Dear Shareholders,
The Board of Directors are pleased to present the Twenty First Annual
Report of your Company, along with the Audited Statement of Accounts for the Financial
Year (FY) ended 31st March 2023.
1. STATE OF COMPANY'S AFFAIRS FINANCIAL RESULTS
The Company's financial performance for the year ended 31st
March 2023 is summarized below:
(Rs. in lakh, except EPS)
Particulars |
Standalone |
Consolidated |
|
2022-23 |
2021-22 |
2022-23 |
2021-22 |
Total Income |
52,147 |
40,323 |
58,117 |
43,331 |
Total Operating Expenditure |
32,947 |
20,143 |
36,382 |
20,463 |
Profit before Interest,
depreciation, exceptional items and tax |
19,200 |
20,180 |
21,735 |
22,868 |
Less: Depreciation |
2,047 |
2,214 |
2,159 |
2,270 |
Less: Interest |
18 |
26 |
21 |
24 |
Less: Exceptional item |
- |
2,043 |
- |
2,043 |
Add / (Less): Share of loss of
Associate |
- |
- |
(498) |
(127) |
Profit after exceptional items
and Share of Profit / (loss) of Associate but before tax |
17,135 |
15,897 |
19,057 |
18,405 |
Less: Provision for tax |
4,152 |
4,051 |
4,160 |
4,059 |
Profit after tax |
12,983 |
11,846 |
14,897 |
14,345 |
Add/(Less) : Other Comprehensive
Income (net of tax) |
(69) |
(276) |
96 |
(283) |
Total Comprehensive Income for
the period (Comprising Profit and Other Comprehensive Income for the period) |
12,914 |
11,570 |
14,993 |
14,062 |
Earnings per share (EPS) |
|
|
|
|
i. Basic (Rs.) |
25.51 |
23.27 |
29.27 |
28.18 |
ii. Diluted (Rs.) |
25.51 |
23.27 |
29.27 |
28.18 |
FINANCIAL HIGHLIGHTS
For FY 2022-23, your Company's (Standalone) total income stood at Rs.
52,147 lakh as compared to Rs. 40,323 lakh in FY 2021-22. The operating income during the
year under review was Rs. 44,922 lakh as against Rs. 32,978 lakh in FY 2021-22. Net profit
after tax in FY 2022-23 was Rs. 12,983 lakh as compared to Rs. 11,846 lakh in FY 2021-22.
In accordance with the provisions of the Income Tax Act, 1961, during
the year Company has adopted confessional tax regime u/s 115BAA of the Income Tax Act,
1961. Tax provision for FY 2022-23 has been made accordingly. The rate of taxation was 22%
as compared to 25% in previous year.
The net worth of the Company as at 31st March 2023 stood at
Rs. 1,59,570 lakh as compared to Rs. 1,55,530 lakh as at 31st March 2022.
The Company had entered into an agreement with Tata Consultancy
Services Ltd. (TCS), according to which the new Commodity Derivative Platform (CDP) was to
be developed, tested and delivered by TCS by 30th September 2022.
Since the new platform is still under development, the Company
considering the exigency to ensure continuity of the existing commodity trading and
clearing platform, continued with the services of the existing vendor, 63 Moons
Technologies Ltd, initially for a quarter ended December 2022 for Rs. 60 crore (plus
applicable taxes). Accordingly, for the quarter ended 31st December 2022, MCX
has incurred Rs. 40.20 crore (net of recoveries from MCXCCL, excluding applicable taxes).
Later these services were extended for another two quarters ending 30th June
2023 for Rs. 81 crore per quarter (plus applicable taxes) as per the minimum period of
services offered by the vendor. Accordingly for the quarter ended 31st March
2023 and 30th June 2023, MCX has incurred Rs. 54.27 crore (net of recoveries
from MCXCCL excluding applicable taxes) respectively. Further, the Company has decided to
extend the support services being rendered by its existing software vendor, 63 Moons
Technologies Ltd. for six months, being the minimum period offered by the vendor,
beginning from 01st July 2023 at a consideration of Rs. 125 crore (plus
applicable taxes) per quarter.
CONSOLIDATED FINANCIAL STATEMENT
Your Company has, in accordance with Section 129(3) of the Companies
Act, 2013, prepared the annual consolidated financial statements, consolidating its
financials with its wholly-owned subsidiary company, MCXCCL and the associate companies,
CCRL and IIBH (from 04th May 2022 to 14th July, 2022 and from 12th
August, 2022 to 31st March, 2023). The annual audited consolidated financial
statements have been prepared in accordance with the requirements of Ind AS prescribed
under Section 133 of the Companies Act, 2013 read with relevant rules issued thereunder,
as applicable, and other accounting principles generally accepted in India and forms part
of this Annual Report. A statement containing the salient features of financial statements
of the Company's subsidiaries, associates & joint ventures in Form AOC-1 is attached
as Annexure I to this Report.
TRADING PERFORMANCE
During FY 2022-23, the Average Daily Turnover (ADT) of commodity
futures contracts stood at Rs. 23,514 crore vis-a-vis Rs. 26,178 crore in FY 2021-22,
witnessing a decline of 10%. However, during the same period, the options ADT went up by
333% to Rs. 33,998 crore from Rs. 7,860 crore. The Average Realization Rate (ARR) for the
futures remained unchanged at Rs. 2.07 per lakh (one side ADT) during the year. Overall
traded Unique Client Codes for futures and options (UCC - PAN based) during the period
increased from 4.71 lakh to 6.22 lakh.
The total turnover of commodity futures traded on your Exchange
declined by 11% to Rs. 60.43 lakh crore in FY 2022-23 as against Rs. 67.54 lakh crore in
FY 2021-22. In contrast, options turnover for the year went up by 331% to a record total
turnover of Rs. 87.37 lakh crore as against Rs. 20.28 lakh crore in the previous year. The
futures in bullion, energy, metals and agriculture registered a turnover of Rs. 28.20 lakh
crore, Rs. 22.30 lakh crore, Rs. 9.50 lakh crore and Rs. 0.21 lakh crore, respectively, as
against Rs. 26.45 lakh crore, Rs. 24.02 lakh crore, Rs. 15.08 lakh crore and Rs. 1.12 lakh
crore in the previous year. On the other hand, options turnover in energy, bullion and
metals recorded total of Rs. 81.92 lakh crore, Rs. 5.45 lakh crore and Rs. 0.01 lakh
crore, respectively, during FY 2022-23 vis-a-vis Rs. 17.69 lakh crore, Rs. 2.58 lakh crore
and Rs. 0.006 lakh crore, in the previous year.
In terms of metal delivery, a total of 83,746.5 metric tonnes (MT) of
Base Metals were delivered through the exchange mechanism during FY 2022-23 as against
81,499 metric tonnes in FY 2021-22. During FY 2022-23, your Company's market share in
commodity futures market stood at 96.8% as against 93.6% in the previous year. The volume
of futures (in terms of contracts) traded on the Exchange decreased by 11% in FY 2022-23,
to 128.8 million lots, as compared to 144.9 million lots in FY 2021-22. On the other hand,
the volume of Options (in terms of contracts) traded increased by 323% in FY 2022-23, to
124.2 million lots, as compared to 29.3 million lots in FY 2021-22.
GLOBAL COMMODITY MARKET
After displaying significant increase during the calendar year (CY)
2021 following the reopening of the post-pandemic world, global commodity prices showed
mixed trends during much of CY 2022. Prices in Agricultural and Energy commodities
generally increased, while most Base Metal prices declined. Bullion prices remained
relatively stable compared to the previous year.
Gold prices experienced high volatility, reaching near all-time highs
in the first quarter of CY 2022 due to the Russia-Ukraine war, but dropped to two-year
lows in the third quarter, due to a strong US dollar. Silver prices rose in the first
quarter and fell significantly in late September, but managed to recover and close the
year with a 2.3% increase compared to CY 2021. Among Base Metals, Copper, Aluminium, Zinc,
and Lead prices declined by the close of CY 2022 after reaching record peaks in March.
Nickel prices surged by 44.8% due to concerns over potential export sanctions on Russian
Nickel and increasing demand due to global shift toward electric vehicles.
In the agricultural commodities segment, US soyabean, sugar, and wheat
prices increased year-on-year by 14.7%, 7.7%, and 2.8% respectively, while US cotton
prices dropped by 24.5% in CY 2022.
Energy prices reached multi-year highs in the first half of CY 2022 on
the backdrop of increasing geopolitical tensions, however they subsequently dropped as
worries emerged about a potential economic recession in many countries. Nevertheless,
Brent and WTI crude oil prices saw increases of 11.1% and 7%, respectively on a
year-on-year basis. Meanwhile, global natural gas prices fell in the second half of CY
2022 due to warmer-than-expected weather, improved energy efficiency, and changes in gas
consumption behaviour. US natural gas prices were 20% higher in CY 2022 compared to the
previous year.
Global commodity derivatives markets experienced a decline in trading
volumes across all segments in CY 2022. Precious metals experienced the largest decrease,
followed by Energy, Non-Precious Metals, and Agricultural commodities. Data from the
Futures Industry Association (FIA) showed that aggregate volumes in these segments
decreased by approximately 20% in CY 2022, compared to the previous year, reaching 6.6
billion contracts in the year. Precious Metals trading volumes were down by around 26%,
while Energy, Non-Precious Metals, and Agricultural commodities' trading volumes declined
by about 24%, 19%, and 15% respectively.
In the current CY 2023, macroeconomic signals emanating from the global
economy show it in a gradual recovery phase, though uncertainties persist due to the
lingering impact of the Russia-Ukraine conflict and high levels of inflation. As a result,
global growth may remain subdued in the medium term, as per most estimates. The
International Monetary Fund's July 2023 update to its World Economic Outlook (WEO) report
suggests that global growth is expected to reach 3.0% in 2023, down from 3.5% in 2022, and
remain at 3.0% in 2024 too. Efforts to control inflation globally are anticipated to
reduce headline inflation from 7.3% to 4.7% in advanced economies (AEs) and from 9.8% to
8.6% among emerging market and developing economies (EMDEs) in 2023, as per IMF's WEO
released in April 2023. These ongoing trends are likely to impact global commodity markets
throughout the year.
Your Company's performance during the FY 2022-23 and outlook during FY
2023-24 may be analysed against this backdrop.
2. SHARE CAPITAL
There has been no change in the share capital of your Company during
the year under review. As on 31st March 2023, the paid-up share capital of your
Company stood at Rs. 5,099.84 lakh comprising of 50998369 Equity shares of Rs. 10 each
fully paid.
Your Company has, during the year under review, neither issued any
Equity shares with differential voting rights nor issued any shares (including sweat
equity shares) to its employees under any scheme.
3. IMPLEMENTATION OF CORPORATE ACTION
During the year under review, the Company has complied with the
specified time limit for implementation of Corporate Action.
4. TRANSFER TO RESERVES
For FY 2022-23, your Company does not propose to transfer any amount to
the General Reserve.
5. SURPLUS IN PROFIT & LOSS ACCOUNT
An amount of Rs. 1,20,415 lakh (Previous Year Rs. 1,16,306 lakh) is
proposed to be retained as surplus in the Profit and Loss Account.
6. DIVIDEND
The Board of Directors of your Company in its meeting held on 20th
May 2023, have recommended a dividend of Rs. 19.09 (191%) per equity share on a face value
of Rs. 10 per share for the Financial Year ended 31st March 2023, subject to
the approval of shareholders at the ensuing Annual General Meeting.
The outgo on account of the proposed dividend of 191% (Previous Year
174%) to be paid by the Company aggregates to approximately Rs. 9,736 lakh, being a payout
of 75% of the profit after tax (PAT) for the year ended 31st March 2023, as
against Rs. 8,874 lakh during the previous year.
Your Directors have recommended the dividend based on the Company's
performance and adequacy of existing cash/ cash equivalent at its disposal to provide for
capital expenditure on technology development and new business initiatives.
In view of the changes made under the Income-Tax Act, 1961, by the
Finance Act, 2020, dividends paid or distributed by the Company shall be taxable in the
hands of the Shareholders. The Company shall, accordingly, make the payment of the Final
Dividend after deduction of tax at source. For more clarity on deduction of tax, please
refer para on 'Tax Deducted at Source ("TDS") on Dividend' as mentioned in the
notes to the Notice of 21st AGM.
7. MEMORANDUM AND ARTICLES OF ASSOCIATION
During the year under review, the Memorandum of Association ('MOA') and
Articles of Association ('AOA') of the Company were amended with the approval of the
shareholders at their 20th Annual General Meeting held on 27th
September 2022. Post receipt of approval of Shareholders, the Company has pre-published
the MOA & AOA in the Gazette of Maharashtra and the Gazette of India, inviting public
comments. The amendments were then approved by the SEBI vide letter dated 23rd January
2023. Post receipt of approval from SEBI, the Company has published the amendments in the
Gazette of Maharashtra and the Gazette of India respectively. Thereafter, the amended MOA
and AOA was filed with Registrar of Companies.
8. INVESTOR RELATIONS
The Company continuously strives for excellence in its Investor
Relations engagement with investors through physical, video and audio meetings through
structured conference-calls and periodic investor/analyst interactions participation in
investor conferences, quarterly earnings calls, and analyst meet from time to time. The
Company's leadership team spent significant time to interact with investors to communicate
the strategic direction of the business in a number of investors meets. No unpublished
price sensitive information is discussed in these meetings. The Company ensures that
critical information about the Company is available to all the investors, by uploading all
such information on the Company's website.
9. MAJOR EVENTS OCCURRED DURING THE YEAR:
A. MATERIAL CHANGES FROM THE END OF THE FINANCIAL YEAR TILL THE DATE OF
THIS REPORT
There are no material changes and commitments affecting the financial
position of the Company which have occurred between the end of the FY 2022-23 to which the
financial statement relate and the date of this Report except to the extent stated at
point 1 above regarding technology expenses.
B. CHANGE IN THE NATURE OF BUSINESS:
During the year under review, there was no change in the nature of
business of the Company.
C. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS
OR TRIBUNALS IMPACTING THE GOING CONCERN STATUS AND COMPANY'S OPERATIONS IN FUTURE
During the year, following orders were passed:
1. SEBI has passed an order dated 04th January 2023, against
the Company imposing a penalty of Rs. 2,00,000/- for indirectly engaging itself in
unrelated/non-incidental activity which is allegedly in violation of the regulation 41(3)
and 38(2) of SECC Regulations 2012 and 2018 respectively. The said order of SEBI was
challenged by the Company before Securities Appellate Tribunal (SAT). SAT by the way of
interim relief inter-alia stayed the effect and operation of the impugned
order till the disposal of the appeal.
2. SEBI has passed an order dated 28th February 2023,
against MCX imposing a penalty of Rs. 6,00,000/- for the following alleged violations:
A. As per Clause 4 of SEBI circular dated 16th September
2016, MCX did not have systems in place for verification of Sikkim based clients, who are
exempted from submission of PAN. A special audit was carried out to verify the allegation
and it was observed that Management has consistently followed the same process/procedure
and there was no malafide intent on the part of the Management.
B. It was purported that MD & CEO was not the Relevant Authority
for levying of penalty on Trading Members according to the ToR of MCSGFC as prescribed in
SEBI circular dated 10th January 2019 and that penalty ought to have been
levied by MCSGFC by formulating a policy.
The Company has paid the penalty of Rs 6,00,000/- on 12th
April 2023.
Except the above, no significant and material orders were passed,
during the year under review, by the regulators or courts or tribunals impacting the going
concern status and Company's operations in future.
10. INVESTOR EDUCATION AND PROTECTION FUND TRANSFER OF UNCLAIMED
DIVIDEND AND TRANSFER OF SHARES
Pursuant to the provisions of Section 124 of the Companies Act, 2013
("the Act") read with Investor Education and Protection Fund Authority
(Accounting, Audit, Transfer and Refund) Rules, 2016 ("IEPF Rules"), and
relevant circulars and amendments thereto, the amount of dividend remaining unpaid or
unclaimed for a period of seven years from the date of transfer of such amount to Unpaid
Dividend Account, is required to be transferred to the Investor Education and Protection
Fund ("IEPF"), constituted by the Central Government.
The Company had, accordingly transferred the following amount to IEPF
during the year under review:
Sr. No Type of Dividend |
Dividend per share |
Date of Declaration |
Date of Transfer |
Amount transferred |
1. Final Dividend for
FY 2014-15 |
Rs. 10/- |
29th September
2015 |
17th November 2022 |
Rs. 15,66,740/- |
TRANSFER OF SHARES
Pursuant to the provisions of IEPF Rules, all equity shares in respect
of which dividend has not been paid or claimed for last seven consecutive years shall be
transferred by the Company to the designated Demat Account of the IEPF Authority
("IEPF Account") within a period of thirty days of such shares becoming due to
be transferred.
Accordingly, 731 equity shares of Rs.10/- each on which the dividend
remained unpaid or unclaimed for last seven consecutive years with reference to the due
date of 04th December 2022, were transferred during the FY 2022-23 to the IEPF
Authority after following the prescribed procedure.
All equity shares in respect of which dividend has not been paid or
claimed for last seven consecutive years shall be transferred by the Company to IEPF
Authority in accordance with provisions of the Act and IEPF Rules made thereunder. Members
who have not enchased any of their dividends, which have not been transferred to IEPF
Authority, are advised to claim their dividends.
Any Shareholder whose dividend/shares are transferred to IEPF can claim
the shares by making an online application in Form IEPF-5 (available on www.iepf.gov.in
).
DETAILS OF NODAL OFFICER:
Name: Manisha Thakur, Company Secretary and Compliance Officer Email
address: Manisha.Thakur@mcxindia.com
The Company has transferred the following unclaimed dividend amount and
shares to IEPF as on 31st March 2023:
Sr. No Year |
No. of shares transferred
to IEPF |
Category amount
transferred to IEPF |
Amount transferred to IEPF
(in. Rs.) |
1. 2011-12 - Interim |
699 |
Unclaimed Dividend |
6,98,328 |
2. 2011-12 - Final |
143 |
Unclaimed Dividend |
1,64,226 |
3. 2012-13 - Interim |
254 |
Unclaimed Dividend |
3,33,264 |
4. 2012-13 - Final |
450 |
Unclaimed Dividend |
5,01,060 |
5. 2013-14 - Interim |
191 |
Unclaimed Dividend |
3,21,797 |
6. 2013-14 - Final |
797 |
Unclaimed Dividend |
5,26,554 |
7. 2014-15- Final |
731 |
Unclaimed Dividend |
15,66,740 |
8. - |
- |
IPO Refund |
26,55,276 |
Total |
3265 |
|
67,67,245 |
Year wise amount of Unpaid/Unclaimed Dividend lying in the unpaid
account upto 31st March 2023, and the corresponding shares, which are liable to
be transferred to the IEPF, and the due dates for such transfer:
Sr. No Date of
declaration of Dividend |
Number of Shareholders
against whom Dividend is unpaid |
Number of Shares against whom
Dividend is unpaid |
Amount Unpaid as on
31st March 2023 |
Due Date of transfer of
Unpaid and Unclaimed Dividend to IEPF |
1. 14th AGM Final
2015-16 |
3027 |
59112 |
Rs. 3,84,228.00/- |
24th November 2023 |
2. 15th AGM Final
2016-17 |
3146 |
53644 |
Rs. 8,04,660.00/- |
27th October 2024 |
3. 16th AGM Final
2017-18 |
3331 |
61521 |
Rs. 10,45,857.00/- |
05th November 2025 |
4. 17th AGM Final
2018-19 |
2661 |
52331 |
Rs. 10,46,620.00/- |
25th November 2026 |
5. 18th AGM Final
2019-20 |
3985 |
82643 |
Rs. 24,00,105.00/- |
05th November 2027 |
6. 19th AGM Final
2020-21 |
2192 |
43259 |
Rs. 11,41,003.40/- |
08th October 2028 |
7. 20th AGM Final
2021-22 |
1790 |
43028 |
Rs. 70,7,196.20/- |
01st December 2029 |
11. PUBLIC DEPOSITS
Your Company has not invited any deposits from the public, and as such,
no amount of principal or interest related thereto was outstanding as on 31st
March 2023.
12. PARTICULARS OF LOANS GIVEN, INVESTMENTS MADE, GUARANTEES GIVEN OR
SECURITY PROVIDED UNDER SECTION 186 OF THE COMPANIES ACT, 2013
The details of loans, guarantees and investments under the provisions
of Section 186 of the Companies Act, 2013 read with the Companies (Meetings of Board and
its Powers) Rules, 2014, as on 31st March 2023, are set out in Note 4 & 8
to the Standalone Financial Statements of the Company.
The Company has not provided any guarantee or security to any person or
entity and has not made any loans and advances in the nature of loans to firms/companies
in which Directors of the Company are interested.
13. MEETINGS OF THE BOARD
During the FY 2022-23, 13 (Thirteen) meetings of the Board of Directors
were held. The details of meetings of the Board, are provided in the Corporate Governance
Report forming part of this Annual Report.
Separate meetings of the Public Interest Directors were held on 15th
June 2022, 26th July 2022, 22nd August 2022, 18th November
2022 and 14th March 2023.
14. DIRECTORS
Your Company, being a recognized stock exchange and regulated by SEBI,
is required to, inter alia, comply with the provisions relating to
constitution of the Company's Board of Directors as specified in the Companies Act, 2013,
the Securities Contracts (Regulation) (Stock Exchanges and Clearing Corporations)
Regulations, 2018 (hereinafter referred to as the "SECC Regulations, 2018") and
the SEBI (LODR) Regulations, 2015.
Your Company has a well-diversified Board comprising of Directors
coming from various walks of life and having wide range of experience, in the areas of
management, technology, governance, risk management, capital market, leadership and
finance. A multi-faceted talent-pool enables leveraging multitude of thoughts,
perspectives, knowledge base, skills and industry experiences, to ensure effective
corporate governance and sustained commercial success of the Company.
As on 31st March 2023, the Board comprised of 11 (eleven)
Directors, of which 6 (six) were Public Interest Directors (PID)/Independent Directors, 4
(four) were Shareholder Directors/Non-Independent Directors and 1 (one) Managing Director.
Your Company had 1 (one) Woman Independent Director on the Board, in compliance with the
SEBI (LODR) Regulations, 2015.
A "Public Interest Director" under the SECC Regulations,
2018, means an Independent Director representing the interests of investors in securities
market and who is not having any association, directly or indirectly, which in the opinion
of the Board, is in conflict with his/her role, and accordingly such Directors are
considered as Independent Directors for adhering compliance with the provisions of the
SEBI (LODR) Regulations, 2015 and the Companies Act, 2013.
As mandated, all the Public Interest Directors of your Company have
been duly registered with the databank for Independent Directors maintained by the Indian
Institute of Corporate Affairs.
Your Company has received confirmations from all the Public Interest
Directors to the effect that each of them meets the criteria of independence, as
prescribed under Regulation (16)(1)(b) of the SEBI (LODR) Regulations, 2015 and Section
149(6) of the Companies Act, 2013. There has been no change in the circumstances affecting
their status as Independent Directors of the Company. The nomination/ appointment of
Independent Directors/Public Interest Directors on the Board of your Company is in
accordance with the eligibility conditions prescribed by SEBI and is made with the
approval of SEBI.
Further, all the Directors have confirmed that they are 'Fit and
Proper,' in terms of the SECC Regulations, 2018. Your Company has also obtained
affirmation of adherence to Schedule IV of the Companies Act, 2013 and the Code of Conduct
of your Company in accordance with the SEBI (LODR) Regulations, 2015 from all the
Directors, as applicable.
None of the Directors of the Company are disqualified for being
appointed as Directors as specified in Section 164 (2) of the Act read with Rule 14 of
Companies (Appointment and Qualifications of Directors) Rules, 2014.
During the year under review, the tenure of Mr. Saurabh Chandra (DIN:
02726077), Public Interest Director/ Independent Director of the Company was completed on
02nd July 2022 pursuant to SECC Regulations, 2018. Further, the tenure of Ms.
Pravin Tripathi (DIN: 06913463) and Mr. Bhartendu Kumar Gairola (DIN: 02442205),
Non-Executive Independent Directors/Public Interest Directors of the Company was completed
on 16th September 2022 pursuant to SECC Regulations, 2018. In order to fill the
resulting vacancies, with the approval of SEBI Mr. Ashutosh Vaidya (DIN: 06751825), Mr.
Ved Prakash Chaturvedi (DIN: 00030839) and Ms. Sonu Bhasin (DIN: 02872234) were appointed
as a Non-Executive Independent Directors/Public Interest Directors for a period of three
years in terms of SECC Regulations, 2018 with effect from 17th September 2022.
Mr. Ved Prakash Chaturvedi vide his letter dated 11th August
2023 has tendered his resignation as Non-Executive- Independent Director/Public Interest
Director of the Company with effect from 11th August 2023 for personal reasons.
Mr. Chaturvedi in his letter has also confirmed that there are no other material reasons
for his resignation other than those mentioned in the resignation letter.
Pursuant to Section 152 of the Companies Act, 2013 read with relevant
rules framed thereunder Mr. Chengalath Jayaram (DIN: 00012214), Shareholder
Director/Non-Independent Director, was liable to retire by rotation at the 20th
Annual General Meeting ("AGM") held on 27th September 2022. However,
Mr. Jayaram had communicated to the Company that he was not seeking reappointment.
Accordingly, Mr. Jayaram has retired from the position of Shareholder
Director/Non-Independent Director in the Company with effect from conclusion of 20th
AGM of the Company held on 27th September 2022.
Further, shareholders of the Company at its 20th Annual
General Meeting held on 27th September 2022 had approved appointment of Mr.
Arvind Kathpalia (DIN: 02630873) as a Shareholder Director/Non-Independent Director on the
Board of the Company, subject to approval of SEBI. Thereafter, with approval of SEBI vide
letter dated 06th December 2022 and approval of the Board of Directors Mr.
Kathpalia was appointed as Shareholder Director/Non-Independent Director with effect from
06th December 2022.
The Board of Directors places on record their earnest appreciation to
the invaluable contribution, leadership and guidance extended by Mr. Saurabh Chandra, Ms.
Pravin Tripathi, Mr. Bhartendu Kumar Gairola, Mr. Chengalath Jayaram and Mr. Ved Prakash
Chaturvedi to the Board and the Management of the Company during their association.
In accordance with the provisions of the Companies Act, 2013, Mr.
Hemang Raja (DIN: 00040769), Shareholder Director/Non-Independent Director, who has been
longest in office since his appointment, is liable to retire by rotation at the ensuing
AGM and being eligible, is seeking re-appointment. The Board recommends his
re-appointment.
As Mr. Vivek Krishna Sinha would be superannuating from NABARD in
October 2023, the Exchange received a letter dated 15th June 2023, from NABARD,
proposing the candidature of Ms. Suparna Tandon (DIN: 08429718), Chief General Manager,
NABARD in terms of Section 160 of the Companies Act, 2013, as a Shareholder Director i.e.
Non-Independent Director on the Board of MCX. Further, the appointment of Ms. Suparna
Tandon (DIN: 08429718) as Non-Independent Director was recommended by the Nomination and
Remuneration Committee in its meeting dated 20th July 2023, and approved in the
Board Meeting dated 29th July 2023. Post approval by the shareholders, the
appointment would be subject to approval of SEBI. NABARD vide letter dated 19th
June 2023, informed that, Mr. Vivek Krishna Sinha shall continue as Shareholder
Director/Non-Independent Director till the completion of process of appointment of Ms.
Suparna Tandon as Shareholder Director/Non-Independent Director.
15. INDEPENDENT EXTERNAL EXPERT
During the year under review, the tenure of Prof. P S Dhekne as an
Independent External Expert in the Standing Committee on Technology (SCT) was completed on
11th November 2022 pursuant to SECC Regulations, 2018. In view of the same, Mr.
Madhusudhan K M was appointed as an Independent External Expert in Standing Committee on
Technology with effect from 22nd December 2022.
Further, the tenure of Mr. Suresh Gupta as an Independent External
Expert in the Member Core Settlement Guarantee Fund Committee (MCSGFC) and Regulatory
Oversight Committee (ROC) was completed on 21st August 2022 and 23rd
September 2022 respectively, pursuant to SECC Regulations 2018. In view of the same, Mr.
S. Gopalan was appointed as an Independent External Expert in MCSGFC with effect from 22nd
August 2022. Thereafter, Mr. S. Gopalan ceased to be an Independent External Expert in
MCSGFC with effect from 06th February 2023 due to acceptance of full time
employment elsewhere with effect from 30th January 2023. In view of the same,
Mr. S V Krishnamohan was appointed as an Independent External Expert in MCSGFC with effect
from 21st March 2023.
Pursuant to cessation of Mr. Suresh Gupta as an Independent External
Expert in the ROC, Mr. R Anand was appointed as an Independent External Expert in ROC with
effect from 30th July 2022.
The Independent External Experts are appointed for a period of three
years, with further extension of three years subject to performance evaluation.
16. KEY MANAGERIAL PERSONNEL (KMP)
The following employees became KMPs under the SECC Regulations, 2018
during FY 2022-23:
Sr. No. Name |
Effective Date |
1 Mr. Shashank Sathe - Chief
Technology Officer |
1st April, 2022 |
2 Dr. Ajit Phanse - Vice
President - Inspection and Audit |
11th July 2022 |
3 Mr. Armaan Gaus - Vice
President - Surveillance and Investigation |
22nd December 2022 |
4 Mr. Kaushal Ashok Mehta - Vice
President - Legal |
22nd December 2022 |
5 Ms. Manisha Thakur - Company
Secretary and Compliance Officer |
22nd December 2022 |
6 Mr. Prashant Brahmanand Wagh
- Vice President- Technology |
22nd December 2022 |
Further, the following employees ceased to be KMPs under the SECC
Regulations, 2018 during FY 2022-23:
Sr. No. Name |
Last working day |
1 Mr. Sanjay Golecha - Chief
Regulatory Officer |
30th June 2022 |
2 Mr. Ajay Puri - Company
Secretary and Compliance Officer |
06th December 2022 |
Mr. Abhishek Govilkar has been appointed the Vice President - Product
Management Team (Agri) of the Company with effect from 21st June 2023.
As Mr. Sanjay Golecha, ceased to be the Chief Regulatory Officer
("CRO") of the Company with effect from 30th June 2022. Pending
appointment of CRO, Mr. Himanshu Ashar, Vice President, Market Operations &
Surveillance & Investigation was assigned interim charge of the office of the CRO with
effect from 01st July 2022 until further orders.
Mr. Shashank Sathe, ceased to be the Chief Technology Officer
("CTO") of the Company with effect from 28th April 2023. Pending
appointment of CTO, Dr. Rajendra Narayanan, Chief Digital Officer was assigned interim
charge of CTO portfolio w.e.f. 24th April 2023 until further orders.
Dr. Ajit Phanse ceased to be the Vice President - Inspection and Audit
with effect from 02nd May 2023.
17. PERFORMANCE EVALUATION OF THE BOARD
Your Company has formulated a Policy for Performance Evaluation/Review
in accordance with the provisions of the Companies Act, 2013, SEBI (LODR) Regulations,
2015, SECC Regulations 2018, SEBI Circular dated 05th January 2017 providing
guidance to listed entities about various aspects involved in the Board Evaluation process
("SEBI Guidance Note") and SEBI circular dated 05th February 2019 on
performance review of Public Interest Directors.
The Policy has been framed with an objective to ensure that Individual
Directors of the Company and the Board as a whole, work efficiently and effectively, for
the benefit of the Company and its stakeholders.
Your Company has implemented a system of evaluating performance of the
Board of Directors, its Committees and Individual Directors, through peer evaluation,
excluding the Director being evaluated, on the basis of a structured questionnaire.
The criteria for performance evaluation, inter-alia,
includes the following:
i. Internal Evaluation of Individual Director's Performance
Level of participation and contribution to the performance of
Board/Committee(s) meetings, qualification & experience, knowledge and competency,
fulfilment and ability to function as a team, initiatives taken, adherence to the
rules/regulations, having independent views and judgement, providing guidance to senior
management and Board members, etc.
ii. External Evaluation of Individual Director's Performance
Pursuant to SECC Regulations, 2018 read with SEBI circular dated 05th
February 2019, the tenure of PIDs may be extended by another 3 years, subject to
performance evaluation, internal and external, both carrying equal weightage Such PIDs
shall be subject to:
a. Internal evaluation by all the governing Board Members, based on the
criteria for the performance review of Individual Director; and
b. External evaluation by a management or a human resources consulting
firm based on their pre-determined criteria.
iii. Evaluation of the Board as a Whole
Providing entrepreneurial leadership to the Company, having clear
understanding of the Company's core business and strategic direction, maintaining contact
with management and external stakeholders, ensuring integrity of financial controls and
systems of risk management, making high quality decisions, monitoring performance of
management, maintaining high standards of integrity and probity, encouraging transparency,
etc.
iv. Chairman's Performance Evaluation
Providing effective leadership, setting effective strategic agenda of
the Board, encouraging active engagement by the Board members, providing guidance and
motivation to MD & CEO, impartiality in conducting discussions, establishing effective
communication with all stakeholders, etc.
v. Performance Evaluation of Board Committees
Sufficiency in the scope for addressing the objectives, effectiveness
in performing the key responsibilities, adequacy in composition and frequency of meetings,
quality of relationship of the Committee with the Board and the management, clarity of
agenda discussed, discussion on critical issues, clarity of role and responsibilities,
etc.
18. BUSINESS OPERATIONS
The Company is an affiliate member of the International Organisation of
Securities Commissions (IOSCO), which is an international body that brings together the
world's securities regulators and is recognised as the global standard setter for the
securities sector. The Exchange is ranked world's 5th largest Exchange by the
number of commodity Options contracts traded in CY 2022, improving from 6th
position last year. (Source: FIA Annual Volume trading statistics).
With an aim to seamlessly integrate with the global commodities
ecosystem, MCX has forged strategic alliances with leading international exchanges such as
CME Group and London Metal Exchange (LME). The Exchange also signed Memorandum of
Understanding (MoUs) with renowned global exchanges viz. Dalian Commodity Exchange (DCE),
Taiwan Futures Exchange (TAIFEX), Zhengzhou Commodity Exchange (ZCE) and European Energy
Exchange AG (EEX) to facilitate
cooperation in areas of sharing knowledge and expertise, education
& training, etc. In April '22, MCX signed a consultancy agreement with Chittagong
Stock Exchange Limited (CSE) for setting up the first commodity derivatives platform of
Bangladesh. Under this agreement, MCX shall assist and provide consultancy services in the
areas of products, clearing and settlement, trading, warehousing, regulatory aspects, etc.
The Exchange has also tied-up with various trade bodies, industry associations and
educational institutions across the country. These partnerships enable the Exchange to
improve trade practices, increase awareness, and facilitate overall growth and development
of the commodity market.
Product Segment Highlights#
Bullion
In pursuit of the Atmanirbhar Bharat mission, your Company has embarked
upon the path of recognizing domestic bullion refiners for good delivery of Gold on
Exchange platform.
MCX has recorded the delivery of 2116 kg of Indian refined Gold valued
at Rs. 3961 crore via MCX empanelled domestic refiners for delivery of Gold under the
existing contract specifications of Gold Mini (100 grams) Futures contract during the FY
2022-23.
The Bullion segment attained various landmarks during FY 2022-23:
The MCX Gold kg Options contract registered an average daily turnover
of Rs. 1572 crore in FY 2022-23 up by 84% from Rs. 854 crore in FY 2021-22. It's highest
turnover (post LES) of Rs. 16,713 crore was observed on 24th March 2023.
After success of Gold Options with Gold (1 kg) Futures as underlying
contract, MCX launched Gold Mini Options with Gold Mini (100 gram) Futures as underlying
on 25th April 2022.
The average daily turnover of Gold Mini Options with Gold Mini (100
gram) Futures as underlying during FY 2022-23 was Rs. 132 crore.
Gold Mini Options with Gold Mini (100 gram) Futures as underlying
recorded the highest volume and turnover of 1290 kg and Rs. 760 crore respectively on 27th
March 2023 and recorded the highest open interest of 836 kg on 09th February
2023 during the FY 2022-23.
Similarly, MCX Silver Options contract registered an average daily
turnover of Rs. 355 crore in FY 2022-23 up by 163% from Rs. 135 crore in FY 2021-22.
Further, the average daily turnover of Silver Mini Options with Silver
Mini (5 kg) Futures as underlying during FY 2022-23 was Rs. 62 crore. The contract
recorded it's highest volume and turnover of 58 MT and Rs. 386.45 crore respectively on 13th
March 2023 and recorded the highest open interest of 35 MT on 31st March
2023.
Continued success of new product design in Bullion:
Gold Petal Futures contract has seen delivery of 76.145 kg (76145
coins) since its launch in October 2019 till 31st March 2023.
Similarly, Silver (1kg) Micro contract has seen successful delivery of
97503 kg from February 2020 series onwards till 31st March 2023 and Silver Mini
(5 Kg) has seen successful delivery of 110160 kg from June 2020 series onwards till 31st
March 2023.
A product profile for Bullion has been hosted on the website of the
Company to help investors understand the physical market dynamics which influence the
trading on the Exchange.
ENERGY SEGMENT PRODUCTS
The world witnessed strained global energy supply chains at the start
of the Financial Year, which was triggered by war between Russia and Ukraine. Energy
markets and countries' policies for addressing market and trade vulnerabilities observed a
major transition. Russia's curtailment of natural gas to Europe and sanctions on imports
of oil and gas from Russia, created an intense change of focus in the overall
international energy landscape.
The global energy crisis had implications on all countries, which led
them to review their energy requirements and energy mix to achieve energy security and
self-sufficiency. Global economic uncertainty continued to be high and downside risks
became predominant, as most Asian and European countries were struggling to fight
inflation effectively, despite continued monetary tightening by central banks.
With global geopolitical and economic uncertainties intensifying,
especially global inflation, the crucial role that oil & gas industry plays in the
global economy and national security, was only reinforced. In fact, the global energy
trade also witnessed changes in the commercial terms in the form of replacement of dollar
denominated transactions with other currencies.
On domestic front, India continued to be the third-largest consumer of
crude oil in the world as of 2022. However, the domestic oil imports saw a surge in
Russian crude oil grade replacing most of OPEC origin grades that led to a reduction in
India's export bills. Further petroleum products were also the most exported commodities
from India to various other countries, amounting to around $86 billion during FY 23 (April
2022 to February 2023). The oil & gas sector is among the eight core industries in
India and also is closely linked to policies and fundamental dynamics of other economic
sectors.
MCX Energy Contracts Overview
With our vision of catering to wider value chain participants in the
energy complex, the Exchange launched mini futures contracts, both crude oil and natural
gas. The crude oil mini futures were launched on 03rd March 2023 and natural
gas mini futures on 14th March 2023.
Both the contracts garnered good interest and wide acceptance by market
participants, clocking an Average Daily Turnover (ADT) of Rs.191 Crores (since its launch
till 31st March 2023) in crude oil and an ADT of Rs.37 Crores (since its launch
till 31st March 2023) in natural gas.
The MCX Crude oil futures contracts registered an ADT of Rs. 3,516
Crores in FY 2022-23. The MCX Natural gas futures contracts registered an average daily
turnover of Rs. 5,108 Crores in FY 2022-23, up by 6% from Rs.4,811 crores in FY 2021-22.
Phenomenal success has been witnessed in the options contracts. MCX
Crude oil options registered an ADT of Rs.25,787 crores during FY 2022-23, compared to an
ADT of Rs.6,590 crores during 2021-22, marking a remarkable increase of 291%. Infact the
Crude oil options contracts set a benchmark by registering highest turnover of Rs.1,24,952
crores on 15th March 2023.
On similar lines, the MCX Natural gas options also saw incredible
growth of 411%, after it clocked an ADT of Rs.5,963 crores during FY 2022-23, as compared
to Rs.1,168 crores in FY 2021-22. MCX Natural Gas Options contract registered its highest
turnover of Rs.25,283 crores on 22nd November 2022.
Agricultural Commodities
MCX agriculture commodities futures registered an average daily
turnover of Rs. 81.73 crore in FY 2022-23 compared to Rs. 435 crores in FY 2021-22. Cotton
contract was available from April-December 2022. Modified Cotton Candy contract was
launched on 13th February 2023, thereby leaving a gap from 01st
January to 12th February 2023 with no contract to trade on. The MCX Cotton
contract Clocked an average daily turnover of Rs. 78.82 crore in 2022-23 compared to Rs.
160 crore in FY 2021-22. Average daily turnover of Mentha oil contract in FY 2022-23 was
Rs. 12.16 crore compared to Rs. 9.03 crore in FY 2021-22. Average daily turnover of Rubber
contract in FY 2022-23 was Rs. 2.15 crore. Rubber contract was delisted from January 2023.
The CPO futures was continue to be suspended from 20th
December 2021, The CPO futures contract met the eligibility criteria for options contract
and the Exchange also obtained approval from the regulator for launch of options contract.
However due to the suspension of CPO futures, the launch of CPO options also remains
suspended.
Base Metals
In pursuit of the Atmanirbhar Bharat mission, the Company has embarked
upon the path of branding domestic Refined Lead Producers to facilitate their direct
participation in price discovery and good delivery on Exchange platform. Two additional
domestic Refined Lead producers, namely, Eswari Global Metal Industries Private Ltd and
Jayachandran Alloys Pvt. Ltd, were empanelled as MCX approved brands during the FY
2022-23. This takes the total count of approved domestic refined lead producers to four.
The empanelment of some more domestic producers is under process.
In all, 83,747 MTs of base metals were delivered via the Exchange
settlement in FY 2022-23. The Exchange worked out to be the perfect platform for
delivery-of-last-resort.
The Exchange has a constant endeavour to make 'One-India-One-Price' for
all metals traded on the Exchange. To meet this objective, we have expanded our delivery
centres across the country to cater to the collective needs of the wider audience.
Delivery centres are now operational at Raipur (Chhattisgarh), Kolkata (West Bengal),
Palwal (NCR/Haryana), Chennai (Tamil Nadu) and Thane (Maharashtra). The additional
delivery centres have also started witnessing inflows of various metals.
In addition to this, the Exchange has launched Mini Contracts (Smaller
denomination contracts) to bring back the lost retail participation. Keeping intact the
alignment of Trading unit and Delivery unit, 1 MT contracts of Aluminium, Lead and Zinc
were launched during the FY 2022-23.
Index Futures
The ADT during FY 2022-23 for index futures was Rs. 88 crore. The
debacle of Nickel futures at London Metal Exchange had adversely affected the MCX Nickel
futures contract and consequently the MCX METLDEX? futures contracts. Applicability of
pre-expiry margins in ENRGDEX? futures also dented the performance of the contract. The
Exchange has removed Nickel futures contract from the index computation and is reaching
out to market participants to solicit their participation for revival of the contract.
While, SEBI has issued the regulatory framework for Options on commodity indices on 24th
March 2022, the exchange shall consider launching the same post go-live of its new
technology platform.
Market Participants
As on 31st March 2023, the Company has a national reach with
548 members, having 50,228 Authorised Persons, operating through several terminals
connected through various available modes of connectivity (including Computer to Computer
Link (CTCL), Internet Based Trading and Wireless Trading) across 700 cities/towns across
India. The unique traded client codes (UCC - PAN based*) which are of significant
importance to Exchange, witnessed a rise from 4.7 lakh in FY 2021-22 to 6.22 lakh in FY
2022-23.
On the Institutional front, three Mutual Funds with four new schemes
were registered for participation in FY 2022-23. More over, five new Alternative
Investment Funds and 2 PMS schemes were also on boarded during the said period.
Additionally, one more custodian received SEBI approval for commodity custodial services,
taking total number of commodity segment custodians to five in the ETCD space. In FY
2022-23, in the PCM category one more bank also received approval to function as clearing
member. In September 2022, SEBI issued guidelines allowing Foreign Portfolio Investors
(FPIs) to participate in cash settled non-agricultural commodity derivative contracts and
indices. Accordingly, the exchange has issued a circular paving the participation of FPIs.
19. REGULATORY DEVELOPMENTS- FY 2022-23
During the year under review, SEBI, has issued master circulars on PMLA
guidelines, Stock brokers and Surveillance of securities market. In order to strengthen
investors' confidence in the securities market, SEBI has issued various circulars for the
benefit the investors at large, viz., strengthening of the Investor Grievance Redressal
Mechanism, streamline the process of handling of unpaid securities by TM/CM, framework to
address the Technical Glitches occurred in the trading systems of the stockbrokers,
information to be displayed by stockbrokers on website, advisory on Cybersecurity best
practices by Regulated Entities, enhanced obligations and responsibilities on Qualified
Stock Brokers (QSBs) and settlement of running account of client's funds lying with
Trading Member (TM).
In line with the above guidelines, the Regulator has issued guidelines
informing the investors to prevent usage of unregulated platforms (services and strategies
marketed by higher return claims on investment) offering algorithmic strategies for
trading by stock broker. Further, after considering the non-participation by EFEs in ETCDs
for more than three years since the EFE framework came into force, SEBI has notified that
the existing EFE route be discontinued and foreign investors to participate in Indian
ETCDs through the FPI route, subject to certain conditions.
SEBI has issued circular and acceded representation made by Stock
Exchange to launch multiple contracts on same commodity.
The important regulatory developments during FY 2022-23, primarily by
SEBI, are as hereunder:
April 2022
I. SEBI has issued additional guidelines in pursuance of amendment to
SEBI KYC Registration Agency (KRA) Regulations, 2011. Further, validation of all KYC
records (New and Existing) shall commence from 01st July 2022.
II. SEBI has issued the risk management framework applicable to the
Electronic Gold Receipt (EGR) segment on the recognized Stock Exchange/s.
May 2022
I. Mils are required to conduct System and Network Audit as per the
framework. This is applicable for the audit to be conducted by the Mils for FY 2021-22
onwards.
II. Issued changes to the Framework to enable Verification of Upfront
Collection of Margins from Clients in Cash and Derivatives segments. It has been decided
that the margin requirements to be considered for the intra-day snapshots, in derivatives
segments (including commodity derivatives), shall be calculated based on the fixed
Beginning of Day (BOD) margin parameters.
III. Modified the Cyber Security and Cyber Resilience framework of
Stock Exchanges, Clearing Corporations and Depositories in partial modification to
Annexure A of SEBI circular dated 06th July 2015, to the paragraph- 11,40, 41
and 42.
All the ancillary systems used for accessing/communicating with
critical systems either for operations or maintenance should also be classified as
critical system. The Board of the MII shall approve the list of critical systems.
MIIs should conduct VAPT at least once in a financial year.
However, for the MIIs, whose systems have been identified as "protected system"
by National Critical Information Infrastructure Protection Centre (NCIIPC), VAPT shall be
conducted at least twice in a financial year. Any gaps/vulnerabilities detected shall be
remedied on immediate basis.
MIIs should also perform vulnerability scanning and conduct
penetration testing prior to the commissioning of a new system which is a critical system
or part of an existing critical system.
Further, MIIs are mandated to conduct comprehensive cyber audit
at least 2 times in a financial year.
IV. Decided to modify clause 4.25 of SEBI circular no.
SEBI/HO/MIRSD/DPIEA/CIR/P/2020/115 dated 01st July 2020 in order to provide
equitable distribution of funds amongst investors.
June 2022
I. SEBI has issued circular to further strengthen the Investor
Grievance Redressal Mechanism. SEBI has amended Clause No. 4 (a) and (b) for Circular No.
SEBI/HO/MIRSD/DOC/CIR/P/2020/226 dated 6th November 2020.
Clause 4(a) - For any dispute between the member and the client
relating to or arising out of the transactions in Stock Exchange, which is of civil
nature, the complainant/ member shall first refer the complaint to the IGRC and/ or to
arbitration mechanism provided by the Stock Exchange before resorting to other remedies
available under any other law. For the removal of doubts, it is clarified that the sole
arbitrator or the panel of arbitrators, as the case may be, appointed under the Stock
Exchange arbitration mechanism may consider any claim relating to any dispute between a
stock broker and client arising out of the transactions in stock exchange, as per law, and
shall always be deemed to have the competence to rule on its jurisdiction. A
complainant/member, who is not satisfied with the recommendation of the IGRC shall avail
the arbitration mechanism of the Stock Exchange for settlement of complaints within three
months from the date of IGRC recommendation.
Clause 4(b) - The time period of three months mentioned in the
previous sub-clause for filing arbitration shall be applicable only for the cases where
the IGRC recommendation is being challenged. For any arbitration application received
without going through IGRC mechanism, the above time period of three months shall not
apply, and for such cases the limitation period for filing arbitration shall be governed
by the law of limitation, i.e., The Limitation Act, 1963.
II. SEBI has issued circular in partial modification to Annexure -1 of
its circular dated 03rd December 2018 on Cyber Security and Cyber resilience
framework for Stock Brokers / Depository Participants for the paragraph- 11,41,42 and 44.
All the ancillary systems used for accessing/communicating with
critical systems either for operations or maintenance shall also be classified as critical
system. The Board/Partners/Proprietor of the Stock Brokers / Depository Participants shall
approve the list of critical systems.
Stock Brokers / Depository Participants shall conduct VAPT at
least once in a financial year. Any gaps/ vulnerabilities detected shall be remedied on
immediate basis.
Further, the Stock Brokers / Depository Participants are
mandated to conduct comprehensive cyber audit at least once in a financial year
III. SEBI has issued Circular on Naming / Tagging of demat accounts
maintained by Stock Brokers which states the stock brokers are required to maintain demat
accounts only under the 5 categories proposed by SEBI.
S. No. Demat Account
Category |
Purpose of Demat Account |
1. Proprietary
Account |
Hold Own Securities |
2. Pool account |
Settlement Purpose |
3. Client Unpaid
Securities Account |
Hold Unpaid Securities of
Clients |
4. Client Securities
Margin Pledge Account |
For Margin obligations to
be given by way of Pledge / Re-pledge |
5. Client Securities
under Margin Funding Account |
Hold funded securities in
respect of margin funding |
IV. SEBI has issued circular for implementation on 'Guidelines in
pursuance of amendment to SEBI KYC (Know Your client) Registration Agency (KRA)
Regulations, 2011'. SEBI has extended the timelines to 01st August 2022 for
following clauses.
KYC records of all existing clients (who have used Aadhaar as an
Officially Valid Documents (OVD) shall be validated within a period of 180 days from 01st
August 2022.
The validation of all KYC records (new and existing) shall
commence from 01st August 2022.
V. SEBI has issued circular on Implementation of 'Execution of 'Demat
Debit and Pledge Instruction' (DDPI) for transfer of securities towards deliveries /
settlement obligations and pledging / re-pledging of securities'. In view of the
representation received from Depositories and that the changes to the systems are still
under process, SEBI has extended the implementation date of the aforesaid circular to 01st
September 2022.
VI. SEBI has issued Circular for Modification in Cyber Security and
Cyber resilience framework for Stock Brokers / Depository Participants, which is in
partial modification to SEBI circular dated 03rd December 2018 that all
Cyber-attacks, threats, cyber-incidents and breaches experienced by Stock Brokers /
Depositories Participants shall be reported to Stock Exchanges / Depositories & also
the said information shall be shared to SEBI through the dedicated e-mail id: sbdp-cyberincidents@sebi.gov.in
July 2022
I. SEBI has issued circular to further strengthen the Investor
Grievance Redressal Mechanism. SEBI has mandate Stock Exchange including Commodity
Derivatives Exchanges/Depositories to develop online web based complaints redressal system
of their own in line with SEBI SCORES platform which in turn enable investors to lodge,
follow up and track the status of the redressal of complaints at any point of time.
II. The GST Council has withdrawn exemption granted to services by SEBI
and the same has been notified on 13th July 2022. Accordingly, the
applicability of fees and other charges payable to SEBI shall be subject to GST at the
rate of 18% with effect from 18th July 2022.
III. Department of Revenue-Ministry of Finance, Government of India,
has notified 155 reporting entities as sub-KUA to use Aadhaar authentication services of
UIDAI under Prevention of Money-laundering Act, 2002.
IV. SEBI has considered the KRA's request for extension of the timeline
for applicability of the said clauses 9 and 13 of SEBI circular on Guidelines in pursuance
of amendment to SEBI KYC Registration Agency (KRA) Regulations, 2011, it has been decided
that:
KYC records of all existing clients (who have used Aadhaar as an
OVD) shall be validated within a period of 180 days from 01st November 2022.
The validation of all KYC records (new and existing) shall
commence from 01st November 2022.
V. To avoid misuse of client's funds lying with Trading Member and to
maintain efficacy while dealing in clients funds, SEBI has strengthened the norms on
Settlement of Running Account of Client's Funds lying with Trading Member (TM). SEBI has
prescribed the requirement of settlement of running account of funds of the client shall
be done by the TM after considering the End of the day (EOD) obligation of funds as on the
date of settlement across all the Exchanges.
September 2022
I. SEBI has issued circular to prevent usage of unregulated platforms
offering algorithmic strategies for
trading by stock broker. This unregulated platform offers services and
strategies marketed by higher return claims on investment. In order to prevent such acts
and misleading strategies Stock brokers were directed as follows:
Not to make any direct and indirect reference to the past or
expected future return/performance of the algorithm;
Not to associate with any such any platform providing any
reference to the past or expected future return / performance of the algorithm.
Stock brokers should disassociate themselves with such platforms
and remove any sort of content available on the website.
II. SEBI to maintain parity has modified the norms for Daily Price
Limit (DPL) for commodity futures contracts to ensure uniformity between closing price on
Domestic Exchange and International Exchange.
III. In order to promote institutional participation in Exchange Traded
Commodity Derivatives (ETCDs), SEBI had permitted Category III Alternative Investment
Funds, Mutual Funds and Portfolio Management Services to participate in ETCDs. In
furtherance to the objective of enhancing institutional participation in ETCDs, SEBI also
permitted Eligible Foreign Entities (EFEs) having actual exposure to Indian commodity
markets, to participate in the commodity derivative segment of recognized stock exchanges
for primarily hedging their exposure.
However, considering the non-participation by such EFEs in ETCDs in
spite of more than three years since the EFE framework came into force, the existing EFE
route discontinued and SEBI has allowed foreign investors to participate in Indian ETCDs
through the FPI route, subject to conditions prescribed.
October 2022
I. SEBI has issued a circular to widen the scope of execution of 'Demat
Debit and Pledge Instruction' (DDPI) to include Mutual Fund transactions being executed on
Stock Exchange order entry platform and tendering shares in open offers through stock
exchange platform.
November 2022
I. In order to avoid misuse of client's securities by the Stock-Brokers
SEBI has streamline the process of handling of unpaid securities by TM/CM and in extensive
consultation with Exchange, Depositories and Clearing Corporation, with regard to
securities that have not been paid for in full by the clients (unpaid securities), a
separate client account titled - "Client Unpaid Securities Account" shall be
opened by the TM/CM. Unpaid securities shall be transferred to such "Client Unpaid
Securities Account" from the pool account of the concerned TM/CM.
II. SEBI has issued a circular wherein robust framework has been put in
place to address the Technical Glitches occurred in the electronic trading systems of the
Stockbroker. The detailed framework has been deliberated on recommendation received from
working group constituted by SEBI and views obtained from stakeholders and industry
experts.
III. In order to streamline process for intermediaries seeking prior
approval for change in control, SEBI has issued circular on Procedure for seeking prior
approval for change in control dated November 28, 2022, detailed procedure is prescribed
by SEBI to benefit the intermediaries to follow uniform practice.
December2022
I. SEBI has issued circular to develop a platform jointly by Exchanges
to provide Investor Risk Reduction Access (IRRA) services which in turn benefit the
investors with an opportunity to square off/close the open positions and/or cancel pending
orders at the time of disruptions in trading services. The IRRA service shall support
multiple segments across multiple exchanges. In order to avail IRRA service TM's needs to
make a request to the stock exchange as per the procedure laid down by Exchanges.
January2023
I. SEBI has issued circular and acceded representation made by Stock
Exchange to launch multiple contracts on same commodity.
February 2023
I. SEBI has issued master circular on Guidelines on Anti-Money
Laundering (AML) Standards and Combating the Financing of Terrorism (CFT) /Obligations of
Securities Market Intermediaries under the Prevention of Money Laundering Act, 2002 and
Rules framed there under. This master circular ensures directions issued from time to time
are placed at one place for necessary action and compliances.
II. SEBI has issued circular on enhanced obligations and
responsibilities on Qualified Stockbrokers (QSBs) to ascertain Qualified Stockbroker based
on parameters enumerated in the circular.
III. Department of Revenue-Ministry of Finance, Government of India,
vide Gazette Notification dated January 30, 2023 has notified another 39 reporting
entities to use Aadhaar authentication services of UIDAI under section 11A of the
Prevention of Money-laundering Act, 2002.
IV. Due to advancement in technology and to provide better services to
investor, SEBI has ensured that necessary information is displayed by stockbrokers and DPs
on their websites. SEBI has issued a circular to ensure that designated website is always
maintained by stockbroker which in turn benefit investors to get conversant information
about the activity of the stockbrokers and DPs.
V. In view of the increasing cyber security threat to the securities
market, SEBI has issued a circular in consonance with recommendation received from
Financial Computer Security Incident Response Team (CSIRT-Fin) regarding advisory on Cyber
security best practices by Regulated Entities.
March 2023
I. SEBI has issued a circular to create awareness among registered
entities of new cyber security risks and challenges associated with cloud computing
services. This cloud framework has been put in place to provide baseline standards of
security and for the legal and regulatory compliances by the RE. The major purpose of this
framework is to highlight the key risks, and mandatory control measures which REs need to
put in place before adopting cloud computing.
II. SEBI has issued a master circular on Surveillance of Securities
Market. In order to ensure availability of consolidated information contained in all the
circulars pertaining to surveillance of securities market at one place, the provisions of
the relevant circulars have been consolidated in this Master Circular.
III. Extension in timeline for providing choice of nomination details
for all existing eligible trading and demat account holders, with regard to freezing of
accounts shall come into force with effect from 30th September 2023, instead of
31st March 2023.
April 2023
I. SEBI has issued circular addressing stockbrokers, clearing members
through stock exchange to wound down the bank guarantee created out of client's fund by 30th
September 2023. Further, no new bank guarantee shall be created by stockbrokers, clearing
members from 01st May 2023. Pursuant to discussion with various stakeholders
and in order to safeguard the interest of investors, pledging client's funds which in turn
issue Bank Guarantees (BGs) is strictly debarred by SEBI.
II. The Government of India, Ministry of Finance has issued an order
detailing the procedure for implementation of Section 12A of the Weapons of Mass
Destruction and their Delivery Systems (Prohibition of Unlawful Activities) Act, 2005
("WMD Act"), in consonance with order issued by Ministry of Finance (MOF), SEBI
has issued circular directing to comply with the procedure laid down in the said Order.
May 2023
I. SEBI directed MIIs to devise testing framework of all their IT
systems for uninterrupted functioning of the securities market.
II. SEBI has allowed stock exchanges to extend DMA facility to FPIs for
participation in ETCDs subject to the conditions stipulated in the circular.
III. In order to enable the users to have access to the provisions of
the applicable circulars at one place, SEBI has issued master circular for stock brokers
for necessary compliances.
IV. Clearing corporation in Commodity Derivatives Segment may now align
their core SGF in terms of SEBI circulars dated 27th August 2014 as well as 11th
July 2018 and excess contribution, if any, may be returned to the contributing
stakeholders on a pro-rata basis, after taking due approval from SEBI.
June 2023
I. In view to safeguard clients' funds placed with SBs/CMs, it has been
decided to require the up streaming of all client funds received by SBs/CMs to the
Clearing Corporations (CCs). As per the framework, no clients' funds shall be retained by
SBs/ CMs on End of Day (EoD) basis. The clients' funds shall all be up streamed by SB/ CMs
to CCs only in the form of either cash, lien on FDR (subject to certain conditions
enumerated), or pledge of units of Mutual Fund Overnight Schemes (MFOS).
II. SEBI has issued Circular on amendment to Guidelines on Anti-Money
Laundering (AML) Standards and Combating the Financing of Terrorism (CFT) /Obligations of
Securities Market Intermediaries under the Prevention of Money-laundering Act, 2002 and
Rules framed there under
III. SEBI has issued Circular on trading preferences by clients with
formats, which clients would need to provide while opening a trading account with a stock
broker. The provisions of this circular shall come into force with effect from 01st
August 2023.
SECC Regulations amendment on 28th February 2023.
The Securities and Exchange Board of India (SEBI) vide Gazette
Notification No. SEBI/LAD-NRO/GN/2023/124 dated
28th February 2023 has amended Securities Contracts
(Regulation) (Stock Exchanges and Clearing Corporations)
Regulations, 2018 which shall come into force on 28th August
2023.
20. RISK MANAGEMENT AND RISK MANAGEMENT POLICY
Your Company has put in place an Enterprise Risk Management
("ERM") framework to enable and support achievement of business objectives
through identification, evaluation, mitigation and monitoring of risks applicable to your
Company.
Your Company has a comprehensive Risk Management Policy for managing
risks such as Financial, Operational, Technology, Sectoral, Sustainability (particularly
Environmental, Social and Governance related risks), Regulatory and Compliance, Business,
Credit, Market, People, Legal, Reputational, Subsidiary Risks and Black Swan events
related risks.
The Company has a Risk Management Committee (RMC), which is constituted
by Board of Directors for, inter-alia, identification, measurement and
monitoring the risk profile of the Exchange. As on 31st March 2023, the RMC
comprised of three Public Interest Directors and an Independent External Expert. RMC
periodically reviews the Risk Management Policy and its implementation thereon, along with
the comprehensive Risk Register. The Committee also periodically examines and evaluates
the Risk Management Information Systems (RMIS) covering the existing as well as emerging
risks. The risks pertaining to internal controls over financial reporting is reviewed by
the Audit Committee. The Chief Risk Officer reviews the Internal Audit Report(s) and
suggests measures to improve the controls.
The matters relating to mitigation of risks in Technology, Information
and Cyber Security, Business Continuity and Disaster Recovery is overseen by the Standing
Committee on Technology.
For details relating to 'Risks and Concerns' of your Company please
refer the Management Discussion and Analysis section forming part of this Annual Report.
21. INVESTOR PROTECTION FUND (IPF) AND INVESTOR SERVICE FUND (ISF)
Your Company has set up Multi Commodity Exchange Investor Protection
Fund (IPF), to protect and safeguard the interest of investors/clients, with respect to
eligible/legitimate claims arising out of default of a member on the Exchange. The
interest income received on investment of surplus funds of IPF is used for imparting
investor/client education, awareness, undertaking research activities or such other
programs as may be specified by SEBI from time-to-time.
Currently, the applicable IPF compensation limit is Rs. 25 lakhs per
client, with no member-wise limit for SEBI-registered members declared defaulter on or
after 24th January 2018. Further, the limits of Rs. 2 lakhs per investor per
defaulter member and Rs. 200 lakhs per defaulter member shall continue to be applicable
for claims against members, declared defaulter prior to 24th January 2018 and
for non-SEBI registered members. As on 31st March 2023, the corpus of IPF
(provisional) stood at Rs. 21,961.50 Lakhs
Your Company has also set up an Investor Service Fund (ISF) for
providing, inter-alia basic minimum facilities at various Investor Service
Centres. The Company has set up 10 (Ten) Investor Service Centres across India till date.
SEBI has permitted the Exchanges to utilize the corpus of ISF for conducting various
investor education and awareness programs, capacity building programs and maintenance of
all price ticker boards installed by the Exchanges, cost of training of arbitrators and
grievance redressal committee members, etc. In addition to above, the corpus may be
utilized in any other manner as prescribed/permitted by SEBI in the interest of investors
from time-to-time.
Your Company has transferred 1% of the turnover fees charged from its
members on a monthly basis to ISF. As on 31st March 2023, the corpus of ISF
stood at Rs. 988.66 lakhs.
In order to enhance literacy and to promote investor education and
awareness in the commodity derivatives market, 1078 awareness programs (seminars/webinars)
were conducted under the banner of ISF in FY 2022-23. Out of these programs/webinars, over
61 programs were regional seminars/webinars conducted jointly with SEBI. In FY 2022-23,
the Exchange has conducted awareness programs across India, for investors, students, FPOs,
hedgers, physical market participants/stakeholders, micro small and medium enterprises
(MSME's), corporate, etc. from the bullion industry, metal industries, energy markets and
agricultural sector including farmers, farmer producer organisations (FPO's).
Some major awareness initiatives in FY 2022-23 undertaken were as
follows:
i. World Investor Week (WIW) was celebrated from 10th
October 2022 - 16th October 2022 throughout India under the aegis of SEBI &
IOSCO.
Total 88 awareness programs were conducted across India during
WIW, which had over 4500 participants.
Total 367 participants took part in various contests in WIW
2022. Out of 367 participants, 292 participants took part in the Quiz contest, 75
participated in the crossword contest.
Successfully carried out Commodity Caravan, which toured in
different locations of Maharashtra. The Commodity Caravan began on 10th October, 2022 from
Mumbai and Completed its journey on 16th October, 2022.
On the last day i.e. on 16th October 2022, the
Commodity Walkathon was conducted under MCX IPF. The Walkathon emphasized that just as we
care for our health we should also care for our Investments. Exercising caution while
investing & trading is the need of an hour for investors.
ii. Awareness programs across commodities were conducted with several
prominent Institutes, State and National Universities, Trade Associations and Chambers of
Commerce under the aegis of ISF.
Awareness through Media channels:
The objective of MCX IPF is to spread mass awareness and educate
commodity market stakeholders. During FY 2022-23, a number of investor awareness
activities were carried out in partnership with various media across digital, electronic
and print modes.
Various investor awareness media activities carried out during FY
22-23:
'A Monk Who Trades' Investor Awareness Comic Series was
published in newspapers.
Short Investor Awareness Videos were played on TV channels, were
run as YouTube ads, were run across various websites & languages.
Investor Awareness messages were broadcast on radio stations in
regional languages.
Investor Awareness Camps were conducted on-ground across India
and aired on TV channels.
Special investor awareness activities were carried out during
the World Investor Week 2022.
Investor Awareness Ads were displayed at airports and were run
on various social media platforms.
Quiz cards are posted everyday on social media.
The 'Monk Who Trades' is a flagship series of MCX IPF created to spread
investor awareness among investors. The Monk Who Trades comic series was also translated
into vernacular languages for a wider reach across print and digital platforms. Further,
these were also developed into animated videos with voice over and uploaded on the MCX
website.
Other Initiatives:
MCX IPF successfully organized the 5th edition of 'MCX-IPF
COMQUEST' - 2023, its premier, National-level Commodity Market Educational Quiz for
students. This year, more than 6500 individual students, from across India participated in
the competition, making it the largest number amongst all previously held editions.
The Commodity Insights Yearbook 2022: - a collection of useful
educational resources on commodity markets- was launched last year during World Investor
Week (WIW) in collaboration with the National Institute of Securities Markets (NISM)
Training sessions for GRC Members & Arbitrators along with
NCDEX and NISM were organized on 23rd February 2023 & 09th March
2023 respectively.
22. TRAINING AND EDUCATION
Your Company continues to reach out to various academic institutions to
enhance knowledge about commodity derivatives, commodity eco-system and role of exchange
traded derivatives market in facilitating derivatives trading for price risk management
and price discovery.
To achieve the said objectives, your Company during FY 2022-23:
i. Facilitated 635 registrations for the MCX Certified Commodity
Professional (MCCP), MCX Certified Index Professional (MCIP) MCX Certified Commodity
Options Professional (MCOP) examination;
ii. Launched Joint Certification Programmes (JCP) with various academic
institutions;
iii. Conducted customized training programmes & awareness sessions
on workings & operations of a commodity exchange & related ecosystem for staff,
regulators, members & bankers in association with Chittagong Commodity Exchange (CSE)
to assist them in gaining knowledge to set up a commodity exchange in Bangladesh at CSE.
iv. Conducted several awareness programmes on multiple aspects of
commodity derivatives for over 40 B-Schools, Colleges, academic bodies, etc.
v. Successfully concluded the Vth edition of MCX-IPF COMQUEST All India
commodity quiz which saw a record number of participation from both the academic
institutions and their students.
23. WAREHOUSING
Consequent to the transfer of clearing and settlement division of the
Exchange to Multi Commodity Exchange Clearing Corporation Ltd. (MCXCCL) w.e.f. 01st
September 2018, physical deliveries of the commodities traded on the Exchange platform are
effected through MCXCCL.
MCXCCL ensures that the members of MCX and their constituents are
provided with warehousing arrangements and associated facilities like testing etc. Those
willing to store goods and give delivery on the Exchange platform get these facilities for
commodities traded on MCX in Bullion, Metals and Agricultural segments. To facilitate
this, MCXCCL verifies and accredits warehouses and vaults across various delivery centres.
It operates only with electronic receipts of goods stored in MCXCCL accredited
warehouses/vaults on a highly efficient digital platform. In order to keep a check on
compliance, correct the deficiencies and enhance market confidence, MCXCCL has an
elaborate warehouse and vault inspection activity in place.
MCXCCL has a wide network of warehouses/vaults for delivery of
commodities traded on MCX platform. This provides confidence to members to trade on MCX.
As on 31st March 2023, MCXCCL has entered into agreements with six Warehouse
Service Provider (WSPs) for facilitating physical deliveries in agricultural commodities
and base metals. As on at 31st March 2023, MCXCCL is operating from 33
accredited warehouses of which 18 warehouses are registered with Warehousing Development
and Regulatory Authority (WDRA). The remaining 15 warehouses for metals do not require
WDRA registration.
Further, MCXCCL has entered into agreements with 4 Vault Service
Provider (VSPs) for facilitating physical deliveries in bullion. There are 25 accredited
vaults of these agencies located at different delivery centres.
24. SUBSIDIARY
Multi Commodity Exchange Clearing Corporation Limited (MCXCCL)
MCXCCL, a wholly-owned subsidiary of your Company, was set up as a
separate clearing house for providing Clearing and Settlement services to the Company.
MCXCCL performs risk management of the trades executed, collects margin from the members,
effects pay-in and pay-out and oversees delivery and settlement processes. SEBI has
granted renewal of recognition to MCXCCL for a period of three years commencing from 31st
July 2019 and ending on 31st July 2022. SEBI vide its letter dated 19th
May 2022, granted renewal of recognition to MCXCCL, to act as a Clearing Corporation for a
period of further three years commencing on 31st July 2022 and ending on 30th
July 2025, subject to complying with all rules, regulations, guidelines and other
instructions as may be issued by SEBI from time to time.
Risk management being an important function for a clearing corporation,
MCXCCL has a well-defined Risk Management Framework and Risk Management Policy in place.
This works at various levels across the enterprise to form a strategic defence cover for
the company. MCXCCL has constituted a Risk Management Committee, which periodically
monitors and reviews Risk Management plan and the implementation of SEBI norms on Risk
Management and recommends to the Board any modifications to the Risk Management Policy.
MCXCCL is recognized as a Qualifying Central Counter party (QCCP) by
SEBI. This enables the participants to apply lower risk weight age towards their exposures
to MCXCCL as per Basel II capital adequacy framework. It has membership of CCP12, the
renowned global association of Central Counter parties and membership of Asia-Pacific
Central Securities Depository Group (ACG).
During the year under review, there was no change in the Authorized,
Issued and Paid-up Share Capital of MCXCCL. As on 31st March 2023, Authorized
Share Capital of MCXCCL stood at Rs. 30,000 lakh and issued and paid-up share capital
stood at Rs. 23,999 lakh. The net worth as at 31st March 2023 was Rs. 44,164
lakh.
Core Settlement Guarantee Fund (Core SGF)
SEBI vide circular no. SEBI/HO/CDMRD/DRMP/CIR/2018/111 dated 11th
July 2018, issued norms related to computation of SGF requirement and standardized stress
testing for credit risk in commodity derivatives. The total Core SGF as on 31st March
2023 stood at Rs. 58,976 lakh, of which Rs. 11,115 lakh has been contributed by MCX, Rs.
32,217 lakh has been contributed by MCXCCL and Rs. 15,644 lakh has accrued from penalties,
interest and other accruals.
25. ASSOCIATES
CDSL Commodity Repository Limited (CCRL)
Your Company entered into a Shares Sale/Purchase and Shareholders
Agreement with Central Depository Services Limited (CDSL) and CDSL Commodity Repository
Ltd. (CCRL) effective 18th May 2018, for setting up and operationalization of a
new repository under the Warehousing (Development and Regulation) Act, 2007. Pursuant to
Section 2(6) of the Companies Act, 2013, CCRL became an associate company of MCX w.e.f. 04th
June 2018, consequent to investment of Rs. 1,200 lakh comprising of 12,000,000 equity
shares of Rs. 10 each, equivalent to 24% stake in CCRL.
India International Bullion Holding IFSC Ltd. (IIBH)
MCX, National Stock Exchange of India, National Securities Depository
Limited, Central Depository Services Limited and BSE's subsidiaries India INX
International Exchange and India International Clearing Corporation have joined hands for
setting up of Market Infrastructure Institutions (MIIs) comprising of International
Bullion Exchange, Clearing Corporation and Depository Company at Gujarat International
Finance Tec-City (GIFT) via a Holding Company i.e. India International Bullion Holding
IFSC Limited (IIBH), as per the Regulations issued by International Financial Services
Authority (IFSCA).
This move is in line with the government's objective to make India a
price-setter in bullion trade through GIFT International Finance Service Centre. It will
help in efficient price discovery in domestic market given the fact that India is the
second
largest consumer of Gold. The Exchange would present an opportunity for
all stakeholders including MCX to expand their scope of business.
Accordingly, MCX, along with all other consortium partners, contributed
Rs. 3,000 lakh each comprising of 30,00,00,000 equity shares of Rs. 1 each equivalent to
20% stake in IIBH as on 31st March, 2023.
The Hon'ble Prime Minister Prime Minister inaugurated the operations of
the said Company in July, 2022. A total of 705 kg of gold has been traded on the Exchange,
out of which 702 kg has been imported into the country by 'Qualified Jewellers'. Further,
161.2 kg is imported under the India-UAE CEPA (Comprehensive Economic Partnership
Agreement) Tariff Rate Quota (TRQ).
During the year under review, there were no companies which have become
or have ceased to be the joint venture of your Company.
Further, the Managing Director & CEO of your Company does not
receive any remuneration or commission from its subsidiary.
A report on the performance and financial position/salient features of
the subsidiary and associate companies as per the Companies Act, 2013 is provided as
Annexure I.
In accordance with Section 136(1) of the Companies Act, 2013, the
financial statements including consolidated financial statements and all other documents
required to be attached thereto and audited annual accounts of MCXCCL, the subsidiary
company, are available on our website at the weblink https://www.mcxindia.com/investor-relations.
26. MANAGEMENT DISCUSSION AND ANALYSIS STATEMENT
Management Discussion and Analysis Statement, as stipulated under the
SEBI (LODR) Regulations, 2015, forms a part of this Annual Report.
27. COMMITMENT TO QUALITY
Your Company continues its journey of delivering value to all its
stakeholders through investments in quality programs. Your Company has been enabling
excellence in product and service delivery through compliance of robust processes, quality
management system, customer centricity and risk mitigation. Your Company has adopted
several external benchmarks and certifications to validate the processes and controls
implemented across the Exchange.
Your Company resolves to maintain its pre-eminent position in the
Commodity space, hence is proactively investing towards building robust and scalable
platform like Commodity Derivatives Platform to support its future business growth and
regulatory compliance.
Despite the FY 2022-23 being full of unprecedented challenges, your
Company was successful in upholding its commitment towards compliance with and adherence
to international best practices as laid out in ISO standards such as ISO 27001:2013
(Information Security Management System), ISO 22301:2019 (Business Continuity Management
Systems) & ISO 9001:2015 (Quality Management Systems). Your Company successfully
re-certified on all aforementioned standards. As a part of its commitment to our
subscribers, trading members, and the partner ecosystem, your Company also undertook
proactive audits to strengthen its core processes, cyber security posture and adherence to
regulator guidelines, as they came into effect. Your Company is happy to report that
despite issues posed by the pandemic, the organisation has successfully evolved to adapt
to the new-normal, and that all security incidents were contained to have a zero effect on
the trading platform, or systems of our subscribers and trading partners.
It is the constant endeavour of your Company to hire and retain the top
talent. The Company has invested in senior leadership resources and also strengthened the
middle management layer.
28. RESEARCH AND DEVELOPMENT
Your Company regularly undertakes research for developing new products
against the backdrop of evolving market needs, changing policy and regulatory landscape
and global best practices. Following research in market demand and after receiving
regulatory approvals, your Company launched mini contracts in Base Metals (Aluminium, Zinc
and Lead), Crude Oil and Natural Gas, as well as Options on Gold Mini during the year FY
2022-23. Such product-based research were carried out on other commodities and variants of
existing derivative contracts, on which the Exchange shall launch products at opportune
times and after receiving due regulatory approvals.
In accordance with SEBI guidelines on utilisation of IPF interest
income on research activities, your Company undertook four research studies during the
year FY2022-23 on various themes connected to commodity derivatives market. The studies
were 'Suspension of Commodity Derivative Contracts and Impact on Price Discovery
undertaken by IIM Ahmedabad; 'Regulatory Landscape in Equity Derivatives versus
Commodity Derivatives Markets in India', undertaken by IIM Lucknow;
Facilitating institutional participation in India's commodity
derivatives market; undertaken by IIM Jammu and Evaluating Risk Management
Tools in Indian Commodity Derivatives Market', undertaken by Acies Consulting. The reports
of the studies have been widely publicised through the Exchange's website and social media
accounts. Besides, the findings of the studies are also being disseminated through
articles published in the print media and also awareness events.
Further, two research studies have been initiated during the FY
2023-24, which include Analyzing Costs and Benefits of Flexibility in Contract
Design on Development of Commodity Derivatives Market, being undertaken by NIT Rourkela
and Hedging of Price Risks in Base Metals, being undertaken by ICFAI Business
School.
To spread awareness and promote research in commodity markets and its
ecosystem, the 'CommodityInsights Yearbook 2022' was published during the FY
2022-23 in partnership with the National Institute of Securities Markets (NISM), an
institution established by SEBI. The same was released by Mr. G.P. Garg, Executive
Director, SEBI, at an event held to mark World Investor Week 2022. This annual publication
aims at dissemination of comprehensive knowledge on the commodity market ecosystem for the
benefit of all stakeholders including market participants, financial institutions,
policymakers, analysts, producers, traders, consumers, industry observers, academicians,
etc. The 2022 edition of the Yearbook focussed on the Energy segment. Like in earlier
years, the Yearbook, together with relevant data in user-friendly spreadsheets, was made
available for free download on the Exchange's website to ensure maximum dissemination.
Copies of the Yearbook were also widely circulated among academicians, libraries, and
other stakeholders mentioned above.
Apart from the annual Commodity Insights Yearbook
mentioned above, a monthly newsletter Commodity Connect' is widely circulated and
uploaded on the website, which is another effective tool used to regularly communicate
with the Exchange's stakeholders.
During the FY 2022-23, your Company also engaged with a number of
educational institutions and participated in research conferences conducted by
institutions such as India Gold Policy Centre at IIM Ahmedabad, apart from conducting and
participating in training and awareness sessions at a number of educational institutions
across the country.
Your Company is undertaking a consultancy project for Chittagong Stock
Exchange (CSE), Bangladesh, which involves sharing of knowledge and expertise for CSE to
set up a Commodity Derivatives Platform, which would be Bangladesh's first Commodity
Derivatives Exchange Segment. The Agreement on this consultancy project was signed between
MCX and CSE on 12th April 2022.
29. ENVIRONMENTAL RESPONSIBILITY
Your Company has very low impact on environment. Your Company is
governed by effective Environmental Policy, and it always strives to ensure that any of
its activity has a low or no impact on the Environment. It uses the resources such as
electricity in an effective manner and follow strict schedule in all its operations. All
the equipment's have long usable life to reduce waste generation. Your Company creates
adequate awareness amongst its employees and vendors to adopt environmental conservation
practices as an ongoing basis in all their processes. Your Company has environmental
impact plan and accordingly checks and monitors the harmful effects to the environment.
Your Company has E-waste policy for safe disposal of E-waste through
approved e-recyclers in eco-friendly manner. Your Company has adopted many conservation
measures such as tap aerators, rainwater harvesting, cold fogging and password enabled
printers to reduce wastage and other harmful effects to the environment.
Your Company monitors environmental pollution through stack emission
monitoring, Noise Pollution test, Indoor air quality and ambient air quality.
30. CORPORATE SOCIAL RESPONSIBILITY (CSR)
The Company has constituted a CSR Committee in accordance with Section
135 of the Act.
Embedded in the vision and mission of your Company, CSR has always been
considered as an opportunity to serve the nation and to bring a perceptible change in the
lives of the people. Focused on the community priorities, your Company regularly aligns
its strategy, by constantly expanding its CSR outreach for the inclusive growth and
development of the society. The Company has been an active citizen and proactively working
on causes of nation building.
The CSR allocation for FY 2022-23 was Rs. 300 lakhs. Your Company has
made specific allocations towards:
- Support to improve the medical and infrastructure facilities for
children affected with Multiple Disabilities and Vision Impairment (MDVI) as well as
support customized learning needs program of the MDVI children.
- Support to provide free transportation facility to the Mentally
Retarded children who reside in the rural areas
- Support to improve the infrastructure and supply of medical
equipment's to Hospital which focus in providing medical facilities to persons from
disadvantaged background.
The interventions during the year epitomize the conviction of your
Company to serve and empower the needy communities and to contribute towards the
development of the nation. Going forward, your Company aims to further strengthen its
initiatives and continue to serve the society at large.
The brief of the CSR activities undertaken during the year have been
provided in the Annual Report on CSR activities forming part of this Report as Annexure
II.
The CSR Policy formulated in accordance with the Companies Act, 2013
(as amended from time to time), guides the Company's CSR approach to sub serve the
well-being of the society at large. The CSR Policy and initiatives adopted by the Company
on CSR are available at the web link https://www.mcxindia.com/about-us/csr.
31. BUSINESS RESPONSIBILITY AND SUSTAINABILITY REPORT (BRSR)
The Business Responsibility and Sustainability Report (BRSR) of the
Company for the Financial Year 2022-23, as required under Regulation 34(2)(f) of the SEBI
(LODR) Regulations, 2015, is a part of this Annual Report and also available on the
website of the Company at www.mcxindia.com. The BRSR provides insights on the
initiatives taken by the Company from an environmental, social and governance perspective.
The Company regularly carries out several initiatives that contribute to the
sustainability and well-being of the environment and the communities in which it operates.
The Company also recognises the importance of sustainability and is committed to conserve
the ecological integrity of its locations through responsible business practices.
Sustainability is thus a core agenda for the Company.
32. ETHICS AND GOVERNANCE POLICIES
Your Company adheres to high ethical standards to ensure integrity,
transparency, independence and accountability in dealing with all stakeholders.
Accordingly, your Company has adopted various codes and policies to carry out the duties
in an ethical manner. Some of these codes/policies framed and implemented by your Company
are the Code of Conduct and Code of Ethics, Code of Conduct for Prevention of Insider
Trading, Code of Practices and Procedures for Fair Disclosures of Unpublished Price
Sensitive Information, Whistle Blower Policy/Vigil Mechanism, Policy on Related Party
Transactions, Policy for determining Material Subsidiaries, Corporate Social
Responsibility Policy, Risk Management Policy, Nomination and Remuneration Policy, Policy
for Appointment of Independent External Persons on Committees of the Board, Board
Diversity Policy, etc.
A. WHISTLE BLOWER POLICY / VIGIL MECHANISM
Your Company believes in the conduct of the affairs of its constituents
in a fair and transparent manner by adopting highest standards of professionalism,
honesty, integrity and ethical behaviour. Pursuant to Section 177(9) of the Companies Act,
2013 read with Rule 7 of the Companies (Meetings of Board and its Powers) Rules, 2014 and
Regulation 22 of the SEBI (LODR) Regulations, 2015. The Board of Directors have
implemented a vigil mechanism through the adoption of a Whistle Blower Policy which has
been amended from time to time. The said policy is available on the website of the Company
at https://www.mcxindia.com/investor-relations/corporate-governance For further
details, please refer to the report on Corporate Governance forming part of this Annual
Report.
B. POLICY ON MATERIAL SUBSIDIARIES
As required under Regulation 16(1)(c) of SEBI (LODR) Regulations, 2015,
the Company has formulated and adopted a policy for determining Material Subsidiaries.
For FY 2022-23, Multi Commodity Exchange Clearing Corporation Limited
("MCXCCL") is the material subsidiary of the Company. As per Regulation 24A of
SEBI (LODR) Regulations, 2015, the Secretarial Audit Report of MCXCCL is a part of
Annexure IV of this report.
The policy on Material Subsidiary is available on the website of the
Company at https://www.mcxindia.com/investor-relations/corporate-governance
C. INSIDER TRADING REGULATIONS
Pursuant to the provisions of SEBI (Prohibition of Insider Trading)
Regulations, 2015 (as amended from time to time), the Company has formulated a Code of
Conduct for Prevention of Insider Trading ("Insider Trading Code") and Code of
Practices and Procedures for fair disclosure of Unpublished Price Sensitive Information
("UPSI"). The Code of Practices and
Procedures for fair disclosure of UPSI is available on the website of
the Company at https://www.mcxindia.com/investor-relations/corporate-aovernance
D. CONTRACTS AND ARRANGEMENTS WITH RELATED PARTIES
Pursuant to the provisions of Regulation 23 of the SEBI (LODR)
Regulations, 2015, effective 01st April 2022, prior approval of Members is
required to be sought by means of an ordinary resolution for related party transactions,
which are material, even if such transactions are in the ordinary course of the business
of the Company and at an arm's length basis. A transaction with a related party is
considered material if the transaction(s) to be entered into individually or taken
together with previous transactions during a financial year, exceeds Rs. 1,000 crore or
10% of the annual consolidated turnover as per the last audited financial statements of
the listed entity, whichever is lower.
All related party transactions entered into by your Company during the
period under review were in the ordinary course of business and at arm's length pricing
basis. Also, prior omnibus approval was obtained for related party transactions which were
of repetitive nature and entered in the ordinary course of business and are at arm's
length. The related party transactions entered into by your Company during the year under
review, were approved by the Audit Committee and noted by the Board, as applicable, in
accordance with the provisions of the Companies Act, 2013, SEBI (LODR) Regulations, 2015
and other applicable guidelines/directions from the Regulator, if any. Further,
transactions entered into between a holding company and its wholly owned subsidiary whose
accounts are consolidated with such holding company are exempted from the provisions
related to omnibus approval, under the applicable provisions of the Companies Act, 2013
and the SEBI (LODR) Regulations, 2015. However, the Company, as a good corporate
governance practice, does seek omnibus approval for transactions to be entered into with
MCXCCL, wholly owned subsidiary of the Company.
Pursuant to Section 134(3)(h) read with Rule 8(2) of the Companies
(Accounts) Rules, 2014, the particulars of material contracts or arrangements with related
parties referred to in Section 188 (1) of the Companies Act, 2013, in Form AOC-2, is
appended as Annexure III to this Report.
Your Company has formulated a policy on materiality of related party
transactions and dealing with related party transactions as amended from time to time. The
Policy is uploaded on the website of your Company and may be accessed at the weblink: https://www.mcxindia.com/docs/default-source/investor-relations/corporate-governance/related-partv-transactions-poli
cy-13-04-2023.pdfRs.sfvrsn=f596d891 4
Regulation 23 of SEBI (LODR) Regulations, 2015, was amended by SEBI
vide notification dated 09th November 2021, inter alia, enhancing
the scope of related party, related party transactions and materiality threshold for
seeking shareholder approval. In line with the amendments to Reg. 23 of SEBI (LODR)
Regulations, 2015, necessary modifications, including definition of 'Material
Modifications' have been incorporated in the Related Party Transactions Policy.
All Related Party Transactions as required under Ind AS 24 - Related
Party Disclosures, are reported in Note 37 of Notes to Accounts of the standalone and
consolidated financial statements of your Company.
E. DIVIDEND DISTRIBUTION POLICY
Pursuant to Regulation 43A of the SEBI (Listing Obligations and
Disclosure Requirements) Regulations, 2015, your Company had formulated a Dividend
Distribution Policy which is available on the Company's website at https://www.mcxindia.com/docs/default-source/investor-relations/corporate-aovemance/dividend-distribution-policv
j uly2020.pdfRs.sfvrsn=c9a29890 2.
F. POLICY ON NOMINATION AND REMUNERATION PARTICULARS OF REMUNERATION
Your Company has adopted a well-defined Nomination & Remuneration
Policy for Directors, Key Managerial Personnel and other employees formulated in terms of
the provisions of SECC Regulations, 2018, Companies Act, 2013 and SEBI (LODR) Regulations,
2015. The said Policy is available under the weblink https://www.mcxindia.com/docs/default-source/investor-relations/corporate-aovemance/remuneration-policv.pdfRs.sfvrs
n=aa65ac93 10
The ratio of the remuneration of each Director and KMP to the median
employee's remuneration and other details in accordance with Section 197 (12) of the
Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of
Managerial Personnel) Rules, 2014 and Regulation 27(6) of the SECC Regulations, 2018,
forms part of this Report as Annexure V.
Further, in accordance with Section 197 (12) of the Companies Act, 2013
read with Rule 5 (2) of the Companies (Appointment and Remuneration of Managerial
Personnel) Rules, 2014, and Regulation 27(5) of SECC Regulations, 2018, a statement
containing particulars of employees as stipulated therein also forms part of this Report
as Annexure VI.
33. BOARD COMMITTEES
There are various Board constituted Committees as stipulated under the
Act and SEBI (LODR) Regulations, 2015 namely Audit Committee, Nomination and Remuneration
Committee, Stakeholders Relationship Committee, Risk Management Committee and Corporate
Social Responsibility Committee. Brief details pertaining to composition, terms of
reference, meetings held and attendance thereat of these Committees during the year have
been enumerated in Corporate Governance Report forming part of this Annual Report.
Additionally, Company being an Exchange, has also constituted other
Regulatory Committees as stipulated under SECC Regulations, 2018.
AUDIT COMMITTEE
A detailed note on the composition, terms of reference etc of Audit
Committee is covered under the Corporate Governance Report. During the year under review,
all the recommendations made by the Audit Committee were accepted by the Board.
34. STATUTORY AUDITORS AND THEIR REPORT
The shareholders, at their 18th Annual General Meeting (AGM)
held on 31st August 2020 have appointed M/s Shah Gupta & Co., Chartered
Accountants (Firm Registration No. 109574W) for another term of 5 (five) consecutive years
to hold office from the conclusion of the 18th AGM until the conclusion of the
23rd AGM of the Company, at a remuneration of Rs.15 lakh (Rupees Fifteen lakh)
for the FY 2020-21, plus reimbursement of out-of-pocket expenses and applicable taxes,
with an escalation of upto 10% once in two years. The Audit Committee and Board in its
meeting held on 04th February 2023, considered, and recommended an increase of
6% in the statutory audit fees of M/s Shah Gupta & Co. for the FY 2022-23 & FY
2023-24 amounting to Rs. 15,90,000/- for each year (plus reimbursement of out-of-pocket
expenses and applicable taxes).
The Report given by the Auditor on Financial Statements of the Company
forms part of the Annual Report. There is no qualification, reservation or adverse remark
made by the Auditor in their report.
35. SECRETARIAL AUDITORS AND THEIR REPORT
M/s. AVS & Associates, Practicing Company Secretaries, were
appointed as the Secretarial Auditors by the Board to conduct the secretarial audit of the
Company for the FY 2022-23. Further, M/s Mayekar & Associates, Practicing Company
Secretaries, were appointed as the Secretarial Auditors by the Board of MCXCCL to conduct
their secretarial audit for the FY 2022-23.
In accordance with Section 204(1) of the Companies Act, 2013 and
Regulation 24A of SEBI (LODR) Regulations, 2015 the Secretarial Audit Reports of the
Company and MCXCCL for the Financial Year ended 31st March 2023 are annexed as
Annexure IV to this Report.
The observations along with Management response as stated in the report
are as follows:
1. One day delay has been noticed w.r.t. the transfer of the final
dividend amount declared in the 20th AGM to the separate bank account opened
for that purpose. However, the dividend has been paid to the shareholders within the
timeline prescribed under the Companies Act, 2013;
The Management hereby clarifies that to regularise the same, the
Company has filed a Compounding Application with Registrar of Companies in the month of
May 2023 under Section 441 of the Companies Act, 2013.
2. SEBI vide order dated 28th February2023 imposed a
penalty of ' 6 Lakhs on the Company for (i) Not having systems in place for verification
of Sikkim-based clients who are exempted from submission of PAN, and (ii) As purported,
the fine imposed on the trading members for submission of incorrect KYC details in the UCC
System of the Company by the MD & CEO of MCX instead of the Member and Core Settlement
Guarantee Fund Committee by way of formulating a policy as per SEBI Circulars dated 16th
September 2016 and 10th January 2019 respectively. Subsequently, the Company
has paid the said penalty to SEBI on 12th April 2023.
The Management hereby clarifies that the Company has paid the penalty
of ' 6,00,000/- on 12th April 2023 as levied by SEBI. A special
audit was carried out with regard to the above through E&Y LLP and they did not find
any malafide intent on part of the management. The Company abides by applicable SEBI
Regulations.
36. INTERNAL AUDITOR
Internal Audit for the year ended 31st March 2023, was
conducted by M/s Sarda & Pareek LLP, Chartered Accountants. Internal Audit report at
periodic intervals were placed before the Audit Committee. Further, the Board of Directors
had approved the extension of internal audit service of M/s Sarda & Pareek, LLP,
Chartered Accountants for FY 2023 - 24.
37. COST RECORDS AND COST AUDIT
Maintenance of cost records and requirement of Cost Audit as prescribed
under the provisions of Section 148(1) of the Act, are not applicable for the business
activities carried out by the Company.
38. COMPLIANCE WITH SECRETARIAL STANDARDS
During the year under review, except to extent stated herein, the
Company has complied with all the applicable provisions of the Secretarial Standards
issued by Institute of Company Secretaries of India on Meetings of the Board of Directors
(SS-1) and General Meetings (SS-2).
39. ANNUAL RETURN
Pursuant to Section 92(3) of the Companies Act, 2013, the Annual Return
for FY 2022-23 is available at the web link https://www.mcxindia.com/investor-relations
40. INTERNAL FINANCIAL CONTROLS AND THEIR ADEQUACY
Your Company has maintained adequate internal financial controls over
financial reporting, which are constantly assessed and strengthened with new/revised
standard operating procedures. The Board has adopted policies and procedures for ensuring
the orderly and efficient conduct of its business, including adherence to the Company's
policies, safeguarding of its assets, prevention and detection of fraud, error reporting
mechanisms, accuracy and completeness of the accounting records and timely preparation of
reliable financial disclosures.
The Company's internal control system is commensurate with its size,
scale and complexities of its operations. The Audit Committee of the Board actively
reviews the adequacy and effectiveness of the internal control systems and suggests
improvements to strengthen the same. The Audit Committee of the Board and Statutory
Auditors are periodically apprised of the internal audit findings and corrective actions
taken. Audit plays a key role in providing assurance to the Board of Directors on the
effectiveness of internal controls and the veracity of the financial statements. Such
internal financial controls over financial reporting were operating effectively as of 31st
March 2023.
41. DETAILS IN RESPECT OF FRAUDS REPORTED BY AUDITORS UNDER SUB-SECTION
(12) OF SECTION 143 OTHER THAN THOSE WHICH ARE REPORTABLE TO THE CENTRAL GOVERNMENT
No fraud has been reported by the Auditors to the Audit Committee or
the Board.
42. LEGAL UPDATE Crude Oil Matters:
On 20th April 2020, the prices of the Crude Oil Futures
Contract traded on NYMEX, that was due to expire on the next day
i.e. 21st April 2020, fell into negative territory i.e.
negative 37.63 $ (Thirty Seven Point Sixty Three Dollars Only) due to the deepest fall in
demand on account of the unprecedented COVID-19 pandemic. As Crude Oil Futures settled on
the Exchange platform as per NYMEX, by the Circular dated 21st April 2020,
issued by MCXCCL, the Due Date Rate of Crude Oil Futures contract expiring on 20th
April 2020 was fixed at a negative value viz. Rs. (-) 2884/- resulting in multiple Writ
Petitions being filed against MCX and MCXCCL in various High Courts. It was inter-alia
prayed to quash and set aside the Impugned Circular 21st April 2020.
MCX had filed a Transfer petition before the Hon'ble Supreme Court, inter-alia
among other grounds that none of the Courts have territorial jurisdiction over the matter
and therefore all the Writs ought to be transferred to Mumbai (before Hon'ble Bombay High
Court). SEBI also had filed a separate Transfer Petition before the Supreme Court seeking
transfer of the Writ Petitions.
Pursuant to the transfer petition of SEBI, the Hon'ble Supreme Court inter-alia
vide its order dated 24th July 2020 stayed the proceedings of all the Writ
Petitions filed before various High Courts till the final disposal of the matter and
tagged the petition of SEBI with the Company's petition. The Transfer petitions were
listed for hearing and final disposal on
01st September 2022. The Hon'ble Supreme Court has inter-alia
directed to transfer all the writ petitions filed before various High Courts to Hon'ble
Bombay High Court which are pending in the Bombay High Court now. In two other Writs, SEBI
has in January 2023 filed transfer petition before the Supreme Court which shall be heard
in due course.
Compounding of offences:
Dividend for FY 2021 - 2022 was deposited in separate Bank account,
after one day delay, however, dividend was paid to shareholders within regulatory
timelines. In view of the same, the Company has filed an application for Compounding of
Offences on May 2023.
43. HUMAN RESOURCE DEVELOPMENT
HR plays an instrumental role in securing the future success of the
organization. In doing so, HR by its long term vision of working in partnership to create
an environment where employees can thrive and are enabled to deliver sustainable
organizational performance.
As on 31st March 2023, the Exchange had 378 employees
(includes confirmed employees and trainees/management trainees).
HR principles & priorities have ensured that exchange seeks to
retain, develop and continue to attract people with the requisite skills to help shape a
better organization and foster employees engagement and motivation throughout the
implementation process. Structured 'Internal Job Posting' provides opportunities to
deserving employees to be considered for lateral & hierarchical career growth within
the organization .
Additionally, Exchange undertakes various staff welfare activities to
improve productivity by bringing unity such as the "Annual Employee Event",
designed to have enhanced interpersonal relationship and team work. As a new initiative,
Exchange has rewarded employee's children for their exceptional efforts in passing 10th
and 12th standard examination with fiying colors.
44. DISCLOSURES PERTAINING TO THE SEXUAL HARASSMENT OF WOMEN AT THE
WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013
Your Company continues to have in place an Anti-Sexual Harassment
Policy and is complied with the provisions relating to the constitution of Internal
Complaints Committee under "The Sexual Harassment of Women at the Workplace
(Prevention, Prohibition & Redressal) Act, 2013"
No complaint was received during the FY 2022- 23 in relation thereto.
45. EMPLOYEE STOCK OPTION SCHEME
The stock options granted to the employees of the Company, operate
under the "Employee Stock Option Scheme 2008 (ESOP 2008)" of the Company,
formulated in accordance with the SEBI (Employee Stock Option Scheme and Employee Stock
Purchase Scheme) Guidelines 1999, which was approved by the shareholders at the
Extraordinary General Meeting held on 27th February 2008. MCX ESOP Trust
constituted by the Company is responsible for administration and implementation of the
scheme under the directions of the Nomination and Remuneration Committee. There has been
no change in the Scheme during the year ended 31st March 2023.
There were no grants pending for vesting as at 31st March
2023. No new grants were made during FY 2022-23.
The relevant disclosures required under the SEBI Regulations for the
year ended 31st March 2023 are available on the website of the Company at https://www.mcxindia.com/investor-relations/corporate-governance.
46. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE
EARNINGS/OUTGO
The disclosures to be made under Section 134 (3) (m) of the Companies
Act, 2013 read with Rule 8 (3) of the Companies (Accounts) Rules, 2014, are explained as
under:
A) CONSERVATION OF ENERGY
Your Company's operations are not energy intensive. However, it
undertook various measures to reduce energy consumption by using energy-efficient computer
systems and equipment. As an ongoing process, your Company evaluates new technologies and
techniques to make its infrastructure more energy efficient.
i. Steps taken or impact on Conservation of Energy:
Your Company has in-row cooling system for servers in the Data Centre,
which cools only the equipment and not the external environment, thereby, ensuring that no
energy is wasted in running compressors excessively to maintain the desired temperature.
Your Company has Variable Refrigerant Volume (VRV) air-conditioning
system for the entire building, which works on invertor compressor, resulting in energy
saving. Moreover, the refrigerant R410A used in the system is also environment friendly.
Your Company has UV resistant film on facade glass windows to reduce
the heat entering the building. This reduces the air-conditioning load. The glass windows
also reduce the electricity consumption due to lesser requirement of lighting during the
day.
Your Company has installed Motion Sensors in low footfall area for
controlling lights and reducing energy consumption.
Your Company maintains adequate capacitor bank for non-linear
electrical loads like air-conditioning plant, pumps and motors, thereby reducing the
drawing of extra energy and improving the power factor.
Your Company uses low energy consuming electrical equipment with modern
efficient devices such as LED lights, IP based cameras etc.
Your Company has adopted BEE guidelines for Air-conditioning and
maintains the temperature at 24 degrees in work areas.
You Company has strict Power monitoring schedule for air conditioners
and lighting to ensure no wastage of electricity.
Also energy audit, heat load calculations and power factor corrections
are carried out at regular intervals.
Your Company has installed password-based printers, which do not print
the document unless password is entered on the printer thereby reducing the paper wastage
resulting in environmental protection.
ii. Steps taken by your Company for utilizing alternate sources of
energy:
No alternate source of energy is utilized by your Company.
iii. Capital investment on energy conservation equipment:
Your company has replaced desktop to energy efficient laptops with the
long-term utility to ensure energy saving.
B) TECHNOLOGY ABSORPTION
(i) The efforts made towards technology absorption are:
Cyber Security framework
Special emphasis was laid by your Company on continuous improvement in
its cyber security framework and information security management systems. There is a
focused approach in cyber security management through people, processes and technology.
Highest priority and continuous support was given by the senior management to all matters
of cyber security and risk management. It is the constant endeavour of your Company to
meet the expectations of the Regulators and comply with the guidelines laid down by the
national agencies tasked with information security and cyber defence of critical
infrastructure. There is a dedicated Security Operations Centre (SOC) staffed with
industry experts who are armed with the latest threat intelligence to protect our critical
infrastructure. The SOC provides 24x7x365 vigilance against cyber threats, proactive
response against incidents, and provides vital inputs on improvement of your Company's
security architecture and design. Your Company follows global security standards like ISO
27001:2013 Information Security Management & aligns with NIST Cyber Security
Framework.
Your Company is not only committed to protection of assets by deploying
security measures for Work from Home (WFH), but also has implemented a long-term strategy
to deal with the challenges of teleworking. Security measures have been implemented for
on-premise and on-cloud infrastructure to protect against cyber-attacks. All staff and
members are provided with information security awareness sessions and trainings on
cyber-vigilance and cyber security practices to avoid human targeted attacks. The Company
has also been classified as a national CII (critical information infrastructure)
custodian, through notifications from the Ministry of Finance (MoF) & National
Critical Information Infrastructure Protection Center (NCIIPC). Your Company has taken
measures to meet expectations of the agency, keeping in mind the additional due diligence
and controls for safeguard of the CII.
Switchover/switchback between Primary & DR site while conducting
un-announced Live trading from DR site
Your Company ensured smooth running of an un-announced Live Trading
Operations from Disaster Recovery Site for two consecutive days, in compliance with
regulatory norms, twice in FY 2022-23.
Your Company ensured that staff members working at DRS are running the
live trading session independent of the PDC staff.
Your Company has strengthened the Business Continuity Plan (BCP) and
Disaster Recovery (DR) Policy and framework considering the latest SEBI Guidelines for
BCP-DR of MIIs issued in March 2021, with an objective to put in place measures to restore
operations of critical systems within stipulated Recovery Time Objective (RTO),
treamlining communication protocols, identifying broad scenarios of disaster, escalation
hierarchy among others.
Up gradation of information technology systems
Your Company has allocated substantial resources towards upgrading
information technology systems, with an over-arching goal of achieving higher capacity,
lower latency, improving market efficiency and transparency, enhancing user access and
providing flexibility for future business growth and market needs.
Your Company upgraded the Data centre infrastructure with latest
technology cooling system reducing the power consumption thus helping in reducing the
carbon footprint.
Migration to new technology platform
Your Company have engaged M/s. Tata Consultancy Services Ltd (TCS) for
development and implementation of the Commodity Derivative Platform (CDP). There was a
delay in implementation of the new platform. Both MCX and technology partner are taking
various steps towards smooth migration to the new platform.
To ensure smooth running of the business, your company has extended the
existing software support services contract with M/s. 63 moons Technologies Ltd for
further period of six months from 01st July 2023 till 31st December
2023. Your Company proposes to implement the new technology platform and complete the
migration before end of September 2023.
(ii) The benefits derived like product improvement, cost reduction and
product development:
During FY 2022-23, your Company continued to invest in IT systems and
using IT as an enabler to provide a competitive advantage. Your Company's robust
technology infrastructure continues to provide uninterrupted trading experience,
reliability, credibility and mitigating risk of single point of failure.
Your Company has an in-house software development team, which undertook
several initiatives in FY 2022-23 to enhance, develop and roll out various ancillary and
peripheral systems as required by the organization.
(iii) Details of imported technology (imported during the last three
years reckoned from the beginning of the financial year):
Your Company has not directly imported any technology during the last
three financial years.
(iv) Expenditure incurred on Research and Development (during the year
under review) - Not applicable
C) FOREIGN EXCHANGE EARNINGS / OUTGO DURING THE YEAR UNDER REVIEW
The details of foreign exchange earnings and outgo during the year
under review forms part of the Significant Accounting Policies and Note no. 34 of Notes to
Accounts of the standalone and consolidated financial statements.
47. CORPORATE GOVERNANCE
Your Company is committed to good corporate governance aligned with the
best corporate practices. The report on Corporate Governance, as stipulated under
Regulation 34(3) read with Schedule V of the SEBI (LODR) Regulations, 2015 and the
certificate from a Practicing Company Secretary, regarding compliance of conditions of
corporate governance, forms part of this Annual Report. The report on Corporate Governance
also contains disclosures as required under the Companies Act, 2013.
48. RESOURCES COMMITTED TOWARDS STRENGTHENING REGULATORY FUNCTIONS AND
TOWARDS ENSURING COMPLIANCE WITH APPLICABLE REGULATORY REQUIREMENTS
The disclosure pertaining to resources committed towards strengthening
regulatory functions and ensuring compliance with regulatory requirements, backed by an
activity based accounting, in terms of Regulation 33 of the SECC Regulations, 2018, is as
under.
The Company has dedicated resources to manage the regulatory functions
given in the table below. There are 131 resources in these functions at various
designations as on 31st March 2023. The total cost incurred by the Exchange
towards these functions in FY 2022-23 was Rs. 16.06/- crore.
Department |
Count |
Inspection & Audit |
34 |
Investor Protection Fund |
3 |
Investor Services Department |
19 |
Market Operations |
22 |
Membership |
20 |
Regulatory Compliance |
4 |
Secretarial &
Compliance |
6 |
Surveillance &
Investigation |
23 |
Grand Total |
131 |
49. DIRECTORS' RESPONSIBILITY STATEMENT
Pursuant to the requirement of Section 134 of the Companies Act, 2013,
your Directors confirm that:
a) in the preparation of the annual accounts for the year ended 31st
March 2023, the applicable accounting standards have been followed and there are no
material departures from the same;
b) they have selected such accounting policies and applied them
consistently and made judgements and estimates that are reasonable and prudent so as to
give a true and fair view of the state of affairs of the Company as at 31st March
2023 and of the profit of the Company for the year ended on that date;
c) they have taken proper and sufficient care for the maintenance of
adequate accounting records in accordance with the provisions of the Act for safeguarding
the assets of the Company and for preventing and detecting fraud and other irregularities;
d) they have prepared the annual accounts on a 'going concern' basis;
e) they have laid down internal financial controls to be followed by
the Company and that such internal financial controls are adequate and are operating
effectively; and
f) they have devised proper systems to ensure compliance with the
provisions of all applicable laws and that such systems are adequate and operating
effectively.
50. THE DETAILS OF APPLICATION MADE OR ANY PROCEEDING PENDING UNDER THE
INSOLVENCY AND BANKRUPTCY CODE, 2016 (31 OF 2016) DURING THE YEAR ALONG WITH THEIR STATUS
AS AT THE END OF THE FINANCIAL YEAR.
During the year under review, no application has been made under the
Insolvency and Bankruptcy Code. Hence, the requirement to disclose the details of
application made or any proceeding pending under the Insolvency and Bankruptcy Code, 2016
(31 of 2016) along with their status as at the end of the financial year is not
applicable.
51. THE DETAILS OF DIFFERENCE BETWEEN AMOUNT OF THE VALUATION DONE AT
THE TIME OF ONETIME SETTLEMENT AND THE VALUATION DONE WHILE TAKING LOAN FROM THE BANKS OR
FINANCIAL INSTITUTIONS ALONG WITH THE REASONS THEREOF.
The requirement to disclose the details of difference between amount of
the valuation done at the time of onetime settlement and the valuation done while taking
loan from the Banks or Financial Institutions along with the reasons thereof, is not
applicable.
52. ACKNOWLEDGMENTS
The Board of Directors wishes to place on record their sincere
gratitude for the valuable guidance and continued support extended by the Government of
India, Ministry of Finance, SEBI, RBI, Stock Exchanges, Ministry of Corporate Affairs,
other government authorities, Banks, trading members, shareholders, members of various
committees, auditors and other stakeholders. The Directors would also like to take this
opportunity to express their appreciation for the dedicated efforts of the employees of
the Company.
For and on behalf of the Board of Directors
Dr. Harsh Kumar Bhanwala
Chairman
(DIN: 06417704)
P S Reddy MD & CEO (DIN: 01064530)
Mumbai 29th July 2023
Mumbai 29th July 2023
Annexure I
Form AOC-1
[Pursuant to first proviso to sub-section (3) of Section 129 of the
Companies Act, 2013 read with Rule 5 of the Companies
(Accounts) Rules, 2014]
Statement containing salient features of the financial statement of
subsidiaries or associate companies or Joint Ventures
PART "A" : SUBSIDIARY Rs. in lakh, except % of
shareholding
Sr. No. Name
of the Subsidiary |
Multi Commodity Exchange
Clearing Corporation Limited (MCXCCL) |
1. The date since
when subsidiary was acquired |
0151 August
2008 (Incorporation date) |
2. Reporting Period |
01st April 2022
- 31st March 2023 |
3. Reporting
Currency |
INR |
4. Share Capital |
23,999 |
5. Reserves &
Surplus |
(11,604) |
6. Total Assets |
1,44,445 |
7. Total Liabilities
(including Share Capital, Reserves & Surplus and Core Settlement and Guarantee Fund) |
1,44,445 |
8. Investments |
7,406 |
9. Turnover |
11,813 |
10. Profit/(Loss)
before taxation |
2,410 |
11. Provision for
taxation |
8 |
12. Profit / (Loss)
after taxation |
2,402 |
13. Proposed
Dividend |
- |
14. Extent of
Shareholding (in percentage) |
100% |
Note:
Multi Commodity Exchange Clearing Corporation Limited, a wholly-owned
subsidiary of Multi Commodity Exchange of India Limited was incorporated on 01st
August 2008 and has commenced its operations from 03rd September 2018.
PART "B": ASSOCIATE Rs. in lakh, except % of
shareholding
Sr. No. Particulars |
CDSL Commodity Repository
Limited (CCRL) |
1. Latest audited
Balance Sheet Date (Financial Year ended) |
31st March 2023 |
2. Date on which the
Associate was associated or acquired |
18th May 2018 |
3. Shares of
Associate or Joint Ventures held by the Company on the year end: |
|
No. of Shares |
5,00,00,000 |
Amount of Investment in
Associates |
1,200 |
Extent of Holding (in
percentage) |
24% |
4. Description of how
there is significant influence |
24% of Equity Share Stake |
5. Reason why the
associate is not consolidated |
Not Applicable |
6. Net worth
attributable to shareholding as per latest audited Balance Sheet |
5,079.57 |
7. Profit or Loss for
the year: |
|
Considered in
Consolidation |
(106.43) |
Not Considered in
Consolidation |
Not Applicable |
Sr. No. Particulars |
India International Bullion
Holding IFSC Limited (IIBH) |
1. Latest audited
Balance Sheet Date (Financial Year ended) |
31st March 2023 |
2. Date on which the
Associate was associated or acquired* |
Please refer note below* |
3. Shares of
Associate or Joint Ventures held by the Company on the year end: |
|
No. of Shares |
15,00,000,000 |
Amount of Investment
in Associates |
3,000 |
Extent of Holding (in
percentage) |
20% |
4. Description of
how there is significant influence |
20% of Equity Share Stake |
5. Reason why the
associate ls not consolidated. |
Not Applicable |
6. Net worth
attributable to shareholding as per latest audited Balance Sheet |
12,994.75 |
7. Profit or Loss
for the year: |
|
Considered in
Consolidation |
(2,422.81) |
Not Considered in
Consolidation |
Not Applicable |
*The Company's holding in India International Bullion Holding IFSC
Limited (IIBH) remain at 20% of the paid-up capital of IIBH till 03rd March
2022 and accordingly considered as an associate till 03rd March 2022. After 03rd
March 2022, Exchange's holding fell below 20% of paid-up capital of IIBH and stood at
14.43%. As on 31st March 2022 Exchange's holding was at 14.43% of paid-up
capital of IIBH. Further, the Exchange's holding is 20% of paid-up capital of IIBH from 04th
May 2022 upto 14th July 2022. After 14th July 2022, Exchange's
holding fell below 20% of paid-up capital of IIBH and stood at 14.29%. With effect from 12th
August 2022, the Exchange's holding is 20% of paid-up capital of IIBH.
For and on behalf of the Board of Directors:
Dr. Harsh Kumar Bhanwala
Chairman
(DIN: 06417704)
Mumbai 29th July 2023
P. S. Reddy MD & CEO (DIN: 01064530) Mumbai 29th July
2023
ANNUAL REPORT ON CORPORATE SOCIAL RESPONSIBILITY ACTIVITIES FY 2022-23
(Pursuant to section 135 of the Companies Act, 2013 and Companies
(Corporate Social Responsibility Policy) Rules, 2014)
1. A brief outline of the Company's CSR policy, including overview of
projects undertaken / programs proposed to be undertaken and a reference to the web-link
to the CSR policy:
Mission: To create lasting value for communities in need by promoting
and supporting education, livelihood, healthcare, sports, environmental and sustainable
development initiatives and others including reducing inequalities faced by socially and
economically backward groups, relief and rehabilitation and intervention towards an
educated, employed, healthier and a cleaner India with an aim to serve communities at
large and to transform their lives in a collaborative manner by partnering with internal
and external stakeholders.
In its endeavour to create economic, social, and environmental capital,
MCX is focused on creating a positive social and environmental impact by leveraging its
resources and expertise.
Accordingly, the thematic focus areas of our MCX policy are:
(a) Healthcare,
(b) Education,
(c) Disabilities,
(d) Environment,
(e) Livelihoods
During the year under consideration, your Company as an active
corporate citizen, initiated the following projects:
Supporting Multiple Disabled children by improving their quality
and dignity of life by providing educational kits, laptops, therapy equipment.
Providing transportation facility to the Mentally Retarded
children who reside in rural areas.
Providing infrastructure and medical equipment's to Hospital
which cater to the needs of persons from disadvantaged background.
The interventions during the year epitomize the conviction of your
Company to serve and empower the needy communities. Going forward, MCX aims to further
strengthen its initiatives and continue to serve the society. Overall, the CSR projects,
programs and activities include investing resources in the following CSR thematic areas
of:
Support to public hospitals by supplying medical equipment.
Promoting education, including special education and employment
enhancing vocation skills, especially among children, women and the differently abled,
livelihood enhancement projects, developing capability and self-reliance of beneficiaries
at grass root level.
Promoting preventive health care and improving sanitation.
Promoting efficient use of energy and adopting
environment-friendly technologies.
Contributing to the Prime Minister's National Relief Fund or any
other fund set up by the Central Government for socio-economic development.
Such other activities as may be prescribed in Schedule VII of
the Companies Act, 2013, as amended from time to time, or prescribed by the Central
Government and approved by the CSR Committee and the Company's Board, as the case may be.
Your Company has always considered CSR as an opportunity to serve and
bring a perceptible change in the society. The CSR outreach has been constantly expanding
for the inclusive growth and development of the society. The commitment and desire of the
Company to do social good is revealed from its various holistic initiatives to address
some of the persistent social challenges in the spheres of education, empowerment of women
and differently abled, healthcare, and rural development.
The Company's CSR policy and the CSR activities are available on the
Company's website at: https://www.mcxindia.com/about-us/csr
2. The Composition of the CSR Committee:
As on March 31,2023, the CSR Committee comprises of the following
members:
Sr. No. Name of
Director |
Designation / Nature of
Directorship |
Number of meetings of CSR
Committee held during the year? |
Number of meetings of CSR
Committee attended during the year |
1$ Mr. Vivek Krishna
Sinha |
Non - Independent Director
and Chairperson |
2 |
2 |
2 Mr. Ved Prakash
Chaturvedi |
Public Interest Director |
1 |
1 |
3 Mr. Hemang Raja |
Non - Independent Director |
2 |
2 |
4 Mr. Mohan Narayan
Shenoi |
Non - Independent Director |
2 |
2 |
5* Ms. Pravin Tripathi |
Public Interest Director |
1 |
1 |
6# Dr. Bhartendu K.
Gairola |
Public Interest Director |
1 |
1 |
@ Meeting held during the tenure of member.
* Ms. Pravin Tripathi ceased to be the member of CSR committee
consequent to the completion of her tenure as a Board Member on 16th September
2022.
# Dr. Bhartendu K. Gairola ceased to be the member of CSR committee
consequent to the completion of his tenure as a Board Member on 16tth
September2022.
$ Mr. Vivek Krishna Sinha was appointed the Chairperson of the CSR
Committee on 06th December 2022.
The Committee was reconstituted by the Board in its meeting held on 06th
December 2022.
i) Web-link of the
website where the Composition of CSR Committee, is disclosed |
Committees of the Board
(mcxindia.com) |
ii) Web-link of the
website where CSR Policy approved by the Board, is disclosed |
mcx-csr-policy.pdf
(mcxindia.com) |
iii) Web-link of the
website where CSR projects approved by the Board is disclosed |
https://www.mcxindia.com/docs/default-source/about-
us/annual-action-plan-csr-for-fy-22- 23.pdfRs.sfvrsn=d3b6a891 4 (mcxindia.com) |
4. The CSR projects undertaken by the Company do not fall in the
category defined for Impact Assessment.
5. Details of the amount available for set off in pursuance and amount
required for set off for the financial year: NIL
Sr.
No |
Financial Year |
Amount available for
set-off from preceding financial years (in ') |
Amount required to be
setoff. for the financial year, if any (in ') |
1 |
2022-2023 |
NIL |
NIL |
2 |
2021-2022 |
NIL |
NIL |
3 |
2020-2021 |
NIL |
NIL |
4 |
2019-2020 |
NIL |
NIL |
6. Average net profit of the Company for last three financial years as
per section 135(5): Rs.14937 lakhs
7. Details:
Particulars: |
Amounts in Lakh) |
a) Two percent of average
net profit of the company for last three financial years, as per section 135(5): |
300 |
b) Surplus arising out of
the CSR projects / programmes or activities of the previous financial years: |
Nil |
c) Amount required to be
set off for the financial year, if any: |
Nil |
d) Total CSR obligation for
the financial year (7a+7b-7c): |
300 |
8(a). Details for CSR amount spent or unspent for the financial year:
Total Amount Spent
for the FY 2022-23.
(' in Lakh) |
Amount Unspent
(' in Lakh) |
Total Amount
transferred to Unspent CSR Account as per section 135(6) |
Amount
transferred to any fund specified under Schedule VII as per second proviso to section
135(5) |
Amount (' in
Lakh) |
Date of Transfer |
Name of the Fund |
Amount in (Rs. in Lakh) |
Date of transfer |
235.71 |
64.29# |
28.04.2023 |
PMNRF |
86.9 |
22-08-2022 |
# After considering the amount incurred in the month of April 2023
8 (b). Details of CSR amount spent against other than ongoing projects
for the financial year 2022-23: Nil. 8 (c). Amount spent in Admin Overheads: Rs. 15 lakhs
8 (d). Amount spent on Impact Assessment, if applicable: Nil 8 (e). Total Amount Spent for
the FY 2022-23 (8b+8c+8d+8e): Rs.235.71Lakh.
8 (f). Excess amount for set off, if any: Nil
Sr. No. Particulars |
Amount (' in
Lakh) |
(i) Two percent of
average net profit of the company as per section 135(5) |
300.00 |
(ii) Total amount
spent for the Financial Year |
235.71 |
(iii) Excess amount
spent for the financial year [(ii)-(i)] |
NIL |
(iv) Surplus arising
out of the CSR projects / programmes or activities of the previous financial years, if any |
NIL |
(v) Amount available
for set off in succeeding financial years [(iii)-(iv)] |
NIL |
9. Details of Unspent CSR amount for the preceding three financial
years:
Sr. No. Preceding
Financial Year |
Amount transferred to
Unspent CSR Account under section 135 (6) (' in Lakh) |
Amount utilised from the
Unspent CSR account in FY 21-22 (' in Lakh) |
Amount
spent
in the reporting
FY 22-23
( ' in Lakh) |
Amount
transferred to any fund specified under Schedule VII as per section 135(6), if any. |
Amount remaining to be spent
in succeeding financial years. (' in Lakh) |
|
|
|
|
Name of the Fund |
Amount (' in Lakh) |
Date of Transfer |
|
1 2021-22 |
307.40 |
NA |
182.9 |
Prime Ministers National
Relief Fund (PMNRF) |
13.05 |
August 22, 2022 |
124.5 |
2 2020-21 |
357 |
251 .5 |
105.50 |
Prime Minister National
Relief Fund (PMNRF) |
50.05 |
August 22, 2022 |
NIL |
3 2019-20 |
NA |
NA |
333.18 |
NA |
NA |
NA |
NIL |
10. In case of creation or acquisition of capital asset, furnish the
details relating to the asset so created or acquired through CSR spent in the financial
year:
(a) Date of creation or acquisition of the capital asset(s): NA
(b) Amount of CSR spent for creation or acquisition of capital asset:
NA
(c) Details of the entity or public authority or beneficiary under
whose name such capital asset is registered, their address etc.: NA
(d) Provide details of the capital asset(s) created or acquired
(including complete address and location of the capital asset): NA
Does not include Capital Assets contributed by the Company to various
Entities. The Capital Assets are registered in the Entities name.
11. Specify the reason(s) if the Company has failed to spend two per
cent of the average net profit as per section 135(5). Your Company has identified various
projects, which are On going Projects. These projects would be completed within the
timelines provided.
12. Responsibility Statement:
The CSR Committee of the Company hereby confirms that the
implementation and monitoring of CSR Policy, is in compliance with CSR objectives and
Policy of the Company and with the various circulars and notifications issued by MCA, from
time to time.
For Multi Commodity Exchange of India Limited
P. S. Reddy MD& CEO (DIN: 01064530)
Vivek Krishna Sinha
Chairperson of the CSR Committee/NID
(DIN: 08667163)
Particulars of contracts/arrangements made with related parties FORM
NO. AOC-2
[Pursuant to clause (h) of sub-section (3) of Section 134 of the
Companies Act, 2013 and Rule 8(2)
of the Companies (Accounts) Rules, 2014]
Form for disclosure of particulars of contracts/arrangements entered
into by the Company with related parties referred to in sub-section (1) of Section 188 of
the Companies Act, 2013 including certain arm's length transaction under third proviso
thereto.
1. Details of contracts or arrangements or transactions not at arm's
length basis.
(a) Name(s) of the related party and nature of relationship: N.A.
(b) Nature of contracts/arrangements/transactions: N.A.
(c) Duration of the contracts/arrangements/transactions: N.A.
(d) Salient terms of the contracts or arrangements or transactions
including the value, if any: N.A.
(e) Justification for entering into such contracts or arrangements or
transactions: N.A.
(f) Date of approval by the Board: N.A.
(g) Amount paid as advances, if any: N.A.
(h) Date on which the special resolution was passed in general meeting
as required under first proviso to section 188: N.A.
2. Details of material contracts or arrangements or transactions at
arm's length basis.
In terms of policy of Related Party Transactions of the Company,
transaction, whether individually or taken together with previous transactions with a
related party during a Financial Year, which exceeds ten per cent of the annual
consolidated turnover of the Company as per the last audited financial statement of the
Company are considered as material related party transactions. Accordingly, the following
information is furnished:
Sr. No. Particulars |
Details |
a) Name (s) of the
related party & nature of relationship |
Please see Annexure to AOC-2 |
b) Nature of
contracts/arrangements/transactions |
Please see Annexure to
AOC-2 |
c) Duration of the
contracts/arrangements/transactions |
On- going transactions
(Continuous) |
d) Salient terms of the
contracts or arrangements or transactions including the value, if any. |
Please see Annexure to AOC-2 |
e) Date of approval by
the Board |
The transactions are on
arm's length basis and in ordinary ,course of business and so the approval of the Board
for this purpose is not required. |
f) Amount paid as
advances, if any. |
NIL |
a) Annexure to AOC-2
Names of the Related parties and Related party relationship: |
|
Sr. No. Related
Party |
Nature of Relationship |
Principal Activities |
% Holding |
1. Multi Commodity
Exchange Clearing Corporation Limited (MCXCCL) |
Subsidiary Company |
Clearing and Settlement |
100% |
2. CDSL Commodity
Repository Limited (CCRL) |
Associate Company |
Commodities Repository |
24% |
3. India International
Bullion Holding IFSC Limited (IIBH) |
Associate Company (from 04th
May 2022 to 14th July 2022 and 12th August 2022 to 31st
March 2023) |
Bullion Holding Company |
20% |
b) Details of transactions with related party are as below:
Name of Related Party |
Nature of Transactions |
For the FY ended 31st
March 2023 (? in lakh) |
For the FY ended 31st
March 2022 (? in lakh) |
Multi Commodity
Exchange Clearing Corporation Limited (MCXCCL) |
Re-imbursements charged to
the Company |
11 |
32 |
Recoveries charged by the
Company |
13 |
27 |
Clearing & settlement
fees |
5,329 |
3,899 |
Rent income |
249 |
246 |
IT and other infrastructure
income |
6,743 |
2,815 |
Status report-processing
charges recovery |
6 |
1 |
Regulatory fees, transactions
charges, fines & penalties and other collections by MCXCCL on behalf of MCX |
1,20,053 |
1,05,302 |
Balances as at 31st
March 2023
Outstanding balance receivable / (payable) |
(278) |
(537) |
Rent deposit |
(61) |
(61) |
Note:
Pursuant to the directions of SEBI to transfer the functions of
Clearing and Settlement of trades to a separate clearing corporation, MCX vide its
agreement with MCXCCL dated 29th May 2017 (amended on 04th June
2018) transferred its Clearing and Settlement functions to MCXCCL.
Name of Related Party |
Nature of Transactions |
For the FY ended 31st
March 2023 (? in lakh) |
For the FY ended 31st
March 2022 (? in lakh) |
India International Bullion
Holding IFSC |
Investment in Equity share
capital (face value Rs. 1) (Closing balance) |
3,000 |
1,350 |
Limited (IIBH) |
Reimbursement of
professional fees |
- |
5 |
There were no transactions with Associate Company CCRL during FY
2022-23. For and on behalf of the Board of Directors:
Dr. Harsh Kumar Bhanwala
Chairman
(DIN: 06417704)
Mumbai 29th July 2023
P. S. Reddy MD & CEO (DIN: 01064530) Mumbai 29th July
2023
FORM NO. MR.3 SECRETARIAL AUDIT REPORT
Annexure IV
For the Financial Year Ended 31st March, 2023
[Pursuant to section 204(1) of the Companies Act, 2013 and rule 9 of
the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014]
To,
The Members,
Multi Commodity Exchange of India Limited
Add: Exchange Square, Suren Road,
Chakala, Andheri (East), Mumbai - 400093
We have conducted the secretarial audit of the compliance of applicable
statutory provisions and the adherence to good corporate practices by M/s. Multi Commodity
Exchange of India Limited (hereinafter called the "Company or Exchange or MCX").
Secretarial Audit was conducted in a manner that provided us a reasonable basis for
evaluating the corporate conducts/statutory compliances and expressing our opinion
thereon.
Auditor's Responsibility:
Our responsibility is to express an opinion on compliance with the
applicable laws and maintenance of records based on the audit. We have conducted the audit
in accordance with the applicable auditing standards issued by the Institute of Company
Secretaries of India. The auditing standards require that the Auditor shall comply with
statutory and regulatory requirements and plan and perform the audit to obtain reasonable
assurance about compliance with applicable laws and maintenance of records.
Due to the inherent limitations of audit including internal, financial
and operating controls, there is an unavoidable risk that some misstatements or material
non-compliances may not be detected, even though the audit is properly planned and
performed in accordance with the Standards.
Modified Opinion:
Based on our verification of the Company's books, papers, minute books,
forms and returns filed and other records maintained by the Company and also the
information provided by the Company, its officers, agents and authorized representatives
during the conduct of the secretarial audit, we hereby report that in our opinion, the
Company has, during the audit period covering the financial year ended on 31st
March, 2023 ('Audit Period') complied with the statutory provisions listed hereunder and
also that the Company has proper board-processes and compliance-mechanism in place to the
extent, in the manner and subject to the reporting made hereinafter:
We have examined the books, papers, minute books, forms and returns
filed and other records maintained by the Company for the financial year ended on March
31,2023 according to the provisions of:
(i) The Companies Act, 2013 ('the Act') and the rules made thereunder;
(ii) The Securities Contracts (Regulation) Act, 1956 ('SCRA') and the
rules made thereunder;
(iii) The Depositories Act, 1996 and the Regulations and Bye-laws
framed thereunder;
(iv) Foreign Exchange Management Act, 1999 and the rules and
regulations made there under to the extent of Overseas Direct Investment w.r.t. Investment
made in IFSC Company. (Foreign Direct Investment and External Commercial Borrowings are
not applicable to the Company during the audit period)
(v) The following Regulations and Guidelines prescribed under the
Securities and Exchange Board of India Act, 1992 ('SEBI Act'):
(a) The Securities and Exchange Board of India (Substantial Acquisition
of Shares and Takeovers)
Regulations, 2011;
(b) The Securities and Exchange Board of India (Prohibition of Insider
Trading) Regulations, 2015;
(c) Securities and Exchange Board of India (Issue of Capital and
Disclosure Requirements) Regulations, 2018 (Not applicable to the Company during the audit
period);
(d) The Securities and Exchange Board of India (Share Based Employee
Benefits and Sweat Equity) Regulations, 2021;
(e) The Securities and Exchange Board of India (Issue and Listing of
Non-Convertible Securities) Regulations, 2021 (Not applicable to the Company during the
audit period);
(f) The Securities and Exchange Board of India (Registrars to an Issue
and Share Transfer Agents) Regulations, 1993 regarding the Companies Act and dealing with
client;
(g) The Securities and Exchange Board of India (Delisting of Equity
Shares) Regulations, 2021 (Not applicable to the Company during the audit period) and
(h) The Securities and Exchange Board of India (Buyback of Securities)
Regulations, 2018 (Not applicable to the Company during the audit period)
(vi) We further report that having regard to the compliance system
prevailing in the Company and on examination of the relevant documents and records in
pursuance thereof on the test-check basis, the Company has complied with regulations of
the following law specifically applicable to the Company except mentioned in this report:
Securities Contracts (Regulation) (Stock Exchanges and Clearing
Corporations) Regulations, 2018 ('SECC Regulations, 2018')
We have also examined compliance with the applicable clauses of the
following:
(i) Secretarial Standards issued by the Institute of Company
Secretaries of India.
(ii) The SEBI (Listing Obligations and Disclosure Requirements)
Regulations, 2015
During the period under review, the Company has complied with the
provisions of the Act, Rules, Regulations, Guidelines, Standards, etc. mentioned above
except for the followings:
a) One day delay has been noticed w.r.t. the transfer of the final
dividend amount declared in the 20th Annual General Meeting to the separate
bank account opened for that purpose. However, the dividend has been paid to the
shareholders within the timeline prescribed under the Companies Act, 2013; and
b) SEBI vide its order dated February28,2023 imposed a penalty of Rs. 6
Lakhs on the Company for (i)
Not having systems in place for verification of Sikkim-based clients
who are exempted from submission of PAN, and (ii) As purported, the fine imposed on the
trading members for submission of incorrect KYC details in the UCC System of the Company
by the MD & CEO of MCX instead of the Member and Core Settlement Guarantee Fund
Committee by way of formulating a policy as per SEBI Circulars dated September 16, 2016
and January 10, 2019 respectively. Subsequently, the Company has paid the said penalty to
SEBI on April 12,2023.
We further report that:
The Board of Directors of the Company is duly constituted with the
proper balance of Executive Directors, Non-Executive Directors and Independent Directors.
The changes in the composition of the Board of Directors that took place during the period
under review were carried out in compliance with the provisions of the Act.
Except in case of meetings convened at shorter notice, adequate notice
is given to all directors to schedule the board meetings and agenda items were sent at
least seven days in advance and a system exists for seeking and obtaining further
information and clarifications on the agenda items before the meeting and for meaningful
participation at the meeting.
All decisions at Board Meetings and Committee Meetings are carried out
either unanimously or by the majority while the dissenting members' views are captured and
recorded as part of the minutes, as the case may be.
We further report that there are adequate systems and processes in the
company commensurate with the size and operations of the company to monitor and ensure
compliance with applicable laws, rules, regulations and guidelines.
We further report that the Company has Structured Digital Database in
place as required under SEBI (PIT) Regulations, 2015 and the steps to be taken
continuously to align the same with the regulatory requirements. Further, SEBI has imposed
a fine of Rs. 2 Lakhs on the Company under regulation 38(2) of SECC Regulations, 2018 in
relation to the indirect deployment of funds in unrelated/non-incidental activity without
prior approval of SEBI and through a separate entity as purported in the matter of
agreement with PESB for developing of SPOT platform for Gold & Natural Gas. The said
order is challenged by the Company before the Securities Appellate Tribunal ('SAT') and
SAT by way of interim relief inter alia stayed the effect and operation of the impugned
order till the disposal of the appeal.
We further report that during the audit period subject to the approval
of SEBI, the Company has made alterations to the Object Clause of the Memorandum of
Association and also amended the Articles of Association as per the Companies Act, 2013
vide special resolutions passed in the 20th Annual General Meeting held on September 27,
2022.
For AVS & Associates Company Secretaries
Vijay Yadav Partner
Membership No. F11990
C.P. No: 16806 Peer Review No: 1451/2021 UDIN:F011990E000704957
Place: Navi Mumbai Date: July 29, 2023
This report is to be read with our letter of even date which is annexed
as 'Annexure - A' and forms an integral part of this report.
Annexure - A'
To,
The Members,
Multi Commodity Exchange of India Limited
Add: Exchange Square, Suren Road,
Chakala, Andheri (East), Mumbai - 400093
Our report of even date is to be read along with this letter.
1. Maintenance of secretarial and other records under applicable laws
is the responsibility of the management of the Company. Our responsibility is to issue
Secretarial Audit Report, based on the audit of the relevant records maintained and
furnished to us by the Company, along with explanations where so required.
2. We have followed the audit practices and processes as were
appropriate to obtain reasonable assurance about the correctness of the contents of the
secretarial records. The verification was done on test check basis to ensure that correct
facts are reflected in secretarial records. We believe that the processes and practices,
we followed provide a reasonable basis for our opinion.
3. We have not verified the correctness and appropriateness of
financial records and Books of Accounts of the Company.
4. Wherever required, we have obtained the management representation
about the compliance of laws, rules and regulations and major events during the audit
period;
5. The compliance of the provisions of Corporate and other applicable
laws, rules, regulations and standards is the responsibility of Management. Our
examination was limited to the verification of procedures on a test-check basis for the
purpose of issue of the Secretarial Audit Report.
6. The Secretarial Audit report is neither an assurance as to the
future viability of the Company nor of the efficiency or effectiveness with which the
management has conducted the affairs of the Company.
For AVS & Associates Company Secretaries
Vijay Yadav Partner
Membership No. F11990 C.P. No: 16806 Peer Review No: 1451/2021
UDIN:F011990E000704957
Place: Navi Mumbai Date: July 29, 2023
SECRETARIAL AUDIT REPORT
FOR THE FINANCIAL YEAR ENDED 31st MARCH, 2023
[Pursuant to section 204(1) of the Companies Act, 2013 and Rule No.9 of
the Companies (Appointment and Remuneration
Personnel) Rules, 2014]
To,
The Members,
MULTI COMMODITY EXCHANGE CLEARING CORPORATION LIMITED
(CIN - U74999MH2008PLC185349)
Exchange Square, CTS 255, Suren Road,
Andheri (East), Mumbai-400093
We have conducted the secretarial audit of the compliance of applicable
statutory provisions and the adherence to good corporate practices by MULTI COMMODITY
EXCHANGE CLEARING CORPORATION LIMITED (CIN - 4999MH2008PLC185349)
(hereinafter called "the company"). Secretarial Audit was
conducted in a manner that provided us a reasonable basis for evaluating the corporate
conducts/statutory compliances and expressing our opinion thereon.
Based on our verification of the company's books, papers, minute books,
forms and returns filed and other records maintained by the company and also the
information provided by the Company, its officers, agents and authorized representatives
during the conduct of secretarial audit, We hereby report that in our opinion, the company
has, during the audit period covering the financial year ended on 31st March,
2023 complied with the statutory provisions listed hereunder and also that the Company has
proper Board-processes and compliance-mechanism in place to the extent, in the manner and
subject to the reporting made hereinafter.
We have examined the books, papers, minute books, forms and returns
filed and other records maintained by the company through electronic mode for the
financial year ended on 31st March, 2023 according to the provisions of:
(i) The Companies Act, 2013 (the Act) and the rules made there under;
(ii) The Securities Contracts (Regulation) Act, 1956 ('SCRA') and the
rules made thereunder;
(iii) The Depositories Act, 1996 and the Regulations and Bye-laws
framed there under;
(iv) Foreign Exchange Management Act, 1999 and the rules and
regulations made thereunder to the extent of Foreign Direct Investment, Overseas Direct
Investment and External Commercial Borrowings (Not Applicable to the Company during the
Audit Period);
(v) The following Regulations and Guidelines prescribed under the
Securities and Exchange Board of India Act,
1992 ('SEBI Act') to the extent applicable: -
(a) The Securities and Exchange Board of India (Substantial Acquisition
of Shares and Takeovers) Regulations, 2011 (Not Applicable to the Company during
audit period)
(b) The Securities and Exchange Board of India (Prohibition of Insider
Trading) Regulations, 2015;
(c) The Securities and Exchange Board of India (Issue of Capital and
Disclosure Requirements) Regulations, 2009 (Not Applicable to the Company during
audit period)
(d) The Securities and Exchange Board of India (Employee Stock Option
Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 (Not Applicable to the
Company during audit period)
(e) The Securities and Exchange Board of India (Issue and Listing of
Non - Convertible Securities) Regulations, 2021; (Not Applicable to the Company
during audit period)
(f) The Securities and Exchange Board of India (Registrars to Issue and
Share Transfer Agents) Regulations, 1993 regarding the Companies Act and dealing with
client
(g) The Securities and Exchange Board of India (Delisting of Equity
Shares) Regulations, 2021; (Not Applicable to the Company during audit period)
and
(h) The Securities and Exchange Board of India (Buy-back of Securities)
Regulations, 2018 (Not Applicable to the Company during audit period);
We have also examined compliance with the applicable clauses of the
following:
(i) Secretarial Standards issued by The Institute of Company
Secretaries of India;
(ii) The Securities and Exchange Board of India (Listing Obligations
and Disclosure requirements) Regulations, 2015 ('Listing Regulation') to the extent as
referred in Regulation 33 of Securities Contracts (Regulation)
(Stock Exchanges and Clearing Corporations) Regulations, 2018 ('SECC
Regulations, 2018').
(iii) Compliances as per the SEBI Letter no.
SEBI/HO/MRD2/MRD2_DDAP/P/OW/2022/24624/1 dated 15th June, 2022
During the period under review the Company has complied with the
provisions of the Act, Rules, Regulations, Guidelines, Standards, etc. as mentioned.
We further report that -
The Board of Directors of the Company is duly constituted. The changes
in the composition of the Board of Directors that took place during the period under
review were carried out in compliance with the provisions of the Act.
Adequate notice was given to all directors to schedule the Board
Meetings, agenda and detailed notes on agenda were sent well in advance for meetings as
per the prescribed timelines and a system exists for seeking and obtaining further
information and clarifications on the agenda items before the meeting and for meaningful
participation at the meeting;
All decisions at Board Meetings & Committee Meetings are carried
out unanimously as recorded in the minutes of the meetings of the Board of Directors or
the Committees of the Board, as the case may be.
We further report that there are reasonable systems and processes in
the Company commensurate with its size and operations to monitor and ensure compliance
with applicable laws, rules, regulations and guidelines and the Company is in the process
of strengthening the same.
We further report that during the year under review,
None of the following events has taken place-
I. Public/Rights/Preferential Issue of Shares/Debentures etc.
II. Redemption/buy-back of securities
III. Major decision taken by the members in pursuance to section 180 of
the Companies Act, 2013.
IV. Merger/Amalgamation/Reconstruction, etc.
V. Foreign Technical Collaborations.
We further report that during the audit period there was no other
event/action having major bearing on the Company's affairs in pursuance of the above
referred laws, rules, regulations, guidelines, and standards.
For Mayekar & Associates Company Secretaries Firm U.I.N -
P2005MH007400
Jatin Prabhakar Patil Partner FCS - 7282 COP - 7954
Date: July 21, 2023 Place: Mumbai
U.D.I.N - F007282E000334378 PR - 777/2020
Note: This report is to be read with our letter of even date which is
annexed as Annexure 'A' and forms an integral part of this report.
Annexure A
To,
The Members,
MULTI COMMODITY EXCHANGE CLEARING CORPORATION LIMITED
(CIN - U74999MH2008PLC185349)
Exchange Square, CTS 255, Suren Road,
Andheri (East), Mumbai-400093
The Management along with the Board of Directors are responsible for
ensuring that the Company complies with the provisions of all applicable laws and
maintains the required statutory records and documents in the prescribed manner.
1) Management's responsibility
The Management along with the Board of Directors are responsible for
ensuring that the Company complies with the provisions of all applicable laws and
maintains the required statutory records and documents in the prescribed manner.
2) Auditor's responsibility
Based on audit, our responsibility is to express an opinion on the
compliance with the applicable laws and maintenance of records by the Company. We
conducted our audit in accordance with the auditing standards CSAS 1 to CSAS 4
("CSAS") prescribed by the Institute of Company Secretaries of India
("ICSI"). These standards require that the auditor complies with statutory and
regulatory requirements and plans and performs the audit to obtain reasonable assurance
about compliance with applicable laws and maintenance of records.
Due to the inherent limitations of an audit including internal,
financial and operating controls, there is an unavoidable risk that some misstatements or
material non-compliances may not be detected, even though the audit is properly planned
and performed in accordance with the CSAS.
3) Basis for Opinion
i. We have followed the audit practices and processes as were
appropriate to obtain reasonable assurance about the correctness of the contents of the
Secretarial Records. The verification was done on test basis to ensure that correct facts
are reflected in the Secretarial Records. We believe that the processes and practices, we
followed provide a reasonable basis for our opinion.
ii. We have not verified the correctness and appropriateness of
financial records and Books of Accounts of the Company.
iii. Wherever required, we have obtained a Management Representation
about the compliance of laws, rules and regulations and happening of events, etc.
iv. The Secretarial Audit report is neither an assurance as to future
viability of the Company nor of the efficiency or effectiveness with which the management
has conducted the affairs of the Company.
For Mayekar & Associates Company Secretaries Firm U.I.N -
P2005MH007400
Jatin Prabhakar Patil Partner FCS - 7282 COP - 7954
Date: July 21, 2023 Place: Mumbai
U.D.I.N - F007282E000334378 PR - 777/2020
A. Disclosure pursuant to Section 197(12) of the Companies Act, 2013
read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial
Personnel) Rules 2014:
Sr. No. Requirements |
Disclosure |
I The ratio of the
remuneration of each Director to the median remuneration of the employees of the Company
for the Financial Year 2022-23** |
Managing Director - 21.16 |
II The percentage
increase in remuneration of each Director, Chief Financial Officer, Chief Executive
Officer, Company Secretary or Manager, if any, in the Financial Year 2022-23 |
Managing Director - 1.16 %
Company Secretary - NA (Was employed for part of the year)
Chief Financial Officer - 3.22 % |
III The percentage
increase in the median remuneration of employees in the Financial Year 2022-23 |
The Median Remuneration of
the employees in the financial year increased by 3%. The calculation of % increase in
Median Remuneration is done based on comparable employees. |
IV The number of
permanent employees on the rolls of Company |
There were 373 employees as
on 31st March 2023.* |
V Average percentile
increase already made in the salaries of employees other than the managerial personnel in
the last financial year and its comparison with the percentile increase in the managerial
remuneration and justification thereof and point out if there are any exceptional
circumstances for increase in the managerial remuneration |
The average percentile
increase for the employees has been 1 2.85% as against 20.87% for the managerial personnel
in the last Financial Year. Apart from the performance based normal increment, there was
no other exceptional salary revision given in FY 2022-23. # |
VI Affirmation that the
remuneration is as per the remuneration policy of the Company |
The remuneration is as per
the remuneration policy of the Company. |
* The employee count includes only employees and excludes 5 trainees.
** All other Directors were paid only sitting fees.
# KMPs under the Companies Act, 2013 as well as under Securities
Contracts (Regulation) (Stock Exchanges and Clearing Corporations) Regulations, 2018 are
considered as managerial personnel.
B. Disclosure as per Regulation 27(5) & (6) of the Securities
Contracts (Regulation) (Stock Exchanges and Clearing Corporations) Regulations, 2018 [SECC
Regulations, 2018] for the period from 01st April 2022 to 31st March
2023:
Sr. No. Name of
the employee |
Designation of
the employee |
Compensation
(amount in Rs.) |
Ratio of the compensation
of Key Management Personnel to median compensation |
1. Mr. Padala Subbi
Reddy |
MD & CEO |
2,54,96,319 |
21.16 |
2. Mr. Rishi Nathany |
Chief Business
Officer |
1,13,87,894 |
9.45 |
3. Mr. Shivanshu Mehta |
Head - Bullion |
90,37,313 |
7.50 |
4. Mr. Manoj Jain |
Chief Operating
Officer |
70,28,055 |
5.83 |
5. Mr. Shashank Sathe |
Chief Technology
Officer |
1,29,99,996 |
10.79 |
6. Dr.
Rajendran Narayanan |
Chief Digital
Officer |
1,28,30,797 |
10.65 |
7. Mr.
Chittaranjan Rege |
Head - Base Metal |
86,66,258 |
7.19 |
8. Mr.
D.G. Praveen |
Chief Risk
Officer |
81,87,795 |
6.79 |
9. Mr.
Sanjay Gakhar |
Vice President -
Business Development |
67,35,867 |
5.59 |
10. Mr.
Himanshu Ashar |
Vice President -
Surveillance & Investigation & Market Operations |
66,03,688 |
5.48 |
11. Mr.
Satyajeet Bolar |
Chief Financial
Officer |
69,66,146 |
5.78 |
12. Ms.
Ruchi Shukla |
Head - Energy |
42,51,699 |
3.53 |
13. Mr.
Puneet Shadija |
Vice President
- Technology |
64,11,312 |
5.32 |
14. Mr.
Sambit Patnaik |
Vice President
- Financial Institutional Marketing |
46,76,699 |
3.88 |
15. Mr.
Radheshyam Yadav |
Vice President
- Technology |
47,75,912 |
3.96 |
16. Mr.
Pravin Gade |
Vice President -
Technology |
52,46,971 |
4.35 |
17. Ms.
Rashmi Nihalani |
Vice President
- Investor Services Department / IPF |
56,82,432 |
4.72 |
18. Mr.
Suresh Raval |
Vice President
- Technology |
36,04,535 |
2.99 |
19. Ms.
Komal Kanzaria |
Vice President
- Business Development |
50,65,713 |
4.2 |
20. Mr.
Muthappa Kaveriappa Nellamakada |
Vice President
- Business Development |
35,94,437 |
2.98 |
21. Mr.
Vaibhav Pramod Aggarwal |
Vice President -
Technology |
61,02,500 |
5.06 |
22. Mr.
Vijay Patel |
Vice President -
Technology |
64,37,181 |
5.34 |
23. Mr.
Ramesh Gurram |
Chief Information
Security Officer |
44,86,871 |
3.72 |
24. Mr.
Ajay Puri |
Company Secretary
& Compliance Officer |
70,75,107 |
@ |
25. Mr.
Sanjay Golecha |
Chief
Regulatory Officer |
31,02,320 |
@ |
26. Dr.
Ajit Phanse |
Vice President
- Inspection & Audit |
21,69,355 |
@ |
27. Mr.
Armaan Gaus |
Vice President
- Surveillance and Investigation |
13,52,982 |
@ |
28. Mr.
Kaushal Ashok Mehta |
Vice President -
Legal |
13,46,916 |
@ |
29. Ms.
Manisha Thakur |
Company Secretary
and Compliance Officer |
11,87,268 |
@ |
30. Mr.
Prashant Brahmanand Wagh |
Vice President -
Technology |
12,82,961 |
@ |
@ Since the remuneration of these KMPs is only for part of the year,
the ratio of their remuneration is not comparable.
Note: a) The Compensation for the KMP's is the total remuneration for
the time that they were part of the organisation/ from the time they became KMP's.
b) Total remuneration considered for the purpose of calculating ratios
includes the total variable pay pertaining to FY 2021-22 which has been paid during FY
2022-23. It may be noted that 50% of such variable pay will be paid on deferred basis
after 3 years as per SECC Regulations, 2018.
C. Ratio of the remuneration of each Director to the median
remuneration of all the employees of your Company for the Financial Year 2022-23 is as
follows:
Sr. No. Name of
Directors # |
Ratio of Remuneration of
Director to median remuneration |
%increase / (decrease) in
remuneration in the Financial Year |
1. Dr. Harsh Kumar
Bhanwala - Chairman and Independent Director |
2.20 |
NA (Refer Note 1 below) |
2. Mr. Shankar
Aggarwal (Non- Executive Independent Director) |
1.97 |
(33) % |
3. Mr. C.S. Verma
(Non-Executive Independent Director) |
2.32 |
NA (Refer Note 2 below) |
4. Mr. Ashutosh Vaidya
(Non- Executive Independent Director w.e.f 17th September 2022) @ |
NA |
NA |
5. Ms. Sonu Bhasin
(Non- Executive Independent Director w.e.f 17th September 2022) @ |
NA |
NA |
6. Mr. Ved Prakash
Chaturvedi (Non- Executive Independent Director w.e.f 17th September 2022) @ |
NA |
NA |
7. Mr. Hemang Raja
(Non- Executive Non - Independent Director) |
1.70 |
(19) % |
8. Mr. Vivek Krishna
Sinha (Non - Executive Non - Independent Director) |
0.95 |
NA
(Refer Note 3 below) |
9. Mr. Mohan Narayan
Shenoi (Non- Executive Non - Independent Director) |
1.93 |
NA
(Refer note 4 below) |
10. Mr. Arvind
Kathpalia (Non- Executive Non - Independent Director w.e.f 06th December 2022)
@ |
NA |
NA |
11. Mr. Saurabh
Chandra (Non- Executive Independent Director upto 02nd July 2022) @ |
NA |
NA |
12. Ms. Pravin
Tripathi (Non- Executive Independent Director upto 16th September 2022) @ |
NA |
NA |
13. Mr. Bhartendu Kumar
Gairola (Non- Executive Independent Director upto 16th September 2022) @ |
NA |
NA |
14. Mr. Chengalath
Jayaram (Non- Executive Non - Independent Director upto 27th September 2022) @ |
NA |
NA |
# The ratio of remuneration is calculated after considering sitting
fees for attending the Board and Committee meetings during FY2022-23.
Note: 1) Dr. Harsh Kumar Bhanwala was appointed as Public Interest
Director w.e.f. 08th August2021 (part of the FY 2021-22)
2) Mr. C.S. Verma was appointed as Public Interest Director w.e.f. 22nd
May 2021 (part of the FY2021-22)
3) Mr. Vivek Krishna Sinha was appointed as Non-Executive
Non-Independent Director w.e.f 30th September2021 (part of the FY2021-22)
4) Mr. Mohan Narayan Shenoi was appointed as Non-Executive
Non-Independent Director w.e.f 30th September 2021 (part of the FY2021-22)
@ appointed/ceased to be as Independent Director / Non - Independent
Director during part of the FY2022-23.
For and on behalf of the Board of Directors:
Dr. Harsh Kumar Bhanwala
Chairman
(DIN: 06417704)
Mumbai 29th July 2023
P. S. Reddy MD & CEO (DIN: 01064530) Mumbai 29th July
2023
Disclosure pursuant to Section 197(12) of the Companies Act, 2013 read
with Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel)
Rules 2014 and the Securities Contracts (Regulation) (Stock Exchanges and Clearing
Corporations) Regulations, 2018 for the period from 01st April 2022 to 31st
March 2023:
Employed throughout the Financial Year
Sr. No. Name of
the employee |
Age
(Yrs.) |
Qualification &
experience of the employee |
Designation of the employee |
Total Remuneration (in Rs.) |
Approx Experience (in
years) |
Date of Commencement of
employment |
Last
Employment |
1 Mr. Padala Subbi
Reddy |
60 |
Master's degree in
Economics, Bachelor's Degree in Economics |
MD & CEO |
2,54,96,319 |
36 |
10th May 2019 |
MD & CEO, Central
Depositary Services (India) Limited |
2 Mr. Rishi Nathany |
49 |
Post Graduate Program in
Management, Bachelor's degree in Commerce |
Chief Business Officer |
1,13,87,894 |
31 |
02nd July 2018 |
Chief -
Financial
Segment,
National
Commodity &
Derivatives
Exchange
Limited |
3 Mr. Manoj Jain |
50 |
Masters of Business
Administration, Bachelors of Technology |
Chief
Operating
Officer |
70,28,055 |
25 |
01st November
2021 |
Deputy Vice President - Axis
Bank |
4 Mr. Shivanshu Mehta |
47 |
Post Graduate Diploma in
Business Management, Bachelors of Engineering |
Head- Bullion |
90,37,313 |
24 |
01st March 2007 |
Assistant Vice President
- Metal, National Commodity & Derivatives Exchange Limited |
5 Mr. Chittaranjan
Rege |
50 |
Masters of Business
Administration, Bachelors of Business Administration |
Head - Base Metal |
86,66,258 |
27 |
01st December
2006 |
Manager - Hindalco
Industries Ltd. |
6 Mr. D.G. Praveen |
46 |
Chartered Financial
Analyst, Masters of Business Administration, Master's Degree in Arts |
Chief Risk Officer |
81,87,795 |
23 |
15th July 2004 |
Faculty Team Leader, ICFAI
University |
7 Mr. Satyajeet Bolar |
59 |
Chartered Accountant,
Bachelor's degree in Commerce |
Chief
Financial
Officer |
69,66,146 |
30 |
09th April 2019 |
Chief Financial Officer,
Multi
Commodity Exchange Clearing Corporation Ltd |
8 Dr. Rajendran
Narayanan |
54 |
Phd. in Computer Science,
Masters of Computer Applications, Bachelors of Science |
Chief Digital Officer |
1,28,30,797 |
22 |
03rd November
2021 |
Chief Executive Officer -
Indian Financial Technology and Allied Services |
9 Mr. Shashank Sathe |
51 |
Post Graduate Diploma in
Computer Management, Post Graduate Training in ERP, Bachelor's degree in Science |
Chief
Technology
Officer |
1,29,99,996 |
27 |
01st April 2022 |
Senior Vice President -
Edelweiss Retail Finance Ltd. |
10 Mr. Sanjay Gakhar |
54 |
Post Graduate Diploma in
Rural
Management, Bachelor's degree in Commerce |
Vice
President-
Business
Development |
67,35,867 |
30 |
01st August 2005 |
Manager,
National
Agricultural
Cooperative
Marketing
Federation of
India |
11 Mr. Himanshu Ashar |
52 |
Chartered
Financial
Analyst,
Bachelor's
degree in
Commerce |
Vice
President- Surveillance & Investigation & Market Operations |
66,03,688 |
28 |
15th December2014 |
Vice President - Market
Operations, Metropolitan Stock
Exchange of India Ltd. |
12 Mr. Pravin Gade |
48 |
Bachelor's Degree in
Electronics & Telecommunication |
Vice President - Technology |
52,46,971 |
25 |
01st October 2015 |
Assistant Vice President,
Financial Technology India Ltd. |
13 Mr. Radheshyam
Yadav |
50 |
Bachelor's degree in Science |
Vice President Technology |
47,75,912 |
23 |
01st October 2015 |
Assistant Vice President,
Indian Energy Exchange |
14 Mr. Sambit Patnaik |
48 |
Post Graduate Diploma in
Management, Bachelor's Degree in Science |
Vice President - Financial
Institutional Marketing |
46,76,699 |
23 |
01st March 2021 |
Senior Vice President -
Marketing and Business Development, Ticker Plant Ltd |
15 Mr. Puneet Shadija |
40 |
Masters of Science in
Computer Technology, Bachelor's Degree in Software Systems |
Vice President - Technology |
64,11,312 |
17 |
08th February
2021 |
Senior Vice President,
Yes Securities Ltd. |
16 Ms. Ruchi Shukla |
44 |
Chartered
Accountant,
Diploma in
Information
Systems
Auditor, Post
Graduate
Diploma in
Securities
Law, Executive
Program in
Advanced
Business
Analytics |
Head - Energy |
42,51,699 |
19 |
29th August 2016 |
Independent
Practising
Chartered
Accountant |
17 Mr. Suresh Raval |
61 |
Post Graduate Diploma in
Data Processing, Masters of Business Management, Bachelor of Science |
Vice President - Technology |
36,04,535 |
38 |
30th January 2017 |
Proprietor - SunVistas
Financial Catalysts |
18 Ms. Rashmi Nihalani |
48 |
Post Graduate Diploma in
Mass
Communications, BA in Economics and Statistics |
Vice President
- Investor
Services
Department/Investor
Protection
Fund |
56,82,432 |
25 |
20th May
2004 |
Dy. Editor - Minerals
& Metal View, Asian Industries and Information Services |
19 Mr. Muthappa Kaveriappa
Nellamakada |
49 |
Masters of Science,
Bachelors of Science |
Vice President - Business
Development |
35,94,437 |
24 |
01st October 2013 |
Assistant Vice
President -
Business
Development ,
Bahrain
Financial
Exchange |
20 Mr. Vaibhav Pramod
Aggarwal |
50 |
Bachelors of Commerce |
Vice President - Technology |
61,02,500 |
18 |
03rd May 2021 |
Vice President - Indian
Energy Exchange |
21 Mr. Vijay Patel |
41 |
Bachelors of Engineering |
Vice President -
Technology |
64,37,181 |
16 |
06th May 2021 |
Product Head - ZebPay |
22 Mr. Ramesh Gurram |
45 |
Masters of Business
Administration, Masters of Science, Bachelors of Science |
Chief
Information
Security
Officer |
44,86,871 |
23 |
30th September
2021 |
Chief Manager - Information
Security - Bank of Baroda |
23 Komal Kanzaria |
49 |
Masters of Business
Administration, B.E. |
Vice President - Business
Development |
50,65,713 |
24 |
02nd May
2007 |
Manager - Indusind Bank Ltd. |
Employed for part of the Financial Year
Sr. No. Name of
the employee |
Age
(Yrs.) |
Qualification &
experience of the employee |
Designation of the employee |
Total Remuneration (in Lakh) |
Approx Experience (in
years) |
Date of Commencement of
employment |
Last
Employment |
1 Mr. Ajay Puri |
66 |
Company
Secretary,
Bachelor's
degree in
Commerce,
Bachelor's
degree in law |
Company Secretary &
Compliance Officer |
70,75,107 |
38 |
07 th
December
2018 |
President, LSI Financial
Services Private Ltd. |
2 Mr. Sanjay Golecha |
56 |
Chartered Accountant,
Bachelor's degree in Commerce |
Chief
Regulatory
Officer |
31,02,320 |
34 |
18th July 2016 |
Vice President - Investor
Grievance, Arbitration & Regulatory Compliance, Metropolitan Stock
Exchange of India Ltd. |
3 Dr. Ajit Phanse |
55 |
PhD, Masters of Business
Administration, Masters of Commers, Bachelors Degree of Commerce |
Vice President - Inspection
and Audit |
21,69,355 |
27 |
11th July 2022 |
Director - Symbiosis Skills
& Professional University |
4 Mr. Armaan Gaus |
42 |
Masters of Financial
Management, Bachelors of Commerce |
Vice President -
Surveillance and
Investigation |
13,52,982 |
20 |
04th June 2003 |
NA |
5 Mr. Kaushal Ashok
Mehta |
40 |
Post Graduate Diploma in
Business and Company Law, Bachelors , Bachelors Degree in Law, Bachelors Degree in
Commerce |
Vice President - Legal |
13,46,916 |
20 |
20 th
November
2017 |
Assistant Vice President -
Legal and Compliance , Religare Securities Ltd. |
6 Ms. Manisha Thakur |
55 |
Company
Secretary,
Bachelors
Degree in law,
Bachelors
Degree in
Commerce |
Company Secretary and
Compliance Officer |
11,87,268 |
26 |
14th February
2022 |
Head - Legal and Company
Secretary - Metropolitan Stock Exchange India Ltd. |
7 Mr. Prashant
Brahmanand Wagh |
40 |
Masters of Science in
Information Technology, Post Graduate Diploma in Information Technology, Bachelors Degree
in Computer Application |
Vice President - Technology |
12,82,961 |
20 |
15th April 2014 |
Senior Manager - Financial
Technologies India Ltd. |
Notes:
1. The above list also includes Key Management Personnel as stipulated
under Regulation 27(5) of the Securities Contracts (Regulation) (Stock Exchanges and
Clearing Corporations) Regulations, 2018 [SECC Regulations, 2018].
2. Total Remuneration includes salary, reimbursement, taxable value of
perquisites etc. excluding gratuity.
3. All employees mentioned above are in permanent employment of the
Company, governed by employment terms & service rules. However, in terms of the
provisions of the SECC Regulations, 2018 the tenure of KMPs is decided by the Nomination
and Remuneration Committee or the Board of Directors, which can be suitably extended.
4. None of the above employee is a relative of any Director of the
Company within the meaning of relative under the Companies Act, 2013.
5. None of the above employee was drawing salary in excess of that
drawn by Managing Director / Whole Time Director.
6. As of 31st March 2023, none of the above employee, by
himself/herself or along with his/her spouse and dependent children, held 2% or more of
the equity shares in the Company as referred to in sub-clause (iii) of Rule 5(2) of
Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.
7. As of 31st March, 2023, none of the employees of the Company are
posted and working in a country outside India.
For and on behalf of the Board of Directors:
Dr. Harsh Kumar Bhanwala
Chairman
(DIN: 06417704)
Mumbai 29th July 2023
P. S. Reddy MD & CEO (DIN: 01064530) Mumbai 29th July
2023
|