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Multi Commodity Exchange of India Ltd.

BSE: 534091 Sector: Others
NSE: MCX ISIN Code: INE745G01035
BSE 00:00 | 29 May 1311.90 45.75






NSE 00:00 | 29 May 1328.05 63.00






OPEN 1252.30
VOLUME 25895
52-Week high 1442.00
52-Week low 779.05
P/E 31.89
Mkt Cap.(Rs cr) 6,691
Buy Price 1333.00
Buy Qty 1.00
Sell Price 1342.00
Sell Qty 4.00
OPEN 1252.30
CLOSE 1266.15
VOLUME 25895
52-Week high 1442.00
52-Week low 779.05
P/E 31.89
Mkt Cap.(Rs cr) 6,691
Buy Price 1333.00
Buy Qty 1.00
Sell Price 1342.00
Sell Qty 4.00

Multi Commodity Exchange of India Ltd. (MCX) - Director Report

Company director report

Dear Shareholders

The Board of Directors is pleased to present the Sixteenth Annual Report on thebusiness and operations of your Company along with the Audited Statement of Accounts andthe Auditors' Report for the financial year (FY) ended March 312018 ('year underreview') highlights of which are given below:


(Rs in Lakh except EPS)




2017-18 2016-17 2017-18 2016-17
Total Income 34620 37587 35186 37634
Total Operating Expenditure 18552 17968 18798 17981
Profit before Interest depreciation exceptional items and tax 16068 19619 16388 19653
Less: Depreciation 1666 1857 1666 1857
Less: Interest - 20 4 20
Profit after exceptional items but before tax 14402 17742 14718 17776
Less: Provision for tax 3767 5115 3882 5117
Profit after tax 10635 12627 10836 12659
Add/(Less): Other Comprehensive Income (net of tax) 265 (1852) 124 (1859)
Total Comprehensive Income for the period (Comprising Profit and Other Comprehensive Income for the period) 10900 10775 10960 10800
Earnings per share (EPS) a. Basic (Rs) 20.91 24.84 21.31 24.90
b. Diluted (Rs) 20.91 24.83 21.31 24.89

The Ministry of Corporate Affairs (MCA) vide its notification dated February 16 2015notified the Indian Accounting Standards (Ind AS) applicable to certain classes ofcompanies. Your Company falls within its ambit and in compliance with the same theCompany has effective April 012016 (transition date being April 012015) adopted Ind ASprescribed under Section 133 of the Companies Act 2013 read with the relevant Rulesthereunder; and the financial statements have been prepared in accordance with Ind AS.


The year 2017 was a turning point for the global economy. While 2017 saw an end to thedecline in the price of most commodities favourable weather conditions capped the pricerise of a number of agricultural crops as their supply increased. Bullion witnessedrenewed pressure on account of the U.S. dollar strengthening in the run-up to the much-anticipated meeting of U.S. Federal Reserve where the Fed was widely expected to lift itsbenchmark interest rates. However in the final weeks of the year gold recovered most ofits previous decline in price consequent to the U.S. central bank reiterating that agradual rate increase was appropriate in light of the new tax regime.

Crude oil prices rose by more than 40% by the year-end from their lows in June 2017.Prices of many base metals touched multi-year highs largely due to tightening of supplyfollowing environmental concerns in large producing nations like China and Philippines.

In general while international prices of the commodities were firm on a yearly basisappreciation of the rupee capped rupee-denominated commodity prices. Given the backdrop ofglobal commodity market and the Indian scenario the operating environment for yourCompany during the year was challenging.


The average daily turnover decreased from ' 22560 crore in FY 17 to ' 21193 crore inFY 18 (single side) while Average Realization Rate (ARR) increased from ' 1.99 per lakh to' 2.22 per lakh. The increase in ARR was on account of the full year impact of therevision in the transaction charges which became effective from October 012016. The totalturnover of commodity futures traded on your Exchange stood at ' 53.83 lakh crore in FY 18as against ' 58.66 lakh crore during FY 17 a decrease of 8.23%. The market share of yourCompany amongst all national exchanges offering commodity derivatives trading was 89.58%in FY 18 as against 90.37% in FY 17. The number of contracts traded on your Exchange in FY18 stood at 2060 lakh as compared to 2220 lakh for FY 17 a decrease of 7.21%.

For FY 18 your Company's (standalone) total income stood at ' 34620 lakh as comparedto ' 37587 lakh during FY 17. This was mainly attributable to decrease in other incomefrom ' 11643 lakh to ' 8636 lakh owing to mark to market losses arising out of increasein interest rates. The 10 year G Sec yield saw a steep run up from 6.69% at the beginningof the year to end at 7.40% on March 31 2018. Your Company has investments in certainlong duration Mutual Fund schemes the yield on which was adversely affected due to markto market losses. Further your Company had recognised a gain on fair valuation of Bondsamounting to ' 1563 lakh in the previous financial year which increased the variance ascompared to FY 17. The operating income during the year under review was ' 25984 lakh asagainst ' 25944 lakh in FY 17. The net profit after tax for the year ended March 312018stood at ' 10635 lakh as against ' 12627 lakh in FY 17. The net worth (includingSettlement Guarantee Fund) as at March 31 2018 stood at ' 155687 lakh.


There has been no change in the share capital of your Company during the year underreview. As on March 312018 the paid-up share capital of your Company stood at ' 5100lakh comprising 50998369 Equity shares of ' 10 each fully paid. Your Company has duringthe year under review neither issued any Equity shares with differential voting rightsnor any shares (including sweat equity shares) to its employees under any scheme save andexcept transfer of shares by the ESOP trust to eligible employees pursuant to the EmployeeStock Option Scheme (ESOP 2008).


For the year ended March 31 2018 your Directors do not propose to transfer any amountto the General Reserve. An amount of ' 97104 lakh is proposed to be retained as surplusin the statement of Profit and Loss Account under the heading 'Reserves and Surplus'.


Pursuant to Regulation 43A of the SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 (hereinafter referred to as the SEBI Listing Regulations2015) your Company has formulated a Dividend Distribution Policy which is attached asAnnexure I to this Report. The same is also available under the weblink: distribution policyre.pdfRssfvrsn=2

As per the Dividend Distribution Policy of the Company the Board considering variousparameters as mentioned in the Policy shall endeavor to maintain a dividend pay-out(interim if any and final put together) in the range of 30 to 50 per cent of profitsafter tax (PAT) every financial year on the standalone financials.

Considering the financial results for FY 18 and particularly in view of the fact thatthe Company has adequate existing cash/cash equivalent at its disposal with no immediatecash outflow requirement coupled with no specific investment in the horizon yourDirectors have recommended for the financial year ended March 312018 a dividend of ' 17(170%) per equity share on a face value of ' 10 per share aggregating ' 8670 lakhsubject to the approval of shareholders at the ensuing Annual General Meeting (AGM). Theoutgo on account of the proposed dividend of 170% (PY 150%) and tax thereupon to be paidby the Company aggregates to ' 10435 lakh (including the Dividend Distribution Tax of '1765 lakh) being a payout of 98.12% of the profit after tax (PAT) for the year endedMarch 31 2018 as against ' 9207 lakh (being a payout of 73% of PAT) for FY 17.


Your Company had not invited any deposits from the public and as such no amount ofprincipal or interest related thereto was outstanding as on the date of the Balance Sheeti.e. March 31 2018.


Your Company has during the year under review not given any loans guarantees orprovided security and has not made any investments in any body corporate in excess oflimits specified under Section 186 of the Companies Act 2013.


There was no change in the nature of business of your Company during the year underreview.

MCX crude oil futures MCX crude oil mini futures and MCX natural gas futures wereamongst the top 20 commodity futures and options contracts in the global ranking ofcommodity futures contracts in Calendar Year 2017 (CY17). (Source: FIA Annual VolumeSurvey March 2018).

Your Company in its endeavor to explore and exploit the opportunities for unlockingthe full potential of the Indian commodity derivatives market launched many new contractsduring FY 18 under different segments. MCX became India's first exchange to launch themuch-anticipated Option Contracts on introduction of Options on Gold (1 Kg) Futures. Theproduct was launched on October 17 2017 at an event in New Delhi by Shri Arun JaitleyHon'ble Union Finance Minister. Since its launch the total volume traded in Gold Optionin FY 18 was 34752 lots amounting to an aggregate notional turnover of ' 10354 crore.Significantly Union Budget for FY 2018-19 reduced the transaction taxes on exercise ofcommodity options from 0.125 per cent to 0.0001 per cent (on settlement value) w.e.f.April 12018 which we believe would encourage hedgers and other participants toactively participate in exchange-traded commodity options.

MCX also became the world's first commodity exchange to launch Brass futures contract.This is the first non-ferrous contract with compulsory delivery option. Further it is thefirst time ever that an alloy is being traded in the form of a futures contract on anydomestic exchange.

Your Company also commenced futures trading in Refined Bleached and Deodorized (RBD)Palmolein and Black Pepper thereby further expanding its basket of agricultural productsbeing traded on its platform.

The Exchange also introduced a facility of disseminating Cotton Prices in Candy inorder to cater to participants who want information of Cotton prices in Candy.

MCX in association with Thomson Reuters launched co-branded commodity index seriesThomson Reuters-MCX India Commodity Indices (iCOMDEX) that track the performance ofcommodity contracts on the Exchange on a real-time basis.

Your Exchange joined hands with Confederation of Indian Textile Industry (CITI) andNorthern India Textiles Mills' Association (NITMA) to engage in various educationinitiatives with their members and other relevant stakeholders of the industry. Furtheryour Company signed an Memorandum of Understanding (MOU) with Mahindra Agri SolutionsLtd. a wholly owned subsidiary of Mahindra and Mahindra to provide agriculture relatedprice information. The information is available on their recently launched mobileapplication- 'MyAgriGuru.'

In order to seamlessly integrate with the global commodities ecosystem MCX continuesto have strategic alliances with leading international exchanges viz. MozambiqueCommodities Exchange (BMM) Singapore Diamond Investment Exchange CME Group London MetalExchange (LME) Dalian Commodity Exchange (DCE) and Taiwan Futures Exchange (TAIFEX). MCXhas also tied-up with various trade bodies corporates educational institutions andR&D centres across the country to improve trade practices increase awareness andfacilitate overall improvement of the commodity market.


During the year under review SEBI the sectoral regulator introduced several reformspaving the path for introduction of new products in commodity derivatives market;participation of Category III Alternative Investment Funds (AIF - CAT III) andstrengthening the operational framework and risk management in commodity exchanges.

The presence of SEBI as the market Regulator has increased the confidence in the marketand generated trust amongst all in the financial and commodity markets ecosystemstakeholders and made the commodity markets more vibrant and built a level-playing fieldacross both the commodities and securities markets.

The Goods and Service Tax (GST) came into effect on July 01 2017 amalgamating a largenumber of Central and State level taxes into a single tax. GST has helped in mitigatingdouble taxation and is paving the way for a common national market. Importantly a singletax across the nation for a commodity has significantly enhanced the relevance ofexchange-discovered prices to the entire ecosystem and can increase reach of delivery ofderivative contracts.

The important Regulatory developments during FY 18 inter-alia includes the following:

i) In terms of the stock selection criteria prescribed by SEBI National Stock Exchangeof India Limited (NSE) introduced trading on Futures & Options contracts on thesecurities of MCX w.e.f. April 28 2017.

ii) SEBI (Stock Brokers and Sub - brokers) Regulations 1992 was amended therebyintegrating the broking activities in Equity Markets and Commodity Derivatives Marketsunder single entity.

iii) The Product Design and Risk Management Framework for Options on Commodity Futureswas issued on June 13 2017. It provides for the eligibility criteria for selection ofunderlying commodity futures for options and the product design for options on commodityfutures.

iv) Guidelines issued for participation of Category III Alternative Investment Funds(AIFs) in Commodity Derivatives market.

v) Detailed framework for determining the Position Limits for Agricultural CommodityDerivatives was issued after due consultation with various stakeholders and on the basisof recommendations of Commodity Derivatives Advisory Committee (CDAC). The frameworkrequires categorization of commodities into 'Broad' 'Narrow' and 'Sensitive' based onwhich the numerical value of overall client level open position limits of agriculturalcommodities is determined.

vi) The Criteria for Settlement Mode of Commodity Derivative Contracts specifying theexemptions under which 'cash settlement' can be considered instead of 'physical delivery'for the settlement of commodity derivative contracts was finalised.

vii) The Role of Independent Oversight Committee for Product Design was prescribedthereby bringing uniformity amongst commodity derivative exchanges.

viii) Guidelines were issued for Liquidity Enhancement Scheme (LES) in CommodityDerivative Contracts allowing the same for the first time in commodity derivatives.

ix) SEBI approved the proposal for amending the Securities Contracts (Regulation)(Stock Exchanges and Clearing Corporations) Regulations 2012 (SECC Regulations) topermit trading of commodity derivatives and other segments of securities market viz.equity equity derivatives debt and currency derivatives segment etc. on single exchangew.e.f. October 12018.

x) The Reserve Bank of India (RBI) permitted Banks to become Professional ClearingMember (PCM) at Commodity Derivatives Exchanges to offer clearing & settlementservices to the trading members/clients of the Exchange. It also permitted Banksubsidiaries to offer broking services in commodity derivatives segment.

xi) RBI issued revised guidelines for Hedging of Commodity Price Risk by Residents inoverseas markets which was effective from April 1 2018.

Several other Regulatory developments are listed under the respective Section in thisReport.


Your Company has a comprehensive Risk Management Policy for managing different risksincluding Regulatory & Compliance risks Technology risks Business risks Operationalrisks Credit risks and Market risks. Also your Company has complied with SECCRegulations relating to risk management and has constituted a Risk Management Committeefor inter-alia identification measurement and monitoring risk profile of the Exchange.As on March 31 2018 the said Committee comprised of two Independent Directors oneShareholder Director and an Independent External Expert. Your Company has successfullylaunched option contracts with a unique risk management feature of providing SensitivityReport and levy of Devolvement Margins to options positions devolving into futurespositions. This was a first of its kind initiative implemented in the Indian markets as arisk management solution. Your Company continues to implement robust risk managementsystems with margins being computed multiple times a day in order to minimize the defaultrisk. During the year under review there was no instance of member default on account ofvolatility observed in the markets.

As a part of risk mitigation plan for avoiding business disruption your Company hasfocused on strengthening its core technology infrastructure so that there is no singlepoint of failure thereby ensuring uninterrupted services. Your Company has a DisasterRecovery (DR) Site at GIFT city in Gandhinagar Gujarat which has a robust infrastructureand accessibility. Your Company successfully conducted live trading from DR site on April03 2017. Further your Company has Near Site in Mumbai with synchronous data replicationto achieve zero data loss in case of any eventuality. Your Company has also strengthenedits Business Continuity Plan and DR initiative and regularly conducts mock drills to testreadiness and effectiveness of IT infrastructure at its Data Centre and also its DR site.

The details relating to 'Settlement Risk Management' and 'Risks and Concerns' of yourCompany are provided in the Management's Discussion and Analysis which forms part of thisAnnual Report.


Your Company has established Multi Commodity Exchange Investor (Client) Protection Fund(IPF) to protect and safeguard the interest of investors (clients) by compensatingeligible/legitimate claims on account of default by any member of the Exchange. Theinterest income on investment of surplus funds of IPF is used for imparting education toinvestors' (clients) conducting awareness programs undertaking research activities orsuch other programs as may be specified by SEBI. As on March 31 2018 the corpus of IPFstood at ' 17070 lakh (provisional).

SEBI with the objective to align with the practices in securities markets issuedcomprehensive guidelines on June 13 2017 for Investor Protection Fund Investor ServiceFund and its related matters for National Commodity Derivatives Exchanges applicable fromJuly 01 2017. The said Circular inter-alia provided modification w.r.t. theconstitution and management of the IPF contribution to the IPF determination oflegitimate claims power of the Exchange to fix IPF compensation limits in consultationwith the IPF Trust etc.

Pursuant to the aforesaid Guidelines the IPF compensation limits have been increasedto ' 25 lakh per client with no member wise limit for SEBI-registered members declareddefaulter on or after January 24 2018. Further the limits of ' 2 lakh per investor perdefaulter member and ' 200 lakh per defaulter member shall continue to be applicable forclaims against members declared as a defaulter prior to January 24 2018 and for non-SEBIregistered members.


Pursuant to SEBI circular dated June 13 2017 your Company has set up an InvestorService Fund (ISF) for providing basic minimum facilities at various Investor ServiceCentres as mentioned in the said Circular. SEBI has permitted utilisation of the corpusof ISF for conducting various investor education and awareness programs capacity buildingprograms and maintenance of all price ticker boards installed by the respective exchangescost of training of arbitrators etc. In addition to above the corpus may be utilized inother manner as prescribed/permitted by SEBI in the interest of investors from time totime.

In terms of the said Circular at an initial stage your Company has contributed ' 10lakh towards setting up the ISF. Subsequently your Company has transferred 1% of theturnover fees charged from its members on a monthly basis.

Since ISF is of recent origin its corpus may be inadequate. In view of the same SEBIhas permitted utilization of interest on IPF for activities of ISF for a period of 3 yearsstarting from April 01 2018.


Pursuant to SEBI directives with respect to the Settlement Guarantee Fund (SGF) stresstests are required to be performed on quarterly basis to determine the adequacy ofbalance in SGF. Accordingly based on the stress tests performed the balance in SGF atthe end of FY 18 was determined to be adequate and hence no contribution to SGF has beenmade during the year under review.

Settlement related penalties and fines amounting to ' 24 lakh (net of tax) and incomeof ' 1002 lakh (net of tax) earned from earmarked SGF investments were credited to theSGF during the year. After effecting the aforesaid transfers the cash component of SGFstood at ' 18060 lakh as at March 31 2018.


To cater to the storage requirements of various members of the Exchange and theirrespective constituents/depositors who are willing to store goods and give delivery onthe Exchange platform your Company has made necessary warehousing and logisticsarrangements with Warehouse Service Providers (WSP)/Vault Service Providers (VSP). YourExchange co-ordinates with WSPs/VSPs and undertakes accreditation of thewarehouses/vaults audit and inspection of warehouses/vaults for safe storage andpreservation of goods deposited by various business participants for delivery on itsplatform. From FY 18 the Exchange has started surprise audits of warehouses based ondefined criterion. Your Company has empaneled independent audit agencies to carry outthird party audits as per Regulatory guidelines. Currently your Company operates throughthree WSPs for facilitating physical deliveries in agricultural commodities viz. OrigoCommodities India Private Limited Yamada Logistics Private Limited and Navjyoti CommodityManagement Services Limited. As on March 31 2018 your Exchange has accredited 29warehouses of these three WSPs. Out of the 29 warehouses 26 warehouses are registeredwith the Warehousing Development & Regulatory Authority (WDRA) 2 warehouses formetals do not require WDRA registration and 1 warehouse is in the process of registration.These warehouses are located at Jalna & Yavatmal in Maharashtra Kadi Rajkot &Mundra in Gujarat Adilabad & Warangal in Telangana for Cotton Bales Vandanmedu inKerala for Cardamom Kadi and Deesa in Gujarat for Castor Seed Barabanki and Chandausi inUttar Pradesh for Mentha Oil Kochi in Kerala for Black Pepper Bhiwandi in Maharashtrafor Aluminium

Copper Lead Nickel and Zinc Kandla for Crude Palm Oil & RBD Palmolein andJamnagar in Gujarat for Brass. Your Company has put in place a detailed WSP Policy and aWarehouse Inspection Policy in compliance with the SEBI revised warehousing norms foragricultural and agricultural processed commodities traded on the National CommodityDerivatives Exchanges. During the year the highest deliverable quantity of agriculturalcommodities stored in the Exchange accredited warehouses were:

• Cotton - 133100 bales of 170 kg each.

• Mentha Oil - 11918 drums of 180 kg each.

• Black Pepper - 1083 bags of 50 kg each.

• Cardamom - 462 bags of 50 kg each.

• Castor Seed - 1485 bags of 75 kg each.

Further the highest value of bullion stored in the Exchange accredited vaults were:

• Gold (including all of its variants) - ' 26569.3 lakh.

• Silver (including all of its variants) - ' 14470.1 lakh.

Your Company is presently availing the services of Sequel Logistics Private Limited& Brinks India Private Limited as vault service providers for facilitating physicaldeliveries in bullion. The vaults of these agencies are located at Ahmedabad Mumbai andNew Delhi. Your Company is making serious efforts to bring in more credible and largeplayers as Warehouse Service Providers and Assayers. Your Company has also launched &gone live with a web based application "ComRIS" (Commodity Receipts InformationSystem) to maintain electronic record of commodities deposited at the Exchange accreditedwarehouses and ensure flow of real time information from January 01 2018. The role ofwarehousing in Settlement Risk Management is included in the Management's Discussion andAnalysis forming part of the Annual Report.


The Training and Education Division has the following key objectives:

(a) facilitation of structured learning of commodity trading to the community at largeand investors in particular and

(b) augmentation of business development and product top lines through training ofvarious market participants.

To achieve the said objectives your Company in FY 18 registered 891 candidates forthe MCX Certified Commodity Professionals (MCCP) examination and conducted 10 MCCPworkshops. In conjunction with the Business Development and the Product teams the Companyconducted over 100000 man hours of trainings for traders farmers students bankersteachers etc. The team conducted 125 programs on sensitizing the community on Options inCommodities. The team has hosted and trained 3 International delegations 10 student andcorporate delegations respectively to help them understand the operations of a commodityexchange. Training and Education department has conducted over 50 awareness programs oncommodity futures and 4 Faculty Development Programs. There are now five institutions thatare offering commodity asset class as part of their syllabus. Also your Company hasentered into MOUs with 4 more Educational Institutions during the year. The Teamintroduced webinar based training and delivered 165 basic option programmes. Sessions werealso conducted in vernacular language. Your Company aims to increase its annual trainingsessions in the coming year to new participants from the banking and mutual fund segments.


Multi Commodity Exchange Clearing Corporation Limited: MCXCCL a wholly-ownedsubsidiary of your Company was set up for having a separate clearing house to provideservices such as clearing and settlement of trades and guaranteeing counter party risk.During the year under review the Authorized Share Capital of MCXCCL was increased from '1000 lakh to ' 15000 lakh and your Company infused a capital of ' 10000 lakh in MCXCCLto enable it to meet the minimum net worth criteria required for a clearing corporation.As on March 31 2018 the company's paid-up capital is ' 10600 lakh. Further MCXCCL hasnot commenced its business yet.

The Board of your Company has approved transfer of its Clearing & Settlementfunction to MCXCCL. Also SEBI vide letter no. CDMRD/DEA/OW/2017/17801/1 dated July 312017 has granted in-principle approval for a period of one year to MCXCCL to act as aClearing Corporation subject to certain conditions as mentioned in the said letter.

Your Company is in the process of executing various agreements with MCXCCL as approvedby the Board and taking effective steps to operationalize it.

SME Exchange of India Limited:

SME Exchange of India Limited (SME) a subsidiary of your company which was set up toprovide a platform for transacting clearing and settlement of trades in small and mediumenterprises segment is under the process of members' voluntary winding up.

The requisite formalities for application of winding up of the company has beencompleted. The Registrar of Companies on May 30 2017 has approved the Liquidatorsstatement showing the manner in which the winding up has been conducted and the propertyof SME has been disposed off. Also "No Dues" certificate has been received fromthe Income Tax Department and the same has been filed with the Assistant OfficialLiquidator High Court Bombay on March 09 2018. The Official Liquidator is expected toissue the final report on winding up of SME after receiving the 'No Objection Certificate'from the Registrar of Companies.

During the year under review there were no companies which have become or have ceasedto be the subsidiary or associate company of your Company. Further neither the ManagingDirector & CEO nor the Whole-time Director of your Company receives any remunerationor commission from its subsidiary.

A report on the performance and financial position/salient features of the subsidiaryas per the Companies Act 2013 is provided as Annexure II.

In accordance with Section 136(1) of the Companies Act 2013 the financial statementsincluding consolidated financial statements and all other documents required to beattached thereto and audited annual accounts of MCXCCL the wholly owned subsidiarycompany are available on our website under the weblink Shareholders interested in obtaining a copy of the audited annual accounts ofthe subsidiary company may write to the Company Secretary at the Company's registeredoffice. Copies of the annual accounts of your Company and of its subsidiary company wouldbe kept at the registered office of your Company for inspection by any shareholder.


Your Company has in accordance with Section 129(3) of the Companies Act 2013prepared consolidated financial statements consolidating its financials with its whollyowned subsidiary company MCXCCL. The audited consolidated financial statements have beenprepared on the basis of the related Consolidated Financial Statements which is inaccordance with the requirements of Ind AS prescribed under Section 133 of the CompaniesAct 2013 read with relevant rules issued thereunder as applicable and other accountingprinciples generally accepted in India and forms part of this Annual Report.


Management's Discussion and Analysis Statement as stipulated under the SEBI ListingRegulations 2015 forms part of this Annual Report.


Commitment to quality is necessary for enabling excellence in products servicesoffered optimization and de-risking. Your Company continues to monitor and maintain itseffective and well-crafted Quality Management Framework (QMF). QMF is aligned to thebusiness objectives of the Exchange and ensures that your Company is focused onmaintaining Quality Centric Approach towards its members and clients. Over the years yourCompany has evolved robust processes and strives to improve them continuously. YourCompany continues to comply with international management standards and has successfullytransitioned ISO 9001 to its latest version. This showcases your Company's dedication andcommitment towards sustaining a customer centric and robust Quality and SecurityManagement System.


In line with your Company's vision and commitment of ensuring information security andproviding assurance to its stakeholders your Company has developed and implementedsimple effective and robust processes and controls using latest international standardISO/IEC 27001:2013 on Information Security Management System. It has also deployed aproactive Information Risk Management approach and carries out risk assessment activitieson a periodic basis. Your Company has driven large change initiatives for productivityimprovements through automation. A dedicated group has worked with respective departmentsand used automation to improve productivity across the Exchange.


Research activities are continuously undertaken by your Company for the development ofnew products viz. futures options and indices considering the evolving policy andregulatory landscape risk management and global best practices. During the year theExchange launched various commodity futures contracts viz. RBD Palmolein on April 5 2017Black Pepper on July 24 2017 and Brass on March 26 2018. The Exchange also launchedOptions contracts with Gold (1 Kg) Futures as underlying on October 17 2017.

The Exchange in association with Thomson Reuters launched co-branded commodity indexseries Thomson Reuters-MCX India Commodity Indices (iCOMDEX) for tracking the performanceof commodities listed on MCX. The Thomson Reuters-MCX iCOMDEX series utilizes a similarmethodology as other established commodity indices which are used by internationalinvestors such as the popular Thomson Reuters/Core Commodity CRB index. Also MCX hasworked with the Indian investors to ensure that the new indices correctly represent Indiancommodity markets with Thomson Reuters validating this approach and ensuring the indicesmeet international standards such as the IOSCO principles for financial benchmarks.

The iCOMDEX series includes a composite index consisting of 11 commodities; sectorindices for bullion and base metals and individual commodity indices for gold copper andcrude oil. These indices have been designed to be tracked by derivatives and exchangetraded funds to allow investors to monetize views and manage investment risk. With SEBIbeginning to open up commodities derivatives to institutional investors these indices canbe leveraged to benchmark performance and build products. Commodity index-based productswhen allowed would allow market participants to trade and invest in commodities on ashort and long term basis.

Further your Company undertook various research studies during the year under review.A survey study was carried out by Kerala Agricultural University (KAU) to analyse theeconomic benefits of futures market to the stakeholders in the cardamom value chain and tounderstand the changes in the cardamom ecosystem since the advent of futures contract. Thestudy found that futures prices were used by the various stakeholders as a benchmark fortaking informed decisions related to buying selling or holding of cardamom. Based on thesurvey and study it has been concluded that cardamom futures has the potential tochannelize market related information make futures prices visible and empower the variousstakeholders to take informed decisions to improve their economic returns.

In another study the Fragrance & Flavour Development Centre undertook acomprehensive survey for analyzing the Quality of Mint Oil Crops in Different Districts ofUttar Pradesh. The survey found that new testing parameters (physico-chemical analysisinstrumental analysis etc.) are required on account of new cropping pattern of Menthaadvent of synthetic oil and other parameters.


The initiatives taken by your Company for growth and market development have beenrecognized at various fora by several institutions. Your Company was honoured with the'Best Bullion Exchange' Award at the Bullion Federation Global Convention organized by theBullion Federation during August 2017 and with the 'Best Commodity Exchange of the year'at the International Gold Convention on August 2017. Your Company was also named 'BestCommodity Exchange of India' by PHD Chamber Of Commerce & Industry and as 'India'sLeading Commodity Exchange and Introducing New Products in the Commodity DerivativesMarket' by Assocham on December 2017. Further your Company was also awarded as the 'BestCommodity Exchange' by Indian Bullion & Jewellers Association on March 2018.


Given the nature of its operations your Company has a very low impact on theenvironment. Notwithstanding it is committed to minimising its environmental impactsthrough efficient use of natural resources including electricity which is the key touchpoint of the Exchange's technology-driven business. Your Company adheres to an effectiveEnvironmental Policy. Your Company cleared the ISO 14001:2004 surveillance audit andcontinues to monitor its Environment Management Plan which is developed on the basis ofthe Environment Review conducted annually to assess the impact of the Company'sactivities. Your Company has also developed an E-Waste Policy for the safe disposal ofe-waste from its premises. Its tie-up with authorised e-waste recyclers helps it todispose its e-waste in an eco-friendly manner. The e-waste disposal is in turn minimisedthrough best practices in maintenance and re-use of resources.


Corporate Social Responsibility (CSR) provides an opportunity for companies toeffectively align its values and strategy for the benefits of the society by contributingto the social economic and environmental development of the society at large.

The CSR Committee steers the CSR activities of your Company. The CSR Policy formulatedin accordance with the Companies Act 2013 (as amended from time to time) guides theCompany to serve the society. The CSR Policy and initiatives adopted by the Company on CSRduring FY 18 are available at the web link

Your Company has associated itself with NABARD in few watershed development programmesbeing implemented by them. Such programmes encourage harvesting of water source(s) andpromotes its efficient distribution which results in overall income enhancement of thebeneficiary households.

The Company has undertaken projects in association with Global Education Trust forteaching in BMC schools wherein our employees actively participate in such programme.Further the Company has provided financial support for setting up of Science laboratoryin Agricultural Polytechnic for practical orientation of students from under-privilegedand/or tribal areas.

The activities of the Gramin Suvidha Kendra (GSK) programme are directed to sub servethe needs of the farmers by making them aware of the new initiatives techniquesknow-how etc. which leads to enhanced yield in the agricultural produce. MCX supportskitchen garden programme by encouraging women and other members of the farmer community tohave a sustainable/alternate livelihood option by growing vegetables fruits etc. intheir back yard.

Your Company's CSR spend for FY 18 was ' 181 lakh as against the prescribed amount of '287 lakh owing to the reasons stated in the Annual Report on CSR activities forming partof this Report as Annexure III. Going forward your Company shall endeavor to undertakeprojects in accordance with the Policy to meet its CSR requirement.


Pursuant to Regulation 34 of the SEBI Listing Regulations 2015 read with SEBI (ListingObligations and Disclosure Requirements) (Amendment) Regulations 2015 the Annual Reportof top 500 listed entities based on market capitalization shall include the BusinessResponsibility Report (BRR) describing the initiatives taken by Company from anenvironmental social and governance perspective.

As your Company falls within the top 500 listed Companies the said Regulations areapplicable to it. In compliance with the same the BRR forms part of this Annual Report.

Further your Company has evolved a Business Responsibility Policy encompassing thebroad scope of the initiatives to be undertaken to best sub serve the interest of allthe Stakeholders.


The extract of Annual Return of your Company pursuant to Section 92(3) of the CompaniesAct 2013 read with Rule 12(1) of the Companies (Management & Administration) Rules2014 is attached as Annexure IV to this Report.


Your Company is committed to good corporate governance aligned with the best corporatepractices. The report on Corporate Governance as stipulated under Regulation 34(3) readwith Schedule V of the SEBI Listing Regulations 2015 and the certificate from aPracticing Company Secretary regarding compliance with Corporate Governance norms formspart of this Annual Report. The report on Corporate Governance also contains certaindisclosures required under the Companies Act 2013.


Eight meetings of the Board of Directors were held during FY 18. For further detailsplease refer report on Corporate Governance forming part of this Annual Report.


Your Company adheres to the highest ethical standards to ensure integritytransparency independence and accountability in dealing with all stakeholders.Accordingly your Company has adopted various codes and policies to carry out the dutiesin an ethical manner. Some of these codes/policies framed and implemented by your Companyare Code of Conduct and Code of Ethics Code of Conduct for Prevention of Insider TradingWhistle Blower Policy/Vigil Mechanism Policy on Related Party Transactions Policy fordetermining Material Subsidiaries Corporate Social Responsibility Policy Risk ManagementPolicy Nomination and Remuneration Policy Policy for Appointment of Independent ExternalPersons on Committees of the Board Board Diversity Policy Dividend Distribution Policyetc.


Your Company believes in the conduct of the affairs of its constituents in a fair andtransparent manner by adopting highest standards of professionalism honesty integrityand ethical behaviour. Pursuant to Section 177(9) of the Companies Act 2013 read withRule 7 of the Companies (Meetings of Board and its Powers) Rules 2014 and Regulation 22of the SEBI Listing Regulations 2015 the Board of Directors have implemented a vigilmechanism through the adoption of Whistle Blower Policy. For further details please referreport on Corporate Governance forming part of this Annual Report.


Your Company has formulated the policy on materiality of related party transactions anddealing with related party transactions. The same is uploaded on the website of yourCompany and may be accessed at the web link:

All related party transactions entered into by your Company are in the ordinary courseof business and at arm's length pricing basis except the transaction with MCXCCL itswholly owned subsidiary which is not in the ordinary course of business. Also prioromnibus approval is obtained for related party transactions which are of repetitive natureand entered in ordinary course of business and are at arm's length. All the related partytransactions entered into by your Company during the year under review were placed andapproved by the Audit Committee and/or by the Board as applicable in accordance with theCompanies Act 2013 SEBI Listing Regulations 2015 and other applicable guidelines/directions from Regulator if any.

SEBI directions provide that every national commodity derivatives exchange shall creditpenalties other than the settlement related penalties to its Investor Protection Fund(IPF) for all transactions executed on the Exchange. IPF is held in trust and managed bythe Trustees who are appointed as per the provisions of the Trust Deed and the RulesBye-Laws and Regulations of the Exchange. The transactions with the MCX IPF Trust areregulated in accordance with the regulatory requirements/guidelines issued from time totime and is independently managed. Except for complying with the regulatory requirementsyour Company does not have any pecuniary relationship with MCX IPF Trust. In view ofclarification issued by Institute of Chartered Accountants of India MCX IPF Trust wastreated as a related party. However pursuant to SEBI circular no.CIR/CDMRD/DEICE/CIR/P/2017/53 dated June 13 2017 MCX IPF Trust has ceased to be arelated party w.e.f. July 01 2017.

Pursuant to Section 134(3) (h) read with Rule 8(2) of the Companies (Accounts) Rules2014 the particulars of material contracts or arrangements with related parties to bereported under Section 188 (1) of the Companies Act 2013 is appended in Form AOC - 2 asAnnexure V to this Report.

All Related Party Transactions as required under Ind AS 24 - Related Party Disclosuresare reported in Note 37 of Notes to Accounts of the standalone and consolidated financialstatements of your Company.


Your Company being a recognized stock exchange under Securities Contract (Regulation)Act 1956 (SCRA) is inter-alia regulated by SEBI.

As on the date of this Report your Board comprises of 12 (twelve) Directors of which6 (six) are Public Interest Directors 5 (five) are Shareholder Directors and 1 (one)Managing Director.

"Public Interest Director" under the SECC Regulations means an independentdirector representing the interests of investors in securities market and who is nothaving any association directly or indirectly which in the opinion of the SEBI is inconflict with his role and accordingly such directors are considered as IndependentDirectors for adhering compliance with the provisions under the SEBI Listing Regulations2015 and Companies Act 2013.

Your Company has received confirmations from the respective Public Interest Directorsto the effect that each of them meets the criteria of independence as prescribed underRegulation (16)(b) of the SEBI Listing Regulations 2015 and Section 149(6) of theCompanies Act 2013. The nomination/appointment of Independent Directors/Public InterestDirectors on the Board of your Company is in accordance with the eligibility conditionsprescribed by SEBI.

Further all the Directors have confirmed that they are 'Fit and Proper' in terms ofthe SECC Regulations. Your Company has also obtained affirmation of adherence to ScheduleIV of the Companies Act 2013 and the Code of Conduct of your Company in accordance withthe SEBI Listing Regulations 2015 from all the Directors as applicable.

Your Company has 2 (two) women Directors on the Board as against the stipulation ofappointing at least one Woman Director on the Board.

In terms of SEBI approval Mr. Shankar Aggarwal (DIN: 02116442) was appointed as aPublic Interest Director on the Board of the Company w.e.f. October 012017 to fill in thevacancy arising out of the completion of tenure of Ms. Pravin Tripathi (DIN: 06913463) asa Public Interest Director w.e.f. close of business hours on August 112017.

Mr. Amit Goela (DIN: 01754804) and Ms. Padma Raghunathan (DIN: 07248423) ShareholderDirectors of the Company were liable to retire by rotation at the 15th AGM of the Companyheld on August 22 2017 and being eligible offered themselves for re-appointment. Theresolutions for their re-appointment were passed by the shareholders with requisitemajority.

Mr. Parveen Kumar Singhal (DIN: 01237602) ceased to be a Shareholder Director and thePresident & Whole Time Director consequent to the expiry of his tenure w.e.f. theclose of business hours on October 13 2017.

In accordance with the provisions of the Companies Act 2013 Ms. Madhu VaderaJayakumar (DIN: 00016921) and Mr. Hemang Raja (DIN: 00040769) Shareholder Directors whohave been longest in office since their appointment are liable to retire by rotation atthe ensuing AGM and being eligible are seeking re-appointment. The Board recommends theirre-appointment.


Consequent to the expiry of the term of Mr. Ajay Puri as the Company Secretary of theCompany on attaining the age of sixty being the age of retirement he ceased to be a KeyManagerial Personnel (KMP) w.e.f. June 30 2017. Mr. Ashwin Patel was appointed as theCompany Secretary and identified as a KMP w.e.f. July 012017.


The performance evaluation of all the Directors the Board and its Committees wasconducted based on the criteria and framework adopted by the Board. The annual evaluationprocess and the criteria for the same are set out in Annexure VI to this Report.


The composition of Audit Committee is covered under the Corporate Governance Report.During the year under review there were no instances where the Board had not acceptedany recommendation of the Audit Committee.


M/s. Shah Gupta & Co. Chartered Accountants (Firm Registration No. 109574W) wereappointed as Statutory Auditor by the shareholders at their 13th AGM held on September 292015 for a period of five years subject to ratification by the shareholders at every AGM.

However pursuant to Section 40 of the Companies (Amendment) Act 2017 effective May07 2018 the requirement of ratification of appointment of Statutory Auditors by membersat every AGM has been omitted. Accordingly the same shall not form part of the Noticefrom next AGM onwards.

The Report given by the Auditor on financial statements of the Company forms part ofthe Annual Report. There is no qualification reservation or adverse remark made by theAuditor in their report.


M/s Rathi & Associates Practicing Company Secretaries were appointed as theSecretarial Auditor by the Board to conduct the secretarial audit of the Company forfinancial year 2017-18.

In accordance with Section 204(1) of the Companies Act 2013 the Secretarial AuditReport for the financial year ended March 312018 is annexed as Annexure VII to thisReport. The Secretarial Audit Report does not contain any qualification reservation oradverse remark.


The Board of Directors confirms that your Company has laid down set of standardsprocesses and structure which enables to implement Internal Financial controls across theorganization with reference to Financial Statements and that such controls are adequateand are operating effectively. During the year under review no material or seriousobservation has been observed for inefficiency or inadequacy of such controls.


No significant and material orders were passed during the year under review by theregulators or courts or tribunals impacting the going concern status and Company'soperations in future.


Your Company believes in strategic alignment of Human Resources to its businesspriorities and corporate objectives.

The Exchange as a part of its compensation philosophy believes in benchmarking itscompensation with market comparators to stay at par with industry practices.

To ensure that employees have avenues and opportunities to raise their concerns sharetheir suggestions and give their opinions Town Hall & 'Chai pe Charcha' with MDacross all level is organised in an informal setting every year.

Additionally Exchange undertakes various staff welfare activities to strengthen unitybreak the monotony and bring the peer groups together for collaborative decision-making.

To map employee engagement and evolve action plan towards enhancement of the same theExchange launched employee engagement survey - with focus on Workplace Values CultureCareer & Compensation. Clear ownership & real time analytics dashboards wasensured to take swift action based on feedback received. Multiple initiatives (online)were designed for employees to be engaged in true sense.

Your Company continues to have in place an Anti-Sexual Harassment Policy in line withthe requirements of "The Sexual Harassment of Women at the Workplace (PreventionProhibition & Redressal) Act 2013". Also your Company has an InternalComplaints Committee to redress complaints received regarding sexual harassment. Nocomplaints were received during the financial year 2017-18 in relation thereto. Furtheryour Company has also imparted awareness training to all employees on the 'Anti-SexualHarassment Policy during the year under review.

Further the disclosures pursuant to SEBI (Share Based Employee Benefits) Regulations2014 Section 62 of the Companies Act 2013 read with Companies (Share Capital andDebenture) Rules 2014 as at March 31 2018 in connection with the ESOP 2008 are set outin Annexure VIII to this Report.


Your Company has adopted a well-defined Nomination & Remuneration Policy forDirectors Key Managerial Personnel and other employees which forms part of this Report asAnnexure IX.

The ratio of the remuneration of each Director to the median employee's remunerationand other details in accordance with Section 197 (12) of the Companies Act 2013 read withRule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules2014 forms part of this Report as Annexure X.

Further in accordance with Section 197 (12) of the Companies Act 2013 read with Rule5 (2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014and Regulation 27(5) of Securities Contracts (Regulation) (Stock Exchanges and ClearingCorporations) Regulations 2012 a statement containing particulars of employees asstipulated therein also forms part of this Report as Annexure XI.


The disclosures to be made under Section 134 (3) (m) of the Companies Act 2013 readwith Rule (8) (3) of the Companies (Accounts) Rules 2014 are explained as under:


Your Company not being energy intensive takes various measures to reduce energyconsumption by using energy-efficient computer systems and equipment. As an ongoingprocess your Company evaluates new technologies and techniques to make its infrastructuremore energy efficient.

The steps taken for Conservation of Energy are given below:

a. Exchange Data Center has in-row cooling system for servers that cools equipment onlyand not the external environment to ensure that no energy is wasted in running compressorsexcessively to maintain the desired temperature levels of external environment.

b. Light Emitting Diode (LED) lights installed at Disaster Recovery site at GIFT Cityreduces the energy consumption and saves energy.

c. The Compact Fluorescent Lamp (CFL) lights in Data Centre and in all conference roomshas been replaced with LED lights.

d. Strict implementation and monitoring of equipment on/off schedule helps in reducingwastage of energy.

e. Some of the policies implemented by the Company on an ongoing basis as a part ofenergy conservation/ saving includes:

• Maintaining adequate capacitor bank for non-linear electrical loads likeair-conditioning plant pumps and Heat Recovery System thereby reducing the drawing ofextra energy and improving power factor.

• Preventive maintenance of air conditioning system on scheduled basis andensuring that the heat sensors and electronic components are properly functioning forcompressors to achieve variable compression linked to heat levels for reduction in powerconsumption.

No alternative source of energy is utilized by your Company.

The capital investment on energy conservation equipment is as herein under:

During the year under review ' 3 lakh were invested for installation of LED lights atthe Data Centre and in all conference rooms.


(i) The efforts made towards technology absorption:

Implementation of hyper converged infrastructure

Your Company has moved its enterprise setup and peripheral systems on hyper convergedinfrastructure and achieved high availability and better disaster recovery capability.Servers have been replaced with newer technology which are more energy efficient enablingthe Exchange to reduce the carbon footprint in the tune of 131 Metric Tonnes per quarter.

Launch of mobile application

Your Company has launched its mobile application which provides near to real timeprices of contracts being traded on Exchange in addition to charting market statisticsindices education relation information.

Automation of switchover/switchback between Primary & DR site

MCX has successfully deployed automated process to the extent possible forswitch-over from Primary site to Disaster Recovery Site with reduced migration timeduration.

Cyber Security Framework

Your Company lays special emphasis on improvement in its cybersecurity framework andinformation security management systems. There is an ongoing process to strengthen cybersecurity under the guidance from market regulator and other national agencies to provideincreased resilience and rapid response to cyber threats throughout its IT infrastructure.

Upgradation of Information Technology Systems

The Company has regularly allocated substantial resources towards upgrading informationtechnology systems with the over-arching goal of achieving higher capacity and lowerlatency improving market efficiency and transparency enhancing user access and providingflexibility for future business growth and market needs.

(ii) The benefits derived like product improvement cost reduction product developmentor import substitution:

Your Company has implemented technologies which are best in class IT systems andpractices in order to ensure that its technology platform becomes a strategic businesstool for building competitive advantage. The Company's robust technology infrastructurehas continued to provide uninterrupted trading experience and ensures no single point offailure. Through use of carefully evaluated and implemented technology solutions yourCompany has been able to offer quality services at optimal costs.

(iii) In case of imported technology (imported during the last three years reckonedfrom the beginning of the financial year)

Your Company has not directly imported any technology during the last three financialyears.

(iv) Your Company has incurred ' 22.84 lakh on Research and Development during the yearunder review.


Your Company is engaged in the business of operating a commodity derivative exchangeand aspire to avail opportunities as and when they arise for rendering its servicesinternationally. The details of foreign exchange earnings and outgo forms part of theSignificant Accounting Policies and Note no. 34 of Notes forming part of the standaloneand consolidated financial statements.


i. Consequent to the cessation of Mr. Narendra Kumar Ahlawat as the Chief RegulatoryOfficer (CRO) and a KMP w.e.f. April 01 2018 the Board appointed Mr. Girish Dev as theCRO of the Company and also designated him as a KMP w.e.f. April 01 2018 and April 282018 respectively.

ii. The transaction fee for Cardamom Cotton CPO & Mentha Oil was revised w.e.f.April 01 2018.

iii. Pursuant to the amendments in the Finance Act w.e.f. April 012018 CommodityTransaction Tax ('CTT') is applicable on options on commodity derivatives in lieu ofSecurities Transaction Charges (STT).

iv. Pursuant to SEBI circular dated March 26 2018 your Company has introduced LES inGold Options with effect from April 17 2018

v. Your Company participated in the rights issue by MCXCCL and further infused anadditional capital of ' 4399 lakh to meet the requirements as stipulated by SEBI for aclearing corporation.

vi. Mr. Basant Seth was appointed as a Public Interest Director (PID) on the Board ofyour Company w.e.f. May 19 2018 for filling one vacancy arising out of the expiry of theterm of Mr. Subrata Kumar Mitra and Mr. Arun Kumar Nanda as PID's on May 18 2018 and itwas decided that the second vacancy need not be filled.

vii. SEBI has increased the order per second limit for algorithmic trading in commodityderivatives.

viii. Your Company launched options trading with Crude Oil (100 Barrels) Zinc (5MT)Silver (30 kg) and Copper (1 MT) futures as underlying.

ix. Your Company entered into an agreement with CDSL and CDSL Commodity Repository Ltd.(CCRL) thereby investing ' 1200 lakh in 12000000 equity shares of ' 10 each of CCRLequivalent to 24% stake in CCRL.

x. Status of compounding applications:

During FY 15 your Company had filed nine applications seeking compounding of offenceof earlier years under Section 621A of the Companies Act 1956 against the Show CauseNotices received from the Registrar of Companies Mumbai Maharashtra. As on date of thisReport compounding has been effected in respect of 8 applications 3 by RegionalDirector Western Region Mumbai and 5 by Hon'ble Company Law Board Mumbai Bench (CLB)and the Compounding Authority has imposed an aggregate compounding fee of ' 743600/- onthe Company and the amount has since been paid. In case of one compounding applicationtowards violation of Section 301 of Companies Act 1956 the Regional Director WesternRegion Mumbai due to lack of jurisdiction has referred back the matter to the Registrarof Companies Mumbai for sending report to NCLT for appropriate action. The Company hadreceived the copy of the Orders passed by the Regional Director Western Region Mumbai inrespect of 3 compounding applications under Section 193(1) Section 301 and Section 301(1)of the Companies Act 1956 in FY 17. Subsequently the Company has received the Orderspassed by NCLT in respect of the 5 applications compounded under Section 220 Section372A Section 372A(5) Section 224(8) and Section 297 of the Companies Act 1956 in June2018. The status of Compounding Applications as at March 312018 is given in the Extractof the Annual Return in Annexure IV.


Pursuant to the requirement of Section 134 of the Companies Act 2013 your Directorsconfirm that:

a) i n the preparation of the annual accounts for the year ended March 312018 theapplicable accounting standards have been followed and there are no material departuresfrom the same;

b) they have selected such accounting policies and applied them consistently and madejudgements and estimates that are reasonable and prudent so as to give a true and fairview of the state of affairs of the Company as at March 31 2018 and of the profit of theCompany for the year ended on that date;

c) they have taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of the Act for safeguarding theassets 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 andthat such internal financial controls are adequate and are operating effectively; and

f) they have devised proper systems to ensure compliance with the provisions of allapplicable laws and that such systems are adequate and operating effectively.


The Board of Directors wish to place on record their sincere gratitude for the valuableguidance and continued support extended by the Securities and Exchange Board of IndiaReserve Bank of India Stock Exchanges Ministry of Corporate Affairs other governmentauthorities Banks and other stakeholders. Your Directors would also like to take thisopportunity to express their appreciation for the dedicated efforts of the employees ofthe Company.

For and on behalf of the Board of Directors

Saurabh Chandra Chairman

(DIN: 02726077)

Mumbai July 20 2018