation that we could Expecting our expenses also like historical growth rate or it could come down to 5%, 6%, 7%, 8% kind of range, Like in the next year, I mean next 2, 3 years? See, it will be difficult to predict next year, But yes, inflationary cost would be increasing. Okay. And I will not be able to put up a percentage right now Because that's we will be able to do it in next quarter. Okay. And our annual issue charges have grown in the 9 months at around 19 So because the markets were a bit like In the last 2 years, they were a bit down. So can we expect that in the next year this kind of growth won't continue? Or We can expect similar growth in the next year also in the annual issuer charges. The annual yes, I think, Again, this is again about the future. So we'll have to kind of really restrict it to what data points we have now. Annual issuer charges, SEBI kind of approves it over a period of time. Whether they increase it, decrease it, Make ensure that remains constant is something which will be difficult to predict at this point of time. But When do we expect to take the price hike with the Chevy? Because it also takes a year to get kind of an approval for them. And I think we are already Ripe in terms of going for the price hike. So because I think it's already 3, 4 years. So is there any real plan to do this? So normally, it's happened in the past at every 4 to 5 years, and it's done in coordination with both the depositories. So I think it will be due from the next financial year, but when Sedi will really take it up for a hike It's something which will be difficult to predict in terms of when and basically in what form it will be satisfying. Okay, okay, okay. Thank you so much for answering the questions. Thank you. Next question is from the line of Ravin Corva from ICICI Securities. Please go ahead. Hello. Sir, I just wanted to confirm the annual issuer charges transaction revenue, IPO and online and others. So annual issued charges standard INR58 crores, right, for 9 month FY 2020? Yes, yes, that's right. Transaction revenue INR 30 crores? Yes. IPO, INR 15 crores? Yes. Online INR 25 crores and others will be INR 37 crores, right? Yes. Okay, sir. Thank you. Thank you. Next question is from the line of Hithin Jain from Invesco. Please go ahead. Hello? Yes. Yes. So I had just one minute. Hello? Yes. Yes. So I wanted to understand this quarter we are seeing a sequential increase in employee expense by 9%, whereas in 1st, since we've already taken a 30% hike, I was just curious to understand what is leading to this sequential jump in employee expense. And at the same time, other expenses down sequentially. So could you just help me understand what happened in this quarter, which led to these kind of outcomes on both employee expense and other expense? Basically, in case of employee expense, Recently, in this Q3, 3 Kmps were hired and 2 Kmps had retired It's on 31 December. So this had led an incremental cost of around 9 So if I can answer that, there were 2 senior KMPs who were due to retire And to ensure that there is no issue in terms of day to day operation, there was the Board had approved The Board as well as the NRC approved 1, 1.5 month of an overlap to ensure there's a smoother transitioning. So the 3 KMPs, which have which are no longer with us, have been replaced by 3 more. So there has been a substitute. On the other expense side? On the other expense side, in last quarter, the SEBI project related cost was recorded, Which are not there in this quarter. So all the costs and income related to Sebi project were recorded up to the Q2. No, no. So the costs okay, so you're saying the SEBI project related costs did not occur this quarter? Yes. And we only had the revenues, Revenues also were recorded in up to last quarter. So when you say the SEBI project of INR 9.4 crores, are you giving this 9 month data? Yes, that's right. Okay. And one question was, what was the revenue contribution from unlisted The companies this quarter with an annual issuer and what is our market share in that? Just a moment, 35 percent is Last quarter, it was 57 lakhs, which you gave. What is the number this quarter? Market share is around 32%, which is growing every quarter. The revenue See, annual issuer income for 9 months, I already said, it is around INR58 crores and compared to last year's Income of INR 50 crores roughly. My question is within the annual issuer, how much is the contribution from Unlisted companies, you gave that number last quarter, which was 57 lakhs of revenue. What is that number in 3Q 2020? Processing fees of around INR1.4 crores in quarter in the last quarter And in 9 months, it was around INR 4.62 crores. So this is the, you think, revenue from the unlisted companies, Puneet, who are coming on to CDSL? Yes. Okay. But last quarter, you gave a number of 57 lacs and in 1Q 2020, you gave us number of 75 So I'm not sure if it's like to like. In 3Q 2019, it was 1.5 crore. And in So I'm not sure what is the number in this call, the 3.2 lakhs. So the max but doesn't include processing charges, which is paid one time. It is INR 15,000 Rupees per company. So, 1.4 crore includes processing charges, which amounts to around L88 lakhs. Okay. So then what is that number? So 1.4 crores in 3Q 2020? Yes. And what was that in 2Q 2020 Like to like? Around 460 companies were added. So accordingly, 15,000 into that amount, we'll give you the processing fee. Okay. And plus and then that's just okay, and you add 57 lags to it? Yes. Okay, okay, okay, okay. Understood. And 1 So sorry to cut you off. I'll have to come back in the question. Sure, sure, sure. Thanks. Thank you. Next question is from the line of Rana Ramesh from Phantomat Fund. Please go ahead. Hi, sir. I just wanted to know the last time when you saw hike in your annual charges and your transaction charges? It was in 2015. The issuer charges was in 2015. 2015 was the issuer charges. And transaction charges was about 2,000, what 2,000,000,000,000,000. 2,000,000? 2,000,000,000. Okay. And What was the 0.7 percentage? Issuer charges was almost 50%, around 40% And transaction charges, we had moved from an ad valorem to a flat fee basis. Got it. Okay, that's all. Thank you, Tom. Thank you very much. Next question is from the line of Neeraj Kamkeerika from Prosperity. Please go ahead. Actually, my phone was disconnect. I have one question, sir. Has it ever come into discussion with Sebi that they may post A decrease in transaction charges that are allowed to be charged by the depositary like Q and NGL. The reason for asking the same Over the period of time, CDSO has decreased the rate across all categories like mutual funds, brokerage and now Capozarom offer GAAP in advisory fees and so on. So what is your long term view on these hands? So in terms of, again, what SEBI will do in future is very difficult to predict right now. Important thing is that we are going to have our services which are going to be up to speed And really the sophistication of technology, whether that will translate into lower fees or higher fees or same fees, Something which we'll have to see as and when it happens in the future. Okay. Thank you. Sir, do you have any follow-up question? Ladies and gentlemen, due to time constraint, that was the last question for today. I will now hand the conference over to the management for closing comments. So I would really like to thank all of you for joining the investor call. We will continue to We invest into our technology to ensure that we have the sophistication of our products and services and also the Innovation in our services. So hoping that this will continue to translate into increased revenue and profits for the company. Thank you. Thank you very much. On behalf of AXIS Capital Limited, this concludes this conference. Thank you for joining us. You may now disconnect your lines. Thank you.