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Multi Commodity Exchange of India Ltd.

BSE: 534091 Sector: Financials
NSE: MCX ISIN Code: INE745G01035
BSE 00:00 | 18 May 749.55 -37.05
(-4.71%)
OPEN

794.00

HIGH

794.00

LOW

747.35

NSE 00:00 | 18 May 752.20 -33.45
(-4.26%)
OPEN

787.00

HIGH

790.95

LOW

748.25

OPEN 794.00
PREVIOUS CLOSE 786.60
VOLUME 97325
52-Week high 1181.90
52-Week low 665.00
P/E 35.95
Mkt Cap.(Rs cr) 3,823
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 794.00
CLOSE 786.60
VOLUME 97325
52-Week high 1181.90
52-Week low 665.00
P/E 35.95
Mkt Cap.(Rs cr) 3,823
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Multi Commodity Exchange of India Ltd. (MCX) - Chairman Speech

Company chairman speech

Dear Shar eholder

The year 2016-17 was a year of challenges for the commodity markets. I am happy toinform you that MCX was able to navigate the turbulence successfully. The operational andfinancial results of your Exchange demonstrate this. For the financial year ended March31 2017 MCX's total income stood at `375.87 crore vis-a-vis `351.40 crore for theprevious financial year. Likewise the Earnings before interest depreciation and tax for2016-17 was `196.19 crore against `191.75 crore for the financial year 2015-16. Theprofit for the year stood at `126.28 crore representing a growth of 11% over that of`113.78 crores in 2015-16. On the operational side MCX's Average Daily Turnover grew from`21923 crore to `22560 crore (single side). Thus the total turnover of the Exchangeclocked `58.66 lakh crore in FY 2016-17 compared with `56.34 lakh crore in the previousyear. As a result your Exchange could maintain and consolidate its market share whichstood at 90.37 per cent for the year 2016-17.

This performance has to be evaluated in the light of serious challenges faced by theExchange during the year. These includes a prolonged strike by jewellers continuouslydepressed prices of many commodities uncertainties in physical commodity marketsfollowing demonetisation. In Addition commodity market witnessed volatility consequent tothe decision of U.K. to exit the European Union results of U.S. presidential election andbouts of geo-political tensions. These events tested the endurance and capacity of yourExchange's systems to withstand external shocks. I am happy to say that the robustness ofMCX's technology and processes ensured that such unanticipated bouts of trades was handledefficiently and effectively. The absence of any incidence of default or trading glitchsupports this optimism that MCX will continue its position of leadership in theCommodities market. However none of this would have been possible without the trust andconfidence that all stakeholders' have reposed in the Exchange. While we speak of ourachievement in all humility we also consider them as stepping stone for a promisingfuture. A slew of policy reforms and regulatory decisions over the past few months haslaid the foundation for creating a vibrant commodity derivatives market in India. SEBIannounced the much awaited guidelines on product design and risk management framework oncommodity Options as also permitted the participation of Category III AlternativeInvestment Funds (AIFs) in the commodity derivatives market. Similarly in pursuance ofthe announcement made by the Hon'ble Union Finance Minister in the Budget 2017 towardsintegration of intermediary services in securities and commodity derivatives market theGovernment of India removed the proviso in the Securities Contracts (Regulation) Rules1957 which required members of stock exchanges to set up a separate company in order toconduct business in commodity derivatives. The introduction of a unified Goods and ServiceTax (GST) replacing a large number of state and union-level indirect taxes is anothersignificant reform measure with positive ramifications for the commodity markets. GSTenvisages a "One India One Tax One Market" and with removal of a large number ofdifferential state-specific taxes a larger pan-India market for commodities can becreated. Apart from enabling seamless transportation of commodities across state bordersGST will also help in building efficient linkages between the spot and derivatives marketsand enhance the relevance of exchange discovered prices to the entire ecosystem. Inaddition to the above policy reforms a number of regulatory decisions which are expectedto strengthen the commodity derivatives market and prepare it for the next level ofgrowth. During the year SEBI undertook policy measures to improve market transparencyrisk management market accessibility and participation investor protection andsynchronizing practices at commodity derivatives exchanges with those at stock exchanges.I am happy to inform that during the year MCX Clearing Corporation Limited (MCX CCL)applied to SEBI seeking recognition to transfer the functions of clearing and settlementof trades to itself as a separate clearing corporation. These measures along with aseries of training education and outreach programmes undertaken have placed the Exchangein a sound position to negotiate for the next wave of growth in the market. Our constantendeavour is to raise the Exchange's internal risk management systems and trading/clearing processes to be on par with the best-in-class standards while externally marketparticipants are being prepared for trading in likely to be introduced derivativeproducts. Given the growth trajectory of the Indian economy and the positive policyactions in the recent past the future is replete with opportunities for rapid growth ofthe commodity derivatives market. I would like to assure you that we are committed to usethese opportunities for steering your Exchange and the market to higher growth andinclusiveness for serving the public good. As in the past I seek your continued supportto enable us convert the emerging opportunities into tangible achievements for taking theExchange to greater heights.

Saurabh Chandra

Chairman

July 13 2017